<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
For the quarterly period ended November 1, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
For the transition period from to
------- -------
Commission file number 0-14678
ROSS STORES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1390387
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8333 CENTRAL AVENUE, NEWARK, CALIFORNIA 94560-3433
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 505-4400
Former name, former address and former fiscal year, N/A
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- ----
The number of shares of Common Stock, with $.01 par value, outstanding on
November 29, 1997 was 47,643,824.
1
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROSS STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
($000) November 1, February 1, November 2,
ASSETS 1997 1997 1996
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(Unaudited) (Note A) (Unaudited)
CURRENT ASSETS
Cash and cash equivalents $21,737 $44,777 $25,305
Accounts receivable 9,720 7,832 11,618
Merchandise inventory 467,947 373,689 401,813
Prepaid expenses and other 14,518 13,289 13,269
-------- -------- --------
Total Current Assets $513,922 439,587 452,005
PROPERTY AND EQUIPMENT
Land and buildings 24,115 24,115 24,115
Fixtures and equipment 184,265 164,980 160,539
Leasehold improvements 142,598 135,810 124,783
Construction-in-progress 11,120 23,798 28,922
-------- -------- --------
362,098 348,703 338,359
Less accumulated depreciation and amortization 171,779 156,056 152,468
-------- -------- --------
190,319 192,647 185,891
Deferred income taxes and other assets 32,802 27,244 22,482
-------- -------- --------
$737,043 $659,478 $660,378
- --------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable $205,249 $184,101 $196,929
Accrued expenses and other 98,936 61,761 61,936
Accrued payroll and benefits 42,740 36,356 35,464
Income taxes payable 4,108 22,567 14,018
-------- -------- --------
Total Current Liabilities 351,033 304,785 308,347
Long-term debt 25,000 10,000
Deferred income taxes and other liabilities 32,089 25,850 29,365
STOCKHOLDERS' EQUITY
Capital stock 479 493 498
Additional paid-in capital 168,595 164,166 156,293
Retained earnings 159,847 164,184 155,875
-------- -------- --------
328,921 328,843 312,666
-------- -------- --------
$737,043 $659,478 $660,378
-------- -------- --------
-------- -------- --------
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------ --------------------------
November 1, November 2, November 1, November 2,
($000 except per share data, unaudited) 1997 1996 1997 1996
- --------------------------------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
SALES $482,875 $403,383 $1,416,395 $1,179,987
COSTS AND EXPENSES
Cost of goods sold and occupancy 334,965 283,797 985,587 833,472
General, selling and administrative 98,080 85,043 280,300 243,025
Depreciation and amortization 7,866 7,363 22,776 21,788
Interest expense (income) 206 (77) (277) 138
--------- ---------- ---------- ----------
441,117 376,126 1,288,386 1,098,423
Earnings before taxes 41,758 27,257 128,009 81,564
Provision for taxes on earnings 16,703 10,903 51,203 32,626
--------- ---------- ---------- ----------
Net earnings $25,055 $16,354 $76,806 $48,938
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
Net earnings per share:
Primary $.50 $.32 $1.52 $.95
Fully diluted $.50 $.32 $1.52 $.95
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
Weighted average shares outstanding:
Primary 49,841 51,250 50,400 51,514
Fully diluted 49,920 51,354 50,578 51,744
--------- ---------- ---------- ----------
Stores open at end of period 326 313
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
ROSS STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------
November 1, November 2,
($000, unaudited) 1997 1996
- ----------------- --------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $76,806 $48,938
Adjustments to reconcile net earnings to
net cash provided by (used in)
operating activities:
Depreciation and amortization of
property and equipment 22,776 21,788
Other amortization 6,261 4,923
Change in current assets and current liabilities:
Merchandise inventory (94,258) (105,848)
Other current assets - net (3,118) (3,816)
Accounts payable 23,368 61,012
Other current liabilities - net 7,720 33,246
Other 1,290 5,683
--------- ---------
Net cash provided by operating activities 40,845 65,926
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (26,712) (33,188)
--------- ---------
Net cash used in investing activities (26,712) (33,188)
--------- ---------
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing under line of credit agreement 22,400 12,700
Proceeds (Repayment) of long-term debt 24,941 (9,835)
Issuance of common stock related to stock plans 8,115 29,352
Repurchase of common stock (85,965) (57,797)
Dividends paid (6,664) (5,279)
--------- ---------
Net cash used in financing activities (37,173) (30,859)
--------- ---------
NET INCREASE (DECREASE) IN CASH (23,040) 1,879
Cash
Beginning of year 44,777 23,426
End of quarter $21,737 $25,305
--------- ---------
Interest Paid $130 $660
Income Taxes Paid $69,976 $29,163
--------- ---------
--------- ---------
</TABLE>
See notes to condensed consolidated financial statements.
4
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ROSS STORES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Nine Months Ended November 1, 1997 and November 2, 1996
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared from the records of the company without audit and, in the
opinion of management, include all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position at
November 1, 1997 and November 2, 1996; the interim results of operations for
the three and nine months ended November 1, 1997 and November 2, 1996; and
changes in cash flows for the nine months ended November 1, 1997 and November
2, 1996. The balance sheet at February 1, 1997, presented herein, has been
derived from the audited financial statements of the company for the fiscal
year then ended.
Accounting policies followed by the company are described in Note A to the
audited consolidated financial statements for the fiscal year ended February
1, 1997. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted for purposes of the
interim condensed consolidated financial statements. The interim condensed
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements, including notes thereto, for the
year ended February 1, 1997.
The results of operations for the three and nine month periods herein
presented are not necessarily indicative of the results to be expected for
the full year.
The condensed consolidated financial statements at November 1, 1997 and
November 2, 1996, and for the three and nine months then ended have been
reviewed, prior to filing, by the registrant's independent accountants whose
report covering their review of the financial statements is included in this
report on page 6.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, (SFAS 128), Earnings per Share
(EPS). SFAS 128 requires dual presentation of basic EPS and diluted EPS on
the face of all income statements issued after December 15, 1997 for all
entities with complex capital structures. Basic EPS is computed as net
income divided by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could occur
from common shares issuable through stock options, warrants and other
convertible securities. The pro forma effect assuming adoption of SFAS 128
at the beginning of each period is presented below.
Three Months Ended Nine Months Ended
-------------------------- -------------------------
November 1, November 2, November 1, November 2,
1997 1996 1997 1996
----------- ----------- ----------- -----------
Pro forma EPS:
Basic $.51 $.33 $1.56 $.97
Diluted $.50 $.32 $1.52 $.95
5
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INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors and Stockholders of Ross Stores, Inc.
Newark, California
We reviewed the accompanying condensed consolidated balance sheets of Ross
Stores, Inc. (the "Company") as of November 1, 1997 and November 2, 1996, and
the related condensed consolidated statements of earnings for the three-month
and nine-month periods then ended and the related condensed consolidated
statements of cash flows for the nine-month periods then ended. These
condensed consolidated financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objectives of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Ross Stores, Inc. as of February
1, 1997, and the related consolidated statements of earnings, stockholders'
equity, and cash flows for the year then ended (not presented herein); and in
our report dated March 7, 1997, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of February 1, 1997
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
Deloitte & Touche LLP
San Francisco, CA
November 21, 1997
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
PERCENTAGE OF SALES
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------- --------------------------
November 1, November 2, November 1, November 2,
1997 1996 1997 1996
--------- --------- ----------- -----------
<S> <C> <C> <C> <C>
SALES
Sales ($000) $482,875 $403,383 $1,416,395 $1,179,987
Sales growth 20% 22% 20% 20%
Comparable store sales growth 12% 14% 12% 12%
COSTS AND EXPENSES
Cost of goods sold and occupancy 69.4% 70.4% 69.6% 70.6%
General, selling and administrative 20.3% 21.1% 19.8% 20.6%
Depreciation and amortization 1.6% 1.8% 1.6% 1.8%
Interest expense (income) 0% (0%) (0%) 0%
NET EARNINGS 5.2% 4.1% 5.4% 4.1%
--------- --------- ----------- -----------
--------- --------- ----------- -----------
</TABLE>
SALES
The results of operations for the three and nine months ended November 1, 1997,
over the same periods last year, reflect an increase in the level of sales
which was due to the increase in comparable store sales as well as a greater
number of open stores during the current period.
COSTS AND EXPENSES
The declines from the prior year in cost of goods sold and occupancy expense as
a percentage of sales for the three and nine month periods ended November 1,
1997 were primarily due to stronger than planned comparable store increases
which contributed to (i) lower markdowns as a percentage of sales and (ii)
increased leverage on occupancy expenses.
General, selling and administrative expenses as a percentage of sales also
declined from the comparable periods in the prior year. This improvement was
due to the company's continued focus on strict expense controls combined with
the leverage realized on the strong increase in comparable store sales.
The company's effective tax rate for the third quarter of 1997 and 1996 was
40%. The rate for both periods reflects the applicable statutory tax rates.
Net earnings for the three months ended November 1, 1997, totaled $25.1
million, or $.50 per share, compared to net earnings of $16.4 million, or $.32
per share, for the three months ended November 2, 1996. Net earnings for the
nine months ended November 1, 1997, totaled $76.8 million, or $1.52 per
share, compared to net earnings of $48.9 million, or $.95 per share, for the
nine months ended November 2, 1996.
7
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LIQUIDITY AND CAPITAL RESOURCES
The primary uses of cash during the first nine months of fiscal 1997 were for
(i) an increase in inventory; (ii) repurchase of the company's common stock;
and (iii) capital expenditures for new stores, improvements to existing
locations and improvements in operating systems.
Total consolidated inventories increased 16% at November 1, 1997 from November
2, 1996 due mainly to an increase in the number of stores and higher levels of
seasonal packaway merchandise.
In September 1997, the company entered into a five year lease for an
approximately 214,500 square foot warehouse building located in Newark,
California which will store the company's packaway merchandise. This
building is expected to replace third party warehousing services used by the
company on the West Coast.
An increase in deferred compensation was the primary driver in the increase
over the prior year in deferred income taxes and other liabilities. The
increase in accrued expenses primarily results from the timing of payments for
expenses related to the volume of business. The increase in payroll reflects
the accruals for the company's incentive plan. The decrease in income taxes
payable results from the timing of stock option exercises and the impact of the
corresponding tax deduction on estimated income tax payments.
The increase in long-term debt and interest expense compared to the prior
year resulted from higher average borrowings to fund the repurchase of common
stock. The stock repurchase program, approved by the Board of Directors in
January 1997, was completed in November 1997. The company repurchased a
total of 3,000,000 shares for an aggregate purchase price of approximately
$98 million.
In September 1997, the company entered into a new revolving credit facility
for $160 million plus a separate $30 million letter of credit facility (the
"Facilities"). The Facilities replace both the Revolving Credit Agreement,
dated July 31, 1993, with Wells Fargo Bank, National Association, as amended
and the Credit Agreement, dated as of June 22, 1994 with Bank of America
National Trust and Savings Association, as amended.
The company believes it can fund its capital needs for the remainder of the
fiscal year and the next twelve months through internally generated cash, trade
credit, established bank lines and lease financing.
The company, in conjunction with an outside vendor, is assessing the extent of
the necessary modifications to its computer hardware and software systems to
enable them to process information beyond 1999. The costs of the
modifications, which are currently unknown, are being determined as part of the
assessment and will be expensed as incurred.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Incorporated herein by reference to the list of Exhibits contained in the
Exhibit Index which begins on page 10 of this Report.
(b) Reports on Form 8-K
None.
8
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
------ -------
3.1 Certificate of Incorporation, as amended, incorporated by
reference to Exhibit 3.1 to the Registration Statement on Form 8-B
(the "Form 8-B") filed September 1, 1989 by Ross Stores, Inc., a
Delaware corporation ("Ross Stores").
3.2 Amended By-laws, dated August 25, 1994, incorporated by
reference to Exhibit 3.2 to the Form 10-Q filed by Ross Stores for
its quarter ended July 30, 1994.
10.1 Agreement of Lease, dated November 24, 1986, for Ross Stores'
corporate headquarters and distribution center in Newark, CA,
incorporated by reference to Exhibit 10.5 to the Form 8-B.
10.2 Credit Agreement, dated September 15, 1997, among Ross Stores,
Bank of America, National Trust and Savings Association ("Bank of
America") as Agent and the other financial institutions party
thereto.
10.3 Letter of Credit Agreement, dated September 15, 1997, between
Ross Stores and Bank of America.
10.4 Amendment to Credit Agreement, dated as of October 7, 1997
between Ross Stores and Bank of America.
MANAGEMENT CONTRACTS AND COMPENSATORY PLANS
(EXHIBITS 10.5 - 10.32)
10.5 Amended and Restated 1992 Stock Option Plan, incorporated by
reference to the appendix to the Proxy Statement filed by Ross Stores
on April 24, 1995 for its Annual Stockholders Meeting held May 25,
1995 ("1995 Proxy Statement").
10.6 Third Amended and Restated Ross Stores Employee Stock Purchase
Plan, incorporated by reference to the appendix to the 1995 Proxy
Statement.
10.7 Third Amended and Restated Ross Stores 1988 Restricted Stock
Plan, incorporated by reference to the appendix to the Proxy
Statement filed by Ross Stores on April 24, 1996 for its Annual
Stockholders Meeting held May 30, 1996 ("1996 Proxy Statement").
10.8 1991 Outside Directors Stock Option Plan, incorporated by
reference to the appendix to the 1996 Proxy Statement.
10.9 Ross Stores Executive Medical Plan, incorporated by reference to
Exhibit 10.13 to the 1993 Form 10-K filed by Ross Stores for its year
ended January 29, 1994 ("1993 Form 10-K").
10.10 Third Amended and Restated Ross Stores Executive
Supplemental Retirement Plan, incorporated by reference to Exhibit
10.14 to the 1993 Form 10-K.
10.11 Ross Stores Non-Qualified Deferred Compensation Plan,
incorporated by reference to Exhibit 10.15 to the 1993 Form 10-K.
10.12 Ross Stores Incentive Compensation Plan, incorporated by
reference to the appendix to the 1996 Proxy Statement.
9
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Exhibit
Number Exhibit
------ -------
10.13 Amended and Restated Employment Agreement between Ross
Stores and Norman A. Ferber, effective as of June 1, 1995,
incorporated by reference to Exhibit 10.17 to the Form 10-Q filed by
Ross Stores for its quarter ended October 28, 1995.
10.14 Amendment to Amended and Restated Employment Agreement
between Ross Stores and Norman A. Ferber, entered into July 29, 1996,
incorporated by reference to Exhibit 10.17 to the Form 10-Q filed by
Ross Stores for its quarter ended August 3, 1996.
10.15 Amendment to Amended Restated Employment Agreement between
Ross Stores and Norman A. Ferber, effective as of March 20, 1997,
incorporated by reference to Exhibit 10.19 to the Form 10-Q filed by
Ross Stores for its quarter ended May 3, 1997.
10.16 Third Amendment to Amended and Restated Employment
Agreement between Ross Stores and Norman A. Ferber, effective as of
April 15, 1997, incorporated by reference to Exhibit 10.20 to the
Form 10-Q filed by Ross Stores for its quarter ended May 3, 1997.
10.17 Employment Agreement between Ross Stores and Melvin A.
Wilmore, effective as of March 15, 1994, incorporated by reference to
Exhibit 10.20 to the Form 10-Q filed by Ross Stores for its quarter
ended April 30, 1994.
10.18 Amendment to Employment and Stock Grant Agreements by and
between Ross Stores and Melvin A. Wilmore, effective as of March 16,
1995, incorporated by reference to Exhibit 10.20 to the Form 10-Q
filed by Ross Stores for its quarter ended October 28, 1995.
10.19 Second Amendment to Employment Agreement by and between
Ross Stores and Melvin A. Wilmore, effective as of June 1, 1995,
incorporated by reference to Exhibit 10.21 to the Form 10-Q filed by
Ross Stores for its quarter ended October 28, 1995.
10.20 Third Amendment to Employment Agreement by and between Ross
Stores and Melvin A. Wilmore, entered into July 29, 1996,
incorporated by reference to Exhibit 10.22 to the Form 10-Q filed by
Ross Stores for its quarter ended August 3, 1996.
10.21 Fourth Amendment to Employment Agreement by and between
Ross Stores and Melvin A. Wilmore, entered into May 19, 1997,
incorporated by reference to Exhibit 10.25 to the Form 10-Q filed by
Ross Stores for its quarter ended August 2, 1997.
10.22 Employment Agreement between Ross Stores and Michael
Balmuth, effective as of February 1, 1995, incorporated by reference
to Exhibit 10.15 to the Form 10-Q filed by Ross Stores for its
quarter ended April 29, 1995.
10.23 Amendment to Employment Agreement between Ross Stores and
Michael Balmuth, effective as of June 1, 1995, incorporated by
reference to Exhibit 10.24 to the Form 10-Q filed by Ross Stores for
its quarter ended October 28, 1995.
10
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Exhibit
Number Exhibit
------ -------
10.24 Second Amendment to Employment Agreement between Ross
Stores and Michael Balmuth, entered into July 29, 1996, incorporated
by reference to Exhibit 10.26 to the Form 10-Q filed by Ross Stores
for its quarter ended August 3, 1996.
10.25 Third Amendment to Employment Agreement between Ross Stores
and Michael Balmuth, entered into May 19, 1997 incorporated by
reference to Exhibit 10.29 to the Form 10-Q filed by Ross Stores for
its quarter ended August 2, 1997.
10.26 Employment Agreement between Ross Stores and Barry S.
Gluck, effective as of March 1, 1996, incorporated by reference to
Exhibit 10.23 to the Form 10-Q filed by Ross Stores for its quarter
ended May 4, 1996.
10.27 First Amendment to Employment Agreement between Ross Stores
and Barry S. Gluck, dated September 1, 1996, incorporated by
reference to Exhibit 10.28 to the Form 10-Q filed by Ross Stores for
its quarter ended October 2, 1996.
10.28 Employment Agreement between Ross Stores and Irene A.
Jamieson, effective as of March 1, 1996, incorporated by reference to
Exhibit 10.24 to the Form 10-Q filed by Ross Stores for its quarter
ended May 4, 1996.
10.29 First Amendment to Employment Agreement between Ross Stores
and Irene A. Jamieson, dated September 1, 1996, incorporated by
reference to Exhibit 10.30 to the Form 10-Q filed by Ross Stores for
its quarter ended October 2, 1996.
10.30 Employment Agreement between Ross Stores and Barbara Levy,
effective as of March 1, 1996, incorporated by reference to Exhibit
10.25 to the Form 10-Q filed by Ross Stores for its quarter ended May
4, 1996.
10.31 First Amendment to Employment Agreement between Ross Stores
and Barbara Levy, dated September 1, 1996, incorporated by reference
to Exhibit 10.32 to the Form 10-Q filed by Ross Stores for its
quarter ended October 2, 1996.
10.32 Consulting Agreement between Ross Stores and Stuart G.
Moldaw, effective as of April 1, 1997, incorporated by reference to
Exhibit 10.34 to the Form 10-Q filed by Ross Stores for its quarter
ended May 3, 1997.
11 Statement re: Computation of Per Share Earnings.
15 Letter re: Unaudited Interim Financial Information.
27 Financial Data Schedules (submitted for SEC use only).
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
ROSS STORES, INC.
