================================================================================
Exhibit 10.16
CONFORMED COPY
of the
364-DAY REVOLVING CREDIT AGREEMENT
dated as of June 30, 2000
as amended by
THE FIRST AMENDMENT TO 364-DAY REVOLVING CREDIT AGREEMENT
dated as of June 26, 2001
among
SPIEGEL, INC.
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS
as the Lenders,
DEUTSCHE BANK SECURITIES INC.
and
β�.β�. ββββββ SECURITIES INC.
as the ΐΦΜμΜΓappΟΒΤΨt Lead Arrangers and Book Runners,
β�.β�. ββββββ SECURITIES INC.
as the Syndication Agent
and
DEUTSCHE BANK AG New York Branch
as the Administrative Agent
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS .............................................................. 1
SECTION 1.1. Defined Terms ......................................................................... 1
SECTION 1.2. Use of Defined Terms .................................................................. 20
SECTION 1.3. Cross-References ...................................................................... 20
SECTION 1.4. Accounting and Financial Determinations ............................................... 20
ARTICLE II COMMITMENTS, LOANS, BORROWING AND ISSUANCE
PROCEDURES AND NOTES AND LETTERS OF CREDIT .................................................... 20
SECTION 2.1. Commitments ........................................................................... 20
SECTION 2.1.2. Loan Commitment of Each Lender ........................................................ 21
SECTION 2.1.3. Letter of Credit Commitment ........................................................... 21
SECTION 2.1.4. Lenders Not Permitted or Required To Make Revolving Loans ............................. 21
SECTION 2.1.5. Issuer Not Permitted or Required to Issue Letters of Credit ........................... 21
SECTION 2.2. Reduction of Commitment Amount or Availability ........................................ 21
SECTION 2.2.1. Mandatory Reductions .................................................................. 21
SECTION 2.2.2. Optional Reduction of Commitment Amount ............................................... 22
SECTION 2.2.3. Reduction Due to External Letters of Credit ........................................... 22
SECTION 2.3. Revolving Loan Borrowing Procedure .................................................... 22
SECTION 2.4. Continuation and Conversion Elections ................................................. 23
SECTION 2.5. Funding ............................................................................... 23
SECTION 2.6. Issuance Procedures ................................................................... 23
SECTION 2.6.1. Other Lenders' Participation .......................................................... 24
SECTION 2.6.2. Disbursements ......................................................................... 24
SECTION 2.6.3. Reimbursement ......................................................................... 24
SECTION 2.6.4. Deemed Disbursements .................................................................. 25
SECTION 2.6.5. Nature of Reimbursement Obligations ................................................... 25
SECTION 2.7. Notes ................................................................................. 26
SECTION 2.8. Competitive Bid Loans ................................................................. 26
SECTION 2.9. Termination; Extension of Commitment Termination Date ................................. 31
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES .................................................... 33
SECTION 3.1. Repayment ............................................................................. 33
SECTION 3.2. Prepayments ........................................................................... 33
SECTION 3.3. Interest Provisions ................................................................... 34
SECTION 3.3.1. Rates ................................................................................. 34
SECTION 3.3.2. Post-Maturity Rates ................................................................... 34
SECTION 3.3.3. Payment Dates ......................................................................... 35
SECTION 3.4. Fees .................................................................................. 35
SECTION 3.4.1. Front-End Fee ......................................................................... 35
SECTION 3.4.2. Facility Fee .......................................................................... 35
SECTION 3.4.3. Administrative Agent's Fee ............................................................ 36
SECTION 3.4.4. Letter of Credit Fee .................................................................. 36
SECTION 3.4.5. Auction Fee ........................................................................... 36
SECTION 3.4.6. Arranger Fee .......................................................................... 36
-i-
TABLE OF CONTENTS
(continued)
Page
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS ........................................................ 36
SECTION 4.1. Fixed Rate Lending Unlawful ........................................................... 36
SECTION 4.2. Deposits Unavailable .................................................................. 36
SECTION 4.2.1. Dollar certificates of deposit or Dollar deposits, as the
case may be, in the relevant amount and for the relevant
Interest Period are not available to it in its relevant
market; or ............................................................................ 36
SECTION 4.3. Increased Loan Costs, etc ............................................................. 37
SECTION 4.4. Funding Losses ........................................................................ 37
SECTION 4.5. Increased Capital Costs ............................................................... 38
SECTION 4.6. Taxes ................................................................................. 38
SECTION 4.7. Payments, Computations, etc ........................................................... 39
SECTION 4.8. Sharing of Payments ................................................................... 40
SECTION 4.9. Setoff ................................................................................ 40
SECTION 4.10. Use of Proceeds ....................................................................... 41
SECTION 4.11. Reserves .............................................................................. 41
SECTION 4.12. Change in Applicable Lending Office ................................................... 41
ARTICLE V CONDITIONS TO CREDIT EXTENSIONS ............................................................... 41
SECTION 5.1. Initial Credit Extension .............................................................. 41
SECTION 5.1.1. Resolutions, etc ...................................................................... 42
SECTION 5.1.2. Delivery of Certain Documents ......................................................... 42
SECTION 5.1.3. Delivery of Notes ..................................................................... 42
SECTION 5.1.4. Payment of Outstanding Indebtedness, etc .............................................. 42
SECTION 5.1.5. Assumption of Outstanding Indebtedness, etc ........................................... 42
SECTION 5.1.6. Closing Date Certificate .............................................................. 42
SECTION 5.1.7. Opinions of Counsel ................................................................... 43
SECTION 5.1.8. Guaranty .............................................................................. 43
SECTION 5.1.9. Insurance ............................................................................. 43
SECTION 5.1.10. Pro Forma Compliance Certificate and Auditor's Reliance Letter ........................ 43
SECTION 5.1.11. Closing Fees, Expenses, etc ........................................................... 43
SECTION 5.1.12. Document Review ....................................................................... 43
SECTION 5.1.13. Simultaneous Closing of Long-Term Credit Agreement .................................... 44
SECTION 5.1.14. Support Letter ........................................................................ 44
SECTION 5.2. All Credit Extensions ................................................................. 44
SECTION 5.2.1. Compliance with Warranties, No Default, etc ........................................... 44
SECTION 5.2.2. Credit Extension Request .............................................................. 44
SECTION 5.2.3. Satisfactory Legal Form ............................................................... 44
SECTION 5.2.4. Acquisition Funding ................................................................... 44
ARTICLE VI REPRESENTATIONS AND WARRANTIES ................................................................ 45
SECTION 6.1. Organization, etc ..................................................................... 45
SECTION 6.2. Due Authorization, Non-Contravention, etc ............................................. 45
SECTION 6.3. Government Approval, Regulation, etc.; Investment Company
Act; Public Utility Holding Company Act ............................................... 45
-ii-
TABLE OF CONTENTS
(continued)
Page
SECTION 6.4. Validity, etc ....................................................................... 46
SECTION 6.5. Financial Information ............................................................... 46
SECTION 6.6. No Material Adverse Change .......................................................... 46
SECTION 6.7. Litigation, Labor Controversies, etc ................................................ 46
SECTION 6.8. Compliance With Laws: Authorizations ................................................ 46
SECTION 6.9. Taxes ............................................................................... 47
SECTION 6.10. Pension and Welfare Plans ........................................................... 47
SECTION 6.11. Environmental Warranties ............................................................ 47
SECTION 6.12. Regulations U and X ................................................................. 47
SECTION 6.13. Subsidiaries ........................................................................ 48
SECTION 6.14. Ownership of Properties ............................................................. 48
SECTION 6.15. Absence of Default .................................................................. 48
SECTION 6.16. Accuracy of Information ............................................................. 48
ARTICLE VII COVENANTS ................................................................................... 48
SECTION 7.1. Affirmative Covenants ............................................................... 48
SECTION 7.1.1. Financial Information, Reports, Notices, etc ........................................ 48
SECTION 7.1.2. Performance of Obligations .......................................................... 50
SECTION 7.1.3. Maintenance of Properties ........................................................... 51
SECTION 7.1.4. Insurance ........................................................................... 51
SECTION 7.1.5. Conduct of Business; Separate Existence ............................................. 51
SECTION 7.1.6. Compliance with Laws, etc ........................................................... 51
SECTION 7.1.7. ERISA ............................................................................... 51
SECTION 7.1.8. Environmental Covenant .............................................................. 52
SECTION 7.1.9. Books and Records ................................................................... 52
SECTION 7.1.10. New Subsidiaries .................................................................... 53
SECTION 7.2. Negative Covenants .................................................................. 53
SECTION 7.2.1. Indebtedness ........................................................................ 53
SECTION 7.2.2. Liens ............................................................................... 55
SECTION 7.2.3. Consolidation, Merger, etc .......................................................... 56
SECTION 7.2.4. Asset Dispositions, etc ............................................................. 57
SECTION 7.2.5. Use of Proceeds ..................................................................... 57
SECTION 7.2.6. Financial Condition ................................................................. 57
SECTION 7.2.7. Investments ......................................................................... 58
SECTION 7.2.8. Restricted Payments, etc ............................................................ 58
SECTION 7.2.9. Fiscal Year ......................................................................... 59
SECTION 7.2.10. Transactions with Affiliates ........................................................ 59
SECTION 7.2.11. Modification, etc. of Subordinated Debt ............................................. 59
SECTION 7.2.12. Negative Pledges, Restrictive Agreements, etc ....................................... 59
SECTION 7.2.13. Spiegel Acceptance Corporation ...................................................... 60
ARTICLE VIII EVENTS OF DEFAULT ........................................................................... 60
SECTION 8.1. Listing of Events of Default ........................................................ 60
SECTION 8.1.1. Non-Payment of Obligations .......................................................... 60
SECTION 8.1.2. Non-Performance of Certain Covenants and Obligations ................................ 60
-iii-
TABLE OF CONTENTS
(continued)
Page
SECTION 8.1.3. Non-Performance of Other Covenants and Obligations ................................... 60
SECTION 8.1.4. Breach of Representation or Warranty ................................................. 60
SECTION 8.1.5. Default on Other Indebtedness ........................................................ 60
SECTION 8.1.6. Control of the Borrower .............................................................. 61
SECTION 8.1.7. Pension Plans ........................................................................ 61
SECTION 8.1.8. Judgments ............................................................................ 61
SECTION 8.1.9. Bankruptcy, Insolvency, etc .......................................................... 61
SECTION 8.2. Action if Bankruptcy ................................................................. 62
SECTION 8.3. Action if Other Event of Default ..................................................... 62
ARTICLE IX THE AGENTS .................................................................................... 62
SECTION 9.1. Actions .............................................................................. 62
SECTION 9.2. Funding Reliance, etc ................................................................ 63
SECTION 9.3. Exculpation .......................................................................... 63
SECTION 9.4. Successor ............................................................................ 63
SECTION 9.5. Loans by Each Agent .................................................................. 64
SECTION 9.6. Credit Decisions ..................................................................... 64
SECTION 9.7. Copies, etc .......................................................................... 64
ARTICLE X MISCELLANEOUS PROVISIONS ...................................................................... 65
SECTION 10.1. Waivers, Amendments, etc ............................................................. 65
SECTION 10.2. Notices .............................................................................. 66
SECTION 10.3. Payment of Costs and Expenses ........................................................ 66
SECTION 10.4. Indemnification ...................................................................... 67
SECTION 10.5. Survival ............................................................................. 67
SECTION 10.6. Severability ......................................................................... 68
SECTION 10.7. Headings ............................................................................. 68
SECTION 10.8. Execution in Counterparts; Effectiveness ............................................. 68
SECTION 10.9. Governing Law; Entire Agreement ...................................................... 68
SECTION 10.10. Successors and Assigns ............................................................... 68
SECTION 10.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes ...................................................................... 68
SECTION 10.11.1. Assignments .......................................................................... 68
SECTION 10.11.2. Participations ....................................................................... 70
SECTION 10.11.3. Confidentiality ...................................................................... 71
SECTION 10.12. Other Transactions ................................................................... 71
SECTION 10.13. Forum Selection and Consent to Jurisdiction .......................................... 71
SECTION 10.14. Waiver of Jury Trial ................................................................. 72
SCHEDULE I Names, Addresses, Commitments and Percentages for the Lenders
and the Issuer
SCHEDULE II Disclosure Schedule
SCHEDULE III Pricing Grid
-iv-
TABLE OF CONTENTS
(continued)
Page
EXHIBIT A Form of Revolving Loan Note
EXHIBIT B Form of Competitive Bid Loan Note
EXHIBIT C Form of Revolving Loan Borrowing Request
EXHIBIT D Form of Issuance Request
EXHIBIT E Form of Continuation/Conversion Notice
EXHIBIT F Form of Lender Assignment Agreement
EXHIBIT G Form of Compliance Certificate
EXHIBIT H Form of Closing Date Certificate
EXHIBIT I Form of Competitive Bid Loan Borrowing Request
EXHIBIT J Form of Invitation for Competitive Bid Loan Offers
EXHIBIT K Form of Competitive Bid Loan Offer
EXHIBIT L Form of Competitive Bid Loan Acceptance
EXHIBIT M-1 Form of Opinion of Counsel to the Borrower
EXHIBIT M-2 Form of Opinion of Counsel to the Borrower
EXHIBIT N Form of Guaranty
EXHIBIT O Form of Subordination Provisions
EXHIBIT P Form of Letter to Independent Public Accountants
EXHIBIT Q Form of Letter of Support
EXHIBIT R Form of Confidentiality Agreement
-iv-
364-DAY REVOLVING CREDIT AGREEMENT
THIS 364-DAY REVOLVING CREDIT AGREEMENT, dated as of June 30, 2000, as
amended by THE FIRST AMENDMENT TO 364-DAY REVOLVING CREDIT AGREEMENT dated as of
June 26, 2001, among SPIEGEL, INC., a Delaware corporation (the "Borrower"), the
--------
various financial institutions as are or may become parties hereto
(collectively, the "Lenders"), DEUTSCHE BANC ALEX. βββββ� INC. (formerly known as
-------
Deutsche Bank Securities Inc.) and β�.β�. ββββββ SECURITIES INC. as joint lead
arrangers and book runners (collectively, the "Arrangers"), ββββββ GUARANTY
---------
TRUST COMPANY OF NEW YORK as syndication agent (the "Syndication Agent"),
-----------------
DEUTSCHE BANK AG New York Branch ("DBNY") as the administrative agent (the
----
"Administrative Agent") (together, the Arrangers, the Syndication Agent and the
--------------------
Administrative Agent are collectively the "Agents") and THE HONGKONG AND
------
SHANGHAI BANKING CORPORATION LIMITED as letter of credit issuer (the "Issuer").
------
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower is primarily engaged in the business of catalog,
e-commerce and retail merchandising;
WHEREAS, the Borrower, the Agents, the Issuer and the financial
institutions party hereto desire to enter into this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
-------------
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Absolute Rate" means, with respect to an Absolute Rate Loan made by a
-------------
given Lender, a fixed rate of interest per annum (rounded to the nearest 1/100th
of 1%) offered by such Lender and accepted by the Borrower.
"Absolute Rate Auction" means a solicitation of Competitive Bid Loan
---------------------
quotes at an Absolute Rate pursuant to Section 2.8.
-----------
"Absolute Rate Loan" means a Competitive Bid Loan which bears interest
------------------
at an Absolute Rate.
"Acquisition" means any transaction, or any series of related
-----------
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any business (whether through
purchase of assets, equity interests, merger or otherwise) or all or
substantially all of the assets of any firm, corporation or division thereof or
(ii) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
equity interests of a Person (other than a corporation or a natural person).
"Administrative Agent" is defined in the preamble and includes each
--------------------
other Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to Section 9.4.
-----------
"Affiliate" of any Person means any other Person which, directly or
---------
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agents" is defined in the preamble to this Agreement.
------ --------
"Agreement" means, on any date, this 364-Day Revolving Credit Agreement
---------
as originally in effect on the Effective Date and as thereafter from time to
time amended, supplemented, amended and restated, or otherwise modified and in
effect on such date.
"Alternate Base Rate" means, on any date and with respect to all Base
-------------------
Rate Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently announced or
established, as applicable, by DBNY at its Domestic Office as its prime
or base rate for Dollar loans; and
(b) the Federal Funds Rate most recently determined by the
Administrative Agent plus 0.50%.
----
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by DBNY in connection with extensions of credit. Changes in
the rate of interest with respect to any Loans maintained as Base Rate Loans
will take effect simultaneously with each change in the Alternate Base Rate.
DBNY will give notice promptly to the Borrower and to the Administrative Agent,
which will promptly notify the Lenders, of changes in the Alternate Base Rate.
"Applicable Base Rate Margin" means, with respect to any Base Rate Loan
---------------------------
for any Pricing Period, the then applicable per annum rate set forth in the
Pricing Grid.
"Applicable LIBO Rate Margin" means, with respect to any LIBO Rate Loan
---------------------------
for any Pricing Period, the then applicable per annum rate set forth in the
Pricing Grid.
2
"Arrangers" is defined in the preamble.
--------- --------
"Assignee Lender" is defined in Section 10.11.1.
--------------- ---------------
"Authorizations" means all filings, recordings and registrations with,
--------------
and all validations or exemptions, approvals, orders, authorizations, consents,
licenses, certificates and permits from, federal, state and local regulatory or
governmental bodies and authorities or any subdivision thereof.
"Authorized Officer" means, relative to the Borrower or any other
------------------
Obligor, those of its officers whose signature and incumbency have been
certified to the Agents and the Lenders pursuant to Section 5.1.1.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
--------------
determined by reference to the Alternate Base Rate.
"Borrower" is defined in the preamble.
-------- --------
"Borrowing" means a Revolving Loan Borrowing or a Competitive Bid Loan
---------
Borrowing, as the case may be.
"Business Day" means
------------
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York or Chicago, Illinois;
(b) relative to the making, continuing, prepaying or repaying
of any LIBO Rate Loans or Competitive Bid Loan based on the LIBO Rate,
any day which satisfies the requirements of clause (a) above and on
which dealings in Dollars are carried on in the London interbank
market; and
(c) relative to the Letter of Credit Commitment of the Issuer,
any day which satisfies the requirements of clause (a) above and is not
a legal holiday in Hong Kong S.A.R.
"Capitalized Lease Liabilities" means all monetary obligations of the
-----------------------------
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time:
--------------------------
(a) any evidence of Indebtedness, maturing not more than one
year after such time, issued or guaranteed by the United States
Government;
3
(b) commercial paper, maturing not more than nine months
from the date of issue, which is issued by
(i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any state of the United
States or of the District of Columbia and rated A-l by
Standard & Poor's Ratings Group or P-l by βββββ�'β� Investors
Service, Inc., or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance,
maturing not more than one year after such time, which is issued by
either
(i) a commercial banking institution that is a
member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than
$500,000,000, or
(ii) any Lender; or
(d) any repurchase agreement entered into with any Lender
(or other commercial banking institution satisfying the requirements of
clause (c)(i)) which
-------------
(i) is secured by a fully perfected security
interest in any obligation of the type described in any of
clauses (a) through (c); and
----------- ---
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such Lender (or other commercial
banking institution) thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation
------
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
-------
Liability Information System List.
"Change of Control" means any event the result of which is the failure
-----------------
of the ββββ Interests to own, directly or indirectly, free and clear of all
Liens at least 67% of the ownership interest in the Borrower.
"Closing Date" means June 30, 2000.
------------
"Closing Date Certificate" means a certificate of a duly Authorized
------------------------
Officer of the Borrower executed and delivered pursuant to Section 5.1.6,
-------------
substantially in the form of Exhibit H.
---------
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
----
otherwise modified from time to time.
4
"Commitment" means, as the context may require, a Lender's Loan
----------
Commitment or the Issuer's (or a Lender's) Letter of Credit Commitment.
"Commitment Amount" means, on any date, $150,000,000, as such amount
-----------------
may be temporarily or permanently reduced from time to time pursuant to Section
-------
2.2.
---
"Commitment Termination Date" means the earliest of
---------------------------
(a) June 25, 2002 (the "Stated Maturity Date");
--------------------
(b) the date on which the Commitment Amount is terminated
in full or reduced to zero pursuant to Section 2.2; and
-----------
(c) the date on which any Commitment Termination Event
occurs.
"Commitment Termination Event" means
----------------------------
(a) the occurrence of any Event of Default described in
clauses (a) through (d) of Section 8.1.9; or
----------- --- -------------
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of the Loans to be due and
payable pursuant to Section 8.3, or
-----------
(ii) in the absence of such declaration, the giving
of notice by the Administrative Agent, acting at the direction
of the Required Lenders, to the Borrower that the Commitments
have been terminated.
"Competitive Bid Loan" means a loan made by a Lender to the Borrower
--------------------
based on the LIBO Rate or the Absolute Rate as part of a Competitive Bid Loan
Borrowing resulting from the procedure described in Section 2.8.
-----------
"Competitive Bid Loan Acceptance" means an acceptance by the Borrower
-------------------------------
of a Competitive Bid Loan Offer pursuant to clause (e) of Section 2.8,
---------- -----------
substantially in the form of Exhibit L attached hereto.
---------
"Competitive Bid Loan Borrowing" means Competitive Bid Loans made
------------------------------
pursuant to the same Competitive Bid Loan Borrowing Request by the Lender or
each of the Lenders whose offer to make such Competitive Bid Loans as part of
such requested Borrowing has been accepted by the Borrower pursuant to clause
------
(e) of Section 2.8.
--- -----------
"Competitive Bid Loan Borrowing Request" means a certificate requesting
--------------------------------------
that the Lenders extend offers to make Competitive Bid Loans, duly executed by
an Authorized Officer substantially in the form of Exhibit I attached hereto.
---------
"Competitive Bid Loan Maturity Date" is defined in clause (a)(iii) of
---------------------------------- ---------------
Section 2.8.
