EXHIBIT 10.1
EXECUTION COPY
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[JPMORGAN LOGO]
CREDIT AGREEMENT
dated as of
September 14, 2005
among
PACIFIC SUNWEAR OF CALIFORNIA, INC.
The Lenders Party Hereto
NATIONAL CITY BANK and U.S. BANK NATIONAL ASSOCIATION
as Co-Documentation Agents
BANK OF AMERICA, N.A.
as Syndication Agent
and
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
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J.P. MORGAN SECURITIES INC. and BANC OF AMERICA SECURITIES LLC,
as Joint Bookrunners and Joint Lead Arrangers
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TABLE OF CONTENTS
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ARTICLE I Definitions
SECTION 1.01. Defined Terms................................................. 1
SECTION 1.02. Classification of Loans and Borrowings........................ 18
SECTION 1.03. Terms Generally............................................... 18
SECTION 1.04. Accounting Terms; GAAP........................................ 18
ARTICLE II The Credits 19
SECTION 2.01. Commitments................................................... 19
SECTION 2.02. Loans and Borrowings.......................................... 19
SECTION 2.03. Requests for Revolving Borrowings............................. 19
SECTION 2.04. Intentionally Omitted......................................... 20
SECTION 2.05. Swingline Loans............................................... 20
SECTION 2.06. Letters of Credit............................................. 21
SECTION 2.07. Funding of Borrowings......................................... 26
SECTION 2.08. Interest Elections............................................ 26
SECTION 2.09. Termination and Reduction of Commitments...................... 27
SECTION 2.10. Repayment of Loans; Evidence of Debt.......................... 28
SECTION 2.11. Prepayment of Loans........................................... 29
SECTION 2.12. Fees.......................................................... 29
SECTION 2.13. Interest...................................................... 31
SECTION 2.14. Alternate Rate of Interest.................................... 31
SECTION 2.15. Increased Costs............................................... 32
SECTION 2.16. Break Funding Payments........................................ 33
SECTION 2.17. Taxes......................................................... 34
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs... 35
SECTION 2.19. Mitigation Obligations; Replacement of Lenders................ 36
SECTION 2.20. Expansion Option.............................................. 37
ARTICLE III Representations and Warranties 38
SECTION 3.01. Organization; Powers; Subsidiaries............................ 38
SECTION 3.02. Authorization; Enforceability................................. 38
SECTION 3.03. Governmental Approvals; No Conflicts.......................... 39
SECTION 3.04. Financial Condition; No Material Adverse Change............... 39
SECTION 3.05. Properties.................................................... 39
SECTION 3.06. Litigation and Environmental Matters.......................... 39
SECTION 3.07. Compliance with Laws and Agreements........................... 40
SECTION 3.08. Investment and Holding Company Status......................... 40
SECTION 3.09. Taxes......................................................... 40
SECTION 3.10. ERISA......................................................... 40
SECTION 3.11. Disclosure.................................................... 41
Table of Contents
(continued)
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SECTION 3.12. Federal Reserve Regulations................................... 41
SECTION 3.13. No Default.................................................... 41
ARTICLE IV Conditions 41
SECTION 4.01. Effective Date................................................ 41
SECTION 4.02. Each Credit Event............................................. 42
ARTICLE V Affirmative Covenants 43
SECTION 5.01. Financial Statements and Other Information.................... 43
SECTION 5.02. Notices of Material Events.................................... 44
SECTION 5.03. Existence; Conduct of Business................................ 45
SECTION 5.04. Payment of Obligations........................................ 45
SECTION 5.05. Maintenance of Properties; Insurance.......................... 45
SECTION 5.06. Books and Records; Inspection Rights.......................... 45
SECTION 5.07. Compliance with Laws.......................................... 46
SECTION 5.08. Use of Proceeds and Letters of Credit......................... 46
SECTION 5.09. Guaranties.................................................... 46
ARTICLE VI Negative Covenants 46
SECTION 6.01. Indebtedness.................................................. 46
SECTION 6.02. Liens......................................................... 48
SECTION 6.03. [Intentionally Omitted]....................................... 48
SECTION 6.04. Fundamental Changes........................................... 48
SECTION 6.05. Investments, Loans, Advances, Guarantees and Acquisitions..... 49
SECTION 6.06. Swap Agreements............................................... 50
SECTION 6.07. Transactions with Affiliates.................................. 50
SECTION 6.08. Financial Covenants........................................... 50
ARTICLE VII Events of Default 50
ARTICLE VIII The Administrative Agent 53
ARTICLE IX Miscellaneous 55
SECTION 9.01. Notices....................................................... 55
SECTION 9.02. Waivers; Amendments........................................... 56
SECTION 9.03. Expenses; Indemnity; Damage Waiver............................ 57
SECTION 9.04. Successors and Assigns........................................ 58
SECTION 9.05. Survival...................................................... 61
SECTION 9.06. Counterparts; Integration; Effectiveness...................... 61
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Table of Contents
(continued)
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SECTION 9.07. Severability.................................................. 62
SECTION 9.08. Right of Setoff............................................... 62
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.... 62
SECTION 9.10. WAIVER OF JURY TRIAL.......................................... 63
SECTION 9.11. Headings...................................................... 63
SECTION 9.12. Confidentiality............................................... 63
SECTION 9.13. USA PATRIOT Act............................................... 64
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Table of Contents
(continued)
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SCHEDULES:
Schedule 2.01 - Commitments
Schedule 2.06 - Letters of Credit
Schedule 3.01 - Subsidiaries
Schedule 3.06 - Disclosed Matters
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.05 - Existing Investments
EXHIBITS:
Exhibit A - Form of Assignment and Assumption
Exhibit B - Form of Opinion of Loan Parties' Counsel
Exhibit C - Form of Increasing Lender Supplement
Exhibit D - Form of Augmenting Lender Supplement
Exhibit E - List of Closing Documents
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CREDIT AGREEMENT dated as of September 14, 2005 among PACIFIC
SUNWEAR OF CALIFORNIA, INC., the LENDERS party hereto, NATIONAL CITY BANK and
U.S. BANK NATIONAL ASSOCIATION, as Co-Documentation Agents, BANK OF AMERICA,
N.A., as Syndication Agent and JPMORGAN CHASE BANK, N.A., as Administrative
Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, N.A., in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person (other than any officer or director of such specified Person in their
capacity as an officer or director of such specified Person) that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, with respect to any Eurodollar
Revolving Loan, or with respect to the facility fees and commercial Letter of
Credit fees payable hereunder, as the case may be, the applicable rate per annum
set forth below under the caption "Eurodollar Spread", "Facility Fee Rate" or
"Commercial Letter of Credit Rate", as the case may be, based upon the Leverage
Ratio applicable on such date:
Eurodollar Facility Fee Commercial Letter
Leverage Ratio: Spread Rate of Credit Rate
- ------------------------------------ ---------- ------------ -----------------
Category 1: < 1.00x 0.525% 0.100% 0.25%
Category 2: > or = 1.00 but < 1.50x 0.625% 0.125% 0.30%
Category 3: > or = 1.50 but < 2.00x 0.725% 0.150% 0.35%
Category 4: > or = 2.00 but < 2.25x 0.825% 0.175% 0.40%
Category 5: > or = 2.25x 0.875% 0.250% 0.45%
For purposes of the foregoing,
(i) if at any time the Borrower fails to deliver the Financials on
or before the 30th day after the date the Financials are due, Category 5
shall be deemed applicable for the period commencing five (5) Business
Days after such 30th day and ending on the date which is five (5) Business
Days after the Financials are actually delivered, after which the Category
shall be determined in accordance with the table above as applicable;
(ii) adjustments, if any, to the Category then in effect shall be
effective five (5) Business Days after the Administrative Agent has
received the applicable Financials (it being understood and agreed that
each change in Category shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding
the effective date of the next such change); and
(iii) notwithstanding the foregoing, Category 1 shall be deemed to
be applicable until the Administrative Agent's receipt of the applicable
Financials for the Borrower's fiscal quarter ending on or about October
29, 2005, and adjustments to the Category then in effect shall thereafter
be effected in accordance with the preceding paragraphs.
"Approved Fund" has the meaning assigned to such term in Section
9.04.
"Assignment and Assumption" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Augmenting Lender" has the meaning assigned to such term in Section
2.20.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
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"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrower" means Pacific Sunwear of California, Inc., a California
corporation.
"Borrowing" means (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower for a Revolving
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in the London interbank market.
"Capital Expenditures" means, without duplication, any expenditures
that should be included in "additions to property, plant or equipment" or
comparable items reflected in the consolidated statement of cash flows of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the
date hereof), of Equity Interests representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding Equity Interests
of the Borrower; or (b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who were neither (i)
nominated by the board of directors of the Borrower nor (ii) appointed by
directors so nominated; provided, however, that any merger effected for the sole
purpose of reincorporating the Borrower in Delaware (other than through the
formation of a holding company that will own any portion of the Equity Interest
of the Borrower following such merger) and any changes in ownership resulting
therefrom shall not constitute a Change in Control.
"Change in Law" means (a) the adoption of any law, rule, treaty or
regulation after the date of this Agreement, (b) any change in any law, rule,
treaty or regulation or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by any
Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any office
of such Lender from or at which Loans and/or Letters of Credit are made or
issued, or are booked, as the case may be, in accordance with the terms of this
Agreement)
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with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Swingline Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Revolving Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section
2.09, (b) increased from time to time pursuant to Section 2.20 and (c) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Commitment is set
forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $200,000,000.
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Borrower and its Subsidiaries calculated
on a consolidated basis for such period; provided that (i) expenditures for
Permitted Acquisitions and other investments and (ii) replacement Capital
Expenditures from insurance and condemnation proceeds shall be excluded from
this definition.
"Consolidated EBITDA" means, with reference to any period,
Consolidated Net Income for such period plus, to the extent deducted in
determining such Consolidated Net Income, (i) Consolidated Interest Expense,
(ii) expense for taxes paid or accrued, (iii) depreciation, (iv) amortization,
(v) charges arising from the impairment of goodwill, (vi) any non-cash charges
or expenses resulting from any currently outstanding stock options or any future
grant, exercise or cancellation of stock options, shares of restricted stock, or
warrants or from any restructuring or consolidation, and (vii) any other
non-cash charges or expenses which do not represent a cash item in such period
or any future period (it being understood and agreed that a write-down of
inventory shall be considered a cash expense in the relevant period) minus, to
the extent included in determining such Consolidated Net Income, any
extraordinary non-cash income or gains which do not represent a cash item in
such period or any future period, all calculated for the Borrower and its
Subsidiaries in accordance with GAAP on a consolidated basis.
