FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended September 30, 2004
Commission file number 1-19254
Lifetime Hoan Corporation
(Exact name of registrant as specified in its charter)
Delaware 11-2682486
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One Merrick Avenue, Westbury, NY 11590
(Address of principal executive offices) (Zip Code)
(516) 683-6000
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No___
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act)
Yes X No ___
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Common Stock, $.01 Par Value, 11,049,099 shares
outstanding as of October 31, 2004
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LIFETIME HOAN CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
September 30,
2004 December 31,
(unaudited) 2003
ASSETS
CURRENT ASSETS
Cash and cash equivalents $689 $1,175
Accounts receivable, less allowances of
$3,514 in 2004 and $3,349 in 2003 30,867 31,977
Merchandise inventories 63,653 49,294
Prepaid expenses 2,083 2,129
Other current assets 6,322 3,709
TOTAL CURRENT ASSETS 103,614 88,284
PROPERTY AND EQUIPMENT, net 19,727 20,563
EXCESS OF COST OVER NET ASSETS ACQUIRED 22,070 16,145
OTHER INTANGIBLES, net 9,135 9,530
OTHER ASSETS 2,213 2,214
TOTAL ASSETS $156,759 $136,736
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $27,200 $16,800
Accounts payable and trade acceptances 8,721 8,405
Accrued expenses 18,568 17,156
Income taxes payable 4,335 4,613
TOTAL CURRENT LIABILITIES 58,824 46,974
DEFERRED RENT & OTHER LONG-TERM LIABILITIES 1,800 1,593
DEFERRED INCOME TAX LIABILITIES 3,300 2,088
LONG-TERM DEBT 5,000 -
STOCKHOLDERS' EQUITY
Common Stock, $0.01 par value, authorized
25,000,000 shares; issued and outstanding
11,049,099 in 2004 and 10,842,540 in 2003 111 109
Paid-in capital 64,771 63,409
Retained earnings 23,432 23,042
Notes receivable for shares issued to
stockholders (479) (479)
TOTAL STOCKHOLDERS' EQUITY 87,835 86,081
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $156,759 $136,736
See independent accountants review report and notes to
consolidated financial statements.
LIFETIME HOAN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2004 2003 2004 2003
Net Sales $51,241 $44,068 $121,399 $98,302
Cost of Sales 30,553 25,552 71,396 55,982
Distribution Expenses 5,562 5,337 15,008 14,103
Selling, General and
Administrative Expenses 10,579 8,163 29,302 22,742
Income from Operations 4,547 5,016 5,693 5,475
Interest Expense 268 189 536 480
Other Income (14) (16) (45) (51)
Income Before Income Taxes 4,293 4,843 5,202 5,046
Tax Provision 1,709 1,956 2,070 2,038
NET INCOME $2,584 $2,887 $3,132 $3,008
BASIC AND DILUTED EARNINGS PER
COMMON SHARE $0.23 $0.27 $0.28 $0.28
WEIGHTED AVERAGE SHARES - BASIC 11,047 10,628 10,960 10,584
WEIGHTED AVERAGE SHARES AND COMMON
SHARE EQUIVALENTS - DILUTED 11,281 10,784 11,217 10,660
See independent accountants review report and notes to
consolidated financial statements.
LIFETIME HOAN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
September 30,
2004 2003
OPERATING ACTIVITIES
Net income $3,132 $3,008
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 2,926 2,639
Deferred tax provision (548) 422
Deferred rent and other long term
liabilities 207 311
Provision for losses on accounts
receivable 18 91
Reserve for sales returns and allowances 6,891 5,579
Changes in operating assets and liabilities,
excluding the effects of the acquisition
of certain assets of Excel Importing Corp:
Accounts receivable (4,476) (14,641)
Merchandise inventories (9,886) (15,024)
Prepaid expenses, other current assets
and other assets (815) (386)
Accounts payable, trade acceptances
and accrued expenses (3,560) 7,806
Accrued income taxes payable (278) 703
NET CASH USED IN OPERATING ACTIVITIES (6,389) (9,492)
INVESTING ACTIVITIES
Purchase of property and equipment, net (1,695) (1,482)
Acquistion of Excel Importing Corp. (7,000) -
NET CASH USED IN INVESTING ACTIVITIES (8,695) (1,482)
FINANCING ACTIVITIES
Proceeds from short-term borrowings, net 10,400 12,300
Proceeds from long-term debt 5,000 -
Proceeds from exercise of stock options 1,364 806
Payment of capital lease obligations (114) -
Cash dividends paid (2,052) (1,981)
NET CASH PROVIDED BY FINANCING ACTIVITIES 14,598 11,125
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (486) 151
Cash and cash equivalents at beginning of
period 1,175 62
CASH AND CASH EQUIVALENTS AT END OF PERIOD $689 $213
See independent accountants review report and notes to
consolidated financial statements.
LIFETIME HOAN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for
the three-month and nine-month periods ended September 30, 2004
are not necessarily indicative of the results that may be
expected for the year ending December 31, 2004. It is suggested
that these condensed financial statements be read in conjunction
with the financial statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2003.
Note B - Distribution Expenses
Distribution expenses consist primarily of warehousing expenses,
handling costs of products sold and freight-out. During 2003,
these expenses also included relocation charges, duplicate rent
and other costs associated with the Company's move into its
Robbinsville, New Jersey warehouse, amounting to $0.1 million in
the third quarter of 2003 and $0.6 million for the nine-month
period ended September 30, 2003. No such expenses were incurred
during the three-month period or nine-month period ended
September 30, 2004.
Note C - Credit Facilities
On July 28, 2004, the Company entered into a $50 million five-
year, secured credit facility (the "Credit Facility") with a
group of banks and, in conjunction therewith, canceled its $35
million secured, reducing revolving credit facility which was due
to mature in November 2004. Borrowings under the Credit Facility
are secured by all of the assets of the Company. Under the terms
of the Credit Facility, the Company is required to satisfy
certain financial covenants, including limitations on
indebtedness and sale of assets; a minimum fixed charge ratio; a
maximum leverage ratio and maintenance of a minimum net worth.
Borrowings under the Agreement have different interest rate
options that are based on an alternate base rate, the LIBOR rate
and the lender's cost of funds rate, plus in each case a margin
based on a leverage ratio.
As of September 30, 2004, the Company had outstanding $0.8
million of letters of credit and trade acceptances, $27.2 million
of short-term borrowings and a $5.0 million term loan under its
Credit Facility and, as a result, the availability under the
Credit Facility was $17.0 million. The $5.0 million long-term
loan is non-amortizing, bears interest at 5.07% and matures in
August 2009. Interest rates on short-term borrowings at
September 30, 2004 ranged from 2.813% to 3.00%.
Note D - Capital Stock and Stock Options
Cash Dividends: On January 30, 2004, the Board of Directors
declared a regular quarterly cash dividend of $0.0625 per share
to stockholders of record on February 6, 2004, paid on February
20, 2004. On April 12, 2004, the Board of Directors declared a
regular quarterly cash dividend of $0.0625 per share to
stockholders of record on May 4, 2004, paid on May 20, 2004. On
July 28, 2004, the Board of Directors of the Company declared a
regular quarterly cash dividend of $0.0625 per share to
stockholders of record on August 4, 2004, to be paid on August
20, 2004. On November 3, 2004, the Board of Directors of the
Company declared a regular quarterly cash dividend of $0.0625 per
share to stockholders of record on November 5, 2004 to be paid on
November 19, 2004.
Earnings Per Share: Basic earnings per share has been computed
by dividing net income by the weighted average number of common
shares outstanding of 11,047,000 for the three months ended
September 30, 2004 and 10,628,000 for the three months ended
September 30, 2003. For the nine month period ended September
30, 2004 and September 30, 2003, the weighted average number of
common shares outstanding were 10,960,000 and 10,584,000,
respectively. Diluted earnings per share has been computed by
dividing net income by the weighted average number of common
shares outstanding, including the dilutive effects of stock
options, of 11,281,000 for the three months ended September 30,
2004 and 10,784,000 for the three months ended September 30,
2003. For the nine month periods ended September 30, 2004 and
September 30, 2003, the diluted number of common shares
outstanding were 11,217,000 and 10,660,000, respectively.
LIFETIME HOAN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note D - Capital Stock and Stock Options (continued)
Accounting for Stock Option Plan: The Company has a stock option
plan, which is more fully described in the footnotes to the
financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2003. The Company
accounts for options granted under the plan under the recognition
and measurement principles of APB Opinion No. 25, "Accounting for
Stock Issued to Employees", and related interpretations. No
stock-based employee compensation cost is reflected in net
income, as all options granted under the plans had an exercise
price equal to the market values of the underlying common stock
on the dates of grant. The following table illustrates the
effect on net earnings and net earnings per share if the Company
had applied the fair value recognition provisions of Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation" to stock-based employee compensation.
Three Months Nine Months
Ended Ended
September 30, September 30,
(in thousands, (in thousands,
except per except per
share data) share data)
2004 2003 2004 2003
Net income, as reported $2,584 $2,887 $3,132 $3,008
Deduct: Total stock option
employee compensation expense
determined under fair value
based method for all awards,
net of realted tax effects (32) (19) (155) (42)
Proforma net income $2,552 $2,868 $2,977 $2,966
Income per common share:
Basic and diluted - as
reported $0.23 $0.27 $0.28 $0.28
Basic and diluted - proforma $0.23 $0.27 $0.27 $0.28
Note E - Acquisition
On July 23, 2004, the Company acquired the business and certain
assets of Excel Importing Corp., ("Excel"), a wholly-owned
subsidiary of Mickelberry Communications Incorporated. Excel
markets and distributes a diversified line of high quality
cutlery, tabletop, cookware and barware products under well-
recognized premium brand names, including Sabatier(R), Farberware(R),
Retroneu Design Studio(R), Joseph Abboud Environments(R), DBK-Daniel
Boulud Kitchen(TM) and Legnoart(R). The purchase price, subject to
post closing adjustments, was approximately $8.5 million, of
which $7.0 million was paid at the closing. The Company has not
paid the balance of $1.5 million as it believes the total
estimated post closing adjustments and certain other claims are
in excess of that amount.
The Company has not yet completed the evaluation and allocation
of the purchase price for the Excel acquisition as the
calculation of post closing adjustments has not yet been
finalized and the valuation of certain intangibles has not been
completed. The initial $7.0 million of the purchase price that
was paid at closing has been allocated based on management`s
estimates as follows (in thousands):
Accounts receivable $1,300
Inventory 4,500
Current liabilities (4,700)
Intangibles 5,900
$7,000
Report of Independent Registered Public Accounting Firm
We have reviewed the condensed consolidated balance sheet of
Lifetime Hoan Corporation and subsidiaries (the "Company") as of
September 30, 2004 and the related condensed consolidated
statements of income for the three-month and nine-month periods
ended September 30, 2004, and the condensed consolidated
statement of cash flows for the nine-months ended September 30,
2004. These interim financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards of the
Public Company Accounting Oversight Board (United States). A
review of interim financial information consists principally of
applying analytical procedures to financial data and of making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with the standards of the Public Company
Accounting Oversight Board, the objective of which is the
expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to such condensed consolidated
interim financial statements for them to be in conformity with
U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Melville, New York
October 29, 2004
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company is a leading designer, developer and marketer of a
broad range of branded consumer products used in the home,
including Kitchenware, Cutlery and Cutting Boards, Bakeware and
Cookware, Pantryware and Spices, Tabletop and Bath Accessories.
Products are marketed under brand names including Farberware(R),
Kitchen-Aid(R), Cuisinart(R), Hoffritz(R), Sabatier(R), DBK-Daniel
Boulud Kitchen(TM), Joseph Abboud Environments(R), Roshco(R), Baker's
Advantage(R), Kamenstein(R), Casa-Moda(R), Hoan(R), Gemco(R) and :USE(R).
The Company uses the Farberware(R) brand name for kitchenware,
cutlery and cutting boards and bakeware pursuant to a 200-year
royalty-free license. The Company licenses the KitchenAid(R),
Cuisinart(R), Farberware(R) (for flatware and dinnerware), Sabatier(R),
DBK-Daniel Boulud Kitchen(TM) and Joseph Abboud Environments(R) trade
names pursuant to licenses granted by the owners of those brands.
All other brand names listed above are owned. Several product
lines are marketed within each of the Company's product
categories and under brands primarily targeting moderate to
medium price points, through every major level of trade.
Over the last several years, sales growth has come from: (i)
expanding product offerings within current categories, (ii)
developing and acquiring product categories and (iii) entering
new channels of distribution, primarily in the United States.
Key factors in the Company's growth strategy have been and will
continue to be, the selective use and management of strong brands
and the ability to provide a steady stream of new products and
designs.
The Company's gross profit margin is subject to fluctuation due
primarily to product mix and, in some instances, customer mix.
The Company's business and working capital needs are highly
seasonal, with a significant majority of sales occurring in the
third and fourth quarters. In 2003 and 2002, net sales for the
third and fourth quarters combined accounted for 66.2% and 60.8%
of total annual net sales, respectively, and operating profit
earned in the third and fourth quarters combined accounted for
96.8% and 100% of total annual profits, respectively. Inventory
levels increase primarily in the June through October time period
in anticipation of the pre-holiday shipping season.
Because of the seasonality of the Company's business and other
factors, results for any interim period are not necessarily
indicative of the results that may be achieved for the full
fiscal year.
CRITICAL ACCOUNTING POLICIES
Management's Discussion and Analysis of Financial Condition and
Results of Operations discusses the unaudited consolidated
financial statements which have been prepared in accordance with
accounting principles generally accepted in the United States for
interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. The preparation of these
financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. On an on-going basis, management evaluates its estimates
and judgments, including those related to inventories.
Management bases it estimates and judgments on historical
experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different
assumptions or conditions. The Company believes that the
following discussion addresses the most critical accounting
policies, which are those that are most important to the
portrayal of the Company's financial condition and results of
operations and require management's most difficult, subjective
and complex judgments. It is suggested that these condensed
financial statements be read in conjunction with the financial
statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2003.
Merchandise inventories, principally finished goods, are priced
by the lower of cost (first-in, first-out basis) or market
method. Reserves for excess or obsolete inventory reflected in
the consolidated balance sheets at September 30, 2004 and
December 31, 2003 are determined to be adequate by management;
however, there can be no assurance that these reserves will prove
adequate over time to provide for ultimate losses in connection
with the Company's inventory. Management periodically reviews
and analyzes inventory reserves based on a number of factors
including, but not limited to, future product demand for items
and estimated profitability of merchandise.
Effective January 1, 2002, the Company adopted Statement of
Financial Accounting Standard ("SFAS") No. 141, "Business
Combinations", and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS No. 141 requires all business combinations
initiated after June 30, 2001 to be accounted for using the
purchase method. Under SFAS No. 142, goodwill and intangible
assets with indefinite lives are no longer amortized but are
reviewed at least annually for impairment. For each of the years
ended December 31, 2003 and December 31, 2002, an assessment was
completed. Based upon such reviews, no impairment to the
carrying value of goodwill was identified, and the Company ceased
amortizing goodwill effective January 1, 2002.
RESULTS OF OPERATIONS
The following table sets forth income statement data of the
Company as a percentage of net sales for the periods indicated
below.
Three Months Nine Months
Ended Ended
September 30, September 30,
2004 2003 2004 2003
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales 59.6 58.0 58.8 56.9
Distribution expenses 10.9 12.1 12.4 14.4
Selling, general and
administrative expenses 20.6 18.5 24.1 23.1
Income from operations 8.9 11.4 4.7 5.6
Interest expense 0.5 0.4 0.4 0.5
Other income - - - (0.1)
Income before income taxes 8.4 11.0 4.3 5.2
Tax provision 3.3 4.4 1.7 2.1
Net income 5.1 % 6.6 % 2.6 % 3.1 %
Three Months Ended September 30, 2004
Compared to Three Months ended September 30, 2003
Net Sales
Net sales for the three months ended September 30, 2004 were
approximately $51.2 million, an increase of $7.2 million or 16.3%
over net sales for the prior year's corresponding period. Gemco
and :USE product lines that were acquired in the fourth quarter
of 2003 and the Excel product lines which were acquired in July
2004 contributed a combined $5.1 million in net sales to the
2004 third quarter. Excluding the combined net sales from the
Gemco :USE and Excel product lines, net sales increased by 4.6%
over the third quarter of 2003. A portion of the increase was
related to increased net sales of KitchenAid branded products,
offset by decreased net sales of the S'mores Maker.
The Outlet Stores also had increased sales, primarily as a result
of the Company occupying 70% of the space in each store in the
third quarter of 2004 as compared to 50% of the space in each
store during the third quarter of 2003. Outlet Stores sales for
the 2004 quarter, were less than 8% of the Company's total net
sales and had an operating loss for the period.
Net sales for the third quarter of 2004 were below our
expectations due principally to the late delivery of merchandise
from overseas suppliers. Many of the Company's suppliers of new
products encountered difficulties with the start-up of production
of new lines, including new lines of KitchenAid(R) Cutlery, the
ceramic S'mores Maker(TM) and the new Smokeless Tabletop Griller(TM).
As a result, a number of sales programs did not begin as
scheduled during the quarter. In addition, the supply chain was
negatively impacted by shortages and delays in the availability
of raw materials in Asia and delays in receiving goods due to
congestion at ports in the United States. These start-up and
other supply chain issues had a negative impact on sales. The
Company believes that these issues have generally been resolved
and expects the flow of merchandise to continue at satisfactory
levels throughout the important holiday shipping season.
Many retail customers also faced challenges during the third
quarter of 2004 caused by high gasoline prices and severe weather
in the Southeastern United States. In addition, measures
instituted earlier in 2004 by a major customer to improve
inventory turns and lower its in-stock position continued.
Together, these factors had a negative effect on the timing and
reduced the dollar value of sales orders the Company received
during the quarter when compared to our expectations.
Cost of Sales
Cost of sales for the three months ended September 30, 2004 was
$30.6 million, an increase of $5.0 million or 19.6% over the
comparable 2003 period. Cost of sales as a percentage of net
sales increased to 59.6% from 58.0%, primarily as a result of
higher sales of KitchenAid branded products which generate lower
gross profit margins due to the added costs of royalties and
higher sales of products that carry lower gross profit margins,
including bakeware, Gemco functional glassware products and Excel
products.
Distribution Expenses
Distribution expenses for the three months ended September 30,
2004 were $5.6 million, an increase of 4.2% from the comparable
2003 period. Excluding the expenses associated with the move to
the new Robbinsville, New Jersey warehouse, which were $0.1
million for the three months ended September 30, 2003,
distribution expenses increased by approximately $0.4 million or
6.9% in the third quarter of 2004 as compared to the third
quarter of 2003. Distribution expenses as a percentage of net
sales decreased in the third quarter of 2004 as compared to the
2003 period. This improved relationship reflects the continued
benefits of labor savings in the Company's Robbinsville, New
Jersey distribution center.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months
ended September 30, 2004 were $10.6 million, an increase of $2.4
million or 29.6% over the comparable 2003 period. The majority
of the increase in selling, general and administrative expenses
was attributable to the Outlet Store operations and the added
operating expenses for the Gemco, :USE and Excel businesses. The
growth in operating expenses for the Outlet Stores were primarily
the result of the Company being responsible for 70% of the space
and expenses in each store in the third quarter of 2004 as
compared to 50% in each store during the third quarter of 2003.
Excluding the expenses for the Outlet Stores, Gemco, :USE and
Excel operations, selling, general and administrative expenses
increased 9.8% in the 2004 quarter due to higher personnel costs
including budgeted personnel increases in the product design
group, the overseas sourcing department and the sales and
marketing departments.
Tax Provision
Income tax expense for the second quarter of 2004 was $1.7
million as compared to $2.0 million in the comparable 2003
quarter. The decrease in income tax expense is directly related
to the decrease in income before taxes from 2004 to 2003. Income
taxes as a percentage of income before taxes remained consistent
from year-to-year at approximately 40%.
Nine Months Ended September 30, 2004
Compared to Nine Months ended September 30, 2003
Net Sales
Net sales for the nine months ended September 30, 2004 were
$121.4 million, an increase of $23.1 million or 23.5% as compared
to the corresponding 2003 period. Gemco and :USE product lines
which were acquired in the fourth quarter of 2003 and sales of
the Excel product lines which were acquired in July 2004,
contributed a combined $8.6 million in net sales for the 2004
period. Excluding the combined net sales from the Gemco, :USE
and Excel product lines, net sales increased by 14.7% over the
nine-month period ended September 30, 2003. The increase in
sales volume was attributable primarily to higher sales of
KitchenAid branded products, Farberware branded kitchenware
products and increased shipments of Kamenstein pantryware
products.
The Outlet Stores also had increased sales, primarily as a result
of the Company occupying 70% of the space in each store in the
2004 as compared to 50% of the space in each store during 2003.
Outlet Stores sales for the first nine months of 2004, which were
less than 9% of the Company's total net sales, were lower than
expected, resulting in an operating loss for the Outlet Stores
for the period.
Cost of Sales
Cost of sales for the nine months ended September 30, 2004 was
$71.4 million, an increase of 27.5% over the comparable 2003
period. Cost of sales as a percentage of net sales increased to
58.8% from 56.9%, primarily as a result of higher sales of
KitchenAid branded products, which generate lower margins due to
the added costs of royalties and higher sales of pantryware,
Gemco functional glassware products and Excel products, each of
which generates lower gross profit margins than the Company's
other major product categories.
Distribution Expenses
Distribution expenses for the nine months ended September 30,
2004 were $15.0 million, an increase of $0.9 million or 6.4% from
the comparable 2003 period. Excluding the expenses associated
with the move to the new Robbinsville, New Jersey warehouse of
approximately $0.6 million for the nine-month period ended
September 30, 2003, distribution expenses increased by
approximately $1.5 million in the nine-month period ended
September 30, 2004 as compared to the nine-month period ended
September 30, 2003. The higher expenses were primarily due to
the increased distribution expenses related to the acquisitions
of the Gemco, :USE and Excel businesses. Distribution expenses
as a percentage of net sales decreased in the nine-months ended
September 30, 2004 as compared to the nine-months ended September
30, 2003. This improved relationship reflects the continued
benefits of labor savings in the Company's Robbinsville, New
Jersey distribution center.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the nine months
ended September 30, 2004 were $29.3 million, an increase of $6.6
million or 28.8% from the comparable 2003 period. The majority
of the increase in selling, general and administrative expenses
was attributable to the Outlet Store operations and the added
operating expenses for the Gemco, :USE and Excel businesses. The
growth in operating expenses for the Outlet Stores were primarily
the result of the Company being responsible for 70% of the space
and expenses in each store in the third quarter of 2004 as
compared to 50% in each store during the third quarter of 2003.
Excluding the expenses for the Outlet Stores, Gemco, :USE and
Excel operations, selling, general and administrative expenses
increased 11.7% in the 2004 period due to higher personnel costs
including budgeted personnel increases in the product design
group, the overseas sourcing department and the sales and
marketing departments.
Tax Provision
Income tax expense for the nine months ended September 30, 2004
was $2.1 million as compared to $2.0 million in the comparable
2003 period. The increase in income tax expense is directly
related to the increase in income before taxes from 2003 to 2004.
Income taxes as a percentage of income before taxes remained
consistent from year-to-year at approximately 40%.
LIQUIDITY AND CAPITAL RESOURCES
On July 28, 2004, the Company entered into a $50 million five-
year, secured credit facility (the "Credit Facility") with a
group of banks and, in conjunction therewith, canceled its $35
million secured, reducing revolving credit facility which was due
to mature in November 2004. Borrowings under the Credit Facility
are secured by all of the assets of the Company. Under the terms
of the Credit Facility, the Company is required to satisfy
certain financial covenants, including limitations on
indebtedness and sale of assets; a minimum fixed charge ratio; a
maximum leverage ratio and maintenance of a minimum net worth.
Borrowings under the credit facility have different interest rate
options that are based on an alternate base rate, the LIBOR rate
and the lender's cost of funds rate, plus in each case a margin
based on a leverage ratio. As of September 30, 2004, the Company
had outstanding $0.8 million of letters of credit and trade
acceptances, $27.2 million of short-term borrowings and a $5.0
million term loan under its Credit Facility and, as a result, the
availability under the Credit Facility was $17.0 million. The
$5.0 million long-term loan is non-amortizing, bears interest at
5.07% and matures in August 2009. Interest rates on short-term
borrowings at September 30, 2004 ranged from 2.813% to 3.00%.
At September 30, 2004, the Company had cash and cash equivalents
of $0.7 million as compared to $1.2 million at December 31, 2003.
On November 3, 2004, the Board of Directors declared a regular
quarterly cash dividend of $0.0625 per share to shareholders of
record on November 5, 2004 to be paid on November 19, 2004. The
dividend to be paid will be approximately $0.7 million.
The Company believes that its cash and cash equivalents,
internally generated funds and its existing credit arrangements
will be sufficient to finance its operations for at least the
next 12 months.
The results of operations of the Company for the periods
discussed have not been significantly affected by inflation or
foreign currency fluctuation. The Company negotiates
predominantly all of its purchase orders with its foreign
manufacturers in United States dollars. Thus, notwithstanding any
fluctuation in foreign currencies, the Company's cost for any
purchase order is not subject to change after the time the order
is placed. However, any weakening of the United States dollar
against local currencies could lead certain manufacturers to
increase United States dollar prices for their products. The
Company believes it would be able to compensate for any such
price increase.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
Market risk represents the risk of loss that may impact the
consolidated financial position, results of operations or cash
flows of the Company. The Company is exposed to market risk
associated with changes in interest rates. The Company's line of
credit bears interest at variable rates. The Company is subject
to increases and decreases in interest expense on its variable
rate debt resulting from fluctuations in the interest rates of
such debt. There were no changes in interest rates that had a
material impact on the consolidated financial position, results
of operations or cash flows of the Company during the nine-month
period ended September 30, 2004.
Item 4. Control and Procedures
The Chief Executive Officer and the Chief Financial Officer of
the Company (its principal executive officer and principal
financial officer, respectively) have concluded, based on their
evaluation as of a date within 90 days prior to the date of the
filing of this Report on Form 10-Q, that the Company's controls
and procedures are effective to ensure that information required
to be disclosed by the Company in the reports filed by it under
the Securities and Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and include controls and
procedures designed to ensure that information required to be
disclosed by the Company in such reports is accumulated and
communicated to the Company's management, including the Chief
Executive Officer and Chief Financial Officer of the Company, as
appropriate to allow timely decisions regarding required
disclosure.
There were no significant changes in the Company's internal
controls or in other factors that could significantly affect
these controls subsequent to the date of such evaluation.
PART II - OTHER INFORMATION
Forward Looking Statements: This Quarterly Report on Form 10-Q
contains certain forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, including statements concerning the Company's
future products, results of operations and prospects. These
forward-looking statements involve risks and uncertainties,
including risks relating to general economic and business
conditions, including changes which could affect customer payment
practices or consumer spending; industry trends; the loss of
major customers; changes in demand for the Company's products;
the timing of orders received from customers; cost and
availability of raw materials; increases in costs relating to
manufacturing and transportation of products; dependence on
foreign sources of supply and foreign manufacturing; and the
seasonal nature of the business as detailed from time to time in
the Company's filings with the Securities and Exchange
Commission. Such statements are based on management's current
expectations and are subject to a number of factors and
uncertainties which could cause actual results to differ
materially from those described in the forward-looking
statements.