-----------
5
"Competitive Bid Loan Note" means any promissory note of the Borrower,
-------------------------
in the form of Exhibit B hereto (as such promissory note may be amended,
---------
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from Competitive Bid Loans
outstanding from such Lender, and also means all other promissory notes accepted
from time to time in substitution therefor or renewal thereof.
"Competitive Bid Loan Offer" means an offer by a Lender to make a
--------------------------
Competitive Bid Loan pursuant to clause (c) of Section 2.8, substantially in the
---------- -----------
form of Exhibit K attached hereto.
---------
"Competitive Bid Rate" means, as the context may require, either the
--------------------
Absolute Rate or the LIBO Rate (plus the LIBO Rate Bid Margin) offered by a
----
Lender in a Competitive Bid Loan Offer in respect of a Competitive Bid Loan
proposed pursuant to Section 2.8.
-----------
"Compliance Certificate" means a certificate duly executed by a
----------------------
financial Authorized Officer of the Borrower, in the form of Exhibit G attached
---------
hereto.
"Contingent Liability" means any agreement, undertaking or arrangement
--------------------
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth in the document evidencing such Contingent
Liability) be deemed to be the outstanding principal amount (or maximum
principal amount, if larger) of the debt, obligation or other liability
guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
------------------------------
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit E hereto.
---------
"Controlled Group" means all members of a controlled group of
----------------
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Credit Extension" means, as the context may require,
----------------
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of
any Stated Expiry Date of any existing Letter of Credit, by the Issuer
and participation in such Letter of Credit by the Lenders pursuant to
the terms of this Agreement.
"Credit Extension Request" means, as the context may require, any
------------------------
Revolving Loan Borrowing Request, Competitive Bid Loan Borrowing Request or
Issuance Request.
6
"Debt to EBITDAR Ratio" means for the period consisting of the Fiscal
---------------------
Year then ended, the ratio of:
(a) the result of
(i) Debt;
plus
----
(ii) the product of eight (8) times annual Rent
Expense for such Fiscal Year;
to
--
(b) EBITDAR for such Fiscal Year.
"DBNY" is defined in the preamble.
----
"Debt" means, without duplication, all indebtedness of the Borrower and
----
its Subsidiaries for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments, including Subordinated Debt.
"Default" means any Event of Default or any condition, occurrence or
-------
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disbursement" is defined in Section 2.6.2.
------------ -------------
"Disbursement Date" is defined in Section 2.6.2.
----------------- -------------
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
-------------------
Schedule II, as it may be amended, supplemented or otherwise modified from time
-----------
to time by the Borrower with the written consent of the Required Lenders.
"Dollar" and the sign "$" mean lawful money of the United States.
------ -
"Domestic Office" means, relative to any Lender, the office of such
---------------
Lender designated on Schedule I hereto or designated in the Lender Assignment
----------
Agreement, if any, executed by such Lender or such other office of a Lender (or
any successor or assign of such Lender) within the United States as may be
designated from time to time by notice from such Lender, as the case may be, to
each other Person party hereto. A Lender may have separate Domestic Offices for
purposes of making, maintaining or continuing, as the case may be, Base Rate
Loans, LIBO Rate Loans and Competitive Bid Loans.
"EBITDAR" means Net Income plus all amounts deducted in determining
-------
such Net Income for Income Taxes, Interest Expense, depreciation, amortization
and Rent Expense.
"Effective Date" means the date this Agreement becomes effective
--------------
pursuant to Section 10.8.
------------
7
"Environmental Laws" means all applicable federal, state or local
------------------
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"ERISA Affiliate" means each person (as defined in Section 3(9) of
---------------
ERISA) which together with the Borrower, any Subsidiary of the Borrower would be
deemed to be a member of the same Controlled Group.
"Event of Default" is defined in Section 8.1.
---------------- -----------
"Excluded Receivables" means those consumer credit card accounts
--------------------
receivable sold or transferred or to be sold or transferred from time to time to
(a) the Spiegel Master Trust in accordance with that certain Receivables
Purchase Agreement, dated as of September 20, 1994, among Spiegel Credit
Corporation III and First Consumers National Bank, as amended, and that certain
Amended and Restated Pooling and Servicing Agreement, dated as of December 13,
1994, among Spiegel Credit Corporation III, First Consumers National Bank and
ββββββ Trust and Savings Bank, as Trustee, as supplemented from time to time,
(b) First Consumers Master Trust in accordance with that certain Amended and
Restated Pooling and Servicing Agreement, dated as of February 1, 1999, between
First Consumers National Bank and ββββββ Trust and Savings Bank, as Trustee, as
supplemented from time to time, in each case described in clause (a) or clause
---------- ------
(b) so long as at the time of such sale or transfer, in the reasonable
---
determination of the Administrative Agent, the terms or the effect on the
Lenders of such agreements and the related securitization programs have not
changed substantially since the Effective Date, (c) to a special-purpose trust
or entity formed for the purpose of one or more securitizations, so long as the
terms or the effect on the Lenders of the agreements governing such entity and
securitizations do not, in the reasonable determination of the Administrative
Agent, differ substantially from the terms or the effect on the Lenders of the
agreements and securitization programs referred to in clause (a) or clause (b)
---------- ----------
in any manner that is material to the Lenders or (d) a Person for purposes of
any securitization; provided, however that in the case of this clause (d) such
-------- ------- ----------
consumer credit card accounts receivable shall be limited to consumer credit
card accounts receivable that have previously been transferred (or arise in
accounts the receivables from which have previously been transferred) in a
transaction described in clause (a), (b), or (c).
---------- --- ---
"External L.O.C. Amount" is defined in Section 2.2.3.
---------------------- -------------
"FDIC" means the Federal Deposit Insurance Corporation and any
----
successor agency thereto.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
------------------
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as
8
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by The Federal Reserve Bank of New York;
or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.
"Fiscal Quarter" means any quarter of a Fiscal Year.
--------------
"Fiscal Year" means the period of 52 or 53 consecutive weeks which make
-----------
up the fiscal year of the Borrower, except for any shorter or longer period
resulting from the change of the Borrower's fiscal year permitted by Section
-------
7.2.9.
-----
"Fixed Asset Expenditures" means, for any period, the sum of
------------------------
(a) the aggregate amount of all expenditures of the Borrower
and its Subsidiaries for fixed or capital assets made during such
period which, in accordance with GAAP, would be classified as fixed
asset expenditures net of any such assets that are disposed of during
such period; and
(b) the aggregate amount of all Capitalized Lease Liabilities
incurred by the Borrower and its Subsidiaries during such period.
"Fixed Charge Coverage Ratio" means, for the period consisting of the
---------------------------
twelve months then ended, the ratio of:
(c) the result of
(i) EBITDAR for such period;
minus
-----
(ii) Fixed Asset Expenditures for such period;
to
--
(d) the sum of
(i) Interest Expense for such period;
plus
----
(ii) Rent Expense for such period;
plus
----
(iii) Restricted Payments for such period.
9
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
------------
or any successor thereto.
"GAAP" is defined in Section 1.4.
---- -----------
"Guaranty" means the Guaranty executed and delivered pursuant to Section
-------- -------
5.1.8 or Section 7.1.10, substantially in the form of Exhibit N attached hereto,
----- -------------- ---------
as amended, supplemented, restated or otherwise modified from time to time.
"Hazardous Material" means
------------------
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other applicable
federal, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or
imposing liability or standards of conduct concerning any hazardous, toxic
or dangerous waste, substance or material, all as amended or hereafter
amended.
"Hedging Obligations" means, with respect to any Person, all liabilities of
-------------------
such Person under interest rate or currency swap agreements, interest rate cap
agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
------ ------ ------ ---------
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
---------------------------
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which reflects the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item
in such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Borrower to be in default of any of its obligations under Section
-------
7.2.6.
-----
10
"including" means including without limiting the generality of any
---------
description preceding such term.
"Income Taxes" means, for any period, all income taxes of the Borrower
------------
and its Subsidiaries, on a consolidated basis, paid or accrued in accordance
with GAAP for such period.
"Indebtedness" of any Person means without duplication:
------------
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(b) all obligations, contingent or otherwise, relative to the
stated amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all obligations relative to then mandatorily redeemable
capital stock;
(d) all obligations of such Person as lessee under leases which
have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(e) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(f) net liabilities of such Person under all Hedging
Obligations;
(g) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services, and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being
purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse (but only to the extent of the exposure of such Person);
and
(h) all Contingent Liabilities of such Person in respect of any
of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer and is liable for any such Indebtedness.
"Indemnified Liabilities" is defined in Section 10.4.
----------------------- ------------
"Indemnified Parties" is defined in Section 10.4.
------------------- ------------
"Interest Expense" means, for any period, the total cash and non-cash
----------------
interest expense (including facility fees payable under this Agreement), in
accordance with GAAP that is payable by the Borrower and its Subsidiaries, on a
consolidated basis, for such period.
11
"Interest Period" means, (i) relative to any Competitive Bid Loan based
---------------
on the LIBO Rate or any LIBO Rate Loan, the period beginning on (and including)
the date on which such Competitive Bid Loan was made or such LIBO Rate Loan is
made or continued as, or converted into, a LIBO Rate Loan pursuant to Section
-------
2.3 or 2.4 and shall end on (but exclude) the day which numerically corresponds
--- ---
to such date one week or two weeks (8 to 14 days) or one, two, three or, subject
to general availability as determined by the Administrative Agent, six months
thereafter (or, if such month has no numerically corresponding day, on the last
Business Day of such month) and (ii) relative to any Absolute Rate Loan, the
period beginning on (and including) the date on which such Absolute Rate Loan is
made and ending on (but excluding) the day which is a minimum of seven and a
maximum of one hundred eighty days thereafter, in any of the foregoing cases, as
the Borrower may select in its relevant notice pursuant to Sections 2.3, 2.4 or
------------ ---
2.8; provided, however, that
--- -------- -------
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than 5 different dates;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless, if such Interest Period applies to LIBO
Rate Loans or Competitive Bid Loans based on the LIBO Rate, such next
following Business Day is the first Business Day of a calendar month,
in which case such Interest Period shall end on the Business Day next
preceding such numerically corresponding day); and
(d) no Interest Period may end later than the Stated Maturity
Date (or, if earlier, the date on which all Loans are scheduled to be
repaid and the Commitments permanently terminated as a result of
reductions to the Commitment Amount pursuant to Section 2.2).
-----------
"Investment" means, relative to any Person,
----------
(e) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);
(f) any Contingent Liability of such Person; and
(g) any ownership or similar interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
12
"Invitation for Competitive Bid Loan Offers" means an Invitation for
------------------------------------------
Competitive Bid Loan Offers delivered by the Administrative Agent to the Lenders
pursuant to clause (b) of Section 2.8, in substantially the form of Exhibit J
---------- ----------- ---------
hereto.
"Issuance Request" means a Letter of Credit request and certificate
----------------
duly executed by an Authorized Officer of the Borrower, substantially in the
form of Exhibit D hereto and any additional forms that may be requested by the
---------
Issuer.
"Issuer" is defined in the preamble.
------ --------
"Legal Requirement" shall mean any requirement imposed upon any Lender
-----------------
by any law of the United States of America or by any regulation, order,
interpretation, ruling or official directive (whether or not having the force of
law) of the Board of Governors of the Federal Reserve System, the FDIC, or any
other board or governmental or administrative agency of the United States of
America, or any political subdivision of any thereof.
"Lender Assignment Agreement" means a Lender Assignment Agreement
---------------------------
substantially in the form of Exhibit F hereto.
---------
"Lenders" is defined in the preamble, and shall include any of their
------- --------
Affiliates pursuant to clause (b) of Section 10.11.1.
---------- ---------------
"Letter of Credit" is defined in Section 2.1.2.
---------------- -------------
"Letter of Credit Commitment" means the Issuer's obligation to issue
---------------------------
Letters of Credit pursuant to Section 2.1.2 and, with respect to each Lender,
-------------
the obligations of such Lender to participate in such Letters of Credit pursuant
to Section 2.6.1.
-------------
"Letter of Credit Outstandings" means, on any date, an amount equal to
-----------------------------
the sum of
(a) the then aggregate amount which is undrawn and available
under all issued and outstanding Letters of Credit,
plus
----
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"Level" means Level I, II, III or IV, as the case may be, set forth on
-----
the Pricing Grid.
"LIBO Rate" means the rate of interest per annum determined on the
---------
basis of the rate for deposits in Dollars in minimum amounts of at least
$2,500,000 for a period equal to the applicable Interest Period which appears on
the Telerate Page 3750 at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of the applicable Interest Period (rounded
upward, if necessary, to the nearest one-sixteenth of one percent (1/16%)). If,
for any reason, such rate does not appear on Telerate Page 3750, then LIBO Rate
shall be determined by the Administrative Agent to be the arithmetic average
(rounded upward, if necessary, to the nearest one-sixteenth of one percent
(1/16%)) of the rate per annum at which deposits in Dollars
13
would be offered by first class banks in the London interbank market to the
Administrative Agent approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period for a period equal
to such Interest Period and in an amount substantially equal to the amount of
the Administrative Agent's applicable LIBO Rate Loan.
"LIBO Rate Bid Margin" means, in respect of Competitive Bid Loans based
--------------------
on the LIBO Rate, the margin above or below the applicable LIBO Rate offered for
each such Competitive Bid Loan, expressed as a percentage (rounded to the
nearest 1/10,000th of 1%) to be added to (or subtracted from) such LIBO Rate.
"LIBO Rate Loan" means a Revolving Loan bearing interest, at all times
--------------
during the Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the LIBO Rate.
"LIBOR Auction" means a solicitation of Competitive Bid Loan quotes
-------------
pursuant to Section 2.8 hereof based on the LIBO Rate.
-----------
"LIBOR Office" means, relative to any Lender, the office of such Lender
------------
designated as such on Schedule I hereto or designated in the Lender Assignment
----------
Agreement or such other office of a Lender as designated from time to time by
notice from such Lender to the Borrower and the Administrative Agent, whether or
not outside the United States, which shall be making or maintaining LIBO Rate
Loans or Competitive Bid Loans based on the LIBO Rate of such Lender hereunder.
"Lien" means any security interest, mortgage, pledge, hypothecation,
----
assignment, asset-deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest in property to secure payment of a debt
or performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" means, as the context may require, either a Competitive Bid Loan
----
or a Revolving Loan.
"Loan Commitment" means, relative to any Lender, such Lender's
---------------
obligation to make Revolving Loans pursuant to Section 2.1.1.
-------------
"Loan Documents" means this Agreement, the Notes, the Letters of
--------------
Credit, the Guaranty and each other relevant agreement, document or instrument
delivered in connection with this Agreement and the Notes, whether or not
specifically mentioned herein or therein.
"Long-Term Credit Agreement" means that certain Second Amended and
--------------------------
Restated Revolving Credit Agreement, dated as of the date hereof, by and among
the Borrower, the Agents and the financial institutions party thereto, as
amended, supplemented, restated or otherwise modified from time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
-----------------------
business, properties, condition (financial or otherwise), or prospects of the
Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Borrower
or any other Obligor to perform its obligations under any
14
of the Loan Documents, (iii) the validity or enforceability of any of the Loan
Documents or (iv) the rights or remedies of the Agents or the Lenders under the
Loan Documents.
"Material Subsidiary" means βββββ� βββββ�, Inc., Newport News, Inc.,
-------------------
First Consumers National Bank, Distribution Fulfillment Services, Inc., Spiegel
Catalog, Inc., Ultimate Outlet Inc., Spiegel Publishing Company, Spiegel
Acceptance Corporation and any other Subsidiary (excluding Spiegel Credit
Corporation III) whose assets, income or sales exceed 5% of the consolidated
assets, income or sales, respectively, of the Borrower and its consolidated
Subsidiaries or any other Subsidiary so designated by the Borrower after the
Effective Date.
"Monthly Payment Date" means the last day of each month or, if any such
--------------------
day is not a Business Day, the next succeeding Business Day.
"Net Income" means, for any period, the net income of the Borrower and
----------
its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP including non-recurring income or loss but excluding
extraordinary gain.
"Net Proceeds" means the gross proceeds received by the Borrower or any
------------
of its Subsidiaries from a sale of their respective assets, less reasonable
selling expenses and attorneys' fees incurred in connection therewith and taxes
estimated in good faith to be payable as a result thereof, and other reasonable
amounts agreed to by the Lenders that are incurred in connection with such sale;
provided, that in the event that the actual taxes paid in respect of any such
--------
sale or other disposition are less than such estimated taxes at the time of such
sale, "Net Proceeds" shall be deemed to include such difference on the date
payment of such taxes is due.
"Net Worth" means, on any date, the consolidated stockholders' equity
---------
of the Borrower and its Subsidiaries on such date, as calculated in accordance
with GAAP plus any Subordinated Debt with a maturity date subsequent to the
----
Stated Maturity Date.
"Note" means, as the context may require, a Competitive Bid Loan Note
----
or a Revolving Loan Note.
"Obligations" means all obligations (monetary or otherwise) of the
-----------
Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes, the Letters of Credit and each other Loan Document,
including, without limitation, principal, interest, fees, expenses, indemnities
and reimbursement obligations.
"Obligor" means the Borrower or any other Person (other than any Agent,
-------
the Issuer or any Lender) obligated under any Loan Document.
"Organic Document" means, relative to the Borrower and any Obligor, as
----------------
applicable, its certificate of incorporation, its by-laws, its partnership
certificate or its partnership agreement, operating agreement or its limited
liability company certificate and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of capital stock
or partnership interests, as the case may be.
"Otto Family" is defined in the definition of "Otto Interest".
-----------
15
"Otto Interests" means (i) ββββββ ββββ of Hamburg, Germany, his spouse
--------------
and any of his lineal descendants and their respective spouses (collectively,
the "Otto Family"), any Subsidiary of any members of the Otto Family, and any
-----------
personal representative, trustee or other fiduciary acting in respect of the
estate of any member of the Otto Family, and (ii) any trust which is solely for
the benefit of one or more members of the Otto Family (whether or not any member
of the Otto Family is a trustee of such trust) or principally for the benefit of
one or more members of the Otto Family (provided that a member of the Otto
Family is a trustee of such trust).
"Participant" is defined in Section 10.11.
----------- -------------
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
------------
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth on
----------
Schedule I hereto or set forth in a Lender Assignment Agreement, as such
----------
percentage may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to Section 10.11.
-------------
"Permitted Acquisition" means, at any time of determination, any
---------------------
Acquisition by the Borrower or any of its Subsidiaries with respect to which
each of the following requirements are met:
(i) such Acquisition has been approved and recommended by
the board of directors or general partner (or similar entity)
of the Person to be acquired;
(ii) the Required Lenders shall have given their prior
written consent to such Acquisition if it is a hostile
Acquisition or if the subject of the Acquisition is not in the
same or related businesses as those conducted by the Borrower
and its Subsidiaries on the Effective Date;
(iii) the Borrower or such Subsidiary and/or the Person to
be acquired, as appropriate, shall have furnished to the
Administrative Agent, concurrently with the consummation of
such Acquisition, such documents as the Administrative Agent
or any Lender shall reasonably request;
(iv) the Borrower or such Subsidiary shall be the
surviving person; and
16
(v) prior to and after giving effect to such Acquisition,
no Default (including under the provisions of Section 7.1.10)
--------------
shall have occurred and be continuing, or would result
therefrom.
"Person" means any natural person, corporation, partnership, firm,
------
limited liability company, association, trust, government, governmental agency
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"Plan" means any Pension Plan or Welfare Plan.
----
"Pricing Grid" means the Pricing Grid attached hereto as Schedule III.
------------ ------------
"Pricing Period" means that period beginning on the 55th day after the
--------------
last day of a Fiscal Quarter and ending on the 54th day after the last day of
the succeeding Fiscal Quarter.
"Purchasing Lender" is defined in Section 2.9(b).
----------------- --------------
"Quarterly Payment Date" means the day that is two Business Days after
----------------------
the end of the applicable Pricing Period.
"Reimbursement Obligations" is defined in Section 2.6.3.
------------------------- -------------
"Release" means a "release", as such term is defined in CERCLA.
-------
"Rent Expense" means, for any period, the total cash and non-cash
------------
rental expense that is payable by the Borrower and its Subsidiaries, on a
consolidated basis for the retail and outlet store properties leased by the
Borrower or any of its Subsidiaries.
"Required Lenders" means, at any time,
----------------
(a) with respect to any provision of this Agreement other than
the declaration of the acceleration of the maturity of all or any
portion of the outstanding principal amount of the Loans and other
Obligations to be due and payable pursuant to Section 8.3, Lenders
-----------
whose Percentages equal or exceed 66 2/3%; or
(b) with respect to the declaration of the acceleration of the
maturity of all or any portion of the outstanding principal amount of
the Loans and other Obligations to be due and payable pursuant to
Section 8.3, Lenders holding 66 2/3% or more of the aggregate
-----------
principal amount of the outstanding Loans and Letter of Credit
Outstandings (excluding Competitive Bid Loans).
"Reserves" means, in relation to any Lender, any reserve (including all
--------
basic, emergency, supplemental, marginal and other reserves), reserve asset,
capital reserve, minimum capital requirement, special deposit, insurance premium
or assessment required by any Legal Requirement to be maintained or paid by such
Lender for or with respect to (i) any deposit purchase in the London interbank
foreign currency deposits market, (ii) any deposit represented by a certificate
of deposit issued by any Lender, (iii) Loans made with the proceeds of any such
deposits, (iv) the principal amount of or interest on any LIBO Rate Loan, or (v)
any portion of
17
the Commitment, including any reserves imposed under Regulation D and any
amounts payable to the FDIC for insurance by the FDIC for time deposits made in
Dollars.