For the purposes of calculating Consolidated EBITDA for any period
of four consecutive fiscal quarters (each, a "Reference Period"), (i) if at any
time during such Reference Period the Borrower or any Subsidiary shall have made
any Material Disposition, the Consolidated EBITDA for such Reference Period
shall be reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the property that is the subject of such Material Disposition
for such Reference Period or increased by an amount equal to the Consolidated
EBITDA (if negative) attributable thereto for such Reference Period, and (ii) if
during such Reference Period the Borrower or any Subsidiary shall have made a
Material
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Acquisition, Consolidated EBITDA for such Reference Period shall be calculated
after giving pro forma effect thereto (taking into account (A) such adjustments
with respect to cost savings as are consistent with the standards set forth in
Rule 11-02(b)(6) of Regulation S-X and (B) all transactions that are directly
related to such Material Acquisition and are entered into in connection and
substantially contemporaneously therewith) as if such Material Acquisition
occurred on the first day of such Reference Period. As used in this definition,
"Material Acquisition" means any acquisition of property or series of related
acquisitions of property that (a) constitutes (i) assets comprising all or
substantially all or any significant portion of a business or operating unit of
a business, or (ii) all or substantially all of the common stock or other Equity
Interests of a Person, and (b) involves the payment of consideration by the
Borrower and its Subsidiaries in excess of $10,000,000; "Material Disposition"
means any Disposition of property or series of related Dispositions of property
that yields gross proceeds to the Borrower or any of its Subsidiaries in excess
of $10,000,000. In making any calculation pursuant to this paragraph with
respect to a Material Acquisition of a Person, business or rights for which
quarterly financial statements are not available, the Borrower shall base such
calculation on the financial statements of such Person, business or rights for
the then most recently completed period of twelve consecutive calendar months
for which such financial statements are available and shall deem the
contribution of such Person, business or rights to Consolidated EBITDA for the
period from the beginning of the applicable Reference Period to the date of such
Material Acquisition to be equal to the product of (x) the number of days in
such period divided by 365 multiplied by (y) the amount of Consolidated EBITDA
of such Person, business or rights for the twelve-month period referred to above
(calculated on the basis set forth in this definition).
"Consolidated EBITDAR" means, for any period, Consolidated EBITDA
for such period plus, to the extent deducted in determining Consolidated Net
Income, Consolidated Rent Expense for such period, all calculated for the
Borrower and its Subsidiaries in accordance with GAAP on a consolidated basis.
"Consolidated Interest Expense" means, with reference to any period,
total interest expense (including that attributable to Capital Lease
Obligations) of the Borrower and its Subsidiaries for such period with respect
to all outstanding Indebtedness of the Borrower and its Subsidiaries (including
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under Swap
Agreements in respect of interest rates to the extent such net costs are
allocable to such period in accordance with GAAP), minus total interest income
of the Borrower and its Subsidiaries not exceeding $25,000,000 for such period
(including net interest income under Swap Agreements in respect of interest
rates to the extent such net interest income is allocable to such period), all
calculated on a consolidated basis for the Borrower and its Subsidiaries for
such period in accordance with GAAP.
"Consolidated Net Income" means, with reference to any period, the
net income (or loss) of the Borrower and its Subsidiaries calculated in
accordance with GAAP on a consolidated basis (without duplication) for such
period.
"Consolidated Rent Expense" means, with reference to any period, all
rent and common area maintenance payments payable under Operating Leases to the
extent deducted in
5
computing Consolidated Net Income, calculated in accordance with GAAP for the
Borrower and its Subsidiaries on a consolidated basis for such period.
"Consolidated Total Assets" means, as of the date of any
determination thereof, total assets of the Borrower and its Subsidiaries
calculated in accordance with GAAP on a consolidated basis as of such date.
"Consolidated Total Indebtedness" means at any time the sum, without
duplication, of the aggregate Indebtedness of the Borrower and its Subsidiaries
calculated on a consolidated basis as of such time in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Domestic Subsidiary" means a Subsidiary organized under the laws of
a jurisdiction located in the United States of America.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity
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ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such equity interest.
"Equity Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interests in
the Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in the Borrower or any option, warrant or other
right to acquire any such Equity Interests in the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excluded Subsidiaries" means, at any time, any Subsidiary formed or
acquired after the Effective Date that is not a "Significant Subsidiary" (as
defined in Regulation S-X).
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, any Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by any other Governmental Authority as
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a result of a present or former connection between the Administrative Agent, any
Lender, any Issuing Bank or any other recipient of any payment to be made by the
Borrower under this Agreement and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the Administrative
Agent, any Lender, any Issuing Bank or any other recipient of any payment to be
made by the Borrower under this Agreement having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document), (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction described in clause (a) above and (c) in the case of a Foreign
Lender, including any Issuing Bank that is a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 2.19(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or (i) causes
pursuant to Section 2.02(b) a new branch or an Affiliate to make any Loan, or
(ii) designates a new lending office) or is attributable to such Foreign
Lender's failure to comply with Section 2.17(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.17(a), and (d) any amounts with respect to any taxes described in
clause (a), (b) or (c) above that are imposed as a result of any event occurring
after the Administrative Agent, any Lender, any Issuing Bank or any other
recipient of any payment to be made by the Borrower under this Agreement becomes
a party to this Agreement, other than a Change in Law.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, vice
president of finance, principal accounting officer, treasurer or controller of
the Borrower.
"Financials" means the annual or quarterly financial statements, and
accompanying certificates and other documents, of the Borrower required to be
delivered pursuant to Section 5.01(a) or 5.01(b).
"Fitch" means Fitch Ratings.
"Foreign Lender" means any Lender that is organized under the laws
of (or the applicable lending office of which is located in) a jurisdiction
other than that in which the Borrower is located. For purposes of this
definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the United
States of America.
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"Governmental Authority" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hostile Acquisition" means (a) the acquisition of the Equity
Interests of a Person through a tender offer or similar solicitation of the
owners of such Equity Interests which has not been approved (prior to such
acquisition) by the board of directors (or any other applicable governing body)
of such Person or by similar action if such Person is not a corporation and (b)
any such acquisition as to which such approval has been withdrawn.
"Increasing Lender" has the meaning assigned to such term in Section
2.20.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding accounts payable and
accrued expense obligations incurred in the ordinary course of business), (e)
all Indebtedness of others secured by any Lien on property owned or acquired by
such Person (to the extent of such Person's interest in such property), whether
or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by
such Person of Indebtedness of others, (g) all Capital Lease Obligations of such
Person, (h) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and (i)
all obligations, contingent or otherwise, of such
9
Person in respect of bankers' acceptances. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor. For purposes of all calculations provided
for in this Agreement, there shall be disregarded any Guarantee of any Person in
respect of any Indebtedness of any other Person with which the accounts of such
first Person are then required to be consolidated in accordance with GAAP.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information
Memorandum dated July 2005 relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.08.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" means with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Revolving Borrowing, thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of Equity Interests or other
securities of, or any assets constituting a business unit of, any other Person,
or any direct or indirect loan, advance or capital contribution by such Person
to any other Person. In computing the amount involved in any Investment at the
time outstanding, (a) undistributed earnings of, and unpaid interest accrued in
respect of Indebtedness owing by, such other Person shall not be included, (b)
there shall not be deducted from the amounts invested in such other Person any
amounts received as earnings (in the form of dividends, interest or otherwise)
on such Investment or as loans from such other
10
Person and (c) unrealized increases or decreases in value, or write-ups,
write-downs or write-offs, of Investments in such other Person shall be
disregarded.
"Issuing Bank" means, as the context may require, (a) JPMorgan Chase
Bank, N.A. and Bank of America, N.A., each with respect to Letters of Credit
issued by it, or (b) any other Lender that becomes an Issuing Bank pursuant to
Section 2.06(k), with respect to Letters of Credit issued by it, and in each
case its successors in such capacity as provided in Section 2.06(i). Each
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of such Issuing Bank, in which case the term "Issuing
Bank" shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate; provided, however, that no arrangement of a type described in
this sentence shall be permitted if, immediately after giving effect thereto,
amounts would become payable by the Borrower under Section 2.15 or 2.17 that are
in excess of those that would be payable under such Section if such arrangement
were not implemented and, provided further, that the fees payable to any such
Affiliate shall be subject to the second sentence of Section 2.12(b).
"LC Disbursement" means a payment made by an Issuing Bank pursuant
to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption or an Augmenting Lender Supplement, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the
context otherwise requires, the term "Lenders" includes the Swingline Lender.
"Letter of Credit" means any standby or commercial letter of credit
issued pursuant to this Agreement.
"Leverage Ratio" has the meaning assigned to such term in Section
6.08(b).
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to deposits in Dollars in the London interbank market)
at approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period, as the rate for deposits in Dollars with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which
deposits in Dollars of $5,000,000 and for a maturity comparable to such Interest
Period
11
are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Loan Documents" means this Agreement, the Subsidiary Guaranty and
any promissory notes executed and delivered pursuant to Section 2.10(e).
"Loan Parties" means, collectively, the Borrower and the Subsidiary
Guarantors.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, condition, financial or otherwise, of the Borrower and the
Subsidiaries taken as a whole or (b) the validity or enforceability of this
Agreement any or any and all other Loan Documents or the rights or remedies of
the Administrative Agent and the Lenders thereunder.
"Material Indebtedness" means Indebtedness (other than the Loans,
obligations under the Subsidiary Guaranty and Letters of Credit), or obligations
in respect of one or more Swap Agreements, of any one or more of the Borrower
and its Subsidiaries in an aggregate principal amount exceeding $10,000,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Borrower or any Subsidiary in respect of any Swap Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Subsidiary would be required to pay if
such Swap Agreement were terminated at such time.