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities and Use of Proceeds
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security-Holders
Not applicable
Item 5. Other Information
Not applicable.
Item 6. Exhibit(s) and Reports on Form 8-K.
(a) Exhibit(s) in the third quarter of 2004:
Exhibit 31.1 Certification by Jeffrey Siegel, Chief
Executive Officer, pursuant to Rule 13a-
14(a) or Rule 15d-14(a) of the Securities
and Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
Exhibit 31.2 Certification by Robert McNally, Chief
Financial Officer, pursuant to Rule 13a-
14(a) or Rule 15d-14(a) of the Securities
and Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
Exhibit 32 Certification by Jeffrey Siegel, Chief
Executive Officer, and Robert McNally,
Chief Financial Officer, pursuant to 18
U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act
of 2002.
Exhibit 10.43 Amendment and Restated Credit Facility
Agreement between Lifetime Hoan
Corporation and The Bank of New York,
dated July 28, 2004.
(b) Reports on Form 8-K in the third quarter of 2004:
On July 28, 2004, the Company filed a
report on Form 8-K announcing results of
operations for and financial condition as
of the end of its second quarter ended
June 30, 2004.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Lifetime Hoan Corporation
November 8, 2004
/s/ Jeffrey Siegel
__________________________________
Jeffrey Siegel
Chief Executive Officer and President
(Principal Executive Officer)
November 8, 2004
/s/ Robert McNally
__________________________________
Robert McNally
Vice President - Finance and Treasurer
(Principal Financial and Accounting Officer)
Exhibit 31.1
CERTIFICATION
I, Jeffrey Siegel, certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Lifetime Hoan Corporation ("the registrant");
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report:
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the registrant and have:
a. designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
c. disclosed in this report any change in the registrant's
internal controls over financial reporting that occurred during
the registrant's most recent fiscal quarter that has materially
affected or is reasonably likely to materially affect the
registrant's internal controls over financial reporting; and
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation of internal
controls over financial reporting, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):
a. all significant deficiencies and material weaknesses in the
design or operation of internal controls over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls over financial reporting.
Date: November 8, 2004
__/s/ Jeffrey Siegel______________
Jeffrey Siegel
President and Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, Robert McNally, certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Lifetime Hoan Corporation ("the registrant");
2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report:
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the registrant and have:
a. designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
c. disclosed in this report any change in the registrant's
internal controls over financial reporting that occurred during
the registrant's most recent fiscal quarter that has materially
affected or is reasonably likely to materially affect the
registrant's internal controls over financial reporting; and
5. The registrant's other certifying officers and I
have disclosed, based on our most recent evaluation of
internal controls over financial reporting, to the
registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the
equivalent functions):
a. all significant deficiencies and material weaknesses in the
design or operation of internal controls over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report information; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls over financial reporting.
Date: November 8, 2004
___/s/ Robert McNally___________
Robert McNally
Vice President and Chief Financial Officer
EXHIBIT 32
Certification by Jeffrey Siegel, Chief Executive Officer, and
Robert McNally, Chief Financial Officer,
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
I, Jeffrey Siegel, Chief Executive Officer, and I, Robert
McNally, Chief Financial Officer, of Lifetime Hoan Corporation, a
Delaware corporation (the "Company"), each hereby certifies that:
(1) The Company's periodic report on Form 10-Q for the period
ended September 30, 2004 (the "Form 10-Q") fully complies with
the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and
(2) The information contained in the Form 10-Q fairly presents,
in all material respects, the financial condition and results of
operations of the Company.
/s/ Jeffrey Siegel /s/ Robert McNally
Jeffrey Siegel Robert McNally
Chief Executive Officer Chief Financial Officer
Date: November 8, 2004 Date: November 8, 2004
EXHIBIT 10.43
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of July __, 2004,
among
LIFETIME HOAN CORPORATION
as Borrower,
the Lenders party hereto
and
THE BANK OF NEW YORK,
as Administrative Agent
___________________________
BNY CAPITAL MARKETS, INC.
as Lead Arranger and Book Manager
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS 1
SECTION 1.01 DEFINED TERMS 1
SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS 18
SECTION 1.03 TERMS GENERALLY 19
SECTION 1.04 ACCOUNTING TERMS; GAAP 19
ARTICLE 2. THE CREDITS 20
SECTION 2.01 COMMITMENTS 20
SECTION 2.02 LOANS AND BORROWINGS 20
SECTION 2.03 REQUESTS FOR BORROWINGS 20
SECTION 2.04 FUNDING OF BORROWINGS 21
SECTION 2.05 SWING LINE LOANS 22
SECTION 2.06 TERMINATION AND REDUCTION OF COMMITMENTS 23
SECTION 2.07 REPAYMENT OF LOANS; EVIDENCE OF DEBT 24
SECTION 2.08 PREPAYMENT OF LOANS 24
SECTION 2.09PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SETOFFS25
SECTION 2.10 OPTIONAL INCREASE IN COMMITMENTS 27
SECTION 2.11 LETTERS OF CREDIT 27
SECTION 2.12 BANKERS ACCEPTANCES 31
SECTION 2.13 CASH COLLATERAL ACCOUNT 34
SECTION 2.14LOANS, LETTERS OF CREDIT AND BANKERS ACCEPTANCES UNDER THE
ORIGINAL CREDIT AGREEMENT 34
ARTICLE 3. INTEREST, FEES, YIELD PROTECTION, ETC. 34
SECTION 3.01 INTEREST 34
SECTION 3.02 INTEREST ELECTIONS 35
SECTION 3.03 FEES 36
SECTION 3.04 ALTERNATE RATE OF INTEREST 37
SECTION 3.05 INCREASED COSTS; ILLEGALITY 38
SECTION 3.06 BREAK FUNDING PAYMENTS 39
SECTION 3.07 TAXES 40
SECTION 3.08 MITIGATION OBLIGATIONS 41
SECTION 3.09 SUBSTITUTION OF LENDERS 41
ARTICLE 4. REPRESENTATIONS AND WARRANTIES 41
SECTION 4.01 ORGANIZATION; POWERS 41
SECTION 4.02 AUTHORIZATION; ENFORCEABILITY 42
SECTION 4.03 GOVERNMENTAL APPROVALS; NO CONFLICTS 42
SECTION 4.04FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE 42
SECTION 4.05 PROPERTIES 42
SECTION 4.06 LITIGATION AND ENVIRONMENTAL MATTERS 43
SECTION 4.07 COMPLIANCE WITH LAWS AND AGREEMENTS 43
SECTION 4.08 INVESTMENT AND HOLDING COMPANY STATUS 43
SECTION 4.09 TAXES 43
SECTION 4.10 ERISA 44
SECTION 4.11 DISCLOSURE 44
SECTION 4.12 SUBSIDIARIES 44
SECTION 4.13 INSURANCE 44
SECTION 4.14 LABOR MATTERS 44
SECTION 4.15 SOLVENCY 45
SECTION 4.16 FEDERAL RESERVE REGULATIONS 45
SECTION 4.17 SECURITY DOCUMENTS 45
ARTICLE 5. CONDITIONS 45
SECTION 5.01 EFFECTIVE DATE 45
SECTION 5.02 EACH EXTENSION OF CREDIT 48
ARTICLE 6. AFFIRMATIVE COVENANTS 48
SECTION 6.01 FINANCIAL STATEMENTS AND OTHER INFORMATION 48
SECTION 6.02 NOTICES OF MATERIAL EVENTS 49
SECTION 6.03 EXISTENCE; CONDUCT OF BUSINESS 50
SECTION 6.04 PAYMENT OF OBLIGATIONS 50
SECTION 6.05 MAINTENANCE OF PROPERTIES 50
SECTION 6.06 BOOKS AND RECORDS; INSPECTION RIGHTS 50
SECTION 6.07 COMPLIANCE WITH LAWS 51
SECTION 6.08 USE OF PROCEEDS 51
SECTION 6.09 NOTICE OF CERTAIN CHANGES 51
SECTION 6.10 INSURANCE 51
SECTION 6.11 ADDITIONAL SUBSIDIARIES 51
SECTION 6.12 INFORMATION REGARDING COLLATERAL 52
SECTION 6.13 CASUALTY AND CONDEMNATION 52
SECTION 6.14 FURTHER ASSURANCES 53
ARTICLE 7. NEGATIVE COVENANTS 53
SECTION 7.01 INDEBTEDNESS 54
SECTION 7.02 LIENS 54
SECTION 7.03 FUNDAMENTAL CHANGES 55
SECTION 7.04INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS 56
SECTION 7.05 ASSET SALES 57
SECTION 7.06 SALE AND LEASE-BACK TRANSACTIONS 58
SECTION 7.07 HEDGING AGREEMENTS 58
SECTION 7.08 RESTRICTED PAYMENTS 58
SECTION 7.09 TRANSACTIONS WITH AFFILIATES 58
SECTION 7.10 RESTRICTIVE AGREEMENTS 58
SECTION 7.11 AMENDMENT OF MATERIAL DOCUMENTS 59
SECTION 7.12 LEVERAGE RATIO 59
SECTION 7.13 FIXED CHARGE COVERAGE RATIO 59
SECTION 7.14 NET WORTH 59
SECTION 7.15 PREPAYMENTS OF INDEBTEDNESS 59
ARTICLE 8. EVENTS OF DEFAULT 59
SECTION 8.01 EVENTS OF DEFAULT 59
SECTION 8.02 CONTRACT REMEDIES 61
ARTICLE 9. THE ADMINISTRATIVE AGENT 62
ARTICLE 10. MISCELLANEOUS 64
SECTION 10.01 NOTICES 64
SECTION 10.02 WAIVERS; AMENDMENTS 64
SECTION 10.03 EXPENSES; INDEMNITY; DAMAGE WAIVER 65
SECTION 10.04 SUCCESSORS AND ASSIGNS 66
SECTION 10.05 SURVIVAL 68
SECTION 10.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS 69
SECTION 10.07 SEVERABILITY 69
SECTION 10.08 RIGHT OF SETOFF 69
SECTION 10.09GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS 69
SECTION 10.10 WAIVER OF JURY TRIAL 70
SECTION 10.11 HEADINGS 70
SECTION 10.12 INTEREST RATE LIMITATION 70
SECTION 10.13 USA PATRIOT ACT NOTICE 71
SCHEDULES:
SCHEDULE COMMITMENTS
2.01
Schedule Existing Letters of Credit
2.11
Schedule Existing Bankers Acceptances
2.12
Schedule Disclosed Matters
4.06
Schedule Subsidiaries
4.12
Schedule Insurance
4.13
Schedule Existing Indebtedness
7.01
Schedule Existing Liens
7.02
Schedule Existing Investments
7.04
Schedule Existing Restrictions
7.10
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Opinion of Rivkin Radler LLP
Exhibit C-1 Form of Revolving Note
Exhibit C-2 Form of Swing Line Note
Exhibit D Form of Guarantee Reaffirmation
Exhibit E Form of Security Agreement Reaffirmation
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July __, 2004
(this "Agreement"), among LIFETIME HOAN CORPORATION, a Delaware
corporation (the "Borrower"), the Lenders party hereto (the
"Lenders") and THE BANK OF NEW YORK, as Administrative Agent (in
such capacity, the "Administrative Agent").
The Borrower, the Administrative Agent and certain lenders are
parties to the Credit Agreement dated as of November 8, 2001 (as
amended through the date hereof, the "Original Credit Agreement")
among the Borrower, such lenders and the Administrative Agent.
The Borrower, the Administrative Agent and the lenders party
hereto desire to amend and restate the Original Credit Agreement
on the terms and conditions set forth herein.
Accordingly, for good and valuable consideration, the parties
hereto agree that the Original Credit Agreement shall be amended
and restated in its entirety as follows:
ARTICLE 1 DEFINITIONS
Section 1.01 Defined Terms
As used in this Agreement, the following terms have the
meanings specified below:
"ABR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any
Eurodollar Borrowing for any Interest Period, an interest
rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means BNY, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" an Administrative
Questionnaire in a form supplied by the Administrative
Agent.
"Affiliate" means, with respect to a specified Person,
another Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is
under common Control with the Person specified.
"Aggregate Revolving Commitment" means, at any time,
the sum at such time of the aggregate Revolving Commitments
of all lenders, which, as of the Effective Date equals
$50,000,000.
"Aggregate Revolving Exposure" means, at any time,
the sum at such time of (i) the outstanding principal
balance of the Revolving Loans of all Lenders, plus (ii) the
outstanding principal balance of the Swing Line Loans, plus
(iii) an amount equal to the Letter of Credit Exposure of
all Lenders, plus (iv) an amount equal to the Bankers
Acceptance Exposure of all Lenders.
"Alternate Base Rate" means, for any day, a rate per
annum equal to the greater of (a) the Prime Rate in effect
on such day and (b) the Federal Funds Rate in effect on such
day plus 1/2 of 1% per annum. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal
Funds Rate shall be effective from and including the
effective date of such change in the Prime Rate or the
Federal Funds Rate, respectively.
"Applicable Margin" means, at all times during the
applicable periods set forth below: (a) with respect to ABR
Borrowings, the percentage set forth below under the heading
"ABR Margin" and adjacent to such period, (b) with respect
to Eurodollar Borrowings, the percentage set forth below
under the heading "Eurodollar Margin" and adjacent to such
period and (c) with respect to the commitment fees payable
under Section 3.03(b), the percentage set forth below under
the heading "Fee Margin" and adjacent to such period:
Period Applicable Margin
When the
Leverage And
Ratio is less
greater than or ABR Eurodollar Fee
than equal to Margin Margin Margin
2.75:1.00 0.500% 1.750% 0.500%
2.50:1.00 2.75:1.00 0.250% 1.500% 0.375%
2.25:1.00 2.50:1.00 0.000% 1.250% 0.250%
2.25:1.00 0.000% 1.000% 0.250%
Changes in the Applicable Margin resulting from a
change in the Leverage Ratio shall be based upon the
certificate most recently delivered under Section 6.01(c)
and shall become effective on the date such certificate is
delivered to the Administrative Agent. Notwithstanding
anything to the contrary in this definition, (i) if the
Borrower shall fail to deliver to the Administrative Agent
such a certificate on or prior to any date required hereby,
the Leverage Ratio shall be deemed to be greater than
2.75:1.00 from and including such date to the date of
delivery to the Administrative Agent of such certificate and
(ii) during the period commencing on the Effective Date and
ending on the date that the certificate to be delivered
under Section 6.01(c) for the fiscal quarter ending
September 30, 2004 is delivered to the Administrative Agent,
the Applicable Margin shall be 0.000% for ABR Borrowings,
1.000% for Eurodollar Borrowings and 0.250% with respect to
the commitment fee payable under Section 3.03(b).
"Appraised Value" means the value of the Designated
Real Property as determined pursuant to the appraisal of the
Designated Real Property to be delivered to the
Administrative Agent pursuant to Section 5.01(q).
"Approved Fund" means, with respect to any Lender that
is a fund that invests in commercial loans, (a) any other
fund that invests in commercial loans and is managed or
advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor, and (b) any bank or
Affiliate thereof that manages or controls such Lender.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an assignee (with
the consent of any party whose consent is required by
Section 10.04), and accepted by the Administrative Agent,
substantially in the form of Exhibit A or any other form
approved by the Administrative Agent.
"Availability Period" means the period from and
including the Effective Date to but excluding the earlier of
the Revolving Maturity Date and the date of termination of
the Revolving Commitments.
"Available Revolving Commitment Amount" means , at any
time, an amount equal to the Aggregate Revolving Commitment
at such time minus the Revolving Exposure at such time.
"BA Issuer" means BNY.
"BA Obligations" means, collectively, the obligation of
the Borrower to the BA Issuer with respect to each Bankers
Acceptance and all documents, instruments and other
agreements related thereto, including the obligation of the
Borrower to reimburse the BA Issuer for amounts drawn under
such Bankers Acceptance.
"Bankers Acceptance Commitment" means the commitment of
the Issuer to create Bankers Acceptances in an aggregate
principal amount of up to $10,000,000.
"Bankers Acceptance Documents" has the meaning set
forth in Section 2.12(a).
"Bankers Acceptance Exposure" means in respect of any
Lender at any time, an amount equal to (i) the sum (without
duplication) of (x) the aggregate face amount of the
outstanding Bankers Acceptances, (y) the aggregate amount of
unpaid drafts drawn on all Bankers Acceptances and (z) the
aggregate unpaid BA Obligations, multiplied by (ii) such
Lender's Revolving Percentage at such time.
"Bankers Acceptance Fee" has the meaning set forth in
Section 3.03(c).
"Bankers Acceptances" means bankers acceptances created
by the BA Issuer pursuant to Section 2.12 by the acceptance,
for the account of the Borrower, of drafts drawn upon it by
the Borrower having not more than 180 days' sight to run,
exclusive of days of grace, which grow out of transactions
involving the importation, exportation or the domestic
shipment of goods. All such drafts shall be subject to the
provisions of the Federal Reserve Act, as amended, and the
rules and regulations thereunder, including, without
limitation, provisions relating to maturity of the
acceptance, relationship to the underlying c.i.f. value and
date of the shipment upon which the acceptance is based and
date of creation of the acceptance. All such drafts shall
be eligible for purchase by, discount with and pledge to,
the Federal Reserve Bank of New York and each request for
the creation of a Bankers Acceptance shall be accompanied by
any certification required by the BA Issuer as to the
necessary elements supporting such eligibility.
"BNY" means The Bank of New York.
"Board" means the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrower" has the meaning ascribed thereto in the
preamble to this Agreement.
"Borrowing" means Revolving Loans or Swing Line Loans,
as applicable, of the same Type made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to
which a single Interest Period is in effect; provided,
however, that Swing Line Loans may not be made or converted
into Eurodollar Loans.
"Borrowing Date" means the date of (a) the making,
conversion or continuation of any Loan, (b) the issuance of
any Letter of Credit or (c) the creation of any Bankers
Acceptance.
"Business Day" means any day that is not a Saturday,
Sunday or other day on which commercial banks in New York
City are authorized or required by law to remain closed,
provided that, when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in
the London interbank market.
"Capital Expenditures" of any Person means expenditures
(whether paid in cash or other consideration or accrued as a
liability) for fixed or capital assets (excluding any
capitalized interest and any such asset acquired in
connection with normal replacement and maintenance programs
properly charged to current operations and excluding any
replacement assets acquired with the proceeds of insurance)
made by such Person.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts
under any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof,
which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall
be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means, as to any Person, all shares,
interest, partnership interests, limited liability company
membership interests, participations, rights in or other
equivalents (however designated) of such Person's equity
(however designated) and any rights, warrants or options
exchangeable for or convertible into such shares, interests,
participations, rights or other equity.
"Cash Collateral" has the meaning set forth in Section
2.13.
"Cash Collateral Account" has the meaning set forth in
Section 2.13.
"Change in Control" means on or after the Effective
Date, any "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934, as amended) becomes the "beneficial owner" (as
defined in Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended), directly or indirectly,
of 25% or more of the total voting power of the then
outstanding Capital Stock of the Borrower entitled to vote
generally in the election of the directors of the Borrower,
other than any Person who is a stockholder of the Borrower
on the Effective Date.
"Change in Law" means (a) the adoption of any law, rule
or regulation after the date of this Agreement, (b) any
change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance
by any Credit Party (or, for purposes of Section 3.05(b), by
any lending office of such Credit Party or by such Credit
Party's holding company, if any) with any request, guideline
or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" means any and all "Collateral", as defined
in any applicable Security Document.
"Commitment Fee" has the meaning set forth in Section
3.03(a).
"Commitment Percentage" means, with respect to any
Lender, a fraction (expressed as a percentage), the
numerator of which is such Lender's Revolving Commitment and
the denominator of which is the aggregate Revolving
Commitments of all Lenders.
"Consolidated": means the Borrower and its Subsidiaries
on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" means, for any period, net income
of the Borrower and its Subsidiaries for such period,
determined on a Consolidated basis plus the sum of, without
duplication, (a) Consolidated Interest Expense for such
period, (b) provision for income taxes accrued for such
period and (c) depreciation, amortization and other non-cash
charges of the Borrower and its Subsidiaries, each to the
extent deducted in determining such net income for such
period, minus the sum of extraordinary gains from sales,
exchanges and other dispositions of property not in the
ordinary course of business, in each case solely to the
extent such items would be classified as an operating
expense in accordance with GAAP.
"Consolidated Fixed Charges" means, for any period, the
sum of, without duplication, (a) Capital Expenditures made
during such period by the Borrower and its Subsidiaries, (b)
income taxes accrued during such period by the Borrower and
the Subsidiaries, (c) Consolidated Interest Expense for such
period, (d) the aggregate amount of principal payments on
long-term Indebtedness by the Borrower and its Subsidiaries
during such period and (e) the aggregate amount of (i) cash
dividends paid by the Borrower in respect of, (ii) purchases
by the Borrower of, and (iii) funds, property or assets
applied to or set aside for sinking funds or other
retirement of, its Capital Stock made during such period.
"Consolidated Interest Expense" means, for any period,
interest and fees accrued or paid by the Borrower and its
Subsidiaries during such period in respect of the
Indebtedness of the Borrower and its Subsidiaries,
determined on a Consolidated basis, including (a) the
amortization of debt discounts to the extent included in
interest expense in accordance with GAAP, (b) the
amortization of all fees (including fees with respect to
interest rate cap agreements or other agreements or
arrangements entered into by the Borrower or any Subsidiary
thereof designed to protect the Borrower or such Subsidiary,
as applicable, against fluctuations in interest rates)
payable in connection with the incurrence of Indebtedness to
the extent included in interest expense in accordance with
GAAP, (c) the portion of any rents payable under capital
leases allocable to interest expense in accordance with
GAAP, and (d) capitalized interest.
"Consolidated Net Income" means, for any period, net
income (or loss) of the Borrower and its Subsidiaries on a
Consolidated basis for such period taken as a single
accounting period determined in accordance with GAAP.
"Consolidated Net Worth" means, at any date of
determination, the sum of all amounts which would be
included under "Shareholders' Equity" or analogous entry on
a Consolidated balance sheet of the Borrower determined in
accordance with GAAP as at such date.
"Consolidated Total Debt" means, as of any date, the
aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries that would be reflected as
liabilities on a Consolidated balance sheet of the Borrower
as of such date prepared in accordance with GAAP; provided,
however, that for purposes of this definition, the term
"Indebtedness" shall not include obligations as an account
party in respect of commercial Letters of Credit.
"Control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the
management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.
The terms "Controlling" and "Controlled" have meanings
correlative thereto.
"Credit Parties" means the Administrative Agent, the
Issuer, the BA Issuer and the Lenders.
"Credit Request" means a request for Revolving Loans,
Bankers Acceptances, Swing Line Loans or Letters of Credit.
"Default" means any event or condition which
constitutes an Event of Default or that upon notice, lapse
of time or both would, unless cured or waived, become an
Event of Default.
"Designated Real Property" means the Real Property of
the Borrower located at One Merrick Avenue, Westbury, New
York.
"Disclosed Matters" means the actions, suits and
proceedings and the environmental matters disclosed in
Schedule 4.06.
"dollars" or "$" refers to lawful money of the United
States of America.
"Domestic Subsidiary" means any wholly-owned Subsidiary
of the Borrower organized under the laws of the United
States of America or any State thereof.
"Effective Date" means the date on which the conditions
specified in Section 5.01 are satisfied (or waived in
accordance with Section 10.02).
"Environmental Laws" means all applicable laws, rules,
regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or
threatened release of any Hazardous Material or to health
and safety matters.
"Environmental Liability" means any liability,
contingent or otherwise (including any liability for
damages, costs of environmental remediation, fines,
penalties or indemnities), of any Loan Party directly or
indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any
Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant
to which liability is assumed or imposed with respect to any
of the foregoing.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) that, together with the Borrower or any
Subsidiary, is treated as a single employer under
Section 414(b) or 414(c) of the Code or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for
which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by the
Borrower or any ERISA Affiliate of any liability under Title
IV of ERISA with respect to the termination of any Plan; (e)
the receipt by the Borrower or any ERISA Affiliate from the
PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the
Borrower or any ERISA Affiliate of any liability with
respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such
term in Section 8.01.
"Excluded Taxes" means, with respect to any Credit
Party or any other recipient of any payment to be made by or
on account of any obligation of any Loan Party under any
Loan Document, (a) income or franchise taxes imposed on (or
measured by) its net income by the United States of America,
or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is
located or, in the case of any Credit Party, in which its
applicable lending office is located, (b) any branch profits
taxes imposed by the United States of America or any similar
tax imposed by any other jurisdiction in which such Loan
Party is located, (c) any Taxes that would not have been
imposed but for such Credit Party's or recipient's present
or former connection (other than a connection solely
resulting from the transaction contemplated by the Loan
Documents) with the jurisdiction (or any political
subdivision thereof or therein) imposing such taxes,
provided that it is determinable that such Taxes were
imposed solely as a result of such Credit Party's or
recipient's present or former connection (other than a
connection solely resulting from the transaction
contemplated by the Loan Documents) with the jurisdiction
(or any political subdivision thereof or therein) imposing
such taxes, and (d) in the case of a Foreign Lender, any
withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office)
or is attributable to such Foreign Lender's failure to
comply with Section 3.07(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new lending office (or
assignment), to receive additional amounts from such Loan
Party with respect to such withholding tax pursuant to
Section 3.07(a).
"Existing Bankers Acceptances" means the Bankers
Acceptances outstanding on the Effective Date and identified
on Schedule 2.12.
"Existing Letters of Credit" means the Letters of
Credit outstanding on the Effective Date and identified on
Schedule 2.11.
"Extensions of Credit" means, collectively, the Loans,
the Bankers Acceptances, the Letters of Credit and any
participations in the Bankers Acceptances or Letters of
Credit pursuant to Section 2.11(c) or 2.12(c).
"Federal Funds Rate" means, for any day, the rate per
annum (rounded, if necessary, to the next greater 1/100 of
1%) equal to the rate per annum at which the Administrative
Agent is offered overnight Federal funds by a Federal funds
broker selected by the Administrative Agent at or about 2:00
p.m. on such day, provided that if such day is not a
Business Day, the Federal Funds Rate for such day shall be
such rate at which the Administrative Agent is offered
overnight Federal funds by such Federal funds broker at or
about 2:00 p.m. on the next preceding Business Day.
"Financial Officer" means, with respect to any Person,
the president, chief financial officer, principal accounting
officer, treasurer or controller of such Person.
"Fixed Charge Coverage Ratio" means, at any date of
determination, the ratio of Consolidated EBITDA to
Consolidated Fixed Charges for the four fiscal quarter
period ending on such date or, if such date is not the last
day of a fiscal quarter, for the immediately preceding four
fiscal quarter period.
"Foreign Lender" means any Lender that is organized
under the laws of a jurisdiction other than that in which
the applicable Loan Party is located. For purposes of this
definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a
single jurisdiction.
