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Exhibit 10.26
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of October 5, 1993
among
MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC.,
WEST COAST LIQUIDATORS, INC.,
PNS STORES, INC.,
THE LENDERS LISTED HEREIN,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as Administrative Agent
and
CONTINENTAL BANK N.A.
as Co-Agent
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MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC.
WEST COAST LIQUIDATORS, INC.
PNS STORES, INC.
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of October 5, 1993
TABLE OF CONTENTS
Section 1. DEFINITIONS 2
1.1 Certain Defined Terms 2
1.2 Computation of Time Periods 27
1.3 Accounting Terms 28
1.4 Other Definitional Provisions 28
Section 2. AMOUNT AND TERMS OF COMMITMENTS
AND LOANS 28
2.1 Loans 28
2.2 Making the Loan 32
2.3 Fees 40
2.4 Voluntary Reductions of Commitments 40
2.5 Repayment 41
2.6 Optional and Mandatory Prepayments 41
2.7 Interest 43
2.8 Interest Rate Determination and Protection 44
2.9 Voluntary Conversion or Continuation of Loans 45
2.10 Increased Costs and Funding Losses 47
2.11 Payments and Computations 49
2.12 Taxes 50
2.13 Sharing of Payments, Etc. 53
2.14 Use of Proceeds 54
2.15 Illegality 54
2.16 Letters of Credit 55
2.17 Evidence of Debt; Bid Notes 63
2.18 Obligations Joint and Several 64
2.19 Contribution Among Borrowers 65
2.20 Financial Condition of Borrowers 65
2.21 Extension of Revolver Maturity Date 66
2.22 Existing Loans and Existing Letters of Credit 66
Section 3. CONDITIONS WITH RESPECT TO LOANS
AND LETTERS OF CREDIT 67
3.1 Conditions to Initial Loans 67
3.2 Conditions to All Loans 69
3.3 Conditions to All Letters of Credit 70
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Section 4. REPRESENTATIONS AND WARRANTIES 71
4.1 Organization, Powers, Good Standing and
Subsidiaries 71
4.2 Authorization of Borrowing, etc. 72
4.3 Financial Condition 73
4.4 Changes, Etc. 73
4.5 Litigation; Adverse Facts 73
4.6 Payment of Tax 74
4.7 Materially Adverse Agreements; Performance 74
4.8 Governmental Regulation 75
4.9 Securities Activities 75
4.10 Employee Benefit Plans 75
4.11 Patents, Trademarks and Licenses 75
4.12 Title to Properties; Liens 76
4.13 Environmental Protection 76
4.14 Labor Matters 78
4.15 Disclosure 78
4.16 No Partnerships or Joint Ventures 79
Section 5. AFFIRMATIVE COVENANTS 79
5.1 Financial Statements and Other Reports 79
5.2 Corporate Existence, etc. 84
5.3 Payment of Taxes and Claims; Tax Consolidation 84
5.4 Maintenance of Properties; Insurance 85
5.5 Equal Security for Obligations; No Further
Negative Pledges 85
5.6 Inspection; Records, etc. 86
5.7 Compliance with Laws, etc. 86
5.8 Further Assurances 86
5.9 Environmental Notice and Inspection 87
Section 6. NEGATIVE COVENANTS 89
6.1 Indebtedness 89
6.2 Liens 90
6.3 Investments 91
6.4 Contingent Obligations 92
6.5 Restricted Junior Payments 92
6.6 Financial Covenants 93
6.7 Restriction on Fundamental Changes 93
6.8 Restriction on Asset Sales 94
6.9 Sales and Lease-Backs 95
6.10 Sale or Discount of Receivables 95
6.11 Transactions with Stockholders and Affiliates 95
6.12 Disposal of Subsidiary Stock 96
6.13 Limitation on Consolidated Capital Expenditures 96
6.14 Conduct of Business 96
6.15 Independence of Covenants 97
6.16 Use of Proceeds 97
Section 7. EVENTS OF DEFAULT 97
7.1 Failure to Make Payments When Due 97
7.2 Breach of Warranty 97
7.3 Breach of Covenants 97
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7.4 Breach of Other Agreements 98
7.5 Bankruptcy 98
7.6 Judgments 99
7.7 Dissolution 99
7.8 ERISA 100
7.9 Control of the Borrowers 101
Section 8. THE ADMINISTRATIVE AGENT; CO-AGENTS 104
8.1 Appointment and Authorization 104
8.2 Delegation of Duties 104
8.3 Liability of Administrative Agent 104
8.4 Reliance by Administrative Agent 105
8.5 Notice of Default 106
8.6 Credit Decision 106
8.7 Indemnification 107
8.8 Administrative Agent in Individual Capacity 108
8.9 Successor Administrative Agent 108
8.10 Co-Agents 109
Section 9. THE LENDERS' REPRESENTATIONS 109
Section 10. MISCELLANEOUS 109
10.1 Amendments, Etc. 109
10.2 Notices, Etc. 110
10.3 No Waiver; Remedies 111
10.4 Costs and Expenses 111
10.5 Right of Set-off 111
10.6 Indemnification 112
10.7 Binding Effect 113
10.8 Assignments and Participations 113
10.9 Severability 117
10.10 Survival of Warranties and Certain Agreements 117
10.11 Headings 117
10.12 Applicable Law; Jurisdiction; Waiver of Jury
Trial 117
10.13 Termination of Collateral Documents; Release of
Security 118
10.14 Execution in Counterparts; Effectiveness 119
10.15 Obligations Several 119
10.16 Complete Agreement 119
SIGNATURE PAGES
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EXHIBITS
I FORM OF NOTICE OF BORROWING (1.1)
II FORM OF NOTICE OF CONVERSION/CONTINUATION (1.1)
III FORM OF BID NOTE (1.1)
IV FORM OF COMPETITIVE BID REQUEST (2.2E)
V FORM OF COMPETITIVE BID (2.2E)
VI FORM OF COMPLIANCE CERTIFICATE (1.1)
VII FORM OF OPINIONS OF COUNSEL TO BORROWERS (3.1)
VIII FORM OF OPINION OF O'MELVENY & MYERS (3.1)
IX FORM OF ASSIGNMENT AND ACCEPTANCE (1.1)
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SCHEDULES
A APPLICABLE LENDING OFFICES
B SUBSIDIARIES
C PATENT, TRADEMARK AND COPYRIGHT DISCLOSURE
D ENVIRONMENTAL DISCLOSURE
E RESTRICTED JUNIOR PAYMENTS
F EXISTING INDEBTEDNESS AND LIENS
G EXISTING INVESTMENTS
H EXISTING CONTINGENT OBLIGATIONS
I CONFLICTS DISCLOSURE
J LITIGATION DISCLOSURE
K SPECIFIED TRADEMARKS
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MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC.
WEST COAST LIQUIDATORS, INC.
PNS STORES, INC.
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of October 5, 1993
This Amended and Restated Credit Agreement is
dated as of October 5, 1993, and is entered into by and
among MAC FRUGAL'S BARGAINS o CLOSE-OUTS INC., a Delaware
corporation (the "Company"), WEST COAST LIQUIDATORS, INC., a
California corporation ("WCL"), PNS STORES, INC., a
California corporation ("PNS") (the Company, WCL and PNS are
sometimes referred to herein individually as a "Borrower"
and collectively as the "Borrowers"), the LENDERS listed on
the signature pages hereof (such lenders, together with each
Person that may become a party hereto pursuant to subsection
10.8 hereof, are referred to herein individually as a
"LENDER" and collectively as the "LENDERS"), BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as
administrative agent for the Lenders and the Issuing Banks
(in such capacity, the "ADMINISTRATIVE AGENT") and
CONTINENTAL BANK N.A. as co-agent (in such capacity, the
"CO-AGENT").
PRELIMINARY STATEMENTS
A. As of May 15, 1991, the Borrowers entered
into a Credit Agreement with certain lenders (the "EXISTING
LENDERS"), BofA (as successor by merger to Security Pacific
National Bank), as agent and The First National Bank of
Chicago, as co-agent (as amended to the date hereof, the
"EXISTING CREDIT AGREEMENT").
B. The Borrowers desire to amend and restate the
Existing Credit Agreement to provide, among other things,
(i) that the Lenders extend certain credit facilities to the
Borrowers and that the Issuing Banks issue Letters of Credit
for the account of the Borrowers, (ii) for a bid loan
option, (iii) for performance-based pricing, and (iv) for
certain other changes and amendments.
C. Concurrently with the effectiveness of this
Agreement, the Collateral Documents (as defined in the
Existing Credit Agreement) shall be terminated and all Liens
pursuant to the Collateral Documents in favor of the agent
under the Existing Credit Agreement, in such capacity, or in
favor of any Existing Lender, in such capacity, shall be
terminated and released.
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NOW, THEREFORE, in consideration of the premises
and the agreements, provisions and covenants herein
contained, the Borrowers, the Lenders, the Administrative
Agent, the Co-Agent and the Issuing Banks agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS
The following terms used in this Agreement shall
have the following meanings:
"ABSOLUTE RATE" has the meaning assigned to
such term in subsection 2.2E(iii)(b)(IV).
"ABSOLUTE RATE AUCTION" means a solicitation
of Competitive Bids setting forth Absolute Rates
pursuant to subsection 2.2E.
"ABSOLUTE RATE BID LOAN" means a Bid Loan
that bears interest at a rate determined with
reference to the Absolute Rate.
"ADJUSTED EURODOLLAR RATE" means, for the Interest
Period for each Eurodollar Rate Loan comprising part of
the same Borrowing, an interest rate per annum equal to
the rate per annum obtained by dividing (a) the rate of
interest determined by the Administrative Agent to be
the arithmetic average of the rates per annum (rounded
upward to the nearest whole multiple of 1/100 of 1%
annum) at which deposits in U.S. dollars are offered by
each Reference Bank in London, England to prime banks
in the London interbank market at 11:00 A.M. (London
time) two Business Days before the first day of such
Interest Period in an amount substantially equal to the
Eurodollar Rate Loan comprising part of such Borrowing
and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage (as defined below) for such Interest
Period. If any Reference Bank fails to provide its
offered rate to the Administrative Agent, the Adjusted
Eurodollar Rate shall be determined on the basis of the
average of the offered rate(s) of the other Reference
Bank(s). The "EURODOLLAR RATE RESERVE PERCENTAGE" for
the Interest Period for each Eurodollar Rate Loan
comprising part of the same Borrowing means the reserve
percentage applicable two Business Days before the
first day of such Interest Period under regulations
issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including,
but not limited to, any emergency, supplemental or
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other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York City with
respect to liabilities or assets consisting of or
including eurocurrency liabilities (or with respect to
any other category of liabilities which includes
deposits by reference to which the interest rate on a
Eurodollar Rate Loan is determined) having a term equal
to such Interest Period. The Adjusted Eurodollar Rate
shall be adjusted automatically as of the effective
date of any change in the Eurodollar Rate Reserve
Percentage.
"ADMINISTRATIVE AGENT" means BofA, and any
successor thereto appointed pursuant to subsection 8.9.
"AFFILIATE", as applied to any Person, means any
other Person directly or indirectly controlling,
controlled by, or under common control with, that
Person. For the purposes of this definition, "control"
(including with correlative meanings, the terms
"controlling", "controlled by" and "under common
control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to
direct or cause the direction of the management and
policies of that Person, whether through the ownership
of voting securities or by contract or otherwise.
"AGENT-RELATED PERSONS" means BofA and any
successor agent arising under subsection 8.9, together
with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.
"AGREED UPON CHARGE" has the meaning assigned to
that term in subsection 2.16E.
"AGREEMENT" means this Amended and Restated Credit
Agreement dated as of October 5, 1993, as it may
hereafter be amended, supplemented, restated or
otherwise modified from time to time.
"APPLICABLE LENDING OFFICE" means, with respect to
any Lender, such Lender's Domestic Lending Office in
the case of a Base Rate Loan and such Lender's
Eurodollar Lending Office in the case of a Eurodollar
Rate Loan.
"APPLICABLE MARGIN" means with respect to
Eurodollar Rate Loans and the fees payable with respect
to Standby Letters of Credit pursuant to subsection
2.16E(2), the relevant percentage per annum set forth
below:
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Fixed Charge Coverage Ratio Applicable Margin
Less than or equal to 1.25 0.750%
Greater than 1.25 but
less than 2.00 0.625%
Greater than or equal to 2.00 0.500%
The Applicable Margin shall be determined by the
Fixed Charge Coverage Ratio set forth in the relevant
Applicable Margin Certificate for the four-fiscal
quarter period covered by such Applicable Margin
Certificate. The Applicable Margin shall become
effective (including with respect to outstanding
Eurodollar Rate Loans) upon delivery of an Applicable
Margin Certificate and shall remain effective until the
delivery of the next Applicable Margin Certificate;
provided that if such Applicable Margin Certificate is
not delivered at the time required pursuant to
subsection 5.1(iii), the Applicable Margin shall equal
0.750% until the date such Applicable Margin
Certificate is delivered. Notwithstanding the
foregoing, from the Closing Date until delivery of the
Applicable Margin Certificate covering the four-fiscal
quarter period ending January 30, 1994, the Applicable
Margin shall equal 0.625%.
"APPLICABLE MARGIN CERTIFICATE" means an Officers'
Certificate delivered with the financial statements
required pursuant to subsection 5.1(i) and (ii) setting
forth in reasonable detail calculation of the Fixed
Charge Coverage Ratio for the four-fiscal quarter
period ending as of the Fiscal Quarter End of the last
fiscal quarter covered by such financial statements.
"ASSET SALE" means the sale, transfer or other
disposition by any Borrower or any of its Subsidiaries
to any Person of any asset of any such Borrower or any
such Subsidiary (other than sales, transfers or other
dispositions of Inventory in the ordinary course of
business and obsolete equipment in the ordinary course
of business for which aggregate consideration for all
such sales, transfers and dispositions of such
equipment does not exceed $1,000,000 per Fiscal Year).
"ASSIGNMENT AND ACCEPTANCE" means an assignment
and acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit IX hereto.
"ATTORNEY COSTS" means and includes all reasonable
fees and disbursements of any law firm or other
external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
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"AUTHORIZED PERSON" means an officer or employee
of a Borrower designated by the President, an Executive
Vice President or a Senior Vice President of the
Borrower making such designation, in a certificate
delivered to the Administrative Agent on the Closing
Date as being authorized to give Notices of Borrowing,
Notices of Continuation/Conversion or requests for
Letters of Credit, which certificate may be amended
from time to time by the President, any Executive Vice
President or any Senior Vice President of such Borrower
to add or subtract names therefrom.
"BANKRUPTCY CODE" means Title 11 of the United
States Code entitled "Bankruptcy" as now and hereafter
in effect, or any successor statute.
"BASE RATE" means, for any period, a fluctuating
interest rate per annum as shall be in effect from time
to time which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly
by BofA in San Francisco, California, from time to
time, as BofA's "reference rate". It is a rate
set by BofA based upon various factors including
BofA's costs and desired return, general economic
conditions and other factors, and is used as a
reference point for pricing some loans, which may
be priced at, above, or below such announced rate;
and
(b) 0.50% per annum above the latest Federal
Funds Rate.
Any change in the reference rate announced by
BofA shall take effect at the opening of business
on the day specified in the public announcement of
such change.
"BASE RATE LOAN" means a Committed Loan which
bears interest as provided in subsection 2.7A.
"BID BORROWING" means a Borrowing hereunder
consisting of one or more Bid Loans made to the
Borrowers on the same day by one or more Lenders.
"BID LOAN" means a Loan by a Lender to the
Borrowers under subsection 2.1C, which may be a
LIBOR Bid Loan or an Absolute Rate Bid Loan.
"BID LOAN LENDER" means, in respect of any
Bid Loan, the Lender making such Loan to the
Borrowers.
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"BID NOTE" means a promissory note issued pursuant
to subsection 2.17D payable to the order of a Lender in
substantially the form of Exhibit III annexed hereto.
"BOfA" means Bank of America National Trust and
Savings Association, a national banking association.
"BORROWER" means any one or more of the Company,
WCL or PNS.
"BORROWING" means a borrowing consisting of Loans
made on the same day, and may be a Bid Borrowing or a
Committed Borrowing.
"BUSINESS DAY" means (i) for all purposes other
than as covered by clause (ii) below, any day excluding
Saturday, Sunday and any day which is a legal holiday
under the laws of the State of New York or the State of
California or is a day on which banking institutions
located in either state are authorized by law or other
governmental action to close and (ii) with respect to
all notices, determinations, fundings and payments in
connection with Eurodollar Rate Loans and LIBOR Bid
Loans, any day which is a Business Day described in
clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the Eurodollar
market.
"CAPITAL ADEQUACY REGULATION" means any guideline,
request or directive of any central bank or other
Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in
each case, regarding capital adequacy of any bank or of
any corporation controlling a bank.
"CAPITAL LEASE", as applied to any Person, means
any lease of any property (whether real, personal or
mixed) by that Person as a lessee that, in conformity
with GAAP, should be accounted for as a capital lease
on the balance sheet of that Person.
"CASH" means money, currency or a credit balance
in a deposit account.
"CASH COLLATERAL ACCOUNT" has the meaning assigned
to that term in the penultimate paragraph of Section 7.
"CASH EQUIVALENTS" means (i) marketable direct
obligations issued or unconditionally guarantied by the
United States Government or issued by any agency
thereof and backed by the full faith and credit of the
United States, in each case maturing within one year
from the date of acquisition thereof; (ii) marketable
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direct obligations issued by any state of the United
States of America or any political subdivision of any
such state or any public instrumentality thereof
maturing within one year from the date of acquisition
thereof and, at the time of acquisition, either (a)
having a rating of at least "A2" by Standard & Poor's
Corporation or at least "P2" by Moody's Investors
Service, Inc. or an equivalent long-term debt rating or
(b) supported by standby letters of credit issued by
any Lender; (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least
"A2" by Standard & Poor's Corporation and at least "P2"
by Moody's Investors Service, Inc.; (iv) certificates
of deposit or bankers' acceptances maturing within one
year from the date of acquisition thereof issued by any
Lender or by any other commercial bank organized under
the laws of the United States of America or any state
thereof or the District of Columbia having combined
capital and surplus of not less than $200,000,000;
(v) repurchase agreements with any commercial bank
organized under the laws of the United States of
America or any state thereof or the District of
Columbia having combined capital and surplus of not
less than $200,000,000, with any Lender or with any
primary dealer or investment bank with its long-term
debt rated at least "A-" by Standard & Poor's
Corporation and at least "A3" by Moody's Investors
Service, Inc. and having combined capital and surplus
of not less than $200,000,000, in each case relating to
marketable direct obligations issued or unconditionally
guarantied by the United States Government or issued by
any agency thereof and backed by the full faith and
credit of the United States; provided, that the terms
of such agreements comply with the guidelines set forth
in the Federal Financial Institutions Examination
Council Supervisory Policy-Repurchase Agreements of
Depository Institutions With Securities Dealers and
Others as adopted by the Comptroller of the Currency on
October 31, 1985; and (vi) money market mutual funds
organized under the laws of the United States of
America or any state thereof or the District of
Columbia that invest primarily in any of the types of
Cash Equivalents defined in clauses (i) through (v) of
this definition; provided, that in each case any
investment in such mutual funds by its terms requires,
or permits the holder of such investment at its option
to require, repayment, redemption or repurchase thereof
on an overnight basis from the date of acquisition
thereof.
"CO-AGENT" has the meaning assigned to such term
in the first paragraph of this Agreement.
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"CLEAN-DOWN DEBT" means, as at any date of
determination, the sum of (i) the outstanding Loans,
(ii) that portion of the Letter of Credit Usage
consisting of Unreimbursed drawings under Letters of
Credit, and (iii) outstanding Indebtedness of the
Borrowers permitted under subsection 6.1(x).
"CLEAN-DOWN PERIOD" has the meaning assigned to
such term in subsection 2.1A.
"CLOSING DATE" means the date on or before
October 15, 1993 that is the date under this Agreement
on which the initial Loans are made and the conditions
set forth in subsection 3.1 are satisfied or waived.
"COLLATERAL DOCUMENTS" means the Collateral
Documents (as such term is defined in the Existing
Credit Agreement) outstanding immediately prior to the
Closing Date.
"COMMERCIAL LETTERS OF CREDIT" means Letters of
Credit issued in favor of the Borrowers for the purpose
of providing the principal payment mechanism in
connection with the purchase of Inventory by the
Borrowers in the ordinary course of business.
"COMMITMENT" of any Lender means such Lender's
Revolving Commitment and with respect to the Swing Line
Lender, its Swing Line Commitment, and the
"Commitments" of any Lender means the total of all the
Commitments of such Lender.
"COMMITTED BORROWING" means a Borrowing hereunder
consisting of Committed Loans made on the same day and,
in the case of Eurodollar Rate Loans, having the same
Interest Periods.
"COMMITTED LOAN" means a Revolving Loan made by a
Lender under subsection 2.1A, or a Swing Line Loan made
by the Swing Line Lender under subsection 2.1B and may
be a Eurodollar Rate Loan or a Base Rate Loan (each of
which shall be a "TYPE" of Loan).
"COMPANY" means Mac Frugal's Bargains o Close-Outs
Inc.
"COMPETITIVE BID" means an offer by a Lender
to make a Bid Loan in accordance with subsection
2.2E(ii).
"COMPETITIVE BID REQUEST" has the meaning
assigned to such term in subsection 2.2E(i).
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"COMPLIANCE CERTIFICATE" means a certificate
substantially in the form of Exhibit VI annexed hereto,
delivered to the Lenders by the Borrowers pursuant to
subsection 5.1(iii).
"CONSOLIDATED", when used with respect to any of
the terms defined herein, refers to such terms as
reflected in a consolidation of the accounts of the
Company and its Subsidiaries in conformity with GAAP
(including giving effect to the elimination of all
intercompany items in conformity with GAAP).
"CONSOLIDATED ADJUSTED CASH FLOW" means, for any
period, the sum of the amounts for such period of
(i) Consolidated Net Income, (ii) depreciation expense,
(iii) amortization expense with respect to all
intangibles of the Company and its Subsidiaries
(determined on a Consolidated basis in conformity with
GAAP), (iv) Consolidated Interest Expense (net of
interest income), (v) Consolidated Operating Lease
Payments actually paid during such period,
(vi) increases in deferred income taxes, (vii) non-cash
extraordinary losses and non-cash charges reducing
Consolidated Net Income, minus the sum of (x) decreases
in any deferred income taxes for such period,
(y) Consolidated Capital Expenditures for such period,
and (z) non-cash extraordinary gains increasing
Consolidated Net Income for such period.
"CONSOLIDATED ASSETS" means, as at any date of
determination, the total assets of the Company and the
Subsidiaries on a Consolidated basis determined in
conformity with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any
period, the expenditures (excluding capitalized
interest), whether paid in cash or accrued as a
liability, including the portion of Capital Leases that
is capitalized on the Consolidated balance sheet of the
Company and its Subsidiaries (but excluding Capital
Leases resulting from sale and leasebacks consummated
within the same 12 month period in which the underlying
property has been acquired), by the Company and its
Subsidiaries during that period that are or should be
included in "capital expenditures", "additions to
property, plant or equipment" or comparable items in
the Consolidated cash flow statement of the Company and
its Subsidiaries; provided, however, that expenditures
of insurance or condemnation proceeds used to rebuild
or replace destroyed or lost properties relating to
such insurance or condemnation proceeds shall not be
included as Consolidated Capital Expenditures.
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"CONSOLIDATED CURRENT ASSETS" means, as at any
date of determination, the Current Assets of the
Company and its Subsidiaries on a Consolidated basis
determined in conformity with GAAP.
"CONSOLIDATED CURRENT LIABILITIES" means, as at
any date of determination, the current liabilities of
the Company and its Subsidiaries on a Consolidated
basis determined in conformity with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means,
for any period, the ratio of (A) Consolidated Adjusted
Cash Flow for such period to (B) Consolidated Fixed
Charges for such period.
"CONSOLIDATED FIXED CHARGES" means, for any
period, the sum of (i) Consolidated Interest Expense
(net of interest income) for such period, (ii) the
aggregate regularly scheduled principal installments of
all Consolidated Funded Debt paid or payable during
such period, and (iii) Consolidated Operating Lease
Payments paid or payable during such period.
"CONSOLIDATED FUNDED DEBT" means, as at any date
of determination, the sum of (i) the outstanding Bid
Loans, (ii) the outstanding Revolving Loans, (iii) the
outstanding Swing Line Loans, (iv) that portion of the
Letter of Credit Usage consisting of unreimbursed
drawings under Letters of Credit, (v) the portion of
obligations with respect to Capital Leases which is
properly classified as a liability on the Consolidated
balance sheet of the Borrowers in conformity with GAAP,
(vi) Indebtedness of the Borrowers secured by real
property determined on a Consolidated basis in
conformity with GAAP and (vii) other Consolidated Long
Term Indebtedness.
"CONSOLIDATED INTEREST EXPENSE" means, for any
period, total interest expense (including that portion
attributable to Capital Leases in conformity with GAAP)
of the Company and its Subsidiaries for such period on
a Consolidated basis, including, without limitation,
net costs under Interest Rate Agreements and fees
payable to the Administrative Agent and the Lenders in
connection with the Loans (including, without
limitation, the commitment fees referred to in
subsection 2.3A and the fees referred to subsection
2.3B, other than fees paid on or prior to the Closing
Date).
"CONSOLIDATED LIABILITIES" means, as at any date
of determination, the total liabilities of the Company
and its Subsidiaries on a Consolidated basis determined
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in conformity with GAAP, including, without limitation,
(i) any balance sheet liability with respect to a
Pension Plan recognized pursuant to Financial
Accounting Standards Board Statements 87 or 88 and
(ii) any withdrawal liability under Section 4201 of
ERISA with respect to a withdrawal from a Multiemployer
Plan, as such liability may be set forth in a notice of
withdrawal liability under Section 4219 (and as
adjusted from time to time subsequent to the date of
such notice).
"CONSOLIDATED LONG TERM INDEBTEDNESS" means, at
any date of determination, (i) all Indebtedness
maturing one year or more from the date of creation
thereof, (ii) all Indebtedness directly or indirectly
renewable or extendible, at the option of the debtor,
by its terms or by the terms of any instrument or
agreement relating thereto, to a date one year or more
from the date of creation thereof and (iii) all
Indebtedness under a revolving credit or similar
agreement obligating the lender or lenders to extend
credit over a period of one year or more even though
such Indebtedness might otherwise conform to the
definition of Consolidated Current Liabilities.
"CONSOLIDATED NET INCOME" means, for any period,
the net income (or loss) of the Company and its
Subsidiaries on a Consolidated basis determined in
conformity with GAAP for such period taken as a single
accounting period; provided that there shall be
excluded (i) the income (or loss) of any Person (other
than a Subsidiary of the Company) in which any other
Person (other than the Company or any of its
Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other
distributions actually paid to the Company or any of
its Subsidiaries by such Person during such period,
(ii) the income (or loss) of any Person accrued prior
to the date it becomes a Subsidiary of the Company or
is merged into or consolidated with the Company or any
of its Subsidiaries or that Person's assets are
acquired by the Company or any of its Subsidiaries, and
(iii) the income of any Subsidiary (other than PNS and
WCL) of the Company to the extent that the declaration
or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to
that Subsidiary.
"CONSOLIDATED OPERATING LEASE PAYMENTS" means, for
any period, all rental payments and other amounts due
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under all Operating Leases of the Company and its
Subsidiaries during such period.
"CONSOLIDATED TANGIBLE ASSETS" means, at any date
of determination, (i) Consolidated Assets minus
(ii) goodwill, patents, trademarks and other
intellectual property, organizational expense, deferred
research and development costs, deferred marketing
expenses and other intangible assets of the Company and
its Subsidiaries (determined on a Consolidated basis in
conformity with GAAP) for the period commencing on the
Closing Date and ending on the date of such
determination.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any
date of determination, the excess of Consolidated
Tangible Assets over Consolidated Liabilities.
"CONTINGENT OBLIGATION", as applied to any Person,
means any direct or indirect liability, contingent or
otherwise, of that Person with respect to any
Indebtedness, lease, dividend, letter of credit or
other obligation of another, including, without
limitation, any such obligation directly or indirectly
guarantied, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made,
or discounted or sold with recourse by that Person, or
in respect of which that Person is otherwise directly
or indirectly liable, including, without limitation,
any such obligation for which that Person is in effect
liable through any agreement (contingent or otherwise)
to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to
maintain the solvency or any balance sheet item, level
of income or other financial condition of the obligor
of such obligation, or to make payment for any
products, materials or supplies or for any
transportation, services or lease regardless of the
non-delivery or non-furnishing thereof, in any case if
the purpose or intent of such agreement is to provide
assurance that such obligation will be paid or
discharged, or that any agreements relating thereto
will be complied with, or that the holders of such
obligation will be protected (in whole or in part)
against loss in respect thereof. The amount of any
Contingent Obligation shall be equal to the amount of
the obligation so guarantied or otherwise supported.
