EXHIBIT 10.1
[LOGO THE BANK OF NEW YORK]
364-DAY CREDIT AGREEMENT,
dated as of July 10, 2002,
by and among
KOHL'S CORPORATION,
THE LENDERS PARTY HERETO,
BANK ONE, NA,
as Syndication Agent,
U.S. BANK, NATIONAL ASSOCIATION,
WACHOVIA BANK, NATIONAL ASSOCIATION,
and
FLEET NATIONAL BANK,
as Co-Documentation Agents
and
THE BANK OF NEW YORK,
as the Administrative Agent
_________________
$133,000,000
________________
EXHIBIT 10.1
BNY CAPITAL MARKETS, INC.
Lead Arranger and Book Runner
TABLE OF CONTENTS
Page
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.............................................. 7
1.1. Definitions....................................................................... 7
1.2. Principles of Construction........................................................ 23
2. AMOUNT AND TERMS OF LOANS............................................................... 24
2.1. Revolving Credit Loans............................................................ 24
2.2. Notes; Maturity................................................................... 24
2.3. [Reserved]........................................................................ 24
2.4. [Reserved]........................................................................ 24
2.5. Procedure for Borrowing........................................................... 24
2.6. Competitive Bid Procedure......................................................... 26
2.7. Termination, Reduction or Increases in Commitments................................ 28
2.8. Prepayments....................................................................... 30
2.9. Use of Proceeds................................................................... 30
2.10. [Reserved]........................................................................ 31
2.11. [Reserved]........................................................................ 31
2.12. [Reserved]........................................................................ 31
2.13. Payments.......................................................................... 31
2.14. Extension of Revolving Credit Commitment Period; Extension of Revolving
Credit Maturity Date............................................................ 31
3. INTEREST, FEES, YIELD PROTECTIONS, ETC.................................................. 32
3.1. Interest Rate and Payment Dates................................................... 32
3.2. Fees.............................................................................. 33
3.3. Conversions; Eurodollar Advances.................................................. 34
3.4. Concerning Eurodollar Interest Periods............................................ 35
3.5. Indemnification for Loss.......................................................... 35
3.6. Capital Adequacy.................................................................. 36
3.7. Reimbursement for Increased Costs................................................. 36
3.8. Illegality of Funding............................................................. 37
3.9. Substituted Interest Rate......................................................... 37
3.10. Taxes; Net Payments............................................................... 38
3.11. Substitution of Lenders........................................................... 39
4. REPRESENTATIONS AND WARRANTIES.......................................................... 40
4.1. Existence and Power............................................................... 40
4.2. Authority and Execution........................................................... 40
4.3. Binding Agreement................................................................. 40
4.4. Litigation........................................................................ 40
4.5. Absence of Defaults; No Conflicting Agreements.................................... 41
4.6. Compliance with Applicable Laws................................................... 41
4.7. Governmental Regulations.......................................................... 41
4.8. Plans.............................................................................. 41
4.9. Financial Statements............................................................... 42
4.10. No Misrepresentation............................................................... 42
5. CONDITIONS TO FIRST LOANS................................................................ 42
5.1. Evidence of Action................................................................. 42
5.2. Notes.............................................................................. 43
5.3. Absence of Litigation.............................................................. 43
5.4. Existing Bank Debt................................................................. 43
5.5. Opinion of Counsel................................................................. 43
5.6. Fees and Expenses.................................................................. 43
5.7. Other Credit Agreement............................................................. 43
5.8. Other Documents.................................................................... 44
6. CONDITIONS OF LENDING - ALL LOANS........................................................ 44
6.1. Compliance......................................................................... 44
6.2. Borrowing Request; Competitive Bid Request......................................... 44
7. AFFIRMATIVE COVENANTS.................................................................... 44
7.1. Financial Statements and Information............................................... 44
7.2. Legal Existence.................................................................... 46
7.3. Insurance.......................................................................... 46
7.4. Performance of Obligations......................................................... 46
7.5. Condition of Property.............................................................. 46
7.6. Observance of Legal Requirements................................................... 46
7.7. Inspection of Property; Books and Records; Discussions............................. 47
7.8. Financial Covenants................................................................ 47
8. NEGATIVE COVENANTS....................................................................... 47
8.1. Subsidiary Indebtedness............................................................ 47
8.2. Liens.............................................................................. 47
8.3. Merger, Consolidations, Acquisitions and Other Changes............................. 48
8.4. Dispositions....................................................................... 49
8.5. [Reserved]......................................................................... 50
8.6. [Reserved]......................................................................... 50
8.7. Business Changes................................................................... 50
8.8. Transactions with Affiliates....................................................... 50
8.9. Restrictive Agreements............................................................. 50
9. DEFAULT.................................................................................. 51
9.1. Events of Default.................................................................. 51
9.2. Contract Remedies.................................................................. 53
10. THE ADMINISTRATIVE AGENT................................................................. 53
10.1. Appointment........................................................................ 53
10.2. Delegation of Duties............................................................... 54
10.3. Exculpatory Provisions............................................................. 54
10.4. Reliance by Administrative Agent................................................. 55
10.5. Notice of Default................................................................ 55
10.6. Non Reliance on Administrative Agent and Other Lenders........................... 55
10.7. Indemnification.................................................................. 56
10.8. Administrative Agent in Its Individual Capacity.................................. 57
10.9. Successor Administrative Agent................................................... 57
10.10. Other Agents..................................................................... 57
11. OTHER PROVISIONS......................................................................... 58
11.1. Amendments and Waivers........................................................... 58
11.2. Notices.......................................................................... 58
11.3. No Waiver; Cumulative Remedies................................................... 59
11.4. Survival of Representations and Warranties and Certain Obligations............... 60
11.5. Lending Offices.................................................................. 60
11.6. Successors and Assigns........................................................... 60
11.7. Indemnity........................................................................ 62
11.8. Limitation of Liability.......................................................... 62
11.9. Counterparts..................................................................... 63
11.10. Adjustments; Set off............................................................. 63
11.11. Construction..................................................................... 64
11.12. Governing Law.................................................................... 64
11.13. Headings Descriptive............................................................. 64
11.14. Severability..................................................................... 64
11.15. Integration...................................................................... 64
11.16. Consent to Jurisdiction.......................................................... 64
11.17. Service of Process............................................................... 65
11.18. No Limitation on Service or Suit................................................. 65
11.19. WAIVER OF TRIAL BY JURY.......................................................... 65
11.20. Expenses......................................................................... 65
11.21. Treatment of Certain Information................................................. 66
EXHIBITS
Exhibit A List of Revolving Credit Commitment Amounts
Exhibit B Form of Note
Exhibit C Form of Borrowing Request
Exhibit D Form of Notice of Conversion
Exhibit E Form of Compliance Certificate
Exhibit F-1 Form of Opinion of Counsel to the Borrower
Exhibit F-2 Form of Opinion of General Counsel of the Borrower
Exhibit G Form of Revolving Credit Increase Supplement
Exhibit H Form of Assignment and Acceptance Agreement
Exhibit I Form of Competitive Bid Request
Exhibit J Form of Invitation to Bid
Exhibit K Form of Competitive Bid
Exhibit L Form of Competitive Bid Accept/Reject Letter
SCHEDULES
Schedule 4.4 List of Litigation
Schedule 4.8 List of Existing Pension Plans
Schedule 8.2 List of Liens
Schedule 8.9 Existing Restrictions
364-Day CREDIT AGREEMENT, dated as of July 10, 2002, by and among KOHL'S
CORPORATION, a Wisconsin corporation (the "Borrower"), the lenders party hereto
(together with their respective assigns, the "Lenders", each a "Lender"), BANK
ONE, NA, as syndication agent (in such capacity, the "Syndication Agent"), U.S.
BANK, NATIONAL ASSOCIATION, WACHOVIA BANK, NATIONAL ASSOCIATION and FLEET
NATIONAL BANK, as co-documentation agents (in such capacity, the
"Co-Documentation Agents") and THE BANK OF NEW YORK ("BNY"), as the
administrative agent (in such capacity, the "Administrative Agent").
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.1. Definitions
As used in this Agreement, terms defined in the preamble have the meanings
therein indicated, and the following terms have the following meanings:
"ABR Advances": the Revolving Credit Loans (or any portions thereof), at
such time as they (or such portions) are made and/or being maintained at a rate
of interest based upon the Alternate Base Rate.
"Accountants": Ernst & Young LLP (or any successor thereto), or such other
firm of certified public accountants of recognized national standing
selected by the Borrower.
"Accumulated Funding Deficiency": as defined in Section 302 of ERISA.
"Acquisition": with respect to any Person, the purchase or other
acquisition by such Person, by any means whatsoever (including through a merger,
dividend or otherwise and whether in a single transaction or in a series of
related transactions), of (i) any Capital Stock of, or other equity securities
of, any other Person if, immediately thereafter, such other Person would be
either a Subsidiary of such Person or otherwise under the control of such
Person, (ii) any Operating Entity, or (iii) any Property of (A) any other Person
or (B) any Operating Entity, in either case other than in the ordinary course of
business, provided, however, that no acquisition of all or substantially all of
the assets of such other Person or Operating Entity shall be deemed ordinary
course of business. For purposes of this definition, "control" shall mean the
ownership of 50% or more of any class or type of the Capital Stock of any
Person.
"Adjusted Net Income": in respect of any period, Consolidated net income,
excluding, without duplication, to the extent included in the determination
thereof, all interest income, interest expense, Rent, depreciation,
amortization, provision for income taxes and all other non cash items.
"Advance": with respect to a Revolving Credit Loan, an ABR Advance or a
Eurodollar Advance, as the case may be.
"Adverse Claim": a lien, security interest, charge or encumbrance, or other
right or claim in, of or on any Person's assets or properties in
favor of any other Person.
"Affected Advance": as defined in Section 3.9.
7
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (i) to vote 5% or more of the securities or other
interests having ordinary voting power for the election of directors or other
managing Persons thereof or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Aggregate Credit Exposure": at any time, the sum at such time of the
outstanding principal balance of the Revolving Credit Loans and Competitive Bid
Loans of all Lenders.
"Aggregate Revolving Credit Commitment Amount": at any time, the sum at
such time of the Revolving Credit Commitment Amounts of all Lenders.
"Agreement": this Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per annum equal to
the higher of (i) the Federal Funds Rate in effect on such date plus 1/2 of 1%
or (ii) the BNY Rate in effect on such date.
"Applicable Debt": senior unsecured long term debt of the Borrower that is
unsupported by any guarantee and is otherwise non credit
enhanced.
"Applicable Margin": (a) Subject to clauses (b) and (c) of this definition,
(i) with respect to the unpaid principal balance of Eurodollar Advances, at all
times during which the applicable Pricing Level set forth below is in effect,
the percentage set forth below under the heading "Applicable Eurodollar Margin"
and adjacent to such Pricing Level, (ii) with respect to the Facility Fee, at
all times during which the applicable Pricing Level set forth below is in
effect, the percentage set forth below under the heading "Facility Fee Margin"
and adjacent to such Pricing Level, and (iii) with respect to the Utilization
Fee, at all times during which the applicable Pricing Level set forth below is
in effect, the percentage set forth below under the heading "Utilization Fee
Margin" and adjacent to such Pricing Level:
Applicable Facility Fee Utilization Fee
---------- ------------ ---------------
Pricing Level Eurodollar Margin Margin
- ------------ ---------- ------ ------
Pricing Level I 0.190% 0.060% 0.050%
Pricing Level II 0.235% 0.065% 0.100%
Pricing Level III 0.325% 0.075% 0.100%
Pricing Level IV 0.400% 0.100% 0.125%
Pricing Level V 0.500% 0.125% 0.125%
Pricing Level VI 0.675% 0.150% 0.150%
Pricing Level VII 0.850% 0.200% 0.150%
(b) In the event that two Pricing Levels would be applicable at any one
time but for this paragraph (b), then for purposes of determining the Applicable
Margin, the higher of the two such Pricing Levels (Pricing Level I being the
highest Pricing Level) shall be the
8
applicable Pricing Level, provided that (i) except as otherwise provided in
clause (ii) below, in the event such two Pricing Levels are separated by more
than one Pricing Level, the Pricing Level that is one Pricing Level below the
higher of such two Pricing Levels shall be the applicable Pricing Level, (ii) in
the event that one of the two such Pricing Levels shall be Pricing Level VII,
then Pricing Level VII shall be the applicable Pricing Level. Notwithstanding
anything to the contrary contained herein, (1) in the event that neither S&P nor
Moody's shall rate the Applicable Debt, then from the date of such event until
such date, if any, as the Borrower shall deliver to the Administrative Agent a
notice pursuant to Section 7.1(h) that either S&P or Moody's has issued a new
rating for the Applicable Debt, Pricing Level VII shall be the applicable
Pricing Level, and (2) in the event that either S&P or Moody's (but not both)
shall not rate the Applicable Debt, then from the date of such event until such
date, if any, as the Borrower shall deliver to the Administrative Agent a notice
pursuant to Section 7.1(h) that such rating agency has issued a new rating for
the Applicable Debt, then for purposes of determining the Applicable Margin, the
Pricing Level that is one Pricing Level below the Pricing Level determined with
respect to the other rating agency shall be the applicable Pricing Level. Each
determination of an applicable Pricing Level shall be based on the ratings (or
lack thereof) by S&P and Moody's as of the close of business in New York City on
such date of determination.
(c) Notwithstanding anything to the contrary contained in paragraph (b)
above, (i) Pricing Level III shall be deemed to be the applicable Pricing Level
in effect on the Effective Date, and (ii) thereafter, increases in the
applicable Pricing Level (from lower to higher) shall become effective upon the
delivery by the Borrower to the Administrative Agent of a notice pursuant to
Section 7.1(h), and decreases in the applicable Pricing Level shall become
effective on the effective date of any downgrade or withdrawal in the rating by
Moody's or S&P of Applicable Debt. Notwithstanding anything to the contrary
contained herein, no increase in the applicable Pricing Level shall become
effective upon the occurrence or during the continuance of any Event of Default.
"Approved Bank": any bank whose (or whose parent company's) unsecured non
credit supported long term senior indebtedness rating from (i) S&P is at least A
or the equivalent thereof or (ii) Moody's is at least A3 or the equivalent
thereof.
"Approved Fund": with respect to any Lender that is a fund that invests in
commercial loans, any other fund that invests in commercial loans and is managed
or advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Assignment and Acceptance Agreement": an assignment and acceptance
agreement executed by an assignor and an assignee, substantially in the form of
Exhibit H.
"BNY Capital Markets": BNY Capital Markets, Inc.
"BNY Rate": a rate of interest per annum equal to the rate of interest
publicly announced in New York City by BNY from time to time as its prime
commercial lending rate, such rate to be adjusted automatically (without notice)
on the effective date of any change in such publicly announced rate.
9
"Borrowing Date": any Business Day on which (i) the Lenders make Revolving
Credit Loans, or (ii) a Lender makes a Competitive Bid Loan.
"Borrowing Request": a request for Revolving Credit Loans in the form of
Exhibit C.
"Business Day": for all purposes other than as set forth in clause (ii)
below, (i) any day other than a Saturday, a Sunday or a day on which commercial
banks located in New York City are authorized or required by law or other
governmental action to close, and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Advances, any day which is a Business Day described in clause (i)
above and which is also a day on which eurodollar funding between banks may be
carried on in London, England.
"Capitalization": at any fiscal quarter end, the sum of (i) Net Worth as of
such fiscal quarter end minus the sum, determined on a Consolidated basis, of
all investments of the Borrower and its Subsidiaries that are accounted for
under equity method accounting, and (ii) Included Indebtedness determined on a
Consolidated basis as of such fiscal quarter end.
"Capital Lease": a lease the obligations in respect of which are required
to be capitalized by the lessee thereunder for financial reporting
purposes in accordance with GAAP.
"Capital Stock": as to any Person, all shares, interests, partnership
interests, limited liability company interests, participations, rights in or
other equivalents (however designated) of such Person's equity (however
designated) and any rights, warrants or options exchangeable for or convertible
into such shares, interests, participations, rights or other equity.
"Change of Control": any one or more of the following events: (i) any
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) shall have become the "beneficial owner" (as defined in Rule 13d 3
under the Exchange Act) of Voting Shares entitled to exercise more than 50% of
the total power of all outstanding Voting Shares of the Borrower (including any
Voting Shares which are not then outstanding of which such person or group is
deemed the beneficial owner), (ii) a change in the composition of the Managing
Person of the Borrower shall have occurred in which the individuals who
constituted the Managing Person of the Borrower at the beginning of the two year
period immediately preceding such change (together with any other individual
whose election by the Managing Person of the Borrower or whose nomination for
election by the shareholders of the Borrower was approved by a vote of at least
two thirds of the members of such Managing Person then in office who either were
members of such Managing Person at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the members of such Managing Person then in
office, or (iii) KDS shall cease to be a wholly-owned Subsidiary of the
Borrower, unless it has merged into the Borrower or into another wholly-owned
Subsidiary of the Borrower. For purposes of this definition, the term "Voting
Shares" shall mean all outstanding shares of any class or classes (however
designated) of Capital Stock of the Borrower entitled to vote generally in the
election of members of the Managing Person thereof.
10
"Charged-Off Receivable": a Receivable (i) as to which the obligor thereof,
if a natural person, is deceased, (ii) which, consistent with the Credit and
Collection Policy, would be written off as uncollectible, (iii) which has been
identified by the Borrower or any Subsidiary thereof as uncollectible or (iv) as
to which any payment, or part thereof remains past due for 91 days or more from
the original due date (which shall be consistent with the Credit and Collection
Policy) for such payment.
"Code": the Internal Revenue Code of 1986, as amended from time to time, or
any successor thereto, and the rules and regulations issued thereunder, as
from time to time in effect.
"Commitment Percentage": with respect to any Lender as of any date, the
percentage as of such date equal to such Lender's Revolving Credit Commitment
Amount divided by the Aggregate Revolving Credit Commitment Amount (or, if no
Revolving Credit Commitments then exist, the percentage equal to such Lender's
Revolving Credit Commitment Amount on the last day upon which Revolving Credit
Commitments did exist divided by the Aggregate Revolving Credit Commitment
Amount as in effect on such day).
"Competitive Bid": an offer by a Lender to make a Competitive Bid Loan,
substantially in the form of Exhibit K.
"Competitive Bid Accept/Reject Letter": a notification given by the
Borrower pursuant to Section 2.6(d) substantially in the form of Exhibit L.
"Competitive Bid Loan": a loan made pursuant to Section 2.6.
"Competitive Bid Rate": with respect to any Competitive Bid made by a
Lender pursuant to Section 2.6, the fixed rate of interest offered by such
Lender in connection therewith.
"Competitive Bid Request": a request by the Borrower for Competitive Bids,
substantially in the form of Exhibit I.
"Competitive Interest Period": with respect to any Competitive Bid Loan,
the period commencing on the Borrowing Date with respect to such Competitive Bid
Loan and ending on the date requested in the Competitive Bid Request with
respect to such Competitive Bid Loan, which date shall be neither earlier than
seven days, nor later than 90 days, after the Borrowing Date with respect to
such Competitive Bid Loan, provided, however, that in no event shall any
Competitive Interest Period end after the Revolving Credit Maturity Date.
Interest shall accrue from and including the first day of a Competitive Interest
Period to, but excluding, the last day of such Competitive Interest Period.
"Compliance Certificate": a certificate substantially in the form of
Exhibit E.
"Consolidated": the Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.
"Contingent Obligation": with respect to any Person, (i) any agreement,
written undertaking or contractual arrangement by which such Person assumes,
guarantees, endorses
11
(other than the endorsement of instruments for deposit or collection in the
ordinary course of business), contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes or is contingently liable upon, the
financial or monetary obligation or financial or monetary liability of any other
Person (excluding customary indemnification obligations arising from a purchase
and sale agreement negotiated at arm's length and typical for transactions of a
similar nature), or agrees in writing to maintain the net worth or working
capital or other financial condition of any other Person, or otherwise assures
any creditor of such other Person in writing against loss, including, without
limitation, any operating agreement, take-or-pay contract or application for or
reimbursement agreement with respect to a letter of credit, and (ii) any
obligation in respect of the liabilities of any partnership in which such Person
is a general partner, except to the extent that such liabilities of such
partnership are nonrecourse to such Person and its separate Property. The amount
of any Contingent Obligation of a Person shall be deemed to be an amount equal
to the stated or determinable amount of a primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by
such Person in good faith.