"GAAP" means generally accepted accounting principles
in the United States of America.
"Governmental Authority" means the government of the
United States of America, any other nation or any political
subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means
any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing
any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor,
direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security
for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner
of such Indebtedness or other obligation of the payment
thereof, (c) to maintain working capital, equity capital or
any other financial statement condition or liquidity of the
primary obligor as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation, provided
that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.
The term "Guaranteed" has a meaning correlative thereto.
"Guarantee Agreement" means the Guarantee Agreement,
dated as of November 8, 2001, among the Borrower, the
Guarantors and the Administrative Agent, for the benefit of
the Credit Parties, as amended, restated, supplemented or
otherwise modified from time to time.
"Guarantee Reaffirmation" means the Guarantee
Reaffirmation, substantially in the form of Exhibit D, by
the Guarantors in favor of the Administrative Agent.
"Guarantor" means each of the entities set forth on
Schedule 4.12 and any other Subsidiary of the Borrower
organized under the laws of the United States of America or
any state thereof that executes and delivers the Guarantee
Agreement, in each case in accordance with Section 5.01(c),
6.11 or 6.14.
"Hazardous Materials" means all explosive or
radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum
or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity
price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without
duplication, (a) all obligations of such Person for borrowed
money or in connection with deposits or advances of any kind
paid to, received by or otherwise for the account of, such
Person, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are
customarily paid (other than as a penalty for non-payment),
(d) all obligations of such Person under conditional sale or
other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person
in respect of the deferred purchase price of property or
services (excluding accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been
assumed, (g) all Guarantees by such Person of Indebtedness
of others, (h) all Capital Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person
as an account party in respect of letters of credit and
letters of guaranty and (j) all obligations, contingent or
otherwise, of such Person in respect of bankers'
acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of
such Person's ownership interest in or other relationship
with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded
Taxes.
"Indemnitee" has the meaning assigned to such term in
Section 10.03(b).
"Interest Election Request" means a request by the
Borrower to convert or continue a Borrowing in accordance
with Section 3.02.
"Interest Payment Date" means (a) with respect to any
ABR Loan, the last day of each January, April, July and
October and (b) with respect to any Eurodollar Loan, the
last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day prior to the last day of
such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest
Period.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in
the calendar month that is one, two, three or six months
thereafter or, if made available by all of the applicable
Lenders, the period (x) commencing on the date of such
Borrowing and ending on the corresponding day of the week
that is two weeks thereafter or (y) commencing on the date
of such Borrowing and ending on the numerically
corresponding day in the calendar month that is nine or
twelve months thereafter, as the Borrower may elect,
provided that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless such
next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the
next preceding Business Day, (b) any Interest Period that
commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall
end on the last Business Day of the last calendar month of
such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such
Borrowing.
"Issuer" means BNY.
"Lenders" means the Persons listed on Schedule 2.01 and
any other Person that shall have become a party hereto
pursuant to an Assignment and Acceptance, other than any
such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"Letter of Credit" has the meanings set forth in
Section 2.11(a).
"Letter of Credit Commitment" means the commitment of
the Issuer to issue Letters of Credit having an aggregate
outstanding face amount up to $10,000,000.
"Letter of Credit Documentation" has the meaning set
forth in Section 2.11(a).
"Letter of Credit Exposure" means in respect of any
Lender at any time, an amount equal to (i) the sum (without
duplication) at such time of (x) the aggregate undrawn face
amount of the outstanding Letters of Credit, (y) the
aggregate amount of unpaid drafts drawn on all Letters of
Credit, and (z) the aggregate unpaid Reimbursement
Obligations, multiplied by (ii) such Lender's Revolving
Percentage at such time.
"Letter of Credit Fees" has the meaning set forth in
Section 3.03(b).
"Leverage Ratio" means, as of any date of
determination, the ratio of (i) Consolidated Total Debt as
of such date to (ii) Consolidated EBITDA of the Borrower for
the four consecutive fiscal quarter period ending on the
last day of the most recent fiscal quarter for which the
financial statements required by Sections 6.01(a) or
6.01(b), as the case may be, have been delivered.
"LIBO Rate" means, with respect to the Interest Period
applicable to any Eurodollar Borrowing, a rate of interest
per annum, as determined by the Administrative Agent, equal
to the rate for deposits in dollars for a period comparable
to such Interest Period which appears on Telerate Page 3750
as of 11:00 a.m., London time, on the day that is two
Business Days prior to the first day of such Interest
Period. If such rate does not appear on Telerate Page 3750,
the LIBO Rate shall be the rate per annum (rounded, if
necessary, to the nearest one hundred-thousandth of a
percentage point) at which deposits in dollars are offered
by four major banks in the London interbank market at
approximately 11:00 a.m., London time, on the day that is
two Business Days prior to the first day of such Interest
Period to prime banks in the London interbank market for a
period of one month commencing on the first day of such
Interest Period in an amount comparable to the principal
amount of such Eurodollar Borrowing. The Administrative
Agent will request the principal London office of each such
bank to provide a quotation of its rate. If at least two
such quotations are provided as requested, the rate for such
Interest Period shall be the arithmetic mean of the
quotations. If fewer then two quotations are provided as
requested, the rate for such Interest Period shall be the
arithmetic mean of the rates quoted by major banks in New
York City, selected by the Administrative Agent, at
approximately 11:00 a.m., New York City time, on the date
that is two Business Days prior to the first day of such
Interest Period for loans in dollars to leading European
banks for a period of one month commencing on the first day
of such Interest Period in an amount comparable to such
Eurodollar Borrowing.
"Lien" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation,
encumbrance, charge or security interest in, on or of such
asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention
agreement relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Loan Documents" means this Agreement, the Notes, the
Guarantee Agreement, the Security Documents and all other
agreements, instruments and documents executed or delivered
in connection herewith.
"Loan Parties" means the Borrower and the Guarantors.
"Loans" means the Revolving Loans or the Swing Line
Loans, as the case may be.
"Margin Stock" has the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" means a material adverse
effect on (a) the business, assets, operations, prospects or
condition, financial or otherwise, of the Borrower and the
Subsidiaries, taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan
Document or (c) the rights of or benefits available to any
Credit Party under any Loan Document.
"Material Indebtedness" means Indebtedness (other than
Indebtedness under the Loan Documents) or obligations in
respect of one or more Hedging Agreements, of any one or
more of the Borrower and the Subsidiaries, whether arising
pursuant to one or more instruments or agreements, in an
aggregate principal amount exceeding $1,000,000. For
purposes of determining Material Indebtedness, the
"principal amount" of the obligations of the Borrower or any
Subsidiary in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any
netting agreements) that the Borrower or such Subsidiary, as
applicable, would be required to pay if such Hedging
Agreement were terminated at such time.
"Mortgage" means the Mortgage dated as of November 8,
2001 by the Borrower in favor of the Administrative Agent
covering the Designated Real Property, as amended, restated,
supplemented or otherwise modified from time to time.
"Mortgage Documents" means, collectively, the Mortgage,
the mortgagee title insurance policies issued in connection
with the granting of the Mortgage, the survey of the
Designated Real Property certified by a licensed
professional surveyor delivered in connection with the
granting of the Mortgage, the appraisal of the Designated
Real Property conducted at the time of the granting of the
Mortgage, the environmental reports prepared at the time of
the granting of the Mortgage, and such other instruments,
documents and agreements executed or delivered in connection
with the execution, delivery and recording of the Mortgage
and the granting of a Lien on the Designated Real Property
in favor of the Administrative Agent.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any
Prepayment/Reduction Event, (a) the cash proceeds received
in respect of such Prepayment/Reduction Event, including (i)
any cash received in respect of any non-cash proceeds, but
only as and when received, (ii) in the case of a casualty,
insurance proceeds and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments,
minus (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid by the Borrower or any of the
Subsidiaries to third parties in connection with such
Prepayment/Reduction Event, (ii) in the case of a sale,
transfer, lease or other disposition of an asset (including
pursuant to a sale and leaseback transaction), the amount of
all payments required to be made by such Borrower and the
Subsidiaries as a result thereof to repay Indebtedness
(other than the Loans) secured by such asset or otherwise
subject to mandatory payment as a result thereof and (iii)
the amount of all taxes paid (or reasonably estimated to be
payable) by such Borrower and the Subsidiaries, and the
amount of any reserves established by such Borrower and the
Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that
such event occurred or the next succeeding year and that are
directly attributable to such event (as determined
reasonably and in good faith by the chief financial officer
of such Borrower).
"Note" means a Revolving Note or the Swing Line Note,
as the case may be.
"Obligations" means (a) the due and punctual payment of
(i) principal of and premium, if any, and interest
(including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in
such proceeding) on the Loans, the Bankers Acceptance
Exposure or the Letter of Credit Exposure, when and as due,
whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, and (ii) all other monetary
obligations, including fees, commissions, costs, expenses
and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such
proceeding), of the Borrower or any other Loan Party to the
Administrative Agent, the Lenders, the BA Issuer, the Issuer
or the Swing Line Lender, or that are otherwise payable to
the Administrative Agent, the Lenders, the BA Issuer, the
Issuer or the Swing Line Lender, under this Agreement and
the other Loan Documents, (b) the due and punctual
performance of all covenants, agreements, obligations and
liabilities of the Borrower or any other Loan Party under or
pursuant to this Agreement and the other Loan Documents and
(c) unless otherwise agreed upon in writing by the Lenders,
all obligations of the Borrower, monetary or otherwise,
under each Hedging Agreement entered into with any Lender
(or an Affiliate thereof) as a counterparty.
"Other Taxes" means any and all current or future stamp
or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of,
or otherwise with respect to, the Loan Documents, other than
Excluded Taxes.
"Participant" has the meaning assigned to such term in
Section 10.04(e).
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity
performing similar functions.
"Perfection Certificate" means a certificate in the
form of Annex 1 to the Security Agreement or any other form
approved by the Administrative Agent.
"Permitted Acquisition" means the purchase, holding or
acquisition of (including pursuant to any merger) any
Capital Stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any
of the foregoing) of any other Person, or the purchase or
acquisition of (in one transaction or a series of
transactions (including pursuant to any merger)) any assets
of any other Person constituting a business unit (each an
"acquisition"), provided that, (i) at the time thereof and
immediately after giving effect thereto no Default shall
have occurred and be continuing, (ii) the aggregate amount
of consideration paid, and Indebtedness assumed, by the
Borrower and the Subsidiaries shall not exceed $25,000,000
with respect to any single acquisition, (iii) such Person or
business unit, as the case may be, is in substantially the
same business as the Borrower and (iv) the Borrower shall
have complied with the provisions of Section 6.11 with
respect to such Person.
"Permitted Encumbrances" means:
(a)Liens imposed by law for taxes that are not yet
due or are being contested in compliance with Section 6.04;
(b)landlords', carriers', warehousemen's,
mechanics', materialmen's, repairmen's and other like Liens
imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than
60 days or are being contested in compliance with
Section 6.04;
(c)pledges and deposits made in the ordinary course
of business in compliance with workers' compensation,
unemployment insurance and other social security laws or
regulations;
(d)deposits to secure the performance of bids,
trade contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a
like nature, in each case in the ordinary course of
business;
(e)attachment or judgment liens in respect of
judgments, writs or warrants of attachment or similar
process that do not constitute an Event of Default under
clause (k) of Article 8;
(f)easements, zoning restrictions, rights-of-way
and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not
secure any monetary obligations and do not materially
detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any
Subsidiary; and
(g)Liens on patents, patent applications,
trademarks, trademark applications, trade names, copyrights,
technology and know-how to the extent such Liens arise from
the granting (i) of exclusive licenses with respect to the
foregoing if it relates to either (x) intellectual property
which is immaterial and not necessary for the on-going
conduct of the Borrower's or any Subsidiary's business or
(y) uses that would not materially restrict the conduct of
the Borrower's or any Subsidiary's on-going businesses and
(ii) of non-exclusive licenses to use any of the foregoing
to any Person, in either case in the ordinary course of
business of the Borrower or any of its Subsidiaries.
"Permitted Investments" means:
(a)direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any
agency thereof to the extent that such obligations are
backed by the full faith and credit of the United States of
America), in each case measuring within one year from the
date of acquisition thereof;
(b)investments in commercial paper maturing within
270 days from the date of acquisition thereof and having, at
such date of acquisition, the highest credit rating
obtainable from Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, or any successor
thereto, or from Moody's Investors Service, Inc. or any
successor thereto;
(c)investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from
the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or
any State thereof that has a combined capital and surplus
and undivided profits of not less than $500,000,000; and
(d)fully collateralized repurchase agreements with
a term of not more than 30 days for securities described in
clause (a) of this definition and entered into with a
financial institution satisfying the criteria described in
clause (c) of this definition.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association,
company, partnership, Governmental Authority or other
entity.
"Plan" means any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or Section 412 of the Code or Section 302
of ERISA, and in respect of which the Borrower, any
Subsidiary or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to
be) an "employer" as defined in Section 3(5) of ERISA.
"Pledged Debt" has the meaning assigned thereto in the
Security Agreement.
"Pledged Equity" has the meaning assigned thereto in
the Security Agreement.
"Prepayment/Reduction Event" means:
(a)any non-ordinary course sale, transfer, lease or
other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of the
Borrower or any of the Subsidiaries, other than (i)
dispositions described in clause (a), (b) or (c) of
Section 7.05 and (ii) other dispositions resulting in
aggregate Net Proceeds not exceeding $3,000,000 during the
period from the Effective Date to the Revolving Maturity
Date;
(b)any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or
similar proceeding of, any property or asset of the Borrower
or any of the Subsidiaries, other than casualties, insured
damage or takings resulting in aggregate Net Proceeds not
exceeding $1,000,000 during any fiscal year; and
(c)the incurrence by the Borrower or any of the
Subsidiaries of any Indebtedness prohibited by any Loan
Document.
"Prime Rate" means the rate of interest per annum
publicly announced from time to time by BNY as its prime
commercial lending rate; each change in the Prime Rate being
effective from and including the date such change is
publicly announced as being effective. The Prime Rate is not
intended to be lowest rate of interest charged by BNY in
connection with extensions of credit to borrowers.
"Real Property" means all real property owned or leased
by the Borrower or any Domestic Subsidiary.
"Redeemable Securities" means, with respect to any
Person, any Capital Stock which is subject to mandatory
redemption or redemption at the option of the holder thereof
or which otherwise obligates such Person (whether on a
contingent or absolute basis) to apply any of its funds,
property or assets to the purchase, redemption, sinking fund
or other retirement of any such Capital Stock; provided,
however, preferred equity securities subject to redemption
solely at the option of such Person (and not the holder
thereof) shall not constitute Redeemable Securities.
"Register" has the meaning assigned to such term in
Section 10.04(c).
"Regulation T" means Regulation T of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Reimbursement Obligation" means, collectively, the
obligation of the Borrower to the Issuer with respect to
each Letter of Credit and all documents, instruments and
other agreements related thereto, including the obligation
of the Borrower to reimburse the Issuer for amounts drawn
under such Letter of Credit.
"Related Parties" means, with respect to any specified
Person, such Person's Affiliates and the respective
directors, officers, employees, agents and advisors of such
Person and such Person's Affiliates.
"Required Lenders" means, at any time, (i) Lenders
having Revolving Exposures and unused Revolving Commitments
representing not less than 51% of the sum of the total
Revolving Exposures and unused Revolving Commitments at such
time and (ii) in any event not less than two Lenders.
"Restricted Payment" means, as to any Person, any
dividend or other distribution by such Person (whether in
cash, securities or other property) with respect to any
shares of any class of equity securities of such Person, or
any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares or any
option, warrant or other right to acquire any such shares.
"Revolving Commitment" means, with respect to each
Lender having a Revolving Commitment, the commitment of such
Lender to make Revolving Loans and create Bankers
Acceptances hereunder, as such commitment may be reduced or
increased from time to time pursuant to Section 2.06 or
Section 2.10 or pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each
applicable Lender's Revolving Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant
to which such Lender shall have assumed its Revolving
Commitment, as applicable. The Aggregate Revolving
Commitment on the Effective Date is $50,000,000.
"Revolving Exposure" means, with respect to any Lender
at any time, the sum as of such time of (i) the outstanding
principal balance of such Lender's Revolving Loans, plus
(ii) such Lender's Swing Line Exposure, plus (iii) such
Lender's Letter of Credit Exposure, plus (iv) such Lender's
Bankers Acceptance Exposure.
"Revolving Loan" means a Loan referred to in
Section 2.01 and made pursuant to Section 2.03.
"Revolving Maturity Date" means July __, 2009.
"Revolving Note" means, with respect to each Lender, a
promissory note evidencing such Lender's Revolving Loans
payable to the order of such Lender (or, if required by such
Lender, to such Lender and its registered assigns)
substantially in the form of Exhibit C-1.
"Revolving Percentage" means, as of any date and with
respect to each Lender, the percentage equal to a fraction
(i) the numerator of which is the Revolving Commitment of
such Lender on such date (or, if there are no Revolving
Commitments on such date, on the last date upon which one or
more Revolving Commitments were in effect), and (ii) the
denominator of which is sum of the Revolving Commitments of
all Lenders on such date (or, if there are no Revolving
Commitments on such date, on the last date upon which one or
more Revolving Commitments were in effect).
"Secured Parties" means the "Secured Parties" as
defined in the Security Agreement.
"Security Agreement" means the Security Agreement,
dated as of November 8, 2001, among the Borrower, the
Guarantors and the Administrative Agent, for the benefit of
the Secured Parties, as amended, restated, supplemented or
otherwise modified from time to time.
"Security Agreement Reaffirmation" means the Security
Agreement Reaffirmation, substantially in the form of
Exhibit E, by the Borrower and the Guarantors in favor of
the Administrative Agent, for the benefit of the Secured
Parties.
"Security Documents" means the Security Agreement, the
Security Agreement Reaffirmation, the Mortgage Documents and
each other security agreement, instrument or other document
executed or delivered pursuant to Section 6.11 or 6.14 to
secure any of the Obligations.
"Statutory Reserve Rate" means a fraction (expressed as
a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a
decimal established by the Board to which the Administrative
Agent is subject for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans
shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
"Subsidiary" means, with respect to any Person (the
"parent") at any date, any corporation, limited liability
company, partnership, association or other entity the
accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if
such financial statements were prepared in accordance with
GAAP as of such date, as well as any other corporation,
limited liability company, partnership, association or other
entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of
the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as
of such date, owned, controlled or held by the parent or one
or more subsidiaries of the parent. Unless the context
otherwise requires, "Subsidiary" means any Subsidiary of the
Borrower.
"Swing Line Commitment" means the Swing Line Lender's
undertaking pursuant hereto to make Swing Line Loans in an
aggregate amount up to $7,500,000.
"Swing Line Exposure" means in respect of any Lender at
any time, an amount equal to the aggregate outstanding
principal amount of the Swing Line Loans at such time
multiplied by such Lender's Revolving Percentage at such
time.
"Swing Line Lender" means BNY.
"Swing Line Loan" and "Swing Line Loans" have the
meanings set forth in Section 2.05(a).
"Swing Line Note" means a promissory note evidencing
the Swing Line Loans payable to the order of the Swing Line
Lender substantially in the form of Exhibit C-2.
"Swing Line Participation Amount" has the meaning set
forth in Section 2.05(d).
"Taxes" means any and all current or future taxes,
levies, imposts, duties, deductions, charges or withholdings
imposed by any Governmental Authority.
"Transactions" means (a) the execution, delivery and
performance by each Loan Party of each Loan Document to
which it is a party, (b) the incurrence of Extensions of
Credit and (c) the use of the proceeds of the Loans.
"Type", when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such
Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02 Classification of Loans and Borrowings
For purposes of this Agreement, Loans may be classified
and referred to by class (e.g., a "Revolving Loan") or by
Type (e.g., a "Eurodollar Loan") or by class and Type (e.g.,
a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by class (e.g., a "Revolving
Borrowing") or by Type (e.g., a "Eurodollar Borrowing") or
by class and Type (e.g., a "Eurodollar Revolving
Borrowing").
Section 1.03 Terms Generally
The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The
words "include", "includes" and "including" shall be deemed
to be followed by the phrase "without limitation". The word
"will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires
otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or
otherwise modified, (b) any reference herein to any Person
shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder",
and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property"
shall be construed to have the same meaning and effect and
to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and
contract rights. Any reference to an "applicable Lender"
shall mean (a) in the case of Revolving Borrowings, Lenders
having a Revolving Commitment and (b) in the case of Swing
Line Borrowings, the Swing Line Lender.
Section 1.04 Accounting Terms; GAAP
Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to
time, provided that, if the Borrower notify the
Administrative Agent that the Borrower requests an amendment
to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or
if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in
the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective
until such notice shall have been withdrawn or such
provision amended in accordance herewith. Unless the
context otherwise requires, any reference to a fiscal period
shall refer to the relevant fiscal period of the Borrower.
ARTICLE 2 THE CREDITS
Section 2.01 Commitments
Subject to the terms and conditions set forth herein,
each Lender having a Revolving Commitment agrees to make
Revolving Loans to the Borrower from time to time during the
Availability Period in an aggregate principal amount up to an
amount that will not result in such Lender's Revolving Exposure
exceeding such Lender's Revolving Commitment. Within the
foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.
Section 2.02 Loans and Borrowings
Each Revolving Loan shall be made as part of a
Borrowing consisting of Revolving Loans made by the applicable
Lenders ratably in accordance with their respective Revolving
Commitments. The failure of any Lender to make any Loan required
to be made by it shall not relieve any other Lender of its
obligations hereunder, provided that the Revolving Commitments of
the applicable Lenders are several, and no Lender shall be
responsible for any other Lender's failure to make Loans as
required.
Subject to Section 3.04, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans, as
applicable, in each case as the Borrower may request in
accordance herewith. Each applicable Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan, provided
that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms
of this Agreement.
At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount that is equal to $1,500,000 or an integral multiple of
$300,000 in excess thereof. At the time that each ABR Borrowing
is made, such Borrowing shall be in an aggregate amount that is
equal to $100,000 or an integral multiple thereof, provided that
an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving
Commitments. Borrowings of more than one Type may be outstanding
at the same time, provided that there shall not at any time be
more than a total of 8 Eurodollar Borrowings outstanding.
Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request, or to elect to
convert or continue, any Borrowing if the Interest Period
requested with respect thereto would end after the Revolving
Maturity Date, in the case of Revolving Loans.
Section 2.03 Requests for Borrowings
To request a Borrowing, the Borrower shall notify the
Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of
the proposed Borrowing or (b) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, on
the date of the proposed Borrowing. Each such telephonic
Credit Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative
Agent of a written Credit Request in a form approved by the
Administrative Agent signed by the Borrower. Each such
telephonic and written Credit Request shall specify the
following information in compliance with Section 2.02:
the aggregate amount of the requested Borrowing;
the date of such Borrowing, which shall be a
Business Day;
whether such Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing;
in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a
period contemplated by the definition of the term "Interest
Period"; and
the location and number of the Borrower's account
to which funds are to be disbursed, which shall comply with
the requirements of
If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest
Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of one month's duration. Promptly following
receipt of a Credit Request in accordance with this Section, the
Administrative Agent shall advise each applicable Lender of the
details thereof and of the amount of such Lender's Loan to be
made as part of the requested Borrowing.
Section 2.04. Funding of Borrowings
Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1:00 p.m., New York City time, to
the account of the Administrative Agent most recently designated
by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the
Borrower by promptly crediting or otherwise transferring the
amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent and designated by the
Borrower in the applicable Credit Request.
Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing
that such Lender will not make available to the Administrative
Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.04(a) and may, in
reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower
severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to
the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the
interest rate that would be otherwise applicable to such
Borrowing. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
Section 2.05 Swing Line Loans
Subject to the terms and conditions hereof, the Swing
Line Lender agrees to make swing line loans (each a "Swing Line
Loan" and, collectively, the "Swing Line Loans") to the Borrower
from time to time on any Business Day during the period from the
Effective Date to the sixth Business Day preceding the Revolving
Maturity Date, provided that (i) immediately after making each
Swing Line Loan, the aggregate outstanding principal balance of
the Swing Line Loans will not exceed the Swing Line Commitment,
and the Aggregate Revolving Exposure will not exceed the
Aggregate Revolving Commitment, (ii) prior thereto or
simultaneously therewith the Borrower shall have borrowed
Revolving Loans, (iii) no Lender shall be in default of its
obligations under this Agreement and (iv) no Credit Party shall
have notified the Swing Line Lender and the Borrower in writing
at least one Business Day prior to the Borrowing Date with
respect to such Swing Line Loan, that the conditions set forth in
Section 5.02 have not been satisfied and such conditions remain
unsatisfied as of the requested time of the making such Swing
Line Loan.
To request a Swing Line Loan, the Borrower shall notify
the Administrative Agent and the Swing Line Lender by the
delivery of a Credit Request, which shall be sent by facsimile
and shall be irrevocable (confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Credit Request
in a form approved by the Administrative Agent signed by the
Borrower), no later than: 11:00 a.m., on the requested Borrowing
Date, specifying (i) the aggregate principal amount to be
borrowed and (ii) the requested Borrowing Date. The Swing Line
Lender will, subject to its determination that the terms and
conditions of this Agreement have been satisfied, make the
requested amount available promptly on that same day, to the
Administrative Agent (for the account of the Borrower) who,
thereupon, will promptly make such amount available to the
Borrower by crediting the account of the Borrower pursuant to
Section 2.04. Each Borrowing of a Swing Line Loan shall be in an
aggregate principal amount equal to $100,000 or, if less, the
unused portion of the Swing Line Commitment.
The Swing Line Lender shall not be obligated to make
any Swing Line Loan at a time when any Lender shall be in default
of its obligations under this Agreement unless arrangements to
eliminate the Swing Line Lender's risk with respect to such
defaulting Lender's participation in such Swing Line Loan shall
have been made for the benefit of the Swing Line Lender and such
arrangements are satisfactory to the Swing Line Lender. The
Swing Line Lender will not make a Swing Line Loan if the
Administrative Agent, or any Lender by notice to the Swing Line
Lender and the Borrower no later than one Business Day prior to
the Borrowing Date with respect to such Swing Line Loan, shall
have determined that the conditions set forth in Section 5.02
have not been satisfied and such conditions remain unsatisfied as
of the requested time of the making of such Swing Line Loan.
Each Swing Line Loan shall be due and payable on the earliest to
occur of the seventh day after the Borrowing Date thereof, the
fifth Business Day prior to the Revolving Credit Commitment
Termination Date, the date on which the Swing Line Commitment
shall have been voluntarily terminated by the Borrower or the
Swing Line Lender in accordance with Section 2.06, and the date
on which the Swing Line Loans shall become due and payable
pursuant to the provisions hereof, whether by acceleration or
otherwise.