Registrant
Date: December 12, 1997 /s/John G. Call
John G. Call, Senior Vice President, Chief Financial
Officer and Principal Accounting Officer
12
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- --------------------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 15, 1997
AMONG
ROSS STORES, INC.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
AS AGENT
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
- -----------------------------------------------------------------
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . 1
1.01 DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 OTHER INTERPRETIVE PROVISIONS . . . . . . . . . . . . . . . . 14
(a) PERFORMANCE; TIME. . . . . . . . . . . . . . . . . . . . 14
(b) CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . 14
(c) LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . 14
(e) INDEPENDENCE OF PROVISIONS . . . . . . . . . . . . . . . 15
(f) INTERPRETATION . . . . . . . . . . . . . . . . . . . . . 15
1.03 ACCOUNTING PRINCIPLES . . . . . . . . . . . . . . . . . . . . 15
ARTICLE II
THE CREDITS. . . . . . . . . . . . . . . . 15
2.01 AMOUNTS AND TERMS OF COMMITMENTS. . . . . . . . . . . . . . . 15
2.02 EXTENSION OF AVAILABILITY . . . . . . . . . . . . . . . . . . 15
2.03 LOAN ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . 16
2.04 PROCEDURE FOR COMMITTED BORROWING . . . . . . . . . . . . . . 16
2.05 CONVERSION AND CONTINUATION ELECTIONS . . . . . . . . . . . . 17
2.06 BID BORROWINGS. . . . . . . . . . . . . . . . . . . . . . . . 19
2.07 PROCEDURE FOR BID BORROWINGS. . . . . . . . . . . . . . . . . 19
(a) COMPETITIVE BID REQUESTS . . . . . . . . . . . . . . . . 19
(b) TRANSMISSION OF REQUEST BY AGENT . . . . . . . . . . . . 20
(c) COMPETITIVE BIDS . . . . . . . . . . . . . . . . . . . . 20
(d) TRANSMISSION OF BIDS BY AGENT . . . . . . . . . . . . . 21
(e) BIDS IRREVOCABLE . . . . . . . . . . . . . . . . . . . . 22
(f) ACCEPTANCE BY COMPANY . . . . . . . . . . . . . . . . . 22
(g) ALLOCATION . . . . . . . . . . . . . . . . . . . . . . . 23
(h) TRANSMISSION OF ACCEPTANCE BY AGENT. . . . . . . . . . . 23
(i) FUNDING. . . . . . . . . . . . . . . . . . . . . . . . . 23
(j) EXCHANGE OF INFORMATION. . . . . . . . . . . . . . . . . 23
(k) OTHER CREDIT FACILITIES PERMITTED. . . . . . . . . . . . 24
2.08 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS . . . . . . 24
2.09 OPTIONAL PREPAYMENTS. . . . . . . . . . . . . . . . . . . . . 24
2.10 REPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.11 INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.12 FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(a) FEE LETTER . . . . . . . . . . . . . . . . . . . . . . . 26
(b) COMMITMENT FEES. . . . . . . . . . . . . . . . . . . . . 26
2.13 COMPUTATION OF FEES AND INTEREST. . . . . . . . . . . . . . . 27
2.14 PAYMENTS BY THE COMPANY . . . . . . . . . . . . . . . . . . . 27
2.15 PAYMENTS BY THE BANKS TO THE AGENT. . . . . . . . . . . . . . 28
2.16 SHARING OF PAYMENTS, ETC. . . . . . . . . . . . . . . . . . . 29
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY. . . . . . . . . 29
3.01 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.02 ILLEGALITY . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.03 INCREASED COSTS AND REDUCTION OF RETURN . . . . . . . . . . . 31
3.04 FUNDING LOSSES. . . . . . . . . . . . . . . . . . . . . . . . 32
3.05 INABILITY TO DETERMINE RATES. . . . . . . . . . . . . . . . . 33
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Section Page
<S> <C> <C>
3.06 CERTIFICATES OF BANKS . . . . . . . . . . . . . . . . . . . . 33
3.07 SURVIVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IV
CONDITIONS PRECEDENT . . . . . . . . . . . . . 33
4.01 CONDITIONS OF INITIAL LOANS . . . . . . . . . . . . . . . . . 33
(a) CREDIT AGREEMENT. . . . . . . . . . . . . . . . . . . . 34
(b) RESOLUTIONS; INCUMBENCY . . . . . . . . . . . . . . . . 34
(c) ARTICLES OF INCORPORATION AND BY-LAWS . . . . . . . . . 34
(d) LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . 34
(e) PAYMENT OF FEES . . . . . . . . . . . . . . . . . . . . 34
(f) CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . 35
(h) OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . 35
4.02 CONDITIONS TO ALL BORROWINGS, CONVERSIONS AND CONTINUATIONS . 35
(a) NOTICE OF BORROWING . . . . . . . . . . . . . . . . . . 35
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. . . . . 35
(c) NO EXISTING DEFAULT . . . . . . . . . . . . . . . . . . 35
ARTICLE V
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 36
5.01 CORPORATE EXISTENCE AND POWER . . . . . . . . . . . . . . . . 36
5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION . . . . . . . . . . 36
5.03 GOVERNMENTAL AUTHORIZATION . . . . . . . . . . . . . . . . . 37
5.04 BINDING EFFECT. . . . . . . . . . . . . . . . . . . . . . . . 37
5.05 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.06 NO DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.07 ERISA COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . 38
5.08 USE OF PROCEEDS; MARGIN REGULATIONS . . . . . . . . . . . . . 38
5.09 TITLE TO PROPERTIES . . . . . . . . . . . . . . . . . . . . . 39
5.10 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.11 FINANCIAL CONDITION . . . . . . . . . . . . . . . . . . . . . 39
5.12 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . 39
5.13 REGULATED ENTITIES. . . . . . . . . . . . . . . . . . . . . . 40
5.14 NO BURDENSOME RESTRICTIONS . . . . . . . . . . . . . . . . . 40
5.15 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC.. . . . . . 40
5.16 SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . 40
5.17 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.18 FULL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VI
AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . 41
6.01 FINANCIAL STATEMENTS AND COMPLIANCE CERTIFICATES . . . . . . . 41
6.02 LEVERAGE RATIO . . . . . . . . . . . . . . . . . . . . . . . . 42
6.03 ADJUSTED INTEREST COVERAGE RATIO . . . . . . . . . . . . . . . 42
6.04 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.05 PRESERVATION OF CORPORATE EXISTENCE, ETC . . . . . . . . . . . 44
6.06 MAINTENANCE OF PROPERTY. . . . . . . . . . . . . . . . . . . . 44
6.07 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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<PAGE>
6.08 PAYMENT OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . 44
6.09 COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . 45
6.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS . . . . . . . . . 45
6.11 ENVIRONMENTAL LAWS . . . . . . . . . . . . . . . . . . . . . . 45
6.12 USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VII
NEGATIVE COVENANTS . . . . . . . . . . . . . 45
7.01 LIMITATION ON LIENS. . . . . . . . . . . . . . . . . . . . . . 45
7.02 DISPOSITION OF ASSETS. . . . . . . . . . . . . . . . . . . . . 46
7.03 CONSOLIDATIONS AND MERGERS . . . . . . . . . . . . . . . . . . 47
7.04 LOANS; ADVANCES; INVESTMENTS; ACQUISITIONS; GUARANTEES . . . . 47
7.05 TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . 47
7.06 USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 47
7.07 USE OF PROCEEDS - INELIGIBLE SECURITIES. . . . . . . . . . . . 48
7.08 COMPLIANCE WITH ERISA . . . . . . . . . . . . . . . . . . . . 48
7.09 CHANGE IN BUSINESS . . . . . . . . . . . . . . . . . . . . . . 48
7.10 CHANGE IN STRUCTURE. . . . . . . . . . . . . . . . . . . . . . 48
7.11 ACCOUNTING CHANGES . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VIII
EVENTS OF DEFAULT. . . . . . . . . . . . . . 49
8.01 EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 49
(a) NON-PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . 49
(b) REPRESENTATION OR WARRANTY . . . . . . . . . . . . . . . . 49
(c) SPECIFIC DEFAULTS. . . . . . . . . . . . . . . . . . . . . 49
(d) OTHER DEFAULTS . . . . . . . . . . . . . . . . . . . . . . 49
(e) CROSS-DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 49
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. . . . . . . . . . . . . 50
(g) INVOLUNTARY PROCEEDINGS. . . . . . . . . . . . . . . . . . 50
(h) ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
(i) MONETARY JUDGMENTS . . . . . . . . . . . . . . . . . . . . 51
(j) NON-MONETARY JUDGMENTS . . . . . . . . . . . . . . . . . . 51
(k) OWNERSHIP. . . . . . . . . . . . . . . . . . . . . . . . . 51
(l) LOSS OF LICENSES . . . . . . . . . . . . . . . . . . . . . 51
(m) ADVERSE CHANGE . . . . . . . . . . . . . . . . . . . . . . 51
8.02 REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.03 RIGHTS NOT EXCLUSIVE . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX
THE AGENT. . . . . . . . . . . . . . . . 52
9.01 APPOINTMENT AND AUTHORIZATION. . . . . . . . . . . . . . . . . 52
9.02 DELEGATION OF DUTIES . . . . . . . . . . . . . . . . . . . . . 52
9.03 LIABILITY OF AGENT . . . . . . . . . . . . . . . . . . . . . . 52
9.04 RELIANCE BY AGENT. . . . . . . . . . . . . . . . . . . . . . . 53
9.05 NOTICE OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 53
9.06 CREDIT DECISION. . . . . . . . . . . . . . . . . . . . . . . . 54
9.07 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Section Page
<S> <C> <C>
9.08 AGENT IN INDIVIDUAL CAPACITY . . . . . . . . . . . . . . . . . 55
9.09 SUCCESSOR AGENT. . . . . . . . . . . . . . . . . . . . . . . . 55
9.10 WITHHOLDING TAX. . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE X
MISCELLANEOUS. . . . . . . . . . . . . 57
10.01 AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . 57
10.02 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.03 NO WAIVER; CUMULATIVE REMEDIES . . . . . . . . . . . . . . . . 59
10.04 COSTS AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . 59
10.05 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.06 MARSHALLING; PAYMENTS SET ASIDE. . . . . . . . . . . . . . . . 60
10.07 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . 61
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.. . . . . . . . . . . . . . . 61
10.09 DESIGNATED BIDDERS . . . . . . . . . . . . . . . . . . . . . . 63
10.10 AUTOMATIC DEBITS OF FEES . . . . . . . . . . . . . . . . . . . 63
10.11 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. . . . . . . . 64
10.12 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.13 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.14 NO THIRD PARTIES BENEFITED . . . . . . . . . . . . . . . . . . 64
10.15 TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.16 GOVERNING LAW AND JURISDICTION . . . . . . . . . . . . . . . . 64
10.17 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . 65
10.18 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 65
</TABLE>
SCHEDULES
<TABLE>
<S> <C>
Schedule 5.05 Litigation
Schedule 5.07 ERISA
Schedule 5.11 Permitted Liabilities
Schedule 5.12 Environmental Matters
Schedule 5.16 Subsidiaries
</TABLE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Notice of Borrowing
Exhibit B Notice of Conversion/Continuation
Exhibit C Assignment and Acceptance
Exhibit D Form of Competitive Bid Request (Agency Auction)
Exhibit E Form of Competitive Bid Request (Company Auction)
Exhibit F Form of Competitive Bid
Exhibit G Form of Bid Loan Note
Exhibit H Form of Designation Agreement
Exhibit I Form of Compliance Certificate
</TABLE>
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<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of September 15, 1997, among
Ross Stores, Inc., a Delaware corporation (the "COMPANY"), the several
financial institutions from time to time party to this Agreement
(collectively, the "BANKS"; individually, a "BANK"); and Bank of America
National Trust and Savings Association, as agent for the Banks.
WHEREAS, the Banks have agreed to make available to the Company a credit
facility upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. In addition to the terms defined elsewhere in this
Agreement, the following terms have the following meanings:
"ABSOLUTE RATE" has the meaning specified in subsection 2.07(c).
"ABSOLUTE RATE AUCTION" means a solicitation of Competitive Bids
setting forth Absolute Rates pursuant to Section 2.07.
"ABSOLUTE RATE BID LOAN" means a Bid Loan that bears interest at
a rate determined with reference to the Absolute Rate.
"ADJUSTED DEBT" means, as of any fiscal quarter end for the Company
on a consolidated basis, the sum of total indebtedness for borrowed money
outstanding as of such date, plus liabilities under guaranties, standby
letters of credit and any other contingent obligation, plus six times the
amount of the Company's operating rent expense and operating lease expense
for the four fiscal quarters immediately preceding the date of
measurement.
"ADJUSTED INTEREST COVERAGE RATIO" means the ratio, for the Company
on a consolidated basis, of (a) the sum of EBITDA, operating rent expense
and operating lease expense to (b) the sum of operating rent expense,
operating lease expense, and interest expense. This ratio will be
calculated at the end of each fiscal quarter, using the results of that
quarter and each of the 3 immediately preceding quarters.
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"AFFILIATE" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities,
membership interests, by contract or otherwise. Without limitation, any
director, executive officer or beneficial owner of 10% or more of the
equity of a Person shall for the purposes of this Agreement, be deemed to
control the other Person. Notwithstanding the foregoing, no Bank shall be
deemed an "Affiliate" of the Company or of any Subsidiary of the Company.
"AGENT" means BofA in its capacity as agent for the Banks and the
Designated Bidders hereunder, and any successor agent.
"AGENT-RELATED PERSONS" means BofA and any successor agent arising
under Section 9.09, together with their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"AGENT'S PAYMENT OFFICE" means the address for payments set forth on
the signature page hereto in relation to the Agent or such other address
as the Agent may from time to time specify.
"AGGREGATE REVOLVING COMMITMENT" means the combined Revolving
Commitments of the Banks, in the initial amount of One Hundred Sixty
Million dollars ($160,000,000), as such amount may be reduced from time to
time pursuant to this Agreement.
"AGREEMENT" means this Credit Agreement, as amended from time to time
in accordance with the terms hereof.
"APPLICABLE MARGIN" means, for Base Rate Committed Loans, zero; and
for Offshore Rate Committed Loans, the number of basis points indicated in
the table below. The Applicable Margin shall depend upon the Adjusted
Interest Coverage Ratio achieved by the Company as of the end of each
fiscal quarter. Any change in the Applicable Margin shall take effect on
the second Business Day following the receipt by the Agent of a Compliance
Certificate showing a change in the Adjusted Interest Coverage Ratio:
<TABLE>
Adjusted Interest Coverage Ratio LIBOR Margin
------------------------------------ ------------
<S> <C> <C>
Greater than: 3.50:1.00 15.50
Greater than: 3.00:1.00
But less than or equal to: 3.50:1.00 17.00
</TABLE>
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<TABLE>
Adjusted Interest Coverage Ratio LIBOR Margin
------------------------------------ ------------
<S> <C> <C>
Greater than: 2.50:1.00
But less than or equal to: 3.00:1.00 18.50
Greater than: 2.25:1.00
But less than or equal to: 2.50:1.00 22.50
Greater than: 2.00:1.00
But less than or equal to: 2.25:1.00 30.00
Less than or equal to: 2.00:1.00 37.50
</TABLE>
"ARRANGER" means BankAmerica Securities, Inc., a wholly-owned
subsidiary of BankAmerica Corporation. The Arranger is a registered
broker-dealer and permitted to underwrite and deal in certain Ineligible
Securities.
"ATTORNEY COSTS" means and includes all fees and disbursements of any
law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"BANK" has the meaning specified in the introductory clause hereto.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, ET SEQ.).
"BASE RATE" means, for any day, the higher of:
(a) the rate of interest in effect for such day as
publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." It is a rate set by BofA based
upon various factors including BofA's costs and desired return,
general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at,
above, or below such announced rate; and
(b) 0.50% per annum above the latest Federal Funds Rate.
Any change in the reference rate announced by BofA shall take effect
at the opening of business on the day specified in the public announcement
of such change.
"BASE RATE COMMITTED LOAN" means a Committed Loan that bears interest
based on the Base Rate.
"BID BORROWING" means a Borrowing hereunder consisting of one or
more Bid Loans made to the Company on the same day by one or more
Banks or Designated Bidders.
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<PAGE>
"BID LOAN" means a Loan by a Bank or a Designated Bidder to the
Company under Section 2.06, which may be a LIBOR Bid Loan or an
Absolute Rate Bid Loan.
"BID LOAN LENDER" means, in respect of any Bid Loan, the Bank or
Designated Bidder making such Bid Loan to the Company.
"BID LOAN NOTE" has the meaning specified in Section 2.03.
"BOFA" means Bank of America National Trust and Savings Association,
a national banking association.
"BORROWING" means a borrowing hereunder consisting of Loans made to
the Company on the same day by the Banks or (in the case of Bid
Borrowings) Designated Bidders pursuant to Article II, and may be a
Committed Borrowing or a Bid Borrowing.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City or San Francisco are
authorized or required by law to close and, if the applicable Business Day
relates to any Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law, in
each case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"CAPITALIZATION" means, as of any fiscal quarter end for the Company
on a consolidated basis, the sum of Adjusted Debt plus shareholders'
equity.
"CLOSING DATE" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied or waived by all Banks.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder as from time to time in
effect.
"COMMITTED BORROWING" means a Borrowing hereunder consisting of
Committed Loans made on the same day by the Banks ratably according
to their respective Commitment Percentage and, in the case of
Offshore Rate Committed Loans, having the same Interest Periods.
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<PAGE>
"COMMITTED LOAN" means a Loan by a Bank to the Company under
Section 2.01, and may be an Offshore Rate Committed Loan or a Base
Rate Committed Loan.
"COMMITMENT PERCENTAGE" means, as to any Bank, the percentage
equivalent of such Bank's Revolving Commitment divided by the Aggregate
Revolving Commitment.
"COMPETITIVE BID" means an offer by a Bank or a Designated
Bidder to make a Bid Loan in accordance with subsection 2.07(c).
"COMPETITIVE BID REQUEST" means a notice in substantially the
form of EXHIBIT D (in the case of an Agency Auction) or EXHIBIT E (in
the case of a Company Auction).
"COMPLIANCE CERTIFICATE" means a compliance certificate substantially
in the form attached hereto as Exhibit I.
"CONTRACTUAL OBLIGATIONS" means, as to any Person, any provision of
any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument, document
or agreement to which such Person is a party or by which it or any of its
property is bound.
"CONTROLLED GROUP" means the Company and all Persons (whether or not
incorporated) under common control or treated as a single employer with
the Company pursuant to Section 414(b), (c), (m) or (o) of the Code.
"CONVERSION DATE" means any date on which the Company converts a Base
Rate Committed Loan to an Offshore Rate Committed Loan; or an Offshore
Rate Committed Loan to a Base Rate Committed Loan.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"DESIGNATED BIDDER" means an Affiliate of a Bank that is an entity
described in clause (i) or (ii) of the definition of "Eligible Assignee"
and that has become a party hereto pursuant to Section 10.09.
"DESIGNATION AGREEMENT" means a designation agreement entered into by
a Bank and a Designated Bidder and accepted by the Agent, in substantially
the form of EXHIBIT H.
"EBITDA" means, for any period, for the Company on a consolidated
basis, the net income (or net loss) for such period PLUS, to the extent
deducted in determining net income (or net loss), the sum of (a) interest
expense, (b)
-5-
<PAGE>
income tax expense, (c) depreciation expense, (d) amortization expense,
(e) non-cash extraordinary charges, and (f) losses on assets sales;
(g) MINUS, to the extent added in determining net income (or net loss),
gains on asset sales.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $1,000,000,000; (ii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $1,000,000,000, provided that such bank is acting
through a branch or agency located in the United States; and (iii) a
Person that is primarily engaged in the business of commercial banking and
that is (A) a Subsidiary of a Bank, (B) a Subsidiary of a Person of which
a Bank is a Subsidiary, or (C) a Person of which a Bank is a Subsidiary.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental, health,
safety and land use matters.
"EQUITY INVESTMENT" means an equity investment in any corporation or
other entity, other than a Subsidiary, but excluding short term
investments of seasonal excess cash for cash management purposes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder as from time
to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) for
purposes of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan or a Multiemployer Plan; (b) a withdrawal by the Company or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in Section
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<PAGE>
4001(a)(2) of ERISA) or a cessation of operations which is treated as such
a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan
or notification that a multiemployer is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a plan amendment as a
termination under Section 4041 or 4041A of ERISA or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) a failure by the Company or any member of the Controlled Group to make
required contributions to a Pension Plan, Multiemployer Plan or other Plan
subject to Section 412 of the Code; (f) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; (g) the imposition of any liability
under Title IV of ERISA, other than PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Company or any ERISA Affiliate; or
(h) an application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code with respect to
any Plan.