"Control Person": as defined in Section 3.6.
"Conversion Date": the date on which: (i) a Eurodollar Advance is converted
to an ABR Advance, (ii) an ABR Advance is converted to a Eurodollar Advance or
(iii) a Eurodollar Advance is converted to a new Eurodollar Advance.
"Credit and Collection Policy": the credit and collection policies and
practices of the Borrower and its Subsidiaries relating to Receivables, as
amended, supplemented or otherwise modified from time to time.
"Credit Parties": the Administrative Agent and each Lender.
"Default": any event or condition which constitutes an Event of Default or
which, with the giving of notice, the lapse of time, or any other condition,
would, unless cured or waived, become an Event of Default.
"Disposition": with respect to any Person, any sale, assignment, transfer
or other disposition by such Person, by any means, of (a) the Capital Stock of
any other Person, (b) any business, going concern or division or segment
thereof, or (c) any other Property of such Person, other than in the ordinary
course of business.
"Dollars" and "$": lawful currency of the United States.
"Effective Date": July 10, 2002.
"Eligible Receivable": at any time, a Receivable:
(i) which is not a Charged-Off Receivable,
(ii) which is denominated and payable only in United States dollars in the
United States,
12
(iii) which satisfies all applicable requirements of the Credit and
Collection Policy, and
(iv) which is not subject to any right of rescission, set off,
counterclaim, any other defense (including defenses arising out of violations of
usury laws) of the applicable obligor against the originator thereof, or any
other Adverse Claim, and the obligor thereon holds no right as against such
originator to cause such originator to repurchase the goods or merchandise the
sale of which shall have given rise to such Receivable (except with respect to
defective goods or returns otherwise in accordance with the originator's usual
and customary terms).
"Employee Benefit Plan": an employee benefit plan within the meaning of
Section 3(3) of ERISA maintained, sponsored or contributed to by the Borrower,
any of its Subsidiaries or any ERISA Affiliate.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations issued thereunder, as from time
to time in effect.
"ERISA Affiliate": when used with respect to an Employee Benefit Plan,
ERISA, the PBGC or a provision of the Code pertaining to employee benefit plans,
any Person which is a member of any group of organizations within the meaning of
Sections 414(b) or (c) of the Code (or, solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, Sections 414(m) or (o) of the Code) of which the Borrower or any of its
Subsidiaries is a member.
"Eurodollar Advances": collectively, the Revolving Credit Loans (or any
portions thereof), at such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Eurodollar Rate.
"Eurodollar Interest Period": with respect to any Eurodollar Advance
requested by the Borrower, the period commencing on, as the case may be, the
Borrowing Date or Conversion Date with respect to such Eurodollar Advance and
ending seven or fourteen days, or one, two, three or six months thereafter, as
selected by the Borrower in its irrevocable Borrowing Request or its irrevocable
Notice of Conversion, provided, however, that (i) if any Eurodollar Interest
Period would otherwise end on a day which is not a Business Day, such Eurodollar
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Eurodollar Interest Period into
another calendar month, in which event such Eurodollar Interest Period shall end
on the immediately preceding Business Day and (ii) any Eurodollar Interest
Period which begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Eurodollar Interest Period) shall end on the last Business Day of a
calendar month. Eurodollar Interest Periods shall be subject to the provisions
of Section 3.4.
"Eurodollar Rate": with respect to the Eurodollar Interest Period
applicable to any Eurodollar Advance, a rate of interest per annum, as
determined by the Administrative Agent,
13
obtained by dividing (and then rounding to the nearest 1/16 of 1% or, if there
is no nearest 1/16 of 1%, then to the next higher 1/16 of 1%):
(a) the rate, as reported by BNY to the Administrative Agent, quoted by BNY
to leading banks in the interbank eurodollar market as the rate at which BNY is
offering Dollar deposits in an amount equal approximately to the Eurodollar
Advance of BNY to which such Eurodollar Interest Period shall apply for a period
equal to such Eurodollar Interest Period, as quoted at approximately 11:00 a.m.
two Business Days prior to the first day of such Eurodollar Interest Period, by
(b) a number equal to 1.00 minus the aggregate of the then stated maximum
rates during such Eurodollar Interest Period of all reserve requirements
(including, without limitation, marginal, emergency, supplemental and special
reserves), expressed as a decimal, established by the Board of Governors of the
Federal Reserve System and any other banking authority to which BNY and other
major United States money center banks are subject, in respect of eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board of Governors of the Federal Reserve System) or in respect of any other
category of liabilities including deposits by reference to which the interest
rate on Eurodollar Advances is determined or any category of extensions of
credit or other assets which includes loans by non domestic offices of any
Lender to United States residents. Such reserve requirements shall include,
without limitation, those imposed under such Regulation D. Eurodollar Advances
shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed to be subject to such reserve requirements without benefit of credits for
proration, exceptions or offsets which may be available from time to time to any
Lender under such Regulation D. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in any such reserve
requirement.
"Event of Default": as defined in Section 9.1.
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Excluded Receivables Indebtedness": as of any date, Indebtedness that is
secured by Receivables of the Borrower or Subsidiaries of the Borrower (but no
other Property of the Borrower or any Subsidiary thereof, other than Related
Receivable Assets), to the extent that such Indebtedness does not exceed 85% of
Eligible Receivables on a Consolidated basis.
"Excluded Taxes": collectively, in the case of any Credit Party, (i) taxes
imposed on the net income of such Credit Party by the jurisdiction in which such
Credit Party has its situs of organization or in which such Credit Party's
lending office is located, (ii) taxes imposed on the net income of such Credit
Party other than those taxes described in clause (i), except to the extent that
such taxes would not have been incurred but for the situs of organization, any
place of business or the activities of any Borrower, in the jurisdiction
imposing the tax, (iii) taxes (other than withholding taxes) imposed on or
measured by the gross income, gross receipts or capital of such Credit Party,
except to the extent that such taxes would not have been incurred but for the
situs of organization, any place of business or the activities of any Borrower,
in the jurisdiction imposing the tax, (iv) any withholding taxes imposed with
respect to a payment to a person who
14
has become a Lender as a result of an Assignment to the extent such withholding
arises as a result of Section 881(c)(3)(A) of the Code, (v) any tax imposed on a
transfer of a Note, and (vi) any tax imposed as a result of the willful
misconduct of such Credit Party.
"Existing Bank Debt": collectively, the indebtedness of KDS under the
Credit Agreement, dated as of June 13, 1997, among Kohl's Corporation, KDS, the
lenders party thereto, the agents party thereto, and BNY, as administrative
agent thereunder, as amended, together with all outstanding principal, accrued
interest and fees and other sums payable thereunder.
"Existing Pension Plans": as defined in Section 4.8.
"Facility Fee": as defined in Section 3.2(a).
"Federal Funds Rate": for any day, a rate per annum (expressed as a
decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
of the quotations for such day on such transactions received by BNY from three
Federal Funds brokers of recognized standing selected by it.
"Financial Officer": the chief financial officer of the Borrower, or such
other representative of the Borrower as shall be satisfactory to the
Administrative Agent.
"Financial Statements": as defined in Section 4.9.
"GAAP": generally accepted accounting principles as in effect from time to
time in the United States.
"Governmental Authority": any foreign, federal, state, municipal or other
government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof, or any court or arbitrator.
"HIPAA": The Health Insurance Portability and Accountability Act of 1996,
as amended from time to time, and the rules and regulations issued thereunder,
as from time to time in effect.
"Impermissible Qualification": relative to any opinion by the Accountants
as to any financial statement delivered pursuant hereto, any qualification or
exception to such opinion: (a) which is of a "going concern" or a similar nature
with respect to the Borrower or any Significant Subsidiary, (b) which relates to
the limited scope of examination of matters relevant to such financial statement
(other than scope limitations included in the standard form of opinion utilized
by the Accountants or with respect to Persons other than the Borrower or such
Significant Subsidiary), or (c) which relates to the treatment or classification
of any item in such
15
financial statement and which, as a condition to its removal, would require an
adjustment to such item the effect of which would be to cause the Borrower to be
in default of any of its obligations under Section 7.8.
"Included Indebtedness": as to any Person, all items which constitute,
without duplication, (1) Indebtedness of such Person, other than (a)
Indebtedness of such Person within the meaning of clause (v) of such defined
term, and (b) Indebtedness of such Person within the meaning of clauses (ix) and
(x) of such defined term solely in respect of Indebtedness referred to in clause
(a) above, minus (2) any unamortized debt discount to the extent not otherwise
taken into consideration in the determination of Indebtedness.
"Included Taxes": all taxes other than Excluded Taxes.
"Income Tax": as to any Person, an income tax or franchise tax imposed on
all or part of the net income or net profits of such Person (including any
interest, fees, or penalties for late payment of such an income tax or franchise
tax) imposed by one of the following jurisdictions or by any political
subdivision or taxing authority thereof: (i) the United States, (ii) the
jurisdiction in which such Person is organized, (iii) the jurisdiction in which
such Person's principal office is located, or (iv) in the case of any Credit
Party, any jurisdiction in which such Credit Party is deemed to be doing
business.
"Indebtedness": as to any Person, at a particular time, all items (other
than any indebtedness or obligations of such Person to the extent owed only to
(A) any Subsidiary of such Person, or (B) any other Person (or any Subsidiary
thereof) of which such Person is a Subsidiary) which constitute, without
duplication, (i) indebtedness for borrowed money, (ii) indebtedness in respect
of the deferred purchase price of Property (other than trade payables incurred
in the ordinary course of business), provided that some or all of the purchase
price is deferred for more than 120 days from the date such Person accepts the
property, (iii) indebtedness evidenced by notes, bonds, debentures or similar
instruments, (iv) obligations with respect to any conditional sale or title
retention agreement, (v) indebtedness arising under acceptance facilities and
the amount available to be drawn under all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn thereunder to
the extent such Person shall not have reimbursed the issuer in respect of the
issuer's payment thereof, (vi) obligations under Capital Leases to the extent
such obligations would be required to be capitalized on the balance sheet of
such Person in accordance with GAAP, (vii) obligations under interest rate or
foreign currency hedging arrangements at market value, (viii) all obligations of
such Person in respect of Capital Stock subject to mandatory redemption or
redemption at the option of the holder thereof, in whole or in part, (ix)
Contingent Obligations of such Person in respect of any of the foregoing, and
(x) all obligations of any other Person in respect of any of the foregoing that
are secured by (or for which any obligee of any such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien on any Property owned
or acquired by such Person whether or not the obligation secured thereby has
been assumed.
"Indemnified Liability": as defined in Section 11.20.
"Indemnified Person": as defined in Section 11.7.
16
"Interest Payment Date": (i) as to any ABR Advance, the last day of each
March, June, September and December commencing on the first of such days to
occur after such ABR Advance is made or any Eurodollar Advance is converted to
an ABR Advance, (ii) as to any Eurodollar Advance as to which the Borrower has
selected a Eurodollar Interest Period of seven or fourteen days, or one, two or
three months, the last day of such Eurodollar Interest Period, (iii) as to any
Eurodollar Advance as to which the Borrower has selected a Eurodollar Interest
Period of six months, the last day of each three month interval occurring during
such Eurodollar Interest Period and the last day of such Eurodollar Interest
Period, (iv) as to any Competitive Bid Loan, the last day of the Competitive
Interest Period with respect thereto, and (v) as to all Advances and all
Competitive Bid Loans, the Revolving Credit Maturity Date.
"Interest Period": a Eurodollar Interest Period or a Competitive Interest
Period, as the case may be.
"Invitation to Bid": an invitation to make Competitive Bids in the form of
Exhibit J.
"KDS": Kohl's Department Stores, Inc., a Delaware corporation.
"Leverage Ratio": at any fiscal quarter end, the ratio of (x) Included
Indebtedness determined on a Consolidated basis as of such fiscal quarter end to
(y) Capitalization as of such fiscal quarter end.
"Lien": any mortgage, deed of trust, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other), or other security agreement or security
interest of any kind or nature whatsoever, including, without limitation, any
conditional sale or other title retention agreement and any capital or financing
lease having substantially the same economic effect as any of the foregoing.
"Loan": a Revolving Credit Loan or a Competitive Bid Loan, as the case may
be.
"Loan Documents": collectively, this Agreement and the Notes.
"Loans": the Revolving Credit Loans and/or the Competitive Bid Loans, as
the case may be.
"Managing Person": with respect to any Person that is (i) a corporation,
its board of directors, (ii) a limited liability company, its board of control,
managing member or members, (iii) a limited partnership, its general partner,
(iv) a general partnership or a limited liability partnership, its managing
partner or executive committee or (v) any other Person, the managing body
thereof or other Person analogous to the foregoing.
"Margin Stock": any "margin stock", as defined in Regulation U of the Board
of Governors of the Federal Reserve System, as amended,
supplemented or otherwise modified from time to time.
"Material Adverse Change": a material adverse change in the financial
condition, operations, business or Property of the Borrower and its Subsidiaries
taken as a whole.
17
"Material Adverse Effect": a material adverse effect on (i) the financial
condition, operations, business or Property of the Borrower and its Subsidiaries
taken as a whole, or (ii) the ability of the Borrower to perform any of its
payment obligations or other material obligations under the Loan Documents.
"Material Obligations": as of any date, (a) Indebtedness (other than
Indebtedness under the Loan Documents and Indebtedness in respect of Capital
Leases) of the Borrower or its Subsidiaries in an aggregate principal amount
exceeding $25,000,000, or (b) obligations under leases in respect of interests
in real property (whether operating leases or Capital Leases) of the Borrower or
its Subsidiaries in an aggregate principal amount exceeding $50,000,000. For
purposes of determining Material Obligations, the "principal amount" of
Indebtedness and such other obligations at such date shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary, as applicable, would be required to pay if such Indebtedness
and such obligations became due and payable on such date.
"Minimum Coverage Ratio": at any fiscal quarter end, the ratio of (a)
Adjusted Net Income, to (b) Rent minus interest income determined on a
Consolidated basis, plus Consolidated interest expense, in each case referred to
in this definition for the four consecutive fiscal quarters then ended.
"Moody's": Moody's Investors Service, Inc., or any successor thereto.
"Multiemployer Plan": a Pension Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Worth": as of any fiscal quarter end, the excess if any of total
assets over total liabilities, in each case determined on a
Consolidated basis.
"Note" and "Notes": as defined in Section 2.2.
"Notice of Conversion": a notice substantially in the form of Exhibit D.
"Operating Entity": any Person or any business or operating unit of a
Person which is, or could be, operated separate and apart from (i) the other
businesses and operations of such Person, or (ii) any other line of business or
business segment.
"Organizational Documents": as to any Person which is (i) a corporation,
the certificate or articles of incorporation and by laws of such Person, (ii) a
limited liability company, the limited liability company agreement or similar
agreement of such Person, (iii) a partnership, the partnership agreement or
similar agreement of such Person, or (iv) any other form of entity or
organization, the organizational documents analogous to the foregoing.
"Other Credit Agreement": the Five-Year Credit Agreement, dated as of the
date hereof, by and among Kohl's Corporation, the lenders party thereto, Bank
One, NA, as Syndication Agent, U.S. Bank, National Association, Wachovia Bank,
National Association, and Fleet National Bank, as Co-Documentation Agents, and
The Bank of New York, as an issuing bank, the swing line lender and the
administrative agent.
18
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to the
functions thereof.
"Pension Plan": at any date of determination, any Employee Benefit Plan
(including a Multiemployer Plan), the funding requirements of which (under
Section 302 of ERISA or Section 412 of the Code) are, or at any time within the
six years immediately preceding such date, were in whole or in part, the
responsibility of the Borrower, any of its Subsidiaries or any ERISA Affiliate.
"Person": any individual, firm, partnership, limited liability company,
joint venture, corporation, association, business enterprise, joint stock
company, unincorporated association, trust, Governmental Authority or any other
entity, whether acting in an individual, fiduciary, or other capacity, and for
the purpose of the definition of "ERISA Affiliate", a trade or business.
"Pricing Level": at any time, Pricing Level I, Pricing Level II, Pricing
Level III, Pricing Level IV, Pricing Level V, Pricing Level VI, or Pricing Level
VII, as applicable at such time.
"Pricing Level I": any time when Applicable Debt is rated A+ or higher by
S&P or A1 or higher by Moody's.
"Pricing Level II": any time when Applicable Debt is rated A by S&P or A2
by Moody's.
"Pricing Level III": any time when Applicable Debt is rated A- by S&P or A3
by Moody's.
"Pricing Level IV": any time when Applicable Debt is rated BBB+ by S&P or
Baa1 by Moody's.
"Pricing Level V": any time when Applicable Debt is rated BBB by S&P or
Baa2 by Moody's.
"Pricing Level VI": any time when Applicable Debt is rated BBB- by S&P or
Baa3 by Moody's.
"Pricing Level VII": any time when Applicable Debt is rated BB+ or lower by
S&P or Ba1 or lower by Moody's.
"Prior Quarter End": with respect to each change after the date hereof in
the fiscal year of the Borrower, the fiscal quarter end of the Borrower that
occurred immediately before the effective date of such change.
"Prohibited Transaction": a transaction which is prohibited under Section
4975 of the Code or Section 406 of ERISA and not exempt under Section 4975 of
the Code or Section 408 of ERISA.
19
"Property": all types of real, personal, tangible, intangible or mixed
property.
"Proposed Lender": as defined in Section 2.7(c).
"Receivables": with respect to any Person as at any date of determination,
the aggregate unpaid principal portion of the obligations of one or more of the
customers of such Person to pay money to such Person, whether constituting an
account, chattel paper, instrument or general intangible, arising in connection
with the sale of goods or the rendering of services by such Person, plus any
finance charges, late fees or other similar charges receivable by such Person
with respect thereto.
"Regulatory Change": the occurrence of any of the following after the
Effective Date: (i) the adoption of any treaty, constitution, law, rule or
regulation, (ii) the issuance or promulgation of any directive, guideline or
request from any Governmental Authority (whether or not having the force of
law), or (iii) any change in the interpretation of any existing treaty,
constitution, law, rule, regulation, directive, guideline or request by any
Governmental Authority.
"Related Parties": with respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
"Related Receivable Assets": with respect to the retail accounts receivable
of any Person, other Property of such Person upon which Liens are customarily
granted in connection with the financing or securitization of such retail
accounts receivable.
"Rent": with respect to any period, consolidated rent expenses under all
leases (other than Capital Leases) of real or personal property, but shall be
exclusive of any amounts, determined on a Consolidated basis, required to be
paid by the Borrower or any such Subsidiary (whether or not designated as rents
or additional rents) on account of maintenance, repairs, insurance, taxes and
similar charges.
"Repayment Extension Date": as defined in Section 2.14(c).
"Reportable Event": with respect to any Pension Plan, (i) any event set
forth in Sections 4043(c) (other than a Reportable Event as to which the 30 day
notice requirement is waived by the PBGC under applicable regulations), 4062(c)
or 4063(a) of ERISA or the regulations thereunder, (ii) an event requiring the
Borrower, any of its Subsidiaries or any ERISA Affiliate to provide security to
a Pension Plan under Section 401(a)(29) of the Code, or (iii) any failure to
make any payment required by Section 412(m) of the Code.
"Required Lenders": (i) except as otherwise provided in clause (ii) of this
defined term, Lenders having Revolving Credit Commitment Amounts greater than or
equal to 51% of the Aggregate Revolving Credit Commitment Amount, and (ii) at
any time after the Revolving Credit Commitment Period that there is any
Aggregate Credit Exposure, Lenders having a pro rata share thereof which is
greater than or equal to 51% of the Aggregate Credit Exposure.