Upon each receipt by a Lender of notice of an Event of
Default from the Administrative Agent pursuant to Article 9, such
Lender shall purchase unconditionally, irrevocably, and severally
from the Swing Line Lender a participation in the outstanding
Swing Line Loans (including accrued interest thereon) in an
amount equal to the product of its Commitment Percentage and the
outstanding amount of the Swing Line Loans (the "Swing Line
Participation Amount"). Each Lender shall also be liable for an
amount equal to the product of its Commitment Percentage and any
amounts paid by the Borrower pursuant to this subsection (d) that
are subsequently rescinded or avoided, or must otherwise be
restored or returned. Such liabilities shall be unconditional
and without regard to the occurrence of any Default or the
compliance by the Borrower with any of its obligations under the
Loan Documents. In furtherance of this subsection, upon each
receipt by a Lender of notice of an Event of Default from the
Administrative Agent, such Lender shall promptly make available
to the Administrative Agent for the account of the Swing Line
Lender its Swing Line Participation Amount, in lawful money of
the United States and in immediately available funds. The
Administrative Agent shall deliver the payments made by each
Lender pursuant to the immediately preceding sentence to the
Swing Line Lender promptly upon receipt thereof in like funds as
received. If a Lender does not make its Swing Line Participation
Amount so available, such Lender shall be required to pay
interest to the Administrative Agent for the account of the Swing
Line Lender from the date such amount was due until paid in full,
on the unpaid portion thereof, at the rate set forth in Section
2.04(b), payable upon demand by the Swing Line Lender. The
Administrative Agent shall distribute such interest payments to
the Swing Line Lender upon receipt thereof in like funds as
received. Whenever the Administrative Agent is reimbursed by the
Borrower, for the account of the Swing Line Lender, for any
payment in connection with Swing Line Loans and such payment
relates to an amount previously paid by a Lender pursuant to this
Section, the Administrative Agent will promptly pay over such
payment to such Lender.
Section 2.06 Termination and Reduction of Commitments
Unless previously terminated, (i) the Revolving
Commitments shall terminate on the Revolving Maturity Date and
(ii) the Swing Line Commitment shall terminate on the sixth
Business Day prior to the Revolving Maturity Date.
The Borrower may at any time terminate, or from time to
time reduce, the Revolving Commitments, provided that (i) the
Borrower shall not terminate or reduce the Revolving Commitments
if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.08, the sum of the
Revolving Exposures would exceed the total Revolving Commitments
and (ii) each such reduction shall be in an amount that is an
integral multiple of $500,000 and not less than $1,000,000.
The Borrower may at any time terminate, or from time to
time reduce, the Swing Line Commitment, provided that the
Borrower shall not terminate or reduce the Swing Line Commitment
if, after giving effect to any concurrent prepayment of the Swing
Line Loans in accordance with Section 2.05(c), the aggregate
outstanding principal amount of all Swing Line Loans would exceed
the Swing Line Commitments.
Each reduction of the Revolving Commitments hereunder
shall be made ratably among the applicable Lenders in accordance
with their respective Revolving Commitments. The Borrower shall
notify the Administrative Agent of any election to terminate or
reduce the Revolving Commitments under Section 2.06(b) at least
three Business Days prior to the effective date of such
termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant
to this Section 2.06 shall be irrevocable, provided that a notice
of termination of the Revolving Commitments delivered by the
Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such
notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date)
if such condition is not satisfied. Any termination or reduction
of the Revolving Commitments hereunder shall be permanent.
Section 2.07 Repayment of Loans; Evidence of Debt
The Borrower hereby unconditionally promises to pay to
the Administrative Agent for the account of each applicable
Lender the then unpaid principal amount of each Revolving Loan
and each Swing Line Loan on the Revolving Maturity Date.
Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the debt of the
Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable
and paid to such Lender from time to time hereunder.
The Administrative Agent shall maintain accounts in
which it shall record (i) the amount of each Loan made hereunder,
the class and Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and
each Lender's share thereof.
The entries made in the accounts maintained pursuant to
paragraphs (c) or (d) of this Section 2.07 shall, to the extent
not inconsistent with any entries made in any Note, be prima
facie evidence of the existence and amounts of the obligations
recorded therein, provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this
Agreement.
The Revolving Loans of each Lender and interest thereon
shall at all times (including after assignment pursuant to
Section 10.04) be represented by one or more Revolving Notes
payable to the order of such Lender (or, if such Revolving Note
is a registered note, to such Lender and its registered assigns).
The Swing Line Loans and interest thereon shall at all times be
represented by a Swing Line Note payable to the order of the
Swing Line Lender.
Section 2.08 Prepayment of Loans
The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, subject
to the requirements of this Agreement, including, without
limitation, Section 3.06.
In the event and on each occasion that any Net Proceeds
are received by or on behalf of the Borrower or any Subsidiary in
respect of any Prepayment/Reduction Event, then, immediately
after such Net Proceeds are received, the Borrower shall prepay
Revolving Borrowings in an amount equal to such Net Proceeds;
provided, however, with respect to Net Proceeds received in
respect of a Prepayment/Reduction Event described in clause (b)
of the definition thereof, so long as no Default has occurred and
is continuing, the Borrower shall not be required to use such Net
Proceeds to prepay the Loans if (i) on or prior to receipt of
such proceeds the Borrower shall have notified the Administrative
Agent in writing that it intends to use such proceeds to replace
or restore any property within 180 days of such
Prepayment/Reduction Event and (ii) the Borrower shall have
replaced or restored such property within such 180-day period
(or, in the event that such property is incapable of being
replaced or restored during such 180-day period, the Borrower
shall have commenced the replacement or restoration of such
property during such 180-day period).
In the event of any partial reduction or termination of
the Revolving Commitments, then (i) at or prior to the date of
such reduction or termination, the Administrative Agent shall
notify the Borrower and the applicable Lenders of the sum of the
Revolving Exposures after giving effect thereto and (ii) if such
sum would exceed the total Revolving Commitments after giving
effect to such reduction or termination, then the Borrower shall,
on the date of such reduction or termination, prepay Revolving
Borrowings in an amount sufficient to eliminate such excess;
provided, that if on the date of such a reduction of the
Aggregate Revolving Commitment, the Aggregate Revolving Exposure
exceeds the aggregate Revolving Commitments of all of the Lenders
after giving effect to such reduction and, if the Revolving Loans
have been paid in full and the Bankers Acceptance Exposure or the
Letter of Credit Exposure of all Lenders is greater than zero,
the Borrower shall deposit into the Cash Collateral Account an
amount in cash which would cause the balance on deposit in the
Cash Collateral Account to equal the sum of the Bankers
Acceptance Exposure and the Letter of Credit Exposure of all
Lenders.
The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i)
in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before
the date of prepayment or (ii) in the case of prepayment of an
ABR Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and
the principal amount of each Borrowing or portion thereof to be
prepaid, provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the
Revolving Commitments as contemplated by Section 2.06(d), then
such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.06(d).
Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing
under Sections 2.06(b) and 2.08(a) shall be in an integral
multiple of $100,000 and not less than $500,000. Each prepayment
of a Borrowing shall be applied ratably to the Loans included in
the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 3.01.
Section 2.09 Payments Generally; Pro Rata Treatment;
Sharing of Setoffs
Each Loan Party shall make each payment required to be
made by it hereunder or under any other Loan Document (whether of
principal of Loans, interest or fees, or of amounts payable under
Sections 3.05, 3.06, 3.07 or 10.03, or otherwise) prior to 12:00
noon, New York City time, on the date when due, in immediately
available funds, without setoff or counterclaim. Any amounts
received after such time on any date may, in the discretion of
the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative
Agent at its office at One Wall Street, New York, New York, or
such other office as to which the Administrative Agent may notify
the other parties hereto, except that payments pursuant to
Sections 3.05, 3.06, 3.07 and 10.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of
any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of
any payment accruing interest, interest thereon shall be payable
for the period of such extension. All payments hereunder shall
be made in dollars.
If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of
principal of Loans, interest, fees and commissions then due
hereunder, such funds shall be applied (i) first, towards payment
of interest, fees and commissions then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts
of interest, fees and commissions then due to such parties and
(ii) second, towards payment of principal of Loans then due
hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal of Loans then due to
such parties.
If any Lender shall, by exercising any right of setoff
or counterclaim or otherwise, obtain payment in respect of any
principal of, or interest on, any of its Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate
amount of its Loans and accrued interest thereon than the
proportion received by any other applicable Lender, then the
applicable Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Loans of
other applicable Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the applicable
Lenders ratably in accordance with the aggregate amount of
principal of, and accrued interest on, their respective Loans,
provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrower pursuant
to and in accordance with the express terms of this Agreement or
any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to
any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of
this paragraph shall apply). Each Loan Party consents to the
foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor
of such Loan Party in the amount of such participation.
Unless the Administrative Agent shall have received
notice from a Loan Party prior to the date on which any payment
is due to the Administrative Agent for the account of the
applicable Credit Parties hereunder that such Loan Party will not
make such payment, the Administrative Agent may assume that such
Loan Party has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to
such Credit Parties the amount due. In such event, if such Loan
Party has not in fact made such payment, then each such Credit
Party severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Credit
Party with interest thereon, for each day from and including the
date such amount is distributed to it to but excluding the date
of payment to the Administrative Agent, at the greater of the
Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank
compensation.
If any Credit Party shall fail to make any payment
required to be made by it pursuant to Section 2.04, then the
Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received
by the Administrative Agent for the account of such Credit Party
to satisfy such Credit Party's obligations under such Section
until all such unsatisfied obligations are fully paid.
Section 2.10 Optional Increase in Commitments
At any time, if no Default shall have occurred and be
continuing, the Borrower may increase the Aggregate Revolving
Commitment, either by designating a financial institution not
theretofore a Lender to become a Lender (such designation to be
effective only with the prior written consent of the
Administrative Agent, which consent will not be unreasonably
withheld or delayed), or by agreeing with an existing Lender that
such Lender's Revolving Commitment shall be increased. Upon
execution and delivery by the Borrower and such Lender or other
financial institution of an instrument in form reasonably
satisfactory to the Administrative Agent, such existing Lender
shall have a Revolving Commitment as therein set forth or such
other financial institution shall become a Lender with a
Revolving Commitment as therein set forth and all the rights and
obligations of a Lender with such a Revolving Commitment
hereunder; provided:
that the Borrower shall provide prompt notice of
such increase to the Administrative Agent, who shall
promptly notify the Lenders; and
that immediately after such increase is made, the
Aggregate Revolving Commitment shall not exceed $65,000,000.
Upon any increase in the Aggregate Revolving Commitment
pursuant to Section 2.10(a) within five Business Days, in the
case of any ABR Loans then outstanding, and at the end of the
then current Interest Period with respect thereto, in the case of
any Eurodollar Loans then outstanding, the Borrower shall prepay
such Revolving Loans in their entirety and, to the extent the
Borrower elects to do so and subject to the conditions specified
in Section 5.02, the Borrower shall reborrow Revolving Loans from
the Lenders in proportion to their respective Revolving
Commitments after giving effect to such increase, until such time
as all outstanding Revolving Loans are held by the Lenders in
such proportion. Effective upon such increase, the amount of the
participations held by each Lender in each Letter of Credit, each
Bankers Acceptance and each Swing Line Loan then outstanding
shall be adjusted such that, after giving effective to such
adjustments, the Lenders shall hold participations in each such
Letter of Credit, Bankers Acceptance and Swing Line Loan in the
proportion its respective Revolving Commitment bears to the
Aggregate Revolving Commitment after giving effect to such
increase.
Section 2.11 Letters of Credit
The Borrower may request the Issuer to issue letters of
credit (the "Letters of Credit"; each, individually, a "Letter of
Credit") during the period from the Effective Date to the
thirtieth Business Day prior to the Revolving Maturity Date,
provided that immediately after the issuance of each Letter of
Credit (i) the Letter of Credit Exposure of all Lenders would not
exceed the Letter of Credit Commitment, (ii) the Aggregate
Revolving Exposure would not exceed the Aggregate Revolving
Commitment and (iii) the sum of the Letter of Credit Exposure of
all Lenders plus the Bankers Acceptance Exposure of all Lenders
would not exceed $10,000,000. To request the issuance of a
Letter of Credit, the Borrower shall notify the Administrative
Agent and the Issuer by the delivery of a Credit Request, which
shall be sent by facsimile and shall be irrevocable (confirmed
promptly, and in any event within five Business Days, by the
delivery to the Administrative Agent of a Credit Request manually
signed by the Borrower), at least three Business Days prior to
the requested date of issuance, specifying (A) the beneficiary of
such Letter of Credit, (B) the Borrower's proposal as to the
conditions under which a drawing may be made under such Letter of
Credit and the documentation to be required in respect thereof,
(C) the maximum amount to be available under such Letter of
Credit, and (D) the requested dates of issuance and expiration.
Such Credit Request shall be accompanied by a duly completed
application for such Letter of Credit on such forms as may be
made available from time to time by the Issuer and such other
certificates, documents (including a reimbursement agreement) and
other information as may be required by the Issuer in accordance
with its customary procedures (collectively, the "Letter of
Credit Documentation"). Upon receipt of such Credit Request from
the Borrower, the Administrative Agent shall promptly notify each
Lender thereof. Subject to the satisfaction of the terms and
conditions of this Agreement, the Issuer shall issue each
requested Letter of Credit. In the event of any conflict between
the provisions of this Agreement and any Letter of Credit
Documentation, the provisions of this Agreement shall control.
Each of the Credit Parties hereby acknowledges and agrees that
the Existing Letters of Credit are Letters of Credit hereunder
and the Lenders hereby assume and are jointly and severally
obligated with respect to all Reimbursement Obligations related
thereto. The letters of credit issued and outstanding under the
Original Credit Agreement on the Effective Date (the "Existing
Letters of Credit") and listed on Schedule 2.10 shall be deemed
to be "Letters of Credit" for all purposes of this Agreement and
the other Loan Documents.
Each Letter of Credit shall (i) be denominated in
dollars, (ii) be issued for the account of the Borrower and in
support of obligations, contingent or otherwise, of the Borrower
or any Subsidiary arising in the ordinary course of business, and
(iii) have an expiration date which shall be not later than one
year from the date of issuance thereof, but in any event, with
respect to all Letters of Credit, five Business Days before the
Revolving Loan Maturity Date, provided that the expiration date
of such Letter of Credit may be extended or such Letter of Credit
may be renewed, provided, further, that any renewal, or any
extension of any expiry date, of a Letter of Credit shall
constitute the issuance of such Letter of Credit for all purposes
of this Agreement.
Immediately upon the issuance of a Letter of Credit,
the Issuer shall be deemed to have sold and transferred to each
Lender, and each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuer, without
recourse or warranty, an undivided interest and participation, to
the extent of such Lender's Revolving Percentage thereof, in such
Letter of Credit and the obligations of the Borrower with respect
thereto and any security therefor and any guaranty pertaining
thereto at any time existing. Each Lender, with respect to each
Existing Letter of Credit, hereby purchases, without recourse or
warranty, an undivided interest and participation, to the extent
of such Lender's Revolving Percentage thereof, in each Existing
Letter of Credit and the obligations of the Borrower with respect
thereto and any such security therefor and guaranty pertaining
thereto at any time existing.
The Issuer shall promptly notify (i) each Lender of the
Issuer's receipt of a drawing request under any Letter of Credit,
stating the amount of such Lender's Revolving Percentage of such
drawing request and the date on which such request will be
honored and (ii) the Administrative Agent and the Borrower of the
amount of such drawing request and the date on which such request
will be honored. Any failure of the Issuer to give or any delay
in the Issuer's giving any such notice shall not release or
diminish the obligations of the Borrower or any Lender hereunder.
In determining whether to pay under any Letter of Credit, the
Issuer shall have no obligation to any Lender or the Borrower
other than to confirm that any documents required to be delivered
under such Letter of Credit have been delivered and that they
appear to comply on their face with the requirements of such
Letter of Credit. In the absence of gross negligence or willful
misconduct on the part of the Issuer, the Issuer shall have no
liability to any Lender or the Borrower for any action taken or
omitted to be taken by it under or in connection with any Letter
of Credit, including any such action negligently taken or
negligently omitted to be taken by it.
The Borrower shall pay to the Administrative Agent for
the account of the Issuer on demand therefor, in dollars in
immediately available funds, the amount of all Reimbursement
Obligations then owing to the Issuer under any Letter of Credit,
together with interest thereon as provided in Section 3.01,
irrespective of any claim, setoff, defense or other right which
the Borrower may have at any time against the Issuer or any other
Person. In the event that the Issuer makes any payment under any
Letter of Credit and the Borrower shall not have repaid such
amount to the Issuer when due, the Issuer shall promptly notify
each Lender of such failure, and each Lender shall promptly and
unconditionally pay to the Administrative Agent, for the account
of the Issuer, the amount of such Lender's Revolving Percentage
of such payment in dollars in immediately available funds on the
Business Day the Issuer so notifies such Lender if such notice is
given prior to 12:00 Noon or, if such notice is given after 12:00
Noon, such Lender shall make its Revolving Percentage of such
payment available to the Issuer prior to 12:00 Noon on the next
succeeding Business Day.
If and to the extent any Lender shall not make such
Lender's Revolving Percentage of any Reimbursement Obligations
available to the Issuer when due in accordance with Section
2.11(e), such Lender shall pay interest to the Issuer on such
unpaid amount for each day from the date such payment is due
until the date such amount is paid in full to the Issuer at the
Federal Funds Rate until (and including) the third Business Day
after the date due and thereafter at the Alternate Base Rate.
The obligations of the Lenders under this Section 2.11(f) are
several and not joint or joint and several, and the failure of
any Lender to make available to the Issuer its Revolving
Percentage of any Reimbursement Obligations when due in
accordance with Section 2.11(e) shall not relieve any other
Lender of its obligation hereunder to make its Revolving
Percentage of such Reimbursement Obligations so available when so
due, but no Lender shall be responsible for the failure of any
other Lender to make such other Lender's Revolving Percentage of
such Reimbursement Obligations so available when so due.
Whenever the Issuer receives a payment of a
Reimbursement Obligation from or on behalf of the Borrower as to
which the Issuer has received any payment from a Lender pursuant
to Section 2.11(e), the Issuer shall promptly pay to such Lender
an amount equal to such Lender's Revolving Percentage of such
payment from or on behalf of the Borrower. If any payment by or
on behalf of the Borrower and received by the Issuer with respect
to any Letter of Credit is rescinded or must otherwise be
returned by the Issuer for any reason and the Issuer has paid to
any Lender any portion thereof, each such Lender shall forthwith
pay over to the Issuer an amount equal to such Lender's Revolving
Percentage of the amount which must be so returned by the Issuer.
Each Lender, upon the demand of the Issuer, shall
reimburse the Issuer, to the extent the Issuer has not been
reimbursed by the Borrower after demand therefor, for the
reasonable costs and expenses (including reasonable attorneys'
fees) incurred by the Issuer in connection with the collection of
amounts due under, and the preservation and enforcement of any
rights conferred by, any Letter of Credit or the performance of
the Issuer's obligations as issuer of the Letters of Credit under
this Agreement in respect thereof, to the extent of such Lender's
Revolving Percentage of the amount of such costs and expenses
provided, however, that no Lender shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent the same result solely from the gross
negligence or willful misconduct of the Issuer. The Issuer shall
refund any costs and expenses reimbursed by such Lender that are
subsequently recovered from the Borrower in an amount equal to
such Lender's Revolving Percentage thereof.
The obligation of the Borrower to reimburse the Issuer
pursuant to this Section 2.11, and the obligation of each Lender
to make available to the Issuer the amounts set forth in this
Section 2.11 shall be absolute, unconditional and irrevocable
under any and all circumstances, shall be made without reduction
for any set-off, counterclaim or other deduction of any nature
whatsoever, may not be terminated, suspended or delayed for any
reason whatsoever, shall not be subject to any qualification or
exception and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including
any of the following circumstances: (1) any lack of validity or
enforceability of this Agreement or any of the other Loan
Documents, (2) the existence of any claim, setoff, defense or
other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may
be acting), the Issuer, any Lender or any other Person, whether
in connection with this Agreement, any other Loan Document, any
Letter of Credit, the transactions contemplated in the Loan
Documents or any unrelated transactions (including any underlying
transaction between the Borrower and the beneficiary named in any
such Letter of Credit), (3) any draft, certificate or any other
document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, (4)
the surrender or impairment of any collateral for the performance
or observance of any of the terms of any of the Loan Documents,
(5) the occurrence of any Default or Event of Default or (6) any
other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide
a right of setoff against, the Borrower's or such Lender's
obligations hereunder. The Issuer shall not have any liability or
responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required
to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the
control of the Issuer. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the
part of the Issuer (as finally determined by a court of competent
jurisdiction), the Issuer shall be deemed to have exercised care
in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to
be in substantial compliance with the terms of a Letter of
Credit, the Issuer may, in its sole discretion, either accept and
make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to
the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
Section 2.12 Bankers Acceptances
The Borrower may request the BA Issuer to create
Bankers Acceptances during the period from the Effective Date to
the thirtieth Business Day prior to the Revolving Maturity Date,
provided that immediately after the creation of each Bankers
Acceptance (i) the Bankers Acceptance Exposure of all Lenders
would not exceed the Bankers Acceptance Commitment, (ii) the
Aggregate Revolving Exposure would not exceed the Aggregate
Revolving Commitment and (iii) the sum of the Letter of Credit
Exposure of all Lenders plus the Bankers Acceptance Exposure of
all Lenders would not exceed $10,000,000. To request the
creation of a Bankers Acceptance, the Borrower shall notify the
Administrative Agent and the BA Issuer by the delivery of a
Credit Request, which shall be sent by facsimile and shall be
irrevocable (confirmed promptly, and in any event within five
Business Days, by the delivery to the Administrative Agent of a
Credit Request manually signed by the Borrower), at least three
Business Days prior to the requested date of creation, specifying
such information in connection with the creation of such Bankers
Acceptance as the BA Issuer may request from time to time. Such
Credit Request shall be accompanied by a duly completed
application for such Bankers Acceptance on such forms as may be
made available from time to time by the BA Issuer and such other
certificates, documents and other information as may be required
by the BA Issuer in accordance with its customary procedures
(collectively, the "Bankers Acceptance Documentation"). Upon
receipt of such Credit Request from the Borrower, the
Administrative Agent shall promptly notify each Lender thereof.
Subject to the satisfaction of the terms and conditions of this
Agreement, the BA Issuer shall issue each requested Bankers
Acceptance. In the event of any conflict between the provisions
of this Agreement and any Bankers Acceptance Documentation, the
provisions of this Agreement shall control. Each of the Credit
Parties hereby acknowledges and agrees that the Existing Bankers
Acceptances are Bankers Acceptances hereunder and the Lenders
hereby assume and are jointly and severally obligated with
respect to all BA Obligations related thereto. The bankers
acceptances created and outstanding under the Original Credit
Agreement on the Effective Date (the "Existing Bankers
Acceptances") and listed on Schedule 2.12 shall be deemed to be
"Bankers Acceptances" for all purposes of this Agreement and the
other Loan Documents.
Each Bankers Acceptance shall (i) be denominated in
dollars, (ii) be issued for the account of the Borrower and in
support of obligations, contingent or otherwise, of the Borrower
or any Subsidiary arising in the ordinary course of business (as
specified in the definition of "Bankers Acceptance", (iii) have
drafts drawn upon it having not more than 180 days sight to run,
and (iv) otherwise conform to the requirements set forth in the
definition of "Bankers Acceptance").
Immediately upon the creation of a Bankers Acceptance,
the BA Issuer shall be deemed to have sold and transferred to
each Lender, and each Lender shall be deemed to have irrevocably
and unconditionally purchased and received from the BA Issuer,
without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Revolving
Percentage thereof, in such Bankers Acceptance and the
obligations of the Borrower with respect thereto and any security
therefor and any guaranty pertaining thereto at any time
existing. Each Lender, with respect to each Existing Bankers
Acceptance, hereby purchases, without recourse or warranty, an
undivided interest and participation, to the extent of such
Lender's Revolving Percentage thereof, in each Existing Bankers
Acceptance and the obligations of the Borrower with respect
thereto and any security therefor and guaranty pertaining thereto
at any time existing.
The BA Issuer shall promptly notify (i) each Lender of
the BA Issuer's receipt of a drawing request under any Bankers
Acceptance, stating the amount of such Lender's Revolving
Percentage of such drawing request and the date on which such
request will be honored and (ii) the Administrative Agent and the
Borrower of the amount of such drawing request and the date on
which such request will be honored. Any failure of the BA Issuer
to give or any delay in the BA Issuer's giving any such notice
shall not release or diminish the obligations of the Borrower or
any Lender hereunder. In determining whether to accept any
drawing, the BA Issuer shall have no obligation to any Lender or
the Borrower other than to confirm that any documents required to
be delivered with respect to such Bankers Acceptance have been
delivered and that they appear to comply on their face with the
requirements of such Bankers Acceptance. In the absence of gross
negligence or willful misconduct on the part of the BA Issuer,
the BA Issuer shall have no liability to any Lender or the
Borrower for any action taken or omitted to be taken by it under
or in connection with any Bankers Acceptance, including any such
action negligently taken or negligently omitted to be taken by
it.
The Borrower shall pay to the Administrative Agent for
the account of the BA Issuer on demand therefor, in dollars in
immediately available funds, the amount of all BA Obligations
then owing to the BA Issuer in respect of any Bankers Acceptance,
together with interest thereon as provided in Section 3.01,
irrespective of any claim, setoff, defense or other right which
the Borrower may have at any time against the BA Issuer or any
other Person. In the event that the BA Issuer makes any payment
under any Bankers Acceptance and the Borrower shall not have
repaid such amount to the BA Issuer when due, the BA Issuer shall
promptly notify each Lender of such failure, and each Lender
shall promptly and unconditionally pay to the Administrative
Agent, for the account of the BA Issuer, the amount of such
Lender's Revolving Percentage of such payment in dollars in
immediately available funds on the Business Day the BA Issuer so
notifies such Lender if such notice is given prior to 12:00 Noon
or, if such notice is given after 12:00 Noon, such Lender shall
make its Revolving Percentage of such payment available to the
Issuer prior to 12:00 Noon on the next succeeding Business Day.
If and to the extent any Lender shall not make such
Lender's Revolving Percentage of any BA Obligations available to
the BA Issuer when due in accordance with Section 2.12(e), such
Lender agrees to pay interest to the BA Issuer on such unpaid
amount for each day from the date such payment is due until the
date such amount is paid in full to the BA Issuer at the Federal
Funds Rate until (and including) the third Business Day after the
date due and thereafter at the Alternate Base Rate. The
obligations of the Lenders under this Section 2.12(f) are several
and not joint or joint and several, and the failure of any Lender
to make available to the BA Issuer its Revolving Percentage of
any BA Obligations when due in accordance with Section 2.12(e)
shall not relieve any other Lender of its obligation hereunder to
make its Revolving Percentage of such BA Obligations so available
when so due, but no Lender shall be responsible for the failure
of any other Lender to make such other Lender's Revolving
Percentage of such BA Obligations so available when so due.