"Maturity Date" means September 14, 2010.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Operating Lease" of a Person means any lease of property (other
than a capital lease under GAAP) by such Person as lessee which has an original
term (including any required renewals and any renewals effective at the option
of the lessor) of one year or more.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
12
"Participant" has the meaning set forth in Section 9.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Acquisition" means any acquisition (whether by purchase,
merger, consolidation or otherwise but excluding in any event a Hostile
Acquisition) or series of related acquisitions by the Borrower or any Subsidiary
of (i) all or substantially all or any significant portion of the assets of a
Person or division or line of business or a business unit of a Person, (ii) the
Equity Interests of a Person or (iii) if clauses (i) and (ii) above are
inapplicable, the rights of any licensee (including by means of the termination
of such licensee's rights under such license) under a trademark license to such
licensee from the Borrower or any Subsidiary, if, at the time of and immediately
after giving effect thereto, (a) no Default has occurred and is continuing or
would arise after giving effect thereto, (b) the assets so acquired or the
assets of a Person so acquired, as the case may be, shall be in a Related Line
of Business, (c) the Borrower and the Subsidiaries are in compliance, on a pro
forma basis after giving effect to such acquisition (taking into account such
adjustments with respect to cost savings as are consistent with the standards
set forth in Rule 11-02(b)(6) of Regulation S-X), with the covenants contained
in Section 6.08 recomputed as of the last day of the most recently ended fiscal
quarter of the Borrower for which financial statements are available, as if such
acquisition (and any related incurrence or repayment of Indebtedness, with any
new Indebtedness being deemed to be amortized over the applicable testing period
in accordance with its terms) had occurred on the first day of each relevant
period for testing such compliance and, if the aggregate consideration paid in
respect of such acquisition exceeds $100,000,000, the Borrower shall have
delivered to the Administrative Agent a certificate of a Financial Officer of
the Borrower to such effect, together with all relevant material financial
information utilized by the Borrower in making its determination to complete
such acquisition included in any pro forma calculations described in this clause
(c), and (d) in the case of a merger, consolidation or amalgamation involving
the Borrower or a Subsidiary Guarantor, the Borrower or a Subsidiary Guarantor
is the surviving entity of such merger, consolidation and/or amalgamation (or,
in the case of a merger involving a Subsidiary Guarantor, the surviving entity
is a Person that will become a Subsidiary Guarantor upon the effectiveness of
such merger, consolidation or amalgamation); provided that in the case of a
merger, consolidation or amalgamation in which the Borrower is one of the
entities being merged, consolidated and/or amalgamated, the Borrower shall be
the surviving entity of such merger, consolidation and/or amalgamation.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes and duties, assessments,
governmental charges or levies that are not yet due or are being contested in
compliance with Section 5.04;
(b) landlords', carriers', warehousemen's, mechanics',
materialmen's, repairmen's and other like Liens imposed by law, Liens of
collecting banks under the Uniform Commercial Code on items in the course of
collection, Liens and rights of set-off of banks, in each case arising in the
ordinary course of business and securing obligations that are not overdue by
more than thirty (30) days or are being contested in compliance with Section
5.04;
13
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) attachment, judgment or other similar liens in respect of
judgments that do not constitute an Event of Default under clause (k) of Article
VII;
(f) easements, zoning restrictions, rights-of-way, restrictive
covenants, encroachments, and similar encumbrances on real property imposed by
law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;
(g) Liens incurred in the ordinary course of business in connection
with the sale, lease, transfer or other disposition of any credit card
receivables of the Borrower or any of its Subsidiaries;
(h) possessory Liens in favor of brokers and dealers arising in
connection with the acquisition or disposition of Permitted Investments;
(i) licenses, leases or subleases granted to third parties and not
interfering in any material respect with the conduct of the business of the
Borrower or any of its Subsidiaries taken as a whole; and
(j) any (i) interest or title of a lessor or sublessor under any
lease, (ii) Lien or restriction that the interest or title of such lessor or
sublessor may be subject to, or (iii) subordination of the interest of the
lessee or sublessee under such lease to any Lien or restriction referred to in
clause (ii);
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investment Policy" shall mean the investment policy of
the Borrower and its Subsidiaries as in effect on the Effective Date, which has
been approved by the board of directors of the Borrower, as amended, restated,
supplemented or otherwise modified from time to time, so long as such amendment,
restatement, supplement or modification has been approved by the Administrative
Agent, which approval shall not be unreasonably withheld.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are directly and fully guaranteed or insured by, the
United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States
of America);
14
(b) investments in commercial paper having, at such date of
acquisition, a credit rating of at least A-2 from S&P or P-2 from Moody's
or F-2 from Fitch;
(c) investments in certificates of deposit, eurodollar time
deposits, banker's acceptances and time deposits maturing within one year
from the date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any Lender
or any commercial bank which has a combined capital and surplus and
undivided profits of not less than $100,000,000;
(d) repurchase agreements with a term of not more than thirty (30)
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c)
above;
(e) securities with maturities of two years or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States or by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth or territory,
political subdivision, taxing authority or foreign government (as the case
may be) are rated, at such date of acquisition, at least A by S&P or A2 by
Moody's or F-2 by Fitch;
(f) securities with maturities of two years or less from the date of
acquisition backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause (c) of this
definition;
(g) shares of money market funds that (i) comply with the criteria
set forth in Securities and Exchange Commission Rule 2a-7 under the
Investment Company Act of 1940, and (ii) have portfolio assets of at least
(x) in the case of funds that invest exclusively in assets satisfying the
requirements of clause (a) of this definition, $250,000,000 and (y) in all
other cases, $500,000,000;
(h) in the case of investments by any foreign Subsidiary,
obligations of a credit quality and maturity comparable to that of the
items referred to in clauses (a) through (g) above that are available in
local markets;
(i) investments in auction rate securities with a rating of AAA from
S&P or Aaa from Moody's or AAA from Fitch and a maximum holding period of
forty-five (45) days, for which the reset date will be used to determine
the maturity date;
(j) investments in short term loan participations of up to
thirty-five (35) days if the short term debt rating thereof is A-2 from
S&P or P-2 from Moody's or F-2 from Fitch or an equivalent long term
rating of investment grade by Moody's or S&P of Fitch exists with respect
thereto; and
(k) investments made in accordance with the Permitted Investment
Policy.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
15
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning set forth in Section 9.04.
"Regulation S-X" means Regulation S-X under the Securities Act of
1933, as amended.
"Related Line of Business" means: (a) any line of business in which
the Borrower or any of its Subsidiaries is engaged as of, or immediately prior
to, the Effective Date, (b) any wholesale, retail or other distribution of
products or services under any domestic or foreign patent, trademark, service
mark, trade name, copyright or license or (c) any similar or related or
complementary business and any business which provides a service and/or supplies
products in connection with any business described in clause (a) or (b) above.
"Related Parties" means, 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.
"Required Lenders" means, at any time, Lenders having Revolving
Credit Exposures and unused Commitments representing more than 50% of the sum of
the total Revolving Credit Exposures and unused Commitments at such time.
"Revolving Credit Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Loan" means a Loan made pursuant to Section 2.03.
"S&P" means Standard & Poor's.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such
16
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantor" means each Domestic Subsidiary (other than an
Excluded Subsidiary) that becomes a party to the Subsidiary Guaranty. The
Subsidiary Guarantors on the Effective Date are identified as such in Schedule
3.01 hereto.
"Subsidiary Guaranty" means that certain Guaranty dated as of the
Effective Date (including any and all supplements thereto) and executed by each
Subsidiary Guarantor, as amended, restated, supplemented or otherwise modified
from time to time.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
"Swingline Exposure" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"Swingline Lender" means JPMorgan Chase Bank, N.A., in its capacity
as lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.05.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" means the execution, delivery and performance by the
Borrower of this Agreement and, if applicable, the promissory notes pursuant to
Section 2.10(e), and by the
17
Subsidiary Guarantors of the Subsidiary Guaranty, the borrowing of Loans, the
use of the proceeds thereof and the issuance of Letters of Credit hereunder.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
18
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans to the Borrower in
Dollars from time to time during the Availability Period in an aggregate
principal amount that will not result in (a) such Lender's Revolving Credit
Exposure exceeding such Lender's Commitment or (b) the sum of the total
Revolving Credit Exposures exceeding the total Commitments. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan shall be
made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at
its option may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement; provided further that no
such option may be exercised by any Lender if, immediately after giving effect
thereto, amounts would become payable by the Borrower under Section 2.15 or 2.17
that are in excess of those that would be payable under such Section if such
option were not exercised.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $500,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Commitments or that is required
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.06(e). Each Swingline Loan shall be in an amount that is an integral multiple
of $500,000 and not less than $1,000,000. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any
time be more than a total of ten (10) Eurodollar Revolving Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone (a)
19
in the case of a Eurodollar Borrowing, not later than 1:00 p.m., New York City
time, three (3) Business Days before the date of the proposed Borrowing or (b)
in the case of an ABR Borrowing, not later than 1:00 p.m., New York City time,
on the date of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Intentionally Omitted.
SECTION 2.05. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
in Dollars to the Borrower from time to time during the Availability Period, in
an aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans exceeding
$15,000,000 or (ii) the sum of the total Revolving Credit Exposures exceeding
the total Commitments; provided that the Swingline Lender shall not be required
to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 1:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan
20
available to the Borrower by means of a credit to the general deposit account of
the Borrower with the Swingline Lender (or, in the case of a Swingline Loan made
to finance the reimbursement of an LC Disbursement as provided in Section
2.06(e), by remittance to the relevant Issuing Bank) by 4:00 p.m., New York City
time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Lender, specifying in such notice such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.07 with respect to Loans made by such Lender (and Section
2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Lenders. The Administrative Agent shall
notify the Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the Swingline Lender.
Any amounts received by the Swingline Lender from the Borrower (or other party
on behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear; provided that any such
payment so remitted shall be repaid to the Swingline Lender or to the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.
SECTION 2.06. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the Borrower may request the issuance of, and
each Issuing Bank agrees to issue, Letters of Credit denominated in Dollars (or
the amendment, renewal or extension of an outstanding Letter of Credit) for its
own account or for the account of any of its Subsidiaries, in a form reasonably
acceptable to the relevant Issuing Bank, at any time and from time to time
during the Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the relevant Issuing Bank relating to any
Letter of Credit, the terms and conditions of this
21
Agreement shall control. The letters of credit identified on Schedule 2.06 shall
be deemed to be "Letters of Credit" issued on the Effective Date for all
purposes of the Loan Documents.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the relevant Issuing Bank) to an
Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by such Issuing Bank,
the Borrower also shall submit a letter of credit application on such Issuing
Bank's standard form in connection with any request for a Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension, the total Revolving Credit Exposures
shall not exceed the total Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five (5) Business Days prior to the Maturity Date; provided that any
such Letter of Credit with a tenor of one year shall, if requested by the
Borrower or any of its Subsidiaries, have renewal periods for additional one
year periods so long as the expiration date shall not extend beyond the date
described in clause (ii).
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of any Issuing Bank or the Lenders, each Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from each Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the relevant Issuing Bank, such Lender's Applicable Percentage of
each LC Disbursement made by such Issuing Bank and not reimbursed by the
Borrower on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason.
Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
22
(e) Reimbursement. If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to such Issuing Bank in Dollars the amount equal to
such LC Disbursement, calculated as of the date such Issuing Bank made such LC
Disbursement not later than 2:00 p.m., New York City time, on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 12:00 noon, New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 2:00 p.m., New York City time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 12:00
noon, New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than $500,000, the Borrower may, subject to
the conditions to borrowing set forth herein, request in accordance with Section
2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or
Swingline Loan in an equivalent amount of such LC Disbursement and, to the
extent so financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the Borrower fails to make such payment when due, the applicable
Issuing Bank shall immediately notify the Administrative Agent, which shall
notify each Lender of the applicable LC Disbursement, the payment then due from
the Borrower in respect thereof and such Lender's Applicable Percentage thereof.
Promptly following receipt of such notice, each Lender (other than such Issuing
Bank) shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section
2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to such Issuing Bank the amounts so
received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the
applicable Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders
and such Issuing Bank as their interests may appear. Any payment made by a
Lender pursuant to this paragraph to reimburse an Issuing Bank for any LC
Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan
as contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason
23
of or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
relevant Issuing Bank; provided that the foregoing shall not be construed to
excuse any Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by such Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of any Issuing Bank (as finally determined by a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, each Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. Such Issuing Bank shall promptly
notify the Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether such Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrower of its obligation to reimburse such Issuing Bank
and the Lenders with respect to any such LC Disbursement. Each Issuing Bank
shall, on each Business Day (or such longer frequency as is agreed to by the
Administrative Agent), deliver to the Administrative Agent and the Borrower a
report via facsimile or e-mail setting forth a list of all Letters of Credit
issued by such Issuing Bank outstanding as of such day (or, if the
Administrative Agent has agreed to a longer frequency, the previous date of
delivery of such report by such Issuing Bank), together with the LC Exposure,
the outstanding LC Disbursements and the expiration date of each such Letter of
Credit.
