Exhibit 10.04
================================================================================
===================================================
DEBTOR IN POSSESSION LOAN AND SECURITY AGREEMENT
===================================================
FLEET RETAIL FINANCE INC.
Administrative Agent
Collateral Agent
===================================================
REVOLVING CREDIT LENDERS
NAMED HEREIN
===================================================
BACK BAY CAPITAL FUNDING LLC
The Tranche B Lender and The Tranche C Lender
===================================================
CASUAL MALE CORP.
The Borrowers' Representative
For:
THE BORROWERS NAMED HEREIN
===================================================
================================================================================
May 18, 2001
================================================================================
TABLE OF CONTENTS
Article 1: - Definitions:.................................................................... 1
Article 2: - The Revolving Credit:........................................................... 36
21 - Establishment of Revolving Credit.............................................. 36
22 - Advances in Excess of Borrowing Base (Overloans)............................... 36
23 - Initial Reserves. Changes to Reserves.......................................... 37
24 - Risks of Value of Collateral................................................... 37
25 - Commitment to Make Revolving Credit Loans and Support Letters of Credit........ 37
26 - Revolving Credit Loan Requests................................................. 38
27 - Making of Revolving Credit Loans............................................... 39
28 - Swingline Loans................................................................ 40
29 - The Loan Account............................................................... 41
210 - The Revolving Credit Notes.................................................... 42
211 - Payment of The Loan Account................................................... 42
212 - Interest On Revolving Credit Loans............................................ 43
213 - Revolving Credit Commitment Fee............................................... 44
214 - Administrative Agent's Fee.................................................... 44
215 - Unused Line Fee............................................................... 44
216 - Early Termination Fee......................................................... 45
217 - Concerning Fees............................................................... 45
218 - Agents' and Lenders' Discretion............................................... 45
219 - Procedures For Issuance of L/C's.............................................. 46
220 - Fees For L/C's................................................................ 47
221 - Concerning L/C's.............................................................. 48
222 - Changed Circumstances......................................................... 50
223 - Designation of Borrowers' Representative as Borrowers' Agent.................. 50
224 - Lenders' Commitments.......................................................... 51
Article 3: - The Tranche B Loan : ........................................................... 52
31 - The Tranche B Loan............................................................. 52
32 - The Tranche B Note............................................................. 52
page ii
33 - Payment of Principal of The Tranche B Loan .................................... 53
34 - Interest On The Tranche B Loan................................................. 53
35 - Tranche B Commitment Fee and Additional assessments............................ 54
36 - Payments On Account of Tranche B Loan.......................................... 54
Article 4: - The Tranche C Loan :............................................................ 55
41 - The Tranche C Loan............................................................. 55
42 - The Tranche C Note............................................................. 55
43 - Payment of Principal of The Tranche C Loan .................................... 55
44 - Interest On The Tranche C Loan................................................. 56
45 - Tranche C Commitment Fee and Additional assessments............................ 57
46 - Payments On Account of Tranche C............................................... 57
Article 5: - Conditions Precedent:........................................................... 57
51 - Corporate Due Diligence........................................................ 58
52 - Opinion........................................................................ 58
53 - Additional Documents........................................................... 58
54 - officers' Certificates......................................................... 58
55 - Borrowing Order................................................................ 58
56 - Representations and Warranties................................................. 59
57 - Minimum Day One Excess Availability............................................ 59
58 - All Fees and Expenses Paid..................................................... 59
59 - Adequate Protection For Leasing................................................ 59
510 - Intentionally Omitted......................................................... 59
511 - No Borrower Indefault......................................................... 59
512 - No Adverse Change............................................................. 59
513 - Benefit of Conditions Precedent............................................... 59
Article 6: - General Representations, Covenants and Warranties: ............................. 60
61 - Payment and Performance of Liabilities......................................... 60
62 - Due Organization. Authorization. No Conflicts.................................. 60
63 - Trade Names.................................................................... 61
64 - Infrastructure................................................................. 62
65 - Restructuring Consultant....................................................... 62
66 - Locations...................................................................... 62
page iii
67 - Stores......................................................................... 63
68 - Title to assets................................................................ 63
69 - Indebtedness................................................................... 64
610 - Insurance..................................................................... 65
611 - Licenses...................................................................... 66
612 - Leases........................................................................ 66
613 - Requirements of Law........................................................... 66
614 - Labor Relations............................................................... 66
615 - Maintain Properties........................................................... 67
616 - Taxes......................................................................... 68
617 - No Margin Stock............................................................... 68
618 - ERISA......................................................................... 69
619 - Hazardous Materials........................................................... 69
620 - Litigation.................................................................... 69
621 - Dividends. Investments. Corporate Action...................................... 69
622 - Loans......................................................................... 70
623 - Protection of assets.......................................................... 70
624 - Line of Business.............................................................. 70
625 - Affiliate Transactions........................................................ 71
626 - Further assurances............................................................ 71
627 - Adequacy of Disclosure........................................................ 72
628 - No Restrictions On Liabilities................................................ 73
629 - Bankruptcy Protections........................................................ 73
630 - Other Covenants............................................................... 73
Article 7: Financial Reporting and Performance Covenants:.................................... 73
71 - Maintain Records............................................................... 73
72 - Access to Records.............................................................. 74
73 - Prompt Notice to Administrative Agent.......................................... 75
74 - Borrowing Base Certificate..................................................... 77
75 - Weekly and Monthly Reports..................................................... 77
76 - Quarterly Reports.............................................................. 77
77 - Annual Reports................................................................. 77
78 - officers' Certificates......................................................... 78
79 - Inventories, Appraisals, and Audits............................................ 79
page iv
710 - Additional Financial Information................................................... 79
711 - Financial Performance Covenants.................................................... 80
Article 8: - Use of Collateral:................................................................... 80
81 - Use of Inventory Collateral......................................................... 80
82 - Inventory Quality................................................................... 81
83 - Adjustments and Allowances.......................................................... 81
84 - Validity of Accounts................................................................ 81
85 - Notification to Account Debtors..................................................... 81
Article 9: - Cash Management. Payment of Liabilities:............................................. 82
91 - Depository Accounts................................................................. 82
92 - Credit Card Receipts................................................................ 82
93 - The Concentration, Blocked, and Operating Accounts.................................. 83
94 - Proceeds and Collections............................................................ 83
95 - Payment of Liabilities.............................................................. 84
96 - The Operating Account............................................................... 85
Article 10: - Grant of Security Interest:......................................................... 85
101 - Grant of Security Interest......................................................... 85
102 - Extent and Duration of Security Interest........................................... 86
Article 11: - Events of Default: ................................................................. 88
111 - Appointment as Attorney-In-Fact.................................................... 87
112 - No Obligation to Act............................................................... 87
Article 12: - Events of Default:.................................................................. 88
121 - Failure to Pay the Revolving Credit, the Tranche B Loan or the Tranche C Loan...... 88
122 - Failure to Make Other Payments..................................................... 88
123 - Failure to Perform Covenant or Liability (No Grace Period)......................... 88
124 - Failure to Perform Covenant or Liability (Grace Period)............................ 89
125 - Restructuring Consultant........................................................... 89
126 - Misrepresentation.................................................................. 89
127 - Acceleration of Other Debt......................................................... 89
page v
128 - Default Under Other Agreements..................................................... 90
129 - Uninsured Casualty Loss............................................................ 90
1210 - Attachment. Judgment. Restraint of Business....................................... 90
1211 - Canton Warehouse Default.......................................................... 90
1212 - Indictment - Forfeiture........................................................... 90
1213 - Challenge to Loan Documents....................................................... 91
1214 - Change in Control................................................................. 91
1215 - Change in Borrowing Order......................................................... 91
1216 - Appointment of Trustee or Examiner................................................ 91
1217 - Conversion of Case................................................................ 91
1218 - Relief From Stay.................................................................. 91
Article 1: - Rights and Remedies Upon Default:.................................................... 92
11 - Acceleration........................................................................ 92
12 - Rights of Enforcement............................................................... 93
13 - Sale of Collateral.................................................................. 93
14 - Occupation of Business Location..................................................... 95
15 - Grant of Nonexclusive License....................................................... 95
16 - assembly of Collateral.............................................................. 95
17 - Rights and Remedies................................................................. 95
Article 2: - Revolving Credit Fundings and Distributions:......................................... 96
21 - Revolving Credit Funding Procedures................................................. 96
22 - Swingline Loans..................................................................... 96
23 - Administrative Agent's Covering of Fundings:........................................ 97
24 - Ordinary Course Distributions: Revolving Credit..................................... 99
25 - Ordinary Course Distributions : The Tranche B Loan and The Tranche C Loan........... 100
Article 3: - Acceleration and Liquidation:........................................................ 101
31 - Acceleration Notices............................................................... 101
32 - Mandatory Acceleration Right of The Tranche B Lender:............................. 101
11. - Acceleration....................................................................... 103
12. - Initiation of Liquidation.......................................................... 103
13. - Actions At and Following Initiation of Liquidation................................ 103
page vi
14. - Collateral Agent's Conduct of Liquidation.......................................... 104
15. - Distribution of Liquidation Proceeds:.............................................. 104
16. - Relative Priorities to Proceeds of Liquidation..................................... 105
Article 1: - The Agents:.......................................................................... 107
11. - Appointment of The Agents.......................................................... 107
12. - Responsibilities of Agents......................................................... 107
13. - Concerning Distributions By The Agents............................................. 108
14. - Dispute Resolution:................................................................ 109
15. - Distributions of Notices and of Documents.......................................... 109
16. - Confidential Information........................................................... 110
17. - Reliance By Agents................................................................. 110
18. - Non-reliance On Agents and Other Lenders........................................... 110
19. - Indemnification.................................................................... 111
110. - Resignation of Agent.............................................................. 111
Article 2: - Action By Agents - Consents - Amendments - Waivers:.................................. 112
21. - Administration of Credit Facilities................................................ 112
22. - Actions Requiring or On Direction of Majority Lenders.............................. 113
23. - Actions Requiring or On Direction of Supermajority Revolving Credit Lenders....... 113
24. - Action Requiring Certain Consent................................................... 113
25. - Actions Requiring or Directed By Unanimous Consent................................. 116
26. - Actions Requiring Swingline Lender Consent......................................... 118
27. - Actions Requiring Tranche B Lender Consent........................................ 118
28. - Actions Requiring Tranche C Lender Consent........................................ 118
29. - Actions Requiring Agents' Consent.................................................. 119
210.- Miscellaneous Actions.............................................................. 119
211.- Actions Requiring Borrowers' Representative's Consent.............................. 119
212.- Nonconsenting Lender............................................................... 120
213. - The Buyout: ...................................................................... 121
Article 3: - Assignments By Lenders:............................................................. 122
31. - Assignments and Assumptions:....................................................... 122
32. - Assignment Procedures.............................................................. 123
page vii
33. - Effect of Assignment............................................................... 123
Article 4: - Notices:............................................................................. 124
41. - Notice Addresses................................................................... 124
42. - Notice Given....................................................................... 125
43. - Wire Instructions.................................................................. 126
Article 5: - Term:................................................................................ 126
51. - Termination of Revolving Credit.................................................... 126
52. - Actions on Termination............................................................. 126
Article 6: - General:............................................................................. 127
61. - Protection of Collateral........................................................... 127
62. - Publicity.......................................................................... 128
63. - Successors and assigns............................................................. 128
64. - Severability....................................................................... 128
65. - Amendments. Course of Dealing..................................................... 128
66. - Power of Attorney.................................................................. 129
67. - Application of Proceeds............................................................ 129
68. - Increased Costs.................................................................... 129
69. - Costs and Expenses of Agents and Lenders........................................... 130
610. - Copies and Facsimiles............................................................. 130
611. - Massachusetts Law................................................................. 131
612. - Indemnification................................................................... 131
613. - Rules of Construction............................................................. 131
614. - Intent............................................................................ 133
615. - Participations.................................................................... 134
616. - Right of Set-off.................................................................. 134
617. - Pledges to Federal Reserve Banks:................................................. 134
618. - Maximum Interest Rate............................................................. 134
619. - Waivers........................................................................... 134
page viii
EXHIBITS
1:1-0: Borrowers
1:1-1: Permitted Encumbrances
2:2-8(c): SwingLine Note
2:2-10: Revolving Credit Note
2:2-12: Pricing Grid
2:2-24: Revolving Credit Lenders' Commitments
3:3-2: Tranche B Note
4:4-2: Tranche C Note
6:6-2: Corporate Information
6:6-3: Trade Names
6:6-6: Locations, Leases, and Landlords
6:6-8(a): Encumbrances
6:6-8(b): Consigned Inventory
6:6-8(c)(ii): Equipment Usage Agreement
6:6-9: Certain Indebtedness
6:6-10: Insurance Policies
6:6-12: Capital Leases
6:6-14(a): Labor Relations
6:6-20: Litigation
6:6-27(b): Contingent Obligations
7:7-4: Borrowing Base Certificate
7:7-5: Weekly and Monthly Financial Reporting Requirements
7:7-11: Financial Performance Covenants
9:9-1: DDA's
9:9-2: Credit Card Arrangements
18:18-2: Assignment / Assumption
page ix
================================================================================
DEBTOR IN POSSESSION
LOAN AND SECURITY AGREEMENT Fleet Retail Finance Inc.
Administrative and Collateral Agent
================================================================================
May 18, 2001
THIS AGREEMENT is made amongst
Fleet Retail Finance Inc. (in such capacity, the "Administrative
Agent"), a Delaware corporation with offices at 40 Broad Street, Boston,
Massachusetts 02109, as Administrative Agent for the ratable benefit of
(i) the Collateral Agent, (ii) the "Revolving Credit Lenders", who are, at
present, those financial institutions identified on the signature pages of
this Agreement and any Person who becomes a "Revolving Credit Lender" in
accordance with the provisions of Article 18:18-1 of this Agreement, (iii)
the Tranche B Lender, and (iv) the Tranche C Lender
and
Fleet Retail Finance Inc. (in such capacity, the "Collateral Agent"),
a Delaware corporation with offices at 40 Broad Street, Boston,
Massachusetts 02109, as Collateral Agent for the ratable benefit of (i) the
Administrative Agent, (ii) the Revolving Credit Lenders, (iii) the Tranche
B Lender, and (iv) the Tranche C Lender
and
The Revolving Credit Lenders;
and
Back Bay Capital Funding LLC (in such capacity, with any successor or
assign, the "Tranche B Lender" and the "Tranche C Lender"), a limited
liability company with offices at 40 Broad Street, Boston, Massachusetts
02109,
and
Casual Male Corp. ( in such capacity, the "Borrowers'
Representative"), a Massachusetts corporation with its principal executive
offices at 555 Turnpike Street, Canton, Massachusetts 02021, as agent for
the Persons named on Exhibit 1:1-0 hereof, debtors and debtors-in-
possession (individually, a "Borrower" and collectively, the "Borrowers").
in consideration of the mutual covenants contained herein and benefits to be
derived herefrom,
WITNESSETH:
ARTICLE 1: - Definitions:
As used herein, the following terms have the following meanings or are
defined in the section of
Page 1
this Agreement so indicated:
"Acceleration": The making of demand or declaration that any indebtedness,
not otherwise due and payable, is due and payable. Derivations of the
word "Acceleration" (such as "Accelerate") are used with like meaning
in this Agreement.
"Acceleration Notice": Written notice as follows:
(a) From the Administrative Agent to the Collateral Agent and the
Revolving Credit Lenders, as provided in Section 15:15-1(a).
(b) From the SuperMajority Lenders to the Administrative Agent,
as provided in Section 15:15-1(b).
(c) From the Tranche B Lender to the Administrative Agent, as
provided in Section 15:15-1(c).
(d) From the Tranche C Lender to the Administrative Agent, as
provided in Section 15:15-1(d).
"Account Debtor": Has the meaning given that term in the UCC.
"Accounts" and "Accounts Receivable" include, without limitation,
"accounts" as defined in the UCC, and also all: accounts, accounts
receivable, receivables, and rights to payment (whether or not earned
by performance) for: property that has been or is to be sold, leased,
licensed, assigned, or otherwise disposed of; services rendered or to
be rendered; a policy of insurance issued or to be issued; a secondary
obligation incurred or to be incurred; energy provided or to be
provided; for the use or hire of a vessel; arising out of the use of a
credit or charge card or information contained on or used with that
card; winnings in a lottery or other game of chance; and also all
Inventory which gave rise thereto, and all rights associated with such
Inventory, including the right of stoppage in transit; all reclaimed,
returned, rejected or repossessed Inventory (if any) the sale of which
gave rise to any Account.
"ACH": Automated clearing house.
"Administrative Agent": Defined in the Preamble.
"Administrative Agent's Cover": Defined in Section 14:14-3(c)(i).
Page 2
"Administrative Agent's Fee": Is defined in Section 2:2-14.
"Affiliate": With respect to any two Persons, a relationship in which (i)
one holds, directly or indirectly, not less than twenty-five percent
(25%) of the capital stock, beneficial interests, partnership
interests, or other equity interests of the other; or (ii) one has,
directly or indirectly, the right, under ordinary circumstances, to
vote for the election of a majority of the directors (or other body
or Person who has those powers customarily vested in a board of
directors of a corporation); or (iii) not less than twenty-five
percent (25%) of their respective ownership is directly or indirectly
held by the same third Person.
"Agent": When not preceded by "Administrative" or "Collateral", the term
"Agent" refers collectively and individually to the Administrative
Agent and the Collateral Agent.
"Agent Fee Letter": The letter dated the date hereof and styled "Agent Fee
Letter" between the Borrowers and FRFI, as such letter may from time
to time be amended.
"Agents' Rights and Remedies": Is defined in Section 13:13-7.
"Applicable Law": As to any Person: (i) All statutes, rules, regulations,
orders, or other requirements having the force of law and (ii) all
court orders and injunctions, arbitrator's decisions, and/or similar
rulings, in each instance ((i) and (ii)) of or by any federal, state,
municipal, and other governmental authority, or court, tribunal,
panel, or other body which has or claims jurisdiction over such
Person, or any property of such Person, or of any other Person for
whose conduct such Person would be responsible.
"Appraised Inventory Liquidation Value": The product of (a) the Retail of
Eligible Inventory (net of Inventory Reserves) multiplied by (b) that
percentage, determined from the then most recent appraisal of the
Borrowers' Inventory undertaken at the request of the Administrative
Agent, to reflect the appraiser's estimate of the net recovery on the
Borrowers' Inventory in the event of an in-store liquidation of that
Inventory.
"Assignee Revolving Credit Lender": Defined in Section 18:18-1(a).
"Assigning Revolving Credit Lender": Defined in Section 18:18-1(a).
Page 3
"Assignment and Acceptance": Defined in Section 18:18-2.
"Availability": The least of (a), (b), or (c), where:
(a) is the result of
(i) The Revolving Credit Ceiling
Minus
(ii) The aggregate unpaid balance of the Loan Account
Minus
(iii) The aggregate undrawn Stated Amount of all then
outstanding L/C's.
(b) is the result of
(i) The Borrowing Base
Minus
(ii) The aggregate unpaid balance of the Loan Account
Minus
(iii) The aggregate undrawn Stated Amount of all then
outstanding L/C's.
Minus
(iv) The aggregate of the Availability Reserves.
Minus
(v) The Carve Out Reserve
(c) is the result of
(i) The Tranche B Borrowing Base
Minus
(ii) The aggregate unpaid balance of the Loan Account
Minus
(iii) The aggregate undrawn Stated Amount of all then
outstanding L/C's.
Minus
(iv) The aggregate of the Availability Reserves.
Minus
(v) The Carve Out Reserve
Minus
(vi) The then unpaid principal balance of the Tranche B
Loan and all accrued but unpaid interest thereon.
Page 4
"Availability Reserves": Such reserves as the Administrative Agent from
time to time determines in the Administrative Agent's reasonable
discretion as being appropriate to reflect the impediments to the
Collateral Agent's ability to realize upon the Collateral. Without
limiting the generality of the foregoing, Availability Reserves may
include (but are not limited to) reserves based on the following::
(i) Customer Credit Liabilities.
(ii) Taxes and other governmental charges, including, ad
valorem, personal property, and other taxes which might
have priority over the Collateral Interests of the
Collateral Agent in the Collateral.
(iii) L/C Landing Costs.
"Average Availability": The average of Availability at the close of each
day of the period in respect of which Average Availability is being
determined.
"Bankruptcy Breach": Any of the following: (a) Any breach of Section
6:6-29; (b) The occurrence of any Event of Default describe in any of
Sections 12:12-15 through and including 12:12-23.
"Bankruptcy Code": Title 11, U.S.C., as amended from time to time.
"Bankruptcy Recoveries": Any claim or recovery realized by the Borrower
or which the Borrower may be entitled to assert by reason of any
avoidance or other power vested in or on behalf of the Borrower or the
estate of the Borrower under Chapter 5 of the Bankruptcy Code.
"Base": The Base Rate announced from time to time by Fleet National Bank
(or any successor in interest to Fleet National Bank). In the event
that said bank (or any such successor) ceases to announce such a rate,
"Base" shall refer to that rate or index announced or published from
time to time as the Administrative Agent, in good faith, designates as
the functional equivalent to said Base Rate. Any change in "Base"
shall be effective, for purposes of the calculation of interest due
hereunder, when such change is made effective generally by the bank on
whose rate or index "Base" is being set.
Page 5
"Base Margin": Until the Pricing Grid Change Date , 1.00% per annum and
thereafter as determined from the Pricing Grid.
"Base Margin Loan": Each Revolving Credit Loan while bearing interest at
the Base Margin Rate.
"Base Margin Rate": The aggregate of Base plus the then applicable Base
Margin.
"BBC": Back Bay Capital LLC.
"Blocked Account": Any DDA into which the contents of any other DDA is
transferred.
"Blocked Account Agreement": An Agreement, in form satisfactory to the
Administrative Agent, which Agreement recognizes the Collateral
Agent's Collateral Interest in the contents of the DDA which is the
subject of such Agreement and agrees that such contents shall be
transferred only to the Concentration Account or as otherwise
instructed by an Agent.
"Borrower" and "Borrowers": Is defined in the Preamble.
"Borrowing Base": The aggregate of the following:
(a) The lesser of
(i) The product of the Retail of Eligible
Inventory (net of Inventory Reserves) multiplied by the
Inventory Advance Rate; or
(ii) 85% of the Appraised Inventory Liquidation
Value.
Plus
(b) The face amount of Eligible Credit Card Receivables
multiplied by the Credit Card Advance Rate.
Plus
(c) The face amount of Eligible Receivables (net of
Receivables Reserves) multiplied by the Receivables
Advance Rate.
"Borrowing Base Certificate": Is defined in Section 7:7-4.
"Borrowing Order": An order, in form satisfactory to the Administrative
Agent, the Tranche B
Page 6
Lender, and the Tranche C Lender, entered in the Proceedings, which
order authorizes the creation of the credit facilities contemplated by
this Agreement, as such Order may from time to time be amended with
the written consent of the Administrative Agent., the Tranche B
Lender, and the Tranche C Lender.
"Business Day": Any day other than (a) a Saturday or Sunday; (b) any day
on which banks in Boston, Massachusetts generally are not open to the
general public for the purpose of conducting commercial banking
business; or (c) a day on which the principal office of the
Administrative Agent is not open to the general public to conduct
business.
"Business Plan": The Borrowers' business plan dated on or about May
17,2001, as from time to time updated by the Borrowers'
Representative pursuant to this Agreement.
"BuyOut": The consummation of a transaction described in Section 17:17-13.
"Capital Expenditures": The expenditure of funds or the incurrence of
liabilities which may be capitalized in accordance with GAAP.
"Capital Lease": Any lease which may be capitalized in accordance with
GAAP.
"Carve Out Reserve": A reserve equal to the "Carve Out", as defined in the
Borrowing Order.
"Casual Male Corp": Casual Male Corp, formerly known as "J. Baker, Inc."
"Change in Control": The occurrence of either of the following:
(a) The acquisition, by any group of persons (within the
meaning of the Securities Exchange Act of 1934, as amended) or by any
Person, of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission) of 35% or more of the issued
and outstanding capital stock of the Borrowers' Representative having
the right, under ordinary circumstances, to vote for the election of
directors of Casual Male Corp..
(b) Any failure of Casual Male Corp. directly or
indirectly to own, beneficially and of record, 100% of the capital
stock of all other Borrowers.
"Chattel Paper": Has the meaning given that term in the UCC.
Page 7
"Collateral": Is defined in Section 10:10-1.
"Collateral Agent": Is defined in the Preamble.
"Collateral Interest": Any interest in property to secure an obligation,
including, without limitation, a security interest, mortgage, and deed
of trust.
"Concentration Account": Is defined in Section 9:9-3.
"Consent": Actual consent given by the Lender from whom such consent is
sought; or the passage of seven (7) Business Days from receipt of
written notice to a Lender from an Agent of a proposed course of
action to be followed by an Agent without such Lender's giving that
Agent written notice of that Lender's objection to such course of
action, provided that all Agents may rely on such passage of time as
consent by a Lender only if such written notice states that consent
will be deemed effective if no objection is received within such time
period.
"Consolidated": When used to modify a financial term, test, statement, or
report, refers to the application or preparation of such term, test,
statement or report (as applicable) based upon the consolidation, in
accordance with GAAP, of the financial condition or operating results
of the Borrowers.
"Costs of Collection": Includes, without limitation, all attorneys'
reasonable fees and reasonable out-of-pocket expenses incurred by any
Agent's attorneys, and all reasonable out-of-pocket costs incurred by
any Agent in the administration of the Liabilities and/or the Loan
Documents, including, without limitation, reasonable costs and
expenses associated with travel on behalf of any Agent, where such
costs and expenses are directly or indirectly related to or in respect
of any Agent's: administration and management of the Liabilities;
negotiation, documentation, and amendment of any Loan Document; or
efforts to preserve, protect, collect, or enforce the Collateral, the
Liabilities, and/or the Agents' Rights and Remedies and/or any of the
rights and remedies of any Agent against or in respect of any
guarantor or other person liable in respect of the Liabilities
(whether or not suit is instituted in connection with such efforts).
"Costs of Collection" also includes the reasonable fees and expenses
of Lenders' Special Counsel. The Costs of Collection are
Page 8
Liabilities, and at the Administrative Agent's option may bear
interest at the then effective Base Margin Rate.
"Credit Card Advance Rate": 85%
"Customer Credit Liability": Gift certificates, customer deposits,
merchandise credits, layaway obligations, frequent shopping programs,
and similar liabilities of any Borrower to its retail customers and
prospective customers.
"DDA": Any checking or other demand daily depository account, other than
an Exempt DDA, maintained by any Borrower.
"Delinquent Revolving Credit Lender": Defined in Section 14:14-3(c).
"Deposit Account": Has the meaning given that term in the UCC.
"Documents": Has the meaning given that term in the UCC.
"Documents of Title": Has the meaning given that term in the UCC.
"Early Termination Assessment": The Revolving Credit Early Termination
Fee, the Tranche B Early Termination Fee, and the Tranche C Early Exit
Assessment.
"EBITDAR": The Borrowers' earnings before interest, taxes, depreciation,
amortization and restructuring charges, each as determined in
accordance with GAAP.
"Eligible Assignee": With respect to an assignee of a Revolving Credit
Lender: a bank, insurance company, or company engaged in the business
of making commercial loans having a combined capital and surplus in
excess of $300 Million or any Affiliate of any Lender, or any Person
to whom a Lender assigns its rights and obligations under this
Agreement as part of a programmed assignment and transfer of such
Lender's rights in and to a material portion of such Lender's
portfolio of asset based credit facilities.
"Eligible Credit Card Receivables": Under 4 business day accounts due on
a non-recourse basis from major credit card processors (which, if due
on account of a private label credit
Page 9
card program, are deemed in the discretion of the Administrative Agent
to be eligible).
"Eligible In-Transit Inventory": "Eligible In-Transit Inventory " will be
calculated at 75% of the retail value of such of the Borrowers'
Inventory (without duplication as to Eligible Inventory and Eligible
L/C Inventory ), title to which has passed to a Borrower and which is
then being shipped from a foreign location for receipt, within 45
days, at a warehouse of one of the Borrowers, provided that
(a) Such Inventory is of such types,
character, qualities and quantities (net of Inventory
Reserves) as the Administrative Agent in its discretion from
time to time determines to be eligible for borrowing; and
(b) The documents which relate to such
shipment names the Collateral Agent as consignee of the
subject Inventory and the Collateral Agent has control over
the documents which evidence ownership of the subject
Inventory (such as by the providing to the Collateral Agent
of a Customs Brokers Agreement in form reasonably
satisfactory to the Collateral Agent).
"Eligible Inventory": The following:
(a) Such of the Borrowers' Inventory, at such
locations, and of such types, character, qualities and quantities, as
the Administrative Agent, in its sole discretion from time to time
determines to be acceptable for borrowing, as to which Inventory, the
Collateral Agent has a perfected security interest which is prior and
superior to all security interests, claims, and encumbrances.
(b) Eligible L/C Inventory.
(c) Eligible In-Transit Inventory
Without limiting the foregoing, "Eligible Inventory" shall not include
(i) direct shipment inventory; (ii) any non-merchandise inventory
(such as labels, bags, and packaging materials); (iii) "dummy
warehouse inventory"; (iv) damaged goods, return to vendor
merchandise, packaways, consigned inventory, and other similar
categories, and (v) inventory which is the subject of a store closing,
liquidation, going-out-of-business or similar sale, as to which in
each case, any Borrower has received an initial payment of the
guaranteed price from the Person conducting the sale.
"Eligible L/C Inventory": "Eligible L/C Inventory" will be calculated at
75% of the retail value of such of the Borrowers' Inventory (without
duplication as to Eligible Inventory and Eligible In-Transit Inventory
), the purchase of which is supported by a documentary
Page 10
L/C then having an initial expiry of sixty (60) or less days, provided
that
(a) Such Inventory is of such types, character,
qualities and quantities (net of Inventory Reserves) as the
Administrative Agent in its discretion from time to time
determines to be eligible for borrowing; and
(b) The documentary L/C supporting such purchase names
the Collateral Agent as consignee of the subject Inventory and
the Collateral Agent has control over the documents which
evidence ownership of the subject Inventory (such as by the
providing to the Collateral Agent of a Customs Brokers Agreement
in form reasonably satisfactory to the Collateral Agent).
"Eligible Receivables": Such of the Borrowers' Accounts and accounts
receivable as arise in the ordinary course of the Borrowers' business
(without duplication of Eligible Credit Card Receivables) for goods
sold and/or services rendered by the Borrowers, which Accounts and
accounts receivable have been determined by the Administrative Agent
to be satisfactory and have been earned by performance and are owed to
the Borrowers by such of the Borrowers' Account Debtors as the
Administrative Agent determines to be satisfactory, in the
Administrative Agent's discretion in each instance.
"Employee Benefit Plan": As defined in ERISA.
"Encumbrance": A Collateral Interest or agreement to create or grant a
Collateral Interest; the interest of a lessor under a Capital Lease;
conditional sale or other title retention agreement; sale of accounts
receivable or chattel paper; or other arrangement pursuant to which
any Person is entitled to any preference or priority with respect to
the property or assets of another Person or the income or profits of
such other Person; each of the foregoing whether consensual or non-
consensual and whether arising by way of agreement, operation of law,
legal process or otherwise.
"End Date": The date upon which both (a) all Liabilities have been paid in
full and (b) all obligations of any Lender to make loans and advances
and to provide other financial accommodations to the Borrowers
hereunder shall have been irrevocably terminated.
"Environmental Laws": All of the following:
(a) Applicable Law which regulates or relates to, or imposes any
standard of conduct or liability on account of or in respect to
environmental protection matters,
Page 11
including, without limitation, Hazardous Materials, as are now or
hereafter in effect.
(b) The common law relating to damage to Persons or property
from Hazardous Materials.
"Equipment": Includes, without limitation, "equipment" as defined in the UCC,
and also all furniture, store fixtures, motor vehicles, rolling stock,
machinery, office equipment, plant equipment, tools, dies, molds, and
other goods, property, and assets which are used and/or were purchased
for use in the operation or furtherance of a Borrower's business, and
any and all accessions or additions thereto, and substitutions
therefor.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"ERISA Affiliate": Any Person which is under common control with a Borrower
within the meaning of Section 4001 of ERISA or is part of a group
which includes any Borrower and which would be treated as a single
employer under Section 414 of the Internal Revenue Code of 1986, as
amended.
"Events of Default": Is defined in Article 12:. An "Event of Default"
shall be deemed to have occurred and to be
continuing unless and until that Event of
Default has been duly waived by the requisite
Lenders or by the Administrative Agent as
applicable. In the event of such due waiver,
the so-waived Event of Default shall be
deemed never to have occurred (other than
with respect to any Costs of Collection for
which the Borrowers are obligated to
reimburse any Agent or the Lenders, which
reimbursement obligation is not specifically
duly waived).
"Excess Availability": The result of (a) Availability minus (b) all then past
due obligations of the Borrowers arising subsequent to the
commencement of the Proceedings, including accounts payable which are
beyond customary trade terms and rent obligations which are beyond
applicable grace periods.
"Exempt DDA": A depository account maintained by any Borrower, the only
contents of which may be transfers from the Operating Account and
actually used solely (i) for petty cash
Page 12
purposes; or (ii) for payroll.
"Farm Products": Has the meaning given that term in the UCC.
"Fee Letter": The letter dated the date hereof and styled "Fee Letter"
between the Borrowers and FRFI, as such letter may from time to time
be amended.
"Final Borrowing Order": A Borrowing Order entered in the Proceedings after
notice and a final hearing pursuant to Rule 4001(c) of the Federal
Rules of Bankruptcy Procedure.
"Financial Covenant Breach": The breach of any of the financial performance
covenants provided for in Section 7:7-11.
"First Day Orders": Orders presented to the Bankruptcy Court in the
Proceedings for consideration on the first day of the Proceedings and
consented to by the Administrative Agent, whether or not entered by
the Bankruptcy Court on the first day of the Proceedings or
thereafter.
"Fiscal": When followed by "month" or "quarter", it refers to the relevant
fiscal period based on the Borrowers' fiscal year and accounting
conventions (e.g. reference to the Borrowers' "Fiscal June, 2002" is
to the Borrowers' fiscal month of June in the calendar year 2001).
When followed by reference to a specific year, it refers to the fiscal
year which ends in a month of the year to which reference is being
made (e.g. if the Borrowers' fiscal year ends in January 2002
reference to that year would be to the Borrowers' "Fiscal 2002").
"Fixtures": Has the meaning given that term in the UCC.
"FRFI": Fleet Retail Finance Inc.
"GAAP": Principles which are consistent with those promulgated or adopted
by the Financial Accounting Standards Board and its predecessors (or
successors) in effect and applicable to that accounting period in
respect of which reference to GAAP is being made, provided, however,
in the event of a Material Accounting Change, then unless otherwise
specifically agreed to by the Administrative Agent, (a) the Borrowers'
Page 13
compliance with the financial performance covenants imposed pursuant
to Section 7:7-11 shall be determined as if such Material Accounting
Change had not taken place and (b) the Borrowers' Representative shall
include, with its monthly, quarterly, and annual financial statements
a schedule, certified by the Borrowers' Representative's chief
financial officer, on which the effect of such Material Accounting
Change on that statement shall be described.
"General Intangibles": Includes, without limitation, "general intangibles" as
defined in the UCC; and also all: rights to payment for credit
extended; deposits; amounts due to any Borrower; credit memoranda in
favor of any Borrower; warranty claims; tax refunds and abatements;
insurance refunds and premium rebates; all means and vehicles of
investment or hedging, including, without limitation, options,
warrants, and futures contracts; records; customer lists; telephone
numbers; goodwill; causes of action; judgments; payments under any
settlement or other agreement; literary rights; rights to performance;
royalties; license and/or franchise fees; rights of admission;
licenses; franchises; license agreements, including all rights of any
Borrower to enforce same; permits, certificates of convenience and
necessity, and similar rights granted by any governmental authority;
patents, patent applications, patents pending, and other intellectual
property; internet addresses and domain names; developmental ideas and
concepts; proprietary processes; blueprints, drawings, designs,
diagrams, plans, reports, and charts; catalogs; manuals; technical
data; computer software programs (including the source and object
codes therefor), computer records, computer software, rights of access
to computer record service bureaus, service bureau computer contracts,
and computer data; tapes, disks, semi-conductors chips and printouts;
trade secrets rights, copyrights, mask work rights and interests, and
derivative works and interests; user, technical reference, and other
manuals and materials; trade names, trademarks, service marks, and all
goodwill relating thereto; applications for registration of the
foregoing; and all other general intangible property of any Borrower
in the nature of intellectual property; proposals; cost estimates, and
reproductions on paper, or otherwise, of any and all concepts or
ideas, and any matter related to, or connected with, the design,
development, manufacture, sale, marketing, leasing, or use of any or
all property produced, sold, or leased, by any or credit extended or
services performed, by any Borrower, whether intended for an
individual customer or the general business of any Borrower, or used
or useful in connection with research by any Borrower.