Whenever the BA Issuer receives a payment of a BA
Obligation from or on behalf of the Borrower as to which the BA
Issuer has received any payment from a Lender pursuant to Section
2.12(e), the BA Issuer shall promptly pay to such Lender an
amount equal to such Lender's Revolving Percentage of such
payment from or on behalf of the Borrower. If any payment by or
on behalf of the Borrower and received by the BA Issuer with
respect to any Bankers Acceptance is rescinded or must otherwise
be returned by the BA Issuer for any reason and the BA Issuer has
paid to any Lender any portion thereof, each such Lender shall
forthwith pay over to the BA Issuer an amount equal to such
Lender's Revolving Percentage of the amount which must be so
returned by the BA Issuer.
Each Lender, upon the demand of the BA Issuer, shall
reimburse the BA Issuer, to the extent the BA Issuer has not been
reimbursed by the Borrower after demand therefor, for the
reasonable costs and expenses (including reasonable attorneys'
fees) incurred by the BA Issuer in connection with the collection
of amounts due under, and the preservation and enforcement of any
rights conferred by, any Bankers Acceptance or the performance of
the BA Issuer's obligations as the creator of the Bankers
Acceptances under this Agreement in respect thereof, to the
extent of such Lender's Revolving Percentage of the amount of
such costs and expenses provided, however, that no Lender shall
be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent the same
result solely from the gross negligence or willful misconduct of
the BA Issuer. The BA Issuer shall refund any costs and expenses
reimbursed by such Lender that are subsequently recovered from
the Borrower in an amount equal to such Lender's Revolving
Percentage thereof.
The obligation of the Borrower to reimburse the BA
Issuer pursuant to this Section 2.12, and the obligation of each
Lender to make available to the BA Issuer the amounts set forth
in this Section 2.12 shall be absolute, unconditional and
irrevocable under any and all circumstances, shall be made
without reduction for any set-off, counterclaim or other
deduction of any nature whatsoever, may not be terminated,
suspended or delayed for any reason whatsoever, shall not be
subject to any qualification or exception and shall be made in
accordance with the terms and conditions of this Agreement under
all circumstances, including any of the following circumstances:
(1) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents, (2) the existence of any claim,
setoff, defense or other right which the Borrower may have at any
time against a beneficiary named in a Bankers Acceptance, any
transferee of any Bankers Acceptance (or any Person for whom any
such transferee may be acting), the BA Issuer, any Lender or any
other Person, whether in connection with this Agreement, any
other Loan Document, any Bankers Acceptance, the transactions
contemplated in the Loan Documents or any unrelated transactions
(including any underlying transaction between the Borrower and
the beneficiary named in any such Bankers Acceptance), (3) any
draft, certificate or any other document issued or delivered in
connection with any Bankers Acceptance proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, (4)
the surrender or impairment of any collateral for the performance
or observance of any of the terms of any of the Loan Documents,
(5) the occurrence of any Default or Event of Default or (6) any
other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide
a right of setoff against, the Borrower's or such Lender's
obligations hereunder. The BA Issuer shall not have any liability
or responsibility by reason of or in connection with the creation
or transfer of any Bankers Acceptance or any payment or failure
to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or
relating to any Bankers Acceptance, any error in interpretation
of technical terms or any consequence arising from causes beyond
the control of the BA Issuer. The parties hereto expressly agree
that, in the absence of gross negligence or willful misconduct on
the part of the Issuer (as finally determined by a court of
competent jurisdiction), the BA Issuer shall be deemed to have
exercised care in each such determination.
Section 2.13 Cash Collateral Account
At, or at any time before, the time the Borrower shall
be required to make a deposit into the Cash Collateral Account,
the Administrative Agent shall establish and maintain at its
offices at One Wall Street, New York, New York in the name of
the Borrower but under the sole dominion and control of the
Administrative Agent, a cash collateral account (the "Cash
Collateral Account"). The Borrower may from time to time make
one or more deposits into the Cash Collateral Account and shall
from time to time make such deposits as are required by this
Agreement. The Borrower hereby pledges to the Administrative
Agent for the benefit of the Credit Parties, a Lien on and
security interest in the Cash Collateral Account and all sums at
any time and from time to time on deposit therein (the Cash
Collateral Account, together with all sums on deposit therein,
being sometimes hereinafter collectively referred to as the
"Cash Collateral"), as collateral security for the prompt
payment in full when due, whether at stated maturity, by
acceleration or otherwise, of the Obligations. The Borrower
shall, at any time and from time to time at its expense,
promptly execute and deliver to the Administrative Agent any
further instruments and documents, and take any further actions,
that may be necessary or that the Administrative Agent may
reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable
the Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Cash Collateral. The
Borrower shall not (i) sell or otherwise dispose of any of the
Cash Collateral, or (ii) create or permit to exist any Lien upon
any of the Cash Collateral. The Borrower hereby authorizes the
Administrative Agent, promptly after each drawing under any
Letter of Credit or Bankers Acceptance shall become due and
payable, to apply any and all cash on deposit in the Cash
Collateral Account towards the reimbursement of the Issuer or
the BA Issuer, as the case may be, for all sums paid in respect
of such drawing, and all other Obligations which shall then be
due and owing.
Section 2.14 Loans, Letters of Credit and Bankers
Acceptances under the Original Credit Agreement
On the Effective Date, the Lenders shall make such
sales and purchases of loans outstanding under the Original
Credit Agreement and participations in Existing Letters of Credit
and Existing Bankers Acceptances in proportion to their
respective Revolving Commitments so that after giving effect to
such sales and purchases, the Lenders shall hold Revolving Loans,
participations in each Letter of Credit and Bankers Acceptance in
the proportion its respective Revolving Commitment bears to the
aggregate Revolving Commitments on the Effective Date.
ARTICLE 3 INTEREST, FEES, YIELD PROTECTION, ETC.
Section 3.01 Interest
ABR Revolving Loans shall, in each case, bear interest
at the Alternate Base Rate plus the Applicable Margin.
Eurodollar Revolving Borrowings shall, in each case,
bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Borrowing plus the Applicable Margin.
Swing Line Loans shall, in each case, bear interest at
a rate per annum equal to the Swing Line Lender's cost of funds
in making such Swing Line Loan plus the Applicable Margin in
respect of Eurodollar Borrowings.
Notwithstanding the foregoing, if an Event of Default
has occurred and is continuing, then, so long as such Event of
Default is continuing, all principal of each Loan and each fee
and other amount then due and payable by the Borrower hereunder
shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of principal of any Loan, 2%
plus the rate otherwise applicable to such Loan as provided in
the preceding paragraphs of this Section or (ii) in the case of
any other amount, 2% plus the Alternate Base Rate plus the
Applicable Margin for ABR Loans.
Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan, provided
that (i) interest accrued pursuant to paragraph (d) of this
Section 3.01 shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
All interest hereunder shall be computed on the basis
of a year of 360 days, except that interest computed by reference
to the Alternate Base Rate at times when the Alternate Base Rate
is based on the Prime Rate shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and in each case
shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable
Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Administrative Agent, and such determination
shall be conclusive absent clearly demonstrable error.
Section 3.02 Interest Elections
Each Borrowing initially shall be of the Type specified
in the applicable Credit Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in
such Credit Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section 3.02.
The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the applicable
Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate
Borrowing. Notwithstanding the foregoing, Swing Line Loans shall
be solely ABR Borrowings and shall not be made or converted to
Eurodollar Borrowings.
To make an election pursuant to this Section 3.02, the
Borrower shall notify the Administrative Agent of such election
by telephone by the time that a Credit Request would be required
under Section 2.03 if the Borrower were requesting a Borrowing of
the Type resulting from such election to be made on the effective
date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by
hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.
Each telephonic and written Interest Election Request
shall specify the following information in compliance with
Section 2.02 and this Section 3.02:
the Borrowing to which such Interest Election
Request applies and, if different options are being elected
with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to
clauses (iii) and (iv) of this paragraph shall be specified
for each resulting Borrowing);
the effective date of the election made pursuant
to such Interest Election Request, which shall be a Business
Day;
whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto
after giving effect to such election, which shall be a
period contemplated by the definition of the term "Interest
Period".
If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the
Borrower shall be deemed to have selected an Interest Period of
one month's duration.
Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each applicable
Lender of the details thereof and of such Lender's portion of
each resulting Borrowing.
If the Borrower fails to deliver a timely Interest
Election Request prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period, such
Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing, (i)
no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.
Section 3.03 Fees
The Borrower agrees to pay to the Administrative Agent,
for the account of the Lenders in accordance with each Lender's
Commitment Percentage, a commitment fee (the "Commitment Fee"),
during the period from the Effective Date through the Revolving
Maturity Date at a rate per annum equal to the Fee Margin on the
average daily Available Revolving Commitment Amount. The
Commitment Fee shall be payable quarterly in arrears on the last
day of each March, June, September and December during such
period commencing on the first such day following the Effective
Date, on the date of any reduction in the Revolving Commitments
(to the extent of such reduction) and on the Revolving Maturity
Date.
The Borrower shall pay to the Administrative Agent, for
the account of the Lenders in accordance with each Lender's
Revolving Percentage, commissions (the "Letter of Credit Fees")
with respect to (i) commercial Letters of Credit for the period
from and including the date of issuance of each thereof through
the expiration date thereof, at a rate per annum equal to 1.00%
and (ii) standby Letters of Credit for the period from and
including the date of issuance of each thereof through the
expiration date thereof, at a rate per annum equal to the
Eurodollar Margin, in each case on the average daily maximum
amount available under any contingency to be drawn under such
Letter of Credit. The Letter of Credit Fees shall be payable
quarterly in arrears on the last Business Day of each March,
June, September and December of each year, commencing on the
first such day following the Effective Date, and on the date that
the Revolving Commitments shall expire. In addition to the
Letter of Credit Fees, the Borrower shall pay to the Issuer, for
its own account, its standard fees and charges customarily
charged to customers similar to the Borrower with respect to any
Letter of Credit.
The Borrower shall pay to the Administrative Agent, for
the account of the Lenders in accordance with each Lender's
Revolving Percentage, a fee (the "Bankers Acceptance Fee") with
respect to Bankers Acceptances for the period from and including
the date of creation of each thereof through the expiration date
thereof, at a rate per annum equal to the Eurodollar Margin, in
each case on the average daily maximum amount available under any
contingency to be drawn under such Bankers Acceptance. The
Bankers Acceptance Fee shall be payable quarterly in arrears on
the last Business Day of each March, June, September and December
of each year, commencing on the first such day following the
Effective Date, and on the date that the Revolving Commitments
shall expire. In addition to the Bankers Acceptance Fee, the
Borrower shall pay to the BA Issuer, for its own account, its
standard fees and charges customarily charged to customers
similar to the Borrower with respect to any Bankers Acceptance.
The Borrower shall pay to each Credit Party, for its
own account, fees and other amounts payable in the amounts and at
the times separately agreed upon between the Borrower and such
Credit Party.
Fees and other amounts paid shall not be refundable
under any circumstances. All commitment fees shall be computed
on the basis of a 360-day year for the actual number of days
elapsed (including the first day but excluding the last day).
Section 3.04 Alternate Rate of Interest
If prior to the commencement of any Interest Period for
a Eurodollar Borrowing:
the Administrative Agent determines (which
determination shall be conclusive absent manifest error)
that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period; or
the Administrative Agent is advised by any
applicable Lender that the Adjusted LIBO Rate or the LIBO
Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lender of
making or maintaining its Loan included in such Borrowing
for such Interest Period;
then the Administrative Agent shall give notice thereof to the
Borrower and the applicable Lenders by telephone or telecopy as
promptly as practicable thereafter and, until the Administrative
Agent notifies the Borrower and the applicable Lenders that the
circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurodollar
Borrowing shall be ineffective, and (ii) if any Credit Request
requests a Eurodollar Borrowing, such Borrowing shall be made as
an ABR Borrowing.
Section 3.05 Increased Costs; Illegality
If any Change in Law shall:
(i)impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any
Credit Party (except any such reserve requirement reflected in
the Adjusted LIBO Rate); or
(ii)impose on any Credit Party or the London in
terbank market any other condition affecting this Agreement, any
Eurodollar Loans made by such Credit Party or any participation
therein;
and the result of any of the foregoing shall be to increase the
cost (other than Excluded Taxes) to such Credit Party of making
or maintaining any Eurodollar Loan hereunder or to increase the
cost (other than Excluded Taxes) to such Credit Party or to
reduce the amount of any sum received or receivable by such
Credit Party hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Credit Party such
additional amount or amounts as will compensate such Credit Party
for such additional costs incurred or reduction suffered.
Failure to demand compensation pursuant to this Section shall not
constitute a waiver of such Credit Party's right to demand such
compensation.
If any Credit Party determines that any Change in Law
regarding capital requirements has or would have the effect of
reducing the rate of return on such Credit Party's capital or on
the capital of such Credit Party's holding company, if any, as a
consequence of this Agreement or the Extensions of Credit made by
such Credit Party to a level below that which such Credit Party
or such Credit Party's holding company could have achieved but
for such Change in Law (taking into consideration such Credit
Party's policies and the policies of such Credit Party's holding
company with respect to capital adequacy), then from time to time
the Borrower will pay to such Credit Party such additional amount
or amounts as will compensate such Credit Party or such Credit
Party's holding company for any such reduction suffered.
A certificate of a Credit Party setting forth the
amount or amounts necessary to compensate such Credit Party or
its holding company, as applicable, as specified in paragraphs
(a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay
such Credit Party the amount shown as due on any such certificate
within 15 days after receipt thereof.
Notwithstanding any other provision of this Agreement,
if, after the date of this Agreement, any Change in Law shall
make it unlawful for any Lender to make or maintain any
Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
such Lender may declare that Eurodollar Loans will
not thereafter (for the duration of such unlawfulness) be made by
such Lender hereunder (or be continued for additional Interest
Periods and ABR Loans will not thereafter (for such duration) be
converted into Eurodollar Loans), whereupon any request for a
Eurodollar Borrowing or to convert an ABR Borrowing to a
Eurodollar Borrowing or to continue a Eurodollar Borrowing, as
applicable, for an additional Interest Period shall, as to such
Lender only, be deemed a request for an ABR Loan (or a request to
continue an ABR Loan as such for an additional Interest Period or
to convert a Eurodollar Loan into an ABR Loan, as applicable),
unless such declaration shall be subsequently withdrawn; and
such Lender may require that all outstanding
Eurodollar Loans made by it be converted to ABR Loans, in which
event all such Eurodollar Loans shall be automatically converted
to ABR Loans, as of the effective date of such notice as provided
in the last sentence of this paragraph.
In the event any Lender shall exercise its rights under clauses
(i) or (ii) of this Section 3.05(d), all payments and prepayments
of principal that would otherwise have been applied to repay the
Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or
resulting from the conversion of, such Eurodollar Loans, as
applicable. For purposes of this Section 3.05(d), a notice to
the Borrower by any Lender shall be effective as to each
Eurodollar Loan made by such Lender, if lawful, on the last day
of the Interest Period currently applicable to such Eurodollar
Loan; in all other cases such notice shall be effective on the
date of receipt by the Borrower.
Section 3.06 Break Funding Payments
In the event of (a) the payment or prepayment
(voluntary or otherwise) of any principal of any Eurodollar Loan
other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan other than on the last day of
the Interest Period applicable thereto or (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan on the
date specified in any Credit Request or other notice delivered
pursuant Section 2.06, 2.08 or 3.02 (regardless of whether such
notice may be revoked under Section 2.08(e) and is revoked in
accordance therewith), then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense
attributable to such event. If such Credit Request or other
notice relates to a Eurodollar Loan (in all cases other than a
revocation permitted under Section 2.08(e)), such loss, cost or
expense to any Lender shall be deemed to include an amount
reasonably determined by such Lender to be the excess, if any, of
(i) the amount of interest that would have accrued on the
principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan,
for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would
have been the Interest Period for such Loan), over (ii) the
amount of interest that would accrue on such principal amount for
such period at the interest rate that such Lender would in good
faith bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled
to receive pursuant to this Section 3.06 shall be delivered to
the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any
such certificate within 15 days after receipt thereof.
Section 3.07 Taxes
Any and all payments by or on account of any obligation
of any Loan Party hereunder and under any other Loan Document
shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes, provided that, if such Loan
Party shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that, after making all required
deductions (including deductions applicable to additional sums
payable under this Section 3.07), the applicable Credit Party
receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Loan Party shall make such
deductions and (iii) such Loan Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance
with applicable law.
In addition, the Loan Parties shall pay any Other Taxes
to the relevant Governmental Authority in accordance with
applicable law.
Each Loan Party shall indemnify each Credit Party,
within ten days after receipt of written demand therefor
describing the amount and the basis in reasonable detail, for the
full amount of any Indemnified Taxes or Other Taxes paid by such
Credit Party on or with respect to any payment by or on account
of any obligation of such Loan Party under the Loan Documents
(including Indemnified Taxes or Other Taxes imposed or asserted
on or attributable to amounts payable under this Section 3.07)
and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability
delivered to the Borrower by a Credit Party, or by the
Administrative Agent on its own behalf or on behalf of a Credit
Party, shall be conclusive absent manifest error. Following any
indemnification pursuant to this Section 3.07(c), the applicable
Credit Party, at the request of the applicable Loan Party, shall
deliver to such Loan Party evidence of such payment reasonably
satisfactory to such Loan Party.
As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the
jurisdiction in which the relevant Loan Party is located, or any
treaty to which such jurisdiction is a party, with respect to
payments under the Loan Documents shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.
Any Credit Party that is not a Foreign Lender shall, at
the request of the Borrower, deliver to the Borrower (with a copy
to the Administration Agent) any documentation as will permit
payments to such Credit Party under the Loan Documents to be made
without withholding of Tax or at a reduced rate of Tax.
Section 3.08 Mitigation Obligations
If any Lender requests compensation under
Section 3.05, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 3.07, then such
Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans (or any
participation therein) hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation
or assignment (i) would eliminate or reduce amounts payable
pursuant to Sections 3.05 or 3.07, as applicable, in the future
and (ii) would not subject such Lender to any unreimbursed cost
or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs
and expenses incurred by any Lender in connection with any such
designation or assignment.
Section 3.09 Substitution of Lenders
If any Lender requests compensation under Section 3.05,
or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 3.07, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the
restrictions contained in Section 10.04), all its interests,
rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that (i)
the Borrower shall have received the prior written consent of the
Administrative Agent to such assignee, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts) and (iii) in the
case of any such assignment resulting from a claim for
compensation under Section 3.05 or payments required to be made
pursuant to Section 3.07, such assignment will result in a
reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Credit
Parties that:
Section 4.01 Organization; Powers
Each of the Borrower and each Subsidiary is duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as
now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is
qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required.
Section 4.02 Authorization; Enforceability
The Transactions are within the corporate, partnership
or other analogous powers of each of the Borrower and each
Subsidiary to the extent it is a party thereto and have been
duly authorized by all necessary corporate, partnership or
other analogous and, if required, equityholder action. Each
Loan Document has been duly executed and delivered by each
of the Borrower and each Subsidiary to the extent it is a
party thereto and constitutes a legal, valid and binding
obligation thereof, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting
creditors' rights generally.
Section 4.03 Governmental Approvals; No Conflicts
The Transactions (a) do not require any consent or
approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have
been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the
charter, by-laws or other organizational documents of the
Borrower or any of the Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a
default under any indenture, agreement or other instrument
binding upon the Borrower or any of the Subsidiaries or its
assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any of the
Subsidiaries, and (d) will not result in the creation or
imposition of any Lien on any asset of the Borrower or any
of the Subsidiaries (other than Liens permitted by
Section 7.02).
Section 4.04 Financial Condition; No Material Adverse
Change
The Borrower has heretofore furnished to the Credit
Parties: (i) the Consolidated balance sheet and statements of
income, stockholders' equity and cash flows of the Borrower as of
and for the fiscal year ended December 31, 2003, reported on by
Ernst & Young LLP, independent public accountants and (ii) the
Consolidated balance sheet and statement of income, stockholders'
equity and cash flows of the Borrower as of and for the fiscal
quarter ended March 31, 2004, prepared by the Borrower. The
financial statements referred to above present fairly, in all
material respects, the financial position and results of
operations and cash flows of the Persons referred to therein as
of such dates and for the indicated periods in accordance with
GAAP (subject, with respect to the interim financial statements,
to footnotes and normal year-end audit adjustments).
Since the dates of the financial statements referred to
in clause (ii) of Section 4.04(a), there has been no material
adverse change in the business, assets, operations, prospects or
condition, financial or otherwise, of the Borrower and the
Subsidiaries taken as a whole.
Section 4.05 Properties
Each of the Borrower and each Subsidiary has good title
to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for
their intended purposes.
Each of the Borrower and each Subsidiary owns, or is
entitled to use, all trademarks, trade names, copyrights, patents
and other intellectual property material to its business, and to
the knowledge of the Borrower the use thereof by the Borrower and
the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or
in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.
Section 4.06 Litigation and Environmental Matters
There are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, to
the knowledge of the Borrower, threatened against or affecting
the Borrower or any of the Subsidiaries (i) that, if adversely
determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the
Disclosed Matters) or (ii) that challenge the validity of any
Loan Document or the Transactions.
Except for the Disclosed Matters and except with
respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a
Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has, to
its knowledge, become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
There has been no change in the status of the Disclosed
Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse
Effect.
Section 4.07 Compliance with Laws and Agreements
Each of the Borrower and each Subsidiary is in
compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default
has occurred and is continuing.
Section 4.08 Investment and Holding Company Status
Neither the Borrower nor any of the Subsidiaries are
(a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b)
a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
Section 4.09 Taxes
Each of the Borrower and each Subsidiary has timely
filed (or validly extended) or caused to be filed (or
validly extended) all Tax returns and reports required to
have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except (a) Taxes that are
being contested in good faith by appropriate proceedings and
for which the Borrower or such Subsidiary, as applicable,
has set aside on its books adequate reserves or (b) to the
extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
Section 4.10 ERISA
Neither the Borrower nor any ERISA Affiliate of the
Borrower has any direct or contingent obligation or
liability under or in respect of any person or other
employee benefit plan which is subject to the provisions of
Title IV of ERISA which has, or would in the foreseeable
future have, in the judgment of the responsible officers of
the Borrower, a Material Adverse Effect.
Section 4.11 Disclosure
The Borrower has disclosed to the Credit Parties all
agreements, instruments and corporate or other restrictions
to which it or any of the Subsidiaries is subject, and all
other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a
Material Adverse Effect. No representation or warranty
contained in any Loan Document and no certificate or report
from time to time furnished by the Borrower or any of its
Subsidiaries in connection with the transactions
contemplated thereby, contains or will contain a
misstatement of material fact, or, to the best knowledge of
the Borrower, omits or will omit to state a material fact
required to be stated in order to make the statements
therein contained not misleading in the light of the
circumstances under which made, provided that any
projections or pro-forma financial information contained
therein are based upon good faith estimates and assumptions
believed by the Borrower to be reasonable at the time made,
it being recognized by the Lender that such projections as
to future events are not to be viewed as facts, and that
actual results during the period or periods covered thereby
may differ from the projected results.
Section 4.12 Subsidiaries
Schedule 4.12 sets forth the name of, and the ownership
interest of the Borrower in, each Subsidiary, in each case
as of the Effective Date.
Section 4.13 Insurance
Schedule 4.13 sets forth a description of all insurance
maintained by or on behalf of the Borrower and the
Subsidiaries as of the Effective Date. As of the Effective
Date, all premiums in respect of such insurance that are due
and payable have been paid.
Section 4.14 Labor Matters
As of the Effective Date, there are no strikes,
lockouts or slowdowns against the Borrower or any Subsidiary
pending or, to the knowledge of the Borrower, threatened.
The hours worked by and payments made to employees of the
Borrower and the Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such
matters, except where any such violations, individually and
in the aggregate, would not be reasonably likely to result
in a Material Adverse Effect. All material payments due
from the Borrower or any Subsidiary, or for which any claim
may be made against the Borrower or any Subsidiary, on
account of wages and employee health and welfare insurance
and other benefits, have been paid or accrued as a liability
on the books of the Borrower or such Subsidiary. The
consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part
of any union under any collective bargaining agreement to
which the Borrower or any Subsidiary is bound.
Section 4.15 Solvency
Immediately after the consummation of each Transaction,
(a) the fair value of the assets of the Borrower and the
Guarantors taken as a whole, at a fair valuation, will
exceed their debts and liabilities, subordinated, contingent
or otherwise; (b) the present fair saleable value of the
property of the Borrower and the Guarantors, taken as a
whole, will be greater than the amount that will be required
to pay the probable liability of their debts and other
liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c)
each of the Borrower and each Guarantor will be able to pay
its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and
matured; and (d) each of the Borrower and each Guarantor
will not have unreasonably small capital with which to
conduct the business in which it is engaged as such business
is now conducted and is proposed to be conducted following
such date.
Section 4.16 Federal Reserve Regulations
Neither the Borrower nor any of the Subsidiaries are
engaged principally, or as one of their important activities, in
the business of extending credit for the purpose of buying or
carrying Margin Stock.
No part of the proceeds of any Loan will be used,
whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase, acquire or carry any
Margin Stock or for any purpose that entails a violation of, or
that is inconsistent with, the provisions of the regulations of
the Board, including Regulation T, U or X.
Section 4.17 Security Documents
The Security Agreement continues to create in favor of
the Administrative Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Security Agreement) and the
Security Agreement (together with all financing statements and
other appropriate filings or recordations made in connection with
the execution and delivery of the Security Agreement) constitutes
a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in such Collateral,
in each case prior and superior in right to any other Person,
other than with respect to Liens expressly permitted by
Section 7.02.
ARTICLE 5 CONDITIONS
Section 5.01 Effective Date
This Agreement shall not become effective until the
date on which each of the following
conditions is satisfied (or waived in
accordance with Section 10.02):
The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this
Agreement.
The Administrative Agent shall have received a
Revolving Note for each Lender, and the Swing Line Note for the
Swing Line Lender, each signed on behalf of the Borrower.
The Administrative Agent shall have received a
counterpart of the Guarantee Reaffirmation signed on behalf of
each Guarantor.
The Administrative Agent shall have received
counterparts of the Security Agreement Reaffirmation signed on
behalf of the Borrower and each Guarantor party thereto, together
with the following:
any stock certificates or other instruments
representing the Pledged Equity owned by or on behalf of any
Loan Party as of the Effective Date (not previously
delivered to the Administrative Agent);
any promissory notes and other instruments
evidencing the Pledged Debt owed or owing to any Loan Party
as of the Effective Date (not previously delivered to the
Administrative Agent);
stock powers and instruments of transfer, endorsed
in blank, with respect to such stock certificates,
promissory notes and other instruments;
all instruments and other documents, including
Uniform Commercial Code financing statements, required by
law or reasonably requested by the Administrative Agent to
be filed, registered or recorded to create or perfect (or
continue the perfection of) the Liens intended to be created
under the Security Agreement; and
a completed Perfection Certificate, dated the
Effective Date and signed by a Vice President or a Financial
Officer of the Borrower, together with all attachments
contemplated thereby.
