<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)
------------------------
MERCANTILE STORES COMPANY, INC.
(Name of Subject Company)
MSC ACQUISITIONS, INC.
DILLARD'S, INC.
(Bidders)
COMMON STOCK, $.14 2/3 PAR VALUE PER SHARE
(Title of Class of Securities)
587533100
(CUSIP Number of Class of Securities)
PAUL J. SCHROEDER, ESQ.
VICE PRESIDENT, SECRETARY
& GENERAL COUNSEL
DILLARD'S, INC.
1600 CANTRELL ROAD
LITTLE ROCK, ARKANSAS 72201
TELEPHONE: (501) 376-5200
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
COPY TO:
ALAN G. SCHWARTZ, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
TELEPHONE: (212) 455-2000
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<PAGE>
This Amendment No. 5 amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed on May 21, 1998 and amended and supplemented on June 4,
1998, June 18, 1998, July 6, 1998 and July 21, 1998 (as amended and
supplemented, the "Schedule 14D-1") relating to the offer by MSC Acquisitions,
Inc., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of
Dillard's, Inc., a Delaware corporation (the "Parent"), to purchase all of the
outstanding shares of Common Stock, $.14 2/3 par value per share (the "Shares"),
of Mercantile Stores Company, Inc., a Delaware corporation (the "Company"), at a
purchase price of $80 per Share, net to the seller in cash without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated May 21, 1998 (the "Offer to Purchase") and in the related Letter
of Transmittal. Unless otherwise indicated, all capitalized terms used but not
defined herein shall have the meanings assigned to them in the Schedule 14D-1.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4(b) of the Schedule 14D-1 is hereby amended and supplemented as
follows:
The total amount of funds required by the Purchaser to purchase all
outstanding Shares pursuant to the Offer and to pay fees and expenses related to
the Offer and the proposed Merger is estimated to be approximately $3 billion.
The Purchaser plans to obtain all funds needed for the Offer and the proposed
Merger through capital contributions or advances made by Parent. Parent expects
to obtain a portion of the funds for such capital contributions or advances from
its available cash and from working capital and expects to obtain the balance of
such funds required to purchase the Shares from a structured receivables
facility supported by a pool of credit card receivables of Parent and the
Company, a public offering of long-term notes pursuant to Parent's existing
universal shelf registration statement, through issuance of commercial paper
and, if necessary, through borrowings under its new 364-day revolving credit
facility and its existing lines of credit, in each case as described below. Any
debt incurred to fund the purchase of the Shares in the Offer is expected to be
repaid from funds internally generated by the Parent and its subsidiaries and
from external sources. THE OFFER IS NOT CONTINGENT UPON THE RECEIPT OF THE
FINANCING DESCRIBED IN THIS ITEM 4.
RECEIVABLES FINANCING
The Parent intends to obtain up to $1.25 billion to finance a portion of the
purchase of the Shares with a 12-month receivables purchase bridge facility (the
"Receivables Facility") through Park Avenue Receivables Corporation ("PARCO"), a
multi-seller asset-backed commercial paper vehicle administered by The Chase
Manhattan Bank. The Receivables Facility will be supported by portfolios of open
and private label credit card receivables generated or to be generated by or
through the Parent, the Company or their affiliates (the "Receivables").
Certain affiliates of the Parent will enter into a Pooling and Servicing
Agreement, as supplemented (the "Pooling and Servicing Agreement") pursuant to
which the Receivables will be transferred to a trust (the "Trust") and serviced
by certain affiliates of the Parent. PARCO or, in certain circumstances, the APA
Bank (as defined below and together with PARCO, the "Receivables Purchasers")
will provide funding to the Parent through the purchase of an undivided
percentage ownership interest in the Trust ("Transferred Interests") the
purchase of which will be financed through the issuance of commercial paper by
PARCO or under the APA Facility (as defined below), as the case may be.
The Chase Manhattan Bank as Funding Agent and on behalf of a syndicate of
lenders, will provide a back-up liquidity commitment (the "APA Facility") of the
outstanding Receivable amount to finance the Receivables, subject to certain
conditions. In addition to providing liquidity support to PARCO, the APA
Facility will also provide funding during the term of the Receivables Facility
in the event PARCO is unwilling or unable to purchase the Transferred Interests
through the issuance of commercial paper. Availability of the Receivables
Facility will be subject to customary conditions precedent for this type of
financing arrangement including the Trust holding Receivables meeting certain
eligibility requirements equal to the amount of the outstanding Transferred
Interests and required reserves, satisfactory due diligence, execution of
satisfactory documentation and payment of initial, agent, commitment,
arrangement and certain other similar fees.
The effective financing rate under the Receivables Facility will be (i) the
PARCO A-1/P-1 commercial paper rate as of the date when the Receivables Facility
is funded in the asset-backed commercial paper
<PAGE>
market, plus dealer and note issuance fees, if any, and program fees which will
be 20 basis points during the first 120 days of the Receivables Facility and 50
basis points thereafter or (ii) if the Receivables Facility is funded by the APA
Facility, LIBOR plus 7.5 basis points with no program fees payable on amounts
funded under the APA Facility.
NOTE OFFERING
Parent expects to obtain approximately $1.7 billion of its acquisition funds
through the issuance of long-term notes pursuant to its existing universal shelf
registration statement. The notes be issued as standard long-term notes at
various maturities and at an interest rate which is to be negotiated.
COMMERCIAL PAPER
Parent expects to obtain any remaining necessary acquisition funds through
the issuance of commercial paper. The issuance will be made through Parent's
existing commercial paper dealers, Goldman Sachs & Co. and Chase Securities,
Inc., at rates of LIBOR plus 5 basis points to LIBOR plus 20 basis points,
depending on maturity.
CREDIT FACILITIES
If, for any reason, sufficient funds are not available from the above-
referenced sources, Parent would obtain the remaining required acquisition funds
from either its new 364-day revolving credit facility, from its existing credit
facility or from additional commercial bank borrowings.
Parent's new 364-day revolving credit facility will be provided by a group
of lenders including The Chase Manhattan Bank, as agent (the "Agent"), and as a
lender. The revolving credit facility will allow Parent and its borrowing
subsidiaries (each a "Borrower") to borrow up to $750 million through the
incurrence of Base Rate Loans or Eurodollar Loans (each as defined therein).
The commitments under the revolving credit facility will terminate 364 days
after the closing date for such facility.
The amounts borrowed pursuant to the revolving credit facility will bear
interest at the following rates per annum: (A) in the case of Base Rate Loans,
the highest of (i) 1/2 of 1% in excess of the Federal Funds Rate (as defined
therein), (ii) the rate that the Agent announces from time to time as its prime
lending rate, as in effect from time to time, and (iii) 1% in excess of the
Adjusted Certificate of Deposit Rate (as defined therein); and (B) in the case
of Eurodollar Loans, the sum of (i) the Eurodollar Rate (as defined therein) (as
adjusted for maximum reserves) as determined by the Agent for the respective
interest period, plus (ii) the Applicable Margin (as defined therein). For so
long as the aggregate principal amount of the loans outstanding exceeds one-half
of the amount of the credit facility, the interest rate applicable to all such
loans shall be increased by 12.5 basis points per annum. The Parent has agreed
to pay a quarterly facility fee and a closing fee to each lender under the
revolving credit facility and an administrative fee to the Agent.
The covenants in the revolving credit facility will, among other things,
restrict the parent and borrowing subsidiaries from consolidating, combining or
merging with or into, or selling, leasing, transferring or assigning
substantially all their assets to, any other person other than pursuant to the
revolving credit facility or incurring liens or making investments, loans or
advances other than pursuant to the revolving credit facility. In addition, the
revolving credit facility will require the Parent and its subsidiaries, on a
consolidated basis, to maintain stockholders' equity of at least $1 billion.
Parent's existing revolving credit facility is provided by a group of
lenders including The Chase Manhattan Bank, as agent (the "Agent"), and as a
lender. The revolving credit facility allows Parent and its borrowing
subsidiaries (each a "Borrower") to borrow up to $500 million through the
incurrence of ABR Loans, CD Loans or Eurodollar Loans (each as defined therein).
The commitments under the revolving credit facility terminate on May 9,
2002.
The amounts borrowed pursuant to the revolving credit facility bear interest
at the following rates per annum: (A) in the case of ABR Loans, the greatest of
(i) the Prime Rate (as defined therein) in effect on such day, (ii) the Base CD
Rate (as defined therein) in effect on such day plus 1% and (iii) the Federal
<PAGE>
Funds Effective Rate (as defined therein) in effect on such day plus 1/2 of 1%;
(B) in the case of CD Loans (rounded upwards, if necessary, to the next 1/100 of
1%), the sum of (i) a rate per annum equal to the product of (a) the Fixed CD
Rate (as defined therein) in effect on such day and (b) Statutory Reserves (as
defined therein), plus (ii) the Assessment Rate (as defined therein) plus (iii)
the Applicable Margin (as defined therein); and (C) for Eurodollar Loans
(rounded upwards, if necessary, to the next 1/16 of 1%), the sum of (i) the
product of (a) the LIBO Rate (as defined therein) in effect on such day and (b)
Statutory Reserves (as defined therein) plus (ii) the Applicable Margin (as
defined therein). The Parent has agreed to pay a quarterly facility fee to each
lender under the revolving credit facility and an administrative fee to the
Agent.
The covenants in the revolving credit facility, among other things, restrict
the parent and borrowing subsidiaries from consolidating, combining or merging
with or into, or selling, leasing, transferring or assigning substantially all
their assets to, any other person other than pursuant to the revolving credit
facility or incurring liens or making investments, loans or advances other than
pursuant to the revolving credit facility. In addition, the revolving credit
facility requires the Parent and its subsidiaries, on a consolidated basis, to
maintain stockholders' equity of at least $1 billion.
ITEM 10. ADDITIONAL INFORMATION.
Item 10(b) of the Schedule 14D-1 is hereby amended and supplemented as
follows:
With respect to State Takeover Laws, Purchaser withdraws its legal
conclusion that certain provisions of existing State takeover statutes conflict
with federal law and constitute an unconstitutional burden on interstate
commerce. Purchaser has no knowledge of any State statute that conflicts with
the terms of the Offer.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 of the Schedule 14D-1 is hereby amended and supplemented to add the
following:
(b)(1) Amended and Restated Credit Agreement, dated as of May 9, 1997, of
Parent.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in the Statement is true, complete and correct.
<TABLE>
<S> <C> <C>
DILLARD'S, INC.
By: /s/ JAMES I. FREEMAN
-----------------------------------------
Name: James I. Freeman
Title: SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
MSC ACQUISITIONS, INC.
By: /s/ JAMES I. FREEMAN
-----------------------------------------
Name: James I. Freeman
Title: SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
</TABLE>
Date: July 28, 1998
<PAGE>
EXHIBIT INDEX
<TABLE>
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EXHIBIT PAGE
NO. DESCRIPTION NO.
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<S> <C> <C>
(b)(1) Amended and Restated Credit Agreement, dated as of May 9, 1997, of Parent.
</TABLE>
<PAGE>
CONFORMED COPY
AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 9, 1997
(the "Amended and Restated Credit Agreement") among DILLARD
DEPARTMENT STORES, INC., a Delaware corporation (the "Parent"),
DILLARD INVESTMENT CO., INC., a Delaware corporation ("DIC" and,
together with the Parent, the "Borrowers"), the financial
institutions listed on Schedule 2.01 (the "Lenders"), THE CHASE
MANHATTAN BANK (as successor to Chemical Bank), a New York banking
corporation, as agent for the Lenders (in such capacity, the
"Agent") and NATIONSBANK OF TEXAS, N.A. and BANK OF AMERICA ILLINOIS
as co-agents (each a "Co-Agent" and, together, the "Co-Agents").
A. The Borrowers, the Lenders and the Agent have heretofore entered
into the Credit Agreement dated as of July 13, 1994 (the "Credit Agreement").
Capitalized terms used herein and defined in the Credit Agreement have the
meanings set forth in the Credit Agreement.
B. The Borrowers wish, and the undersigned Lenders, the Agent and
the Co-Agents are willing, upon the terms and subject to the conditions set
forth herein, to amend the Credit Agreement as set forth herein and to restate
the Credit Agreement in its entirety to read as set forth in the Credit
Agreement after giving effect to the amendments set forth herein.
Accordingly, for and in consideration of the premises and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments to Section 1.01 of the Credit Agreement.
Section 1.01 of the Credit Agreement is hereby amended as of the Restatement
Effective Date (as defined below) as follows:
(a) by deleting the table in the definition of "Applicable Facility
Fee Percentage" and substituting therefor the following:
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<TABLE>
<CAPTION>
2
S&P/Moody's Rating Facility Fee Percentage
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<S> <C>
Category 1 .065%
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AA--/Aa3 or higher
Category 2 .075%
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A+/A1, A/A2 or A-/A3
Category 3 .10%
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BBB+/Baa1 or BBB/Baa2
Category 4 .225%
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BBB-/Baa3 or lower
</TABLE>
(b) by deleting the definition of "Closing Date" in its entirety and
substituting therefor the following:
"Closing Date" means the date of the Amended and Restated
Credit Agreement.
(c) by deleting the definition of "Maturity Date" in its entirety
and substituting therefor the following:
"Maturity Date" means May 9, 2002.
SECTION 2. Amendment to Section 3.05 of the Credit Agreement.
Section 3.05 of the Credit Agreement is hereby amended as of the Restatement
Effective Date by deleting the Section in its entirety and substituting
therefore the following:
SECTION 3.05. Financial Statements. The Parent has heretofore
furnished to the Lenders its balance sheets and statements of income and
changes in financial condition as of and for the fiscal year ended
February 1, 1997, audited and certified by Deloite & Touche, independent
public accountants. Such financial statements present fairly the financial
condition and results of operations of the Parent as of the dates and for
the periods indicated. Such balance sheets and the notes thereto disclose
all material liabilities, direct or contingent, of the Parent and its
consolidated subsidiaries as of the dates thereof. Such financial
statements were prepared in accordance with GAAP applied on a consistent
basis.
SECTION 3. Amendment to Section 3.06 of the Credit Agreement.
Section 3.06 of the Credit Agreement is
<PAGE>
3
hereby amended as of the Restatement Effective Date by deleting the reference to
"January 29, 1994" and substituting therefor a reference to "February 1, 1997".
SECTION 4. Amendment to Article VIII of the Credit Agreement.
Article VIII of the Credit Agreement is hereby amended as of the Restatement
Effective Date as follows:
(a) by deleting the reference to "Chemical Bank" in the first
paragraph thereof and substituting therefor a reference to "The Chase
Manhattan Bank"; and
(b) by adding the following sentence to the end of the first
paragraph:
The Co-Agents will have no duties under this Amended and Restated
Credit Agreement other than those duties that may arise from their
status as Lenders under this Agreement.
SECTION 5. Amendment to Section 9.01 of the Credit Agreement.
Section 9.01 of the Credit Agreement is hereby amended as of the Restatement
Effective Date by deleting the Section in its entirety and substituting therefor
the following:
SECTION 9.01. 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:
(a) if to either of the Borrowers, to it at 1600 Cantrell
Road, Little Rock, Arkansas 72207, Attention of Mr. James I.
Freeman, Vice President and Chief Financial Officer (Telecopy No.
501-376-5917), with copy to Mr. James E. Darr, Jr., Vice President
and General Counsel (Telecopy No. 501-376-5031);
(b) if to the Agent, to The Chase Manhattan Bank, Agent Bank
Services Group, One Chase Manhattan Plaza, 8th Floor, New York, New
York 10018, Attention of Barbara Clemens (Telecopy No. (212)
552-7500), with a copy to The Chase Manhattan Bank, 270 Park Avenue,
New York 10017],
<PAGE>
4
Attention of Maggie Lane (Telecopy No. (212) 270-5646);
(c) if to any other Lender, 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 6. Amendments to Exhibit A to the Credit Agreement. Exhibit
A to the Credit Agreement is hereby amended as of the Restatement Effective Date
by:
(a) deleting the reference in the first full paragraph thereof to
"Chemical Bank" and substituting therefor a reference to "The Chase
Manhattan Bank";
(b) deleting the reference in the first full paragraph thereof to
"(the 'Credit Agreement')" and substituting therefor the following:
(as amended and restated as of May 9, 1997, the "Amended and
Restated Credit Agreement");
(c) by deleting therefrom all other references to "the Credit
Agreement" and substituting therefor in each instance a reference to "the
Amended and Restated Credit Agreement".