"CONTRACTUAL OBLIGATION", as applied to any
Person, means any provision of any material indenture,
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mortgage, deed of trust, contract, undertaking,
agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound
or to which it or any of its properties is subject.
"CONVERSION" and "CONVERT" and "CONVERTED" each
refers to a conversion of Eurodollar Rate Loans into
Base Rate Loans, or vice versa, in accordance with the
terms of this Agreement.
"CURRENT ASSETS" as applied to any Person, means,
at any date of determination, the total assets of such
Person that may be properly classified as current
assets in conformity with GAAP.
"DOLLARS" or the sign "$" means the lawful money
of the United States of America.
"DOMESTIC LENDING OFFICE" means, with respect to
any Lender, the office of such Lender specified as its
"Domestic Lending Office" opposite its name on Schedule
A hereto or in the Assignment and Acceptance pursuant
to which it became a Lender, or such other office of
such Lender as such Lender may from time to time
specify to the Borrowers and the Administrative Agent.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank
organized under the laws of the United States, or any
State thereof and having a combined capital and surplus
of at least $500,000,000; (ii) a commercial bank
organized under the laws of any other country, or a
political subdivision thereof, and having a combined
capital and surplus of at least $500,000,000 provided
that (x) such bank is acting through a branch or agency
located in the United States or (y) such bank is
organized under the laws of a country that is a member
of the OECD or a political subdivision of such country;
and (iii) any Affiliate of a Lender, in each case that
is reasonably acceptable to the Administrative Agent;
provided, however, that no Affiliate of any Loan Party
shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any Pension Plan,
any employee welfare benefit plan, or any other
employee benefit plan which is described in Section
3(3) of ERISA and which is maintained for employees of
the Borrowers or any ERISA Affiliate of the Borrowers.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all
liabilities, obligations, responsibilities, Remedial
Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and
expenses (including all reasonable fees, disbursements
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and expenses of counsel, expert and consulting fees and
costs of investigation and feasibility studies), fines,
penalties, sanctions and interest, incurred as a result
of any claim or demand, by any Person, whether based in
contract, tort, implied or express warranty, strict
liability, criminal or civil statute, including any
Hazardous Materials Law, permit, law, rule, regulation,
order or agreement with a governmental authority or
other Person, arising from environmental, health or
safety conditions related to, or the Release or
threatened Release by reason of, the past, present or
future operations of the Company or any of its
Subsidiaries.
"ENVIRONMENTAL LIEN" means any Lien in favor of
any Governmental Authority for Environmental
Liabilities and Costs.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and
any successor statute.
"ERISA AFFILIATE", as applied to any Person, means
(i) any corporation which is a member of a controlled
group of corporations within the meaning of Section
414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether
or not incorporated) which is a member of a group of
trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code
of which that Person is a member; and (iii) any member
of an affiliated service group within the meaning of
Section 414(m) or (o) of the Internal Revenue Code of
which that Person, any corporation described in clause
(i) above or any trade or business described in clause
(ii) above is a member.
"EURODOLLAR LENDING OFFICE" means, with respect to
any Lender, the office of such Lender specified as its
"Eurodollar Lending Office" opposite its name on
Schedule A hereto or in the Assignment and Acceptance
pursuant to which it became a Lender (or, if no such
office is specified, its Domestic Lending Office) or
such other office of such Lender as such Lender may
from time to time specify to the Borrowers and the
Administrative Agent.
"EURODOLLAR RATE LOAN" means a Committed Loan
which bears interest as provided in subsection 2.7B.
"EVENT OF DEFAULT" means each of the events set
forth in Section 7.
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"EXCHANGE ACT" means the Securities Exchange Act
of 1934, as amended from time to time, and any
successor statute.
"EXISTING CREDIT AGREEMENT" has the meaning
assigned to such term in the Preliminary Statements to
this Agreement.
"EXISTING LENDERS" has the meaning assigned to
such term in the Preliminary Statements to this
Agreement.
"EXISTING LETTERS OF CREDIT" has the meaning
assigned to such term in subsection 2.22.
"EXISTING LOANS" has the meaning assigned to such
term in subsection 2.22.
"FEDERAL FUNDS RATE" means, for any period, the
rate set forth in the weekly statistical release
designated as H.15(519), or any successor publication,
published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such day opposite the
caption "Federal Funds (Effective)". If on any
relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set
forth in the daily statistical release designated as
the Composite 3:30 p.m. Quotations for U.S. Government
Securities, or any successor publication, published by
the Federal Reserve Bank of New York (including any
such successor, the "COMPOSITE 3:30 P.M. QUOTATION")
for such day under the caption "Federal Funds Effective
Rate". If on any relevant day the appropriate rate for
such previous day is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the
rate for such day will be the arithmetic mean of the
rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York time) on
that day be each of three leading brokers of Federal
funds transactions in New York City selected by the
Administrative Agent.
"FEDERAL RESERVE BOARD" means the Board of
Governors of the Federal Reserve System.
"FISCAL QUARTER END" means for any fiscal quarter
in a Fiscal Year of the Borrowers, the last day of such
fiscal quarter which shall be determined in accordance
with GAAP applied on a consistent basis.
"FISCAL YEAR" means the fiscal year of the
Borrowers, which shall be the 52 or 53 week period
ending on the Sunday closest to January 31 in each year
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or such other period as the Borrowers may designate and
the Requisite Lenders may approve in writing, such
approval not to be unreasonably withheld and, if such
approval is withheld, with notice to the Borrowers
specifying the basis therefor.
"FUNDING DATE" means the date of the funding of a
Loan.
"GAAP" means generally accepted accounting
principles set forth in the opinions and pronouncements
of the Accounting Principles Board of the American
Institute of Certified Public Accountants and
statements and pronouncements of the Financial
Accounting Standards Board or in such other statements
by such other entity as may be approved by a
significant segment of the accounting profession, which
are applicable to the circumstances as of the date of
determination.
"GOVERNMENTAL AUTHORITY" means any nation or
government, any state or other political subdivision
thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or
administrative functions of or pertaining to
government, and any corporation or other entity owned
or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"HAZARDOUS MATERIALS" means (i) any chemical,
material or substance defined as or included in the
definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," or "toxic
substances" or words of similar import under any
applicable local, state or federal law or under the
regulations adopted or promulgated pursuant thereto,
including, without limitation, Hazardous Materials
Laws, (ii) any oil, petroleum or petroleum derived
substance, any drilling fluids, produced waters and
other wastes associated with the exploration,
development or production of crude oil, any flammable
substances or explosives, any radioactive materials,
(iii) asbestos in any form which is or could become
friable, urea formaldehyde foam insulation, electrical
equipment which contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in
excess of fifty parts per million, and (iv) any other
chemical, material or substance, exposure to which may
or could pose a hazard to the health and safety of the
owners or occupants of or any Persons surrounding any
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23
of the properties of the Company or any of its
Subsidiaries.
"HAZARDOUS MATERIALS LAWS" means all statutes,
ordinances, orders, rules, regulations, plans or
decrees and the like relating to health or welfare or
protection of the environment, including, without
limitation, those relating to fines, orders,
injunctions, penalties, damages, contribution, cost
recovery compensation, losses or injuries resulting
from the Release or threatened Release of Hazardous
Materials and to the generation, use, storage,
transportation, or disposal of Hazardous Materials, in
any manner applicable to the Company or any of its
Subsidiaries or any of their respective properties,
including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act
(42 U.S.C. Section 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), the Federal Water Pollution Control
Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), the Occupational Safety
and Health Act (29 U.S.C. Section 651 et seq.), and the
Emergency Planning and Community Right-to-Know Act (42
U.S.C. Section 11001 et seq.), each as amended or
supplemented, and any analogous future or present
local, state and federal statutes and regulations
promulgated pursuant thereto, each as in effect as of
the date of determination.
"INDEBTEDNESS", as applied to any Person, means
(i) all indebtedness for borrowed money, (ii) that
portion of obligations with respect to Capital Leases
which is properly classified as a liability on a
balance sheet in conformity with GAAP, (iii) notes
payable and drafts accepted representing extensions of
credit whether or not representing obligations for
borrowed money, (iv) any obligation owed for all or any
part of the deferred purchase price of property or
services which purchase price is due more than six
months from the date of incurrence of the obligation in
respect thereof or evidenced by a note or similar
written instrument, and (v) all similar indebtedness
secured by any Lien existing on any property or asset
owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by
that Person or is non-recourse to the credit of that
Person.
"INTEREST PAYMENT DATE" means, with respect to any
Eurodollar Rate Loan, or Bid Loan, the last day of each
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Interest Period applicable to such Loan and, with
respect to Base Rate Loans, the last Business Day of
each fiscal quarter, provided, however, that (a) if any
Interest Period for a Eurodollar Rate Loan or Bid Loan
exceeds three months, the date which falls three months
after the beginning of such Interest Period shall also
be an "Interest Payment Date" and (b) in respect of any
Bid Loan, such intervening days prior to the maturity
thereof as may be agreed between the Borrowers and the
applicable Bid Loan Lender shall also be "Interest
Payment Dates".
"INTEREST PERIOD" means, (a) with respect to each
Eurodollar Rate Loan comprising part of the same
Borrowing, the period commencing on the Funding Date of
such Eurodollar Rate Loan or the date of the Conversion
of any Base Rate Loan into such a Eurodollar Rate Loan
and ending on the last day of the period selected by
the Borrowers pursuant to the provisions below and,
thereafter, each subsequent period commencing on the
last day of the immediately preceding Interest Period
and ending on the last day of the period selected by
the Borrowers pursuant to the provisions below and
(b) with respect to any Bid Loan, a period commencing
on the Funding Date of such Bid Loan and ending on the
last day of the period selected by the Borrowers
pursuant to the provisions below. The duration of each
such Interest Period with respect to a Eurodollar Rate
Loan shall be one, two, three or six months (if
available), as the Borrowers may, upon notice received
by the Administrative Agent not later than 9:00 A.M.
(San Francisco time) on the third Business Day prior to
the first day of such Interest Period, select;
provided, however, that:
(i) no Interest Period with respect to any
Bid Loan shall exceed 183 days in the case of an
Absolute Rate Bid Loan and six months in the case
of a LIBOR Bid Loan;
(ii) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day; provided, however, that if such
extension would cause the last day of such
Interest Period to occur in the next following
calendar month, the last day of such Interest
Period shall occur on the next preceding Business
Day;
(iii) there shall be no more than fifteen
Interest Periods outstanding at any one time; and
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(iv) no Interest Period shall extend beyond
the Revolver Maturity Date.
"INTEREST RATE AGREEMENT" means any interest rate
swap agreement, interest rate cap agreement, interest
rate collar agreement or other similar agreement,
evidenced by an International Swap Dealers Association
form agreement, designed to protect the Borrowers
against fluctuations in interest rates; provided that
the counterparty to any such agreement shall be a
Lender or an Affiliate of a Lender.
"INTERNAL REVENUE CODE" means the Internal Revenue
Code of 1986, as amended from time to time, and any
successor statute.
"INVENTORY" means all of the Borrowers' now owned
and hereafter acquired goods, merchandise and other
personal property (including freight and handling costs
capitalized under GAAP), wherever located, to be
furnished under any contract of service or held for
sale or lease, all raw materials, work in process,
finished goods and materials and supplies of any kind,
nature or description which are or might be used or
consumed in a person's business or used in connection
with the manufacture, packing, shipping, advertising,
selling or finishing of such goods, merchandise and
other personal property, and all documents of title or
other documents representing them.
"INVESTMENT", as applied to any Person, means any
direct or indirect purchase or other acquisition by
that Person of, or a beneficial interest in, stock or
other securities of any other Person, or any direct or
indirect loan, advance (other than advances to
employees or consultants for moving and travel
expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital
contribution by that Person to any other Person,
including all Indebtedness and accounts receivable from
that other Person which are not Current Assets or did
not arise from sales to that other Person in the
ordinary course of business. The amount of any
Investment (for purposes of the Dollar limitations set
forth in subsection 6.3) shall be the original cost of
such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with
respect to such Investment.
"INVITATION FOR COMPETITIVE BIDS" means a
solicitation for Competitive Bids and has the meaning
specified in subsection 2.2E(ii).
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"ISSUING BANK" means, with respect to a Letter of
Credit, the Lender selected by the applicable Borrower
to issue such Letter of Credit under this Agreement.
"LENDERS" means the Lenders listed on the
signature pages hereof and each Eligible Assignee that
shall become a party hereto pursuant to subsection
10.8.
"LETTER OF CREDIT" means any Commercial Letter of
Credit or Standby Letter of Credit which is hereafter
issued pursuant to this Agreement at the request of and
for the account of the Borrowers by an Issuing Bank.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate
amount that is or at any time thereafter may become
available for drawing under all Letters of Credit then
issued and outstanding plus (ii) the aggregate amount
of all drawings under Letters of Credit honored by the
Issuing Bank and not theretofore reimbursed by the
Borrowers.
"LEVERAGE RATIO" means, at any date of
determination, the ratio of (A) Consolidated
Liabilities to (B) Consolidated Tangible Assets.
"LIBOR" means the rate of interest per annum
determined by the Administrative Agent to be the
arithmetic mean (if such percentage is not a
multiple of 1/100th of one percent, rounded upward
to the nearest 1/100th of one percent) of the
rates of interest per annum notified to the
Administrative Agent by each Reference Bank as the
rate of interest (rounded upward to the nearest
1/100th of one-percent) at which dollar deposits
in an amount approximately equal to the aggregate
amount of LIBOR Bid Loans requested to be
borrowed, and having a maturity equal to such
Interest Period are offered to major banks in the
London interbank market at their request at or
about 11:00 a.m. (London time) on the second
Business Day before the commencement of such
Interest Period. If one of the Reference Banks
shall be unable or shall otherwise fail to notify
the Administrative Agent of such a rate, LIBOR
shall be determined on the basis of the rates as
notified by the remaining Reference Banks.
"LIBOR AUCTION" means a solicitation of
Competitive Bids setting forth a LIBOR Bid Margin
pursuant to subsection 2.2E.
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"LIBOR BID LOAN" means any Bid Loan that
bears interest at a rate determined with reference
to LIBOR.
"LIBOR BID MARGIN" has the meaning specified
in subsection 2.2E(iii)(b)(III).
"LIEN" means any lien, mortgage, pledge, security
interest, charge or encumbrance of any kind (including
any conditional sale or other title retention
agreement, any lease in the nature thereof, and any
agreement to give any security interest).
"LOAN" or "LOANS" means one or more of the Loans
made by the Lenders pursuant to subsection 2.1 and may
be a Committed Loan or a Bid Loan.
"LOAN DOCUMENTS" means this Agreement and the Bid
Notes.
"LOAN PARTIES" means the Borrowers.
"MARGIN STOCK" has the meaning assigned to that
term in Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material
adverse effect upon the business, operations,
properties, assets, business prospects or condition
(financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or (ii) the material
impairment of the ability of any Loan Party to perform
or of the Lenders to enforce the Obligations.
"MULTIEMPLOYER PLAN" means a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA which is
maintained for employees of the Borrowers or any ERISA
Affiliate of the Borrowers.
"NET CASH PROCEEDS" means, in the case of any
Asset Sale, cash payments received (including any cash
received by way of deferred payment pursuant to a note
receivable or otherwise, but only as and when so
received) by any Loan Party from any Asset Sale (other
than liabilities assumed directly or indirectly by the
buyer) less (i) the amount of actual liabilities for
taxes (net of any amount of tax benefits) reasonably
anticipated by the Borrowers to be attributable to such
sale or other disposition, (ii) the amount of any
reserves against any liabilities associated with such
sale required to be retained by any Loan Party after
such sale or other disposition in conformity with GAAP
(but only for the period required to be retained as a
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reserve), (iii) the amount of Indebtedness secured
solely by the assets sold required to be repaid under
the terms thereof in connection with such Asset Sale
and (iv) the amount of fees and commissions payable to
persons other than any Loan Party or any Affiliate of
any Loan Party, and other costs and expenses related to
such sale or other disposition that are to be paid in
cash, in each case only to the extent customarily borne
by a seller in an arm's-length transaction or
reasonable in light of the applicable circumstances.
"NEW ORLEANS DISTRIBUTION CENTER" means WCL's
interest in the real property and improvements thereon
located at 3501 Jourdan Road, New Orleans, Louisiana.
"NOTICE OF BORROWING" means a notice substantially
in the form of EXHIBIT I annexed hereto with respect to
a proposed Borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of EXHIBIT II annexed hereto
delivered by the Borrowers to the Administrative Agent
pursuant to subsection 2.9.
"OBLIGATIONS" means all loans, advances, debts,
reimbursement obligations, liabilities, obligations,
covenants and duties owing by any Loan Party to any
Lender, the Administrative Agent, the Issuing Bank, any
Affiliate of any Lender or the Administrative Agent, or
Person entitled to indemnification pursuant to
subsection 10.6 of this Agreement, of any kind or
nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, and arising
under this Agreement, under any other Loan Document or
under any Interest Rate Agreements (other than interest
rate cap agreements), whether or not for the payment of
money, whether arising by reason of an extension of
credit, loan, guaranty, indemnification, foreign
exchange or interest rate swap transactions or in any
other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising
and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees,
attorneys' fees and disbursements and any other sum
chargeable to any Loan Party under this Agreement, any
other Loan Document or any Interest Rate Agreements
(other than interest rate cap agreements).
"OECD" means the Organization for Economic
Cooperation and Development.
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"OFFICERS' CERTIFICATE" means a certificate
executed on behalf of any Loan Party, by its President,
its Chief Executive Officer, any Executive Vice
President or any Senior Vice President and by its Chief
Financial Officer, or its Treasurer or Controller, in
each case acting in such capacity.
"OPERATING LEASE" means, as applied to any Person,
any lease (including, without limitation, leases that
may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not
a Capital Lease other than any such lease under which
that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation
(or any successor thereto).
"PENSION PLAN" means any employee plan which is
subject to Section 412 of the Internal Revenue Code and
which is maintained for employees of the Borrowers or
any ERISA Affiliate of the Borrowers, other than a
Multiemployer Plan.
"PERMITTED LIENS" means
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not at the
time required by the covenant on payment of taxes;
(ii) Statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and
other similar Persons and other Liens imposed by law
incurred in the ordinary course of business for sums
not yet delinquent or being contested in good faith, if
such reserve or other appropriate provisions, if any,
as shall be required by GAAP shall have been made
therefor;
(iii) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of
business in connection with workers' compensation,
unemployment insurance and other types of social
security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return-
of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(iv) Any attachment or judgment Lien, unless the
judgment it secures (a) shall not, within 30 days after
the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been
discharged within 30 days after the expiration of any
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such stay or (b) shall be in effect and a period of 10
days or less remains prior to any proposed sale
thereunder; and
(v) Easements, rights of way, servitudes or
zoning or building restrictions and other minor
encumbrances on real property which do not in the
aggregate materially interfere with or impair the
operation of such property for the purposes for which
it is or may reasonably be expected to be used.
"PERSON" means and includes natural persons,
corporations, limited partnerships, general
partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other
organizations, whether or not legal entities, and
governments and agencies and political subdivisions
thereof.
"PNS" means PNS Stores, Inc., a California
corporation and a wholly owned Subsidiary of the
Company.
"POTENTIAL EVENT OF DEFAULT" means a condition or
event which, after notice or lapse of time or both,
would constitute an Event of Default if that condition
or event were not cured or waived within any applicable
grace or cure period.
"PRO RATA SHARE" means, with respect to any of the
Commitments of each Lender (other than the Swing Line
Commitment of the Swing Line Lender), or, if such
Commitment has terminated, the Loans or participations
held by such Lender with respect to such Commitment,
the percentage designated as such Lender's Pro Rata
Share under the name of such Lender on the applicable
signature page of this Agreement with respect to such
Commitment, in each case as such percentage may be
adjusted as a result of assignments permitted under
subsection 10.8 and evidenced as provided in subsection
2.17.
"REFERENCE BANKS" means BofA and Continental Bank N.A.
"REFUNDED SWING LINE LOANS" has the meaning
specified in subsection 2.1B.
"REGISTER" has the meaning specified in subsection
10.8.
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"RELEASE" means any release, spill, emission,
leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration of any
Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the
abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous
Materials) or into or out of any property owned, used
or operated by the Company or any of its Subsidiaries,
including the movement of any Hazardous Materials
through or in the air, soil, surface water, groundwater
or property.
"REMEDIAL ACTION" means all actions required to
(i) clean up, remove, treat or in any other way address
Hazardous Materials in the indoor or outdoor
environment; (ii) prevent the Release or threat of
Release or minimize the further Release of Hazardous
Materials so they do not migrate or endanger or
threaten to endanger public health or welfare or the
indoor or outdoor environment; or (iii) perform pre-
remedial studies and investigations and post-remedial
monitoring and care.
"REQUISITE LENDERS" means Persons holding at any
time more than sixty-six and two-thirds percent
(66-2/3%) of the sum of the aggregate Commitments or,
in the event that the Commitments have terminated, the
Total Utilization of Revolving Commitments.
"RESPONSIBLE OFFICER" means any of the Chief
Executive Officer, any Senior Vice President, any
Executive Vice President, the Chief Financial Officer
or the Controller.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend
or other distribution, direct or indirect, on account
of any shares of any class of stock of the Company or
any of its Subsidiaries now or hereafter outstanding,
except a dividend payable solely in shares of that
class of stock to the holders of that class, (ii) any
repurchase, redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class
of stock of the Company or any of its Subsidiaries now
or hereafter outstanding, (iii) any payment or
prepayment of principal of, premium, if any, or
interest on, redemption, purchase, retirement,
defeasance, sinking fund or similar payment with
respect to, any Indebtedness owed to shareholders of
the Company or any of its Subsidiaries, and (iv) any
payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to
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acquire shares of any class of stock of the Company or
any of its Subsidiaries now or hereafter outstanding.
"REVOLVER MATURITY DATE" means the earlier of
(i) October 5, 1996 (or such other date as the Lenders
may consent to pursuant to subsection 2.21), or if such
date is not a Business Day, the Business Day next
succeeding such date, and (ii) the date upon which the
Revolving Commitments terminate in accordance with
subsection 2.4 or any other provision contained in this
Agreement.
"REVOLVING COMMITMENT" means the commitment or
commitments of a Lender or the Lenders to make
Revolving Loans as set forth in subsection 2.1A. The
amount of the original Commitment of each Lender is set
forth on the applicable signature page of this
Agreement.
"REVOLVING LOAN" means a Loan made by a Lender to
the Borrowers pursuant to subsection 2.1A, which Loan
may be a Base Rate Loan or a Eurodollar Rate Loan.
"SEC" means the Securities and Exchange
Commission, and any successor thereto.
"SECURITIES ACT" means the Securities Act of 1933
as amended from time to time, and any successor
statute.
"SPECIFIED TRADEMARKS" means the trademarks of the
Borrowers identified on Schedule K, as such Schedule K
may be amended from time to time.
"STANDBY LETTERS OF CREDIT" means any Letter of
Credit which is not a Commercial Letter of Credit.
"SUBSIDIARY", with respect to any Person, means
any corporation, association or other business entity
of which more than 50% of the total voting power of
shares of stock entitled to vote in the election of
directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"SWING LINE COMMITMENT" means the commitment of
the Swing Line Lender to make Swing Line Loans as set
forth in subsection 2.1B.
"SWING LINE LENDER" means BofA, or any successor
Swing Line Lender appointed in accordance with
subsection 2.1B.
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"SWING LINE LOAN" means a Loan made by the Swing
Line Lender to the Borrowers pursuant to subsection
2.1B, which Swing Line Loan shall be a Base Rate Loan.
"TERMINATION EVENT" means (i) a "Reportable Event"
described in Section 4043 of ERISA and the regulations
issued thereunder (other than a "Reportable Event" not
subject to the provision for 30-day notice to the PBGC
under such regulations), or (ii) the withdrawal of any
Borrower or any of its ERISA Affiliates from a Pension
Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the distribution of a notice of intent to
terminate a Pension Plan or the treatment of a Pension
Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings by the
PBGC to terminate, or to appoint a trustee to
administer, a Pension Plan or (v) any other event or
condition which might reasonably be expected to
constitute grounds under ERISA for the termination of,
or the appointment of a trustee to administer, any
Pension Plan, or (vi) the complete or partial
withdrawal from a Multiemployer Plan by any Borrower or
any ERISA Affiliate that results in liability under
Section 4201 of ERISA or the receipt by any Borrower or
any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of
ERISA, or (vii) the imposition of a lien pursuant to
Section 412(n) of the Internal Revenue Code.
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS"
means, as at any date of determination, the sum of
(i) the aggregate principal amount of Revolving Loans
outstanding plus (ii) the aggregate principal amount of
Swing Line Loans outstanding plus (iii) the aggregate
principal amount of Bid Loans outstanding plus (iv) the
Letter of Credit Usage.
"TYPE" has the meaning specified in the definition
of "Committed Loans".
"WCL" means West Coast Liquidators, Inc., a
California corporation and a wholly owned Subsidiary of
the Company.
1.2 COMPUTATION OF TIME PERIODS
In this Agreement, in the computation of periods
of time from a specified date to a later specified date,
unless otherwise specifically provided, the word "from"
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means "from and including" and the words "to" and "until"
each means "to but excluding".
1.3 ACCOUNTING TERMS
All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.
1.4 OTHER DEFINITIONAL PROVISIONS
References to "Sections" and "subsections" shall
be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided. Any of
the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural
depending on the reference. Unless otherwise expressly
provided herein, references to agreements and other
contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications
are not prohibited by the terms of any Loan Document.
References to any statute or regulation are to be construed
as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1 LOANS
A. REVOLVING COMMITMENTS. Each Lender severally
agrees, on the terms and conditions hereinafter set forth,
to make Revolving Loans to the Borrowers from time to time
on any Business Day during the period from the date hereof
until the Revolver Maturity Date in an aggregate amount not
to exceed at any time outstanding the amount set forth
opposite such Lender's name on the signature pages hereof,
or, if such Lender has entered into one or more Assignments
and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent, as such amount may
be reduced pursuant to subsection 2.4 or any other provision
contained in this Agreement (such Lender's "Revolving
Commitment"). The aggregate original amount of the
Revolving Commitments is $150,000,000. Each Borrowing shall
be in an aggregate amount not less than $3,000,000 or an
integral multiple of $1,000,000 in excess thereof, except in
the case of Borrowings made to repay Swing Line Loans
pursuant to subsection 2.1B. Each Committed Borrowing of
Revolving Loans shall be made by the Lenders proportionately
to their Pro Rata Shares of the Revolving Commitments.
Within the limits of each Lender's Revolving Commitments,
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the Borrowers may from time to time, borrow under this
subsection 2.1A, repay and reborrow under this subsection
2.1A. The Lenders' Revolving Commitments shall expire on
the Revolver Maturity Date.
Notwithstanding the foregoing provisions of this
subsection 2.1A, (i) at no time shall the Total Utilization
of Revolving Commitments exceed the aggregate Revolving
Commitments then in effect, and (ii) for 45 consecutive days
during each twelve consecutive month period (a "Clean-Down
Period") set forth below, the aggregate principal amount of
Clean-Down Debt shall not exceed the correlative amounts
indicated below:
12-month Period Ending Amount
September 30, 1994 $60,000,000
September 30, 1995 55,000,000
September 30, 1996 50,000,000
; provided, that if the sale of the New Orleans Distribution
Center has been consummated during any of the aforementioned
12-month periods, on and from the date of consummation of
such sale, for each subsequent Clean-Down Period, the
aggregate principal amount of Clean-Down Debt shall not
exceed the correlative amounts indicated below:
12-month Period Ending Amount
September 30, 1994 $35,000,000
September 30, 1995 30,000,000
September 30, 1996 25,000,000
B. SWING LINE COMMITMENT. The Swing Line Lender
severally agrees, on the terms and conditions hereinafter
set forth, to make Swing Line Loans to the Borrowers from
time to time on any Business Day during the period from the
date hereof until the Revolver Maturity Date in an aggregate
amount not to exceed at any time outstanding $10,000,000
(the "Swing Line Commitment"). Each Borrowing shall be in
an aggregate amount not less than $100,000 or an integral
multiple of $25,000 in excess thereof. Within the limits of
the Swing Line Commitment, the Borrowers may, from time to
time, borrow under this subsection 2.1B, repay and reborrow
under this subsection 2.1B. The Swing Line Commitment shall
expire on the Revolver Maturity Date.