The Administrative Agent shall have received a
favorable written opinion (addressed to the Credit Parties and
dated the Effective Date) from Rivkin Radler LLP, on behalf of
the Loan Parties, substantially in the form of Exhibit B and
covering such other matters relating to the Loan Parties, the
Loan Documents or the Transactions as the Required Lenders shall
reasonably request. The Borrower hereby requests such counsel to
deliver such opinion.
The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization,
existence and good standing of each Loan Party, the authorization
of the Transactions and any other legal matters relating to the
Loan Parties, the Loan Documents or the Transactions, all in form
and substance satisfactory to the Administrative Agent and its
counsel.
The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by a Financial
Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 5.02.
The Administrative Agent shall have received all fees
and other amounts due and payable on or prior to the Effective
Date, including, to the extent invoiced, reimbursement or payment
of all out-of-pocket expenses required to be reimbursed or paid
by the Borrower hereunder.
The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 6.10 is
in effect.
The performance by each Loan Party of its obligations
under each Loan Document shall not (i) violate any applicable
law, statute, rule or regulation or (ii) conflict with, or result
in a default or event of default under, any material agreement of
any Loan Party, and the Administrative Agent shall have received
one or more legal opinions and/or officer's certificates to such
effect, satisfactory to the Administrative Agent.
The Lenders shall be reasonably satisfied as to the
amount and nature of any environmental and employee health and
safety exposures to which the Borrower and the Subsidiaries may
be subject, and with the plans of the Borrower with respect
thereto.
The Lenders shall be reasonably satisfied (i) that
there shall be no litigation or administrative proceeding, or
regulatory development, that would reasonably be expected to have
a material adverse effect on (a) the business, assets,
operations, prospects, condition (financial or otherwise) or
material agreements of the Borrower and the Subsidiaries, (b) the
ability of any Loan Party to perform any of its obligations under
any Loan Document or (c) the rights of or benefits available to
any Credit Party under any Loan Document and (ii) with the
current status of, and the terms of any settlement or other
resolution of, any litigation or other proceedings brought
against the Borrower or any Subsidiary.
After giving effect to the Transactions, none of the
Borrower or any of the Subsidiaries shall have outstanding any
shares of preferred equity securities or any Indebtedness, other
than (i) Indebtedness incurred under the Loan Documents and (ii)
Indebtedness set forth on Schedule 7.01.
The Lenders shall be reasonably satisfied that no
material adverse change or material adverse condition in the
business, assets, operations, properties, condition (financial or
otherwise), liabilities (including contingent liabilities),
prospects or material agreements of the Borrower and the
Subsidiaries has occurred since December 31, 2003.
The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by a Financial
Officer of the Borrower, setting forth reasonably detailed
calculations demonstrating compliance with Section 7.12 on a pro
forma basis as of the Effective Date, immediately after giving
effect to the Transactions.
The Administrative Agent shall have received an updated
title report on the Designated Real Property as of a date not
more than 60 days prior to the Effective Date prepared by
Advantage Title Agency, Inc., Huntington, New York.
The Administrative Agent shall notify the Borrower and the Credit
Parties of the Effective Date, and such notice shall be
conclusive and binding. Notwithstanding the foregoing, the
obligations of the Lenders to make Extensions of Credit hereunder
shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.02) at
or prior to 3:00 p.m., New York City time, on August 15, 2004
(and, in the event such conditions are not so satisfied or
waived, the Revolving Commitments shall terminate at such time).
Section 5.02 Each Extension of Credit
The obligation of each Lender to make an Extension of
Credit is subject to the satisfaction of the following
conditions:
The representations and warranties of each Loan Party
set forth in each Loan Document shall be true and correct in all
material respects on and as of the date of such Extension of
Credit, except to the extent such representations and warranties
relate to an earlier date.
At the time of and immediately after giving effect to
such Extension of Credit, no Default shall have occurred and be
continuing.
The Administrative Agent shall have received such other
documentation and assurances as shall be reasonably required by
it in connection with such Extension of Credit.
Each Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower on the date thereof
as to the matters specified in paragraphs (a) and (b) of this
Section 5.02.
ARTICLE 6 AFFIRMATIVE COVENANTS
Until the Revolving Commitments have expired or been
terminated and the principal of and interest on each Extension of
Credit, all Reimbursement Obligations, all BA Obligations and all
fees and other amounts (other than contingent indemnity
obligations) payable under the Loan Documents shall have been
paid in full, the Borrower covenants and agrees with the Lenders
that:
Section 6.01 Financial Statements and Other Information
The Borrower will furnish to the Administrative Agent
and each Lender:
within 90 days after the end of each fiscal year, the
audited Consolidated balance sheet and related statements of
income, stockholders' equity and cash flows of the Borrower and
the Subsidiaries as of the end of and for such year, setting
forth in each case in comparative form the figures for the
previous fiscal year, all reported on by independent public
accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of
operations of the Borrower and the Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, the Consolidated balance
sheets and related statements of income and cash flows of the
Borrower and the Subsidiaries as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for
the corresponding fiscal quarter end, and period or periods, of
the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and
the Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit
adjustments;
concurrently with any delivery of financial statements
under clauses (a) or (b) of this Section 6.01, a certificate of a
Financial Officer of the Borrower (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken
with respect thereto, (ii) setting forth (A) reasonably detailed
calculations demonstrating compliance with Sections 7.12, 7.13
and 7.14 and (B) any change in the Guarantors as of the date of
such certificate and (iii) stating whether any change in GAAP or
in the application thereof has occurred since the date of the
financial statements referred to in Section 4.04(a) and, if any
such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate;
promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and
other materials filed by the Borrower or any Subsidiary with the
Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of the Securities and
Exchange Commission, or with any national securities exchange, or
distributed by the Borrower or any Subsidiary to its shareholders
generally, as the case may be, and delivery by the Borrower of
its (i) Annual Report on Form 10-K for each fiscal year of the
Borrower containing financial statements reported on in a manner
acceptable to the Securities and Exchange Commission by
independent public accountants of recognized national standing
and (ii) report on Form 10-Q for each of the first three fiscal
quarters of each fiscal year of the Borrower with the financial
statements contained therein certified by one of its Financial
Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and
the Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit
adjustments, in each case within the time periods prescribed by
Section 6.01(a) or 6.01(b), respectively, shall be deemed to
satisfy the requirements of Section 6.01(a) or 6.01(b), as the
case may be; and
promptly following any request therefor, such other
information regarding the operations, business affairs and
financial condition of the Borrower or any Subsidiary, or
compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may reasonably request.
Section 6.02 Notices of Material Events
The Borrower will furnish to the Administrative Agent
and each Lender prompt written notice of the following:
the occurrence of any Default;
the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Borrower or any Affiliate thereof that,
if adversely determined, could in the good faith opinion of the
Borrower reasonably be expected to result in a Material Adverse
Effect;
the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and
the Subsidiaries in an aggregate amount exceeding $500,000; and
any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 6.02 shall be
accompanied by a statement of a Financial Officer or other
executive officer of the Borrower setting forth the details of
the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.
Section 6.03 Existence; Conduct of Business
The Borrower will, and will cause each of the
Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its
legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its
business, provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted
under Section 7.03.
Section 6.04 Payment of Obligations
The Borrower will, and will cause each of the
Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material
Adverse Effect before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings,
(b) the Borrower or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a
Material Adverse Effect.
Section 6.05 Maintenance of Properties
The Borrower will, and will cause each of the
Subsidiaries to, keep and maintain all property material to
the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
Section 6.06 Books and Records; Inspection Rights
The Borrower will, and will cause each of the
Subsidiaries to, keep, in all material respects, proper
books of record and account in which full, true and correct
entries are made of all dealings and transactions in
relation to its business and activities. The Borrower will,
and will cause each of the Subsidiaries to, permit any
representatives designated by the Administrative Agent or
any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants,
all at such reasonable times during normal business hours
and as often as reasonably requested. Each Credit Party and
its agents may enter upon any of the Borrower's or any
Subsidiary's premises (prior to the occurrence of an Event
of Default, upon reasonable notice) at any time during
business hours and at any other reasonable time, and, from
time to time, for the purpose of inspecting the Collateral
and any and all records pertaining thereto and the operation
of the Borrower's or such Subsidiary's business.
Section 6.07 Compliance with Laws
The Borrower will, and will cause each of the
Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or
its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
Section 6.08 Use of Proceeds
The proceeds of the Loans will be used only to finance
Capital Expenditures and Acquisitions and for working
capital and general corporate purposes not inconsistent with
the terms hereof. No part of the proceeds of any Loan will
be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase,
acquire or carry any Margin Stock or for any purpose that
entails a violation of any of the regulations of the Board,
including Regulations T, U and X.
Section 6.09 Notice of Certain Changes
The Borrower will furnish to the Administrative Agent
prompt written notice of any change in (i) the legal name of
any Loan Party or in any trade name used to identify it in
the conduct of its business or in the ownership of its
properties, (ii) the jurisdiction of organization or the
location of the chief executive office of any Loan Party,
its principal place of business, any office in which it
maintains its books or records, (iii) the identity or
organizational structure of any Loan Party or (iv) the
organizational identification number or the Federal Taxpayer
Identification Number of any Loan Party.
Section 6.10 Insurance
The Borrower will, and will cause each of the
Subsidiaries to, maintain, with financially sound and
reputable insurance companies, (i) adequate insurance for
its insurable properties, all to such extent and against
such risks, including fire, casualty, business interruption
and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses
operating in the same or similar locations and (ii) such
other insurance as is required pursuant to the terms of any
Security Document.
Section 6.11 Additional Subsidiaries
If any Subsidiary organized under the laws of the
United States of America or any state thereof is formed or
acquired after the Effective Date, the Borrower will notify
the Administrative Agent and the Lenders in writing thereof
within five Business Days after the date on which such
Subsidiary is formed or acquired and (i) the Borrower will
cause such Subsidiary to (A) execute and deliver the
Guarantee Agreement (or otherwise become a party thereto in
the manner provided therein) and (B) become a party to each
applicable Security Document in the manner provided therein,
in each case within five Business Days after the date on
which such Subsidiary is formed or acquired, and (ii)
promptly take such actions to create and perfect Liens on
such Subsidiary's assets to secure the Obligations as the
Administrative Agent or the Required Lenders shall
reasonably request and (b) if any equity securities issued
by any such Subsidiary are owned or held by or on behalf of
the Borrower or any Subsidiary or any loans, advances or
other debt is owed or owing by any such Subsidiary to the
Borrower or any Subsidiary, the Borrower will cause such
equity securities and promissory notes and other instruments
evidencing such loans, advances and other debt to be pledged
pursuant to the Security Agreement within five Business Days
after the date on which such Subsidiary is formed or
acquired.
Section 6.12 Information Regarding Collateral
The Borrower will furnish to the Administrative Agent
prompt written notice of any change in (i) the legal name of any
Loan Party, (ii) the jurisdiction of organization of any Loan
Party, (iii) the location of the chief executive office of any
Loan Party, its principal place of business, any office in which
it maintains books or records relating to Collateral owned or
held by it or on its behalf or any office or facility at which
Collateral owned or held by it or on its behalf is located
(including the establishment of any such new office or facility),
(iv) the identity or organizational structure of any Loan Party
such that a filed financing statement becomes misleading or (v)
the organizational identification number or the Federal Taxpayer
Identification Number of any Loan Party. The Borrower shall not
effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial
Code or otherwise that are required in order for the
Administrative Agent to continue at all times following such
change to have a valid, legal and perfected security interest in
all the Collateral. The Borrower shall promptly notify the
Administrative Agent if any material portion of the Collateral is
damaged or destroyed.
Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to
Section 6.01(a), the Borrower shall deliver to the Administrative
Agent a certificate of a Financial Officer of the Borrower, (i)
setting forth the information required pursuant to Sections 1, 2,
4, 5 and 6 of the Perfection Certificate or confirming that there
has been no change in such information since the date of the
Perfection Certificate or the date of the most recent certificate
delivered pursuant to this Section and (ii) certifying that the
Loan Parties are in compliance with all of the terms of the
Security Agreement.
Section 6.13 Casualty and Condemnation
The Borrower will furnish to the Administrative Agent
and the Lenders prompt written notice of any casualty or other
insured damage to any portion of any Collateral or the
commencement of any action or proceeding for the taking of any
Collateral or any part thereof or interest therein under power of
eminent domain or by condemnation or similar proceeding.
If any event described in Section 6.13(a) results in
Net Proceeds (whether in the form of insurance proceeds,
condemnation award or otherwise), the Administrative Agent is
authorized to collect such Net Proceeds and, if received by the
Borrower or any Subsidiary, such Net Proceeds shall be paid over
to the Administrative Agent, provided that (i) to the extent that
the Borrower or such Subsidiary intends to use any such Net
Proceeds to repair, restore, reinvest or replace assets of the
Borrower or such Subsidiary as provided in the proviso to Section
2.08(b), the Administrative Agent shall, subject to the provision
of such proviso, deliver such Net Proceeds to the Borrower or the
applicable Subsidiary, (ii) otherwise, the Administrative Agent
shall, and the Borrower and the Subsidiaries hereby authorize the
Administrative Agent to, apply such Net Proceeds, to the extent
that they are Net Proceeds, to prepay the Loans in accordance
with Section 2.08 and (iii) all proceeds of business interruption
insurance shall be paid over to the Borrower unless a Default has
occurred and is continuing.
If any Net Proceeds retained by or paid over to the
Administrative Agent as provided in Section 6.13(b) continue to
be held by the Administrative Agent on the date that is 365 days
after the receipt of such Net Proceeds, then such Net Proceeds
shall be applied to prepay Borrowings as provided in
Section 2.08.
Section 6.14 Further Assurances
The Borrower will, and will cause each Subsidiary to,
execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions
(including the filing and recording of financing statements,
fixture filings, and other documents), that may be required under
any applicable law, or which the Administrative Agent or the
Required Lenders may reasonably request, to effectuate the
transactions contemplated by the Loan Documents or to grant,
preserve, protect or perfect the Liens created or intended to be
created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Borrower. The Borrower
shall provide to the Administrative Agent, from time to time upon
request, evidence reasonably satisfactory to the Administrative
Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.
If any material assets are acquired by the Borrower or
any Subsidiary after the Effective Date (other than assets
constituting Collateral under the Security Agreement that become
subject to the Lien of the Security Agreement upon acquisition
thereof), the Borrower will notify the Administrative Agent and
the Lenders thereof, and, if requested by the Administrative
Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and
will take, and cause the Subsidiaries to take, such actions as
shall be necessary or reasonably requested by the Administrative
Agent to grant and perfect such Liens, including actions
described in Section 6.14(a), all at the expense of the Borrower.
The Administrative Agent, promptly at the direction of
the Required Lenders by notice to the Administrative Agent, shall
file the Security Agreement (or any other instrument or agreement
of assignment that the Administrative Agent may reasonably
request) in the United States Patent and Trademark Office and the
United States Copyright Office.
ARTICLE 7 NEGATIVE COVENANTS
Until the Revolving Commitments have expired or been
terminated and the principal of and interest on each Extension of
Credit, all Reimbursement Obligations, all BA Obligations and all
fees and other amounts (other than contingent liability
obligations) payable under the Loan Documents shall have been
paid in full, the Borrower covenants and agrees with the Lenders
that:
Section 7.01 Indebtedness
The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
Indebtedness under the Loan Documents;
Indebtedness existing on the Effective Date and
set forth in Schedule 7.01, including any extensions,
renewals or replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof;
Indebtedness incurred to finance the acquisition,
construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the
acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase
the outstanding principal amount thereof, provided that (A)
such Indebtedness is incurred prior to or within 90 days
after such acquisition or the completion of such
construction or improvement and (B) the aggregate principal
amount of Indebtedness permitted by this clause (iii) shall
not exceed $5,000,000 at any time outstanding;
Indebtedness of any Person that becomes a
Subsidiary after the Effective Date, provided that (A) such
Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary and (B)
the aggregate principal amount of Indebtedness permitted by
this clause (iv) shall not exceed $3,000,000 at any time
outstanding;
Indebtedness of a Subsidiary to any other
Subsidiary and of any Subsidiary to the Borrower; and
other unsecured Indebtedness in an aggregate
principal amount not exceeding $2,000,000 at any time
outstanding.
The Borrower will not, and it will not permit any
Subsidiary to, (i) (A) issue any preferred equity securities that
constitute Redeemable Securities, (B) issue any Capital Stock
which is convertible into Redeemable Securities, (C) grant any
options, warrants or other rights to purchase or otherwise
acquire Redeemable Securities or (D) enter into any put or other
contractual arrangement which shall provide to any holder of
Capital Stock rights substantially similar to any of the
foregoing, or (ii) be or become liable in respect of any
obligation (contingent or otherwise) to purchase, redeem, retire,
acquire or make any other payment in respect of any shares of
equity securities of the Borrower or any Subsidiary or any
option, warrant or other right to acquire any such shares of
equity securities, except as permitted by Section 7.08.
Section 7.02 Liens
The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
Permitted Encumbrances;
any Lien on any property or asset of the Borrower or
any Subsidiary existing on the Effective Date and set forth in
Schedule 7.02, provided that (i) such Lien shall not apply to any
other property or asset of the Borrower or any Subsidiary and
(ii) such Lien shall secure only those obligations which it
secures on the date hereof and any extensions, renewals and
replacements thereof that do not increase the outstanding
principal amount thereof;
any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing
on any property or asset of any Person that becomes a Subsidiary
after the Effective Date prior to the time such Person becomes a
Subsidiary, provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition of such
Person becoming a Subsidiary, as applicable, (ii) such Lien shall
not apply to any other property or assets of the Borrower or any
Subsidiary and (iii) such Lien shall secure only those
obligations that it secures on the date of such acquisition or
the date such Person becomes a Subsidiary, as applicable, and any
extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
Liens on fixed or capital assets acquired, constructed
or improved by the Borrower or any Subsidiary, provided that (i)
such security interests secure Indebtedness permitted by clause
(iii) of Section 7.01(a), (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90
days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured
thereby does not exceed the cost of acquiring, constructing or
improving such fixed or capital assets and (iv) such security
interests shall not apply to any other property or assets of the
Borrower or any Subsidiary;
possessory Liens in favor of lessees or sublessees of
property leased or subleased by the Borrower or any Subsidiary to
such Person in the ordinary course of business of the Borrower or
such Subsidiary, provided that such Liens attach only to such
property and
Liens created under the Security Documents.
Section 7.03 Fundamental Changes
The Borrower will not, and will not permit any
Subsidiary to, merge into or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially
all of its assets, or all or substantially all of the equity
securities of any of the Subsidiaries (in each case, whether now
owned or hereafter acquired), or liquidate or dissolve, except
that, if at the time thereof and immediately after giving effect
thereto, no Default shall have occurred and be continuing:
any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving entity,
and any Subsidiary may merge into any other Subsidiary;
any Subsidiary may merge with any Person in a
transaction that is not permitted by clause (i) of this
Section 7.03(a), provided that such merger is permitted by
Section 7.04 or 7.05, as applicable, and the surviving
entity of such merger complies with the provisions of
Section 6.11;
any Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to the Borrower or to any
other Subsidiary; and
any Subsidiary may sell, transfer, lease or
otherwise dispose of its assets in a transaction that is not
permitted by clause (iii) of this Section 7.03(a), provided
that such sale, transfer, lease or other disposition is also
permitted by Section 7.05.
The Borrower will not, and will not permit any of the
Subsidiaries to, engage to any material extent in any business
other than businesses of the type conducted by the Borrower and
the Subsidiaries on the Effective Date and businesses or
activities that are substantially similar, related or incidental
thereto.
Section 7.04 Investments, Loans, Advances, Guarantees and
Acquisitions
The Borrower will not, and will not permit any of the
Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger) any Capital Stock, evidences of
Indebtedness or other securities (including any option,
warrant or other right to acquire any of the foregoing) of,
make or permit to exist any loans or advances to, Guarantee
any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a
series of transactions (including pursuant to any merger))
any assets of any other Person constituting a business unit,
or purchase, hold or acquire any "derivative" (other than a
Hedging Agreement permitted by Section 7.07), except:
Permitted Investments;
investments existing on the Effective Date and
set forth in Schedule 7.04;
investments made by the Borrower in the equity
securities of the Subsidiaries; provided that any such
equity securities owned by the Borrower shall become
Pledged Equity pursuant to the Security Agreement;
investments made by a Subsidiary in the equity
securities of any other Subsidiary; provided that any such
equity securities owned by such Subsidiary shall become
Pledged Equity pursuant to the Security Agreement;
loans or advances made by any Subsidiary to any
other Subsidiary; provided that (i) any such loans or
advances constituting Pledged Debt shall be evidenced by a
promissory note which shall be pledged pursuant to the
Security Agreement and (ii) the aggregate amount of all
loans and advances made by the Borrower and the Domestic
Subsidiaries to all Subsidiaries that are not a Domestic
Subsidiary shall not exceed $3,000,000 at any time
outstanding;
loans or advances made by the Borrower to any
Subsidiary; provided that (i) any such loans or advances
constituting Pledged Debt shall be evidenced by a
promissory note which shall be pledged pursuant to the
Security Agreement and (ii) the aggregate amount of all
loans and advances made by the Borrower and the Domestic
Subsidiaries to all Subsidiaries that are not a Domestic
Subsidiary shall not exceed $3,000,000 at any time
outstanding;
acquisitions made by any Subsidiary from any
other Subsidiary;
acquisitions made by the Borrower from any
Subsidiary;
Permitted Acquisitions by the Borrower or any
Subsidiary; provided that the Borrower shall have delivered
to the Administrative Agent and the Lenders not less than
10 Business Days prior to the consummation of any such
Permitted Acquisition a certificate of a Financial Officer
of the Borrower in form and substance satisfactory to the
Administrative Agent and the Required Lenders evidencing
projected pro forma compliance with Sections 7.12, 7.13 and
7.14 after giving effect to such Permitted Acquisition for
the period from the date of such Permitted Acquisition to
the Revolving Maturity Date;
Indebtedness permitted to be incurred pursuant to
Section 7.01(a);
investments made by the Borrower or any
Subsidiary in any new Subsidiary of the Borrower or any
Subsidiary (including, without limitation, a new Subsidiary
acquired in connection with a Permitted Acquisition);
provided, that after giving effect to such investment the
aggregate stockholders' equity of all direct or indirect
non-wholly-owned Subsidiaries of the Borrower is not
greater than 10% of the Consolidated stockholders' equity
of the Borrower determined in accordance with GAAP on a
basis consistent with the financial statements delivered
pursuant to Section 6.01(a);
other investments in an aggregate amount not to
exceed $500,000.
Section 7.05 Asset Sales
The Borrower will not, and will not permit any of the
Subsidiaries to, sell, transfer, lease or otherwise dispose
(including pursuant to a merger) of any asset, including any
equity securities, nor will the Borrower permit any of the
Subsidiaries to issue any additional shares of its equity
securities, except:
sales, transfers and other dispositions of
inventory, used or surplus equipment, intellectual property
and Permitted Investments, in each case in the ordinary
course of business;
sales, transfers, leases and other dispositions
made by any Subsidiary to any other Subsidiary; and
sales, transfers, leases and other dispositions
made by the Borrower to any Subsidiary.
Section 7.06 Sale and Lease-Back Transactions
The Borrower will not, and will not permit any of the
Subsidiaries to, enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in
its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
Section 7.07 Hedging Agreements
The Borrower will not, and will not permit any of the
Subsidiaries to, enter into any Hedging Agreement, other
than Hedging Agreements entered into in the ordinary course
of business to hedge or mitigate risks to which the Borrower
or any Subsidiary is exposed in the conduct of its business
or the management of its liabilities.
Section 7.08 Restricted Payments
The Borrower will not, and will not permit any
of the Subsidiaries to, declare or make, or agree to pay for
or make, directly or indirectly, any Restricted Payment,
except that (a) the Borrower may (i) declare and pay
dividends with respect to its equity securities payable (1)
in additional shares of its equity securities or (2) in cash
and (ii) repurchase shares of its common stock in open
market transactions; provided that, (x) after giving effect
to any such payment of dividends or repurchase of common
stock, the Fixed Charge Coverage Ratio, calculated on a pro
forma basis as if such dividends or stock repurchases had
been made on the last day of the most recently ended fiscal
quarter of the Borrower, shall not be less than the amount
set forth in Section 7.13 with respect to such fiscal
quarter and (y) before and after giving effect to such
dividends or repurchase no Default shall exist or result
therefrom and (b) any Subsidiary may declare and pay
dividends to the Borrower or any other Subsidiary.
Section 7.09 Transactions with Affiliates
The Borrower will not, and will not permit any of the
Subsidiaries to, sell, transfer, lease or otherwise dispose
(including pursuant to a merger) any property or assets to,
or purchase, lease or otherwise acquire (including pursuant
to a merger) any property or assets from, or otherwise
engage in any other transactions with, any of its
Affiliates, except at prices and on terms and conditions not
less favorable to the Borrower or such Subsidiary than could
be obtained on an arms-length basis from unrelated third
parties, provided that this Section shall not apply to any
transaction that is permitted under Sections 7.01, 7.03,
7.04, 7.05 or 7.08 between or among the Loan Parties and not
involving any other Affiliate.
Section 7.10 Restrictive Agreements
The Borrower will not, and will not permit any of the
Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Subsidiary to create, incur
or permit to exist any Lien upon any of its property or
assets or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any shares of its
equity securities or to make or repay loans or advances to
the Borrower or any other Subsidiary or to Guarantee
Indebtedness of the Borrower or any other Subsidiary,
provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this
Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the Effective Date
identified on Schedule 7.10 (but shall apply to any
extension or renewal of, or any amendment or modification
expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided that
such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted
hereunder, (iv) clause (a) of this Section 7.10 shall not
apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement
if such restrictions or conditions apply only to the
property or assets securing such Indebtedness and (v) clause
(a) of this Section 7.10 shall not apply to customary
provisions in leases restricting the assignment thereof.
Section 7.11 Amendment of Material Documents
The Borrower will not, and will not permit any
Subsidiary to, amend, modify or waive any of its rights
under its certificate of incorporation, by-laws or other
organizational documents, other than immaterial amendments,
modifications or waivers that would not reasonably be
expected to adversely affect the Credit Parties.
Section 7.12 Leverage Ratio
The Borrower will not permit the Leverage Ratio at any
time to be greater than 3.00 to 1.00.
Section 7.13 Fixed Charge Coverage Ratio
The Borrower will not permit the Fixed Charge
Coverage Ratio as of the end of any fiscal quarter to be
less than 1.20 to 1.00.
Section 7.14 Net Worth
The Borrower will not permit Consolidated Net Worth
at any time to be less than the sum of (i) 85% of
Consolidated Net Worth as set forth on the financial
statements referred to in clause (ii) of Section 4.04(a),
(ii) 50% of the Borrower's Consolidated net income (if
positive) for each fiscal quarter commencing April 1, 2004
to such date of determination and (iii) 75% of any increase
to Consolidated Net Worth resulting from any equity issuance
by the Borrower or any of its Subsidiaries.
Section 7.15 Prepayments of Indebtedness
The Borrower will not, and shall not permit any
Subsidiary to, pay or obligate itself to prepay any
Indebtedness (other than Indebtedness under the Loan
Documents).