SECTION 7. Amendments to Exhibit B. Exhibit B to the Credit
Agreement is hereby amended as of the Restatement Effective Date by:
(a) deleting the reference in the first full paragraph thereof to
"(the 'Credit Agreement')" and substituting therefor the following:
(as amended and restated as of May 9, 1997, the "Amended and
Restated Credit Agreement");
(b) deleting all references therein to "Chemical Bank" and
substituting therefor in each instance a reference to "The Chase Manhattan
Bank";
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5
(c) by deleting therefrom all other references to "the Credit
Agreement" and substituting therefor in each instance a reference to "the
Amended and Restated Credit Agreement".
SECTION 8. Amendment to Exhibit C to the Credit Agreement. Exhibit C
to the Credit Agreement is hereby amended as of the Restatement Effective Date
by deleting the Exhibit in its entirety and substituting therefor Exhibit A to
this Amendment and Restatement.
SECTION 9. Amendments to Schedule 2.01, 3.07, 3.08, 3.16 and 6.01 to
the Credit Agreement. Schedules 2.01, 3.07, 3.08, 3.16 and 6.01 to the Credit
Agreement are hereby amended as of the Restatement Effective Date by deleting
such Schedules in their entirety and substituting therefor Schedules 2.01, 3.07,
3.08, 3.16 and 6.01 to this Amendment and Restatement.
SECTION 10. Representations and Warranties. Each Borrower represents
and warrants to the Lenders and the Agent, on and as of the Restatement
Effective date, that:
(a) This Amendment and Restatement has been duly authorized,
executed and delivered by each Borrower, and each of this Amendment and
Restatement and the Credit Agreement, as amended and restated hereby,
constitutes a legal, valid and binding obligation of each Borrower
enforceable in accordance with its terms (subject, as to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors' rights generally and to
general principles of equity).
(b) The representations and warranties of each Borrower contained in
the Credit Agreement, as amended and restated hereby, are true and correct
on and as of the Restatement Effective Date, except to the extent that
such representations and warranties relate to an earlier date.
(c) No Default or Event of Default has occurred and is continuing.
SECTION 11. Effectiveness. This Amendment and Restatement shall
become effective on the date (the "Restatement Effective Date") that each of the
following conditions is satisfied:
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6
(a) The Agent (or its counsel) shall have received counterparts
hereof signed by each of the Borrowers and the Lenders or, in the case of
any party as to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of telegraphic,
telex or other written confirmation from such party of execution of a
counterpart hereof by such party.
(b) The Agent (or its counsel) shall have received a duly executed
Note for each Lender complying with the provisions of Section 2.04 of the
Credit Agreement as amended and restated hereby.
(c) The Agent (or its counsel) shall have received a favorable
written opinion of Friday, Eldridge & Clark, counsel for the Borrowers,
dated the Restatement Effective Date and addressed to the Lenders, to the
effect set forth in Exhibit B to this Amendment and Restatement and
satisfactory to Cravath, Swaine & Moore, counsel for the Agent; the
Borrowers hereby instruct such counsel to deliver such opinion to the
Agent.
(d) The Agent (or its counsel) shall have received (i) a copy of the
certificate of incorporation, as amended, including all amendments
thereto, of each Borrower, certified by the Secretary of State of
Delaware, and a certificate as to the good standing of and charter
documents filed by each Borrower from such Secretary of State; (ii) a
certificate of the Secretary or Assistant Secretary of each Borrower dated
the Restatement Effective Date and certifying (A) that attached thereto is
a true and complete copy of the by-laws of such Borrower as in effect on
the date of such certificate and at all times since a date prior to the
date of the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of such Borrower, or appropriate committee thereof,
authorizing, on behalf of such Borrower, the execution, delivery and
performance of each of this Amendment and Restatement and the Credit
Agreement as amended and restated hereby, and that such resolutions have
not been modified, rescinded or amended and are in full force and effect,
(C) that the certificate of incorporation of such Borrower has not been
amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above,
<PAGE>
7
and (D) as to the incumbency and specimen signature of each officer of
such Borrower executing this Amendment and Restatement or any other
document delivered in connection herewith on behalf of such Borrower;
(iii) a certificate of another officer of each Borrower as to the
incumbency and specimen signature of the Secretary or such Assistant
Secretary of such Borrower executing the certificate pursuant to (ii)
above; and (iv) such other documents as the Lenders or Cravath, Swaine &
Moore, counsel for the Agent, may reasonably request.
(e) The Agent shall have received a certificate, dated the
Restatement Effective Date and signed by a Financial Officer of the
Parent, confirming compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.01 of the Credit Agreement as amended
and restated hereby.
(f) The Agent shall have received all Fees and other amounts due and
payable on or prior to the Restatement Effective Date (including all
Facility Fees accrued under the Credit Agreement as of the Restatement
Effective Date).
(g) If any Loans are outstanding on the Restatement Effective Date,
such Loans shall be prepaid on such date (without prejudice to each
Borrower's right to finance such prepayment pursuant to a Borrowing on the
Restatement Effective Date).
SECTION 12. Restatement. On the Restatement Effective Date, the
Credit Agreement, as amended hereby, shall be deemed incorporated herein by
reference and restated in its entirety.
SECTION 13. Expenses. The Borrowers shall pay all reasonable
out-of-pocket expenses of the Agent, including but not limited to syndication
expenses and the fees and disbursements of Cravath, Swaine & Moore, counsel for
the Agent, in connection with the preparation and implementation of this
Amendment and Restatement.
SECTION 14. New York Law. THIS AMENDMENT AND RESTATEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 15. Counterparts. This Amendment and Restatement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as
<PAGE>
8
if the signatures thereto and hereto were upon the same instrument.
SECTION 16. Headings. The headings of this Amendment and Restatement
are for convenience of reference only and are not part of this Amendment and
Restatement and are not to be taken into consideration in interpreting this
Amendment and Restatement.
SECTION 17. Entire Agreement. This Amendment and Restatement
constitutes the entire agreement and understanding of the parties with respect
to the subject matter hereof and supercedes any and all prior agreements and
understandings relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
and Restatement to be duly executed by their respective authorized officers as
of the date first written above.
DILLARD DEPARTMENT STORES,
INC.,
by James I. Freeman
-------------------------
Name: James I. Freeman
Title: Vice President
DILLARD INVESTMENT CO., INC.,
by James I. Freeman
-------------------------
Name: James I. Freeman
Title: Vice President
<PAGE>
CONFORMED COPY
================================================================================
CREDIT AGREEMENT
Dated as of July 13, 1994
Among
DILLARD DEPARTMENT STORES, INC.,
DILLARD INVESTMENT CO., INC.,
THE LENDERS NAMED HEREIN
and
CHEMICAL BANK,
as Agent
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
I. DEFINITIONS ......................................................... 1
SECTION 1.01. Defined Terms ......................................... 1
SECTION 1.02. Terms Generally ....................................... 15
II. THE CREDITS ......................................................... 15
SECTION 2.01. Commitments .......................................... 15
SECTION 2.02. Loans ................................................ 15
SECTION 2.03. Notice of Borrowings ................................. 17
SECTION 2.04. Notes; Repayment of Loans ............................ 18
SECTION 2.05. Fees ................................................. 18
SECTION 2.06. Interest on Loans .................................... 19
SECTION 2.07. Default Interest ..................................... 20
SECTION 2.08. Alternate Rate of Interest ........................... 20
SECTION 2.09. Termination and Reduction of Commitments ............. 21
SECTION 2.10. Prepayment ........................................... 21
SECTION 2.11. Reserve Requirements; Change in Circumstances ........ 22
SECTION 2.12. Change in Legality ................................... 24
SECTION 2.13. Indemnity ............................................ 24
SECTION 2.14. Pro Rata Treatment ................................... 25
SECTION 2.15. Sharing of Setoffs ................................... 26
SECTION 2.16. Payments ............................................. 26
SECTION 2.17. Taxes ................................................ 27
SECTION 2.18. Termination or Assignment of Commitments
Under Certain Circumstances ........................ 30
III. REPRESENTATIONS AND WARRANTIES ...................................... 31
SECTION 3.01. Organization; Powers ................................. 31
SECTION 3.02. Authorization ........................................ 31
SECTION 3.03. Enforceability ....................................... 31
SECTION 3.04. Governmental Approvals ............................... 31
SECTION 3.05. Financial Statements ................................. 32
SECTION 3.06. No Material Adverse Change ........................... 32
SECTION 3.07. Subsidiaries ......................................... 32
SECTION 3.08. Litigation; Compliance with Laws ..................... 32
</TABLE>
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2
<TABLE>
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SECTION 3.09. Agreements ........................................... 33
SECTION 3.10. Federal Reserve Regulations .......................... 33
SECTION 3.11. Investment Company Act; Public Utility Holding
Company Act ........................................ 33
SECTION 3.12. Use of Proceeds ...................................... 33
SECTION 3.13. Tax Returns .......................................... 33
SECTION 3.14. No Material Misstatements ............................ 34
SECTION 3.15. Employee Benefit Plans ............................... 34
SECTION 3.16. Environmental and Safety Matters ..................... 34
IV. CONDITIONS OF LENDING ............................................... 35
SECTION 4.01. All Borrowings ....................................... 35
SECTION 4.02. First Borrowing ...................................... 36
V. AFFIRMATIVE COVENANTS ............................................... 37
SECTION 5.01. Existence; Businesses and Properties ................. 37
SECTION 5.02. Insurance ............................................ 38
SECTION 5.03. Obligations and Taxes ................................ 38
SECTION 5.04. Financial Statements, Reports, etc. .................. 39
SECTION 5.05. Litigation and Other Notices ......................... 40
SECTION 5.06. ERISA ................................................ 41
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections ........................................ 41
SECTION 5.08. Use of Proceeds ...................................... 41
VI. NEGATIVE COVENANTS .................................................. 42
SECTION 6.01. Liens ................................................ 42
SECTION 6.02. Investments, Loans and Advances ...................... 44
SECTION 6.03. Mergers, Consolidations and Sales of Assets .......... 44
SECTION 6.04. Net Worth ............................................ 45
VII. EVENTS OF DEFAULT ................................................... 45
VIII. THE AGENT ........................................................... 48
IX. MISCELLANEOUS ....................................................... 51
</TABLE>
<PAGE>
3
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 9.01. Notices .............................................. 51
SECTION 9.02. Survival of Agreement ................................ 52
SECTION 9.03. Binding Effect ....................................... 52
SECTION 9.04. Successors and Assigns ............................... 53
SECTION 9.05. Expenses; Indemnity .................................. 56
SECTION 9.06. Right of Setoff ...................................... 58
SECTION 9.07. Applicable Law ....................................... 58
SECTION 9.08. Waivers; Amendments .................................. 58
SECTION 9.09. Interest Rate Limitation ............................. 59
SECTION 9.10. Entire Agreement ..................................... 59
SECTION 9.11. Waiver of Jury Trial ................................. 60
SECTION 9.12. Severability ......................................... 60
SECTION 9.13. Counterparts ......................................... 60
SECTION 9.14. Headings ............................................. 60
SECTION 9.15. Jurisdiction; Consent to Service of Process .......... 61
X. GUARANTEES .......................................................... 61
</TABLE>
<TABLE>
<CAPTION>
References
<S> <C>
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Administrative Questionnaire
Exhibit D Form of Opinion
Schedule 2.01 Lenders
Schedule 3.07 Subsidiaries
Schedule 3.08 Litigation
Schedule 3.16 Environmental Liability
Schedule 6.01 Liens
</TABLE>
<PAGE>
$500,000,000 REVOLVING CREDIT FACILITY AGREEMENT dated as of
July 13, 1994, among Dillard Department Stores, Inc., a Delaware
corporation (the "Parent"), Dillard Investment Co., Inc., a Delaware
corporation ("DIC" and, together with the Parent, the "Borrowers"),
the financial institutions listed in Schedule 2.01 (the "Lenders")
and CHEMICAL BANK, a New York banking corporation, as agent for the
Lenders (in such capacity, the "Agent").
The Borrowers have requested the Lenders to extend credit in order
to enable the Borrowers, subject to the terms and conditions of this Agreement,
to borrow on a revolving basis, at any time and from time to time prior to the
Maturity Date (as defined herein), an aggregate principal amount at any time
outstanding not in excess of $500,000,000. The proceeds of such borrowings are
to be used for general corporate purposes. The Lenders are willing to extend
such credit to the Borrowers on the terms and subject to the conditions set
forth herein.
Accordingly, the Borrowers, the Lenders and the Agent agree as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"Adiusted CD Rate" shall mean, with respect to any CD Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to the sum of (a) a rate per annum equal to the
product of (i) the Fixed CD Rate in effect for such Interest Period and (ii)
Statutory Reserves, plus (b) the Assessment Rate. For purposes hereof, the term
"Fixed CD Rate" shall
<PAGE>
2
mean the arithmetic average (rounded upwards, if necessary, to the next 1/100 of
1%) of the prevailing rates per annum bid at or about 10:00 a.m., New York City
time, to the Agent on the first Business Day of the Interest Period applicable
to such CD Borrowing by three New York City negotiable certificate of deposit
dealers of recognized standing selected by the Agent for the purchase at face
value of negotiable certificates of deposit of major United States money center
banks in a principal amount approximately equal to the Agent's portion of such
CD Borrowing and with a maturity comparable to such Interest Period.
"Adjusted LIBO Rate" shall mean, 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 the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves. For purposes
hereof, the term' "LIBO Rate" shall mean the rate (rounded upwards, if
necessary, to the next 1/16 of 1%) at which dollar deposits approximately equal
in principal amount to the Agent's portion of such Eurodollar Borrowing and for
a maturity comparable to such Interest Period are offered to the principal
London office of the Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit C.
"Affiliate" shall mean, when used 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.
"Agent Fees" shall have the meaning assigned to such term in Section
2.05(b).
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof, "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by the Agent as its
<PAGE>
3
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly announced
as being effective. "Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate. "Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it. "Federal
Funds Effective Rate" shall mean, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason the Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Base CD Rate or the Federal Funds Effective
Rate or both for any reason, including the inability or failure of the Agent to
obtain sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate, respectively.
<PAGE>
4
"Applicable Facility Fee Percentage" shall mean on any date the applicable
percentage set forth below based upon the Ratings:
<TABLE>
<CAPTION>
S&P/Moody's Rating Facility Fee Percentage
------------------ -----------------------
<S> <C>
Category 1 .08%
----------
AA-/Aa3 or higher
Catecory 2 .10%
----------
A+/A1, A/A2 or A-/A3
Category 3 .15%
----------
BBB+/Baal or BBB/Baa2
Category 4 .25%
----------
BBB-/Baa3 or lower
</TABLE>
For purposes of the foregoing, (i) if the Ratings established or deemed to have
been established by Moody's and S&P shall fall within different Categories, the
ratings in the numerically higher Category shall be disregarded, (ii) if Moody's
or S&P shall not have in effect a Rating (other than because such rating agency
shall no longer be in the business of rating corporate debt obligations), then
such rating agency will be deemed to have established a Rating in Category 4;
and (iii) if any rating established or deemed to have been established by
Moody's or S&P shall be changed (other than as a result of a change in the
rating system of Moody's or S&P) such change shall be effective as of the date
on which it is first announced by the applicable rating agency. Each change in
the Applicable Facility Fee Percentage shall apply during the period commencing
on the effective date of such change and ending on the date immediately
preceding the effective date of the next such change. If the rating system of
Moody's or S&P shall change, or if either such rating agency shall cease to be
in the business of rating corporate debt obligations, the Borrowers and the
Lenders shall negotiate in good faith to amend the references to specific
ratings in this definition to reflect such changed rating system or the
non-availability of ratings from such rating agency.