"Resource Conservation and Recovery Act" means the Resource Conservation
--------------------------------------
and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect from time to
time. -- ---
"Restricted Payments" is defined in Section 7.2.8.
------------------- -------------
"Revolving Loan" is defined in Section 2.1.
-------------- -----------
"Revolving Loan Borrowing" means Revolving Loans of the same type and,
------------------------
in the case of LIBO Rate Loans, having the same Interest Period, made by all
Lenders on the same Business Day and pursuant to the same Revolving Loan
Borrowing Request in accordance with Section 2.1.
-----------
"Revolving Loan Borrowing Request" means a loan request and certificate
--------------------------------
duly executed by an Authorized Officer of the Borrower, substantially in the
form of Exhibit C hereto.
---------
"Revolving Loan Note" means any promissory note of the Borrower in the
-------------------
form of Exhibit A hereto (as such promissory note may be amended, endorsed or
---------
otherwise modified from time to time), evidencing the aggregate Indebtedness of
the Borrower to such Lender resulting from Revolving Loans outstanding from such
Lender, and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Stated Amount" of each Letter of Credit means the total amount
-------------
available to be drawn under such Letter of Credit upon the issuance thereof.
"Stated Expiry Date" is defined in Section 2.6.
------------------ -----------
"Stated Maturity Date" is defined in clause (a) of the definition of
-------------------- ----------
"Commitment Termination Date".
"Subordinated Debt" means indebtedness of the Borrower that is
-----------------
subordinate to the Credit Extensions on terms that satisfy the provisions of
Exhibit O hereto.
---------
"Subsidiary" of a Person means (i) any corporation more than 50% of the
----------
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture, limited liability company or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Syndication Agent" is defined in the preamble.
----------------- --------
"Tangible Net Worth" means the consolidated stockholders' equity of the
------------------
Borrower and its Subsidiaries as calculated in accordance with GAAP, minus the
-----
aggregate amount of
18
intangible assets, including, without limitation, goodwill, franchises,
licenses, patents, trademarks, trade names, copyrights, service marks and brand
names.
"Taxes" is defined in Section 4.6.
----- -----------
"Terminating Lender" is defined in Section 2.9(b).
------------------ --------------
"Termination Notice" is defined in Section 2.9(b).
------------------ --------------
"Total Borrowed Funds" means, as of any date, without duplication, an
--------------------
amount equal to the consolidated Indebtedness of the Borrower and its
Subsidiaries comprising borrowed money, drawn trade letters of credit, standby
letters of credit, mandatorily redeemable stock, Capitalized Lease Liabilities,
and Subordinated Debt with a maturity date on or prior to the "Stated Maturity
Date" (as defined in the Long-Term Credit Agreement), and all Contingent
Liabilities with respect to the foregoing.
"Total Leverage Ratio" means, as of the last day of any Fiscal Quarter, the
--------------------
ratio of
(a) Total Borrowed Funds as of such date
to
--
(b) Net Worth as of such date.
"type" means, relative to any Revolving Loan, the portion thereof, if
----
any, being maintained as a Base Rate Loan or a LIBO Rate Loan.
"United States" or "U.S." means the United States of America, its fifty
------------- ---
States and the District of Columbia.
"Weighted Life to Maturity" means, with respect to any loan, as at the
-------------------------
time of determination, the number of years obtained by dividing the then
Remaining Dollar-years of such loan by the outstanding principal amount of such
loan. The term "Remaining Dollar-years" of such loan means the product obtained
by (i) multiplying (1) the amount of each then remaining required principal
payment (including repayment at final maturity, by (2) the number of years
(calculated to the nearest one-twelfth) which will elapse between the time of
determination and the date such required repayment is due, and (ii) totaling all
the products obtained in (i).
"Welfare Plan" means a "welfare plan", as such term is defined in
------------
section 3(1) of ERISA.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
-----------------------
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person, or by such Person and one or
more Wholly-Owned Subsidiaries of such Person, or (ii) any partnership,
association, limited liability company, joint venture or similar business
organization 100% of the ownership interests having ordinary voting power of
which shall at the time be so owned or controlled.
19
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context
--------------------
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Disclosure Schedule and in each Note,
Revolving Loan Borrowing Request, Continuation/Conversion Notice, Loan Document,
notice and other communication delivered from time to time in connection with
this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references in
----------------
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
---------------------------------------
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.6) shall be made, and all financial
-------------
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles ("GAAP") in
----
existence on the date hereof. If any changes in accounting principles from those
used in the preparation of the financial statements referred to in Section 6.5
-----------
hereafter occur as a result of the promulgation of rules, regulations,
pronouncements, or opinions by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions), and the application thereof result in a change
in the method of calculation of financial covenants, standards, or terms found
in this Agreement, the Borrower and the Lenders agree to enter into good faith
negotiations in order to amend such financial covenants, standards, or terms so
as to equitably reflect such changes with the desired result that the
evaluations of the Borrower's financial condition shall be the same after such
changes as if such changes had not been made; provided, however, that until the
-------- -------
parties hereto have reached a definitive agreement on such amendments, the
Borrower's financial condition shall continue to be evaluated (with respect to
other than the audited financial statements) on the same principles as those
used in the preparation of the financial statements referred to in Section 6.5.
-----------
ARTICLE II
COMMITMENTS, LOANS, BORROWING AND ISSUANCE PROCEDURES AND NOTES
AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions of
-----------
this Agreement (including Article V),
---------
(a) each Lender severally agrees to make Revolving Loans pursuant to
the Commitments described in this Section 2.1; and
-----------
(b) the Issuer agrees that it will issue Letters of Credit pursuant
to Section 2.1.2, and each Lender severally agrees that it will participate
-------------
in such Letters of Credit in accordance with Section 2.6.1.
-------------
20
SECTION 2.1.2. Loan Commitment of Each Lender. From time to time on any
------------------------------
Business Day occurring prior to the Commitment Termination Date, each Lender
will make loans (relative to such Lender, and of any type, its "Revolving
---------
Loans") to the Borrower equal to such Lender's Percentage of the aggregate
-----
amount of the Revolving Loan Borrowing requested by the Borrower to be made on
such day. On the terms and subject to the conditions hereof, the Borrower may,
prior to the Commitment Termination Date, from time to time borrow, prepay,
repay and reborrow Revolving Loans.
SECTION 2.1.3. Letter of Credit Commitment. From time to time on any
---------------------------
Business Day occurring prior to the Commitment Termination Date, the Issuer
will, subject to Section 2.6.1,
-------------
(a) issue one or more letters of credit (a "Letter of Credit") for
----------------
the account of the Borrower in the Stated Amount requested by the Borrower
on such day; provided that the Stated Expiry Date of any Letter of Credit
shall be no later than the Commitment Termination Date; or
(b) extend the Stated Expiry Date of an existing Letter of Credit
previously issued hereunder to a date not later than the Commitment
Termination Date.
SECTION 2.1.4. Lenders Not Permitted or Required To Make Revolving Loans.
---------------------------------------------------------
No Lender shall be permitted or required to make any Revolving Loan if, after
giving effect thereto, the aggregate outstanding principal amount of
(a) all Loans and Letter of Credit Outstandings of all Lenders would
exceed the Commitment Amount, or
(b) the Revolving Loans and Percentage of Letter of Credit
Outstandings of such Lender would exceed such Lender's Percentage of the
Commitment Amount.
SECTION 2.1.5. Issuer Not Permitted or Required to Issue Letters of Credit.
-----------------------------------------------------------
The Issuer shall not be permitted or required to issue any Letter of Credit if,
after giving effect thereto, the sum of the aggregate amount of all Letter of
Credit Outstandings plus the aggregate principal amount of all Loans then
----
outstanding would exceed the Commitment Amount. The Administrative Agent shall
notify the Issuer if, after giving effect to the issuance of any such Letter of
Credit, the sum referred to in the previous sentence would exceed the Commitment
Amount.
SECTION 2.2. Reduction of Commitment Amount or Availability. The
----------------------------------------------
Commitment Amount is subject to reduction from time to time pursuant to this
Section 2.2.
-----------
SECTION 2.2.1. Mandatory Reductions.
--------------------
(a) INTENTIONALLY OMITTED.
(b) For so long as the Borrower is at Level II, III or IV, the
Commitment Amount (along with the "Commitment Amount" as defined in the
Long-Term Credit Agreement) on a pro rata basis will be permanently reduced
by:
21
(i) except as specified in items (ii) and (iii) of this
section and in Section 7.2.4(d), 100% of the Net Proceeds from the
sale of assets of the Borrower or any of its Subsidiaries in excess of
$15,000,000 in the aggregate since the Closing Date during the term of
this Agreement (excluding Excluded Receivables);
(ii) 50% of the Net Proceeds from the issuance of the
Borrower's capital stock in excess of $15,000,000 in the aggregate
during the term of this Agreement; provided, however, that such amount
shall not include any issuance of the Borrower's capital stock to be
100% owned directly or indirectly by the Otto Interests on,
immediately prior to, or after the Effective Date.
(iii) 75% of the proceeds (net of any reasonable expenses) from
the issuance of Subordinated Debt in excess of $25,000,000 in the
aggregate during the term of this Agreement; provided, however, that
such amount shall not include any indebtedness issued to the Otto
Interests that is junior to Subordinated Debt, nor indebtedness issued
as a replacement or pay-off for currently existing Subordinated Debt.
In so reducing the Commitment Amount the Borrower shall comply with the
provisions of clause (b) of Section 3.2.
SECTION 2.2.2. Optional Reduction of Commitment Amount. Subject to
---------------------------------------
compliance with the provisions of clause (b) of Section 3.2, the Borrower may,
from time to time on any Business Day occurring after the Closing Date,
voluntarily reduce the Commitment Amount; provided, however, that all such
reductions shall require at least three Business Days' prior notice to the
Administrative Agent and be permanent, and any partial reduction of the
Commitment Amount shall be in a minimum amount of $25,000,000 and in an integral
multiple of $5,000,000 in excess thereof.
SECTION 2.2.3. Reduction Due to External Letters of Credit. The Borrower
-------------------------------------------
may have letters of credit outstanding which are not issued pursuant to this
Agreement or the Long-Term Credit Agreement (the aggregate amount which is
undrawn and available under all such letters of credit (plus the then aggregate
amount of all unpaid and outstanding reimbursement obligations with respect
thereto) at any time outstanding being referred to herein as the "External
L.O.C. Amount"). For so long as the Borrower is at Level II, III or IV, the
aggregate Commitment Amount plus the "Commitment Amount" as defined in the
Long-Term Credit Agreement shall be unavailable by the amount by which the
External L.O.C. Amount exceeds $200,000,000.
SECTION 2.3. Revolving Loan Borrowing Procedure. By delivering a
----------------------------------
Revolving Loan Borrowing Request to the Administrative Agent (which shall
promptly give notice thereof to each Lender) on or before 11:00 a.m., New York
City time, on a Business Day, the Borrower may from time to time irrevocably
request, on the same day (in the case of Base Rate Loans), and on not less than
three Business Days' notice (in the case of LIBO Rate Loans) nor in any case on
more than five Business Days' notice, that a Borrowing be made in a minimum
amount of $10,000,000 (or $5,000,000, in the case of Base Rate Loans) and an
integral multiple of
22
$1,000,000, or in the unused amount of the Commitment Amount. On
the terms and subject to the conditions of this Agreement, each Revolving Loan
Borrowing shall be comprised of the type of Revolving Loans, and shall be made
on the Business Day, specified in such Revolving Loan Borrowing Request. On or
before 12:00 noon New York City time (or as soon thereafter as is practicably
possible in the case of Base Rate Loans), on such Business Day each Lender shall
deposit with the Administrative Agent same day funds in an amount equal to such
Lender's Percentage of the requested Revolving Loan Borrowing. Such deposit will
be made to an account which the Administrative Agent shall specify from time to
time by notice to the Lenders. To the extent funds are received from the
Lenders, the Administrative Agent promptly upon receipt shall make such funds
available to the Borrower by wire transfer to the accounts the Borrower shall
have specified in its Revolving Loan Borrowing Request.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
-------------------------------------
Continuation/Conversion Notice to the Administrative Agent on or before 11:00
a.m., New York City time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than three nor more than five Business Days'
notice that all, or any portion in an aggregate minimum amount of $10,000,000
and an integral multiple of $1,000,000, of any Base Rate Loans or any LIBO Rate
Loans be, in the case of Base Rate Loans, converted into LIBO Rate Loans or, in
the case of LIBO Rate Loans, be converted into a Base Rate Loan or continued as
a LIBO Rate Loan (in the absence of delivery of a Continuation/Conversion Notice
with respect to any LIBO Rate Loan at least three Business Days before the last
day of the then current Interest Period with respect thereto, such LIBO Rate
Loan shall, on such last day, automatically convert to a Base Rate Loan);
provided, however, that each such conversion or continuation shall be pro rated
among the applicable outstanding Revolving Loans of all Lenders to which such
conversion or continuation is applicable, and no portion of the outstanding
principal amount of any Revolving Loans may be continued as, or be converted
into, LIBO Rate Loans when any Default has occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
-------
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing, as
the case may be, Dollar certificates of deposit in the U.S. or Dollar deposits
in its LIBOR Office's interbank eurodollar market. The failure of any Lender to
fund its obligation hereunder shall not excuse any other Lender from funding its
obligation hereunder and no Lender shall be responsible for the failure of any
other Lender to fund its obligation hereunder.
SECTION 2.6. Issuance Procedures. By delivering to the Issuer an Issuance
-------------------
Request on a Business Day, the Borrower may, from time to time irrevocably
request, on not less than two nor more than ten Business Days' notice, in the
case of an initial issuance of a Letter of Credit, and not less than five
Business Days' notice prior to the existing Stated Expiry Date (or, if a Letter
of Credit has an automatic extension provision, at least five Business Days'
notice
23
prior to the date that such Letter of Credit will, by its terms, be extended or,
if earlier, the date on which a notice from the Issuer is required to be
delivered to the beneficiary of the Letter of Credit informing the beneficiary
that the Letter of Credit will not be extended), in the case of a request for
the extension of the Stated Expiry Date of a Letter of Credit, that the Issuer
issue, or extend the Stated Expiry Date of, as the case may be, a Letter of
Credit in such form as may be requested by the Borrower and approved by the
Issuer, solely in support of obligations for the payment of goods and services
and in support of financial obligations (including surety, bonding and
performance obligations) arising in the ordinary course of the Borrower's and
its Subsidiaries' business. Each Letter of Credit shall by its terms be stated
to expire on a date (its "Stated Expiry Date") no later than the Stated Maturity
Date. The Issuer will make available to the beneficiary thereof the original of
each Letter of Credit which it issues hereunder.
SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of each
----------------------------
Letter of Credit issued by the Issuer pursuant hereto, and without further
action, each Lender shall be deemed to have severally and irrevocably purchased,
to the extent of its Percentage, a participation interest in such Letter of
Credit (including the Contingent Liability of the Issuer with respect thereto
and the obligation to pay to the Issuer the amount of any unreimbursed
Disbursement thereunder), and such Lender shall, to the extent of its
Percentage, be responsible for promptly paying to the Issuer such Lender's
Percentage of any unreimbursed Disbursements under the Letter of Credit issued
by the Issuer which have not been reimbursed by the Borrower in accordance with
Sections 2.6.2 and 2.6.3. In addition, such Lender shall, to the extent of its
Percentage, be entitled to receive a ratable portion of the Letter of Credit
fees payable pursuant to Section 3.4.4 with respect to each Letter of Credit
(other than the issuance and other fees payable to the Issuer of such Letter of
Credit pursuant to the last sentence of Section 3.4.4), the interest payable
pursuant to Section 2.6.2 and, if applicable, the interest payable pursuant to
Section 3.3.2 with respect to any Reimbursement Obligation not paid when due. To
the extent that any Lender has reimbursed the Issuer for a Disbursement as
required by this Section, such Lender shall be entitled to receive its ratable
portion of any amounts subsequently received (from the Borrower or otherwise) in
respect of such Disbursement. The Issuer shall notify each Lender on each
Quarterly Payment Date of the outstanding amount of all Letters of Credit issued
and outstanding hereunder.
SECTION 2.6.2. Disbursements. The Issuer will notify the Borrower and the
-------------
Administrative Agent promptly of the presentment for payment of any Letter of
Credit issued by the Issuer, together with notice of the date (the "Disbursement
Date") such payment shall be made (each such payment, a "Disbursement"). Subject
to the terms and provisions of such Letter of Credit and this Agreement, the
Issuer shall make such payment to the beneficiary (or its designee) of such
Letter of Credit pursuant to the terms of such Letter of Credit. Prior to 12:00
noon, New York City time, on the first Business Day following the Disbursement
Date, the Borrower will reimburse the Administrative Agent, for the account of
the Issuer, for all amounts which the Issuer has disbursed under such Letter of
Credit, together with interest thereon at a rate per annum equal to the rate
then in effect for Base Rate Loans for the period from the Disbursement Date
through the date of such reimbursement.
SECTION 2.6.3. Reimbursement. The obligation (a "Reimbursement Obligation")
-------------
of the Borrower under Section 2.6.2 to reimburse the Issuer with respect to each
Disbursement (including interest thereon), and, upon the failure of the Borrower
to reimburse the Issuer, each
24
Lender's obligation under Section 2.6.1 to reimburse the Issuer,
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower or such Lender, as the case may be, may have or have had against the
Issuer or any such Lender, including any defense based upon the failure of any
Disbursement to conform to the terms of the applicable Letter of Credit (but
only if, in the Issuer's good faith opinion, such Disbursement is determined to
be appropriate) or any non-application or misapplication by the beneficiary of
the proceeds of such Letter of Credit; provided, however, that after paying in
full its Reimbursement Obligation or its participation obligation, as the case
may be, nothing herein shall adversely affect the right of the Borrower or such
Lender, as the case may be, to commence any proceeding against the Issuer for
any wrongful Disbursement made by the Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or wilful misconduct
on the part of the Issuer.
SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during the
--------------------
continuation of any Default of the type described in Section 8.1.9 (other than
any default of the type described in Section 8.1.9(e)) or, with notice from the
Administrative Agent with the approval of the Required Lenders, upon the
occurrence and during the continuation of any other Event of Default,
(a) an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate amount which is undrawn and
available under all Letters of Credit issued and outstanding hereunder
shall, without demand upon or notice to the Borrower, be deemed to have
been paid or disbursed by the Issuer under such Letters of Credit
(notwithstanding that such amount may not in fact have been so paid or
disbursed); and
(b) upon notification by the Administrative Agent to the Borrower of
its obligations under this Section, the Borrower shall be immediately
obligated to reimburse the Issuer for the amount deemed to have been so
paid or disbursed by the Issuer.
Any amounts so payable by the Borrower pursuant to this Section shall be
deposited in cash with the Administrative Agent and held as collateral security
for the Obligations in connection with the Letters of Credit issued by the
Issuer and in connection therewith the Borrower hereby grants to the
Administrative Agent for the benefit of the Lenders a security interest in such
cash to secure the Obligations. The Administrative Agent shall have the right to
apply any such cash collateral to such Obligations as they become due and
payable. At such time when the Defaults or Events of Default giving rise to the
deemed disbursements hereunder shall have been cured or waived, the
Administrative Agent shall return to the Borrower all amounts then on deposit
with the Administrative Agent pursuant to this Section which have not been
applied to the partial satisfaction of such Obligations.
SECTION 2.6.5. Nature of Reimbursement Obligations. The Borrower and, to
-----------------------------------
the extent set forth in Section 2.6.1, each Lender shall assume all risks of the
acts, omissions or misuse of any Letter of Credit by the beneficiary thereof.
The Issuer (except to the extent of its own gross negligence or wilful
misconduct) shall not be responsible for:
25
(a) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or the proceeds thereof in whole or in part, which may prove to be invalid
or ineffective for any reason;
(c) the failure of the beneficiary of a Letter of Credit to comply
fully with conditions required in order to demand payment under a Letter of
Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise; or
(e) any loss or delay in the transmission or otherwise of any document
or draft required in order to make a Disbursement under a Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to the Issuer or any Lender. In furtherance and
extension and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by the Issuer in good faith (and not
constituting gross negligence or wilful misconduct) shall be binding upon the
Borrower and each such Lender, and shall not put the Issuer under any resulting
liability to the Borrower or any such Lender, as the case may be.
SECTION 2.7. Notes. Each Lender's Revolving Loans under its Commitment
-----
shall be evidenced by a Revolving Loan Note payable to the order of such Lender
in a maximum principal amount equal to such Lender's Percentage of the original
Commitment Amount. Each Lender's Competitive Bid Loans under this Agreement
shall be evidenced by a Competitive Bid Loan Note payable to the order of such
Lender in a maximum principal amount equal to the original Commitment Amount.
The Borrower hereby irrevocably authorizes each Lender to make (or cause to be
made) appropriate notations on the grid attached to such Lender's Notes (or on
any continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of, the outstanding principal of, and the interest rate and
Interest Period, if any, applicable to the Loans evidenced thereby. Such
notations shall be conclusive and binding on the Borrower absent manifest error;
provided, however, that the failure of any Lender to make any such notations
shall not limit or otherwise affect any Obligations of the Borrower or any other
Obligor.
SECTION 2.8. Competitive Bid Loans. Subject to the terms and conditions of
---------------------
this Agreement (including Article V), each Lender severally agrees that the
Borrower may request that Competitive Bid Loan Borrowings under this Section 2.8
be made from time to time on any Business Day prior to the date occurring
fifteen Business Days prior to the Commitment Termination Date in the manner set
forth below; provided, however, and subject to the following proviso, that
following the making of each Competitive Bid Loan Borrowing, the aggregate
amount of all Loans and Letter of Credit Outstandings then outstanding shall not
exceed the
26
Commitment Amount; and provided, further, that the Borrower hereby
agrees to make a mandatory prepayment of Loans on the date of each Competitive
Bid Loan Borrowing with the proceeds of Competitive Bid Loans to the extent
necessary to reduce the outstanding principal amount of all Loans (after giving
effect to such Competitive Bid Loan Borrowing) plus all Letter of Credit
Outstandings to an amount not in excess of the Commitment Amount.