20
"Restricted Payment": as to any Person (i) any dividend or other
distribution, direct or indirect, on account of any shares of Capital Stock or
other equity interest in such Person now or hereafter outstanding (other than a
dividend payable solely in shares of such Capital Stock to the holders of such
shares), (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition, direct or indirect, of any shares of any class of
Capital Stock or other equity interest in such Person now or hereafter
outstanding, and (iii) the acquisition for value by such Person of any Capital
Stock issued by such Person or any other Person that controls such Person.
"Revolving Credit Commitment": in respect of any Lender, such Lender's
undertaking during the Revolving Credit Commitment Period to make Revolving
Credit Loans, subject to the terms and conditions hereof, in an aggregate
outstanding principal amount not exceeding the Revolving Credit Commitment
Amount of such Lender.
"Revolving Credit Commitment Amount": as of any date and with respect
to any Lender, an amount equal to (i) the sum set forth adjacent to its name
under the heading "Revolving Credit Commitment Amount" in Exhibit A, if any,
plus (ii) the amount of any increase in such Lender's "Revolving Credit
Commitment Amount" pursuant to Section 2.7(c), plus (iii) the "Revolving Credit
Commitment Amount" which such Lender shall have assumed from another Lender in
accordance with Section 11.6 on or prior to such date, minus (iv) the "Revolving
Credit Commitment Amount" which such Lender shall have assigned to another
Person in accordance with Section 11.6 on or prior to such date; as such amount
may be reduced from time to time pursuant to Section 2.7(a).
"Revolving Credit Commitment Period": the period from the Effective
Date to but excluding the earlier to occur of the Revolving Credit Commitment
Expiration Date and such other date upon which the Revolving Credit Commitments
shall be terminated (or the Aggregate Revolving Credit Commitment Amount shall
be reduced to zero).
"Revolving Credit Commitment Expiration Date": July 8, 2003, as the
same may be extended from time to time in accordance with Section 2.14(a), or
such earlier date on which the Aggregate Revolving Credit Commitment Amounts
shall terminate in accordance with Section 2.7 or Article 9.
"Revolving Credit Exposure": with respect to any Lender as of any
date, the outstanding principal balance of such Lender's Revolving Credit Loans.
"Revolving Credit Increase Supplement": as defined in Section 2.7(c).
"Revolving Credit Loan" and "Revolving Credit Loans": as defined in
Section 2.1.
"Revolving Credit Maturity Date": the Revolving Credit Commitment
Expiration Date or, if the Borrower has duly extended the Revolving Credit
Maturity Date in accordance with Section 2.14(c), the Repayment Extension Date.
"S&P": Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc., or any successor thereto.
21
"SEC": the Securities and Exchange Commission or any Governmental
Authority succeeding to the functions thereof.
"Significant Subsidiary": each "Significant Subsidiary" of the
Borrower within the meaning of Regulation S-X of the SEC as in effect from time
to time.
"Special Counsel": Bryan Cave LLP, or such other counsel selected by
the Administrative Agent as, special counsel to the Administrative Agent in
connection with the Loan Documents.
"Subsidiary": as to any Person, any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which such Person or any Subsidiary of such Person, directly or indirectly,
either (i) in respect of a corporation, owns or controls more than 50% of the
outstanding capital stock having ordinary voting power to elect a majority of
the Managing Person thereof, irrespective of whether a class or classes shall or
might have voting power by reason of the happening of any contingency, or (ii)
in respect of an association, partnership, limited liability company, joint
venture or other business entity, is entitled to share in more than 50% of the
profits and losses, however determined.
"Substitute Lender": as defined in Section 3.11.
"Tangible Net Worth": as of any date, the following determined on a
Consolidated basis as of the fiscal quarter end occurring on such date (or, if
such date shall not be a fiscal quarter end, as of the fiscal quarter end
immediately preceding such date): (a) Net Worth minus (b) intangible assets of
the Borrower and its Subsidiaries on a Consolidated basis, consisting of
goodwill, patents, trademarks, service marks, trade names, copyrights,
organizational or developmental expenses, and similar categories of assets that
may arise in the future.
"Tax": any present or future tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature and whatever called, by a Governmental
Authority, on whomsoever and wherever imposed, levied, collected, withheld or
assessed.
"Termination Event": with respect to any Pension Plan, (i) a
Reportable Event, (ii) the termination of a Pension Plan, or the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension Plan
amendment as a termination under Section 4041(e) of ERISA, (iii) the institution
of proceedings to terminate a Pension Plan under Section 4042 of ERISA, or (iv)
the appointment of a trustee to administer any Pension Plan under Section 4042
of ERISA.
"Unfunded Pension Liabilities": with respect to any Pension Plan, at
any date of determination, the amount determined by taking the accumulated
benefit obligation, as disclosed in accordance with Statement of Accounting
Standards No. 87, "Employers' Accounting for Pensions", over the fair market
value of Pension Plan assets.
"United States": the United States of America.
22
"Unrecognized Retiree Welfare Liability": with respect to any Employee
Benefit Plan that provides postretirement benefits other than pension benefits,
the amount of the transition obligation, as determined in accordance with
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," as of the most recent valuation
date, that has not been recognized as an expense in an income statement of the
Borrower and its Subsidiaries.
"Utilization Fee": the fee referred to in Section 3.2(c).
1.2. Principles of Construction
(a) All terms defined in a Loan Document shall have the meanings
given such terms therein when used in the other Loan Documents or any
certificate, opinion or other document made or delivered pursuant thereto to the
extent not otherwise provided therein.
(b) As used in the Loan Documents and in any certificate, opinion or
other document made or delivered pursuant thereto, accounting terms not defined
in Section 1.1, and accounting terms partly defined in Section 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
If at any time any change in GAAP would affect the computation of any financial
ratio or requirement set forth in this Agreement and (i) the Borrower notifies
the Administrative Agent that the Borrower objects to determining compliance
with such financial ratio or requirement on the basis of GAAP in effect
immediately after such change becomes effective or (ii) Required Lenders so
object, then the Borrower's compliance with such ratio or requirement shall be
determined on the basis of GAAP in effect immediately before such change becomes
effective, until either such notice is withdrawn by the Borrower or Required
Lenders, as the case may be, or the Borrower and Required Lenders otherwise
agree. Except as otherwise expressly provided herein, the computation of
financial ratios and requirements set forth in this Agreement shall be
consistent with the Borrower's financial statements required to be delivered
hereunder.
(c) The words "hereof", "herein", "hereto" and "hereunder" and
similar words when used in a Loan Document shall refer to such Loan Document as
a whole and not to any particular provision thereof, and Section, schedule and
exhibit references contained therein shall refer to Sections thereof or
schedules or exhibits thereto unless otherwise expressly provided therein.
(d) Unless the context otherwise requires, words in the singular
number include the plural, and words in the plural include the singular.
(e) Unless specifically provided in a Loan Document to the contrary,
any reference to a time shall refer to such time in New York.
(f) Unless specifically provided in a Loan Document to the contrary,
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding".
(g) References in any Loan Document to a fiscal period shall refer to
that fiscal period of the Borrower.
23
2. AMOUNT AND TERMS OF LOANS
2.1. Revolving Credit Loans
Subject to the terms and conditions hereof, each Lender severally (and
not jointly) agrees to make revolving credit loans (each a "Revolving Credit
Loan" and, as the context may require, collectively with all other Revolving
Credit Loans of such Lender and with the Revolving Credit Loans of all other
Lenders, the "Revolving Credit Loans") to the Borrower from time to time during
the Revolving Credit Commitment Period, provided that immediately after giving
effect thereto (i) such Lender's Revolving Credit Exposure would not exceed such
Lender's Revolving Credit Commitment Amount, and (ii) the Aggregate Credit
Exposure would not exceed the Aggregate Revolving Credit Commitment Amount.
During the Revolving Credit Commitment Period, the Borrower may borrow, prepay
in whole or in part and reborrow under the Revolving Credit Commitments, all in
accordance with the terms and conditions of this Agreement. Subject to the
provisions of Sections 2.5 and 3.3, at the option of the Borrower, Revolving
Credit Loans may be made as one or more (i) ABR Advances, (ii) Eurodollar
Advances or (iii) any combination thereof.
2.2. Notes; Maturity
The Revolving Credit Loans and the Competitive Bid Loans made by each
Lender shall be evidenced by a promissory note made by the Borrower,
substantially in the form of Exhibit B, payable to the order of such Lender, and
dated the Effective Date (each, as indorsed or modified from time to time, a
"Note" and, collectively with the Notes of all other Lenders, the "Notes"). The
outstanding principal balance of the Revolving Credit Loans shall be due and
payable on the Revolving Credit Maturity Date. The outstanding principal balance
of each Competitive Bid Loan shall be due and payable on the earlier to occur of
the last day of the Competitive Interest Period applicable thereto and the
Business Day immediately preceding the Revolving Credit Maturity Date.
2.3. [Reserved]
2.4. [Reserved]
2.5. Procedure for Borrowing
(a) Revolving Credit Loans. The Borrower may borrow under the
Revolving Credit Commitments on any Business Day during the Revolving Credit
Commitment Period, provided that the Borrower shall notify the Administrative
Agent by the delivery of a Borrowing Request, which shall be sent by facsimile
and shall be irrevocable (confirmed promptly, and in any event within five
Business Days, by the delivery to the Administrative Agent of a Borrowing
Request manually signed by the Borrower), no later than 12:00 noon, three
Business Days prior to the requested Borrowing Date, in the case of Eurodollar
Advances, and 12:00 noon on the requested Borrowing Date, in the case of ABR
Advances, specifying (A) the aggregate principal amount to be borrowed under the
Revolving Credit Commitments, (B) the requested Borrowing Date, (C) whether such
borrowing is to consist of one or more Eurodollar Advances, ABR Advances, or a
combination thereof and (D) if the borrowing is to consist of one or more
Eurodollar Advances, the amount of, and the length of the Interest Period for,
each such
24
Eurodollar Advance. Each (i) Eurodollar Advance to be made on a Borrowing Date,
when aggregated with all amounts to be converted to a Eurodollar Advance on such
date and having the same Interest Period as such first Eurodollar Advance, shall
equal no less than $5,000,000 or such amount plus a whole multiple of $1,000,000
in excess thereof and (ii) each ABR Advance made on each Borrowing Date shall
equal no less than $5,000,000 or such amount plus a whole multiple of $1,000,000
in excess thereof or, if less, the unused portion of the Aggregate Revolving
Credit Commitment Amount.
(b) Funding of Revolving Credit Loans. Upon receipt of each
Borrowing Request requesting Revolving Credit Loans, the Administrative Agent
shall promptly notify each Lender thereof. Subject to its receipt of the notice
referred to in the preceding sentence, each Lender will make the amount of its
Commitment Percentage of the requested Revolving Credit Loans available to the
Administrative Agent for the account of the Borrower at the office of the
Administrative Agent set forth in Section 11.2 not later than 2:00 p.m., on the
relevant Borrowing Date requested by the Borrower, in funds immediately
available to the Administrative Agent at such office. The amounts so made
available to the Administrative Agent on such Borrowing Date will then, subject
to Section 5.2, be promptly made available on such date to the Borrower by the
Administrative Agent at the office of the Administrative Agent specified in
Section 11.2 by crediting the account of the Borrower at such office or
elsewhere as the Borrower may from time to time instruct the Administrative
Agent in writing.
(c) Failure to Fund. Unless the Administrative Agent shall have
received prior notice from a Lender (by telephone or otherwise, such notice to
be promptly confirmed by facsimile or other writing) that such Lender will not
make available to the Administrative Agent such Lender's Commitment Percentage
of the Revolving Credit Loans requested by the Borrower, the Administrative
Agent may assume that such Lender has made the same available to the
Administrative Agent on the Borrowing Date in accordance with this Section, and
the Administrative Agent may, in reliance upon such assumption, make available
to the Borrower on the Borrowing Date a corresponding amount. If and to the
extent such Lender shall not have so made its Commitment Percentage of such
Revolving Credit Loans available to the Administrative Agent, such Lender and
the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount (to the extent not previously paid by the
other), together with interest thereon for each day from the date such amount is
made available to the Borrower to the date such amount is paid to the
Administrative Agent, at a rate per annum equal to, in the case of the Borrower,
the applicable interest rate payable by the Borrower in respect of such Loans as
set forth in Section 3.1, and, in the case of such Lender, at a rate of interest
per annum equal to the Federal Funds Rate for the first three days after the due
date of such payment and the Federal Funds Rate plus 2% thereafter until the
date such payment is received by the Administrative Agent. Such payment by the
Borrower, however, shall be without prejudice to its rights against such Lender.
If such Lender shall pay to the Administrative Agent such corresponding amount,
such amount so paid shall constitute such Lender's Revolving Credit Loan as part
of the Revolving Credit Loans for purposes of this Agreement, which Loan shall
be deemed to have been made by such Lender on the Borrowing Date applicable to
such Revolving Credit Loans.
(d) Netting. If a Lender makes a new Loan on a Borrowing Date on
which the Borrower is to repay an existing Loan from such Lender, such Lender
shall apply the proceeds of
25
such new Loan to make such repayment, and only the excess of the proceeds of
such new Loan over the outstanding principal balance of the existing Loan being
repaid need be made available to the Administrative Agent.
2.6. Competitive Bid Procedure
(a) The Borrower may, at any time and from time to time during the
Revolving Credit Commitment Period, provided that no Event of Default shall have
occurred and then be continuing, request Competitive Bids by delivering by hand
or telecopy to the Administrative Agent a duly completed Competitive Bid
Request. A request for Competitive Bids that does not conform substantially to
the format of Exhibit I may be rejected in the Administrative Agent's sole
discretion, and the Administrative Agent shall promptly notify the Borrower of
such rejection by telecopy. Each Competitive Bid Request shall specify (i) the
aggregate amount of Competitive Bid Loans upon which the Borrower desires
Competitive Bids under this Section 2.6, which amount shall not be in excess of
(X) the Aggregate Revolving Credit Commitment Amount on such date, over (Y) the
Aggregate Credit Exposure on such date, (ii) a proposed Borrowing Date for such
Competitive Bid Loans, which date shall not be earlier than one Business Days
after the date of delivery to the Administrative Agent of such Competitive Bid
Request, provided that any Competitive Bid Request delivered to the
Administrative Agent after 11:00 a.m., on any Business Day shall be deemed to
have been given on the immediately succeeding Business Day, (iii) the proposed
Competitive Interest Period(s) requested, provided that the number of different
Competitive Interest Periods requested in a single Competitive Bid Request shall
not exceed three, and (iv) in the event that more than one Competitive Interest
Period shall have been so requested, the amount of the requested Competitive Bid
Loan (in no event less than $5,000,000 or an integral multiple of $1,000,000 in
excess thereof) in respect of each such Competitive Interest Period. Promptly
after its receipt of each Competitive Bid Request that is not rejected as
aforesaid, the Administrative Agent shall send to each Lender an Invitation to
Bid, appropriately completed by the Administrative Agent with reference to such
Competitive Bid Request.
(b) Each Lender may, in its sole and absolute discretion, make one or
more Competitive Bids to the Borrower in response to each Invitation to Bid.
Each Competitive Bid by a Lender must be received by the Administrative Agent
not later than 10:00 a.m., on such proposed Borrowing Date. Competitive Bids
that do not conform substantially to the format of Exhibit K may be rejected by
the Administrative Agent after conferring with, and upon the instruction of, the
Borrower, and the Administrative Agent shall notify the Lender making such
nonconforming bid of such rejection as soon as practicable. Each Competitive Bid
shall be irrevocable and, with respect to each Competitive Interest Period
requested by the Borrower, shall specify (i) the Competitive Interest Period
offered by such Lender, and (ii) with respect to each such Competitive Interest
Period offered by such Lender, the Competitive Bid Rate and the amount (which
amount (A) shall not be less than $5,000,000, or a whole multiple of $1,000,000
in excess thereof, and (B) shall not exceed the Competitive Bid Loan requested
by the Borrower in respect of such Competitive Interest Period) of the
Competitive Bid Loan with respect thereto. If any Lender shall elect not to make
a Competitive Bid, such Lender shall so notify the Administrative Agent by
telecopy not later than 10:00 a.m., on such proposed Borrowing Date therefor,
provided, however, that the failure by any Lender to give any such notice shall
not
26
obligate such Lender to make any Competitive Bid Loan in connection with the
relevant Competitive Bid Request.
(c) With respect to each Invitation to Bid sent to the Lenders, the
Administrative Agent shall (i) promptly notify the Borrower by telecopy of the
amount of each Competitive Bid Loan offered thereby, and the Competitive
Interest Period and Competitive Bid Rate applicable thereto, and the identity of
the Lender that made such offer, and (ii) send a list of all Competitive Bids to
the Borrower for its records as soon as practicable after completion of the
bidding process.
(d) The Borrower may in its sole and absolute discretion, subject
only to the provisions of this Section 2.6(d), accept or reject any Competitive
Bid made in accordance with the procedures set forth in this Section 2.6, and
the Borrower shall notify the Administrative Agent by telephone, confirmed by
telecopy in the form of a Competitive Bid Accept/Reject Letter, whether and to
what extent it has decided to accept or reject any or all of such Competitive
Bids, not later than 11:00 a.m., on the proposed Borrowing Date therefor,
provided, however, that the failure by the Borrower to give such notice shall be
conclusively deemed to be a rejection of all such Competitive Bids. In
connection with each acceptance of one or more Competitive Bids by the Borrower:
(i) the Borrower shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if the Borrower has decided to reject
another Competitive Bid made at a lower Competitive Bid Rate and
having the same Competitive Interest Period as such Competitive Bid,
(ii) the aggregate amount of the Competitive Bids accepted by
the Borrower shall not exceed the aggregate principal amount of the
Competitive Bid Loans specified in the related Competitive Bid
Request,
(iii) if the Borrower shall desire to accept a Competitive Bid
made at a particular Competitive Bid Rate and Competitive Interest
Period, it must accept all other Competitive Bids at such Competitive
Bid Rate and Competitive Interest Period, provided, however, that if
the acceptance of all such other Competitive Bids would cause the
aggregate amount of all accepted Competitive Bids to exceed the
aggregate principal amount of the Competitive Bid Loans specified in
the related Competitive Bid Request, then such acceptance shall be
made pro rata in accordance with the amount of each such Competitive
Bid at such Competitive Bid Rate and Competitive Interest Period, and
(iv) except pursuant to Section 2.6(d)(iii), no Competitive Bid
shall be accepted unless the Competitive Bid Loan with respect thereto
shall be in (A) a minimum principal amount of $5,000,000, or a whole
multiple of $1,000,000 in excess thereof, or (B) if less, an aggregate
principal amount equal to the excess of the Aggregate Revolving Credit
Commitment Amount over the Aggregate Credit Exposure.
27
(e) The Administrative Agent shall promptly notify each bidding
Lender whether or not each Competitive Bid of such Lender has been accepted by
telecopy sent by the Administrative Agent, and, if such Competitive Bid has been
accepted by the Borrower, in whole or in part, such bidding Lender shall, after
its receipt of such notice and no later than 2:00 p.m., on the related Borrowing
Date, make immediately available funds available to the Administrative Agent at
the address therefor set forth in Section 11.2, in the amount in which each such
Competitive Bid of such Lender was accepted by the Borrower, and the amount so
made available to the Administrative Agent on such Borrowing Date will then,
subject to the satisfaction of the terms and conditions of this Agreement, as
determined by the Administrative Agent, be promptly made available on such
Borrowing Date to the Borrower by the Administrative Agent at such office by
crediting the account of the Borrower on the books of such office (or elsewhere
as the Borrower may from time to time instruct the Administrative Agent in
writing) with the aggregate of said amount received by the Administrative Agent.