(h) Interim Interest. Except as otherwise agreed with any Issuing
Bank with respect to any Letter of Credit relating to the period beginning on
any date an LC Disbursement is made and ending two Business Days after the
Borrower's receiving notice from such Issuing Bank of such LC Disbursement, if
any Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made
(or, if such date is not a Business Day, on or prior to the next Business Day),
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to ABR Revolving Loans; provided that, if the Borrower fails to reimburse such
LC Disbursement when due pursuant to paragraph (e) of this Section, then Section
2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be
24
for the account of such Issuing Bank, except that interest accrued on and after
the date of payment by any Lender pursuant to paragraph (e) of this Section to
reimburse such Issuing Bank shall be for the account of such Lender to the
extent of such payment.
(i) Replacement of Any Issuing Bank. Any Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of an
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of an Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and
be continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 50% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash equal to the amount of the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (h) or (i) of Article VII. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the obligations of the Borrower under this Agreement. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Administrative Agent and at the Borrower's risk and
expense, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
be applied by the Administrative Agent to reimburse the relevant Issuing Bank
for LC Disbursements for which it has not been reimbursed and, to the extent not
so applied, shall be held for the satisfaction of the reimbursement obligations
of the Borrower for the LC Exposure at such time or, if the maturity of the
Loans has been accelerated (but subject to the consent of Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three (3) Business Days
after all Events of Default have been cured or waived.
25
(k) Additional Issuing Banks. The Borrower may, at any time and from
time to time with the consent of the Administrative Agent (which consent shall
not be unreasonably withheld) and such Lender, designate one or more additional
Lenders to act as an issuing bank under the terms of this Agreement. Any Lender
designated as Issuing Bank pursuant to this paragraph (k) shall be deemed to be
an "Issuing Bank" for the purposes of this Agreement (in addition to being a
Lender) with respect to Letters of Credit issued by such Lender.
SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders; provided that Swingline Loans shall be made as provided
in Section 2.05. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request;
provided that ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the relevant Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from
a Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. This Section shall
not apply to Swingline Borrowings, which may not be converted or continued.
26
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Revolving Borrowing shall be converted to an ABR Borrowing at
the end of the Interest Period applicable thereto.
SECTION 2.09. Termination and Reduction of Commitments. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.
27
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments without premium or penalty but subject to Section 2.16
with respect to any Loans in the event such Loans are required to be repaid as a
result of such termination or reduction; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $100,000 and
not less than $1,000,000 or, if less, the remaining amount of the total
Commitments, and (ii) the Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.11, the sum of the Revolving Credit Exposures would exceed the
total Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least two (2) Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
on the Maturity Date and (ii) to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of the Maturity Date and the first
date after such Swingline Loan is made that is the 15th or last day of a
calendar month and is at least five (5) Business Days after such Swingline Loan
is made; provided that on each date that a Revolving Borrowing is made, the
Borrower shall repay all Swingline Loans then outstanding.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain
28
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.11. Prepayment of Loans.
(a) The Borrower shall have the right at any time and from time to
time to prepay voluntarily any Borrowing in whole or in part, without premium or
penalty, subject to prior notice in accordance with paragraph (b) of this
Section and subject to Section 2.16.
(b) The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 1:00 p.m., New
York City time, one (1) Business Day before the date of prepayment, (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 1:00 p.m., New
York City time, on the date of prepayment or (iii) in the case of prepayment of
a Swingline Loan, not later than 2:00 p.m., New York City time, on the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date, the principal amount of each Borrowing or portion thereof to be
prepaid and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each; provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice relating to a Revolving Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial prepayment
of any Revolving Borrowing shall be in an amount that is an integral multiple of
$100,000 and not less than $500,000. Each prepayment of a Revolving Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Rate on the daily amount of the Commitment of such
Lender (whether used or unused) during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates;
provided that, if such Lender continues to have any Revolving Credit Exposure
after its Commitment terminates, then such facility fee shall continue to accrue
on the daily amount of such Lender's Revolving Credit Exposure from and
including the date on which its Commitment terminates to but excluding the date
on which such Lender ceases to have any Revolving Credit Exposure. Accrued
facility fees shall be payable in arrears on the last day of March, June,
29
September and December of each year and on the date on which the Commitments
terminate, commencing on the first such date to occur after the date hereof;
provided that any facility fees accruing after the date on which the Commitments
terminate shall be payable on demand. All facility fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent for
the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue, in the case of standby
Letters of Credit at the same Applicable Rate used to determine the interest
rate applicable to Eurodollar Revolving Loans and, in the case of commercial
Letters of Credit, at the Applicable Rate applicable to such Letters of Credit,
in each case on the average daily amount of such Lender's LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the
date on which such Lender's Commitment terminates and the date on which such
Lender ceases to have any LC Exposure and (ii) to the applicable Issuing Bank a
fronting fee, which shall accrue at the rate of 0.125% per annum or such other
rate as is separately agreed upon between the Borrower and such Issuing Bank on
the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) attributable to Letters of Credit
issued by such Issuing Bank during the period from and including the Effective
Date to but excluding the later of the date of termination of the Commitments
and the date on which there ceases to be any LC Exposure, as well as such
Issuing Bank's standard fees and commissions (including without limitation
standard commissions with respect to commercial Letters of Credit, payable at
the time of invoice of such amounts) with respect to the issuance, amendment,
cancellation, negotiation, transfer, presentment, renewal or extension of any
Letter of Credit or processing of drawings thereunder. For the avoidance of
doubt, in any case where, in accordance with the second sentence of the
definition of Issuing Bank, an Issuing Bank arranges for one or more Letters of
Credit to be issued by an Affiliate of such Issuing Bank, the fees agreed upon
by such Issuing Bank with the Borrower shall be deemed to have been agreed upon
by such Affiliate unless the Borrower and such Affiliate otherwise agree. Unless
otherwise specified above, participation fees and fronting fees accrued through
and including the last day of March, June, September and December of each year
shall be payable on the third (3rd) Business Day following such last day,
commencing on the first such date to occur after the Effective Date; provided
that all such fees shall be payable on the date on which the Commitments
terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. Any other fees payable to any Issuing Bank
pursuant to this paragraph shall be payable within ten (10) days after demand.
All participation fees and fronting fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the relevant
Issuing Bank, in the case of fees payable to it) for distribution, in the case
of facility fees and participation fees, to the Lenders.
30
Fees paid shall not be refundable under any circumstances (other than in the
case, and to the extent, of any overpayment thereof by the Loan Parties).
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, upon
written notice to the Borrower by the Administrative Agent, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR
Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Commitments; provided that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.
(e) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year) and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (or
Lender) of making or
31
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing; provided that if
the circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or any Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make such Loan) or to increase the cost to such Lender or such
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder, whether of principal, interest or otherwise, then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or such Issuing Bank's capital as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a
level below that which such Lender could have achieved but for such Change in
Law (taking into consideration such Lender's or such Issuing Bank's policies
with respect to capital adequacy), then from time to time the Borrower will pay
to such Lender or such Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or such Issuing Bank for any such
reduction suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or such Issuing Bank, as
the case may be, as specified in paragraph (a) or (b) of this Section,
containing a reasonably detailed explanation of the basis on which such amount
or amounts were calculated and explaining the Change in Law
32
by reason of which it has become entitled to be so compensated, shall be
delivered to the Borrower and shall be conclusive absent manifest error. No
Lender or Issuing Bank shall be entitled to the benefits of this Section 2.15
unless such Lender or Issuing Bank shall have complied with the requirements of
this Section 2.15. The Borrower shall pay such Lender or such Issuing Bank, as
the case may be, the amount shown as due on any such certificate within ten (10)
days after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or such Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or an Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or such Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or such Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof. Notwithstanding any other provision of this Section
2.15, no Lender shall demand compensation for any increased costs or reduction
referred to above in this Section if it shall not then be the general policy of
such Lender to demand such compensation in similar circumstances from comparable
borrowers under comparable provisions of other credit agreements, if any (it
being understood, for the avoidance of doubt, that a waiver by any Lender in any
given case of its right to demand such compensation from any given borrower
shall not, in and of itself, be deemed to constitute a change in the general
policy of such Lender).
(e) Notwithstanding any other provision to the contrary, this
Section 2.15 shall have no application with respect to any Indemnified Taxes,
Other Taxes or any Excluded Taxes, which matters, for the avoidance of doubt,
shall be dealt with exclusively under Section 2.17.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.11(b) and is revoked in accordance therewith) or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. Such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for deposits in Dollars of a comparable amount and
period
33
from other banks in the eurodollar market. A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within ten (10) days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of
any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
the relevant Issuing Bank (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each
Lender and any Issuing Bank, as promptly as possible but in any event within
thirty (30) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender
or such Issuing Bank, as the case may be, on or with respect to any payment by
or on account of any obligation of the Borrower hereunder (including Indemnified
Taxes or Other Taxes imposed on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or any Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or any Issuing Bank, shall be conclusive
absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Each Foreign Lender (including each Issuing Bank that is a
Foreign Lender) shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time it becomes a Lender (or, in the case of any Participant, on
or before the date such Participant purchases the related participation) and at
all times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding. Each
Foreign Lender (including each Issuing Bank that is a Foreign Lender) shall
promptly notify the Borrower at any time it determines, in its reasonable
discretion, that it is not practicable to provide any documentation required to
be delivered to the Borrower pursuant to this paragraph. No Person shall be
deemed
34
to be a Lender or Participant as defined herein unless it shall have complied
with the requirements of the first sentence of this paragraph (if such
requirements are applicable to it).
(f) If the Administrative Agent, a Lender or an Issuing Bank
determines that it has received a refund which, in the good faith judgment of
the Administrative Agent, such Lender or such Issuing Bank, as the case may be,
is allocable to any Indemnified Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.17, it shall promptly pay over
such refund to the Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section 2.17 with respect
to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, New York City time on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to an Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto. 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. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
35
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements and Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Banks hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing
Banks, as the case may be, the amount due. In such event, if the Borrower has
not in fact made such payment, then each of the Lenders or each Issuing Bank, as
the case may be, severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender
36
pursuant to Section 2.17, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.15 or 2.17, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.15 or payments required to be made pursuant to Section 2.17, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply. No such
assignment shall be deemed to be a waiver of any rights which the Borrower, the
Administrative Agent or any other Lender shall have against the replaced Lender.
Each reference to any Lender in this Section 2.19 shall also refer to any
Issuing Bank.
SECTION 2.20. Expansion Option. The Borrower may from time to time
elect to increase the Commitments in a minimum amount of $5,000,000 so long as,
after giving effect thereto, the aggregate amount of the Commitments does not
exceed $275,000,000. The Borrower may arrange for any such increase to be
provided by one or more Lenders (each Lender so agreeing to an increase in its
Commitment, an "Increasing Lender"), or by one or more new banks, financial
institutions or other entities (each such new bank, financial institution or
other entity, an "Augmenting Lender"), to increase their existing Commitments,
or extend Commitments, as the case may be, provided that (i) each Augmenting
Lender, shall be reasonably acceptable to the Borrower and the Administrative
Agent and (ii) (x) in the case of an Increasing Lender, the Borrower and such
Increasing Lender execute an agreement substantially in the form of Exhibit C
hereto, and (y) in the case of an Augmenting Lender, the Borrower and such
Augmenting Lender execute an agreement substantially in the form of Exhibit D
hereto. Increases and new Commitments created pursuant to this Section 2.20
shall become effective on the date agreed by the Borrower, the Administrative
Agent and the relevant Increasing Lenders or Augmenting Lenders and the
Administrative Agent shall notify each Lender thereof.