(a) Competitive Bid Loan Borrowing Request. The Borrower may request
Competitive Bid Loan Borrowings under this Section 2.8 by delivering to the
Administrative Agent, not later than 11:00 a.m., New York City time, on a
Business Day, at least (x) five Business Days prior to the date of the
proposed Competitive Bid Loan Borrowing (in the case of LIBOR Auctions) or
(y) one Business Day prior to the date of the proposed Competitive Bid Loan
Borrowing (in the case of an Absolute Rate Auction), a revocable
Competitive Bid Loan Borrowing Request (which shall constitute an
invitation to the Lenders to extend Competitive Bid Loan quotes to the
Borrower, and which may contain requests for up to three different
Competitive Bid Loan Borrowings), specifying
(i) the proposed date (which shall be a Business Day) and
aggregate principal amount or amounts of each Competitive Bid Loan to
be made as part of such proposed Competitive Bid Loan Borrowing (each
of which such Competitive Bid Loan shall be in a minimum principal
amount of $10,000,000 and in an integral multiple of $1,000,000) (and,
subject to the proviso contained in the first sentence of this
Section, which principal amount may exceed the Commitment Amount then
available to be borrowed),
(ii) whether the Competitive Bid Loan quotes requested are to
set forth a LIBO Rate Bid Margin or an Absolute Rate (or a combination
thereof),
(iii) the proposed maturity date or dates (each a "Competitive
Bid Loan Maturity Date") for repayment of each Competitive Bid Loan to
be made as part of such Competitive Bid Loan Borrowing (which maturity
date or dates may not be earlier than 7 days (in the case of an
Absolute Rate Auction) nor later than the earlier of the date
occurring (A) six months after the date of such Competitive Bid Loan
Borrowing in the case of a Competitive Bid Loan based on the LIBO
Rate, (B) 180 days after the date of such Competitive Bid Loan
Borrowing in the case of an Absolute Rate Loan, or (C) the Commitment
Termination Date), and
(iv) the proposed duration of the Interest Period applicable
thereto.
(b) Invitation for Competitive Bid Loan Offers. Promptly upon receipt
of a Competitive Bid Loan Borrowing Request but in no event later than 2:30
p.m., New York City time, on the date of such receipt, the Administrative
Agent shall send to the Lenders by facsimile an Invitation for Competitive
Bid Loan Offers substantially in the form of Exhibit J attached hereto
containing the information contained in the applicable Competitive Bid Loan
Request and which shall constitute an invitation by the Borrower to each
Lender to submit Competitive Bid Loan quotes in response thereto.
27
(c) Submission and Contents of Competitive Bid Loan Offers.
(i) If any Lender, in its sole discretion, elects to offer to
make a Competitive Bid Loan to the Borrower as part of such proposed
Competitive Bid Loan Borrowing at a rate of interest specified by such
Lender in its sole discretion, it shall deliver to the Administrative
Agent not later than (x) 11:00 a.m., New York City time, on the fourth
Business Day prior to the proposed date of Borrowing, in the case of a
LIBOR Auction or (y) 9:30 a.m., New York City time, on the proposed
date of Borrowing, in the case of an Absolute Rate Auction, a
Competitive Bid Loan Offer, which must comply with the requirements of
this clause, in the form of Exhibit K hereto; provided, that
Competitive Bid Loan quotes submitted by the Administrative Agent (or
any affiliate of the Administrative Agent) in the capacity of a Lender
may be submitted, and may only be submitted, if the Administrative
Agent or such affiliate notifies the Borrower of the terms of the
offer or offers contained therein not later than (x) 10:45 a.m., New
York City time, on the fourth Business Day prior to the proposed date
of Borrowing, in the case of a LIBOR Auction or (y) 9:15 a.m., New
York City time, on the proposed date of Borrowing, in the case of an
Absolute Rate Auction. Subject to Articles V and VIII, such
Competitive Bid Loan Offer shall be irrevocable, and shall specify
(A) the proposed date of Borrowing, which shall be the same
as that set forth in the applicable Invitation for Competitive
Bid Loan Offers,
(B) the principal amount of the Competitive Bid Loan which
such Lender would be willing to make as part of such proposed
Competitive Bid Loan Borrowing, which principal amount may be
greater than, less than or equal to such Lender's Percentage of
the Commitment Amount, but which amount shall be in a minimum
principal amount of $10,000,000 and in an integral multiple of
$1,000,000,
(C) in the case of a LIBOR Auction, the LIBO Rate Bid
Margin, and in the case of an Absolute Rate Auction, the Absolute
Rate therefor, and
(D) the identity of the quoting Lender.
(ii) Any Competitive Bid Loan Offer that:
(A) is not substantially in the form of Exhibit K hereto or
does not specify all of the information required in clause (c) of
this Section;
(B) contains qualifying, conditional or similar language;
(C) contains proposed terms other than or in addition to
those set forth in the applicable Invitation for Competitive Bid
Loan Offers; or
28
(D) arrives after the time set forth in clause (c) of this
Section shall be disregarded by the Administrative Agent.
(d) Notice to the Borrower. The Administrative Agent shall (by
telephone confirmed by telecopy), by 1:00 p.m., New York City time (on the
fourth Business Day prior to the proposed date of Borrowing, in the case of
a LIBOR Auction), and 10:30 a.m., New York City time (on the proposed date
of Borrowing, in the case of an Absolute Rate Auction), notify the Borrower
of the terms of any Competitive Bid Loan Offer submitted by a Lender that
is in accordance with clause (c) of this Section. Any subsequent
Competitive Bid Loan Offer of a Lender shall be disregarded by the
Administrative Agent unless such subsequent Competitive Bid Loan Offer is
submitted solely to correct a manifest error in such earlier Competitive
Bid Loan Offer. The Administrative Agent's notice to the Borrower shall
specify (i) the aggregate principal amount of Competitive Bid Loans for
which offers have been received in respect of the related Invitation for
Competitive Bid Loan Offers, (ii) the respective principal amounts and
Competitive Bid Rates so offered, and (iii) the identity of such quoting
Lenders.
(e) Competitive Bid Loan Acceptance. The Borrower shall, in turn,
before (x) 4:00 p.m., New York City time, on the fourth Business Day prior
to the proposed date of Borrowing, in the case of a LIBOR Auction, or (y)
12:00 (noon), New York City time, on the date of such proposed Competitive
Bid Loan Borrowing, in the case of an Absolute Rate Auction, either
(i) irrevocably cancel the Competitive Bid Loan Borrowing
Request that requested such Competitive Bid Loan Borrowing by giving
the Administrative Agent (which shall promptly notify each Lender)
telephonic notice (promptly confirmed in writing) to that effect (and,
for purposes of this Section, a failure on the part of the Borrower to
timely notify the Administrative Agent under the terms of this clause
shall be deemed to be non-acceptance of all offers so notified to it
pursuant to clause (d) above), or
(ii) irrevocably accept, in its sole discretion, but subject to
the other provisions of this Section 2.8, any one or more of the
offers made by any Lender or Lenders pursuant to clause (d) above, in
its sole discretion, by giving the Administrative Agent telephonic
notice (and the Administrative Agent shall, promptly upon receiving
such telephonic notice from the Borrower, notify each Lender whose
Competitive Bid Loan Offer has been accepted) (promptly confirmed in
writing by delivery to the Administrative Agent of a Competitive Bid
Loan Acceptance in the form of Exhibit L, copies of which shall
thereafter be forwarded to each of the Lenders) of
(A) the amount of the Competitive Bid Loan Borrowing to be
made on such date,
and
29
(B) the amount of the Competitive Bid Loan (which amount
shall not be greater than, but which may be less than, the amount
offered by such Lender for such Competitive Bid Loan pursuant to
clause (d) above) to be made by such Lender as part of such
Competitive Bid Loan Borrowing, and reject any remaining offers
made by Lenders pursuant to clause (d) above by giving the
Administrative Agent (which shall promptly give to the Lenders)
notice to that effect;
provided, however, that
(C) if the Borrower accepts any Competitive Bid Loan Offer,
the Borrower must accept Competitive Bid Loan Offers based
exclusively upon the successively lowest interest rate and no
other criteria. If two or more Lenders submit Competitive Bid
Loan Offers with identical interest rates for the same Interest
Period and the Borrower accepts any thereof, the Borrower shall,
subject to the first three sentences of this paragraph (C),
accept all such Competitive Bid Loan Offers as nearly as possible
in proportion to the amounts of such Competitive Bid Loan Offers;
provided, that if the amount of Competitive Bid Loan Offers to be
so allocated is not sufficient to enable each such Lender to make
such Competitive Bid Loan Offer (or portions thereof) in an
aggregate principal amount of $10,000,000 or, for amounts in
excess thereof, an integral multiple of $1,000,000, the Borrower
shall round the Competitive Bid Loan Offers (or portions thereof)
allocated to such Lender or Lenders as the Borrower shall select
as necessary to the nearest multiple of $1,000,000.
(D) the aggregate amount of the Competitive Bid Loan Offers
accepted by the Borrower shall not exceed the principal amount
specified in the applicable Competitive Bid Loan Borrowing
Request,
(E) no Lender shall, without its prior written consent (in
its sole discretion), be required to make a Competitive Bid Loan
in a principal amount of less than $10,000,000 and larger
integral multiples of $1,000,000;
(F) no bid shall be accepted for a Competitive Bid Loan
unless such Competitive Bid Loan is in a minimum principal amount
of $10,000,000 (except as provided in clause (D) above) and an
integral multiple of $1,000,000 and is part of a Competitive Bid
Loan Borrowing in a minimum principal amount of $25,000,000, and
(G) the Borrower may not accept any offer that is described
in clause (c)(ii) of this Section, or that otherwise fails to
comply with the requirements of this Agreement.
(f) Funding of Competitive Bid Loans. Not later than 11:00 a.m., New
York City time (in the case of a Borrowing based on a LIBOR Auction), and
1:00 p.m., New
30
York City time (in the case of a Borrowing based on an Absolute Rate
Auction), in each case on the date specified for each Competitive Bid Loan
hereunder, each Lender participating therein shall make available the
amount of the Competitive Bid Loan to be made by it on such date to the
Administrative Agent in immediately available funds, for the account of the
Borrower, such deposit to be made to an account maintained by the
Administrative Agent, as the Administrative Agent shall specify from time
to time by notice to the Lenders or as otherwise agreed to in writing by
the Administrative Agent and the Borrower. The amount so received by the
Administrative Agent shall promptly be made available to the Borrower by
depositing the same in immediately available funds in an account of the
Borrower notified to the Administrative Agent in writing.
SECTION 2.9. Termination; Extension of Commitment Termination Date. The
-----------------------------------------------------
Commitments shall terminate and each Lender shall be relieved of its obligations
to make any Loan or issue or risk-participate in any Letter of Credit on the
Commitment Termination Date subject to the following:
(a) Provided that no Default shall have occurred and be continuing,
and if all of the representations and warranties contained in the Loan
Documents shall be true and correct as of the date of such request, at
least thirty (30) but not more than sixty (60) days before the existing
Commitment Termination Date, the Borrower may provide the Administrative
Agent with written notice that it desires to extend the Commitment
Termination Date for an additional 364 days.
(b) Upon receipt of the notice requesting extension of the Commitment
Termination Date from the Borrower, the Administrative Agent will promptly
provide copies of such notice to the Lenders. Each Lender shall notify the
Administrative Agent of its consent to or rejection (such notice of
rejection being a "Termination Notice") of the extension of the Commitment
Termination Date (by telecopier or by telephone (confirmed in writing
promptly thereafter)) on or before one (1) Business Day prior to the
earlier to occur of (i) ten (10) days before the existing Commitment
Termination Date and (ii) thirty (30) days after being notified by the
Administrative Agent of such request. The failure of any Lender to timely
notify the Administrative Agent of its consent or rejection pursuant to
this clause (b) shall be deemed to be a rejection by such Lender of such
extension request, and such Lender shall be a "Terminating Lender"
hereunder and such Lender shall be deemed to have given (and the
Administrative Agent deemed to have received) a Termination Notice
hereunder. Promptly after the applicable response date, the Administrative
Agent shall give each non-Terminating Lender and the Borrower notice of its
receipt (or deemed receipt) or non-receipt of Termination Notices. If the
Administrative Agent has notified the Borrower of its receipt (or deemed
receipt) of Termination Notices, the Borrower shall then have the right to
have each Terminating Lender's Commitment assigned to and assumed by, one
or more eligible Assignee Lenders (which are not Terminating Lenders and
may be non-Terminating Lenders) as purchasing lenders under this Agreement
(in such capacity, each a "Purchasing Lender") to replace such Terminating
Lender.
(c) On any Commitment Termination Date if (i) the aggregate amount of
the Commitments which have not been the subject of a Termination Notice
given or deemed
31
given pursuant to Section 2.9(b) plus any Commitments to be assumed by
Purchasing Lender(s) equals at least 90% of the Commitment Amount existing
as of the date the Borrower provided written notice to the Administrative
Agent under Section 2.9(a), (ii) no Default has occurred and is continuing
on and as of such Commitment Termination Date, and (iii) the
representations and warranties contained in the Loan Documents are true and
correct on and as of such Commitment Termination Date, then the
Administrative Agent shall so notify the Borrower, and the following shall
occur: (1) the Commitment Termination Date shall be automatically extended
for 364 days for all of the Lenders other than the Terminating Lenders, (2)
the Terminating Lender(s) (upon payment in full of all of the Obligations
owed to them on and as of such date by the Borrower and/or the Purchasing
Lenders) shall cease to be Lenders hereunder on the existing Commitment
Termination Date, (3) the Purchasing Lenders shall become Lenders hereunder
on such Commitment Termination Date, (4) the Commitment Amount shall be
automatically reduced on such Commitment Termination Date by the amount, if
any, that the Commitment Amount exceeds the aggregate Commitments of the
Lenders (after giving effect to any Commitments to be assumed by Purchasing
Lender(s)) and (5) the aggregate outstanding Loans and Letter of Credit
Outstandings shall not exceed the resulting Commitment Amount. The transfer
of Commitments and/or outstanding Obligations from Terminating Lenders to
Purchasing Lenders shall take place as of the applicable Commitment
Termination Date, and pursuant to the execution, delivery, acceptance and
recording of, a Lender Assignment Agreement in accordance with the
procedures set forth in Section 10.11.1; provided, that either the Borrower
or the Purchasing Lender shall pay the fee required by Section 10.11.1.
(d) On any applicable Commitment Termination Date if (i) the aggregate
amount of the Commitments which have not been the subject of a Termination
Notice given or deemed given pursuant to Section 2.9(b) plus any
Commitments to be assumed by Purchasing Lender(s) is less than 90% of the
Commitment Amount existing as of the date the Borrower provided written
notice to the Administrative Agent under Section 2.9(a), (ii) a Default has
occurred and is continuing on and as of such Commitment Termination Date,
(iii) the representations and warranties contained in the Loan Documents
are not true and correct on and as of such Commitment Termination Date, or
(iv) each Terminating Lender shall not have been fully paid all of the
Obligations owed to it on and as of such Commitment Termination Date, then
the Commitment Termination Date shall not be extended and, irrespective of
whether a Lender has sent or has not sent a Termination Notice as provided
in Section 2.9(b), the Commitment Termination Date shall not be extended
and no Purchasing Lender shall assume a Commitment pursuant to this Section
2.9.
(e) Each Terminating Lender shall have no further obligation or
Commitment hereunder following the date on which it is terminated as a
Lender under this Agreement as provided herein other than any obligations
accruing on or prior to such date on which it is terminated as a Lender
under this Agreement as provided herein and its rights under Section 10.5
shall continue.
32
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayment. The Borrower shall make the following repayments of
---------
the Loans:
(a) Subject to clause (b) of Section 3.2, the Borrower shall repay in
full the entire unpaid principal amount of each Revolving Loan upon the
Commitment Termination Date and each Competitive Bid Loan upon the
Competitive Bid Loan Maturity Date therefor.
(b) The Borrower shall, immediately upon the acceleration pursuant to
Section 8.2 or Section 8.3, repay the aggregate unpaid principal amount of
all Loans then accelerated.
SECTION 3.2. Prepayments. The Borrower may (in the case of clause (a)) and
-----------
shall (in the case of each other clause) make the following prepayments of the
Revolving Loans (Competitive Bid Loans may not be voluntarily prepaid):
(a) The Borrower may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Revolving Loans; provided, however, that
(i) any such prepayment shall be made among Revolving Loans pro
rata to each Lender (according to the respective Percentages of the
Lenders) as directed by the Borrower and absent such direction shall
be made pro rata among Revolving Loans of the same type and, if
applicable, having the same Interest Period, of all Lenders;
(ii) all such voluntary prepayments shall require at least same
day prior written notice to the Administrative Agent (in the case of
Base Rate Loans) and at least two (in the case of LIBO Rate Loans,
provided the Borrower pays all related break funding costs) but no
more than five (in the case of Base Rate or LIBO Rate Loans) Business
Days' prior written notice to the Administrative Agent; and
(iii) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $20,000,000 (or $5,000,000, in the case of
Base Rate Loans) and an integral multiple of $5,000,000.
(b) The Borrower shall, on each date when any reduction in the
Commitment Amount (or the availability thereof) shall become effective,
including pursuant to Section 2.2, make a mandatory prepayment of all
Loans, and if required, deliver cash collateral for Letter of Credit
Outstandings, equal to the excess, if any, of the aggregate outstanding
principal amount of all Loans and Letter of Credit Outstandings over the
Commitment Amount as so reduced (or as so available). The Borrower shall
also make a mandatory prepayment of all Loans equal to the Net Proceeds
received from the sale of the ββββββ Road warehouse facility, located in
Columbus, Ohio, in accordance with Section 7.2.4(d)
33
hereof; provided, that such mandatory prepayment shall be allocated between
the Loans hereunder and the "Loans" as defined in the Long-Term Credit
Agreement on a pro rata basis based on the Commitment Amount hereunder and
the "Commitment Amount" under the Long-Term Credit Agreement.
(c) Each prepayment of any Loans made pursuant to this Section shall
be without premium or penalty, but shall be subject to Section 4.4. No
voluntary prepayment of principal of any Loans prior to the Commitment
Termination Date pursuant to clause (a) shall cause a reduction in the
Commitment Amount.
SECTION 3.3. Interest Provisions. Interest on the outstanding principal
-------------------
amount of Loans shall accrue and be payable in accordance with this Section 3.3.
SECTION 3.3.1. Rates. Pursuant to an appropriately delivered Revolving Loan
-----
Borrowing Request, Competitive Bid Loan Borrowing Request or
Continuation/Conversion Notice, the Borrower may elect that Loans comprising a
Borrowing accrue interest at the rate per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Base Rate Margin;
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate for
such Interest Period plus the Applicable LIBO Rate Margin plus any
additional amount requested by any Lender to reflect all additional amounts
to be incurred by such Lender in respect of such LIBO Rate Loan in
obtaining and holding any deposit so acquired in providing such LIBO Rate
Loans and in maintaining or paying any Reserves existing as of the first
day of such interest period to the extent not otherwise included in the
definition of "LIBO Rate";
(c) on that portion maintained as a Competitive Bid Loan, during each
Interest Period applicable thereto, equal to the applicable Competitive Bid
Rate specified by the Lender making such Competitive Bid Loan in the
Competitive Bid Loan Offer delivered by such Lender and accepted by the
Borrower pursuant to Section 2.8.
All LIBO Rate Loans and Competitive Bid Loans shall bear interest from and
including the first day of the applicable Interest Period to (but excluding) the
last day of such Interest Period at the interest rate determined as applicable
to such Loan.
SECTION 3.3.2. Post-Maturity Rates. After the date any principal amount of
-------------------
any Loan is due and payable (whether on the Commitment Termination Date,
Competitive Bid Loan Maturity Dates, upon acceleration or otherwise), or after
any other monetary Obligation of the Borrower shall have become due and payable,
the Borrower shall pay, but only to the extent permitted by law, interest (after
as well as before judgment) on such amounts at a rate per annum equal to the
Alternate Base Rate plus the Applicable Base Rate Margin, the LIBO Rate plus the
Applicable LIBO Rate Margin or the applicable Competitive Bid Rate as then
accruing on the Loans outstanding plus a margin of 2% in each case. The
Administrative Agent agrees to
34
promptly notify the Borrower of such post-maturity rates but the failure to so
notify shall not affect such rates.
SECTION 3.3.3. Payment Dates. Interest accrued on each Loan shall be
-------------
payable, without duplication:
(a) on the Commitment Termination Date;
(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Loan, with respect to the amount so paid or
prepaid;
(c) with respect to Base Rate Loans, on each Monthly Payment Date
occurring after the date of the initial Borrowing hereunder;
(d) with respect to LIBO Rate Loans or Competitive Bid Loans, on the
last day of each applicable Interest Period (and, if such Interest Period
shall exceed 90 days (in the case of Absolute Rate Loans) or three months
(in the case of LIBO Rate Loans or Competitive Bid Loans based on the LIBO
Rate), on each 90th day (in the case of Absolute Rate Loans) or three month
(in the case of LIBO Rate Loans or Competitive Bid Loans based on the LIBO
Rate) anniversary of the first day of the applicable Interest Period for
such Loan occurring during such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO Rate Loans
on a day when interest would not otherwise have been payable pursuant to
clause (c), on the date of such conversion; and
(f) on that portion of any Loans which is accelerated pursuant to
Section 8.2 or Section 8.3, immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Commitment Termination Date, Competitive Bid Loan
Maturity Date, upon acceleration or otherwise) shall be payable upon demand.