"Applicable Margin" shall mean on any date, with respect to the
Loans comprising any Eurodollar Borrowing or
<PAGE>
5
CD Borrowing, as the case may be, the applicable spread set forth below based on
the Ratings:
<TABLE>
<CAPTION>
Applicable Margin
------------------------------
Certificate
Eurodollar of Deposit
S&P/Moody's Rating Loan Spread Loan Spread
------------------ ----------- -----------
<S> <C> <C>
Category 1
----------
AA-/Aa3 or higher 0.125% 0.25%
Category 2
----------
A+/A1, A/A2 or A-/A3 0.15% 0.275%
Category 3
----------
BBB+/Baal or BBB/Baa2 0.25% 0.375%
Category 4
----------
BBB-/Baa3 or lower 0.375% 0.500%
</TABLE>
For the purposes of the foregoing, (i) if the Ratings established or deemed to
have been established by Moody's and S&P shall fall within different Categories,
the rating in the numerically higher Category shall be disregarded, (ii) if
Moody's or S&P shall not have in effect a Rating (other than because such rating
agency shall no longer be in the business of rating corporate debt obligations),
then such rating agency will be deemed to have established a Rating in Category
4; and (iii) if any rating established or deemed to have been established by
Moody's or S&P shall be changed (other than as a result of a change in the
rating system of Moody's or S&P) such change shall be effective as of the date
on which it is first announced by the applicable rating agency. Each change in
the Applicable Margin shall apply during the period commencing on the effective
date of such change and ending on the date immediately preceding the effective
date of the next such change. If the rating system of Moody's or S&P shall
change, or if either such rating agency shall cease to be in the business of
rating corporate debt obligations, the Borrowers and the Lenders shall negotiate
in good faith to amend the references to specific ratings in this definition to
reflect such changed rating system or the non-availability of ratings from such
rating agency.
<PAGE>
6
"Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Agent as the then current net annual assessment rate that will be employed in
determining amounts payable by the Agent to the Federal Deposit Insurance
Corporation (or any successor) for insurance by such Corporation (or such
successor) of time deposits made in dollars at the Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Agent, in the form
of Exhibit B or such other form as shall be approved by the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, 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 Lease Obligations" of any person shall mean 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, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CD Borrowing" shall mean a Borrowing comprised of CD Loans.
"CD Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Adjusted CD Rate in accordance with the provisions of
Article II.
<PAGE>
7
A "Change in Control" shall be deemed to have occurred if (a) any
person or group (within the meaning of Rule 13d-5 of the Securities and
Exchange Commission as in effect on the date hereof), other than the Dillards,
shall own directly or indirectly, beneficially or of record, shares representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding capital stock of the Parent; (b) a majority of the seats (other
than vacant seats) on the board of directors of the Parent shall at any time
have been occupied by persons who were neither (i) nominated by the Dillards or
by the Board of Directors of the Parent, nor (ii) appointed by directors so
nominated; or (c) any person or group, other than the Dillards, shall otherwise
directly or indirectly Control the Parent; or (d) DIC shall cease to be a wholly
owned subsidiary of the Parent.
"Closing Date" shall mean the date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.
"Commitment" shall mean, with respect to each Lender, the commitment
of such Lender to make Loans hereunder as set forth in Section 2.01, as the same
may be reduced from time to time pursuant to Section 2.09.
"Control" shall mean 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 ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"Dillards" shall mean William T. Dillard, William Dillard, Jr., Alex
Dillard, Mike Dillard or any of their immediate families, any of their lineal
descendants, or any trusts exclusively for the benefit of the aforementioned,
and any entity wholly owned directly or indirectly by one or more of the
foregoing.
"dollars" or "$" shall mean lawful money of the United States of
America.
<PAGE>
8
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is a member of a group of which the Parent is a member and
which is treated as a single employer under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean a Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Facility Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Fees" shall mean the Facility Fees and the Agent Fees.
"Fee Letter" shall mean the Fee Letter between the Agent and the
Borrower dated the date hereof.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, Treasurer or Controller of such
corporation.
"GAAP" shall mean United States generally accepted accounting
principles, applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security
<PAGE>
9
for the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital,
cash flow, fixed charge coverage (or other coverage ratio) or other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness; provided, however, that the term
Guarantee shall not include endorsements for collection or deposit, in either
case in the ordinary course of business.
"Guaranteed Obligations" shall mean, as to each Borrower, the
principal of and interest on the Loans made to, and the other obligations,
monetary or otherwise, of, the other Borrower under this Agreement or any other
Loan Document.
"Indebtedness" of any person shall mean, without duplication, (a)
all obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services, (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
obligations secured thereby have been assumed, (g) all Guarantees by such person
of Indebtedness of others, (h) all Capital Lease Obligations of such person, (i)
all obligations of such person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or exchange
rate hedging arrangements and (j) all obligations of such person as an account
party in respect of letters of credit and bankers' acceptances. The Indebtedness
of any person shall include the Indebtedness of any partnership in which such
person is a general partner.
"Interest Payment Date" shall mean, with respect to any 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 or a CD Borrowing with an
<PAGE>
10
Interest Period of more than 90 days' duration, each day that would have been an
Interest Payment Date had successive Interest Periods of three months' duration
or 90 days' duration, as the case may be, been applicable to such Borrowing,
and, in addition, the date of any refinancing or conversion of such Borrowing
with or to a Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the Borrower may elect, (b) as to any CD
Borrowing, a period of 30, 60, 90 or 180 days' duration, as the Borrower may
elect, commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and (c) as to any ABR Borrowing, the period commencing on the date of
such Borrowing or on the last day of the immediately preceding Interest Period
applicable to such Borrowing, as the case may be, and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or December 31, (ii) the
Maturity Date and (iii) the date such Borrowing is repaid or prepaid in
accordance with Section 2.04 or 2.10, as applicable; provided, however, that 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, in the case
of a Eurodollar Borrowing only, 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. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.
"Investment", as applied to any person, shall mean any direct or
indirect purchase or other acquisition by that person of, or a beneficial
interest in, the stock, shares, partnership interest, notes or other debt or
equity securities of any other person, or any direct or indirect loan, advance
(other than advances to employees for moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or capital
contribution by that person to any other person, including all Indebtedness and
accounts receivable from that other
<PAGE>
11
person which are not current assets or did not arise from sales to that other
person in the ordinary course of business. The amount of any Investment shall be
the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on 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.
"Loans" shall mean the revolving loans made by the Lenders to the
Borrowers pursuant to Section 2.01. Each Loan shall be a Eurodollar Loan, a CD
Loan or an ABR Loan.
"Loan Documents" shall mean this Agreement, the Fee Letter and the
Notes.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect
on the business, assets, operations, prospects or condition, financial or
otherwise, of the Parent and the Subsidiaries taken as a whole, (b) material
impairment of the ability of a Borrower to perform any of its obligations under
any Loan Document to which it is or will be a party or (c) material impairment
of the rights of or benefits available to the Lenders under any Loan Document.
"Maturity Date" shall mean the fifth anniversary of the date of this
Agreement.
"Moody's" shall mean Moody's Investors Service, Inc.
"Note" shall mean a promissory note of a Borrower, substantially in
the form of Exhibit A, evidencing Loans.
<PAGE>
12
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred
to and defined in ERISA.
"Permitted Investments" shall mean:
(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 such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within 365 days from the date of acquisition thereof;
(b) investments in short-term corporate debt through programs
administered by any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital and
surplus and undivided profits of not less than $250,000,000, or
investments in commercial paper, maturing within 90 days from the date of
acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits, maturing within 365 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 or licensed under the laws of the United States of America or
any State thereof which has a combined capital and surplus and undivided
profits of not less than $250,000,000; and
(d) other investment instruments approved in writing by the Required
Lenders and offered by financial institutions which have a combined
capital and surplus and undivided profits of not less than $250,000,000.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Plan" shall mean any pension plan subject to the provisions of
Title IV of ERISA or Section 412 of the Code
<PAGE>
13
which is maintained for employees of a Borrower or any ERISA Affiliate.
"Ratings" shall refer to the ratings of Moody's and S&P applicable
to Parent's senior unsecured non-credit enhanced long-term debt obligations.
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"Required Lenders" shall mean, at any time, Lenders holding Loans
representing at least 66-2/3% of the aggregate principal amount of the Loans
outstanding or, if no Loans are outstanding, Lenders having Commitments
representing at least 66-2/3% of the aggregate Commitments.
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one
<PAGE>
14
minus the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the Board and any other banking authority to which the Agent is subject (a)
with respect to the Adjusted CD Rate or the Base CD Rate (as such term is used
in the definition of "Alternate Base Rate"), for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities approximately equal to (i)
the applicable Interest Period, in the case of the Adjusted CD Rate, and (ii)
three months, in the case of the Base CD Rate (as such term is used in the
definition of "Alternate Base Rate"), and (b) with respect to the Adjusted LIBO
Rate, for Eurocurrency Liabilities (as defined 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 Liabilities and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets which may be available from time to time to any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"subsidiary" shall mean, with respect to any person (herein referred
to as the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) which is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of the Parent.
"Transactions" shall have the meaning assigned to such term in
Section 3.02.
"Type", when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the Adjusted LIBO Rate, the Adjusted CD Rate and the Alternate Base
Rate.
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15
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both 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".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. 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,
however, that, for purposes of determining compliance with any covenant set
forth in Article VI, such terms shall be construed in accordance with GAAP as in
effect on the date of this Agreement applied on a basis consistent with the
application used in preparing the Borrower's audited financial statements
referred to in Section 3.05.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make revolving credit loans to the
Borrowers, at any time and from time to time on or after the date hereof and
until the earlier of the Maturity Date and the termination of the Commitment of
such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding not to exceed the Commitment set forth opposite
its name in Schedule 2.01 hereto, as the same may be reduced from time to time
pursuant to Section 2.09.
Within the limits set forth in the preceding sentence, the Borrowers
may borrow, pay or prepay and reborrow Loans on or after the Closing Date and
prior to the Maturity Date, subject to the terms, conditions and limitations set
forth herein.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments; provided, however, that the failure of any Lender
to make any Loan shall not in itself relieve any other Lender
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16
of its obligation to lend hereunder (it being understood, however, that no
Lender shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). The Loans comprising each Borrowing
shall be in an aggregate principal amount which is an integral multiple of
$1,000,000 and not less than $10,000,000 (or an aggregate principal amount equal
to the remaining balance of the Commitments).
(b) Each Borrowing shall be comprised entirely of ABR Loans, CD
Loans or Eurodollar Loans, as the applicable Borrower may request pursuant to
Section 2.03. Each Lender may at its option fulfill its Commitment with respect
to any Eurodollar Loan or CD 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 applicable Borrower to repay such
Loan in accordance with the terms of this Agreement and the applicable Note.
Borrowings of more than one Type may be outstanding at the same time; provided,
however, that no Borrower shall be entitled to request any Borrowing which, if
made, would result in an aggregate of more than three separate CD Loans or
Eurodollar Loans of any Lender being outstanding hereunder at any one time. For
purposes of the foregoing, Loans having different Interest Periods, regardless
of whether they commence on the same date, shall be considered separate Loans.
(c) Subject to paragraph (e) below, each Lender shall make a Loan in
the amount of its pro rata portion, as determined under Section 2.14, of each
Borrowing hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Agent in New York, New York, not later than 12:00 noon,
New York City time, and the Agent shall by 3:00 p.m., New York City time, credit
the amounts so received to the general deposit account of the appropriate
Borrower with the Agent or, if a Borrowing shall not occur on such date because
any condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders. Unless the Agent shall have
received notice from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Agent such Lender's portion of such
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Borrowing in accordance with this paragraph (c)
and the Agent may, in reliance upon such assumption, make available to the
appropriate Borrower on such date a corresponding amount. If and to the extent
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17
that such Lender shall not have made such portion available to the Agent, such
Lender and such Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to such Borrower until the date such
amount is repaid to the Agent at (i) in the case of such Borrower the interest
rate applicable at the time to the Loans comprising such Borrowing and (ii) in
the case of such Lender, the Federal Funds Effective Rate. If such Lender shall
repay to the Agent such corresponding amount, such amount shall constitute such
Lender's Loan as part of such Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
(e) Each Borrower may refinance all or any part of any Borrowing
with a Borrowing of the same or a different Type, subject to the conditions and
limitations set forth in this Agreement. Any Borrowing or part thereof so
refinanced shall be deemed to be repaid or prepaid in accordance with Section
2.04 or 2.10, as applicable, with the proceeds of a new Borrowing, and the
proceeds of the new Borrowing, to the extent they do not exceed the principal
amount of the Borrowing being refinanced, shall not be paid by the Lenders to
the Agent or by the Agent to such Borrower pursuant to paragraph (c) above.
SECTION 2.03. Notice of Borrowings. The appropriate Borrower shall
give the Agent written or telecopy notice (or telephone notice promptly
confirmed in writing or by telecopy) (a) in the case of a Eurodollar Borrowing,
not later than 10:00 a.m., New York City time, three Business Days before a
proposed borrowing, (b) in the case of a CD Borrowing, not later than 10:00
a.m., New York City time, two Business Days before a proposed borrowing and (c)
in the case of an ABR Borrowing, not later than 12:00 (noon), New York City
time, one Business Day before a proposed borrowing. Such notice shall be
irrevocable and shall in each case refer to this Agreement and specify (i)
whether the Borrowing then being requested is to be a Eurodollar Borrowing, a CD
Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a
Business Day) and the amount thereof; and (iii) if such Borrowing is to be a
Eurodollar Borrowing or CD Borrowing, the Interest Period with respect thereto.
If no election as to the Type
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18
of Borrowing is specified in any such notice, then the requested Borrowing shall
be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing or CD Borrowing is specified in any such notice, then the Borrower
shall be deemed to have selected an Interest Period of one month's duration, in
the case of a Eurodollar Borrowing, or 30 days' duration, in the case of a CD
Borrowing. If a Borrower shall not have given notice in accordance with this
Section 2.03 of its election to refinance a Borrowing prior to the end of the
Interest Period in effect for such Borrowing, then such Borrower shall (unless
such Borrowing is repaid at the end of such Interest Period) be deemed to have
given notice of an election to refinance such Borrowing with an ABR Borrowing.
The Agent shall promptly advise the Lenders of any notice given pursuant to this
Section 2.03 and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Notes; Repayment of Loans. The Loans made by each
Lender to each Borrower shall be evidenced by a Note, duly executed on behalf of
such Borrower, dated the Closing Date, in substantially the form attached hereto
as Exhibit A, with the blanks appropriately filled, payable to the order of such
Lender in a principal amount equal to such Lender's Commitment. The outstanding
principal balance of each Loan, as evidenced by such a Note, shall be payable on
the last day of the Interest Period applicable to such Loan and on the Maturity
Date. Each Note shall bear interest from the date of the first borrowing
hereunder on the outstanding principal balance thereof as set forth in Section
2.06. Each Lender shall, and is hereby authorized by the Borrowers to, endorse
on the schedule attached to each Note delivered to such Lender (or on a
continuation of such schedule attached to such Note and made a part thereof), or
otherwise to record in such Lender's internal records, an appropriate notation
evidencing the date and amount of each Loan from such Lender, each payment and
prepayment of principal of any such Loan, each payment of interest on any such
Loan and the other information provided for on such schedule; provided, however,
that the failure of any Lender to make such a notation or any error therein
shall not affect the obligation of the relevant Borrower to repay the Loans made
by such Lender in accordance with the terms of this Agreement and the applicable
Notes.