Notwithstanding anything to the contrary contained herein, no Lender shall be
obligated to make a Competitive Bid Loan if immediately after making such
Competitive Bid Loan, the Aggregate Credit Exposure would exceed the Aggregate
Revolving Credit Commitment Amount.
(f) A Competitive Bid Request shall not be made within four Business
Days after the date of any previous Competitive Bid Request, unless the Borrower
has accepted one or more Competitive Bids pursuant to a Competitive Bid Request
made within such five Business Days.
(g) If the Administrative Agent shall elect to submit a Competitive
Bid in its capacity as a Lender, it shall submit such bid directly to the
Borrower fifteen minutes earlier than the latest time at which the other Lenders
are required to submit their bids to the Administrative Agent pursuant to
Section 2.6(b).
2.7. Termination, Reduction or Increases in Commitments
(a) Voluntary Termination or Reductions. The Borrower shall have the
right, upon at least three Business Days' prior written notice to the
Administrative Agent, (A) at any time when the Aggregate Credit Exposure shall
be zero, to terminate the Revolving Credit Commitments of all of the Lenders,
and (B) at any time and from time to time when the Aggregate Revolving Credit
Commitment Amount shall exceed the Aggregate Credit Exposure, to permanently
reduce the Aggregate Revolving Credit Commitment Amount by a sum not greater
than the amount of such excess, provided, however, that each such reduction
shall be in the amount of $10,000,000 or such amount plus a whole multiple of
$1,000,000 in excess thereof.
(b) Reductions in General. Each reduction of the Aggregate
Revolving Credit Commitment Amount shall be made by reducing each Lender's
Revolving Credit Commitment Amount by an amount equal to such Lender's
Commitment Percentage of such reduction. Simultaneously with each reduction of
the Aggregate Revolving Credit Commitment Amount, the Borrower shall pay the
Facility Fee accrued and unpaid on the amount by which the Aggregate Revolving
Credit Commitment Amount is being reduced.
28
(c) Increases of Revolving Credit Commitments. The Borrower may at
any time prior to the first voluntary reduction of the Aggregate Revolving
Credit Commitment Amount, and from time to time (but no more than twice in any
calendar year and no more than five times in the aggregate), at its sole cost
and expense, request (i) any Lender to increase (such decision to increase to be
within the sole and absolute discretion of such Lender) its Revolving Credit
Commitment Amount, or (ii) any other Person (each a "Proposed Lender"; each such
Proposed Lender to be reasonably satisfactory to the Administrative Agent) to
provide a new Revolving Credit Commitment, by submitting a supplement to this
Agreement in the form of Exhibit G (each a "Revolving Credit Increase
Supplement"), duly executed by the Borrower and each such Lender or Proposed
Lender, as the case may be. If such Revolving Credit Increase Supplement is in
all respects reasonably satisfactory to the Administrative Agent, the
Administrative Agent shall execute such Revolving Credit Increase Supplement and
deliver a copy thereof to the Borrower and each such Lender or Proposed Lender,
as the case may be. Upon execution and delivery of such Revolving Credit
Increase Supplement, (i) in the case of each such Lender, such Lender's
Revolving Credit Commitment Amount shall be increased to the amount set forth in
such Revolving Credit Increase Supplement, (ii) in the case of each such
Proposed Lender, such Proposed Lender shall become a party hereto and shall for
all purposes of the Loan Documents be deemed a "Lender" with a Revolving Credit
Commitment Amount in the amount set forth in such Revolving Credit Increase
Supplement, and (iii) the Borrower shall have executed and delivered to the
Administrative Agent a Note for each Proposed Lender providing a new Revolving
Credit Commitment; provided, however, that:
(A) immediately after giving effect thereto, the sum of all
increases in the Aggregate Revolving Credit Commitment Amount plus the sum of
all increases in the "Aggregate Revolving Credit Commitment Amount" under, and
as such term is defined in, the Other Credit Agreement, shall not exceed the
excess of (I) $700,000,000 over (II) the sum of the Aggregate Revolving Credit
Commitment Amount plus the "Aggregate Revolving Credit Commitment Amount" under,
and as such term is defined in, the Other Credit Agreement, in each case as in
effect on the Agreement Date;
(B) each such increase shall be in an amount not less than
$25,000,000 or such amount plus an integral multiple of $5,000,000;
(C) if Revolving Credit Loans would be outstanding immediately
after giving effect to such increase, then simultaneously with such increase (1)
each Lender (including each such Proposed Lender) shall be deemed to have
entered into a master assignment and acceptance agreement, in form and substance
substantially similar to Exhibit H, pursuant to which the Lenders (including
such Proposed Lenders) shall have assigned to each other such portion of its
Revolving Credit Loans, if any, as shall be necessary to reflect proportionately
the Revolving Credit Commitment Amounts as adjusted in accordance with this
Section 2.7(c), and (2) in connection with such assignment, each such Lender
(including each such Proposed Lender) shall pay to the Administrative Agent, for
the account of the other Lenders, such amount as shall be necessary to
appropriately reflect the assignment to it of Revolving Credit Loans, and in
connection with such master assignment and acceptance agreement each Lender may
treat the assignment of Eurodollar Advances by it as a prepayment of such
Eurodollar Advances for purposes of Section 3.5;
29
(D) each Proposed Lender shall have delivered to the
Administrative Agent and the Borrower all forms, if any, that are required to be
delivered by such Proposed Lender pursuant to section 3.10(c); and
(E) the Administrative Agent shall have received such
certificates, legal opinions and other documents as it shall reasonably request
in connection with such increase.
2.8. Prepayments
(a) Voluntary Prepayments. The Borrower may, at its option, prepay
the Revolving Credit Loans without premium or penalty (but subject to Section
3.5), in full at any time or in part from time to time by delivering to the
Administrative Agent an irrevocable written notice thereof on the proposed
prepayment date, in the case of Revolving Credit Loans consisting of ABR
Advances, and at least three Business Days prior to the proposed prepayment
date, in the case of Revolving Credit Loans consisting of Eurodollar Advances,
specifying whether the Revolving Credit Loans to be prepaid consist of ABR
Advances, Eurodollar Advances, or a combination thereof, the amount to be
prepaid and the date of prepayment, whereupon the amount specified in such
notice shall be due and payable on the date specified. Upon receipt of such
notice, the Administrative Agent shall promptly notify each Lender thereof. Each
partial prepayment of the Revolving Credit Loans pursuant to this subsection (a)
shall be in an aggregate principal amount of $10,000,000 or such amount plus a
whole multiple of $1,000,000 in excess thereof, or, if less, the outstanding
principal balance of the Revolving Credit Loans. After giving effect to any
partial prepayment with respect to Eurodollar Advances which were made (whether
as the result of a borrowing or a conversion) on the same date and which had the
same Interest Period, the outstanding principal balance of such Eurodollar
Advances shall exceed $5,000,000. Competitive Bid Loans may not be prepaid.
(b) In General. Simultaneously with each prepayment of a Revolving
Credit Loan, the Borrower shall prepay all accrued interest on the amount
prepaid through the date of prepayment. Unless otherwise specified by the
Borrower, each prepayment of Revolving Credit Loans shall first be applied to
ABR Advances. If any prepayment is made in respect of any Eurodollar Advance or
any Competitive Bid Loan, in whole or in part, prior to the last day of the
applicable Interest Period, the Borrower agrees to indemnify the Lenders in
accordance with Section 3.5.
2.9. Use of Proceeds
The Borrower agrees that the proceeds of the Loans shall be used
solely (i) to repay the Existing Bank Debt, (ii) to pay all of the fees and
other sums due hereunder, (iii) to pay the reasonable out of pocket fees and
expenses incurred by the Borrower in connection with the Loan Documents, (iv)
for the Borrower's working capital purposes in the ordinary course of business
and (v) for the Borrower's general corporate purposes not inconsistent with the
provisions hereof including funding the acquisition of real estate (as single
locations or in groups of locations), development of real estate and
construction of retail facilities, remodeling of existing facilities, capital
improvements, acquisitions of other businesses not otherwise prohibited in this
Agreement, or to repay, or otherwise make payments in respect of, commercial
30
paper, including commercial paper that has become due or cannot be remarketed.
Notwithstanding anything to the contrary contained in any Loan Document, the
Borrower further agrees that no part of the proceeds of any Loan will be used,
directly or indirectly, for a purpose which violates any law, rule or regulation
of any Governmental Authority, including, without limitation, the provisions of
Regulations T, U or X of the Board of Governors of the Federal Reserve System,
as amended.
2.10. [Reserved]
2.11. [Reserved]
2.12. [Reserved]
2.13. Payments
(a) Each sum payable by the Borrower to the Credit Parties under the
Loan Documents, including each payment of principal and interest on the Loans,
the Facility Fee and the Utilization Fee shall be made prior to 1:00 p.m., on
the date such payment is due, to the Administrative Agent for the account of the
applicable parties hereto at the Administrative Agent's office specified in
Section 11.2, in each case in lawful money of the United States, in immediately
available funds and without set off or counterclaim, provided that payments
required to be made under Sections 3.5, 3.6, 3.7, 11.7 and 11.20 shall be made
directly to the party entitled thereto. The failure of the Borrower to make any
such payment by such time shall not constitute a Default, provided that such
payment is made on such due date, but any such payment made after 1:00 p.m., on
such due date shall be deemed to have been made on the next Business Day for the
purpose of calculating interest thereon. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof.
(b) If any payment hereunder or under the Notes shall be due and
payable on a day which is not a Business Day, the due date thereof (except as
otherwise provided in the definition of Eurodollar Interest Period) shall be
extended to the next Business Day and (except with respect to payments of the
Facility Fee and the Utilization Fee) interest shall be payable at the
applicable rate specified herein during such extension, provided, however that
if such next Business Day is after the Revolving Credit Maturity Date, any such
payment shall be due on the immediately preceding Business Day.
2.14. Extension of Revolving Credit Commitment Period; Extension of
Revolving Credit Maturity Date.
(a) The Borrower may at any time and from time to time (but not more
than 60 days nor less than 31 days prior to the then existing Revolving Credit
Commitment Expiration Date) request that the Lenders agree (the decision so to
agree to be within the sole and absolute discretion of each Lender) to extend
the Revolving Credit Commitment Expiration Date by one year per each such
request by giving written notice thereof to the Administrative Agent. Upon
receipt of each such notice, the Administrative Agent shall promptly send each
Lender a copy thereof. Any Lender not responding to such notice shall be deemed
not to have consented to such extension. In the event that Lenders then having
Revolving Credit Commitment Amounts
31
equal to or greater than $66,500,000 shall have consented to such extension
request on or after the 30th day, but on or before the 15th day, prior to the
then existing Revolving Credit Commitment Expiration Date, the Revolving Credit
Commitment Expiration Date shall be extended to the day which is one year
following the then existing Revolving Credit Commitment Expiration Date (or, if
such day is not a Business Day, the Business Day immediately preceding such
day), provided, however, that (i) immediately before and after giving effect
thereto, no Default shall exist, and (ii) the Administrative Agent shall have
received such certificates, legal opinions and other documents as it shall
reasonably request in connection with such extension. In all other events, the
then existing Revolving Credit Commitment Expiration Date shall not be extended
and shall remain in full force and effect until such time, if any, as the same
may be extended pursuant to a subsequent extension request.
(b) With respect to each extension request approved in accordance with
Section 2.14(a), on the existing Revolving Credit Commitment Expiration Date
with respect thereto (i) with respect to each Lender which (A) shall not have so
consented to such extension request, and (B) shall not have transferred its
Revolving Credit Commitment pursuant to Section 3.11, the Aggregate Revolving
Credit Commitment Amount shall be automatically reduced by an amount equal to
the sum of the Revolving Credit Commitment Amounts of each such Lender (each a
"Non-Extending Lender"), (ii) the Revolving Credit Commitment of each
Non-Extending Lender shall automatically terminate, and (iii) the Borrower shall
pay to the Administrative Agent for the account of each Non-Extending Lender all
principal, interest, fees and other sums owing to such Non-Extending Lender
under the Loan Documents, whether or not then otherwise due and, upon receipt by
such Lender of such amount so paid, such Lender shall cease to be a "Lender"
hereunder.
(c) Unless a Default shall have occurred and is continuing, effective
upon the delivery by the Borrower to the Administrative Agent on or after the
14th day, but on or before the 7th day, prior to the then effective Revolving
Credit Commitment Expiration Date of an express written notice (the "Term-Out
Notice") that the Borrower intends to extend the Revolving Credit Maturity Date
to the date certain (the "Repayment Extension Date") set forth in such Term-Out
Notice that is not later than one year after such Revolving Credit Commitment
Expiration Date, the Revolving Credit Maturity Date shall be extended to such
Repayment Extension Date. The delivery by the Borrower to the Administrative
Agent of a Term-Out Notice shall constitute a representation and warranty by the
Borrower that no Default then exists.
3. INTEREST, FEES, YIELD PROTECTIONS, ETC.
3.1. Interest Rate and Payment Dates
(a) Prior to Default. Except as otherwise provided in Section 3.1(b)
and 3.1(c), (i) each Competitive Bid Loan shall bear interest at the applicable
Competitive Bid Rate therefor, and (ii) Revolving Credit Loans shall bear
interest on the outstanding principal balance thereof at the applicable interest
rate or rates per annum set forth below:
ADVANCES RATE
Each ABR Advance Alternate Base Rate.
32
Each Eurodollar Advance Eurodollar Rate for the applicable Interest
Period plus the Applicable Margin applicable
to Eurodollar Advances.
(b) Default Rate. Upon the occurrence and during the continuance of an
Event of Default under Section 9.1(a) or 9.1(b), the unpaid principal balance of
the Loans shall bear interest at a rate per annum (whether before or after the
entry of a judgment thereon) equal to 2% plus the rate which would otherwise be
applicable under Section 3.1(a), and any overdue interest or other amount
payable under the Loan Documents shall bear interest (whether before or after
the entry of a judgment thereon) at a rate per annum equal to the Alternate Base
Rate plus 2%. For purposes of the preceding sentence, the rate applicable
pursuant to Section 3.1(a), as the case may be, to any overdue principal,
interest or other amount payable under the Loan Documents shall be (i) in the
case of an overdue principal balance of any Eurodollar Advance, the applicable
Eurodollar Rate plus the Applicable Margin until the last day of the applicable
Interest Period (or the earlier termination thereof pursuant to this Agreement)
and thereafter at the Alternate Base Rate, (ii) in the case of an overdue
principal balance of any Competitive Bid Loan, the applicable Competitive Bid
Rate until the last day of the applicable Competitive Interest Period (or the
earlier termination thereof pursuant to this Agreement) and thereafter at the
Alternate Base Rate, and (iii) in all other cases, the Alternate Base Rate. All
such interest shall be payable on demand.
(c) In General. Interest on (i) ABR Advances to the extent based on
the BNY Rate shall be calculated on the basis of a 365 or 366 day year (as the
case may be), and (ii) ABR Advances to the extent based on the Federal Funds
Rate, Eurodollar Advances, Competitive Bid Loans shall be calculated on the
basis of a 360 day year, in each case, for the actual number of days elapsed.
Except as otherwise expressly provided herein, interest shall be payable in
arrears on each Interest Payment Date and upon each payment (including
prepayment) of the Loans. Any change in the interest rate on the Loans resulting
from a change in the Alternate Base Rate or reserve requirements shall become
effective as of the opening of business on the day on which such change shall
become effective. The Administrative Agent shall, as soon as practicable, notify
the Borrower and the Lenders of the effective date and the amount of each such
change in the BNY Rate, but any failure to so notify shall not in any manner
affect the obligation of the Borrower to pay interest on the Loans in the
amounts and on the dates required. Each determination of the Alternate Base Rate
or a Eurodollar Rate by the Administrative Agent pursuant to this Agreement
shall be conclusive and binding on all parties hereto absent manifest error. The
Borrower acknowledges that to the extent interest payable on ABR Advances is
based on the BNY Rate, such rate is only one of the bases for computing interest
on loans made by the Lenders, and by basing interest payable on ABR Advances on
the BNY Rate, the Lenders have not committed to charge, and the Borrower has not
in any way bargained for, interest based on a lower or the lowest rate at which
any Lender may now or in the future make loans to other borrowers.
3.2. Fees
(a) Facility Fees. The Borrower agrees to pay to the Administrative
Agent, for the account of the Lenders in accordance with each Lender's
Commitment Percentage, a fee (the "Facility Fee"), during the Revolving Credit
Commitment Period, at a rate per annum equal to the Applicable Margin on the
average daily Aggregate Revolving Credit Commitment Amount,
33
regardless of usage. The Facility Fee shall be payable (i) quarterly in arrears
on the last day of each March, June, September and December during such period
commencing on the first such day following the Effective Date, (ii) on the date
of any reduction in the Aggregate Revolving Credit Commitment Amount (to the
extent of such reduction) and (iii) on the last day of the Revolving Credit
Commitment Period. The Facility Fee shall be calculated on the basis of a 360
day year for the actual number of days elapsed.
(b) Administrative Agent's Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, such other fees as have been agreed
to in writing by the Borrower and the Administrative Agent.
(c) Utilization Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender ratably in accordance with its Revolving
Credit Commitment Amount a utilization fee at a rate per annum equal to the
Applicable Margin on the Aggregate Credit Exposure for each day (i) that the
Aggregate Credit Exposure together with the "Aggregate Credit Exposure" under,
and as such term is defined in, the Other Credit Agreement, shall exceed 50.0%
of the sum of the Aggregate Revolving Credit Commitment Amount plus the
"Aggregate Revolving Credit Commitment Amount" under, and as such term is
defined in, the Other Credit Agreement, or (ii) following the Revolving Credit
Commitment Period that there shall be any Aggregate Credit Exposure. Accrued
Utilization Fees shall be payable in arrears on the last day of March, June,
September and December of each year and each date on which the Aggregate
Revolving Credit Commitment Amount is permanently reduced, commencing on the
first such date to occur after the Effective Date. All Utilization Fees shall be
calculated on the basis of a 360 day year for the actual number of days elapsed.
3.3. Conversions; Eurodollar Advances
(a) The Borrower may elect from time to time to convert one or more
Eurodollar Advances to ABR Advances by delivering to the Administrative Agent by
facsimile a Notice of Conversion (confirmed promptly, and in any event within
five Business Days, by the delivery to the Administrative Agent of a Notice of
Conversion manually signed by the Borrower) at least one Business Day's prior
irrevocable notice of such election, specifying the amount to be converted,
provided, that any such conversion shall only be made on a Business Day and on
the last day of the Eurodollar Interest Period applicable thereto. In addition,
the Borrower may elect from time to time to convert ABR Advances to Eurodollar
Advances or existing Eurodollar Advances to new Eurodollar Advances by
delivering to the Administrative Agent by facsimile a Notice of Conversion
(confirmed promptly, and in any event within five Business Days, by the delivery
to the Administrative Agent of a Notice of Conversion manually signed by the
Borrower) at least three Business Days' prior irrevocable notice of such
election, specifying the amount to be so converted and the initial Eurodollar
Interest Period relating thereto, provided that any such conversion shall only
be made on a Business Day and, in the case of existing Eurodollar Advances being
converted to new Eurodollar Advances, on the last day of the Eurodollar Interest
Period applicable thereto. The Administrative Agent shall promptly provide the
Lenders with notice of each such election. Advances may be converted pursuant to
this Section in whole or in part, provided that the amount to be converted to
each Eurodollar Advance, when aggregated with any Eurodollar Advance to be made
on such date in accordance with Section 2.5 and having the same Eurodollar
Interest Period as such first Eurodollar
34
Advance, shall equal no less than $5,000,000 or such amount plus a whole
multiple of $1,000,000 in excess thereof.
(b) Notwithstanding anything in this Agreement to the contrary,
upon the occurrence and during the continuance of an Event of Default, the
Borrower shall have no right to elect to convert any existing ABR Advance to a
new Eurodollar Advance or to convert any existing Eurodollar Advance to a new
Eurodollar Advance. In such event, all ABR Advances shall be automatically
continued as ABR Advances and all Eurodollar Advances shall be automatically
converted to ABR Advances on the last day of the Eurodollar Interest Period
applicable to such Eurodollar Advance.