Notwithstanding the foregoing provisions of this
subsection 2.1B, (i) at no time shall the aggregate
principal amount of Swing Line Loans outstanding exceed the
Swing Line Commitment and (ii) at no time shall the Total
Utilization of Revolving Commitments exceed the aggregate
Revolving Commitments then in effect.
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The Swing Line Lender, in its sole and absolute
discretion may, on and after the fifth Business Day after
the making of a Swing Line Loan which has not been
voluntarily prepaid by the Borrowers pursuant to subsection
2.6A, on one Business Day's notice to the Administrative
Agent and the Borrowers, so long as amounts are available to
be borrowed under the Revolving Commitments, require each
Lender, including the Swing Line Lender, and each Lender
hereby agrees, subject to this subsection 2.1B, to make a
Revolving Loan in an amount equal to such Lender's Pro Rata
Share of the amount of the Swing Line Loans (the "Refunded
Swing Line Loans") outstanding on the date notice is given
which the Swing Line Lender requests the Lenders to prepay;
provided that the obligation of each Lender to make any such
Revolving Loan is unconditional so long as one of the
following is true and applicable: (i) the Swing Line Lender
believed in good faith that all conditions under Section 3
to the making of the Swing Line Loan were satisfied at the
time such Swing Line Loan was made, or (ii) such Lender had
actual knowledge, by receipt of the statements required
pursuant to subsection 5.1 or otherwise, that any such
condition had not been satisfied and failed to notify the
Administrative Agent and the Swing Line Lender in writing
that it had no obligation to make Revolving Loans until such
condition was satisfied (which notice shall be effective as
of the date of receipt by the Administrative Agent and the
Swing Line Lender), or (iii) the satisfaction of any such
condition not satisfied had been waived by Requisite Lenders
prior to or at the time such Swing Line Loan was made. In
the case of Revolving Loans made by Lenders other than the
Swing Line Lender under the immediately preceding sentence,
each such Lender shall, before 10:00 A.M. (San Francisco
time) on the Business Day next succeeding the date such
notice is given, make available for the account of its
Applicable Lending Office to the Administrative Agent the
amount of its Revolving Loan by depositing same day funds
with the Administrative Agent. The proceeds of such
Revolving Loans shall be immediately delivered to the Swing
Line Lender (and not to the Borrowers) and applied to repay
the Refunded Swing Line Loans. On the day such Revolving
Loans are made, the Swing Line Lender's Pro Rata Share of
the Refunded Swing Line Loans shall be deemed to be paid
with the proceeds of a Revolving Loan made by the Swing Line
Lender and such portion of the Swing Line Loan deemed to be
so paid shall no longer be outstanding as Swing Line Loans
and shall only be outstanding as a Revolving Loan. The
Borrowers authorize the Swing Line Lender to charge the
Borrowers' accounts with the Swing Line Lender (up to the
amount available in each such account) in order to
immediately pay the Swing Line Lender the amount of such
Refunded Swing Line Loans to the extent that amounts
received from the Lenders, including amounts deemed to be
received from the Swing Line Lender, are not sufficient to
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repay in full such Refunded Swing Line Loans, and the Swing
Line Lender agrees to give notice to the Borrowers of any
such charge concurrently with the making of such charge. If
any portion of any such amount paid (or deemed to be paid)
to the Swing Line Lender should be recovered by or on behalf
of the Borrowers from the Swing Line Lender in bankruptcy,
by assignment for the benefit of creditors or otherwise, the
loss of the amount so recovered shall be ratably shared
among all Lenders that have made Refunded Swing Line Loans
in the manner contemplated by subsection 2.13. Subject to
the proviso contained in the first sentence of this
paragraph, each Lender's obligation to make the Revolving
Loans referred to in this paragraph shall be absolute and
unconditional and shall not be affected by any circumstance,
including, without limitation (i) any set-off, counterclaim,
recoupment, defense or other right which such Lender may
have against the Swing Line Lender, the Borrowers or anyone
else for any reason whatsoever, (ii) the occurrence or
continuance of an Event of Default or Potential Event of
Default; (iii) the occurrence of any Material Adverse
Effect; (iv) any breach of this Agreement by any of the
Borrowers or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. A copy of each notice
given by the Swing Line Lender to the Administrative Agent
pursuant to this paragraph shall promptly be delivered by
the Administrative Agent to the Borrowers and the Lenders.
Notwithstanding anything herein to the contrary,
the Swing Line Lender shall not be obligated to make any
Swing Line Loans if it has elected after the occurrence and
during the continuation of a Potential Event of Default or
Event of Default not to make Swing Line Loans and has
notified the Borrowers in writing or by telephone of such
election. The Swing Line Lender shall promptly give notice
to the Administrative Agent of such election not to make
Swing Line Loans.
The Swing Line Lender may resign, effective as set
forth below, at any time by giving written notice thereof to
the Administrative Agent and the Borrowers. Upon any such
resignation, Requisite Lenders shall have the right to
appoint one of the Lenders as successor Swing Line Lender.
If no successor Swing Line Lender shall have been so
appointed by Requisite Lenders, and shall have accepted such
appointment within 30 days after the retiring Swing Line
Lender's giving of notice of resignation, then the retiring
Swing Line Lender may appoint a successor Swing Line Lender
from among the Lenders. Upon the acceptance of any
appointment as Swing Line Lender hereunder by a successor
Swing Line Lender, the resignation of the retiring Swing
Line Lender shall become effective and such successor Swing
Line Lender shall thereupon succeed to and become vested
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with all the rights, powers, privileges and duties of the
retiring Swing Line Lender, and the retiring Swing Line
Lender shall be discharged from its duties and obligations
as Swing Line Lender under this Agreement.
C. BID BORROWINGS. In addition to Committed
Borrowings pursuant to subsections 2.1A and 2.1B, each
Lender severally agrees that the Borrowers may, as set forth
in subsection 2.2E, from time to time request the Lenders
prior to the Revolver Maturity Date to submit offers to make
Bid Loans to the Borrowers; provided, however, that the
Lenders may, but shall have no obligation to, submit such
offers and the Borrowers may, but shall have no obligation
to, accept any such offers; and provided, further, that (i)
at no time shall the Total Utilization of Revolving
Commitments exceed the aggregate Revolving Commitments; and
(ii) at no time shall the outstanding aggregate principal
amount of all Bid Loans made by all Lenders exceed the
lesser of (a) 50% of the aggregate Revolving Commitments and
(b) $75,000,000.
2.2 MAKING THE LOAN
A. PROCEDURE FOR COMMITTED BORROWING. Each
Committed Borrowing shall be made on notice, given, in the
case of Base Rate Loans, not later than 9:00 A.M. (San
Francisco time) on the Business Day prior to the date of
such proposed Borrowing, in the case of Swing Line Loans,
not later than 11:00 A.M. (San Francisco time) on the date
of the proposed Borrowing and in the case of Eurodollar Rate
Loans, not later than 9:00 A.M. (San Francisco time) on the
third Business Day prior to the date of the proposed
Borrowing, by the Borrowers to the Administrative Agent,
which shall give to the Swing Line Lender or each Lender, as
the case may be, prompt notice thereof by telecopy, telex or
cable. Each such notice of a Committed Borrowing (a "Notice
of Borrowing") shall be by telecopy, telex or cable,
confirmed immediately in writing, in substantially the form
of EXHIBIT I hereto, specifying therein (i) whether such
Borrowing is to consist of a Swing Line Loan or Revolving
Loans, (ii) the requested Funding Date (which shall be a
Business Day), (iii) whether such Committed Borrowing is to
consist of Base Rate Loans or Eurodollar Rate Loans, (iv) in
the case of Eurodollar Rate Loans, the requested Interest
Period therefor, (v) the requested aggregate amount of such
Committed Borrowing, (vi) the Borrower that is to receive
the proceeds of such Borrowing and (vii) the amount of
proceeds to be received by each such Borrower. In addition,
a Notice of Borrowing shall certify that the amount of the
proposed Borrowing, when added to the Total Utilization of
Revolving Loan Commitments immediately prior to such
Borrowing, will not exceed the aggregate Revolving
Commitments then in effect. Each Lender shall, before
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10:00 A.M. (San Francisco time) on the date of such
Committed Borrowing of Revolving Loans, make available for
the account of its Applicable Lending Office to the
Administrative Agent, such Lender's Pro Rata Share (with
respect to the applicable Commitment) of such Borrowing by
depositing same day funds in the Administrative Agent's
Account No. 12332-15414 re: Mac Frugal's Bargains o Close-
Outs Inc. Attention: Global Agency #5596, maintained at
Bank of America National Trust and Savings Association, ABA
No. 1210-0035-8 or in such other account as the
Administrative Agent may from time to time specify in
writing to the Lenders. The Swing Line Lender shall, before
2:00 P.M. (San Francisco time) on the date of such Borrowing
of Swing Line Loans, make available to the Administrative
Agent, the amount of such Borrowing by depositing same day
funds with the Administrative Agent as described in the
immediately preceding sentence. Upon fulfillment of the
applicable conditions set forth in Section 3, the
Administrative Agent will make the proceeds of the Loans
received by it available to the Borrowers, that, in
accordance with the related Notice of Borrowing, are to
receive such proceeds, by crediting such Borrowers' accounts
maintained at such office of the Administrative Agent or any
other account of any Borrower with the Administrative Agent
as such Borrower shall advise the Administrative Agent in
writing.
With respect to any Committed Borrowing, in lieu
of delivering the above described Notice of Borrowing,
Authorized Persons, on behalf of the Borrowers, may give the
Administrative Agent telephonic notice by the required time
of any proposed borrowing under this subsection 2.2;
provided, however, that such notice shall be promptly
confirmed in writing by delivery of a Notice of Borrowing to
the Administrative Agent. The Administrative Agent shall
incur no liability to the Borrowers in acting upon any
telephonic notice referred to above (or with respect to any
other Borrowing hereunder) which the Administrative Agent
believes in good faith to have been given by an Authorized
Person or Authorized Persons of the Borrowers or for
otherwise acting in good faith under this subsection 2.2 and
in making any Loans in accordance with this Agreement
pursuant to any telephonic notice.
B. NOTICE OF BORROWING. Each Notice of
Borrowing shall be irrevocable and binding on the Borrowers.
The Borrowers shall indemnify each Lender against any loss,
cost or expense incurred by such Lender as a result of any
failure by the Borrowers to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Section 3 (other than
conditions that have been waived by the Lenders in
accordance with subsection 10.1), including, without
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limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Loan to be made by such
Lender as a part of such Borrowing when such Loan, as a
result of such failure, is not made on such date.
C. PAYMENTS BY LENDERS. Unless the
Administrative Agent shall have received notice from a
Lender (i) prior to the date of any such Borrowing
(including without limitation Borrowings made pursuant to
subsection 2.1B) that such Lender will not make available to
the Administrative Agent such Lender's Pro Rata Share (with
respect to the applicable Commitment) of such Borrowing or
(ii) prior to the date of the issuance of any Letter of
Credit that such Lender will not purchase a participation in
such Letter of Credit, in each case because of an existence
of an Event of Default or a Potential Event of Default, the
Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on the
date of such Borrowing in accordance with subsection 2.2A
(or otherwise in accordance with subsection 2.1B) or that
such Lender will purchase a participation in such Letter of
Credit in accordance with subsection 2.16, as the case may
be, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrowers (or in the case
of a Revolving Loan made pursuant to subsection 2.1B, to the
Swing Line Lender) on such date a corresponding amount and
the Issuing Bank may, in reliance upon such assumption,
issue the Letter of Credit, as the case may be. If and to
the extent that a Lender not providing such notice shall not
have so made its Pro Rata Share (with respect to the
applicable Commitment) available to the Administrative
Agent, such Lender and the Borrowers severally agree to
repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for
each day from the date such amount is made available to the
Borrowers or the Swing Line Lender (as the case may be)
until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrowers, the interest
rate applicable at the time to Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount
so repaid shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement. The
Borrowers reserve all of their rights against any defaulting
Lender.
D. SEVERAL OBLIGATIONS OF LENDERS. The failure
of any Lender to make the Loan to be made by it as part of
any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Loan on the date
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of such Borrowing, but no Lender shall be responsible for
the failure of any other Lender to make the Loan to be made
by such other Lender on the date of any Borrowing.
E. PROCEDURE FOR BID BORROWINGS.
(i) When the Borrowers wish to request the
Lenders to submit offers to make Bid Loans hereunder, they
shall transmit to the Administrative Agent by telephone call
followed promptly by written transmission a notice in
substantially the form of EXHIBIT IV (a "Competitive Bid
Request") so as to be received no later than 9:00 A.M. (San
Francisco time) (x) four Business Days prior to the date of
a proposed Bid Borrowing in the case of a LIBOR Auction, or
(y) one Business Day prior to the date of a proposed Bid
Borrowing in the case of an Absolute Rate Auction,
specifying:
(a) the Funding Date for such
Borrowing, which shall be a Business Day;
(b) the aggregate amount of such
Borrowing, which shall be a minimum amount of
$5,000,000 or in multiples of $1,000,000 in excess
thereof;
(c) whether the Competitive Bids
requested are to be for LIBOR Bid Loans or
Absolute Rate Bid Loans;
(d) the duration of the Interest Period
applicable thereto, subject to the provisions of
the definition of "Interest Period;" and
(e) the Borrower that is to receive the
proceeds of such Borrowing.
Subject to subsection 2.2E(iii), the Borrowers may not
request Competitive Bids more than twice in any period of
five consecutive Business Days.
(ii) Upon receipt of a Competitive Bid Request
and a bid fee of $400 in respect thereof, the Administrative
Agent will promptly send to the Lenders by telex or
facsimile transmission an invitation by the Borrowers to
each Lender to submit Competitive Bids offering to make the
Bid Loans to which such Competitive Bid Request relates in
accordance with this subsection 2.2E (an "Invitation for
Competitive Bids").
(iii)(a) Each Lender may at its discretion
submit a Competitive Bid containing an offer or
offers to make Bid Loans in response to any
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Invitation for Competitive Bids. Each Competitive
Bid must comply with the requirements of this
subsection 2.2E(iii) and must be submitted to the
Administrative Agent by telex or facsimile
transmission at the Administrative Agent's office
specified in the Invitation for Competitive Bids
not later than (1) 7:30 A.M. (San Francisco time)
three Business Days prior to the proposed Funding
Date, in the case of a LIBOR Auction or
(2) 7:30 A.M. (San Francisco time) on the proposed
Funding Date, in the case of an Absolute Rate
Auction; provided that Competitive Bids submitted
by BofA (or any Affiliate of BofA) in the capacity
of a Lender may be submitted, and may only be
submitted, if BofA or such Affiliate notifies the
Borrowers of the terms of the offer or offers
contained therein not later than (A) 7:15 A.M.
(San Francisco time) three Business Days prior to
the proposed Funding Date, in the case of a LIBOR
Auction or (B) 7:15 A.M. (San Francisco time) on
the proposed Funding Date, in the case of an
Absolute Rate Auction.
(b) Each Competitive Bid shall be in
substantially the form of EXHIBIT V, specifying
therein:
(I) the proposed Funding Date;
(II) the principal amount of each
Bid Loan for which such Competitive Bid is
being made, which principal amount (x) may be
equal to, greater than or less than the
Revolving Commitment of the quoting Lender,
(y) must be $5,000,000 or in multiples of
$1,000,000 in excess thereof, and (z) may not
exceed the principal amount of Bid Loans for
which Competitive Bids were requested;
(III) in case the Borrowers elect
a LIBOR Auction, the margin above or below
LIBOR (the "LIBOR Bid Margin") offered for
each such Bid Loan, expressed as a percentage
(rounded to the nearest 1/100th of 1%) to be
added to or subtracted from the applicable
LIBOR and the Interest Period applicable
thereto;
(IV) in case the Borrowers elect
an Absolute Rate Auction, the rate of
interest per annum (rounded upward to the
nearest 1/100th of 1%) (the "Absolute Rate")
offered for each such Bid Loan;
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(V) the identity of the quoting
Lender; and
(VI) any Interest Payment Dates
other than the last day of the Interest
Period applicable thereto.
A Competitive Bid may contain up to three separate
offers by the quoting Lender with respect to each
Interest Period specified in the related
Invitation for Competitive Bids.
(c) Any Competitive Bid shall be
disregarded if it:
(I) is not substantially in
conformity with EXHIBIT V or does not specify
all of the information required by subsection
(iii)(b) of this subsection;
(II) contains qualifying,
conditional or similar language;
(III) proposes terms other than or
in addition to those set forth in the
applicable Invitation for Competitive Bids;
or
(IV) arrives after the time set
forth in subsection (iii)(a).
(iv) Promptly on receipt and not later than
8:00 A.M. (San Francisco time) three Business Days prior to
the proposed Funding Date in the case of a LIBOR Auction, or
8:00 A.M. (San Francisco time) on the proposed Funding Date,
in the case of an Absolute Rate Auction, the Administrative
Agent will notify the Borrowers of the terms (a) of any
Competitive Bid submitted by a Lender that is in accordance
with subsection 2.2E(iii), and (b) of any Competitive Bid
that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid submitted by such Lender with
respect to the same Competitive Bid Request. Any such
subsequent Competitive Bid shall be disregarded by the
Administrative Agent unless such subsequent Competitive Bid
is submitted solely to correct a manifest error in such
former Competitive Bid and only if received within the times
set forth in subsection 2.2E(iii). The Administrative
Agent's notice to the Borrowers shall specify (1) the aggre-
gate principal amount of Bid Loans for which offers have
been received for each Interest Period specified in the
related Competitive Bid Request; and (2) the respective
principal amounts and LIBOR Bid Margins or Absolute Rates,
as the case may be, so offered. Subject only to the
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provisions of subsection 3.2 hereof and the provisions of
this subsection (iv), any Competitive Bid shall be
irrevocable except with the written consent of the
Administrative Agent given on the written instructions of
the Borrowers.
(v) Not later than 8:45 A.M. (San Francisco time)
three Business Days prior to the proposed Funding Date, in
the case of a LIBOR Auction, or 8:45 A.M. (San Francisco
time) on the proposed Funding Date, in the case of an
Absolute Rate Auction, the Borrowers shall notify the
Administrative Agent of their acceptance or non-acceptance
of the offers so notified to them pursuant to subsection
2.2E(iv). The Borrowers shall be under no obligation to
accept any offer and may choose to reject all offers. In
the case of acceptance, such notice shall specify the
aggregate principal amount of offers for each Interest
Period that is accepted. The Borrowers may accept any
Competitive Bid in whole or in part; provided that:
(a) the aggregate principal amount of
each Bid Borrowing may not exceed the applicable
amount set forth in the related Competitive Bid
Request;
(b) the principal amount of each Bid
Borrowing must be $5,000,000 or in any multiple of
$1,000,000 in excess thereof;
(c) acceptance of offers may only be
made on the basis of ascending LIBOR Bid Margins
or Absolute Rates within each Interest Period, as
the case may be; and
(d) the Borrowers may not accept any
offer that is described in subsection 2.2E(iii)(c)
or that otherwise fails to comply with the
requirements of this Agreement.
(vi) If offers are made by two or more Lenders
with the same LIBOR Bid Margins or Absolute Rates, as the
case may be, for a greater aggregate principal amount than
the amount in respect of which such offers are accepted for
the related Interest Period, the principal amount of Bid
Loans in respect of which such offers are accepted shall be
allocated by the Administrative Agent among such Lenders as
nearly as possible (in such multiples, not less than
$1,000,000, as the Administrative Agent may deem
appropriate) in proportion to the aggregate principal
amounts of such offers. Determination by the Administrative
Agent of the amounts of Bid Loans shall be conclusive in the
absence of manifest error.
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(vii) (a) The Administrative Agent will promptly
by no later than 9:15 A.M. notify each Lender having
submitted a Competitive Bid if its offer has been
accepted and, if its offer has been accepted, of the
amount of the Bid Loan or Bid Loans to be made by it on
the Funding Date.
(b) Each Lender, which has received
notice pursuant to subsection 2.2E(vii)(a) that
its Competitive Bid has been accepted, shall make
the amounts of such Bid Loans available to the
Administrative Agent for the account of the
Borrowers at the Administrative Agent's payment
office, by 12:00 Noon (San Francisco time) in the
case of Absolute Rate Bid Loans, and by 12:00 Noon
(San Francisco time) in the case of LIBOR Bid
Loans, on such Funding Date, in funds immediately
available to the Administrative Agent for the
account of the Borrowers at the Administrative
Agent's payment office.
(c) Promptly following each Bid
Borrowing, the Administrative Agent shall notify
each Lender of the ranges of bids submitted and
the highest and lowest Competitive Bids accepted
for each Interest Period requested by the
Borrowers and the aggregate amount borrowed
pursuant to such Bid Borrowing.
(d) From time to time, the Borrowers
and the Lenders shall furnish such information to
the Administrative Agent as the Administrative
Agent may request relating to the making of Bid
Loans, including the amounts, interest rates,
dates of borrowings and maturities thereof, for
purposes of the allocation of amounts received
from the Borrowers for payment of all amounts
owing hereunder.
(viii) If, on or prior to the proposed Funding
Date, the Revolving Commitments have not been terminated and
if, on such proposed Funding Date all applicable conditions
to funding referenced in subsection 3.2 hereof are
satisfied, the Lender or Lenders whose offers the Borrowers
have accepted will fund each Bid Loan so accepted. Nothing
in this subsection 2.2E shall be construed as a right of
first offer in favor of the Lenders or to otherwise limit
the ability of the Borrowers to request and accept credit
facilities from any Person (including any of the Lenders),
provided that no Potential Event of Default or Event of
Default would otherwise arise or exist as a result of the
Borrower executing, delivering or performing under such
credit facilities.
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(ix) Each outstanding Bid Loan shall reduce pro
tanto the available Revolving Commitments, but shall not
reduce or affect the Bid Loan Lender's available Revolving
Commitment or its Pro Rata Share.
2.3 FEES
A. COMMITMENT FEES.
(i) The Borrowers agree to pay a commitment fee
to each Lender on the average daily unused portion of such
Lender's Pro Rata Share of the Revolving Commitments at the
rate of 0.250% per annum, from the Closing Date, and from
the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case
of each other Lender, until the Revolver Maturity Date.
Such commitment fee shall be payable on the last Business
Day of each fiscal quarter in arrears for such fiscal
quarter (or portion thereof).
(ii) Anything contained in this Agreement to the
contrary notwithstanding, for purposes of calculating the
commitment fees payable by the Borrowers hereunder, (a) the
"unused portion" of the Revolving Commitments, as of any
date of determination, shall be an amount equal to the
aggregate amount of the Revolving Commitments in effect on
such date of determination minus the sum of (1) the
Revolving Loans outstanding on such date of determination
and (2) the Letter of Credit Usage as of such date of
determination and (b) such calculation shall not give effect
to any limitation on the amount available for borrowing set
forth in subsection 2.1A but shall give effect to any
voluntary reduction pursuant to subsection 2.4.
B. OTHER FEES. The Borrowers agree to pay all
other fees, including without limitation the arrangement fee
and the annual agency fee, referred to in the fee letter
dated August 30, 1993 between the Company and the
Administrative Agent and the letter dated August 24, 1993
between Company and the Co-Agent at the times and in the
amounts specified in such letters.
C. AMENDMENT FEE. The Borrowers agree to pay on
the Closing Date an amendment fee to each Lender in amount
equal to such Lender's Pro Rata Share of 0.10% of the
aggregate Revolving Commitments.
2.4 VOLUNTARY REDUCTIONS OF COMMITMENTS
The Borrowers, acting together, shall have the
right, at any time and from time to time, to terminate in
whole or permanently reduce ratably in part, without premium
or penalty, the unused portions of the Lenders' respective
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Commitments, by giving not less than five Business Days'
prior written notice to the Administrative Agent or
telephonic notice promptly confirmed in writing designating
that the Commitments are to be reduced, the date (which
shall be a Business Day) of any such termination or
reduction and the amount of any partial reduction. Such
termination or partial reduction of the Commitments shall be
effective on the dates specified in such notice and shall
reduce the respective Commitment of each Lender
proportionately to its Pro Rata Share for such Commitment.
Any such partial reduction of the Commitments shall be in an
aggregate minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount. Any
reduction of the aggregate Revolving Commitments to an
amount below the then current amount of the Swing Line
Commitment shall result in an automatic corresponding
reduction of the Swing Line Commitment to the amount of the
Revolving Commitments, as so reduced.
2.5 REPAYMENT
A. Each Bid Loan shall mature, and the principal
amount thereof shall be due and payable, on the last day of
the Interest Period applicable thereto. Subject to
subsection 10.1, the Borrowers may not voluntarily prepay
all or any portion of the principal amount of any Bid Loan
prior to the maturity thereof.
B. The Borrowers shall repay to the
Administrative Agent the principal amount of each Revolving
Loan owing to each Lender for the account of each Lender and
all other amounts owing hereunder with respect to the
Revolving Commitments on the Revolver Maturity Date for the
account of each Lender.
C. The Borrowers shall repay to the
Administrative Agent the principal amount of each Swing Line
Loan for the account of the Swing Line Lender and all other
amounts owing hereunder with respect to the Swing Line
Commitment on the Revolver Maturity Date for the account of
the Swing Line Lender.
2.6 OPTIONAL AND MANDATORY PREPAYMENTS
A. OPTIONAL PREPAYMENTS. The Borrowers may,
upon written notice to the Administrative Agent stating the
Type of the Loans to be prepaid and the Committed Borrowing
of which such Loans were a part, and the proposed date and
aggregate principal amount of the prepayment (provided that
such notice shall be given not later than 10:00 A.M. (San
Francisco time) (a) on the proposed date of such prepayment
in the case of a Swing Line Loan, (b) at least one Business
Day prior to the proposed date of such prepayment, in the
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48
case of a prepayment of Revolving Loans that are Base Rate
Loans and (c) at least four Business Days prior to the
proposed date of such prepayment, in the case of Revolving
Loans that are Eurodollar Rate Loans prepaid on other than
the last day of the Interest Period applicable thereto), and
if such notice is given, the Borrowers shall, prepay without
premium or penalty the outstanding principal amounts of the
Loans of the Type specified comprising part of the same
Borrowing in whole or ratably in part; provided, however,
that any prepayment of any Eurodollar Rate Loans on other
than the last day of an Interest Period for such Loans shall
be subject to subsection 2.10; and provided, further, that
each partial prepayment of the Loans shall be in an
aggregate principal amount not less than $3,000,000 or an
integral multiple of $1,000,000 in excess thereof. In lieu
of delivering the above described notice, Authorized
Persons, on behalf of the Borrowers, may give the
Administrative Agent telephonic notice by the required time
of any proposed prepayments; provided, however that such
notice shall be promptly confirmed in writing. The
Administrative Agent shall incur no liability to the
Borrowers in acting upon any such telephonic notice which
the Administrative Agent believes in good faith to have been
given by an Authorized Person or Authorized Persons of the
Borrowers or for otherwise acting in good faith under this
subsection 2.6A. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in
such notice, and, in the case of Eurodollar Loans, all
interest accrued thereon through the date of prepayment,
shall become due and payable on the prepayment date.
B. MANDATORY PREPAYMENTS. At any time the Total
Utilization of Revolving Commitments outstanding exceeds the
aggregate Revolving Commitments then in effect the Borrowers
shall immediately prepay the Loans in an amount equal to the
applicable excess. In addition, at the commencement of and
during the 45 consecutive day period set forth in clause
(ii) of the last paragraph of subsection 2.1A, the Borrowers
shall immediately prepay the Loans in an amount necessary to
reduce and maintain the aggregate principal amount of Clean-
Down Debt to the level required thereby.
C. APPLICATION OF MANDATORY PREPAYMENTS.
(i) Application to Loans. Mandatory
prepayments of Loans shall be applied first to repay
outstanding Swing Line Loans, to the full extent
thereof, second to repay outstanding Revolving Loans,
to the full extent thereof, and third to cash
collateralize all Letters of Credit and to repay
amounts to become due thereunder.
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(ii) Application by Type of Loan. Subject to
clause (i) above, any mandatory prepayment shall be
applied first to Base Rate Loans to the full extent
thereof before application to Eurodollar Rate Loans.
(iii) Application to Principal and Interest of
Loans. All mandatory prepayments of Eurodollar Rate
Loans shall include payment of accrued interest on the
principal amount so prepaid and shall be applied to
payment of interest before application to principal.