SECTION 2.05. Fees. (a) The Parent agrees to pay to each Lender,
through the Agent, on the last day of
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19
March, June, September and December in each year, and on the date on which the
Commitment of such Lender shall be terminated as provided herein, a facility fee
(a "Facility Fee") at a rate per annum equal to the Applicable Facility Fee
Percentage from time to time in effect on the average daily amount of the
Commitment of such Lender, whether used or unused, during the preceding quarter
(or shorter period commencing with the date hereof or ending with the Maturity
Date or the date on which the Commitment of such Lender shall be terminated).
All Facility Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days. The Facility Fee due to each Lender shall
commence to accrue on the date of this Agreement and shall cease to accrue on
the date on which the Commitment of such Lender shall be terminated as provided
herein.
(b) The Parent agrees to pay to the Agent, for its own account, fees
(the "Agent Fees") at the times and in the amounts set forth in the Fee Letter.
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Agent for distribution, if and as appropriate, among the
Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when determined by reference to the Prime Rate
and over a year of 360 days at all other times) at a rate per annum equal to the
Alternate Base Rate.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each CD Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted CD Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin.
(c) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Margin.
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20
(d) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Alternate Base Rate, Adjusted CD Rate or Adjusted LIBO Rate for
each Interest Period or day within an Interest Period, as the case may be, shall
be determined by the Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.07. Default Interest. If any Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, such Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such defaulted
amount up to (but not including) the date of actual payment (after as well as
before judgment) at a rate per annum (computed on the basis of the actual number
of days elapsed over a year of 360 days) equal to the Alternate Base Rate plus
2%.
SECTION 2.08. Alternate Rate of Interest. (a) In the event, and on
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurodollar Borrowing the Agent shall have determined
that dollar deposits in the principal amounts of the Loans comprising such
Borrowing are not generally available in the London interbank market, or that
the rates at which such dollar deposits are being offered will not adequately
and fairly reflect the cost to any Lender of making or maintaining its
Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Agent shall, as soon as
practicable thereafter, give written or telecopy notice of such determination to
the Borrowers and the Lenders. In the event of any such determination, any
request by a Borrower for a Eurodollar Borrowing pursuant to Section 2.03 shall,
until the Agent shall have advised the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, be deemed to be a
request for an ABR Borrowing. Each determination by the Agent hereunder shall be
conclusive absent manifest error.
(b) In the event, and on each occasion, that on or before the day on
which the Adjusted CD Rate for a CD Borrowing is to be determined the Agent
shall have determined that such Adjusted CD Rate cannot be determined for any
reason, including the inability of the Agent to obtain sufficient bids in
accordance with the terms of the
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21
definition of Fixed CD Rate, or the Agent shall determine that the Adjusted CD
Rate for such CD Borrowing will not adequately and fairly reflect the cost to
any Lender of making or maintaining its CD Loan during such Interest Period, the
Agent shall, as soon as practicable thereafter, give written or telecopy notice
of such determination to the Borrowers and the Lenders. In the event of any such
determination, any request by a Borrower for a CD Borrowing pursuant to Section
2.03 shall, until the Agent shall have advised the Borrowers and the Lenders
that the circumstances giving rise to such notice no longer exist, be deemed to
be a request for an ABR Borrowing. Each determination by the Agent hereunder
shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The
Commitments shall be automatically terminated on the Maturity Date.
(b) Upon at least 30 days' prior irrevocable written or telecopy
notice to the Agent, a Borrower may at any time in whole permanently terminate,
or from time to time in part permanently reduce, the Commitments; provided,
however, that each partial reduction of the Commitments shall be in an integral
multiple of $10,000,000 and in a minimum principal amount of $50,000,000.
(c) Each reduction in the Commitments hereunder shall be made
ratably among the Lenders in accordance with their respective applicable
Commitments. The Parent shall pay to the Agent for the account of the Lenders,
on the date of each termination or reduction, the Facility Fees on the amount of
the Commitments so terminated or reduced accrued through the date of such
termination or reduction.
SECTION 2.10. Prepayment. (a) Each Borrower shall have the right at
any time and from time to time to prepay any Borrowing, in whole or in part,
upon at least five Business Days' prior written or telecopy notice (or telephone
notice promptly confirmed by written or telecopy notice) to the Agent; provided,
however, that each partial prepayment shall be in an amount which is an integral
multiple of $1,000,000 and not less than $10,000,000.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.09, the Borrowers shall pay or prepay so much of the
Borrowings as shall be necessary in order that the aggregate principal amount of
the Loans outstanding will not exceed the aggregate
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22
Commitments after giving effect to such termination or reduction.
(c) Each notice of prepayment shall specify the prepayment date and
the principal amount of each Borrowing (or portion thereof) to be prepaid, shall
be irrevocable and shall commit the relevant Borrower to prepay such Borrowing
by the amount stated therein on the date stated therein. All prepayments under
this Section 2.10 shall be subject to Section 2.13 but otherwise without premium
or penalty. All prepayments under this Section 2.10 shall be accompanied by
accrued interest on the principal amount being prepaid to the date of payment.
SECTION 2.11. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender of the
principal of or interest on any Eurodollar Loan or CD Loan made by such Lender
or any Fees or other amounts payable hereunder (other than changes in respect of
taxes imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or by any political subdivision or
taxing authority therein), or shall 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 such Lender (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate or the Adjusted CD
Rate) or shall impose on such Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans or CD Loans made by such
Lender, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan or CD Loan or to reduce
the amount of any sum received or receivable by such Lender hereunder or under
the Notes (whether of principal, interest or otherwise) by an amount deemed by
such Lender to be material, then the Parent will pay to such Lender upon demand
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the applicability of
any law, rule, regulation, agreement or
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23
guideline adopted pursuant to or arising out of the July 1988 report of the
Basle Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards", or the
adoption after the date hereof of any other law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration of any of the foregoing by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this Agreement or
the Loans made by such Lender pursuant hereto to a level below that which such
Lender or such Lender's holding company could have achieved but for such
applicability, adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time the Parent shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender's holding company for any
such reduction suffered.
(c) A certificate of each Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified in paragraph (a) or (b) above, as the case may be, shall be
delivered to the Parent and shall be conclusive absent manifest error. The
Parent shall pay each Lender the amount shown as due on any such certificate
delivered by it within 10 days after its receipt of the same.
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
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24
SECTION 2.12. Change in Legality. (a) Notwithstanding any other
provision herein, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof 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 relevant Borrower and to the Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request by a Borrower for a
Eurodollar Borrowing shall, as to such Lender only, be deemed a request
for an ABR Loan unless such declaration shall be subsequently withdrawn;
and
(ii) 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 paragraph (b) below (notwithstanding the provisions
of Section 2.10).
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which 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 and the ABR Loans resulting from the conversion of such
Eurodollar Loans shall be prepayable only at the times the converted Eurodollar
Loans would have been prepayable, notwithstanding the provisions of Section
2.10.
(b) For purposes of this Section 2.12, a notice to a Borrower by any
Lender shall be effective as to each Eurodollar Loan, 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 such
Borrower.
SECTION 2.13. Indemnity. The Borrowers agree, jointly and severally,
to indemnify each Lender against any loss or expense which such Lender may
sustain or incur as a consequence of (a) any failure by a Borrower to fulfill on
the date of any borrowing hereunder the applicable
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25
conditions set forth in Article IV, (b) any failure by a Borrower to borrow or
to refinance, convert or continue any Loan hereunder after irrevocable notice of
such borrowing, refinancing, conversion or continuation has been given pursuant
to Section 2.03, (c) any payment, prepayment or conversion of a Eurodollar Loan
or CD Loan required by any other provision of this Agreement or otherwise made
or deemed made on a date other than the last day of the Interest Period
applicable thereto, (d) any default in payment or prepayment of the principal
amount of any Loan or any part thereof or interest accrued thereon, as and when
due and payable (at the due date thereof, whether by scheduled maturity,
acceleration, irrevocable notice of prepayment or otherwise) or (e) the
occurrence of any Event of Default, including, in each such case, any loss or
reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurodollar Loan or CD Loan. Such
loss or reasonable expense shall include an amount equal to the excess, if any,
as reasonably determined by such Lender, of (i) its cost of obtaining the funds
for the Loan being paid, prepaid, converted or not borrowed, converted or
continued (assumed to be the Adjusted LIBO Rate or Adjusted CD Rate applicable
thereto) for the period from the date of such payment, prepayment, conversion or
failure to borrow, convert or continue to the last day of the Interest Period
for such Loan (or, in the case of a failure to borrow, convert or continue, the
Interest Period for such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in reemploying the funds so paid,
prepaid, converted or not borrowed, converted or continued for such period or
Interest Period, as the case may be. A certificate of any Lender setting forth
any amount or amounts which such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrowers and shall be conclusive absent
manifest error.
SECTION 2.14. Pro Rata Treatment. Except as required under Section
2.12, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Facility Fees, each
reduction of the Commitments and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective Commitments (or, if such Commitments
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26
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made hereunder, the Agent
may, in its discretion, round each Lender's percentage of such Borrowing,
computed in accordance with Section 2.01, to the next higher or lower whole
dollar amount.
SECTION 2.15. Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against either Borrower, or pursuant to a secured claim under Section 506 of
Title 11 of the United States Code or other security or interest arising from,
or in lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
obtain payment (voluntary or involuntary) in respect of any Loan or Loans as a
result of which the unpaid principal portion of its Loans shall be
proportionately less than the unpaid principal portion of the Loans of any other
Lender, it shall be deemed simultaneously to have purchased from such other
Lender at face value, and shall promptly pay to such other Lender the purchase
price for, a participation in the Loans of such other Lender, so that the
aggregate unpaid principal amount of the Loans and participations in Loans held
by each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans then outstanding as the principal amount of its Loans prior
to such exercise of banker's lien, setoff or counterclaim or other event was to
the principal amount of all Loans outstanding prior to such exercise of banker's
lien, setoff or counterclaim or other event; provided, however, that, if any
such purchase or purchases or adjustments shall be made pursuant to this Section
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. Each
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by such Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to such Borrower in
the amount of such participation.
SECTION 2.16. Payments. (a) Each Borrower shall make each payment
(including principal of or interest on any
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27
Borrowing or any Fees or other amounts) hereunder and under any other Loan
Document not later than 12:00 (noon), New York City time, on the date when due
in dollars, without set-off, counterclaim or any other deduction, to the Agent
at its offices at 277 Park Avenue, New York, New York, in immediately available
funds.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.17. Taxes. (a) Any and all payments by the Borrowers
hereunder shall be made, in accordance with Section 2.16, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on the net income of the Agent or any Lender (or any
transferee or assignee thereof, including a participation holder (any such
entity being called a "Transferee")) and franchise taxes imposed on the Agent or
any Lender (or Transferee) by the United States or any jurisdiction under the
laws of which the Agent or any such Lender (or Transferee) is organized or any
political subdivision thereof (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If a Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to the Lenders (or any Transferee) or
the Agent, (i) the sum payable shall be increased by the amount necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.17) such Lender (or Transferee) or
the Agent (as the case may be) shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) such Borrower shall make
such deductions and (iii) such Borrower shall pay the full amount deducted to
the relevant taxing authority or other Governmental Authority in accordance with
applicable law; provided, however, that no Transferee of any Lender shall be
entitled to receive any greater payment under this paragraph (a) than such
Lender would have been entitled to receive with respect to the rights assigned,
participated or otherwise transferred
<PAGE>
28
unless such assignment, participation or transfer shall have been made at a time
when the circumstances giving rise to such greater payment did not exist.
(b) In addition, each Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) Each Borrower will indemnify each Lender (or Transferee) and the
Agent for the full amount of Taxes and Other Taxes paid by such Lender (or
Transferee) or the Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date any Lender (or
Transferee) or the Agent, as the case may be, makes written demand therefor. If
a Lender (or Transferee) or the Agent shall become aware that it is entitled to
receive a refund in respect of Taxes or Other Taxes as to which it has been
indemnified by a Borrower pursuant to this Section 2.17, it shall promptly
notify such Borrower of the availability of such refund and shall, within 30
days after receipt of a request by such Borrower, apply for such refund at such
Borrower's expense. If any Lender (or Transferee) or the Agent receives a refund
in respect of any Taxes or Other Taxes as to which it has been indemnified by a
Borrower pursuant to this Section 2.17, it shall promptly notify such Borrower
of such refund and shall, within 30 days after receipt of a request by such
Borrower (or promptly upon receipt, if such Borrower has requested application
for such refund pursuant hereto), repay such refund to such Borrower (to the
extent of amounts that have been paid by such Borrower under this Section 2.17
with respect to such refund), net of all out-of-pocket expenses of such Lender
and without interest; provided that such Borrower, upon the request of such
Lender (or Transferee) or the Agent, agrees to return such refund (plus
penalties, interest or other charges) to such Lender (or Transferee) or the
Agent in the event such Lender (or Transferee) or the Agent is required to repay
such refund. Nothing contained in this paragraph (c) shall require any Lender
(or Transferee) or the Agent to make available any of its tax
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29
returns (or any other information relating to its taxes which it deems to be
confidential).
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by a Borrower in respect of any payment to any Lender (or
Transferee) or the Agent, such Borrower will furnish to the Agent, at its
address referred to in Section 9.01, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.17
shall survive the payment in full of the principal of and interest on all Loans
made hereunder.
(f) Upon the written request of a Borrower, each Lender (or
Transferee) that is organized under the laws of a jurisdiction outside the
United States shall, if legally able to do so, prior to the immediately
following due date of any payment by such Borrower hereunder, deliver to such
Borrower such certificates, documents or other evidence, as required by the Code
or Treasury Regulations issued pursuant thereto, including Internal Revenue
Service Form 1001 or Form 4224 and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such Lender (or Transferee) establishing that
such payment is (i) not subject to United States Federal withholding tax under
the Code because such payment is effectively connected with the conduct by such
Lender (or Transferee) of a trade or business in the United States or (ii)
totally exempt from United States Federal withholding tax, or subject to a
reduced rate of such tax under a provision of an applicable tax treaty. Unless a
Borrower and the Agent have received forms or other documents satisfactory to
them indicating that such payments hereunder or under the Notes are not subject
to United States Federal withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, such Borrower or the Agent shall withhold
taxes from such payments at the applicable statutory rate.
(g) Each Borrower shall not be required to pay any additional
amounts to any Lender (or Transferee) in respect of United States Federal
withholding tax pursuant to paragraph (a) above if the obligation to pay such
additional amounts would not have arisen but for a failure by such
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30
Lender (or Transferee) to comply with the provisions of paragraph (f) above;
provided, however, that each Borrower shall be required to pay those amounts to
any Lender (or Transferee) that it was required to pay hereunder prior to the
failure of such Lender (or Transferee) to comply with the provisions of such
paragraph (f).
(h) Any Lender (or Transferee) claiming any additional amounts
payable pursuant to this Section 2.17 shall use reasonable efforts (consistent
with legal and regulatory restrictions) to file any certificate or document
requested by a Borrower or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
reduce the amount of any such additional amounts which may thereafter accrue and
would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender (or Transferee) or contrary to its policies.
SECTION 2.18. Termination or Assignment of Commitments Under Certain
Circumstances. In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.11 or 2.12, or the Borrowers shall be required
to make additional payments to any Lender under Section 2.17, the Borrowers
shall have the right, at their own expense, upon notice to such Lender and the
Agent, (a) to terminate the Commitment of such Lender or (b) to require such
Lender to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in Section 9.04) all its interests, rights and
obligations under this Agreement to another financial institution which shall
assume such obligations; provided that (i) no such termination or assignment
shall conflict with any law, rule or regulation or order of any Governmental
Authority and (ii) the Borrowers or the assignee, as the case may be, shall pay
to the affected Lender in immediately available funds on the date of such
termination or assignment the principal of and interest accrued to the date of
payment on the Loans made by it hereunder and all other amounts accrued for its
account or owed to it hereunder.
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31
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to each of the Lenders that:
SECTION 3.01. Organization; Powers. Each Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, has all requisite power and authority to own its property and
assets and to carry on its business as now conducted and is qualified to do
business in every jurisdiction where such qualification is required, except
where the failure so to qualify would not result in a Material Adverse Effect.