SECTION 3.4. Fees. The Borrower agrees to pay the fees set forth in this
----
Section 3.4. All such fees shall be non-refundable.
SECTION 3.4.1. Front-End Fee. The Borrower agrees to pay to the
-------------
Administrative Agent on the Effective Date for the account of each Lender a
one-time fee calculated and paid on each Lender's initial Commitment in an
amount as agreed between the Borrower and each Lender.
SECTION 3.4.2. Facility Fee. The Borrower agrees to pay to the
------------
Administrative Agent for the account of each Lender, for the period (including
any portion thereof when its Commitment is suspended by reason of the Borrower's
inability to satisfy any condition of Article V or partially unavailable because
of the provisions of Sections 2.2.1(a) and 2.2.3) commencing on the Effective
Date and continuing through the Commitment Termination Date, a facility fee at
the then applicable rate set forth in the Pricing Grid on such Lender's
Percentage of
35
the Commitment Amount. Such facility fees shall be payable by the Borrower in
arrears, on each Quarterly Payment Date, commencing with the first such day
following the Effective Date, and on the Commitment Termination Date.
SECTION 3.4.3. Administrative Agent's Fee. The Borrower agrees to pay to
--------------------------
the Administrative Agent, for its own account, an administrative agent's fee in
an annual amount and on the dates agreed to between the Borrower and the
Administrative Agent.
SECTION 3.4.4. Letter of Credit Fee. The Borrower agrees to pay to the
--------------------
Issuer, for the pro rata account of the Issuer and each other Lender, a Letter
of Credit fee on the average Letter of Credit Outstandings set forth in clause
(a) of the definition thereof during the applicable Pricing Period in an amount
equal to the then applicable rate set forth in the Pricing Grid, such fees to be
payable on each Quarterly Payment Date in arrears. The Borrower agrees to pay
the Issuer for its own account, an issuance fee, an administrative fee,
amendment fee and extension fee in such amounts and on dates agreed to between
the Borrower and the Issuer.
SECTION 3.4.5. Auction Fee. The Borrower agrees to pay to the
-----------
Administrative Agent, for its own account, an auction fee for administering each
Competitive Bid Loan auction under Section 2.8 in an amount and to be paid on
such dates as agreed between the Borrower and the Administrative Agent.
SECTION 3.4.6. Arranger Fee. The Borrower agrees to pay to each of the
------------
Arrangers, for their own respective accounts, an up-front arranger fee on the
Effective Date in an amount agreed to by the Borrower and each Arranger.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. Fixed Rate Lending Unlawful. If any Lender shall determine
---------------------------
in good faith (which determination shall, upon notice thereof to the Borrower
and the Lenders, be conclusive and binding on the Borrower) that the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for such Lender to make, continue or maintain any Loan as, or to
convert any Loan into, a LIBO Rate Loan, the obligations of all Lenders to make,
continue, maintain or convert any such Loans shall, upon such determination,
forthwith be suspended until such Lender shall notify the Administrative Agent
that the circumstances causing such suspension no longer exist, and all LIBO
Rate Loans shall automatically convert into Base Rate Loans at the end of the
then current Interest Periods with respect thereto or sooner, if required by
such law or assertion.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent, or any
--------------------
Lenders whose Percentages equal or exceed 35% upon notice to the Administrative
Agent, shall have determined in good faith that
SECTION 4.2.1. Dollar certificates of deposit or Dollar deposits, as the
---------------------------------------------------------
case may be, in the relevant amount and for the relevant Interest Period are not
--------------------------------------------------------------------------------
available to it in its relevant market; or
------------------------------------------
36
(a) adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans or Competitive Bid Loans based on
the LIBO Rate,
then, upon notice from the Administrative Agent to the Borrower and the Lenders,
the obligations of all Lenders under Sections 2.3 and 2.4 and 2.8 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans or
Competitive Bid Loans based on the LIBO Rate shall forthwith be suspended until
the Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 4.3. Increased Loan Costs, etc. The Borrower agrees to reimburse
-------------------------
each Lender for any increase in the cost to such Lender of, or any reduction in
the amount of any sum receivable by such Lender in respect of, making,
continuing or maintaining (or of its obligation to make, continue or maintain)
any Loans as, or of converting (or of its obligation to convert) any Loans into,
LIBO Rate Loans. Such Lender shall promptly notify the Administrative Agent and
the Borrower in writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Lender for such increased cost or reduced
amount. Such additional amounts shall be payable by the Borrower directly to
such Lender within five days of its receipt of such notice, and such notice
shall, in the absence of manifest error, be conclusive and binding on the
Borrower.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any loss
--------------
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan
or Competitive Bid Loan) as a result of
(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Loans or any Competitive Bid Loans on a date other than
the scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 2.2.2, 3.1, 3.2 or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance with the
Revolving Loan Borrowing Request therefor other than by reason of the fault
of any such Lender; or
(c) any Loans not being made as Competitive Bid Loans in accordance
with the Competitive Bid Loan Borrowing Request therefor other than by
reason of the fault of any such Lender; or
(d) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/ Conversion Notice therefor other
than by reason of the fault of any such Lender,
then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for
37
such loss or expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
-----------------------
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline or decision (whether or
not having the force of law) of any court, central bank, regulator or other
governmental authority affects or would affect the amount of capital required or
expected to be maintained by any Lender or any Person controlling such Lender,
and such Lender determines (in its sole and absolute discretion) that the rate
of return on its or such controlling Person's capital as a consequence of its
Commitment or the Loans made, or the Letters of Credit issued or participated
in, by such Lender is reduced to a level below that which such Lender or such
controlling Person could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to time by such
Lender to the Borrower, the Borrower shall immediately pay directly to such
Lender additional amounts sufficient to compensate such Lender or such
controlling Person for such reduction in rate of return. A statement of such
Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, such Lender
may use any method of averaging and attribution that it uses with other
customers which have similar arrangements, and, if done in good faith, shall, in
the absence of manifest error, be conclusive.
SECTION 4.6. Taxes. All payments by the Borrower of principal of, and
-----
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's
income or receipts by the jurisdictions where such Lender is organized or
maintains a place of business (such non-excluded items being called "Taxes"). In
the event that any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official receipt
or other documentation reasonably satisfactory to the Administrative Agent
(with copies to each of the affected Lenders) evidencing such payment to
such authority; and
(c) pay to the Administrative Agent for the account of the Lenders
such additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against any Agent or any Lender
with respect to any payment received by such Agent or such Lender hereunder,
such Agent or such Lender may pay such Taxes and the Borrower will promptly pay
such additional amounts (including any penalties, interest or expenses resulting
from the Borrower's omission in reimbursing such Agent
38
or such Lender sooner) as is necessary in order that the net amount received by
such person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such person would have received had
not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent, for the account of the
applicable Lender, the required receipts or other required documentary evidence,
the Borrower shall indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of any such failure.
For purposes of this Section 4.6, a distribution hereunder by the Administrative
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
The Administrative Agent shall request that each Lender that is organized
under the laws of a jurisdiction other than the United States, prior to the date
of the initial Credit Extension and annually thereafter, execute and deliver to
the Borrower and the Administrative Agent, one or more copies (as the Borrower
or the Administrative Agent may reasonably request) of United States Internal
Revenue Service Form W-8BEN or Form W-8ECI or such other forms or documents (or
successor forms or documents), appropriately completed, as may be applicable to
establish the extent, if any, to which a payment to such Lender is exempt from
withholding or deduction of Taxes.
SECTION 4.7. Payments, Computations, etc. (a) Unless otherwise expressly
---------------------------
provided, all payments by the Borrower pursuant to this Agreement, the Notes,
each Letter of Credit or any other Loan Document shall be made by the Borrower
to the Administrative Agent for the pro rata account of the Lenders entitled to
receive such payment.
(a) All such payments required to be made to the Administrative Agent
shall be made, without setoff, deduction or counterclaim, not later than
2:00 p.m., New York City time, on the date due, in same day or immediately
available funds, to such account as the Administrative Agent shall specify
from time to time by notice to the Borrower. Funds received after that time
shall be deemed to have been received by the Administrative Agent on the
next succeeding Business Day. The Administrative Agent shall promptly remit
in same day funds to each Lender its share, if any, of such payments
received by the Administrative Agent for the account of such Lender;
provided, that if the Administrative Agent receives such funds after 3:00
p.m., New York City time, it may remit such payments to the Lenders on the
next Business Day (with accrued interest on such amount, to the extent the
Administrative Agent has received interest on such amount from the
Borrower).
(b) All interest and fees (including the fees payable in accordance
with Section 3.4) shall be computed on the basis of the actual number of
days (including the first day but excluding the last day) occurring during
the period for which such interest or fee is payable over a year comprised
of 360 days (or, in the case of interest on a Base Rate Loan (i) determined
in accordance with clause (a) of the definition of Alternate Base Rate, 365
days or, if appropriate, 366 days or (ii) determined in accordance with
clause (b) of the definition of Alternate Base Rate, 360 days).
39
(c) Whenever any payment to be made shall otherwise be due on a day
which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period" with
respect to LIBO Rate Loans or Competitive Bid Loans based on the LIBO Rate)
be made on the next succeeding Business Day and such extension of time
shall be included in computing interest and fees, if any, in connection
with such payment.
SECTION 4.8. Sharing of Payments. If any Lender shall obtain any payment
-------------------
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan or Reimbursement Obligation (other than
pursuant to the terms of Sections 4.3, 4.4, 4.5 and 4.6) in excess of its pro
rata share of payments then or therewith obtained by all Lenders, such Lender
shall purchase from the other Lenders such participations in Credit Extensions
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided, however,
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of
(a) the amount of such selling Lender's required repayment to the
purchasing Lender
to
(b) 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 Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If, under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence of any Default
------
described in clauses (a) through (d) of Section 8.1.9, or upon the occurrence of
any other Event of Default, have the right to appropriate and apply to the
payment of the Obligations owing to it (whether or not then due), and (as
security for such Obligations) the Borrower hereby grants to each Lender a
continuing security interest in, any and all balances, credits, deposits
(general or special), accounts or moneys of the Borrower then or thereafter
maintained with such Lender; provided, however, that any such appropriation and
application shall be subject to the provisions of Section 4.8. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender; provided, however, that the
40
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff under applicable law
or otherwise) which such Lender may have.
SECTION 4.10. Use of Proceeds. The Borrower shall apply the proceeds of
---------------
each Borrowing (i) for working capital for the Borrower and its Subsidiaries,
(ii) to refinance certain existing Indebtedness of the Borrower and its
Subsidiaries, (iii) for other general corporate purposes of the Borrower and its
Subsidiaries and (iv) to pay fees and expenses in connection with the financing
under this Agreement; without limiting the foregoing, no proceeds of any Loan
will be used to acquire any equity security of a class which is registered
pursuant to Section 12 of the Securities Exchange Act of 1934 or any "margin
stock", as defined in F.R.S. Board Regulation U.
SECTION 4.11. Reserves. If at any time during the term of this Agreement,
--------
any Lender shall be required by any Legal Requirement to maintain any Reserves
in respect of any LIBO Rate Loans or Competitive Bid Loans based on the LIBO
Rate, other than Reserves existing as of the date of the making of such Loans
and included in the calculation of LIBO Rate, the LIBO Rate or LIBO Rate Bid
Margin, as applicable, shall be adjusted to reflect all additional costs
incurred or to be incurred by such Lender in maintaining such Reserves. Such
costs shall be computed by determining the amount by which such Legal
Requirement effectively increases the cost to such Lender of obtaining deposits
of Dollars in the London interbank foreign currency deposits market or
certificate of deposit market in an amount approximately equal to the LIBO Rate
Loan or the Competitive Bid Loan based on the LIBO Rate, as applicable. The
determination by any Lender of the amount of such costs and the allocations, if
any, of such costs among the Borrower and other customers which have
arrangements with such Lender similar to the making of the LIBO Rate Loans and
Competitive Bid Loans based on the LIBO Rate hereunder, if done in good faith
and, with respect to such allocation, on an equitable basis, shall, in the
absence of manifest error, be conclusive and shall be provided to the Borrower
in a notice from any such Lender.
SECTION 4.12. Change in Applicable Lending Office. Each Lender agrees that,
-----------------------------------
upon the occurrence of any event giving rise to the operation of Section 4.1,
4.3, 4.5 or 4.6 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event, provided that such designation is made on such terms that such Lender and
its lending office suffer no economic, legal, regulatory or other disadvantage,
with the object of avoiding the consequence of the event giving rise to the
operation of any such Section. Nothing in this Section 4.12 shall affect or
postpone any of the Obligations of the Borrower or the right of any Lender
provided in any of Sections 4.1, 4.3, 4.5 or 4.6.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension. The obligations of the Lenders and
------------------------
the Issuer to fund the initial Credit Extension shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth in this
Section 5.1.
41
SECTION 5.1.1. Resolutions, etc. The Administrative Agent shall have
----------------
received from the Borrower with sufficient copies for each Lender a certificate,
dated the date of the initial Credit Extension, of an Authorized Officer of the
Borrower certifying the following:
(a) resolutions of the Board Committee of the Borrower then in full
force and effect authorizing the execution, delivery and performance of
this Agreement, the Notes and each other Loan Document to be executed by or
on behalf of the Borrower,
(b) true, correct and complete copies of the Articles of Incorporation
and the By-Laws of the Borrower, which documents shall be in form and
substance satisfactory to the Administrative Agent, and
(c) the incumbency and signatures of those officers of the Borrower
authorized to act on behalf of the Borrower with respect to this Agreement,
the Notes and each other Loan Document executed by the Borrower,
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of an Authorized Officer of the Borrower
canceling or amending such prior certificate.
SECTION 5.1.2. Delivery of Certain Documents. The Administrative Agent
-----------------------------
shall have received with sufficient copies for each Lender the following
documents, agreements or instruments:
(a) a certificate of good standing of the Borrower, certified as of a
recent date by the appropriate governmental officer in Delaware; and
(b) copies of the Organic Documents of each Obligor other than the
Borrower, together with all amendments thereto, and a certificate of good
standing, in each case certified as of a recent date by the appropriate
governmental officer in its jurisdiction of incorporation for certain
Subsidiaries.
SECTION 5.1.3. Delivery of Notes. Each Lender shall have received, for its
-----------------
own account, its Revolving Loan Note and its Competitive Bid Loan Note duly
executed and delivered by and on behalf of the Borrower.
SECTION 5.1.4. Payment of Outstanding Indebtedness, etc. All Indebtedness
----------------------------------------
identified in Item 7.2.1(b) ("Indebtedness to be Paid") of the Disclosure
Schedule, together with all interest, all prepayment premiums and other amounts
due and payable with respect thereto, shall have been paid in full (including,
to the extent necessary, from proceeds of the initial Borrowing), and the
Administrative Agent shall have received payoff letters for the Indebtedness
identified in Item 7.2.1(b) ("Indebtedness to be Paid") of the Disclosure
Schedule.
SECTION 5.1.5. Assumption of Outstanding Indebtedness, etc. All
-------------------------------------------
Indebtedness identified in Item 7.2.1(c) ("Ongoing Indebtedness") of the
Disclosure Schedule as Indebtedness to be assumed shall have been assumed by the
Borrower.
SECTION 5.1.6. Closing Date Certificate. The Administrative Agent shall
------------------------
have received with sufficient copies for each Lender the Closing Date
Certificate, dated the date of the
42
initial Credit Extension and duly executed by an Authorized Officer of the
Borrower, in which the Borrower shall agree and acknowledge that the statements
made therein shall be deemed to be true and correct representations and
warranties made as of such date under this Agreement, and, at the time such
certificate is delivered, such statements shall in fact be true and correct. All
documents and agreements required to be appended to the Closing Date Certificate
shall be in form and substance satisfactory to the Lenders.
SECTION 5.1.7. Opinions of Counsel. The Administrative Agent shall have
-------------------
received with sufficient copies for each Lender opinions, dated the date of the
initial Credit Extension and addressed to the Arrangers and all Lenders, from
(a) the following counsel:
(i) βββββββ� β�. βββββ�, General Counsel of the Borrower, in
substantially the form of Exhibit M-1 hereto; and
(ii) βββββ�, βββββ� and βββββ�, counsel to the Borrower and the
other Obligors, in substantially the form of Exhibit M-2 hereto.
SECTION 5.1.8. Guaranty. The Administrative Agent shall have received the
--------
Guaranty in substantially the form of Exhibit N, dated the date hereof, duly
executed by each Material Subsidiary other than First Consumers National Bank
and Spiegel Acceptance Corporation.
SECTION 5.1.9. Insurance. The Administrative Agent shall have received
---------
with sufficient copies for each Lender a schedule of the policies of insurance
maintained and in effect on the Effective Date as required pursuant to Section
7.1.4, certified by an Authorized Officer of the Borrower.
SECTION 5.1.10. Pro Forma Compliance Certificate and Auditor's Reliance
-------------------------------------------------------
Letter. The Administrative Agent shall have received, with counterparts for each
------
Lender, an initial Compliance Certificate as of April 1, 2000, duly executed
(and with all schedules thereto duly completed) and a letter from the Borrower
to the Borrower's independent public accountants substantially in the form of
Exhibit P, all delivered by a financial or accounting Authorized Officer of the
Borrower.
SECTION 5.1.11. Closing Fees, Expenses, etc. The Administrative Agent shall
---------------------------
have received for its own account, or for the account of each Lender entitled
thereto, as the case may be, all fees, costs and expenses due and payable
pursuant to Sections 3.4 and 10.3, and the Administrative Agent shall have
received all fees, costs and expenses due and payable pursuant to Section 10.3
and the Lenders shall have received all amounts then due as prescribed by
Schedule IV.
SECTION 5.1.12. Document Review. The Administrative Agent shall have
---------------
received and reviewed to its satisfaction all documents, instruments,
information, approvals, and opinions relating to the Borrower as the
Administrative Agent may reasonably request.
43
SECTION 5.1.13. Simultaneous Closing of Long-Term Credit Agreement. The
--------------------------------------------------
Long-Term Credit Agreement shall close on or concurrently with the satisfaction
of each condition under this Section 5.1.
SECTION 5.1.14. Support Letter. The Administrative Agent shall have
--------------
received from ββββ Versand (GmbH & Co) a signed Letter of Support to be in the
form of Exhibit Q hereto.
SECTION 5.2. All Credit Extensions. The obligation of each Lender to
---------------------
fund any Loan on the occasion of any Credit Extensions (including the initial
Credit Extensions) shall be subject to the satisfaction of each of the
conditions precedent set forth in this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both before
-------------------------------------------
and after giving effect to any Credit Extensions the following statements shall
be true and correct:
(a) the representations and warranties set forth in Article VI
(excluding, in the case of any Loan the proceeds of which are used entirely
to repay outstanding Loans, those contained in Sections 6.6 and 6.7) and
those contained in each other Loan Document shall be true and correct with
the same effect as if then made (unless stated to relate solely to an
earlier date, in which case such representations and warranties shall be
true and correct as of such earlier date); and
(b) no Default shall have then occurred and be continuing or would
result from the transactions contemplated by this Agreement and the Loan
Documents, and none of the Borrower, the other Obligors, or any of their
respective Subsidiaries are in material violation of any law, governmental
regulation, court order or decree, which violation would reasonably be
expected to have a Material Adverse Effect.
SECTION 5.2.2. Credit Extension Request. The Administrative Agent shall
------------------------
have received a Revolving Loan Borrowing Request or a Competitive Bid Loan
Borrowing Request if Loans are being requested, or the Issuer shall have
received an Issuance Request if a Letter of Credit is being requested or
extended. Each of the delivery of a Revolving Loan Borrowing Request, a
Competitive Bid Loan Borrowing Request or an Issuance Request and the acceptance
by the Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty by the Borrower that on the date of such Credit
Extension (both immediately before and after giving effect to such Credit
Extension and the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct.
SECTION 5.2.3. Satisfactory Legal Form. All documents executed or
-----------------------
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel; and the Administrative
Agent shall have received all information, approvals, opinions, documents or
instruments as the Administrative Agent may reasonably request.
SECTION 5.2.4. Acquisition Funding. To the extent that any Credit
-------------------
Extension will be used in connection with any Acquisition, such Acquisition
shall satisfy the terms of a "Permitted Acquisition" and the Borrower shall
deliver to the Lenders a Compliance Certificate, attaching such pro forma
financial and other information (after giving effect to the applicable
44
Acquisition and the making of the requested Loans) as shall be necessary to
evidence that no Event of Default or Default will occur.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuer and the Agents to enter into
this Agreement and to make Credit Extensions hereunder, the Borrower represents
and warrants as set forth in this Article VI.
SECTION 6.1. Organization, etc. The Borrower is a corporation and each of
-----------------
its Subsidiaries (if any) is validly organized and existing and in good standing
under the laws of the state of its organization or incorporation, as applicable,
is duly qualified to do business and is in good standing as a foreign
partnership or corporation, as applicable, in each jurisdiction where the
failure to be so qualified could have a Material Adverse Effect and has full
partnership or corporate power and authority, as applicable, and holds all
requisite governmental licenses, permits and other approvals to enter into and
perform its Obligations under this Agreement, the Notes and each other Loan
Document to which it is a party and to own and hold under lease its property and
to conduct its business substantially as currently conducted by it.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
-----------------------------------------
delivery and performance by the Borrower of this Agreement, the Notes and each
other Loan Document executed or to be executed by it, and the execution,
delivery and performance by each other Obligor of each Loan Document executed or
to be executed by it, are within the Borrower's and each such Obligor's
partnership or corporate powers, as applicable, have been duly authorized by all
necessary partnership or corporate action, as applicable, and do not
(a) contravene the Borrower's or any such Obligor's Organic
Documents;
(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting the Borrower or
any such Obligor; or
(c) result in, or require the creation or imposition of, any Lien on
any of the Borrower's or any Obligor's properties, except pursuant to the
terms of a Loan Document.