(c) Each conversion shall be effected by each Lender by applying
the proceeds of its new ABR Advance or Eurodollar Advance, as the case may be,
to its Advances (or portion thereof) being converted (it being understood that
any such conversion shall not constitute a borrowing for purposes of Sections
4, 5 or 6).
(d) Competitive Bid Loans shall not be converted.
3.4. Concerning Eurodollar Interest Periods
Notwithstanding any other provision of any Loan Document:
(a) If the Borrower shall have failed to elect a Eurodollar
Advance under Section 2.5 or 3.3, as the case may be, in connection with any
borrowing of new Revolving Credit Loans or expiration of an Eurodollar Interest
Period with respect to any existing Eurodollar Advance, the amount of the
Revolving Credit Loans subject to such borrowing or such existing Eurodollar
Advance shall thereafter be an ABR Advance until such time, if any, as the
Borrower shall elect a new Eurodollar Advance pursuant to Section 3.3.
(b) No Interest Period selected in respect of the
conversion of any Eurodollar Advance comprising a Revolving Credit Loan shall
end after the Revolving Credit Maturity Date.
(c) The Borrower shall not be permitted to have more than
twelve Eurodollar Advances outstanding at any one time, it being agreed that
each borrowing of a Eurodollar Advance pursuant to a single Borrowing Request
shall constitute the making of one Eurodollar Advance for the purpose of
calculating such limitation.
3.5. Indemnification for Loss
Notwithstanding anything contained herein to the contrary, if
the Borrower shall fail for any reason to borrow a Revolving Credit Loan in
respect of which it shall have requested a Eurodollar Advance or to convert an
Advance to a Eurodollar Advance after it shall have notified the Administrative
Agent of its intent to do so, or if the Borrower shall fail for any reason to
borrow a Competitive Bid Loan in any instance in which it shall have accepted
one or more Competitive Bids, or if a Eurodollar Advance or Competitive Bid Loan
shall terminate for any reason prior to the last day of the Interest Period
applicable thereto, or if the Borrower shall for any reason to prepay or repay
all or any part of the principal amount of a Eurodollar Advance
35
or Competitive Bid Loan prior to the last day of the Interest Period applicable
thereto, without duplication of other payments hereunder, the Borrower shall
indemnify each Lender against, and pay on demand directly to such Lender the
amount (calculated by such Lender (in reasonable detail delivered to the
Borrower) using any reasonable method chosen by such Lender which is customarily
used by such Lender for such purpose) equal to any loss or out of pocket expense
suffered by such Lender as a result of such failure to borrow or convert, or
such termination, repayment or prepayment, including any loss, cost or expense
suffered by such Lender in liquidating or employing deposits acquired to fund or
maintain the funding of such Eurodollar Advance or Competitive Bid Loan, as the
case may be, or redeploying funds prepaid or repaid, in amounts which correspond
to such Eurodollar Advance or Competitive Bid Loan, as the case may be, and any
internal processing charge customarily charged by such Lender in connection
therewith.
3.6. Capital Adequacy
If the amount of capital required or expected to be maintained
by any Lender or any Person directly or indirectly owning or controlling such
Lender (each a "Control Person"), shall be affected by the occurrence of a
Regulatory Change and such Lender shall have determined that such Regulatory
Change shall have had or will thereafter have the effect of reducing the rate of
return on such Lender's or such Control Person's capital in respect of the Loans
or the Revolving Credit Commitment made or maintained by such Lender, in any
case to a level below that which such Lender or such Control Person could have
achieved or would thereafter be able to achieve but for such Regulatory Change
(after taking into account such Lender's or such Control Person's policies
regarding capital adequacy) by an amount deemed by such Lender to be material,
then, within ten days after demand by such Lender, without duplication of other
payments hereunder, the Borrower shall pay to such Lender or such Control
Person, as the case may be, such additional amount or amounts (calculated by
such Lender (in reasonable detail delivered to the Borrower) using any
reasonable method chosen by such Lender) as shall be sufficient to compensate
such Lender or such Control Person for such reduction.
3.7. Reimbursement for Increased Costs
If any Credit Party shall determine that a Regulatory Change:
(a) does or shall (i) subject it to any Tax of any kind
whatsoever with respect to any Eurodollar Advances or its obligations under this
Agreement to make Eurodollar Advances, or (ii) change the basis of taxation of
payments to it of principal, interest or any other amount payable hereunder in
respect of its Eurodollar Advances, or impose on such Credit Party any Tax
required to be withheld from any amounts payable under the Loan Documents
(except for imposition of, or change in the rate of, any Income Tax applicable
to such Lender); or
(b) does or shall impose, modify or make applicable any
reserve, special deposit, compulsory loan, assessment, increased cost or similar
requirement against assets held by, or deposits of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Lender in respect of its Eurodollar Advances which is not otherwise
included in the determination of a Eurodollar Rate; and the result of any of the
36
foregoing is to increase the cost to such Lender of making, renewing, converting
or maintaining its Eurodollar Advances or its commitment to make such Eurodollar
Advances, or to reduce any amount receivable hereunder in respect of its
Eurodollar Advances, then, in any such case, the Borrower shall, without
duplication of other payments hereunder, pay such Credit Party within ten days
after demand therefor, such additional amounts (calculated by such Lender (in
reasonable detail delivered to the Borrower) using any reasonable method chosen
by such Lender) as is sufficient to compensate such Credit Party for such
additional cost or reduction in such amount receivable which such Lender deems
to be material as determined by such Credit Party; provided, however, that
nothing in this Section shall require the Borrower to indemnify any Credit Party
with respect to withholding Taxes for which the Borrower has no obligation under
Section 3.10. No failure by any Credit Party to demand, and no delay in
demanding, compensation for any increased cost shall constitute a waiver of its
right to demand such compensation at any time.
3.8. Illegality of Funding
Notwithstanding any other provision hereof, if any Lender
shall reasonably determine that any Regulatory Change shall make it unlawful for
such Lender to make or maintain any Eurodollar Advance as contemplated by this
Agreement, such Lender shall promptly notify the Borrower and the Administrative
Agent thereof, and (i) the commitment of such Lender to make such Eurodollar
Advances or convert ABR Advances to Eurodollar Advances shall forthwith be
suspended, (ii) such Lender shall fund its portion of each requested Eurodollar
Advance as an ABR Advance and (iii) such Lender's Revolving Credit Loans then
outstanding as such Eurodollar Advances, if any, shall be converted
automatically to an ABR Advance on the last day of the then current Eurodollar
Interest Period applicable thereto or at such earlier time as may be required.
If the commitment of any Lender with respect to Eurodollar Advances is suspended
pursuant to this Section and such Lender shall have obtained actual knowledge
that it is once again legal for such Lender to make or maintain Eurodollar
Advances, such Lender shall promptly notify the Administrative Agent and the
Borrower thereof and, upon receipt of such notice by each of the Administrative
Agent and the Borrower, such Lender's commitment to make or maintain Eurodollar
Advances shall be reinstated.
3.9. Substituted Interest Rate
In the event that (i) the Administrative Agent shall have
determined (which determination shall be conclusive and binding) that by reason
of circumstances affecting the interbank eurodollar market either adequate or
reasonable means do not exist for ascertaining the Eurodollar Rate, or (ii)
Required Lenders shall have notified the Administrative Agent that they have
determined (which determination shall be conclusive and binding absent manifest
error) that the applicable Eurodollar Rate will not adequately and fairly
reflect the cost to such Lenders of maintaining or funding loans bearing
interest based on such Eurodollar Rate, with respect to any portion of the
Revolving Credit Loans that the Borrower has requested be made as Eurodollar
Advances or Eurodollar Advances that will result from the requested conversion
of any portion of the Advances into Eurodollar Advances (each, an "Affected
Advance"), the Administrative Agent shall promptly notify the Borrower and the
Lenders (by telephone or otherwise, to be promptly confirmed in writing) of such
determination, on or, to the extent practicable, prior to the requested
Borrowing Date or Conversion Date for such Affected
37
Advances. If the Administrative Agent shall give such notice, (a) any Affected
Advances shall be made as ABR Advances, (b) the Advances (or any portion
thereof) that were to have been converted to Affected Advances shall be
converted to ABR Advances and (c) any outstanding Affected Advances shall be
converted, on the last day of the then current Eurodollar Interest Period with
respect thereto, to ABR Advances. Until any notice under clauses (i) or (ii), as
the case may be, of this Section has been withdrawn by the Administrative Agent
(by notice to the Borrower promptly upon either (x) the Administrative Agent
having determined that such circumstances affecting the interbank eurodollar
market no longer exist and that adequate and reasonable means do exist for
determining the Eurodollar Rate, or (y) the Administrative Agent having been
notified by such Required Lenders that circumstances no longer render the
Advances (or any portion thereof) Affected Advances), no further Eurodollar
Advances shall be required to be made by the Lenders, nor shall the Borrower
have the right to convert all or any portion of the Revolving Credit Loans to or
as Eurodollar Advances.
3.10. Taxes; Net Payments
(a) All payments made by the Borrower under the Loan Documents
shall be made free and clear of, and without reduction for or on account of, any
Included Taxes required by law to be withheld from any amounts payable under the
Loan Documents. In the event that the Borrower is prohibited by law from making
payments under the Loan Documents free of deductions or withholdings in respect
of Included Taxes, then the Borrower, without duplication of other payments
hereunder, shall pay such additional amounts to the Administrative Agent, for
the benefit of the Credit Parties, as may be necessary in order that the actual
amounts received by each Credit Party in respect of interest and any other
amount payable under the Loan Documents after deduction or withholding (and
after payment of any additional taxes or other charges due as a consequence of
the payment of such additional amounts) shall equal the amount that would have
been received if such deduction or withholding were not required. In the event
that any such deduction or withholding with respect to Included Taxes can be
reduced or nullified as a result of the application of any relevant double
taxation convention, the relevant Credit Party will cooperate with the Borrower
(at the sole expense of the Borrower) in making application to the relevant
taxing authorities to seek to obtain such reduction or nullification, so long as
it would not be disadvantageous to such Credit Party, provided, however, that no
Credit Party shall have any obligation to engage in litigation with respect
thereto. If the Borrower shall make any payments under this Section 3.10 or
shall make any deductions or withholdings from amounts paid in accordance with
this Section 3.10, the Borrower shall, as promptly as practicable thereafter,
forward to the Administrative Agent original or certified copies of official
receipts or other evidence acceptable to the Administrative Agent establishing
such payment and the Administrative Agent in turn shall distribute copies of
such receipts to each Credit Party. If payments under the Loan Documents to any
Credit Party are or become subject to any withholding, such Credit Party shall
(unless otherwise required by a Governmental Authority or as a result of any
treaty, convention, law, rule, regulation, order or similar directive applicable
to such Credit Party) use its best efforts to designate a different office or
branch to which payments are to be made under the Loan Documents from that
initially selected thereby, if such designation would avoid or mitigate such
withholding and would not be disadvantageous to such Credit Party. In the event
that any Credit Party shall have determined that it received a refund or credit
for Included Taxes paid by the Borrower under this Section 3.10, such Credit
Party shall promptly notify the Administrative Agent and the Borrower of such
fact and shall remit to the
38
Borrower the amount of such refund or credit applicable to the payments made by
the Borrower in respect of such Credit Party under this Section 3.10.
(b) Each Credit Party shall deliver to the Borrower such
certificates, documents, or other evidence as the Borrower may reasonably
require from time to time as are necessary to establish that such Credit Party
is not subject to withholding under Section 1441, 1442 or 3406 of the Code or as
may be necessary to establish, under any law imposing upon the Borrower,
hereafter, an obligation to withhold any portion of the payments made by the
Borrower under the Loan Documents, that payments to the Administrative Agent on
behalf of such Credit Party are not subject to withholding. Notwithstanding any
provision herein to the contrary, the Borrower shall not have any obligation to
pay to the Administrative Agent for the benefit of any Credit Party any amount
which the Borrower is required to withhold (and shall have no obligation to
otherwise indemnify any Lender with respect to such amount) to the extent that
the Borrower's obligation to withhold is due to the failure of such Credit Party
to file any required statement, certificate or other document with respect to
exemption which such Borrower requested of it.
(c) Each Credit Party not incorporated under the laws of
the United States or any State thereof shall deliver to the Borrower such
certificates, documents, or other evidence as the Borrower may reasonably
require from time to time as are necessary to establish that such Credit Party
is not subject to withholding under Section 1441, 1442 or 3406 of the Code or as
may be necessary to establish, under any law imposing upon the Borrower,
hereafter, an obligation to withhold any portion of the payments made by the
Borrower under the Loan Documents, that payments to the Administrative Agent on
behalf of such Credit Party are not subject to withholding. Notwithstanding any
provision herein to the contrary, the Borrower shall not have any obligation to
pay to the Administrative Agent for the benefit of any Credit Party any amount
which the Borrower is liable to withhold due to the failure of such Credit Party
to file any statement of exemption required by the Code.
3.11. Substitution of Lenders
Notwithstanding anything to the contrary contained herein, if
any Lender shall request compensation pursuant to Sections 3.6, 3.7 or 3.10 or
shall not have consented to any request for the extension of the Revolving
Credit Maturity Date which request was approved in accordance with Section 2.14,
then, in each such case, provided that no Event of Default shall then exist and
be continuing, the Borrower may require that such Lender transfer all of its
right, title and interest under the Loan Documents to one or more of the other
Lenders (in the sole and absolute discretion of each such Lender) or any other
Person identified by the Borrower and reasonably acceptable to the
Administrative Agent (a "Substitute Lender"), if such Substitute Lender agrees
to assume all of the obligations of such Lender under the Loan Documents for
consideration equal to all principal, interest, fees and other sums owing to
such Lender under the Loan Documents, whether or not then otherwise due,
provided that if such Lender is a "Lender" under and as defined in the Other
Credit Agreement, the Borrower must replace or remove such Lender as a "Lender"
from the Other Credit Agreement pursuant to the terms of Section 3.11 thereof
simultaneously with the replacement or removal of such Lender hereunder. Subject
to (i) the execution and delivery by the Borrower at its expense of a new Note,
an instrument of assignment and assumption, and such other documents as such
Lender may reasonably require,
39
and (ii) the simultaneous replacement or removal of such Lender as a "Lender"
under and as defined in the Other Credit Agreement, such Substitute Lender shall
be a "Lender" for all purposes hereunder. Without prejudice to the survival of
any other agreement of the Borrower hereunder, the agreements of the Borrower
contained in Sections 3.5, 3.6, 3.7, 11.7 and 11.20 (without duplication of any
payments made to such Lender by the Borrower or the Substitute Lender) shall
survive for the benefit of any Lender replaced under this Section with respect
to the time prior to such replacement.
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Lenders to
enter into this Agreement and the Lenders to make the Revolving Credit Loans,
the Borrower makes the following representations and warranties to the Credit
Parties:
4.1. Existence and Power
Each of the Borrower and each Significant Subsidiary has been duly
organized and is validly existing in good standing under the laws of the
jurisdiction of its incorporation or formation, has all requisite power and
authority to own its Property and to carry on its business as now conducted, and
is in good standing and authorized to do business in each jurisdiction in which
the nature of the business conducted therein or the Property owned by it therein
makes such qualification necessary, except where the failure to have such
requisite power and authority or to qualify would not reasonably be expected to
have a Material Adverse Effect.
4.2. Authority and Execution
Each of the Borrower and each Significant Subsidiary has full
legal power and authority to enter into, execute, deliver and perform the terms
of the Loan Documents to which it is a party all of which have been duly
authorized by all proper and necessary corporate, partnership or other
applicable action and are in full compliance with its Organizational Documents.
The Borrower and each Significant Subsidiary has duly executed and delivered
each Loan Document to which it is a party.
4.3. Binding Agreement
The Loan Documents (other than the Notes) constitute, and the
Notes, when issued and delivered pursuant hereto for value received, will
constitute, the valid and legally binding obligations of the Borrower, in each
case to the extent it is a party thereto, enforceable in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
4.4. Litigation
Except as set forth on Schedule 4.4, there are no actions,
suits or proceedings at law or in equity or by or before any Governmental
Authority (whether purportedly on behalf of the Borrower or any of its
Subsidiaries) pending or, to the knowledge of the Borrower, threatened against
the Borrower or any of its Subsidiaries or maintained by the Borrower or any
40
of its Subsidiaries or which may affect the Property of the Borrower or any of
its Subsidiaries or any of their respective Properties or rights, which actions,
suits or proceedings would reasonably be expected to have a Material Adverse
Effect.
4.5. Absence of Defaults; No Conflicting Agreements
Neither the Borrower nor any of its Subsidiaries is in default under
any judgment, order, writ, injunction, decree or decision of any Governmental
Authority or any mortgage, indenture, contract or agreement to which it is a
party or by which it or any of its Property is bound, the effect of which
default would reasonably be expected to have a Material Adverse Effect. The
execution, delivery and performance of the terms of the Loan Documents will not
constitute a default under or result in a breach of or require the mandatory
repayment of or other acceleration of payment under or pursuant to the terms of,
any such mortgage, indenture, contract or agreement.
4.6. Compliance with Applicable Laws
The Borrower and each of its Subsidiaries is complying with all laws,
regulations, rules and orders of all Governmental Authorities, except to the
extent a violation thereof would not reasonably be expected to have a Material
Adverse Effect.
4.7. Governmental Regulations
Neither the Borrower nor any of its Subsidiaries nor any Person
controlled by, controlling, or under common control with, the Borrower or any of
its Subsidiaries, is subject to regulation under the Public Utility Holding
Company Act of 1935, as amended, the Federal Power Act, as amended, or the
Investment Company Act of 1940, as amended. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock. No part of the proceeds of any Loan will be used, directly or
indirectly, for a purpose which violates any law, rule or regulation of any
Governmental Authority, including, without limitation, the provisions of
Regulations T, U or X of the Board of Governors of the Federal Reserve System,
as amended. After giving effect to the making of each Loan, Margin Stock will
constitute less than 25% of the assets (as determined by any reasonable method)
of the Borrower and its Subsidiaries.
4.8. Plans
The only Pension Plans in effect as of the Effective Date (the
"Existing Pension Plans") are listed on Schedule 4.8. Each Employee Benefit Plan
is in compliance with ERISA, HIPAA and the Code, and other applicable federal
and state laws, where applicable, except to the extent a violation thereof would
not reasonably be expected to have a Material Adverse Effect. The Borrower and
its Subsidiaries and ERISA Affiliates have, as of the Effective Date, made all
contributions or payments to or under each such Pension Plan required by law or
the terms of such Pension Plan or any contract or agreement with respect
thereto, except to the extent that the failure to make such contribution or
payment would not reasonably be expected to have a Material Adverse Effect. No
liability to the PBGC has been, or is expected by the Borrower, any of its
Subsidiaries or any ERISA Affiliate to be, incurred by the Borrower, any such
Subsidiary
41
or any ERISA Affiliate, except to the extent that such liability would not
reasonably be expected to have a Material Adverse Effect. Liability, as referred
to in this Section includes any joint and several liability. Each Employee
Benefit Plan which is a group health plan within the meaning of Section
5000(b)(1) of the Code is in compliance with the continuation of health care
coverage requirements of Section 4980B of the Code except to the extent a
violation thereof would not reasonably be expected to have a Material Adverse
Effect.
4.9. Financial Statements
The Borrower has heretofore delivered to the Administrative Agent and
the Lenders copies of the audited Consolidated balance sheets of the Borrower as
of February 2, 2002, and the related Consolidated statements of operations,
stockholder's equity and cash flows for the fiscal year then ended (with the
related notes and schedules, the "Financial Statements"). The Financial
Statements fairly present in all material respects the Consolidated financial
condition and results of the operations of the Borrower and its Subsidiaries as
of the dates and for the periods indicated therein and have been prepared in
conformity with GAAP. Since February 2, 2002, there has been no Material Adverse
Change.