Page 14
"Goods": Has the meaning given that term in the UCC, and also includes all
things movable when a security interest therein attaches and also all
computer programs embedded in goods and any supporting information
provided in connection with a transaction relating to the program if
(i) the program is associated with the goods in such manner that it
customarily is considered part of the goods or (ii) by becoming the
owner of the goods, a Person acquires a right to use the program in
connection with the goods.
"Guarantor": Casual Male Corp.
"Guarantor Agreement": Each instrument and document executed by the Guarantor
of the Liabilities to evidence or secure the Guarantor's guaranty
thereof .
"Guarantor Default": Default or breach or the occurrence of any event of
default under any Guarantor Agreement.
"Hazardous Materials": Any (a) substance which is defined or regulated as a
hazardous material in or under any Environmental Law and (b) oil in
any physical state.
"Indebtedness": All indebtedness and obligations of or assumed by any
Person on account of or in respect to any of the following:
(a) In respect of money borrowed (including any indebtedness
which is non-recourse to the credit of such Person but which is
secured by an Encumbrance on any asset of such Person) whether or not
evidenced by a promissory note, bond, debenture or other written
obligation to pay money.
(b) In connection with any letter of credit or acceptance
transaction (including, without limitation, the face amount of all
letters of credit and acceptances issued for the account of such
Person or reimbursement on account of which such Person would be
obligated).
(c) In connection with the sale or discount of accounts
receivable or chattel paper of such Person.
(d) On account of deposits or advances.
(e) As lessee under Capital Leases.
(f) In connection with any sale and leaseback transaction.
"Indebtedness" of any Person also includes:
(x) Indebtedness of others secured by an Encumbrance
on
Page 15
any asset of such Person, whether or not such
Indebtedness is assumed by such Person.
(y) Any guaranty, endorsement, suretyship or other
undertaking pursuant to which that Person may be liable on
account of any obligation of any third party other than on
account of the endorsement of checks and other items in the
ordinary course.
(z) The Indebtedness of a partnership or joint venture
for which such Person is liable as a general partner or
joint venturer.
"In Default": Any occurrence, circumstance, or state of facts with respect to a
Borrower which (a) is an Event of Default; or (b) would become an
Event of Default if any requisite notice were given and/or any
requisite period of time were to run and such occurrence,
circumstance, or state of facts were not cured within any applicable
grace period.
"Indemnified Person": Is defined in Section 21:21-12.
"Instruments": Has the meaning given that term in the UCC.
"Interest Payment Date": With reference to:
Each Libor Loan: The last day of the Interest Period relating
thereto; the Termination Date; and the End Date.
Each Base Margin Loan: The first day of each month; the
Termination Date; and the End Date.
"Interest Period": The following:
(a) With respect to each Libor Loan: Subject to Subsection (c),
below, the period commencing on the date of the making or continuation
of, or conversion to, the subject Libor Loan and ending one, two, or
three months thereafter, as the Borrowers' Representative may elect by
notice (pursuant to Section 2:2-6) to the Administrative Agent and
such other periods (no longer, in any event, however, than three
months) to which the Administrative Agent and the Borrowers'
Representative may agree from time to time.
(b) With respect to each Base Margin Loan: Subject to Subsection
(c), below, the period commencing on the date of the making or
continuation of or conversion to such Base Margin Loan and ending on
that date (i) as of which the subject Base
Page 16
Margin Loan is converted to a Libor Loan, as the Borrowers'
Representative may elect by notice (pursuant to Section 2:2-6) to the
Administrative Agent, or (ii) on which the subject Base Margin Loan is
paid by the Borrowers.
(c) The setting of Interest Periods is in all instances subject
to the following:
(i) Any Interest Period for a Base Margin Loan which
would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day.
(ii) Any Interest Period for a Libor Loan which would
otherwise end on a day that is not a Business Day shall be
extended to the next succeeding Business Day, unless that
succeeding Business Day is in the next calendar month, in which
event such Interest Period shall end on the last Business Day of
the month during which the Interest Period ends.
(iii) Subject to Subsection (iv), below, any Interest
Period applicable to a Libor Loan, which Interest Period begins
on a day for which there is no numerically corresponding day in
the calendar month during which such Interest Period ends, shall
end on the last Business Day of the month during which that
Interest Period ends.
(iv) Any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
(v) The number of Interest Periods in effect at any one
time is subject to Section 2:2-12(e) hereof.
"Interim Borrowing Order": A Borrowing Order entered in the Proceedings prior
to notice and a final hearing pursuant to Rule 4001(c) of the Federal
Rules of Bankruptcy Procedure.
"Inventory": Includes, without limitation, "inventory" as defined in the UCC
and also all: (a) Goods which are leased by a Person as lessor; are
held by a Person for sale or lease or to be furnished under a contract
of service; are furnished by a Person under a contract of service; or
consist of raw materials, work in process, or materials used or
consumed in a business; (b) Goods of said description in transit; (c)
Goods of said description which are returned, repossessed and
rejected; (d) packaging, advertising, and shipping materials related
to any of the foregoing; (e) all names, marks, and General Intangibles
affixed or to be affixed or associated thereto; and (f) Documents and
Documents of Title which represent any of the foregoing.
Page 17
"Inventory Advance Rate": 30%.
"Inventory Reserves": Such Reserves as may be established from time to time by
the Administrative Agent in the Administrative Agent's reasonable
discretion with respect to the determination of the saleability, at
retail, of the Eligible Inventory or which reflect such other factors
as affect the market value of the Eligible Inventory. Without limiting
the generality of the foregoing, Inventory Reserves may include (but
are not limited to) reserves based on the following:
(i) Obsolescence (based upon Inventory on hand beyond a given
number of days).
(ii) Seasonality.
(iii) Shrinkage.
(iv) Imbalance.
(v) Change in Inventory character.
(vi) Change in Inventory composition
(vii) Change in Inventory mix.
(viii) Markdowns (both permanent and point of sale)
(ix) Retail markons and markups inconsistent with prior period
practice and performance; industry standards; current
business plans; or advertising calendar and planned
advertising events.
(x) Consigned Inventory.
"Investment Property": Has the meaning given that term in the UCC.
"Issuer": The issuer of any L/C.
"L/C": Any letter of credit, the issuance of which is procured by the
Administrative Agent for the account of any Borrower and any
acceptance made on account of such letter of credit.
"L/C Landing Costs": To the extent not included in the Stated Amount of an L/C,
customs, duty, freight, and other out-of-pocket costs and expenses
which will be expended to "land" the Inventory, the purchase of which
is supported by such L/C.
"Lease": Any lease or other agreement, no matter how styled or structured,
pursuant to which a Borrower is entitled to the use or occupancy of
any space.
Page 18
"Leasehold Interest": Any interest of a Borrower as lessee under any Lease.
"Leasehold Proceeds": Any proceeds of the sale or other disposition of a
Leasehold Interest.
"Leasing": Fleet Capital Corporation.
"Leasing Debt": All obligations due to Leasing under a certain Chattel
Promissory Note dated August 26, 1999 in the original principal amount
of $9,000,000.00 and all instruments, documents, and agreements
related thereto, all as modified, amended, supplemented, or restated.
"Leasing Senior Collateral": All Collateral which consists of Equipment.
"Lender": Collectively and each individually, each Revolving Credit Lender,
the Tranche B Lender and the Tranche C Lender.
"Lenders' Special Counsel": Collectively, (i) a single counsel, selected by
Revolving Credit Lenders holding more than 51% of the Loan Commitments
(other than any Loan Commitments held by Delinquent Revolving Credit
Lenders) following the occurrence of an Event of Default to represent
their interests in connection with the enforcement, attempted
enforcement, or preservation of any rights and remedies under this, or
any other Loan Document, (ii) a single counsel, selected by the
Tranche B Lender and (iii) a single counsel selected by the Tranche C
Lender, in case of each of clause (ii) and (iii) hereof, to represent
the interests of the Tranche B Lender and the Tranche C Lender,
respectively, in connection with the preparation, negotiation,
administration, enforcement, attempted enforcement, or preservation of
any rights and remedies under this, or any other Loan Document.
"Letter-of-Credit Right": Has the meaning given that term in UCC 9'99 and
also refers to any right to payment or performance under an L/C,
whether or not the beneficiary has demanded or is at the time entitled
to demand payment or performance.
"Liabilities": (a) All and each of the following, whether now existing
or hereafter arising under this Agreement or under any of the other
Loan Documents, including, without
Page 19
limitation, the following:
(i) Any and all direct and indirect liabilities, debts, and
obligations of each Borrower to any Agent or any Lender, each of every
kind, nature, and description owing on account of this Agreement or
any other Loan Document.
(ii) Each obligation to repay any loan, advance,
indebtedness, note, obligation, overdraft, or amount now or hereafter
owing by any Borrower to any Agent or any Lender (including all future
advances whether or not made pursuant to a commitment by any Agent or
any Lender), whether or not any of such are liquidated, unliquidated,
primary, secondary, secured, unsecured, direct, indirect, absolute,
contingent, or of any other type, nature, or description, or by reason
of any cause of action which any Agent or any Lender may hold against
any Borrower.
(iii) All notes and other obligations of each Borrower now or
hereafter assigned to or held by any Agent or any Lender, each of
every kind, nature, and description.
(iv) All interest, fees, and charges and other amounts which
may be charged by any Agent or any Lender to any Borrower and/or which
may be due from any Borrower to any Agent or any Lender from time to
time.
(v) All costs and expenses incurred or paid by any Agent in
respect of any agreement between any Borrower and any Agent or
instrument furnished by any Borrower to any Agent (including, without
limitation, Costs of Collection, attorneys' reasonable fees, and all
court and litigation costs and expenses).
(vi) Any and all covenants of each Borrower to or with any
Agent or any Lender and any and all obligations of each Borrower to
act or to refrain from acting in accordance with any agreement between
that Borrower and any Agent or any Lender or instrument furnished by
that Borrower to any Agent or any Lender.
(vii) Each of the foregoing as if each reference to the " any
Agent or any Lender" were to each Affiliate of the Administrative
Agent.
(b) Any and all direct or indirect liabilities, debts, and
obligations of each Borrower to any Agent or any Affiliate of any Agent, each of
every kind, nature, and description owing on account of any service or
accommodation provided to, or for the account of any Borrower pursuant to this
or any other Loan Document, including cash management services and the issuances
of L/C's.
"Libor Business Day": Any day which is both a Business Day and a day on which
the principal interbank market for Libor deposits in London in which
Fleet National Bank participates is
Page 20
open for dealings in United States Dollar deposits.
"Libor Loan": Any Revolving Credit Loan which bears interest at a Libor Rate.
"Libor Margin": Until the Pricing Grid Change Date , 2.75% per annum and
thereafter as determined from the Pricing Grid.
"Libor Offer Rate": That rate of interest (rounded upwards, if necessary, to
the next 1/100 of 1%) determined by the Administrative Agent in good
faith to be the highest prevailing rate per annum at which deposits on
U.S. Dollars are offered to Fleet National Bank, by first-class banks
in the London interbank market in which Fleet National Bank
participates at or about 10:00AM (Boston Time) two (2) Libor Business
Days before the first day of the Interest Period for the subject Libor
Loan, for a deposit approximately in the amount of the subject loan
for a period of time approximately equal to such Interest Period.
"Libor Rate": That per annum rate which is the aggregate of the Libor Offer
Rate plus the Libor Margin except that, in the event that the
Administrative Agent determines in good faith that any Revolving
Credit Lender may be subject to the Reserve Percentage, the "Libor
Rate" shall mean, with respect to any Libor Loans then outstanding
(from the date on which that Reserve Percentage first became
applicable to such loans), and with respect to all Libor Loans
thereafter made, an interest rate per annum equal the sum of (a) plus
(b), where:
(a) is the decimal equivalent of the following
fraction:
Libor Offer Rate
----------------
1 minus Reserve Percentage
(b) is the applicable Libor Margin.
"Liquidation": The exercise, by the Collateral Agent, of those rights accorded
to the Collateral Agent under the Loan Documents as a creditor of the
Borrowers following and on account of the occurrence of an Event of
Default looking towards the realization on the Collateral. Derivations
of the word "Liquidation" (such as "Liquidate") are used with like
meaning in this Agreement.
"Loan Account": Is defined in Section 2:2-9.
Page 21
"Loan Commitment": With respect to each Revolving Credit Lender, that
respective Revolving Credit Lender's Revolving Credit Dollar
Commitment.
With respect to the Tranche B Lender, the then unpaid
principal balance of the Tranche B Loan.
With respect to the Tranche C Lender, the then unpaid
principal balance of the Tranche C Loan.
"Loan Documents": This Agreement, each instrument and document executed as
contemplated by Article 5, below, and each other instrument or
document from time to time executed and/or delivered in connection
with the arrangements contemplated hereby or in connection with any
transaction with the Administrative Agent or the Collateral Agent or
any Affiliate of the Administrative Agent or the Collateral Agent,
including, without limitation, any transaction which arises out of any
cash management, depository, investment, letter of credit, interest
rate protection, or equipment leasing services provided by the
Administrative Agent or the Collateral Agent or any Affiliate of the
Administrative Agent or the Collateral Agent, as each may be amended
from time to time.
"Majority Lenders": Lenders (other than Delinquent Revolving Credit Lenders)
holding 51% or more of the Loan Commitments (other than any Loan
Commitments held by Delinquent Revolving Credit Lenders).
"Majority Revolving Credit Lenders": Revolving Credit Lenders (other than
Delinquent Revolving Credit Lenders) holding 51% or more the Loan
Commitments which support the Revolving Credit (other than such Loan
Commitments held by a Delinquent Revolving Credit Lender).
"Material Accounting Change": Any change in GAAP applicable to
accounting periods subsequent to the Borrowers' fiscal year most
recently completed prior to the execution of this Agreement, which
change has a material effect on the Borrowers' Consolidated financial
condition or operating results, as reflected on financial statements
and reports prepared by or for the Borrowers, when compared with such
condition or results as if such change had not taken place or where
preparation of the Borrowers' statements and reports in compliance
with such change results in the breach of a financial performance
covenant imposed pursuant to Section 7:7-11 where such a breach would
not have
Page 22
occurred if such change had not taken place or visa versa.
"Maturity Date": July 31, 2001, unless the Final Borrowing Order is
entered by that date (which order shall not then have been stayed,
modified, appealed, reversed, or otherwise affected), and if the Final
Borrowing Order is so entered, the "Maturity Date" shall mean May 18,
2003.
Minimum Excess Availability Breach: The failure of the Borrowers at any time
to comply with the provisions of Paragraph 3 of Exhibit 7:7-11.
"Nominee": A business entity (such as a corporation or limited partnership)
formed by the Collateral Agent to own or manage any Post Foreclosure
Asset.
"NonConsenting Lender": Is defined in Section 17:17-12.
"Obligor": The Guarantor and each Borrower.
"Operating Account": Is defined in Section 9:9-3.
"OverLoan": A loan, advance, or providing of credit support (such as the
issuance of any L/C) to the extent that, immediately after its having
been made, Availability is less than zero.
"Participant": Is defined in Section 21:21-15, hereof.
"Payment Intangible": Has the meaning given that term in UCC 9'99 and
also refers to any general intangible under which the Account Debtor's
primary obligation is a monetary obligation.
"Permitted Asset Disposition": A sale or other disposition of the
assets of any Borrower, not in the ordinary course, where either the
conditions of (a) or (b) of this Definition are satisfied:
(a) The sale, other than in the ordinary course, of
substantially all of the assets or capital stock of WGS Corp. in
compliance with and having the effect provided for in Section6:6-
15(d)(v).
(b) Each of the following conditions is satisfied:
(i) The assets which are the subject of such sale
(valued for such
Page 23
purpose in the same manner that such assets are valued for
purposes of calculation of the Borrowing Base) when aggregated
with all assets which had been the subject of prior such sales or
other dispositions subsequent to the commencement of the
Proceedings (other than the sale of the assets of WGS Corp. as
described in (a) of this Definition) does not exceed fifteen
percent (15%) of the Borrowing Base on the date on which the
Proceedings were initiated.
(ii) On the date on which the sale or other disposition
of assets is consummated, no Borrower is InDefault and none will
become InDefault as a result of such consummation.
"Permitted Encumbrances": The following:
(a) Those Encumbrances permitted as provided in Section 6:6-8(a)
hereof.
(b) Encumbrances on properties to secure taxes, assessments and other
government charges or claims for labor, material or supplies in
respect of obligations not then overdue; deposits or pledges made in
connection with, or to secure payment of, workmen's compensation,
unemployment insurance, old age pensions or other social security
obligations; Encumbrances of carriers, warehousemen, mechanics and
materialmen, and other like Encumbrances on properties in existence
less than 90 days from the date of creation thereof in respect of
obligations not overdue; and Encumbrances on properties consisting of
easements, rights of way, zoning restrictions, restrictions on the use
of real property and defects and irregularities in the title thereto,
landlord's or lessor's Encumbrances under leases to which any Borrower
is a party, and other minor Encumbrances or encumbrances none of which
interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrowers, which defects do
not individually or in the aggregate have a materially adverse effect
on the business of any Borrower individually or of the Borrowers as a
whole or which are being actively contested in good faith by
appropriate proceedings as to which the Borrowers have established
reasonable reserves, it being understood, however, that the filing of
a tax lien which includes any Inventory or Accounts does not
constitute a "Permitted Encumbrance", even if being so contested.
(c) Encumbrances described on Exhibit 1:1-1 hereto.
"Permitted Indebtedness": The following Indebtedness:
(a) Indebtedness on account of the Revolving Credit.
(b) Indebtedness on account of the Tranche B Loan.
Page 24
(c) Indebtedness on account of the Tranche C Loan.
(d) Indebtedness arising prior to the commencement of the
Proceedings and set forth on Exhibit 6:6-8.
(e) Leasing Debt.
Permitted Investments": Marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the date
of purchase by a Borrower; demand deposits, certificates of deposit,
bankers acceptances and time deposits of United States banks having
total assets in excess of $1,000,000,000.00; securities commonly known
as "commercial paper" issued by a corporation organized and existing
under the laws of the United States of America or any state thereof
that at the time of purchase have been rated and the ratings for which
are not less than "P 1" if rated by Moody's Investors Services, Inc.,
and not less than "A 1" if rated by Standard and Poor's; investments
(not to exceed $100,000.00 at any one time) in common and preferred
stock traded on national securities exchanges; additional investments
in the capital stock of any other Borrower; and loans permitted
pursuant to Section 6:6-21(c).
"Permitted Overhead Contributions": Rent under the lease of the Canton
Warehouse.
"Permitted Protective OverAdvance" Is defined in Section 17:17-3(a).
"Person": Any natural person, and any corporation, limited liability
company, trust, partnership, joint venture, or other enterprise or
entity.
"Post Foreclosure Asset": All or any part of the Collateral, ownership of which
is acquired by the Collateral Agent or a Nominee on account of the
"bidding in" at a disposition as part of a Liquidation or by reason of
a "deed in lieu" type of transaction.
"PreBankruptcy Senior Debt": The Borrower's indebtedness under and on account of
the loan agreement styled "2001 Loan and Security Agreement", dated
February 3, 2001 amongst Fleet Retail Finance Inc., as Administrative
Agent and as Collateral Agent for a syndicate of lenders, and those
lenders, on the one hand, and the Lenders' Representative and certain
of its subsidiaries, on the other, as amended.
Page 25
"Pricing Grid": The table annexed hereto as EXHIBIT 2:2-12.
"Pricing Grid Change Date": The first day of the thirteenth month after (and
counting) the month in which this Agreement is dated.
"Proceedings": The cases, pursuant to Chapter 11 of the Bankruptcy Code,
respectively initiated by the Borrowers in the United States
Bankruptcy Court for the Southern District of New York.
"Proceeds": Includes, without limitation, "Proceeds" as defined in the UCC
and each type of property described in Section 10:10-1 hereof.
"Pro-Rata": A proportional distribution based upon a Lender's percentage
claim to the overall aggregate amount being distributed.
"Protective OverAdvances": Revolving Credit Loans which are OverLoans, but as
to which each of the following conditions is satisfied: (a) the
Revolving Credit Ceiling is not exceeded; and (b) when aggregated with
all other Protective OverAdvances, such Revolving Credit Loans do not
aggregate more than 5% of the aggregate of the Borrowing Base; and (c)
such Revolving Credit Loans are made or undertaken in the Agents'
discretion to protect and preserve the interests of the Lenders.
"Receipts": All cash, cash equivalents, money, checks, credit card slips,
receipts and other Proceeds from any sale of the Collateral.
"Receivables Advance Rate": 75%.
"Receivables Collateral": That portion of the Collateral which consists of
Accounts, Accounts Receivable, General Intangibles, Chattel Paper,
Instruments, Documents of Title, Documents, Investment Property,
Payment Intangibles, Letter-of-Credit Rights, bankers' acceptances,
and all other rights to payment.
"Receivables Reserves": Such Reserves as may be established from time to
time by the Administrative Agent in the Administrative Agent's
reasonable discretion with respect to the determination of the
collectibility in the ordinary course and of the creditworthiness of
Page 26
the Eligible Receivables. Without limiting the generality of the
foregoing, A/R Reserves shall include (but are not limited to)
reserves based on the following:
(i) The aggregate of all accounts receivables which are more
than 60 days past invoice.
(ii) The aggregate of all accounts receivable owed by any
Account Debtor 25% or more of whose accounts are
described in Subsection (i), above
(iii) The aggregate of all accounts receivable which arise out
of the sale by the Borrower of goods consigned or
delivered to the Borrower or to the Account Debtor on
sale or return terms (whether or not compliance has been
made with the applicable provisions of Article 2 of the
Uniform Commercial Code).
(iv) The aggregate of all accounts receivable which arise out
of any sale made on a basis other than upon terms usual
to the business of the Borrower.
(v) The aggregate of all accounts receivable which arise out
of any sale made on a "bill and hold," dating, or delayed
shipping basis.
(vi) The aggregate of all accounts receivable which are owed
by any Account Debtor whose principal place of business
is not within the United States, the District of
Columbia, or Canada.
(vii) The aggregate of all accounts receivable which are owed
by any Affiliate.
(viii) The aggregate of all accounts receivable to the extent
that the Account Debtor holds or is entitled to any
claim, counterclaim, set off, or chargeback as determined
by the Administrative Agent in its discretion.
(ix) The aggregate of all accounts receivable which are
evidenced by a promissory note or other documentation
evidencing modified payment terms.
(x) The aggregate of all accounts receivable which are owed
by any person employed by, or a salesperson of, the
Borrower.
"Register": Is defined in Section 18:18-2(c).
"Requirements of Law": As to any Person:
(a) Applicable Law.
(b) That Person's organizational documents.
(c) That Person's by-laws and/or other instruments which deal
with
Page 27
corporate or similar governance, as applicable.
(d) Without limiting the generality of the foregoing,
"Requirement of Law" includes all requirements of the Bankruptcy Code;
all rules adopted pursuant to the Bankruptcy Code or otherwise and
applicable to the Borrowers and/or the Proceedings; the Borrowing
Order; and all other orders or rulings formally or informally entered
in the Proceedings or in any action or proceeding which relates
thereto.
"Reserve Percentage": The decimal equivalent of that rate applicable to
the Lender under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the maximum
reserve requirement of Lender with respect to "Eurocurrency
liabilities" as defined in such regulations. The Reserve Percentage
applicable to a particular Libor Loan shall be based upon that in
effect during the subject Interest Period, with changes in the Reserve
Percentage which take effect during such Interest Period to take
effect (and to consequently change any interest rate determined with
reference to the Reserve Percentage) if and when such change is
applicable to such loans.
"Reserves": The following: Carve Out Reserve; Receivables Reserves;
Availability Reserves; and Inventory Reserves.
"Restructuring Consultant": A consultant with a nationally recognized practice
in addressing issues related to the restructuring of companies which
are debtors in cases pursuant to Chapter 11 of the Bankruptcy Code.
"Retail": As reflected in a Borrowers' stock ledger, being the current
ticket price aggregated by SKU, except that to the extent that
Eligible Inventory is not reflected in the stock ledger, "Retail"
shall be determined as tracked on such non stock ledger inventory
systems of a Borrower which are deemed adequate for such purpose by
the Administrative Agent in the exercise of the Administrative Agent's
discretion.
"Revolving Credit": Is defined in Section 2:2-1.
"Revolving Credit Ceiling": $100,000,000.00.
"Revolving Credit Commitment Fee": Is defined in Section 2:2-13.
Page 28
"Revolving Credit Debt": At any time, the lesser of (a) or (b), where
(a) is $100,000,000.00.
(b) is Indebtedness of the Borrowers on account of loans and
advances under the Revolving Credit which Indebtedness, when incurred
or when Acceleration takes place, is within amounts available to be
borrowed under the Revolving Credit or constitutes Protective
OverAdvances, as reflected on the Borrowing Base Certificate (if any)
in reliance on which the subject loan or advance was made, it being
understood that, (i) in the absence of manifest computational error by
the Borrowers' Representative, the Administrative Agent may rely on,
and each of the Tranche B Lender and the Tranche C Lender shall be
bound by, the determination of such availability as reflected on such
Borrowing Base Certificate, and (ii) the status of indebtedness as
"Revolving Credit Debt" is determined without regard to any subsequent
declination in the appraised value of the Inventory or other assets on
which such availability had been so determined, and (iii) the
occurrence of a Tranche B Availability Breach, in and of itself, shall
not affect the status of indebtedness as "Revolving Credit Debt". (For
purposes of the determination of whether a loan or advance to cover
the honoring of a L/C constitutes "Revolving Credit Debt", the date of
issuance of the subject L/C shall constitute the date on which the
subject indebtedness was incurred).
"Revolving Credit Dollar Commitment": As set forth on EXHIBIT 2:2-24,
annexed hereto (as such amounts may change in accordance with the
provisions of this Agreement).
"Revolving Credit Early Termination Fee": Is defined in Section 2:2-16.
"Revolving Credit Fees": The Unused Line Fee, Revolving Credit Commitment
Fee, Revolving Credit Early Termination Fee, fees for L/C's which are
specifically for the account of the Revolving Credit Lenders and all
other fees (such as a fee (if any) on account of the execution of an
amendment of a Loan Document) payable by any Borrower in respect of
the Revolving Credit other than any amount payable to an Agent as
reimbursement for any cost or expense incurred by that Agent on
account of the discharge of that Agent's duties under the Loan
Documents.
"Revolving Credit Lenders": Each Revolving Credit Lender to which reference is
made in the Preamble of this Agreement and any other Person who
becomes a "Revolving Credit
page 29
Lender" in accordance with the provisions of this Agreement.
"Revolving Credit Loans": Loans made under the Revolving Credit, except that
where the term "Revolving Credit Loan" is used with reference to
available interest rates applicable to the loans under the Revolving
Credit, it refers to so much of the unpaid principal balance of the
Loan Account as bears the same rate of interest for the same Interest
Period. (See Section 2:2-12(d)).
"Revolving Credit Note": Is defined in Section 2:2-10.
"Revolving Credit Obligations": The aggregate of the Borrowers' liabilities,
obligations, and indebtedness of any character on account of or in
respect to the Revolving Credit.
"Revolving Credit Percentage Commitment": As set forth on EXHIBIT 2:2-24,
annexed hereto (as such amounts may change in accordance with the
provisions of this Agreement).
"Revolving Credit Senior Collateral": All Collateral other than the Tranche C
Senior Collateral, the Leasing Senior Collateral, and Leasehold
Proceeds.
"SEC": The Securities and Exchange Commission.
"Standstill Period": A period consisting of the following number of consecutive
days, initiated by written notice by either the Tranche B Lender or
the Tranche C Lender to the Administrative Agent in accordance with
Section 15:15-2(a).
All Tranche B Action Events other than a Financial Covenant
Breach: 15.
A Tranche B Action Event which consists of a Financial Covenant
Breach: 30.
All Tranche C Action Events other than a Financial Covenant
Breach: 30.
A Tranche C Action Event which consists of a Financial Covenant
Breach: 45.
"Stated Amount": The maximum amount for which an L/C may be honored.
"Store": Each location at which a Borrower regularly offers Inventory for sale
to the public.
"SuperMajority Lenders": Lenders (other than Delinquent Revolving Credit
Lenders) holding 66-2/3% or more the Loan Commitments (other than Loan
Commitments held by
Page 30
a Delinquent Revolving Credit Lender).
"SuperMajority Revolving Credit Lenders": Revolving Credit Lenders (other than
Delinquent Revolving Credit Lenders) holding 66-2/3% or more the Loan
Commitments which support the Revolving Credit (other than such Loan
Commitments held by a Delinquent Revolving Credit Lender).
"Supporting Obligation": Has the meaning given that term in UCC 9'99 and also
refers to a Letter-of-Credit Right or secondary obligation which
supports the payment or performance of an Account, Chattel Paper, a
Document, a General Intangible, an Instrument, or Investment Property.
"SwingLine": The facility pursuant to which the SwingLine Lender may advance
Revolving Credit Loans aggregating up to the SwingLine Loan Ceiling.
"SwingLine Lender": FRFI.
"SwingLine Loan Ceiling": $15,000,000.00 (subject to increase as provided in
Section 17:17-4(j)).
"SwingLine Loans": Defined in Section 2:2-8.
"Termination Date": The earliest of (a) the Maturity Date; or (b) the
Administrative Agent's notice to the Borrowers' Representative setting
the Termination Date on account of the occurrence of any Event of
Default; or (c) that date, ninety (90) days irrevocable written notice
of which is provided by the Borrowers' Representative to the
Administrative Agent, or (d) the date of substantial consummation (as
defined in Section 1101 of the Bankruptcy Code) of a plan of
reorganization in the Proceedings that has been confirmed pursuant to
an order of the Bankruptcy Court in the Proceedings.
"Tranche B Action Event": The occurrence of any of the following: a Tranche B
Loan Availability Breach; a Minimum Excess Availability Breach; a
Tranche B Payment Breach; a Financial Covenant Breach; or a Bankruptcy
Breach.
"Tranche B Borrowing Base": The aggregate of the following:
Page 31
(a) The Appraised Inventory Liquidation Value
Plus
(b) The lesser of
(i) 3% of Appraised Inventory Liquidation Value
or
(ii) (A) Through November 30, 2001: $3 Million
(B) Commencing December 1, 2001: Zero
Plus
(c) The face amount of Eligible Credit Card Receivables multiplied by
the Credit Card Advance Rate.
Plus
(d) The face amount of Eligible Receivables (net of Receivables
Reserves) multiplied by the Receivables Advance Rate.
"Tranche B Current Pay Interest": Is defined in Section 3:3-4(b)(i)
"Tranche B Commitment Fee and Additional Fees": Described in Section
3:3-5.
"Tranche B Early Termination Fee": Defined in Section 3:3-3(c).
"Tranche B Fees": The Tranche B Commitment Fee and Additional Fees, the
Tranche B Early Termination Fee, and all other fees (such as a fee (if
any) on account of the execution of an amendment of any Loan Document)
payable by any Borrower in respect of the Tranche B other than any
amount payable to an Agent as reimbursement for any cost or expense
incurred by that Agent on account of the discharge of that Agent's
duties under the Loan Documents.
"Tranche B Interest Payment Date": Defined in Section 3:3-4(b)(i).
"Tranche B Interest Rate": Defined in Section 3:3-4(a).
"Tranche B Lender": Defined in the Preamble.
"Tranche B Loan ": Defined in Section 3:3-1.
Page 32
"Tranche B Availability Breach": The aggregate of the following is equal
to or less than zero:
(a) The Tranche B Borrowing Base
Minus
(b) The aggregate unpaid balance of the Loan Account
Minus
(c) The aggregate undrawn Stated Amount of all then outstanding
L/C's.
Minus
(d) The then unpaid principal balance of the Tranche B Loan and all
accrued but unpaid interest thereon.
Minus
(e) The aggregate of the Availability Reserves.
Minus
(f) The Carve Out Reserve
"Tranche B Fee Letter": The letter dated the date hereof and styled
"Tranche B Fee Letter" between the Borrowers and BBC, as such letter
may from time to time be amended.
"Tranche B Note": Defined in Section 3:3-2.
"Tranche B Payment Breach": The failure by the Borrowers to have made any
payment on account of the Borrowers' Liabilities to the Tranche B
Lender under the Loan Documents prior to expiry of any grace period
applicable to such payment.
"Tranche B PIK Interest": 3:3-4(b)(ii).
"Tranche C Action Event": The occurrence of any of the following: a
Tranche B Availability Breach; a Minimum Excess Availability Breach;
a Tranche C Payment Breach; a Financial Covenant Breach; or a
Bankruptcy Breach.
"Tranche C Current Pay Interest": Is defined in Section 4:4-4(b)(i).
"Tranche C Commitment Fee and Additional Assessments": Described in
Section 4:4-5.
Page 33
"Tranche C Early Exit Assessment": Defined in Section 4:4-3(c).
"Tranche C Assessment Letter": The letter dated the date hereof and styled
"Tranche C Assessment Letter" between the Borrowers and BBC, as such
letter may from time to time be amended.
"Tranche C Assessments": The Tranche C Commitment Assessment and
Additional Assessments, the Tranche C Early Exit Assessment, and all
other fees (such as a fee (if any) on account of the execution of an
amendment of any Loan Document) payable by any Borrower in respect of
the Tranche C other than any amount payable to an Agent as
reimbursement for any cost or expense incurred by that Agent on
account of the discharge of that Agent's duties under the Loan
Documents.
"Tranche C Interest Payment Date": Defined in Section 4:4-4(b)(i).
"Tranche C Interest Rate": Defined in Section 4:4-4(a).
"Tranche C Lender": Defined in the Preamble.
"Tranche C Loan ": Defined in Section 4:4-1(a).
"Tranche C Note": Defined in Section 4:4-2.
"Tranche C Payment Breach": The failure by the Borrowers to have made any
payment on account of the Borrowers' Liabilities to the Tranche C
Lender under the Loan Documents prior to expiry of any grace period
applicable to such payment.
"Tranche C PIK Interest": Defined in Section 4:4-4(b)(ii).
"Tranche C Senior Collateral": So much of the Collateral as consists of
the capital stock of JBAK Holding, Inc.
"Tranche Loan Prepayment Conditions": The following:
(a) The subject prepayment is made after June 1, 2002.
(b) Excess Availability, for each of the 45 days prior to the
making of such
Page 34
prepayment, is not less than $45 Million.
(c) Immediately after, and giving effect to such prepayment,
Excess Availability is not less than $30 Million.
(d) EBITDAR for the 12 months immediately prior to such
prepayment is not less than $40.5 Million.
(e) No more than fifteen days prior to such prepayment, the
Borrowers' Representative has provided the Administrative Agent with a
forecast, for the then next succeeding 12 month period which reflects that
Excess Availability will never be less than $20 Million.
(f) On the date on which such prepayment is made and after
giving effect to such prepayment, no Borrower is InDefault.
"Transfer": Wire transfer pursuant to the wire transfer system maintained
by the Board of Governors of the Federal Reserve Board, or as
otherwise may be agreed to from time to time by the Administrative
Agent making such Transfer and the subject Revolving Credit Lender.
Wire instructions may be changed in the same manner that Notice
Addresses may be changed (Section 19:19-1), except that no change of
the wire instructions for Transfers to any Revolving Credit Lender
shall be effective without the consent of the Administrative Agent.
"UCC": The Uniform Commercial Code as in effect from time to time in
Massachusetts.
"UCC9'99": The Uniform Commercial Code, Article 9, 1999 Official Text,
except that following the effectiveness, in Massachusetts, of the
revision of Article 9 of the Uniform Commercial Code contemplated by
UCC9'99 (with such nonuniform variations as may be adopted as part of
the enactment of that revision), each reference to "UCC9'99" shall be
to the UCC.