SECTION 6.3. Government Approval, Regulation, etc.; Investment Company Act;
-------------------------------------------------------------
Public Utility Holding Company Act. Except as disclosed in Item 6.3
----------------------------------
("Approvals") of the Disclosure Schedule, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body or other Person is required for the due execution, delivery or
performance by the Borrower or any other Obligor of this Agreement, the Notes or
any other Loan Document. Neither the Borrower nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
45
SECTION 6.4. Validity, etc. This Agreement constitutes, and the Notes and
-------------
each other Loan Document executed by the Borrower will, on the due execution and
delivery thereof, constitute, the legal, valid and binding obligations of the
Borrower enforceable in accordance with their respective terms except as such
enforceability may be limited by bankruptcy, insolvency or similar laws from
time to time in effect that affect creditors rights generally; and each Loan
Document executed pursuant hereto by each other Obligor will, on the due
execution and delivery thereof by such Obligor, be the legal, valid and binding
obligation of such Obligor enforceable in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency or similar laws
from time to time in effect that affect creditors rights generally.
SECTION 6.5. Financial Information. The (a) audited balance sheet of the
---------------------
Borrower as at January 1, 2000, and the related statements of operations and
cash flow of the Borrower, and (b) unaudited balance sheet of the Borrower for
the Fiscal Quarter ended April 1, 2000 and the related statements of income and
cash flow of the Borrower, copies of which have been furnished to each Lender,
have in each case been prepared in accordance with GAAP consistently applied,
and present fairly the consolidated financial condition of the Borrower as at
the dates thereof and the results of its operations for the periods then ended.
SECTION 6.6. No Material Adverse Change. Since January 1, 2000, there has
--------------------------
been no material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Borrower and its Subsidiaries.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no pending or,
------------------------------------
to the knowledge of the Borrower, threatened litigation, arbitration,
governmental investigation, action, proceeding, or labor controversy affecting
the Borrower or any of its Subsidiaries, or any of their respective properties,
businesses, assets or revenues, which would reasonably be expected to have a
Material Adverse Effect except as disclosed in Item 6.7 ("Litigation") of the
Disclosure Schedule.
SECTION 6.8. Compliance With Laws: Authorizations. The Borrower and its
------------------------------------
Subsidiaries have complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government, or any instrumentality or agency thereof, having jurisdiction over
the conduct of its businesses or the ownership of its properties, including,
without limitation, those relating to public health and safety and protection of
the environment, except where the failure to so comply would not reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries has received any notice to the effect that its operations are not
in material compliance with any of the requirements of applicable federal, state
and local environmental, health and safety statutes and regulations or are the
subject of any federal or state investigation evaluating whether any remedial
action is needed to respond to a release of any toxic or hazardous waste or
substance into the environment, which non-compliance or remedial action could
have a Material Adverse Effect. The Borrower and its Subsidiaries have obtained
all Authorizations necessary and appropriate to own and operate their respective
properties and all such Authorizations are in full force and effect, except
where the failure to so obtain such Authorizations or to so keep such
Authorizations in full force and effect would not reasonably be expected to have
a Material Adverse Effect.
46
SECTION 6.9. Taxes. Each of the Borrower and its Subsidiaries has filed
-----
all tax returns and reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be owing, except, in
each case, any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
SECTION 6.10. Pension and Welfare Plans. During the
-------------------------
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, no
steps have been taken to terminate any Pension Plan, and no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by the Borrower or any member of the Controlled Group of any material liability,
fine or penalty. Except as disclosed in Item 6.10 ("Employee Benefit Plans") of
the Disclosure Schedule, neither the Borrower nor any member of the Controlled
Group has any contingent liability with respect to any post-retirement benefit
under a Welfare Plan, other than liability for continuation coverage described
in Part 6 of Title I of ERISA.
SECTION 6.11. Environmental Warranties. Except as set forth in Item 6.11
------------------------
("Environmental Matters") of the Disclosure Schedule,
(a) neither the Borrower nor any Subsidiary has in the past or is
presently operating its business in such a manner as to violate any
Environmental Law, except for such violations that would not reasonably be
expected to have a Material Adverse Effect;
(b) there are no pending nor, to the best of Borrower's knowledge,
threatened lawsuits, administrative proceedings, or investigations against
the Borrower or any Subsidiary that allege violations of Environmental
Laws, except for such lawsuits, administrative proceedings, or
investigations as would not reasonably be expected to have a Material
Adverse Effect;
(c) to the best of Borrower's knowledge, no Hazardous Materials have
been placed, deposited or disposed of on any real property which the
Borrower or any Subsidiary owned or operated in the past or owns or
operates at present in such concentrations, quantities, or circumstances
which are reasonably likely to result in material expenditures in
connection with removal or response costs pursuant to any Environmental
Law; and
(d) to the best of the Borrower's knowledge, no Hazardous Materials
generated in the course of Borrower's or any Subsidiaries' business have
been placed, deposited or disposed of on the real property of any other
Person in circumstances which are reasonably likely to result in the
expenditure of material removal or response costs pursuant to any
Environmental Laws.
SECTION 6.12. Regulations U and X. The Borrower is not engaged in the
-------------------
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Credit Extensions will be used for a purpose which
violates, or would be inconsistent with,
47
F.R.S. Board Regulation U or X. Terms for which meanings are provided in F.R.S.
Board Regulation U or X or any regulations substituted therefor, as from time to
time in effect, are used in this Section with such meanings.
SECTION 6.13. Subsidiaries. The Borrower has no Subsidiaries, except those
------------
Subsidiaries
(a) which are identified in Item 6.13 ("Existing Subsidiaries") of
the Disclosure Schedule; or
(b) which are permitted to have been acquired in accordance with
Section 7.1.10 or 7.2.3.
SECTION 6.14. Ownership of Properties. The Borrower and each of its
-----------------------
Subsidiaries owns good and defensible title to all of their respective
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever (including patents, trademarks, trade names, service marks and
copyrights), in each case, free and clear of all Liens, charges or claims
(including infringement claims with respect to patents, trademarks, copyrights
and the like) except as permitted pursuant to Section 7.2.2.
SECTION 6.15. Absence of Default. Neither the Borrower nor any of its
------------------
Subsidiaries is in default in the payment of or in the performance of any
obligation applicable to any outstanding Indebtedness including, without
limitation, any Default hereunder.
SECTION 6.16. Accuracy of Information. All factual information heretofore
-----------------------
or contemporaneously furnished by the Borrower or the Otto Interests in writing
to any Agent or any Lender for purposes of or in connection with this Agreement
or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of the Borrower to any Agent or
any Lender will be, true and accurate in every material respect on the date as
of which such information is dated or certified and as of the date of execution
and delivery of this Agreement by the Agents and such Lender, and such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with the Agents,
---------------------
the Issuer and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will perform the
obligations set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The Borrower
--------------------------------------------
will furnish, or will cause to be furnished, to each Lender, the Issuer and the
Administrative Agent copies of the following financial statements, reports,
notices and information:
48
(a) as soon as available and in any event within 55 days after the end
of each Fiscal Quarter, a consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such Fiscal Quarter and a consolidated
statement of income and cash flows of the Borrower and its Subsidiaries for
such Fiscal Quarter, with a comparison to budget for such Fiscal Quarter
and for the period commencing at the end of the previous Fiscal Year and
ending with the end of such Fiscal Quarter, in each case certified by a
financial Authorized Officer of the Borrower; provided, that any such
information for the final Fiscal Quarter of a Fiscal Year may be
preliminary and subject to final adjustment no later than 100 days after
the end of such Fiscal Year and, if such final adjustment results in a
Level change for the Pricing Period, interest and fees will be
retroactively adjusted for the corresponding Pricing Period;
(b) as soon as available and in any event within 100 days after the
end of each Fiscal Year of the Borrower, a copy of the annual audit report
for such Fiscal Year for the Borrower and its Subsidiaries, including
therein a consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such Fiscal Year and a consolidated statement of retained
earnings, income and shareholders' equity and cash flows of the Borrower
and its Subsidiaries for such Fiscal Year, and changes in financial
position as of the end of such Fiscal Year, in each case certified (without
any Impermissible Qualification) in a manner acceptable to the Required
Lenders by KPMG Peat Marwick or other independent public accountants
acceptable to the Required Lenders, together with a certificate from such
accountants to the effect that, in making the examination necessary for the
signing of such annual report by such accountants, they have not become
aware of any Default that has occurred and is continuing, or, if they have
become aware of such Default, describing such Default and the steps, if
any, being taken to cure it, and a letter from the Borrower to such
accountants substantially in the form of Exhibit P;
(c) within three Business Days after becoming aware of the occurrence
of any development, voluntary, financial or otherwise, which would
reasonably be expected to have a Material Adverse Effect, a report in
reasonable detail;
(d) as soon as possible and in any event within three Business Days
after any executive officer of the Borrower has knowledge, notice to the
Administrative Agent of the issuance or adoption after the date of this
Agreement of any federal, state or local statute, regulation or ordinance
or judicial or administrative order limiting or controlling the operations
of the Borrower or any of its Subsidiaries which would reasonably be
expected to have a Material Adverse Effect, together with a copy of such
statute, regulation, ordinance or judicial or administrative order;
(e) as soon as available and in any event within 55 days after the end
of each Fiscal Quarter, a Compliance Certificate, executed by a financial
Authorized Officer of the Borrower, showing compliance with the financial
covenants set forth in Section 7.2.6, and certifying as to the absence of
any Default; provided, that any such Compliance Certificate for the final
Fiscal Quarter of a Fiscal Year may be subject to a final adjustment in a
similar manner as set forth in the proviso of Section 7.1.1(a);
49
(f) as soon as possible and in any event within three Business Days
after any executive officer of the Borrower has knowledge, notice of the
occurrence of each Default, and a statement of an Authorized Officer of the
Borrower setting forth details of such Default and the action which the
Borrower has taken and proposes to take, if any, with respect thereto; the
occurrence of any material adverse development with respect to any
litigation, action, proceeding, or labor controversy described in Section
6.7; and the commencement of any labor controversy, litigation, action,
proceeding of the type described in Section 6.7, notice thereof and copies
of all documentation relating thereto;
(g) promptly after the sending or filing thereof, copies of all
reports which the Borrower sends to its public shareholders;
(h) within three Business Days after becoming aware of the
institution of any steps by the Borrower or any other Person to terminate
any Pension Plan, or the failure to make a required contribution to any
Pension Plan if such failure is sufficient to give rise to a Lien under
section 302(f) of ERISA, or the taking of any action with respect to a
Pension Plan which could result in the requirement that the Borrower
furnish a bond or other security to the PBGC or such Pension Plan, or the
occurrence of any event with respect to any Pension Plan which could result
in the incurrence by the Borrower of any material liability, fine or
penalty, or any material increase in the contingent liability of the
Borrower with respect to any post-retirement Welfare Plan benefit, notice
thereof and copies of all documentation relating thereto;
(i) promptly, and in any event within 90 days after the end of each
Fiscal Year, quarterly cash flow, balance sheet, income statement and fixed
asset expenditure budgets, in addition to a calculation of projected
compliance with the financial covenants set forth in Section 7.2.6, in each
case for the current Fiscal Year, each in reasonable detail satisfactory to
the Administrative Agent and signed by an Authorized Officer of the
Borrower;
(j) promptly, and in any event within 90 days after the end of each
Fiscal Year, annual financial projections for the Borrower and its
Subsidiaries covering the period until the Stated Maturity Date;
(k) promptly after the occurrence thereof, notice to the
Administrative Agent that the External L.O.C. Amount exceeds $200,000,000
and the amount by which the External L.O.C. Amount exceeds $200,000,000
(such notice to be promptly updated upon any change in such excess); and
(l) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries as any
Lender through the Administrative Agent may from time to time reasonably
request.
SECTION 7.1.2. Performance of Obligations. The Borrower and each other
--------------------------
Obligor will perform in all material respects all of their obligations under the
terms of the Loan Documents.
50
SECTION 7.1.3. Maintenance of Properties. The Borrower will, and will cause
-------------------------
each of its Subsidiaries to, maintain, preserve, protect and keep its properties
in good repair, working order and condition, and make necessary and proper
repairs, renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times, unless the Borrower or such
Subsidiary determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable.
SECTION 7.1.4. Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its properties and business against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses and will, by December 31 of each
year, furnish to each Lender a certificate of an Authorized Officer of the
Borrower setting forth a schedule of all insurance maintained by the Borrower
and its Subsidiaries in accordance with this Section.
SECTION 7.1.5. Conduct of Business; Separate Existence. The Borrower will,
---------------------------------------
and will cause each of its Subsidiaries to (a) carry on and conduct its business
in substantially the same fields of enterprise as it is presently conducted; and
(b) do all things necessary to remain duly organized, validly existing and in
good standing in its jurisdiction of organization and maintain all requisite
authority to conduct its business in each jurisdiction where the failure to be
so qualified could have a Material Adverse Effect. The Borrower will cause First
Consumers National Bank to limit its business activities to those conducted as
of the Closing Date and to those permitted by its Articles of Association and
By-Laws as in effect on the Second Restatement Date. The Borrower will cause
Spiegel Acceptance Corporation to limit its business activities to those
conducted as of the Closing Date, specifically, acquiring, holding and
transferring interests in securitization trusts which hold Excluded Receivables,
and obtaining and repaying intercompany advances received from the Borrower from
time to time in connection therewith as permitted by Sections 7.2.1(l) and
7.2.7(c).
SECTION 7.1.6. Compliance with Laws, etc. The Borrower will, and will cause
-------------------------
each of its Subsidiaries to, comply in all material respects with all applicable
laws, rules, regulations and orders except where the failure to so comply would
not reasonably be expected to have a Material Adverse Effect, such compliance to
include (without limitation):
(a) the maintenance and preservation of its partnership or corporate
existence, as applicable, and qualification as a foreign partnership or
corporation, as applicable except where the failure to so qualify would not
reasonably be expected to have a Material Adverse Effect; and
(b) payment of all taxes, assessments and governmental charges
imposed upon it or upon its property except to the extent being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
SECTION 7.1.7. ERISA. The Borrower and each ERISA Affiliate will (a) at all
-----
times make prompt payment of all contributions required under all Pension Plans
and required to meet the minimum funding standard set forth in ERISA with
respect to each Plan; (b) promptly
51
upon request, furnish the Administrative Agent and the Lenders copies of each
annual report/return (Form 5500 Series), as well as all schedules and
attachments required to be filed with the department of Labor and/or the
Internal Revenue Service pursuant to ERISA, and the regulations promulgated
thereunder, in connection with each of its Pension Plans for each Plan Year (as
defined in ERISA); (c) notify the Administrative Agent immediately of any fact,
including, but not limited to, any Reportable Event (as defined in ERISA)
arising in connection with any Plan, which might constitute grounds for
termination thereof by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer such Plan, together with a
statement if requested by the Administrative Agent, as to the reason therefor
and the action, if any, proposed to be taken with respect thereof; and (d)
furnish to the Administrative Agent, upon its request, such additional
information concerning any of the Pension Plans as may be reasonably requested.
The Borrower will not, nor will it permit any of its Subsidiaries or ERISA
Affiliates to (I) terminate a Plan if any such termination would reasonably be
expected to have a Material Adverse Effect, or (II) cause or permit to exist any
Reportable Event (as defined in ERISA) or other event or condition which
presents a material risk of termination at the request of the PBGC.
SECTION 7.1.8. Environmental Covenant. The Borrower will, and will cause
----------------------
each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with
all applicable Environmental Laws, in each case, except where failure to so
comply would not reasonably be expected to have a Material Adverse Effect;
(b) immediately notify the Administrative Agent and provide copies
upon receipt of all written claims, complaints, notices or inquiries of an
environmental nature that relate to the condition of its facilities and
properties or compliance with Environmental Laws, in each case, except
where failure to so comply would not reasonably be expected to have a
Material Adverse Effect; and
(c) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to evidence
compliance with this Section.
SECTION 7.1.9. Books and Records. The Borrower will, and will cause each of
-----------------
its Subsidiaries to, keep books and records which accurately reflect all of its
business affairs and transactions, and the Borrower will permit the
Administrative Agent, and each Lender or any of their respective
representatives, at reasonable times and intervals, to visit all of its offices,
to discuss the financial matters of the Borrower and such Subsidiary with its
officers and its independent public accountant (and the Borrower hereby
authorizes such independent public accountant to discuss the Borrower's or such
Subsidiary's financial matters with each Lender or its representatives in the
presence of a representative of the Borrower) and to examine any of its books or
other corporate records. Any visits to, or with officers of, any Subsidiary of
the Borrower and any discussions with the Borrower's independent public
accountants shall be
52
coordinated through the Borrower. The Borrower shall pay any fees of such
independent public accountant incurred in connection with the Administrative
Agent's or any Lender's exercise of its rights pursuant to this Section.
SECTION 7.1.10. New Subsidiaries.
----------------
(a) If the Borrower is at Level II, III or IV, promptly after the
date the Borrower acquires or creates a new Material Subsidiary (or an
existing Subsidiary becomes a Material Subsidiary) and, in any event,
within three Business Days following receipt by the Borrower from the
Administrative Agent of a counterpart of the Guaranty, or if the Borrower
changes from Level I to Level II, III or IV, promptly after the date of
such change in Levels, the Borrower will cause each Material Subsidiary
other than First Consumers National Bank and Spiegel Acceptance Corporation
(which has not previously executed the Guaranty) to execute and deliver the
Guaranty to the Administrative Agent and the Administrative Agent will send
a copy to each Lender;
(b) If the Borrower is at Level II, III or IV, within thirty days
after the date such Subsidiary becomes a Material Subsidiary, or if the
Borrower changes from Level I to Level II, III or IV, within thirty days of
such change in Levels, the Borrower and such Material Subsidiary other than
First Consumers National Bank and Spiegel Acceptance Corporation shall have
executed and delivered to the Administrative Agent, such other items as
reasonably requested by the Administrative Agent in connection with the
foregoing, including, without limitation, resolutions, incumbency and
officer's certificates, opinions of counsel, search reports and other
certificates and documents.
SECTION 7.2. Negative Covenants. The Borrower agrees with the Agents,
------------------
the Issuer and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will comply with
the restrictions set forth in this Section 7.2.
SECTION 7.2.1. Indebtedness. The Borrower will not, and will not permit
------------
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
(a) Indebtedness in respect of the Credit Extensions and other
Obligations;
(b) until the Closing Date, Indebtedness identified in Item 7.2.1(b)
("Indebtedness to be Paid") of the Disclosure Schedule;
(c) Indebtedness of the Borrower and its Subsidiaries existing as of
the Effective Date which is identified in Item 7.2.1(c) ("Ongoing
Indebtedness") of the Disclosure Schedule; provided that such Ongoing
Indebtedness may not be replaced except to the extent repaid or extended by
(i) Loans made hereunder at the stated maturity of such Ongoing
Indebtedness or (ii) loans which have a Weighted Life to Maturity at least
as long as the lesser of (x) such Ongoing Indebtedness and (y) the
Commitment Termination Date and which are on a pari passu unsecured basis
with Indebtedness of the Borrower in respect of the Credit Extensions;
53
(d) term loans that are Subordinated Debt; provided that the
subordination provisions in the agreements governing such loans (x) are
approved by the Required Lenders or (y) conform to the subordination
provisions attached hereto as Exhibit O;
(e) Indebtedness (other than accounts payable to suppliers to the
extent permitted by clause (g) of Section 7.2.1) (i) in an aggregate
principal amount not to exceed $5,000,000 at any time outstanding which is
incurred by the Borrower or any of its Subsidiaries (other than Spiegel
Acceptance Corporation) to a vendor of any assets to finance its
acquisition of such assets, and (ii) in respect of Capitalized Lease
Liabilities to the extent permitted by Section 7.2.6; and
(f) Normal limited recourse indebtedness for breaches of
representations and warranties or for reductions or cancellations of
receivables in respect of Excluded Receivables;
(g) unsecured Indebtedness incurred in the ordinary course of
business (including (i) salaries to employees and (ii) open accounts
extended by suppliers on customary trade terms in connection with purchases
of goods and services, but excluding Indebtedness incurred through the
borrowing of money or Contingent Liabilities), provided, however, that no
Indebtedness otherwise permitted by this clause (g) (other than salaries to
employees) shall be permitted if any Default shall result from the
incurrence thereof;
(h) other Indebtedness of the Borrower's Subsidiaries (other than
Spiegel Acceptance Corporation, and excluding intercompany Indebtedness) in
an aggregate amount not to exceed $10,000,000 at any time outstanding;
(i) other secured Indebtedness of the Borrower (excluding
intercompany Indebtedness) in an aggregate amount not to exceed $10,000,000
at any time outstanding;
(j) Indebtedness of the Borrower in connection with Hedging
Obligations;
(k) Indebtedness of the Borrower in connection with letters of credit
but subject, however, to Section 2.2.3;
(l) Indebtedness in respect of intercompany loans from the Borrower
to:
(i) βββββ� βββββ�, Inc., provided that the total amount of such
loans at any time does not exceed the amount of the total assets of
βββββ� βββββ�, Inc. less its cash at such time, all determined in
accordance with GAAP;
(ii) First Consumers National Bank, provided that the total
amount of such loans at any time does not exceed the lesser of (x) 92%
of the total assets of First Consumers National Bank, determined in
accordance with GAAP, and (y) $300,000,000;
(iii) Spiegel Acceptance Corporation, provided that the total
amount of such loans at any time does not exceed 90% of Spiegel
Acceptance Corporation's
54
Investments in securitization trusts which hold Excluded Receivables,
all determined in accordance with GAAP;
(iv) Any Material Subsidiary (other than βββββ� βββββ�, Inc., First
Consumers National Bank and Spiegel Acceptance Corporation), provided
that the total amount of such loans at any time to each Material
Subsidiary does not exceed the amount of the total tangible assets of
such Material Subsidiary less its cash at such time, all determined in
accordance with GAAP; and
(v) Any other Wholly-Owned Subsidiary of the Borrower, provided
that (x) the total amount of such loans to each such Wholly-Owned
Subsidiary at any time, does not exceed the total tangible assets of
such Wholly-Owned Subsidiary less its cash at such time, all
determined in accordance with GAAP, and (y) the total amount of all
such loans to such Wholly-Owned Subsidiaries at any time does not
exceed $25,000,000;
(m) Indebtedness in respect of intercompany loans from any of the
Borrower's Subsidiaries to the Borrower on a subordinated basis (such
subordination terms to be approved by the Administrative Agent);
(n) unsecured Indebtedness of the Borrower within the limitations of
Section 7.2.6 and subject to Section 2.2.1(b)(v);
(o) any guaranty by any Subsidiary of the Borrower now or hereafter
guarantying the Obligations pursuant to the Guaranty which (i) guaranty is
in substantially the same form as the Guaranty and is for the benefit of
the holders of Indebtedness permitted by Section 7.2.1(c) or Section
7.2.1(j) or (ii) guaranty is in substantially the same form as the Guaranty
and is for the benefit of each Person participating in that certain Letter
of Credit Facility Agreement, dated as of September 27, 1996, as amended
from time to time, by and among the Borrower, the financial institutions
party thereto and Bank of America, N. A. (formerly known as Bank of America
National Trust and Savings Association), as the Agent;
(p) any guaranty by any Subsidiary of the Borrower now or hereafter
guarantying the Obligations pursuant to the Guaranty which guaranty, in the
reasonable determination of the Administrative Agent, is in a form
permitted by clause (o) of Exhibit O and is for the benefit of the holders
of Subordinated Debt; and
(q) Indebtedness under the Long-Term Credit Agreement.