"EURODOLLAR RESERVE PERCENTAGE" has the meaning specified in the
definition of "Offshore Rate".
"EVENT OF DEFAULT" means any of the events or circumstances specified
in Section 8.01.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, or any entity
succeeding to any of its principal functions.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum set forth
in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including
any such successor, "H.15(519)") on the preceding Business Day opposite
the caption "Federal Funds (Effective)". If such rate is not so published
on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any entity succeeding to any of its principal
functions.
"FEE LETTER" has the meaning defined in section 2.12(a).
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"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature
and authority within the accounting profession), or in such other
statements by such other entity as may be in general use by significant
segments of the U.S. accounting profession, which are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"INDEMNIFIED PERSON" has the meaning specified in Section 10.05.
"INDEMNIFIED LIABILITIES" has the meaning specified in Section 10.05.
"INELIGIBLE SECURITIES" means securities which may not be
underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24,
Seventh), as amended.
"INSOLVENCY PROCEEDING" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; in each case (a) and (b) undertaken
under U.S. Federal, State or foreign law, including the Bankruptcy Code.
"INTEREST PAYMENT DATE" means, as to any Loan other than a Base Rate
Committed Loan, the last day of each Interest Period applicable to such
Loan and, with respect to Base Rate Committed Loans, the last Business Day
of each calendar quarter and each date a Base Rate Committed Loan is
converted into an Offshore Rate Loan; PROVIDED, HOWEVER, that if any
Interest Period for an Offshore Rate Committed Loan exceeds three months,
the date which falls three months after the beginning of such Interest
Period and after each Interest Payment Date thereafter shall also be an
Interest Payment Date.
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"INTEREST PERIOD" means, (a) with respect to any Offshore Rate Loan,
the period commencing on the Business Day the Loan is disbursed or
continued or on the Conversion Date on which the Loan is converted to the
Offshore Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Company in its Notice of Borrowing, Notice
of Conversion/Continuation or Competitive Bid Request; and (b) as to any
Absolute Rate Bid Loan, a period of not less than 7 days and not more than
180 days as selected by the Company in the applicable Competitive Bid
Request; PROVIDED that:
(i) if any Interest Period pertaining to an Offshore Rate
Loan would otherwise end on a day which is not a Business Day, that
Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(ii) any Interest Period pertaining to an Offshore Rate
Loan that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the
last Business Day of the calendar month at the end of such Interest
Period;
(iii) no Interest Period applicable to a Loan or portion
thereof shall extend beyond the Revolving Termination Date.
"IRS" means the Internal Revenue Service or any entity succeeding to
any of its principal functions under the Code.
"JOINT VENTURE" means a partnership, limited liability company, joint
venture or other similar legal arrangement (whether created pursuant to
contract or conducted through a separate legal entity) now or hereafter
formed by the Company or any of its Subsidiaries with another Person in
order to conduct a common venture or enterprise with such Person.
"LENDING OFFICE" means, with respect to any Bank, the office or
offices of the Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, opposite its
name on the applicable signature page hereto, or such other office or
offices of the Bank as it may from time to time notify the Company and the
Agent.
"LEVERAGE RATIO" means the ratio, expressed as a percentage, of
Adjusted Debt to Capitalization.
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"LIBOR" means, for any Interest Period with respect to a LIBOR Bid
Loan or Offshore Rate Committed Loan the rate of interest per annum
notified to the Agent by BofA as the rate of interest at which dollar
deposits in the approximate amount of the smallest LIBOR Bid Loan or
Offshore Rate Committed Loan to be borrowed in such Borrowing, and having
a maturity comparable to such Interest Period, would be offered to major
banks in the London interbank market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of
such Interest Period.
"LIBOR AUCTION" means a solicitation of Competitive Bids setting
forth a LIBOR Bid Margin pursuant to Section 2.07.
"LIBOR BID LOAN" means any Bid Loan that bears interest at a
rate based upon LIBOR.
"LIBOR BID MARGIN" has the meaning specified in subsection
2.07(c)(ii)(C).
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a capital lease, any
financing lease having substantially the same economic effect as any of
the foregoing, or the filing of any financing statement naming the owner
of the asset to which such lien relates as debtor, under the UCC or any
comparable law) and any contingent or other agreement to provide any of
the foregoing, but not including the interest of a lessor under an
operating lease.
"LOAN" means an extension of credit by a Bank or a Designated Bidder
to the Company pursuant to Article II, and may be a Committed Loan or a
Bid Loan.
"LOAN DOCUMENTS" means this Agreement, the Fee Letter, any promissory
notes, and all other documents delivered to the Agent or any Bank or
Designated Bidder in connection therewith.
"MAJORITY BANKS" means (a) at any time prior to the Revolving
Termination Date, at least two Banks then holding more than 50% of the
Aggregate Revolving Commitment, and (b) on and after the Revolving
Termination Date, at least two Banks then holding more than 50% of the
then aggregate unpaid principal amount of the Loans. For purposes of this
definition, each Bank shall be deemed to hold all outstanding Bid Loans of
such Bank's Designated Bidders.
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"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Company or the
Company and its Subsidiaries taken as a whole or as to any Subsidiary; (b)
a material impairment of the ability of the Company to perform under any
Loan Document and avoid any Event of Default; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability of
any Loan Document.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (within the meaning
of Section 4001(a)(3) of ERISA) and to which the Company or any ERISA
Affiliate makes, is making, or is obligated to make contributions or,
during the preceding three calendar years, has made, or been obligated to
make, contributions.
"NOTICE OF BORROWING" means a notice given by the Company to the
Agent pursuant to Section 2.04, in substantially the form of EXHIBIT A.
"NOTICE OF CONVERSION/CONTINUATION" means a notice given by the
Company to the Agent pursuant to Section 2.05, in substantially the form
of EXHIBIT B.
"OBLIGATIONS" means all Loans, and other indebtedness, advances,
debts, liabilities, obligations, covenants and duties owing by the Company
to any Bank, Designated Bidder, the Agent, or any other Person required to
be indemnified, that arises under any Loan Document, whether or not for
the payment of money, whether arising by reason of an extension of credit,
loan, guaranty, indemnification or in any other manner, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising and however
acquired.
"OFFSHORE RATE" means, for each Interest Period in respect of
Offshore Rate Committed Loans comprising part of the same Borrowing, an
interest rate per annum (rounded upward to the nearest 1/16th of 1%)
determined pursuant to the following formula:
Offshore Rate = LIBOR
-------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR RESERVE PERCENTAGE" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the nearest
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1/100th of 1%) in effect on such day (whether or not applicable to
any Bank) under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred
to as "Eurocurrency liabilities") having a term comparable to such
Interest Period. The Offshore Rate shall be adjusted automatically
as of the effective date of any change in the Eurodollar Reserve
Percentage.
"OFFSHORE RATE COMMITTED LOAN" means any Committed Loan that bears
interest based on the Offshore Rate.
"OFFSHORE RATE LOAN" means any LIBOR Bid Loan or any Offshore Rate
Committed Loan.
"OTHER TAXES" means 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 Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any of its principal functions under ERISA.
"PARTICIPANT" has the meaning specified in subsection 10.08(d).
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Company or any ERISA
Affiliate sponsors, maintains, or to which it makes, is making, or is
obligated to make contributions, or in the case of a multiple employer
plan (as described in Section 4064(a) of ERISA) has made contributions at
any time during the immediately preceding five (5) plan years, but
excluding any Multiemployer Plan.
"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Company or any ERISA Affiliate sponsors or maintains or
to which the Company or any ERISA Affiliate makes, is making, or is
obligated to make contributions and includes any Pension Plan or
Multiemployer Plan
"REPORTABLE EVENT" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder,
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other than any such event for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the PBGC.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or
of a Governmental Authority, in each case applicable to or binding upon
the Person or any of its property or to which the Person or any of its
property is subject.
"RESPONSIBLE OFFICER" means the chief executive officer, the
president or the chief financial officer of the Company, or any other
officer having substantially the same authority and responsibility; or,
with respect to compliance with financial covenants, the treasurer or
assistant treasurer of the Company, or any other officer having
substantially the same authority and responsibility.
"REVOLVING COMMITMENT", with respect to each Bank, has the meaning
specified in subsection 2.01.
"REVOLVING TERMINATION DATE" means the earlier to occur of:
(a) the fifth anniversary of the Closing Date, but in any
event no later than September 1, 2002; and
(b) the date on which the Aggregate Revolving Commitment
shall terminate in accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any entity
succeeding to any of its principal functions.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof.
"SURETY INSTRUMENTS" means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"TANGIBLE NET WORTH" means total stockholder's equity less any
intangible assets, with intangible assets defined as goodwill, patents,
trademarks, tradenames, lease rights, capitalized pre-opening costs,
franchises, organization costs and property rights.
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"TAXES" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured
by each Bank's net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank or the Agent, as
the case may be, is organized or maintains a Lending Office.
"UCC" means the Uniform Commercial Code as in effect in the State of
California.
"UNFUNDED PENSION LIABILITY" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current
value of that Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for
the applicable plan year.
"UNITED STATES" and "U.S." each means the United States of America.
1.02 OTHER INTERPRETIVE PROVISIONS.
(a) PERFORMANCE; TIME. Whenever any performance obligation
hereunder (other than a payment obligation) shall be stated to be due or
required to be satisfied on a day other than a Business Day, such performance
shall be made or satisfied on the next succeeding Business Day. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until" each
mean "to but excluding", and the word "through" means "to and including." If
any provision of this Agreement refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be interpreted to encompass any and all means, direct or indirect, of
taking, or not taking, such action.
(b) CONTRACTS. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document.
(c) LAWS. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or regulation.
(d) CAPTIONS. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
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(e) INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
(f) INTERPRETATION. This Agreement is the result of negotiations
among and has been reviewed by counsel to the Agent, the Company and other
parties, and is the product of all parties hereto. Accordingly, this Agreement
and the other Loan Documents shall not be construed against the Banks or the
Agent merely because of the Agent's or Banks' involvement in the preparation of
such documents and agreements.
1.03 ACCOUNTING PRINCIPLES.
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 AMOUNTS AND TERMS OF COMMITMENTS. Each Bank severally agrees, on
the terms and conditions hereinafter set forth, to make Committed Loans to the
Company from time to time on any Business Day during the period from the
Closing Date to the Revolving Termination Date, in an aggregate amount not to
exceed at any time outstanding the amount set forth opposite the Bank's name on
the signature pages of this Agreement (such amount as the same may be reduced
pursuant to Section 2.08 or as a result of one or more assignments pursuant to
Section 10.08, the Bank's "REVOLVING COMMITMENT"); PROVIDED, HOWEVER, that,
after giving effect to any Committed Borrowing, the aggregate principal amount
of all outstanding Committed Loans plus the aggregate principal amount of all
Bid Loans outstanding shall not exceed the Aggregate Revolving Commitment.
Within the limits of each Bank's Revolving Commitment, and subject to the other
terms and conditions hereof, the Company may borrow under this subsection 2.01,
prepay pursuant to Section 2.09 and reborrow pursuant to this subsection 2.01.
2.02 EXTENSION OF AVAILABILITY. The Company may request extensions of
the Revolving Termination Date for additional one-year periods, with each
request to be made no earlier than two years, and no later than 90 days, prior
to the then-current Revolving Termination Date. Any such extension will be
subject to the approval of the Agent and all Banks in their sole discretion.
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2.03 LOAN ACCOUNTS. (a) The Loans made by each Bank or Designated Bidder
shall be evidenced by one or more loan accounts maintained by such Bank or
Designated Bidder in the ordinary course of business. The loan accounts or
records maintained by the Agent and each Bank or Designated Bidder shall be
conclusive absent manifest error of the amount of the Loans made by the Banks
and Designated Bidders to the Company and the interest and payments thereon.
Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Company hereunder to pay any amount
owing with respect to the Loans.
(b) Upon the request of any Bank or Designated Bidder made through
the Agent, the Bid Loans made by such Bank or Designated Bidder may be
evidenced by one or more notes ("Bid Loan Notes"), instead of or in addition to
loan accounts. Each such Bank or Designated Bidder shall endorse on the
schedules annexed to its Note(s) the date, amount and maturity of each Loan
made by it and the amount of each payment of principal made by the Company with
respect thereto. Each such Bank and Designated Bidder is irrevocably
authorized by the Company to endorse its Note(s) and each Bank's or Designated
Bidder's record shall be conclusive absent manifest error; PROVIDED, HOWEVER,
that the failure of a Bank or Designated Bidder to make, or an error in making,
a notation thereon with respect to any Loan shall not limit or otherwise affect
the Obligations of the Company hereunder or under any such Note to such Bank or
Designated Bidder.
2.04 PROCEDURE FOR COMMITTED BORROWING.
(a) Each Committed Borrowing shall be made upon the Company's
irrevocable written notice delivered to the Agent in accordance with Section
10.02 in the form of a Notice of Borrowing (which notice must be received by
the Agent prior to 10:00 a.m. (San Francisco time) (i) three Business Days
prior to the requested Borrowing date, in the case of Offshore Rate Committed
Loans; and (ii) on the requested Borrowing date, in the case of Base Rate
Committed Loans, specifying:
(A) the amount of the Committed Borrowing, which
shall be in an aggregate minimum principal amount of one million
dollars ($1,000,000) or any multiple of one million dollars
($1,000,000) in excess thereof;
(B) the requested Borrowing date, which shall be a
Business Day;
(C) whether the Committed Borrowing is to be
comprised of Offshore Rate Committed Loans or Base Rate Committed
Loans;
(D) the duration of the Interest Period applicable to
such Loans included in such notice. If the Notice of Borrowing shall
fail to specify the
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duration of the Interest Period for any Borrowing
comprised of Offshore Rate Committed Loans, such Interest Period
shall be three months.
PROVIDED, HOWEVER, that with respect to the Committed Borrowing to be made on
the Closing Date, the Notice of Borrowing shall be delivered to the Agent not
later than 11:00 a.m. (San Francisco time) on the Closing Date and such
Committed Borrowing will consist of Base Rate Committed Loans only.
(b) Upon receipt of the Notice of Borrowing, the Agent will promptly
notify each Bank thereof and of the amount of such Bank's Commitment Percentage
of the Committed Borrowing.
(c) Each Bank will make the amount of its Commitment Percentage of
the Committed Borrowing available to the Agent for the account of the Company
at the Agent's Payment Office by 11:00 a.m. (San Francisco time) on the
Borrowing date requested by the Company in funds immediately available to the
Agent; PROVIDED, HOWEVER, that with respect to the Committed Borrowing to be
made on the Closing Date, the funds shall be made available to the Agent not
later than 12:00 noon (San Francisco time) on the Closing Date. The proceeds
of all such Committed Loans will then be made available to the Company by the
Agent at such office by crediting the account of the Company on the books of
BofA with the aggregate of the amounts made available to the Agent by the Banks
and in like funds as received by the Agent.
(d) Unless the Majority Banks shall otherwise agree, during the
existence of a Default or an Event of Default, the Company may not elect to
have a Loan be made as, or converted into or continued as, an Offshore Rate
Loan.
(e) After giving effect to any Committed Borrowing, there shall not
be more than ten different Interest Periods in effect in respect of all
Committed Loans and Bid Loans together then outstanding.
2.05 CONVERSION AND CONTINUATION ELECTIONS FOR COMMITTED BORROWINGS.
(a) The Company may upon irrevocable written notice to the Agent in
accordance with subsection 2.05(b):
(i) elect to convert on any Business Day, any Base Rate
Committed Loans (or any part thereof in an amount not less than
$1,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof) into Offshore Rate Committed Loans; or
(ii) elect to convert on the last day of the applicable
Interest Period any Offshore Rate Committed Loans having Interest Periods
maturing on such day (or any part thereof in an amount not less than
$1,000,000, or that is in
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an integral multiple of $1,000,000 in excess thereof) into Base Rate
Committed Loans; or
(iii) elect to renew on the last day of the applicable Interest
Period any Offshore Rate Committed Loans having Interest Periods maturing
on such day (or any part thereof in an amount not less than $1,000,000, or
that is in an integral multiple of $1,000,000 in excess thereof);
PROVIDED, that if the aggregate amount of Offshore Rate Committed Loans in
respect of any Committed Borrowing shall have been reduced, by payment,
prepayment, or conversion of part thereof to be less than $1,000,000, such
Offshore Rate Committed Loans shall automatically convert into Base Rate
Committed Loans.
(b) The Company shall deliver a Notice of Conversion/
Continuation in accordance with Section 10.02 to be received by the Agent not
later than 10:00 a.m. (San Francisco time) at least (i) three Business Days in
advance of the Conversion Date or continuation date, if the Committed Loans are
to be converted into or continued as Offshore Rate Committed Loans; and (ii) on
the Conversion Date, if the Committed Loans are to be converted into Base Rate
Committed Loans, specifying:
(A) the proposed Conversion Date or continuation
date;
(B) the aggregate amount of Committed Loans to be
converted or renewed;
(C) the nature of the proposed conversion or
continuation; and
(D) if applicable, the duration of the requested
Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Committed Loans, the Company has failed to select timely a new
Interest Period to be applicable to such Offshore Rate Committed Loans, or if
any Default or Event of Default shall then exist, the Company shall be deemed
to have elected to convert such Offshore Rate Committed Loans into Base Rate
Committed Loans effective as of the expiration date of such current Interest
Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the Agent
will promptly notify each Bank thereof, or, if no timely notice is provided by
the Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made pro rata
according to the respective outstanding principal amounts of the Committed
Loans with respect to which the notice was given held by each Bank.
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(e) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Committed Loans,
there shall not be more than five different Interest Periods in effect.
2.06 BID BORROWINGS. In addition to Committed Borrowings pursuant to
Section 2.04, each Bank severally agrees that the Company may, as set forth in
Section 2.07, from time to time request the Banks prior to the Revolving
Termination Date to submit offers to make Bid Loans to the Company; PROVIDED,
HOWEVER, that the Banks may, but shall have no obligation to, submit such
offers and the Company may, but shall have no obligation to, accept any such
offers, and any Bank may designate one or more Designated Bidders to make such
offers from time to time and, if such offers are accepted by the Company, to
make such Bid Loans; and PROVIDED, FURTHER, that at no time shall (a) the
outstanding aggregate principal amount of all Bid Loans made by all Banks and
Designated Bidders, plus the outstanding aggregate principal amount of all
Committed Loans made by all Banks exceed the Aggregate Revolving Commitment; or
(b) the number of Interest Periods for Bid Loans then outstanding plus the
number of Interest Periods for Committed Loans then outstanding exceed five.
2.07 PROCEDURE FOR BID BORROWINGS.
(a) COMPETITIVE BID REQUESTS. The Company may request offers to
make Bid Loans either through the Agent (an "Agency Auction") or directly to
the Banks and Designated Bidders (a "Company Auction"). When the Company
wishes to request the Banks to submit offers to make Bid Loans hereunder, it
shall transmit to the Agent (for an Agency Auction) or directly to each Bank
and Designated Bidder, with a copy to the Agent (for a Company Auction) a
Competitive Bid Request. The Competitive Bid Request shall be transmitted by
telephone call followed promptly by facsimile transmission so as to be received
no later than (x) 3:00 p.m. (San Francisco time) four Business Days prior to
the date of a proposed Bid Borrowing in the case of a LIBOR Auction, or
(y) 9:00 a.m. (San Francisco time) one Business Day prior to the date of a pro
posed Bid Borrowing in the case of an Absolute Rate Auction, specifying:
(i) the date of such Bid Borrowing, which shall be a
Business Day;
(ii) the aggregate amount of such Bid Borrowing, which
shall be a minimum amount of $1,000,000 or in multiples of $1,000,000
in excess thereof;
(iii) whether the Competitive Bids requested are to be for
LIBOR Bid Loans or Absolute Rate Bid Loans or both; and
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(iv) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of "Interest
Period" herein.
Subject to subsection 2.07(c), the Company may not request Competitive Bids for
more than three Interest Periods in a single Competitive Bid Request and may
not request Competitive Bids more than once in any period of five Business
Days.