Each Borrower has the corporate power and authority to execute, deliver and
perform its obligations under each of the Loan Documents.
SECTION 3.02. Authorization. The execution, delivery and performance
by each Borrower of each of the Loan Documents and the borrowings hereunder
(collectively, the "Transactions") (a) have been duly authorized by all
requisite corporate and, if required, stockholder action and (b) will not (i)
violate (A) any provision of law, statute, rule or regulation, or the
certificate of incorporation or by-laws of either Borrower, (B) any order of any
Governmental Authority or (C) any provision of any indenture, agreement or other
instrument to which either is a party or by which either or any of its
properties or assets are or may be bound, (ii) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument referred to in
(b), or (iii) result in the creation or imposition of any Lien upon any property
or assets of either.
SECTION 3.03. Enforceability. This Agreement has been duly executed
and delivered by each Borrower and constitutes, and the Notes when executed and
delivered by each Borrower will constitute, legal, valid and binding obligations
of each Borrower in each case enforceable in accordance with their respective
terms (subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting creditors'
rights generally and to general principles of equity).
SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or any other action by
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32
any Governmental Authority is or will be required in connection with the
Transactions, except such as have been made or obtained and are in full force
and effect.
SECTION 3.05. Financial Statements. Each Borrower has heretofore
furnished to the Lenders its balance sheets and statements of income and changes
in financial condition as of and for (a) the fiscal year ended January 29, 1994,
audited and certified by Deloitte & Touche, independent public accountants, and
(b) the fiscal quarter and the portion of the fiscal year ended April 30, 1994,
certified by its chief financial officer, each prepared on a basis consistent
with that of the annual financial statements of such Borrower. Such financial
statements present fairly the financial condition and results of operations of
such Borrower as of the dates and for the periods indicated. Such balance sheets
and the notes thereto disclose all material liabilities, direct or contingent,
of such Borrower and its consolidated subsidiaries as of the dates thereof. Such
financial statements were prepared in accordance with GAAP applied on a
consistent basis.
SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the businesses, assets, operations, prospects or conditions,
financial or otherwise, of the Parent and the Subsidiaries, since January 29,
1994.
SECTION 3.07. Subsidiaries. Schedule 3.07 sets forth as of the
Closing Date a list of all Subsidiaries of the Parent and the percentage
ownership interest of each Borrower therein.
SECTION 3.08. Litigation; Compliance with Laws. (a) Except as set
forth in Schedule 3.08, there are not any actions, suits or proceedings at law
or in equity or by or before any Governmental Authority now pending or, to the
knowledge of either Borrower, threatened against or affecting the Parent or any
Subsidiary or any business, assets or rights of any such person (i) which
involve any Loan Document or the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and which, if adversely
determined, could, individually or in the aggregate, result in a Material
Adverse Effect.
(b) Neither the Parent nor any of the Subsidiaries is in violation
of any law, rule or regulation, or in
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33
default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could result in a
Material Adverse Effect.
SECTION 3.09. Agreements. (a) Neither the Parent nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted, and is not currently aware of any such
agreements, instruments or restrictions that could result, in a Material Adverse
Effect.
(b) Neither the Parent nor any of the Subsidiaries is in default in
any manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, where such default could result in a Material Adverse Effect.
SECTION 3.10. Federal Reserve Regulations. (a) Neither of the
Borrowers is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, (i)
to purchase or carry Margin Stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including Regulation G, U or X.
SECTION 3.11. Investment Company Act; Public Utility Holding Company
Act. Neither of the Borrowers is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.12. Use of Proceeds. The Borrower will use the proceeds of
the Loans only for the purposes specified in the preamble to this Agreement.
SECTION 3.13. Tax Returns. Each of the Parent and the Subsidiaries
has filed or caused to be filed all
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34
Federal, state and local tax returns required to have been filed by it and has
paid or caused to be paid all taxes shown to be due and payable on such returns
or on any assessments received by it, except taxes or assessments that are being
contested in accordance with Section 5.03.
SECTION 3.14. No Material Misstatements. No information, report,
financial statement, exhibit or schedule prepared or furnished by either
Borrower to the Agent or any Lender in connection with the negotiation of any
Loan Document or included therein contained, contains or will contain any
material misstatement of fact or omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading.
SECTION 3.15. Employee Benefit Plans. Each of the Parent and its
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred with respect to any Plan as to
which the Borrower or any ERISA Affiliate was required to file a report with the
PBGC, and no material unfunded vested liabilities exist under any Plan. Neither
the Parent nor any ERISA Affiliate (other than one considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Code Section 414) has, within the past
five years, contributed to, or accrued an obligation to contribute to, any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA).
SECTION 3.16. Environmental and Safety Matters. Except as set forth
in Schedule 3.16, the Parent and each Subsidiary has complied in all material
respects with all Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental regulation or control or to employee health or safety. Except as
set forth in Schedule 3.16, neither the Parent nor any Subsidiary has received
notice of any material failure so to comply. Except as set forth in Schedule
3.16, the Parent's and the Subsidiaries' plants do not manage any hazardous
wastes, hazardous substances, hazardous materials, toxic substances, toxic
pollutants or substances similarly denominated, as those terms or similar terms
are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance
<PAGE>
35
Control Act, the Clean Air Act, the Clean Water Act or any other applicable law
relating to environmental pollution or employee health and safety, in violation
in any material respect of any law or any regulations promulgated pursuant
thereto. Except as set forth in Schedule 3.16, each Borrower is aware of no
events, conditions or circumstances involving environmental pollution or
contamination or employee health or safety that could reasonably be expected to
result in material liability on the part of the Parent or any Subsidiary.
ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are subject
to the satisfaction of the following conditions:
SECTION 4.01. All Borrowings. On the date of each Borrowing,
including each Borrowing in which Loans are refinanced with new Loans as
contemplated by Section 2.02(e):
(a) The Agent shall have received a notice of such Borrowing as
required by Section 2.03.
(b) The representations and warranties set forth in Article III
hereof shall be true and correct in all material respects with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) The Borrowers shall be in compliance with all the terms and
provisions set forth herein on their part to be observed or performed, and
at the time of and immediately after such Borrowing no Event of Default or
Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrowers on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
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36
SECTION 4.02. First Borrowing. On the Closing Date:
(a) Each Lender shall have received a duly executed Note complying
with the provisions of Section 2.04.
(b) The Agent shall have received a favorable written opinion of
Friday, Eldredge & Clark, counsel for the Borrowers, dated the Closing
Date and addressed to the Lenders, to the effect set forth in Exhibit D
hereto, and satisfactory to Cravath, Swaine & Moore, counsel for the
Agent; the Borrowers hereby instruct such counsel to deliver such opinion
to the Agent.
(c) All legal matters incident to all of the Loan Documents and the
Transactions hereunder shall be satisfactory to the Lenders and their
counsel and to Cravath, Swaine & Moore, counsel for the Agent.
(d) The Agent shall have received (i) a copy of the certificate of
incorporation, as amended, including all amendments thereto, of each
Borrower, certified by the Secretary of State of Delaware, and a
certificate as to the good standing of and charter documents filed by each
Borrower from such Secretary of State; (ii) a certificate of the Secretary
or Assistant Secretary of each Borrower dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of such Borrower as in effect on the date of such certificate and
at all times since a date prior to the date of the resolutions described
in clause (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Borrower, or
appropriate committee thereof, authorizing the Transactions on behalf of
such Borrower, and that such resolutions have not been modified, rescinded
or amended and are in full force and effect, (C) that the certificate of
incorporation of such Borrower has not been amended since the date of the
last amendment thereto shown on the certificate of good standing furnished
pursuant to clause (i) above, and (D) as to the incumbency and specimen
signature of each officer of such Borrower executing any Loan Document or
any other document delivered in connection herewith on behalf of such
Borrower; (iii) a certificate of another officer of each Borrower as to
the incumbency and specimen signature of the Secretary
<PAGE>
37
or such Assistant Secretary of such Borrower executing the certificate
pursuant to (ii) above; and (iv) such other documents as the Lenders or
Cravath, Swaine & Moore, counsel for the Agent, may reasonably request.
(e) The Agent shall have received a certificate, dated the Closing
Date and signed by a Financial Officer of the Parent, confirming
compliance with the conditions precedent set forth in paragraphs (b) and
(c) of Section 4.01.
(f) The Agent shall have received all Fees and other amounts due and
payable on or prior to the Closing Date.
(g) All amounts payable pursuant to the Revolving Credit Agreements
dated as of July 14, 1992, among the Parent, DIC, the Agent, and the
lenders named therein shall have been paid and the commitments of the
lenders thereunder shall have been terminated.
ARTICLE V. AFFIRMATIVE COVENANTS
The Borrowers covenant and agree with each Lender that so long as
this Agreement shall remain in effect or the principal of or interest on any
Loan, any Fees or any other expenses or amounts payable under any Loan Document
shall be unpaid, unless the Required Lenders shall otherwise consent in writing,
the Parent will, and will cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.03.
(b) At all times do or cause to be done all things necessary to
obtain, preserve, renew and keep in full force and effect the rights, licenses,
permits, franchises, patents, copyrights, trademarks and trade names material to
the conduct of its businesses; maintain and operate such businesses in
substantially the manner in which they are presently conducted and operated
(subject to changes in the ordinary course of business); comply in all material
respects with all laws and regulations applicable to the operation of such
business, whether now in effect or
<PAGE>
38
hereafter enacted and with all other applicable laws and regulations; take all
action which may be required to obtain, preserve, renew and extend all licenses,
permits and other authorizations which may be material to the operation of such
businesses; and at all times maintain, preserve and protect all property
material to the conduct of such businesses and keep such property in good
repair, working order and condition and from time to time make, or cause to be
made, all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the businesses carried on in
connection therewith may be properly conducted at all times.
SECTION 5.02. Insurance. Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and other
risks insured against by extended coverage, as is customary with companies
similarly situated and in the same or similar businesses; maintain in full force
and effect public liability insurance against claims for personal injury or
death or property damage occurring upon, in, about or in connection with the use
of any properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law. The Parent and the Subsidiaries may satisfy
the foregoing requirements, in whole or in part, through self-insurance programs
to the extent consistent with prudent business practices and applicable law.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other
obligations promptly when due in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise which, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such tax, assessment, charge, levy or claim, or to any Indebtedness
consisting of payment obligations to vendors or trade creditors, so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and it shall, to the extent required by GAAP applied on a consistent
basis, have set aside on its books adequate reserves with respect thereto.
<PAGE>
39
SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Parent, furnish to the Agent and each Lender:
(a) within 90 days after the end of each fiscal year, its
consolidated and consolidating balance sheets and related statements of
income and changes in financial position, showing the financial condition
of the Parent and its consolidated subsidiaries as of the close of such
fiscal year and the results of its operations and the operations of such
subsidiaries during such year, all audited by Deloitte & Touche or other
independent public accountants of recognized national standing acceptable
to the Required Lenders and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the effect that
such consolidated financial statements fairly present the financial
condition and results of operations of the Parent on a consolidated basis
in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated and consolidating balance
sheets and related statements of income and changes in financial position,
showing the financial condition of the Parent and its consolidated
subsidiaries as of the close of such fiscal quarter and the results of its
operations and the operations of such subsidiaries during such fiscal
quarter and the then elapsed portion of the fiscal year, all certified by
one of its Financial Officers as fairly presenting the financial condition
and results of operations of the Parent on a consolidated basis in
accordance with GAAP applied consistently with those used in preparing the
statements delivered pursuant to (a) above;
(c) concurrently with any delivery of financial statements under (a)
or (b) above, a certificate of the accounting firm or Financial Officer
opining on or certifying such statements (which certificate, when
furnished by an accounting firm, may be limited to accounting matters and
disclaim responsibility for legal interpretations) (i) certifying that no
Event of Default or Default has occurred or, if such an Event of Default
or Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto, (ii)
setting
<PAGE>
40
forth computations in reasonable detail satisfactory to the Agent
demonstrating compliance with the covenants contained herein, if any, and
(iii) setting forth a receivables aging schedule for the Parent and its
consolidated subsidiaries in form and detail reasonably satisfactory to
the Agent.
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
it with the Securities and Exchange Commission, or any governmental
authority succeeding to any of or all the functions of said Commission, or
with any national securities exchange, or distributed to its shareholders,
as the case may be; and
(e) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of the Parent or
any Subsidiary, or compliance with the terms of any Loan Document, as the
Agent or any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the Agent and
each Lender prompt written notice of the following:
(a) the issuance by any Governmental Authority of an injunction,
order or other restraint prohibiting, or having the effect of prohibiting,
the making of the Loans or the initiation of any litigation seeking any
such injunction, order or other restraint;
(b) any Event of Default or Default, specifying the nature and
extent thereof and the action (if any) proposed to be taken with respect
thereto;
(c) the filing or commencement of, or any threat or notice of
intention to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any Governmental Authority, as to which
there is a reasonable possibility of an adverse determination and which,
if adversely determined, could result in a Material Adverse Effect; and
(d) any development that has resulted in, or could reasonably be
anticipated to result in, a Material Adverse Effect.
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41
SECTION 5.06. ERISA. (a) Comply in all material respects with the
applicable provisions of ERISA and (b) furnish to the Agent and each Lender (i)
as soon as possible, and in any event within 30 days after any Responsible
Officer of the Parent or any ERISA Affiliate either knows or has reason to know
that any Reportable Event has occurred that alone or together with any other
Reportable Event could reasonably be expected to result in liability of the
Parent to the PBGC in an aggregate amount exceeding $5,000,000, a statement of
the Parent's chief financial officer setting forth details as to such Reportable
Event and the action proposed to be taken with respect thereto, together with a
copy of the notice, if any, of such Reportable Event given to the PBGC, (ii)
promptly after receipt thereof, a copy of any notice the Parent or any ERISA
Affiliate may receive from the PBGC relating to the intention of the PBGC to
terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate
which is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) or to appoint a trustee to administer any Plan or
Plans, and (iii) within 10 days after the due date for filing with the PBGC
pursuant to Section 412(n) of the Code of a notice of failure to make a required
installment or other payment with respect to a Plan, a statement of the Parent's
chief financial officer setting forth details as to such failure and the action
proposed to be taken with respect thereto, together with a copy of such notice
given to the PBGC.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Maintain financial records in accordance with GAAP and, upon
reasonable notice, at all reasonable times, permit any authorized
representatives designated by the Agent to visit and inspect the authorized
properties of the Parent or any Subsidiary, and permit any authorized
representatives designated by any Lender to discuss the affairs, finances and
condition of the Parent or any Subsidiary with the Parent's chief financial
officer and chief accounting officer and such other officers as the Parent shall
deem appropriate.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans only
for the purposes set forth in the preamble to this Agreement.