"Unanimous Consent": Consent of Lenders (other than Delinquent Revolving
Credit Lenders) holding 100% of the Loan Commitments (other than Loan
Commitments held by a Delinquent Revolving Credit Lender).
"Unused Line Fee": Is defined in Section 2:2-15.
"Yield Revenue": All amounts which are (or would be) payable on account of
the Tranche C
Page 35
Commitment Fee and Additional Assessments and the Tranche C Interest
Rate (as if all interest were paid in cash on the relevant Tranche C
Interest Payment Date) with respect to the Tranche C Loan.
Article 2: - The Revolving Credit:
21 -. Establishment of Revolving Credit
(a) The Revolving Credit Lenders hereby establish a revolving line of
credit (the "Revolving Credit") in the Borrowers' favor pursuant to which each
Revolving Credit Lender, subject to, and in accordance with, this Agreement,
acting through the Administrative Agent, shall make loans and advances and
otherwise provide financial accommodations to and for the account of the
Borrowers as provided herein.
(b) Loans, advances, and financial accommodations under the Revolving
Credit shall be subject to Availability. The Borrowing Base and Availability
shall be determined by the Administrative Agent by reference to Borrowing Base
Certificates furnished as provided in Section 7:7-4, below, and shall be subject
to the following:
(ii) Such determination shall take into account such Reserves
as the Administrative Agent may determine as being applicable thereto.
(iii) The Retail of Eligible Inventory will be calculated in a
manner consistent with current tracking practices, based on stock ledger
inventory at Retail and (to the extent not reflected in the stock ledger)
JBI Apparel catalogue and Work N' Gear inventory shall be determined at
Retail as tracked on such non stock ledger inventory systems of a Borrower
which are deemed adequate for such purpose by the Administrative Agent.
(a) The commitment of each Revolving Credit Lender to provide such
loans, advances, and financial accommodations is subject to Section 2:2-24.
(b) The proceeds of borrowings under the Revolving Credit shall be
used solely as follows:
(iv) Towards the retirement of the PreBankruptcy Senior Debt.
(v) For the Borrowers' working capital needs.
(vi) For Capital Expenditures, to the extent permitted by this
Agreement.
22 - Advances in Excess of Borrowing Base (OverLoans).
(a) No Revolving Credit Lender has any obligation to make any loan or
advance, or otherwise to provide any credit to or for the benefit of the
Borrowers where the result of such loan, advance, or credit is an OverLoan.
(b) The Revolving Credit Lenders' obligations, among themselves, are
Page 36
subject to Section 14:14-3(a) (which relates to each Revolving Credit Lender's
making amounts available to the Administrative Agent) and to Section 17:17-3(a)
(which relates to Protective OverAdvances).
(c) The Revolving Credit Lenders' providing of an OverLoan on any one
occasion does not affect the obligations of each Borrower hereunder (including
each Borrower's obligation to immediately repay any amount which otherwise
constitutes an OverLoan) nor obligate the Revolving Credit Lenders to do so on
any other occasion.
23 - Initial Reserves. Changes to Reserves.
(a) At the execution of the amendment and restatement of this
Agreement, the only Reserves are as reflected on the Borrowing Base Certificate,
a specimen of which is annexed hereto as EXHIBIT 7:7-4.
(b) The Administrative Agent shall provide not less than seven (7)
days prior notice to the Borrowers' Representative of the establishment of any
Reserve (other than those established at the execution of this Agreement) except
that the following may be undertaken without such prior notice:
(ii) a change to the amount of a then existing Reserve (as
distinguished from a change by which such Reserve is measured or
determined), which change reflects changed circumstances (e.g. the amount
of the Reserve for Customer Credit Liability will change based on the
aggregate of Customer Credit Liability at any one time); and
(iii) the creation of, or a change to an existing Reserve on
account of circumstances which the Administrative Agent determines as
having a material adverse change on the maintenance of loan to collateral
values.
24 - Risks of Value of Collateral. The Administrative Agent's reference to
a given asset in connection with the making of loans, credits, and advances and
the providing of financial accommodations under the Revolving Credit and/or the
monitoring of compliance with the provisions hereof shall not be deemed a
determination by the Administrative Agent or any Revolving Credit Lender
relative to the actual value of the asset in question. All risks concerning the
value of the Collateral are and remain upon the Borrowers. All Collateral
secures the prompt, punctual, and faithful performance of the Liabilities
whether or not relied upon by the Administrative Agent in connection with the
making of loans, credits, and advances and the providing of financial
accommodations under the Revolving Credit.
25 - Commitment to Make Revolving Credit Loans and Support Letters of
Credit. Subject to the provisions of this Agreement, the Lenders shall make a
loan or advance under the Revolving Credit and the Administrative Agent shall
cause L/C's to be issued for the account of the Borrowers' Representative, in
each instance if duly and timely requested by the Borrowers' Representative as
Page 37
provided herein provided that:
(a) No OverLoan is then outstanding and none will result therefrom.
(b) No Borrower is then InDefault and none will thereby become
InDefault.
26 - Revolving Credit Loan Requests.
(a) Requests for loans and advances under the Revolving Credit or for
the continuance or conversion of an interest rate applicable to a Revolving
Credit Loan may be requested by the Borrowers' Representative in such manner as
may from time to time be reasonably acceptable to the Administrative Agent.
(b) Subject to the provisions of this Agreement, the Borrowers'
Representative may request a Revolving Credit Loan and elect an interest rate
and Interest Period to be applicable to that Revolving Credit Loan by giving
notice to the Administrative Agent by no later than the following:
(ii) If such Revolving Credit Loan is to be or is to be
converted to a Base Margin Loan: By 1:00PM on the Business Day on which the
subject Revolving Credit Loan is to be made or is to be so converted. Base
Margin Loans requested by the Borrowers' Representative, other than those
resulting from the conversion of a Libor Loan, shall not be less than
$10,000.00.
(iii) If such Revolving Credit Loan is to be, or is to be
continued as, or converted to, a Libor Loan: By 1:00PM three (3) Libor
Business Days before the commencement of any new Interest Period or the end
of the then applicable Interest Period. Libor Loans and conversions to
Libor Loans shall each be not less than $1,000,000.00 and in increments of
$100,000.00 in excess of such minimum.
(iv) Any Libor Loan which matures while any Borrower is
InDefault shall be converted, at the option of the Administrative Agent, to
a Base Margin Loan notwithstanding any notice from the Borrowers'
Representative that such Loan is to be continued as a Libor Loan.
(a) Any request for a Revolving Credit Loan or for the continuance or
conversion of an interest rate applicable to a Revolving Credit Loan which is
made after the applicable deadline therefor, as set forth above, shall be deemed
to have been made at the opening of business on the then next Business Day or
Libor Business Day, as applicable. Each request for a Revolving Credit Loan or
for the conversion of a Revolving Credit Loan shall be made in such manner as
may from time to time be acceptable to the Administrative Agent.
(b) The Borrowers' Representative may request that the Administrative
Agent cause the issuance by the Issuer of L/C's for the account of a Borrower as
provided in Section 2:2-19.
(c) The Administrative Agent may rely on any request for a loan or
advance, or other financial accommodation under the Revolving Credit which the
Administrative Agent, in good faith,
Page 38
believes to have been made by a Person duly authorized to act on behalf of the
Borrowers' Representative and may decline to make any such requested loan or
advance, or issuance, or to provide any such financial accommodation pending the
Administrative Agent's being furnished with such documentation concerning that
Person's authority to act as reasonably may be satisfactory to the
Administrative Agent.
(d) A request by the Borrowers' Representative for loan or advance,
or other financial accommodation under the Revolving Credit shall be irrevocable
and shall constitute certification by each Borrower that as of the date of such
request, each of the following is true and correct:
(v) There has been no material adverse change in the
Borrowers' financial condition (taken as a whole) from the most recent
financial information furnished Administrative Agent or any Lender pursuant
to this Agreement.
(vi) Each representation, not relating to a specific date,
which is made herein or in any of the Loan Documents is then true and
correct in all material respects as of and as if made on the date of such
request (except (A) to the extent of changes resulting from transactions
contemplated or permitted by this Agreement or the other Loan Documents and
changes occurring in the ordinary course of business which singly or in the
aggregate are not materially adverse and (B) to the extent that such
representations and warranties expressly relate to a then earlier date).
(vii) Unless accompanied by the Certificate of the Borrowers'
Representative's Chief Executive Officer, President, or Chief Financial Officer
describing (in reasonable detail) the facts and circumstances thereof and the
steps (if any) being taken to remedy such condition, no Borrower is InDefault.
(a) If, at any time or from time to time, any Borrower is InDefault:
(viii) The Administrative Agent may suspend the Revolving Credit
immediately, in which event, neither the Administrative Agent nor any Revolving
Credit Lender shall be obligated, during such suspension, to make any loans or
advance, or to provide any financial accommodation hereunder or to seek the
issuance of any L/C.
(ix) The Administrative Agent may suspend the right of the
Borrowers' Representative to request any Libor Loan or to convert any Base
Margin Loan to a Libor Loan.
27 - Making of Revolving Credit Loans.
(a) A loan or advance under the Revolving Credit shall be made by the
transfer of the proceeds of such loan or advance to the Operating Account or as
otherwise instructed by the Borrowers' Representative.
(b) A loan or advance shall be deemed to have been made under the
Revolving
Page 39
Credit (and the Borrowers shall be indebted to the Administrative Agent and the
Revolving Credit Lenders for the amount thereof immediately) at the following:
(ii) The Administrative Agent's initiation of the transfer of
the proceeds of such loan or advance in accordance with the Borrowers'
Representative's instructions (if such loan or advance is of funds
requested by the Borrowers' Representative).
(iii) The charging of the amount of such loan to the Loan
Account (in all other circumstances).
(a) There shall not be any recourse to or liability of any Agent or
any Lender on account of:
(iv) Any delay, beyond the reasonable control of the Agents and
the Revolving Credit Lenders, in the making of any loan or advance
requested under the Revolving Credit.
(v) Any delay, beyond the reasonable control of the Agents and
the Revolving Credit Lenders, by any bank or other depository institution
in treating the proceeds of any such loan or advance as collected funds.
(vi) Any delay in the receipt, and/or any loss, of funds which
constitute a loan or advance under the Revolving Credit, the wire transfer
of which was properly initiated by the Administrative Agent in accordance
with wire instructions provided to the Administrative Agent by the
Borrowers' Representative.
28 - SwingLine Loans.
(a) For ease of administration, Base Margin Loans may be made by the
SwingLine Lender (in the aggregate, the "SwingLine Loans") in accordance with
the procedures set forth in this Agreement for the making of loans and advances
under the Revolving Credit. The unpaid principal balance of the SwingLine Loans
shall not at any one time be in excess of the SwingLine Loan Ceiling.
(b) The aggregate unpaid principal balance of SwingLine Loans shall
bear interest at the rate applicable to Base Margin Loans and shall be repayable
as a loan under the Revolving Credit.
(c) The Borrowers' obligation to repay SwingLine Loans shall be
evidenced by a Note in the form of EXHIBIT 2:2-8(c), annexed hereto, executed by
the Borrowers, and payable to the SwingLine Lender. Neither the original nor a
copy of that Note shall be required, however, to establish or prove any
Liability. Upon the Borrowers' Representative's being provided with an affidavit
from the Administrative Agent to the effect that said Note has been lost,
mutilated, or destroyed, the Borrowers shall execute a replacement thereof and
deliver such replacement to the SwingLine Lender.
(d) For all purposes of this Loan Agreement, the SwingLine Loans and
the Borrowers' obligations to the SwingLine Lender constitute Revolving Credit
Loans and are secured as
Page 40
"Liabilities".
(e) SwingLine Loans may be subject to periodic settlement with the
Revolving Credit Lenders as provided in this Agreement.
29 - The Loan Account.
(a) An account ("Loan Account") shall be opened on the books of the
Administrative Agent in which a record shall be kept of all loans and advances
made under the Revolving Credit.
(b) The Administrative Agent shall also keep a record (either in the
Loan Account or elsewhere, as the Administrative Agent may from time to time
elect) of all interest, fees, service charges, costs, expenses, and other debits
owed to the Administrative Agent and each Lender on account of the Liabilities
and of all credits against such amounts so owed.
(c) All credits against the Liabilities shall be conditional upon
final payment to the Administrative Agent for the account of each Lender of the
items giving rise to such credits. The amount of any item credited against the
Liabilities which is charged back against the Administrative Agent or any Lender
for any reason or is not so paid shall be a Liability and shall be added to the
Loan Account, whether or not the item so charged back or not so paid is
returned.
(d) Except as otherwise provided herein, all fees, service charges,
costs, and expenses for which any Borrower is obligated hereunder are payable on
demand. In the determination of Availability, the Administrative Agent may deem
fees, service charges, accrued interest, and other payments which will be due
and payable between the date of such determination and the first day of the then
next succeeding month as having been advanced under the Revolving Credit whether
or not such amounts are then due and payable.
(e) The Administrative Agent, without the request of the Borrowers'
Representative, may advance under the Revolving Credit any interest, fee,
service charge, or other payment to which any Agent or any Lender is entitled
from any Borrower pursuant hereto and may charge the same to the Loan Account
notwithstanding that an OverLoan may result thereby. Such action on the part of
the Administrative Agent shall not constitute a waiver of the Administrative
Agent's rights and each Borrower's obligations under Section 2:2-11(b). Any
amount which is added to the principal balance of the Loan Account as provided
in this Section 2:2-9(e) shall bear interest at the interest rate then and
thereafter applicable to Base Margin Loans.
(f) In the absence of manifest error, a statement rendered by the
Administrative Agent or any Lender to the Borrowers' Representative concerning
the Liabilities shall be considered correct and accepted by each Borrower and
shall be conclusively binding upon each Borrower unless the Borrowers'
Representative provides the Administrative Agent with written objection thereto
within thirty
Page 41
(30) days from the mailing of such statement, which written objection shall
indicate, with particularity, the reason for such objection. In the absence of
manifest error, the Loan Account and the Administrative Agent's books and
records concerning the loan arrangement contemplated herein and the Liabilities
shall be prima facie evidence and proof of the items described therein.
210 -The Revolving Credit Notes. The Borrowers' obligation to repay loans
and advances under the Revolving Credit, with interest as provided herein, shall
be evidenced by Notes (each, a "Revolving Credit Note") in the form of EXHIBIT
2:2-10, annexed hereto, executed by each Borrower, one payable to each Revolving
Credit Lender. Neither the original nor a copy of any Revolving Credit Note
shall be required, however, to establish or prove any Liability. Upon the
Borrowers' Representative's being provided with an affidavit, from the
Administrative Agent to the effect that any Revolving Credit Note has been lost,
mutilated, or destroyed, the Borrowers shall execute a replacement thereof and
deliver such replacement to the Administrative Agent.
211 -Payment of The Loan Account.
(a) The Borrowers may repay all or any portion of the principal
balance of the Loan Account from time to time until the Termination Date. Unless
the Borrowers' Representative otherwise advises the Administrative Agent, such
payments shall be applied first to Base Margin Loans and only then to Libor
Loans.
(b) The Borrowers, without notice or demand from the Administrative
Agent or any Revolving Credit Lender, shall pay the Administrative Agent that
amount, from time to time, which is necessary so that there is no OverLoan
outstanding.
(c) The Borrowers shall repay the then entire unpaid balance of the
Loan Account and all other Liabilities on the Termination Date.
(d) The Administrative Agent shall endeavor to cause the application
of payments (if any), pursuant to Sections 2:2-11(a) and 2:2-11(b) against Libor
Loans then outstanding in such manner as results in the least cost to the
Borrowers, but shall not have any affirmative obligation to do so nor liability
on account of the Administrative Agent's failure to have done so. In no event
shall action or inaction taken by the Administrative Agent excuse any Borrower
from any indemnification obligation under Section 2:2-11(e).
(e) The Borrowers shall indemnify the Administrative Agent and each
Revolving Credit Lender and hold the Administrative Agent and each Revolving
Credit Lender harmless from and against any loss, cost or expense (including
loss of anticipated profits and amounts payable by the Administrative Agent or
such Revolving Credit Lender on account of "breakage fees" (so-called)) which
Page 42
the Administrative Agent or such Revolving Credit Lender may sustain or incur
(including, without limitation, by virtue of acceleration after the occurrence
of any Event of Default) as a consequence of the following :
(ii) Default by any Borrower in payment of the principal amount
of or any interest on any Libor Loan as and when due and payable, including
any such loss or expense arising from interest or fees payable by such
Revolving Credit Lender in order to maintain its Libor Loans.
(iii) Default by any Borrower in making a borrowing or
conversion after the Borrowers' Representative has given (or is deemed to
have given) a request for a Revolving Credit Loan or a request to convert a
Revolving Credit Loan from one applicable interest rate to another.
(iv) The making of any payment on a Libor Loan or the making of
any conversion of any such Loan to a Base Margin Loan on a day that is not
the last day of the applicable Interest Period with respect thereto.
212 -Interest on Revolving Credit Loans.
(a) Each Revolving Credit Loan shall bear interest at the Base Margin
Rate unless timely notice is given (as provided in Section 2:2-6) that the
subject Revolving Credit Loan (or a portion thereof) is, or is to be converted
to, a Libor Loan.
(b) Each Revolving Credit Loan which consists of a Libor Loan shall
bear interest at the applicable Libor Rate .
(c) The Base Margin and the Libor Margin shall be determined as
follows:
(ii) Until the Pricing Grid Change Date, the Base Margin and the
Libor Margin shall be determined as provided in the Definitions of those
terms.
(iii) After the Pricing Grid Change Date the Base Margin and the
Libor Margin shall be determined in accordance with the Pricing Grid
annexed hereto as EXHIBIT 2:2-12 and shall be reset as provided therein,
except that the Libor Rate applicable to any Revolving Credit Loan shall
remain in effect with respect to that Revolving Credit Loan notwithstanding
any change in the Libor Margin which takes place subsequent to the making
of that Revolving Credit Loan, that is to say Libor contracts in effect at
the time of increases/decreases in margin will remain at the margin
originally utilized when the contract was opened for the balance of the
applicable Interest Period.
(a) Subject to, and in accordance with, the provisions of this
Agreement, the Borrowers' Representative may cause all or a part of the unpaid
principal balance of the Loan Account to bear interest at the Base Margin Rate
or the Libor Rate as specified from time to time by notice to the Administrative
Agent. For ease of reference and administration, each part of the Loan Account
which
Page 43
bears interest at the same interest and for the same Interest Period is referred
to herein as if it were a separate "Revolving Credit Loan".
(b) The Borrowers' Representative shall not select, renew, or convert
any interest rate for a Revolving Credit Loan such that, in addition to interest
at the Base Margin Rate, there are more than eight (8) Libor Rates applicable to
the Revolving Credit Loans at any one time.
(c) The Borrowers shall pay accrued and unpaid interest on each
Revolving Credit Loan in arrears as follows:
(iv) On the applicable Interest Payment Date for that Revolving
Credit Loan.
(v) On the Termination Date and on the End Date.
(vi) Following the occurrence of any Event of Default, with such
frequency as may be determined by the Administrative Agent.
(a) Following the occurrence of any Event of Default (and whether or
not the Administrative Agent exercises the Administrative Agent's rights on
account thereof), all Revolving Credit Loans shall bear interest, at the option
of the Administrative Agent or at the instruction of the SuperMajority Revolving
Credit Lenders at rate which is the aggregate of the rate applicable to Base
Margin Loans plus two Percent (2%) per annum.
213 -Revolving Credit Commitment Fee. In consideration of the commitment to
make loans and advances to the Borrowers under the Revolving Credit, and to
maintain sufficient funds available for such purpose, there has been earned by
FRFI and the Borrowers shall pay the "Revolving Credit Commitment Fee" (so
referred to herein) to the Administrative Agent in the amount and payable as
provided in the Fee Letter.
214 -Administrative Agent's Fee. In addition to any other fee or expense to
be paid by the Borrowers on account of the Revolving Credit, the Borrowers shall
pay the Administrative Agent the "Administrative Agent's Fee" at the times and
in the amounts as set forth the Agent Fee Letter.
215 -Unused Line Fee. In addition to any other fee to be paid by the
Borrowers on account of the Revolving Credit, the Borrowers shall pay the
Administrative Agent the "Unused Line Fee" (so referred to herein) of 0.375% per
annum of the average difference, during the month just ended (or relevant period
with respect to the payment being made on the Termination Date) between the
Revolving Credit Ceiling and the aggregate of the unpaid principal balance of
the Loan Account and the undrawn Stated Amount of L/C's outstanding during the
relevant period. The Unused Line Fee shall be paid in arrears, on the first day
of each month after the execution of this Agreement and on the Termination Date.
Page 44
216 -Early Termination Fee.
(a) In the event that the Termination Date occurs, for any reason
(whether by virtue of Acceleration or otherwise), prior to eighteen months after
the date of this Agreement, then except as provided in Section 2:2-16(b), the
Borrowers shall pay the Administrative Agent, for the Pro-Rata account of the
Revolving Credit Lenders, the "Revolving Credit Early Termination Fee" (so
referred to herein) consisting of one percent (1.0%) of the Revolving Credit
Ceiling in effect as of the date of this Agreement.
(b) No Revolving Credit Early Termination Fee shall be due and
payable in the event of the early termination of the Revolving Credit in
connection with a refinancing of the Revolving Credit which is agented or
provided by FRFI or any Affiliate of FRFI, it being understood that neither FRFI
nor any affiliate of FRFI has agreed to provide any such refinancing.
217 -Concerning Fees. Except as provided in Section 2:2-16(b), the
Borrower shall not be entitled to any credit, rebate or repayment of any fee
previously earned by any Agent or any Lender pursuant to this Agreement
notwithstanding any termination of this Agreement or suspension or termination
of the Administrative Agent's and any Lender's respective obligation to make
loans and advances hereunder.
218 -Agents' and Lenders' Discretion.
(a) Each reference in the Loan Documents to the exercise of
discretion, reasonable discretion, or the like by any Agent or any Lender shall
be to such Person's reasonable exercise of its judgment, in good faith (which
shall be presumed), based upon such Person's consideration of any such factors
as that Agent or that Lender, taking into account information of which that
Person then has actual knowledge, reasonably believes:
(ii) Will or reasonably could be expected to affect, in more
than a de minimis manner, the value of the Collateral, the enforceability
of the Collateral Agent's Collateral Interests therein, or the amount which
the Collateral Agent would likely realize therefrom (taking into account
delays which may possibly be encountered in the Collateral Agent's
realizing upon the Collateral and likely Costs of Collection) .
(iii) Indicates that any report or financial information
delivered to any Agent or any Lender by or on behalf of any Borrower is
incomplete, inaccurate, or misleading in any material manner or was not
prepared in accordance with the requirements of this Agreement.
(iv) That any Borrower is InDefault.
(a) In the exercise of such judgement, each Agent or each Lender
reasonably also may take into account any of the following factors:
(v) Those included in, or tested by, the definitions of
"Eligible Accounts," "Eligible
Page 45
Inventory" and "Cost".
(vi) Material changes in or to the mix of the Borrowers'
Inventory.
(vii) Seasonality with respect to the Borrowers' Inventory and
patterns of retail sales.
(a) The burden of establishing the failure of any Agent or any
Revolving Credit Lender to have acted in a reasonable manner in such Person's
exercise of such discretion shall be the Borrowers'.
219 -Procedures For Issuance of L/C's.
(a) The Borrowers' Representative may request that the Administrative
Agent cause the issuance by the Issuer of L/C's for the account of a Borrower.
Each such request shall be in such manner as may from time to time be reasonably
acceptable to the Administrative Agent.
(b) The Administrative Agent will endeavor to cause the issuance of
any L/C so requested by the Borrowers' Representative, provided that , at the
time that the request is made, the Revolving Credit has not been suspended as
provided in Section 2:2-6(g) and if so issued:
(ii) The aggregate Stated Amount of all L/C's then outstanding,
does not exceed $15,000,000.00 .
(iii) The expiry of the L/C is not later than the following:
(B) Standby's: One (1) year from initial issuance.
(C) Documentary's: One Hundred Eighty (180) days from
issuance.
(i) If the expiry of an L/C is later than the Maturity Date,
it is 103% cash collateralized at its issuance.
(ii) An OverLoan will not result from the issuance of the subject
L/C.
(a) Unless otherwise agreed between the Borrowers' Representative and
the Administrative Agent, the Issuer of all L/C's shall be Fleet National Bank
and any successor to Fleet National Bank.
(b) Each Borrower shall execute such documentation to apply for and
support the issuance of an L/C as may be required by the Issuer.
(c) There shall not be any recourse to, nor liability of, any Agent
or any Revolving Credit Lender on account of
(iii) Any delay or refusal by an Issuer to issue an L/C;
(iv) Any action or inaction of an Issuer on account of or in
respect to, any L/C except where there is a specific finding in a judicial
proceeding (in which the Administrative Agent has had an opportunity to be
heard), from which finding no further appeal is available, that the subject
action or omission to act had been in actual bad faith or grossly negligent
or constituted
Page 46
willful misconduct.
(a) The Borrowers shall reimburse the Issuer for the amount of any
honoring of a drawing under an L/C on the same day on which such honoring takes
place. The Administrative Agent, without the request of any Borrower, may
advance under the Revolving Credit (and charge to the Loan Account) the amount
of any honoring of any L/C and other amount for which any Borrower, the Issuer,
or the Revolving Credit Lenders become obligated on account of, or in respect
to, any L/C. Such advance shall be made whether or not any Borrower is InDefault
or such advance would result in an OverLoan. Such action shall not constitute a
waiver of the Administrative Agent's rights under Section 2:2-11(b) hereof.
220 -Fees For L/C's.
(a) The Borrowers shall pay to the Administrative Agent the following
per annum fees on account of L/C's, the issuance of which had been procured by
the Administrative Agent monthly in arrears, and on the Termination Date and on
the End Date based on the weighted average Stated Amount of L/C's outstanding
during the period in respect of which such fee is being paid except that,
following the occurrence of any Event of Default (and whether or not the
Administrative Agent exercises the Administrative Agent's rights on account
thereof), such fees, at the option of the Administrative Agent or the direction
of the SuperMajority Revolving Credit Lenders shall be the respective aggregate
of those forth below plus 2.00% per annum.
(i) Documentaries: The Libor Margin in effect on the date on
which the relevant L/C was issued minus 50 basis points.
(ii) Standbys: The Libor Margin in effect on the date on which the
relevant L/C was issued.
(b) In addition to the fee to be paid as provided in Subsection 2:2-
20(a), above, the Borrowers shall pay to the Administrative Agent (or to the
Issuer, if so requested by Administrative Agent), on demand, all customary
issuance, processing, negotiation, amendment, and administrative fees and other
amounts charged by the Issuer on account of, or in respect to, any L/C.
(c) If any change in Applicable Law shall either:
(ii) impose, modify or deem applicable any reserve, special
deposit or similar requirements against letters of credit heretofore or
hereafter issued by any Issuer or with respect to which any Revolving
Credit Lender or any Issuer has an obligation to lend to fund drawings
under any L/C; or
(iii) impose on any Issuer any other condition or requirements
relating to any such letters of credit;
Page 47
and the result of any event referred to in Section 2:2-20(c)(i) or 2:2-
20(c)(ii), above, shall be to increase the cost to any Revolving Credit Lender
or to any Issuer of issuing or maintaining any L/C (which increase in cost shall
be the result of such Issuer's reasonable allocation among that Revolving Credit
Lender's or Issuer's letter of credit customers of the aggregate of such cost
increases resulting from such events), then, upon demand by the Administrative
Agent and delivery by the Administrative Agent to the Borrowers' Representative
of a certificate of an officer of the subject Revolving Credit Lender or the
subject Issuer describing such change in law, executive order, regulation,
directive, or interpretation thereof, its effect on such Revolving Credit Lender
or such Issuer, and the basis for determining such increased costs and their
allocation, the Borrowers shall immediately pay to the Administrative Agent,
from time to time as specified by the Administrative Agent, such amounts as
shall be sufficient to compensate the subject Revolving Credit Lender or the
subject Issuer for such increased cost. In the absence of manifest error, any
Revolving Credit Lender's or any Issuer's determination of costs incurred under
Section 2:2-20(c)(i) or 2:2-20(c)(ii), above, and the allocation, if any, of
such costs among the Borrowers and other letter of credit customers of such
Revolving Credit Lender or such Issuer, if done in good faith and made on an
equitable basis and in accordance with such officer's certificate, shall be
conclusive and binding on the Borrowers.
221 -Concerning L/C's.
(a) None of the Issuer, the Issuer's correspondents, any Lender, any
Agent, or any advising, negotiating, or paying bank with respect to any L/C
shall be responsible in any way for:
(ii) The performance by any beneficiary under any L/C of that
beneficiary's obligations to any Borrower.
(iii) The form, sufficiency, correctness, genuineness, authority
of any person signing; falsification; or the legal effect of; any documents
called for under any L/C if (with respect to the foregoing) such documents
on their face appear to be in order.
(a) The Issuer may honor, as complying with the terms of any L/C and
of any drawing thereunder, any drafts or other documents otherwise in order, but
signed or issued by an administrator, executor, conservator, trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
liquidator, receiver, or other legal representative of the party authorized
under such L/C to draw or issue such drafts or other documents.
(b) The Borrower may instruct the Issuer concerning the designation
of any advising bank, paying bank, and negotiating bank, it being understood
that the Issuer shall honor such designation to the extent then practicable.
(c) All directions, correspondence, and funds transfers relating to
any L/C are at the risk of the Borrowers. The Issuer shall have discharged the
Issuer's obligations under any L/C which, or
Page 48
the drawing under which, includes payment instructions, by the initiation of the
method of payment called for in, and in accordance with, such instructions (or
by any other commercially reasonable and comparable method). None of the Agent,
the Lenders, or the Issuer shall have any responsibility for any inaccuracy,
interruption, error, or delay in transmission or delivery by post, telegraph or
cable, or for any inaccuracy of translation.
(d) Each Agent's, each Lender's and the Issuer's rights, powers,
privileges and immunities specified in or arising under this Agreement are in
addition to any heretofore or at any time hereafter otherwise created or
arising, whether by statute or rule of law or contract.
(e) Except to the extent otherwise expressly provided hereunder or
agreed to in writing by the Issuer and the Borrowers' Representative,
documentary L/C's will be governed by the Uniform Customs and Practice for
Documentary Credits, International Chamber of Commerce, Publication No. 500, and
standby L/C's will be governed by International Standby Practices ISP98 (adopted
by the International Chamber of Commerce on April 6, 1998) and any respective
subsequent revisions thereof.
(f) The obligations of the Borrowers under this Agreement with
respect to L/C's are absolute, unconditional, and irrevocable and shall be
performed strictly in accordance with the terms hereof under all circumstances,
whatsoever including, without limitation, the following:
(iv) Any lack of validity or enforceability or restriction,
restraint, or stay in the enforcement of this Agreement, any L/C, or any
other agreement or instrument relating thereto.
(v) Any Borrower's consent to any amendment or waiver of, or
consent to the departure from, any L/C.
(vi) The existence of any claim, set-off, defense, or other right
which any Borrower may have at any time against the beneficiary of any L/C.
(vii)Any good faith honoring of a drawing under any L/C, which
drawing possibly could have been dishonored based upon a strict
construction of the terms of the L/C.
(a) Each Issuer shall be deemed to have agreed as follows:
(viii) That any action taken or omitted by that Issuer, that
Issuer's correspondents, or any advising, negotiating or paying bank with
respect to any L/C and the related drafts and documents, shall be done in
good faith and in compliance with foreign or domestic laws.
(ix) That the Borrowers shall not be required to indemnify the
Issuer, the Issuer's correspondents, or any advising, negotiating or paying
bank with respect to any L/C for any claims, damages, losses, liabilities,
costs or expenses to the extent, caused by (x) the willful misconduct or
gross negligence of the Issuer, the Issuer's correspondents, or any
advising, negotiating or paying bank with respect to any L/C in determining
whether a request presented
Page 48
under any Letter of Credit complied with the terms of such Letter of Credit
or (y) the Issuer's failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit.
222 -Changed Circumstances.
(a) The Administrative Agent may advise the Borrowers' Representative
(in reasonable detail as to the facts and circumstances thereof) that the
Administrative Agent has made the good faith determination (which determination,
in the absence of manifest error, shall be final and conclusive) of any of the
following:
(ii) Adequate and fair means do not exist for ascertaining the
rate for Libor Loans.
(iii) The continuation of or conversion of any Revolving Credit
Loan to a Libor Loan has been made impracticable or unlawful by the
occurrence of a contingency that materially and adversely affects the
applicable market or the compliance by the Administrative Agent or any
Revolving Credit Lender in good faith with any Applicable Law.
(iv) The indices on which the interest rates for Libor Loans are
based shall no longer represent the effective cost to the Administrative
Agent or any Revolving Credit Lender for U.S. dollar deposits in the
interbank market for deposits in which it regularly participates.
(a) In the event that the Administrative Agent advises the Borrowers'
Representative of an occurrence described in Section 2:2-22(a), then, until the
Administrative Agent notifies the Borrowers' Representative that the
circumstances giving rise to such notice no longer apply:
(v) The obligation of the Agent or each Revolving Credit Lender
to make loans of the type affected by such changed circumstances or to
permit the Borrowers' Representative to select the affected interest rate
as otherwise applicable to any Revolving Credit Loans shall be suspended.
(vi) Any notice which the Borrowers' Representative had given the
Administrative Agent with respect to any Libor Loan, the time for action
with respect to which has not occurred prior to the Administrative Agent's
having given notice pursuant to Section 2:2-22(a), shall be deemed at the
option of the Administrative Agent to not having been given.
223 -Designation of Borrowers' Representative as Borrowers' Agent.
(a) Each Borrower hereby irrevocably designates and appoints the
Borrowers' Representative as that Borrower's agent to obtain loans and advances
under the Revolving Credit, Tranche B and Tranche C, the proceeds of which shall
be available to each Borrower for those uses as those set forth in this
Agreement. As the disclosed principal for its agent, each Borrower shall be
Page 50
obligated to the Agent and each Lender on account of loans and advances so made
as if made directly by the Lenders to that Borrower, notwithstanding the manner
by which such loans and advances are recorded on the books and records of the
Borrowers' Representative and of any Borrower.
(b) Each Borrower recognizes that credit available to it under the
Revolving Credit, the Tranche B Loan and the Tranche C Loan is in excess of and
on better terms than it otherwise could obtain on and for its own account and
that one of the reasons therefor is its joining in the credit facility
contemplated herein with all other Borrowers. Consequently, each Borrower hereby
assumes and agrees to discharge all Liabilities of each of the other Borrowers
as if the Borrower which is so assuming and agreeing were each of the other
Borrowers.
(c) The Borrowers' Representative shall act as a conduit for each
Borrower (including itself, as a "Borrower") on whose behalf the Borrowers'
Representative has requested a Revolving Credit Loan, Tranche B Loan or Tranche
C Loan.
(d) The proceeds of each loan and advance provided under the
Revolving Credit which is requested by the Borrowers' Representative shall be
deposited into the Operating Account or as otherwise indicated by the Borrowers'
Representative. The Borrowers' Representative shall cause the transfer of the
proceeds thereof to the (those) Borrower(s) on whose behalf such loan and
advance was obtained. Neither the Agent nor any Revolving Credit Lender shall
have any obligation to see to the application of such proceeds.
224 -Lenders' Commitments
(a) Subject to Section 18:18-1 (which provides for assignments and
assumptions of commitments), each Revolving Credit Lender's "Revolving Credit
Percentage Commitment", and "Revolving Credit Dollar Commitment" (respectively
so referred to herein) is set forth on EXHIBIT 2:2-24, annexed hereto.
(b) The obligations of each Revolving Credit Lender are several and
not joint. No Revolving Credit Lender shall have any obligation to make any loan
or advance under the Revolving Credit in excess of either of the following:
(ii) That Revolving Credit Lender's Revolving Credit Percentage
Commitment of the subject loan or advance or of Availability.
(iii) that Revolving Credit Lender's Revolving Credit Dollar
Commitment.