(b) TRANSMISSION OF REQUEST BY AGENT. Upon receipt of a Competitive
Bid Request for an Agency Auction, the Agent will promptly send to the Banks
and Designated Bidders by facsimile transmission a copy of such Competitive Bid
Request, which shall constitute an invitation by the Company to each Bank and
Designated Bidder to submit Competitive Bids offering to make the Bid Loans to
which such Competitive Bid Request relates in accordance with this
Section 2.07.
(c) COMPETITIVE BIDS.
(i) Each Bank and Designated Bidder may at its discretion
submit a Competitive Bid containing an offer or offers to make Bid Loans
in response to any Competitive Bid Request. Each Competitive Bid must
comply with the requirements of this subsection 2.07(c) and must be
submitted to the Agent (for Agency Auctions) or the Company (for Company
Auctions) by facsimile transmission at the respective office for notices
set forth on the signature pages hereto not later than (1) 6:30 a.m. (San
Francisco time) three Business Days prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (2) 6:30 a.m. (San Francisco
time) on the proposed date of Borrowing, in the case of an Absolute Rate
Auction.
(ii) In the case of Agency Auctions, Competitive Bids submitted
by the Agent (or any Affiliate of the Agent) in the capacity of a Bank or
Designated Bidder may be submitted, and may only be submitted, if the
Agent notifies the Company of the terms of the offer or offers contained
therein not later than (A) 6:15 a.m. (San Francisco time) three Business
Days prior to the proposed date of Borrowing, in the case of a LIBOR
Auction or (B) 6:15 a.m. (San Francisco time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction.
(iii) Each Competitive Bid shall be in substantially the
form of EXHIBIT F, specifying therein:
(A) the proposed date of Borrowing;
(B) the principal amount of each Bid Loan for which
such Competitive Bid is being made, which principal amount
(x) may be equal to, greater than or less than the Commitment of the
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quoting Bank, (y) must be $1,000,000 or in multiples of
$1,000,000 in excess thereof, and (z) may not exceed the
principal amount of Bid Loans for which Competitive Bids were
requested;
(C) in case the Company elects a LIBOR Auction,
the margin above or below LIBOR (the "LIBOR BID MARGIN") offered
for each such Bid Loan, expressed in multiples of 1/1000th of
one basis point to be added to or subtracted from the applicable
LIBOR and the Interest Period applicable thereto;
(D) in case the Company elects an Absolute Rate
Auction, the rate of interest per annum expressed in multiples
of 1/1000th of one basis point (the "ABSOLUTE RATE") offered for
each such Bid Loan and the Interest Period applicable thereto;
and
(E) the identity of the quoting Bank or
Designated Bidder.
(iv) A Competitive Bid may contain up to three separate
offers by the quoting Bank or Designated Bidder with respect to each
Interest Period specified in the related Competitive Bid Request.
(v) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with
EXHIBIT F or does not specify all of the information required by
subsection (c)(ii) of this Section;
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to
those set forth in the applicable Competitive Bid Request; or
(D) arrives after the time set forth in
subsection (c)(i) or (ii).
(vi) Notwithstanding anything to the contrary contained in
this subsection 2.07(c), a Competitive Bid by BofA may contain, and
will not be disregarded if it does contain, a restriction on the use
of proceeds of the type contained in paragraph 7.07 of this
Agreement.
(d) TRANSMISSION OF BIDS BY AGENT. In the case of Agency Auctions:
Promptly on receipt and not later than 7:00 a.m.
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(San Francisco time) three Business Days prior to the proposed date of
Borrowing in the case of a LIBOR Auction, or 7:00 a.m. (San Francisco time)
on the proposed date of Borrowing, in the case of an Absolute Rate Auction,
the Agent will notify the Company of the terms (i) of any Competitive Bid
submitted by a Bank or Designated Bidder that is in accordance with
subsection 2.07(c), and (ii) of any Competitive Bid that amends, modifies or
is otherwise inconsistent with a previous Competitive Bid submitted by such
Bank or Designated Bidder with respect to the same Competitive Bid Request.
Any such subsequent Competitive Bid shall be disregarded by the Agent unless
such subsequent Competitive Bid is submitted solely to correct a manifest
error in such former Competitive Bid and only if received within the times
set forth in subsection 2.07(c). The Agent's notice to the Company shall
specify (1) the aggregate principal amount of Bid Loans for which offers have
been received for each Interest Period specified in the related Competitive
Bid Request; and (2) the respective principal amounts and LIBOR Bid Margins
or Absolute Rates, as the case may be, so offered.
(e) BIDS IRREVOCABLE. Subject only to the provisions of
Sections 3.02, 3.05 and 4.02 hereof and the provisions of this subsection (e),
any Competitive Bid shall be irrevocable except with the written consent of the
Company.
(f) ACCEPTANCE BY COMPANY. Not later than 7:30 a.m. (San Francisco
time) three Business Days prior to the proposed date of Borrowing, in the case
of a LIBOR Auction, or 7:30 a.m. (San Francisco time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction, the Company shall notify
the Agent of its acceptance or non-acceptance of the offers received by it.
The Company shall be under no obligation to accept any offer and may choose to
reject all offers. In the case of acceptance, such notice shall specify the
aggregate principal amount of offers for each Interest Period that is accepted.
The Company may accept any Competitive Bid in whole or in part; PROVIDED that:
(i) the aggregate principal amount of each Bid Borrowing
may not exceed the applicable amount set forth in the related
Competitive Bid Request;
(ii) the principal amount of each Bid Borrowing must be
$1,000,000 or in any multiple of $1,000,000 in excess thereof;
(iii) acceptance of offers may only be made on the basis
of ascending LIBOR Bid Margins or Absolute Rates within each Interest
Period, as the case may be; and
(iv) the Company may not accept any offer that is
described in subsection 2.07(c)(v) or that otherwise fails to comply
with the requirements of this Agreement.
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(g) ALLOCATION. If offers are made by two or more Banks or
Designated Bidders with the same LIBOR Bid Margins or Absolute Rates, as the
case may be, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related Interest Period, the
principal amount of Bid Loans in respect of which such offers are accepted
shall be allocated among such Banks or Designated Bidders as nearly as possible
(in such multiples, not less than $1,000,000, as the Agent may deem
appropriate) in proportion to the aggregate principal amounts of such offers.
Determination by the Agent (for Agency Auctions) or the Company (for Company
Auctions) of the amounts of Bid Loans shall be conclusive in the absence of
manifest error.
(h) TRANSMISSION OF ACCEPTANCE BY AGENT. The Agent will promptly
notify each Bank or Designated Bidder having submitted a Competitive Bid if its
offer has been accepted and, if its offer has been accepted, of the amount of
the Bid Loan or Bid Loans to be made by it on the date of the Bid Borrowing.
In addition, in the case of LIBOR Auctions, the Agent shall determine the
applicable LIBOR interest rate and give notice thereof to the Company and the
relevant Banks or Designated Bidders two Business Days prior to the date of the
Bid Borrowing.
(i) FUNDING. If, on or prior to the proposed date of Borrowing, the
Revolving Commitments have not been terminated and if, on such proposed date of
Borrowing all applicable conditions to funding referenced in Sections 3.02,
3.05 and 4.02 hereof are satisfied, the Banks and Designated Bidders whose
offers the Company has accepted will fund each Bid Loan so accepted. Each Bank
or Designated Bidder shall make the amounts of such Bid Loans available to the
Agent for the account of the Company at the Agent's Payment Office by
11:00 a.m. (San Francisco time) on such date of Bid Borrowing, in funds
immediately available to the Agent for the account of the Company at the
Agent's Payment Office.
(j) EXCHANGE OF INFORMATION.
(i) Promptly following each Bid Borrowing, the Agent (for Agency
Auctions) or the Company (for Company Auctions) shall notify each Bank and
Designated Bidder of the ranges of bids submitted and the highest and
lowest Bids accepted for each Interest Period requested by the Company and
the aggregate amount borrowed pursuant to such Bid Borrowing.
(ii) From time to time, the Company and the Banks and
Designated Bidders shall furnish such information to the Agent as the
Agent may request relating to the making of Bid Loans, including the
amounts, interest rates, dates of borrowings and maturities thereof,
for purposes of the allocation of amounts received from the Company
for payment of all amounts owing hereunder.
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(k) OTHER CREDIT FACILITIES PERMITTED. Nothing in this Section 2.07
shall be construed as a right of first offer in favor of the Banks or
Designated Bidders or to otherwise limit the ability of the Company to request
and accept credit facilities from any Person (including any of the Banks or
Designated Bidders), provided that no Default or Event of Default would
otherwise arise or exist as a result of the Company executing, delivering or
performing under such credit facilities.
2.08 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The Company may,
upon not less than five Business Days' prior notice to the Agent, terminate the
Aggregate Revolving Commitment or permanently reduce the Aggregate Revolving
Commitment by an aggregate minimum amount of $10,000,000 or any multiple of
$1,000,000 in excess thereof; PROVIDED that no such reduction or termination
shall be permitted if, after giving effect thereto and to any prepayments of
the Committed Loans made on the effective date thereof, the then outstanding
principal amount of the Committed Loans and Bid Loans would exceed the amount
of the Aggregate Revolving Commitment then in effect and, PROVIDED, FURTHER,
that once reduced in accordance with this Section 2.08, the Aggregate Revolving
Commitment may not be increased without the written consent of Agent and each
Bank. Any reduction of the Aggregate Revolving Commitment shall be applied to
each Bank's Revolving Commitment in accordance with such Bank's Commitment
Percentage. All accrued commitment fees to, but not including the effective
date of any reduction or termination of Revolving Commitments, shall be paid on
the effective date of such reduction or termination.
2.09 OPTIONAL PREPAYMENTS. Subject to Section 3.04, the Company may, at
any time or from time to time, upon notice to the Agent as specified below,
ratably prepay Committed Loans in whole or in part, in amounts of $1,000,000 or
any multiple of $1,000,000 in excess thereof. Such notice of prepayment must
be provided to Agent at least three Business Days in advance for Offshore Rate
Committed Loans or at least one Business Day in advance for Base Rate Committed
Loans, and shall specify the date and amount of such prepayment and whether
such prepayment is of Base Rate Committed Loans, or Offshore Rate Committed
Loans, or any combination thereof. Such notice shall not thereafter be
revocable by the Company and the Agent will promptly notify each Bank thereof
and of such Bank's Commitment Percentage of such prepayment. If such notice is
given by the Company, the Company shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to each such date on the amount prepaid
and any amounts required pursuant to Section 3.04. Bid Loans may not be
voluntarily prepaid other than with the consent of the applicable Bid Loan
Lender.
2.10 REPAYMENT. The aggregate principal amount of the Committed Loans
outstanding on the Revolving Termination Date shall be repaid by the Company on
the Revolving Termination Date. Each Bid Loan shall be repaid on the last day
of the relevant
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Interest Period, but no later than the Revolving Termination Date.
2.11 INTEREST.
(a) Subject to subsection 2.11(d), each Committed Loan shall bear
interest on the outstanding principal amount thereof from the date when made at
a rate per annum equal to the Offshore Rate or the Base Rate, as the case may
be, PLUS the Applicable Margin. Each Bid Loan shall bear interest on the
outstanding principal amount thereof from the relevant Borrowing Date at a rate
per annum equal to LIBOR plus (or minus) the LIBOR Bid Margin, or at the
Absolute Rate, as the case may be.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Committed Loans pursuant to Section 2.09 for the portion of the Committed Loans
so prepaid and upon payment (including prepayment) in full thereof.
(c) While any Event of Default exists or after acceleration, the
Company shall pay interest (after as well as before entry of judgment thereon
to the extent permitted by law) on the principal amount of all Obligations due
and unpaid, at a rate per annum which is determined by adding 1% per annum to
the Applicable Margin then in effect for such Loans and, in the case of
Obligations not subject to an Applicable Margin, at a rate per annum equal to
the Base Rate plus 1%; PROVIDED, HOWEVER, that, on and after the expiration of
any Interest Period applicable to any Offshore Rate Loan outstanding on the
date of occurrence of such Event of Default or acceleration, the principal
amount of such Loan shall, during the continuation of such Event of Default or
after acceleration, bear interest at a rate per annum equal to the Base Rate
plus 1%. If any amount of principal of or interest on any Loan, or any other
amount payable hereunder or under any of the other Loan Documents is not paid
in full when due (whether at stated maturity, by acceleration, demand or
otherwise), the Company agrees to pay interest on such unpaid principal or
other amount, from the date such amount becomes due until the date such amount
is paid in full, and after as well as before any entry of judgment thereon to
the extent permitted by law, payable on demand, at a fluctuating rate per annum
equal to the Base Rate plus 1%. This may result in compounding of interest.
(d) Anything herein to the contrary notwithstanding, the obligations
of the Company hereunder shall be subject to the limitation that payments of
interest shall not be required, for any period for which interest is computed
hereunder, to the extent (but only to the extent) that contracting for or
receiving such payment by the respective Bank or Designated Bidder would be
contrary to the provisions of any law applicable to such Bank or Designated
Bidder limiting the highest rate of interest which may be lawfully contracted
for, charged or received by such Bank or Designated Bidder, and in such event
the Company shall pay such
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Bank or Designated Bidder interest at the highest rate permitted by
applicable law.
2.12 FEES.
(a) FEE LETTER. The Company shall pay to the Agent and to the
Arranger, for their own accounts, the fees in the amounts set forth in a letter
agreement between the Company and the Agent dated July 17, 1997 (the "Fee
Letter").
(b) COMMITMENT FEES. The Company shall pay to the Agent for the
account of each Bank a commitment fee on the average daily amount of each
Bank's Revolving Commitment, computed on a quarterly basis in arrears on the
last Business Day of each calendar quarter. The fee shall be equal to the
number of basis points per annum indicated in the table below. The fee shall
depend upon the Adjusted Interest Coverage Ratio achieved by the Company as of
the end of each fiscal quarter. Any change in the fee shall take effect on the
second Business Day following the receipt by the Agent of a Compliance
Certificate showing a change in the Adjusted Interest Coverage Ratio:
Adjusted Interest Coverage Ratio Fee
Greater than: 3.50:1.00 7.00
Greater than: 3.00:1.00
But less than or equal to: 3.50:1.00 8.00
Greater than: 2.50:1.00
But less than or equal to: 3.00:1.00 9.00
Greater than: 2.25:1.00
But less than or equal to: 2.50:1.00 10.00
Greater than: 2.00:1.00
But less than or equal to: 2.25:1.00 15.00
Less than or equal to: 2.00:1.00 20.00
The commitment fee shall accrue from the Closing Date to the Revolving
Termination Date and shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter, commencing on September 30, 1997,
through the Revolving Termination Date, with the final payment to be made on
the Revolving Termination Date; provided that, in connection with any reduction
or termination of Revolving Commitments pursuant to Section 2.08, the accrued
commitment fee calculated for the period ending on such date shall also be paid
on the date of such reduction or termination, with the next succeeding
quarterly payment being calculated on the basis of the period from the
reduction date to such quarterly payment date. The commitment fees provided in
this subsection shall accrue at all times after the above-mentioned
commencement date, including at any time during which one or more conditions in
Article IV are not met.
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2.13 COMPUTATION OF FEES AND INTEREST.
(a) All computations of Base Rate interest shall be based on a
365/366 day year and actual days elapsed; and all other computations of fees
and interest under this Agreement shall be made on the basis of a 360-day
year and actual days elapsed, which results in more interest being paid than
if computed on the basis of a 365-day year. Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.
(b) The Agent will, with reasonable promptness, notify the
Company and the Banks of each determination of an Offshore Rate; PROVIDED
that any failure to do so shall not relieve the Company of any liability
hereunder or provide the basis for any claim against the Agent. Any change
in the interest rate on a Loan resulting from a change in the Applicable
Margin or the Eurodollar Reserve Percentage shall become effective as of the
opening of business on the day on which such change in the Applicable Margin
or the Eurodollar Reserve Percentage becomes effective. The Agent will with
reasonable promptness notify the Company and the Banks of the effective date
and the amount of each such change, PROVIDED that any failure to do so shall
not relieve the Company of any liability hereunder or provide the basis for
any claim against the Agent.
(c) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company and the Banks in the absence of
manifest error. The Agent will, at the request of the Company or any Bank,
deliver to the Company or the Bank, as the case may be, a statement showing
the quotations used by the Agent in determining any interest rate.
2.14 PAYMENTS BY THE COMPANY.
(a) All payments (including prepayments) to be made by the
Company on account of principal, interest, fees and other amounts required
hereunder shall be made without set-off, recoupment or counterclaim; shall,
except as otherwise expressly provided herein, be made to the Agent for the
ratable account of the Banks and Designated Bidders at the Agent's Payment
Office, and shall be made in dollars and in immediately available funds, no
later than 11:30 a.m. (San Francisco time) on the date specified herein. The
Agent will promptly distribute to each Bank or Designated Bidder its
Commitment Percentage with respect to payments on Committed Loans and its
ratable interest with respect to Bid Loans (or other applicable share as
expressly provided herein) of such principal, interest, fees or other
amounts, in like funds as received. Any payment which is received by the
Agent later than 11:30 a.m. (San Francisco time) shall be deemed to have been
received on the immediately succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be
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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, as the case may
be; subject to the provisions set forth in the definition of "Interest
Period" herein.
(c) Unless the Agent shall have received notice from the Company
prior to the date on which any payment is due to the Banks or Designated
Bidders hereunder that the Company will not make such payment in full as and
when required hereunder, the Agent may assume that the Company has made such
payment in full to the Agent on such date in immediately available funds and
the Agent may (but shall not be so required), in reliance upon such
assumption, cause to be distributed to each Bank or Designated Bidder on such
due date an amount equal to the amount then due such Bank or Designated
Bidder. If and to the extent the Company shall not have made such payment in
full to the Agent, each Bank or Designated Bidder shall repay to the Agent on
demand such amount distributed to such Bank or Designated Bidder, together
with interest thereon for each day from the date such amount is distributed
to such Bank or Designated Bidder until the date such Bank or Designated
Bidder repays such amount to the Agent, at the Federal Funds Rate as in
effect for each such day.
2.15 PAYMENTS BY THE BANKS TO THE AGENT.
(a) Unless the Agent shall have received notice from a Bank on the
Closing Date or, with respect to each Committed Borrowing after the Closing
Date, at least one Business Day prior to the date of any proposed Borrowing,
that such Bank will not make available to the Agent as and when required
hereunder for the account of the Company the amount of that Bank's Commitment
Percentage of the Borrowing, the Agent may assume that each Bank has made
such amount available to the Agent in immediately available funds on the
Borrowing date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Company on such date a
corresponding amount. If and to the extent any Bank shall not have made its
full amount available to the Agent in immediately available funds and the
Agent in such circumstances has made available to the Company such amount,
that Bank shall on the next Business Day following the date of such Borrowing
make such amount available to the Agent, together with interest at the
Federal Funds Rate for and determined as of each day during such period. A
notice of the Agent submitted to any Bank with respect to amounts owing under
this subsection (a) shall be conclusive, absent manifest error. If such
amount is so made available, such payment to the Agent shall constitute such
Bank's Loan on the date of Borrowing for all purposes of this Agreement. If
such amount is not made available to the Agent on the next Business Day
following the date of such Borrowing, the Agent shall notify the Company of
such failure to fund and, upon demand by the Agent, the Company shall pay
such amount to the Agent for the Agent's account, together with interest
thereon for each day elapsed since the date of such Borrowing, at a rate per
annum equal to the interest
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rate applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any date of
borrowing shall not relieve any other Bank of any obligation hereunder to
make a Loan on the date of such borrowing, but no Bank shall be responsible
for the failure of any other Bank to make the Loan to be made by such other
Bank on the date of any borrowing.