SECTION 7.2.2. Liens. The Borrower will not, and will not permit any of
-----
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its capital stock, property, revenues or assets, whether now owned or
hereafter acquired, except:
(a) Liens securing payment of the Obligations, granted pursuant to
any Loan Document;
55
(b) Liens securing payment of Indebtedness of the type permitted and
described in clause (b) of Section 7.2.1;
(c) Liens granted prior to the Effective Date to secure payment of
Indebtedness of the type permitted and described in clause (c) of Section
7.2.1;
(d) Liens securing payment of Indebtedness of the type permitted and
described in clause (i) of Section 7.2.1;
(e) Liens securing payment of Indebtedness of the type permitted and
described in clause (e) of Section 7.2.1;
(f) Liens attaching to Excluded Receivables;
(g) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books;
(h) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(i) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds; and
(j) judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies.
SECTION 7.2.3. Consolidation, Merger, etc. The Borrower will not, and will
--------------------------
not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with,
or merge into or with, any other Person, purchase or otherwise acquire all or
substantially all of the assets of any Person (or of any division thereof) or
make any Acquisition except
(a) any such Subsidiary may liquidate or dissolve voluntarily into,
and may merge with and into, the Borrower or any Wholly-Owned Subsidiary,
and the assets or stock of any Subsidiary may be purchased or otherwise
acquired by the Borrower or any other Subsidiary;
(b) so long as no Default has occurred and is continuing or would
result therefrom, the Borrower may consolidate with or merge with or into
any other Person organized or incorporated under the laws of a state of the
United States but only if the
56
Borrower is the surviving Person and the Borrower has executed such
agreements and instruments as requested by the Administrative Agent to
evidence the continued compliance with and obligations of the Borrower
under this Agreement and the Loan Documents to which it is a party; and
(c) the Borrower or any of its Subsidiaries may purchase all or
substantially all of the assets of any Person, acquire such Person by
merger, or make an Acquisition so long as such transaction qualifies as a
Permitted Acquisition.
SECTION 7.2.4. Asset Dispositions, etc. The Borrower will not, and will
-----------------------
not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other equity rights in the
Borrower or its Subsidiaries, or do any of the foregoing with respect to all or
any material part of its assets to any Person, except
(a) if such sale, transfer, lease, contribution or conveyance is in
the ordinary course of its business or is permitted by Section 7.2.3;
(b) the Borrower and its Subsidiaries may sell or otherwise transfer
Excluded Receivables;
(c) the Borrower and its Subsidiaries may sell or otherwise transfer
interests in master trusts held by the Borrower or its Subsidiaries that
are established as part of securitizations; and
(d) the Borrower or any Subsidiary may sell the ββββββ Road
warehouse facility, located in Columbus, Ohio, for a sale price of at least
$60,000,000 and lease back such warehouse facility on terms reasonably
satisfactory to and approved by the Administrative Agent; provided that the
Net Proceeds from such sale shall be used to make a mandatory prepayment of
all Loans pursuant to Section 3.2(b) but shall not reduce the Commitment
Amount pursuant to Section 2.2.1(b)(i).
SECTION 7.2.5. Use of Proceeds. The Borrower will use the proceeds of the
---------------
Credit Extensions solely for the purposes set forth in the recitals to this
Agreement; and not use or permit any proceeds of the Credit Extensions to be
used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of "purchasing or carrying any margin stock" within the
meaning of Regulation U of the Federal Reserve Board, as amended from time to
time.
SECTION 7.2.6. Financial Condition. The Borrower will not permit:
-------------------
(a) the Total Leverage Ratio as of the last day of any Fiscal Quarter
to exceed 200%;
(b) the Tangible Net Worth to be less than $365,000,000 plus 70% of
positive Net Income for each Fiscal Year ending after January 2, 1999;
(c) the Fixed Charge Coverage Ratio as of the last day of any Fiscal
Quarter to be less than 1.15 to 1.00; and
57
(d) the Debt to EBITDAR Ratio as of the last day of Fiscal Year 2001
to be greater than 4.00 to 1.00.
SECTION 7.2.7. Investments. For so long as the Borrower is at Level II,
-----------
III or IV, the Borrower will not, and will not permit any of its Subsidiaries
to, make, incur, assume or suffer to exist any Investment in any other Person,
except:
(a) Investments existing on the Effective Date and identified in Item
7.2.7(a) ("Ongoing Investments") of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) without duplication, Investments permitted as Indebtedness
pursuant to Section 7.2.1;
(d) without duplication, Investments in any Obligor not to exceed
$20,000,000 in the aggregate at any time outstanding;
(e) other Investments of the Borrower and its Subsidiaries (including
equity, loans and advances) in joint ventures and other enterprises in
which the Borrower or its Subsidiaries hold less than a 51% common equity
voting interest, in the aggregate, not to exceed $30,000,000 in each Fiscal
Year so long as the Borrower is at Level II, III or IV of the Pricing Grid
attached hereto as Schedule III;
(f) Permitted Acquisitions; and
(g) Investments by Spiegel Acceptance Corporation in securitization
trusts which hold Excluded Receivables;
provided, however, that any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent Investment" may
continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements.
SECTION 7.2.8. Restricted Payments, etc. On and after the Effective Date,
------------------------
the Borrower will not and will not permit any Subsidiary to declare or pay any
dividends or make any other distributions on its capital stock or other equity
interests or redeem, repurchase, defease or otherwise acquire or retire any of
its capital stock or other equity interests at any time outstanding, or make any
deposit for any of the foregoing purposes (each such action being a "Restricted
Payment"), except that
(a) any Subsidiary may declare and pay distributions or dividends to
the Borrower or to a Wholly-Owned Subsidiary of the Borrower;
(b) the following conditions must be satisfied to enable the Borrower
to declare or make Restricted Payments:
58
(i) the Fixed Charge Coverage Ratio must have been equal to or
greater than 1.15 to 1.0 as of the end of each of the then most recent
four consecutive Fiscal Quarters; and
(ii) before making a Restricted Payment, the amount proposed to
be declared or paid shall be added to the denominator of the Fixed
Charge Coverage Ratio for the most recently completed Fiscal Quarter
and the Fixed Charge Coverage Ratio recalculated. The proposed
Restricted Payment may only be declared or paid if, after such
recalculation, such Fixed Charge Coverage Ratio is equal to or greater
than 1.15 to 1.0;
(c) the Borrower may only declare and make Restricted Payments under
Section 7.2.8(b) if (i) after accounting for any such Restricted Payments,
the Borrower is still able to meet its debt obligations and (ii) no Default
has occurred and is continuing or would result from such Restricted
Payment.
SECTION 7.2.9. Fiscal Year. Neither the Borrower nor any of its
-----------
Subsidiaries shall change its Fiscal Year except (i) for a one-time change after
the date hereof to a Fiscal Year ending the Saturday closest to January 31 or
(ii) with the consent of the Required Lenders.
SECTION 7.2.10. Transactions with Affiliates. The Borrower will not, and
----------------------------
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
unless such arrangement or contract is fair and equitable to the Borrower or
such Subsidiary and is an arrangement or contract of a nature which would be
entered into by a prudent Person in the position of the Borrower or such
Subsidiary with a Person which is not one of its Affiliates.
SECTION 7.2.11. Modification, etc. of Subordinated Debt. The Borrower
---------------------------------------
will not amend, modify, restate, supplement or replace any term or provision,
including any subordination provision, covenant, event of default or right of
acceleration or any sinking fund provision or term of required repayment or
redemption (except any change which extends the date or reduces the amount of
any required repayment or redemption or otherwise is not disadvantageous to the
Lenders), contained in or applicable to any instrument or agreement evidencing
or applicable to any Subordinated Debt of the Borrower.
SECTION 7.2.12. Negative Pledges, Restrictive Agreements, etc. The
---------------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement, any other Loan Document and any
agreement governing any Indebtedness permitted either by clause (c) of Section
7.2.1 as in effect on the Effective Date or by clause (e) of Section 7.2.1 as to
the assets financed with the proceeds of such Indebtedness)
(a) prohibiting the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter acquired
other than in connection with Excluded Receivables and Excluded Mastercard
Receivables, or limiting the ability of the Borrower or any other Obligor
to amend or otherwise modify this Agreement or any other Loan Document; or
59
(b) limiting the ability of any Subsidiary to make any payments,
directly or indirectly, to the Borrower by way of dividends, advances,
repayments of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly or indirectly,
to the Borrower.
SECTION 7.2.13. Spiegel Acceptance Corporation. The Borrower will not
------------------------------
permit Spiegel Acceptance Corporation to amend, modify, restate, supplement or
replace any term or provision of Spiegel Acceptance Corporation's Certificate of
Incorporation or By-Laws.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following events
----------------------------
or occurrences described in this Section 8.1 shall constitute an "Event of
Default".
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall default (a)
--------------------------
in the payment or prepayment when due of any principal of any Loan; (b) in the
payment when due of any Reimbursement Obligations or any deposit of cash for
collateral purposes pursuant to Section 2.6.2 or Section 2.6.4, as the case may
be; or (c) in the payment when due of any interest on any Loan, of any
commitment fee or of any other monetary Obligation, and such default shall
continue unremedied, in the case of this clause (c) only, for a period of three
days.
SECTION 8.1.2. Non-Performance of Certain Covenants and Obligations. The
----------------------------------------------------
Borrower shall default in the due performance and observance of any of its
obligations under Section 7.2.
SECTION 8.1.3. Non-Performance of Other Covenants and Obligations. Any
--------------------------------------------------
Obligor shall default in the due performance and observance of any covenant
(other than as provided above) contained herein or in any other Loan Document
executed by it, and such default shall continue unremedied for a period of
thirty days after written notice thereof shall have been given to the Borrower
by the Administrative Agent or any Lender.
SECTION 8.1.4. Breach of Representation or Warranty. Any representation or
------------------------------------
warranty of the Borrower or any other Obligor made or deemed to be made
hereunder or in any other Loan Document executed by it or any other writing or
certificate furnished by or on behalf of the Borrower or any other Obligor to
any Agent, the Issuer or any Lender for the purposes of or in connection with
this Agreement or any such other Loan Document (including any certificates
delivered pursuant to Article V) is or shall be incorrect when made in any
material respect.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur in the
-----------------------------
payment when due (after the expiration of any applicable grace period), whether
by acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Borrower or any of its Subsidiaries or any
other Obligor having a principal amount, individually or in the aggregate, in
excess of $5,000,000 (excluding trade payables (i) arising in the ordinary
60
course of business that are not more than sixty days overdue and on which no
interest is being charged or which do not otherwise comprise "Total Borrowed
Funds" or (ii) that are the subject of dispute, provided that adequate reserves
have been established in accordance with GAAP), or a default shall occur in the
performance or observance of any obligation or condition with respect to such
Indebtedness if the effect of such default is to accelerate the maturity of any
such Indebtedness or such default shall continue unremedied for any applicable
period of time sufficient to permit the holder or holders of such Indebtedness,
or any trustee or agent for such holders, to cause such Indebtedness to become
due and payable prior to its expressed maturity.
SECTION 8.1.6. Control of the Borrower. Any Change of Control shall occur.
-----------------------
SECTION 8.1.7. Pension Plans. Any of the following events shall occur with
-------------
respect to any Pension Plan.
(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, in excess
of the aggregate amount of $5,000,000 or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 8.1.8. Judgments. Any judgment or order for the payment of money
---------
not covered by insurance (net of deductibles) issued by a solvent insurance
company in excess of the aggregate amount of $5,000,000 shall be rendered
against the Borrower or any of its Subsidiaries or any Material Subsidiary and
there shall be any period of thirty consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Borrower or any Material
---------------------------
Subsidiary shall
(a) become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Borrower or any
Material Subsidiary or any property of any thereof, or make a general
assignment for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Borrower or any Material Subsidiary
or for a substantial part of the property of any thereof, and such trustee,
receiver, sequestrator or other custodian shall not be discharged within
sixty days, provided that the Borrower hereby expressly authorizes the
Administrative Agent and each Lender to appear in any court conducting any
relevant proceeding during such sixty-day period to preserve, protect and
defend its rights under the Loan Documents;
61
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding in respect of the Borrower or any Material Subsidiary and, if
any such case or proceeding is not commenced by the Borrower or such
Material Subsidiary, such case or proceeding shall be consented to or
acquiesced in by the Borrower or such Material Subsidiary or shall result
in the entry of an order for relief or shall remain for sixty days
undismissed, provided that the Borrower hereby expressly authorizes the
Administrative Agent and each Lender to appear in any court conducting any
such case or proceeding during such sixty-day period to preserve, protect
and defend its rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in
--------------------
clauses (a) through (d) of Section 8.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand.
SECTION 8.3. Action if Other Event of Default. If any Event of Default
--------------------------------
(other than any Event of Default described in clauses (a) through (d) of Section
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Loans and other Obligations to be due and
payable and/or the Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations which shall
be so declared due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the case may be, the
Commitments shall terminate and the Borrower shall comply with the provisions of
Section 2.6.4.
ARTICLE IX
THE AGENTS
SECTION 9.1. Actions. Each Lender, the Issuer and each other Agent hereby
-------
appoints DBNY as the Administrative Agent, under and for purposes of this
Agreement, the Notes and each other Loan Document. Each Lender authorizes the
Issuer and the Administrative Agent to act on behalf of such Lender under this
Agreement, the Notes and each other Loan Document and, in the absence of other
written instructions from the Required Lenders received from time to time by
such Agent (with respect to which each Agent agrees that it will comply, except
as otherwise provided in this Section or as otherwise advised by counsel), to
exercise such powers hereunder and thereunder as are specifically delegated to
or required of such Agent by the terms hereof and thereof, together with such
powers as may be reasonably incidental thereto. Each Lender hereby indemnifies
(which indemnity shall survive any termination of this Agreement) each Agent,
pro rata according to such Lender's Percentage, from and against any and all
liabilities, obligations, losses, damages, claims, costs or expenses of any kind
or nature whatsoever which may at any time be imposed on, incurred by, or
asserted against, such Agent
62
in any way relating to or arising out of this Agreement, the Notes
and any other Loan Document, including reasonable attorneys' fees, and as to
which such Agent is not reimbursed by the Borrower; provided, however, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, claims, costs or expenses to the extent such are
determined by a court of competent jurisdiction in a final proceeding to have
resulted from such Agent's gross negligence or wilful misconduct. No Agent shall
be required to take any action hereunder, under the Notes or under any other
Loan Document, or to prosecute or defend any suit in respect of this Agreement,
the Notes or any other Loan Document, unless it is indemnified hereunder to its
satisfaction. If any indemnity in favor of any Agent shall be or become, in such
Agent's determination, inadequate, such Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative Agent shall
---------------------
have been notified by telephone, confirmed in writing, by any Lender by 5:00
p.m., New York City time, on the day prior to a Borrowing that such Lender will
not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If and to the extent that such Lender shall not have made such amount
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date the
Administrative Agent made such amount available to the Borrower to the date such
amount is repaid to the Administrative Agent, at the interest rate applicable at
the time to Loans comprising such Borrowing, in the case of the Borrower, and at
the Federal Funds Rate, in the case of the Lender.
SECTION 9.3. Exculpation. No Agent nor any of its directors, officers,
-----------
employees or agents shall be liable to any Lender for any action taken or
omitted to be taken by it under this Agreement or any other Loan Document, or in
connection herewith or therewith, except for its own wilful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or therein,
nor for the effectiveness, enforceability, validity or due execution of this
Agreement or any other Loan Document, nor for the creation, perfection or
priority of any Liens purported to be created by any of the Loan Documents, or
the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral security, nor to make any inquiry respecting the performance by
the Borrower of its obligations hereunder or under any other Loan Document. Any
such inquiry which may be made by any Agent shall not obligate it to make any
further inquiry or to take any action. Each Agent shall be entitled to rely upon
advice of counsel concerning legal matters and upon any notice, consent,
certificate, statement or writing which such Agent believes to be genuine and to
have been presented by a proper Person.
SECTION 9.4. Successor. Any Agent may resign as such at any time upon at
---------
least 30 days' prior notice to the Borrower and all Lenders. If the
Administrative Agent at any time shall resign, the Required Lenders may appoint,
and, except during the existence of an Event of Default, with the Borrower's
consent, which consent shall not be unreasonably withheld, another Lender as a
successor Administrative Agent which shall thereupon assume the resigning
Administrative Agent's position hereunder. If no successor Administrative Agent
shall have
63
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent which shall be one of the
Lenders or a commercial banking institution organized under the laws of the U.S.
(or any State thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least $500,000,000.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall be
entitled to receive from the retiring Administrative Agent such documents of
transfer and assignment as such successor Administrative Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After the retiring Administrative Agent's
resignation hereunder, the provisions of
(a) this Article IX 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; and
(b) Section 10.3 and Section 10.4 shall continue to inure to its
benefit.
Any Agent, other than the Administrative Agent, that resigns shall not be
replaced.
SECTION 9.5. Loans by Each Agent. Each Agent shall have the same rights and
-------------------
powers with respect to (x) the Credit Extensions made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Agent. Each Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if such Agent were not the Agent hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
----------------
independently of each Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitment.
Each Lender also acknowledges that it will, independently of each Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan Document.
SECTION 9.7. Copies, etc. The Administrative Agent shall give prompt notice
-----------
to each Lender of each notice or request required or permitted to be given to
the Administrative Agent by the Borrower pursuant to the terms of this Agreement
(unless concurrently delivered to the Lenders by the Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Administrative Agent from the Borrower for distribution to the Lenders by the
Administrative Agent in accordance with the terms of this Agreement.
64
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this Agreement
------------------------
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrower and the Required Lenders; provided, however, that no such
amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action
required to be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender or the Required Lenders, as
applicable;
(b) modify this Section 10.1, change the definition of "Required
Lenders", increase the Commitment Amount or the Percentage of any Lender,
release all or substantially all collateral security or the Guaranty,
except as otherwise specifically provided in any Loan Document, or extend
the Commitment Termination Date shall be made without the consent of each
Lender;
(c) extend the Commitment Termination Date or increase the Commitment
Amount shall be made without the consent of each Lender;
(d) decrease the fees payable pursuant to this Agreement shall be made
without the consent of each affected Lender;
(e) release any Obligor from its Obligations shall be made without the
consent of each Lender;
(f) extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of principal of or interest on any Loan (or reduce
the principal amount of or rate of interest on any Loan) shall be made
without the consent of the holder of that Note evidencing such Loan;
(g) increase the Stated Amount of any Letter of Credit shall be made
unless consented to by the Issuer of such Letter of Credit; or
(h) affect adversely the interests, rights or obligations of any Agent
qua Agent or the Issuer, shall be made unless consented to by such Agent or
the Issuer, as the case may be.
No failure or delay on the part of any Agent, the Issuer, any Lender or the
holder of any Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances (unless such notice or demand is required
hereby). No waiver or approval by any Agent, the Issuer, any Lender or the
holder of any Note under this Agreement or any other Loan
65
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 10.2. Notices. All notices and other communications provided to any
-------
party hereto under this Agreement or any other Loan Document shall be in writing
(including facsimile) and addressed, delivered or transmitted to such party at
its address or facsimile number set forth on Schedule I hereto or set forth in
the Lender Assignment Agreement or at such other address or facsimile number as
may be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid or if properly addressed and
sent by pre-paid courier service, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given when transmitted.