4.10. No Misrepresentation
No representation or warranty contained in any Loan Document and no
certificate or report from time to time furnished by the Borrower or any of its
Subsidiaries in connection with the transactions contemplated thereby, on the
date when made or deemed made, contains or will contain a misstatement of
material fact, or omits or will omit to state a material fact required to be
stated in order to make the statements therein contained not misleading in the
light of the circumstances under which made.
5. CONDITIONS TO FIRST LOANS
In addition to the conditions precedent set forth in Section 6, the
obligation of each Lender to make Loans on the first Borrowing Date and the
Lenders to participate therein shall be subject to the fulfillment of the
following conditions precedent:
5.1. Evidence of Action
The Administrative Agent shall have received a certificate, dated the
Effective Date, of the Secretary or Assistant Secretary or other analogous
counterpart of the Borrower (i) attaching a true and complete copy of the
resolutions of its Managing Person and of all documents evidencing all necessary
corporate, partnership or similar action (in form and substance satisfactory to
the Administrative Agent) taken by it to authorize the Loan Documents to which
it is a party and the transactions contemplated thereby, (ii) attaching a true
and complete copy of its Organizational Documents, (iii) setting forth the
incumbency of its officer or officers or other analogous counterpart who may
sign the Loan Documents, including therein a signature specimen of such officer
or officers and (iv) attaching a certificate of good standing of the Secretary
of State of the jurisdiction of its formation and of each other jurisdiction in
which it is qualified to do business.
42
5.2. Notes
The Administrative Agent shall have received the Notes.
5.3. Absence of Litigation
There shall be no injunction, writ, preliminary restraining order or
other order of any nature issued by any Governmental Authority in any respect
affecting the transactions provided for in the Loan Documents and no action or
proceeding by or before any Governmental Authority shall have been commenced or
threatened seeking to prevent or delay the transactions contemplated by the Loan
Documents or challenging any term or provision thereof or seeking any damages in
connection therewith, and the Administrative Agent shall have received a
certificate, in all respects satisfactory to the Administrative Agent, of an
executive officer of the Borrower to the foregoing effects.
5.4. Existing Bank Debt
Prior to or simultaneously with the Effective Date, the Borrower shall
have fully repaid all Existing Bank Debt and all agreements with respect thereto
shall have been, and the Borrower and each of the Lenders agree that all
commitments to extend credit under such agreements are hereby, cancelled or
terminated (other than provisions thereof which, by their terms, provide that
they survive any such termination), all Liens, if any, securing the same shall
have been terminated, and the Administrative Agent shall have received
satisfactory evidence of all of the foregoing.
5.5. Opinion of Counsel
The Administrative Agent shall have received (i) an opinion of Godfrey
& Kahn S.C., counsel to the Borrower, dated the Effective Date and substantially
in the form of Exhibit F, it being understood that such opinion is being
delivered upon the direction of the Borrower, and that the addressees thereof
may and will rely on such opinion, and (ii) an opinion of Richard D. Schepp,
general counsel of the Borrower, dated the Effective Date and substantially in
the form of Exhibit F-2.
5.6. Fees and Expenses
All fees payable under the Loan Documents to each Credit Party on or
prior to the Effective Date shall have been paid, and the reasonable fees and
expenses of Special Counsel in connection with the preparation, negotiation and
closing of the Loan Documents shall have been paid.
5.7. Other Credit Agreement
The Administrative Agent shall have received evidence that, prior to
or simultaneously with the Effective Date, the Other Credit Agreement shall have
become effective.
43
5.8. Other Documents
The Administrative Agent shall have received such other documents,
each in form and substance reasonably satisfactory to the Administrative Agent,
as the Administrative Agent shall reasonably require.
6. CONDITIONS OF LENDING - ALL LOANS
The obligation of each Lender to make any Loan on a Borrowing Date is
subject to the satisfaction of the following conditions precedent as of the date
of such Loan:
6.1. Compliance
On each Borrowing Date and after giving effect to the Loans to be made
thereon (i) there shall exist no Default and (ii) the representations and
warranties contained in the Loan Documents (other than that contained in the
last sentence of Section 4.9) shall be true and correct with the same effect as
though such representations and warranties had been made on such Borrowing Date.
Each borrowing by the Borrower shall constitute a representation and warranty by
the Borrower as of such Borrowing Date that each of the foregoing matters is
true and correct in all respects.
6.2. Borrowing Request; Competitive Bid Request
With respect to the Loans to be made on each Borrowing Date, the
Administrative Agent shall have received, (i) in the case of Revolving Credit
Loans, a Borrowing Request, and (ii) in the case Competitive Bid Loans, a
Competitive Bid Request and such other documents required to be delivered
pursuant to Section 2.6, in each case duly executed by the Borrower.
7. AFFIRMATIVE COVENANTS
The Borrower agrees that, so long as this Agreement is in effect, any
Loan remains outstanding, or any other amount is owing under any Loan Document
to any Credit Party, the Borrower shall:
7.1. Financial Statements and Information
Furnish or cause to be furnished to the Administrative Agent and each
Lender:
(a) As soon as available, but in any event within 90 days after
the end of each fiscal year, a copy of the Borrower's annual report on Form 10 K
in respect of such fiscal year, containing its Consolidated balance sheet as at
the end of such fiscal year, together with the related Consolidated statements
of operations, stockholders' equity and cash flows as of and through the end of
such fiscal year, setting forth in each case in comparative form the figures for
the preceding fiscal year, such Consolidated financial statements to be audited
and certified without Impermissible Qualification by the Accountants.
(b) As soon as available, but in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year, a copy
of the Borrower's quarterly
44
report on Form 10 Q in respect of such fiscal quarter, containing the
Consolidated balance sheet of the Borrower as at the end of each such quarterly
period, together with the related Consolidated statements of operations,
stockholders' equity and cash flows for such period and for the elapsed portion
of the fiscal year through such date (setting forth in each case in comparative
form the figures for the corresponding periods of the preceding fiscal year),
all of which shall be complete and correct in all material respects and shall
present fairly the Consolidated financial condition and the Consolidated results
of operations of the Borrower in accordance with GAAP (subject to normal year
end adjustments and the absence of footnotes).
(c) Within 45 days after the end of each of the first three
fiscal quarters, and within 90 days after the end of the last fiscal quarter, of
each fiscal year a Compliance Certificate certified by a Financial Officer.
(d) Prompt written notice if there shall occur and be continuing
any Event of Default.
(e) Prompt written notice of any citation, summons, subpoena,
order to show cause or other document naming the Borrower or any of its
Subsidiaries a party to any proceeding before any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect or which calls
into question the validity or enforceability of any of the Loan Documents, and
include with such notice a copy of such citation, summons, subpoena, order to
show cause or other document.
(f) Promptly upon becoming available, copies of all registration
statements, Annual Reports to shareholders, 10-Ks, 10-Qs, 8-Ks, proxy materials
and other material documents which the Borrower or any of its Subsidiaries may
now or hereafter be required to deliver to shareholders or file with or deliver
to any securities exchange or the SEC.
(g) Prompt written notice in the event that the Borrower, any of
its Subsidiaries or any ERISA Affiliate knows, or has reason to know, that any
event shall have occurred or will occur, or any condition exists, with respect
to a Pension Plan the result of which could reasonably be expected to have a
Material Adverse Effect.
(h) Prompt written notice upon the Borrower becoming aware of any
change, withdrawal or reinstatement of any rating of Applicable Debt by S&P or
Moody's.
(i) Such other information as the Administrative Agent or any
Lender shall reasonably request from time to time.
Each report and document required to be delivered by the Borrower pursuant to
subparagraphs (a), (b) and (f) of this Section 7.1 shall be deemed to have been
delivered on the date on which the Borrower notifies the Administrative Agent
and the Lenders that such report or such document has been posted at a site (the
address of which shall be contained in such notice) on the world wide web, which
site is accessible by a widely held nationally recognized web browser, from
which such report or document may be readily printed.
45
7.2. Legal Existence
Except as may otherwise be permitted by Section 8.3, maintain, and
cause each Significant Subsidiary to maintain, its corporate, partnership or
analogous existence, as the case may be, in good standing in the jurisdiction of
its incorporation or formation and in each other jurisdiction in which the
failure so to do would reasonably be expected to have a Material Adverse Effect;
provided, however, that any Subsidiary of the Borrower may be dissolved if such
dissolution would not reasonably be expected to have a Material Adverse Effect.
7.3. Insurance
Maintain, and cause each of its Subsidiaries to maintain, with
financially sound and reputable insurance companies, insurance on all its
Property in at least such amounts, having such deductibles and against at least
such risks (but including in any event public liability, product liability and
business interruption coverage) as are usually insured against in the same
general area by companies engaged in the same or a similar business, and furnish
to the Administrative Agent upon request full information as to all such
insurance carried.
7.4. Performance of Obligations
Pay and discharge when due, and cause each of its Subsidiaries so to
do, all lawful Indebtedness, obligations and claims for labor, materials and
supplies or otherwise which, if unpaid, (i) would reasonably be expected to have
a Material Adverse Effect, or (ii) become a Lien upon Property of the Borrower
or any of its Subsidiaries other than a Lien permitted under Section 8.2, unless
and to the extent only that the validity of such Indebtedness, obligation or
claim shall be contested in good faith and by appropriate proceedings diligently
conducted, and provided that the Borrower shall give the Administrative Agent
prompt notice of any such contest and that such reserve or other appropriate
provision as may be required by GAAP shall have been made therefor.
7.5. Condition of Property
At all times, maintain, protect and keep in good repair, working order
and condition (ordinary wear and tear excepted), and cause each of its
Subsidiaries so to do, all Property necessary to the operation of the Borrower's
or such Subsidiary's business except to the extent that the failure so to do
would not reasonably be expected to have a Material Adverse Effect.
7.6. Observance of Legal Requirements
Observe and comply in all respects, and cause each of its Subsidiaries
so to do, with all laws, ordinances, orders, judgments, rules, regulations,
certifications, franchises, permits, licenses, directions and requirements of
all Governmental Authorities, which now or at any time hereafter may be
applicable to it, except to the extent a violation thereof would not reasonably
be expected to have a Material Adverse Effect, and except such violations
thereof as shall be contested in good faith and by appropriate proceedings
diligently conducted by it,
46
provided that the Borrower shall give the Administrative Agent prompt notice of
such contest and that such reserve or other appropriate provision as shall be
required in accordance with GAAP shall have been made therefor.
7.7. Inspection of Property; Books and Records; Discussions
Keep proper books of record and account, and cause each of its
Subsidiaries so to do, in which full, true and correct entries in conformity
with GAAP and all requirements of law shall be made in all dealings and
transactions in relation to its business and activities; and at all reasonable
times, upon reasonable prior notice, permit representatives of the
Administrative Agent and each Lender to visit the offices of the Borrower and
each of its Subsidiaries, to examine the books and records thereof and
Accountants' reports relating thereto, and to make copies or extracts therefrom,
to discuss the affairs of the Borrower and each such Subsidiary with the
respective officers thereof, and to examine and inspect the Property of the
Borrower and each such Subsidiary and to meet and discuss the affairs of the
Borrower and each such Subsidiary with the Accountants.
7.8. Financial Covenants
(a) Leverage Ratio. At each fiscal quarter end, have a Leverage Ratio
of not more than 0.65:1.00.
(b) Minimum Coverage Ratio. At each fiscal quarter end, have a Minimum
Coverage Ratio of not less than 2.50:1.00.
8. NEGATIVE COVENANTS
The Borrower agrees that, so long as this Agreement is in effect, any
Loan remains outstanding, or any other amount is owing under any Loan Document
to any Credit Party, the Borrower shall not:
8.1. Subsidiary Indebtedness
Permit any Subsidiary of the Borrower to create, incur, assume or
suffer to exist any liability for Indebtedness, except Indebtedness which, when
aggregated with all Indebtedness of the Subsidiaries of the Borrower, other than
Excluded Receivables Indebtedness and any Indebtedness evidenced by undrawn
trade letters of credit, does not exceed 15% of Tangible Net Worth.
8.2. Liens
Create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, or permit any of its
Subsidiaries so to do, except (i) Liens for Taxes in the ordinary course of
business which are not delinquent or which are being contested in accordance
with Section 7.4, provided that enforcement of such Liens is stayed pending such
contest, (ii) Liens in connection with workers' compensation, unemployment
insurance or other social security obligations (but not ERISA), (iii) deposits
or pledges to secure bids, tenders, contracts (other than contracts for the
payment of money), leases, statutory obligations, surety
47
and appeal bonds and other obligations of like nature arising in the ordinary
course of business, (iv) zoning ordinances, easements, rights of way, minor
defects, irregularities, and other similar restrictions affecting real Property
which do not adversely affect the value of such real Property or impair its use
for the operation of the business of the Borrower or such Subsidiary, (v)
mechanics', materialmen's, carriers', warehousemen's and other similar Liens
arising by operation of law and incurred in the ordinary course of business
which are not delinquent or which are being contested in accordance with Section
7.4, provided that enforcement of such Liens is stayed pending such contest,
(vi) Liens arising out of judgments or decrees (other than judgments or decrees
of the type referred to in Section 9.1(i)) which are being contested in
accordance with Section 7.4, provided that enforcement of such Liens is stayed
pending such contest, (vii) Liens in favor of the Credit Parties under the Loan
Documents, (viii) Liens on Margin Stock to the extent that a prohibition on such
Liens would result in any Credit Party being deemed to be "indirectly secured"
by Margin Stock under Regulation U of the Board of Governors of the Federal
Reserve System, as amended, (ix) Liens on Property of the Borrower and its
Subsidiaries existing on the Effective Date as set forth on Schedule 8.2 as
renewed from time to time, but not any increases in the amounts secured thereby
or extensions thereof to additional Property, (x) Liens encumbering only
Receivables and Related Receivable Assets of the Borrower or the Subsidiaries of
the Borrower that secure only Indebtedness of the Borrower or the Subsidiaries
of the Borrower permitted under Section 8.1, (xi) consensual Liens on fixed or
capital assets (including any accessions thereto) acquired (including by lease
under any Capital Lease), constructed or improved by the Borrower or any
Subsidiary thereof, provided that (a) such consensual Liens secure only
Indebtedness of the Borrower's Subsidiaries permitted by Section 8.1 or
Indebtedness of the Borrower, (b) such consensual Liens and such Indebtedness
are incurred no later than the 90th (or, in the case of real property and
fixtures, the 180th) day after such acquisition, leasing or the completion of
such construction or improvement, (c) the Indebtedness secured thereby does not
exceed the cost of acquiring, leasing, constructing or improving such fixed or
capital assets, and (d) such consensual Liens shall not apply to any other
Property (other than accessions to such fixed or capital assets) of the Borrower
or any Subsidiary thereof, and (xii) consensual Liens existing on any Property
(and any accessions thereto) prior to the acquisition thereof by the Borrower or
any Subsidiary thereof or existing on any Property (and any accessions thereto)
of any Person that becomes a Subsidiary of the Borrower after the Effective Date
prior to the time such Person became a Subsidiary of the Borrower, provided that
(a) such consensual Liens secure only Indebtedness of the Borrower's
Subsidiaries permitted by Section 8.1 or Indebtedness of the Borrower, (b) such
consensual Liens are not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary of the Borrower, as applicable,
(c) such consensual Liens shall not apply to any other Property of the Borrower
or any Subsidiary thereof, and (d) such consensual Liens shall secure only the
Indebtedness that they secure on the date of such acquisition or the date such
Person becomes a Subsidiary of the Borrower, as applicable, and any extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof.
8.3. Merger, Consolidations, Acquisitions and Other Changes
Consolidate with, or merge into or with, any Person, or make any
Acquisition, or change its fiscal year, or permit any of its Subsidiaries so to
do, except that provided both immediately before and after giving effect thereto
no Default shall exist, the Borrower or any Subsidiary thereof may:
48
(a) merge with the Borrower or any Subsidiary thereof, provided that
in the event of a merger involving the Borrower, the Borrower shall be the
surviving corporation,
(b) merge with any other Person or make any Acquisition, provided
that (i) immediately after giving effect thereto and any Indebtedness or other
obligation incurred or assumed in connection therewith, all of the
representations and warranties contained in Section 4 shall be true and correct
as if then made and the Borrower will be in compliance herewith on a pro forma
basis, (ii) it is on a non hostile basis pursuant to a negotiated agreement, and
(iii) in the event of a merger involving the Borrower, the Borrower shall be the
surviving corporation, or
(c) change its fiscal year, provided that with respect to each such
change by the Borrower
(i) each reference to a fiscal quarter end contained in Section
7.8 shall be deemed to include both (1) the fiscal quarter end of the
Borrower that would have occurred immediately after the Prior Quarter
End assuming no such change had occurred (the "Existing Quarter End"),
and (2) the fiscal quarter end of the Borrower that will (after having
given effect to such change) occur immediately after the Prior Quarter
End (the "New Quarter End"),
(ii) for purposes of determining the Minimum Coverage Ratio as
of the New Quarter End and each of the three fiscal quarter ends (the
"Three Additional Quarter Ends") immediately following the New Quarter
End, such Minimum Coverage Ratio shall instead be calculated on the
basis of the 12 consecutive months then ended, and
(iii) each of Sections 7.1(a), 7.1(b) and 7.1(c) shall be deemed
to require (in addition to all of the other requirements thereof) the
Borrower to furnish or cause to be furnished to the Administrative
Agent and each Lender, at the applicable times required by each such
Section, the financial statements otherwise required by such Section
with respect to the Existing Quarter End, the New Quarter End and each
of the Three Additional Quarter Ends, provided that each such
statement of operations and each such statement of cash flows so
furnished in respect of the New Quarter End and each of the Three
Additional Quarter Ends shall instead be calculated on the basis of
the 12 consecutive months then ended.
8.4. Dispositions
Make any Disposition, or permit any of its Subsidiaries so to do,
except one or more Dispositions (other than a Disposition of all or
substantially all assets of the Borrower or any Significant Subsidiary),
provided that (i) immediately before and after giving effect to each such
Disposition, no Default shall or would exist, and (ii) immediately after giving
effect to each such Disposition, all of the representations and warranties
contained in Section 4 shall be true
49
and correct as if then made and the Borrower will be in compliance herewith on a
pro forma basis
8.5. [Reserved]
8.6. [Reserved]
8.7. Business Changes
Become significantly engaged, or permit any Significant Subsidiary to
be significantly engaged, in any business other than in substantially the same
or complimentary fields of enterprise as conducted by the Borrower and its
Subsidiaries on the Effective Date.
8.8. Transactions with Affiliates
Become, or permit any Subsidiary of the Borrower to become, a party to
any transaction with any Affiliate thereof unless the terms and conditions
relating thereto are as favorable to the Borrower or such Subsidiary as those
which would be obtainable at the time in a comparable arms length transaction
with a Person other than an Affiliate thereof; provided, however, that the
foregoing restrictions shall not prohibit the Borrower or any Subsidiary from
(i) entering into any such transactions with the Borrower or another Subsidiary
of the Borrower, or (ii) entering into any transaction, or series of related
transactions not involving cash or other property having an aggregate value in
excess of $2,000,000.
8.9. Restrictive Agreements
The Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement binding on the Borrower or any Subsidiary thereof that
prohibits, restricts or imposes any condition upon the ability of any Subsidiary
of the Borrower to pay dividends or make other distributions with respect to any
of its Capital Stock or to make or repay loans or advances to the Borrower or
any other Subsidiary thereof, provided that (a) the foregoing shall not apply to
restrictions and conditions imposed by law, by this Agreement, by the Other
Credit Agreement, or by any other loan or credit agreement containing such
restrictions and conditions that are no more onerous than the restrictions and
conditions contained herein, (b) the foregoing shall not apply to restrictions
and conditions existing on the date hereof and identified on Schedule 8.9 (but
shall apply to any extension or renewal of, or any amendment or modification
expanding the scope of, any such restriction or condition), (c) the foregoing
shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary of the Borrower pending such sale, provided
that such restrictions and conditions apply only to such Subsidiary and such
sale is permitted hereunder and (d) the foregoing shall not apply to
Subsidiaries which are special purpose entities involved in a securitization
relating to the sale or financing of accounts receivable.