2.16 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Committed Loans
made by it, any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its Commitment Percentage
of payments on account of the Committed Loans obtained by all the Banks, such
Bank shall forthwith (a) notify the Agent of such fact, and (b) purchase from
the other Banks such participations in the Committed Loans made by them as
shall be necessary to cause such purchasing Bank to share the excess payment
ratably with each of them; PROVIDED, HOWEVER, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Bank, such
purchase shall to that extent be rescinded and each other Bank shall repay to
the purchasing Bank the purchase price paid therefor, together with an amount
equal to such paying Bank's Commitment Percentage (according to the
proportion of (i) the amount of such paying Bank's required repayment to (ii)
the total amount so recovered from the purchasing Bank) of any interest or
other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. The Company agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section may, to the fullest
extent permitted by law, exercise all its rights of payment with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Agent will keep records
(which shall be conclusive and binding in the absence of manifest error) of
participations purchased pursuant to this Section and will in each case
notify the Banks following any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Company to each Bank, Designated
Bidder or the Agent under this Agreement and any other Loan Document shall be
made free and clear of, and without deduction or withholding for any Taxes. In
addition, the Company shall pay all Other Taxes.
(b) The Company agrees to indemnify and hold harmless each Bank and
the Agent for the full amount of Taxes or Other Taxes (including any Taxes or
Other Taxes imposed by any
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jurisdiction on amounts payable under this Section) paid by the Bank or the
Agent and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the Bank or the
Agent makes written demand therefor.
(c) If the Company shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under
this Section) such Bank or the Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance
with applicable law; and
(iv) the Company shall also pay to each Bank or the Agent for
the account of such Bank, at the time interest is paid, all additional
amounts which the respective Bank specifies as necessary to preserve the
after-tax yield the Bank would have received if such Taxes or Other Taxes
had not been imposed.
(d) Within 30 days after the date of any payment by the Company
of Taxes or Other Taxes, the Company shall furnish the Agent the original or
a certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to the Agent.
(e) If the Company is required to pay additional amounts to any
Bank or the Agent pursuant to subsection (c) of this Section, then such Bank
shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Company which may thereafter
accrue, if such change in the judgment of such Bank is not otherwise
disadvantageous to such Bank.
3.02 ILLEGALITY.
(a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other
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Governmental Authority has asserted that it is unlawful, for any Bank or its
applicable Lending Office, or such Bank's Designated Bidders in the case of
LIBOR Bid Loans, to make Offshore Rate Loans, then, on notice thereof by the
Bank to the Company through the Agent, any obligation of that Bank or
Designated Bidder to make Offshore Rate Loans (including in respect of any
LIBOR Bid Loan as to which the Company has accepted such Bank's or Designated
Bidder's Competitive Bid, but as to which the Borrowing Date has not arrived)
shall be suspended until the Bank notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful for such Bank or
such Bank's Designated Bidders to maintain any Offshore Rate Loan, the
Company shall, upon its receipt of notice of such fact and demand from such
Bank (with a copy to the Agent), prepay in full such Offshore Rate Loans of
that Bank then outstanding, together with interest accrued thereon and
amounts required under Section 3.04, either on the last day of the Interest
Period thereof, if the Bank or Designated Bidder may lawfully continue to
maintain such Offshore Rate Loans to such day, or immediately, if the Bank or
Designated Bidder may not lawfully continue to maintain such Offshore Rate
Loan. If the Company is required to so prepay any Offshore Rate Committed
Loan, then concurrently with such prepayment, the Company shall borrow from
the affected Bank, in the amount of such repayment, a Base Rate Committed
Loan.
(c) If the obligation of any Bank to make or maintain Offshore
Rate Committed Loans has been so terminated or suspended, the Company may
elect, by giving notice to the Bank through the Agent that all Loans which
would otherwise be made by the Bank as Offshore Rate Committed Loans shall be
instead Base Rate Committed Loans.
(d) Before giving any notice to the Agent under this Section, the
affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
3.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Bank shall determine that, due to either (i) the
introduction of or any change (other than any change by way of imposition of
or increase in reserve requirements included in the calculation of the
Offshore Rate) in or in the interpretation of any law or regulation or (ii)
the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall
be any increase in the cost to such Bank of agreeing to make or making,
funding or maintaining any Offshore Rate Committed Loans, then the Company
shall be liable for, and shall from time to time, upon demand therefor by
such Bank (with a copy
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of such demand to the Agent), pay to the Agent for the account of such Bank,
additional amounts as are sufficient to compensate such Bank for such
increased costs.
(b) If any Bank shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Bank (or its Lending Office) or any corporation controlling
the Bank, with any Capital Adequacy Regulation; affects or would affect the
amount of capital required or expected to be maintained by the Bank or any
corporation controlling the Bank and determines that the amount of such
capital is increased as a consequence of its Revolving Commitment, loans,
credits or obligations under this Agreement, then, upon demand of such Bank
(with a copy to the Agent), the Company shall upon demand pay to the Bank,
from time to time as specified by the Bank, additional amounts sufficient to
compensate the Bank for such increase.
3.04 FUNDING LOSSES. The Company agrees to reimburse each Bank and to
hold each Bank harmless from any loss or expense which the Bank may sustain
or incur as a consequence of:
(a) the failure of the Company to make any payment of principal
of any Offshore Rate Loan (including payments made after any acceleration
thereof);
(b) the failure of the Company to borrow, continue or convert a
Loan after the Company has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation;
(c) the failure of the Company to make any prepayment after the
Company has given a notice in accordance with Section 2.09;
(d) the prepayment (including pursuant to Section 2.10) of an
Offshore Rate Loan or Absolute Rate Bid Loan on a day which is not the last
day of the Interest Period with respect thereto; or
(e) the conversion pursuant to Section 2.05 of any Offshore Rate
Committed Loan to a Base Rate Committed Loan on a day that is not the last
day of the respective Interest Period;
including any such loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain its Offshore Rate Loans
hereunder or from fees payable to terminate the deposits from which such
funds were obtained. Solely for purposes of calculating amounts payable by
the Company to the Banks under this Section 3.04 and under subsection
3.03(a), each Offshore Rate Loan made by a Bank (and each related reserve,
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special deposit or similar requirement) shall be conclusively deemed to have
been funded at the LIBOR used in determining the Offshore Rate for such
Offshore Rate Loan by a matching deposit or other borrowing in the interbank
eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
3.05 INABILITY TO DETERMINE RATES. If the Agent shall have determined
that for any reason adequate and reasonable means do not exist for
ascertaining the Offshore Rate for any requested Interest Period with respect
to a proposed Offshore Rate Loan or that the Offshore Rate applicable for any
requested Interest Period with respect to a proposed Offshore Rate Loan does
not adequately and fairly reflect the cost to the Banks of funding such Loan,
the Agent will forthwith give notice of such determination to the Company and
each Bank. Thereafter, the obligation of the Banks to make or maintain
Offshore Rate Loans hereunder shall be suspended until the Agent upon the
instruction of the Majority Banks revokes such notice in writing. Upon
receipt of such notice, the Company may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted by it. If the Company does
not revoke such notice, the Banks shall make, convert or continue the
Committed Loans, as proposed by the Company, in the amount specified in the
applicable notice submitted by the Company, but such Committed Loans shall be
made, converted or continued as Base Rate Committed Loans instead of Offshore
Rate Committed Loans.
3.06 CERTIFICATES OF BANKS. Any Bank or Designated Bidder claiming
reimbursement or compensation pursuant to this Article III shall deliver to
the Company (with a copy to the Agent) a certificate setting forth in
reasonable detail the amount payable to the Bank or Designated Bidder
hereunder and such certificate shall be conclusive and binding on the Company
in the absence of manifest error.
3.07 SURVIVAL. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations and the
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS OF INITIAL LOANS. The obligation of each Bank to make
its initial Loan hereunder is subject to the condition that the Agent shall
have received on or before the Closing Date all of the following, in form and
substance satisfactory to the Agent and each Bank and in sufficient copies
for each Bank, each of the following items. For items to be executed by the
parties, Agent may receive either a duly executed original signature page, or
an executed signature page sent by facsimile transmission to be followed
promptly by mailing of a hard copy original. Each of the parties understands
and agrees that receipt by the Agent of a facsimile transmitted signature
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page purportedly bearing the signature of a party shall bind such party with
the same force and effect as the delivery of a hard copy original. Any
failure by the Agent to receive the hard copy original signature page shall
not diminish the binding effect of receipt of the facsimile transmitted
signature page of the party whose hard copy original signature page was not
received by the Agent:
(a) CREDIT AGREEMENT. This Agreement executed by the Company,
the Agent and each of the Banks;
(b) RESOLUTIONS; INCUMBENCY.
(i) Copies of the resolutions of the board of directors of the
Company approving and authorizing the execution, delivery and performance
by the Company of this Agreement and the other Loan Documents to be
delivered hereunder, and authorizing the borrowing of the Loans, certified
as of the Closing Date (or a date acceptable to the Agent reasonably close
to the Closing Date) by the Secretary or an Assistant Secretary of the
Company; and
(ii) A certificate of the Secretary or Assistant Secretary of
the Company certifying the names and true signatures of the officers of
the Company authorized to execute, deliver and perform, as applicable,
this Agreement, and all other Loan Documents to be delivered hereunder;
(c) ARTICLES OF INCORPORATION AND BY-LAWS. The articles or
certificate of incorporation of the Company as in effect on the Closing Date,
certified by the Secretary of State (or similar, applicable Governmental
Authority) of the state of incorporation of the Company as of a recent date
and by the Secretary or Assistant Secretary of the Company as of the Closing
Date (or a date acceptable to the Agent reasonably close to the Closing
Date), and the bylaws of the Company as in effect on the Closing Date,
certified by the Secretary or Assistant Secretary of the Company as of the
Closing Date (or a date acceptable to the Agent reasonably close to the
Closing Date); and
(d) LEGAL OPINION. An opinion of legal counsel to the Company
and addressed to the Agent and the Banks, in form and substance, and from
legal counsel, satisfactory to the Agent and the Banks.
(e) PAYMENT OF FEES. The Company shall have paid all accrued and
unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date, together with Attorney Costs of BofA to the extent invoiced
prior to or on the Closing Date, together with such additional amounts of
Attorney Costs as shall constitute BofA's reasonable estimate of Attorney
Costs incurred or to be incurred through the closing proceedings, provided
that such estimate shall not thereafter preclude final settling of accounts
between the Company and BofA;
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(f) CERTIFICATE. A certificate signed by a Responsible Officer,
dated as of the Closing Date (or a date acceptable to the Agent reasonably
close to the Closing Date), stating that:
(i) the representations and warranties contained in Article V
are true and correct on and as of such date, as though made on and as of
such date;
(ii) no Default or Event of Default exists or would result
from the initial Borrowing;
(iii) there has occurred since February 1, 1997, no event or
circumstance that has resulted or could reasonably be expected to result
in a Material Adverse Effect; and
(iv) calculating the Adjusted Interest Coverage Ratio as of the
end of the preceding fiscal quarter.
(g) PRIOR AGREEMENT. Evidence that all obligations of the
Company under the syndicated agreement among the Company, Wells Fargo Bank as
agent and the banks party thereto, have been paid in full and all commitments
related thereto have been terminated; provided, however, that commercial
letters of credit outstanding thereunder in amounts acceptable to the Banks
may remain outstanding thereunder.
(h) OTHER DOCUMENTS. Such other approvals, opinions, documents
or materials as the Agent or any Bank may request.
4.02 CONDITIONS TO ALL BORROWINGS, CONVERSIONS AND CONTINUATIONS. The
obligation of each Bank to make any Committed Loan to be made by it hereunder
(including its initial Loan), and the obligation of any Bank or Designated
Bidder to make any Bid Loan as to which the Company has accepted the relevant
Competitive Bid, or to accept a conversion or continuation election under
paragraph 2.05 is subject to the satisfaction of the following conditions
precedent on the relevant disbursement date:
(a) NOTICE OF BORROWING. As to any Committed Loan, the Agent
shall have received (with, in the case of the initial Loan only, a copy for
each Bank) a Notice of Borrowing or Notice of Conversion/Continuation;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by the Company contained in Article V
shall be true and correct on and as of the date of the Borrowing, conversion
or continuation with the same effect as if made on and as of such date; and
(c) NO EXISTING DEFAULT. No Default or Event of Default shall
exist or shall result from such Borrowing, continuation or conversion.
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Each Notice of Borrowing, Competitive Bid Request, and Notice of
Conversion/Continuation submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the date of each
such notice or application and as of the date of each Borrowing, conversion
or continuation that the conditions in Section 4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
5.01 CORPORATE EXISTENCE AND POWER. The Company and each of its
Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under, the Loan
Documents;
(c) is duly qualified as a foreign corporation, and licensed and
in good standing, under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification or license; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (c) or clause (d), to the extent
that the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by the Company and its Subsidiaries of this
Agreement, and any other Loan Document to which such Person is party, have
been duly authorized by all necessary corporate action, and do not and will
not:
(a) contravene the terms of any of that Person's certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all applicable resolutions
of the board of directors (or any committee thereof);
(b) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any
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Governmental Authority to which such Person or its property is subject; or
(c) violate any Requirement of Law.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of the Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement and each other Loan Document to
which the Company or any of its Subsidiaries is a party constitute the legal,
valid and binding obligations of the Company, enforceable against such Person
in accordance with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
5.05 LITIGATION. Except as specifically disclosed in SCHEDULE 5.05,
there are no actions, suits, proceedings, claims or disputes pending, or to
the best knowledge of the Company, threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, against the
Company, or its Subsidiaries or any of their respective Properties which:
(a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to the Company or its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin
or restrain the execution, delivery or performance of this Agreement or any
other Loan Document, or directing that the transactions provided for herein
or therein not be consummated as herein or therein provided.
5.06 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company. Neither the Company
nor any of its Subsidiaries is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect or that would, if such default had occurred after the Closing date,
create an Event of Default under subsection 8.01(e).
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5.07 ERISA COMPLIANCE.
(a) Except as specifically disclosed in SCHEDULE 5.07, each Plan
is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is intended
to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS and to the best knowledge of the Company,
nothing has occurred which would cause the loss of such qualification.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan which has resulted or could reasonably be expected
to result in a Material Adverse Effect.
(c) Except as specifically disclosed in SCHEDULE 5.07, no ERISA
Event has occurred or is reasonably expected to occur with respect to any
Pension Plan or Multiemployer Plan.
(d) Except as specifically disclosed in SCHEDULE 5.07, no Pension
Plan has any Unfunded Pension Liability.
(e) Except as specifically disclosed in SCHEDULE 5.07, neither the
Company nor any ERISA Affiliate has incurred, nor reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA).
(f) Except as specifically disclosed in SCHEDULE 5.07, neither the
Company nor any ERISA Affiliate has incurred nor reasonably expects to incur
any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section
4201 or 4243 of ERISA with respect to a Multiemployer Plan.
(g) Except as specifically disclosed in SCHEDULE 5.07, neither the
Company nor any ERISA Affiliate has transferred any Unfunded Pension
Liability to any person or otherwise engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
5.08 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans
are intended to be and shall be used solely for the purposes set forth in and
permitted by Section 6.12, and are intended to be and shall be used in
compliance with Sections 7.06 and 7.07. Neither the Company nor any of its
Subsidiaries is generally engaged in the business of purchasing or selling
Margin Stock or extending credit for the purpose of purchasing or carrying
Margin Stock.
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5.09 TITLE TO PROPERTIES. The Company and each of its Subsidiaries
have good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
their respective businesses, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. As of the
Closing Date, the property of the Company and its Subsidiaries is subject to
no Liens, other than those permitted by this Agreement.
5.10 TAXES. The Company and its Subsidiaries have filed all Federal
and other material tax returns and reports required to be filed, and have
paid all Federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their Properties, income
or assets otherwise due and payable, except those which are being contested
in good faith by appropriate proceedings and for which adequate reserves have
been provided in accordance with GAAP and no notice of lien has been filed or
recorded. There is no proposed tax assessment against the Company or any of
its Subsidiaries which would, if the assessment were made, have a Material
Adverse Effect.
5.11 FINANCIAL CONDITION.
(a) The audited consolidated financial statements of financial
condition of the Company and its Subsidiaries dated February 1, 1997; the
related consolidated statements of income or operations, shareholders' equity
and cash flows for the fiscal year ended on that date; and the interim
financial statements dated as of May 3, 1997:
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein;
(ii) fairly present the financial condition of the Company and
its Subsidiaries as of the date thereof and results of operations for the
period covered thereby; and
(iii) except as specifically disclosed in SCHEDULE 5.11, show
all material indebtedness and other liabilities, direct or contingent of
the Company and its consolidated Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and contingent
obligations.
(b) Since February 1, 1997, there has been no Material Adverse
Effect.
5.12 ENVIRONMENTAL MATTERS. The Company conducts in the ordinary
course of business a review of the effect of existing Environmental Laws and
existing Environmental Claims on its business, operations and properties, and
as a result thereof the Company has reasonably concluded that, except as
specifically disclosed in SCHEDULE 5.12, such Environmental Laws and
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Environmental Claims could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
5.13 REGULATED ENTITIES. None of the Company, any Person controlling
the Company, or any Subsidiary of the Company, is (a) an "Investment Company"
within the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or
any other Federal or state statute or regulation limiting its ability to
incur indebtedness.
5.14 NO BURDENSOME RESTRICTIONS. Neither the Company nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject
to any charter or corporate restriction, or any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect.
5.15 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. The Company or
its Subsidiaries own or are licensed or otherwise have the right to use all
of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person. To the best knowledge of the Company,
no slogan or other advertising device, product, process, method, substance,
part or other material now employed, or now contemplated to be employed, by
the Company or any of its Subsidiaries infringes upon any rights held by any
other Person; except as specifically disclosed in SCHEDULE 5.05, no claim or
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
5.16 SUBSIDIARIES. As of the Closing Date, the Company has no
Subsidiaries other than those specifically disclosed in part (a) of SCHEDULE
5.16 hereto and has no Equity Investments other than those specifically
disclosed in part (b) of SCHEDULE 5.16.
5.17 INSURANCE. The Properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not
Affiliates of the Company, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar Properties in localities where the
Company or such Subsidiary operates.
5.18 FULL DISCLOSURE. None of the representations or warranties made
by the Company or any of its Subsidiaries in the Loan Documents as of the
date such representations and warranties are made or deemed made, and none of
the statements contained in each exhibit, report, statement or certificate
furnished by or on
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behalf of the Company or any of its Subsidiaries in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of
the circumstances under which they are made, not misleading as of the time
when made or delivered.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any Bank shall have
any Revolving Commitment hereunder, or any Loan or other Obligation shall
remain unpaid or unsatisfied, unless the Majority Banks waive compliance in
writing:
6.01 FINANCIAL STATEMENTS AND COMPLIANCE CERTIFICATES. The Company
shall deliver the following to the Agent, all in form and detail satisfactory
to the Agent and Majority Banks and in such number of copies as each Bank may
request:
(a) as soon as available, but not later than sixty (60) days
after and as of the close of each of the Company's quarterly accounting
periods, beginning with the quarter ending August 2, 1997:
(i) a financial statement for the Company prepared by
the Company on a consolidated and consolidating basis, which shall
include the Company's balance sheet as of the close of such period,
and the Company's statement of income for such period and that
portion of the fiscal year ending with such period, prepared on a
consolidated basis; and
(ii) a certificate from a Responsible Officer that the
financial statements are complete and correct and fairly present the
Company's financial condition and results of operations;
(b) as soon as available, but not later than sixty (60) days
after and as of the close of each of the Company's first, second and third
quarter accounting periods, beginning with the quarter ending August 2,
1997:
(i) a Compliance Certificate from a Responsible
Officer that there exists no Event of Default or circumstance which,
upon a lapse of time or giving of notice or both, would become an
Event of Default, and calculating compliance with Sections 6.02 and
6.03 of this Agreement; and
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(ii) a copy of the Company's filed Securities and
Exchange Commission Report 10-Q for said fiscal quarter;
(c) as soon as available, but not later than one hundred twenty
(120) days after and as of the close of each of the Company's fiscal
years:
(i) a complete copy of the Company's audit report for
such year, together with a copy of the Company's filed Securities and
Exchange Commission Report 10-K for said fiscal year, which audit
report shall include at least the Company's balance sheet as of the
close of such year and the Company's statement of income and retained
earnings and statement of cash flow for such year, all prepared on a
consolidated basis and certified by Deloitte & Touche or another
nationally recognized independent public accountant selected by the
Company, which certificate shall not be qualified in any manner
whatsoever; and
(ii) a Compliance Certificate from a Responsible
Officer that there exists no Event of Default or circumstance which,
upon a lapse of time or giving of notice or both, would become an
Event of Default, and calculating compliance with Sections 6.02 and
6.03 of this Agreement.