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to pay on
-----------------------------
demand all reasonable expenses of the Arrangers and the Administrative Agent
(including the fees and reasonable out-of-pocket expenses of counsel to the
Arrangers and the Administrative Agent, and of local counsel, if any, who may be
retained by counsel to the Arrangers or the Administrative Agent in connection
with clauses (b) and (c) below) in connection with
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document (to the extent
that such amendments, waivers, consents, supplements or modifications do
not relate solely to inter-Lender matters) as may from time to time
hereafter be required, whether or not the transactions contemplated hereby
are consummated,
(b) the filing, recording, refiling or rerecording of any Loan
Document and/or any Uniform Commercial Code financing statements relating
thereto and all amendments, supplements and modifications to any thereof
and any and all other documents or instruments of further assurance
required to be filed or recorded or refiled or rerecorded by the terms
hereof, and
(c) the preparation and review of the form of any other document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Agents, the Issuer and the
Lenders harmless from all liability for, any stamp or other taxes which may be
payable in connection with the execution or delivery of this Agreement, the
Credit Extensions hereunder, or the issuance of the Notes, Letters of Credit or
any other Loan Documents. The Borrower also agrees to reimburse the Agents, the
Issuer and each Lender upon demand for all reasonable out-of-pocket expenses
(including attorneys' fees and legal expenses and including, without
duplication, the allocated costs of internal counsel) incurred by such Agent,
the Issuer or such Lender in connection with (x) the negotiation of any
restructuring or "work-out", whether or not consummated, of any Obligations and
(y) the enforcement of any Obligations.
66
SECTION 10.4. Indemnification. In consideration of the execution and
---------------
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds each Agent, the Issuer and
each Lender and each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, costs, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys' fees and disbursements and
including, without duplication, the allocated costs of internal counsel
(collectively, the "Indemnified Liabilities"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension;
(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Borrower as the result of any determination
by the Required Lenders pursuant to Article V not to fund any Credit
Extension);
(c) any investigation, litigation or proceeding related to any
Acquisition or proposed Acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any Person,
whether or not such Agent, the Issuer or such Lender is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any of its
Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower or
such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Borrower under Sections 4.3,
--------
4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under Section
9.1, shall in each case survive any termination of this Agreement, the payment
in full of all Obligations and the termination of all Commitments. The
representations and warranties made by each Obligor in this Agreement and in
each other Loan Document shall survive the execution and delivery of this
Agreement and each such other Loan Document.
67
SECTION 10.6. Severability. Any provision of this Agreement or any other
------------
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and of
--------
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts; Effectiveness. This Agreement
----------------------------------------
may be executed by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall constitute together but
one and the same agreement. This Agreement shall become effective when
counterparts hereof executed on behalf of the Borrower and each Lender (or
notice thereof satisfactory to the Administrative Agent) shall have been
received by the Administrative Agent and notice thereof shall have been given by
the Administrative Agent to the Borrower and each Lender.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES
-------------------------------
AND EACH OTHER LOAN DOCUMENT (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS
CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
(AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO ANY LENDER. This Agreement, the Notes and the other
Loan Documents constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and supersede any prior agreements, written
or oral, with respect thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding
----------------------
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) the Borrower may not assign or transfer its rights or obligations
hereunder without the prior written consent of the Agents and all Lenders;
and
(b) the rights of sale, assignment and transfer of the Lenders are
subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Loans and Notes; Participations in
-------------------------------------------------------
Loans and Notes. Each Lender may assign, or sell participations in, its Loans,
---------------
Letters of Credit participations and Commitment to one or more other Persons in
accordance with this Section 10.11.
SECTION 10.11.1. Assignments. Any Lender,
-----------
(a) with the written consent of (i) the Borrower (which consent shall
not be unreasonably delayed or withheld at any time during which an Event
of Default has occurred and is continuing for a period of 45 days or more),
it being understood that, in
68
the event of the Borrower's objection or failure to consent, the Borrower
is committed to working with the assigning Lender to find a solution
acceptable to both parties, (ii) the Administrative Agent (which consent
shall not be unreasonably delayed or withheld), and (iii) the Issuer (which
consent shall not be unreasonably delayed or withheld), may at any time
assign and delegate to one or more commercial banks or other financial
institutions;
(b) with notice to the Borrower and the Agents, but without the
consent of the Borrower or the Agents, may assign and delegate to any of
its Affiliates (but for this purpose the reference to 10% in clause (a) in
the definition thereof shall be to 51%); and
(c) with the written consent of the Borrower, it being understood
that, in the event of the Borrower's objection or failure to consent, the
Borrower is committed to working with the assigning Lender to find a
solution acceptable to both parties, and the Agents (such consent not to be
unreasonably withheld or delayed), may at any time assign and delegate to
any other Lender;
all or any fraction of a Lender's total Loans, Letter of Credit Outstandings and
Commitments (which assignment and delegation shall be of a constant, and not a
varying, percentage of all the assigning Lender's Loans, Loan Commitment, Letter
of Credit Commitment and participation in the Letters of Credit issued
hereunder) in a minimum aggregate amount of $5,000,000 (or the then remaining
amount of such Lender's Loans, Letter of Credit Outstandings and Commitments)
unless otherwise agreed to by the Borrower and the Administrative Agent. Each
Person described in either of the foregoing clauses (a) and (b) as being the
Person to whom such assignment and delegation is to be made, being hereinafter
referred to as an "Assignee Lender." Confidential information may be provided to
a potential Assignee Lender if the potential Assignee Lender agrees to hold all
non-public information identified as such by the Borrower in accordance with its
customary procedures for handling confidential information, after obtaining the
Borrower's consent (if the Borrower's consent is required for any such
assignment). Each Assignee Lender will comply, if applicable, with the
provisions contained in the last sentence of Section 4.6 and the Borrower, each
other Obligor and the Agents shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until
(i) written notice of such assignment and delegation, together
with payment instructions, addresses and related information with
respect to such Assignee Lender, shall have been given to the Borrower
and the Administrative Agent by such Lender and such Assignee Lender;
(ii) such Assignee Lender shall have executed and delivered to
the Borrower and the Administrative Agent a Lender Assignment
Agreement, accepted by the Administrative Agent; and
(iii) the processing fees described below shall have been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and
69
delegated to such Assignee Lender in connection with such Lender Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and under
the other Loan Documents, and (y) the assignor Lender, to the extent that rights
and obligations hereunder have been assigned and delegated by it in connection
with such Lender Assignment Agreement, shall be released from its obligations
hereunder and under the other Loan Documents. Within five Business Days after
its receipt of notice that the Administrative Agent has received an executed
Lender Assignment Agreement, the Borrower shall execute and deliver to the
Administrative Agent (for delivery to the relevant Assignee Lender) new Notes
evidencing such Assignee Lender's assigned Loans and Loan Commitment and, if the
assignor Lender has retained Loans and a Loan Commitment hereunder, replacement
Notes in the principal amount of the Loans and Loan Commitment retained by the
assignor Lender hereunder (each such Note to be in exchange for, but not in
payment of, each Note then held by such assignor Lender). Each such Note shall
be dated the earliest date for which interest has not yet been paid. The
assignor Lender shall ββββ any predecessor Note "exchanged" and deliver it to
the Borrower. Accrued interest on that part of a predecessor Note evidenced by
the new Note, and accrued fees, shall be paid as provided in the Lender
Assignment Agreement. Accrued interest on that part of the predecessor Note
evidenced by a replacement Note shall be paid to the assignor Lender. Accrued
interest and accrued fees shall be paid at the same time or times provided in
the predecessor Notes and in this Agreement. Such Lender or such Assignee Lender
must also pay a processing fee to the Administrative Agent upon delivery of any
Lender Assignment Agreement in the amount of $3,000. Notwithstanding anything
contained in this Section 10.11.1 to the contrary, each Lender shall have the
unrestricted right to assign its rights hereunder to any Federal Reserve Bank to
secure such Lender's borrowing from such Federal Reserve Bank. Any attempted
assignment and delegation not made in accordance with this Section 10.11.1 shall
be null and void.
SECTION 10.11.2. Participations. Any Lender at any time may sell to one or
--------------
more commercial banks or other Persons, excluding any competitor of the Borrower
or its Subsidiaries, (each of such commercial banks and other Persons being
herein called a "Participant") participating interests in any of its Loans, Loan
Commitment, Letter of Credit Commitment and Letter of Credit Outstandings
participated in by it, or other interests of such Lender hereunder; provided,
however, that
(a) no participation contemplated in this Section 10.11.2 shall
relieve such Lender from its Commitments or its other obligations hereunder
or under any other Loan Document;
(b) such Lender shall remain solely responsible for the performance
of its Commitments and such other obligations;
(c) the Borrower and each other Obligor and the Agents shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and each of the other
Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, take
70
any actions of the type described in clauses (b) through (h) of Section
10.1 provided that such Lender has the option (but not the obligation) to
repurchase such participation if the Participant fails to give any such
consent; and
(e) the Borrower shall not be required to pay any amount under
Section 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4 that is greater than
the amount which it would have been required to pay had no participating
interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a
Lender. Confidential information may be provided to the potential Participant
with advance written notice to the Borrower, if such potential Participant
agrees to hold all non-public information identified as such by the Borrower in
accordance with its customary procedures for handling confidential information.
SECTION 10.11.3. Confidentiality. No Assignment or Participation hereunder
---------------
shall be effective unless such Assignee or such Participant shall have executed
a Confidentiality Agreement substantially in the form of Exhibit R prior to the
receipt of any Information (as defined in the Confidentiality Agreement).
SECTION 10.12. Other Transactions. Nothing contained herein shall preclude
------------------
the Agents, the Issuer or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.13. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
-------------------------------------------
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS, THE ISSUER OR
THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE.
THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY
71
IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.14. Waiver of Jury Trial. EACH AGENT, THE LENDERS, THE ISSUER
--------------------
AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF SUCH AGENT, THE LENDERS, THE ISSUER OR
THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENTS, THE ISSUER AND THE LENDERS ENTERING INTO
THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
72
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BORROWER
SPIEGEL, INC.
By: /s/ ββββ β�. ββββββ
------------------
Name: ββββ β�. ββββββ
Title: Treasurer
AGREED AND CONSENTED:
βββββ� βββββ�, INC.
By: /s/ ββββ β�. ββββββ
----------------------
Name: ββββ β�. ββββββ
Title: Treasurer
ULTIMATE OUTLET INC.
By: /s/ ββββ β�. ββββββ
----------------------
Name: ββββ β�. ββββββ
Title: Treasurer
S-1
NEWPORT NEWS, INC.
By: /s/ ββββ β�. ββββββ
----------------------
Name: ββββ β�. ββββββ
Title: Treasurer
S-2
DISTRIBUTION FULFILLMENT SERVICES, INC. (DFS)
By:/s/ ββββ β�. ββββββ
---------------------
Name: ββββ β�. ββββββ
Title: Treasurer
SPIEGEL PUBLISHING COMPANY
By:/s/ ββββ β�. ββββββ
---------------------
Name: ββββ β�. ββββββ
Title: Treasurer
SPIEGEL CATALOG, INC.
By:/s/ ββββ β�. ββββββ
---------------------
Name: ββββ β�. ββββββ
Title: Treasurer
S-3
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Administrative Agent
By: /s/ ββββ-βββββ� ββββββ
-------------------------
Name Printed: ββββ-βββββ� ββββββ
Title: Director
By: /s/ββββββ βββββββ�
---------------------
Name Printed: ββββββ βββββββ�
Title: Vice President
S-4
DEUTSCHE BANC ALEX. βββββ� INC., as
Arranger
By: /s/ββββ-βββββ� ββββββ
------------------------
Name Printed: ββββ-βββββ� ββββββ
Title: Director
By: /s/ββββββ βββββββ�
---------------------
Name Printed: ββββββ βββββββ�
Title: Vice President
S-5
**β�.β�. ββββββ SECURITIES INC., as Arranger
By:/s/βββββββ� βββββββ�
---------------------
Name Printed: βββββββ� βββββββ�
Title: Vice President
S-6
ABN AMRO BANK N.V., as a Lender
By:/s/W. βββββββ� βββββ�
----------------------
Name Printed: W. βββββββ� βββββ�
Title: Senior Vice President
By: /s/ βββββ� β�. ββββββ
-----------------------
Name Printed: βββββ� β�. ββββββ
Title: Assistant Vice President
S-7
INTESABCI, NEW YORK BRANCH, as a Lender
By:/s/ βββββ� ββββββ
-------------------
Name Printed: βββββ� ββββββ
Title: Vice President
By:/s/ β�. βββββββββ�
-------------------
Name Printed: β�. βββββββββ�
Title: Vice President
S-8
BANK OF AMERICA, N.A., as a Lender
By:/s/ βββββββ� β�. ββββββ
------------------------
Name Printed: βββββββ� β�. ββββββ
Title: Managing Director
S-9
THE BANK OF NEW YORK, as a Lender
By:/s/ βββββββββ� ββββ βββββ�
---------------------------
Name Printed: βββββββββ� ββββ Fuiks
Title: Vice President
S-10
BANKGESELLSCHAFT BERLIN AG, as a Lender
By: /s/ Schutt_________________________
Name Printed: ββββββ
Title: Director
By: /s/ ββββββ βββββ�
--------------------
Name Printed: ββββββ βββββ�
Title: Director
β�-ββ
βββββββββββ� ββ, βββ� ββββ AND GRAND
CAYMAN BRANCHES, as a Lender
By: /s/ ββββ ββββββ
-------------------
Name Printed: ββββ ββββββ
Title: Vice President
By: /s/ ββββββ ββββββ
---------------------
Name Printed: ββββββ ββββββ
Title: Assistant Treasurer
S-12
CREDIT LYONNAIS AMERICAS, as a Lender
By: /s/ βββββββββ� ββββββ
-------------------------------------
Name Printed: βββββββββ� ββββββ
Title: Vice President
S-13
DEUTSCHE BANK AG NEW YORK BRANCH,
as a Lender
By: /s/ ββββ-βββββ� ββββββ
-------------------------
Name Printed: ββββ-βββββ� ββββββ
Title: Director
By: /s/ ββββββ βββββββ�
----------------------
Name Printed: ββββββ βββββββ�
Title: Vice President
S-14
DANSKE BANK, as a Lender
By: /s/ ββ ββββββββ
-------------------
Name Printed: ββ ββββββββ
Title: Vice President
By: /s/ ββββ ββββββ
-------------------
Name Printed: ββββ ββββββ
Title: Vice President
S-15
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG, as a Lender
By: /s/ Jochen Breiltgens
-------------------------
Name Printed: Jochen Breiltgens
Title: Vice President
By: /s/ ββββββββ βββββ�
----------------------
Name Printed: ββββββββ βββββ�
Title: Vice President
β�-ββ
ββββββββ ββββ ββ, βββ� ββββ AND
GRAND CAYMAN BRANCHES, as a Lender
By: /s/ ββββββββ β�. ββββββ
--------------------------
Name Printed: ββββββββ β�. ββββββ
Title:Associate
By: /s/ ββββββ ββββββ
---------------------
Name Printed: ββββββ ββββββ
Title:Associate
S-17
THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED, as Issuer
By:/s/βββββββ� β�'βββββ�
---------------------
Name Printed: βββββββ� β�'βββββ�
Title:Regional Relationship
Manager
S-18
HSBC BANK USA, as a Lender
By: /s/ βββββββ� β�. ββββββ
-------------------------
Name Printed: βββββββ� β�. ββββββ
Title:Senior Vice President
S-19
LANDESBANK HESSEN-THURINGEN
GIROZENTRALE, as a Lender
By: /s/ ββββ βββββ�
------------------
Name Printed: ββββ βββββ�
Title: Senior Vice President
By: /s/ βββββ� ββββββ
--------------------
Name Printed: βββββ� ββββββ
Title: Senior Vice President
S-20
ββββββ GUARANTY TRUST CO.
OF NEW YORK, as a Lender
By: /s/ βββββ� β�. βββββββ�
------------------------
Name Printed: βββββ� β�. βββββββ�
Title: Vice President
S-21
NORDDEUTSCHE LANDESBANK GIROZENTRALE
NEW YORK BRANCH AND/OR CAYMAN ISLANDS
BRANCH, as a Lender
By: /s/βββββββ� β�. ββββββ
------------------------
Name Printed: βββββββ� β�. ββββββ
Title:Senior Vice President
By: /s/Hinrich ββββ
--------------------
Name Printed: Hinrich ββββ
Title:Vice President
S-22
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH, as a Lender
By: /s/ ββββββ ββββββββ
-----------------------
Name Printed: ββββββ ββββββββ
Title: Director
By: /s/ ββββ βββββββββ�
----------------------
Name Printed: ββββ βββββββββ�
Title: Manager
β�-ββ
ββββββββββ ββββ βββ� βββββββββββ� ββ,
βββ� ββββ BRANCH, as a Lender
By: /s/ ββββ ββββββ
-------------------
Name Printed: ββββ ββββββ
Title: Managing Director
By: /s/ββββββ ββββββ
--------------------
Name Printed: ββββββ ββββββ
Title: Director
S-24
AGREED AND CONSENTED:
CREDIT SUISSE FIRST BOSTON, as a
Terminating Bank
By: /s/ ββββ β�'ββββ
------------------------------------
Name Printed: ββββ β�'ββββ
Title: Vice President
By: /s/ βββ� βββββ�
------------------------------------
Name Printed: βββ� βββββ�
Title: Director
S-25
SCHEDULE I
LENDERS COMMITMENTS AND PERCENTAGES
-----------------------------------
--------------------------------------------------------------------------------------------------------------
LENDERS COMMITMENT PERCENTAGE
--------------------------------------------------------------------------------------------------------------
DEUTSCHE BANK AG NEW YORK BRANCH $ 18,750,000 12.50%
--------------------------------------------------------------------------------------------------------------
ββββββ GUARANTY TRUST CO. OF NEW YORK $ 18,750,000 12.50%
--------------------------------------------------------------------------------------------------------------
BANK OF AMERICA, N.A. $ 13,500,000 9.00%
--------------------------------------------------------------------------------------------------------------
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES $ 13,500,000 9.00%
--------------------------------------------------------------------------------------------------------------
ABN AMRO BANK N.V. $ 11,250,000 7.50%
--------------------------------------------------------------------------------------------------------------
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES $ 11,250,000 7.50%
--------------------------------------------------------------------------------------------------------------
HSBC BANK USA $ 11,250,000 7.50%
--------------------------------------------------------------------------------------------------------------
THE BANK OF NEW YORK $ 11,250,000 7.50%
--------------------------------------------------------------------------------------------------------------
BAYERISCHE HYPO UND VEREINSBANK AG, NEW YORK BRANCH $ 4,500,000 3.00%
--------------------------------------------------------------------------------------------------------------
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG $ 4,500,000 3.00%
--------------------------------------------------------------------------------------------------------------
NORDDEUTSCHE LANDESBANK GIROZENTRALE NEW YORK BRANCH AND/OR CAYMAN $ 4,500,000 3.00%
ISLANDS BRANCH
--------------------------------------------------------------------------------------------------------------
INTESABCI $ 4,500,000 3.00%
--------------------------------------------------------------------------------------------------------------
BANKGESELLSCHAFT BERLIN AG $ 4,500,000 3.00%
--------------------------------------------------------------------------------------------------------------
CREDIT LYONNAIS AMERICAS $ 4,500,000 3.00%
--------------------------------------------------------------------------------------------------------------
LANDESBANK HESSEN-THURINGEN GIROZENTRALE $ 4,500,000 3.00%
--------------------------------------------------------------------------------------------------------------
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH $ 4,500,000 3.00%
--------------------------------------------------------------------------------------------------------------
DANSKE BANK $ 4,500,000 3.00%
--------------------------------------------------------------------------------------------------------------
TOTAL $150,000,000 100%
--------------------------------------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
SCHEDULE III
364-DAY CREDIT AGREEMENT PRICING GRID
------------------------------------------------------------------------------------------------------------------------------------
Fixed Charge Applicable Applicable All in Standby Commercial
Coverage Total Base Rate LIBOR Rate LIBOR Letters of Letters of Credit
Level Ratio LeverageRatio Margin Margin Facility Fee Drawn Cost Credit Fee Fee
------------------------------------------------------------------------------------------------------------------------------------
I * 2.25 ** 1.30 0% p.a. 0.625% p.a. 0.125% p.a. 0.75% p.a. 0.625% p.a. 0.36% p.a.
------------------------------------------------------------------------------------------------------------------------------------
II * 2.00 ** 2.25 * 1.30 ** 1.50 0% p.a. 0.775% p.a. 0.225% p.a. 1.00% p.a. 0.775% p.a. 0.45% p.a.
------------------------------------------------------------------------------------------------------------------------------------
III * 1.20 ** 2.00 * 1.50 ** 1.80 0% p.a. 0.925% p.a. 0.325% p.a. 1.25% p.a. 0.925% p.a. 0.525% p.a.
------------------------------------------------------------------------------------------------------------------------------------
IV ** 1.20 * 1.80 0.875% p.a. 1.925% p.a. 0.450% p.a. 2.375% p.a. 1.925% p.a. 1.125% p.a.
====================================================================================================================================
* Greater than
** Less than
For each Pricing Period, Level calculations shall be determined by reference to
the Fixed Charge Coverage Ratio and Total Leverage Ratio. In the event that the
Fixed Charge Coverage Ratio and the Total Leverage Ratio as of the previous
Fiscal Quarter do not fall within the same Level, the Applicable Base Rate
Margin, Applicable LIBO Rate Margin, Facility Fee, All in LIBOR Drawn Cost and
Letter of Credit fees will be determined by the lower of the two Levels (with
Level IV being the lowest Level).
As of the Closing Date, the Borrower is at Level I.
-i-