37
Notwithstanding the foregoing, no increase in the Commitments (or in the
Commitment of any Lender), shall become effective under this paragraph unless,
(i) on the proposed date of the effectiveness of such increase, the conditions
set forth in paragraphs (a) and (b) of Section 5.02 shall be satisfied or waived
by the Required Lenders and the Administrative Agent shall have received a
certificate to that effect dated such date and executed by a Responsible Officer
of the Borrower and (ii) the Administrative Agent shall have received documents
consistent with those delivered on the Effective Date as to the corporate power
and authority of the Borrower to borrow hereunder after giving effect to such
increase. On the effective date of any increase in the Commitments, (i) each
relevant Increasing Lender and Augmenting Lender shall make available to the
Administrative Agent such amounts in immediately available funds as the
Administrative Agent shall determine, for the benefit of the other Lenders, as
being required in order to cause, after giving effect to such increase and the
use of such amounts to make payments to such other Lenders, each Lender's
portion of the outstanding Revolving Loans of all the Lenders to equal its
Applicable Percentage of such outstanding Revolving Loans, and (ii) the Borrower
shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as
of the date of any increase in the Commitments (with such reborrowing to consist
of the Types of Revolving Loans, with related Interest Periods if applicable,
specified in a notice delivered by the Borrower in accordance with the
requirements of Section 2.03). The deemed payments made pursuant to clause (ii)
of the immediately preceding sentence shall be accompanied by payment of all
accrued interest on the amount prepaid and, in respect of each Eurodollar Loan,
shall be subject to indemnification by the Borrower pursuant to the provisions
of Section 2.16 if the deemed payment occurs other than on the last day of the
related Interest Periods.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers; Subsidiaries. Each of the
Borrower and its Subsidiaries (other than Excluded Subsidiaries) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required. Schedule
3.01 hereto (as supplemented from time to time) identifies each Subsidiary, the
jurisdiction of its incorporation or organization, as the case may be, the
percentage of issued and outstanding shares of each class of its capital stock
or other equity interests owned by the Borrower and the other Subsidiaries and,
if such percentage is not 100% (excluding directors' qualifying shares as
required by law), a description of each class issued and outstanding.
SECTION 3.02. Authorization; Enforceability. The Transactions are
within the Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by the Borrower and constitutes a legal, valid
and binding obligation of the Borrower, enforceable in
38
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any of its Subsidiaries other than any
violation or default that could not reasonably be expected to result in a
Material Adverse Effect, and (d) will not result in the creation or imposition
of any Lien on any asset of the Borrower or any of its Subsidiaries (other than
Liens permitted under Section 6.02).
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
The Borrower has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year ended January 29, 2005 reported on by Deloitte & Touche LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended July 30, 2005, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.
(b) Since January 29, 2005, there has been no material adverse
change in the business, assets, operations or condition, financial or otherwise,
of the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes or
such other defects as, in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed
to use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business as currently conducted, and the use thereof by
the Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending
39
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
this Agreement or the Transactions. There are no labor controversies pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries (i) which could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters), or (ii) that involve this Agreement or the
Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Borrower nor any of
its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.08. Investment and Holding Company Status. Neither the
Borrower nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $10,000,000 the fair market value of the assets of such Plan, and the
present value of all
40
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $10,000,000 the fair market value of the
assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Information Memorandum together with
any of the other reports, financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or
hereafter delivered hereunder or reports filed pursuant to the Securities
Exchange Act of 1934 (as modified or supplemented by other information so
furnished prior to the date on which this representation or warranty is made or
deemed made) do not contain any material misstatement of fact or omit to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time, provided further that the Borrower makes no
representation or warranty whatsoever concerning the information contained in
the Information Memorandum under the heading "Industry Overview" or any
financial information delivered pursuant to clause (c) of the definition of
"Permitted Acquisition".
SECTION 3.12. Federal Reserve Regulations. No part of the proceeds
of any Loan have been used or will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.
SECTION 3.13. No Default. No Default or Event of Default has
occurred and is continuing.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans and of any Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed
on behalf of such party or (ii) written evidence reasonably satisfactory
to the Administrative Agent (which may include telecopy transmission of a
signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated
the Effective Date) of O'Melveny & Myers LLP, counsel for the Loan
Parties, substantially in the form of Exhibit B. The Borrower hereby
requests such counsel to deliver such opinion.
41
(c) The Lenders shall have received (i) reasonably satisfactory
audited consolidated financial statements of the Borrower for the two most
recent fiscal years ended prior to the Closing Date as to which such
financial statements are available, (ii) reasonably satisfactory unaudited
interim consolidated financial statements of the Borrower for each
quarterly period ended subsequent to the date of the latest financial
statements delivered pursuant to clause (i) of this paragraph as to which
such financial statements are available and (iii) reasonably satisfactory
financial statement projections through and including the Borrower's 2010
fiscal year, together with such information as the Administrative Agent
and the Lenders shall reasonably request (including, without limitation, a
reasonably detailed description of the assumptions used in preparing such
projections).
(d) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of the
Borrower, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the Administrative
Agent and its counsel and as further described in the list of closing
documents attached as Exhibit E.
(e) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President or
a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(f) The Administrative Agent shall have received evidence
satisfactory to it that all of the Borrower's existing credit facilities
shall have been cancelled and terminated and all indebtedness thereunder
shall have been fully repaid (except to the extent being so repaid with
the initial Revolving Loans and other than the letters of credit listed on
Schedule 2.06).
(g) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all reasonable
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Banks to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section
9.02) at or prior to 3:00 p.m., New York City time, on the Effective Date (and,
in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing, and of any Issuing Bank to issue,
increase, renew or extend any Letter of Credit, is subject to the satisfaction
of the following conditions:
42
(a) The representations and warranties of the Borrower set forth in
this Agreement shall be true and correct in all material respects on and
as of the date of such Borrowing or the date of issuance, increase,
renewal or extension of such Letter of Credit, as applicable (other than
such representations as are made as of a specific earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date).
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, increase, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, increase, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Lenders through the Administrative Agent:
(a) within ninety (90) days after the end of each fiscal year of the
Borrower, its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on by Deloitte & Touche LLP or
other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and without
any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied; provided, however, that, so
long as the Borrower is required to file reports under Section 13 of the
Securities and Exchange Act of 1934, the requirements of this paragraph
shall be deemed satisfied by the delivery of, the Annual Report of the
Borrower on Form 10-K for such fiscal year, signed by the duly authorized
officer or officers of the Borrower;
(b) within forty-five (45) days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower, its
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the
43
case of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes; provided, however, that,
so long as the Borrower is required to file reports under Section 13 of
the Securities and Exchange Act of 1934, the requirements of this
paragraph shall be deemed satisfied by the delivery of the Quarterly
Report of the Borrower on Form 10-Q for the relevant fiscal quarter,
signed by the duly authorized officer or officers of the Borrower;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) stating that he or she has obtained no knowledge that a
Default has occurred (other than as set forth in such certificate) and, if
a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Section
6.08 and (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements
referred to in Section 3.04 which has had an effect on such financial
statements and, if any such change has occurred, specifying the effect of
such change on the financial statements accompanying such certificate;
(d) promptly after the same become publicly available, copies of all
other periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may
be; provided, however, that, so long as the Borrower files any such
material with the Securities Exchange Commission pursuant to the
requirements of the Securities and Exchange Act of 1934, the requirements
of this paragraph shall be deemed satisfied by such filings; and
(e) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this
Agreement, as the Administrative Agent or any Lender may reasonably
request.
SECTION 5.02. Notices of Material Events. The Borrower will furnish
to the Lenders through the Administrative Agent prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Borrower or any Affiliate thereof that could reasonably be expected to
result in a Material Adverse Effect;
44
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $5,000,000; and
(d) any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Borrower will, and
will cause each of its Subsidiaries (other than the Excluded Subsidiaries) to,
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its business except, in
each case (other than the case of the foregoing requirements insofar as they
relate to the legal existence of the Borrower and the Subsidiary Guarantors), to
the extent that failure to do so could not reasonably be expected to result in a
Material Adverse Effect; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 6.04.
SECTION 5.04. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could reasonably be expected to result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. Except where the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect, the Borrower will, and will cause each of its Subsidiaries to,
(a) maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (b) maintain,
with financially sound and reputable insurance companies, insurance on such of
its property and in such amounts and against such risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations.
SECTION 5.06. Books and Records; Inspection Rights. The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which entries in conformity in all material respects with all
applicable laws, rules and regulations of any Governmental Authority are made of
all dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, on an annual basis at
the request of the Administrative Agent (or at any time after the occurrence and
during the continuance of a Default), permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make
45
extracts from its books and records, and to discuss its affairs, finances and
condition with its officers and independent accountants, all during reasonable
business hours.
SECTION 5.07. Compliance with Laws. The Borrower will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property (including
without limitation Environmental Laws), except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.08. Use of Proceeds and Letters of Credit. The proceeds of
the Loans will be used only to refinance certain existing credit facilities of
the Borrower and to finance the working capital needs, capital expenditures,
acquisitions (including Permitted Acquisitions), dividends, distributions and
stock repurchases, and for general corporate purposes of, the Borrower and its
Subsidiaries. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X. Standby letters of
credit will be issued only to support insurance, utilities, workers'
compensation and lease obligations, in each case incurred in the ordinary course
of business by the Borrower or any Subsidiary.
SECTION 5.09. Guaranties. As promptly as possible but in any event
within sixty (60) days (or such later date as may be agreed upon by the
Administrative Agent) after any Person becomes a Domestic Subsidiary (other than
an Excluded Subsidiary), the Borrower shall provide the Administrative Agent
with written notice thereof setting forth information in reasonable detail
describing the material assets of such Person and shall cause each such
Subsidiary which also qualifies as a Subsidiary Guarantor to execute and deliver
to the Administrative Agent a supplement to the Subsidiary Guaranty pursuant to
which such Subsidiary agrees to be bound by the terms and provisions of thereof,
such supplement to the Subsidiary Guaranty to be accompanied by appropriate
corporate resolutions, other corporate documentation and legal opinions to the
extent, and in form and substance reasonably satisfactory to, the Administrative
Agent and its counsel.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
SECTION 6.01. Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created under the Loan Documents;
46
(b) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness with Indebtedness of a similar type that does not increase
the outstanding principal amount thereof;
(c) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(d) Guarantees (i) by the Borrower of (A) Indebtedness of any
Subsidiary or (B) any lease obligations of any Subsidiary and (ii) by any
Subsidiary of (A) Indebtedness of the Borrower or any other Subsidiary or
(B) any lease obligations of the Borrower or any other Subsidiary;
(e) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or secured
by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof; provided that (i) such
Indebtedness is incurred prior to or within ninety (90) days after such
acquisition or the completion of such construction or improvement and (ii)
the aggregate principal amount of Indebtedness permitted by this clause
(e) shall not exceed $25,000,000 at any time outstanding;
(f) Indebtedness of the Borrower or any Subsidiary as an account
party in respect of letters of credit;
(g) Indebtedness of any Person that becomes a Subsidiary or merges
into an existing Subsidiary after the date hereof or Indebtedness assumed
by the Borrower or any Subsidiary in connection with an asset acquisition
(and any extension, renewal, refinancing, replacement or refunding
thereof); provided that such Indebtedness (other than such extension,
renewal, refinancing, replacement or refunding thereof) exists at the time
such Person becomes a Subsidiary or at the time of such asset acquisition
and is not created in contemplation of or in connection with such Person
becoming a Subsidiary or in connection with such asset acquisition;
(h) Guarantees by the Borrower and any Subsidiary of sublessees of
any subleases entered into by the Borrower or any Subsidiary as
sublessors; and
(i) Indebtedness of the Borrower or any of its Subsidiaries not
otherwise permitted by this Section 6.01, in an aggregate principal amount
at any time outstanding not exceeding $150,000,000; provided that the
aggregate principal amount of Indebtedness permitted by this clause (i) to
the extent constituting (x) Indebtedness of the Borrower or any Subsidiary
secured by a Lien on any asset of the Borrower or any Subsidiary or (y)
Indebtedness of any Subsidiary which is not a Subsidiary Guarantor shall
not in the aggregate exceed $40,000,000 at any time outstanding.