(d) upon the request of the Agent or any Bank, but no more
frequently than annually, the Company's financial plan, updated as
appropriate, covering the remaining period until the Revolving Termination
Date, and including quarterly balance sheet and cash flow projections, and
annual income statement projections.
(e) from time to time such other information as the Agent, at
the request of any Bank, may reasonably request.
6.02 LEVERAGE RATIO. The Company shall maintain on a consolidated
basis as of the end of each fiscal quarter a Leverage Ratio not greater than
seventy-two percent (72%).
6.03 ADJUSTED INTEREST COVERAGE RATIO. The Company shall maintain on a
consolidated basis an Adjusted Interest Coverage Ratio at least equal to
1.80:1.00.
6.04 NOTICES. The Company shall promptly notify the Agent and each
Bank:
(a) of the occurrence of any Default or Event of Default, and of
the occurrence or existence of any event or circumstance that foreseeably
will become a Default or Event of Default;
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(b) of any matter that has resulted or may result in a Material
Adverse Effect, including (i) breach or non-performance of, or any default
under, a Contractual Obligation of the Company or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between the
Company or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Company or any Subsidiary; including pursuant to any applicable
Environmental Laws;
(c) of any of the following events affecting the Company or any
ERISA Affiliate (but in no event more than 10 days after such event),
together with a copy of any notice with respect to such event that may be
required to be filed with a Governmental Authority and any notice delivered
by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event:
(i) an ERISA Event;
(ii) if any of the representations and warranties in Section
5.07 cease to be true and correct;
(iii) the adoption of any new Pension Plan or other Plan subject
to Section 412 of the Code by the Company or an ERISA Affiliate;
(iv) the adoption of any amendment to a Pension Plan or other
Plan subject to Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension Liability; or
(v) the commencement of contributions by the Company or an
ERISA Affiliate to any Pension Plan, Multiemployer Plan or other Plan
subject to Section 412 of the Code;
(d) of any material change in accounting policies or financial
reporting practices by the Company or any of its Subsidiaries.
(e) of any new Subsidiaries other than those specifically
disclosed in part (a) of SCHEDULE 5.16 hereto; or any new Equity Investments
other than those specifically disclosed in part (b) of SCHEDULE 5.16.
Each notice pursuant to this Section shall be accompanied by a
written statement by a Responsible Officer of the Company setting forth
details of the occurrence referred to therein, and stating what action the
Company proposes to take with respect thereto and at what time. Each notice
under subsection (a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been breached
or violated.
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6.05 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall, and
shall cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation;
(b) preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business except in connection with
transactions permitted by Section 7.03 and sales of assets permitted by
Section 7.02;
(c) use its reasonable efforts, in the ordinary course of
business, to preserve its business organization and preserve the goodwill and
business of the customers, suppliers and others having material business
relations with it; and
(d) preserve or renew all of its registered trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall
cause each of its Subsidiaries to maintain, and preserve all its property
which is used or useful in its business in good working order and condition,
ordinary wear and tear excepted, except as permitted by Section 7.02. The
Company shall use the standard of care typical in the industry in the
operation and maintenance of its facilities.
6.07 INSURANCE. The Company shall maintain, and shall cause each of
its Subsidiaries to maintain, with financially sound and reputable
independent insurers, insurance with respect to its Properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons.
The Company's current program of self insurance for workers' compensation
shall be deemed acceptable under this paragraph.
6.08 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause its
Subsidiaries to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; and
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(c) all indebtedness, as and when due and payable, but subject to
any subordination provisions contained in any instrument or agreement
evidencing such indebtedness.
6.09 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause
each of its Subsidiaries to comply, in all material respects with all
Requirements of Law of any Governmental Authority having jurisdiction over it
or its business (including the Federal Fair Labor Standards Act), except such
as may be contested in good faith or as to which a bona fide dispute may
exist.
6.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company and its
Subsidiaries shall maintain proper books of record and account in accordance
with GAAP. The Company and its Subsidiaries shall permit representatives and
independent contractors of the Agent or any Bank, no more frequently than
annually, to inspect any of their respective Properties, to examine their
books and records, and make copies thereof, and to discuss their affairs with
their respective directors, officers, and independent public accountants, all
at reasonable times during normal business hours; PROVIDED, HOWEVER, when an
Event of Default exists the Agent or any Bank may do any of the foregoing
more frequently than annually and at the expense of the Company.
6.11 ENVIRONMENTAL LAWS. The Company shall, and shall cause each of
its Subsidiaries to, conduct its operations and keep and maintain its
property in compliance with all Environmental Laws.
6.12 USE OF PROCEEDS. The Company shall use the proceeds of the Loans
solely as follows: (a) to refinance the Company's existing debt; (b) to fund
repurchase by the Company of the Company's own stock, with such stock being
retired upon its repurchase; (c) to finance capital expenditures; and (d) for
general corporate purposes.
ARTICLE VII
NEGATIVE COVENANTS
The Company hereby covenants and agrees that, so long as any Bank shall
have any Revolving Commitment hereunder, or any Loan or other Obligation
shall remain unpaid or unsatisfied, unless the Majority Banks waive
compliance in writing:
7.01 LIMITATION ON LIENS. The Company shall not, and the Company shall
not suffer or permit any of its Subsidiaries to, create, assume or suffer to
exist any security interest, lien (including, but not limited to, the lien of
an attachment, judgment or execution) or encumbrance, securing a charge or
obligation, on or with respect to any real or personal property of the
Company or any Subsidiary whether now owned or hereafter acquired, except:
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(a) liens for current taxes, assessments or other governmental
charges which are not delinquent or remain payable without any penalty, or
the validity of which is contested in good faith by appropriate
proceedings upon stay of execution of the enforcement thereof;
(b) deposits or pledges to secure:
(i) statutory obligations;
(ii) surety or appeal bonds;
(iii) bonds for release of attachment, stay of
execution or injunction; or
(iv) performance of bids, tenders, contracts (other
than for the repayment of borrowed money) or leases, or for purposes
of like general nature in the ordinary course of its business as
presently conducted;
(c) purchase money liens and liens on real property securing
construction or permanent real estate financing where the lien does not
exceed 100% of the cost of the real property and all improvements thereon
and does not extend beyond the property purchased or constructed;
(d) a security interest in favor of the issuer of any letter of
credit for the account of the Company, covering any documents presented in
connection with a drawing under any letter of credit; all goods which are
described in such documents or any letter of credit; and the proceeds
thereof; and
(e) security interests and liens securing charges or
obligations of the Company or any Subsidiary in amounts not to exceed an
aggregate of $2,000,000 in addition to those permitted under subsections
(a) through (d) of this Section.
The Company shall not, and shall not suffer or permit any of its Subsidiaries
to, acquire Margin Stock to the extent that more than 25% of the value of the
assets subject to the restrictions of this paragraph consist of Margin Stock.
7.02 DISPOSITION OF ASSETS. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any property (including accounts and notes
receivable, with or without recourse) or enter into any agreement to do any
of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
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(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to
the purchase price of such replacement equipment; and
(c) dispositions of property by the Company or any of its
Subsidiaries to the Company or any of its Subsidiaries pursuant to reasonable
business requirements; provided, however, that such dispositions do not
result in the movement of any such property from a domestic Subsidiary to a
Subsidiary located outside the United States.
7.03 CONSOLIDATIONS AND MERGERS. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, merge, consolidate with or into,
or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person.
7.04 LOANS; ADVANCES; INVESTMENTS; ACQUISITIONS; GUARANTEES. The
Company shall not, and shall not permit any Subsidiary to, make any loans or
advances to, or any investment in, any person or entity; nor acquire, or
permit any Subsidiary to acquire, any interest in any entity; nor enter into,
or permit any Subsidiary to enter into, any joint venture; nor guarantee or
become liable, or permit any Subsidiary to guarantee or become liable, in any
way as surety, endorser (other than as endorser of negotiable instruments for
deposit or collection in the ordinary course of business), accommodation
endorser or otherwise for, any liabilities or obligations of any other person
or entity, except any of the foregoing in any fiscal year so long as the
total dollar amount of all such transactions by the Company and the
Subsidiaries does not exceed an aggregate of (a) 10% of the Company's
Tangible Net Worth as of the end of the immediately preceding fiscal year,
plus (b) the cost of the acquisitions and investments financed by the
issuance of equity.
7.05 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall
not suffer or permit any of its Subsidiaries to, enter into any transaction
with any Affiliate of the Company or of any such Subsidiary, except (a) as
expressly permitted by this Agreement, or (b) in the ordinary course of
business and pursuant to the reasonable requirements of the business of the
Company or such Subsidiary; in each case (a) and (b), upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than
would obtain in a comparable arm's-length transaction with a Person not an
Affiliate of the Company or such Subsidiary.
7.06 USE OF PROCEEDS. The Company shall not and shall not suffer or
permit any of its Subsidiaries to use any portion of the Loan proceeds,
directly or indirectly, (i) to purchase or carry Margin Stock (except the
repurchase by the Company of the Company's own stock, with such stock being
retired upon its
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repurchase), (ii) to repay or otherwise refinance indebtedness of the Company
or others incurred to purchase or carry Margin Stock, (iii) to extend credit
for the purpose of purchasing or carrying any Margin Stock, or (iv) to
acquire any security in any transaction that is subject to Section 13 or 14
of the Exchange Act.
7.07 USE OF PROCEEDS - INELIGIBLE SECURITIES. The Company shall not,
directly or indirectly, use any portion of the Loan proceeds (i) knowingly to
purchase Ineligible Securities from the Arranger during any period in which
the Arranger makes a market in such Ineligible Securities, (ii) knowingly to
purchase during the underwriting period Ineligible Securities being
underwritten by the Arranger, or (iii) to make payments of principal or
interest on Ineligible Securities underwritten by the Arranger and issued by
or for the benefit of the Company or any Affiliate of the Company.
7.08 COMPLIANCE WITH ERISA. The Company shall not, and shall not
suffer or permit any of its Subsidiaries to, (i) terminate any Plan subject
to Title IV of ERISA so as to result in any material (in the opinion of the
Majority Banks) liability to the Company or any ERISA Affiliate, (ii) permit
to exist any ERISA Event or any other event or condition, which presents the
risk of a material (in the opinion of the Majority Banks) liability to any
member of the Controlled Group, (iii) make a complete or partial withdrawal
(within the meaning of ERISA Section 4201) from any Multiemployer Plan so as
to result in any material (in the opinion of the Majority Banks) liability to
the Company or any ERISA Affiliate, (iv) enter into any new Plan or modify
any existing Plan so as to increase its obligations thereunder which could
result in any material (in the opinion of the Majority Banks) liability to
any member of the Controlled Group, or (v) permit the present value of all
nonforfeitable accrued benefits under any Plan (using the actuarial
assumptions utilized by the PBGC upon termination of a Plan) materially (in
the opinion of the Majority Banks) to exceed the fair market value of Plan
assets allocable to such benefits, all determined as of the most recent
valuation date for each such Plan.
7.09 CHANGE IN BUSINESS. The Company shall not, and shall not permit
any of its Subsidiaries to, engage in any material line of business
substantially different from those lines of business carried on by it on the
date hereof.
7.10 CHANGE IN STRUCTURE. The Company shall not and shall not permit
any of its Subsidiaries to, make any changes in its equity capital structure
(including in the terms of its outstanding stock, but excluding the Company's
stock repurchase programs), or amend its certificate of incorporation or
by-laws in any material respect.
7.11 ACCOUNTING CHANGES. The Company shall not, and shall not suffer
or permit any of its Subsidiaries to, make any significant change in
accounting treatment or reporting
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practices, except as required by GAAP, or change the fiscal year of the
Company or of any of its consolidated Subsidiaries.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an "EVENT
OF DEFAULT":
(a) NON-PAYMENT. The Company fails to pay, (i) within one
calendar day after the same shall become due, any amount of principal or
interest of any Loan, or (ii) within ten calendar days after the same shall
become due, any other interest, fee or any other amount payable hereunder or
pursuant to any other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty by
the Company or any of its Subsidiaries made or deemed made herein, in any
Loan Document, or which is contained in any certificate, document or
financial or other statement by the Company, any of its Subsidiaries, or
their respective Responsible Officers, furnished at any time under this
Agreement, or in or under any Loan Document, shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. The Company fails to perform or observe
any term, covenant or agreement contained in Sections 6.02, 6.03 and 6.07 or
Article VII; or
(d) OTHER DEFAULTS. The Company fails to perform or observe any
other term or covenant contained in this Agreement or any Loan Document, and
such default shall continue unremedied for a period of 20 days after the
earlier of (i) the date upon which a Responsible Officer of the Company knew
or should have known of such failure or (ii) the date upon which written
notice thereof is given to the Company by the Agent or any Bank; or
(e) CROSS-DEFAULT. The Company or any of its Subsidiaries (i)
fails to make any payment in respect of any indebtedness, guaranty obligation
or other contingent obligation, having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than $2,000,000, when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) and such failure continues
after the applicable grace or notice period, if any, specified in the
document relating thereto on the date of such failure; or (ii) fails to
perform or observe any other condition or covenant, or any other event shall
occur or condition exist, under any agreement or instrument relating to any
such indebtedness, guaranty obligation or other contingent obligation, and
such failure continues after the applicable grace or notice period, if any,
specified in the document relating thereto on the date of such failure if the
effect of such failure, event or condition is to cause, or to permit the
holder or holders of such
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indebtedness or beneficiary or beneficiaries of such indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such indebtedness to be declared to be due and
payable prior to its stated maturity, or such guaranty obligation or other
contingent obligation to become payable or cash collateral in respect thereof
to be demanded.
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Company or any of its
Subsidiaries (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject
to applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Subsidiary of the
Company, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of the Company's or
any of its Subsidiaries' Properties, and any such proceeding or petition
shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded
within 60 days after commencement, filing or levy; (ii) the Company or any of
its Subsidiaries admits the material allegations of a petition against it in
any Insolvency Proceeding, or an order for relief (or similar order under
non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Company
or any of its Subsidiaries acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or
agent therefor), or other similar Person for itself or a substantial portion
of its property or business;
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably
expected to result in liability of the Company under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess
of $1,000,000; (ii) the commencement or increase of contributions to, or the
adoption of or the amendment of a Pension Plan by the Company or an ERISA
Affiliate which has resulted or could reasonably be expected to result in an
increase in Unfunded Pension Liability among all Pension Plans in an
aggregate amount in excess of $1,000,000; (iii) any of the representations
and warranties contained in Section 5.07 shall cease to be true and correct
in any material respect; or (iv) the Company or an ERISA Affiliate shall fail
to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan, which has resulted or could
reasonably be expected to result in a Material Adverse Effect.
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(i) MONETARY JUDGMENTS. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards shall be entered
against the Company or any of its Subsidiaries involving in the aggregate a
liability (not fully covered by independent third-party insurance) as to any
single or related series of transactions, incidents or conditions, of
$5,000,000 or more, and the same shall remain unsatisfied, unvacated and
unstayed pending appeal for a period of 30 days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or
decree shall be rendered against the Company or any of its Subsidiaries which
does or would reasonably be expected to have a Material Adverse Effect, and
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(k) OWNERSHIP. Any one shareholder holds in the aggregate a
direct or indirect beneficial equity interest in the Company equal to 35% or
more of the total equity interest of the Company; or
(l) LOSS OF LICENSES. Any other Governmental Authority shall
revoke or fail to renew any material license, permit or franchise of the
Company or any of its Subsidiaries or the Company or any of its Subsidiaries
shall for any reason lose any material license, permit or franchise or the
Company or any of its Subsidiaries shall suffer the imposition of any
restraining order, escrow, suspension or impound of funds in connection with
any proceeding (judicial or administrative) with respect to any material
license, permit or franchise; or
(m) ADVERSE CHANGE. There shall occur a Material Adverse Effect.
8.02 REMEDIES. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Banks,
(a) declare the Revolving Commitment of each Bank to make Loans to
be terminated, whereupon such Revolving Commitments shall forthwith be
terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due and
payable; without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
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PROVIDED, HOWEVER, that upon the occurrence of any event specified in
paragraph (f) or (g) of Section 8.01 above (in the case of clause (i) of
paragraph (g) upon the expiration of the 60-day period mentioned therein),
the obligation of each Bank to make Loans shall automatically terminate and
the unpaid principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and payable without
further act of the Agent or any Bank.
8.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any
other rights, powers, privileges or remedies provided by law or in equity, or
under any other instrument, document or agreement now existing or hereafter
arising.
ARTICLE IX
THE AGENT
9.01 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
(subject to Section 9.09) appoints, designates and authorizes the Agent to
take such action on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor
shall the Agent have or be deemed to have any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" in this
Agreement with reference to the Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
9.02 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
9.03 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or
in connection with this Agreement or any other Loan Document (except for its
own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any
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of the Banks for any recital, statement, representation or warranty made by
the Company or any Subsidiary or Affiliate of the Company, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or
any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document,
or for any failure of the Company or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person
shall be under any obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
Properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
9.04 RELIANCE BY AGENT.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Company), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Majority Banks as it
deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Banks (or all Banks as
required by paragraph 10.01) and such request and any action taken or failure
to act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with
each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Bank.
9.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and
fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have
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received written notice from a Bank or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Banks. The Agent shall
take such action with respect to such Default or Event of Default as shall be
requested by the Majority Banks in accordance with Article VIII; PROVIDED,
HOWEVER, that unless and until the Agent shall have received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
9.06 CREDIT DECISION. Each Bank expressly acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it and
that no act by the Agent hereinafter taken, including any review of the
affairs of the Company and its Subsidiaries shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Bank. Each
Bank represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition
and creditworthiness of the Company and its Subsidiaries, and all applicable
bank regulatory laws relating to the transactions contemplated thereby, and
made its own decision to enter into this Agreement and extend credit to the
Company hereunder. Each Bank also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
the Company which may come into the possession of any of the Agent-Related
Persons.
9.07 INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro
rata, from and against any and all Indemnified Liabilities; PROVIDED,
HOWEVER, that no Bank shall be liable for the payment to the Agent-Related
Persons of any portion of such Indemnified Liabilities resulting solely from
such Person's gross negligence or willful misconduct. Without limitation of
the foregoing, each Bank shall reimburse
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the Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including Attorney Costs) incurred by the Agent in connection with
the preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Company. The undertaking in this Section
shall survive the payment of all Obligations hereunder and the resignation or
replacement of the Agent.
9.08 AGENT IN INDIVIDUAL CAPACITY. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Company
and its Subsidiaries and Affiliates as though BofA were not the Agent
hereunder and without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such activities, BofA or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of
the Company or such Subsidiary) and acknowledge that the Agent shall be under
no obligation to provide such information to them. With respect to its
Loans, BofA shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it were not the Agent, and the
terms "Bank" and "Banks" include BofA in its individual capacity.
9.09 SUCCESSOR AGENT. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days' notice to the Banks. If
the Agent shall resign as Agent under this Agreement, the Majority Banks
shall appoint from among the Banks a successor agent for the Banks which
successor agent shall be approved by the Company. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Banks and the Company, a
successor agent from among the Banks. Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Agent and the term "Agent" shall
mean such successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article IX and Sections 10.04 and
10.05 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement. If no successor agent
has accepted appointment as Agent by the date which is 30 days following a
retiring Agent's notice of resignation, the retiring Agent's resignation
shall nevertheless thereupon become effective and the Banks shall perform all
of the duties of the Agent hereunder until such time, if any, as the Majority
Banks appoint a successor agent as provided for above.