2.7 INTEREST
The Borrowers shall pay interest on the unpaid
principal amount of each Loan made by each Lender from the
date of each such Loan until such principal amount shall be
paid in full, at the applicable rate set forth below:
A. BASE RATE LOANS. During such periods as
a Committed Loan is a Base Rate Loan, at a rate per
annum equal at all times to the Base Rate in effect
from time to time, payable in arrears on each Interest
Payment Date with respect to such Loan during such
periods and on the date such Loan shall be paid in
full; provided, however, that after the occurrence and
during the continuance of any Event of Default, the
Base Rate Loans shall bear interest, payable on demand,
at a rate per annum equal at all times to 2.00% per
annum above the rate of interest otherwise payable
under this Agreement;
B. EURODOLLAR RATE LOANS. During such
periods as a Committed Loan is a Eurodollar Rate Loan,
at a rate per annum equal at all times during each
Interest Period for such Loan to the sum of the
Adjusted Eurodollar Rate for such Interest Period plus
the Applicable Margin, payable in arrears on each
Interest Payment Date with respect to such Loan during
such Interest Period, and on the date such Loan shall
be paid in full; provided, however, that after the
occurrence and during the continuation of any Event of
Default, the Eurodollar Rate Loans shall bear interest,
payable on demand, at a rate per annum equal at all
times to 2.00% per annum above the rate of interest
otherwise payable under this Agreement. Anything
herein to the contrary notwithstanding, (w) none of the
Loans made pursuant to subsection 2.1A shall constitute
a Eurodollar Rate Loan (or shall bear interest at the
rate provided in this subsection 2.7B) unless the
Borrowers shall so request by notice given pursuant to
subsection 2.2 or 2.9; (x) in the absence of such
request by the Borrower, or if an Event of Default or
Potential Event of Default occurs and is continuing,
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none of the Loans made pursuant to subsection 2.1A
shall constitute a Eurodollar Rate Loan (or shall bear
interest at the rate provided in this subsection 2.7B)
and with respect to an outstanding Eurodollar Rate
Loan, at the end of the Interest Period in effect at
the time of such Event of Default or Potential Event of
Default, such Loan shall constitute a Base Rate Loan
and shall bear interest at the rate provided in
subsection 2.7A above; (y) none of the Swing Line Loans
shall constitute a Eurodollar Rate Loan; and (z) none
of the Loans made pursuant to subsection 2.1A on the
Closing Date shall constitute a Eurodollar Rate Loan
(or shall bear interest as provided in this subsection
2.7B).
C. LIBOR BID LOANS. During such period as
a Bid Loan is a LIBOR Bid Loan, at a rate per annum
equal at all times to LIBOR plus (or minus) the LIBOR
Bid Margin, payable in arrears on each Interest Payment
Date with respect to such Loan during the applicable
Interest Period and on the date such Loan is paid in
full; provided, however, that after the occurrence and
during the continuance of any Event of Default, the
LIBOR Bid Loans shall bear interest, payable on demand,
at a rate per annum equal at all times to 2.00% per
annum above the rate of interest otherwise payable
under this Agreement.
D. ABSOLUTE RATE BID LOANS. During such
period as a Bid Loan is an Absolute Rate Bid Loan, at a
rate per annum equal at all times to the Absolute Rate,
payable in arrears on each Interest Payment Date with
respect to such Loan during the applicable Interest
Period and on the date such Loan is paid in full;
provided, however, that after the occurrence and during
the continuance of any Event of Default, the Absolute
Bid Rate Loans shall bear interest, payable on demand ,
at a rate per annum equal at all times to 2.00% per
annum above the rate of interest otherwise payable
under this Agreement.
2.8 INTEREST RATE DETERMINATION AND PROTECTION
A. The Administrative Agent shall give prompt
notice to the Borrowers and the Lenders of the applicable
interest rate determined by the Administrative Agent for
purposes of subsection 2.7.
B. If, with respect to any Eurodollar Rate Loans
or LIBOR Bid Loans, any Lender notifies (and provides a
certificate in reasonable detail as to the reasons and
amounts relating thereto) the Borrowers with a copy to the
Administrative Agent that, as a result of circumstances
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51
affecting Eurodollar markets, the Adjusted Eurodollar Rate
or LIBOR, as the case may be for any Interest Period for
such Loans will not adequately reflect the cost to such
Lender of making, funding or maintaining its Eurodollar Rate
Loans or LIBOR Bid Loans for such Interest Period,
whereupon:
(i) the Borrowers shall from time to time
pay to the Administrative Agent for the account of such
Lender all amounts payable under subsection 2.10A and
2.10B,
(ii) each such Eurodollar Rate Loan by such
Lender will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base
Rate Loan (or, if such Loan is then a Base Rate Loan,
will continue as a Base Rate Loan), and
(iii) the obligations of such Lender to make,
or to Convert Loans into, Eurodollar Rate Loans shall
be suspended until the Administrative Agent shall
notify the Borrowers that the circumstances causing
such suspension by such Lender no longer exist (and
such Lender shall make all of its Loans as Base Rate
Loans notwithstanding any election by the Borrowers to
have the Lenders make, or to Convert any Loans into,
Eurodollar Rate Loans).
C. If the Borrower shall fail to select the
duration of any Interest Period for any Eurodollar Rate
Loans in accordance with the provisions contained in the
definition of "Interest Period" in subsection 1.1, the
Administrative Agent will forthwith so notify the Borrowers
and the Lenders and such Loans will automatically, on the
last day of the then existing Interest Period therefor,
Convert into Base Rate Loans.
2.9 VOLUNTARY CONVERSION OR CONTINUATION OF LOANS
The Borrowers may, subject to the provisions of
subsections 2.8 and 2.15, (i) Convert all or any portion of
the Base Rate Loans (other than Swing Line Loans) into
Eurodollar Rate Loans, and vice versa and (ii) upon the
expiration of any Interest Period applicable to a Eurodollar
Rate Loan, continue all or any portion of such Loan as a
Eurodollar Rate Loan; provided, however, that any such
Conversion of any Eurodollar Rate Loans into Base Rate Loans
shall be made on, and only on, the last day of an Interest
Period for such Eurodollar Rate Loans, and any such
Conversion of Base Rate Loans into Eurodollar Rate Loans
shall (i) be in an amount not less than the minimum amount
specified in subsection 2.1 for a Borrowing of the relevant
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type and (ii) not be made if an Event of Default or
Potential Event of Default has occurred and is continuing.
The Borrowers shall deliver a Notice of
Conversion/Continuation (executed by an Authorized Person from each
Borrower) to the Administrative Agent no later than 9:00 A.M. (San
Francisco time) at least three Business Days in advance of the
proposed conversion/continuation date (in the case of a Conversion
to, or a continuation of, a Eurodollar Rate Loan). A Notice of
Conversion/Continuation shall certify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii)
the type and amount of the Loan to be converted/continued, (iii)
the nature of the proposed conversion/continuation, (iv) in the
case of a Conversion to, or a continuation of, a Eurodollar Rate
Loan, the requested Interest Period, and (v) that no Potential
Event of Default or Event of Default has occurred and is continuing
or would result from the proposed conversion/continuation. In lieu
of delivering the above described Notice of
Conversion/Continuation, Authorized Persons of the Borrowers may
give the Administrative Agent telephonic notice by the required
time of any proposed conversion/continuation under this subsection
2.9; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to the
Administrative Agent on or before the proposed
conversion/continuation date.
Neither the Administrative Agent nor any Lender shall
incur any liability to the Borrowers in acting upon any telephonic
notice referred to above that the Administrative Agent believes in
good faith to have been given by an Authorized Person or Authorized
Persons on behalf of the Borrowers or for otherwise acting in good
faith under this subsection 2.9 and upon conversion/continuation by
the Administrative Agent in accordance with this Agreement pursuant
to any telephonic notice, the Borrowers shall have effected the
conversion/continuation of Loans hereunder.
A Notice of Conversion/Continuation for Conversion
to, or continuation of, a Eurodollar Rate Loan (or
telephonic notice in lieu thereof) shall be irrevocable on
and after such notice is given and the Borrowers shall be
bound to Convert or continue in accordance therewith.
Notwithstanding anything herein to the contrary,
the Borrowers shall not have any right to
Convert outstanding Swing Line Loans which are Base Rate
Loans into Eurodollar Rate Loans.
After the occurrence of and during the continuance
of a Potential Event of Default or Event of Default, the
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Borrowers may not elect to have a Loan be made or continued
as, or Converted to, a Eurodollar Rate Loan, in each case
after the expiration of any Interest Period then in effect
for that Loan.
2.10 INCREASED COSTS AND FUNDING LOSSES
A. If, due to either (i) the introduction of or
any change after the date hereof (other than any change by
way of imposition or increase of reserve requirements
included in the Eurodollar Rate Reserve Percentage) in or in
the interpretation of any law or regulation by any
Governmental Authority or (ii) the compliance with any
guideline or request issued or made after the date hereof
from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any
increase in the cost to any Lender or any Issuing Bank of
agreeing to make or making, funding or maintaining
Eurodollar Rate Loans, LIBOR Bid Loans, or the Letters of
Credit under this Agreement, then the Borrowers shall from
time to time, upon demand by such Lender or Issuing Bank
(with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such
Lender or Issuing Bank additional amounts sufficient to
compensate such Lender or Issuing Bank for such increased
cost. A certificate specifying in reasonable detail the
amount of such increased cost, the calculation thereof, and
the basis therefor submitted to the Borrowers and the
Administrative Agent by such Lender or Issuing Bank, shall
be conclusive and binding for all purposes, absent manifest
error. If the Borrowers so notify the Administrative Agent
within five Business Days after any Lender notifies the
Borrowers of any increased cost pursuant to the foregoing
provisions of this subsection 2.10, the Borrowers may
Convert all Eurodollar Rate Loans of such Lender then
outstanding into Base Rate Loans in accordance with
subsection 2.8 and, additionally, shall reimburse such
Lender for such increased cost in accordance with this
subsection 2.10.
B. If any Lender or Issuing Bank determines that
(i) the introduction of any Capital Adequacy Regulation
after the date hereof, (ii) any change in any Capital
Adequacy Regulation after the date hereof, (iii) any change
after the date hereof in the interpretation or
administration of any Capital Adequacy Regulation by any
central bank or other Governmental Authority charged with
the interpretation or administration thereof, or
(iv) compliance by such Lender or Issuing Bank (or its
Applicable Lending Office) or any corporation controlling
such Lender or Issuing Bank with any of the foregoing,
affects or would affect the amount of capital required or
expected by any Governmental Authority to be maintained by
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such Lender or Issuing Bank or any corporation controlling
such Lender or Issuing Bank and (taking into consideration
such Lender's or Issuing Bank's or such corporation's
policies with respect to capital adequacy and such Lender's
or Issuing Bank's desired return on capital) reasonably
determines that the amount of such capital is increased as a
consequence of its commitments, loans, credits or
obligations or the existence of Letters of Credit under this
Agreement, then, within five Business Days of a demand by
such Lender or Issuing Bank to the Borrowers (with a copy of
such demand to the Administrative Agent), the Borrowers
shall pay to the Administrative Agent for the account of
such Lender or Issuing Bank, from time to time as specified
by such Lender or Issuing Bank, additional amounts
sufficient to compensate such Lender, Issuing Bank or other
corporation for such increase. A certificate specifying in
reasonable detail the amounts, the calculation of such
amounts and the basis therefor submitted to the Borrowers
and the Administrative Agent by such Lender or Issuing Bank
shall be conclusive and binding for all purposes, absent
manifest error. Each Lender and each Issuing Bank agrees
promptly to notify the Borrowers and the Administrative
Agent of any circumstances that would cause the Borrowers to
pay additional amounts pursuant to this subsection; provided
that the failure to give such notice shall not affect the
Borrowers' obligation to pay such additional amounts
hereunder.
C. The Borrowers shall compensate each Lender, upon
written request by that Lender (which request shall set forth in
reasonable detail the basis for requesting such amounts), for all
losses, expenses and liabilities (including, without limitation,
any loss or expense arising from interest or fees paid or payable
by that Lender to lenders of funds borrowed by it to make or carry
its Eurodollar Rate Loans or Bid Loans and any loss sustained by
that Lender in connection with the re-employment of such funds),
that such Lender may sustain: (i) if for any reason (other than a
default or error by that Lender) a borrowing of any Eurodollar Rate
Loan or Bid Loan does not occur on a date specified therefor in a
Notice of Borrowing, a Notice of Conversion/Continuation,
Invitation for Competitive Bids or a telephonic request for
borrowing or conversion/continuation or a successive Interest
Period does not commence after notice therefor is given pursuant to
subsection 2.9, (ii) if any payment or prepayment (by acceleration
of maturity, mandatory prepayments or otherwise) of any of its
Eurodollar Rate Loans or Bid Loan occurs on a date that is not the
last day of an Interest Period applicable to that Loan, (iii) if
any payment or prepayment (by acceleration of maturity, mandatory
prepayments or otherwise) of any of its Eurodollar Rate Loans or
Bid Loans is not made on any date specified in a
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notice of prepayment given by the Borrowers, or (iv) as a
consequence of any other default by the Borrowers to repay
its Eurodollar Rate Loans or Bid Loans when required by the
terms of this Agreement. Such written determination of such
amount by such Lender shall be conclusive and binding in all
matters in the absence of manifest error. This covenant
shall survive termination of this Agreement and payment of
the outstanding Obligations.
2.11 PAYMENTS AND COMPUTATIONS
A. MANNER AND TIME OF PAYMENT. The Borrowers
shall make each payment hereunder irrespective of and
without condition or deduction for any counterclaim,
defense, recoupment or setoff in U.S. dollars and in same
day funds delivered to the Administrative Agent not later
than 11:00 A.M. (San Francisco time) on the date when due by
deposit of such funds to the Administrative Agent's Account
No. 12332-15414, re: Mac Frugal's Bargains o Close-Outs
Inc., Attention: Global Agency #5596, maintained at Bank of
America National Trust and Savings Association, ABA No.
1210-0035-8, or at such other account as the Administrative
Agent may from time to time designate by notice to the
Borrowers. The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to
(i) the payment of principal or interest relating to the Bid
Loans to the Bid Loan Lenders for the account of their
respective Applicable Lending Offices, (ii) the payment of
principal, interest or commitment fees relating to the
Revolving Loans ratably (other than amounts payable pursuant
to subsection 2.10 or 2.12) to the Lenders for the account
of their respective Applicable Lending Offices, and
(iii) the payment of any other amount payable to any Lender
to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to subsection
10.8D, from and after the effective date specified in such
Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder in respect of the interest
assigned thereby to the Lender assignee thereunder, and the
parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior
to such effective date directly between themselves.
B. AUTHORIZATION TO CHARGE ACCOUNTS. The
Borrowers hereby authorize each Lender and Issuing Bank, if
and to the extent payment owed to such Lender or Issuing
Bank is not made to the Administrative Agent when due
hereunder, to charge from time to time against any or all of
the Borrowers' accounts with such Lender or Issuing Bank any
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amount so due; provided that no such charge shall be deemed
a set-off by the Administrative Agent.
C. COMPUTATIONS. All computations of interest
and commitment fees shall be made by the Administrative
Agent, and all computations of interest pursuant to
subsection 2.10 shall be made by a Lender, on the basis of a
year of 365 or 366 days, as the case may be, with respect to
interest on Base Rate Loans and a year of 360 days in all
other cases, in each case for the actual number of days
(including the first day but excluding the last day)
occurring in the period for which such interest or
commitment fees are payable; provided, that if a Loan is
repaid on the same day on which it is made, one day's
interest shall be paid on that Loan. Each determination by
the Administrative Agent (or, in the case of subsection
2.10, by a Lender) of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest
error.
D. PAYMENT ON NON-BUSINESS DAYS. Whenever any
payment hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made by the next
succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of
interest or commitment fee, as the case may be; provided,
however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Loans or LIBOR
Bid Loans to be made in the next following calendar month,
such payment shall be made on the next preceding Business
Day.
2.12 TAXES
A. Any and all payments by the Borrowers
hereunder shall be made, in accordance with subsection 2.11,
free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender, each Issuing
Bank, and the Administrative Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender, each
Issuing Bank, or the Administrative Agent (as the case may
be) is organized or any political subdivision thereof and,
in the case of each Lender or Issuing Bank, taxes imposed on
its income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's or Issuing Bank's Applicable
Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrowers shall be required
by law to deduct any Taxes from or in respect of any sum
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payable hereunder to any Lender, any Issuing Bank, or the
Administrative Agent, (i) the sum payable shall be increased
as may be necessary so that after making all required
deductions (including deductions applicable to additional
sums payable under this subsection 2.12) such Lender, such
Issuing Bank, or the Administrative Agent, as the case may
be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the
Borrowers shall make such deductions and (iii) the Borrowers
shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable
law; provided that the Borrowers shall not be required
pursuant to clause (i) above to increase the sum payable to
any Lender, any Issuing Bank, or the Administrative Agent
organized under the laws of a jurisdiction outside of the
United States if such Lender, such Issuing Bank, or the
Administrative Agent shall have failed to provide either the
forms or documents referred to in subsection 2.12E or a
letter from such Lender, such Issuing Bank, or the
Administrative Agent stating that it is not legally entitled
to provide such forms or documents.
B. In addition, the Borrowers agree to pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Agreement (hereinafter referred to as "Other Taxes").
C. The Borrowers will indemnify each Lender,
each Issuing Bank and the Administrative Agent for the full
amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this subsection 2.12)
paid by such Lender, such Issuing Bank or the Administrative
Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted; provided, in the case of
Taxes or Other Taxes imposed by jurisdictions outside of the
United States of America, the Borrowers shall not be
required to indemnify any Lender, any Issuing Bank or the
Administrative Agent for any liability resulting from the
failure of such Lender, such Issuing Bank or the
Administrative Agent to notify the Borrowers on a timely
basis of the assertion of such Taxes or Other Taxes. This
indemnification shall be made within 30 days from the date
such Lender, such Issuing Bank or the Administrative Agent
(as the case may be) makes written demand therefor. Each
Lender, each Issuing Bank and the Administrative Agent
agrees to reimburse the Borrowers for amounts paid by the
Borrowers pursuant to this subsection 2.12 to the extent
that such Lender, such Issuing Bank or the Administrative
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Agent actually recovers all or any portion of such amounts
from the applicable taxing authority.
D. Within 60 days after the date of any payment
of Taxes, the Borrowers will furnish to the Administrative
Agent, at its address referred to in subsection 10.2, the
original or a certified copy of a receipt evidencing payment
thereof or other evidence of the payment thereof reasonably
satisfactory to the Administrative Agent.
E. Prior to the date of the initial Borrowing in
the case of each Lender listed on the signature pages
hereof, and on the date of the Assignment and Acceptance
pursuant to which it became a Lender in the case of each
other Lender, (and from time to time thereafter if requested
by the Borrowers or the Administrative Agent) organized
under the laws of a jurisdiction outside the United States
shall provide the Administrative Agent and the Borrowers
with the forms prescribed by the Internal Revenue Service of
the United States certifying as to such Lender's status for
purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to
such Lender hereunder or other documents satisfactory to the
Borrowers and the Administrative Agent indicating that all
payments to be made to such Lender hereunder are subject to
such taxes at a rate reduced by an applicable tax treaty.
Unless the Borrowers and the Administrative Agent have
received forms or other documents satisfactory to them
indicating that payments hereunder are not subject to United
States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Borrowers or the
Administrative Agent shall withhold taxes from such payments
at the applicable statutory rate in the case of payments to
or for any Lender organized under the laws of a jurisdiction
outside the United States.
F. Any Lender or any Issuing Bank claiming any
additional amounts payable pursuant to this subsection 2.12
shall use its reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Applicable Lending Office if
the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the reasonable judgment
of such Lender or Issuing Bank, be otherwise disadvantageous
to such Lender or Issuing Bank.
G. Without prejudice to the survival of any
other agreement of the Borrowers hereunder, the agreements
and obligations of the Borrowers contained in this
subsection 2.12 shall survive the payment in full of
principal and interest hereunder.
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H. In the event that any Lender shall give
notice to the Borrowers that such Lender is entitled to
compensation under this subsection 2.12, and such requested
compensation materially exceeds the requests, if any, for
compensation made by the other Lenders under this
subsection, and unless the change or circumstance giving
rise to such compensation is no longer in effect and is not
reasonably likely to reoccur, the Borrowers may (upon 30
days' prior written notice to the Administrative Agent and
such Lender) elect to cause such Lender to assign its Loans
and Commitments in full first, if requested by the
Administrative Agent and agreed to by the Lenders to whom
such Loans and Commitments are being assigned, to the
Lenders on a pro rata basis in accordance with their Pro
Rata Shares then in effect or in such other proportions as
otherwise allocated by the Administrative Agent in its sole
discretion and agreed to by the Lender or Lenders to whom
such Loans and Commitments are being assigned and, second to
an Eligible Assignee agreeing thereto acceptable to the
Administrative Agent and the Borrowers in their sole
discretion, in each case in accordance with the provisions
of subsection 10.8 (so long as such Lender received payment
in full of the principal amount of all Loans outstanding,
together with all interest on such Loans and other amounts
payable to such Lender hereunder to the date of such
assignment).
2.13 SHARING OF PAYMENTS, ETC.
If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Committed Loans
owing to it (other than a payment on account of Revolving
Loans and Letters of Credit provided for herein, as to which
the payments relating thereto are to be shared ratably among
the Lenders and other than payments pursuant to subsection
2.10 or 2.12) in excess of its ratable share of payments on
account of the Committed Loans obtained by all the Lenders
such Lender shall forthwith purchase from the other Lenders
such participations in the Committed Loans owing to them as
shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of them, provided,
however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender
shall repay to the purchasing Lender the purchase price to
the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of
(i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so
recovered. The Borrowers agree that any Lender so
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purchasing a participation from another Lender pursuant to
this subsection 2.13 or any other provision of this
Agreement may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right
to set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrowers in
the amount of such participation.
2.14 USE OF PROCEEDS
A. LOANS AND LETTERS OF CREDIT. The proceeds of
the Loans made by the Lenders and the Letters of Credit
issued hereunder to the Borrowers shall be used by the
Borrowers (i) to repay the Existing Loans, (ii) to continue
the Existing Letters of Credit, (iii) for working capital
purposes of the Borrowers, (iv) for other letter of credit
requirements incurred in the ordinary course of business of
the Borrowers, (v) for refinancing of indebtedness and the
payment of Restricted Junior Payments to the extent
permitted under and subject to the restrictions of this
Agreement, (vi) for acquisitions permitted under subsection
6.7, and (vii) for the general corporate purposes of the
Borrowers.
B. PROHIBITED USES. No portion of the proceeds
of any Borrowing under this Agreement shall be used by the
Borrowers in any manner which might cause the Borrowing or
the application of such proceeds to violate Regulation G,
Regulation U, Regulation T, or Regulation X of the Board of
Governors of the Federal Reserve System or any other
regulation of the Board or to violate the Exchange Act, in
each case as in effect on the date or dates of such
Borrowing and such use of proceeds.
C. ACKNOWLEDGEMENT. The Borrowers hereby
acknowledge and agree that the restrictions on the use of
proceeds set forth herein are commercially reasonable and
made in good faith.
2.15 ILLEGALITY
Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it
unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender
or its Eurodollar Lending Office to make Eurodollar Rate
Loans or LIBOR Bid Loans or to continue to fund or maintain
Eurodollar Rate Loans or LIBOR Bid Loans hereunder (any such
introduction, change or assertion being an "Event of
Illegality"), then, on notice thereof (which notice shall
specify the basis therefor) and demand therefor by such
Lender to the Borrowers through the Administrative Agent,
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(a) the obligation of such Lender to make Eurodollar Rate
Loans or LIBOR Bid Loans and to Convert Base Rate Loans into
Eurodollar Rate Loans shall terminate (and such Lender shall
make all of its Loans as Base Rate Loans notwithstanding any
election by the Borrowers to have the Lenders make, or to
Convert any Loans into, Eurodollar Rate Loans) and (b) the
Borrowers shall within five Business Days of such notice and
demand, Convert all Eurodollar Rate Loans of such Lender
then outstanding into Base Rate Loans in accordance with
subsection 2.9; provided, however, that, before making any
such demand, such Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and
regulatory restrictions) to designate a different Eurodollar
Lending Office if the making of such a designation would
allow such Lender or its Eurodollar Lending office to
continue to perform its obligations to make Eurodollar Rate
Loans or to continue to fund or maintain Eurodollar Rate
Loans and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender; and provided
further, however, that if at any time after such Conversion
no such Event of Illegality shall be continuing, such Lender
shall promptly so notify the Administrative Agent and the
Borrowers, and the obligation of such Lender to make
Eurodollar Rate Loans shall be reinstated; and provided
further, however, that neither the Administrative Agent nor
such Lender shall have any liability for the manner or
timeliness of such notice.
2.16 LETTERS OF CREDIT
A. LETTERS OF CREDIT. In addition to the
Borrowers requesting that the Lenders make Revolving Loans
pursuant to subsection 2.1, the Borrowers may request, in
accordance with the provisions of this subsection 2.16A,
that on and after the Closing Date an Issuing Bank issue
Letters of Credit for the account of the Borrowers; provided
that: (i) the Borrowers shall not request that any Issuing
Bank issue any Letter of Credit if, after giving effect to
such issuance, the Total Utilization of Revolving
Commitments would exceed the aggregate Revolving Commitments
then available, as the amount available under the Revolving
Commitments may be reduced from time to time pursuant to
subsection 2.4 or limited from time to time pursuant to
subsection 2.1A; (ii) in no event shall any Issuing Bank
issue (x) any Letter of Credit having an expiration date
later than the Revolver Maturity Date, (y) any Commercial
Letter of Credit having an expiration date more than 180
days after its date of issuance; provided that the Issuing
Bank may issue Commercial Letters of Credit having
expiration dates between 181 days and 270 days after the
date of issuance so long as, after giving effect to the
issuance thereof the aggregate face amount of all such
Commercial Letters of Credit outstanding does not exceed
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$7,500,000, or (z) any Standby Letter of Credit having an
expiration date more than one year after its date of
issuance; and (iii) the Borrowers shall not request that any
Issuing Bank issue any Letter of Credit if, after giving
effect to such issuance, the Letter of Credit Usage in
respect of all Letters of Credit would exceed the lesser of
$50,000,000 or the Revolving Commitments. The issuance of
any Letter of Credit in accordance with the provisions of
this subsection 2.16 shall be given effect in the
calculation of the Total Utilization of Revolving
Commitments and shall require the satisfaction of each
condition set forth in subsection 3.3.
Immediately upon the issuance of each Letter of
Credit by the Issuing Bank, each Lender shall be deemed to,
and hereby agrees to, have irrevocably purchased from the
Issuing Bank a participation in such Letter of Credit and
drawings thereunder in an amount equal to such Lender's Pro
Rata Share (with respect to the Revolving Commitments) of
the maximum amount that is or at any time may become
available to be drawn thereunder.
B. NOTICE OF ISSUANCE. Whenever the Borrowers
desire the issuance of a Letter of Credit, they shall make
request therefor to the Issuing Bank at least two Business
Days, or such shorter period as may be agreed to by the
Issuing Bank in any particular instance, in advance of the
proposed date of issuance, specifying (i) the proposed date
of issuance (which shall be a business day under the laws of
the jurisdiction of the Issuing Bank), (ii) the face amount
of the Letter of Credit, (iii) the expiration date of the
Letter of Credit, (iv) the name and address of the
beneficiary and (v) whether the Letter of Credit requested
is a Standby Letter of Credit or a Commercial Letter of
Credit.
Together with such request for the issuance of a
Letter of Credit, the Borrowers shall deliver to the Issuing
Bank and the Administrative Agent a notice which shall
certify that (i) the Letter of Credit requested to be
issued, when added to the then Total Utilization of
Revolving Commitments, will not exceed the aggregate
Revolving Commitments therein available, as the amount
available under the Revolving Commitments may be reduced
from time to time pursuant to subsection 2.4 or limited from
time to time pursuant to subsection 2.1A and (ii) subsection
3.2B is satisfied on and as of the date of delivery of such
notice to the same extent as though the issuance of such
Letter of Credit were the making of a Loan, and shall
deliver to the Issuing Bank an executed application for such
Letter of Credit in the form customarily required by the
Issuing Bank for the issuance of commercial letters of
credit or standby letters of credit, as the case may be, and
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specify a precise description of the documents and the
verbatim text of any certificate to be presented by the
beneficiary which, if presented by the beneficiary prior to
the expiration date of the Letter of Credit, would require
the Issuing Bank to make payment under the Letter of Credit;
provided that the Issuing Bank, in its reasonable judgment,
may require changes in any such documents and certificates.