(a) No Revolving Credit Lender shall have any liability to the
Borrowers on account of the failure of any other Revolving Credit Lender to
provide any loan or advance under the Revolving Credit nor any obligation to
make up any shortfall which may be created by such failure.
(b) The Revolving Credit Dollar Commitments, Revolving Credit
Commitment Percentages, and identities of the Revolving Credit Lenders (but not
the Revolving Credit Ceiling) may
Page 51
be changed, from time to time by the reallocation or assignment of Revolving
Credit Dollar Commitments and Revolving Credit Commitment Percentages amongst
the Revolving Credit Lenders or with other Persons who determine to become
"Revolving Credit Lenders".
(c) Upon written notice given the Borrowers' Representative from time to
time by the Administrative Agent, of any assignment or allocation referenced in
Section 2:2-24(d):
(iv) Each Borrower shall execute one or more replacement
Revolving Credit Notes to reflect such changed Revolving Credit Dollar
Commitments, Revolving Credit Commitment Percentages, and identities and
shall deliver such replacement Revolving Credit Notes to the Administrative
Agent (which promptly thereafter shall deliver to the Borrowers'
Representative the Revolving Credit Notes so replaced) provided however, in
the event that a Revolving Credit Note is to be exchanged following its
acceleration or the entry of an order for relief under the Bankruptcy Code
with respect to any Borrower, the Administrative Agent, in lieu of causing
the Borrowers to execute one or more new Revolving Credit Notes, may issue
the Administrative Agent's Certificate confirming the resulting Revolving
Credit Dollar Commitments and Revolving Credit Percentage Commitments.
(v) Such change shall be effective from the effective date
specified in such written notice and any Person added as a Revolving Credit
Lender shall have all rights, privileges, and obligations of a Revolving
Credit Lender hereunder thereafter as if such Person had been a signatory
to this Agreement and any other Loan Document to which a Revolving Credit
Lender is a signatory and any Person removed as a Revolving Credit Lender
shall be relieved of any obligations or responsibilities of a Revolving
Credit Lender hereunder thereafter.
Article 3: - The Tranche B Loan :
31 - The Tranche B Loan.
(a) Subject to satisfaction of the Conditions Precedent (Article 5),
the Borrower shall borrow from the Tranche B Lender and the Tranche B Lender
shall lend to the Borrower the sum of $20,000,000.00 (the "Tranche B Loan "),
repayable with interest as provided herein.
(b) The proceeds of the Tranche B Loan shall be used solely towards
the retirement of the PreBankruptcy Senior Debt.
32 - The Tranche B Note. The obligation to repay the Tranche B Loan, with
interest as provided herein, shall be evidenced by a Note (the "Tranche B Note")
in the form of EXHIBIT 3:3-2, annexed hereto, executed by the Borrowers. Neither
the original nor a copy of the Tranche B Note shall be required, however, to
establish or prove any Liability. Upon the Borrowers' Representative's being
provided with an affidavit, from the Administrative Agent to the effect that
said Note has been lost,
Page 52
mutilated, or destroyed, the Borrowers shall execute a replacement thereof and
deliver such replacement to the Tranche B Lender.
33 -Payment of Principal of the Tranche B Loan.
(a) The Borrowers may not prepay all or any portion of the
principal balance of the Tranche B Loan prior to the Maturity Date or
Acceleration unless each of the Tranche Loan Prepayment Conditions is satisfied
in connection with such prepayment.
(b) In the event that all or any portion of the principal
balance of the Tranche B Loan is prepaid (whether following satisfaction of the
Tranche Loan Prepayment Conditions, by virtue of Acceleration, or otherwise)
then, except as otherwise provided in Section 3:3-3(c), the Borrowers shall pay
the Administrative Agent contemporaneous with such prepayment, for the account
of the Tranche B Lender, the "Tranche B Early Termination Fee" (so referred to
herein) equal to the following percentage of the amount of the Tranche B Loan
which is paid prior to the Maturity Date for any reason (whether following
satisfaction of the Tranche Loan Prepayment Conditions, by virtue of
Acceleration, or otherwise):
(ii) 2%: Prepayment on or before the first anniversary
of the date of this Agreement.
(iii) 1% Prepayment after the first anniversary of the
date of this Agreement.
(a) No Tranche B Early Termination Fee shall be due and
payable in the event of a prepayment in connection with a refinancing of the
Tranche B Loan which is agented or provided by BBC, it being understood that BBC
has not agreed to provide or to entertain a request to provide any such
refinancing.
(b) The Borrowers shall repay the then entire unpaid balance
of the Tranche B Loan and all accrued and unpaid interest thereon on the
Termination Date.
34 -Interest On The Tranche B Loan.
(a) Subject to Section 3:3-4(c), the unpaid principal
balance of the Tranche B Loan shall bear interest, until repaid fixed at 17.5%
per annum (the "Tranche B Interest Rate").
(b) Interest on the Tranche B Loan, at the Tranche B
Interest Rate, shall be payable as follows:
(ii) Accrued interest on the unpaid principal balance
of the Tranche B Loan equal to 15.5% per annum ("Tranche B Current Pay
Interest") shall be payable monthly in arrears, on the first Business
Day of each month (the "Tranche B Interest Payment Date"), and on the
Maturity Date.
(iii) Subject to Section 3:3-4(b)(ii)(C), accrued
interest on the unpaid principal
Page 53
balance of the Tranche B Loan in excess of Tranche B Current Pay Interest
(which excess is referred to herein as "Tranche B PIK Interest") shall be
payable as follows:
(B) The Borrowers shall have the option, exercisable
by irrevocable written notice by the Borrowers' Representative to the
Administrative Agent made at least three (3) Business Days prior to
relevant Tranche B Interest Payment Date, to pay all or any part of
such Tranche B PIK Interest by adding the same to the principal
balance of the Tranche B Note on that Tranche B Interest Payment Date.
(C) Tranche B PIK Interest as to which the option
provided in Section 3:3-4(b)(ii)(A) is not exercised shall be paid on
the then next Tranche B Interest Payment Date.
(D) At the direction of the Tranche B Lender,
following the occurrence of any Event of Default (and whether or not
Acceleration has taken place), the option provided in Section 3:3-
4(b)(ii)(A) shall terminate and accrued interest to which such option
otherwise could have been exercised shall be paid on each Tranche B
Interest Payment Date.
(a) Following the occurrence of any Event of Default (and whether or
not Acceleration has taken place), at the direction of the Tranche B Lender,
interest shall accrue and shall be payable on the unpaid principal balance of
the Tranche B Loan at the aggregate of the Tranche B Interest Rate then in
effect plus three percent (3%) per annum.
35 -Tranche B Commitment Fee and Additional Assessments. As compensation
for the Tranche B Lender's having committed to enter into this Agreement, the
Tranche B Lender has earned the Tranche B Commitment Fee and Additional
Assessments in the amount and payable as provided in the Tranche B Fee Letter.
36 -Payments On Account of Tranche B Loan. The Borrowers authorize the
Administrative Agent to determine and to pay over directly to the Tranche B
Lender any and all amounts due and payable from time to time under or on account
of the Tranche B Loan as advances under the Revolving Credit it being
understood, however, that the authorization of the Administrative Agent provided
in this Section 3:3-6 shall not excuse the Borrowers from fulfilling their
obligations to the Tranche B Lender on account of the Tranche B Loan nor place
any obligation on the Administrative Agent to do so. The Administrative Agent
shall provide prompt advice to the Borrowers' Representative of any amount which
is so paid over by the Administrative Agent to the Tranche B Lender pursuant to
this Section 3:3-6. The Tranche B Lender shall refund to the Administrative
Agent any overpayment which may have been made pursuant to this Section 3:3-6.
The Borrower shall not be entitled to any credit, rebate or
Page 54
repayment of any fee previously earned by the Tranche B Lender pursuant to this
Agreement notwithstanding any termination of this Agreement or suspension or
termination of the Administrative Agent's and any Lender's respective obligation
to make loans and advances hereunder.
Article 4: - The Tranche C Loan:
41 -The Tranche C Loan.
(a) Subject to satisfaction of the Conditions Precedent
(Article ), the Borrower shall borrow from the Tranche C Lender and the Tranche
C Lender shall lend to the Borrower the sum of $15,000,000.00 (the "Tranche C
Loan "), repayable with interest as provided herein.
(b) The proceeds of the Tranche C Loan shall be used solely as
follows:
(ii) Towards the retirement of the PreBankruptcy Senior
Debt.
(iii) For the Borrowers' working capital needs.
42 -The Tranche C Note. The obligation to repay the Tranche C Loan,
with interest as provided herein, shall be evidenced by a Note (the "Tranche C
Note") in the form of EXHIBIT 4:4-2, annexed hereto, executed by the Borrowers.
Neither the original nor a copy of the Tranche C Note shall be required,
however, to establish or prove any Liability. Upon the Borrowers'
Representative's being provided with an affidavit, from the Administrative Agent
to the effect that said Note has been lost, mutilated, or destroyed, the
Borrowers shall execute a replacement thereof and deliver such replacement to
the Tranche C Lender.
43 -Payment of Principal of the Tranche C Loan.
(a) The Borrowers may not prepay all or any portion of the
principal balance of the Tranche C Loan prior to the Maturity Date or
Acceleration unless each of the Tranche Loan Prepayment Conditions is satisfied
in connection with such prepayment. Notwithstanding the foregoing, in the event
of the sale, or other disposition of the real estate owned by JBAK Canton
Realty, Inc., the net proceeds therefrom shall, at the option of the Tranche C
Lender, either (x) be applied in reduction of the Tranche C Loan (together with
payment of the applicable Tranche C Early Exit Assessment) or (y) be applied in
reduction of the Revolving Credit Loans, in which case the Minimum Excess
Availability financial performance covenant which is imposed by Section 7:7-11
shall be increase, in each month, by the amount of such net proceeds so applied
to the Revolving Credit Loans.
(b) If any portion of the Tranche C Loan is paid prior to the
Maturity Date for any reason ( whether following satisfaction of the Tranche
Loan Prepayment Conditions, Acceleration, or otherwise) the Borrowers shall pay
the Administrative Agent, contemporaneous with such prepayment, for the account
of the Tranche C Lender, the "Tranche C Early Exit Assessment" (so referred to
herein)
Page 55
equal to the greater of 4:4-3(b)(i) or 4:4-3(b)(ii).
(ii) The result of
(B) The aggregate Yield Revenue accruing (or which would
have accrued) on the Tranche C Loan during the first twelve (12)
months after the date such Tranche C Loan is made
Minus
(C) The aggregate Yield Revenue actually received by the
Tranche C Lender prior to the date of prepayment.
(i) One percent (1%) of the principal balance of the
Tranche C Loan which is so paid prior to the Maturity Date
(a) The Borrowers shall repay the then entire unpaid balance of the
Tranche C Loan and all accrued and unpaid interest thereon on the Termination
Date.
44 -Interest On The Tranche C Loan.
(a) Subject to Section 4:4-4(c), the unpaid principal balance of the
Tranche C Loan shall bear interest, until repaid, fixed at twenty-two percent
(22%) per annum (the "Tranche C Interest Rate").
(b) Interest on the Tranche C , at the Tranche C Interest Rate, shall
be payable as follows:
(ii) Accrued interest on the unpaid principal balance of the
Tranche C equal to nineteen percent (19%) per annum ("Tranche C Current Pay
Interest") shall be payable monthly in arrears, on the first Business Day
of each month (the "Tranche C Interest Payment Date"), and on the Maturity
Date.
(iii) Subject to Section 4:4-4(b)(ii)(C), accrued interest on
the unpaid principal balance of the Tranche C Loan in excess of Tranche C
Current Pay Interest (which excess is referred to herein as "Tranche C PIK
Interest") shall be payable as follows:
(B) The Borrowers shall have the option, exercisable by
irrevocable written notice by the Borrowers' Representative to the
Administrative Agent made at least three (3) Business Days prior to
relevant Tranche C Interest Payment Date, to pay all or any part of
such Tranche C PIK Interest by adding the same to the principal
balance of the Tranche C Note on that Tranche C Interest Payment Date.
(C) Tranche C PIK Interest as to which the option
provided in Section 4:4-4(b)(ii)(A) is not exercised shall be paid on
the then next Tranche C Interest Payment Date.
(D) At the direction of the Tranche C Lender, following
the
Page 56
occurrence of any Event of Default (and whether or not Acceleration
has taken place), the option provided in Section 4:4-4(b)(ii)(A) shall
terminate and accrued interest to which such option otherwise could
have been exercised shall be paid on each Tranche C Interest Payment
Date.
(a) Following the occurrence of any Event of Default (and whether or
not Acceleration has taken place), at the direction of the Tranche C Lender,
interest shall accrue and shall be payable on the unpaid principal balance of
the Tranche C Loan at the aggregate of the Tranche C Interest Rate then in
effect plus three percent (3%) per annum.
45 -Tranche C Commitment Fee and Additional Assessments. As compensation
for the Tranche C Lender's having committed to enter into this Agreement, the
Tranche C Lender has earned the Tranche C Commitment Fee and Additional
Assessments in the amount and payable as provided in the Tranche C Assessment
Letter.
46 -Payments On Account of Tranche C. The Borrowers authorize the
Administrative Agent to determine and to pay over directly to the Tranche C
Lender any and all amounts due and payable from time to time under or on account
of the Tranche C Loan as advances under the Revolving Credit it being
understood, however, that the authorization of the Administrative Agent provided
in this Section 3:3-6 shall not excuse the Borrowers from fulfilling their
obligations to the Tranche C Lender on account of the Tranche C Loan nor place
any obligation on the Administrative Agent to do so. The Administrative Agent
shall provide prompt advice to the Borrowers' Representative of any amount which
is so paid over by the Administrative Agent to the Tranche C Lender pursuant to
this Section 4:4-6. The Tranche C Lender shall refund to the Administrative
Agent any overpayment which may have been paid pursuant to this Section 4:4-6.
The Borrower shall not be entitled to any credit, rebate or repayment of any fee
or assessment previously earned by the Tranche C Lender pursuant to this
Agreement notwithstanding any termination of this Agreement or suspension or
termination of the Administrative Agent's and any Lender's respective obligation
to make loans and advances hereunder.
Article 5: - Conditions Precedent:
As a condition to the effectiveness of this Agreement, the establishment of
the Revolving Credit, and the making of the first loan under the Revolving
Credit, and the making of the Tranche B Loan and the Tranche C Loan, each of the
documents respectively described in Sections 5:5-1 through and including 5:5-4,
(each in form and substance satisfactory to the Administrative Agent) shall have
been delivered to the Administrative Agent, and the conditions respectively
described in Sections 5:5-6 through and including 5:5-12, shall have been
satisfied:
Page 57
51 -Corporate Due Diligence.
(a) Certificates of corporate good standing for each Borrower,
respectively issued by the Secretary of State for the state in which that
Borrower is incorporated.
(b) Certificates of each Borrower's Clerk of the due adoption,
continued effectiveness, and setting forth the texts of, each corporate
resolution adopted in connection with the establishment of the loan arrangement
contemplated by the Loan Documents and attesting to the true signatures of each
Person authorized as a signatory to any of the Loan Documents.
52 -. Opinion. An opinion of counsel to the Borrowers in form and substance
satisfactory to the Administrative Agent.
53 -Additional Documents. Such additional instruments and documents as the
Administrative Agent or its counsel reasonably may require or request, including
the following:
(a) The furnishing to the Administrative Agent by the Borrowers'
Representative of an executed counterpart of engagement letter by the Borrowers'
Representative with a Restructuring Consultant, reasonably satisfactory to the
Administrative Agent, which retention letter is in form and substance reasonably
satisfactory to the Administrative Agent.
(b) The delivery to the Administrative Agent by the Borrowers'
Representative of a management prepared Consolidated annual financial statement
for the Borrowers' Fiscal 2001.
(c) The delivery to the Administrative Agent of written instructions
to apply the proceeds of the Tranche B Loan, the Tranche C Loan and the first
funding under the Revolving Credit to the retirement in full of the
PreBankruptcy Senior Debt.
54 -Officers' Certificates. Certificates executed by (a) either the
President or the Chief Executive Officer and (b) the Chief Financial Officer of
the Borrowers' Representative and stating that the representations and
warranties made by the Borrowers to the Agents and the Lenders in the Loan
Documents are true and complete in all material respects as of the date of such
Certificate, and that no event has occurred which is or which, solely with the
giving of notice or passage of time (or both) would be an Event of Default.
55 -Borrowing Order. There shall have been entered in the Proceedings the
Interim Borrowing Order, which order shall not have been stayed, modified,
appealed, reversed, or otherwise affected.
Page 58
56 -Representations and Warranties. Each of the representations made by or
on behalf of each Borrower in this Agreement or in any of the other Loan
Documents or in any other report, statement, document, or paper provided by or
on behalf of each Borrower shall be true and complete in all material respects
as of the date as of which such representation or warranty was made.
57 -Minimum Day One Excess Availability. After giving effect to the first
funding under the Revolving Credit, the Tranche B Loan and the Tranche C Loan,
Excess Availability shall not be less than $14 Million.
58 -All Fees and Expenses Paid. All fees due at or immediately after the
first funding under the Revolving Credit, the Tranche B Loan and the Tranche C
Loan and all costs and expenses incurred by the Administrative Agent, the
Collateral Agent, the Tranche B Lender and the Tranche C Lender in connection
with the establishment of the credit facility contemplated hereby (including the
reasonable fees and expenses of counsel to the Administrative Agent, the
Collateral Agent, the Tranche B Lender and the Tranche C Lender) shall have been
paid in full.
59 -Adequate Protection for Leasing. The Agents shall be satisfied with the
terms and nature of any adequate protection granted by the Borrowers or ordered
by the Bankruptcy Court in the Proceedings in favor of Leasing.
510 -Intentionally Omitted.
511 -No Borrower InDefault. No Borrower is InDefault.
512 -No Adverse Change. No event shall have occurred or failed to occur,
which occurrence or failure is or could have a materially adverse effect upon
any Borrower's financial condition (other than by virtue of the commencement of
the Proceedings) when compared with such financial condition at the close of the
Borrowers' Fiscal 2001, as supplemented by the Business Plan through the date of
the commencement of the Proceedings.
513 -Benefit of Conditions Precedent. The conditions set forth in this
Article 5 are for the sole benefit of each Agent and each Lender and may be
waived by the Administrative Agent, the Tranche B Lender and the Tranche C
Lender, in whole or in part without prejudice to any Agent or any Lender.
Page 59
No document shall be deemed delivered to the Administrative Agent, the
Collateral Agent, the Tranche B Lender, the Tranche C Lender or any Revolving
Credit Lender until received and accepted by the Administrative Agent at its
offices in Boston, Massachusetts. Under no circumstances shall this Agreement
take effect until executed and accepted by the Administrative Agent at said
offices.
Article 6: - General Representations, Covenants and Warranties:
To induce each Lender to establish the credit facilities contemplated
herein and to induce the Revolving Credit Lenders to provide loans and advances
under the Revolving Credit (each of which loans shall be deemed to have been
made in reliance thereupon) and to induce the Tranche B Lender to make the
Tranche B Loan and the Tranche C Lender to make the Tranche C Loan, respectively
as contemplated hereby, the Borrowers, in addition to all other representations,
warranties, and covenants made by any Borrower in any other Loan Document, make
those representations, warranties, and covenants included in this Agreement.
61 -Payment and Performance of Liabilities. The Borrowers shall pay each
payment Liability when due (or when demanded, if payable on demand) and shall
promptly, punctually, and faithfully perform each other Liability.
62 -Due Organization. Authorization. No Conflicts.
(a) Each Borrower presently is and hereafter shall remain in
good standing as a corporation under the laws of the State in which it is
organized, as set forth in the Preamble to this Agreement and is and shall
hereafter remain duly qualified and in good standing in every other State in
which, by reason of the nature or location of each Borrower's assets or
operation of each Borrower's business, such qualification may be necessary,
except where the failure to so qualify would not have a material adverse effect
on the business or assets of that Borrowers.
(b) Each Borrower's respective organizational identification
number assigned to it by the State of its incorporation and its respective
federal employer identification number is stated on EXHIBIT 6:6-2, annexed
hereto.
(c) No Borrower shall change its State of organization; any
organizational identification number assigned to that Borrower by that State; or
that Borrower's federal taxpayer identification number on less than sixty (60)
days prior written notice (in reasonable detail) to the Administrative Agent.
(d) Each Affiliate is listed on EXHIBIT 6:6-2. The Borrowers'
Representative shall provide the Administrative Agent with prior written notice
of any entity's becoming or ceasing to be an
Page 60
Affiliate.
(e) Each Borrower has all requisite power and authority to
execute and deliver all Loan Documents to which that Borrower is a party and has
and will hereafter retain all requisite power to perform all Liabilities.
(f) The execution and delivery by each Borrower of each Loan
Document to which it is a party; each Borrower's consummation of the
transactions contemplated by such Loan Documents (including, without limitation,
the creation of Collateral Interests by that Borrower to secure the
Liabilities); each Borrower's performance under those of the Loan Documents to
which it is a party; the borrowings hereunder; and the use of the proceeds
thereof:
(ii) Have been duly authorized by all necessary action.
(iii) Do not, and will not, contravene in any material
respect any provision of any Requirement of Law or obligation of that
Borrower, where such contravention would have a material adverse effect on
that Borrower.
(iv) Will not result in the creation or imposition of, or
the obligation to create or impose, any Encumbrance upon any assets of that
Borrower pursuant to any Requirement of Law or obligation, except pursuant
to or as permitted by the Loan Documents.
(a) The Loan Documents have been duly executed and delivered by
each Borrower and, upon the entry of a Borrowing Order, are the legal, valid and
binding obligations of each Borrower, enforceable against each Borrower in
accordance with their respective terms, except as such enforceability may be
subject to limitations on the rights and remedies of secured creditors generally
imposed under bankruptcy or insolvency law and that the availability of
equitable relief is subject to the discretion of the court from which such
relief is sought.
63 -Trade Names.
(a) EXHIBIT 6:6-3, annexed hereto, is a listing of:
(ii) All names under which any Borrower conducted its
business since June 1, 1998.
(iii) All Persons with whom any Borrower, since June 1,
1998, consolidated or merged, or from whom any Borrower, since June 1,
1998, acquired in a single transaction or in a series of related
transactions substantially all of such Person's assets.
(a) The Borrowers' Representative will provide the
Administrative Agent with not less than twenty-one (21) days prior written
notice (with reasonable particularity) of any change to any Borrower's name from
that under which that Borrower is conducting its business at the execution of
this Agreement and will not effect such change unless each Borrower is then in
compliance with all provisions of this Agreement.
Page 61
64 -Infrastructure.
(a) Each Borrower has and will maintain a sufficient
infrastructure to conduct its business as presently conducted and as
contemplated to be conducted following its execution of this Agreement.
(b) Each Borrower owns and possesses, or has the right to use
(and will hereafter own, possess, or have such right to use) all patents,
industrial designs, trademarks, trade names, trade styles, brand names, service
marks, logos, copyrights, trade secrets, know-how, confidential information, and
other intellectual or proprietary property of any third Person necessary for
that Borrower's conduct of that Borrower's business except where the failure to
own, possess, or have such right or use will not have more than a de minimis
adverse effect on any Borrower.
(c) The conduct by each Borrower of that Borrower's business
does not presently infringe (nor will any Borrower conduct its business in the
future so as to infringe) the patents, industrial designs, trademarks, trade
names, trade styles, brand names, service marks, logos, copyrights, trade
secrets, know-how, confidential information, or other intellectual or
proprietary property of any third Person except where such infringement will not
have no more than a de minimis adverse effect on that Borrower.
65 -Restructuring Consultant. The Lead Borrower and each Borrower:
(a) Shall continue working with the Restructuring Consultant
engaged as contemplated by Section 5:5-3(a) in compliance with and as
contemplated by the engagement letter described in Section 5:5-3(a).
(b) Shall provide reasonable access for the Administrative
Agent, the Tranche B Lender and the Tranche C Lender (and their respective
participants) from time to time with such Restructuring Consultant to discuss
such matters concerning the Borrowers as they reasonably may determine (other
than as to matters which the Borrowers advise the Restructuring Consultant are
confidential and not to be then disclosed).
(c) Shall not dismiss such Restructuring Consultant except with
either (i) the consent of the Administrative Agent and the Tranche B Lender and
the Tranche C Lender or (ii) an order of the Bankruptcy Court in the
Proceedings, provided that nothing contained herein shall modify the obligation
of the Borrowers to retain a Restructuring Consultant as required herein.
66 -Locations.
(a) The Collateral, and the books, records, and papers of
Borrowers' pertaining thereto, are kept and maintained solely at the following
locations:
Page 2
(ii) The Borrowers' Representative's chief executive offices
which are at 555 Turnpike Street, Canton, Massachusetts 02021.
(iii) Those locations which are listed on EXHIBIT 6:6-6, annexed
hereto, which EXHIBIT includes, with respect to each such location, the name and
address of the landlord on the Lease which covers such location (or an
indication that a Borrower owns the subject location) and of all service bureaus
with which any such records are maintained and the names and addresses of each
of the Borrowers' landlords.
(a) No Borrower shall remove any of the Collateral from said chief
executive office or those locations listed on EXHIBIT 6:6-6 except for the
following purposes:
(iv) To accomplish sales of Inventory in the ordinary course of
business.
(v) To move Inventory from one such location to another such
location.
(vi) To utilize such of the Collateral as is removed from such
locations in the ordinary course of business (such as motor vehicles).
(a) Except where caused by a force majeure or as otherwise
agreed by the Administrative Agent, no Borrower shall cease the conduct of
business at any of its present or future Stores for more than fifteen (15)
consecutive days without first furnishing the Administrative Agent with not less
than thirty (30) days (or such lesser period as the Administrative Agent may
agree) prior written notice thereof.
67 -Stores.
(a) No Borrower is or may commit to or become legally
obligated to open additional Stores where such commitment, obligation, or
opening is prohibited by, or would result in a breach of, this Agreement.
(b) No tangible personal property of any Borrower (beyond a
de minimis amount of such property) is in the care or custody of any third party
or stored or entrusted with a bailee or other third party other than
(ii) pursuant to a license presently in effect under which WGS
Corp. operates a licensed department on the premises of a third party; and
(iii) as otherwise consented to by the Administrative Agent.
68 -Title to Assets.
(a) The Borrowers are, and shall hereafter remain, the owners of the
Collateral free and clear of all Encumbrances with the exceptions of the
following:
(ii) Encumbrances in favor of the Collateral Agent.
(iii) Those Encumbrances (if any) listed on EXHIBIT 6:6-8(a),
annexed hereto.
Page 3
(iv) Permitted Encumbrances.
(v) Encumbrances junior in priority to those of the
Collateral Agent and, to the extent applicable, on account of the PreBankruptcy
Senior Debt, which Encumbrances are granted solely as adequate protection for
any pre-petition secured obligations of the Borrowers
(a) Except as disclosed on EXHIBIT 6:6-8(b), annexed hereto, the
Borrowers do not have possession of any property on consignment to the Borrowers
and will not have possession of property on consignment hereafter except on not
less than fifteen (15) days prior written notice (with reasonable particularity)
from the Borrowers' Representative, which property on such consignment shall not
have a cost at any one time exceeding three percent (3%) of the Borrowers'
Inventory at Retail.
(b) No Borrower shall acquire or obtain the right to use any
Equipment, the acquisition or right to use of which Equipment is otherwise
permitted by this Agreement, in which Equipment any third party has an interest,
except for:
(vi) Equipment which is merely incidental to the conduct of that
Borrower's business; or
(vii) Equipment, the acquisition or right to use of which has
been consented to by the Administrative Agent, which consent may be
conditioned solely upon the Administrative Agent's receipt of an agreement,
substantially in the form of EXHIBIT 6:6-8(c)(ii), annexed hereto with the
third party which has an interest in such Equipment. Agent.
(a) No Affiliate (other than Casual Male Corp.) which is not a
Borrower has, and none will, acquire any assets other than of nominal value.
(b) Casual Male Corp. does not have any assets which, in
accordance with GAAP, would be required to be reflected on its balance sheet
other than the capital stock which it holds as of the date of this Agreement.
69 -Indebtedness.
(a) The Borrowers do not and shall not hereafter have any
Indebtedness with the exceptions of Permitted Indebtedness.
(b) The Borrowers will not make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property) of
or in respect of principal of or interest on any Indebtedness (other than on
account of the Liabilities and the Leasing Debt), except for the following:
(ii) Except as described in 6:6-9(b)(ii), payments required to be
made pursuant to an order of the Bankruptcy Court in the Proceedings for
adequate protection payments pursuant to the Bankruptcy Code.
(iii) Payments required to be made to Leasing pursuant to an order
of the Bankruptcy Court in the Proceedings for adequate protection payments
pursuant to the
Page 4
Bankruptcy Code.
(iv) Payments, in amounts reasonably acceptable to the
Administrative Agent, to provide funds for a reclamation program, the terms
of which program are subject to the Administrative Agent's consent.
(v) Payments of prepetition claims authorized by the First Day
Orders or other orders entered in the Proceedings, to which Orders the
Administrative Agent has consented (which consent shall not be unreasonably
withheld).
(a) The Lead Borrower shall not permit any nondebtor subsidiary
(including JBAK Holdings, Inc. or JBAK Realty, Inc) to incur any Indebtedness
not extant on May 1, 2001.
610 -Insurance.
(a) EXHIBIT 6:6-10, annexed hereto, is a schedule of all insurance
policies owned by the Borrowers or under which any Borrower is the named
insured. Each of such policies is in full force and effect. Neither the issuer
of any such policy nor any Borrower is in default or violation of any such
policy.
(b) The Borrowers shall have and maintain at all times insurance
covering such risks, in such amounts, containing such terms, in such form, for
such periods, and written by such companies as may be satisfactory to the
Administrative Agent.
(c) All insurance carried by the Borrowers shall provide for a
minimum of thirty (30) days' prior written notice of cancellation to the
Administrative Agent and all such insurance which covers the Collateral shall
include an endorsement in favor of the Agents, which endorsement shall provide
that the insurance, to the extent of the Agent's respective interest therein,
shall not be impaired or invalidated, in whole or in part, by reason of any act
or neglect of any Borrower or by the failure of any Borrower to comply with any
warranty or condition of the policy.
(d) The coverage reflected on EXHIBIT 6:6-10 presently satisfies the
foregoing requirements, it being recognized by each Borrower, however, that such
requirements may change hereafter to reflect changing circumstances.
(e) The Borrowers' Representative shall furnish the Administrative
Agent from time to time with certificates or other evidence satisfactory to the
Administrative Agent regarding compliance by the Borrowers with the foregoing
requirements.
(f) In the event of the failure by the Borrowers to maintain
insurance as required herein, the Administrative Agent, at its option, may
obtain such insurance, provided, however, the Administrative Agent's obtaining
of such insurance shall not constitute a cure or waiver of any Event of Default
occasioned by the Borrowers' failure to have maintained such insurance.
Page 5
611 -Licenses. Each license, distributorship, franchise, and similar
agreement issued to, or to which any Borrower is a party is in full force and
effect , except (a) where the failure thereof to be in full force and effect
does not have a material adverse effect on the Borrowers, or (b) enforcement
thereof against the Borrowers is stayed by the commencement of, and during the
pendency of, the Proceedings. No party to any such license or agreement is in
default or violation thereof. No Borrower has received any notice or threat of
cancellation of any such license or agreement.
612 -Leases. EXHIBIT 6:6-12, annexed hereto, is a schedule of all
presently effective Capital Leases. (Exhibit 6:6-6 includes a list of all other
presently effective Leases). Each of such Leases and Capital Leases is in full
force and effect. No party to any such Lease or Capital Lease is in default or
violation of any such Lease or Capital Lease except on account of defaults the
enforcement of which is stayed under Applicable Law during the pendency of the
Proceedings. . Each Borrower hereby authorizes the Administrative Agent at any
time and from time to time, with the consent of the Borrowers' Representative
and at any time following the occurrence of an Event of Default to contact any
of the Borrowers' respective landlords in order to confirm the Borrowers'
continued compliance with the terms and conditions of the Lease(s) between the
subject Borrower and that landlord and to discuss such issues, concerning the
subject Borrower's occupancy under such Lease(s), as the Administrative Agent
may determine.
613 -Requirements of Law. Each Borrower is in compliance with, and shall
hereafter comply with and use its assets in compliance with, all Requirements of
Law except where the failure of such compliance (a) will not have more than a de
minimis adverse effect on the Borrowers' business or assets or (b) is not
required under Applicable Law during the pendency of the Proceedings . No
Borrower has received any notice of any violation of any Requirement of Law
(other than of a violation which has no more than a de minimis adverse effect on
the Borrowers' business or assets), which violation has not been cured or
otherwise remedied.
614 -Labor Relations.
(a) Except as disclosed on EXHIBIT 6:6-14(a), annexed hereto, no
Borrower is presently a party to any collective bargaining or other labor
contract.
(b) There is not presently pending and, to any Borrower's knowledge,
there is not threatened any of the following:
(ii) Any strike, slowdown, picketing, work stoppage, or material
employee grievance process.
(iii) Any proceeding against or affecting any Borrower relating
to the alleged
Page 6
violation of any Applicable Law pertaining to labor relations or before
National Labor Relations Board, the Equal Employment Opportunity
Commission, or any comparable governmental body, organizational activity,
or other labor or employment dispute against or affecting any Borrower,
which, if determined adversely to that Borrower could have more than a de
minimis adverse effect on that Borrower.
(iv) Any lockout of any employees by any Borrower (and no such
action is contemplated by any Borrower).
(v) Any application for the certification of a collective
bargaining agent.
(a) To the knowledge of the Borrowers' Representative and each
Borrower, no material event has occurred or circumstance exists which could
provide the basis for any work stoppage or other labor dispute.
(b) Each Borrower:
(vi) Has complied in all material respects with all Applicable
Law relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar taxes, occupational
safety and health, and plant closing.
(vii) Is not liable for the payment of more than a de minimius
amount of compensation, damages, taxes, fines, penalties, or other amounts,
however designated, for that Borrower's failure to comply with any
Applicable Law referenced in Section 6:6-14(d)(i).
615 -Maintain Properties. The Borrowers shall:
(a) Keep the Collateral in good order and repair (ordinary reasonable
wear and tear and insured casualty excepted).
(b) Not suffer or cause the waste or destruction of any material part
of the Collateral.
(c) Not use any of the Collateral in violation of any policy of
insurance thereon.
(d) Not sell, lease, or otherwise dispose of any of the Collateral,
other than the following:
(ii) The sale of Inventory in compliance with this Agreement.
(iii) The disposal of Equipment which is obsolete, worn out, or
damaged beyond repair, which Equipment is replaced to the extent necessary
to preserve or improve the operating efficiency of any Borrower.
(iv) The turning over to the Administrative Agent of all
Receipts as provided herein.
(v) Permitted Asset Dispositions for fair consideration.
(vi) The sale of substantially all of the assets or capital
stock of WGS Corp.
Page 7
as long as the conditions set forth in a letter agreement of even date
between the Borrowers and the Administrative Agent are satisfied.
616 -Taxes.
(a) The Borrowers, in compliance with all Applicable Law, have
properly filed the Borrower's tax returns due to be filed up to the date of this
Agreement. All federal and state taxes and other amounts in the nature of taxes
for which the Borrower is liable or obligated are presently due and payable
without penalty; or have been paid or settled, or, to the extent unpaid as of
the date of the commencement of the Proceedings, will be paid in accordance with
Applicable Law and the Borrowers' plan or reorganization in the Proceedings.
(b) The Borrowers shall: pay, as they become due and payable, all
taxes and unemployment contributions and other charges of any kind or nature
levied, assessed or claimed against any Borrower or the Collateral by any person
or entity whose claim could result in an Encumbrance upon any asset of any
Borrower or by any governmental authority, except to the extent that the
Borrower is not required, under Applicable Law, to pay such taxes and other
charges during the pendency of the Proceedings; properly exercise any trust
responsibilities imposed upon any Borrower by reason of withholding from
employees' pay or by reason of any Borrower's receipt of sales tax or other
funds for the account of any third party; timely make all contributions and
other payments as may be required pursuant to any Employee Benefit Plan now or
hereafter established by any Borrower; and timely file all tax and other returns
and other reports with each governmental authority to whom any Borrower is
obligated to so file except where failure to file would not have a material
adverse effect provided however, nothing included in this Section 6:6-16(b)
shall prevent the Borrowers from contesting, in good faith and by appropriate
proceedings, any tax liability claimed against any Borrower, but only provided
that and so long as no tax lien is filed with respect thereto.