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42
ARTICLE VI. NEGATIVE COVENANTS
The Borrowers covenant and agree with each Lender that, so long as
this Agreement shall remain in effect or the principal of or interest on any
Loan, any Fees or any other expenses or amounts payable under any Loan Document
shall be unpaid, unless the Required Lenders shall otherwise consent in writing,
the Parent will not, either directly or indirectly and will not cause or permit
any of the Subsidiaries to:
SECTION 6.01. Liens. Create, incur, assume or permit to exist any
Lien on any of its property or assets (including stock or other securities of
any person, including any Subsidiary) whether owned at the date hereof or
hereafter acquired or assign or convey any rights to or security interests in
any future revenues, except:
(a) Liens incurred and pledges and deposits made in the ordinary
course of business in connection with workmen's compensation, unemployment
insurance, old-age pensions and other social security laws or regulations;
(b) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety, customs and appeal bonds and other obligations of
like nature, incurred as an incident to and in the ordinary course of
business;
(c) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and vendors' liens, incurred in good faith in
the ordinary course of business and securing obligations which are not yet
due or which are being contested in compliance with Section 5.03;
(d) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03;
(e) zoning restriction, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of
property or minor irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under or
asserted by a landlord or owner of the leased property, with or
<PAGE>
43
without consent of the lessee), none of which materially impairs the use
of any parcel of property material to the operation of the business of the
Parent or any Subsidiary or the value of such property for the purpose of
such business;
(f) Liens upon any real property acquired, constructed or improved
by the Parent or any Subsidiary which are created or incurred
contemporaneously with or within 90 days after such acquisition,
construction or improvement to secure or provide for the payment of any
part of the purchase price of such property or the cost of such
construction or improvement (but no other amounts); provided that any such
Lien or security interest (other than Liens otherwise allowed pursuant to
paragraph (i) of this Section 6.01) shall not apply to any other property
of the Parent or any Subsidiary;
(g) Liens on property existing at the time such property is acquired
by the Parent or any Subsidiary; provided, in each case, that such liens
were not created in contemplation of the acquisition by the Parent or any
Subsidiary of such property;
(h) Liens existing on the date of this Agreement and disclosed in
the financial statements referred to in Section 3.05 or the notes thereto
or set forth in Schedule 6.01 hereto;
(i) Liens on stores or groups of stores securing Indebtedness for
borrowed money;
(j) other Liens on assets other than inventory or accounts
receivable created, incurred, assumed or permitted to exist in the
ordinary course of its business or customary in its industry; and
(k) extensions, renewals and replacements of Liens referred to in
paragraphs (a) through (j) of this Section 6.01; provided, that any such
extension, renewal or replacement Lien shall be limited to the property or
assets covered by the Lien extended, renewed or replaced and that the
obligations secured by any such extension, renewal or replacement Lien
shall be in an amount not greater than the amount of the obligations
secured by the Lien extended, renewed or replaced.
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44
SECTION 6.02. Investments, Loans and Advances. (a) Make or own any
Investment in any person or (b) create or become or be liable with respect to
any Guarantee, except:
(i) Permitted Investments;
(ii) Guarantees pursuant to Article X of this Agreement;
(iii) Investments in the Subsidiaries, including Investments in
securities of Dillard National Bank, a national banking association;
(iv) Investments in The Higbee Company, a Delaware corporation;
(v) Investments in the ordinary course of business in joint ventures
or limited partnerships formed to develop and operate shopping centers;
and
(vi) additional other Investments in an aggregate principal amount
at any time outstanding not to exceed 25% of the consolidated assets of
the Parent.
SECTION 6.03. Mergers, Consolidations, and Sales of Assets. Merge
with or into or consolidate or combine with any other person or sell, lease,
transfer or assign to any person or otherwise dispose of (whether in one
transaction or a series of transactions) all or substantially all its assets
(whether now owned or hereafter acquired); provided, however, that (a) any
Subsidiary other than DIC may merge with or into or consolidate or combine with
or dispose of all or substantially all its assets to the Parent or any other
Subsidiary, (b) any Subsidiary other than DIC may merge, consolidate or combine
with another corporation if the surviving corporation in such transaction shall
be a wholly owned Subsidiary; and (c) if no Default or Event of Default shall
have occurred at the time of or immediately after giving effect to such
transaction, the Parent or DIC may merge, consolidate or combine with another
corporation if (i) the surviving corporation shall be the Parent or DIC, as the
case may be, or (ii) the surviving corporation shall assume all obligations and
liabilities of the Parent or DIC, as the case may be, under this Agreement
pursuant to an agreement in form and substance satisfactory to the Agent.
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45
SECTION 6.04. Net Worth. Permit at any time the consolidated
stockholders' equity of the Parent and its Subsidiaries (calculated in the
manner used in preparing the financial statements referred to in Section 5.04)
to be less than $1,000,000,000.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings hereunder or in any
report, certificate, financial statement or other instrument furnished in
connection with any Loan Document or the borrowings hereunder, shall prove
to have been false or misleading in any material respect when made;
(b) default shall be made in the payment of any principal of any
Loan when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in (b)
above) due under any Loan Document, when and as the same shall become due
and payable, and such default shall continue unremedied for a period of 10
calendar days;
(d) default shall be made in the due observance or performance of
any other covenant, condition or agreement to be observed or performed on
the part of either Borrower pursuant to the terms of this Agreement and,
in the case of any covenant, condition or agreement contained in Article V
hereof (other than Section 5.01(a) or 5.05), such default shall continue
for a period of fifteen days after written or telecopy notice thereof from
the Agent or any Lender to the Borrowers;
(e) default shall be made with respect to any Indebtedness of the
Parent or any Subsidiary if the effect of any such default shall be to
accelerate, or to permit the holder or obligee of any Indebtedness (or
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46
any trustee on behalf of such holder or obligee) to accelerate (with or
without notice or lapse of time or both), the maturity of Indebtedness; or
any payment of principal or interest, regardless of amount, on any
Indebtedness of the Parent or any Subsidiary shall not be paid when due,
whether at maturity, by acceleration or otherwise (after giving effect to
any period of grace specified in the instrument evidencing or governing
such Indebtedness);
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Parent or any Subsidiary, or of a substantial
part of the property or assets of the Parent or a Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator
or similar official for the Parent or any Subsidiary or for a substantial
part of the property or assets of the Parent or a Subsidiary or (iii) the
winding-up or liquidation of the Parent or any Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall continue
unstayed and in effect for 30 days;
(g) the Parent or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
Federal or state bankruptcy, insolvency, liquidation or similar law, (ii)
consent to the institution of, or fail to contravene in a timely and
appropriate manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Parent or any Subsidiary or for a substantial part of the property or
assets of the Parent or any Subsidiary, (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,
(vi) become unable, admit in writing its inability or fail generally to
pay its debts as they
<PAGE>
47
become due or (vii) take corporate action for the purpose of effecting any
of the foregoing;
(h) a final judgment for the payment of money (which alone, or when
aggregated with all other unpaid judgments against it at such time, is for
$100,000,000 or more) shall be rendered by a court or other tribunal
against the Parent, any Subsidiary or any combination thereof and the same
shall remain undischarged and unstayed for a period of 30 days other than
any judgment, the validity of which either Borrower is contesting in good
faith by appropriate proceedings;
(i) a Reportable Event or Reportable Events, or a failure to make a
required payment (within the meaning of Section 412(n)(1) of the Code),
shall have occurred with respect to any Plan or Plans that reasonably
could be expected to result in liability of the Parent or any ERISA
Affiliate to the PBGC or to a Plan in an aggregate amount exceeding
$100,000,000 and, within 30 days after the reporting of any such
Reportable Event to the Agent or after the receipt by the Agent of the
statement required pursuant to Section 5.06(b)(iii), the Agent shall have
notified the Borrowers in writing that (i) the Required Lenders have made
a determination that, on the basis of such Reportable Event or Reportable
Events or the failure to make a required payment, there are reasonable
grounds (A) for the termination of such Plan or Plans by the PBGC, (B) for
the appointment by the appropriate United States District Court of a
trustee to administer such Plan or Plans or (C) for the imposition of a
lien in favor of a Plan and (ii) as a result thereof an Event of Default
exists hereunder; or a trustee shall be appointed by a United States
District Court to administer any such Plan or Plans; or the PBGC shall
institute proceedings to terminate any Plan or Plans with vested unfunded
liabilities aggregating in excess of $100,000,000; or
(j) there shall have occurred a Change in Control;
then, and in any such event (other than an event with respect to either Borrower
described in paragraph (f) or (g) above), and at any time thereafter during the
continuance of such event, the Agent, with the consent of the Required Lenders
may and, at the request of the Required Lenders shall, by written, telecopy, or
telephone (promptly confirmed in writing or by telecopy) notice to the
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48
Borrowers, take either or both of the following actions, at the same or
different times: (i) terminate forthwith the Commitments of the Lenders
hereunder and (ii) declare the Notes then outstanding to be forthwith due and
payable, whereupon the principal of the Notes, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrowers
accrued hereunder, shall become forthwith due and payable both as to principal
and interest, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrowers, anything
contained herein or in any other Loan Document to the contrary notwithstanding;
and in any event with respect to either Borrower described in paragraph (f) or
(g) above, the Commitments of the Lenders shall automatically terminate and the
Notes shall automatically become due and payable, both as to principal and
interest, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrower, anything contained
herein or in any other Loan Document to the contrary notwithstanding.
ARTICLE VIII. THE AGENT
In order to expedite the transactions contemplated by this
Agreement, Chemical Bank is hereby appointed to act as Agent on behalf of the
Lenders. Each of the Lenders, and each subsequent holder of any Note by its
acceptance thereof, hereby irrevocably authorizes the Agent to take such actions
on behalf of such Lender or holder and to exercise such powers as are
specifically delegated to the Agent by the terms and provisions hereof and of
the other Loan Documents, together with such actions and powers as are
reasonably incidental thereto. The Agent is hereby expressly authorized by the
Lenders, without hereby limiting any implied authority, (a) to receive on behalf
of the Lenders all payments of principal of and interest on the Loans and all
other amounts due to the Lenders hereunder, and promptly to distribute to each
Lender its proper share of each payment so received; (b) to give notice on
behalf of each of the Lenders to the Borrowers of any Event of Default specified
in this Agreement of which the Agent has actual knowledge acquired in connection
with its agency hereunder; (c) to distribute to each Lender copies of all
notices, financial statements and other materials delivered by the Borrowers
pursuant to this Agreement as received by the Agent; and (d) to distribute to
the Borrowers any and all
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49
requests, demands and approvals received by the Agent from the Banks.
Neither the Agent nor any of its directors, officers, employees or
agents shall be liable as such for any action taken or omitted by any of them
except for its or his own gross negligence or wilful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by the Borrowers of
any of the terms, conditions, covenants or agreements contained in any Loan
Document. Except for its own due execution or delivery thereof, as the case may
be, the Agent shall not be responsible to the Lenders or the holders of the
Notes for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement, the Notes or any other Loan Documents or other
instruments or agreements. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof until it shall have received from the
payee of such Note notice, given as provided herein, of the transfer thereof in
compliance with Section 9.04. The Agent shall in all cases be fully protected in
acting, or refraining from acting, in accordance with written instructions
signed by the Required Lenders and, except as otherwise specifically provided
herein, such instructions and any action or inaction pursuant thereto shall be
binding on all the Lenders and each subsequent holder of any Note. The Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper person or persons. Neither the
Agent nor any of its directors, officers, employees or agents shall have any
responsibility to a Borrower on account of the failure of or delay in
performance or breach by any Lender of any of its obligations hereunder or to
any Lender on account of the failure of or delay in performance or breach by any
other Lender or a Borrower of any of their respective obligations hereunder or
under any other Loan Document or in connection herewith or therewith. The Agent
may execute any and all duties hereunder by or through agents or employees and
shall be entitled to rely upon the advice of legal counsel selected by it with
respect to all matters arising hereunder and shall not be liable for any action
taken or suffered in good faith by it in accordance with the advice of such
counsel.
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50
The Lenders hereby acknowledge that the Agent shall be under no duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by notifying the Lenders and
the Borrowers. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor, which shall be reasonably satisfactory to the
Borrowers. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a bank having a combined
capital and surplus of at least $500,000,000 and an office in any city in which
a Federal Reserve Bank is located, or an Affiliate of any such bank. Upon the
acceptance of any appointment as Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder. After the Agent's
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder and the Notes issued
to it, the Agent in its individual capacity and not as Agent shall have the same
rights and powers as any other Lender and may exercise the same as though it
were not the Agent, and the Agent and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with the Parent or
any Subsidiary or other Affiliate thereof as if it were not the Agent.
Each Lender recognizes that applicable laws, rules, regulations or
guidelines of Governmental Authorities may require the Agent to determine
whether the transactions contemplated hereby should be classified as "highly
leveraged" or assigned any similar or successor classification, and that such
determination may be binding upon the other Lenders. Each Lender understands
that any such determination shall be made solely by the Agent based upon such
factors (which may include the Agent's internal policies and prevailing market
practices) as the Agent shall
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51
deem relevant and agrees that the Agent shall have no liability for the
consequences of any such determination.
Each Lender agrees (i) to reimburse the Agent, on demand, in the
amount of its pro rata share (based on its Commitment hereunder) of any expenses
incurred for the benefit of the Lenders by the Agent, including counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Lenders, which shall not have been reimbursed by either Borrower and (ii) to
indemnify and hold harmless the Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against it in
its capacity as the Agent or any of them in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted by
it or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by either Borrower; provided that no
Lender shall be liable to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of the Agent or any of its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender 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 this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall
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52
be delivered, mailed or sent by graphic scanning or other telegraphic
communications equipment of the sending party, as follows:
(a) if to either of the Borrowers, to it at 1600 Cantrell Road,
Little Rock, Arkansas 72207, Attention of Mr. James I. Freeman, Vice
President and Chief Financial Officer (telecopy No. 501-376-5917), with
copy to Mr. James E. Darr, Jr., Vice President and General Counsel
(telecopy No. 501-376-5031); and
(b) if to the Agent or to any Lender, to it at its address or
telecopy number set forth in Schedule 2.01 hereof or in the Assignment and
Acceptance pursuant to which such Lender shall have become a party 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 if delivered by hand or overnight courier service or upon
receipt of by any telex, telecopy or other telegraphic communications equipment,
or on the date three days after dispatch by certified or registered mail,
postage prepaid, return receipt requested, if mailed, in each case delivered,
sent or mailed (properly addressed) to such party as provided in this Section
9.01 or in accordance with the latest unrevoked direction from such party given
in accordance with this Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrowers herein and in the
certificates or other instruments prepared or delivered in connection with this
Agreement or any other Loan Document shall be considered to have been relied
upon by the Lenders and shall survive the making by the Lenders of the Loans,
and the execution and delivery to the Lenders of the Notes evidencing such
Loans, and shall continue in full force and effect as long as the principal of
or any accrued interest on any Note or any Fee or any other fee or amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid and so long as the Commitments have not been terminated.
SECTION 9.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by each of the Borrowers and the Agent and when
the Agent shall have received copies hereof which, when taken together, bear the
signatures of each Lender, and thereafter shall be
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53
binding upon and inure to the benefit of the Borrowers, the Agent and each
Lender and their respective successors and assigns, except that neither of the
Borrowers shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of all the Lenders.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrowers, the Agent or the Lenders that
are contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion
of its interests, rights and obligations under this Agreement (including all or
a portion of its Commitment and the Loans at the time owing to it and the Notes
held by it); provided, however, that (i) except in the case of an assignment to
a Lender or an Affiliate of such Lender, the Parent and the Agent must give
their prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Lender's rights and obligations
under this Agreement, (iii) the amount of the 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 Agent) shall not
be less than $5,000,000, (iv) the parties to each such assignment shall execute
and deliver to the Agent an Assignment and Acceptance, together with the Note or
Notes subject to such assignment and a processing and recordation fee of $2,500
and (v) the assignee, if it shall not be a Lender, shall deliver to the Agent an
Administrative Questionnaire. Upon such execution, delivery, acceptance and
recording pursuant to paragraph (e) of this Section 9.04, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) 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 this Agreement and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the
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54
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.11, 2.13, 2.17 and 9.05, as well as to
any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Parent or any Subsidiary or the
performance or observance by the Parent or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.04 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (vi) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with
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55
their terms all the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Agent shall maintain at one of its principal offices 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 Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive in the absence of manifest error and the Borrowers, the Agent and the
Lenders may treat each person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrowers and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee together with the Note or Notes
subject to such assignment, an Administrative Questionnaire completed in respect
of the assignee (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) above and, if
required, the written consent of the Parent and the Agent to such assignment,
the Agent shall (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Lenders. Within five Business Days after receipt of notice, each
Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for the surrendered Note or Notes, a new Note or Notes to the order of
such assignee in a principal amount equal to the applicable Commitment assumed
by it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment, a new Note to the order of such assigning Lender in a
principal amount equal to the applicable Commitment retained by it. Such new
Note or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note; such new Notes shall be dated the
date of the surrendered Notes which they replace and shall otherwise be in
substantially the form of Exhibit A hereto, as appropriate. Canceled Notes shall
be returned to the Borrowers.