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9.10 WITHHOLDING TAX. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, two properly completed
and executed copies of IRS Form 1001 before the payment of any interest in
the first calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be paid under
this Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Bank, two
properly completed and executed copies of IRS Form 4224 before the payment
of any interest is due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest may be paid
under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part
of the Obligations of the Company to such Bank, such Bank agrees to notify the
Agent of the percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Bank. To the extent of such percentage
amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into
account such
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reduction. However, if the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Bank not providing such forms
or other documentation an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because
such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, together with all costs
and expenses (including Attorney Costs). The obligation of the Banks under
this subsection shall survive the payment of all Obligations and the
resignation or replacement of the Agent.
ARTICLE X
MISCELLANEOUS
10.01 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) , the Company and acknowledged by the Agent, and
then such waiver shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Banks, the
Company and acknowledged by the Agent, do any of the following:
(a) increase or extend the Revolving Commitment of any Bank (or
reinstate any Revolving Commitment terminated pursuant to subsection 8.02(a) or
subject any Bank to any additional obligations;
(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Banks (or any of them) hereunder or
under any Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (ii) below) any fees or other amounts
payable hereunder or under any Loan Document;
(d) change the percentage of the Revolving Commitments or of the
aggregate unpaid principal amount of the Loans which
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shall be required for the Banks or any of them to take any action hereunder;
or
(e) amend this Section 10.01 or Section 2.16 or any provision
providing for consent or other action by all Banks;
and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, and (ii) the Fee Letter may be amended,
or rights or privileges thereunder waived, in a writing executed by the parties
thereto.
10.02 NOTICES.
(a) All notices, requests and other communications provided for
hereunder shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by the Company by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on the applicable
signature page hereof, and (ii) shall be followed promptly by a hard copy
original thereof) and mailed, faxed or delivered, to the address or facsimile
number specified for notices on the applicable signature page hereof; or, as
directed to the Company or the Agent, to such other address as shall be
designated by such party in a written notice to the other parties, and as
directed to each other party, at such other address as shall be designated by
such party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or IX shall not be effective until actually
received by the Agent.
(c) The Company acknowledges and agrees that any agreement of the
Agent and the Banks in Article II herein to receive certain notices by
telephone and facsimile is solely for the convenience and at the request of the
Company. The Agent and the Banks shall be entitled to rely on the authority of
any Person purporting to be a Person authorized by the Company to give such
notice and the Agent and the Banks shall not have any liability to the Company
or other Person on account of any action taken or not taken by the Agent or the
Banks in reliance upon such telephonic or facsimile notice. The obligation of
the Company to repay the Loans shall not be affected in any way or to any
extent by any failure by the Agent and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the Agent
and the Banks of a confirmation which is at
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variance with the terms understood by the Agent and the Banks to be contained
in the telephonic or facsimile notice.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
10.04 COSTS AND EXPENSES. The Company shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) pay or reimburse BofA (including in its capacity as Agent), on
the Closing Date, or within five Business Days after any demand which is made
subsequent to the Closing Date, for all costs and expenses incurred by BofA
(including in its capacity as Agent) in connection with the drafting, delivery,
and execution of this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including the reasonable Attorney
Costs incurred by BofA (including in its capacity as Agent) with respect
thereto; provided, however, that such Attorney Costs shall not exceed Fifteen
Thousand Dollars ($15,000).
(b) pay or reimburse BofA (including in its capacity as Agent)
within five Business Days after demand (subject to subsection 4.01(e)) for all
costs and expenses, not covered by (a) above, which are incurred after the
Closing Date by BofA (including in its capacity as Agent) in connection with
the development, preparation, delivery, administration and execution of, and
any amendment, supplement, waiver or modification to (in each case, whether or
not consummated), this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including the reasonable Attorney
Costs incurred by BofA (including in its capacity as Agent) with respect
thereto;
(c) pay or reimburse each Bank, the Agent and the Arranger within
five Business Days after demand (subject to subsection 4.01(e)) for all costs
and expenses incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies during the existence of
an Event of Default (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding
or appellate proceeding) under this Agreement, any other Loan Document, and any
such other documents, including Attorney Costs, incurred by the Agent, the
Arranger and any Bank; and
(d) pay or reimburse BofA (including in its capacity as Agent)
within five Business Days after demand (subject to
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subsection 4.01(f)) for all appraisal (including the allocated cost of
internal appraisal services), audit, environmental inspection and review
(including the allocated cost of such internal services), search and filing
costs, fees and expenses, incurred or sustained by BofA (including in its
capacity as Agent) in connection with the matters referred to under
subsections (a) and (b) of this Section.
10.05 INDEMNITY. Whether or not the transactions contemplated hereby
shall be consummated: The Company shall pay, indemnify, and hold harmless each
Indemnified Person from and against all Indemnified Liabilities. The
obligations of the Company under this paragraph shall in no event apply to
Indemnified Liabilities incurred by an Indemnified Person which arise from the
gross negligence, willful misconduct, breach of this Agreement or violation of
any law by such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations; provided, however, that this
indemnification shall expire on the fourth anniversary of the final payment in
full of all other Obligations, unless prior to such fourth anniversary an
Indemnified Person has provided notice to the Company of a dispute, claim or
other facts which give rise to an obligation of the Company to indemnify such
Indemnified Person under this paragraph.
"Indemnified Person" means each Bank, the Agent, the Agent-Related Persons and
each of their respective officers, directors, employees, counsel, agents and
attorneys-in-fact. "Indemnified Liabilities" means any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including Attorney Costs) of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and any other Loan Documents,
or the transactions contemplated hereby and thereby, and with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to this Agreement or the Loans or the use of the
proceeds thereof, whether or not any Indemnified Person is a party thereto.
10.06 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor the Banks
shall be under any obligation to marshall any assets in favor of the Company or
any other Person or against or in payment of any or all of the Obligations. To
the extent that the Company makes a payment or payments to the Agent or the
Banks, or the Agent or the Banks enforce their Liens or exercise their rights
of set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Agent in its discretion) to be repaid to a
trustee, receiver or any other party in connection with any Insolvency
Proceeding, or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full
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force and effect as if such payment had not been made or such enforcement or
set-off had not occurred, and (b) each Bank severally agrees to pay to the
Agent upon demand its ratable share of the total amount so recovered from or
repaid by the Agent.
10.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agent and each Bank.
10.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Bank may, with the written consent of the Company at all
times other than during the existence of an Event of Default and the Agent,
which consents shall not be unreasonably withheld, at any time assign and
delegate to one or more Eligible Assignees (provided that no written consent of
the Company or the Agent shall be required in connection with any assignment
and delegation by a Bank to an Eligible Assignee that is an Affiliate of such
Bank) (each an "ASSIGNEE") a ratable part of all, of the Loans, the Revolving
Commitments and the other rights and obligations of such Bank hereunder, in a
minimum amount of $10,000,000; PROVIDED, HOWEVER, that (i) no single Bank may
make more than two such assignments; (ii) the Company and the Agent may
continue to deal solely and directly with such Bank in connection with the
interest so assigned to an Assignee until (A) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Bank and the Assignee; (B) such Bank and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of EXHIBIT C ("ASSIGNMENT AND ACCEPTANCE") and (C) the assignor
Bank or Assignee has paid to the Agent a processing fee in the amount of
$3,500. Each Bank shall retain a minimum Revolving Commitment amount of at
least $10,000,000, unless its Revolving Commitment is reduced to zero.
(b) From and after the date that the Agent notifies the assignor
Bank that it has received (and provided its consent with respect to) an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents.
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(c) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement, shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Revolving
Commitments arising therefrom. The Revolving Commitment allocated to each
Assignee shall reduce the Revolving Commitment of the assigning Bank PRO TANTO.
(d) Any Bank or Designated Bidder may at any time sell to one or
more commercial banks or other Persons not Affiliates of the Company (a
"PARTICIPANT") participating interests in any Loans, the Revolving Commitment
of that Bank and the other interests of that Bank or Designated Bidder (the
"Originator") hereunder and under the other Loan Documents; PROVIDED, HOWEVER,
that (i) the Originator's obligations under this Agreement shall remain
unchanged, (ii) the Originator shall remain solely responsible for the
performance of such obligations, (iii) the Company and the Agent shall continue
to deal solely and directly with the Originator in connection with the
Originator's rights and obligations under this Agreement and the other Loan
Documents, and (iv) no Bank shall transfer or grant any participating interest
under which the Participant shall have rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would require
unanimous consent of the Banks as described in the FIRST PROVISO to Section
10.01. In the case of any such participation, the Participant shall not have
any rights under this Agreement, or any of the other Loan Documents, and all
amounts payable by the Company hereunder shall be determined as if the
Originator had not sold such participation; except that, if amounts outstanding
under this Agreement are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank or Designated Bidder (as the case may be) under this Agreement.
(e) Each Bank and Designated Bidder agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company and provided to it by the Company or any Subsidiary,
or by the Agent on the Company's or such Subsidiary's behalf, under this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information other than in connection with or in enforcement
of this Agreement and the other Loan Documents or in connection with other
business now or hereafter existing or contemplated with the Company or any
Subsidiary; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Bank or
Designated Bidder, or (ii) was or
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becomes available on a non-confidential basis from a source other than the
Company, provided that such source is not bound by a confidentiality
agreement with the Company known to the Bank or Designated Bidder; PROVIDED,
HOWEVER, that any Bank or Designated Bidder may disclose such information (A)
at the request or pursuant to any requirement of any Governmental Authority
to which the Bank or Designated Bidder is subject or in connection with an
examination of such Bank or Designated Bidder by any such authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to
the extent reasonably required in connection with any litigation or
proceeding to which the Agent, any Bank or Designated Bidder or their
respective Affiliates may be party; (E) to the extent reasonably required in
connection with the exercise of any remedy hereunder or under any other Loan
Document; (F) to such Bank's or Designated Bidder's independent auditors and
other professional advisors; (G) to any Participant or Assignee, actual or
potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of the Banks hereunder;
(H) as to any Bank or Designated Bidder or its Affiliate, as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Company or any Subsidiary is party or is deemed
party with such Bank or Designated Bidder or such Affiliate; and (I) to its
Affiliates.
(f) Notwithstanding any other provision in this Agreement, any Bank
or Designated Bidder may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR Section203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
10.09 DESIGNATED BIDDERS. Any Bank may designate one or more Designated
Bidders to have a right to offer and make Bid Loans pursuant to Section 2.07;
PROVIDED, HOWEVER, that (i) no such Bank may make more than one such
designation, (ii) each such Bank making any such designation shall retain the
right to make Bid Loans, and (iii) the parties to each such designation shall
execute and deliver to the Agent a Designation Agreement. No later than five
Business Days after its receipt of an appropriately completed Designation
Agreement executed by a designating Bank and a designee representing that it is
a Designated Bidder, the Agent will accept such Designation Agreement and give
prompt notice thereof to the Company, whereupon such designation of such
Designated Bidder shall become effective and shall become a party to this
Agreement as a "Designated Bidder."
10.10 AUTOMATIC DEBITS OF FEES. With respect to any commitment fee,
facility fee, or other fee, or any other cost or expense (including Attorney
Costs) due and payable to the Agent, BofA or the Arranger under the Loan
Documents, the Company hereby
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irrevocably authorizes BofA, upon at least one day's prior written notice to
the Company, to debit any deposit account of the Company with BofA in an
amount such that the aggregate amount debited from all such deposit accounts
does not exceed such fee or other cost or expense. If there are insufficient
funds in such deposit accounts to cover the amount of the fee or other cost
or expense then due, such debits will be reversed (in whole or in part, in
BofA's sole discretion) and such amount not debited shall be deemed to be
unpaid. No such debit under this Section 10.10 shall be deemed a setoff.
10.11 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Bank and
Designated Bidder shall notify the Agent in writing of any changes in the
address to which notices to the Bank and Designated Bidder should be directed,
of addresses of any Lending Office, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative
information as the Agent shall reasonably request.
10.12 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Agent.
10.13 SEVERABILITY. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not
in any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
10.14 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Designated Bidders, the Agent, the Agent-Related Persons, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents. Neither
the Agent nor any Bank or Designated Bidder shall have any obligation to any
Person not a party to this Agreement or other Loan Documents.
10.15 TIME. Time is of the essence as to each term or provision of this
Agreement and each of the other Loan Documents.
10.16 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE AGENT, THE BANKS
AND THE DESIGNATED BIDDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
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(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF
CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT,
THE DESIGNATED BIDDERS, AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
COMPANY, THE AGENT, THE BANKS, AND THE DESIGNATED BIDDERS IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE AGENT, THE BANKS,
AND THE DESIGNATED BIDDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
CALIFORNIA LAW.
10.17 WAIVER OF JURY TRIAL. THE COMPANY, THE BANKS, THE DESIGNATED
BIDDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. THE COMPANY, THE BANKS, THE DESIGNATED BIDDERS AND THE AGENT
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks, the Designated Bidders and the Agent, and supersedes all prior or
contemporaneous Agreements and understandings of such Persons,
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verbal or written, relating to the subject matter hereof and thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
ROSS STORES, INC. Address for notices:
By: /s/ J. Call
------------------- 8333 Central Avenue
Newark, CA 94560-3433
Title: Sr. Vice President & CFO Attn: John G. Call, Chief
------------------------ Financial Officer
Facsimile: (510) 505-4181
Tel: (510) 505-4315
BANK OF AMERICA NATIONAL TRUST Address for Notices of Borrowing,
AND SAVINGS ASSOCIATION, Conversion/Continuation and
as Agent other operational matters:
By: /s/ Christine E. Cordi
--------------------------- 1850 Gateway Blvd., 5th Floor
Christine E. Cordi Concord, CA 94520
Vice President Attn: Agency Administrative
Services #5596
Facsimile: (510) 675-8500
Telephone: (510) 675-8439
Address for all other notices:
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attention: Agency Management #10831
Facsimile: (415) 436-3425
Telephone: (415) 436-2790
Address for payments:
Bank of America NT & SA
ABA No. 121-000-358
850 Gateway Blvd.
Concord, CA 94520
For credit to Account
No. 12331-14279
Attn: Agency Administrative
Services #5596
Ref: Ross Stores, Inc.
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BANK OF AMERICA NATIONAL TRUST Lending Office:
AND SAVINGS ASSOCIATION,
as a Bank Northern California Commercial Loan
Service Center #1591
141 Mission Falls Lane, 2nd floor
By: /s/ Hagop V. Bouldoukian Fremont, California 94539
------------------------------
Hagop V. Bouldoukian Notices (other than Borrowing
Vice President notices and Notices of
Conversion/Continuation):
COMMITMENT AMOUNT: $50,000,000
San Francisco Regional Commercial
Banking Office #1499
345 Montgomery Street, Concourse
Level
San Francisco, CA 94104
Attention: Hagop V. Bouldoukian
Telephone: (415) 953-9023
Facsimile: (415) 622-1878
WELLS FARGO BANK, N.A. Notices (other than Borrowing
as a Bank notices and Notices of
Conversion/Continuation):
By: /s/ Edward Barosky 707 Wilshire Blvd., 16th floor
----------------------------- MAC 28180165
Edward Barosky, Jr. Los Angeles, CA 90017
Vice President
Attention: Frieda Youlios,
COMMITMENT AMOUNT: $40,000,000 Vice President
Telephone: (213) 614-2872
Facsimile: (213) 614-2305
Lending Office:
201 Third Street, 8th floor
MAC 0187-081
San Francisco, CA 94103
Attention: Tessie Melgar
Assistant Vice President and
Loan Operations Manager
Telephone: (415) 477-5421
Facsimile: (415) 979-0675
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BANQUE NATIONALE DE PARIS, Address for notices, and Domestic
as a Bank and Offshore Lending Office:
By: /s/ Stephane Rouse 180 Montgomery Street
----------------------------------- San Francisco, CA 94104
Printed Name Stephanie Rouse Attention: Katherine Wolfe
------------------------ Vice President
Title Assistant Vice President Telephone: (415) 956-0707
------------------------------- Facsimile: (415) 296-8954
/s/ Debra Wright For operations:
By: ---------------------------------- Don Hart, Vice President, Treasury
Debra Wright Telephone: (415) 956-2511
Vice President Facsimile: (415) 989-9041
COMMITMENT AMOUNT: $30,000,000
NATIONSBANK, N. A., Notices (other than Borrowing
as a Bank notices and Notices of
Conversion/Continuation):
By: /s/ M. M. Shafroth Corporate Finance Group
-------------------------------- 444 South Flower Street, Suite 4100
Michele M. Shafroth Los Angeles, CA 90071-2901
Senior Vice President
Attention: Michelle L. Hilse
COMMITMENT AMOUNT: $20,000,000 Corporate Banking Officer
Telephone: (213) 236-4937
Facsimile: (213) 624-5812
Lending Office:
NationsBank of Texas, N.A.
901 Main Street, 14th floor
Dallas, TX 75202
Attention: Karen Puente
Telephone: (214) 508-3089
Facsimile: (214) 508-0944
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THE BANK OF NEW YORK, Address for Notices (other than
as a Bank Borrowing Notices and Notices of
Conversion/Continuation):
By: /s/ Charlotte Sohn One Wall Street, 8th floor
--------------------------------- New York, NY 10286
Charlotte Sohn
Vice President Attention: Charlotte Sohn
Vice President
COMMITMENT AMOUNT: $20,000,000 Telephone: (212) 635-7869
Facsimile: (212) 635-1481/1483
Lending Office:
101 Barclay Street
New York, NY
Attention: Diane Burgess
Telephone: (212) 635-1311
Facsimile: (212) 635-1481/1483
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______________________________________________________________________________
______________________________________________________________________________
LETTER OF CREDIT AGREEMENT
BETWEEN
ROSS STORES, INC.
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
DATED SEPTEMBER 15, 1997
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 LETTERS OF CREDIT AND SHIPSIDE BONDS.. . . . . . . . . . . . . . . . 2
2.2 AMOUNT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 EXTENSION OF AVAILABILITY. . . . . . . . . . . . . . . . . . . . . . 2
2.4 PRINCIPAL REPAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 INTEREST.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6 OTHER TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 EXPENSES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. DISBURSEMENTS, PAYMENTS AND COSTS . . . . . . . . . . . . . . . . . . . . 3
3.1 REQUESTS FOR CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 DISBURSEMENTS AND PAYMENTS.. . . . . . . . . . . . . . . . . . . . . 3
3.3 DIRECT DEBIT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.4 BANKING DAYS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.6 ADDITIONAL COSTS.. . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.7 COMPUTATION OF FEES AND INTEREST.. . . . . . . . . . . . . . . . . . 4
4. CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT . . . . . . . . . . . . . 4
(a) AUTHORIZATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) SYNDICATED CREDIT AGREEMENT . . . . . . . . . . . . . . . . . . 5
(c) OTHER ITEMS . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 CONDITIONS TO EACH EXTENSION OF CREDIT. . . . . . . . . . . . . . . 5
(a) CONTINUATION OF REPRESENTATIONS AND WARRANTIES . . . . . . . . 5
(b) NO EXISTING DEFAULT. . . . . . . . . . . . . . . . . . . . . . 5
5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . 5
5.1 AUTHORIZATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.2 ENFORCEABLE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . 5
5.3 NO CONFLICTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.4 NO EVENT OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 6
6. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.1 FAILURE TO PAY.. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.2 REPRESENTATION OR WARRANTY. . . . . . . . . . . . . . . . . . . . . 6
7.3 ADVERSE CHANGE.. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.4 SYNDICATED CREDIT AGREEMENT. . . . . . . . . . . . . . . . . . . . . 7
7.5 OTHER DEFAULTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8. ENFORCING THIS AGREEMENT; MISCELLANEOUS . . . . . . . . . . . . . . . . . 7
8.1 SYNDICATED CREDIT AGREEMENT. . . . . . . . . . . . . . . . . . . . . 7
8.2 SUCCESSORS AND ASSIGNS.. . . . . . . . . . . . . . . . . . . . . . . 8
8.3 SEVERABILITY; WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . 8
8.4 COSTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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8.5 ATTORNEYS' FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8.6 ONE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8.7 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.8 HEADINGS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.9 COUNTERPARTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8.10 GOVERNING LAW AND JURISDICTION. . . . . . . . . . . . . . . . . . . 9
8.11 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . 9
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LETTER OF CREDIT AGREEMENT
This Agreement dated as of September 15, 1997, is between Bank of
America National Trust and Savings Association (the "Bank") and Ross Stores,
Inc. (the "Borrower").