ARTICLE 8 EVENTS OF DEFAULT
Section 8.01 Events of Default
Each of the following events shall constitute an
"Event of Default":
the Borrower shall fail (i) to pay any principal of any
Loan or in respect of any BA Obligation or any Reimbursement
Obligation when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise or (ii) make any deposit into the Cash
Collateral Account when required hereby; or
the Borrower shall fail to pay any interest on any
Extension of Credit or any fee, commission or any other amount
(other than an amount referred to in clause (a) of this Section
8.01) payable under any Loan Document, when and as the same shall
become due and payable, and such failure shall continue
unremedied for a period of three Business Days; or
any representation or warranty made or deemed made by
or on behalf of any Loan Party in or in connection with any Loan
Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with any
Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material
respect when made or deemed made; or
the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Sections 6.02,
6.03, 6.08, 6.11, 6.12, 6.13 or 6.14 or in Article 7; or
any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document
to which it is a party (other than those specified in clauses
(a), (b) or (d) of this Section 8.01), and such failure shall
continue unremedied for a period of 30 days after such Loan Party
shall have obtained knowledge thereof; or
the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the
same shall become due and payable (after giving effect to any
applicable grace period); or
any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits the holder or holders of any
Material Indebtedness or any trustee or agent on its or their
behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity, provided that this
clause (g) shall not apply to secured Indebtedness that becomes
due solely as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness; or
an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Guarantor or its debts, or of a substantial part of its assets,
under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii)
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Guarantor
or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the
foregoing shall be entered; or
the Borrower or any Guarantor shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law now
or hereafter in effect, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Section
8.01, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Guarantor or for a
substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting
any of the foregoing; or
the Borrower or any Guarantor shall become unable,
admit in writing its inability or fail generally to pay its debts
as they become due; or
one or more judgments for the payment of money in an
aggregate amount in excess of $1,000,000 shall be rendered
against the Borrower or any Guarantor or any combination thereof
and the same shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any
assets of the Borrower or any Guarantor to enforce any such
judgment; or
an ERISA Event shall have occurred that, in the
judgment of the Required Lenders reasonably exercised, when taken
together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect; or
any Loan Document shall cease, for any reason, to be
in full force and effect, or any Loan Party shall so assert in
writing or shall disavow any of its obligations thereunder; or
any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan
Party not to be, a valid and perfected Lien on any Collateral,
with the priority required by the applicable Security Document;
or
a Change in Control shall occur.
Section 8.02 Contract Remedies
Upon the occurrence of an Event of Default or at any
time thereafter during the continuance
thereof,
in the case of an Event of Default specified in Section
8.01(h) or 8.01(i), without declaration or notice to the
Borrower, the Revolving Commitments (including the Letter of
Credit Commitment and the Bankers Acceptance Commitment) shall
immediately and automatically terminate, and the Loans, all
accrued and unpaid interest thereon and all other amounts owing
under the Loan Documents shall immediately become due and
payable, and
in all other cases, upon the direction of the Required
Lenders, the Administrative Agent shall, by notice to the
Borrower, declare all of the Revolving Commitments (including the
Letter of Credit Commitment and the Bankers Acceptance
Commitment) to be terminated forthwith, whereupon such Revolving
Commitments (including the Letter of Credit Commitment and the
Bankers Acceptance Commitment) shall immediately terminate, or
declare the Loans, all accrued and unpaid interest thereon and
all other amounts owing under the Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become
due and payable.
In the event that the Loans, all accrued and unpaid interest
thereon and all other amounts owing under the Loan Documents
shall have been declared due and payable pursuant to the
provisions of this Section 8.02, (i) the Administrative Agent (A)
upon the direction of the Required Lenders, shall proceed to
enforce the rights of the holders of the Notes, the BA
Obligations and the Reimbursement Obligations by suit in equity,
action at law and/or other appropriate proceedings, whether for
payment or the specific performance of any covenant or agreement
contained in the Loan Documents and (B) may exercise any and all
rights and remedies provided to the Administrative Agent by the
Loan Documents and (ii) the Borrower shall deposit in the Cash
Collateral Account Cash Collateral in an amount equal to the sum
of (x) the Bankers Acceptance Exposure and (y) the Letter of
Credit Exposure after giving effect to all payments required
under this Section 8.02. Except as otherwise expressly provided
in the Loan Documents, the Borrower expressly waives presentment,
demand, protest and all other notices of any kind in connection
with the Loan Documents. The Borrower hereby further expressly
waives and covenants not to assert any appraisement, valuation,
stay, extension, redemption or similar laws, now or at any time
hereafter in force which might delay, prevent or otherwise impede
the performance or enforcement of any Loan Document.
ARTICLE 9 THE ADMINISTRATIVE AGENT
Each Credit Party hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are
reasonably incidental thereto.
The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity
as a Lender as any other Lender and may exercise the same as
though it were not the Administrative Agent, and such Person and
its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein. Without
limiting the generality of the foregoing, (a) the Administrative
Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent
is required to exercise in writing by the Required Lenders (or
such other number or percentage of the Credit Parties as shall be
necessary under the circumstances as provided in Section 10.02),
and (c) except as expressly set forth herein, the Administrative
Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to
the Borrower, any of the Subsidiaries or any other Loan Party
that is communicated to or obtained by the Person serving as
Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the
Credit Parties as shall be necessary under the circumstances as
provided in Section 10.02) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by
the Borrower or a Credit Party (and, promptly after its receipt
of any such notice, it shall give each Credit Party and the
Borrower notice thereof), and the Administrative Agent shall not
be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set
forth therein, (iv) the validity, enforceability, effectiveness
or genuineness thereof or any other agreement, instrument or
other document or (v) the satisfaction of any condition set forth
in Article 5 or elsewhere herein, other than to confirm receipt
of items expressly required to be delivered to the Administrative
Agent.
The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to
have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it
orally or by telephone and believed by it to be made by the
proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel
(who may be counsel for the Borrower; provided such counsel has
not been retained by the Administrative Agent), independent
accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its
duties and exercise its rights and powers by or through any one
or more sub-agents appointed by the Administrative Agent,
provided that no such delegation shall serve as a release of the
Administrative Agent or waiver by the Borrower or the Borrower of
any rights hereunder. The Administrative Agent and any such sub-
agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities
as Administrative Agent.
Subject to the appointment and acceptance of a
successor Administrative Agent as provided in this paragraph, the
Administrative Agent may resign at any time by notifying the
Credit Parties and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, with the approval of the
Borrower (provided that such approval shall not be required if a
Default has occurred and is continuing), to appoint a successor.
If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on
behalf of the Credit Parties, appoint a successor Administrative
Agent which shall be a bank with an office in New York, New York,
or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder. The
fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After
the Administrative Agent's resignation hereunder, the provisions
of this Article 9 and Section 10.03 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents
and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting
as Administrative Agent.
Each Credit Party acknowledges that it has,
independently and without reliance upon the Administrative Agent
or any other Credit Party and based on such documents and
information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Credit
Party also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Credit Party
and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon any Loan
Document, any related agreement or any document furnished
thereunder.
ARTICLE 10 MISCELLANEOUS
Section 10.01 Notices
Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by telecopy, as follows:
if to the Borrower, to it at One Merrick Avenue,
Westbury, New York 11590, Attention: Chief Financial Officer
(Telephone No. (516) 683-6000; Telecopy No. (516) 450-1017);
if to the Administrative Agent, to it at One Wall
Street, New York, New York 10286, Attention of: Tony Pinella,
Agency Administrative Function (Telephone No. (212) 635-4698;
Telecopy No. (212) 635-6365, 6366 or 6367; with a copy to The
Bank of New York, at 1401 Franklin Avenue, Garden City, New York
11530, Attention of: Edward P. Nallan (Telephone No. (516) 294-
2269; Telecopy No. (516) 294-2055);
if to any other Credit Party, to it at its address (or
telecopy number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other
parties hereto. All notices and other communications given to
any party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given on the date of
receipt.
Section 10.02 Waivers; Amendments
No failure or delay by any Credit Party in exercising
any right or power under any Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or
power. The rights and remedies of the Credit Parties under the
Loan Documents are cumulative and are not exclusive of any rights
or remedies that they would otherwise have. No waiver of any
provision of any Loan Document or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section 10.02,
and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of
whether any Credit Party may have had notice or knowledge of such
Default at the time.
Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower and the
Required Lenders or by the Borrower and the Administrative Agent
with the consent of the Required Lenders, provided that no such
agreement shall (i) increase the Revolving Commitment of any
Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Extension of Credit, or reduce the
rate of interest thereon, or reduce any fees or other amounts
payable under the Loan Documents, or reduce the amount of any
scheduled reduction of any Revolving Commitment, without the
written consent of each Credit Party affected thereby, (iii)
postpone the scheduled date of payment of the principal amount of
any, or any interest thereon (except in connection with a waiver
of the applicability of any post-default increase in interest
rates), or any fees or other amounts payable under the Loan
Documents, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of reduction or
expiration of any Commitment, without the written consent of each
Credit Party affected thereby, (iv) change any provision hereof
in a manner that would alter the pro rata sharing of payments
required by any Loan Document, without the written consent of
each Credit Party, (v) change any of the provisions of this
Section 10.02(b) or the definition of "Required Lenders" or any
other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder
or make any determination or grant any consent hereunder, without
the written consent of each Lender, (vi) release any Guarantor
from its Guarantee under the Guarantee Agreement (except as
expressly provided in the Guarantee Agreement), or limit its
liability in respect of such Guarantee, without the written
consent of each Lender or (vii) release of any of the Collateral
from the Liens of the Loan Documents (except as expressly
provided in the Security Agreement), without the consent of each
Lender, and provided, further, that no such agreement shall
amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Swing Line Lender, the BA Issuer or the
Issuer hereunder without the prior written consent of the
Administrative Agent, the Swing Line Lender, the BA Issuer or the
Issuer, as the case may be.
Section 10.03 Expenses; Indemnity; Damage Waiver
The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, the
preparation and administration of this Agreement or any
amendments, modifications or waivers of the provisions of any
Loan Document (whether or not the transactions contemplated
thereby shall be consummated) and (ii) all reasonable
out-of-pocket expenses (other than Taxes) incurred by any Credit
Party, including the fees, charges and disbursements of any
counsel (including any in-house counsel, whether or not on an out-
of-pocket basis) for any Credit Party, in connection with the
enforcement or protection of its rights in connection with the
Loan Documents, including its rights under this Section 10.03, or
in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring
or negotiations in respect of such Loans.
The Borrower shall indemnify each Credit Party and each
Related Party thereof (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any
counsel for any indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any
agreement or instrument contemplated thereby, the performance by
the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other
transactions contemplated thereby, (ii) any Loan or the use of
the proceeds, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by
the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of the
Subsidiaries or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such
Indemnitee or that such indemnity relates to Taxes.
To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent under
paragraphs (a) or (b) of this Section 10.03, each Lender
severally agrees to pay to the Administrative Agent an amount
equal to the product of such unpaid amount multiplied by a
fraction, the numerator of which is the sum of such Lender's
Revolving Commitment and the denominator of which is the sum of
the total of all Lenders' Revolving Commitments (in each case
determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought), provided that the
unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as applicable, was incurred by or
asserted against the Administrative Agent in its capacity as
such.
To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of,
any Loan Document or any agreement, instrument or other document
contemplated thereby, the Transactions or any Loan or the use of
the proceeds thereof.
All amounts due under this Section 10.03 shall be
payable promptly but in no event later than thirty days after
written demand therefor.
Section 10.04 Successors and Assigns
The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that
the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent
of each Credit Party (and any attempted assignment or transfer by
the Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related
Parties of each Credit Party) any legal or equitable right,
remedy or claim under or by reason of any Loan Document.
Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement
(including all or a portion of its Revolving Commitment and the
Loans at the time owing to it), provided that (i) except in the
case of an assignment to a Lender or an Affiliate or an Approved
Fund of a Lender, each of the Borrower and the Administrative
Agent must give its prior written consent to such assignment
(such consents shall not be unreasonably withheld or delayed),
(ii) except in the case of an assignment to a Lender or an
Affiliate or an Approved Fund of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Revolving
Commitment, the amount of the Revolving Commitment of the
assigning Lender subject to each such assignment (determined as
of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be
less than $5,000,000 unless the Borrower and the Administrative
Agent otherwise consent, (iii) the parties to each assignment
shall execute and deliver to the Administrative Agent an
Assignment and Acceptance together with, unless otherwise agreed
by the Administrative Agent, a processing and recordation fee of
$3,500, and (iv) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative
Questionnaire, and provided further, that any consent of the
Borrower otherwise required under this paragraph shall not be
required if a Default has occurred and is continuing. Subject to
acceptance and recording thereof pursuant to paragraph (d) of
this Section 10.04, from and after the effective date specified
in each Assignment and Acceptance, the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by
such Assignment and Acceptance, have the rights and obligations
of a Lender under the Loan Documents, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under
the Loan Documents (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and
obligations under the Loan Documents, such Lender shall cease to
be a party hereto but shall continue to be entitled to the
benefits of Sections 3.05, 3.06, 3.07 and 10.03). Any assignment
or transfer by a Lender of rights or obligations under the Loan
Documents that does not comply with this paragraph shall be
treated for purposes of the Loan Documents as a sale by such
Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section 10.04.
Notwithstanding anything to the contrary, an assignee Lender
shall not be entitled to receive any greater payment under
Sections 3.05 or 3.07 than the assigning Lender would have been
entitled to receive with respect to the interest so assigned
unless the assignment of such interest is made with the
Borrower's prior written consent
The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in
New York City a copy of each Assignment and Acceptance delivered
to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal
amount of the Revolving Loans owing to, each Lender pursuant to
the terms hereof from time to time (the "Register"). The entries
in the Register shall be conclusive absent clearly demonstrable
error, and the Borrower and each Credit Party may treat each
Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower and any Credit
Party, at any reasonable time and from time to time upon
reasonable prior notice.
Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) of this Section
10.04 and any written consent to such assignment required by
paragraph (b) of this Section 10.04, the Administrative Agent
shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.
Any Lender may, without the consent of the Borrower or
any Credit Party, sell participations to one or more banks or
other entities (each such bank or other entity being called a
"Participant") in all or a portion of such Lender's rights and
obligations under the Loan Documents (including all or a portion
of its Commitment and the Loans owing to it), provided that (i)
such Lender's obligations under the Loan Documents shall remain
unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations
and (iii) the Loan Parties and the Credit Parties shall continue
to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under the Loan Documents.
Any agreement or instrument pursuant to which a Lender sells such
a participation shall provide that such Lender shall retain the
sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of any Loan
Documents, provided that such agreement or instrument may provide
that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver
described in the first proviso to paragraph (b) of Section 10.02
that affects such Participant. Subject to paragraph (f) of this
Section 10.04, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 3.05 and 3.06 to the same
extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section 10.04. To
the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a
Lender, provided that such Participant agrees to be subject to
paragraph (c) of Section 2.10 as though it were a Lender.
A Participant shall not be entitled to receive any
greater payment under Sections 3.05 or 3.07 than the Lender would
have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written
consent. A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 3.07
unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the
Borrower, to comply with paragraph (e) of Section 3.07 as though
it were a Lender.
Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under the Loan
Documents to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section 10.04 shall not apply to any such pledge
or assignment of a security interest, provided that no such
pledge or assignment of a security interest shall release a
Lender from any of its obligations under the Loan Documents or
substitute any such pledgee or assignee for such Lender as a
party hereto.
Section 10.05 Survival
All covenants, agreements, representations and
warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other
Loan Document shall be considered to have been relied upon
by the other parties hereto and shall survive the execution
and delivery of any Loan Document and the making of any
Loans, regardless of any investigation made by any such
other party or on its behalf and notwithstanding that any
Credit Party may have had notice or knowledge of any Default
or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full
force and effect as long as the principal of or any accrued
interest on any Loan or any fee or any other amount payable
under the Loan Documents is outstanding and unpaid and so
long as the Commitments have not expired or terminated. The
provisions of Sections 3.05, 3.06, 3.07 and 10.03 and
Article 9 shall survive and remain in full force and effect
regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans and the
termination of the Commitments or the termination of this
Agreement or any provision hereof.
Section 10.06 Counterparts; Integration; Effectiveness
This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of
which shall constitute an original, but all of which, when
taken together, shall constitute but one contract. This
Agreement and any separate letter agreements with respect to
fees payable to any Credit Party constitute the entire
contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 5.01, this
Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and
their respective successors and assigns. Delivery of an
executed counterpart of this Agreement by facsimile
transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.
Section 10.07 Severability
In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal
or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby (it
being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of
itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the
invalid, illegal or unenforceable provisions.
Section 10.08 Right of Setoff
If an Event of Default shall have occurred and be
continuing, each of the Lenders and their respective
Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable law, to
setoff and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and
other obligations at any time owing by it to or for the
credit or the account of the Borrower against any of and all
the obligations of the Borrower now or hereafter existing
under this Agreement held by it, irrespective of whether or
not it shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of
each of the Lenders and their respective Affiliates under
this Section 10.08 are in addition to other rights and
remedies (including other rights of setoff) that it may
have.
Section 10.09 Governing Law; Jurisdiction; Consent to
Service of Process
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal
court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that, to the extent permitted by
applicable law, all claims in respect of any such action or
proceeding may be heard and determined in such New York State or,
to the extent permitted by applicable law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect
any right that any party hereto may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan
Documents in the courts of any jurisdiction.
Each party hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan
Documents in any court referred to in paragraph (b) of this
Section 10.09. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, the
defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in
Section 10.01. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other
manner permitted by law.
Section 10.10 WAIVER OF JURY TRIAL
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
Section 10.11 Headings
Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction
of, or be taken into consideration in interpreting, this
Agreement.
Section 10.12 Interest Rate Limitation
Notwithstanding anything herein to the contrary, if at
any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts that are treated as
interest on such Loan under applicable law (collectively the
"charges"), shall exceed the maximum lawful rate (the
"maximum rate") that may be contacted for, charged, taken,
received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable
in respect of such Loan hereunder, together with all of the
charges payable in respect thereof, shall be limited to the
maximum rate and, to the extent lawful, the interest and the
charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this
Section 10.12 shall be cumulated, and the interest and the
charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the maximum rate
therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Rate to the date of
repayment, shall have been received by such Lender.
Section 10.13 USA Patriot Act Notice
Each of the Administrative Agent and each Lender hereby
notifies the Borrower that, pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the "Patriot Act"), it is required to obtain,
verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and
other information that will allow the Administrative Agent and
such Lender to identify the Borrower in accordance with the
Patriot Act.
[Signature pages follow.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of
the day and year first above written.
LIFETIME HOAN CORPORATION
By:
Name:
Title:
THE BANK OF NEW YORK,
as Administrative Agent and Lender
By:
Name:
Title
HSBC BANK USA
By:
Name:
Title:
CITIBANK, N.A.
By:
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
SCHEDULE 2.01
Effective Date Commitments
Lender Commitment
The Bank of New York $15,000,000
HSBC Bank USA $13,000,000
Citibank, N.A. $11,000,000
Wachovia Bank, National $11,000,000
Association
TOTAL $50,000,000
SCHEDULE 2.11
Existing Letters of Credit
Commercial
Amount Issuance Date
Standby
Amount Issuance Date
SCHEDULE 2.12
Existing Bankers Acceptances
Amount Issuance Date
SCHEDULE 4.06
Disclosed Matters
SCHEDULE 4.12
Subsidiaries
SCHEDULE 4.13
Insurance
SCHEDULE 7.01
Existing Indebtedness
SCHEDULE 7.02
Existing Liens
SCHEDULE 7.04
Existing Investments
SCHEDULE 7.10
Existing Restrictions
REVOLVING NOTE
$11,000,000.00 July __, 2004
New York, New
York
FOR VALUE RECEIVED, the undersigned, LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of WACHOVIA BANK, NATIONAL
ASSOCIATION (the "Lender") ELEVEN MILLION DOLLARS
($11,000,000.00) or if less, the unpaid principal amount of
the Revolving Loans made by the Lender to the Borrower, in
the amounts and at the times set forth in the Amended and
Restated Credit Agreement, dated as of July __, 2004 (as the
same may be amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Borrower,
the Lenders party thereto, and The Bank of New York, as
Administrative Agent, and to pay interest from the date
hereof on the principal balance of such Revolving Loans from
time to time outstanding at the rate or rates and at the
times set forth in the Credit Agreement, in each case at the
office of the Administrative Agent located at One Wall
Street, New York, New York, or at such other place as the
Administrative Agent may specify from time to time, in
lawful money of the United States of America in immediately
available funds. Terms defined in the Credit Agreement are
used herein with the same meanings.
The Revolving Loans evidenced by this Revolving
Note are prepayable in the amounts,
and under the circumstances, and
their respective maturities are
subject to acceleration upon the
terms, set forth in the Credit
Agreement. This Revolving Note is
subject to, and should be construed
in accordance with, the provisions of
the Credit Agreement and is entitled
to the benefits and security set
forth in the Loan Documents.
The Lender is hereby authorized to record on the
schedule annexed hereto, and any continuation sheets which
the Lender may attach hereto, (a) the date of each Revolving
Loan made by the Lender, (b) the class, Type and amount
thereof, (c) the interest rate (without regard to the
Applicable Margin) and Interest Period applicable to each
Eurodollar Loan and (d) the date and amount of each
conversion of, and each payment or prepayment of the
principal of, any such Revolving Loan. The entries made in
such schedule shall be prima facie evidence of the existence
and amounts of the obligations recorded therein, provided
that the failure to so record or any error therein shall not
in any manner affect the obligation of the Borrower to repay
the Revolving Loans in accordance with the terms of the
Credit Agreement.
Except as specifically otherwise provided in the
Credit Agreement, the Borrower hereby
waives presentment, demand, notice of
dishonor, protest, notice of protest
and all other demands, protests and
notices in connection with the
execution, delivery, performance,
collection and enforcement of this
Revolving Note.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
LIFETIME HOAN CORPORATION
By:
Name:
Title:
SCHEDULE TO REVOLVING NOTE
Amount of
principal Interest Interest
converted, rate on Period for
Type of Amount paid or Eurodollar Eurodollar Notation
Date Loan of Loan prepaid Loans Loans made by
REVOLVING NOTE
$13,000,000.00 July __, 2004
New York, New
York
FOR VALUE RECEIVED, the undersigned, LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of HSBC BANK USA (the "Lender")
THIRTEEN MILLION DOLLARS ($13,000,000.00) or if less, the
unpaid principal amount of the Revolving Loans made by the
Lender to the Borrower, in the amounts and at the times set
forth in the Amended and Restated Credit Agreement, dated as
of July __, 2004 (as the same may be amended, supplemented
or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the Lenders party thereto,
and The Bank of New York, as Administrative Agent, and to
pay interest from the date hereof on the principal balance
of such Revolving Loans from time to time outstanding at the
rate or rates and at the times set forth in the Credit
Agreement, in each case at the office of the Administrative
Agent located at One Wall Street, New York, New York, or at
such other place as the Administrative Agent may specify
from time to time, in lawful money of the United States of
America in immediately available funds. Terms defined in
the Credit Agreement are used herein with the same meanings.
The Revolving Loans evidenced by this Revolving
Note are prepayable in the amounts,
and under the circumstances, and
their respective maturities are
subject to acceleration upon the
terms, set forth in the Credit
Agreement. This Revolving Note is
subject to, and should be construed
in accordance with, the provisions of
the Credit Agreement and is entitled
to the benefits and security set
forth in the Loan Documents.
This Revolving Note shall be deemed to be in complete
substitution for and replacement of, and not a repayment of
the Revolving Note dated November 8, 2001 made by the
Borrower payable to the Lender (the "Prior Revolving Note")
and all interest accrued and unpaid under such Prior
Revolving Note shall be deemed evidenced by this Revolving
Note and payable hereunder from and after the date of
accrual thereof. The execution and delivery of this
Revolving Note shall not be construed (i) to have
constituted repayment of any amount of principal or interest
on the Prior Revolving Note, or (ii) to release, cancel,
terminate or otherwise impair all or any part of any lien or
security interest granted to the Lenders party to the
Original Credit Agreement or their agents as collateral
security for the Prior Revolving Note.
The Lender is hereby authorized to record on the
schedule annexed hereto, and any continuation sheets which
the Lender may attach hereto, (a) the date of each Revolving
Loan made by the Lender, (b) the class, Type and amount
thereof, (c) the interest rate (without regard to the
Applicable Margin) and Interest Period applicable to each
Eurodollar Loan and (d) the date and amount of each
conversion of, and each payment or prepayment of the
principal of, any such Revolving Loan. The entries made in
such schedule shall be prima facie evidence of the existence
and amounts of the obligations recorded therein, provided
that the failure to so record or any error therein shall not
in any manner affect the obligation of the Borrower to repay
the Revolving Loans in accordance with the terms of the
Credit Agreement.
Except as specifically otherwise provided in the
Credit Agreement, the Borrower hereby
waives presentment, demand, notice of
dishonor, protest, notice of protest
and all other demands, protests and
notices in connection with the
execution, delivery, performance,
collection and enforcement of this
Revolving Note.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
LIFETIME HOAN CORPORATION
By:
Name:
Title:
SCHEDULE TO REVOLVING NOTE
Amount of
principal Interest Interest
converted, rate on Period for
Type of Amount paid or Eurodollar Eurodollar Notation
Date Loan of Loan prepaid Loans Loans made by
REVOLVING NOTE
$11,000,000.00 July __, 2004
New York, New
York
FOR VALUE RECEIVED, the undersigned, LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of CITIBANK, N.A. (the
"Lender") ELEVEN MILLION DOLLARS ($11,000,000.00) or if
less, the unpaid principal amount of the Revolving Loans
made by the Lender to the Borrower, in the amounts and at
the times set forth in the Amended and Restated Credit
Agreement, dated as of July __, 2004 (as the same may be
amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, the
Lenders party thereto, and The Bank of New York, as
Administrative Agent, and to pay interest from the date
hereof on the principal balance of such Revolving Loans from
time to time outstanding at the rate or rates and at the
times set forth in the Credit Agreement, in each case at the
office of the Administrative Agent located at One Wall
Street, New York, New York, or at such other place as the
Administrative Agent may specify from time to time, in
lawful money of the United States of America in immediately
available funds. Terms defined in the Credit Agreement are
used herein with the same meanings.
The Revolving Loans evidenced by this Revolving
Note are prepayable in the amounts,
and under the circumstances, and
their respective maturities are
subject to acceleration upon the
terms, set forth in the Credit
Agreement. This Revolving Note is
subject to, and should be construed
in accordance with, the provisions of
the Credit Agreement and is entitled
to the benefits and security set
forth in the Loan Documents.
This Revolving Note shall be deemed to be in complete
substitution for and replacement of, and not a repayment of
the Revolving Note dated November 8, 2001 made by the
Borrower payable to the Lender (the "Prior Revolving Note")
and all interest accrued and unpaid under such Prior
Revolving Note shall be deemed evidenced by this Revolving
Note and payable hereunder from and after the date of
accrual thereof. The execution and delivery of this
Revolving Note shall not be construed (i) to have
constituted repayment of any amount of principal or interest
on the Prior Revolving Note, or (ii) to release, cancel,
terminate or otherwise impair all or any part of any lien or
security interest granted to the Lenders party to the
Original Credit Agreement or their agents as collateral
security for the Prior Revolving Note.