(f) Each Lender may without the consent of the Borrowers or the
Agent sell participations to one or more
<PAGE>
56
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it and the Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.11, 2.13 and 2.17 to the same extent as if they were Lenders and (iv) the
Borrowers, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrowers relating to the Loans and to approve
any amendment, modification or waiver of any provision of this Agreement (other
than amendments, modifications or waivers decreasing any Fees payable hereunder
or the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans or changing or extending the Commitments).
(g) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers furnished to such Lender
by or on behalf of either Borrower; provided that, prior to any such disclosure
of information designated by a Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information.
(h) Any Lender may at any time assign all or any portion of its
rights under this Agreement and the Notes issued to it to a Federal Reserve
Bank; provided that no such assignment shall release a Lender from any of its
obligations hereunder.
(i) Neither Borrower shall assign or delegate any of its rights or
duties hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Parent agrees to pay all
reasonable out-of-pocket expenses
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57
incurred by the Agent in connection with the preparation of this Agreement and
the other Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby contemplated shall be consummated) or incurred by the Agent or any Lender
in connection with the enforcement or protection of their rights in connection
with this Agreement and the other Loan Documents or in connection with the Loans
made or the Notes issued hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore, counsel for the Agent, and, in
connection with any such enforcement or protection, the fees, charges and
disbursements of any other counsel for the Agent or any Lender. The Parent
further agrees that it shall indemnify the Lenders from and hold them harmless
against any documentary taxes, assessments or charges made by any Governmental
Authority by reason of the execution and delivery of this Agreement or any of
the other Loan Documents.
(b) The Parent agrees to indemnify the Agent, each Lender and each
of their respective directors, officers, employees and agents (each such person
being called an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of this Agreement or any other Loan
Document or any agreement or instrument contemplated thereby, the performance by
the parties thereto of their respective obligations thereunder or the
consummation of the Transactions and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not 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
(A) any unexcused breach by such Lender of any of its obligations under this
Agreement or (B) the gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and
in full force and effect regardless of
<PAGE>
58
the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the Agent or
any Lender. All amounts due under this Section 9.05 shall be payable on written
demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the relevant Borrower against any of and all
the obligations of such Borrower now or hereafter existing under this Agreement
and other Loan Documents held by such Lender, irrespective of whether or not
such Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Agent or any Lender in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Agent and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No waiver
of any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrowers therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on either Borrower in any case shall entitle such
Borrower to any
<PAGE>
59
other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan, or waive or excuse any such payment or any part
thereof, or decrease the rate of interest on any Loan, without the prior written
consent of each holder of a Note affected thereby, (ii) change or extend the
Commitment or decrease the Facility Fees of any Lender without the prior written
consent of such Lender, or (iii) amend or modify the provisions of Section 2.14,
the provisions of this Section or the definition of "Required Lenders", without
the prior written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Agent hereunder without the prior written consent of the Agent. Each Lender and
each holder of a Note shall be bound by any waiver, amendment or modification
authorized by this Section regardless of whether its Note shall have been marked
to make reference thereto, and any consent by any Lender or holder of a Note
pursuant to this Section shall bind any person subsequently acquiring a Note
from it, whether or not such Note shall have been so marked.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything
herein or in the Notes to the contrary, if at any time the applicable interest
rate, together with all fees and charges which are treated as interest under
applicable law (collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable under the Note held by such Lender, together with all
Charges payable to such Lender, shall be limited to the Maximum Rate.
SECTION 9.10. Entire Agreement. This Agreement and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof.
<PAGE>
60
Any previous agreement among the parties with respect to the subject matter
hereof is superseded by this Agreement and the other Loan Documents. Nothing in
this Agreement or in the other Loan Documents, expressed or implied, is intended
to confer upon any party other than the parties hereto and thereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement or the
other Loan Documents.
SECTION 9.11. 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 or any of the other Loan
Documents. 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 and the other Loan Documents, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 9.11.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. 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 9.13. Counterparts. This Agreement 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 contract, and shall become
effective as provided in Section 9.03.
SECTION 9.14. 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 are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
<PAGE>
61
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each
Borrower 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 all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against the Borrower or its properties in
the courts of any jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
ARTICLE X. GUARANTEES
To induce the Lenders to make the Loans, each Borrower hereby
unconditionally guarantees, as a primary obligor and not merely as a surety, the
due and punctual payment and performance, when and as due, whether at maturity,
by acceleration, by notice of prepayment or otherwise of the Guaranteed
Obligations. Each Borrower
<PAGE>
62
further agrees that the Guaranteed Obligations may be extended or renewed, in
whole or in part, without notice or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Guaranteed Obligation.
Each Borrower waives presentment to, demand of payment from and
protest to the other Borrower of any of the Guaranteed Obligations, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment. The obligations of each Borrower under this Article X shall not be
affected by (a) the failure of any Lender to assert any claim or demand or to
enforce any right or remedy against the other Borrower under the provisions of
this Agreement, any Loan Document or otherwise; (b) any rescission, waiver,
amendment or modification of any of the terms or provisions of this Agreement;
or (c) the failure of any Lender to exercise any right or remedy against any
other guarantor of the Guaranteed Obligations.
Each Borrower further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by any Lender to any security held for payment of
the Guaranteed Obligations or to any balance of any deposit account or credit on
the books of such Lender in favor of the other Borrower or any other person.
The obligations of each Borrower under this Article X shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Borrower under this
Article X shall not be discharged or impaired or otherwise affected by the
failure of any Lender to assert any claim or demand or to enforce any remedy
under this Agreement, any Loan Document, any guarantee or any other agreement,
by any waiver or modification of any thereof, by any default, failure or delay,
wilful or otherwise, in the performance of the Guaranteed Obligations, or by any
other act or omission which may or might in any manner or to any extent vary the
risk of such Borrower or otherwise operate as a discharge of such Borrower as a
matter of law or equity.
<PAGE>
62
further agrees that the Guaranteed Obligations may be extended or renewed, in
whole or in part, without notice or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Guaranteed Obligation.
Each Borrower waives presentment to, demand of payment from and
protest to the other Borrower of any of the Guaranteed Obligations, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment. The obligations of each Borrower under this Article X shall not be
affected by (a) the failure of any Lender to assert any claim or demand or to
enforce any right or remedy against the other Borrower under the provisions of
this Agreement, any Loan Document or otherwise; (b) any rescission, waiver,
amendment or modification of any of the terms or provisions of this Agreement;
or (c) the failure of any Lender to exercise any right or remedy against any
other guarantor of the Guaranteed Obligations.
Each Borrower further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by any Lender to any security held for payment of
the Guaranteed Obligations or to any balance of any deposit account or credit on
the books of such Lender in favor of the other Borrower or any other person.
The obligations of each Borrower under this Article X shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Borrower under this
Article X shall not be discharged or impaired or otherwise affected by the
failure of any Lender to assert any claim or demand or to enforce any remedy
under this Agreement, any Loan Document, any guarantee or any other agreement,
by any waiver or modification of any thereof, by any default, failure or delay,
wilful or otherwise, in the performance of the Guaranteed Obligations, or by any
other act or omission which may or might in any manner or to any extent vary the
risk of such Borrower or otherwise operate as a discharge of such Borrower as a
matter of law or equity.
<PAGE>
63
Each Borrower further agrees that its guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Guaranteed Obligation
(including any payment pursuant to this Guarantee) is rescinded or must
otherwise be restored by any Lender upon the bankruptcy or reorganization of the
other Borrower or otherwise.
Upon payment by a Borrower of any sums to a Lender as provided
above, all rights of such Borrower against the other Borrower arising as a
result thereof by way of right of subrogation or otherwise shall in all respects
be subordinated and junior in right of payment to the prior indefeasible payment
in full of all the Guaranteed Obligations to the Lenders; provided, however,
that to the extent any right of subrogation that a Borrower might have pursuant
to this Agreement or otherwise would constitute such Borrower a "creditor" of
the other Borrower within the meaning of Section 547 of Title 11 of the United
States Code as now in effect or hereafter amended, or any comparable provision
of any successor statute, such Borrower hereby irrevocably waives such right of
subrogation.
IN WITNESS WHEREOF, the Borrowers, the Agent and the Lenders have
caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
<PAGE>
DILLARD DEPARTMENT STORES, INC.,
by
James I. Freeman
--------------------------------------
Name: James I. Freeman
Title: Vice President
DILLARD INVESTMENT CO., INC.,
by
James I. Freeman
--------------------------------------
Name: James I. Freeman
Title: Vice President
CHEMICAL BANK, individually
and as agent,
by
Meredith L. Vanden Handel
--------------------------------------
Name: Meredith L. Vanden Handel
Title: Vice President
ABN AMRO BANK N.V.,
by
David P. Orr
--------------------------------------
Name: David P. Orr
Title: Vice President
by
M.A. Tribolet
--------------------------------------
Name: M.A. Tribolet
Title: Vice President
BANK IV KANSAS, N.A.,
by
Lloyd A. Jones
--------------------------------------
Name: Lloyd A. Jones
Title: Senior Vice President
<PAGE>
2
THE BANK OF TOKYO TRUST COMPANY,
by
Victor F. Bulzacchelli
--------------------------------------
Name: Victor F. Bulzacchelli
Title: Vice President & Manager
BOATMEN'S FIRST NATIONAL BANK OF
OKLAHOMA,
by
Hilarie H. Dean
--------------------------------------
Name: Hilarie H. Dean
Title: Vice President
THE BOATMEN'S NATIONAL BANK OF ST.
LOUIS,
by
Timothy R. Conway
--------------------------------------
Name: Timothy R. Conway
Title: Vice-President
CITIZENS BANK OF JONESBORO,
by
Glenda Frangenberg
--------------------------------------
Name: Glenda Frangenberg
Title: Vice President
CONTINENTAL BANK,
by
Mary Jo Hoch
--------------------------------------
Name: Mary Jo Hoch
Title: Vice President
<PAGE>
3
CREDIT LYONNAIS NEW YORK BRANCH,
by
R. Ivosevich
--------------------------------------
Name: Robert Ivosevich
Title: Senior Vice President
CREDIT SUISSE,
by
William P. Murray
--------------------------------------
Name: William P. Murray
Title: Member of Senior Management
by
K.R. Kristinsson
--------------------------------------
Name: Kristinn R. Kristinsson
Title: Associate
FIRST AMERICAN NATIONAL BANK,
by
David C. May
--------------------------------------
Name: David C. May
Title: Senior Vice President
FIRST COMMERCIAL BANK, N.A.,
by
Wm. D. Oury
--------------------------------------
Name: William D. Oury
Title: Vice President
FIRST INTERSTATE BANK OF TEXAS,
N.A.,
by
Connor J. Duffey
--------------------------------------
Name: Connor J. Duffey
Title: Vice President
<PAGE>
4
THE FIRST NATIONAL BANK OF BOSTON,
by
Bethann R. Halligan
--------------------------------------
Name: Bethann R. Halligan
Title: Director
FIRST NATIONAL BANK OF COMMERCE,
by
Howard Blank
--------------------------------------
Name: Howard Blank
Title: Vice President
THE FROST NATIONAL BANK,
by
Beth Weakley
--------------------------------------
Name: Beth Weakley
Title: Senior Vice President
THE FUJI BANK, LIMITED,
by
David Kelley
--------------------------------------
Name: David Kelley
Title: Vice President & Senior Manager
NATIONSBANK OF TEXAS, N.A.,
by
Steven A. Deily
--------------------------------------
Name: Steven A. Deily
Title: Senior Vice President
NBD BANK, N.A.,
by
L E Schuster
--------------------------------------
Name: Larry E. Schuster
Title: Vice President
<PAGE>
5
PREMIER BANK, N.A.,
by
L J Holland
--------------------------------------
Name: L. J. Holland
Title: Vice President
ROYAL BANK OF CANADA,
by
Tom J. Oberaigner
--------------------------------------
Name: Tom J. Oberaigner
Title: Manager
THE SANWA BANK, LIMITED,
by
Robert S. Smith
--------------------------------------
Name: Robert S. Smith
Title: Assistant Vice President
SOCIETE GENERALE,
by
Louis P. Laville, III
--------------------------------------
Name: Louis P. Laville, III
Title: Vice President
SUN BANK, NATIONAL ASSOCIATION,
by
J. Carol Doyle
--------------------------------------
Name: J. Carol Doyle
Title: First Vice President
WORTHEN,
by
Robert E. Rogers
--------------------------------------
Name: Robert E. Rogers
Title: Vice President
<PAGE>
EXHIBIT A
[ ]*
NOTE
$[Amount of Lender's Commitment] New York, New York
, 19
FOR VALUE RECEIVED, the undersigned, [ ]*, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
(the "Lender"), at the office of Chemical Bank (the
"Agent"), at 270 Park Avenue, New York, New York 10017, (i) on the last day of
each Interest Period, as defined in the $500,000,000 Revolving Credit Facility
Agreement dated as of July 13, 1994 (the "Credit Agreement"), among the
Borrower, [ , Inc.,]** the Lenders named therein and the Agent, the
aggregate unpaid principal amount of all Loans (as defined in the Credit
Agreement) made to the Borrower by the Lender pursuant to the Credit Agreement
to which such Interest Period applies and (ii) on the Maturity Date (as defined
in the Credit Agreement) the lesser of the principal sum of [amount of Lender's
Commitment] Dollars ($ ) and the aggregate unpaid principal amount
of all Loans made to the Borrower by the Lender pursuant to the Credit
Agreement, in lawful money of the United States of America in immediately
available funds, and to pay interest from the date hereof on the principal
amount hereof from time to time outstanding, in like funds, at said office, at
the rate or rates per annum and payable on the dates provided in the Credit
Agreement.
- --------------------
1/ The bracketed language is for use in the 364 day facility.
* Insert "DILLARD DEPARTMENT STORES, INC." or "DILLARD INVESTMENT CO.,
INC."
** If Dillard Department Stores, Inc., is the Borrower as set forth above,
insert "Dillard Investment Co." If Dillard Investment Co., Inc., is the Borrower
as set forth above, insert "Dillard Department Stores".
<PAGE>
2
The Borrower promises to pay interest, on demand, on any overdue principal and,
to the extent permitted by law, overdue interest from their due dates at the
rate or rates provided in the Credit Agreement.
The Borrower hereby waives diligence, presentment, demand, protest
and notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and interest hereon and the respective dates
and maturity dates thereof shall be endorsed by the holder hereof on the
schedule attached hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof, or otherwise recorded by
such holder in its internal records; provided, however, that the failure of the
holder hereof to make such a notation or any error in such a notation shall not
affect the obligations of the Borrower under this Note.
This Note is one of the Notes referred to in the Credit Agreement,
which, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for optional and mandatory
prepayment of the principal hereof prior to the maturity hereof and for the
amendment or waiver of certain provisions of the Credit Agreement, all upon the
terms and conditions therein specified. This Note shall be construed in
accordance with and governed by the laws of the State of New York and any
applicable laws of the United States of America.
[ ]*,
by
--------------------------------
Name:
Title:
- -------------------
* Insert "DILLARD DEPARTMENT STORES, INC." or "DILLARD INVESTMENT CO.,
INC."