50
9. DEFAULT
9.1. Events of Default
The following shall each constitute an "Event of Default":
(a) The failure of the Borrower to make any payment (i) of
principal on any Note when due and payable, or (ii) with respect to any
Reimbursement Obligation when due and payable; or
(b) The failure of the Borrower to make any payment of interest,
fees, expenses or other amounts (other than amounts under paragraph (a)
immediately above) payable under any Loan Document when due and payable and such
failure shall continue for a period of three Business Days; or
(c) The failure of the Borrower to observe or perform any
covenant or agreement contained in Sections 2.9, 2.14(b), 7.1(d), 7.2, 7.8 or
Section 8; or
(d) The failure of the Borrower to observe or perform any other
term, covenant, or agreement contained in any Loan Document and such failure
shall have continued unremedied for a period of 30 days after the Borrower shall
have become aware thereof; or
(e) Any representation or warranty made or deemed made by the
Borrower (or by an officer thereof on its behalf) in any Loan Document or in any
certificate, report, opinion (other than an opinion of counsel) or other
document delivered or to be delivered pursuant thereto (including any amendment
or modification thereof or waiver thereunder), shall prove to have been
incorrect or misleading (whether because of misstatement or omission) in any
material respect when made; or
(f) (i) The Borrower or any Subsidiary thereof shall fail to make
any payment (whether in respect of principal, interest or otherwise and
regardless of amount) in respect of any Material Obligations when and as the
same shall become due and payable (after giving effect to any applicable grace
period), or (ii) any event or condition occurs that results in any Material
Obligations becoming due prior to their scheduled maturity or payment date, or
that enables or permits (with or without the giving of notice, the lapse of time
or both) the holder or holders of any Material Obligations or any trustee or
agent on its or their behalf to cause any Material Obligations to become due
prior to their scheduled maturity or payment date or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to their scheduled maturity
or payment date (in each case after giving effect to any applicable cure
period), provided that this clause (f)(ii) shall not apply to secured
Indebtedness that becomes due solely as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness; or
(g) The Borrower or any Significant Subsidiary shall (i) suspend
or discontinue its retail business (other than pursuant to the transfer of such
business to the Borrower or any Subsidiary thereof), (ii) make an assignment for
the benefit of creditors, (iii) generally not be paying its debts as such debts
become due, (iv) admit in writing its inability to pay its debts as they become
due, (v) file a voluntary petition in bankruptcy, (vi) become
51
insolvent (however such insolvency shall be evidenced), (vii) file any petition
or answer seeking for itself any reorganization, arrangement, composition,
readjustment of debt, liquidation or dissolution or similar relief under any
present or future statute, law or regulation of any jurisdiction, (viii)
petition or apply to any tribunal for any receiver, custodian or any trustee for
any substantial part of its Property, (ix) be the subject of any such proceeding
filed against it which remains undismissed for a period of 45 days, (x) file any
answer admitting or not contesting the material allegations of any such petition
filed against it or any order, judgment or decree approving such petition in any
such proceeding, (xi) seek, approve, consent to, or acquiesce in any such
proceeding, or in the appointment of any trustee, receiver, sequestrator,
custodian, liquidator, or fiscal agent for it, or any substantial part of its
Property, or an order is entered appointing any such trustee, receiver,
custodian, liquidator or fiscal agent and such order remains in effect for 45
days, or (xii) take any formal action for the purpose of effecting any of the
foregoing or looking to the liquidation or dissolution of the Borrower or any
Significant Subsidiary under any laws relating to bankruptcy, insolvency,
reorganization or relief of debtors; or
(h) An order for relief is entered under the United States
bankruptcy laws or any other decree or order is entered by a court having
jurisdiction (i) adjudging the Borrower or any Significant Subsidiary bankrupt
or insolvent, (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or composition of or in
respect of the Borrower or any Significant Subsidiary under the United States
bankruptcy laws or any other applicable Federal or state law, (iii) appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Borrower or any Significant Subsidiary or of any
substantial part of the Property of any thereof, or (iv) ordering the winding up
or liquidation of the affairs of the Borrower or any Significant Subsidiary, and
any such decree or order continues unstayed and in effect for a period of 45
days; or
(i) one or more judgments for the payment of money in an
aggregate amount (exclusive of any portions thereof covered by insurance) in
excess of $25,000,000 shall be rendered against the Borrower or any Subsidiary
thereof or any combination thereof and the same shall remain undischarged or
unbonded for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of the Borrower or any Subsidiary to enforce
any such judgment;
(j) The occurrence of a Change of Control; or
(k) Any Loan Document shall cease, for any reason, to be in full
force and effect, or the Borrower shall so assert in writing or shall disavow
any of its material obligations thereunder; or
(l) (i) any Termination Event shall occur; (ii) any Accumulated
Funding Deficiency, whether waived, shall exist with respect to any Pension
Plan; (iii) any Person shall engage in any Prohibited Transaction involving any
Employee Benefit Plan; (iv) the Borrower, any of its Subsidiaries or any ERISA
Affiliate shall fail to pay when due an amount which is payable by it to the
PBGC or to any Employee Benefit Plan; (v) the imposition of any tax under
Section 4980B(a) or 4980C(a)of the Code; (vi) the assessment of a civil or
criminal
52
penalty with respect to any Employee Benefit Plan under any provision of ERISA
or HIPAA; or (vii) any other event or condition shall occur or exist with
respect to an Employee Benefit Plan which in the case of clauses (i) through
(vii) would, individually or in the aggregate, have a Material Adverse Effect;
or
(m) an "Event of Default" under, and as such term is defined in,
the Other Credit Agreement shall have occurred and be continuing.
9.2. Contract Remedies
Upon the occurrence of an Event of Default or at any time thereafter
during the continuance thereof, (i) if it is an Event of Default specified in
Sections 9.1(g) or 9.1(h), all Revolving Credit Commitments shall immediately
and automatically terminate and the Loans, all accrued and unpaid interest
thereon and all other amounts owing under the Loan Documents shall immediately
become due and payable, and (ii) if it is any other Event of Default, upon the
direction of the Required Lenders, the Administrative Agent shall (A) by notice
to the Borrower, declare all Revolving Credit Commitments to be terminated
forthwith, whereupon such Revolving Credit Commitments shall immediately
terminate, and/or (B) by notice of default to the Borrower, declare the Loans,
all accrued and unpaid interest thereon and all other amounts owing under the
Loan Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as otherwise provided in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived. The Borrower hereby further expressly waives and
covenants not to assert any appraisement, valuation, stay, extension, redemption
or similar laws, now or at any time hereafter in force which might delay,
prevent or otherwise impede the performance or enforcement of any Loan Document.
10. THE ADMINISTRATIVE AGENT
10.1. Appointment
Each Credit Party hereby irrevocably designates and appoints the
Administrative Agent as its agent under the Loan Documents and hereby
irrevocably authorizes the Administrative Agent to take such action on its
behalf under the provisions of the Loan Documents and to exercise such powers
and perform such duties as are expressly delegated to the Administrative Agent
by the terms of the Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in any Loan Document, the Administrative Agent shall not have any
duties or responsibilities other than those expressly set forth therein, or any
fiduciary relationship with, or fiduciary duty to, any other Credit Party, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into the Loan Documents or otherwise exist against the
Administrative Agent. The Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Credit Parties as shall be
necessary under the circumstances as provided in Section 11.1), and (iii) except
as expressly set forth herein, the Administrative Agent shall not have any duty
to disclose, and shall
53
not be liable for the failure to disclose, any information relating to the
Borrower, any of its Subsidiaries or any other Loan Party that is communicated
to or obtained by the Person serving as Administrative Agent or any of its
Affiliates in any capacity.
10.2. Delegation of Duties
The Administrative Agent may execute any of its duties under the Loan
Documents by or through sub agents, provided that no such delegation shall serve
as a release of the Administrative Agent or waiver by the Borrower of any rights
hereunder. The Administrative Agent and any such sub agent may perform any and
all its duties and exercise its rights and powers through their respective
Related Parties. The exculpatory provisions of this Section 10 shall apply to
any such sub agent and to the Related Parties of the Administrative Agent and
any such sub agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent. The Administrative Agent shall be entitled
to rely upon, and shall be fully protected in, and shall not be under any
liability for, relying upon, the advice of counsel concerning all matters
pertaining to such duties.
10.3. Exculpatory Provisions
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys in fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with the Loan Documents (except the Administrative Agent for its own
gross negligence or willful misconduct), or (ii) responsible in any manner to
any other Credit Party for any recitals, statements, representations or
warranties made by the Borrower, or any officer thereof, contained in the Loan
Documents or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, the Loan Documents or for the value, validity, effectiveness,
genuineness, perfection, enforceability or sufficiency of any of the Loan
Documents or for any failure of the Borrower or any other Person to perform its
obligations thereunder. The Administrative Agent shall not be responsible for or
have any duty to ascertain or inquire into (a) any statement, warranty or
representation made in or in connection with any Loan Document, (b) the contents
of any certificate, report or other document delivered thereunder or in
connection therewith, (c) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth therein, (d) the validity,
enforceability, effectiveness or genuineness thereof or any other agreement,
instrument or other document or (e) the satisfaction of any condition set forth
in Section 5, Section 6 or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent. Each
Credit Party acknowledges that the Administrative Agent shall not be under any
duty to take any discretionary action permitted under the Loan Documents unless
the Administrative Agent shall be instructed in writing to do so by the Required
Lenders; provided, however, that the Administrative Agent shall not be required
to take any action which exposes the Administrative Agent to personal liability
or is contrary to law or any provision of the Loan Documents. The Administrative
Agent shall not be under any liability or responsibility whatsoever, as
Administrative Agent, to the Borrower or any other Person as a consequence of
any failure or delay in performance, or any breach, by any other Credit Party of
any of its obligations under any of the Loan Documents.
54
10.4. Reliance by Administrative Agent
The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by a
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may treat each other Credit Party, or the Person designated
in the last notice filed with it under this Section, as the holder of all of the
interests of such Credit Party, in its Loans or Notes, as applicable, until
written notice of transfer, signed by such Credit Party (or the Person
designated in the last notice filed with the Administrative Agent) and by the
Person designated in such written notice of transfer, in form and substance
satisfactory to the Administrative Agent, shall have been filed with the
Administrative Agent. The Administrative Agent shall not be under any duty to
examine or pass upon the validity, effectiveness, enforceability or genuineness
of the Loan Documents or any instrument, document or communication furnished
pursuant thereto or in connection therewith, and the Administrative Agent shall
be entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under the Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under the Loan Documents in accordance with a request or direction of
the Required Lenders, and such request or direction and any action taken or
failure to act pursuant thereto shall be binding upon the other Credit Parties
and all future holders of the Notes.
10.5. Notice of Default
The Administrative Agent shall be deemed not to have knowledge or
notice of the occurrence of any Default unless the Administrative Agent has
received written notice thereof from another Credit Party or the Borrower. In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall promptly give notice thereof to the other parties
hereto.
10.6. Non Reliance on Administrative Agent and Other Lenders
Each Credit Party expressly acknowledges that neither the
Administrative Agent nor any of its respective officers, directors, employees,
agents, attorneys in fact or affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter,
including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
other Credit Party. Each Credit Party represents to the Administrative Agent
that it has, independently and without reliance upon any other Credit Party, and
based on such documents and information as it has deemed appropriate made its
own evaluation of and investigation into the business, operations, Property,
financial and other condition and creditworthiness of the Borrower and the value
and Lien status of any collateral security and made its own decision to enter
into this Agreement. Each Credit Party also represents that it will,
independently and without reliance upon any other
55
Credit Party, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, evaluations
and decisions in taking or not taking action under any Loan Document, and to
make such investigation as it deems necessary to inform itself as to the
business, operations, Property, financial and other condition and
creditworthiness of the Borrower and the value and Lien status of any collateral
security. Except for notices, reports and other documents expressly required to
be furnished to the other Credit Parties by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any other Credit Party with any credit or other information concerning the
business, operations, Property, financial and other condition or
creditworthiness of the Borrower which at any time may come into the possession
of the Administrative Agent or any of its officers, directors, employees,
agents, attorneys in fact or affiliates.
10.7. Indemnification
Each Lender agrees (severally and not jointly) to indemnify and hold
harmless the Administrative Agent in its capacity as such (to the extent not
promptly reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), pro rata in accordance with (i) at any time that the
Revolving Credit Commitments shall have expired or otherwise been terminated and
there shall be Loans outstanding, its share of the Aggregate Credit Exposure,
and (ii) at all other times, its Commitment Percentage, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever including,
without limitation, any amounts paid to the Credit Parties (through the
Administrative Agent) by the Borrower pursuant to the terms of the Loan
Documents, that are subsequently rescinded or avoided, or must otherwise be
restored or returned) which may at any time (including, without limitation, at
any time following the payment of the Loans and the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of the Loan Documents or any other documents contemplated by or
referred to therein or the transactions contemplated thereby or any action taken
or omitted to be taken by the Administrative Agent under or in connection with
any of the foregoing; provided, however, that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the finally adjudicated gross negligence or willful
misconduct of the Administrative Agent. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent promptly upon demand
for its pro rata share of any unpaid fees owing to the Administrative Agent, and
any costs and expenses (including, without limitation, reasonable fees and
expenses of counsel) payable by the Borrower under Section 11.20, to the extent
that the Administrative Agent has not been paid such fees or has not been
reimbursed for such costs and expenses by the Borrower. The failure of any
Lender to reimburse the Administrative Agent promptly upon demand for any amount
required to be paid by such Lender to the Administrative Agent as provided in
this Section shall not relieve any other Lender of its obligation hereunder. The
agreements in this Section shall survive the termination of the Revolving Credit
Commitments of all of the Lenders and the payment of all amounts otherwise
payable under the Loan Documents.
56
10.8. Administrative Agent in Its Individual Capacity
BNY and its affiliates may make secured or unsecured loans to, accept
deposits from, issue letters of credit for the account of, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower
as though BNY were not Administrative Agent hereunder and BNY Capital Markets
did not arrange the transactions contemplated hereby. With respect to the
Revolving Credit Commitment and the Notes issued to BNY, BNY shall have the same
rights and powers under the Loan Documents as any Lender and may exercise the
same as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall in each case include BNY.
10.9. Successor Administrative Agent
If at any time the Administrative Agent deems it advisable, in its
sole discretion, it may submit to each other Credit Party a written notice of
its resignation as Administrative Agent under the Loan Documents, such
resignation to be effective upon the earlier of (i) the written acceptance of
the duties of the Administrative Agent under the Loan Documents by a successor
Administrative Agent and (ii) on the 30th day after the date of such notice.
Upon any such resignation, the Required Lenders shall have the right to appoint
from among the Lenders a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
accepted such appointment in writing within 30 days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the other Credit Parties, appoint a
successor Administrative Agent, which successor Administrative Agent shall be a
commercial bank organized under the laws of the United States or any State
thereof and having a combined capital, surplus, and undivided profits of at
least $100,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent's rights, powers, privileges and duties as
Administrative Agent under the Loan Documents shall be terminated. The Borrower
and the Credit Parties (other than the Administrative Agent) shall execute such
documents as shall be necessary to effect such appointment. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
the Loan Documents shall inure to its benefit as to any actions taken or omitted
to be taken by it, and any amounts owing to it, while it was Administrative
Agent under the Loan Documents. If at any time there shall not be a duly
appointed and acting Administrative Agent, the Borrower agrees to make each
payment due under the Loan Documents directly to the Credit Party entitled
thereto during such time. Notwithstanding anything to the contrary contained in
this Section 10.9, the appointment of any successor Administrative Agent shall
be consented to by the Borrower (such consent not to be unreasonably withheld
and such consent not to be required during the occurrence and continuance of any
Default).
10.10. Other Agents
Notwithstanding anything in any Loan Document to the contrary,
neither the Syndication Agent nor the Co-Documentation Agents, acting in such
capacity, shall have any duty or obligation under the Loan Documents.
57
11. OTHER PROVISIONS
11.1. Amendments and Waivers
(a) Neither any Loan Document nor any provision thereof may be
waived, amended or otherwise modified except pursuant to an agreement in writing
entered into by the Borrower and either Required Lenders or the Administrative
Agent with the consent of Required Lenders; provided, however, that no such
amendment, supplement, modification, waiver or consent shall (i) increase the
Revolving Credit Commitment Amount of any Lender without the consent of such
Lender, (ii) extend the Revolving Credit Commitment Period or the Revolving
Credit Maturity Date without the consent of each Credit Party affected thereby,
(iii) decrease the principal sum of any Loan, or any payment in respect thereof,
or the rate (other than any rate or rates provided for in Section 3.1(b)) of
interest on any obligation, without the consent of each Credit Party affected
thereby, (iv) extend the scheduled due date for any payment of any principal of,
or interest on, any Loan without the consent of each Credit Party affected
thereby, (v) change the pro rata allocation of payments under, or the pro rata
reductions of the Revolving Credit Commitments under, the Loan Documents without
the consent of each Credit Party, (vi) decrease the rate or amount of, or extend
the time of payment of, or change the pro rata allocation of, payments in
respect of the Facility Fee or the Utilization Fee, in each case without the
consent of each Credit Party affected thereby, or (vii) without the consent of
each Credit Party, change the provisions of this Section 11.1 or the definition
of "Required Lenders"; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent
without the prior written consent of such Credit Party.
(b) Any such agreement referred to in paragraph (a) above shall
apply equally to each Credit Party and shall be binding upon the parties to the
applicable Loan Document and all future holders of the Notes. In the case of any
waiver, the Borrower and the Credit Parties shall be restored to their former
position and rights under the Loan Documents to the extent provided for in such
waiver, and any Default waived shall not extend to any subsequent or other
Default, or impair any right consequent thereon. The Loan Documents shall not be
amended orally or by any course of conduct.
11.2. Notices
Except as otherwise expressly provided in each Loan Document, all
notices and other communications under the Loan Documents shall be in writing
and shall be delivered by hand or overnight courier service, mailed by certified
or registered mail or sent by facsimile, as follows:
58
The Borrower:
Kohl's Corporation
c/o Kohl's Department Stores, Inc.
N56W17000 Ridgewood Drive
Menomonee Falls, Wisconsin 53051
Attention: Chief Financial Officer and
Chief Operating Officer
Telephone: (262) 703 1893
Facsimile: (262) 703 6143
The Administrative Agent:
The Bank of New York
One Wall Street
Agency Function Administration
18th Floor
New York, New York 10286
Attention: Susan E. Baratta
Telephone: (212) 635 4695
Facsimile: (212) 635 6365 or 6366 or 6367
with a copy to:
The Bank of New York
One Wall Street
New York, New York 10286
Attention: William M. Barnum
Telephone: (212) 635-1019
Facsimile: (212) 635-1483
Each notice, request or demand hereunder shall not be effective until received.
Any party to a Loan Document may rely on signatures of the parties thereto which
are transmitted by facsimile or other electronic means as fully as if originally
signed.
11.3. No Waiver; Cumulative Remedies
No failure to exercise and no delay in exercising, on the part of any
Credit Party, any right, remedy, power or privilege under any Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege under any Loan Document preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges under the Loan Documents
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
59
11.4. Survival of Representations and Warranties and Certain Obligations
(a) All representations and warranties made under the Loan Documents
and in any document, certificate or statement delivered pursuant thereto or in
connection therewith shall survive the execution and delivery of the Loan
Documents.
(b) The obligations of the Borrower under Sections 3.5, 3.6, 3.7,
3.10, 11.7 and 11.20 shall survive the termination of the Revolving Credit
Commitments of all of the Lenders, the payment of the Loans and all other
amounts payable under the Loan Documents.