(c) At its option, with prior notice to the Borrower's
Representative, the Administrative Agent may pay any tax, charge levied,
assessed, or claimed upon any Borrower or the Collateral by any person or entity
or governmental authority, and make any payments on account of any Borrower's
Employee Benefit Plan as the Administrative Agent , in the Administrative
Agent's discretion, may deem necessary or desirable, to protect the Agents'
Rights and Remedies.
617 -No Margin Stock. No Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulations U, T, and X of the Board of Governors of the
Federal Reserve System of the United States). No part of the proceeds of any
borrowing hereunder will be used at any time to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock.
Page 8
618 -ERISA. The Borrowers are and shall hereafter remain in compliance,
in all material respects, with ERISA, except to the extent that the Borrowers
are not required under Applicable Law to comply therewith during the pendency of
the Proceedings.
619 -Hazardous Materials. To the Borrowers' knowledge, none of the real
property used or operated by any Borrower contains a material amount of
Hazardous Materials.
620 -Litigation. Except as described in EXHIBIT 6:6-20, annexed hereto,
there is not presently pending or to its knowledge, threatened in writing, by or
against the Borrowers any suit, action, proceeding, or investigation which (a)
if determined adversely to the Borrowers, would have a material adverse effect
upon the Borrowers' financial condition or ability to conduct their business as
such business is presently conducted or is contemplated to be conducted in the
foreseeable future, and (b) is not stayed by the commencement of, and during the
pendency of, the Proceedings.
621 -Dividends. Investments. Corporate Action. The Obligors shall cause
the net proceeds from any sale or other disposition of the real estate owned by
JBAK Canton Realty, inc. to be distributed to an Obligor immediately upon
receipt for application to the Liabilities as provided herein. Further, no
Obligor shall
(a) Pay any cash dividend or make any other distribution in respect
of any class of their respective capital stock, other than payments to another
Borrower.
(b) Own, redeem, retire, purchase, or acquire any of that Person's
capital stock.
(c) Except for (x) Permitted Investments and (y) capital stock of
JBAK Canton Realty, Inc. and capital stock of other wholly owned direct or
indirect subsidiaries of the Obligors, invest in or purchase any stock or
securities or rights to purchase any such stock or securities, of any
corporation or other entity, including without limitation, any capital stock of
Casual Male Corp.
(d) Merge or consolidate or be merged or consolidated with or into
any other corporation or other entity; provided that nothing in this Agreement
shall prevent any Borrower from merging into any other Borrower.
(e) Consolidate any of that Obligor's operations with those of any
other corporation or other entity.
(f) Subordinate any debts or obligations owed to that Obligor by any
third party to any other debts owed by such third party to any other Person.
(g) Engage in any interest rate swaps, caps, or similar activities,
or any hedging activities other than in the ordinary course and conduct of that
Obligor's business, and then only
Page 9
with a Lender or any affiliate of a Lender.
622 -Loans. The Borrowers shall not make any loans to, nor acquire
the Indebtedness of, any Person, provided, however, the foregoing does not
prohibit any of the following:
(a) Subject to such conditions respectively as apply
thereto, the making of Permitted Investments.
(b) Advances to employees of a Borrower for travel and
other business expenses to be incurred by such employees in the ordinary course
of the business of one or more of the Borrowers.
(c) Cash loans to employees of a Borrower not exceeding
$25,000.00 outstanding at any time to any employee nor exceeding $100,00.00 in
the aggregate outstanding at any time.
(d) Advance payments made to the Borrowers' suppliers in
the ordinary course.
(e) Intercompany loans by any Borrower to any other
Borrower.
623 -Protection of Assets. The Administrative Agent, in the
Administrative Agent's discretion, and from time to time, may discharge any tax
or Encumbrance on any of the Collateral, or take any other action which the
Administrative Agent may deem necessary or desirable to repair, insure,
maintain, preserve, collect, or realize upon any of the Collateral. The
Administrative Agent shall not have any obligation to undertake any of the
foregoing and shall have no liability on account of any action so undertaken
except where there is a specific finding in a judicial proceeding (in which the
Administrative Agent has had an opportunity to be heard), from which finding no
further appeal is available, that the Administrative Agent had acted in actual
bad faith or in a grossly negligent manner. The Borrowers shall pay to the
Administrative Agent, on demand, or the Administrative Agent, in its discretion,
may add to the Loan Account, all amounts paid or incurred by the Administrative
Agent pursuant to this section 6:6-23.
624 -Line of Business.
(a) Except as provided in Sections 6:6-24(b) and 6:6-24(c), no
Borrower shall engage in any business other than the business in which it is
currently engaged or a business reasonably related thereto (the conduct of which
reasonably related business is reflected in the Business Plan).
(b) The Borrowers, with the prior written notice to the
Administrative Agent in each instance, may license the use of up to 5% of the
selling space of any Store (measured in terms of square feet) for the operation
of certain departments of their Stores by third parties.
Page 10
(c) The Borrowers, with the prior written consent of the
Administrative Agent (as to which, see Section 6:6-24(c)(i)), may (x) license
the use of more than 5% of the selling space of any Store (measured in terms of
square feet) for the operation of certain departments by third parties and (y)
franchise to others the right to operate comparable Stores, it being understood
that:
(ii) The Administrative Agent's determination to consent to
the Borrowers' activities described in Section 6:6-24(c) may be conditioned
on the Administrative Agent's being satisfied that the secured position of
the Collateral Agent, and the Agents' Rights and Remedies would not be
adversely affected by such restructuring and that such restructuring does
not place any material additional administrative burdens on the Agents.
(iii) The Administrative Agent may provide such consent
pursuant to this Section 6:6-24(c) on its own authority and without
obtaining the Consent of the Majority Lenders.
(iv) The Administrative Agent may condition its providing
of such consent pursuant to this Section 6:6-24(c) on the Consent of the
Majority Lenders.
625 -Affiliate Transactions. No Borrower shall make any payment, nor give
any value to any Affiliate except for
(a) goods and services actually purchased by that Borrower from,
or sold by that Borrower to, such Affiliate for a price and on terms which
shall
(ii) be competitive and fully deductible as an "ordinary
and necessary business expense" and/or fully depreciable under the Internal
Revenue Code of 1986 and the Treasury Regulations, each as amended; and
(iii) be no less favorable to that Borrower than those which
would have been charged and imposed in an arms length transaction.
(a) Permitted Overhead Contributions.
(b) Intercompany loans to the extent permitted by Section 6:6-
21(e).
(c) Transfers of Inventory between Borrowers.
626 -Further Assurances.
(a) No Borrower is the owner of, nor has it any interest in, any
property or asset which, immediately upon the satisfaction of the conditions
precedent to the effectiveness of the credit facility contemplated hereby
(Article 5:) will not be subject to a perfected Collateral Interest in favor of
the Collateral Agent (subject only to Permitted Encumbrances) to secure the
Liabilities.
(b) Except as otherwise permitted by this Agreement, no Borrower
will hereafter acquire any asset or any interest in property which is not,
immediately upon such acquisition, subject to
Page 11
such a perfected Collateral Interest in favor of the Collateral Agent to
secure the Liabilities (subject only to Permitted Encumbrances).
(c) Each Borrower shall execute and deliver to the Administrative
Agent such instruments, documents, and papers, and shall do all such things from
time to time hereafter as the Administrative Agent reasonably may request to
carry into effect the provisions and intent of this Agreement; to protect and
perfect the Collateral Agent's Collateral Interests in the Collateral; and to
comply with all applicable statutes and laws, and facilitate the collection of
the Receivables Collateral. Each Borrower shall execute all such instruments as
may be required by the Administrative Agent with respect to the recordation
and/or perfection of the Collateral Interests created or contemplated herein.
(d) Each Borrower hereby designates the Collateral Agent as and for
that Borrower's true and lawful attorney, with full power of substitution, to
sign and file any financing statements in order to perfect or protect the
Collateral Agent's Collateral Interests in the Collateral.
(e) This Agreement constitutes an authenticated record which
authorizes the Collateral Agent to file such financing statements as the
Collateral Agent determines as appropriate to perfect or protect the Agent's
Collateral Interests created hereby.
(f) A carbon, photographic, or other reproduction of this Agreement
or of any financing statement or other instrument executed pursuant to this
Section 6:6-26 shall be sufficient for filing to perfect the security interests
granted herein.
627 -Adequacy of Disclosure.
(a) All financial statements furnished to each Agent and each Lender
by each Borrower have been prepared in accordance with GAAP consistently applied
and present fairly the condition of the Borrowers at the date(s) thereof and the
results of operations and cash flows for the period(s) covered (provided
however, that unaudited financial statements are subject to normal year end
adjustments and to the absence of footnotes). There has been no change in the
Consolidated financial condition, results of operations, or cash flows of the
Borrowers since the date(s) of such financial statements, as supplemented by the
Business Plan through the date of commencement of the Proceedings, other than
the commencement of the Proceedings and changes in the ordinary course of
business, which changes have not been materially adverse, either singularly or
in the aggregate.
(b) Except as set forth on EXHIBIT 6:6-27(b), annexed hereto, no
Borrower has any contingent obligations or obligation under any Lease or Capital
Lease which is not noted in the Borrowers' Consolidated financial statements
furnished to each Agent and each Lender prior to the execution of this Agreement
other than obligations which are entered into in the ordinary course of business
since the date of such financial statement.
(c) No document, instrument, agreement, or paper now or hereafter
given to any
Page 72
Agent and any Lender by or on behalf of each Borrower or any guarantor of the
Liabilities in connection with the execution of this Agreement by each Agent and
each Lender (except for any projections provided by or on behalf of any
Borrower) contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make the
statements therein not misleading.
628 -No Restrictions on Liabilities. No Borrower shall enter into or
directly or indirectly become subject to any agreement which prohibits or
restricts, in any manner, any Borrower's:
(a) Creation of, and granting of Collateral Interests in favor of the
Collateral Agent.
(b) Incurrence of Liabilities.
629 -Bankruptcy Protections. The Borrowers will not seek, consent, suffer
to exist any of the following:
(a) Any modification, stay, vacation or amendment to the Borrowing
Orders to which the Administrative Agent, the Tranche B Lender, and the Tranche
C Lender have not consented.
(b) A priority claim for administrative expense or unsecured claim
against any Borrower (now existing or hereafter arising of any kind or nature
whatsoever, including, without limitation, any administrative expense of the
kind specified in Section 105, 326, 330, 331, 503(a), 503(b), 506(c), 507(a),
507(b), 546(c), 546(d) or 1114 of the Bankruptcy Code) equal or superior to the
priority claim of the Agents and the Lenders in respect of the Liabilities,
except with respect to the Carve Out (as defined in the Borrowing Orders).
(c) Any Encumbrance on any Collateral, having a priority equal or
superior to the Encumbrances of the Agents and the Lenders.
630 -Other Covenants. No Borrower shall indirectly do or cause to be done
any act which, if done directly by that Borrower, would breach any covenant
contained in this Agreement.
Article 7: Financial Reporting and Performance Covenants:
71 -Maintain Records. The Borrowers shall:
(a) At all times, keep proper books of account, in which full, true,
and accurate entries shall be made of all of the Borrowers' financial
transactions, all in accordance with GAAP applied consistently with prior
periods to fairly reflect the Consolidated financial condition of the Borrowers
at the close of, and its results of operations for, the periods in question.
Page 73
(b) Timely provide the Administrative Agent with those financial
reports, statements, and schedules required by this Article 7: or otherwise,
each of which reports, statements and schedules shall be prepared, to the extent
applicable, in accordance with GAAP applied consistently with prior periods to
fairly reflect the Consolidated financial condition of the Borrowers at the
close of, and the results of operations for, the period(s) covered therein.
(c) At all times, keep accurate current records of the Collateral
including, without limitation, accurate current stock, cost, and sales records
of its Inventory, accurately and sufficiently itemizing and describing the
kinds, types, and quantities of Inventory and the cost and selling prices
thereof.
(d) At all times, retain independent certified public accountants who
are reasonably satisfactory to the Administrative Agent and instruct such
accountants to fully cooperate with, and be available to, the Administrative
Agent to discuss the Borrowers' financial performance, financial condition,
operating results, controls, and such other matters, within the scope of the
retention of such accountants, as may be raised by the Administrative Agent.
(e) Not change any Borrower's fiscal year.
72 -Access to Records.
(a) Each Borrower shall accord the Administrative Agent with
reasonable access on reasonable notice during customary business hours from time
to time as the Administrative Agent reasonably may require to all properties
owned by or over which any Borrower has control. The Administrative Agent shall
have the right during customary business hours on reasonable notice, and each
Borrower will permit the Administrative Agent from time to time as
Administrative Agent reasonably may request, to examine, inspect, copy, and make
extracts from any and all of the Borrowers' books, records, electronically
stored data, papers, and files. Each Borrower shall make all of that Borrower's
copying facilities available to the Administrative Agent.
(b) Each Borrower hereby authorizes the Administrative Agent during
customary business hours on reasonable notice to:
(ii) Inspect, copy, duplicate, review, cause to be reduced to
hard copy, run off, draw off, and otherwise use any and all computer or
electronically stored information or data which relates to any Borrower, or
any service bureau, contractor, accountant, or other person, and directs
any such service bureau, contractor, accountant, or other person fully to
cooperate with the Administrative Agent with respect thereto.
(iii) Verify at any time the Collateral or any portion thereof,
including verification with Account Debtors, and/or with each Borrower's
computer billing companies, collection agencies, and accountants and to
sign the name of each Borrower on any notice to each
Page 74
Borrower's Account Debtors or verification of the Collateral.
(a) The Borrowers' Representative, on reasonable request from time to
time from the Administrative Agent, will make representatives of management
available from time to time to discuss the Borrowers' operating results and
other related matters with the Administrative Agent.
(b) The Administrative Agent from time to time may designate one or
more representatives to exercise the Administrative Agent's rights under this
Section 7:7-2 as fully as if the Administrative Agent were doing so.
(c) The Tranche B Lender and the Tranche C Lender , and their
respective participants, likewise shall have those rights accorded to the
Administrative Agent under this Section 7:7-2.
73 -Prompt Notice to Administrative Agent.
(a) The Borrowers' Representative shall provide the Administrative
Agent with written notice promptly upon its becoming aware of the occurrence of
any of the following events, which written notice shall be with reasonable
particularity as to the facts and circumstances in respect of which such notice
is being given:
(ii) Any material adverse change in the business affairs of any
Borrower.
(iii) Any change in the executive officers of Casual Male Corp..
(iv) Any ceasing of the Borrowers' making of post-petition
payment, in the ordinary course (except where there is a bona fide dispute
with the relevant creditor), to a material number of its creditors
extending credit or services after the commencement of the Proceedings
which, in the aggregate, constitute a material amount of the Borrowers'
trade debt.
(v) Except where the same has arisen out of a bona fide
dispute, any failure by the Borrowers to pay post-petition rent for periods
subsequent to the commencement of the Proceedings as and when due for 10%
or more of the Borrowers' stores (other than stores closed in connection
with Permitted Asset Dispositions), which failure continues for more than
five (5) Business Days following the day on which such rent first came due.
(vi) Any Borrower's becoming InDefault.
(vii) Any of the following with respect to the Restructuring
Consultant retained by the Borrowers in compliance with Sections 5:5-3(a)
and 6:6-5:
(B) Intention on the part of the Borrowers to alter or
amend its retention letter with such professional consultants.
(C) Any course of conduct or dealings which constitutes a
change, initiated by either the Borrowers or such consultants, to
their working relationship as contemplated by the engagement of such
consultants by the Borrowers.
Page 75
(D) The filing of any pleading in the Proceedings which
seeks to disqualify such Restructuring Consultant.
(E) The entry of an order in the Proceedings which
disqualifies such Restructuring Consultant.
(F) The receipt of any written communication from or on
behalf of such Restructuring Consultant which suggests that such
Restructuring Consultant intends to resign.
(G) The resignation of such Restructuring Consultant.
(i) Any intention on the part of a Borrower to discharge that
Borrower's present independent accountants or any withdrawal or resignation
by such independent accountants from their acting in such capacity (as to
which, see Subsection 7:7-1(d)).
(ii) Any litigation which, if determined adversely to a
Borrower, would have a material adverse effect on the financial condition
of that Borrower, except to the extent such litigation is stayed by the
commencement of, and during the pendency of, the Proceedings.
(a) The Borrowers' Representative shall:
(iii) Add the Administrative Agent as an addressee on all
mailing lists maintained by or for any Borrower.
(iv) At the request of the Administrative Agent provide the
Administrative Agent with a copy of the results of any physical or cycle
count of a Borrower's Inventory.
(v) Provide the Administrative Agent , when received by any
Borrower, with a copy of any management letter or similar communications
from any accountant of that Borrower.
(vi) Provide the Administrative Agent with copies of all
filings, by Casual Male Corp., with the Securities and Exchange Commission,
when so filed by Casual Male Corp.
(vii) Provide the Administrative Agent and the Administrative
Agent's counsel with copies, when so filed or submitted, of any pleadings
filed in the Proceedings by or on behalf of the Borrower or the submission
by or on behalf of the Borrower of any report and financial statement to
any of: the Bankruptcy Court in which the Proceedings are pending; the
office of the United States Trustee; or any committee appointed in the
Proceedings.
(viii) Provide the Administrative Agent with written notice of
any intended bulk sale, liquidation, or other disposition of assets of any
Borrower at least ten (10) Business Days prior to the consummation of such
sale or disposition, or commencement of such liquidation and a detailed
summary of the net proceeds expected to be received therefrom. Such notice
shall be in addition to any notices which may be required to be furnished
the Administrative Agent and the Lenders under the Bankruptcy Code in
connection with any hearings in the Proceedings to approve any such sale,
liquidation or disposition.
Page 76
74 -Borrowing Base Certificate. The Borrowers' Representative shall
provide the Administrative Agent by 1:00 p.m., daily, with a Borrowing Base
Certificate (in the form of EXHIBIT 7:7-4 annexed hereto, as such form may be
revised from time to time by the Administrative Agent). Such Certificate may be
sent to the Administrative Agent by facsimile transmission, provided that the
original thereof is forwarded to the Administrative Agent on the date of such
transmission.
75 -Weekly and Monthly Reports. The Borrowers' Representative shall
provide the Administrative Agent with those financial statements and reports
described in EXHIBIT 7:7-5.
76 -Quarterly Reports. Quarterly, within forty-five (45) days following the
end of each of the Borrowers' fiscal quarters, the Borrowers' Representative
shall provide the Administrative Agent with the following:
(a) An original counterpart of a management prepared Consolidated
financial statement of the Borrowers for the period from the beginning of the
Borrowers' then current fiscal year through the end of the subject quarter, with
comparative information for the same period of the previous fiscal year, which
statement shall include, at a minimum, a balance sheet, income statement, cash
flows and a schedule of consolidation, as well as a comparison of same store
sales and operating results for the corresponding quarter of the then
immediately previous year and to the year-to-date period and to the Business
Plan or updated forecast.
(b) The officer's compliance certificate described in Section 7:7-8.
77 -Annual Reports.
(a) On or before the one hundred eightieth day after the end of the
Borrowers' Fiscal 2001, the Borrowers' Representative shall provide the
Administrative Agent (which the Administrative Agent and the Lenders shall
maintain as confidential until the annual financial statement for Casual Male is
otherwise made public) with the following:
(ii) A draft of the annual consolidated financial statement of
Casual Male for its Fiscal 2001 (with consolidating schedules).
(iii) Written assurances by the Borrowers' Representative's
accountants that the condition of Casual Male, and the results of its
operations for the periods covered by such draft annual Consolidated
financial statement are materially accurate, subject only to those
exceptions which are specifically included in such written assurances.
(a) Commencing with the Borrowers' Fiscal 2002, and annually
thereafter, within
Page 77
ninety (90) days following the end of the Borrowers' fiscal year, the Borrowers'
Representative shall furnish the Administrative Agent with the following:
(iv) An original signed counterpart of the Casual Male Corp.'s
annual consolidated financial statement (with consolidating schedules),
which statement shall have been prepared by, and bearing the unqualified
opinion of, the Borrowers' independent certified public accountants (i.e.
said statement shall be "certified" by such accountants), except for
qualifications and exceptions resulting from the commencement and pendency
of the Proceedings. Such annual statement shall include, at a minimum (with
comparative information for the then prior fiscal year) a balance sheet,
income statement, statement of changes in shareholders' equity, and cash
flows.
(v) The following Consolidated financial statements for the
Borrowers for the prior fiscal year (each prepared by the Borrowers'
independent accountants): Balance sheet, income statement, statement of
changes in stockholders' equity and cash flow.
(vi) A certificate of the Borrowers' independent accountant
which states that in connection with their preparation of such annual
financial statements, such accountants did not note or encounter any fact
or circumstance which would lead them to believe that an Event of Default
has occurred by reason of a breach of any financial covenant included in
Section 7:7-11.
78 -Officers' Certificates. The Borrowers' Representative shall cause the
Borrowers' Representative's Chief Executive Officer, its President or its Chief
Financial Officer, in each instance, to provide such Person's Certificate with
those monthly, quarterly, and annual statements to be furnished pursuant to this
Agreement, which Certificate shall:
(a) Indicate that the subject statement was prepared in accordance
with GAAP consistently applied and presents fairly the Consolidated financial
condition of the Borrowers at the close of, and the results of the Borrowers'
operations and cash flows for, the period(s) covered, subject, however to the
following:
(ii) Usual year end adjustments (this exception shall not be
included in the Certificate which accompanies such annual statement).
(iii) Material Accounting Changes (in which event, such
Certificate shall include a schedule (in reasonable detail) of the effect
of each such Material Accounting Change) not previously specifically taken
into account in the determination of the financial performance covenant
imposed pursuant to Section 7:7-11.
(a) Indicate either that (i) no Borrower is InDefault, or (ii) if
such an event has occurred, its nature (in reasonable detail) and the steps (if
any) being taken or contemplated by the Borrowers to be taken on account
thereof.
Page 78
(b) Include calculations concerning the Borrowers' compliance (or
failure to comply) at the date of the subject statement with each of the
financial performance covenants included in Section 7:7-11 hereof.
79 -Inventories, Appraisals, and Audits.
(a) The Administrative Agent may observe each inventory and any cycle
count of the Collateral which is undertaken on behalf of any Borrower. No
Borrower may change the methodology to be followed in connection with the
conduct of and reporting on the results of such inventory from the methodology
in effect on August 1, 1999. The Borrowers shall conduct not less than one
physical inventory, per Store and per warehouse, per fiscal year. The
Administrative Agent does not contemplate undertaking or requiring any
additional physical inventories by or of the Borrowers, provided, however, the
Administrative Agent may do so if any Borrower becomes InDefault.
(ii) On the Administrative Agent's request, the Borrowers'
Representative shall provide the Administrative Agent with a copy of the
preliminary results of each such inventory (as well as of any other
physical inventory undertaken by any Borrower) within ten (10) days
following the completion of such inventory.
(iii) On the Administrative Agent's request, the Borrowers'
Representative shall provide the Administrative Agent with a reconciliation
of the results of each such inventory (as well as of any other physical
inventory undertaken by any Borrower) to that Borrower's books and records
within thirty (30) days following the completion of such inventory.
(iv) The Administrative Agent, in its discretion, if any
Borrower becomes InDefault, may cause such additional inventories to be
taken as the Administrative Agent determines (each, at the expense of the
Borrowers)
(a) The Administrative Agent contemplates conducting four (4)
commercial finance audits (in each event, at the Borrowers' expense) of the
Borrowers' books and records during any twelve (12) month period during
which this Agreement is in effect, but following the occurrence of an Event
of Default, may cause additional such audits to be undertaken (in each
event, at the Borrowers' expense).
(b) The Administrative Agent contemplates obtaining of four (4)
appraisals (in all events, at the Borrowers' expense) of the Borrowers'
Inventory during any twelve (12) month period during which this Agreement
is in effect, each conducted by such appraisers as are satisfactory to the
Administrative Agent , but following the occurrence of an Event of Default,
may cause additional such audits to be undertaken (in each event, at the
Borrowers' expense).
710 -Additional Financial Information.
(a) In addition to all other information required to be provided
pursuant to this Article
Page 79
7:, the Borrowers' Representative promptly shall provide the Administrative
Agent (and any guarantor of the Liabilities), with such other and additional
information concerning the Borrowers, the Collateral, the operation of the
Borrowers' business, and the Borrowers' financial condition, including original
counterparts of financial reports and statements, as the Administrative Agent
reasonably may from time to time request from the Borrowers' Representative.
(b) The Borrowers' Representative may provide the Administrative
Agent, from time to time hereafter, with updated forecasts of the Borrowers'
anticipated performance and operating results.
(c) In all events, the Borrowers' Representative, by no later than 30
days prior the end of the Borrowers' fiscal year, shall furnish the
Administrative Agent with an updated and extended forecast (which shall include,
on a monthly basis, balance sheets, income statements, and cash flow, as well as
of all components of each borrowing base) which shall go out at least through
the end of the then next fiscal year. Such updated and extended forecast shall
be prepared pursuant to a methodology and shall include such assumptions as are
reasonably satisfactory to the Administrative Agent, it being understood that
such forecasts are estimates and not guarantees of actual results.
(d) Each Borrower recognizes that all appraisals, inventories,
analysis, financial information, and other materials which the Administrative
Agent may obtain, develop, or receive with respect to the Borrowers are
confidential to the Administrative Agent and that, except as otherwise provided
herein, no Borrower is entitled to receipt of any of such appraisals,
inventories, analysis, financial information, and other materials, nor copies or
extracts thereof or therefrom.
711 -Financial Performance Covenants. The Borrowers shall observe and
comply with those financial performance covenants set forth on EXHIBIT 7:7-11,
annexed hereto, which compliance shall be determined as if no Material
Accounting Changes had been made (other than any Material Accounting Changes
specifically taken into account in the setting of such covenants). The
Administrative Agent may determine the Borrowers' compliance with such covenants
based upon financial reports and statements provided by the Borrowers'
Representative to the Administrative Agent (whether or not such financial
reports and statements are required to be furnished pursuant to this Agreement)
as well as by reference to interim financial information provided to, or
developed by, the Administrative Agent.
Article 8: - Use of Collateral:
81 -Use of Inventory Collateral.
(a) No Borrower shall engage in any sale of the Inventory other than
(i) for fair consideration in the conduct of the Borrowers' business in the
ordinary course, or (ii) Permitted Asset Dispositions for fair consideration.
Page 80
(b) No sale of Inventory shall be on consignment, approval, or under
any other circumstances such that, with the exception of the Borrowers'
customary return policy applicable to the return of inventory purchased by the
Borrowers' retail customers in the ordinary course, such Inventory may be
returned to a Borrower without the consent of the Administrative Agent.
(c) No borrower shall consent to or suffer the entry of an order in
the Proceedings which authorizes the return of any of the Borrower's property
pursuant to Section 546(g)* of the Bankruptcy Code other than de minimis
Inventory which is accepted for return in the ordinary course of business.
82 -Inventory Quality. All Inventory now owned or hereafter acquired by
each Borrower is and will be of good and merchantable quality and free from
defects (other than defects within customary trade tolerances).
83 -Adjustments and Allowances. Each Borrower may grant such allowances or
other adjustments to that Borrower's Account Debtors (exclusive of extending the
time for payment of any material Account or Account Receivable, which shall not
be done without first obtaining the Administrative Agent's prior written consent
in each instance) as that Borrower may reasonably deem to accord with sound
business practice, provided, however, at any time that a Borrower is InDefault,
the authority granted the Borrowers pursuant to this Section 8:8-3 may be
limited or terminated by the Administrative Agent at any time in the
Administrative Agent's discretion.
84 -Validity of Accounts.
(a) The amount of each Account shown on the books, records, and
invoices of the Borrowers represented as owing by each Account Debtor is and
will be the correct amount actually owing by such Account Debtor and shall have
been fully earned by performance by the Borrowers.
(b) The Administrative Agent from time to time may verify the
Receivables Collateral directly with the Borrowers' Account Debtors, such
verification to be undertaken in keeping with commercially reasonable commercial
lending standards.
(c) The Borrowers have no knowledge of any impairment of the validity
or collectability of any of the Accounts and shall notify the Administrative
Agent of any such fact immediately after the Borrowers become aware of any such
impairment.
85 -Notification to Account Debtors. The Administrative Agent shall have
the right at any time that an Event of Default has occurred to notify any of the
Borrowers' Account Debtors to make payment directly to the Administrative Agent
and to collect all amounts due on account of the Collateral.
Page 81
ARTICLE 9:- Cash Management. Payment of Liabilities:
91 -Depository Accounts.
(a) Annexed hereto as EXHIBIT 9:9-1 is a Schedule of all present
DDA's, which Schedule includes, with respect to each depository (i) the name and
address of that depository; (ii) the account number(s) of the account(s)
maintained with such depository; and (iii) a contact person at such depository.
(b) The Borrowers' Representative shall deliver to the Administrative
Agent, as a condition to the effectiveness of this Agreement:
(ii) Notifications executed on behalf of the relevant Borrower,
to each depository institution with which any DDA is maintained (other than
the Operating Account ), in form satisfactory to the Administrative Agent,
of the Collateral Agent's interest in such DDA.
(iii) An agreement (generally referred to as a "Blocked Account
Agreement"), in form satisfactory to the Administrative Agent with any
depository institution at which both any DDA (other than the Operating
Account) and the Operating Account is maintained.
(iv) An agreement (generally referred to as a "Blocked Account
Agreement"), in form satisfactory to the Administrative Agent, with each
depository institution at which a Blocked Account is maintained.
(a) No Borrower will establish any DDA hereafter unless,
contemporaneous with such establishment, the Borrowers' Representative provides
a notification of the Collateral Agent's interest in such DDA and will not
establish any Blocked Account unless the Borrowers' Representative provides t he
Administrative Agent with such a Blocked Account Agreement.
92 -Credit Card Receipts.
(a) Annexed hereto as EXHIBIT 9:9-2, is a Schedule which describes
all arrangements to which the Borrower is a party with respect to the payment to
the Borrower of the proceeds of all credit card charges for sales by the
Borrower.
(b) The Borrowers' Representative shall deliver to the Administrative
Agent, as a condition to the effectiveness of this Agreement, notification,
executed on behalf of the relevant Borrower, to each of the Borrower's credit
card clearinghouses and processors of notice (in form satisfactory to the
Administrative Agent ), which notice provides that payment of all credit card
charges submitted by any Borrower to that clearinghouse or other processor and
any other amount payable to any Borrower by such clearinghouse or other
processor shall be directed to the Concentration Account or as otherwise
designated from time to time by the Administrative Agent. No Borrower shall
change such direction or
Page 82
designation except upon and with the prior written consent of the Administrative
Agent .
93-The Concentration, Blocked, and Operating Accounts.
(a) The following checking accounts have been or will be
established (and are so referred to herein):
(ii) The "Concentration Account" (so referred to herein):
Established by the Administrative Agent with Fleet National Bank.
(iii) The "Blocked Account" (so referred to herein): Established
by the Borrowers' Representative with Fleet National Bank.
(iv) The "Operating Account" (so referred to herein):
Established by the Borrowers' Representative with Fleet National Bank.
(a) The contents of each DDA and of the Blocked Account constitutes
Collateral and Proceeds of Collateral. The contents of the Concentration Account
constitutes the Administrative Agent's property.
(b) The Borrowers shall pay all fees and charges of, and maintain
such impressed balances as may be required by the depository in which any
account is opened as required hereby (even if such account is opened by and/or
is the property of the Administrative Agent).
94 -Proceeds and Collections.
(a) All Receipts and all cash proceeds of any sale or other
disposition of any of each Borrower's assets:
(ii) Constitute Collateral and proceeds of Collateral.
(iii) Shall be held in trust by the Borrowers for the
Administrative Agent.
(iv) Shall not be commingled with any of any Borrower's other
funds.
(v) Shall be deposited and/or transferred only to the Blocked
Account or the Concentration Account.
(a) The Borrowers' Representative shall cause the ACH or wire
transfer to the Blocked or the Concentration Account, no less frequently than
daily (and whether or not there is then an outstanding balance in the Loan
Account) of the following:
(vi) The then contents of each DDA (other than any Exempt DDA),
each such transfer to be net of any minimum balance, not to exceed the
lesser of $2,500.00 or that amount which the Borrowers' Representative, in
its best business judgement determines as being required to be maintained
in the subject DDA by the bank at which such DDA is maintained).
(vii) The proceeds of all credit card charges not otherwise
provided for pursuant hereto.
Page 83
Telephone advice (confirmed by written notice) shall be provided to the
Administrative Agent on each Business Day on which any such transfer is made.
(a) Whether or not any Liabilities are then outstanding, the
Borrowers' Representative shall cause the ACH or wire transfer to the
Concentration Account, no less frequently than daily, of then entire ledger
balance of the Blocked Account, net of such minimum balance, not to exceed the
lesser of $2,500.00 or that amount which the Borrowers' Representative, in its
best business judgement determines as being required to be required to be
maintained in the Blocked Account by the depository which the Blocked Account is
maintained.
(b) In the event that, notwithstanding the provisions of this Section
9:9-4, any Borrower receives or otherwise has dominion and control of any
Receipts, or any proceeds or collections of any Collateral, such Receipts,
proceeds, and collections shall be held in trust by that Borrower for the
Administrative Agent and shall not be commingled with any of that Borrower's
other funds or deposited in any account of any Borrower other than as instructed
by the Administrative Agent.
95 -Payment of Liabilities.
(a) On each Business Day, the Administrative Agent shall apply the
then collected balance of the Concentration Account (net of fees charged, and of
such impressed balances as may be required by the bank at which the
Concentration Account is maintained) First, towards the SwingLine Loans and
Second, towards the unpaid balance of the Loan Account and all other Liabilities
other than principal and interest on the Tranche B Loan or the Tranche C Loan,
provided, however, for purposes of the calculation of interest on the unpaid
principal balance of the Loan Account, all payments other than by wire transfer
shall be deemed to have been made One (1) Business Day after such transfer.
(b) The following rules shall apply to deposits and payments under
and pursuant to this Section 9:9-5 :
(ii) Funds shall be deemed to have been deposited to the
Concentration Account on the Business Day on which deposited, provided that
notice of such deposit is available to the Administrative Agent by 2:00PM
on that Business Day.
(iii) Funds paid to the Administrative Agent, other than by
deposit to the Concentration Account, shall be deemed to have been received
on the Business Day when they are good and collected funds, provided that
notice of such payment is available to the Administrative Agent by 2:00PM
on that Business Day.
(iv) If notice of a deposit to the Concentration Account
(Section 9:9-5(b)(i)) or payment (Section 9:9-5(b)(ii)) is not available to
the Administrative Agent until after 2:00PM on a Business Day, such deposit
or payment shall be deemed to have been made at 9:00AM on the then next
Business Day.
Page 84
(v) All deposits to the Concentration Account and other
payments to the Administrative Agent are subject to clearance and
collection.
(a) The Administrative Agent shall transfer to the Operating Account
any surplus in the Concentration Account remaining after the application towards
the Liabilities referred to in Section 9:9-5(a), above (less those amount which
are to be netted out, as provided therein) provided, however, in the event that
(vi) any Borrower is InDefault; and
(vii) either
(B) one or more L/C's are then outstanding; or
(C) there is any amount unpaid on account of either the
Tranche B Loan or the Tranche C Loan,
then the Administrative Agent may establish a funded reserve of up to 110% of
the aggregate of (x) the Stated Amounts of such L/C's plus (y) amounts unpaid
on account of the Tranche B Loan and the Tranche C Loan. Such funded reserve
shall either be (i) returned to the Borrowers' Representative provided that no
Borrower is InDefault or (ii) applied towards the Liabilities following
Acceleration.
96 -The Operating Account. Except as otherwise specifically provided in, or
permitted by, this Agreement, all checks shall be drawn by the Borrowers'
Representative upon, and other disbursements shall be made by the Borrowers'
Representative solely from, the Operating Account.