The Lender is hereby authorized to record on the
schedule annexed hereto, and any continuation sheets which
the Lender may attach hereto, (a) the date of each Revolving
Loan made by the Lender, (b) the class, Type and amount
thereof, (c) the interest rate (without regard to the
Applicable Margin) and Interest Period applicable to each
Eurodollar Loan and (d) the date and amount of each
conversion of, and each payment or prepayment of the
principal of, any such Revolving Loan. The entries made in
such schedule shall be prima facie evidence of the existence
and amounts of the obligations recorded therein, provided
that the failure to so record or any error therein shall not
in any manner affect the obligation of the Borrower to repay
the Revolving Loans in accordance with the terms of the
Credit Agreement.
Except as specifically otherwise provided in the
Credit Agreement, the Borrower hereby
waives presentment, demand, notice of
dishonor, protest, notice of protest
and all other demands, protests and
notices in connection with the
execution, delivery, performance,
collection and enforcement of this
Revolving Note.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
LIFETIME HOAN CORPORATION
By:
Name:
Title:
SCHEDULE TO REVOLVING NOTE
Amount of
principal Interest Interest
converted, rate on Period for
Type of Amount paid or Eurodollar Eurodollar Notation
Date Loan of Loan prepaid Loans Loans made by
REVOLVING NOTE
$15,000,000.00 July __, 2004
New York, New
York
FOR VALUE RECEIVED, the undersigned, LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of THE BANK OF NEW YORK (the
"Lender") FIFTEEN MILLION DOLLARS ($15,000,000.00) or if
less, the unpaid principal amount of the Revolving Loans
made by the Lender to the Borrower, in the amounts and at
the times set forth in the Amended and Restated Credit
Agreement, dated as of July __, 2004 (as the same may be
amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, the
Lenders party thereto, and The Bank of New York, as
Administrative Agent, and to pay interest from the date
hereof on the principal balance of such Revolving Loans from
time to time outstanding at the rate or rates and at the
times set forth in the Credit Agreement, in each case at the
office of the Administrative Agent located at One Wall
Street, New York, New York, or at such other place as the
Administrative Agent may specify from time to time, in
lawful money of the United States of America in immediately
available funds. Terms defined in the Credit Agreement are
used herein with the same meanings.
The Revolving Loans evidenced by this Revolving
Note are prepayable in the amounts,
and under the circumstances, and
their respective maturities are
subject to acceleration upon the
terms, set forth in the Credit
Agreement. This Revolving Note is
subject to, and should be construed
in accordance with, the provisions of
the Credit Agreement and is entitled
to the benefits and security set
forth in the Loan Documents.
This Revolving Note shall be deemed to be in complete
substitution for and replacement of, and not a repayment of
the Revolving Note dated November 8, 2001 made by the
Borrower payable to the Lender (the "Prior Revolving Note")
and all interest accrued and unpaid under such Prior
Revolving Note shall be deemed evidenced by this Revolving
Note and payable hereunder from and after the date of
accrual thereof. The execution and delivery of this
Revolving Note shall not be construed (i) to have
constituted repayment of any amount of principal or interest
on the Prior Revolving Note, or (ii) to release, cancel,
terminate or otherwise impair all or any part of any lien or
security interest granted to the Lenders party to the
Original Credit Agreement or their agents as collateral
security for the Prior Revolving Note.
The Lender is hereby authorized to record on the
schedule annexed hereto, and any continuation sheets which
the Lender may attach hereto, (a) the date of each Revolving
Loan made by the Lender, (b) the class, Type and amount
thereof, (c) the interest rate (without regard to the
Applicable Margin) and Interest Period applicable to each
Eurodollar Loan and (d) the date and amount of each
conversion of, and each payment or prepayment of the
principal of, any such Revolving Loan. The entries made in
such schedule shall be prima facie evidence of the existence
and amounts of the obligations recorded therein, provided
that the failure to so record or any error therein shall not
in any manner affect the obligation of the Borrower to repay
the Revolving Loans in accordance with the terms of the
Credit Agreement.
Except as specifically otherwise provided in the
Credit Agreement, the Borrower hereby
waives presentment, demand, notice of
dishonor, protest, notice of protest
and all other demands, protests and
notices in connection with the
execution, delivery, performance,
collection and enforcement of this
Revolving Note.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
LIFETIME HOAN CORPORATION
By:
Name:
Title:
SCHEDULE TO REVOLVING NOTE
Amount of
principal Interest Interest
converted, rate on Period for
Type of Amount paid or Eurodollar Eurodollar Notation
Date Loan of Loan prepaid Loans Loans made by
Amount
SWING LINE NOTE
$7,500,000.00 July __, 2004
New York, New
York
FOR VALUE RECEIVED, the undersigned, LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of THE BANK OF NEW YORK (the
"Swing Line Lender") SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS ($7,500,000.00) or if less, the unpaid principal
amount of the Swing Line Loans made by the Swing Line Lender
to the Borrower, in the amounts and at the times set forth
in the Amended and Restated Credit Agreement, dated as of
July __, 2004, among the Borrower, the Lenders party
thereto, and The Bank of New York, as Administrative Agent
(as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), and to
pay interest from the date hereof on the principal balance
of such Swing Line Loans from time to time outstanding at
the rate or rates and at the times set forth in the Credit
Agreement, in each case at the office of the Administrative
Agent located at One Wall Street, New York, New York, or at
such other place as the Administrative Agent may specify
from time to time, in lawful money of the United States of
America in immediately available funds. Terms defined in
the Credit Agreement are used herein with the same meanings.
The Swing Line Loans evidenced by this Swing
Line Note are prepayable in the
amounts, and under the circumstances,
and their respective maturities are
subject to acceleration upon the
terms, set forth in the Credit
Agreement. This Swing Line Note is
subject to, and should be construed
in accordance with, the provisions of
the Credit Agreement and is entitled
to the benefits and security set
forth in the Loan Documents.
The Lender is hereby authorized to record on the
schedule annexed hereto, and any continuation sheets which
the Lender may attach hereto, (a) the date of each Swing
Line Loan, (b) the amount thereof and (c) the date and
amount of each payment or prepayment of the principal of any
such Swing Line Loan. The entries made in such schedule
shall be prima facie evidence of the existence and amounts
of the obligations recorded therein, provided that the
failure to so record or any error therein shall not in any
manner affect the obligation of the Borrower to repay the
Swing Line Loans in accordance with the terms of the Credit
Agreement.
Except as specifically otherwise provided in the
Credit Agreement, the Borrower hereby
waives presentment, demand, notice of
dishonor, protest, notice of protest
and all other demands, protests and
notices in connection with the
execution, delivery, performance,
collection and enforcement of this
Swing Line Note.
THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
LIFETIME HOAN CORPORATION
By:
Name:
Title:
SCHEDULE TO SWING LINE NOTE
Amount of
principal
paid or Notation
Date Amount of Loan prepaid made by
REAFFIRMATION OF GUARANTEE AGREEMENT
July __, 2004
The Bank of New York, Administrative Agent
1401 Franklin Avenue
Garden City, New York 11530
Attn: Edward P. Nallan
Ladies and Gentlemen:
Reference is made to (i) the Guarantee Agreement dated as of
November 8, 2001 (the "Guarantee Agreement"), among the
undersigned (each, a "Guarantor" and collectively, the
"Guarantors"), Lifetime Hoan Corporation (the "Borrower")
and The Bank of New York, as Administrative Agent (in such
capacity, the "Administrative Agent") for the benefit of the
Credit Parties (as defined in the Original Credit Agreement
referred to below) pursuant to which all loans and
extensions of credit made or to be made by such Credit
Parties to the Borrower and all other obligations and
liabilities of the Borrower to such Credit Parties are
jointly and severally guaranteed by the Guarantors and (ii)
the Credit Agreement dated as of November 8, 2001 (as
heretofore amended, the "Original Credit Agreement") among
the Borrower, the lenders party thereto and the
Administrative Agent.
The Borrower has entered into the Amended and Restated
Credit Agreement dated as of the date hereof (as amended,
restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") among the Borrower, the
lenders from time to time party thereto (the "Lenders") and
the Administrative Agent, pursuant to which the Lenders have
agreed to amend and restate the Original Credit Agreement on
the terms and conditions set forth therein. Terms not
otherwise defined in this Reaffirmation shall have the
respective meanings ascribed thereto in the Credit
Agreement.
It is a condition to the effectiveness of the Credit
Agreement that the Guarantors reaffirm their respective
obligations under the Guarantee Agreement. In order to
induce the Lenders to execute the Credit Agreement, each of
the Guarantors hereby (i) acknowledges receipt of a copy of
the Credit Agreement, (ii) consents to the execution of the
Credit Agreement by the Borrower, (iii) reaffirms all of its
agreements and obligations under the Guarantee Agreement,
(iv) reaffirms that all Obligations of the Borrower under or
in connection with the Credit Agreement are "Obligations" as
that term is defined in the Guarantee Agreement, which
Guarantee Agreement remains in full force and effect and is
hereby ratified and confirmed and (v) agrees that all
references in the Guarantee Agreement to (a) "the Credit
Agreement" shall be deemed to refer to the Credit Agreement
and (b) "Loans" shall be deemed to refer to Loans under the
Credit Agreement.
This Reaffirmation shall be governed by, and construed in
accordance with, the laws of the State of New York.
This Reaffirmation may be executed in two or more
counterparts, each of which shall constitute an original,
but all of which, when taken together, shall constitute but
one agreement. Delivery of an executed counterpart of this
Reaffirmation by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of
this Reaffirmation.
Very truly yours,
OUTLET RETAIL STORES,INC.
By:
Name:
Title:
ROSHCO, INC.
By:
Name:
Title:
M. KAMENSTEIN CORP.
By:
Name:
Title:
REAFFIRMATION OF SECURITY AGREEMENT
July __, 2004
The Bank of New York, Administrative Agent
1401 Franklin Avenue
Garden City, New York 11530
Attn: Edward P. Nallan
Ladies and Gentlemen:
Reference is made (i) the Security Agreement dated as of
November 8, 2001 (the "Security Agreement"), among the
undersigned (each, a "Grantor" and collectively, the
"Grantors") and The Bank of New York, as Administrative
Agent (in such capacity, the "Administrative Agent") for the
benefit of the Credit Parties (as defined in the Original
Credit Agreement referred to below), pursuant to which all
Obligations (as defined in the Original Credit Agreement) of
the Grantors are secured by the collateral described therein
and (ii) the Credit Agreement dated as of November 8, 2001
(as heretofore amended, the "Original Credit Agreement")
among the Lifetime Hoan Corporation (the "Borrower"), the
lenders party thereto and the Administrative Agent.
The Borrower has entered into the Amended and Restated
Credit Agreement dated as of the date hereof (as amended,
restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") among the Borrower, the
lenders from time to time party thereto (the "Lenders") and
the Administrative Agent, pursuant to which the Lenders have
agreed to amend and restate the Original Credit Agreement on
the terms and conditions set forth therein. Terms not
otherwise defined in this Reaffirmation shall have the
respective meanings ascribed thereto in the Credit
Agreement.
It is a condition to the effectiveness of the Credit
Agreement that the Grantors reaffirm their respective
obligations under the Security Agreement. In order to
induce the Lenders to execute the Credit Agreement, each of
the Grantors hereby (i) acknowledges receipt of a copy of
the Credit Agreement, (ii) consents to the execution of the
Credit Agreement by the Borrower, (iii) reaffirms all of its
agreements and obligations under the Security Agreement and
(iv) reaffirms that all Obligations of the Borrower under or
in connection with the Credit Agreement are "Obligations" as
that term is defined in the Security Agreement, (v)
reaffirms that all such Obligations continue to be secured
by the Security Agreement, which remains in full force and
effect and is hereby ratified and confirmed and (vi) agrees
that all references in the Security Agreement to (a) "the
Credit Agreement" shall be deemed to refer to the Credit
Agreement and (b) "Loans", "Letter of Credit Exposure" and
"Bankers Acceptance Exposure" shall be deemed to refer to
Loans, Letter of Credit Exposure and Banker Acceptance
Exposure, respectively, under the Credit Agreement.
This Reaffirmation shall be governed by, and construed in
accordance with, the laws of the State of New York.
This Reaffirmation may be executed in two or more
counterparts, each of which shall constitute an original,
but all of which, when taken together, shall constitute but
one agreement. Delivery of an executed counterpart of this
Reaffirmation by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of
this Reaffirmation.
Very truly yours,
LIFETIME HOAN CORPORATION
By:
Name:
Title:
OUTLET RETAIL STORES, INC.
By:
Name:
Title:
ROSHCO, INC.
By:
Name:
Title:
M. KAMENSTEIN CORP.
By:
Name:
Title:
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit
Agreement, dated as of July __, 2004 (as amended, restated,
supplemented or otherwise modified from time to time and in
effect on the date hereof, the "Credit Agreement"), among
Lifetime Hoan Corporation, as Borrower, the Lenders named
therein and The Bank of New York, as Administrative Agent.
Terms defined in the Credit Agreement are used herein with
the same meanings.
The Assignor named below hereby sells and assigns, without
recourse, to the Assignee named below, and the Assignee
hereby purchases and assumes, without recourse, from the
Assignor, effective as of the Assignment Date, the interests
set forth below (the "Assigned Interest") in the Assignor's
rights and obligations under the Credit Agreement,
including, without limitation, the interests set forth below
in [the Revolving Commitment of the Assignor on the
Assignment Date and the Revolving Loans owing to the
Assignor that are outstanding on the Assignment Date]1, but
excluding accrued interest and fees to and excluding the
Assignment Date. The Assignee hereby acknowledges receipt
of a copy of the Credit Agreement. From and after the
Assignment Date, (a) the Assignee shall be a party to and be
bound by the provisions of the Credit Agreement and, to the
extent of the Assigned Interest, have the rights and
obligations of a Lender under the Loan Documents and (b) the
Assignor shall, to the extent of the Assigned Interest,
relinquish its rights and be released from its obligations
under the Loan Documents.
This Assignment and Acceptance is being delivered to the
Administrative Agent, together with (a) if the Assignee is a
Foreign Lender, any documentation required to be delivered
by the Assignee pursuant to Section 3.07(e) of the Credit
Agreement, duly completed and executed by the Assignee, and
(b) except as otherwise provided in Section 10.04(b) of the
Credit Agreement, if the Assignee is not already a Lender
under the Credit Agreement, an Administrative Questionnaire
in the form supplied by the Administrative Agent, duly
completed by the Assignee. The [Assignee/Assignor]2 shall
pay the fee payable to the Administrative Agent pursuant to
Section 10.04(b) of the Credit Agreement.
THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of
Assignment (the "Assignment Date"):
[Revolving Commitment Assigned:
Principal Amount of Revolving Loans Assigned: ]3
The terms set forth above are hereby agreed to:
[Name of Assignor], as
Assignor
By:
Name:
Title:
[Name of Assignee], as
Assignee
By:
Name:
Title:
The undersigned hereby consents to the within assignment:4
LIFETIME HOAN CORPORATION THE BANK OF NEW YORK,
as Administrative Agent
By: By:
Name: Name:
Title: Title:
EXHIBIT B
FORM OF OPINION OF BORROWER'S COUNSEL
[see attached]
EXHIBIT C-1
FORM OF REVOLVING NOTE
$_____________ July __, 2004
New York, New
York
FOR VALUE RECEIVED, the undersigned, LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of
_______________________________________ (the "Lender")
______________ DOLLARS ($_____________) or if less, the
unpaid principal amount of the Revolving Loans made by the
Lender to the Borrower, in the amounts and at the times set
forth in the Amended and Restated Credit Agreement, dated as
of July __, 2004 (as the same may be amended, supplemented
or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the Lenders party thereto,
and The Bank of New York, as Administrative Agent, and to
pay interest from the date hereof on the principal balance
of such Revolving Loans from time to time outstanding at the
rate or rates and at the times set forth in the Credit
Agreement, in each case at the office of the Administrative
Agent located at One Wall Street, New York, New York, or at
such other place as the Administrative Agent may specify
from time to time, in lawful money of the United States of
America in immediately available funds. Terms defined in
the Credit Agreement are used herein with the same meanings.
The Revolving Loans evidenced by this Revolving
Note are prepayable in the amounts,
and under the circumstances, and
their respective maturities are
subject to acceleration upon the
terms, set forth in the Credit
Agreement. This Revolving Note is
subject to, and should be construed
in accordance with, the provisions of
the Credit Agreement and is entitled
to the benefits and security set
forth in the Loan Documents.
[This Revolving Note shall be deemed to be in complete
substitution for and replacement of, and not a repayment of
the Revolving Note dated November 8, 2001 made by the
Borrower payable to the Lender (the "Prior Revolving Note")
and all interest accrued and unpaid under such Prior
Revolving Note shall be deemed evidenced by this Revolving
Note and payable hereunder from and after the date of
accrual thereof. The execution and delivery of this
Revolving Note shall not be construed (i) to have
constituted repayment of any amount of principal or interest
on the Prior Revolving Note, or (ii) to release, cancel,
terminate or otherwise impair all or any part of any lien or
security interest granted to the Lenders party to the
Original Credit Agreement or their agents as collateral
security for the Prior Revolving Note.]5
The Lender is hereby authorized to record on the
schedule annexed hereto, and any continuation sheets which
the Lender may attach hereto, (a) the date of each Revolving
Loan made by the Lender, (b) the class, Type and amount
thereof, (c) the interest rate (without regard to the
Applicable Margin) and Interest Period applicable to each
Eurodollar Loan and (d) the date and amount of each
conversion of, and each payment or prepayment of the
principal of, any such Revolving Loan. The entries made in
such schedule shall be prima facie evidence of the existence
and amounts of the obligations recorded therein, provided
that the failure to so record or any error therein shall not
in any manner affect the obligation of the Borrower to repay
the Revolving Loans in accordance with the terms of the
Credit Agreement.
Except as specifically otherwise provided in the
Credit Agreement, the Borrower hereby
waives presentment, demand, notice of
dishonor, protest, notice of protest
and all other demands, protests and
notices in connection with the
execution, delivery, performance,
collection and enforcement of this
Revolving Note.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
LIFETIME HOAN CORPORATION
By:
Name:
Title:
SCHEDULE TO REVOLVING NOTE
Amount of
principal Interest Interest
converted, rate on Period for
Type of Amount paid or Eurodollar Eurodollar Notation
Date Loan of Loan prepaid Loans Loans made by
EXHIBIT C-2
FORM OF SWING LINE NOTE
$7,500,000.00 July __, 2004
New York, New
York
FOR VALUE RECEIVED, the undersigned, LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of THE BANK OF NEW YORK (the
"Swing Line Lender") SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS ($7,500,000.00) or if less, the unpaid principal
amount of the Swing Line Loans made by the Swing Line Lender
to the Borrower, in the amounts and at the times set forth
in the Amended and Restated Credit Agreement, dated as of
July __, 2004, among the Borrower, the Lenders party
thereto, and The Bank of New York, as Administrative Agent
(as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), and to
pay interest from the date hereof on the principal balance
of such Swing Line Loans from time to time outstanding at
the rate or rates and at the times set forth in the Credit
Agreement, in each case at the office of the Administrative
Agent located at One Wall Street, New York, New York, or at
such other place as the Administrative Agent may specify
from time to time, in lawful money of the United States of
America in immediately available funds. Terms defined in
the Credit Agreement are used herein with the same meanings.
The Swing Line Loans evidenced by this Swing
Line Note are prepayable in the
amounts, and under the circumstances,
and their respective maturities are
subject to acceleration upon the
terms, set forth in the Credit
Agreement. This Swing Line Note is
subject to, and should be construed
in accordance with, the provisions of
the Credit Agreement and is entitled
to the benefits and security set
forth in the Loan Documents.
The Lender is hereby authorized to record on the
schedule annexed hereto, and any continuation sheets which
the Lender may attach hereto, (a) the date of each Swing
Line Loan, (b) the amount thereof and (c) the date and
amount of each payment or prepayment of the principal of any
such Swing Line Loan. The entries made in such schedule
shall be prima facie evidence of the existence and amounts
of the obligations recorded therein, provided that the
failure to so record or any error therein shall not in any
manner affect the obligation of the Borrower to repay the
Swing Line Loans in accordance with the terms of the Credit
Agreement.
Except as specifically otherwise provided in the
Credit Agreement, the Borrower hereby
waives presentment, demand, notice of
dishonor, protest, notice of protest
and all other demands, protests and
notices in connection with the
execution, delivery, performance,
collection and enforcement of this
Swing Line Note.
THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
LIFETIME HOAN CORPORATION
By:
Name:
Title:
SCHEDULE TO SWING LINE NOTE
Amount of
principal
paid or Notation
Date Amount of Loan prepaid made by
EXHIBIT D
FORM OF REAFFIRMATION OF GUARANTEE AGREEMENT
July __, 2004
The Bank of New York, Administrative Agent
1401 Franklin Avenue
Garden City, New York 11530
Attn: Edward P. Nallan
Ladies and Gentlemen:
Reference is made to (i) the Guarantee Agreement dated as of
November 8, 2001 (the "Guarantee Agreement"), among the
undersigned (each, a "Guarantor" and collectively, the
"Guarantors"), Lifetime Hoan Corporation (the "Borrower") and The
Bank of New York, as Administrative Agent (in such capacity, the
"Administrative Agent") for the benefit of the Credit Parties (as
defined in the Original Credit Agreement referred to below)
pursuant to which all loans and extensions of credit made or to
be made by such Credit Parties to the Borrower and all other
obligations and liabilities of the Borrower to such Credit
Parties are jointly and severally guaranteed by the Guarantors
and (ii) the Credit Agreement dated as of November 8, 2001 (as
heretofore amended, the "Original Credit Agreement") among the
Borrower, the lenders party thereto and the Administrative Agent.
The Borrower has entered into the Amended and Restated Credit
Agreement dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement") among the Borrower, the lenders from time to time
party thereto (the "Lenders") and the Administrative Agent,
pursuant to which the Lenders have agreed to amend and restate
the Original Credit Agreement on the terms and conditions set
forth therein. Terms not otherwise defined in this Reaffirmation
shall have the respective meanings ascribed thereto in the Credit
Agreement.
It is a condition to the effectiveness of the Credit Agreement
that the Guarantors reaffirm their respective obligations under
the Guarantee Agreement. In order to induce the Lenders to
execute the Credit Agreement, each of the Guarantors hereby (i)
acknowledges receipt of a copy of the Credit Agreement, (ii)
consents to the execution of the Credit Agreement by the
Borrower, (iii) reaffirms all of its agreements and obligations
under the Guarantee Agreement, (iv) reaffirms that all
Obligations of the Borrower under or in connection with the
Credit Agreement are "Obligations" as that term is defined in the
Guarantee Agreement, which Guarantee Agreement remains in full
force and effect and is hereby ratified and confirmed and (v)
agrees that all references in the Guarantee Agreement to (a) "the
Credit Agreement" shall be deemed to refer to the Credit
Agreement and (b) "Loans" shall be deemed to refer to Loans under
the Credit Agreement.
This Reaffirmation shall be governed by, and construed in
accordance with, the laws of the State of New York.
This Reaffirmation may be executed in two or more counterparts,
each of which shall constitute an original, but all of which,
when taken together, shall constitute but one agreement.
Delivery of an executed counterpart of this Reaffirmation by
facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Reaffirmation.
Very truly yours,
OUTLET RETAIL STORES, INC.
By:
Name:
Title:
ROSHCO, INC.
By:
Name:
Title:
M. KAMENSTEIN CORP.
By:
Name:
Title:
EXHIBIT E
FORM OF REAFFIRMATION OF SECURITY AGREEMENT
July __, 2004
The Bank of New York, Administrative Agent
1401 Franklin Avenue
Garden City, New York 11530
Attn: Edward P. Nallan
Ladies and Gentlemen:
Reference is made (i) the Security Agreement dated as of November
8, 2001 (the "Security Agreement"), among the undersigned (each,
a "Grantor" and collectively, the "Grantors") and The Bank of New
York, as Administrative Agent (in such capacity, the
"Administrative Agent") for the benefit of the Credit Parties (as
defined in the Original Credit Agreement referred to below),
pursuant to which all Obligations (as defined in the Original
Credit Agreement) of the Grantors are secured by the collateral
described therein and (ii) the Credit Agreement dated as of
November 8, 2001 (as heretofore amended, the "Original Credit
Agreement") among the Lifetime Hoan Corporation (the "Borrower"),
the lenders party thereto and the Administrative Agent.
The Borrower has entered into the Amended and Restated Credit
Agreement dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement") among the Borrower, the lenders from time to time
party thereto (the "Lenders") and the Administrative Agent,
pursuant to which the Lenders have agreed to amend and restate
the Original Credit Agreement on the terms and conditions set
forth therein. Terms not otherwise defined in this Reaffirmation
shall have the respective meanings ascribed thereto in the Credit
Agreement.
It is a condition to the effectiveness of the Credit Agreement
that the Grantors reaffirm their respective obligations under the
Security Agreement. In order to induce the Lenders to execute
the Credit Agreement, each of the Grantors hereby (i)
acknowledges receipt of a copy of the Credit Agreement, (ii)
consents to the execution of the Credit Agreement by the
Borrower, (iii) reaffirms all of its agreements and obligations
under the Security Agreement and (iv) reaffirms that all
Obligations of the Borrower under or in connection with the
Credit Agreement are "Obligations" as that term is defined in the
Security Agreement, (v) reaffirms that all such Obligations
continue to be secured by the Security Agreement, which remains
in full force and effect and is hereby ratified and confirmed and
(vi) agrees that all references in the Security Agreement to (a)
"the Credit Agreement" shall be deemed to refer to the Credit
Agreement and (b) "Loans", "Letter of Credit Exposure" and
"Bankers Acceptance Exposure" shall be deemed to refer to Loans,
Letter of Credit Exposure and Banker Acceptance Exposure,
respectively, under the Credit Agreement.
This Reaffirmation shall be governed by, and construed in
accordance with, the laws of the State of New York.
This Reaffirmation may be executed in two or more counterparts,
each of which shall constitute an original, but all of which,
when taken together, shall constitute but one agreement.
Delivery of an executed counterpart of this Reaffirmation by
facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Reaffirmation.
Very truly yours,
LIFETIME HOAN CORPORATION
By:
Name:
Title:
OUTLET RETAIL STORES, INC.
By:
Name:
Title:
ROSHCO, INC.
By:
Name:
Title:
M. KAMENSTEIN CORP.
By:
Name:
Title:
_______________________________
1. Delete inapplicable term(s).
2. Delete inapplicable term(s).
3. Delete inapplicable term(s).
4. Consents to be included to the extent required by
Section 10.04(b) of the Credit Agreement.
5. 5 This paragraph shall be included in the Revolving Note
of each Lender that is a lender under the November 8, 2001
credit agreement.