In determining whether to pay under any Letter of Credit,
the Issuing Bank shall be responsible only to determine that
the documents and certificates required to be delivered
under that Letter of Credit have been delivered and that
they comply on their face with the requirements of that
Letter of Credit.
Upon receipt by the Issuing Bank of such notice
and such other documents from the Borrowers requesting the
issuance of a Letter of Credit, if the Issuing Bank elects
to issue such Letter of Credit, it shall so notify the
Borrowers and the Administrative Agent of the proposed
issuance and the Issuing Bank shall issue such Letter of
Credit. If the Issuing Bank, in its sole discretion, elects
not to issue such Letter of Credit because issuance of such
Letter of Credit may violate any applicable laws or any
applicable policies of the Issuing Bank or any Lender, the
Issuing Bank shall promptly so notify the Borrowers and the
Administrative Agent and no Letter of Credit will be issued.
Upon the issuance, negotiation, amendment or expiration of a
Letter of Credit, each Issuing Bank shall notify the
Administrative Agent of such activity and on no less than a
semi-monthly basis, the Administrative Agent shall notify
each Lender of such activity and the aggregate face amount
of all outstanding Letters of Credit.
C. PAYMENT OF AMOUNTS DRAWN UNDER LETTERS OF
CREDIT. In the event of any request for drawing under any
Letter of Credit by the beneficiary thereof, the Issuing
Bank shall immediately notify the Borrowers and the
Administrative Agent, and the Borrowers shall reimburse such
Issuing Bank on the day on which such drawing is honored in
an amount in same day funds equal to the amount of such
drawing. If the Borrowers shall fail to reimburse such
Issuing Bank on the date of any drawing under a Letter of
Credit issued by it in an amount equal to the amount of such
drawing, (i) the Borrowers shall be deemed to have given a
Notice of Borrowing to the Administrative Agent requesting
the Lenders to make Revolving Loans that are Base Rate Loans
on the date on which such drawing is honored in an amount
equal to the amount of such drawing, and (ii) subject to
satisfaction or waiver of the conditions specified in
subsections 2.1A and 3.2, the Lenders shall, on the Business
Day next following the date of such drawing, make Revolving
Loans that are Base Rate Loans in the amount of such drawing
together with accrued interest thereon at the rate for Base
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Rate Loans from the date of drawing to the date of such
Loans (and shall make such amounts available to the
Administrative Agent), the proceeds of which shall be
applied directly by the Administrative Agent to reimburse
such Issuing Bank for the amount of such drawing together
with such accrued interest thereon; provided, that, if for
any reason proceeds of Revolving Loans are not received by
such Issuing Bank on such date in an amount equal to the
amount of such drawing together with accrued interest
thereon, the Borrowers shall reimburse such Issuing Bank,
within three Business Days of the date of such drawing, in
an amount in same day funds equal to the excess of the
amount of such drawing over the amount of such Revolving
Loans, if any, that are so received, plus accrued interest
thereon. Interest on all amounts not reimbursed to such
Issuing Bank on the date of such drawing shall accrue at the
rates set forth in the proviso to subsection 2.7A.
D. PAYMENT BY LENDERS. If the Borrowers shall
fail to reimburse an Issuing Bank as provided in subsection
2.16C in an amount equal to the amount of any drawing
honored by such Issuing Bank under a Letter of Credit issued
by it together with accrued interest thereon, such Issuing
Bank shall promptly notify the Administrative Agent of the
unreimbursed amount of such drawing together with accrued
interest thereon and the Administrative Agent shall notify
each Lender of such Lender's respective participation
therein based on such Lender's Pro Rata Share of the
Revolving Commitments. Each Lender shall make available to
the Administrative Agent for the account of such Issuing
Bank an amount equal to its respective participation, in
same day funds, at the office of the Administrative Agent,
not later than 9:00 A.M. (San Francisco time) on the
Business Day next following the date notified by the
Administrative Agent. The day of payment by each Lender to
the Administrative Agent and the day of notice by the
Administrative Agent to each Lender shall be both a Business
Day and a business day under the laws of the jurisdiction of
each such Lender. If any Lender fails to make available to
the Administrative Agent the amount of such Lender's
participation in such Letter of Credit as provided in this
subsection 2.16D, such Issuing Bank shall be entitled to
recover such amount on demand from such Lender, together
with interest (to the extent such interest is not received
from the Borrowers) until such amount is recovered at the
Federal Funds Rate. Nothing in this subsection 2.16 shall
be deemed to prejudice the right of any Lender to recover
from an Issuing Bank any amounts made available by such
Lender to such Issuing Bank pursuant to this subsection
2.16D if it is determined by a judgment of a court of
competent jurisdiction that the payment with respect to a
Letter of Credit by such Issuing Bank in respect of which
payment was made by such Lender constituted gross negligence
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or willful misconduct on the part of such Issuing Bank.
Each Issuing Bank shall distribute through the
Administrative Agent to each other Lender which has paid all
amounts payable by it under this subsection 2.16D with
respect to any Letter of Credit issued by such Issuing Bank
such other Lender's Pro Rata Share (with respect to the
Revolving Commitments) of all payments received by such
Issuing Bank from any Loan Party in reimbursement of
drawings honored by such Issuing Bank under such Letter of
Credit when such payments are received. The Borrowers shall
be liable to the Lenders for all of the principal and
interest made available by the Lenders to any Issuing Bank
pursuant to this subsection 2.16D and interest on all
amounts made available by Lenders to any Issuing Bank shall
accrue at the rates set forth in the proviso to subsection
2.7A. All such principal and interest amounts shall be part
of the Obligations.
E. COMPENSATION. The Borrowers agree to pay the
following amounts to the Issuing Bank with respect to each
Letter of Credit issued by it:
(1) if a Commercial Letter of Credit, a
Commercial Letter of Credit fee equal to the greater of
the Dollar amount or the percentage set forth below
opposite the corresponding tenor of the maximum amount
available to be drawn under such Commercial Letter of
Credit, payable on the date of issuance:
Tenor Fee (the greater of)
----- --------------------
Up to 180 days 1/4% or $150
181 - 270 days 3/8% or $300
(2) if a Standby Letter of Credit, a Standby
Letter of Credit fee equal to the Applicable Margin
(plus an additional charge as mutually agreed upon by
the Borrowers and the Issuing Bank (the "Agreed Upon
Charge")) of the maximum amount available to be drawn
under such Standby Letter of Credit on the basis of the
actual number of days elapsed in a (360-day) year,
payable quarterly in arrears on the last Business Day
of each fiscal quarter; provided, however, that after
the occurrence and during the continuance of any Event
of Default, such Standby Letter of Credit fee shall
increase, from the date on which such Event of Default
shall have occurred until the expiration of such
Standby Letter of Credit, payable on demand, 2.00% per
annum above the Standby Letter of Credit fee otherwise
payable under this Agreement;
(3) with respect to drawings made under any
Letter of Credit which have not been immediately
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reimbursed by the Borrowers as provided in subsection
2.16C, interest, payable on demand, on the amount paid
by the Issuing Bank in respect of each such drawing
from the date of the drawing through the date such
amount is reimbursed by the Borrowers at a rate equal
to the Base Rate in effect from time to time; provided,
however, that after the occurrence and during the
continuance of an Event of Default, such unreimbursed
drawing shall bear interest, from the date on which
such Event of Default shall have occurred until such
amount is paid in full, payable on demand, at a rate
per annum equal at all times to 2.00% per annum above
the rate of interest otherwise payable under this
Agreement; and
(4) negotiation, amendment, presentation,
administrative, documentary and processing charges and
other charges in accordance with the Issuing Bank's
standard schedule for such charges from time to time in
effect or as otherwise mutually agreed.
Promptly upon receipt by the Issuing Bank of any
amount described in clauses (1), (2) and (3) of this
subsection 2.16E, the Issuing Bank shall deliver to the
Administrative Agent for distribution to each Lender of its
Pro Rata Share of such amount, which amount shall be
distributed to the Lenders no less than quarterly in
arrears; provided, that (x) with respect to any amount
described in clause (1), the Issuing Bank shall retain a
reasonable and customary servicing charge for its own
account prior to making the foregoing delivery to the
Administrative Agent and (y) with respect to any amount
described in clause (2), the Issuing Bank shall retain the
Agreed Upon Charge for its own account prior to making the
foregoing delivery to the Administrative Agent. All amounts
provided for by this subsection 2.16E are payable
notwithstanding any cancellation or prepayment of any Letter
of Credit issued hereunder.
F. OBLIGATIONS ABSOLUTE. The obligation of the
Borrowers to reimburse each Issuing Bank for drawings made
under the Letters of Credit issued by it and, subject to
subsection 2.2C, the obligations of the Lenders under
subsection 2.16D shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, set-off,
recoupment, defense or other right that any Loan Party
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or any Lender may have at any time against any
beneficiary or any transferee of any Letter of Credit
(or any persons or entities for whom any such
transferee may be acting), any Lender or any other
Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated
transaction (including any underlying transaction
between any Borrower or any of its Subsidiaries and the
beneficiary for which the Letter of Credit was
procured);
(iii) any draft, demand, certificate or any other
document presented under any Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the Issuing Bank under any Letter
of Credit against presentation of a demand, draft or
certificate or other document that does not comply with
the terms of such Letter of Credit; provided that such
payment does not constitute gross negligence or willful
misconduct of the Issuing Bank, as determined by a
judgment of a court of competent jurisdiction;
(v) the occurrence of any Material Adverse
Effect;
(vi) any breach of this Agreement or any other
Loan Document by any Loan Party, the Administrative
Agent or any Lender;
(vii) the fact that an Event of Default or a
Potential Event of Default shall have occurred and be
continuing; or
(viii) any other circumstance or happening
whatsoever that is similar to any of the foregoing.
G. INDEMNIFICATION; NATURE OF ISSUING BANK'S
DUTIES. In addition to amounts payable as elsewhere
provided in this subsection 2.16, the Borrowers hereby agree
to protect, indemnify, pay and hold each Issuing Bank
harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses
(including reasonable out-of-pocket attorneys' fees and
costs) that such Issuing Bank may incur or be subject to as
a consequence, direct or indirect, of (i) the issuance of
any Letter of Credit, or (ii) the failure of such Issuing
Bank to honor a drawing under any Letter of Credit as a
result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or
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governmental authority (all such acts or omissions are
herein called "Government Acts").
As between the Borrowers and any Issuing Bank, the
Borrowers assume all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Bank
by, the respective beneficiaries of such Letters of Credit.
In furtherance and not in limitation of the foregoing,
subject to the last paragraph of this subsection 2.16G, the
Issuing Bank shall not be responsible: (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with
the application for and issuance of such Letters of Credit,
even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged;
(ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or
assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason or for
the identity of any purported transferee or assignee of any
beneficiary thereof; (iii) for failure of the beneficiary of
any such Letter of Credit to comply fully with conditions
required in order to draw upon such Letter of Credit;
(iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher; (v) for errors in interpretation of technical terms;
(vi) for any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under
any such Letter of Credit or of the proceeds thereof;
(vii) for the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such
Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of the Issuing Bank,
including, without limitation, any Government Acts. None of
the above shall affect, impair, or prevent the vesting of
any of the Issuing Bank's rights or powers hereunder.
In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action
taken or omitted to be taken by the Issuing Bank under or in
connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith, and
to the extent not with gross negligence or willful
misconduct as determined by a judgment of a court of
competent jurisdiction, shall not put such Issuing Bank
under any resulting liability to any Borrower or any of its
Subsidiaries.
Notwithstanding anything to the contrary contained
in this subsection 2.16G, the Borrowers shall have no
obligation to indemnify any Issuing Bank in respect of any
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liability incurred by such Issuing Bank arising out of the
gross negligence or willful misconduct of such Issuing Bank,
as determined by a judgment of a court of competent
jurisdiction.
H. COMPUTATION OF INTEREST. Interest payable
pursuant to this subsection 2.16 shall be computed on the
basis of a 360-day year and the actual number of days
elapsed in the period during which it accrues.
2.17 EVIDENCE OF DEBT; BID NOTES
A. Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness of the Borrowers to such Lender resulting from
each Committed Loan owing to such Lender from time to time,
including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder.
B. The Register maintained by the Administrative
Agent pursuant to subsection 10.8C shall include a control
account and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made hereunder, (ii) the terms of
each Assignment and Acceptance delivered to and accepted by
it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrowers to
each Lender hereunder, and (iv) the amount of any sum
received by the Administrative Agent from the Borrowers
hereunder and each Lender's share thereof.
C. The entries made in the Register shall be
conclusive and binding for all purposes, absent manifest
error.
D. The Bid Loans made by each Lender shall be
evidenced by a Bid Note payable to the order of such Lender.
Each Lender shall endorse on the schedules annexed to its
Bid Note the date, amount and maturity of each Bid Loan made
by it and the amount of each payment of principal made by
the Borrowers with respect thereto. Each Lender is
irrevocably authorized by the Borrowers to endorse its Bid
Note and each Lender's record shall constitute prima facie
evidence of the accuracy of the information so recorded;
provided, however, that the failure of a Lender to make, or
an error in making, a notation thereon with respect to any
Bid Loan shall not limit or otherwise affect the obligations
of the Borrowers hereunder or under any such Bid Note to
such Lender.
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2.18 OBLIGATIONS JOINT AND SEVERAL
Anything herein to the contrary notwithstanding,
each Borrower hereby agrees and acknowledges that the
obligation of each Borrower for payment of the Obligations
shall be joint and several with the obligations of each
other Borrower hereunder.
Each Borrower agrees that its joint and several
obligation to pay all Obligations hereunder is irrevocable,
absolute, independent and unconditional and shall not be
affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than the
indefeasible payment in full of the Obligations, and the
liability of each Borrower with respect to the Obligations
shall not be affected, reduced or impaired by
(i) consideration of the amount of proceeds of the Loans
received by any Borrower relative to the aggregate amount of
the Loans, (ii) consideration of the face amount of Letters
of Credit issued for the account of any Borrower relative to
the aggregate face amount of all Letters of Credit issued
hereunder, (iii) the dissolution or termination of or any
increase, decrease or change in personnel of, any other
Borrower, (iv) the insolvency or business failure of, or any
assignment for the benefit of creditors by, or the
commencement of any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceedings by or against
any other Borrower or (v) the appointment of a receiver for,
or the attachment, restraint of or making or levying of any
order of court or legal process affecting, the property of
any other Borrower. Each Borrower agrees that a separate
action or actions may be brought and prosecuted against such
Borrower whether or not action is brought against any other
Borrower and whether or not any other Borrower is joined in
any such action or actions. Any Borrower's payment of a
portion, but not all, of the Obligations shall in no way
limit, affect, modify or abridge such Borrower's liability
for that portion of the Obligations which is not paid.
Each Borrower hereby waives any right to require
the Administrative Agent or any Lender, as a condition of
payment or performance of the Obligations by such Borrower,
to proceed against any other Borrower or any other Person,
to exhaust any security held from any Borrower, or pursue
any other remedy in the power of the Administrative Agent or
any Lender. Each Borrower hereby waives any defense arising
by reason of incapacity, lack of authority or any disability
or other defense that may be available to any other Borrower
and any defenses or benefits that may be derived or afforded
by law which would limit the liability of or exonerate any
guarantor or surety with respect to the Obligations, or
which may conflict with the terms and provisions of this
Agreement.
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2.19 CONTRIBUTION AMONG BORROWERS
In order to provide for just and equitable
contribution among Borrowers, each Borrower hereby agrees
that if any Borrower shall make payments on the Obligations
in an amount in excess of the net value of the benefits
received by such Borrower and its Subsidiaries from
extensions of credit hereunder (including receipt of the
proceeds of Loans and any Letters of Credit), it shall have
a right of contribution against each other Borrower for such
excess; provided, that such right of contribution shall be
subordinate to the Lenders' right to receive indefeasible
payment in full of the Obligations. The parties hereto
acknowledge that the right to contribution hereunder shall
constitute an asset of any Borrower to which such
contribution is owing.
For the purposes of this subsection 2.19, the "net
value of the benefits" received by any Borrower from
extensions of credit hereunder shall include benefits of
funds constituting proceeds of Loans advanced by the Lenders
to such Borrower or its Subsidiaries and benefits consisting
of any drawings under Letters of Credit issued for the
account or benefit of such Borrower or its Subsidiaries.
Nothing in this subsection 2.19 shall impair the
absolute and unconditional obligation of the Borrowers
jointly and severally to pay all Obligations when the same
shall become due in accordance with the terms of this
Agreement.
2.20 FINANCIAL CONDITION OF BORROWERS
Neither the Administrative Agent nor any Lender
shall have any obligation to any Borrower to disclose or
discuss with such Borrower the Administrative Agent's or any
Lender's assessment of the financial condition of any
Borrower, and each Borrower hereby waives any obligation of
any Lender to disclose any matter, fact or thing relating to
the business, operations or conditions of any Borrower now
or hereafter known by the Administrative Agent or any
Lender. Each Borrower assumes the responsibility for being
and keeping informed of the financial condition of each
other Borrower and of all circumstances bearing upon the
risk of nonpayment of the Obligations by any other Borrower.
No Lender shall have any obligation to any Borrower arising
from any Lender's assessment of, or failure to assess, any
Borrower's financial condition in connection with the
granting of any Loans or other extensions of credit
hereunder.
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2.21 EXTENSION OF REVOLVER MATURITY DATE
Not later than 60 days nor earlier than 90 days
prior to September 30, 1994 or any subsequent anniversary
thereof, the Borrowers may request a one-year extension of
the Revolver Maturity Date by written notice to the
Administrative Agent, which shall promptly notify the
Lenders of such request, and the Lenders agree to respond to
the Borrowers' request for an extension within 45 days of
receipt of such written notice from the Administrative
Agent; provided, however, that the consent of 100% of the
Lenders shall be required to extend the Revolver Maturity
Date and the failure of any Lender to respond to such
request within such 45-day period shall be deemed a
rejection of such request and shall not in any manner
constitute an extension of the Revolver Maturity Date. Each
Lender's decision with respect to any requested extension of
the Revolver Maturity Date shall be in its sole discretion.
If all of the Lenders consent to such extension, the
Revolver Maturity Date then in effect shall automatically be
extended by one year without any further action on the part
of the Administrative Agent, the Lenders or the Borrowers.
2.22 EXISTING LOANS AND EXISTING LETTERS OF CREDIT
Notwithstanding anything to the contrary in this
Agreement, subject to the terms and conditions of this
Agreement and in reliance upon the representations and
warranties of the Borrowers herein set forth, as of the
Closing Date, all loans outstanding under the Existing
Credit Agreement on the Closing Date (the "Existing Loans")
shall be assigned by the Existing Lenders to the Lenders
proportionately to their Pro Rata Shares, and shall be
repaid in full with the proceeds of the initial Loans
hereunder. All letters of credit issued pursuant to the
Existing Credit Agreement that are outstanding on the
Closing Date or with respect to which an unpaid
reimbursement obligation is outstanding on the Closing Date
("Existing Letters of Credit") for all purposes of this
Agreement shall be deemed to have been issued under and
pursuant to the terms of this Agreement as Letters of
Credit. Any amounts of accrued interest, commitment fees,
letter of credit fees or other amounts (including, without
limitation, any Eurodollar Loan breakage costs payable with
respect to the assignment and repayment of the Existing
Loans) owed (whether or not presently due and payable) by
the Borrowers to the Existing Lenders under or in respect of
the Existing Loans and Existing Letters of Credit shall be
due and payable to the Existing Lenders on the Closing Date.
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Section 3. CONDITIONS WITH RESPECT TO LOANS AND
LETTERS OF CREDIT
3.1 CONDITIONS TO INITIAL LOANS
The obligation of each Lender to make its initial
Revolving Loan, the obligation of the Swing Line Lender to
make the initial Swing Line Loan and the obligation of the
Issuing Bank to issue the initial Letter of Credit are in
addition to the conditions precedent specified in
subsections 3.2 and 3.3, subject to the prior or concurrent
fulfillment to its satisfaction of the following conditions:
A. DELIVERY OF THE BORROWER DOCUMENTS. On or
before the Closing Date, each Borrower shall deliver the
following to the Administrative Agent for the Lenders with
sufficient originally executed copies for each Lender, the
Administrative Agent and its counsel each, unless otherwise
noted, dated the Closing Date:
(i) Certified copies of the Articles of
Incorporation of each Borrower, together with good
standing certificates and telegrams, if available, from
the Secretary of State of the State of its
incorporation, and good standing certificates from each
state in which such Borrower is required to be
qualified to transact business as a foreign
corporation, each to be dated a recent date prior to
the Closing Date;
(ii) Copies of each Borrower's Bylaws certified by
its corporate secretary or an assistant secretary;
(iii) Resolutions of each Borrower's Board of
Directors approving and authorizing the execution,
delivery and performance of this Agreement and the
issuance and payment of the Bid Notes to which it is a
party, and any other documents, instruments and
certificates required to be executed by such Borrower
in connection herewith or therewith, each certified by
its corporate secretary or an assistant secretary;
(iv) Signature and incumbency certificates of each
Borrower's officers executing this Agreement, the other
Loan Documents to which it is a party and any other
documents, instruments and certificates required to be
executed by such Borrower in connection herewith or
therewith;
(v) Executed copies of this Agreement, the Bid
Notes payable to the Lenders with appropriate
insertions and any other Loan Documents to which any
Borrower is a party; and
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(vi) Such other documents as the Administrative
Agent or the Lenders may reasonably request.
B. DELIVERY OF OPINIONS OF COUNSEL TO THE
BORROWERS. On the Closing Date, the Administrative Agent
shall have received originally executed copies (with
sufficient copies for the Lenders, the Administrative Agent
and its counsel) of one or more favorable written opinions
of (i) Gibson, Dunn & Crutcher, counsel for the Company and
(ii) Dan Zuckerman, counsel for WCL and PNS, substantially
in the form of Exhibit VII annexed hereto, and as to such
other matters as the Administrative Agent or the Lenders may
reasonably request.
C. OPINION OF THE ADMINISTRATIVE AGENT'S
COUNSEL. On the Closing Date, the Administrative Agent
shall have received originally executed copies (with
sufficient copies for the Lenders, the Administrative Agent
and its counsel) of one or more favorable written opinions
of O'Melveny & Myers, counsel to the Administrative Agent,
dated as of the Closing Date, substantially in the form of
EXHIBIT VIII annexed hereto and as to such other matters as
the Lenders or the Administrative Agent may reasonably
request.
D. PERFORMANCE OF AGREEMENTS. On or before the
Closing Date, each Loan Party shall have performed in all
material respects all agreements which this Agreement
provides shall be performed on the part of such Loan Party
on or before the Closing Date.
E. FEES. On or before the Closing Date, the
Borrowers shall have paid to the Administrative Agent and
the Co-Agent the fees payable on the Closing Date to the
Administrative Agent and the Co-Agent on behalf of
themselves and the Lenders pursuant to subsections 2.3B and
2.3C, and the Attorney Costs of the Administrative Agent's
counsel incurred through the Closing Date.
F. OTHER CORPORATE ACTIONS. On or before the
Closing Date, all corporate and other proceedings taken or
to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously
found acceptable by the Lenders or the Administrative Agent,
acting on behalf of the Lenders, and its counsel shall be
reasonably satisfactory in form and substance to the
Administrative Agent and such counsel, and the
Administrative Agent and such counsel shall have received
all such counterpart originals or certified copies of such
documents as the Administrative Agent may reasonably
request.
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G. NO CHANGE IN MARKET CONDITIONS. From
August 30, 1993 to the Closing Date, there shall have
occurred, in the reasonable judgment of the Administrative
Agent, no material adverse change in the loan syndication or
capital markets.
H. On or before the Closing Date, the Borrowers
shall have delivered to the Administrative Agent (with
sufficient copies for the Lenders, the Administrative Agent
and its counsel) such other documents as the Lenders may
reasonably request.
3.2 CONDITIONS TO ALL LOANS
The obligation of each Bid Loan Lender to make
each Bid Loan on each Funding Date, the obligation of the
Swing Line Lender to make each Swing Line Loan on each
Funding Date (including the initial Funding Date) and the
obligation of each Lender to make each Revolving Loan on
each Funding Date (including the initial Funding Date) are
subject to prior or concurrent fulfillment to such Lender's
satisfaction, as the case may be, of the following further
conditions precedent:
A. DELIVERY OF NOTICE. Prior to each such
Funding Date with respect to a Committed Loan, the
Administrative Agent shall have received, in accordance with
the provisions of subsection 2.2, an originally executed
Notice of Borrowing signed by an Authorized Person of each
of the Borrowers. The giving of such Notice of Borrowing
shall be deemed to be a representation by the Borrowers that
all of the conditions to borrowing set forth in this
subsection 3.2 shall have been satisfied as of the date of
such Notice of Borrowing.
B. OTHER REQUIREMENTS.
(i) The representations and warranties of the
Borrowers contained herein and in the other Loan
Documents shall be true, correct and complete on and as
of each Funding Date to the same extent as though made
on and as of that date;
(ii) No event shall have occurred and be
continuing or would result from the consummation of the
Borrowing contemplated by the applicable Notice of
Borrowing that would constitute an Event of Default or
a Potential Event of Default;
(iii) The making of any Loan and the use of the
proceeds thereof, shall not violate Regulation U,
Regulation G, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System, and the
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Administrative Agent shall on each Funding Date have
received from the Borrowers such documents and
information as it may request (including but not
limited to opinions of counsel) relating to the
satisfaction of such conditions;
(iv) There shall not be pending or, to the
knowledge of any Borrower threatened, any action, suit,
proceeding, governmental investigation or arbitration
against or affecting any Loan Party or any property of
any Loan Party that has not been disclosed by the
Borrowers in writing prior to the execution of this
Agreement and there shall have occurred no development
not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed,
which, in either event, in the opinion of the Lenders,
(as communicated by Requisite Lenders to the
Administrative Agent and evidenced by a written notice
from the Administrative Agent to the Borrowers), could
be expected to prohibit the making of the Loans
hereunder or extensions of credit under the other
financing agreements contemplated hereby or otherwise
result in a Material Adverse Effect. No injunction or
other restraining order shall have been issued and no
hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, or
that could otherwise prohibit the making of Loans
hereunder, the application of the proceeds thereof as
contemplated hereby, the extensions of credit under any
of the other financing agreements contemplated hereby
or any of the transactions contemplated by the
foregoing.
3.3 CONDITIONS TO ALL LETTERS OF CREDIT
The issuance of any Letter of Credit by an Issuing
Bank hereunder and the participation therein by the Lenders
are subject to prior or concurrent satisfaction of all of
the following conditions:
A. On or before the date of issuance of such
Letter of Credit, each of the conditions set forth in
subsection 3.1 shall have been satisfied or waived and the
initial Loans shall have been made.
B. The Issuing Bank (and, to the extent
applicable, the Administrative Agent) shall have received,
in accordance with the provisions of subsection 2.16B, a
notice requesting the issuance of such Letter of Credit, an
executed application for such Letter of Credit in the form
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customarily required by the Issuing Bank for the issuance of
letters of credit, all other information specified in
subsection 2.16B and such other documents as the Issuing
Bank may reasonably require in connection with the issuance
of such Letter of Credit.
C. Each of the other conditions to the issuance
of such Letter of Credit set forth in subsection 2.16 shall
have been satisfied.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this
Agreement and to make the Loans and to induce the Issuing
Banks to issue the Letters of Credit, each Borrower
represents and warrants to the Lenders that the following
statements are true, correct and complete.
4.1 ORGANIZATION, POWERS, GOOD STANDING AND
SUBSIDIARIES
A. ORGANIZATION AND POWERS. Each Loan Party is
a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation
and has all requisite corporate power and authority to own
and operate its properties and to carry on its business as
now conducted and proposed to be conducted. Each Loan Party
has all requisite corporate power and authority to enter
into this Agreement, each other Loan Document to which it is
a party, and to carry out the transactions contemplated
hereby and thereby. PNS Eastern, Inc. is an inactive
corporation with total assets of not more than $500,000.
B. GOOD STANDING. Each Loan Party is in good
standing wherever necessary to carry on its present business
and operations, except in jurisdictions where the failure to
be in good standing has not and will not have a Material
Adverse Effect.