For purposes of this subsection 6.01, any Person becoming a Subsidiary of
the Borrower after the date of this Agreement shall be deemed to have incurred
all of its then outstanding Indebtedness at the time it becomes a Subsidiary,
and any Indebtedness assumed by the
47
Borrower or any of its Subsidiaries shall be deemed to have been incurred on the
date of assumption.
SECTION 6.02. Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02 or
any Lien required by Section 2.06(j) of this Agreement;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case may be,
(ii) such Lien shall not apply to any other property or assets of the
Borrower or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by clause (e) of Section
6.01, (ii) such security interests and the Indebtedness secured thereby
are incurred prior to or within ninety (90) days after such acquisition or
the completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such
security interests shall not apply to any other property or assets of the
Borrower or any Subsidiary;
(e) Liens arising from precautionary Uniform Commercial Code
financing statement filings with respect to leases entered into by the
Borrower or any of its Subsidiaries in the ordinary course; and
(f) Liens securing Indebtedness permitted under Section 6.01(i).
SECTION 6.03. [Intentionally Omitted].
SECTION 6.04. Fundamental Changes. (a) The Borrower will not, and
will not permit any Subsidiary (other than any Excluded Subsidiaries) to, merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all of
its assets, or all or substantially all of the stock of any of its Subsidiaries
(in each case, whether now owned or hereafter acquired) (other than any Excluded
Subsidiaries), or liquidate or
48
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing (i) any Person
may merge into the Borrower in a transaction in which the Borrower is the
surviving corporation, (ii) any Subsidiary/Person may merge into any Subsidiary
in a transaction in which the surviving entity is a Subsidiary or in which the
surviving entity is a Person that will become a Subsidiary of the Borrower upon
the effectiveness of such merger, (iii) the Borrower or any Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary, (iv) any merger effected for the sole purpose of reincorporating the
Borrower in Delaware (other than through the formation of a holding company that
will own any portion of the Equity Interest of the Borrower following such
merger), and (v) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders
and except that the Borrower or any Subsidiary may effect any acquisition
permitted by Section 6.05 by means of a merger of the Person that is the subject
of such acquisition with the Borrower or any of its Subsidiaries (provided that,
in the case of a merger with the Borrower, the Borrower is the survivor).
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than a
Related Line of Business.
SECTION 6.05. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except
(a) Permitted Investments;
(b) Permitted Acquisitions;
(c) investments by the Borrower and its Subsidiaries in their
respective Subsidiaries or in the capital stock of their respective
Subsidiaries;
(d) loans or advances made by the Borrower to, and Guarantees by the
Borrower of obligations of, any Subsidiary, and loans or advances made by any
Subsidiary to, and Guarantees by any Subsidiary of obligations of, the Borrower
or any other Subsidiary;
(e) Guarantees constituting Indebtedness permitted by Section 6.01;
(f) advances or loans made in the ordinary course of business to
non-executive officers and employees of the Borrower and its Subsidiaries;
(g) Investments existing on the date hereof not otherwise permitted
under this Agreement and described in Schedule 6.05 hereto;
49
(h) Investments received in connection with the bona fide settlement
of any defaulted Indebtedness or other liability owed to the Borrower or any
Subsidiary; and
(i) joint ventures, loans to contractors, loans in connection with
retail development, deposits to landlords and other Investments in an aggregate
amount not exceeding $50,000,000 at any time.
SECTION 6.06. Swap Agreements. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Swap Agreement, except (a)
Swap Agreements entered into to hedge or mitigate risks to which the Borrower or
any Subsidiary has actual exposure (other than those in respect of Equity
Interests of the Borrower or any of its Subsidiaries), and (b) Swap Agreements
entered into in order to effectively cap, collar or exchange interest rates
(from fixed to floating rates, from one floating rate to another floating rate
or otherwise) with respect to any interest-bearing liability or investment of
the Borrower or any Subsidiary.
SECTION 6.07. Transactions with Affiliates. The Borrower will not,
and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) in the ordinary course of business at prices and
on terms and conditions not less favorable to the Borrower or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Borrower and its Subsidiaries (including
between and among Subsidiaries) not involving any other Affiliate, and (c) any
Equity Payment.
SECTION 6.08. Financial Covenants.
(a) Minimum Fixed Charge Coverage Ratio. The Borrower will not
permit the ratio, determined as of the end of each of its fiscal quarters ending
on and after October 29, 2005 for the period of 4 consecutive fiscal quarters
ending with the end of such fiscal quarter, of (i) Consolidated EBITDAR minus
Consolidated Capital Expenditures to (ii) Consolidated Interest Expense plus
Consolidated Rent Expense, all calculated for the Borrower and its Subsidiaries
on a consolidated basis, to be less than 1.5 to 1.0.
(b) Maximum Leverage Ratio. The Borrower will not permit the ratio
(the "Leverage Ratio"), determined as of the end of each of its fiscal quarters
ending on and after October 29, 2005, of (i) Consolidated Total Indebtedness as
of such ending date to (ii) Consolidated EBITDA for the period of 4 consecutive
fiscal quarters ending with the end of such fiscal quarter, all calculated for
the Borrower and its Subsidiaries on a consolidated basis, to be greater than
2.5 to 1.0.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
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(a) the Borrower shall fail to pay (i) any principal of any Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise or (ii) any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable and such failure to pay such reimbursement
obligation shall continue unremedied for a period of two (2) Business Days;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five (5)
days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Subsidiary in or in connection with this Agreement
or any other Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with this Agreement or any other Loan
Document or any amendment or modification thereof or waiver thereunder, shall
prove to have been incorrect in any material respect when made or deemed made;
(d) (i) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.03 (with respect to the Borrower's
existence) or 5.08 or in Article VI or (ii) any Loan Document shall for any
reason not be or shall cease to be in full force and effect or is declared to be
null and void, or the Borrower or any Subsidiary takes any action for the
purpose of terminating, repudiating or rescinding any Loan Document or any of
its obligations thereunder;
(e) the Borrower or any Subsidiary Guarantor, as applicable, shall
fail to observe or perform any covenant, condition or agreement contained in
this Agreement (other than those specified in clause (a), (b) or (d) of this
Article) or any other Loan Document, and such failure shall continue unremedied
for a period of thirty (30) days after notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable beyond
the period (without giving effect to any extensions, waivers, amendments or
other modifications of or to such period) of grace, if any, provided in the
instrument or agreement under which such Material Indebtedness was created;
(g) any event or condition occurs (after giving effect to any
applicable grace periods and after giving effect to any extensions, waivers,
amendments or other modifications of any applicable provision or agreement) that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause, with the
giving of an acceleration or similar notice if required, any Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption
or defeasance thereof, prior to its scheduled maturity; provided that this
clause (g) shall not apply to secured Indebtedness that becomes due as a result
of the voluntary sale or transfer of the property or assets securing such
Indebtedness;
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(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for
sixty (60) days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount (not paid or covered by insurance) in excess of $10,000,000 shall be
rendered against the Borrower, any Subsidiary or any combination thereof and the
same shall remain undischarged for a period of thirty (30) consecutive days from
the entry thereof during which execution shall not be effectively stayed or
bonded, 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;
(l) an ERISA Event shall have occurred that, when taken together
with all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; or
(m) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder and under the other
Loan Documents, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived
52
by the Borrower; and in case of any event with respect to the Borrower described
in clause (h) or (i) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder and under the other Loan Documents, shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Banks hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof, together with such
actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) 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 hereby that the Administrative Agent is
required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement, (ii) the contents of any certificate, report or
other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or document, or
(v) the satisfaction of any condition set forth in Article IV or
53
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. 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 the
preceding paragraphs 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.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Banks and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, subject
to, so long as no Event of Default has occurred and is continuing, the consent
of the Borrower (such consent not to be unreasonably withheld), to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within thirty (30) days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Banks,
appoint a successor Administrative Agent which shall be a bank with an office in
New York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender (including each Issuing Bank) acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender and
54
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any related agreement or any document
furnished hereunder or thereunder.
None of the Lenders, if any, identified in this Agreement as a
Syndication Agent or Documentation Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to the
relevant Lenders in their capacity as Syndication Agents or Documentation Agents
as it makes with respect to the Administrative Agent in the preceding paragraph.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
and in the other 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 telecopy, as follows:
(i) if to the Borrower, to it at 3450 E. Miraloma Avenue, Anaheim,
California 92806, Attention of Gerald M. Chaney, Senior Vice President and
Chief Financial Officer (Telecopy No. (714) 414-4251);
(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A.,
Loan and Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas
77002, Attention of Rebecca Ybarra (Telecopy No. (713) 750-2228), with a
copy to JPMorgan Chase Bank, N.A., 270 Park Avenue, 5th Floor, New York
10017, Attention of Jay Droogan (Telecopy No. (212) 270-1063);
(iii) if to an Issuing Bank, to it at (A) in the case of JPMorgan
Chase Bank, N.A., to it at JPMorgan Chase Bank, N.A., Loan and Agency
Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention
of Rebecca Ybarra (Telecopy No. (713) 750-2228), with a copy to JPMorgan
Chase Bank, N.A., 270 Park Avenue, 5th Floor, New York 10017, Attention of
Jay Droogan (Telecopy No. (212) 270-1063), (B) in the case of Bank of
America, N.A., to it at Bank of America, N.A., 40 Broad Street, 10th
Floor, Boston, Massachusetts 02109, Attention of Stephen J. Garvin
(Telecopy No. (617) 434-4312) and (C) in the case of any other Issuing
Bank, to it at the address and telecopy number specified from time to time
by such Issuing Bank to the Borrower and the Administrative Agent;
(iv) if to the Swingline Lender, to it at JPMorgan Chase Bank, N.A.,
Loan and Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas
77002, Attention of Rebecca Ybarra (Telecopy No. (713) 750-2228), with a
copy to JPMorgan Chase Bank,
55
N.A., 270 Park Avenue, 5th Floor, New York 10017, Attention of Jay Droogan
(Telecopy No. (212) 270-1063); and
(v) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders (including any
Issuing Bank) hereunder may be delivered or furnished to the Lenders through the
Administrative Agent by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties hereto
(or, in the case of any Lender, by notice to the Administrative Agent and the
Borrower). All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, any Issuing Bank or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Banks and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or any Issuing Bank may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner
56
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, or (v) change any of the provisions of this
Section or the definition of "Required Lenders" or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent, any Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, such Issuing Bank
or the Swingline Lender, as the case may be.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of one counsel for the Administrative Agent, in connection
with the syndication of the credit facilities provided for herein, the
preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by any Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Administrative Agent, any Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
(b) The Borrower shall indemnify the Administrative Agent, each
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds therefrom (including any refusal
by any Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
57
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent, any Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent, any Issuing Bank or the Swingline Lender, as
the case may be, such Lender's Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, any Issuing Bank or the Swingline
Lender in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of an Issuing Bank that issues any Letter of Credit), except that (i)
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void) and (ii) no Lender (including any Issuing Bank) may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b)(i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it) with the
prior written consent (such consent not to be unreasonably withheld, it
being understood that withholding of consent by the Borrower or the
Administrative Agent with respect to an assignment (including any
assignment to a Lender, an Affiliate of a Lender or an Approved Fund)
because amounts that would become payable by the Borrower under Section
2.15 or 2.17 (including amounts payable under Section 2.17 in respect of
withholding taxes) are in excess of those that would be payable under such
Section in respect of the amount assigned if such assignment were not
made, will not be considered to be unreasonable) of:
58
(A) the Borrower, provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or, if an Event of Default has occurred and
is continuing, any other assignee; and
(B) the Administrative Agent.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment or Loans of any Class,
the amount of the Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent;
(B) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, provided that this clause shall
not be construed to prohibit the assignment of a proportionate part
of all the assigning Lender's rights and obligations in respect of
one Class of Commitments or Loans;
(C) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500 payable by the
assignor or the assignee; and
(D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire.