Article 10: - Grant of Security Interest:
101 -Grant of Security Interest. To secure the Borrowers' prompt,
punctual, and faithful performance of all and each of the Liabilities, each
Borrower hereby grants to the Collateral Agent, for the ratable benefit of the
Lenders, a continuing security interest in and to, and assigns to the Collateral
Agent, for the ratable benefit of the Lenders, the following, and each item
thereof, whether now owned or now due, or in which that Borrower has an interest
(and without regard to whether acquired prior or subsequent to the initiation of
the Proceedings), or hereafter acquired, arising, or to become due, or in which
that Borrower obtains an interest, and all products, Proceeds, substitutions,
and accessions of or to any of the following (all of which, together with any
other property in which the Collateral Agent may in the future be granted a
security interest, is referred to herein as the "Collateral"):
(a) All Accounts and accounts receivable.
(b) All Inventory.
(c) All General Intangibles.
(d) All Equipment.
(e) All Goods.
Page 85
(f) All Farm Products.
(g) All Fixtures.
(h) All Chattel Paper.
(i) All Letter-of-Credit Rights.
(j) All Payment Intangibles.
(k) All Supporting Obligations.
(l) All books, records, and information relating to the Collateral
and/or to the operation of each Borrower's business, and all rights of access to
such books, records, and information, and all property in which such books,
records, and information are stored, recorded, and maintained.
(m) All Leasehold Interests.
(n) All Investment Property, Instruments, Documents, Deposit
Accounts, money, policies and certificates of insurance, deposits, impressed
accounts, compensating balances, cash, or other property.
(o) All insurance proceeds, refunds, and premium rebates, including,
without limitation, proceeds of fire and credit insurance, whether any of such
proceeds, refunds, and premium rebates arise out of any of the foregoing.
(10:10-1(a) through 10:10-1(n)) or otherwise.
(p) All liens, guaranties, rights, remedies, and privileges
pertaining to any of the foregoing (10:10-1(a) through 10:10-1(o)), including
the right of stoppage in transit.
102 -Extent and Duration of Security Interest.
(a) The security interest created and granted herein is in addition
to, and supplemental of, any security interest previously granted by any
Borrower to the Collateral Agent and shall continue in full force and effect
applicable to all Liabilities until both (a) all Liabilities have been paid
and/or satisfied in full and (b) the security interest created herein is
specifically terminated in writing by a duly authorized officer of the
Collateral Agent.
(b) It is intended that the Collateral Interests created herein
extend to and cover all assets of each Borrower other than Bankruptcy Recoveries
(except as otherwise provided in the Borrowing Orders).
(c) It is further intended that, with respect to any term used herein
to describe Collateral, which term is defined in either (or both) the UCC as in
effect on the date when this Agreement was executed by the Borrowers or in
UCC9'99, the meaning given that term shall be the more encompassing of the two
definitions.
(d) The Collateral Agent's Collateral Interest in any Collateral
which is the subject of a transfer pursuant to a Permitted Asset Disposition
shall automatically be released upon the consummation of such Permitted Asset
Disposition.
Page 86
Article 11: - Administrative Agent As Borrower's Attorney-In-Fact:
111 -Appointment as Attorney-In-Fact. Each Borrower hereby irrevocably
constitutes and appoints the Collateral Agent as that (acting through any of its
officers) Borrower's true and lawful attorney, with full power of substitution,
following the occurrence of an Event of Default, to convert the Collateral into
cash at the sole risk, cost, and expense of that Borrower, but for the sole
benefit of the Agents and the Lenders. The rights and powers granted the
Collateral Agent by this appointment include but are not limited to the right
and power to:
(a) Prosecute, defend, compromise, or release any action relating to
the Collateral.
(b) Sign change of address forms to change the address to which each
Borrower's mail is to be sent to such address as the Collateral Agent shall
designate; receive and open each Borrower's mail; remove any Receivables
Collateral and Proceeds of Collateral therefrom and turn over the balance of
such mail either to the Borrowers' Representative or to any trustee in
bankruptcy or receiver of the Borrowers' Representative, or other legal
representative of a Borrower whom the Collateral Agent determines to be the
appropriate person to whom to so turn over such mail.
(c) Endorse the name of the relevant Borrower in favor of the
Collateral Agent upon any and all checks, drafts, notes, acceptances, or other
items or instruments; sign and endorse the name of the relevant Borrower on, and
receive as secured party, any of the Collateral, any invoices, schedules of
Collateral, freight or express receipts, or bills of lading, storage receipts,
warehouse receipts, or other documents of title respectively relating to the
Collateral.
(d) Sign the name of the relevant Borrower on any notice to that
Borrower's Account Debtors or verification of the Receivables Collateral; sign
the relevant Borrower's name on any Proof of Claim in Bankruptcy against Account
Debtors, and on notices of lien, claims of mechanic's liens, or assignments or
releases of mechanic's liens securing the Accounts.
(e) Take all such action as may be necessary to obtain the payment of
any letter of credit and/or banker's acceptance of which any Borrower is a
beneficiary.
(f) Repair, manufacture, assemble, complete, package, deliver, alter
or supply goods, if any, necessary to fulfill in whole or in part the purchase
order of any customer of each Borrower.
(g) Use, license or transfer any or all General Intangibles of each
Borrower.
112 -No Obligation to Act. The Collateral Agent shall not be obligated to
do any of the acts or to exercise any of the powers authorized by Section 11:11-
1 herein, but if the Collateral Agent elects to do any such act or to exercise
any of such powers, it shall not be accountable for more than it actually
receives as a result of such exercise of power, and shall not be responsible to
any Borrower for any act or omission to act except for any act or omission to
act as to which there is a final determination made in a
Page 87
judicial proceeding (in which proceeding the Collateral Agent has had an
opportunity to be heard) which determination includes a specific finding that
the subject act or omission to act had been grossly negligent or in actual bad
faith or constituted wilful misconduct.
Article 12: - Events of Default:
The occurrence of any event described in this Article 12: respectively
shall constitute an "Event of Default" herein. Upon the occurrence of any Event
of Default, the Administrative Agent may, and on the instruction of the
SuperMajority Lenders as provided in Section 15:15-1(b) , or as provided in
Section 15:15-1(c) or 15:15-1(d) shall, declare any and all Liabilities shall
become immediately due and payable. The occurrence of any Event of Default shall
also constitute, without notice or demand, a default under all other Loan
Documents.
121 -Failure to Pay the Revolving Credit, the Tranche B Loan or the Tranche
C Loan.
The failure by any Borrower to pay when due any principal of, interest on,
or fees in respect of, the Revolving Credit, the Tranche B Loan or the Tranche C
Loan.
122 -Failure To Make Other Payments. The failure by any Borrower, on
three (3) days notice by the Administrative Agent to the Borrowers'
Representative, to discharge any payment Liability then due, other than under
the Revolving Credit, the Tranche B Loan or the Tranche C Loan.
123 -Failure to Perform Covenant or Liability (No Grace Period). The
failure by any Borrower to promptly, punctually, faithfully and timely perform,
discharge, or comply with any covenant or Liability not otherwise described in
Section 12:12-1 or Section 12:12-2 hereof, and included in any of the following
provisions hereof:
Section Relates to
----------------------------------------
6:6-2(c) State of Incorporation, State Identification Number
and Taxpayer Identification Number
6:6-3(b) Notice of Name Change
6:6-6 Location of Collateral
6:6-8(a) Title to Assets
6:6-9 Indebtedness
6:6-10 Insurance Policies
6:6-16 Pay taxes
6:6-21 Dividends, Investments and Other Corporate Actions
6:6-25 Affiliate Transactions
6:6-26 Additional Assurances
6:6-29 Bankruptcy Protections
8:8-1 Use of Collateral
Article 7: Reporting Requirements (Except two Business
Page 88
Days grace for all financial reports other than the
Borrower's daily Borrowing Base Certificate required
pursuant to Section 7:7-4)
Article 7: Financial Performance Covenants
Article 9: Cash Management (except if the failure to
comply is as
a result of force majeure or through no fault of
the Borrowers)
124 -Failure to Perform Covenant or Liability (Grace Period). The
failure by any, Borrower, within thirty (30) days following the earlier of any
Borrower's knowledge of a breach of any covenant or Liability not described in
any of Sections 12:12-1, 12:12-2, or 12:12-3 or of the Borrowers'
Representative's receipt of written notice from the Administrative Agent of the
breach of any of any of such covenants or Liabilities.
125 -Restructuring Consultant. A breach of Section 6:6-5 shall
constitute an Event of Default as follows:
(a) Except as provided in Section 12:12-5(b), any breach of
Section 6:6-5 which is not cured within the earlier of within five (5) Business
Days following the earlier of (i) any Borrower's knowledge of such breach or
(ii) the Borrowers' Representative's receipt of written notice of such breach
from the Administrative Agent.
(b) The resignation, dismissal, or disqualification of the
Restructuring Consultant shall constitute an Event of Default, but only if such
Restructuring Consultant is not replaced by a Restructuring Consultant
reasonably satisfactory to the Administrative Agent, the Tranche B Lender, and
the Tranche C Lender within thirty (30) Business Days thereafter, (or such
longer period as the Administrative Agent, the Tranche B Lender, and the Tranche
C Lender may agree) where the retention of such replacement Restructuring
Consultant is subject to a retention letter which, if it had been delivered in
satisfaction of the conditions precedent to the effectiveness of this Agreement,
would have satisfied the requirements of Section 5:5-3(a).
126 -Misrepresentation. The determination by the Administrative Agent
that any representation or warranty at any time made by any Borrower to any
Agent or any Lender was not true or complete in all material respects when
given.
127 -Acceleration of Other Debt. The occurrence of any event such that
Indebtedness of any Borrower in excess of $1,000,000.00 to any creditor incurred
subsequent to the commencement of the Proceedings other than any Agent or any
Lender could be accelerated unless, prior to the acceleration of the Liabilities
on account of such occurrence, the other creditor duly waives such default
Page 89
and evidence of such written waiver is provided to the Administrative Agent.
128 -Default Under Other Agreements. The occurrence of any breach of
any covenant or Liability imposed by, or of any default under, any agreement
(including any Loan Document) between any Agent or any Lender and any Borrower
or instrument given by any Borrower to any Agent or any Lender and the expiry,
without cure, of any applicable grace period (notwithstanding that subject Agent
or Lender may not have exercised all or any of its rights on account of such
breach or default) where the result of such breach or default, if exercised
upon, could have more than a de minimis adverse effect on a Borrower.
129 -Uninsured Casualty Loss. The occurrence of any uninsured loss,
theft, damage, or destruction of or to any material portion of the Collateral.
1210 -Attachment. Judgment. Restraint of Business.
(a) The service of process upon any Agent or any Lender or any
Participant of a court order or order of any other applicable governmental
authority attaching, by trustee, mesne, or other process, any funds of any
Borrower on deposit with, or assets of any Borrower in the possession of, that
Agent or that Lender or such Participant.
(b) The entry of judgments against any Borrower, not fully covered by
insurance (subject to a reasonable deductible) aggregating more than $1 Million,
which judgments are not satisfied (if a money judgment) or appealed from (with
execution or similar process stayed) within thirty (30) days of entry, but only
if and to the extent that the enforcement of such judgments are not stayed in
the Proceedings.
(c) The entry of any order or the imposition of any other process
having the force of law, the effect of which is to restrain in any material way
the conduct by any Borrower of its business in the ordinary course.
1211 -Canton Warehouse Default. The occurrence of any event such that any
Indebtedness of JBAK Holdings, Inc. or JBAK Realty, Inc in excess of
$1,000,000.00 or which is secured by the Canton Warehouse could be accelerated.
1212 -Indictment - Forfeiture. The indictment of, or institution of
any legal process or proceeding against, any Borrower, under any federal, state,
municipal, and other civil or criminal statute, rule, regulation, order, or
other requirement having the force of law where the relief, penalties, or
remedies sought or available include the forfeiture of more than a de minimus
part of the property of that Borrower and/or the imposition of any stay or other
order, the effect of which could be to
Page 90
restrain in any material way the conduct by any Borrower of its business in the
ordinary course.
1213 -Challenge to Loan Documents.
(a) Any challenge by or on behalf of the Borrowers' Representative,
any Borrower, or any Guarantor to the validity of any Loan Document or the
applicability or enforceability of any Loan Document strictly in accordance with
the subject Loan Document's terms or which seeks to void, avoid, limit, or
otherwise adversely affect any security interest created by or in any Loan
Document or any payment made pursuant thereto.
(b) Any determination by any court or any other judicial or
government authority that any Loan Document is not enforceable strictly in
accordance with the subject Loan Document's terms or which voids, avoids,
limits, or otherwise adversely affects any security interest created by any Loan
Document or any payment made pursuant thereto.
1214 -Change in Control. Any Change in Control.
1215 -Change in Borrowing Order. The entry of an order in the Proceedings,
without the consent of the Administrative Agent the Tranche B Lender and the
Tranche C Lender, which order constitutes the stay, modification, appeal, or
reversal of any Borrowing Order or which otherwise affects the effectiveness of
any Borrowing Order.
1216 -Appointment of Trustee or Examiner. The appointment in the
Proceedings of a trustee or of any examiner having expanded powers to operate
all or any part of the Borrower's business.
1217 -Conversion of Case. The conversion of the Proceedings to a case
under Chapter 7 of the Bankruptcy Code.
1218 -Relief From Stay. The entry of any order which provides relief
from the automatic stay otherwise imposed pursuant to Section 362 of the
Bankruptcy Code, which order permits any creditor, other than the Collateral
Agent, to realize upon, or to exercise any right or remedy with respect to, any
asset of the Borrower or to terminate any license, franchise, or similar
agreement, where such relief from stay could have a material adverse effect on
the Borrower's financial condition or ability to conduct its business in the
ordinary course.
11 - Termination of Business. Unless subject to the prior written consent
of the Agent, the determination of the Borrowers, whether by vote of the
Borrowers' board of directors or otherwise to:
Page 91
suspend the operation of the Borrowers' business in the ordinary course,
liquidate all or a material portion of the Borrowers' assets or Stores, or
employ an agent or other third party to conduct any so-called store closing,
store liquidation or "Going-Out-Of-Business" sales (other than in connection
with a Permitted Asset Disposition); or the filing of a motion or other
application in the Proceedings seeking authority to do any of the foregoing.
12 - Certain Applications. An application shall be filed by any Borrower
for the approval of any other super-priority claim in the Proceedings which is
pari passu with or senior to the claims of the Agents and the Lenders against
the Borrowers or there shall arise any such super-priority claim.
13 - Payment of Pre-Petition Indebtedness. The Borrowers shall pay or
discharge any pre-petition Indebtedness except as expressly permitted hereunder.
14 - Adequate Protection Orders. Any adequate protection is granted by
the Borrowers or is ordered by the Bankruptcy Court in the Proceedings in favor
of any of the Borrowers' pre-petition creditors (other than Leasing) without the
consent of the Agents, or any such adequate protection is modified or expanded
without the consent of the Agents.
15 - Material Adverse Actions. The filing, by any Borrower, of a motion
in the Proceedings to take any action or actions which are materially adverse to
the Lenders or their rights and remedies hereunder or under the other Loan
Documents or the Lenders' interest in any Collateral.
16 - Default by Guarantor. The occurrence of any Guarantor Default.
17 - Termination of Guaranty. The termination or attempted termination of
any guaranty by the Guarantor of the Liabilities.
Article 1: - Rights and Remedies Upon Default:
11 - Acceleration. Upon the occurrence of any Event of Default, subject
to the provisions of the Borrowing Orders, the Administrative Agent may (and on
the issuance of Acceleration Notice(s) requisite to the causing of Acceleration,
the Administrative Agent shall) declare all Indebtedness of the Borrower to the
Lenders to be immediately due and payable and may exercise all of the
Administrative Agent's Rights and Remedies (and the Collateral Agent may
likewise exercise all of its rights and remedies upon default) as the
Administrative Agent from time to time thereafter determines as appropriate.
Page 2
12 - Rights of Enforcement. Subject to the provisions of the Borrowing
Orders, the Collateral Agent shall have all of the rights and remedies of a
secured party upon default under the UCC, in addition to which the Collateral
Agent shall have all and each of the following rights and remedies:
(a) To give notice to any bank at which any DDA or Blocked Account is
maintained and in which Proceeds of Collateral are deposited, to turn over such
Proceeds directly to the Collateral Agent.
(b) To give notice to any customs broker of any of the Borrowers to
follow the instructions of the Collateral Agent as provided in any written
agreement or undertaking of such broker in favor of the Collateral Agent.
(c) To collect the Receivables Collateral with or without the taking
of possession of any of the Collateral.
(d) To take possession of all or any portion of the Collateral.
(e) To sell, lease, or otherwise dispose of any or all of the
Collateral, in its then condition or following such preparation or processing as
the Collateral Agent deems advisable and with or without the taking of
possession of any of the Collateral.
(f) To conduct one or more going out of business sales which include
the sale or other disposition of the Collateral.
(g) To apply the Receivables Collateral or the Proceeds of the
Collateral towards (but not necessarily in complete satisfaction of) the
Liabilities.
(h) To exercise all or any of the rights, remedies, powers,
privileges, and discretions under all or any of the Loan Documents.
13 - Sale of Collateral.
(a) Any sale or other disposition of the Collateral may be at public
or private sale upon such terms and in such manner as the Collateral Agent deems
advisable, having due regard to compliance with any statute or regulation which
might affect, limit, or apply to the Collateral Agent's disposition of the
Collateral.
(b) The Collateral Agent, in the exercise of the Collateral Agent's
rights and remedies upon default, may conduct, or may require the Borrowers to
conduct, one or more going out of business sales, in the Collateral Agent's own
right or by one or more agents and contractors. Such sale(s) may be conducted
upon any premises owned, leased, or occupied by any Borrower. The Collateral
Agent and any such agent or contractor, in conjunction with any such sale, may
augment the Inventory with other goods (all of which other goods shall remain
the sole property of the Collateral Agent or such agent or contractor). Any
amounts realized from the sale of such goods which constitute augmentations to
the Inventory (net of an allocable share of the costs and reasonable expenses
incurred in their
Page 3
disposition) shall be the sole property of the Collateral Agent or such agent or
contractor and neither any Borrower nor any Person claiming under or in right of
any Borrower shall have any interest therein. The proceeds of any such going out
of business sale which is conducted by a Borrower at the request of the
Collateral Agent shall be first applied to the direct costs of such sale.
(c) In the exercise of the Collateral Agent's rights and remedies
upon default, (i) the Collateral Agent may by written notice to the Borrowers'
Representative require the Borrowers to file a motion seeking to retain one or
more agents to sell, lease, or otherwise dispose of the Collateral on terms
reasonably acceptable to the Collateral Agent. The Borrowers shall file such
motion within ten (10) Business Days of the Collateral Agent's request and shall
diligently prosecute such motion. If the Borrowers fail to so file the motion,
the Collateral Agent may, file and prosecute such a motion in the name of the
Borrowers; and/or (b) the Collateral Agent may by written notice to the
Borrowers' Representative require the Borrowers to file a motion or motions
seeking to sell, assume, assign, or otherwise dispose of any or all real estate
(including, without limitation, Leasehold Interests) of the Borrowers pursuant
to Sections 363 and 365 of the Bankruptcy Code, on terms reasonably acceptable
to the Collateral Agent. The Borrowers shall file such motion or motions within
ten (10) Business Days of the Collateral Agent's request and shall diligently
prosecute such motion(s). If the Borrowers fail to so file such motion(s), the
Collateral Agent may, file and prosecute such motion(s) in the name of the
Borrowers.
(d) Unless the Collateral is perishable or threatens to decline
speedily in value, or is of a type customarily sold on a recognized market (in
which event the Collateral Agent shall provide the Borrowers' Representative
such notice as may be practicable under the circumstances), the Collateral Agent
shall give the Borrowers' Representative at least ten (10) days prior written
notice of the date, time, and place of any proposed public sale, and of the date
after which any private sale or other disposition of the Collateral may be made.
Each Borrower agrees that such written notice shall satisfy all requirements for
notice to that Borrower which are imposed under the UCC or other applicable law
with respect to the exercise of the Collateral Agent's rights and remedies upon
default.
(e) The Collateral Agent, the Administrative Agent, and any Lender
may purchase the Collateral, or any portion of it at any sale held under this
Article.
(f) If any of the Collateral is sold, leased, or otherwise disposed
of by the Collateral Agent on credit, the Liabilities shall not be deemed to
have been reduced as a result thereof unless and until payment is finally
received thereon by the Collateral Agent.
(g) The Collateral Agent shall turn over to the Administrative Agent
the proceeds of the exercise by the Collateral Agent of its rights and remedies
under this Article 13:. The Administrative Agent shall apply the proceeds of the
Collateral Agent's exercise of its rights and remedies upon default pursuant to
this Article 13: in accordance with Sections 15:15-8 and 15:15-9.
Page 4
14 - Occupation of Business Location. In connection with the Collateral
Agent's exercise of the Collateral Agent's rights under this Article 13:, the
Collateral Agent may enter upon, occupy, and use any premises owned or occupied
by each Borrower, and may exclude each Borrower from such premises or portion
thereof as may have been so entered upon, occupied, or used by the Collateral
Agent. The Collateral Agent shall not be required to remove any of the
Collateral from any such premises upon the Collateral Agent's taking possession
thereof, and may render any Collateral unusable to the Borrowers. In no event
shall the Collateral Agent be liable to any Borrower for use or occupancy by the
Collateral Agent of any premises pursuant to this Article 13:, nor for any
charge (such as wages for any Borrower's employees and utilities) incurred in
connection with the Collateral Agent's exercise of the Collateral Agent's Rights
and Remedies.
15 - Grant of Nonexclusive License. Each Borrower hereby grants to the
Collateral Agent a royalty free nonexclusive irrevocable license to use, apply,
and affix any trademark, trade name, logo, or the like in which any Borrower now
or hereafter has rights, such license being with respect to the Collateral
Agent's exercise of the rights hereunder including, without limitation, in
connection with any completion of the manufacture of Inventory or sale or other
disposition of Inventory.
16 - Assembly of Collateral. The Collateral Agent may require any
Borrower to assemble the Collateral and make it available to the Collateral
Agent at the Borrowers' sole risk and expense at a place or places which are
reasonably convenient to both the Collateral Agent and the Borrowers'
Representative.
17 - Rights and Remedies. The rights, remedies, powers, privileges, and
discretions of the Administrative Agent hereunder (herein, the Agents' Rights
and Remedies") shall be cumulative and not exclusive of any rights or remedies
which it would otherwise have. No delay or omission by an Agent in exercising or
enforcing any of the Agents' Rights and Remedies shall operate as, or
constitute, a waiver thereof. No waiver by an Agent of any Event of Default or
of any default under any other agreement shall operate as a waiver of any other
default hereunder or under any other agreement. No single or partial exercise of
any of the Agents' Rights or Remedies, and no express or implied agreement or
transaction of whatever nature entered into between any Agent and any person, at
any time, shall preclude the other or further exercise of the Agents' Rights and
Remedies. No waiver by any Agent of any of the Agents' Rights and Remedies on
any one occasion shall be deemed a waiver on any subsequent occasion, nor shall
it be deemed a continuing waiver. The Agents' Rights and Remedies may be
exercised at such time or times and in such order of preference as the Agents
may determine. The Agents' Rights and Remedies may be exercised without resort
or regard to any other source of satisfaction of the Liabilities.
Page 5
Article 2: - Revolving Credit Fundings and Distributions:
21 - Revolving Credit Funding Procedures. Subject to Section 14:14-2:
(a) The Agent shall advise each Revolving Credit Lender, no later
than 2:00PM on a date on which any Revolving Credit Loan (other than a SwingLine
Loan) is to be made on that date. Such advice, in each instance, may be by
telephone or facsimile transmission, provided that if such advice is by
telephone, it shall be confirmed in writing. Advice of a Revolving Credit Loan
shall include the amount of and interest rate applicable to the subject
Revolving Credit Loan.
(b) Subject to that Revolving Credit Lender's Revolving Credit Dollar
Commitment, each Revolving Credit Lender, by no later than the end of business
on the day on which the subject Revolving Credit Loan is to be made, shall
Transfer that Revolving Credit Lender's Revolving Credit Percentage Commitment
of the subject Revolving Credit Loan to the Administrative Agent.
22 - SwingLine Loans.
(a) In the event that, when a Revolving Credit Loan is requested, the
aggregate unpaid balance of the SwingLine Loan is less than the SwingLine Loan
Ceiling, then the SwingLine Lender may advise the Administrative Agent that the
SwingLine Lender has determined to include up to the amount of the requested
Revolving Credit Loan as part of the SwingLine Loan. In such event, the
SwingLine Lender shall Transfer the amount of the requested Revolving Credit
Loan to the Administrative Agent.
(b) The SwingLine Loan shall be converted to a Revolving Credit Loan
in which all Revolving Credit Lenders participate as follows:
(ii) At any time and from time to time, the SwingLine Lender may
advise the Administrative Agent that all, or any part of the SwingLine Loan
is to be converted to a Revolving Credit Loan in which all Revolving Credit
Lenders participate.
(iii) At the initiation of a Liquidation, the then entire unpaid
principal balance of the SwingLine Loan shall be converted to a Revolving
Credit Loan in which all Revolving Credit Lenders participate.
In either such event, the Administrative Agent shall advise each Revolving
Credit Lender of such conversion as if, and with the same effect as if such
conversion were the making of a Revolving Credit Loan as provided in Section
14:14-1.
(a) The SwingLine Lender, in separate capacities, may also be one or
more Agents, a Revolving Credit Lender, Tranche B Lender and the Tranche C
Lender.
(b) The SwingLine Lender, in its capacity as SwingLine Lender, is not
a "Revolving Credit Lender" for any of the following purposes:
Page 6
(iv) Except as otherwise specifically provided in the relevant
Section, any distribution pursuant to Section 15:15-8.
(v) Determination of whether the requisite Loan Commitments
have Consented to action requiring such Consent.
23 - Administrative Agent's Covering of Fundings:
(a) Each Revolving Credit Lender shall make available to the
Administrative Agent, as provided herein, that Revolving Credit Lender's
Revolving Credit Percentage Commitment of the following:
(ii) Each Revolving Credit Loan, up to the maximum amount of
that Revolving Credit Lender's Revolving Credit Dollar Commitment of the
Revolving Credit Loans.
(iii) Up to the maximum amount of that Revolving Credit Lender's
Revolving Credit Dollar Commitment of each L/C Drawing (to the extent that
such L/C Drawing is not "covered" by a Revolving Credit Loan as provided
herein).
(a) In all circumstances, the Administrative Agent may:
(iv) Assume that each Revolving Credit Lender, subject to
Section 14:14-3(a), timely shall make available to the Administrative Agent
that Revolving Credit Lender's Revolving Credit Percentage Commitment of
each Revolving Credit Loan, notice of which is provided pursuant to Section
14:14-1 and shall make available, to the extent not "covered" by a
Revolving Credit Loan, that Revolving Credit Lender's Revolving Credit
Percentage Commitment of any honoring of an L/C.
(v) In reliance upon such assumption, make available the
corresponding amount to the Borrowers.
(vi) Assume that each Revolving Credit Lender timely shall pay,
and shall make available, to the Administrative Agent all other amounts
which that Revolving Credit Lender is obligated to so pay and/or make
available hereunder or under any of the Loan Documents.
(a) In the event that, in reliance upon any of such assumptions, the
Administrative Agent makes available, a Revolving Credit Lender's Revolving
Credit Percentage Commitment of one or more Revolving Credit Loans, or any other
amount to be made available hereunder or under any of the Loan Documents, which
amount a Revolving Credit Lender (a "Delinquent Revolving Credit Lender") fails
to provide to the Administrative Agent within One (1) Business Day of written
notice of such failure, then:
(vii) The amount which had been made available by the
Administrative Agent is an " Administrative Agent's Cover" (and is so
referred to herein).
(viii) All interest paid by the Borrowers on account of the
Revolving Credit
Page 7
Loan or coverage of the subject L/C Drawing which consist of the Administrative
Agent's Cover shall be retained by the Administrative Agent until the
Administrative Agent's Cover, with interest, has been paid.
(ix) The Delinquent Revolving Credit Lender shall pay to the
Administrative Agent, on demand, interest at a rate equal to the prevailing
federal funds rate on any Administrative Agent's Cover in respect of that
Delinquent Revolving Credit Lender
(x) The Administrative Agent shall have succeeded to all
rights to payment to which the Delinquent Revolving Credit Lender otherwise
would have been entitled hereunder in respect of those amounts paid by or
in respect of the Borrowers on account of the Administrative Agent's Cover
together with interest until it is repaid. Such payments shall be deemed
made first towards the amounts in respect of which the Administrative
Agent's Cover was provided and only then towards amounts in which the
Delinquent Revolving Credit Lender is then participating. For purposes of
distributions to be made pursuant to Section 14:14-4(a) (which relates to
ordinary course distributions) or Section 15:15-8 (which relates to
distributions of proceeds of a Liquidation) below, amounts shall be deemed
distributable to a Delinquent Revolving Credit Lender (and consequently, to
the Administrative Agent to the extent to which the Administrative Agent is
then entitled) at the highest level of distribution (if applicable) at
which the Delinquent Revolving Credit Lender would otherwise have been
entitled to a distribution.
(xi) Subject to Subsection 14:14-3(c)(iv), the Delinquent
Revolving Credit Lender shall be entitled to receive any payments from the
Borrowers to which the Delinquent Revolving Credit Lender is then entitled,
provided however there shall be deducted from such amount and retained by
the Administrative Agent any interest to which the Administrative Agent is
then entitled on account of Section 14:14-3(c)(ii), above.
(a) A Delinquent Revolving Credit Lender shall not be relieved of any
obligation of such Delinquent Revolving Credit Lender hereunder (all and each of
which shall constitute continuing obligations on the part of any Delinquent
Revolving Credit Lender).
(b) A Delinquent Revolving Credit Lender may cure its status as a
Delinquent Revolving Credit Lender by paying the Administrative Agent the
aggregate of the following:
(xii) The Administrative Agent's Cover (to the extent not
previously repaid by the Borrowers and retained by the Administrative Agent
in accordance with Subsection 14:14-3(c)(iv), above) with respect to that
Delinquent Revolving Credit Lender.
Plus
(xiii) The aggregate of the amount payable under Subsection
14:14-3(c)(iii), above (which relates to interest to be paid by that
Delinquent Revolving Credit Lender).
Plus
Page 8
(xiv) All such costs and expenses as may be incurred by the
Administrative Agent in the enforcement of the Administrative Agent's
rights against such Delinquent Revolving Credit Lender.
24 - Ordinary Course Distributions: Revolving Credit. (This Section
14:14-4 applies unless the provisions of Section 15:15-8 (which relates to
distributions in the event of a Liquidation) becomes operative).
(a) Weekly, on such day as may be set from time to time by the
Administrative Agent (or more frequently at the Administrative Agent's option)
the Administrative Agent and each Revolving Credit Lender shall settle up on
amounts advanced under the Revolving Credit and collected funds received in the
Concentration Account.
(b) The Administrative Agent shall distribute to the SwingLine Lender
and to each Revolving Credit Lender, such Person's respective Pro-Rata share of
interest payments on the Revolving Credit Loans when actually received and
collected by the Administrative Agent (excluding the one Business Day for
settlement provided for in Section 9:9-5(a), which shall be for the account of
the Administrative Agent only). For purposes of calculating interest due to a
Revolving Credit Lender, that Revolving Credit Lender shall be entitled to
receive interest on the actual amount contributed by that Revolving Credit
Lender towards the principal balance of the Revolving Credit Loans outstanding
during the applicable period covered by the interest payment made by the
Borrowers. Any net principal reductions to the Revolving Credit Loans received
by the Administrative Agent in accordance with the Loan Documents during such
period shall not reduce such actual amount so contributed, for purposes of
calculation of interest due to that Revolving Credit Lender, until the
Administrative Agent has distributed to that Revolving Credit Lender its Pro-
Rata share thereof.
(c) The Administrative Agent shall distribute fees paid on account of
the Revolving Credit, as follows:
(ii) L/C Fee (Section 2:2-20(a)): Pro-Rata to the Revolving
Credit Lenders.
(iii) Unused Line Fee (Section 2:2-15): Pro-Rata to the
Revolving Credit Lenders.
(iv) Revolving Credit Early Termination Fee (Section 2:2-16) :
Pro-Rata to the Revolving Credit Lenders.
(v) Revolving Credit Commitment Fee (Section 2:2-13) : As
provided in separate letter agreements with the respective Revolving Credit
Lenders.
(a) No Lender shall have any interest in or right to receive any part
of the following:
(vi) Any interest which reflects "float" as described in the
proviso
Page 9
included in Section 9:9-5(a), all of which float shall be for the account
of the Administrative Agent only.
(vii) The Administrative Agent's Fee (Section 2:2-14) to be paid
by the Borrowers to the Administrative Agent.
(viii) Fees described in Section 2:2-20(b) (which relates to fees
associated with, among other things, the issuance of L/C's): Retained by
the Issuer.
(a) No Revolving Credit Lender shall have any interest in or right to
receive any part of the Tranche B Fees or the Tranche C Assessments.
(b) Any amount received by the Administrative Agent or the Collateral
Agent as reimbursement for any cost or expense (including without limitation,
attorneys' reasonable fees) shall be distributed by the Administrative Agent to
that Person which is entitled to such reimbursement as provided in this
Agreement (and if such Person(s) is (are) the Lenders, Pro-Rata determined as of
the date on which the expense, in respect of which such reimbursement is being
made, was incurred).
(c) Each distribution pursuant to this Section 14:14-4 is subject to
Section 14:14-3(c), above (which relates to the effect of the failure of any
Revolving Credit Lender to have Transferred to the Administrative Agent any
amount which that Revolving Credit Lender is then obligated to so Transfer
pursuant to the within Agreement).
25 - Ordinary Course Distributions: The Tranche B Loan and the Tranche C
Loan (This Section 14:14-5 applies unless the provisions of Section 15:15-8
(which relates to distributions in the event of a Liquidation) becomes
operative).
(a) The Administrative Agent shall distribute to the Tranche B Lender
and the Tranche C Lender, respectively, payments on account of principal of, and
interest on, the Tranche B Loan and the Tranche C Loan and the Tranche B Fees
and Tranche C Assessments as received and collected by the Administrative Agent
from the Borrowers in accordance with the provisions of this Agreement or as
made available by the Administrative Agent as the proceeds of advances under the
Revolving Credit. As provided in Section 14:14-4(f), any amount received by the
Administrative Agent or the Collateral Agent as reimbursement for any cost or
expense (including without limitation, attorneys' reasonable fees) shall be
distributed by the Administrative Agent to that Person which is entitled to such
reimbursement as provided in this Agreement (and if such Person(s) is (are) the
Lenders, Pro-Rata determined as of the date on which the expense, in respect of
which such reimbursement is being made, was incurred).
(b) Unless otherwise specifically agreement to in writing, the
Administrative Agent shall distribute the proceeds of a disposition of
Collateral, other than in the ordinary course, in accordance with the ordering
of distributions set forth in Section 15:15-9(c).
Page 10
Article 3: - Acceleration and Liquidation:
31 - Acceleration Notices
(a) Subject to the provisions of the Borrowing Orders, the
Administrative Agent may give the Collateral Agent and Lenders an Acceleration
Notice at any time following the occurrence of an Event of Default.
(b) Subject to the provisions of the Borrowing Orders, the
SuperMajority Revolving Credit Lenders may give the Administrative Agent an
Acceleration Notice at any time following the occurrence of an Event of Default.
Such notice may be by multiple counterparts, provided that counterparts executed
by the requisite Lenders are received by the Administrative Agent within a
period of five (5) consecutive Business Days.
(c) Subject to the provisions of the Borrowing Orders, the Tranche B
Lender may give the Administrative Agent an Acceleration Notice as follows:
(ii) At any time following the occurrence of an Event of
Default which occurs after the Revolving Credit Loan Debt has been paid in
full, all L/C's have been cash collateralized, and there is no obligation
on the Revolving Credit Lenders to make any further loans or to provide any
further financial accommodation under the Revolving Credit.
(iii) At any time following the occurrence of an Event of
Default which occurs after a BuyOut by the Tranche B Lender.
(iv) At any time as permitted pursuant to Section 15:15-2.