11.5. Lending Offices
Each Lender agrees that, upon the occurrence of any event giving rise
to any increased cost or indemnity under Sections 3.6, 3.7 and 3.10 with respect
to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section shall affect or postpone any of the obligations of the
Borrower or the right of any Lender provided in Sections 3.6, 3.7 and 3.10.
11.6. Successors and Assigns
(a) This Agreement, the Notes and the other Loan Documents to which
the Borrower is a party shall be binding upon and inure to the benefit of the
Borrower and each Credit Party, all future holders of the Notes and their
respective successors and assigns. The Borrower shall not assign any right, nor
delegate any duty, under any Loan Document without the prior written consent of
each Credit Party and any such attempted assignment or delegation without each
such consent shall be void.
(b) Any Credit Party may at any time pledge or assign a security
interest in all or any portion of its rights under the Loan Documents to secure
obligations of such Credit Party, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest, provided that no such pledge
or assignment of a security interest shall release such Credit Party from any of
its obligations under the Loan Documents or substitute any such pledgee or
assignee for such Credit Party as a party hereto.
(c) In addition to its rights under Section 11.6(b), each Lender
shall have the right to sell, assign, transfer or negotiate (each an
"Assignment") one hundred percent, or any lesser percentage, of its Loans, its
Revolving Credit Commitment and its Notes to any Affiliate of, or Approved Fund
of, such Lender or to any other Lender or Affiliate or Approved Fund thereof or,
with the consent of the Administrative Agent and the Borrower (which consent
shall not be unreasonably withheld and shall not be required of the Borrower,
if, at the time of such Assignment, an Event of Default shall exist), to any
other Person (other than an Affiliate of the Borrower), provided that (i) each
such Assignment shall be of a constant, and not a varying, percentage of the
assignor Lender's rights and obligations under the Loan Documents, (ii) the
60
Revolving Credit Commitment Amount of the Revolving Credit Commitment assigned,
shall be not less than $5,000,000, or the full Revolving Credit Commitment
Amount of such assignor Lender's Revolving Credit Commitment, and (iii) the
assignor Lender and such assignee shall deliver to the Administrative Agent
three copies of an Assignment and Acceptance Agreement executed by each of them,
along with an assignment fee in the sum of $3,500 for the account of the
Administrative Agent, provided that if such assignor Lender is, substantially
simultaneously therewith, assigning all or a portion of its "Revolving Credit
Commitment" (under and as defined in the Other Credit Agreement), the total
assignment fee payable hereunder and under the Other Credit Agreement in respect
of such substantially simultaneous assignments shall be $3,500. Upon receipt of
such number of executed copies of each such Assignment and Acceptance Agreement,
together with the assignment fee therefor, and the consents to such Assignment,
if required, the Administrative Agent shall record the same and execute not less
than two copies of such Assignment and Acceptance Agreement, deliver one such
copy to the assignor and one such copy to the assignee, and deliver one
photocopy thereof, as executed, to the Borrower. From and after the Assignment
Effective Date specified in, and as defined in, such Assignment and Acceptance
Agreement, the assignee thereunder shall be a party hereto and shall for all
purposes of this Agreement and the other Loan Documents be deemed a "Lender"
and, to the extent provided in such Assignment and Acceptance Agreement, the
assignor Lender thereunder shall be released from its obligations under this
Agreement and the other Loan Documents subject to Section 11.6(e). The Borrower
agrees that, in connection with each such Assignment, it shall at its own cost
and expense execute and deliver to the Administrative Agent for the account of
such assignee a Note. The Administrative Agent shall be entitled to rely upon
the representations and warranties made by the assignee under each Assignment
and Acceptance Agreement.
(d) In addition to the participations expressly provided for in the
Loan Documents, each Lender may grant participations in all or any part of its
Loans, its Notes and its Revolving Credit Commitment, provided that (i) such
Lender's obligations under this Agreement and the other Loan Documents shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties to this Agreement and the other Loan Documents for the performance of
such obligations, (iii) the Borrower and the Credit Parties shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents and such Lender shall retain the
sole right to enforce the obligations of the Borrower relating to the Loan
Documents and to approve any modification, amendment, or waiver of any provision
of the Loan Documents, provided that such participation may provide that the
Lender will not, without the consent of the participant, agree to any amendment,
modification or waiver described in clauses (i) - (vii) of Section 11.1(a).
(e) No Lender shall, as between and among the Borrower, the
Administrative Agent, and such Lender, be relieved of any of its obligations
under the Loan Documents as a result of any assignment of or granting of
participations in, all or any part of its Loans, its Revolving Credit Commitment
and its Notes, except that a Lender shall be relieved of its obligations to the
extent of any such Assignment of all or any part of its Loans, its Revolving
Credit Commitment or its Notes pursuant to Section 11.6(c).
61
11.7. Indemnity
The Borrower agrees to defend, protect, indemnify, and hold harmless
each Credit Party and BNY Capital Markets, each of their respective Affiliates
and each of the Related Parties of each of the foregoing (each an "Indemnified
Person" and, collectively, the "Indemnified Persons") from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, and out of pocket costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel (including, other than with respect to clauses (i) and
(ii) below, allocated costs of internal counsel) to such Indemnified Persons to
the extent set forth in a reasonably detailed invoice therefor) in connection
with (i) the execution and delivery of the Loan Documents or any other agreement
or instrument contemplated thereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of the
transactions contemplated thereby, (ii) the making of, issuance of, management
of and participation in the Loans, or the use or intended use of the proceeds of
the Loans hereunder, (iii) any presence of asbestos containing materials at any
Property, or the release or threatened release of any hazardous substance into
the environment from any Property, owned or operated by the Borrower or any
Subsidiary thereof, and (iv) any actual or prospective claim or any
investigative, administrative or judicial proceeding, whether direct, indirect
or consequential and whether based on any federal or state laws or other
statutory regulations, including, without limitation, securities and commercial
laws and regulations, under common law or at equitable cause, or on contract or
otherwise, including any liabilities and out of pocket costs under environmental
laws, Federal, state or local health or safety laws, regulations, or common law
principles, arising from or in connection with the past, present or future
operations of the Borrower or its predecessors in interest, or the past, present
or future environmental condition of the Property of the Borrower or any of its
Subsidiaries, or any of the foregoing referred to in clauses (i) - (iii) above,
regardless of whether any Indemnified Person is a party thereto, provided that
the Borrower shall have no obligation under this Section to an Indemnified
Person with respect to any of the foregoing to the extent found in a final
judgment of a court having jurisdiction to have resulted primarily out of the
gross negligence or willful misconduct of such Indemnified Person or arising
solely from claims between one such Indemnified Person and another such
Indemnified Person. The indemnity set forth herein shall be in addition to any
other obligations or liabilities of the Borrower to each Indemnified Person
under the Loan Documents or at common law or otherwise, and shall survive any
termination of the Loan Documents, the expiration of the Revolving Credit
Commitments of all of the Lenders and the payment of all monetary obligations of
the Borrower under the Loan Documents.
11.8. Limitation of Liability
No claim may be made by the Borrower, any of its Subsidiaries, any
Lender or other Person against the Administrative Agent, any Lender, or any
directors, officers, employees, or agents of any of them for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by any Loan Document, or any act, omission or event
occurring in connection therewith, and each of the Borrower, its Subsidiaries,
any such Lender or other Person hereby waives, releases and agrees not to sue
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
62
11.9. Counterparts
Each Loan Document (other than the Notes) may be executed by one or
more of the parties thereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
document. It shall not be necessary in making proof of any Loan Document to
produce or account for more than one counterpart signed by the party to be
charged. A counterpart of any Loan Document or to any document evidencing, and
of any amendment, modification, consent or waiver to or of any Loan Document
transmitted by facsimile shall be deemed to be an originally executed
counterpart. A set of the copies of the Loan Documents signed by all the parties
thereto shall be deposited with each of the Borrower and the Administrative
Agent. Any party to a Loan Document may rely upon the signatures of any other
party thereto which are transmitted by facsimile or other electronic means to
the same extent as if originally signed.
11.10. Adjustments; Set off
(a) In addition to any rights and remedies of each Lender provided
by law, upon the occurrence of an Event of Default and acceleration of the
Notes, or at any time upon the occurrence and during the continuance of an Event
of Default under Sections 9.1(a) or 9.1(b), each Credit Party shall have the
right, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, to set off and
apply against any indebtedness or other liability, whether matured or unmatured,
of the Borrower to such Credit Party arising under the Loan Documents, any
amount owing from such Credit Party to the Borrower. To the extent permitted by
applicable law, the aforesaid right of set off may be exercised by such Credit
Party against the Borrower or against any trustee in bankruptcy, custodian,
debtor in possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor of the Borrower, or against anyone
else claiming through or against the Borrower or such trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receivers, or execution, judgment or attachment creditors, notwithstanding the
fact that such right of set off shall not have been exercised by such Credit
Party prior to the making, filing or issuance of, service upon such Credit Party
of, or notice to such Credit Party of, any petition, assignment for the benefit
of creditors, appointment or application for the appointment of a receiver, or
issuance of execution, subpoena, order or warrant. Each Credit Party agrees
promptly to notify the Borrower and the Administrative Agent after each such set
off and application made by such Credit Party, provided that the failure to give
such notice shall not affect the validity of such set off and application.
(b) If any Credit Party shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set off, or
otherwise) on account of its Loans or its Notes in excess of its pro rata share
of payments then due and payable on account of the Loans or the Notes received
by all the Credit Parties, such Credit Party shall forthwith purchase, without
recourse, for cash, from the other Credit Parties such participations in their
Loans and Notes as shall be necessary to cause such purchaser to share such
excess payment with each of them on a pro rata basis, provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchaser, such purchase shall be rescinded and the related seller shall repay
to such purchaser the purchase price to the extent of such recovery, together
with an amount equal to such seller's pro rata share (according to the
proportion of (i) the amount of all
63
other related required repayments to (ii) the total amount so recovered from the
purchaser) of any interest or other amount paid or payable by the purchaser in
respect of the total amount so recovered.
11.11. Construction
Each party to a Loan Document represents that it has been represented
by counsel in connection with the Loan Documents and the transactions
contemplated thereby and that the principle that agreements are to be construed
against the party drafting the same shall be inapplicable.
11.12. Governing Law
The Loan Documents and the rights and obligations of the parties
thereunder shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of New York.
11.13. Headings Descriptive
Section headings have been inserted in the Loan Documents for
convenience only and shall not be construed to be a part thereof.
11.14. Severability
Every provision of the Loan Documents is intended to be severable,
and if any term or provision thereof shall be invalid, illegal or unenforceable
for any reason, the validity, legality and enforceability of the remaining
provisions thereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.
11.15. Integration
All exhibits to a Loan Document shall be deemed to be a part thereof.
Except for agreements between the Borrower and a Credit Party with respect to
certain additional fees and expenses, the Loan Documents embody the entire
agreement and understanding among the Borrower and the Credit Parties with
respect to the subject matter thereof and supersede all prior agreements and
understandings among them with respect to the subject matter thereof.
11.16. Consent to Jurisdiction
Each party to a Loan Document hereby irrevocably submits to the
jurisdiction of any New York State or Federal court sitting in the City of New
York (and each appellate court from any thereof) over any suit, action or
proceeding arising out of or relating to the Loan Documents or for recognition
or enforcement of any judgment. Each party to a Loan Document hereby irrevocably
waives, to the fullest extent permitted or not prohibited by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in such a court and any claim that any such suit,
action or proceeding brought in such a court has been brought in an inconvenient
forum. The Borrower hereby agrees
64
that a final judgment in any such suit, action or proceeding brought in such a
court, after all appropriate appeals, shall be conclusive and binding upon each
of them.
11.17. Service of Process
Each party to a Loan Document hereby irrevocably consents to the
service of process in any suit, action or proceeding arising thereunder or in
connection therewith by sending the same by first class mail, return receipt
requested or by overnight courier service, to the address of such party set
forth in Section 11.2. Each party to a Loan Document hereby agrees that any such
service (i) shall be deemed in every respect effective service of process upon
it in any such suit, action, or proceeding, and (ii) shall to the fullest extent
enforceable by law, be taken and held to be valid personal service upon and
personal delivery to it.
11.18. No Limitation on Service or Suit
Nothing in the Loan Documents or any modification, waiver, consent or
amendment thereto shall affect the right of any Credit Party to serve process in
any manner permitted by law or limit the right of any Credit Party to bring
proceedings against the Borrower in the courts of any jurisdiction or
jurisdictions in which the Borrower may be served.
11.19. WAIVER OF TRIAL BY JURY
EACH OF THE CREDIT PARTIES AND THE BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREIN. FURTHER, THE BORROWER HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF, OR COUNSEL TO, ANY CREDIT PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY CREDIT PARTY WOULD NOT, IN THE
EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION. THE BORROWER ACKNOWLEDGES THAT EACH CREDIT PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
11.20. Expenses
The Borrower agrees, promptly after presentation of a statement or
invoice therefor, and whether any Loan is made (i) to pay or reimburse the
Administrative Agent and BNY Capital Markets for all their respective out of
pocket costs and expenses reasonably incurred in connection with the
development, preparation and execution of the Loan Documents and any amendment,
supplement or modification thereto (whether or not executed or effective), any
other documents prepared in connection therewith and the consummation and
administration of the transactions contemplated thereby, including the
reasonable fees and disbursements of Special Counsel, (ii) to pay or reimburse
each Credit Party for all of its out of pocket costs and expenses, including
reasonable fees and disbursements of counsel (to the extent set forth in a
reasonably detailed invoice therefor), incurred in connection with the
preservation, protection or enforcement of any rights under the Loan Documents
and any such other documents, including, without limitation, the reasonable fees
and disbursements of counsel (including allocated costs of
65
internal counsel) (to the extent set forth in a reasonably detailed invoice
therefor) to each Credit Party and including all such out of pocket costs and
expenses incurred during any workout, restructuring or negotiations in respect
hereof, (iii) to pay, indemnify, and hold each Credit Party harmless from and
against any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Loan Documents and any such
other documents, and (iv) to pay, indemnify and hold each Credit Party and each
of its officers, directors, employees and other agents and representatives
harmless from and against any and all other liabilities, obligations, claims,
losses, damages, penalties, actions, judgments, suits, and out of pocket costs,
expenses and disbursements of any kind or nature whatsoever (including
reasonable counsel fees and disbursements to the extent set forth in a
reasonably detailed invoice therefor) with respect to the execution, delivery,
performance, enforcement and administration of, or in any other way arising out
of or relating to, the Loan Documents (all the foregoing referred to in this
clause (iv), collectively, the "Indemnified Liabilities"); provided, however,
that the Borrower shall have no obligation to pay Indemnified Liabilities to any
Credit Party to the extent found in a final judgment of a court having
jurisdiction to have resulted primarily out of the gross negligence or willful
misconduct of such Credit Party. The agreements in this Section shall survive
the performance by the Borrower of all of its other obligations under the Loan
Documents.
11.21. Treatment of Certain Information
Each Credit Party agrees (on behalf of itself and each of its
affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with their customary
procedures for handling confidential information of the same nature, all non
public information supplied by the Borrower or any of its Subsidiaries pursuant
to this Agreement which (a) is identified by such Person as being confidential
at the time the same is delivered to such Credit Party, or (b) constitutes any
financial statement, financial projections or forecasts, budget, compliance
certificate, audit report, management letter or accountants' certification
delivered hereunder, provided, however, that nothing herein shall limit the
disclosure of any such information (i) to the extent required by law, rule,
regulation or judicial process, (ii) on a confidential basis, to counsel to any
Credit Party, (iii) to bank examiners, auditors or accountants, and any
analogous counterpart thereof, (iv) to the Credit Parties, (v) in connection
with any litigation to which any one or more of the Credit Parties is a party,
(vi) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or participant)
agrees to keep such information confidential on substantially the same basis as
set forth in this Section, or (vii) to affiliates of the Credit Parties.
66
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
KOHL'S CORPORATION
By: /s/ Arlene Meier
-----------------------
Name: Arlene Meier
-----------------------
Title: COO
-----------------------
67
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
THE BANK OF NEW YORK, individually and as
Administrative Agent
By: /s/ William M. Barnum
-----------------------------------
Name: William M. Barnum
-----------------------------------
Title: Vice President
-----------------------------------
68
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
U.S. BANK, NATIONAL ASSOCIATION,
individually and as Co-Documentation Agent
By: /s/ James Spredemann
-----------------------------------
Name: JAMES SPREDEMANN
-----------------------------------
Title: VICE PRESIDENT
-----------------------------------
69
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
BANK ONE, NA (main office Chicago),
individually and as Syndication Agent
By: /s/ Vincent R. Henchek
-------------------------------
Name: Vincent R. Henchek
-------------------------------
Title: Director
-------------------------------
70
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
WACHOVIA BANK, NATIONAL
ASSOCIATION, individually and as
Co-Documentation Agent
By: /s/ William F. Fox
----------------------------------
Name: William F. Fox
----------------------------------
Title: Vice President
----------------------------------
71
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
FLEET NATIONAL BANK, individually and as
Co-Documentation Agent
By: /s/ Alexis Griffin
----------------------------------
Name: Alexis Griffin
----------------------------------
Title: Vice President
----------------------------------
72
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
MORGAN STANLEY BANK
By: /s/ Jaap L. Tonckens
----------------------------------
Name: Jaap L. Tonckens
----------------------------------
Title: Vice President
----------------------------------
Morgan Stanley Bank
----------------------------------
73
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
BANK OF AMERICA, N.A.
By: /s/ Amy Krovocheck
----------------------------------
Name: AMY KROVOCHECK
----------------------------------
Title: VICE PRESIDENT
----------------------------------
74
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
COMERICA BANK
By: /s/ Kathleen M. Kasperek
----------------------------------
Name: Kathleen M. Kasperek
----------------------------------
Title: Vice President
----------------------------------
75
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
FIFTH THIRD BANK
By: /s/ Andy Buschle
------------------------------------------
Name: Andy Buschle
----------------------------------------
Title: Vice President
---------------------------------------
76
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
M&I MARSHALL & ILSLEY BANK
By: /s/ James R. Miller
------------------------------------------
Name: James R. Miller
----------------------------------------
Title: Vice President
---------------------------------------
By: /s/ Ann M. Benschoter
------------------------------------------
Name: Ann M. Benschoter
----------------------------------------
Title: SVP
---------------------------------------
77
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
MERRILL LYNCH BANK USA
By: /s/ D. Kevin Imlay
------------------------------------------
Name: D. Kevin Imlay
----------------------------------------
Title: Senior Credit Officer
---------------------------------------
78
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Timothy P. Streb
------------------------------------------
Name: Timothy P. Streb
----------------------------------------
Title: Vice President
---------------------------------------
79
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By: /s/ Scott Bjelde
------------------------------------------
Name: Scott Bjelde
----------------------------------------
Title: Vice President and Senior Banker
---------------------------------------
By: /s/ James D. Heinz
------------------------------------------
Name: James D. Heinz
----------------------------------------
Title: Senior Vice President
---------------------------------------
Wells Fargo Bank, National Association
---------------------------------------
80
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
NATIONAL CITY BANK
By: /s/ Brian T. Strayton
------------------------------------------
Name: Brian T. Strayton
----------------------------------------
Title: Vice President
---------------------------------------
81
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
THE NORTHERN TRUST COMPANY
By: /s/ Edmund H. Lester
------------------------------------------
Name: Edmund H. Lester
----------------------------------------
Title: Vice President
---------------------------------------
82
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
THE HUNTINGTON NATIONAL BANK
By: /s/ Marcia J. Carmean
------------------------------------------
Name: Marcia J. Carmean
----------------------------------------
Title: Vice President
---------------------------------------
83
KOHL'S CORPORATION
364-DAY CREDIT AGREEMENT
UMB BANK, N.A.
By: /s/ Charles J. Wolf
-------------------------------------
Name: Charles J. Wolf
---------------------------------
Title: Senior Vice President
---------------------------------
84