For the purposes of this Section 9.04(b), the term "Approved Fund"
has the following meaning:
"Approved Fund" means any Person (other than a natural person) that
is engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement
(including, in the case of any Foreign Lender (including each Issuing Bank that
is a Foreign Lender), obligations under Section 2.17(e)), and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall
59
cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03), provided, however, that no such assignment
or transfer shall be deemed to be a waiver of any rights which the Borrower, the
Administrative Agent or any other Lender shall have against such Lender. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 9.04 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Banks and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, any Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to Section 2.05(c),
2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have
no obligation to accept such Assignment and Assumption and record the
information therein in the Register unless and until such payment shall have
been made in full, together with all accrued interest thereon. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Banks or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender's obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Banks and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each
60
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.
(ii) A Participant shall not be entitled to the benefits of Section
2.15, 2.16 or 2.17 unless such Participant shall have complied with the
requirements of such Section; provided, that in any case in which a Participant
is so entitled, any such Participant shall not be entitled to receive any
greater payment under Section 2.15, 2.16 or 2.17 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.17(e) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including without limitation 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 a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
or any Letter of Credit is outstanding and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the
61
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) Each party hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party hereto may
otherwise have to bring any action or proceeding relating to this Agreement
against any other party hereto or its properties in the courts of any
jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
62
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the
Issuing Banks and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent, any Issuing
Bank or any Lender on a nonconfidential basis from a source other than the
Borrower. For the purposes of this Section, "Information" means all information
received from the Borrower relating to the Borrower or its business, other than
any such information that is available to the Administrative Agent, any Issuing
Bank or any Lender on a nonconfidential basis prior to disclosure by the
Borrower; provided that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
63
SECTION 9.13. USA PATRIOT Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act") hereby notifies the Borrower that pursuant to
the requirements of the Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Act.
[Signature Pages Follow]
64
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PACIFIC SUNWEAR OF CALIFORNIA, INC.
By /s/ Seth R. Johnson
-------------------------------------
Name: Seth R. Johnson
Title: Chief Executive Officer
By /s/ Gerald M. Chaney
-------------------------------------
Name: Gerald M. Chaney
Title: Chief Financial Officer
Signature Page to Credit Agreement
Pacific Sunwear of California, Inc.
JPMORGAN CHASE BANK, N.A.,
individually as a Lender, as the
Swingline Lender,
as an Issuing Bank and as
Administrative Agent
By: /s/ James A. Knight
------------------------------------
Name: James A. Knight
Title: Vice President
Signature Page to Credit Agreement
Pacific Sunwear of California, Inc.
BANK OF AMERICA, N.A.
individually as a Lender, as an Issuing
Bank and as Syndication Agent
By: /s/ Stephen J. Garvin
------------------------------------
Name: Stephen J. Garvin
Title: Managing Director
Signature Page to Credit Agreement
Pacific Sunwear of California, Inc.
NATIONAL CITY BANK,
individually as a Lender and as
Co-Documentation Agent
By: /s/ Ralph Kaparos
------------------------------------
Name: Ralph Kaparos
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION,
individually as a Lender and as
Co-Documentation Agent
By: /s/ Janet E. Jordan
------------------------------------
Name: Janet E. Jordan
Title: Vice President
Signature Page to Credit Agreement
Pacific Sunwear of California, Inc.
PNC BANK, N.A.,
as a Lender
By: /s/ Philip K. Liebscher
------------------------------------
Name: Philip K. Liebscher
Title: Vice President
Signature Page to Credit Agreement
Pacific Sunwear of California, Inc.
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By: /s/ Margaret Furbank
------------------------------------
Name: Margaret Furbank
Title: Vice President
Signature Page to Credit Agreement
Pacific Sunwear of California, Inc.
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Susan T. Gallagher
------------------------------------
Name: Susan T. Gallagher
Title: Vice President
Signature Page to Credit Agreement
Pacific Sunwear of California, Inc.
SCHEDULE 2.01
COMMITMENTS
LENDER COMMITMENT
- ---------------------------------- ------------
JPMORGAN CHASE BANK, N.A. $ 40,000,000
BANK OF AMERICA, N.A. $ 40,000,000
NATIONAL CITY BANK $ 30,000,000
U.S. BANK NATIONAL ASSOCIATION $ 30,000,000
PNC BANK, N.A. $ 20,000,000
UNION BANK OF CALIFORNIA, N.A. $ 20,000,000
WACHOVIA BANK NATIONAL ASSOCIATION $ 20,000,000
TOTAL COMMITMENTS $200,000,000
EXHIBIT A
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells
and assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any letters of credit, guarantees, and
swingline loans included in such facilities) and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the "Assigned Interest"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.
1. Assignor: _____________________________________
2. Assignee: _____________________________________
[and is an Affiliate/Approved Fund of
[identify Lender](1)]
3. Borrower(s): Pacific Sunwear of California, Inc.
4. Administrative Agent: JPMorgan Chase Bank, N.A., as the administrative
agent under the Credit Agreement
- ----------
(1) Select as applicable.
5. Credit Agreement: The $200,000,000 Credit Agreement dated as of
September 14, 2005 among Pacific Sunwear of
California, Inc., the Lenders parties thereto,
JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other agents parties thereto
6. Assigned Interest:
Aggregate Amount of Amount of Percentage Assigned
Commitment/Loans for all Commitment/ of
Lenders Loans Assigned Commitment/Loans(2)
- ------------------------ -------------- --------------------
$ $ %
$ $ %
$ $ %
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By: ____________________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By: ____________________________________
Title:
Consented to and Accepted:
JPMORGAN CHASE BANK, N.A., as
Administrative Agent
By: ______________________________
Title:
- ----------
(2) Set forth, so at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
2
[Consented to:](3)
PACIFIC SUNWEAR OF CALIFORNIA, INC.
By: _______________________________
Title:
- ----------
(3) To be added only if the consent of the Borrower is required by the terms
of the Credit Agreement.
3
ANNEX I
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it
is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
satisfies the requirements, if any, specified in the Credit Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Lender, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 5.01 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of New York.
2
EXHIBIT B
OPINION OF COUNSEL FOR THE LOAN PARTIES
[Effective Date]
To the Lenders and the Administrative
Agent Referred to Below
c/o JPMorgan Chase Bank, N.A., as
Administrative Agent
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
We have acted as counsel to Pacific Sunwear of California, Inc., a
California corporation (the "Borrower"), and Pacific Sunwear Stores Corp., a
California corporation ("Pac Sun Stores" and collectively with the Borrower, the
"Loan Parties"), in connection with the Credit Agreement dated as of September
14, 2005 (the "Credit Agreement"), among the Borrower, the banks and other
financial institutions identified therein as Lenders, and JPMorgan Chase Bank,
N.A., as Administrative Agent. We are providing this opinion to you at the
request of the Loan Parties pursuant to Section 4.01(b) of the Credit Agreement.
Terms defined in the Credit Agreement and not defined herein are used herein
with the same meanings.
In our capacity as such counsel, we have examined originals or
copies of those corporate and other records and documents we considered
appropriate, including the following (the documents listed in clauses (i)
through (ii) below collectively being referred to herein as the "Loan
Documents"):
1. the Credit Agreement; and
2. the Subsidiary Guaranty.
As to relevant factual matters, we have relied upon, among other
things, the Loan Parties' factual representations in the Borrower Certificate
(the "Borrower Certificate"). In addition, we have obtained and relied upon
those certificates of public officials we considered appropriate.
We have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals and the conformity with originals
of all documents submitted to us as copies. To the extent the Loan Parties'
obligations depend on the enforceability of the Loan Documents against the other
parties to the Loan Documents, we have assumed that the Loan Documents are
enforceable against such other parties.
On the basis of such examination, our reliance upon the assumptions
in this opinion and our consideration of those questions of law we considered
relevant, and subject to the limitations and qualifications in this opinion, we
are of the opinion that:
1. Each Loan Party is a corporation validly existing under the laws
of the State of California, with corporate power to enter into the Loan
Documents to which it is a party, and to perform its obligations under the Loan
Documents to which it is a party.
2. The execution, delivery and performance of the Loan Documents
have been duly authorized by all necessary corporate action on the part of each
Loan Party party thereto, and each of the Loan Documents has been duly executed
and delivered by each of the Loan Parties party thereto.
3. Each of the Loan Documents constitutes the legally valid and
binding obligation of each Loan Party party thereto, enforceable against such
Loan Party in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws) and by general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law.
4. The execution and delivery by each Loan Party of each Loan
Document to which it is a party do not, and each such Loan Party's performance
of its obligations under the Loan Documents to which it is a party on or prior
to the date hereof will not, (i) violate such Loan Party's articles of
incorporation or bylaws, (ii) violate, breach, or result in a default or result
in the creation or imposition of any lien upon any of the assets of such Loan
Party under, any existing obligation of or restriction on any such Loan Party
under any material agreement (the "Material Agreements") identified in Exhibit D
of the Borrower Certificate, or (iii) breach or otherwise violate any existing
obligation of or restriction on any Loan Party under any order, judgment or
decree of any California or federal court or governmental authority binding on
any Loan Party identified in the Borrower Certificate. If a Material Agreement
is governed by the laws of a jurisdiction other than California, we have assumed
such Material Agreement is governed by the laws of the State of California. We
express no opinion as to the effect of any Loan Parties' performance of its
obligations in the Loan Documents to which it is a party on any Loan Party's
compliance with financial covenants in the Material Agreements.