(a) Subject to the provisions of the Borrowing Orders, the Tranche C
Lender may give the Administrative Agent an Acceleration Notice as follows:
(v) At any time following the occurrence of an Event of
Default which occurs after the Revolving Credit Loan Debt and the Tranche B
Loan have been paid in full, all L/C's have been cash collateralized, and
there is no obligation on the Revolving Credit Lenders to make any further
loans or to provide any further financial accommodation under the Revolving
Credit.
(vi) At any time following the occurrence of an Event of
Default which occurs after a BuyOut by the Tranche C Lender.
(vii) At any time as permitted pursuant to Section 15:15-3.
32 - Mandatory Acceleration Right of The Tranche B Lender:
(a) The Tranche B Lender may initiate a Standstill Period by written
notice to the Administrative Agent and to the Tranche C Lender at any time after
the occurrence of any Tranche B Action Event and may so initiate a Standstill
Period, on account of a separate Tranche B Action Event
Page 11
during the pendency of another Standstill Period which has been initiated by it
or by the Tranche C Lender.
(b) Upon the expiry of a Standstill Period initiated by reason
of a Financial Covenant Breach or a Bankruptcy Breach, the Tranche B Lender may
give the Administrative Agent and the Collateral Agent an Acceleration Notice
unless acceleration has been stayed by judicial or statutory process other than
the automatic stay imposed at the initiation of the Proceedings.
(c) Upon the expiry of a Standstill Period initiated by a
Tranche B Action Event other than a Financial Covenant Breach, the Tranche B
Lender may give the Administrative Agent and the Collateral Agent an
Acceleration Notice unless either 15:15-2(c)(i) or 15:15-2(c)(ii) is applicable:
(ii) Acceleration has been stayed by judicial or statutory
process other than the automatic stay imposed at the initiation of the
Proceedings.
(iii) As applicable:
(A) If the relevant Tranche B Action Event had been a
Tranche B Availability Breach: On three (3) consecutive days during
the relevant Standstill Period, no Tranche B Availability Breach
exists or occurs.
(B) If the relevant Tranche B Event is a Minimum Excess
Availability Breach: On any day during the relevant Standstill Period,
no Minimum Excess Availability Breach exists or occurs.
(C) If the relevant Tranche B Action Event is a Tranche B
Payment Breach: All payments which are due or overdue on account of
the Tranche B Loan (other than those which would be due only if the
Tranche B Loan were accelerated) are paid prior to the expiry of the
relevant Standstill Period.
11- Mandatory Acceleration Right of The Tranche C Lender:
(a) The Tranche C Lender may initiate a Standstill Period by written
notice to the Administrative Agent and to the Tranche B Lender at any time after
the occurrence of any Tranche C Action Event and may so initiate a Standstill
Period, on account of a separate Tranche C Action Event during the pendency of
another Standstill Period which has been initiated by it or by the Tranche C
Lender.
(b) Upon the expiry of a Standstill Period initiated by reason of a
Financial Covenant Breach or a Bankruptcy Breach, the Tranche C Lender may give
the Administrative Agent and the Collateral Agent an Acceleration Notice unless
acceleration has been stayed by judicial or statutory process other than the
automatic stay imposed at the initiation of the Proceedings.
(c) Upon the expiry of a Standstill Period initiated by a Tranche C
Action Event other than a Financial Covenant Breach or Bankruptcy Breach, the
Tranche C Lender may give the
Page 102
Administrative Agent and the Collateral Agent an Acceleration Notice unless
either 15:15-3(c)(i) or 15:15-3(c)(ii) is applicable:
(ii) Acceleration has been stayed by judicial or statutory
process other than the automatic stay imposed at the initiation of the
Proceedings.
(iii) As applicable:
(A) If the relevant Tranche C Action Event had been a
Tranche B Availability Breach: On three (3) consecutive days during
the relevant Standstill Period, no Tranche C Availability Breach
exists or occurs.
(B) If the relevant Tranche C Event is a Minimum Excess
Availability Breach: On any day during the relevant Standstill Period,
no Minimum Excess Availability Breach exists or occurs.
(C) If the relevant Tranche C Action Event is a Tranche C
Payment Breach: All payments which are due or overdue on account of
the Tranche C Loan (other than those which would be due only if the
Tranche C Loan were accelerated) are paid prior to the expiry of the
relevant Standstill Period.
11. -Acceleration Unless stayed by judicial or statutory process, subject
to the provisions of the Borrowing Orders, the Administrative Agent shall
Accelerate the Revolving Credit Obligations, the Tranche B Loan and the Tranche
C Loan within a commercially reasonable time following:
(a) The Administrative Agent's giving of an Acceleration Notice to
the Collateral Agent and the Revolving Credit Lenders as provided in Section
15:15-1(a).
(b) The Administrative Agent's receipt of an Acceleration Notice from
the SuperMajority Revolving Credit Lenders, in compliance with Section 15:15-
1(b) .
(c) The Administrative Agent's receipt of an Acceleration Notice from
the Tranche B Lender, in compliance with Section 15:15-1(c).
(d) The Administrative Agent's receipt of an Acceleration Notice from
the Tranche C Lender, in compliance with Section 15:15-1(d).
12. -Initiation of Liquidation Unless stayed by judicial or statutory
process, subject to the provisions of the Borrowing Orders a Liquidation shall
be initiated by the Collateral Agent within a commercially reasonable time
following Acceleration of the Revolving Credit Obligations, the Tranche B Loan
and the Tranche C Loan.
13. -Actions At and Following Initiation of Liquidation
(a) At the initiation of a Liquidation:
Page 103
(ii) The unpaid principal balance of the SwingLine Loan (if any)
shall be converted, pursuant to Section 14:14-2(b)(ii), to a Revolving
Credit Loan in which all Revolving Credit Lenders participate.
(iii) The Administrative Agent and the Revolving Credit Lenders
shall "net out" each Revolving Credit Lender's respective contributions
towards the Revolving Credit Loans, so that each Revolving Credit Lender
holds that Revolving Credit Lender's Revolving Credit Percentage Commitment
of the Revolving Credit Loans and advances.
(a) Following the initiation of a Liquidation, each Revolving Credit
Lender shall contribute, towards any L/C thereafter honored and not immediately
reimbursed by the Borrowers, that Revolving Credit Lender's Revolving Credit
Percentage Commitment of such honoring.
14. -Collateral Agent's Conduct of Liquidation
(a) Any Liquidation shall be conducted by the Collateral Agent, with
the advice and assistance of the Administrative Agent and the Lenders.
(b) The Collateral Agent may establish one or more Nominees to "bid
in" or otherwise acquire ownership to any Post Foreclosure Asset.
(c) The Collateral Agent shall manage the Nominee and manage and
dispose of any Post Foreclosure Assets with a view towards the realization of
the economic benefits of the ownership of the Post Foreclosure Assets and in
such regard, the Collateral Agent and/or the Nominee may operate, repair,
manage, maintain, develop, and dispose of any Post Foreclosure Asset in such
manner as the Collateral Agent determines as appropriate under the
circumstances.
(d) Each Agent may decline to undertake or to continue taking a
course of action or to execute an action plan (whether proposed by an Agent or a
Lender) unless indemnified Pro-Rata to that Agent's satisfaction by the Lenders
against any and all liability and expense which may be incurred by that Agent by
reason of taking or continuing to take that course of action or action plan.
(e) The Administrative Agent and each Lender shall execute all such
instruments and documents not inconsistent with the provisions of this Agreement
as the Administrative Agent and/or the Nominee reasonably may request with
respect to the creation and governance of any Nominee, the conduct of the
Liquidation, and the management and disposition of any Post Foreclosure Asset.
15. -Distribution of Liquidation Proceeds:
(a) The Collateral Agent may establish one or more reasonably funded
reserve accounts into which proceeds of the conduct of any Liquidation may be
deposited in anticipation of future expenses which may be incurred by any Agent
in the exercise of rights as a secured creditor of the Borrowers and prior
claims which the Agents anticipate may need to be paid.
Page 104
(b) The Collateral Agent shall distribute the proceeds of any
Liquidation to the Administrative Agent.
(c) The Administrative Agent shall distribute the net proceeds of
Liquidation, as distributed to the Administrative Agent by the Collateral Agent
pursuant to Section 15:15-8(b), in accordance with the relative priorities set
forth in Section 15:15-9.
(d) Each Revolving Credit Lender, on the written request of the
Administrative Agent and/or any Nominee, not more frequently than once each
month, shall reimburse the Agents and/or any Nominee, Pro-Rata, for any cost or
expense reasonably incurred by the Agents and/or the Nominee in the conduct of a
Liquidation, which amount is not covered out of current proceeds of the
Liquidation, which reimbursement shall be paid over to and distributed by the
Administrative Agent.
16. -Relative Priorities To Proceeds of Liquidation
(a) Proceeds of a Liquidation shall be distributed based on the
First through Fourth levels of priority with respect to each classification of
Collateral without taking any Early Termination Assessments into account and
then shall be distributed in the Fifth level of distribution on account of any
Early Termination Assessments.
(b) All distributions of proceeds of a Liquidation shall be net
of payment over to the Agents as reimbursement for all reasonable third party
costs and expenses incurred by the Agents and to Lenders' Special Counsel and to
any funded reserve established pursuant to Section 15:15-8(a).
(c) The relative priorities to the proceeds of a Liquidation
shall be distributed based on the following relative priorities:
(ii) Revolving Credit Senior Collateral:
(B) First:, as provided in Section 15:15-9(d); and
then
(C) Second, to the Tranche B Lender; and then
(D) Third, to Leasing; and then
(E) Fourth, to the Tranche C Lender; and then
(F) Fifth, in the same order as in First through
Fourth, towards Early Termination Assessments.
(G) Sixth, to all other Liabilities.
(i) Leasing Senior Collateral:
(H) First, to Leasing; and then
(I) Second, as provided in Section 15:15-9(d); and
then
(J) Third, to the Tranche B Lender; and then
(K) Fourth, to the Tranche C Lender; and then
(L) Fifth, in the same order as in Second through
Page 105
above Fourth, towards Early Termination Assessments.
(M) Sixth, to all other Liabilities.
(i) Tranche C Senior Collateral:
(N) First, to the Tranche C Lender; and then
(O) Second, to the Tranche B Lender; and then
(P) Third, as provided in Section 15:15-9(d); and then
(Q) Fourth, to Leasing; and then
(R) Fifth, in the same order as in First through above
Fourth, towards Early Termination Assessments.
(S) Sixth, to all other Liabilities.
(i) Leasehold proceeds:
(T) First:, as provided in Section 15:15-9(d); and
then
(U) Second, to the Tranche B Lender; and then
(V) Third, to the Tranche C Lender; and then
(W) Fourth, to Leasing; and then
(X) Fifth, in the same order as in First through
Fourth, towards Early Termination Assessments.
(Y) Sixth, to all other Liabilities.
(a) Distributions which are made pursuant to reference to
Section15:15-9(d) shall be in the following order:
(ii) To the SwingLine Lender, on account of any SwingLine loans
not converted to Revolving Credit Loans pursuant to Section 15:15-5(a)(i);
and then
(iii) To the Revolving Credit Lenders (other than any Delinquent
Revolving Credit Lender) and to FRFI or any of its Affiliates providing
cash management services or L/Cs to the extent of any credit exposure in
connection therewith (but excluding any fees earned on account thereof),
Pro-Rata, to the unpaid principal balance of Revolving Credit Debt and any
amounts owed on account of such cash management services and any L/Cs
(including as cash collateral for any undrawn L/Cs) and fees due to the
Issuer on account thereof; and then
(iv) To the Revolving Credit Lenders (other than any Delinquent
Revolving Credit Lender), Pro-Rata, to accrued interest which constitutes
Revolving Credit Debt; and then
(v) To the Revolving Credit Lenders (other than any Delinquent
Revolving Credit Lender), Pro-Rata, to Revolving Credit Fees, other than
the Revolving Credit Early Termination Fee; and then
(vi) To any Delinquent Revolving Credit Lenders, Pro-Rata to
amounts to which such Revolving Credit Lenders otherwise would have been
entitled pursuant to
Page 106
Sections 15:15-9(d)(ii), 15:15-9(d)(iii), and 15:15-9(d)(iv).
Article 1: - The Agents:
11. -Appointment of The Agents
(a) Each Lender appoints and designates Fleet Retail Finance Inc. as
the "Administrative Agent" hereunder and under the Loan Documents.
(b) Each Lender appoints and designates Fleet Retail Finance Inc. as
the "Collateral Agent" hereunder and under the Loan Documents.
(c) Each Lender authorizes each Agent:
(ii) To execute those of the Loan Documents and all other
instruments relating thereto to which that Agent is a party.
(iii) To take such action on behalf of the Lenders and to
exercise all such powers as are expressly delegated to that Agent hereunder
and in the Loan Documents and all related documents, together with such
other powers as are reasonably incident thereto.
(a) Each Lender recognizes that Fleet Retail Finance Inc., Back
Bay Capital Funding LLC, and Leasing are interrelated and waives any potential
claim which may be based on an Agent's acting in conflict of interest on account
thereof. Nothing contained herein shall be deemed to release the Agents from
liability under Section 16:16-2(f) hereof for conduct undertaken in a grossly
negligent manner, in actual bad faith, or in willful misconduct.
12. -Responsibilities of Agents
(a) The Administrative Agent shall have principal responsibilities
for and primary authority for the administration of the credit facilities
contemplated by this Agreement and for all matters for which the Collateral
Agent is not responsible. In all instances where the allocation of
responsibility and authority, as between the Collateral Agent and the
Administrative Agent is in doubt, the Administrative Agent shall be vested with
such responsibility and authority.
(b) The Collateral Agent shall have principal responsibilities for
and primary authority for the conduct of the Liquidation and the distribution of
the proceeds of such Liquidation.
(c) Neither Agent shall have any duties or responsibilities to, or
any fiduciary relationship with, any Lender except for those expressly set forth
in this Agreement.
(d) Neither Agent nor any of its Affiliates shall be responsible to
any Lender for any of the following:
(ii) Any recitals, statements, representations or warranties
made by any Borrower or any other Person.
(iii) Any appraisals or other assessments of the assets of any
Borrower or of
Page 107
any other Person responsible for or on account of the Liabilities.
(iv) The value, validity, effectiveness, genuineness,
enforceability, or sufficiency of the Loan Agreement, the Loan Documents or
any other document referred to or provided for therein.
(v) Any failure by any Borrower or any other Person (other than
the subject Agent) to perform its obligations under the Loan Documents.
(a) Each Agent may employ attorneys, accountants, and other
professionals and agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such attorneys, accountants, and other
professionals or agents or attorneys-in-fact selected by the subject Agent with
reasonable care. No such attorney, accountant, other professional, agent, or
attorney-in-fact shall be responsible for any action taken or omitted to be
taken by any other such Person.
(b) Neither Agent, nor any of its directors, officers, or employees
shall be responsible for any action taken or omitted to be taken or omitted to
be taken by any other of them in connection herewith in reliance upon advice of
their respective counsel nor, in any other event except for any action taken or
omitted to be taken as to which a final judicial determination has been or is
made (in a proceeding in which such Person has had an opportunity to be heard)
that such Person had acted in a grossly negligent manner, in actual bad faith,
or in willful misconduct.
(c) Neither Agent shall have any responsibility in any event for more
funds than that Agent actually receives and collects.
(d) The Agents, in their separate capacities as Lenders, shall have
the same rights and powers hereunder as any other Lender.
13. -Concerning Distributions By the Agents
(a) Each Agent, in that Agent's reasonable discretion based upon that
Agent's determination of the likelihood that additional payments will be
received, expenses incurred, and/or claims made by third parties to all or a
portion of such proceeds, may delay the distribution of any payment received on
account of the Liabilities.
(b) Each Agent may disburse funds prior to determining that the sums
which that Agent expects to receive have been finally and unconditionally paid
to that Agent. If and to the extent that Agent does disburse funds and it later
becomes apparent that the Agent did not then receive a payment in an amount
equal to the sum paid out, then any Lender to whom the Agent made the funds
available, on demand from the Agent, shall refund to the Administrative Agent
the sum paid to that person.
(c) If, in the opinion of an Agent, the distribution of any amount
received by that Agent might involve that Agent in liability, or might be
prohibited hereby, or might be questioned by any Person, then that Agent may
refrain from making distribution until that Agent's right to make distribution
Page 108
has been adjudicated by a court of competent jurisdiction.
(d) The proceeds of any Lender's exercise of any right of, or in the
nature of, set-off shall be deemed, First, to the extent that a Lender is
entitled to any distribution hereunder, to constitute such distribution and
Second, shall be shared with the other Lenders as if distributed pursuant to
(and shall be deemed as distributions under) Section 15:15-9.
(e) Each Lender recognizes that the crediting of the Borrowers with
the "proceeds" of any transaction in which a Post Foreclosure Asset is acquired
is a non-cash transaction and that, in consequence, no distribution of such
"proceeds" will be made by the Administrative Agent to any Lender.
(f) In the event that (x) a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Administrative Agent is
to be repaid or disgorged or (y) the requisite Lenders (as provided in Section
17:17-4(i)) determine to effect such repayment or disgorgement, then each Lender
to which any such distribution shall have been made shall repay, to the Agent
which had made such distribution, that Lender's Pro-Rata share of the amount so
adjudged or determined to be repaid or disgorged.
14. -Dispute Resolution: Any dispute among the Lenders and/or any Agent
concerning the interpretation, administration, or enforcement of the financing
arrangements contemplated by this or any other Loan Document or the
interpretation or administration of this or any other Loan Document which cannot
be resolved amicably shall be resolved in the United States District Court for
the District of Massachusetts, sitting in Boston or in the Superior Court of
Suffolk County, Massachusetts, to the jurisdiction of which courts each Lender
hereto hereby submits.
15. -Distributions of Notices and of Documents The Administrative Agent
will forward to each Lender, promptly after the Administrative Agent's receipt
thereof, a copy of each notice or other document furnished to the Administrative
Agent pursuant to this Agreement, including monthly, quarterly, and annual
financial statements received from the Borrowers' Representative pursuant to
Article 7: of this Agreement, other than any of the following:
(a) Routine communications associated with requests for Revolving
Credit Loans and/or the issuance of L/C's.
(b) Routine or nonmaterial communications.
(c) Any notice or document required by any of the Loan Documents to
be furnished to the Lenders by the Borrowers' Representative.
(d) Any notice or document of which the Administrative Agent has
knowledge that such notice or document had been forwarded to the Lenders other
than by the Administrative Agent.
Page 109
16. -Confidential Information
(a) Each Lender will maintain, as confidential (other than to their
respective attorneys, agents, accountants, participants and prospective
participants) all of the following:
(ii) Proprietary approaches, techniques, and methods of analysis
which are applied by the Administrative Agent in the administration of the
credit facility contemplated by this Agreement.
(iii) Proprietary forms and formats utilized by the
Administrative Agent in providing reports to the Lenders pursuant hereto,
which forms or formats are not of general currency.
(a) Confidential information provided by any Borrower pursuant to the
Loan Documents, other than any information which becomes known to the general
public through sources other than that Lender.
(b) Nothing included herein shall prohibit the disclosure of any such
information as may be required to be provided by judicial process or by
regulatory authorities having jurisdiction over any party to this Agreement.
17. -Reliance by Agents Each Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, telex, or
facsimile) reasonably believed by that Agent to be genuine and correct and to
have been signed or sent by or on behalf of the proper person or persons, and
upon advice and statements of attorneys, accountants and other experts selected
by that Agent. As to any matters not expressly provided for in this Agreement,
any Loan Document, or in any other document referred to therein, that Agent
shall in all events be fully protected in acting, or in refraining from acting,
in accordance with the applicable Consent required by this Agreement.
Instructions given with the requisite Consent shall be binding on all Lenders.
18. -Non-Reliance on Agents and Other Lenders
(a) Each Lender represents to all other Lenders and to the Agents
that such Lender:
(ii) Independently and without reliance on any representation or
act by any Agent or by any other Lender, and based on such documents and
information as that Lender has deemed appropriate, has made such Lender's
own appraisal of the financial condition and affairs of the Borrowers and
decision to enter into this Agreement.
(iii) Has relied upon that Lender's review of the Loan Documents
by that Lender and by counsel to that Lender as that Lender deemed
appropriate under the circumstances.
(a) Each Lender agrees that such Lender, independently and without
reliance upon
Page 110
any Agent or any other Lender, and based upon such documents and information as
such Lender shall deem appropriate at the time, will continue to make such
Lender's own appraisals of the financial condition and affairs of the Borrowers
when determining whether to take or not to take any discretionary action under
this Agreement.
(b) Neither Agent in the discharge of that Agent's duties hereunder,
shall be required to make inquiry of, or to inspect the properties or books of,
any Person.
(c) Except for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder (as to which, see Section 16:16-5), the Agents shall not have any
affirmative duty or responsibility to provide any Lender with any credit or
other information concerning any Person, which information may come into the
possession of Agents or any Affiliate of an Agent.
(d) Each Lender, at such Lender's request, shall have reasonable
access to all nonprivileged documents in the possession of the Agents, which
documents relate to the Agents' performance of their duties hereunder.
19. -Indemnification Without limiting the liabilities of the Borrowers
under any this or any of the other Loan Documents, each Lender shall indemnify
each Agent, Pro-Rata, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including attorneys' reasonable fees and expenses and
other out-of-pocket expenditures) which may at any time be imposed on, incurred
by, or asserted against that Agent and in any way relating to or arising out of
this Agreement or any other Loan Document or any documents contemplated by or
referred to therein or the transactions contemplated thereby or the enforcement
of any of terms hereof or thereof or of any such other documents, provided,
however, no Lender shall be liable for any of the foregoing to the extent that
any of the foregoing arises from any action taken or omitted to be taken by the
subject Agent as to which a final judicial determination has been or is made (in
a proceeding in which the subject Agent has had an opportunity to be heard) that
the subject Agent had acted in a grossly negligent manner, in actual bad faith,
or in willful misconduct.
110. -Resignation of Agent
(a) An Agent may resign at any time by giving 60 days prior written
notice thereof to the Lenders and to the other Agent. Upon receipt of any such
notice of resignation, the SuperMajority Lenders shall have the right to appoint
a successor to such Agent (and if no Event of Default has occurred, with the
consent of the Borrowers' Representative, not to be unreasonably withheld and,
in any event, deemed given by the Borrowers' Representative if no written
objection is provided by the Borrowers' Representative to the (resigning) Agent
within seven (7) Business Days notice of such
Page 111
proposed appointment). If a successor Agent shall not have been so appointed and
accepted such appointment within 30 days after the giving of notice by the
resigning Agent, then the resigning Agent may appoint a successor Agent, which
shall be a financial institution having a combined capital and surplus in excess
of $500,000,000.00. The consent of the Borrowers' Representative otherwise
required by this Section 16:16-10(a) shall not be required if an Event of
Default has occurred.
(b) Upon the acceptance of any appointment as an Agent hereunder by a
successor Agent, such successor shall thereupon succeed to, and become vested
with, all the rights, powers, privileges, and duties of the (resigning) Agent so
replaced, and the (resigning) Agent shall be discharged from the (resigning)
Agent's duties and obligations hereunder, other than on account of any
responsibility for any action taken or omitted to be taken by the (resigning)
Agent as to which a final judicial determination has been or is made (in a
proceeding in which the (resigning) Person has had an opportunity to be heard)
that such Person had acted in a grossly negligent manner or in bad faith.
(c) After any retiring Agent's resignation, the provisions of this
Agreement and of all other Loan Documents shall continue in effect for the
retiring Person's benefit in respect of any actions taken or omitted to be taken
by it while it was acting as an Agent.
Article 2: - Action By Agents - Consents - Amendments - Waivers:
21. -Administration of Credit Facilities
(a) Except as otherwise specifically provided in this Agreement, each
Agent may take any action with respect to the credit facility contemplated by
the Loan Documents as that Agent determines to be appropriate within their
respective areas of responsibility and authority, as set forth in Sections
16:16-2(b) and 16:16-2(a), provided, however, neither Agent is under any
affirmative obligation to take any action which it is not required by this
Agreement or the Loan Documents specifically to so take.
(b) Except as specifically provided in the following Sections of this
Agreement, whenever a Loan Document or this Agreement provides that action may
be taken or omitted to be taken in an Agents' discretion, that Agent shall have
the sole right to take, or refrain from taking, such action without, and
notwithstanding, any vote of the Lender:
Actions Described in Section Type of Consent Required
-------------------------------------------------------
17:17-2 Majority Lenders
17:17-3 SuperMajority Revolving Credit Lenders
17:17-4 Certain Consent
17:17-5 Unanimous Consent
17:17-6 Consent of SwingLine Lender
Page 112
17:17-7 Consent of Tranche B Lender
17:17-8 Consent of Tranche C Lender
17:17-9 Consent of the Agents
(c) The rights granted to the Lenders in those sections referenced in
Section 17:17-1(b) shall not otherwise limit or impair any Agent's exercise of
its discretion under the Loan Documents.
22. - Actions Requiring or On Direction of Majority Lenders Except as
otherwise provided in this Agreement, the Consent or direction of the Majority
Lenders is required for any amendment, waiver, or modification of any Loan
Document.
23. - Actions Requiring or On Direction of SuperMajority Revolving
Credit Lenders
The Consent or direction of the SuperMajority Revolving Credit Lenders is
required as follows:
(a) The Lenders agree that any loan or advance under the Revolving
Credit which results in a Protective OverAdvance may be made by the
Administrative Agent in its discretion without the Consent of the Lenders and
that each Lender shall be bound thereby, provided, however, the Consent or
direction of the SuperMajority Revolving Credit Lenders is required to permit a
Protective OverAdvance to be outstanding for more than 45 consecutive Business
Days or more than twice in any twelve month period. (Any Protective OverAdvance
which is permitted by this Section 17:17-3(a) is referred to as a "Permitted
Protective OverAdvance").
(b) If any Borrower is then InDefault, the SuperMajority Revolving
Credit Lenders may direct the Administrative Agent to suspend the Revolving
Credit, whereupon, as long as a Borrower is InDefault, the only Revolving Credit
Loans which may be made are the following:
(ii) Revolving Credit Loans made to "cover" the honoring of
L/C's.
(iii) Permitted Protective OverAdvances.
(iv) Revolving Credit Loans made with Consent of the
SuperMajority Lenders.
(a) If an Event of Default has occurred and not been duly waived, the
SuperMajority Revolving Credit Lenders (subject to the provisions of the
Borrowing Orders) may:
(v) Give the Administrative Agent an Acceleration Notice in
accordance with Section 15:15-1(b).
(vi) Direct the Administrative Agent to increase the rate of
interest to the default rate of interest as provided in, and to the extent
permitted by, this Agreement and the Borrowing Orders.
24. - Action Requiring Certain Consent The following Consent shall be
required
Page 113
for the following actions:
- --------------------------------------------------------------------------------------------------------
ACTION REQUIRED CONSENT
- --------------------------------------------------------------------------------------------------------
(a) Any change to the dates on which SuperMajority Revolving Credit Lenders and the
any payment of principal of the Tranche B Loan Tranche B Lender and the Tranche C Lender.
shall be due and payable or the amount of any
such payment.
- --------------------------------------------------------------------------------------------------------
(b) Any change to the dates on which SuperMajority Revolving Credit Lenders and the
any payment of principal of the Tranche C Loan Tranche B Lender and the Tranche C Lender.
shall be due and payable or the amount of any
such payment.
- --------------------------------------------------------------------------------------------------------
(c) Waiver or amendment of minimum Majority Revolving Credit Lenders and the
Excess Availability financial performance Tranche B Lender and the Tranche C Lender.
covenant
- --------------------------------------------------------------------------------------------------------
(d) Waiver or amendment of all The Tranche B Lender and the Tranche C Lender.
financial performance covenants other than
minimum Excess Availability
- --------------------------------------------------------------------------------------------------------
(e) Waiver or amendment of any of Majority Revolving Credit Lenders and the
the following Sections or provisions of this Tranche B Lender and the Tranche C Lender.
Agreement:
Section 6:6-5 ("Restructuring Consultant")
Section 6:6-29 ("Bankruptcy Protections")
Section 12:12-5 ("Restructuring Consultant")
Any Bankruptcy Breach
- --------------------------------------------------------------------------------------------------------
Page 114
- --------------------------------------------------------------------------------------------------------
ACTION REQUIRED CONSENT
- --------------------------------------------------------------------------------------------------------
(f) Any increase in any Revolving All Revolving Credit Lenders other than any
Credit Lender's Revolving Credit Dollar Delinquent Revolving Credit Lender.
Commitment or Revolving Credit Percentage
Commitment (other than by reason of the
application of Section 17:17-12 (which deals
with NonConsenting Revolving Credit Lenders)
or Section 18:18-1 (which deals with
assignments and participations)), it being
understood that this Section 17:17-4(f)
addresses changes to commitments inter se
and not any increase in the overall size of
the Revolving Credit.
- --------------------------------------------------------------------------------------------------------
(g) Any forgiveness of all or any All Lenders whose payment Liability is being
portion of any payment Liability. so forgiven (other than any Delinquent Revolving
Credit Lender, if otherwise applicable).
- --------------------------------------------------------------------------------------------------------
(h) Any decrease in any interest All Lenders adversely affected thereby (other
rate, fee or assessment payable under any of than any Delinquent Revolving Credit Lender, if
the Loan Documents (other than any otherwise applicable).
Administrative Agent's Fee (for which the
consent of the Agents shall also be required))
and of any fee provided for by any Fee Letter
(which may be amended by written agreement
between the Borrowers' Representative on the
one hand, and the Administrative Agent on the
other).
- --------------------------------------------------------------------------------------------------------
(i) Disgorgement as described in If disgorgement is
Section 16:16-3(f). By the Revolving Credit Lenders- The
SuperMajority Revolving Credit Lenders.
By the Tranche B Lender - The Tranche B
Lender.
By the Tranche C Lender - The Tranche C
Lender.
- --------------------------------------------------------------------------------------------------------
Page 115
- --------------------------------------------------------------------------------------------------------
ACTION REQUIRED CONSENT
- --------------------------------------------------------------------------------------------------------
(j) Any increase of the The SwingLine Lender.
SwingLine Loan Ceiling. and
SuperMajority Revolving Credit Lenders
- --------------------------------------------------------------------------------------------------------
(k) Any increase of the Tranche B The Tranche C Lender
Loan (other than on account of the
capitalization of Tranche B PIK Interest.
- --------------------------------------------------------------------------------------------------------
(l) Any amendment of the following Majority Revolving Credit Lenders and the
Definitions other than an amendment to Tranche B Lender and the Tranche C Lender
permit up to $750 Thousand Indebtedness
secured by purchase money security interests
in Equipment:
"Encumbrance"
"Indebtedness"
"Leasing Debt"
"Permitted Encumbrances"
"Permitted Indebtedness"
- --------------------------------------------------------------------------------------------------------
25. - Actions Requiring or Directed By Unanimous Consent None of the
following may take place except with Unanimous Consent:
(a) Any extension of the Maturity Date.
(b) Any release of a material portion of the Collateral not otherwise
required or provided for in the Loan Documents or to facilitate a Liquidation.
(c) Any amendment of the definition of the terms "Borrowing Base",
Tranche B Borrowing Base, or "Availability" or of any Definition of any
component thereof, such that more credit would be available to the Borrowers,
based on the same assets, as would have been available to the Borrowers
immediately prior to such amendment , it being understood, however, that:
(ii) The foregoing shall not limit the adjustment by the
Administrative Agent of any Reserve in the Administrative Agent's
administration of the Revolving Credit as otherwise permitted by this
Agreement.
(iii) The foregoing shall not prevent the Administrative Agent,
in its administration of the Revolving Credit, from restoring any component
of Borrowing Base which
Page 116
had been lowered by the Administrative Agent back to the value of such
component, as stated in this Agreement or to an intermediate value.
(a) Any release of any Person obligated on account of the
Liabilities.
(b) The making of any Revolving Credit Loan which, when made, exceeds
Availability and is not a Permitted Protective OverAdvance, provided, however,
(iv) no Consent shall be required in connection with the making
of any Revolving Credit Loan to "cover" any honoring of a drawing under any
L/C; and
(v) each Lender recognizes that subsequent to the making of a
Revolving Credit Loan which does not constitute a Permitted Protective
OverAdvance, the unpaid principal balance of the Loan Account may exceed
Borrowing Base on account of changed circumstances beyond the control of
the Administrative Agent (such as a drop in collateral value).
(a) The waiver of the obligation of the Borrowers to reduce
the unpaid principal balance of loans under the Revolving Credit to an amount
which does not exceed a Permitted Protective OverAdvance or, subject to the time
limits included in Section 17:17-3(a) (which places time and frequency limits on
Permitted Protective OverAdvances).
(b) Any amendment of this Article 17:.
(c) Amendment of any of the following Sections of this
Agreement:
(vi) 14:14-4
(vii) 14:14-5
(viii) 15:15-8
(ix) 15:15-9
(a) Amendment of any of the following Definitions:
"Appraised Inventory Liquidation Value"
"Financial Covenant Breach"
"Majority Lenders"
"Majority Revolving Credit Lenders"
"Minimum Excess Availability Breach"
"Tranche B Availability Breach"
"Tranche B Payment Breach"
"Tranche C Payment Breach"
"Permitted Protective OverAdvance"
"Standstill Period"
"SuperMajority Lenders"
"SuperMajority Revolving Credit Lenders"
"Tranche B Action Events"
Page 117
"Tranche C Action Events"
"Unanimous Consent"
26. -Actions Requiring SwingLine Lender Consent No action, amendment, or
waiver of compliance with, any provision of the Loan Documents or of this
Agreement which affects the SwingLine Lender may be undertaken without the
Consent of the SwingLine Lender.
27. -Actions Requiring Tranche B Lender Consent None of the following
may be made without the Consent of the Tranche B Lender:
(a) Any increase in any interest rate or fee payable to the Revolving
Credit Lenders on account of the Revolving Credit Loans in excess of 150 basis
points per annum in the aggregate.
(b) Any increase in any interest rate or fee payable to the Revolving
Credit Lenders on account of the Revolving Credit Loans not requiring the
Consent of the Tranche B Lender pursuant to Section 17:17-7(a), unless the
Borrowers agree to increase the interest rate and fees payable to the Tranche B
Lender contemporaneously therewith by a like amount.
(c) Any amendment, modification, or waiver of any provision of
Article 3 (entitled "The Tranche B Loan").
(d) Any amendment of Section 15:15-2 (which relates to the
circumstances under which the Tranche B Lender may require Acceleration).
(e) Any amendment to the financial performance covenants set forth in
Exhibit 7:7-11.
(f) Any amendment to the provisions of Section 6:6-8 (Indebtedness).
28. -Actions Requiring Tranche C Lender Consent None of the following may
be made without the Consent of the Tranche C Lender:
(a) Any increase in any interest rate or fee payable to the Revolving
Credit Lenders on account of the Revolving Credit Loans in excess of 150 basis
points per annum in the aggregate.
(b) Any increase in any interest rate or fee payable to the Revolving
Credit Lenders on account of the Revolving Credit Loans not requiring the
Consent of the Tranche C Lender pursuant to Section 17:17-8(a), unless the
Borrowers agree to increase the interest rate and fees payable to the Tranche C
Lender contemporaneously therewith by a like amount.
(c) Any increase to the Tranche B Interest Rate not resulting from
the effect of Section 17:17-7(a).
(d) Any amendment, modification, or waiver of any provision of
Article 4 (entitled "The Tranche C Loan").
Page 118
(e) Any amendment of Section 15:15-3 (which relates to the
circumstances under which the Tranche C Lender may require Acceleration).
(f) Any amendment to the financial performance covenants set forth in
Exhibit 7:7-11.
(g) Any amendment to the provisions of Section 6:6-8
(Indebtedness).
29. -Actions Requiring Agents' Consent
(a) No action, amendment, or waiver of compliance with, any
provision of the Loan Documents or of this Agreement which affects an Agent in
its capacity as an Agent may be undertaken without the written consent of the
Agents.
(b) No action referenced herein which affects the rights, duties,
obligations, or liabilities of an Agent shall be effective without the written
consent of the Agents.
210. -Miscellaneous Actions
(a) Notwithstanding any other provision of this Agreement, no single
Lender independently may exercise any right of action or enforcement against or
with respect to any Borrower.