C. SUBSIDIARIES. All of the Subsidiaries of each
Loan Party as of the Closing Date are identified in Schedule
B annexed hereto. The capital stock of each Person
identified in Schedule B is duly authorized, validly issued,
fully paid and nonassessable and such shares of capital
stock are free and clear of any claim, lien, encumbrance or
agreement with respect thereto. Except as set forth on
Schedule B, no capital stock (or any securities,
instruments, warrants, option or purchase rights, conversion
or exchange rights, calls, commitments or claims of any
character convertible into or exercisable for capital stock)
of any Person identified in Schedule B is subject to
issuance under any security instrument, warrant, option or
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purchase right, conversion or exchange right, call,
commitment or claim of any right, title or interest therein
or thereto. Except as otherwise indicated on Schedule B,
the capital stock of each Person identified on Schedule B is
not Margin Stock. Schedule B correctly sets forth as of the
Closing Date the ownership interest of each Loan Party in
each of its Subsidiaries.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION. The execution, delivery and
performance by each Loan Party of each Loan Document to
which it is a party, have been duly authorized by all
necessary corporate action.
B. NO CONFLICT. The execution, delivery and
performance by each Loan Party of each Loan Document to
which it is a party, the application of the proceeds of the
Loans and the consummation of any other transactions
contemplated by the Loan Documents do not and will not
(i) violate any provision of law applicable to any Loan
Party, the Certificate or Articles of Incorporation or
Bylaws (or other charter documents) of, or any order,
judgment or decree of any court or other agency of
government binding on, such Loan Party, (ii) except as
disclosed on Schedule I annexed hereto, conflict with,
result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual
Obligation of any Loan Party, (iii) result in or require the
creation or imposition of any Lien, charge or encumbrance of
any nature whatsoever upon any of the properties or assets
of any Loan Party or (iv) require any approval of
stockholders or any approval or consent of any Person under
any Contractual Obligation of any Loan Party, other than
such approvals or consents which have been previously
obtained and described in a writing and delivered to the
Lenders no later than five Business Days prior to the
Closing Date and which are identified as being delivered
pursuant to this subsection 4.2B.
C. GOVERNMENTAL CONSENTS. The execution,
delivery and performance by each Loan Party of each Loan
Document to which it is a party and, the application of the
proceeds of the Loans and the consummation of any other
transactions contemplated by the Loan Documents do not and
will not require any registration with, consent or approval
of, or notice to, or other action with or by, any federal,
state or other governmental authority or regulatory body or
other Person except for filings, consents or notices
required by federal or state securities laws, all of which
filings, recordings, consents and notices have been obtained
or made and all applicable waiting periods relating thereto
have expired.
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D. BINDING OBLIGATION. This Agreement is and the
other Loan Documents when executed and delivered will be,
the legally valid and binding obligations of the applicable
Loan Party, enforceable against the applicable Loan Party in
accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors
rights generally and subject to the availability of
equitable remedies.
4.3 FINANCIAL CONDITION
The Borrowers have heretofore delivered to the
Lenders, at the Lenders' request, (i) a Consolidated balance
sheet of the Company and its Subsidiaries for the Fiscal
Year ending January 31, 1993 and the related Consolidated
statements of income, retained earnings and cash flows for
such Fiscal Year and (ii) the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended August 2, 1993. None
of the Loan Parties has any material Contingent Obligation,
contingent liability or liability for taxes, long term lease
or unusual forward or long term commitment, which is not
reflected in the foregoing financial statements or the notes
thereto.
4.4 CHANGES, ETC.
There has been no change in the business,
operations, properties, assets, liabilities, business
condition (financial or otherwise) or business prospects of
the Company or any of its Subsidiaries since January 31,
1993, which has been, either in any case or in the
aggregate, materially adverse to the Company and its
Subsidiaries, taken as a whole. Since January 31, 1993,
none of the Company or any of its Subsidiaries, has directly
or indirectly declared, ordered, paid or made or set apart
any payment (whether in cash or securities) for any
Restricted Junior Payment or agreed to do so except as
described in Schedule E.
4.5 LITIGATION; ADVERSE FACTS
Except as otherwise set forth in Schedule J
annexed hereto, there is no action, suit, proceeding or
arbitration (whether or not purportedly on behalf of any
Loan Party) at law or in equity or before or by any federal,
state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality,
domestic or foreign, pending against any Loan Party or, to
the knowledge of any Borrower, threatened against or
affecting any Loan Party or any property of any Loan Party
which is reasonably likely to result in a Material Adverse
Effect, and there is no basis known to any Borrower for any
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such action, suit or proceeding. No Loan Party is (i) in
violation of any applicable law in a manner which materially
adversely affects or is reasonably likely to materially
adversely affect the business, operations, properties,
assets, business prospects or condition (financial or
otherwise) of such Loan Party, or (ii) subject to or in
default with respect to any final judgment, writ,
injunction, decree, rule or regulation of any court or
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality,
domestic or foreign, in a manner which is reasonably likely
to have a Material Adverse Effect. There is no action,
suit, proceeding or investigation pending or, to the best
knowledge of any Borrower, threatened against or affecting
any Loan Party which questions the validity or the
enforceability of any Loan Document.
4.6 PAYMENT OF TAX
All tax returns and reports of each Loan Party
required to be filed by such Loan Party have been timely
filed (after giving effect to any extensions for filing
obtained), and all taxes, assessments, fees and other
governmental charges upon each Loan Party and their
respective properties, assets, income and franchises (if
any) which are due and payable have been paid when due and
payable, except (i) to the extent contemplated by the
proviso in subsection 5.3A hereof or (ii) to the extent that
such taxes, assessments, fees and other governmental charges
or the failure to pay the same would not be material to the
condition of such Loan Party. The Borrowers know of no
proposed tax assessment against any Loan Party that would be
material to the condition (financial or otherwise) of such
Loan Party.
4.7 MATERIALLY ADVERSE AGREEMENTS; PERFORMANCE
A. AGREEMENTS. No Loan Party is a party to or
subject to any material agreement or instrument or charter
or other internal restriction materially adversely affecting
the business, properties, assets, operations, business
prospects or condition (financial or otherwise) of such Loan
Party.
B. PERFORMANCE. No Loan Party is in default in
the performance, observance or fulfillment of any of the
material obligations, covenants or conditions contained in
any of its Contractual Obligations, and no condition exists
which, with the giving of notice or the lapse of time or
both, would constitute such a default, except where the
consequences, direct or indirect, of such default or
defaults, if any, would not have a Material Adverse Effect.
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4.8 GOVERNMENTAL REGULATION
No Loan Party is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment
Company Act of 1940 or to any United States federal or state
statute or regulation limiting its ability to incur
Indebtedness for money borrowed or to become contingently
liable for the Indebtedness of another.
4.9 SECURITIES ACTIVITIES
No Loan Party is engaged principally, or as one of
its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin
Stock.
4.10 EMPLOYEE BENEFIT PLANS
A. Each Loan Party and each of its ERISA
Affiliates is in compliance in all material respects with
any applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all
Employee Benefit Plans.
B. No Termination Event has occurred or is
reasonably expected to occur with respect to any Pension
Plan that could reasonably be expected to result in a
liability of any Loan Party or its ERISA Affiliates in
excess of $1,000,000.
C. The actuarial present value of all benefit
liabilities under all Pension Plans (excluding in such
computation Pension Plans with assets greater than benefit
liabilities) does not exceed the fair market value of the
assets allocable to such benefit liabilities. For purposes
of the preceding sentence, the terms "actuarial present
value" and "benefit liabilities" shall have the meanings
specified in Section 4001 of ERISA.
4.11 PATENTS, TRADEMARKS AND LICENSES
Except as disclosed on Schedule C annexed hereto,
each Loan Party possesses all of the licenses, patents,
patent applications, copyrights, service marks, trademarks
and trade names necessary to continue to conduct its
business as heretofore conducted by it, all of which are set
forth in Schedule K. The Borrowers own all of the Specified
Trademarks free and clear of all Liens, claims, licenses and
interests. All information furnished any or all of the
Lenders concerning the Specified Trademarks is, or will be
at the time the same is furnished, accurate and correct in
all material respects. To the best of any Borrower's
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knowledge and belief after due inquiry, no material
infringement or unauthorized use is presently made of any of
the Specified Trademarks. Except as disclosed on Schedule
C, there has not been to the Closing Date any claim or
litigation pending, or to the best of any Borrower's
knowledge after diligent inquiry, threatened by or against
any Borrower relating to any of the Specified Trademarks.
Except as disclosed in Schedule C, there are no agreements,
licenses or understandings permitting the use by any Person
of any of the Specified Trademarks or restricting in any
manner any Borrower's use thereof. The consummation of the
transactions contemplated by this Agreement and the other
Loan Documents will not in any manner or to any extent
materially impair the ownership of or the license to use, as
the case may be, any of the Specified Trademarks.
4.12 TITLE TO PROPERTIES; LIENS
Each of the Company and its Subsidiaries has good,
sufficient and legal title to all of its properties and
assets reflected in the Consolidated balance sheet of the
Company and its Subsidiaries as of January 31, 1993 or in
the most recent financial statements delivered pursuant to
subsection 5.1, except for assets acquired or disposed of
since the date of such financial statements and Capital
Leases of which the Company or its Subsidiaries is a lessee
shown as being owned by the Company or its Subsidiaries.
Except for Permitted Liens and as permitted by this
Agreement, all such properties and assets are free and clear
of Liens. Each Borrower enjoys peaceful and undisturbed
possession under all the leases to which it is lessee. All
of the material leases under which the Company or its
Subsidiaries is a lessee are valid and subsisting, no
default of any Borrower exists under any of them and, to the
knowledge of the Borrowers, no default of any other party
exists under any of them.
4.13 ENVIRONMENTAL PROTECTION
Except as disclosed in Schedule D annexed hereto:
(i) The operations of the Company and its
Subsidiaries comply in all material respects with all
Hazardous Materials Laws;
(ii) The Company and its Subsidiaries have
obtained all permits, licenses and approvals under all
Hazardous Materials Laws necessary for their respective
operations, and all such permits, licenses and
approvals are in good standing and the Company and its
Subsidiaries are in compliance with all material terms
and conditions of such permits, licenses and approvals;
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(iii) The Company and its Subsidiaries and all of
their present property or operations, and to the best
of any Borrower's knowledge, their past property or
operations, are not subject to any outstanding written
order from or agreement with any Governmental Authority
or other Person and are not subject to any judicial or
docketed administrative proceeding or investigation,
respecting (a) any specific existing, potential or
alleged violation of any Hazardous Materials Laws,
(b) any Remedial Action which has or could reasonably
be expected to have a Material Adverse Effect or
(c) any material Environmental Liabilities and Costs;
(iv) None of the Company or any of its
Subsidiaries has ever been or is now a treatment,
storage or disposal facility requiring a permit under
the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq., related regulations or any other state
equivalent;
(v) None of the Company or any of its
Subsidiaries has filed or should have filed any notice
required under any Hazardous Materials Laws reporting a
Release into the environment which Release has or would
have any reasonable likelihood of having a Material
Adverse Effect and none of the Company or any of its
Subsidiaries has filed or should have filed any notice
pursuant to Section 103(a) or (c) of the Comprehensive
Environmental Response, Compensation, and Liability Act
("CERCLA");
(vi) There is not now on or in any property of the
Company or any of its Subsidiaries:
(a) any underground storage tanks or surface
impoundments,
(b) any Hazardous Materials, or
(c) any polychlorinated biphenyls (PCBs)
used in electrical or other equipment,
the presence of which has any reasonable likelihood of
having a Material Adverse Effect;
(vii) None of the Company or any of its
Subsidiaries has received (i) any notice or claim to
the effect that it is or may be liable to any Person as
a result of a Release or threatened Release which
Release or threatened Release has any reasonable
likelihood of having a Material Adverse Effect, or
(ii) any letter or request for information under
Section 104 of CERCLA or comparable State laws;
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(viii) To the best knowledge of the Company and its
Subsidiaries, there are no past or present conditions
or circumstances which may give rise to any
Environmental Liabilities or Costs arising from the
operations of the Company or any Subsidiary of the
Company, including but not limited to off-site disposal
of any Hazardous Materials by or on behalf of the
Company or any of its Subsidiaries, which in the
aggregate have any reasonable likelihood of having a
Material Adverse Effect;
(ix) No Environmental Lien (whether recorded or
unrecorded) has attached to any real or personal
property owned, used or operated by the Company or any
of its Subsidiaries which individually or in the
aggregate has a reasonable likelihood of having a
Material Adverse Effect; and
(x) The Company and each of its Subsidiaries is
in compliance in all material respects with any
applicable financial responsibility requirements of all
Hazardous Materials Laws, including without limitation
those contained in 40 C.F.R., parts 264 and 265,
subpart H, and any state equivalents.
4.14 LABOR MATTERS
There are no strikes or other labor disputes or
grievances pending or, to the knowledge of any Borrower,
threatened against any Borrower or its Subsidiaries that
could reasonably be expected to have a Material Adverse
Effect.
4.15 DISCLOSURE
As of the Closing Date and as of any date
thereafter on which representations and warranties are made,
no representation or warranty of any Loan Party contained in
this Agreement or any other document, certificate or written
statement furnished to the Administrative Agent or the
Lenders, or any of them, by or on behalf of such Loan Party
for use in connection with the transactions contemplated by
this Agreement, contains or will contain any untrue
statement of a material fact or omits or will omit to state
a material fact (known to any Borrower in the case of any
document not furnished by it) necessary in order to make the
statements contained herein or therein not misleading. The
projections and pro forma financial information contained in
such materials are based upon good faith estimates and
assumptions believed by such Persons to be reasonable at the
time made, it being recognized by the Lenders that such
projections as to future events are not to be viewed as
facts or guarantees and that actual results during the
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period or periods covered by any such projections may differ
from the projected results. There is no fact known to any
Borrower (other than matters of a general economic nature)
which could have a Material Adverse Effect, which has not
been disclosed herein or in such other documents,
certificates and statements furnished to the Lenders for use
in connection with the transactions contemplated hereby.
4.16 NO PARTNERSHIPS OR JOINT VENTURES
No Loan Party has any interest in or is party to
any partnership, joint venture or similar arrangement,
whether in corporate, partnership or other legal form.
SECTION 5. AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that, so long
as any portion of the aggregate Commitments hereunder shall
be in effect and until payment in full of all of the Loans,
and all other amounts owing hereunder and the expiration of
all Letters of Credit, unless Requisite Lenders shall
otherwise give prior written consent in accordance with
subsection 10.1 of this Agreement, the Borrowers shall
perform all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS
The Borrowers will maintain a system of accounting
established and administered in accordance with sound
business practices to permit preparation of financial
statements in conformity with GAAP applied on a consistent
basis. The Borrowers will deliver to the Administrative
Agent with sufficient copies for the Lenders and the
Administrative Agent:
(i) as soon as practicable and in any event
within 45 days (or 60 days if an extension from the SEC
for the filing of the Company's Quarterly Report on
Form 10-Q has been obtained; provided that the Company
shall give the Administrative Agent prompt written
notice of any such extension requested) (in the case of
the first three fiscal quarters) after the end of each
of the first three fiscal quarters in each Fiscal Year,
the Consolidated balance sheets of the Company as at
the end of such period and the related Consolidated
statements of income and retained earnings of the
Company for such fiscal quarter and the related
statement of cash flow for the period from the
beginning of the then current Fiscal Year to the end of
such fiscal quarter, setting forth in comparative form
the corresponding figures for the corresponding periods
of the previous Fiscal Year and the corresponding
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figures from the Consolidated plan for such fiscal
quarter, all in reasonable detail and certified by the
chief financial officer, the controller or the
treasurer of the Company, that they fairly present the
financial condition of the Company and its
Subsidiaries, as at the dates indicated and the results
of their operations and changes in their financial
position for the periods indicated, subject to changes
resulting from audit and normal year-end adjustment;
(ii) as soon as practicable and in any event
within 90 days (or 105 days if an extension from the
SEC for the filing of the Company's Annual Report on
Form 10-K has been obtained; provided that the Company
shall give the Administrative Agent prompt written
notice of any such extension requested) after the end
of each Fiscal Year, (a) the Consolidated balance sheet
of the Company as at the end of such year and the
related Consolidated statements of income, retained
earnings and cash flow of the Company for such Fiscal
Year, setting forth in comparative form the
corresponding figures from the Consolidated plan and
the audited financial statements from the previous
Fiscal Year, all in reasonable detail, and (b) in the
case of such Consolidated financial statements,
accompanied by a report thereon of an independent
certified public accountant of recognized national
standing selected by the Company, which report shall be
unqualified as to going concern and scope of audit and
shall state that such Consolidated financial statements
present fairly the financial position of the Company
and its Subsidiaries as at the dates indicated and the
results of their operations and changes in their
financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with
prior years (except as otherwise stated therein) and
that the examination by such accountants in connection
with such Consolidated financial statements has been
made in accordance with generally accepted auditing
standards;
(iii) together with each delivery of financial
statements of the Company and its Subsidiaries pursuant
to subsections (i) and (ii) above, (a) an Officers'
Certificate of the Borrowers stating that the signers
have reviewed the terms of this Agreement and have
made, or caused to be made under their supervision, a
review in reasonable detail of the transactions and
condition of the Company and its Subsidiaries during
the accounting period covered by such financial
statements and that such review has not disclosed the
existence during or at the end of such accounting
period, and that the signers do not have knowledge of
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the existence as at the date of the Officers'
Certificate, of any condition or event that constitutes
an Event of Default or Potential Event of Default, or,
if any such condition or event existed or exists,
specifying the nature and period of existence thereof
and what action the Borrowers have taken, are taking
and propose to take with respect thereto; (b) a
Compliance Certificate demonstrating in reasonable
detail compliance by the Borrowers at the end of such
accounting periods with the restrictions contained in
subsections 6.1, 6.3, 6.5, 6.6, 6.7, 6.8, 6.9 and 6.13
and, if not specified in the financial statements
delivered pursuant to subdivision (i) or (ii) above, as
the case may be, specifying the aggregate amount of
interest paid or accrued by the Company and its
Subsidiaries, and the aggregate amount of depreciation,
depletion and amortization charged on the books of the
Company and its Subsidiaries during such accounting
period; and (c) an Applicable Margin Certificate.
(iv) together with each delivery of audited
financial statements of the Company and its
Subsidiaries pursuant to subdivision (ii) above, a
written statement by the independent public accountants
of recognized national standing giving the report
thereon (a) stating that their audit examination has
included a review of the terms of this Agreement as
they relate to accounting matters, (b) stating whether,
in connection with their audit examination, any
condition or event that constitutes an Event of Default
or Potential Event of Default has come to their
attention, and if such a condition or event has come to
their attention, specifying the nature and period of
existence thereof; provided that such accountants shall
not be liable by reason of any failure to obtain
knowledge of any such Event of Default or Potential
Event of Default with respect to accounting matters
that would not be disclosed in the course of their
audit examination, and (c) stating that based on their
audit examination nothing has come to their attention
that causes them to believe that the information
contained in the certificate delivered therewith
pursuant to subdivision (iii) above is not correct;
(v) promptly upon receipt thereof, copies of all
significant reports submitted to any of the Company and
its Subsidiaries by independent public accountants of
recognized national standing in connection with each
annual, interim or special audit or review of the
financial statements or practices of the Company and
its Subsidiaries, made by such accountants, including,
without limitation, the comment letter submitted by
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such accountants to management in connection with their
annual audit;
(vi) promptly upon their becoming available but no
later than 15 days after any filing hereof with any
regulatory agency, copies of (a) all financial
statements, reports, notices and proxy statements sent
or made available generally by any of the Company and
its Subsidiaries to their security holders, (b) all
regular and periodic reports and all registration
statements and prospectuses, if any, filed by any of
the Company and its Subsidiaries with any securities
exchange or with the SEC or any governmental or private
regulatory authority and (c) all press releases and
other statements regarding management or financial
matters made available generally by any of the Company
and its Subsidiaries to the public concerning material
developments in the business of any Loan Party;
(vii) promptly upon any officer of any Borrower
obtaining knowledge (a) that a condition or event has
occurred and is continuing that constitutes an Event of
Default or Potential Event of Default, or becoming
aware that any Lender or the Agent has given any notice
or taken any other action with respect to a claimed
Event of Default or Potential Event of Default under
this Agreement, (b) that any Person has given any
notice to any Borrower or any of its Subsidiaries or
taken any other action with respect to a claimed
default or event or condition of the type referred to
in subsection 7.4, or (c) of a material adverse change
in the business, operations, properties, assets or
condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole, an Officers'
Certificate specifying the nature and period of
existence of such condition or event, or specifying the
notice given or action taken by such holder or Person
and the nature of such claimed default, Event of
Default, Potential Event of Default, event or
condition, and what action the Borrowers have taken,
are taking and propose to take with respect thereto;
(viii) promptly upon any officer of any Borrower
obtaining knowledge of (a) the institution of, or
nonfrivolous threat of, any action, suit, proceeding,
governmental investigation or arbitration against or
affecting any Borrower or any of its Subsidiaries or
any property of any Borrower or any of its Subsidiaries
not previously disclosed by the Borrowers to the
Lenders, or (b) any material development in any such
action, suit, proceeding, governmental investigation or
arbitration, that, in either case:
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(y) creates a reasonable possibility of a
Material Adverse Effect; or
(z) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages in
excess of $1,000,000 or obtain relief as a result
of, the Loans;
the Borrowers shall promptly give notice thereof to the
Administrative Agent and the Lenders and provide such
other information as may be reasonably available to it
to enable the Lenders and their counsel to evaluate
such matters;
(ix) promptly upon becoming aware that one of the
following has occurred or is about to occur:
(a) Termination Event, or (b) "prohibited transaction,"
as such terms are defined in Section 4975 of the
Internal Revenue Code or Section 406 of ERISA, in
connection with any Employee Benefit Plan or any trust
created thereunder, a written notice specifying the
nature thereof, what action the Borrowers have taken,
are taking or propose to take with respect thereto,
and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor, or
the PBGC with respect thereto;
(x) with reasonable promptness copies of (a) all
notices received by any Borrower or any of its ERISA
Affiliates of the PBGC's intent to terminate any
Pension Plan or to have a trustee appointed to
administer any Pension Plan; (b) each Schedule B
(Actuarial Information) to the annual report (Form 5500
Series) filed by any Borrower or any of its ERISA
Affiliates with the Internal Revenue Service with
respect to each Pension Plan; and (c) all notices
received by any Borrower or any of its ERISA Affiliates
from a Multiemployer Plan sponsor concerning the
imposition or amount of withdrawal liability pursuant
to Section 4202 of ERISA;
(xi) as soon as practicable and in any event
within 90 days after the beginning of each Fiscal Year,
a Consolidated plan and financial forecast for the
Company and its Subsidiaries for the then current
Fiscal Year and each subsequent Fiscal Year through the
Fiscal Year in which the Revolver Maturity Date occurs,
including without limitation, a forecasted Consolidated
balance sheet and Consolidated statements of income and
cash flow for each such Fiscal Year, each such plan and
forecast to be in form similar to the plans and
forecasts delivered to the Administrative Agent and the
Lenders prior to the Closing Date;
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(xii) within 10 Business Days of the end of any
Clean-Down Period, an Officers' Certificate identifying
the beginning and ending dates of such Clean-Down
Period and certifying that Clean-Down Debt outstanding
during such Clean-Down Period did not at any time
exceed the level required pursuant to subsection 2.1A;
(xiii) as soon as practicable, and in any event
within 90 days after the last day of each Fiscal Year,
a statement of Inventory for each of PNS and WCL in
form and substance reasonably satisfactory to the
Lenders and the Administrative Agent;
(xiv) with reasonable promptness, such other
information and data with respect to any of the Company
and its Subsidiaries as from time to time may be
reasonably requested by any Lender or the
Administrative Agent.
5.2 CORPORATE EXISTENCE, ETC.
Each Borrower will, and will cause each of its
Subsidiaries to, at all times preserve and keep in full
force and effect its corporate existence, licenses, bonds,
franchises, leases, patents, trademarks, contracts and other
rights material to its business. Each of PNS and WCL will
at all times be a wholly-owned Subsidiary of the Company.
PNS and WCL will preserve and retain at all times their
separate corporate existence and keep separate books,
records and accounts identifying their respective assets and
liabilities.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX
CONSOLIDATION
A. PAYMENT OF TAXES AND CLAIMS. Each Borrower
will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed
upon it or any of its material properties or assets or in
respect of any of its franchises, business, income or
property before any penalty or interest accrues thereon, and
all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums which have become
due and payable and which by law have or may become a Lien
upon any of its material properties or assets, prior to the
time when any penalty or fine shall be incurred with respect
thereto; provided that no such tax, assessment, charge or
claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently
conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with
GAAP shall have been made therefor.
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B. TAX CONSOLIDATION. No Borrower will, nor
will it permit any of its Subsidiaries to, file or consent
to the filing of any consolidated income tax return with any
Person (other than the Company or any of its Subsidiaries)
unless that other Person shall have agreed in writing with
the Borrowers that the Borrowers' liability with respect to
taxes as a result of the filing of any such consolidated
income tax return with such Person shall not be greater, nor
the receipt of any tax benefits less, than they would have
been had the Borrowers continued to file an unconsolidated
income tax return.
5.4 MAINTENANCE OF PROPERTIES; INSURANCE
Each Borrower will maintain or cause to be
maintained in good repair, working order and condition all
material properties used or useful in the business of the
Company and its Subsidiaries and from time to time will make
or cause to be made all appropriate repairs, renewals and
replacements thereof. Each Borrower will maintain or cause
to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and
business and the properties and business of its Subsidiaries
against loss or damage of the kinds customarily insured
against by corporations of established reputation engaged in
the same or similar businesses and similarly situated, of
such types and in such amounts as are customarily carried
under similar circumstances by such other corporations. On
or before the end of the first fiscal quarter of each Fiscal
Year, the Borrowers shall submit to the Administrative Agent
(i) an Officers' Certificate setting forth in detail the
type and amount of insurance maintained pursuant to this
subsection 5.4 and (ii) a certificate from an independent
insurance brokerage confirming the insurance coverage
required to be maintained by the preceding sentence.
5.5 EQUAL SECURITY FOR OBLIGATIONS; NO FURTHER
NEGATIVE PLEDGES
A. If any Borrower or any of its Subsidiaries
shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than
Liens excepted by the provisions of subsection 6.2, it shall
make or cause to be made effective provision whereby the
Obligations will be secured by such Lien equally and ratably
with any and all other Indebtedness thereby secured as long
as any such Indebtedness shall be secured; provided that,
notwithstanding the foregoing, this covenant shall not be
construed as a consent by the Requisite Lenders to any
creation or assumption of any such Lien not permitted by the
provisions of subsection 6.2.
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B. Except with respect to (i) lease provisions
prohibiting the creation or assumption of Liens upon the
particular property subject to such leases and (ii) specific
property encumbered to secure payment of particular
Indebtedness, none of the Borrowers and any of their
respective Subsidiaries shall enter into any agreement
(other than the Loan Documents) prohibiting the creation or
assumption of any Lien upon its properties or assets,
whether now owned or hereafter acquired.
5.6 INSPECTION; RECORDS, ETC.
The Borrowers will permit any Persons designated
by the Administrative Agent or by any Lender to visit and
inspect any of the properties of the Company and its
Subsidiaries including the Company and its Subsidiaries'
financial and accounting records, and to make copies and
take extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective
officers and independent public accountants, all during
regular business hours, upon reasonable notice to the office
of the chief financial officer or controller of the Company
and as often as may be reasonably requested.
5.7 COMPLIANCE WITH LAWS, ETC.
Each Borrower shall, and shall cause its
Subsidiaries to, (i) comply with all applicable laws, rules,
regulations and orders of all governmental authority,
noncompliance of which could materially adversely affect or
impair the Lenders' rights, remedies or privileges under or
enforceability of any of the Loan Documents, including,
without limitation, the Fair Labor Standards Act, and
(ii) exercise all due diligence in order to comply with the
requirements of all other applicable laws, rules,
regulations and orders of any governmental authority
(including without limitation, all Hazardous Materials
Laws), noncompliance with which could reasonably be expected
to result in a Material Adverse Effect.
5.8 FURTHER ASSURANCES
At any time or from time to time upon the request
of any Lender, each Borrower shall execute and deliver such
further documents and do such other acts and things as any
Lender or the Administrative Agent may reasonably request in
order to effect fully the purposes of this Agreement and to
provide for payment of the Loans and interest thereon, in
accordance with the terms of this Agreement.