5. The execution and delivery by each Loan Party of each Loan
Document to which it is a party do not, and each Loan Party's performance of its
obligations under each Loan Document to which it is a party on or prior to the
date hereof will not, violate any current New York, California or federal
statute, rule or regulation that we have, in the exercise of customary
professional diligence, recognized as applicable to such Loan Party or to
transactions of the type contemplated by such Loan Documents.
6. No order, consent, permit or approval of any California, New York
or federal governmental authority that we have, in the exercise of customary
professional diligence, recognized as applicable to each Loan Party or to
transactions of the type contemplated by the Loan Documents is required on the
part of any Loan Party for the execution and delivery of, and performance of its
obligations on or prior to the date hereof under, the Loan Documents to which it
is a party, except for such as have been obtained.
2
7. None of the Loan Parties is an investment company required to
register under the Investment Company Act of 1940, as amended.
8. None of the Loan Parties is a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Our opinion in paragraph 3 above as to the enforceability of the
Loan Documents is subject to:
(i) public policy considerations, statutes or court decisions that
may limit the rights of a party to obtain indemnification against its own
negligence, willful misconduct or unlawful conduct;
(ii) the unenforceability under certain circumstances of broadly or
vaguely stated waivers or waivers of rights granted by law where the
waivers are against public policy or prohibited by law;
(iii) the unenforceability under certain circumstances of provisions
imposing penalties, liquidated damages or other economic remedies;
(iv) the unenforceability under certain circumstances of provisions
appointing one party as trustee for an adverse party or provisions for the
appointment of a receiver; and
(vi) the unenforceability under certain circumstance of choice of
law provisions.
In addition, we call your attention to the fact that the California
Supreme Court in Grafton Partners v. Superior Court, 36 Cal. 4th 944 (2005),
recently held that, under California law, pre-dispute waivers of the right to
trial by jury are unenforceable. Although each Loan Document states it is
governed by the laws of the State of New York, a California court may not
enforce the choice of New York law with respect to the waiver of the right to
trial by jury in such Loan Document. Accordingly, we express no opinion as to
whether or not the waiver of such right would be given effect by a California
court.
We express no opinion with respect to your ability to collect
attorneys' fees and costs in an action involving the Loan Documents if you are
not the prevailing party in that action (we call your attention to the effect of
Section 1717 of the California Civil Code, which provides that where a contract
permits one party thereto to recover attorneys' fees, the prevailing party in
any action to enforce any provision of the contract shall be entitled to recover
its reasonable attorneys' fees).
We express no opinion as to any provision of any Loan Documents
requiring written amendments or waivers of such Loan Document insofar as they
suggest that oral or other modifications, amendments or waivers could not be
effectively agreed upon by the parties or that the doctrine of promissory
estoppel might not apply.
3
As to our opinion in paragraph 3, we advise you of California
statutory provisions and case law to the effect that a guarantor may be
discharged if the beneficiary of the guaranty alters the original obligation of
the principal, fails to inform the guarantor of material information pertinent
to the principal or any collateral, elects remedies that may impair either the
subrogation or reimbursement rights of the guarantor against the principal or
the value of any collateral, fails to accord the guarantor the protections
afforded a debtor under Division 9 of the California Uniform Commercial Code or
otherwise takes any action that prejudices the guarantor, unless, in any such
case, the guarantor validly waives such rights or the consequences of any such
action. See, e.g., California Civil Code Sections 2799 through Section 2855;
California Commercial Code Section 9-602, Sumitomo Bank of California v.
Iwasaki, 70 Cal. 2d 81, 73 Cal. Rptr. 564 (1968); Union Bank v. Gradsky, 265
Cal. App. 2d 40, 71 Cal. Rptr. 64 (1968). While California Civil Code Section
2856 provides that express waivers of a guarantor's right to be discharged, such
as those contained in the Subsidiary Guaranty, are generally enforceable under
California law, we express no opinion with respect to the effectiveness of the
waivers in the Subsidiary Guaranty.
We express no opinion as to the effect of non-compliance by you with
any state or federal laws or regulations applicable to the transactions
contemplated by the Loan Documents because of the nature of your business.
We express no opinion as to any provision of the Loan Documents
insofar as it purports to grant a right of setoff in respect of any Loan Party's
assets to any person other than a creditor of such Loan Party.
We advise you that Section 9.09(b) of the Credit Agreement, which
provides for non exclusive jurisdiction of the courts of the State of New York
and federal courts sitting in that State, may not be binding on the courts in
the forums selected or excluded.
We advise you that if an action based on the Loan Documents were
commenced in a federal or state court in New York, a judgment for money relating
to the Loan Documents ordinarily would be enforced only in United States
dollars. The method used to determine the rate of conversion of foreign currency
into United States dollars will depend on various factors.
We express no opinion concerning (i) federal or state securities
laws or regulations, (ii) federal or state antitrust, unfair competition or
trade practice laws or regulations, (iii) pension and employee benefit laws and
regulations, (iv) compliance with fiduciary requirements, (v) federal or state
environmental laws and regulations, (vi) federal or state land use or
subdivision laws or regulations (vii) the Trading with the Enemy Act, as
amended, the foreign assets control regulations of the United States Treasury
Department, the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001, as
amended, Executive Order No. 13,224 of September 24, 2001, Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, as amended, and any enabling legislation, rules, regulations or
executive orders relating thereto, or (viii) federal or state laws and
regulations concerning filing requirements.
4
The law covered by this opinion is limited to the present federal
law of the United States, the present law of the State of California and with
respect to our opinions in paragraphs 3, 5 and 6, the present law of the State
of New York. We express no opinion as to the laws of any other jurisdiction and
no opinion regarding the statutes, administrative decisions, rules, regulations
or requirements of any county, municipality, subdivision or local authority of
any jurisdiction.
This opinion is furnished by us as counsel for the Loan Parties and
may be relied upon by you only in connection with the Loan Documents. It may not
be used or relied upon by you for any other purpose or by any other person, nor
may copies be delivered to any other person, without in each instance our prior
written consent. You may, however, deliver a copy of this opinion to your
accountants, attorneys, and other professional advisors, to governmental
regulatory agencies having jurisdiction over you, to permitted assignees of the
Loans in connection with such assignment and to participants in connection with
their purchase of a participation interest in the Loans. At your request, we
hereby consent to reliance on this opinion by such assignees (but not such
participants) to the same extent as the addressees hereof as if this opinion
were addressed and had been delivered to them on the date of this opinion, on
the condition and understanding that (i) we assume no responsibility or
obligation to consider the applicability or correctness of this opinion to any
person other than its addressee(s) and (ii) any such reliance by a future
assignee and by the Administrative Agent on behalf of such future assignee must
be actual and reasonable under the circumstances existing at the time of
assignment. This opinion is expressly limited to the matters set forth above,
and we render no opinion, whether by implication or otherwise, as to any other
matters. This letter speaks only as of the date hereof and we assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances that arise after the date of this opinion and come to our
attention, or any future changes in laws.
Respectfully submitted,
5
EXHIBIT C
FORM OF INCREASING LENDER SUPPLEMENT
INCREASING LENDER SUPPLEMENT, dated __________, 20___ (this
"Supplement"), by and among each of the signatories hereto, to the Credit
Agreement, dated as of September 14, 2005 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Pacific
Sunwear of California, Inc. (the "Borrower"), the Lenders party thereto and
JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H
WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the
Borrower has the right, subject to the terms and conditions thereof, to
effectuate from time to time an increase in the aggregate Commitments under the
Credit Agreement by requesting one or more Lenders to increase the amount of its
Commitment;
WHEREAS, the Borrower has given notice to the Administrative Agent
of its intention to increase the aggregate Commitments pursuant to such Section
2.20; and
WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the
undersigned Increasing Lender now desires to increase the amount of its
Commitment under the Credit Agreement by executing and delivering to the
Borrower and the Administrative Agent this Supplement;
NOW, THEREFORE, each of the parties hereto hereby agrees as follows:
1. The undersigned Increasing Lender agrees, subject to the terms
and conditions of the Credit Agreement, that on the date of this Supplement it
shall have its Commitment increased by $[__________], thereby making the
aggregate amount of its total Commitments equal to $[__________].
2. The Borrower hereby represents and warrants that no Default or
Event of Default has occurred and is continuing on and as of the date hereof.
3. Terms defined in the Credit Agreement shall have their defined
meanings when used herein.
4. This Supplement shall be governed by, and construed in accordance
with, the laws of the State of New York.
5. This Supplement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the undersigned has caused this
Supplement to be executed and delivered by a duly authorized officer on the date
first above written.
[INSERT NAME OF INCREASING LENDER]
By: ____________________________________
Name:
Title:
Accepted and agreed to as of the date first written above:
PACIFIC SUNWEAR OF CALIFORNIA, INC.
By:______________________________________
Name:
Title:
Acknowledged as of the date first written above:
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
By:______________________________________
Name:
Title:
2
EXHIBIT D
FORM OF AUGMENTING LENDER SUPPLEMENT
AUGMENTING LENDER SUPPLEMENT, dated __________, 20___ (this
"Supplement"), to the Credit Agreement, dated as of September 14, 2005 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Pacific Sunwear of California, Inc. (the "Borrower"),
the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent
(in such capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Credit Agreement provides in Section 2.20 thereof that
any bank, financial institution or other entity may extend Commitments under the
Credit Agreement subject to the approval of the Borrower and the Administrative
Agent, by executing and delivering to the Borrower and the Administrative Agent
a supplement to the Credit Agreement in substantially the form of this
Supplement; and
WHEREAS, the undersigned Augmenting Lender was not an original party
to the Agreement but now desires to become a party thereto;
NOW, THEREFORE, each of the parties hereto hereby agrees as follows:
1. The undersigned Augmenting Lender agrees to be bound by the
provisions of the Credit Agreement and agrees that it shall, on the date of this
Supplement, become a Lender for all purposes of the Credit Agreement to the same
extent as if originally a party thereto, with a Commitment of $[__________].
2. The undersigned Augmenting Lender (a) represents and warrants
that it has full power and authority, and has taken all action necessary, to
execute and deliver this Supplement and to consummate the transactions
contemplated hereby and by the Credit Agreement and to become a Lender under the
Credit Agreement; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.01 thereof, as applicable, and has reviewed such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Supplement; (c) agrees that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; (e) agrees that it will be bound by the provisions of the
Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (f) if it is a Foreign Lender,
attached to this Supplement is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the undersigned.
3. The undersigned's address for notices for the purposes of the
Credit Agreement is as follows:
[__________]
4. The Borrower hereby represents and warrants that no Default or
Event of Default has occurred and is continuing on and as of the date hereof.
5. Terms defined in the Credit Agreement shall have their defined
meanings when used herein.
6. This Supplement shall be governed by, and construed in accordance
with, the laws of the State of New York.
7. This Supplement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same document.
[remainder of this page intentionally left blank]
2
IN WITNESS WHEREOF, each of the undersigned has caused this
Supplement to be executed and delivered by a duly authorized officer on the date
first above written.
[INSERT NAME OF AUGMENTING LENDER]
By: ____________________________________
Name:
Title:
Accepted and agreed to as of the date first written above:
PACIFIC SUNWEAR OF CALIFORNIA, INC.
By:_____________________________________
Name:
Title:
Acknowledged as of the date first written above:
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
By:_____________________________________
Name:
Title:
3
EXHIBIT E
LIST OF CLOSING DOCUMENTS
[Attached]