<PAGE>
3
<TABLE>
<CAPTION>
Unpaid Name of
Amount Payments Principal Person
and Type Maturity --------------------- Balance Making
Date of Loan Date Principal Interest of Note Notation
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Reference is made to the $500,000,000 Revolving Credit Facility
Agreement dated as of July 13, 1994 (the "Credit Agreement"), among Dillard
Department Stores, Inc., a Delaware corporation (the "Parent"), Dillard
Investment Co., Inc., a Delaware corporation ("DIC", and together with the
Parent, the "Borrowers"), the lenders listed in Schedule 2.01 thereof (the
"Lenders") and Chemical Bank, as agent for the Lenders (in such capacity, the
"Agent"). Terms defined in the Credit Agreement are used herein with the same
meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the "Assigned Interest")
in the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the Commitment of the Assignor on the Effective Date and the
Loans owing to the Assignor which are outstanding on the Effective Date,
together with unpaid interest accrued on the assigned Loans to the Effective
Date and the amount, if any, set forth on the reverse hereof of the Fees accrued
to the Effective Date for the account of the Assignor. Each of the Assignor and
the Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 9.04(c) of the Credit Agreement,
a copy of which has been received by each such party. From and after the
Effective Date (i) the Assignee shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the interests assigned
by this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent of the interests assigned by this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance is being delivered to the Agent
together with (i) the Notes evidencing the Loans included in the Assigned
Interest, (ii) if the Assignee is organized under the laws of a jurisdiction
outside the United States, the forms specified in Section 2.17(f) of the Credit
Agreement, duly completed and executed by such Assignee, (iii) if the Assignee
is not already a Lender under the Credit Agreement,
<PAGE>
2
an Administrative Questionnaire in the form of Exhibit C to the Credit Agreement
and (iv) a processing and recordation fee of $2,500.
3. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
<PAGE>
3
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
<TABLE>
<CAPTION>
Percentage Assigned
of Commitment
Thereunder (set
forth, to at least 8
decimals, as a
Principal percentage of the
Facility Amount aggregate
- -------- Assigned Commitments of all
-------- Lenders thereunder)
-------------------
<S> <C> <C>
Revolving
Credit $ %
Fees
Assigned
(if any):
</TABLE>
<PAGE>
4
The terms set forth above
and on the reverse side hereof are
hereby agreed to: Accepted:
, as Assignor CHEMICAL BANK, as agent,
- ----------------------
By: By:
-------------------------- --------------------------
Name: Name:
Title: Title:
, as Assignee DILLARD DEPARTMENT
- ---------------------- STORES, INC.,
By: By:
-------------------------- --------------------------
Name: Name:
Title: Title:
DILLARD INVESTMENT CO., INC.,
By:
--------------------------
Name:
Title:
<PAGE>
EXHIBIT C
[Form of]
Administrative Questionnaire
$500,000,000 Revolving Credit Facility Agreement
NOTE TO PARTICIPANTS: PLEASE FORWARD THIS COMPLETED FORM AS SOON AS
- --------------------- POSSIBLE TO BARBARA CLEMENS, SYNDICATIONS DEPT.,
CHEMICAL BANK, VIA TELECOPIER TO (212) 270-4300.
PLEASE TYPE ALL INFORMATION.
----------------------------
AGENT: Chemical Bank
- ------ 270 Park Avenue
New York, N.Y. 10017
CONTACTS: (212) 622-0484 Syndications
- ---------
Banking &
Corporate
Finance
OPERATIONAL CONTACT: Barbara Clemens (212) 310-4956 Syndication/
- -------------------- Sales
Support
TELEX:
- ------
TELECOPIER:
- -----------
Full Legal Name of your Bank:
-----------------------------------------------
Exact name of signing officer:
-----------------------------------------------
Title of signing officer:
-----------------------------------------------
Business address for delivery of
execution copies of credit
agreement (Please do not use
P.O. Box address; hand
deliveries cannot be made.): -----------------------------------------------
-----------------------------------------------
Signing officer's phone no.: -----------------------------------------------
Alternate officer contact: -----------------------------------------------
Alternate officer's phone no.: -----------------------------------------------
<PAGE>
2
PRIMARY CONTACT INFORMATION
---------------------------
These contacts are for critical notification (drawdowns, repayments, rate
setting, etc.)
Bank Name:
------------------------------------------------------
Address:
------------------------------------------------------
Primary Contact:
------------------------------------------------------
Title and Department:
------------------------------------------------------
Phone Number:
------------------------------------------------------
Primary Telecopier:
------------------------------------------------------
Alternate Telecopier:
------------------------------------------------------
Primary Telex/Answerback:
------------------------------------------------------
ALTERNATE CONTACT INFORMATION
-----------------------------
Alternate Contact:
------------------------------------------------------
Title and Department:
------------------------------------------------------
Phone Number:
------------------------------------------------------
Primary Telecopier:
------------------------------------------------------
Alternate Telecopier:
------------------------------------------------------
Primary Telex/Answerback:
------------------------------------------------------
GENERAL OPERATIONAL INFORMATION
-------------------------------
Wire Instructions to your bank: Bank Name:
-------------------------
Dept:
-------------------------
ABA #:
-------------------------
A/C #:
-------------------------
Attn:
-------------------------
Ref:
-------------------------
Telex information: Contact Name(s):
-------------------------------------
Number:
-------------------------------------
Answerback:
-------------------------------------
If any changes are made to the above information please notify by telecopier
to , and.
<PAGE>
3
Movement of funds: to us: Wire Fed Funds to:
- ------------------
Chemical Bank
Agent Bank Services
Attention: Barbara Clemens
Reference: [Borrower]
<PAGE>
EXHIBIT D
Substance of Opinion of
Friday, Eldredge & Clark,
Counsel for the Borrowers,
To Be Delivered on the Closing Date
1. Each of the Borrowers is duly organized, validly existing and in
good standing under the laws of the State of Delaware, has the requisite power
and authority to own its property and assets and to carry on its business as now
conducted and is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify would not have
a material adverse effect on the condition, financial or otherwise, of such
Borrower. Each of the Borrowers has the corporate power to execute and deliver,
and perform its obligations under this Agreement, to borrow hereunder and to
execute and deliver the Notes.
2. The execution, delivery and performance by each of the Borrowers
of this Agreement, the borrowings hereunder, and the execution and delivery of
the Notes being delivered by each of the Borrowers (a) have been duly authorized
by all requisite corporate and, if required, shareholder action and (b) will not
(i) violate (A) any provision of law, statute, rule or regulation or the
articles of incorporation or the By-laws of either of the Borrowers, (B) to the
best of our knowledge after due inquiry, any order of any court or any rule,
regulation or order of any other agency of government binding upon either of the
Borrowers or (C) to the best of our knowledge after due inquiry, any provisions
of any indenture, agreement or other instrument to which either of the Borrowers
or any of their respective properties or assets are or may be bound or (ii) to
the best of our knowledge after due inquiry, be in conflict with, result in a
breach of or constitute (alone or with due notice or lapse of time or both) a
default under any indenture, agreement or other instrument referred to in (b)
(i) (C) above.
3. Assuming the laws of the State of New York are the same as the
laws of the State of Arkansas, except for usury laws, and the validity of this
Agreement and the Notes under the laws of the State of New York, this Agreement
and the Notes have been duly executed and delivered by each of the Borrowers and
constitute legal, valid and binding obligations of each of the Borrowers,
enforceable against each of them in accordance with their respective terms and
an Arkansas court would enforce the law of the State of New York as the
governing law (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency and similar laws affecting creditors'
rights
<PAGE>
2
generally and to moratorium laws from time to time in effect).
4. No registration with or consent or approval of, or other action
by, any Federal, state or other governmental agency, authority or regulatory
body is required in connection with the execution, delivery and performance of
this Agreement by either of the Borrowers; the execution and delivery of the
Notes by either of the Borrowers; or the borrowings hereunder.
5. To the best of our knowledge after due inquiry, there are not any
actions, suits or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory authority now pending
or threatened against or affecting either of the Borrowers or the business,
assets or rights of either of the Borrowers (a) which involve this Agreement or
any of the transactions contemplated hereby or thereby or (b) as to which there
is a reasonable possibility of an adverse determination and which, if adversely
determined, would be likely, in our judgment, individually or in the aggregate,
materially to impair the ability of either of the Borrowers to conduct business
substantially as now conducted, or materially and adversely to affect the
business, assets, operations, prospects or condition, financial or otherwise, of
either of the Borrowers, or to impair the validity or enforceability of or the
ability of either of the Borrowers to perform its obligations under this
Agreement or the Notes.
<PAGE>
SCHEDULE 2.01
<TABLE>
<CAPTION>
Lenders
-------
Name and Address Revolving Credit
of Lender Commitment
---------------- ----------------
<S> <C>
Chemical Bank $50,000,000
270 Park Avenue
New York, NY 10017-2070
Telecopier No. (212) 270-1474
Attention of: Ms. Meredith Vanden
Handel
ABN AMRO Bank N.V. $20,000,000
3 Riverway, Suite 1600
Houston, TX 77056
Telecopier No. (713) 629-7533
Attention of: Mr. David P. Orr
Bank IV Kansas, N.A. $10,000,000
100 North Broadway
Wichita, KS 67201
Telecopier No. (316) 261-2290
Attention of: Mr. Lloyd A. Jones
Bank of Tokyo Trust Company $20,000,000
1251 Avenue of the Americas
New York, NY 10006-3138
Telecopier No. (212) 782-6440
Attention of: Mr. Victor F.
Bulzacchelli
Boatmen's First National Bank $10,000,000
of Oklahoma
120 N. Robinson
Oklahoma City, OK 73102
Telecopier No. (405) 230-4113
Attention of: Ms. Hilarie H. Dean
</TABLE>
<PAGE>
2
<TABLE>
<CAPTION>
Name and Address Revolving Credit
of Lender Commitment
---------------- ----------------
<S> <C>
The Boatmen's National Bank of $25,000,000
St. Louis
800 Market Street
St. Louis, MO 63101
Telecopier No. (314) 466-6353
Attention of: Mr. Timothy R. Conway
Citizens Bank of Jonesboro $1,000,000
420 South Main Street
Jonesboro, AR 72401
Telecopier No. (501) 933-4334
Attention of: Ms. Glenda Frangenberg
Continental Bank $50,000,000
231 South LaSalle
Chicago, IL 60697
Telecopier No. (312) 987-5833
Attention of: Ms. Mary Jo Hoch
Credit Lyonnais $20,000,000
500 North Akard,
Suite 3210
Dallas, TX 75201
Telecopier No. (214) 954-3312
Attention of: Mr. Robert Ivosevich
Credit Suisse $40,000,000
12 East 49th Street,
Suite 4100
New York, NY 10017
Telecopier No. (713) 751-0702
Attention of: Ms. Kristinn R.
Kristinsson
</TABLE>
<PAGE>
3
<TABLE>
<CAPTION>
Name and Address Revolving Credit
of Lender Commitment
---------------- ----------------
<S> <C>
First American National Bank $10,000,000
4894 Popular Ave
Memphis, TN 38117
Telecopier No. (615) 748-2485
Attention of: Mr. David C. May
First Commercial Bank, N.A. $10,000,000
400 West Capitol
Little Rock, AR 72201
Telecopier No. (501) 371-3344
Attention of: Mr. William Oury
First Interstate Bank of Texas, N.A. $20,000,000
1445 Ross Avenue
Dallas, TX 75265
Telecopier No. 214-740-1543
Attention of: Mr. Connor J. Duffey
The First National Bank of Boston $10,000,000
100 Federal Street
Boston, MA 02110
Telecopier No.
Attention of: Ms. Bethann R.
Halligan
First National Bank of Commerce $25,000,000
210 Barrone
New Orleans, LA 70112
Telecopier No. (504) 561-1864
Attention of: Mr. Howard Blank
</TABLE>
<PAGE>
4
<TABLE>
<CAPTION>
Name and Address Revolving Credit
of Lender Commitment
---------------- ----------------
<S> <C>
The Frost National Bank $4,000,000
100 West Houston Street
San Antonio, TX 78205
Telecopier No. (210) 220-4626
Attention of: Ms. Beth Weakley
The Fuji Bank, Limited $20,000,000
2 Houston Center,
909 Fanin, Suite 2800
Houston, TX 77010
Telecopier No. (713) 759-0048
Attention of: Mr. David Kelley
NationsBank of Texas, N.A. $50,000,000
901 Main Street, 67th Floor
Dallas, TX 75202
Telecopier No. (214) 508-0980
Attention of: Mr. Steven Deily
NBD Bank, N.A. $10,000,000
611 Woodward Avenue
Detroit, MI 48226
Telecopier No. (313) 225-2649
Attention of: Mr. Larry E. Schuster
Premier Bank, N.A. $10,000,000
400 Texas Street
Shreveport, LA 71101
Telecopier No. (318) 226-2075
Attention of: Mr. L. J. Holland
</TABLE>
<PAGE>
5
<TABLE>
<CAPTION>
Name and Address Revolving Credit
of Lender Commitment
---------------- ----------------
<S> <C>
Royal Bank of Canada $20,000,000
TCBT,
600 Wilshire Blvd, Suite 800
Los Angeles, CA 90017
Telecopier No. (213) 955-5350
Attention of: Mr. Tom Oberaigher
The Sanwa Bank, Limited $10,000,000
901 Main Street, #2830
Dallas, TX 75202
Telecopier No. (214) 741-6535
Attention of: Mr. Robert S. Smith
Societe Generale $20,000,000
2001 Ross Avenue, Suite 4800
Dallas, TX 75201
Telecopier No. (214) 979-1104
Attention of: Mr. Louis P. LaVille,
III
Sun Bank National Association $25,000,000
200 South Orange Avenue, Tower 4
Orlando, FL 32802
Telecopier No. (407) 237-6894
Attention of: Ms. J. Carol Doyle
Worthen $10,000,000
124 West Capital
Little Rock, AR 72201
Telecopier No. (501) 378-1146
Attention of: Mr. Robert E. Rogers
---------------
Total....................$ $500,000,000
</TABLE>
<PAGE>
SCHEDULE 3.07
Subsidiaries of Dillard Department Stores, Inc.
-----------------------------------------------
<TABLE>
<CAPTION>
Percentage
Name of Subsidiary of Ownership
------------------ ------------
(indirect subsidiaries
are indented)
<S> <C>
Dillard Investment Co., Inc .................................... 100%
Dillard National Bank ........................................ 100%
Construction Developers, Incorporated .......................... 100%
Condev Mission, Inc .......................................... 100%
Quail Springs Properties, Inc. ............................... 100%
SI Lessors (general partnership) ............................. 99%
Ingram Food Court Associates
(general partnership) ...................................... 50%
Windsor Park Court Associates
(general partnership) ...................................... 50%
CDI Contractors, Inc ........................................... 50%
Joske's, Inc ................................................... 100%
Joske's Houston Real Estate Company ............................ 100%
Joske's Dallas Real Estate Company ............................. 100%
Joske's San Antonio Real Estate
Company ...................................................... 100%
Cain Sloan, Inc ................................................ 100%
Higbee Associates (general
partnership) ................................................. 100%
The Higbee Company ........................................... 100%
Higbee Financial Center .................................... 100%
D.H. Holmes Company, Limited ................................... 100%
D.H. Holmes Realty, Inc ...................................... 100%
D.H. Holmes Credit Corporation ............................... 100%
Holmes Broadcasting, Inc ..................................... 100%
D.H. Holmes B.R., Inc ........................................ 100%
EBR Associates (general
partnership) ............................................. 62.5%
Holmes Alexandria, Inc ..................................... 100%
ABR Joint Venture ........................................ 50%
D.H. Holmes Ticket Co ...................................... 100%
J.B. Ivey & Company ............................................ 100%
Dillard Travel, Inc ............................................ 100%
Central Ace Hardware Co., Inc. ................................. 51%
Goldstein Chapman Company ...................................... 100%
Pulaski Realty Company ......................................... 100%
Ivey Development Company ....................................... 100%
Dillard Ticketing Systems, Inc. ................................ 100%
</TABLE>
<PAGE>
SCHEDULE 3.08
Material Litigation
-------------------
None
<PAGE>
SCHEDULE 3.16
Environmental Liability
-----------------------
Dillard has been notified that D.H. Holmes Company, Limited, a
wholly-owned subsidiary of Dillard, may be a de minimis contributor, through a
jobber, to a battery disposal site under Environmental Protection Agency
supervision. As Dillard now understands the facts and circumstances, it is not
probable that this will be a material matter to Dillard.
<PAGE>
SCHEDULE 6.01
Liens
-----
None