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5.9 ENVIRONMENTAL NOTICE AND INSPECTION
Each Borrower shall:
(i) Exercise, and shall cause each of its
Subsidiaries to exercise, all due diligence in order to
comply and cause (a) all tenants under any lease or
occupancy agreement affecting any portion of any property
owned, used, leased or operated by the Company or any of its
Subsidiaries and (b) all other Persons on or occupying such
property, to comply with all Hazardous Materials Laws;
(ii) Notify the Lenders and the Administrative
Agent in writing and in reasonable detail, promptly, and in
any event within 30 days of the Company or any of its
Subsidiaries receiving any of the following:
(a) written notice or claim to the effect that
the Company or any of its Subsidiaries is or may be
liable to any Person as a result of the Release or
threatened Release or has or is in violation of any
Hazardous Materials Laws, in each case if the same has
any reasonable likelihood of having a Material Adverse
Effect;
(b) written notice that any real or personal
property of the Company or any of its Subsidiaries is
subject to an Environmental Lien; and
(c) written notice of the commencement of any
judicial or administrative proceeding or investigation
alleging a violation of any Hazardous Materials Laws or
subjecting the Company or any of its Subsidiaries to
Environmental Liabilities and Costs, in each case if
the same has any reasonable likelihood of having a
Material Adverse Effect;
(iii) Notify the Lenders and the Administrative
Agent promptly and in any event within 30 days, of:
(a) any Release required to be reported to any
federal, state or local governmental or regulatory
agency under any applicable Hazardous Materials Laws;
(b) any and all written communications with
respect to any Environmental Liabilities and Costs that
are reasonably likely to have a Material Adverse Effect
or any Release required to be reported to any federal,
state or local governmental or regulatory agency;
(c) any Remedial Action taken by the Company, any
of its Subsidiaries or any other Person in response to
(1) any Hazardous Materials on, under or about any
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property owned, used or operated by the Company or any
of its Subsidiaries, the existence of which is
reasonably likely to result in a Material Adverse
Effect or (2) any Environmental Liabilities and Costs
that are reasonably likely to result in a Material
Adverse Effect;
(d) The Company's or any of its Subsidiaries'
discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any facility
owned, used or operated by the Company or any of its
Subsidiaries that could reasonably be expected to cause
such property to be subject to any restrictions on the
ownership, occupancy, transferability or use thereof
under any Hazardous Materials Laws which restrictions,
individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect;
(e) any request for information from any
governmental agency that suggests that such agency is
investigating whether the Company or any of its
Subsidiaries may be potentially responsible for a
Release;
(f) any proposed acquisition of stock, assets,
real estate, or leasing of property by the Company or
any of its Subsidiaries that could reasonably be
expected to subject the Company or any of its
Subsidiaries to a Material Adverse Effect resulting
from Environmental Liabilities and Costs;
(g) any proposed action taken by the Company or
any of its Subsidiaries to commence manufacturing,
industrial, or other operations that could reasonably
be expected to subject the Company or any of its
Subsidiaries to additional laws, rules or regulations,
including but not limited to the obtaining of
environmental, health, or safety permits, licenses or
approvals or Environmental Liabilities and Costs, that
could reasonably be expected to have a Material Adverse
Effect.
(iv) Submit, upon written request by the
Administrative Agent, a report providing an update of the
status of any environmental, health or safety compliance,
hazard or liability issue identified in any notice or report
required pursuant to this Section 5.9 and any other
environmental, health or safety compliance obligation,
remedial obligation or liability that could have a Material
Adverse Effect.
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SECTION 6. NEGATIVE COVENANTS
Each Borrower agrees that, so long as any portion
of the aggregate Commitments shall be in effect and until
payment in full of all of the Loans and all other amounts
owing hereunder and the expiration of all Letters of Credit,
unless the Lenders shall otherwise give prior written
consent in accordance with subsection 10.1 of this
Agreement, the Borrowers shall perform all covenants in this
Section 6.
6.1 INDEBTEDNESS
Each Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur,
assume, guaranty, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness, except:
(i) The Borrowers may become and remain
liable with respect to Capital Leases permitted by
subsections 6.9 and 6.13;
(ii) The Borrowers may become and remain
liable with respect to Contingent Obligations permitted
by subsection 6.4 and, upon any obligations actually
arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so
extinguished;
(iii) The Borrowers may remain liable with
respect to the Existing Indebtedness described in
Schedule F annexed hereto and any renewals or
extensions thereof; provided that any such renewal or
extension does not (a) increase the principal amount of
Indebtedness outstanding immediately prior to such
renewal or extension and (b) have terms and conditions
more onerous to the Borrowers than those terms and
conditions in existence immediately prior to such
renewal or extension;
(iv) The Borrowers may become and remain
liable with respect to the Obligations;
(v) Each Borrower may become and remain
liable with respect to Indebtedness owing to any other
Borrower, provided that such Indebtedness is hereby
subordinated in right of payment to the payment in full
of the Obligations on terms and conditions satisfactory
to the Lenders;
(vi) The Borrowers may become and remain
liable with respect to Indebtedness assumed or incurred
in connection with the acquisition of property
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permitted under subsections 6.7 and 6.13; provided that
the amount of Indebtedness assumed or incurred in
connection with any such acquisition does not exceed
(a) 100% of the purchase price of such acquired
property in the case of equipment acquisitions and (b)
85% of the purchase price of such acquired property in
the case of real property acquisitions; provided,
further, that in connection with acquisitions of up to
four stores per Fiscal Year, up to 100% of the purchase
price thereof may be assumed or incurred in connection
with such acquisitions so long as the aggregate
principal amount of such Indebtedness does not exceed
$8,000,000;
(vii) The Borrowers may become and remain
liable with respect to interest rate protection
agreements, including without limitation, Interest Rate
Agreements;
(viii) The Borrowers may become and remain
liable with respect to Indebtedness in connection with
the financing of insurance premiums of the Borrowers in
an aggregate amount not to exceed $1,000,000 at any
time outstanding;
(ix) The Borrowers may become and remain
liable with respect to Indebtedness consisting of
promissory notes payable to insurance companies or
their subsidiaries in connection with workers'
compensation insurance; provided that the aggregate
principal amount of such notes shall not exceed the
aggregate face amount of all Letters of Credit issued
for the benefit of such insurance companies or their
subsidiaries in connection with such workers'
compensation; and
(x) In addition to the foregoing
Indebtedness permitted by clauses (i)-(ix) above, the
Borrowers may become and remain liable with respect to
unsecured Indebtedness not exceeding $30,000,000 in the
aggregate at any time outstanding.
6.2 LIENS
Each Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any
property or asset of a Borrower or any of its Subsidiaries,
whether now owned or hereafter acquired, or any income or
profits therefrom, except:
(i) Permitted Liens;
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(ii) Purchase money Liens securing
Indebtedness permitted pursuant to subsection 6.1(vi);
provided that such Liens shall extend only to the
property financed; and
(iii) Liens existing on the date hereof
described in Schedule F annexed hereto securing
Indebtedness permitted pursuant to subsection 6.1(iii).
6.3 INVESTMENTS
Each Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, make or own any
Investment in any Person, except:
(i) The Borrowers may make and own
Investments in Cash and Cash Equivalents;
(ii) The Borrowers may make and own
Investments described in Schedule G annexed hereto
existing on the date hereof;
(iii) The Borrowers may make and own
Investments consisting of the intercompany Indebtedness
permitted by subsection 6.1(v);
(iv) The Company may own all of the
outstanding capital stock of PNS, WCL and PNS Eastern,
Inc.;
(v) The Borrowers may make and own
Investments received in connection with the bankruptcy
or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the
ordinary course of business;
(vi) The Borrowers may make advances secured
by Liens on residential real estate to their respective
officers and employees in the ordinary course of
business in an aggregate amount not exceeding $750,000
at any time; provided that up to $250,000 of such
advances may be unsecured;
(vii) The Borrowers may make and own
Investments to the extent such Investments are
acquisitions permitted under subsection 6.7; and
(viii) In addition to the foregoing Investments
permitted by clauses (i) - (vii) above, the Borrowers
may make and own Investments not exceeding $1,000,000
at any time outstanding.
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6.4 CONTINGENT OBLIGATIONS
Each Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create or
become or be liable with respect to any Contingent
Obligation except:
(i) The Borrowers may be liable with respect
to guaranties resulting from endorsement of negotiable
instruments for collection in the ordinary course of
business;
(ii) The Borrowers may be liable with respect
to contingent reimbursement obligations with respect to
Letters of Credit issued pursuant hereto;
(iii) The Borrowers may be liable with respect
to Contingent Obligations existing on the date hereof
described in Schedule H annexed hereto;
(iv) Each Borrower may be liable with respect
to guaranties of Indebtedness of another Borrower;
provided that such Indebtedness is permitted under
subsection 6.1;
(v) The Borrowers may be liable with respect
to forward purchase contracts or similar hedging
instruments in connection with the purchase of up to
one year's supply of commodities used in the ordinary
course of the business of the Borrowers; and
(vi) The Borrowers may be liable with respect
to percentage rents incurred under leases permitted
hereunder.
6.5 RESTRICTED JUNIOR PAYMENTS
The Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, declare, order,
pay, make or set apart any sum for (by way of defeasance or
otherwise) any Restricted Junior Payment; provided, that so
long as no Event of Default or Potential Event of Default
has occurred and is continuing, (i) the Subsidiaries of the
Company may make Restricted Junior Payments to the Company
and (ii) the Company may make Restricted Junior Payments to
purchase outstanding capital stock of the Company in open
market purchases or otherwise or to pay cash dividends to
its shareholders so long as after giving effect to such
proposed Restricted Junior Payment the aggregate of all such
Restricted Junior Payments made pursuant to this clause (ii)
since the Closing Date does not exceed the sum of (x)
$10,000,000 plus (y) on a cumulative basis from August 2,
1993 to the date of such proposed Restricted Junior Payment
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(the "Cumulative Period"), 50% of all positive Consolidated
Net Income for each fiscal quarter during the Cumulative
Period less 100% of all negative Consolidated Net Income for
each fiscal quarter during the Cumulative Period.
6.6 FINANCIAL COVENANTS
A. MINIMUM CONSOLIDATED TANGIBLE NET WORTH. The
Borrowers will not permit, on any Fiscal Quarter End during
the period from the Closing Date until the Revolver Maturity
Date, commencing with the fiscal quarter ending on
October 31, 1993, Consolidated Tangible Net Worth to be less
than the sum of $215,000,000 plus 50% of Consolidated Net
Income (with no deduction for losses) determined on a fiscal
quarter basis for the period from August 2, 1993 to such
Fiscal Quarter End.
B. MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE
RATIO. The Borrowers will not permit, on any Fiscal Quarter
End during the period from the Closing Date until the
Revolver Maturity Date, commencing with the fiscal quarter
ending on October 31, 1993, the Consolidated Fixed Charge
Coverage Ratio for the four fiscal quarters ending on such
Fiscal Quarter End to be less than 1.10 to 1.00 on the
Fiscal Quarter End of October 31, 1993 and 1.15 to 1.00 on
each Fiscal Quarter End thereafter.
C. MAXIMUM LEVERAGE RATIO. The Borrowers will
not permit, on any Fiscal Quarter End occurring during the
period from the Closing Date to the Revolver Maturity Date,
commencing with the fiscal quarter ending on October 31,
1993, the Leverage Ratio to be more than 0.50 to 1.00.
6.7 RESTRICTION ON FUNDAMENTAL CHANGES
None of the Borrowers or any of their respective
Subsidiaries will enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution), or acquire by
purchase or otherwise all or substantially all the business,
property or fixed assets of, or stock or other evidence of
beneficial ownership of, any Person, in each case, without
the prior written consent of Requisite Lenders; provided
that (a) PNS Eastern, Inc. may be merged with and into
Company and (b) the Borrowers may make acquisitions (whether
by asset purchase, stock purchase or otherwise) of all or
substantially all of the assets or stock or other evidence
of beneficial ownership of a Person so long as (i) no Event
of Default or Potential Event of Default has occurred and is
continuing or would result therefrom, (ii) the aggregate
consideration paid for all such acquisitions consummated in
any Fiscal Year does not exceed $15,000,000, (iii) the
aggregate consideration paid for all such acquisitions
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consummated since the Closing Date does not exceed
$30,000,000 and (iv) each such acquisition is a permitted
capital expenditure under subsection 6.13.
6.8 RESTRICTION ON ASSET SALES
None of the Borrowers or any of their respective
Subsidiaries will convey, sell, lease, sublease, transfer or
otherwise dispose of, any of its business, property or fixed
assets, whether now owned or hereafter acquired; except that
each Borrower and its Subsidiaries may:
(i) sell or dispose of Inventory and worn-
out or obsolete equipment in the ordinary course of
business;
(ii) consummate any Asset Sale (other than
with respect to the New Orleans Distribution Center) in
a single transaction or a series of related
transactions so long as (a) such Asset Sale is an arms-
length transaction, (b) the sales price equals or
exceeds the estimated fair market value of the assets
sold as determined in good faith by the selling
Borrower and (c) after giving effect to such Asset
Sale, the aggregate sales price for all such Asset
Sales consummated during the then current Fiscal Year
does not exceed $7,500,000; provided that if, after
giving effect to such Asset Sale, the aggregate sales
prices for all such Asset Sales consummated in the then
current Fiscal Year exceeds $3,000,000, the Borrowers
shall give notice to the Administrative Agent of all
such Asset Sales and each other Asset Sale thereafter
consummated during such Fiscal Year;
(iii) enter into sale-leaseback transactions
permitted by subsection 6.9;
(iv) lease or sublease to a third Person
buildings or portions thereof (and any related parking
lots) for use in a manner substantially similar to the
Company's past use of such property or other uses
customarily found in shopping centers;
(v) renew, extend or replace the real
property leases existing on the Closing Date; provided
that any property subject to any such replacement lease
shall not be used in any manner not substantially
similar to the use of such property by the previous
lessee or for any use not customarily found in shopping
centers; and
(vi) sell the New Orleans Distribution Center
so long as (a) such sale is an arms-length transaction
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and (b) the sales price equals or exceeds the estimated
fair market value thereof as determined in good faith
by the selling Borrower.
6.9 SALES AND LEASE-BACKS
Other than with respect to the New Orleans
Distribution Center, each Borrower will not, and will not
permit any of its Subsidiaries, directly or indirectly, to
become or remain liable as lessee or as guarantor or other
surety with respect to any lease with any Person, whether an
Operating Lease or a Capital Lease, of any property (whether
real or personal or mixed) whether now owned or hereafter
acquired, (i) which a Borrower or any of its Subsidiaries
has sold or transferred or is to sell or transfer to such
Person or such Person's Affiliate, or (ii) which a Borrower
or any such Subsidiary intends to use for substantially the
same purpose as any other property which has been or is to
be sold or transferred by the Company or any such Subsidiary
to such Person or such Person's Affiliate in connection
with such lease; provided that Borrowers may enter into any
sale and leaseback of real property, improvements thereon
and equipment of the Borrowers entered into to finance or
refinance the purchase price or construction of such real
property, improvements and equipment; provided that the Net
Cash Proceeds (plus the related amounts described in clauses
(i) and (iii) of the definition of Net Cash Proceeds) of
each such Asset Sale during any Fiscal Year together with
aggregate Net Cash Proceeds from other Asset Sales
consisting of sale and leasebacks consummated during such
Fiscal Year do not exceed $15,000,000.
6.10 SALE OR DISCOUNT OF RECEIVABLES
Each Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, (i) sell with
recourse, or discount or otherwise sell for less than the
face value thereof, notes or accounts receivable or
(ii) sell, assign, pledge, hypothecate, transfer or
otherwise dispose of any of their rights and claims to the
payment or receipt of money or other forms of consideration
of any kind other than pursuant to the Loan Documents.
6.11 TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES
Each Borrower will not, and will not permit any of
its Subsidiaries to, enter into any transaction (including,
without limitation, the purchase, sale, lease or exchange of
any property or the rendering of any service) with any
holder of 5% or more of any class of equity securities of a
Borrower or with any Affiliate of a Borrower or any such
holder on terms that are less favorable to a Borrower or any
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such Subsidiary than those which might be obtained at the
time from Persons who are not such a holder or Affiliate.
6.12 DISPOSAL OF SUBSIDIARY STOCK
Except as permitted by subsection 6.7 and 6.8, the
Company will not,
(i) directly or indirectly sell, assign, pledge
or otherwise encumber or dispose of any shares of
capital stock or other equity securities of (or
warrants, rights or options to acquire shares or other
equity securities of) any of its Subsidiaries, except
to qualify directors if required by applicable law; or
(ii) permit any of its Subsidiaries directly or
indirectly to sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or
other securities of (or warrants, rights or options to
acquire shares or other securities of) any of its
Subsidiaries, except to the Company, another Subsidiary
of the Company, pursuant to the Collateral Documents or
to qualify directors if required by applicable law.
6.13 LIMITATION ON CONSOLIDATED CAPITAL
EXPENDITURES
Each Borrower will not, and will not permit its
Subsidiaries to, incur aggregate Consolidated Capital
Expenditures during the following Fiscal Years in excess of
the correlative amounts indicated below:
Maximum Consolidated
Fiscal Year Capital Expenditures
----------- --------------------
1993 $40,000,000
1994 50,000,000
1995 50,000,000
1996 60,000,000
; provided that any amounts not used in one Fiscal Year may
be carried forward and used during the first six months of
the succeeding Fiscal Year in addition to the amount set
forth above for such succeeding Fiscal Year.
6.14 CONDUCT OF BUSINESS
Each Borrower will not, and will not permit any of
its Subsidiaries to, engage in any business other than the
business engaged in by it on the date hereof and any
businesses or activities substantially similar or related
thereto; provided, that PNS will not engage in any business
other than that of a retail merchant and WCL will not engage
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in any business other than that of a wholesaler and PNS
Eastern, Inc. will remain inactive. The Company will not
engage in any business other than owning the outstanding
capital stock of its wholly owned Subsidiaries.
6.15 INDEPENDENCE OF COVENANTS
All covenants hereunder shall be given independent
effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would
be permitted by an exception to, or be otherwise within the
limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of
Default if such action is taken or condition exists.
6.16 USE OF PROCEEDS
The Borrowers will not use all or any portion of
the proceeds of any Loan or Letter of Credit for any purpose
other than the purposes set forth in subsection 2.14.
SECTION 7. EVENTS OF DEFAULT
If any of the following conditions or events
("Events of Default") shall occur and be continuing:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE
The Borrowers shall fail to pay any principal of
any Loan or shall fail to pay any other amount due under
this Agreement (other than interest on the Loans and fees
due to the Lenders hereunder) when the same becomes due and
payable; or the Borrowers shall fail to pay any interest on
any Loan or any fees due to the Lenders under this Agreement
within five days after the same becomes due and payable; or
7.2 BREACH OF WARRANTY
Any representation or warranty made or deemed made
by any Loan Party (or any of its officers) in any Loan
Document or certificate or other writing delivered pursuant
thereto shall prove to have been incorrect or misleading in
any material respect when made or deemed made; or
7.3 BREACH OF COVENANTS
Any Loan Party shall fail to perform or observe
any term, covenant or agreement contained in Section 5 or
Section 6; or any Loan Party shall fail to perform or
observe any other term, covenant or agreement contained in
this Agreement or any other Loan Document on its part to be
performed or observed if such failure shall remain
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unremedied or unwaived for 10 days after the earlier of (a)
the date upon which any Responsible Officer of any of the
Borrowers knew of such failure or (b) the date upon which
written notice thereof shall have been given to such Loan
Party by the Administrative Agent; or
7.4 BREACH OF OTHER AGREEMENTS
Any Loan Party shall fail to pay any portion of
principal of or premium or interest on any Indebtedness,
which Indebtedness is in an aggregate principal amount
greater than $1,000,000 (but excluding Indebtedness
outstanding hereunder) or shall fail to pay any portion of a
Contingent Obligation, which Contingent Obligation is in an
aggregate principal amount of greater than $1,000,000, when
the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue unwaived after
the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness or
Contingent Obligation; or any other event shall occur or
condition shall exist under any agreement or instrument
relating to any such Indebtedness or Contingent Obligation
and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the
effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such
Indebtedness or Contingent Obligation; or any such
Indebtedness or Contingent Obligation shall be declared to
be due and payable, or required to be prepaid (other than by
a regularly scheduled required prepayment), prior to the
stated maturity thereof; or
7.5 BANKRUPTCY
(i) A court having jurisdiction in the
premises shall enter a decree or order for relief in
respect of any Loan Party or any of its Subsidiaries in
an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in
effect, which decree or order is not stayed; or any
other similar relief shall be granted under any
applicable federal or state law; or
(ii) An involuntary case is commenced against
any Loan Party or any of its Subsidiaries under any
applicable bankruptcy, insolvency or other similar law
now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar
powers over any Loan Party or any of its Subsidiaries,
or over all or a substantial part of its property,
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shall have been entered; or there shall be the
involuntary appointment of an interim receiver, trustee
or other custodian of any Loan Party or any of its
Subsidiaries for all or a substantial part of its
property; or there shall be the issuance of a warrant
of attachment, execution or similar process against any
substantial part of the property of any Loan Party or
any of its Subsidiaries, and the continuance of any
such event referred to in this clause (ii) for 60 days
unless dismissed, bonded or discharged; or
(iii) Any Loan Party or any of its
Subsidiaries shall have an order for relief entered
with respect to it or commence a voluntary case under
any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or shall consent to the
entry of an order for relief in an involuntary case, or
to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the
appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial
part of its property or shall make any assignment for
the benefit of creditors; or
(iv) Any Loan Party or any of its
Subsidiaries shall fail, be unable, or admit its
inability to pay its debts as such debts become due; or
the Board of Directors of any Loan Party or any of its
Subsidiaries (or any committee thereof) adopts any
resolution to approve or otherwise authorizes any of
the actions referred to in clause (iii) above or this
clause (iv); or
7.6 JUDGMENTS
Any unpaid judgments, orders for the payment of
money (other than judgments and orders covered by insurance,
but only if the insurer has admitted liability with respect
to such judgments and orders), writs or warrants of
attachment involving amounts in excess of $1,000,000 in the
aggregate shall be entered or filed against any of the
Borrowers or any of their respective Subsidiaries and shall
remain undischarged, unvacated, unbonded or unstayed for a
period of 30 days or in any event later than 30 days prior
to any sale under any such judgment, order, writ or warrant;
or
7.7 DISSOLUTION
Any order, judgment or decree shall be entered
against any Loan Party or any of its Subsidiaries decreeing
the dissolution or split up of any Loan Party or any of its
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Subsidiaries and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
7.8 ERISA
(i) Any Borrower or any of its ERISA
Affiliates fails to make full payment when due of all
amounts in excess of $1,000,000 in the aggregate which,
under the provisions of any Pension Plan, Multiemployer
Plan or Section 412 of the Internal Revenue Code, such
Borrower or any of its ERISA Affiliates is required to
pay as contributions thereto;
(ii) Any accumulated funding deficiency in
excess of $1,000,000 in the aggregate occurs or exists,
whether or not waived, with respect to any Pension
Plan;
(iii) The excess of the actuarial present
value of all benefit liabilities under all Pension
Plans over the fair market value of the assets of such
Pension Plans (excluding in such computation Pension
Plans with assets greater than benefit liabilities)
allocable to such benefit liabilities is greater than
$1,000,000;
(iv) Any Borrower or any of its ERISA
Affiliates enters into any transaction which has as its
principal purpose the evasion of liability under
Subtitle D or E of Title IV of ERISA;
(v) (A) Any Pension Plan maintained by any
Borrower or any of its ERISA Affiliates shall be
terminated within the meaning of Title IV of ERISA, or
(B) a trustee shall be appointed by an appropriate
United States district court to administer any Pension
Plan, or (C) the PBGC shall institute proceedings to
terminate, or to appoint a trustee to administer any
Pension Plan or Multiemployer Plan, or (D) any Borrower
or any of its ERISA Affiliates shall withdraw (under
Section 4063 of ERISA) from a Pension Plan or under
Sections 4203 or 4205 from a Multiemployer Plan, if as
of the date of the event listed in subclauses (A)-(D)
above or any subsequent date, any Borrower or any of
its ERISA Affiliates have incurred or are reasonably
likely to incur any liability in excess of $1,000,000
(such liability to include, without limitation, any
liability to any Pension Plan, Multiemployer Plan, or
the PBGC, or to any other part under Sections 4062,
4063 or 4064 of ERISA or any other provision of law)
resulting from or otherwise associated with the events
listed in subclause (A)-(D) above;
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As used in this subsection 7.8 the term
"accumulated funding deficiency" has the meaning specified
in Section 412 of the Internal Revenue Code, and the terms
"actuarial present value" and "benefit liabilities" have the
meanings specified in Section 4001 of ERISA; or
7.9 CONTROL OF THE BORROWERS
(i) Any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities and Exchange Act of 1934, as
amended), directly or indirectly, of securities of any
Borrower (or other securities convertible into such
securities) representing 50% or more of the combined voting
power of all securities of such Borrower entitled to vote in
the election of directors, other than securities having such
power only by reason of the happening of a contingency; or
(ii) Any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement which upon
consummation will result in its or their acquisition of, the
power to exercise, directly or indirectly, control over
securities of any Borrower (or other securities convertible
into such securities) representing 50% or more of the
combined voting power of all securities of such Borrower
entitled to vote in the election of directors, other than
securities having such power only by reason of the happening
of a contingency; or
(iii) Any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities and Exchange Act of 1934, as
amended), directly or indirectly, of securities of any
Borrower (or other securities convertible into such
securities) representing 35% or more of the combined voting
power of all securities of such Borrower entitled to vote in
the election of directors, other than by reason of the
happening of a contingency and during any period commencing
with the acquisition of such securities and ending with the
next stockholders' meeting at which (a) a majority of
individuals constituting the board of directors of such
Borrower will be elected, and (b) the Person acquiring such
securities shall have the right to vote, individuals who
prior to such election were directors of such Borrower shall
cease for any reason (other than death or incapacity) to
constitute 50% of the board of directors of such Borrower;
or
(iv) Any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or
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shall have entered into a contract or arrangement which upon
consummation will result in its or their acquisition of, the
power to exercise, directly or indirectly, control over
securities of any Borrower (or other securities convertible
into such securities) representing 35% or more of the
combined voting power of all securities of such Borrower
entitled to vote in the election of directors, other than by
reason of the happening of a contingency and during any
period commencing with the acquisition of such securities
and ending with the next stockholders' meeting at which
(a) a majority of individuals constituting the board of
directors of such Borrower will be elected, and (b) the
Person acquiring such securities shall have the right to
vote, individuals who prior to such election were directors
of such Borrower shall cease for any reason (other than
death or incapacity) to constitute 50% of the board of
directors of such Borrower; or
(v) The Company shall cease to own 100% of the
issued and outstanding capital stock of PNS and WCL;
then, and in any such event, the Administrative Agent shall
at the request, or may with the consent, of the Requisite
Lenders, (i) by notice to the Borrowers, declare the
obligation of each Lender to make Loans and the obligation
of the Issuing Banks to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate,
(ii) shall at the request, or may with the consent, of
Requisite Lenders, by notice to the Borrowers, declare
(x) the Loans and all interest thereon, (y) an amount equal
to the maximum amount that may at any time be drawn under
all Letters of Credit then outstanding (whether or not any
beneficiary under any Letter of Credit shall have presented,
or shall be entitled at such time to present, the drafts and
other documents required to draw under such Letter of
Credit), and (z) all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the
Loans, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrowers; (iii) exercise
any other remedies provided under this Agreement and the
other Loan Documents or by law; provided, however, that in
the event of an actual or deemed entry of an order for
relief with respect to the Company or any of its
Subsidiaries under the Bankruptcy Code, (A) the obligation
of each Lender to make Loans and the obligation of the
Issuing Banks to issue Letters of Credit shall automatically
be terminated and (B) the Loans, the amount set forth in
clause (y) above, all such interest and all such amounts
shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrowers;
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provided further that the foregoing shall not affect in any
way the obligations of the Revolving Lenders to purchase
from any Issuing Bank participations in the unreimbursed
amount of any drawings under any Letters of Credit as
provided in subsection 2.16E. So long as any Letters of
Credit shall remain outstanding, any amounts described in
clause (y) above with respect to Letters of Credit, when
received by the Administrative Agent, shall be held by the
Administrative Agent as cash collateral for the obligation
of the Borrowers to reimburse the Issuing Banks in the event
of any drawing under outstanding Letters of Credit, and upon
any drawing under any outstanding Letter of Credit in
respect of which the Administrative Agent has deposited in a
cash collateral account (the "Cash Collateral Account") any
amounts described in clause (y) above, the Administrative
Agent shall apply such amounts to reimburse the Issuing Bank
with respect to such Letter of Credit for the amount of such
drawing. In the event of the cancellation or expiration of
any Letter of Credit in respect of which the Administrative
Agent has deposited in Cash Collateral Account any amounts
described in clause (y) above or in the event of any
reduction in the maximum amount available at any time for
drawing under Letters of Credit ("Maximum Available
Amount"), the Administrative Agent shall apply the amount
then in the Cash Collateral Account less the Maximum
Available Amount immediately after such cancellation,
expiration or reduction, if any, first to reimburse the
Issuing Banks for any drawings under outstanding Letters of
Credit, second to the payment in full of the Obligations,
and third to whomsoever shall be lawfully entitled to
receive such funds.