(b) Each Agent shall be fully justified in failing or refusing to
take action under this Agreement or any Loan Document on behalf of any Lender
unless that Agent shall first
(ii) receive such clear, unambiguous, written instructions as
that Agent deems appropriate; and
(iii) be indemnified to that Agent's satisfaction by the Lenders
against any and all liability and expense which may be incurred by that Agent by
reason of taking or continuing to take any such action, unless such action had
been grossly negligent, in willful misconduct, or in bad faith.
(a) Each Agent may establish reasonable procedures for the
providing of direction and instructions from the Lenders to that Agent,
including its reliance on multiple counterparts, facsimile transmissions, and
time limits within which such direction and instructions must be received in
order to be included in a determination of whether the requisite Loan
Commitments has provided its direction, Consent, or instructions.
(b) The Lenders acknowledge that the Agent's performance of
its obligations under this Agreement and the other Loan Documents is subject to
the provisions of the Borrowing Orders and any other orders entered by the
Bankruptcy Court in the Proceedings. No Agent shall have any liability to any
Lender by virtue of such Agent's compliance with any such order in the
Proceedings.
211. -Actions Requiring Borrowers' Representative's Consent
Page 119
(a) The Borrowers' Representative's consent is required for any
amendment of this Agreement, except that each of the following Articles of this
Agreement may be amended without the consent of the Borrowers' Representative:
Article Title of Article
---------------------------
14: Revolving Credit Fundings and Distributions
16: The Agents
(b) The Borrowers' Representative's consent to the amendment of those
provisions referenced in Section 16:16-10(b)
(ii) Shall be deemed given unless written objection is made,
within seven (7) Business Days following the Administrative Agent's giving
notice to the Borrowers' Representative of the proposed amendment; and
(iii) shall not be required following the occurrence of any
Event of Default.
212. -NonConsenting Lender
(a) In the event that a Lender (in this Section 17:17-12, a
"NonConsenting Lender") does not provide its Consent to a proposal by the
Administrative Agent to take action which requires consent under this Article
17:, then one or more Lenders who provided Consent to such action may require
the assignment, without recourse and in accordance with the procedures outlined
in Section 18:18-1, below, of the NonConsenting Lender's commitment hereunder on
five (5) days written notice to the Administrative Agent and to the
NonConsenting Lender.
(b) At the end of such five (5) days, and provided that the
NonConsenting Lender delivers the Note held by the NonConsenting Lender to the
Administrative Agent, the Lenders who have given such written notice shall
Transfer the following to the NonConsenting Lender:
(ii) Such NonConsenting Lender's Pro-Rata share of the
principal and interest of the Loans to the date of such assignment.
(iii) All fees distributable hereunder to the NonConsenting
Lender to the date of such assignment.
(iv) Any out-of-pocket costs and expenses for which the
NonConsenting Lender is entitled to reimbursement from the Borrowers.
(a) In the event that the NonConsenting Lender fails to
deliver to the Administrative Agent the Note held by the NonConsenting Lender as
provided in Section 17:17-12(b), then:
(v) The amount otherwise to be Transferred to the
NonConsenting Lender shall be Transferred to the Administrative Agent and
held by the Administrative Agent, without interest, to be turned over to
the NonConsenting Lender upon delivery of the Note held by that
Page 120
NonConsenting Lender.
(vi) The Note held by the NonConsenting Lender shall have no
force or effect whatsoever.
(vii) The NonConsenting Lender shall cease to be a "Lender".
(viii) The Lender(s) which have Transferred the amount to the
Administrative Agent as described above shall have succeeded to all rights
and become subject to all of the obligations of the NonConsenting Lender as
"Lender".
(a) In the event that more than One (1) Lender wishes to require such
assignment, the NonConsenting Lender's commitment hereunder shall be divided
among such Lenders, pro-rata based upon their respective Loan Commitments, with
the Administrative Agent coordinating such transaction.
(b) The Administrative Agent shall coordinate the retirement of the
Note held by the NonConsenting Lender and the issuance of Notes to those Lenders
which "take-out" such NonConsenting Lender, provided, however, no processing fee
otherwise to be paid as provided in Section 18:18-2(b) shall be due under such
circumstances.
213. - The BuyOut:
(a) This Section 17:17-13(a) describes the buy out right of the
Tranche B Lender.
(ii) The Tranche B Lender may (but shall not be obligated to)
cause the assignment to the Tranche B Lender, or its designee, by the
Revolving Credit Lenders, of all right, title and interest in, to, arising
under, or in respect of the Revolving Credit Obligations upon five (5)
Business Days prior written notice given at any time that the Tranche B
Lender has the right, under Section 15:15-1(c), to give an Acceleration
Notice.
(iii) Such assignments shall be effected on the Business Day
next following the expiry of such five (5) Business Days by the execution,
by the Revolving Credit Lenders, of an Assignment and Assumption (in the
form of EXHIBIT 18:18-1, annexed hereto) in exchange for the payment, in
immediately available funds, of the amount of Revolving Credit Obligations
(including the Revolving Credit Early Termination Fee as if the same were
then due and payable ) as of the date on which such assignment is made.
(iv) The Tranche B Lender's buy out right under this Section
17:17-13(a) may only be exercised completely with respect to the entire
Revolving Credit.
(a) This Section 17:17-13(b) describes the buy out right of the
Tranche C Lender.
(v) The Tranche C Lender may (but shall not be obligated
to) cause the assignment to the Tranche C Lender, or its designee, by the
Revolving Credit Lenders and by the Tranche B Lender of all their
respective right, title and interest in, to, arising under, or in
Page 121
respect of the Revolving Credit Obligations and the Tranche B Loan upon
five (5) Business Days prior written notice given at any time that the
Tranche C Lender has the right, under Section 15:15-1(d) to give an
Acceleration Notice.
(vi) Such assignments shall be effected on the Business Day
next following the expiry of such five (5) Business Days by the execution,
of the following:
(B) By the Revolving Credit Lenders, of an Assignment
and Assumption (in the form of EXHIBIT 18:18-1, annexed hereto) in
exchange for the payment, in immediately available funds, of the
amount of Revolving Credit Obligations (including the Revolving Credit
Early Termination Fee as if the same were then due and payable ) as of
the date on which such assignment is made.
(C) By the Tranche B Lender, of the nonrecourse
assignment of the Tranche B Note in exchange for the payment, in
immediately available funds, of the aggregate of the unpaid principal
of the Tranche B Loan, all accrued and unpaid interest thereon, and
the Tranche B Early Termination Fee as if the same were then due and
payable as of the date on which such assignment is made.
(i) The Tranche C Lender's buy out right under this Section
17:17-13(b) may only be exercised completely with respect to the entire
Revolving Credit and the entire Tranche B Loan.
ARTICLE 3: - Assignments By Lenders:
31. -Assignments and Assumptions:
(a) Except as provided herein, each Revolving Credit Lender (in this
Section 18:18-1(a), an "Assigning Revolving Credit Lender") may assign to one or
more Eligible Assignees (in this Section 18:18-1(a), each an "Assignee Revolving
Credit Lender") all or a portion of that Lender's interests, rights and
obligations under this Agreement and the Loan Documents (including all or a
portion of its Commitment) and the same portion of the Loans at the time owing
to it, and of the Note held by the Assigning Revolving Credit Lender, provided
that:
(ii) The Administrative Agent shall have given its prior
written consent to such assignment, which consent shall not be unreasonably
withheld, but need not be given if the proposed assignment would result in
any resulting Revolving Credit Lender's having a Dollar Commitment of less
than the "minimum hold" amount specified in Section 18:18-1(a)(iii).
(iii) Each such assignment shall be of a constant, and not a
varying, percentage of all the Assigning Revolving Credit Lender's rights
and obligations under this Agreement.
(iv) Following the effectiveness of such assignment, the
Assigning Revolving
Page 122
Credit Lender's Dollar Commitment (if not an assignment of all of the
Assigning Revolving Credit Lender's Commitment) shall not be less than
$10,000,000.00.
(v) If no Event of Default has occurred, such assignment
shall be subject to the consent of the Borrowers' Representative, not to be
unreasonably withheld or delayed and which consent shall be deemed given if
no written objection is received within seven (7) days of the Borrowers'
Representative's receipt of notice of such proposed assignment.
(a) Each Tranche B Lender and each Tranche C Lender, with prior
written notice to the Administrative Agent, may assign all or a portion of that
Lender's interests, rights and obligations under this Agreement and the Loan
Documents freely to any Person other than a Person which is in the retail
apparel business.
32. -Assignment Procedures. (This Section 18:18-2 describes the procedures
to be followed in connection with an assignment effected pursuant to this
Article 18: and permitted by Section 18:18-1).
(a) The parties to such an assignment shall execute and deliver to
the Administrative Agent, for recording in the Register, an Assignment and
Acceptance substantially in the form of EXHIBIT 18:18-1, annexed hereto.
(b) The Assigning Revolving Credit Lender shall deliver to the
Administrative Agent, with such Assignment and Acceptance, the Note held by the
subject Assigning Revolving Credit Lender and the Administrative Agent's
processing fee of $3,000.00, provided, however, no such processing fee shall be
due where the Assigning Revolving Credit Lender is one of the Lenders at the
initial execution of this Agreement.
(c) The Administrative Agent shall maintain a copy of each Assignment
and Acceptance delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Lenders and of the Loan
Commitments, the Revolving Credit Percentage Commitment and Revolving Credit
Percentage Commitment of each Lender. The Register shall be available for
inspection by the Lenders at any reasonable time and from time to time upon
reasonable prior notice. In the absence of manifest error, the entries in the
Register shall be conclusive and binding on all Lenders. The Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a "Lender" hereunder for all purposes of this Agreement.
(d) The Assigning Revolving Credit Lender and Assignee Revolving
Credit Lender, directly between themselves, shall make all appropriate
adjustments in payments for periods prior to the effective date of an Assignment
and Assumption.
33. -Effect of Assignment.
Page 123
(a) From and after the effective date specified in an Assignment and
Acceptance which has been executed, delivered, and recorded (which effective
date the Administrative Agent may delay by up to five (5) Business Days after
the delivery of such Assignment and Acceptance):
(ii) The Assignee Revolving Credit Lender:
(B) Shall be a party to this Agreement and the Loan
Documents (and to any amendments thereof) as fully as if the Assignee
Revolving Credit Lender had executed each.
(C) Shall have the rights of a Lender hereunder to the
extent of the Loan Commitment, the Revolving Credit Percentage
Commitment and Revolving Credit Percentage Commitment assigned by such
Assignment and Acceptance.
(i) The Assigning Revolving Credit Lender shall be released
from the Assigning Revolving Credit Lender's obligations under this
Agreement and the Loan Documents to the extent of the Commitment assigned
by such Assignment and Acceptance.
(ii) The Administrative Agent shall undertake to obtain and
distribute replacement Notes to the subject Assigning Revolving Credit
Lender and Assignee Revolving Credit Lender.
(a) By executing and delivering an Assignment and Acceptance, the
parties thereto confirm to and agree with each other and with all parties to
this Agreement as to those matters which are set forth in the subject Assignment
and Acceptance.
ARTICLE 4: - Notices:
41. -Notice Addresses. All notices, demands, and other communications made
in respect of any Loan Document (other than a request for a loan or advance or
other financial accommodation under the Revolving Credit) shall be made to the
following addresses, each of which may be changed upon seven (7) days written
notice to all others given by certified mail, return receipt requested:
Page 124
If to either Agent:
Fleet Retail Finance Inc.
40 Broad Street
Boston, Massachusetts 02109
Attention: Sally A. Sheehan
Director
Fax: 617 434 4339
With a copy to:
Riemer & Braunstein LLP
Three Center Plaza
Boston, Massachusetts 02108
Attention: David S. Berman, Esquire
Fax: 617 880 3456
If to the Borrowers' Representative
And All Borrowers:
Casual Male Corp., Inc.
555 Turnpike Street
Canton, Massachusetts 02021
Attention: Elizabeth C. White
Fax: 781 821 4867
With copies to: Casual Male Corp., Inc.
555 Turnpike Street
Canton, Massachusetts 02021
Attention: Michael O'Hara, Esquire
Fax: 781 821 0614
Goodwin Procter LLP
Exchange Place
Boston, Massachusetts 02109-2881
Attention: Raymond C. Zemlin, P.C.
Fax: 617 523 1231
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, New York 10153-0119
Attention: Adam C. Rogoff, Esquire
Fax: (212) 310-8007
42. - Notice Given.
(a) Except as otherwise specifically provided herein, notices shall
be deemed made and correspondence received, as follows (all times being local to
the place of delivery or receipt):
(ii) By mail: the sooner of when actually received or three (3)
days following deposit in the United States mail, postage prepaid.
(iii) By recognized overnight express delivery: the Business Day
following the day when sent.
Page 125
(iv) By Hand: If delivered on a Business Day after 9:00 AM and
no later than three (3) hours prior to the close of customary business
hours of the recipient, when delivered. Otherwise, at the opening of the
then next Business Day.
(v) By Facsimile transmission (which must include a header on
which the party sending such transmission is indicated): If sent on a
Business Day after 9:00 AM and no later than three (3) hours prior to the
close of customary business hours of the recipient, one (1) hour after
being sent. Otherwise, at the opening of the then next Business Day.
(a) Rejection or refusal to accept delivery and inability to deliver
because of a changed address or Facsimile Number for which no due notice was
given shall each be deemed receipt of the notice sent.
43. - Wire Instructions. Subject to change in the same manner that a notice
address may be changed (as to which, see Section 19:19-1), wire transfers to the
Administrative Agent shall be made in accordance with the following wire
instructions:
Fleet National Bank
ABA No. 011000390
Acct Name: Fleet Retail Finance Inc.
Acct No. : 530-39952
Reference: Casual Male Corp.
Article 5: - Term:
51. - Termination of Revolving Credit. The Revolving Credit shall remain in
effect (subject to suspension as provided in Section 2:2-6(g) hereof) until the
Termination Date.
52. - Actions On Termination.
(a) On the Termination Date, the Borrowers shall pay the
Administrative Agent (whether or not then due), in immediately available funds,
all then Liabilities including, without limitation: the following:
(ii) The entire balance of the Loan Account (including the
unpaid principal balance of the Revolving Credit Loans, the SwingLine Loan,
the Tranche B Loan and the Tranche C Loan).
(iii) Any then remaining unpaid installments of the Revolving
Credit Commitment Fee.
(iv) Any then remaining unpaid installments of the
Administrative Agent's Fee.
(v) Any payments due on account of the indemnification
obligations included
Page 126
in Section 2:2-11(e).
(vi) Any accrued and unpaid Unused Line Fee.
(vii) Any applicable Revolving Credit Early Termination Fee.
(viii) All accrued and unpaid interest (including all accrued and
unpaid Tranche B Current Pay Interest and all accrued and unpaid Tranche B
PIK Interest) on the Tranche B Loan.
(ix) All accrued and unpaid interest (including all accrued and
unpaid Tranche C Current Pay Interest and all accrued and unpaid Tranche C
PIK Interest) on the Tranche C Loan.
(x) Any then remaining unpaid installments of the Tranche B
Commitment Fee and Additional Assessments.
(xi) Any then remaining unpaid installments of the Tranche C
Commitment Fee and Additional Assessments.
(xii) Any accrued and unpaid Tranche B Early Termination Fee.
(xiii) Any accrued and unpaid Tranche C Early Exit Assessment.
(xiv) All unreimbursed costs and expenses of each Agent and of
Lenders' Special Counsel for which each Borrower is responsible.
(a) On the Termination Date, the Borrowers shall also shall make such
arrangements concerning any L/C's then outstanding as are reasonably
satisfactory to the Administrative Agent (such as their being cash
collateralized at 103 % of their then Stated Amount).
(b) Until such payment (Section 20:20-2(a)) and arrangements
concerning L/C's (Section 20:20-2(b)), all provisions of this Agreement, other
than those included in Article 2: which place any obligation on the
Administrative Agent or any Revolving Credit Lender to make any loans or
advances or to provide any financial accommodations to any Borrower and those
included in Article 3: which place any obligation on the Tranche B Lender to
make any loan or advance or to provide any financial accommodation to any
Borrower and those included in Article 4: which place any obligation on the
Tranche C Lender to make any loan or advance or to provide any financial
accommodation to any Borrower shall remain in full force and effect until all
Liabilities shall have been paid in full.
(c) The release by the Collateral Agent of the Collateral Interests
granted the Collateral Agent by the Borrowers hereunder may be upon such
conditions and indemnifications as the Administrative Agent reasonably may
require.
Article 6: - General:
61. - Protection of Collateral. No Agent has any duty as to the collection
or protection of the Collateral beyond the safe custody of such of the
Collateral as may come into the possession of
Page 127
that Agent.
62. - Publicity. The Agents (or either of them) and the Tranche B Lender
and the Tranche C Lender respectively may issue a "tombstone" notice of the
establishment of the credit facility contemplated by this Agreement and may make
reference to each Borrower (and may utilize any logo or other distinctive symbol
associated with each Borrower) in connection with any advertising, promotion, or
marketing undertaken by the Agents (or either of them) and/or by the Tranche B
Lender and/or by the Tranche C Lender.
63. - Successors and Assigns. This Agreement shall be binding upon the
Borrowers' Representative, each Borrower, and their respective representatives,
successors, and assigns and shall enure to the benefit of each Agent and each
Lender and their respective successors and assigns, provided, however, no
trustee or other fiduciary appointed with respect to any Borrower shall have any
rights hereunder. In the event that any Agent or any Lender assigns or transfers
its rights under this Agreement, the assignee shall thereupon succeed to and
become vested with all rights, powers, privileges, and duties of such assignor
hereunder and such assignor shall thereupon be discharged and relieved from its
duties and obligations hereunder.
64. - Severability. Any determination that any provision of this Agreement
or any application thereof is invalid, illegal, or unenforceable in any respect
in any instance shall not affect the validity, legality, or enforceability of
such provision in any other instance, or the validity, legality, or
enforceability of any other provision of this Agreement.
65. - Amendments. Course of Dealing.
(a) This Agreement and the other Loan Documents incorporate all
discussions and negotiations between each Borrower and each Agent and each
Lender, either express or implied, concerning the matters included herein and in
such other instruments, any custom, usage, or course of dealings to the contrary
notwithstanding. No such discussions, negotiations, custom, usage, or course of
dealings shall limit, modify, or otherwise affect the provisions thereof. No
failure by any Agent or any Lender to give notice to the Borrowers'
Representative of any Borrower's having failed to observe and comply with any
warranty or covenant included in any Loan Document shall constitute a waiver of
such warranty or covenant or the amendment of the subject Loan Document.
(b) Each Borrower may undertake any action otherwise prohibited
hereby, and may omit to take any action otherwise required hereby, upon and with
the express prior written consent of the Administrative Agent. Subject to
Article 17:, no consent, modification, amendment, or waiver of any
Page 128
provision of any Loan Document shall be effective unless executed in writing by
or on behalf of the party to be charged with such modification, amendment, or
waiver (and if such party is the Administrative Agent then by a duly authorized
officer thereof). Any modification, amendment, or waiver provided by the
Administrative Agent shall be in reliance upon all representations and
warranties theretofore made to the Administrative Agent by or on behalf of the
Borrowers (and any guarantor, endorser, or surety of the Liabilities) and
consequently may be rescinded in the event that any of such representations or
warranties was not true and complete in all material respects when given.
66. - Power of Attorney. In connection with all powers of attorney included
in this Agreement, each Borrower hereby grants unto the Administrative Agent
(acting through any of its officers) full power to do any and all things
necessary or appropriate in connection with the exercise of such powers as fully
and effectually as that Borrower might or could do, hereby ratifying all that
said attorney shall do or cause to be done by virtue of this Agreement. No power
of attorney set forth in this Agreement shall be affected by any disability or
incapacity suffered by any Borrower and each shall survive the same. All powers
conferred upon the Administrative Agent or the Collateral Agent by this
Agreement, being coupled with an interest, shall be irrevocable until this
Agreement is terminated by a written instrument executed by a duly authorized
officer of the Administrative Agent.
67. - Application of Proceeds. The proceeds of any collection, sale, or
disposition of the Collateral, or of any other payments received hereunder,
shall be applied towards the Liabilities in such order and manner as the
Administrative Agent determines in its sole discretion, consistent, however,
with Sections 15:15-8 and 15:15-9 and any other applicable provisions of this
Agreement. The Borrowers shall remain liable for any deficiency remaining
following such application.
68. - Increased Costs. If, as a result of any Requirement of Law, or of the
interpretation or application thereof by any court or by any governmental or
other authority or entity charged with the administration thereof, whether or
not having the force of law, which:
(a) subjects any Lender to any taxes or changes the basis of
taxation, or increases any existing taxes, on payments of principal, interest or
other amounts payable by any Borrower to the Administrative Agent or any Lender
under this Agreement (except for taxes on the Administrative Agent or any Lender
based on net income or capital imposed by the jurisdiction in which the
principal or lending offices of the Administrative Agent or that Lender are
located);
(b) imposes, modifies or deems applicable any reserve, cash margin,
special deposit or similar requirements against assets held by, or deposits in
or for the account of or loans by or any other acquisition of funds by the
relevant funding office of any Lender;
Page 129
(c) imposes on any Lender any other condition with respect to any
Loan Document; or
(d) imposes on any Lender a requirement to maintain or allocate
capital in relation to the Liabilities;
and the result of any of the foregoing, in such Lender's reasonable opinion, is
to increase the cost to that Lender of making or maintaining any loan, advance
or financial accommodation or to reduce the income receivable by that Lender in
respect of any loan, advance or financial accommodation by an amount which that
Lender deems to be material, then upon written notice from the Administrative
Agent, from time to time, to the Borrowers' Representative (such notice to set
out in reasonable detail the facts giving rise to and a summary calculation of
such increased cost or reduced income), the Borrowers shall forthwith pay to the
Administrative Agent, for the benefit of the subject Revolving Credit Lender,
upon receipt of such notice, that amount which shall compensate the subject
Lender for such additional cost or reduction in income.
69. - Costs and Expenses Of Agents and Lenders.
(a) The Borrowers shall pay from time to time on demand all Costs of
Collection and all reasonable costs, expenses, and disbursements (including
attorneys' reasonable fees and expenses) which are incurred by each Agent and by
the Tranche B Lender and by the Tranche C Lender (and the respective
Participants with the Tranche B Lender and the Tranche C Lender) in connection
with the preparation, negotiation, execution, and delivery of this Agreement and
of any other Loan Documents, and all other reasonable costs, expenses, and
disbursements which may be incurred in connection with or in respect to the
credit facility contemplated hereby or which otherwise are incurred with respect
to the Liabilities.
(b) The Borrowers shall pay from time to time on demand all
reasonable costs and expenses (including attorneys' reasonable fees and
expenses) incurred, following the occurrence of any Event of Default, by the
Lenders to Lenders' Special Counsel.
(c) Each Borrower authorizes the Administrative Agent to pay all such
fees and expenses and in the Administrative Agent's discretion, to add such fees
and expenses to the Loan Account.
(d) The undertaking on the part of each Borrower in this Section
21:21-9 shall survive payment of the Liabilities and/or any termination,
release, or discharge executed by any Agent in favor of any Borrower, other than
a termination, release, or discharge which makes specific reference to this
Section 21:21-9.
610. - Copies and Facsimiles. Each Loan Document and all documents and
papers
Page 130
which relates thereto which have been or may be hereinafter furnished any Agent
or any Lender may be reproduced by any Lender or by any Agent by any
photographic, microfilm, xerographic, digital imaging, or other process, and
such Person making such reproduction may destroy any document so reproduced. Any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course of
business). Any facsimile which bears proof of transmission shall be binding on
the party which or on whose behalf such transmission was initiated and likewise
shall be so admissible in evidence as if the original of such facsimile had been
delivered to the party which or on whose behalf such transmission was received.
611. - Massachusetts Law. This Agreement and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the law of The Commonwealth of Massachusetts.
612. - Indemnification. The Borrowers' Representative and each Borrower
shall indemnify, defend, and hold each Agent and each Lender and any of their
respective employees, officers, or agents (each, an "Indemnified Person")
harmless of and from any claim brought or threatened against any Indemnified
Person by any Borrower, any guarantor or endorser of the Liabilities, or any
other Person (as well as from attorneys' reasonable fees, expenses, and
disbursements in connection therewith) on account of the relationship of the
Borrowers' Representative, the Borrowers or of any other guarantor or endorser
of the Liabilities, including all costs, expenses, liabilities, and damages as
may be suffered by any Indemnified Person in connection with (x) the Collateral;
(y) the occurrence of any Event of Default; or (z) the exercise of any rights or
remedies under any of the Loan Documents (each of claims which may be defended,
compromised, settled, or pursued by the Indemnified Person with counsel of the
Administrative Agent's selection, but at the expense of the Borrowers'
Representative and the Borrowers) other than any claim as to which a final
determination is made in a judicial proceeding (in which the Administrative
Agent and any other Indemnified Person has had an opportunity to be heard),
which determination includes a specific finding that the Indemnified Person
seeking indemnification had acted in a grossly negligent manner or in actual bad
faith or wilful misconduct. This indemnification shall survive payment of the
Liabilities and/or any termination, release, or discharge executed by the
Administrative Agent in favor of the Borrowers' Representative and/or the
Borrowers, other than a termination, release, or discharge duly executed on
behalf of the Administrative Agent which makes specific reference to this
Section 21:21-12.
613. - Rules of Construction. The following rules of construction shall be
applied in the
Page 131
interpretation, construction, and enforcement of this Agreement and of the other
Loan Documents:
(a) Unless otherwise specifically provided for herein, interest and
any fee or charge which is stated as a per annum percentage shall be calculated
based on a 360 day year and actual days elapsed.
(b) Any term used herein to describe Collateral or a Person, which
term is defined in either (or both) the UCC as in effect on the date when this
Agreement was executed by the Borrowers or in UCC9'99, shall be given the
meaning which is the more encompassing of the two definitions.
(c) Words in the singular include the plural and words in the plural
include the singular.
(d) Any reference, herein, to a circumstance or event's having "more
than a de minimis adverse effect" and any similar reference is to a circumstance
or event which (x) in a well managed enterprise, would receive the active
attention of senior management with a view towards its being reversed or
remedied; or (y) if not reversed or remedied could reasonably be expected to
lead to its becoming a material adverse effect.
(e) Cross references to Sections in this Agreement begin with the
Article in which that Section appears, followed by a colon, and then the Section
to which reference is made. (For example, a reference to "Section 5:5-6" is to
Section 5-6, which appears in Article 5 of this Agreement).
(f) Titles, headings (indicated by being underlined or shown in Small
----------
Capitals) and any Table of Contents are solely for convenience of reference; do
not constitute a part of the instrument in which included; and do not affect
such instrument's meaning, construction, or effect.
(g) The words "includes" and "including" are not limiting.
(h) Text which follows the words "including, without limitation" (or
similar words) is illustrative and not limitational.
(i) Text which is shown in italics (except for parenthesized
italicized text), shown in bold, shown IN ALL CAPITAL LETTERS, or in any
combination of the foregoing, shall be deemed to be conspicuous.
(j) The words "may not" are prohibitive and not permissive.
(k) Any reference to a Person's "knowledge" (or words of similar
import) are to such Person's knowledge assuming that such Person has undertaken
reasonable and diligent investigation with respect to the subject of such
"knowledge" (whether or not such investigation has actually been undertaken).
(l) Terms which are defined in one section of any Loan Document are
used with such definition throughout the instrument in which so defined.
(m) The symbol "$" refers to United States Dollars.
(n) Unless limited by reference to a particular Section or provision,
any reference to
Page 132
"herein", "hereof", or "within" is to the entire Loan Document in which such
reference is made.
(o) References to "this Agreement" or to any other Loan Document is
to the subject instrument as amended to the date on which application of such
reference is being made.
(p) Except as otherwise specifically provided, all references to time
are to Boston time.
(q) In the determination of any notice, grace, or other period of
time prescribed or allowed hereunder:
(ii) Unless otherwise provided (I) the day of the act, event, or
default from which the designated period of time begins to run shall not be
included and the last day of the period so computed shall be included
unless such last day is not a Business Day, in which event the last day of
the relevant period shall be the then next Business Day and (II) the period
so computed shall end at 5:00 PM on the relevant Business Day.
(iii) The word "from" means "from and including".
(iv) The words "to" and "until" each mean "to, but excluding".
(v) The word "through" means "to and including".
(a) The Loan Documents shall be construed and interpreted in a
harmonious manner and in keeping with the intentions set forth in Section 21:21-
14 hereof, provided, however, in the event of any inconsistency between the
provisions of this Agreement and any other Loan Document, the provisions of this
Agreement shall govern and control.
614. -Intent. It is intended that:
(a) This Agreement take effect as a sealed instrument.
(b) The scope of all Collateral Interests created by any Borrower to
secure the Liabilities be broadly construed in favor of the Administrative Agent
and that they cover all assets of each Borrower.
(c) All Collateral Interests created in favor of the Collateral Agent
at any time and from time to time by any Borrower secure all Liabilities,
whether now existing or contemplated or hereafter arising.
(d) All reasonable costs, expenses, and disbursements incurred by any
Agent, and, to the extent provide in Section 21:21-9 each Lender, in connection
with such Person's relationship(s) with any Borrower shall be borne by the
Borrowers.
(e) Unless otherwise explicitly provided herein, the Administrative
Agent's consent to any action of any Borrower which is prohibited unless such
consent is given may be given or refused by the Administrative Agent in its sole
discretion and without reference to Section 2:2-18 hereof.
Page 133
615. -Participations. Each Lender may sell participations to one or more
financial institutions (each, a "Participant") in that Lender's interests herein
provided that no such participation shall include any provision which accords
that Participant with any rights, vis a vis any Agent, with respect to any
requirement herein for approval by a requisite number or proportion of the
Lenders, but provided further, such participation, if in the Tranche B Loan or
the Tranche C Loan may be on such "voting" rights between that Lender and its
Participant as the two may determine. No such sale of a participation shall
relieve a Lender from that Lender's obligations hereunder nor obligate any Agent
to any Person other than a Lender.
616. -Right of Set-Off. Any and all deposits or other sums at any time
credited by or due to any Borrower from any Agent or any Lender or any
Participant or from any Affiliate of any of the foregoing, and any cash,
securities, instruments or other property of any Borrower in the possession of
any of the foregoing, whether for safekeeping or otherwise (regardless of the
reason such Person had received the same) to the extent permitted by law, shall
at all times constitute security for all Liabilities and for any and all
obligations of each Borrower to each Agent and such Lender or any Participant or
such Affiliate and following the occurrence of an Event of Default may be
applied or set off against the Liabilities and against such obligations at any
time, whether or not such are then due and whether or not other collateral is
then available to any Agent or that Lender.
617. -Pledges To Federal Reserve Banks: Nothing included in this Agreement
shall prevent or limit any Lender, to the extent that such Lender is subject to
any of the twelve Federal Reserve Banks organized under (S)4 of the Federal
Reserve Act (12 U.S.C. (S)341) from pledging all or any portion of that Lender's
interest and rights under this Agreement, provided, however, neither such pledge
nor the enforcement thereof shall release the pledging Lender from any of its
obligations hereunder or under any of the Loan Documents.
618. -Maximum Interest Rate. Regardless of any provision of any Loan
Document, neither any Agent nor any Lender shall be entitled to contract for,
charge, receive, collect, or apply as interest on any Liability, any amount in
excess of the maximum rate imposed by Applicable Law. Any payment which is made
which, if treated as interest on a Liability would result in such interest's
exceeding such maximum rate shall be held, to the extent of such excess, as
additional collateral for the Liabilities as if such excess were "Collateral."
619. -Waivers.
(a) The Borrowers' Representative and each Borrower (and all
guarantors,
Page 134
endorsers, and sureties of the Liabilities) make each of the waivers included in
Section 21:21-19(b), below, knowingly, voluntarily, and intentionally, and
understands that each Agent and each Lender, in establishing the facilities
contemplated hereby and in providing loans and other financial accommodations to
or for the account of the Borrowers as provided herein, whether not or in the
future, is relying on such waivers.
(b) THE BORROWERS' REPRESENTATIVE, EACH BORROWER, AND EACH SUCH
GUARANTOR, ENDORSER, AND SURETY RESPECTIVELY WAIVES THE FOLLOWING:
(ii) Except as otherwise specifically required hereby, notice of non-
payment, demand, presentment, protest and all forms of demand and notice,
both with respect to the Liabilities and the Collateral.
(iii) Except as otherwise specifically required hereby, the right to
notice and/or hearing prior to an Agent's exercising of that Agent's rights
upon default.
(iv) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN
WHICH ANY AGENT OR ANY LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR
CONTROVERSY IS INITIATED BY OR AGAINST ANY AGENT OR ANY LENDER OR IN WHICH
ANY AGENT OR ANY LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR
CONTROVERSY ARISES OUT OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR
BETWEEN THE BORROWERS' REPRESENTATIVE, ANY BORROWER OR ANY OTHER PERSON AND
THE AGENT AND EACH LENDER LIKEWISE WAIVES THE RIGHT TO A JURY IN ANY TRIAL
OF ANY SUCH CASE OR CONTROVERSY).
(v) Except for manifest error, any defense, counterclaim, set-off,
recoupment, or other basis on which the amount of any Liability, as stated
on the books and records of the Administrative Agent or any Lender, could
be reduced or claimed to be paid otherwise than in accordance with the
tenor of and written terms of such Liability.
(vi) Any claim to consequential, special, or punitive damages.
Page 135
The Borrowers' Representative
CASUAL MALE CORP.,
By /s/ Elizabeth C. White
------------------------------------
Print Name: Elizabeth C. White
------------------------------------
Title: First Senior Vice President
--------------------------------------
Chief Financial Officer and Treasurer
-------------------------------------
The Borrowers:
MORSE SHOE, INC.
JBI, INC.
JBI APPAREL, INC.
HE CASUAL MALE, INC.
WGS CORP.
TCMB&T, INC
LP INNOVATIONS, INC.
SPENCER COMPANIES, INC.
THE CASUAL MALE, INC.
BUCKMIN, INC.
ELM EQUIPMENT CORP.
JBI HOLDING COMPANY, INC.
TCM HOLDING COMPANY, INC.
ISAB, INC.
MORSE SHOE INTERNATIONAL, INC.
WHITE CAP FOOTWEAR, INC.
By /s/ Elizabeth C. White
------------------------------------
Print Name: Elizabeth C. White
------------------------------------
Title: First Senior Vice President
--------------------------------------
Chief Financial Officer and Treasurer
-------------------------------------
Signature Page 136
Administrative Agent and Collateral Agent
FLEET RETAIL FINANCE INC.
By /s/ Sally A. Sheehan
------------------------------------
Print Name: Sally A. Sheehan
------------------------------------
Title: Director
---------------------------------
TRANCHE b lender and Tranche C Lender
BACK BAY CAPITAL FUNDING LLC
By /s/ Joseph V. Balsamo
------------------------------------
Print Name: Joseph V. Balsamo
------------------------------------
Title: Director
---------------------------------
Signature Page 137
The Revolving Credit Lenders:
FLEET RETAIL FINANCE INC.
By /s/ Sally A. Sheehan
------------------------------------
Name: Sally A. Sheehan
------------------------------------
Title: Director
---------------------------------
FOOTHILL CAPITAL CORPORATION
By /s/ Stacy Yucht
------------------------------------
Name: Stacy Yucht
------------------------------------
Title: Vice President
---------------------------------
HELLER FINANCIAL, INC.
By /s/ Richard J. Holston
------------------------------------
Name: Richard J, Holston
------------------------------------
Title: Assistant Vice President
---------------------------------
LASALLE BUSINESS CREDIT, INC
By /s/ Anthony Lavinio
------------------------------------
Name: Anthony Lavinio
------------------------------------
Title: Assistant Vice President
---------------------------------
NATIONAL CITY COMMERCIAL FINANCE, INC.
By /s/ Gregory A. Godec
------------------------------------
Name: Gregory A. Godec
------------------------------------
Title: Senior Vice President
---------------------------------
Signature Page 138
IBJ WHITEHALL BUSINESS CREDIT CORP.
By /s/ Bruce Kasper
------------------------------------
Name: Bruce Kasper
------------------------------------
Title: Vice President
---------------------------------
THE PROVIDENT BANK
By /s/ Jose V. Garde
------------------------------------
Name: Jose V. Garde
------------------------------------
Title: Vice President
---------------------------------
Signature Page 139