Upon acceleration, the Lenders and the
Administrative Agent, or any of them, without notice to or
demand upon the Borrowers which are expressly waived by the
Borrowers, may proceed (but only with the consent of
Requisite Lenders) to protect, exercise, and enforce their
rights and remedies under the Loan Documents and such other
rights and remedies as are provided by law or equity.
Requisite Lenders may determine in their sole discretion the
order and manner in which the Lenders' rights and remedies
are to be exercised, and all payments received by the
Administrative Agent or the Lenders, or any one or more of
them, shall be applied as follows (regardless of how each
Lender may treat the payments for the purpose of its own
accounting); first, to all costs and expenses (including,
without limitation, attorneys' fees, costs of maintaining,
preserving and/or disposing of any real, personal or mixed
property of the Company and its Subsidiaries which secures
the Obligations to the Lenders and costs of settlement)
incurred by the Administrative Agent or the Lenders, or any
of them, in enforcing any Obligations of, or in collecting
any payments due from, the Borrowers hereunder by reason of
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such Event of Default; second, to all fees and expenses due
and owing to the Administrative Agent or the Lenders, third,
ratably to accrued interest; fourth, ratably to principal
amounts outstanding; fifth, to other Obligations then due
and owing under any of the Loan Documents; and sixth to
whomsoever shall be lawfully entitled to receive such funds.
SECTION 8. THE ADMINISTRATIVE AGENT; CO-AGENTS
8.1 APPOINTMENT AND AUTHORIZATION
Each Lender hereby irrevocably appoints,
designates and authorizes the Administrative Agent to take
such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably
incidental thereto. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement or in any
other Loan Document, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be
deemed to have any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist
against the Administrative Agent.
8.2 DELEGATION OF DUTIES
The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters
pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any
agent or attorney-in-fact that it selects with reasonable
care.
8.3 LIABILITY OF ADMINISTRATIVE AGENT
None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other
Loan Document (except for its own gross negligence or
willful misconduct), or (b) be responsible in any manner to
any of the Lenders for any recital, statement, representa-
tion or warranty made by any Borrower or any Subsidiary or
Affiliate of any Borrower, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to
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or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document,
or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document,
or for any failure of any Borrower or any other party to any
Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or
records of any Borrower or any of the Borrowers'
Subsidiaries or Affiliates.
8.4 RELIANCE BY ADMINISTRATIVE AGENT
(a) The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation
believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and
upon advice and statements of legal counsel (including
counsel to the Borrowers), independent accountants and other
experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such
advice or concurrence of the Requisite Lenders as it deems
appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a
request or consent of the Requisite Lenders and such request
and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with
the conditions specified in subsections 3.1 and 3.2, each
Lender that has executed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied
with each document or other matter either sent by the
Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to
the Lender, unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan
Documents shall have received notice from the Lender prior
to the applicable Borrowing specifying its objection thereto
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and either such objection shall not have been withdrawn by
notice to the Administrative Agent to that effect or the
Lender shall not have made available to the Administrative
Agent the Lender's ratable portion of such Committed
Borrowing.
8.5 NOTICE OF DEFAULT
The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or
Event of Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid
to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written
notice from a Lender or the Borrowers referring to this
Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice,
the Administrative Agent shall give notice thereof to the
Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be
requested by the Requisite Lenders in accordance with
Section 7; provided, however, that unless and until the
Administrative Agent shall have received any such request,
the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.
8.6 CREDIT DECISION
Each Lender expressly acknowledges that none of
the Agent-Related Persons has made any representation or
warranty to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of
the Company and its Subsidiaries shall be deemed to
constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents
to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent and based on
such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the
business, prospects, operations, property, financial and
other condition and creditworthiness of the Company and its
Subsidiaries, and all applicable bank regulatory laws
relating to the transactions contemplated thereby, and made
its own decision to enter into this Agreement and extend
credit to the Borrowers hereunder. Each Lender also
represents that it will, independently and without reliance
upon the Administrative Agent and based on such documents
and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this
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Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrowers.
Except for notices, reports and other documents expressly
herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not
have any duty or responsibility to provide any Lender with
any credit or other information concerning the business,
prospects, operations, property, financial and other
condition or creditworthiness of the Borrowers which may
come into the possession of any of the Agent-Related
Persons.
8.7 INDEMNIFICATION
Whether or not the transactions contemplated
hereby shall be consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Borrowers and without
limiting the obligation of the Borrowers to do so), ratably
from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind whatsoever
which may at any time (including at any time following the
repayment of the Loans and the termination or resignation of
the related Administrative Agent) be imposed on, incurred by
or asserted against any such Person any way relating to or
arising out of this Agreement or any document contemplated
by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or
omitted by any such Person under or in connection with any
of the foregoing; provided, however, that no Lender shall be
liable for the payment to the Agent-Related Persons of any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the
preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document
contemplated by or referred to herein to the extent that the
Administrative Agent is not reimbursed for such expenses by
or on behalf of the Borrowers. Without limiting the
generality of the foregoing, if the Internal Revenue Service
or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Administrative
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Agent did not properly withhold tax from amounts paid to or
for the account of any Lender (because the appropriate form
was not delivered, was not properly executed, or because
such Lender failed to notify the Administrative Agent of a
change in circumstances which rendered the exemption from,
or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Administrative
Agent fully for all amounts paid, directly or indirectly, by
the Administrative Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the
Administrative Agent under this Section, together with all
costs and expenses (including Attorney Costs). The
obligation of the Lenders in this Section shall survive the
payment of all Obligations hereunder.
8.8 ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY
BofA and its Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind
of banking, trust, financial advisory or other business with
the Company and its Subsidiaries and Affiliates as though
BofA were not the Administrative Agent hereunder and without
notice to or consent of the Lenders. With respect to its
Loans, BofA shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as
though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include BofA in its individual
capacity.
8.9 SUCCESSOR ADMINISTRATIVE AGENT
The Administrative Agent may, and at the request
of the Requisite Lenders shall, resign as Administrative
Agent upon 30 days' notice to the Lenders and the Borrowers.
If the Administrative Agent shall resign as Administrative
Agent under this Agreement, the Requisite Lenders shall
appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be reasonably
acceptable to the Borrowers. If no successor agent shall
have been appointed by the Requisite Lenders and shall have
accepted such appointment within 10 days prior to the
effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Borrowers, a successor
agent from among the Lenders. If no successor agent shall
have been so appointed by the Administrative Agent and shall
have accepted such appointment prior to the effective date
of the resignation of the Administrative Agent, the
Administrative Agent may appoint a successor agent which
shall be a commercial bank organized under the laws of the
United States or any state thereof having a combined capital
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and surplus of at least $500,000,000. Upon the acceptance
of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor agent and
the retiring Administrative Agent's appointment, powers and
duties as Administrative Agent shall be terminated. After
any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 8 and
subsections 10.4 and 10.6 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
8.10 CO-AGENTS
None of the Lenders identified on the facing page
or signature pages of this Agreement as a Co-Agent shall
have any right, power, obligation, liability, responsibility
or duty under this Agreement other than those applicable to
all Lenders as such. Each Lender acknowledges that it has
not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
SECTION 9. THE LENDERS' REPRESENTATIONS
Each Lender hereby represents that it is a
commercial lender or financial institution which makes loans
in the ordinary course of its business and that it will make
each Loan hereunder and participate in each Letter of Credit
issued hereunder in the ordinary course of such business;
provided, however, that the disposition of any evidence of
indebtedness held by such Lender shall at all times be
within its exclusive control subject to subsection 10.8.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS, ETC.
No amendment or waiver of any provision of this
Agreement or any other Loan Document nor consent to any
departure by any Loan Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by
Requisite Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following:
(a) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations, (b) reduce the
principal of, or interest on, the Loans or any fees or other
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amounts payable hereunder, (c) postpone any date fixed for
any scheduled payment of principal of, or interest on, the
Loans or any fees or other amounts payable hereunder,
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans, or the
number of Lenders, which shall be required for the Lenders
or any of them to take any action hereunder or (e) amend
this subsection 10.1 or subsection 2.13; and provided,
further, that no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent in
addition to the Lenders required above to take such action,
shall affect the rights or duties of the Administrative
Agent under this Agreement or any other Loan Document. No
notice to or demand on the Borrowers in any case shall
entitle the Borrowers to any other or further notice or
demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in
accordance with this subsection 10.1 shall be binding upon
each holder of any indebtedness resulting from the making of
Loans hereunder at the time outstanding, each future holder
of any such indebtedness, and if signed by the Borrowers, on
the Borrowers. Notwithstanding the foregoing, each Bid Loan
Lender may, in its sole discretion, if there exists no
Potential Event of Default or Event of Default, and without
the consent or signature of the Administrative Agent or any
other Lender (provided, however, that prompt notice thereof
is provided by such Bid Loan Lender to the Administrative
Agent), accept any prepayment on account of any such Bid
Loan Lender's Bid Loans.
10.2 NOTICES, ETC.
All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telex,
facsimile transmission or cable communication) and mailed,
telegraphed, telexed, cabled or delivered. For the purposes
hereof, the addresses of the parties named on the signature
pages hereto shall be as set forth under each party's name
on the signature pages hereto (or with respect to any Lender
not listed on the signature pages hereto, at the address
specified for such Lender in the Assignment and Acceptance
pursuant to which it became a Lender) or, as to the
Borrowers, the Co-Agent or the Administrative Agent, at such
other address as shall be designated by such party in a
written notice to the other parties and, as to each other
party, at such other address as shall be designated by such
party in a written notice to the Borrowers and the
Administrative Agent. All such notices and communications
shall, when delivered, mailed, telegraphed, telexed,
telecopied or cabled, be effective when delivered, three
days after mailing, when delivered to the telegraph company,
when confirmed by telecopy response, when confirmed by telex
answerback or when delivered to the cable company,
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respectively, except that notices and communications to the
Administrative Agent pursuant to Section 2 or 8 shall not be
effective until received by the Administrative Agent.
10.3 NO WAIVER; REMEDIES
No failure on the part of any Lender, the Co-Agent
or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Loan Document
shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
10.4 COSTS AND EXPENSES
Whether or not the transactions contemplated
hereby shall be consummated, the Borrowers agree to pay on
demand all reasonable costs and expenses incurred by the
Administrative Agent in connection with the administration,
development, preparation, execution, delivery, syndication,
filing, recording, modification, supplement, waiver and
amendment of (whether or not consummated), and searching or
filing or recording of files in respect of, the Loan
Documents and the other documents (including without
limitation, legal, appraisal, environmental, valuation,
audit, insurance and travel costs and expenses) to be
delivered under the Loan Documents, including, without
limitation, independent accounting firms for the
Administrative Agent, and Attorney Costs with respect
thereto and with respect to advising the Administrative
Agent as to its rights and responsibilities under the Loan
Documents. In addition, the Borrowers agree to pay on
demand, all reasonable costs and expenses of the Lenders,
the Co-Agent and the Administrative Agent, if any
(including, without limitation, legal, appraisal,
environmental, valuation, audit, consulting, travel costs
and expenses, Attorney Costs and the fees and expenses of
independent accounting firms or other experts for the
Administrative Agent or the Lenders) in connection with the
enforcement (whether through negotiations, legal proceedings
or otherwise) of the Loan Documents and the other documents
to be delivered under the Loan Documents, or in connection
with any refinancing or restructuring of the credit
arrangement provided under the Loan Documents in the nature
of a "workout" or of any insolvency or bankruptcy
proceeding.
10.5 RIGHT OF SET-OFF
Upon (i) the occurrence and during the continuance
of any Event of Default and (ii) the making of the request
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or the granting of the consent specified by Section 7 to
authorize the Administrative Agent to declare the Loans and
other amounts due and payable pursuant to the provisions of
Section 7, each Lender 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 indebtedness at any time owing by such Lender
to or for the credit or the account of any Borrower against
any and all of the Obligations of the now or hereafter
existing under any Loan Document, irrespective of whether or
not such Lender shall have made any demand under such Loan
Document and although such Obligations may be unmatured.
Each Lender agrees promptly to notify such Borrower after
any such set-off and application made by such Lender,
provided that the failure to give such notice shall not
affect the validity of such set-off and application. The
rights of each Lender under this subsection 10.5 are in
addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may
have.
10.6 INDEMNIFICATION
Each Borrower jointly and severally agrees to pay,
and on demand to indemnify and hold harmless the
Administrative Agent, the Co-Agent and each Lender and their
respective Affiliates, and each of their respective
successors, assigns, directors, officers, employees,
servants, attorneys and agents (collectively, the
"Indemnitees") from and against any and all claims,
including claims based on strict liability in tort, damages,
losses, liabilities, demands, suits, judgments, causes of
action and all legal proceedings, whether civil, criminal,
administrative or in arbitration, whether or not such
Indemnitee is a party thereto, penalties, fines and other
sanctions and expenses, including, without limitation
Attorney Costs, which may be imposed on, incurred by or
asserted against any Indemnitee:
(a) by reason of any inaccuracy in any material
respect, or any untrue statement or alleged untrue
statement of any material fact, made in any report,
exhibit or publication in connection with the
effectiveness of this Agreement, the incurrence of the
Indebtedness hereunder and the transactions
contemplated hereby, or by reason of the omission or
alleged omission to state therein a material fact
necessary to make such statements, in the light of the
circumstances under which they were made, not
misleading; or
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(b) by reason of or in connection with the
execution, delivery, performance, administration or
enforcement of any Loan Document or any proposal, fee,
or commitment letter relating thereto, or any
transaction contemplated by any Loan Document; or
(c) arising under or pursuant to activities of
any Loan Party that violate Hazardous Materials Laws;
(d) arising out of or relating to the use of
proceeds of the Loans or the Letters of Credit;
provided, however, that the Borrowers shall not be liable to
any Indemnitee for (i) any portion of such claims, damages,
liabilities and expenses that a court of competent
jurisdiction shall have determined by a judgment to have
directly resulted from such Indemnitee's gross negligence or
willful misconduct or (ii) any settlement by such Indemnitee
of any claim or action involving the payment of monetary
damages effected without the consent of the Borrowers, which
consent shall not be unreasonably withheld; provided,
further, that such consent shall not be required if such
Indemnitee determines in good faith on advice of counsel
that such settlement is advisable to avoid fines or other
penalties (whether or not monetary) adverse to the interests
of such Indemnitee. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the
immediately preceding sentence may be unenforceable because
it is violative of any law or public policy, the Borrowers
shall contribute the maximum portion which they are
permitted to pay and satisfy under applicable law to the
payment and satisfaction of all indemnified liabilities
incurred by the Indemnitees or any of them.
10.7 BINDING EFFECT
This Agreement shall become effective when it
shall have been executed by the Borrowers, the
Administrative Agent, the Co-Agent and the Lenders and
thereafter shall be binding upon and inure to the benefit of
each Borrower, the Administrative Agent, each Lender and
their respective successors and assigns permitted under
subsection 10.8, except that no Borrower shall have the
right to assign its rights hereunder or any interest herein
without the prior written consent of the Lenders.
10.8 ASSIGNMENTS AND PARTICIPATIONS
A. Each Lender may assign to one or more
Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without
limitation, all or a portion of its Commitment), the Loans
and its participations in the Letters of Credit owing to
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it); provided, however, that (i) no assignment shall,
without the consent of the Borrowers, require the Borrowers
to file a registration statement with the Securities and
Exchange Commission or apply to qualify the Loans under the
blue sky laws of any state, (ii) each such assignment by a
Lender shall be of a constant, and not a varying, percentage
of all of the assigning Lender's rights and obligations
under this Agreement with respect to the Loans and
Commitments, (iii) the amount of the Commitments or Loans of
the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no
event be less than $10,000,000; provided, however, that the
amount of the Commitments and Loans of the assigning Lender
being assigned may be in an amount equal to such assigned
Lender's entire Commitments and outstanding Loans, (iv) each
such assignment shall be to an Eligible Assignee and, in the
case of an Eligible Assignee that is not a Lender or an
Affiliate of a Lender, shall be consented to in advance in
writing by the Administrative Agent and the Borrowers (which
consent shall not be unreasonably withheld), and (v) the
parties to each such assignment shall execute and deliver to
the Administrative Agent (with a copy to the Borrowers), for
its acceptance and recording in the Register, an Assignment
and Acceptance, together with a processing and recordation
fee of $2,500. Upon such execution, delivery, acceptance
and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender
assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to
be a party hereto).
B. By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender
makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement
or any other Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes
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no representation or warranty and assumes no responsibility
with respect to the financial condition of any Loan Party or
the performance or observance by any Loan Party of any of
its obligations under this Agreement or any other Loan
Document or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of
the financial statements referred to in subsection 4.3 and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the
Administrative Agent, such assigning Lender 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 this
Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent or co-
agent, respectively, on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms
hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
C. The Administrative Agent shall maintain at
its address referred to in subsection 10.2 a copy of each
Assignment and Acceptance delivered to and accepted by it
and records for the recordation of the names and addresses
of the Lenders and the Commitments of, and principal amount
of the Revolving Loans owing to, each Lender from time to
time (collectively, such records are the "Register"). The
entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be
available for inspection by the Borrowers, the
Administrative Agent or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
D. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, the
Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the
form of Exhibit IX hereto, and subject to receipt of the
written consent of the Borrowers and the Administrative
Agent, if required hereby, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in
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the Register and (iii) give prompt notice thereof to the
Borrowers.
E. Each Lender may sell participations to one or
more banks or other entities in or to all or a portion of
its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, the
Loans owing to it and its participations in Letters of
Credit issued hereunder); provided, however, that (i) no
participation shall, without the consent of the Borrowers,
require the Borrowers to file a registration statement with
the Securities and Exchange Commission or apply to qualify
the Loans under the blue sky laws of any state, (ii) such
Lender's obligations under this Agreement (including,
without limitation, its Commitment to the Borrowers
hereunder) shall remain unchanged, (iii) such Lender shall
remain solely responsible to the other parties hereto for
the performance of such obligations, (iv) the Borrowers, the
Administrative Agent 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,
and (v) no Lender shall sell any participation under which
the participant shall have rights to approve any amendment
or waiver of any Loan Document except to the extent such
amendment or waiver would (a) postpone any date fixed for
any scheduled payments of principal of or interest with
respect to the Loans or any fees or other amounts payable
hereunder or (b) reduce the principal of, or interest on,
the Loans or any fees or other amounts payable hereunder.
F. Any Lender may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this subsection 10.8, disclose to
the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers
furnished to such Lender by or on behalf of the Borrowers;
provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree
to preserve the confidentiality of any confidential
information relating to the Borrowers received by it from
such Lender.
G. Notwithstanding any other provision contained
in this Agreement or any other Loan Document to the
contrary, any Lender may assign all or any portion of the
Loans held by it to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to
Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such
Federal Reserve Bank, provided that any payment in respect
of such assigned Loans made by the Borrowers to or for the
account of the assigning and/or pledging Lender in
accordance with the terms of this Agreement shall satisfy
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the Borrowers' obligations hereunder in respect to such
assigned Loans to the extent of such payment. No such
assignment shall release the assigning Lender from its
obligations hereunder.
10.9 SEVERABILITY
In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.
10.10 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS
A. All agreements, representations and
warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans
hereunder and the issuance of the Letters of Credit
hereunder and, except as set forth in subsection 10.10B,
terminate upon the indefeasible payment in full of the
Obligations.
B. Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of the
Borrowers set forth in subsections 2.10, 2.12, 10.4, 10.5
and 10.6 shall survive the payment of the Loans, the
expiration of the Letters of Credit and the termination of
this Agreement.
10.11 HEADINGS
Section and subsection headings in this Agreement
are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
10.12 APPLICABLE LAW; JURISDICTION; WAIVER OF JURY
TRIAL
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. The Lenders retain all of their rights under
federal law, including those relating to interest rates.
Each Borrower and each Lender hereby submits to the non-
exclusive jurisdiction of the state courts of the State of
New York and the federal courts located in the State of New
York for all matters arising under this Agreement and
related documents. Service of process sufficient for
personal jurisdiction in any action against any Borrower in
New York may be made by registered or certified mail, return
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receipt requested, to the address specified pursuant to
subsection 10.2.
THE BORROWERS, THE ADMINISTRATIVE AGENT, THE CO-
AGENT, THE LENDERS AND THE ISSUING BANK HEREBY AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS
BEING ESTABLISHED. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of
this transaction, including without limitation, contract
claims, tort claims, breach of duty claims, and all other
common law and statutory claims. The Administrative Agent,
the Co-Agent, the Lenders, the Issuing Banks and the
Borrowers each acknowledge that this waiver is a material
inducement to enter into a business relationship, that each
has already relied on the waiver in entering into this
Agreement, and that each will continue to rely on the waiver
in their related future dealings. The Administrative Agent,
the Co-Agent, the Lenders, the Issuing Banks and the
Borrowers further warrant and represent that each has
reviewed this waiver with its legal counsel, and that each
knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN. In
the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.13 TERMINATION OF COLLATERAL DOCUMENTS; RELEASE
OF SECURITY
On the Closing Date, each of the Collateral
Documents is hereby terminated and of no further force and
effect except as to provisions therein expressly intended to
survive such termination and all Liens on the collateral
described therein are hereby released. All releases,
termination statements, assignment documents and other
documents deemed necessary or advisable to terminate the
Liens created pursuant to the Collateral Documents shall be
executed, delivered, filed and/or recorded and all other
action deemed necessary or advisable to so terminate such
Liens shall be taken promptly following the Closing Date.
At any time or from time to time upon the request of the
Borrowers, the Administrative Agent shall cause to be
executed and delivered such further documents and to be done
such other acts as the Borrowers may reasonably request in
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order to effect fully the release of the Collateral
Documents and the Liens granted thereby.
10.14 EXECUTION IN COUNTERPARTS; EFFECTIVENESS
This Agreement and any amendments, waivers,
consents, or supplements may be executed in any number of
counterparts, and by different parties hereto in separate
counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
10.15 OBLIGATIONS SEVERAL
The obligation of each Lender hereunder is
several, and no Lender shall be responsible for the
obligation or commitment of any other Lender hereunder.
Nothing contained in this Agreement and no action taken by
the Lenders pursuant hereto shall be deemed to constitute
the Lenders to be a partnership, an association, a joint
venture or any other kind of entity.
10.16 COMPLETE AGREEMENT
This written Agreement, together with the exhibits
to this Agreement and other documents described herein is
intended by the parties as a final expression of their
agreement and is intended as a complete statement of the
terms and conditions of their agreement.
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WITNESS the due execution hereof by the respective
duly authorized officers of the undersigned as of the date
first written above.
THE COMPANY:
MAC FRUGAL'S BARGAINS o CLOSE-OUTS
INC.
By: LEONARD S. WILLIAMS
------------------------------
Title: President
---------------------------
Notice Address:
Mac Frugal's Bargains o Close-Outs
Inc.
2430 East Del Amo Boulevard
Dominguez, California 90220
Attention: Philip L. Carter
Telecopy No.: (310) 632-4477
Attention: Dan Felsenthal
Telecopy No.: (310) 762-2364
WCL:
WEST COAST LIQUIDATORS, INC.
By: LEONARD S. WILLIAMS
------------------------------
Title: President
---------------------------
Notice Address:
c/o Mac Frugal's Bargains o Close-
Outs Inc.
2430 East Del Amo Boulevard
Dominguez, California 90220
Attention: Philip L. Carter
Telecopy No.: (310) 632-4477
Attention: Dan Felsenthal
Telecopy No.: (310) 762-2364
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PNS:
PNS STORES, INC.
By: LEONARD S. WILLIAMS
------------------------------
Title: President
---------------------------
Notice Address:
c/o Mac Frugal's Bargains o Close-
Outs Inc.
2430 East Del Amo Boulevard
Dominguez, California 90220
Attention: Philip L. Carter
Telecopy No.: (310) 632-4477
Attention: Dan Felsenthal
Telecopy No.: (310) 762-2364
THE ADMINISTRATIVE AGENT:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Administrative Agent
By: KAY S. WARREN
------------------------------
Title: Vice President
---------------------------
Notice Address:
Bank of America National Trust and
Savings Association
Global Agency #5596
1455 Market Street
San Francisco, California 94103
Attention: Kay Warren
Telecopy No.: (415) 622-4894
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THE CO-AGENT AND LENDER:
CONTINENTAL BANK N.A., INDIVIDUALLY
AND AS CO-AGENT
By: JOSEPH TYLER
------------------------------
Title: Vice President
---------------------------
Notice Address:
Continental Bank N.A.
231 South La Salle Street
Chicago, Illinois 60697
Attention: Joseph Tyler
Telecopy No.: (312) 765-2080
Revolving Commitment:
$30,000,000
Pro Rata Share:
20.0000000%
THE LENDERS:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: DENNIS V. ARRIOLA
------------------------------
Title: Vice President
---------------------------
Notice Address:
Bank of America National Trust and
Savings Association
555 South Flower Street, #5618
Los Angeles, California 90071
Attention: Dennis V. Arriola
Telecopy No.: (213) 228-2756
Revolving Commitment:
$30,000,000
Pro Rata Share:
20.0000000%
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PNC BANK, N.A.
By: TED A. DUNN
-----------------------
Title: Commercial Banking Officer
-----------------------
Notice Address:
PNC Bank, N.A.
Suite #650
55 South Lake Avenue
Pasadena, California 91104
Attention: Ted A. Dunn
Telecopy No.: (818) 568-0653
Revolving Commitment:
$15,000,000
Pro Rata Share:
10.0000000%
THE BANK OF CALIFORNIA, N.A.
By: SCOTT LANE
-----------------------
Title: Vice President
--------------------
Notice Address:
The Bank of California, N.A.
P.O. Box 2330
5th Floor
5550 South Hope Street
Los Angeles, California 90071
Attention: Scott M. Lane
Telecopy No.: (213) 243-3552
629-0147
Revolving Commitment:
$15,000,000
Pro Rata Share:
10.0000000%
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THE LONG-TERM CREDIT BANK
OF JAPAN,LIMITED
LOS ANGELES AGENCY
By: CURT BIREN
------------------------------
Title: Vice President
---------------------------
Notice Address:
The Long-Term Credit Bank of Japan,
Limited
Los Angeles Agency
444 South Flower Street
Suite 3700
Los Angeles, California 90071
Attention: Jan Hanssen
Telecopy No.: (213) 622-6908
Revolving Commitment:
$15,000,000
Pro Rata Share:
10.0000000%
UNITED STATES NATIONAL BANK OF
OREGON
By: TIMOTHY A. MILLER
------------------------------
Title: Corporate Credit Officer
---------------------------
Notice Address:
United States National Bank of
Oregon
Note Department, BB-10th Floor
309 S.W. 6th Avenue
Portland, Oregon 97204
Attention: Janet Jordan
Telecopy No.: (503) 275-5428
Revolving Commitment:
$15,000,000
Pro Rata Share:
10.0000000%
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BANQUE PARIBAS
By: JULIE B. KULAS
------------------------
Title: Senior Vice President
---------------------
By: ETHEL YAMAMOTO
-----------------------
Title: Senior Credit Officer
---------------------
Notice Address:
Banque Paribas
2029 Century Park East
Los Angeles, California 90067
Attention: Steve Li
Telecopy No.: (310) 556-8759
556-0924
Revolving Commitment:
$10,000,000
Pro Rata Share:
6.6666667%
MELLON BANK, N.A.
By: EDWIN WIEST
-----------------------
Title: First Vice President
--------------------
Notice Address:
Mellon Bank, N.A.
Suite #1200
300 South Grand Avenue
Los Angeles, California 90071
Attention: Robert Harkins
Telecopy No.: (213) 626-3745
Revolving Commitment:
$10,000,000
Pro Rata Share:
6.6666667%
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UNION BANK
By: ANN M. YASUDA
-------------------------
Title: Vice President
----------------------
Notice Address:
Union Bank
G12-224
445 South Figueroa Street
Los Angeles, California 90071
Attention: Ann Yasuda
Telecopy No.: (213) 629-5328
Revolving Commitment:
$10,000,000
Pro Rata Share:
6.6666667%
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