1. DEFINITIONS
The following terms have the following meanings:
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"EVENT OF DEFAULT" means any of the events or circumstances specified
in Article 7.
"EXPIRATION DATE" means the fifth anniversary of the date of this
Agreement, but in any event no later than September 1, 2002.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Borrower or the
Borrower and its Subsidiaries taken as a whole or as to any Subsidiary; (b)
a material impairment of the ability of the Borrower to perform under this
Agreement and avoid any Event of Default; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability of this
Agreement or any agreement required by this Agreement.
"REFERENCE RATE" means the rate of interest publicly announced from
time to time by the Bank in San Francisco, California, as its Reference
Rate. The Reference Rate is set by the Bank based on various factors,
including the Bank's costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some loans.
The Bank may price loans to its customers at, above or below the Reference
Rate. Any change in the Reference Rate will take effect at the opening of
business on the day specified in the public announcement of a change in the
Bank's Reference Rate.
"RESPONSIBLE OFFICER" has the meaning defined in the Syndicated Credit
Agreement.
"SUBSIDIARY" has the meaning defined in the Syndicated Credit
Agreement.
"SYNDICATED CREDIT AGREEMENT" has the meaning defined in Paragraph 8.1
below.
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2. CREDIT FACILITY
2.1 LETTERS OF CREDIT AND SHIPSIDE BONDS. At the request of the
Borrower, between the date of this Agreement and the Expiration Date, the Bank
will issue for the account of the Borrower commercial and standby letters of
credit and shipside bonds. Each letter of credit shall have a maximum term no
longer than one year. The standby letters of credit may include a provision
providing that the maturity date will be automatically extended each year for an
additional year unless the Bank gives written notice to the contrary. In
addition, each letter of credit shall have a maximum maturity not to extend
beyond the Expiration Date. Each commercial letter of credit will require
drafts payable at sight or up to 90 days after sight.
2.2 AMOUNT. The amount of the letters of credit outstanding at any
one time (including the drawn and unreimbursed amounts of the letters of credit)
and shipside bonds may not exceed Thirty Million Dollars ($30,000,000) (the
"Commitment"). The amount of shipside bonds outstanding at any one time may not
exceed Five Hundred Thousand Dollars ($500,000).
2.3 EXTENSION OF AVAILABILITY. The Borrower may request extensions
of the Expiration Date for additional one-year periods, with each request to
be made no earlier than two years, and no later than 90 days, prior to the
then-current Expiration Date. Any such extension will be subject to the
approval of the Bank in its sole discretion.
2.4 PRINCIPAL REPAYMENT. Any amounts drawn under letters of credit
and shipside bonds shall be repaid by the Borrower immediately upon demand,
either from a Loan as permitted under the Syndicated Credit Agreement or
otherwise.
2.5 INTEREST. Any amounts drawn under letters of credit and shipside
bonds shall bear interest, until paid, at the Bank's Reference Rate plus one
(1.0) percentage point, payable on the first day of each calendar month.
2.6 OTHER TERMS. The Borrower agrees:
(a) if the Bank declares an Event of Default under this
Agreement, the Borrower shall, upon demand, prepay and make the Bank whole
for any outstanding letters of credit and shipside bonds.
(b) the issuance of any letter of credit or shipside bond and any
amendment to a letter of credit or shipside bond is subject to the Bank's
written approval and must be in form and content reasonably satisfactory to
the Bank and in favor of a beneficiary reasonably acceptable to the Bank.
(c) to sign the Bank's application, security agreement and other
standard forms for letters of credit and shipside bonds, and to pay any
issuance and/or other fees that the Bank notifies the Borrower will be
charged for
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issuing and processing letters of credit and shipside bonds for
the Borrower; provided, however, that certain fees shall be in the amounts
agreed between the Bank and the Borrower by separate letter agreement.
(d) to pay the Bank a non-refundable fee, in such percentage per
annum as agreed between the Bank and the Borrower by separate letter
agreement, calculated against the outstanding undrawn amount of each
standby letter of credit and shipside bond, payable annually in advance,
calculated on the basis of the face amount outstanding on the day the fee
is calculated.
(e) to pay the Bank a commitment fee, in such percentage per
annum as agreed between the Bank and the Borrower by separate letter
agreement, on the average daily amount of the Commitment, computed on a
quarterly basis in arrears on the last Business Day of each calendar
quarter.
2.7 EXPENSES. The Borrower agrees to reimburse the Bank for any
reasonable expenses it incurs in the preparation of this Agreement and any
agreement or instrument required by this Agreement. Expenses include, but are
not limited to, reasonable attorneys' fees, including any allocated costs of the
Bank's in-house counsel.
3. DISBURSEMENTS, PAYMENTS AND COSTS
3.1 REQUESTS FOR CREDIT. Each request for a letter of credit will be
made in writing in a manner acceptable to the Bank, or by another means
acceptable to the Bank.
3.2 DISBURSEMENTS AND PAYMENTS. Each disbursement by the Bank and
each payment by the Borrower will be:
(a) made at the Bank's San Francisco Regional Commercial Banking
Office, or other location reasonably selected by the Bank from time to time
after not less than 15 days prior written notice to the Borrower;
(b) made for the account of the Bank's branch selected by the
Bank from time to time;
(c) made in immediately available funds;
(d) evidenced by records kept by the Bank, absent manifest error.
3.3 DIRECT DEBIT.
(a) The Borrower agrees that interest and any fees, discounts and
charges will be deducted automatically on the due date from checking
account number 14991-00158.
(b) The Bank will debit the account on the dates the payments
become due. If a due date does not fall on a
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banking day, the Bank will debit the account on the first banking day
following the due date.
(c) The Borrower will maintain sufficient funds in the account on
the dates the Bank enters debits authorized by this Agreement. If there
are insufficient funds in the account on the date the Bank enters any debit
authorized by this Agreement, the debit will be reversed.
3.4 BANKING DAYS. Unless otherwise provided in this Agreement, a
banking day is a day other than a Saturday or a Sunday on which the Bank is open
for business in California. All payments and disbursements which would be due
on a day which is not a banking day will be due on the next banking day. All
payments received on a day which is not a banking day will be applied to the
credit on the next banking day.
3.5 TAXES. The Borrower will not deduct any taxes from any payments
it makes to the Bank. If any government authority imposes any taxes or charges
on any payments made by the Borrower, the Borrower will pay the taxes or
charges. Upon request by the Bank, the Borrower will confirm that it has paid
the taxes by giving the Bank official tax receipts (or notarized copies) within
30 days after the due date. However, the Borrower will not pay the Bank's net
income taxes.
3.6 ADDITIONAL COSTS. The Borrower will pay the Bank, on written
demand, for the Bank's costs or losses arising from any statute or regulation,
or any request or requirement of a regulatory agency which is applicable to all
national banks or a class of all national banks, including the Bank. The
written demand shall set forth in reasonable detail the basis for the demand and
the calculations used by the Bank. The costs and losses will be allocated to
the loan in a manner determined by the Bank, using any reasonable method. The
costs include the following:
(a) any reserve or deposit requirements; and
(b) any capital requirements relating to the Bank's assets and
commitments for credit.
3.7 COMPUTATION OF FEES AND INTEREST. All computations of fees and
interest under this Agreement shall be made on the basis of a 360-day year and
actual days elapsed, which results in more interest being paid than if computed
on the basis of a 365-day year. Interest and fees shall accrue during each
period during which interest or such fees are computed from the first day
thereof to the last day thereof.
4. CONDITIONS
4.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The Bank must receive
the following items, in form and content acceptable to the Bank, before it is
required to extend any credit to the Borrower under this Agreement:
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(a) AUTHORIZATIONS. Evidence that the execution, delivery and
performance by the Borrower of this Agreement and any instrument or
agreement required under this Agreement have been duly authorized.
(b) SYNDICATED CREDIT AGREEMENT. The executed Syndicated Credit
Agreement, and evidence that all conditions precedent specified in section
4.01 thereof have been fulfilled or waived.
(c) OTHER ITEMS. Any other items that the Bank reasonably
requires.
4.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The obligation of the
Bank to make each extension of credit under this Agreement is subject to the
satisfaction of the following conditions precedent on the date of the extension
of credit:
(a) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in Article 5 of this Agreement and in
Article V of the Syndicated Credit Agreement shall be true and correct on
and as of such date with the same effect as if made on and as of such date;
and
(b) NO EXISTING DEFAULT. No Default or Event of Default shall
exist or shall result from such extension of credit.
Each request for an extension of credit submitted by the Borrower hereunder
shall constitute a representation and warranty by the Borrower hereunder, as of
the date of each such extension of credit, that the conditions in this paragraph
4.2 are satisfied.
5. REPRESENTATIONS AND WARRANTIES
The Borrower makes the following representations and warranties. Each
request for an extension of credit constitutes a renewed representation that:
5.1 AUTHORIZATION. This Agreement, and any instrument or agreement
required hereunder, are within the Borrower's powers, have been duly authorized,
and do not contravene any of its organizational papers.
5.2 ENFORCEABLE AGREEMENT. This Agreement is a legal, valid and
binding agreement of the Borrower, enforceable against the Borrower in
accordance with its terms, and any instrument or agreement required hereunder,
when executed and delivered, will be similarly legal, valid, binding and
enforceable.
5.3 NO CONFLICTS. This Agreement, and any instrument or agreement
required hereunder, does not violate or result in any breach or contravention
of, or the creation of any lien under, any document evidencing any contractual
obligation to which the Borrower or any Subsidiary is a party or any order,
injunction, writ or decree of any governmental authority to which the Borrower
or any Subsidiary or its property is subject; or
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violate any law (statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a governmental authority, in each case
applicable to or binding upon the Borrower or Subsidiary or any of its
property or to which the Borrower or Subsidiary or any of its property is
subject.
5.4 NO EVENT OF DEFAULT. No event has occurred and is continuing or
would result from the extension of credit under this Agreement which constitutes
or would constitute an Event of Default.
6. COVENANTS
The Borrower agrees, so long as credit is available under this
Agreement and until the Bank is repaid in full (unless the Bank waives
compliance in writing), to comply with the affirmative covenants set forth in
Article VI of the Syndicated Credit Agreement and the negative covenants set
forth in Article VII of the Syndicated Credit Agreement.
7. DEFAULT
If any of the following events occurs and is continuing, the Bank may
do one or more of the following: declare the Borrower in default, stop making
any additional credit available to the Borrower, and require the Borrower to
repay its entire debt immediately and without prior notice. If a bankruptcy
petition is filed with respect to the Borrower, the entire debt outstanding
under this Agreement will automatically be due immediately; provided, however,
that in the case of an involuntary bankruptcy proceeding, the entire debt
outstanding under this Agreement will automatically be due at the expiration of
the 60 day period provided for in paragraph 8.01(g)(i) of the Syndicated Credit
Agreement or upon the occurrence of any of the events specified in subparagraphs
(ii) and (iii) of paragraph 8.01(g).
7.1 FAILURE TO PAY. The Borrower fails to pay: (i) within one
calendar day after the same shall become due, any amount of principal due under
this Agreement, or (ii) within 5 days after the same becomes due, any interest,
fee or any other amount payable hereunder or under any other agreement executed
in connection with this Agreement.
7.2 REPRESENTATION OR WARRANTY. Any representation or warranty by
the Borrower or any Subsidiary made or deemed made herein (including any
representation or warranty contained in Article V of the Syndicated Credit
Agreement), or which is contained in any certificate, document or financial or
other statement by the Borrower, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement or under the Syndicated Credit
Agreement, is false in any material respect on or as of the date made or deemed
made.
7.3 ADVERSE CHANGE. There occurs a Material Adverse Effect.
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7.4 SYNDICATED CREDIT AGREEMENT. Any Event of Default (as defined
therein) occurs under the Syndicated Credit Agreement; or the Syndicated Credit
Agreement is terminated, or the Bank is no longer a party to the Syndicated
Credit Agreement.
7.5 OTHER DEFAULTS. The Borrower fails to perform or observe any
other term or covenant contained in this Agreement and such default shall
continue unremedied for a period of 20 days after the earlier of (i) the date
upon which a Responsible Officer knew or should have known of such failure or
(ii) the date upon which written notice thereof is given to the Borrower by the
Bank.
8. ENFORCING THIS AGREEMENT; MISCELLANEOUS
8.1 SYNDICATED CREDIT AGREEMENT.
(a) "Syndicated Credit Agreement" means the syndicated Credit
Agreement dated as of September 15, 1997 among the Borrower, the
several financial institutions from time to time party thereto, and Bank of
America National Trust and Savings Association, as agent; as such agreement
may be modified, amended or replaced.
(b) All references to the Syndicated Credit Agreement shall
refer to the most current version of such agreement as then in effect. If
the Syndicated Credit Agreement is at any time terminated and no longer in
effect, or the Bank is no longer a party thereto, and the Bank, in its
discretion, chooses not to declare an Event of Default under this
Agreement, the Bank and the Borrower agree that the references in this
Agreement to the Syndicated Credit Agreement shall be deemed to be to the
version as is in effect as of the termination of the Syndicated Credit
Agreement or as of the time the Bank ceases to be a party thereto.
(c) For purposes of this Agreement, the Bank and the Borrower
agree that in interpreting the terms "Loan Document" and "Event of Default"
in the Syndicated Credit Agreement, those terms shall be deemed to include
this Agreement and any instrument or agreement required by this Agreement
and any Event of Default hereunder.
(d) Notwithstanding the foregoing, the Borrower agrees that the
Bank may, in its reasonable discretion, determine at any time that any
provision of the Syndicated Credit Agreement referenced in this Agreement
shall no longer be applicable to this Agreement. In such event, the Bank
and the Borrower shall memorialize the Bank's determination through an
appropriate amendment to this Agreement. Among the circumstances (without
limiting such circumstances) under which the Bank may reasonably make such
a determination would be the circumstances resulting from the Bank's
decision to no longer remain a party to the Syndicated Credit Agreement or
resulting from the execution
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of an amendment to the Syndicated Credit Agreement to which the Bank
does not consent.
8.2 SUCCESSORS AND ASSIGNS. This Agreement is binding on the
Borrower's and the Bank's successors and assignees. The Borrower agrees that it
may not assign this Agreement without the Bank's prior consent. The Bank may
sell participations in or assign this loan, and may exchange financial
information about the Borrower with actual or potential participants or
assignees provided such actual or potential participants or assignees shall
agree in writing to treat all non-public financial information exchanged as
confidential. Any assignment by the Bank shall require the prior consent of the
Borrower, which consent shall not unreasonably be withheld. If a participation
is sold or the loan is assigned, the purchaser will have the right of set-off
against the Borrower.
8.3 SEVERABILITY; WAIVERS. If any part of this Agreement is not
enforceable, the rest of the Agreement may be enforced. The Bank retains all
rights, even if it makes a loan after an Event of Default. If the Bank waives
an Event of Default, it may enforce a later Event of Default. Any consent or
waiver under this Agreement must be in writing.
8.4 COSTS. The Borrower shall pay the Bank for all reasonable costs
incurred by the Bank in connection with administering this Agreement.
8.5 ATTORNEYS' FEES. The Borrower shall reimburse the Bank for any
reasonable costs and attorneys' fees incurred by the Bank in connection with the
enforcement or preservation of any rights or remedies under this Agreement and
any other documents executed in connection with this Agreement, and in
connection with any amendment, waiver, "workout" or restructuring under this
Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing
party is entitled to recover costs and reasonable attorneys' fees incurred in
connection with the lawsuit or arbitration proceeding, as determined by the
court or arbitrator. In the event that any case is commenced by or against the
Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar
or successor statute, the Bank is entitled to recover costs and reasonable
attorneys' fees incurred by the Bank related to the preservation, protection, or
enforcement of any rights of the Bank in such a case. As used in this
paragraph, "attorneys' fees" includes the allocated costs of the Bank's in-house
counsel.
8.6 ONE AGREEMENT. This Agreement and any related security or other
agreements required by this Agreement, collectively:
(a) represent the sum of the understandings and agreements
between the Bank and the Borrower concerning this credit;
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(b) replace any prior oral or written agreements between the Bank
and the Borrower concerning this credit; and
(c) are intended by the Bank and the Borrower as the final,
complete and exclusive statement of the terms agreed to by them.
In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.
8.7 NOTICES. All notices required under this Agreement shall be
personally delivered, faxed or sent by first class mail, postage prepaid, to the
addresses on the signature page of this Agreement, or to such other addresses as
the Bank and the Borrower may specify from time to time in writing. Notice
shall be effective upon receipt if personally delivered or faxed, or three (3)
banking days after deposited in first class mail, postage prepaid.
8.8 HEADINGS. Article and paragraph headings are for reference only
and shall not affect the interpretation or meaning of any provisions of this
Agreement.
8.9 COUNTERPARTS. This Agreement may be executed in as many
counterparts as necessary or convenient, and by the different parties on
separate counterparts each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
agreement.
8.10 GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA; PROVIDED THAT EACH PARTY TO THIS AGREEMENT SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER DOCUMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE BORROWER AND THE BANK CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER AND THE
BANK IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER AND
THE BANK EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
8.11 WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK EACH WAIVES THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER DOCUMENTS EXECUTED IN
CONNECTION WITH THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
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THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
BORROWER AND THE BANK EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
This Agreement is executed as of the date stated at the top of the first page.
Bank of America National Ross Stores, Inc.
Trust and Savings Association
By /s/ Hagop V. Bouldoukian By /s/ J. Call
------------------------ ------------------------
Hagop V. Bouldoukian
Vice President Title Sr. Vice President & CFO
------------------------
Address where notices to Address where notices to
the Bank are to be sent: the Borrower are to be sent:
San Francisco Commercial 8333 Central Avenue
Banking #1499 Newark, CA 94560-3433
345 Montgomery Street Attn: John G. Call
San Francisco, CA 94104 Chief Financial Officer
Attn: Hagop V. Bouldoukian Fax: (510) 505-4181
Fax: (415) 622-1878 Tel: (510) 505-4315
Tel: (415) 953-9023
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EXHIBIT 10.4
AMENDMENT TO CREDIT AGREEMENT
This Amendment dated as of October 7, 1997, is between Bank of
America National Trust and Savings Association (the "Bank") and Ross Stores,
Inc. (the "Borrower").
RECITALS
A. The Bank and the Borrower entered into a certain Letter of
Credit Agreement dated as of September 15, 1997 (the "L/C Agreement").
B. The Bank and the Borrower desire to amend the L/C Agreement.
AGREEMENT
1. DEFINITIONS. Capitalized terms used but not defined in this
Amendment shall have the meaning given to them in the L/C Agreement.
2. AMENDMENTS. Subparagraphs 2.6(d) and (e) of the L/C Agreement
are amended to read as follows:
(d) to pay the Bank a non-refundable fee (the "L/C Fee"), in
such percentage per annum as agreed between the Bank and the Borrower by
separate letter agreement dated as of October 7, 1997 (as it may be
amended from time to time). The fee shall be computed on a quarterly basis
in arrears on the first Business Day of the following calendar quarter,
and shall be calculated for each day during the quarter (commencing
September 15, 1997) by applying the percentage fee per annum in effect on
such day, divided by 360, multiplied by the aggregate undrawn amount of
all standby letters of credit and shipside bonds outstanding on such day.
(e) to pay the Bank a commitment fee (the "Commitment Fee"), in
such percentage per annum as agreed between the Bank and the Borrower by
separate letter agreement dated as of October 7, 1997 (as it may be
amended from time to time). The fee shall be computed on a quarterly basis
in arrears on the first Business Day of the following calendar quarter,
and shall be calculated for each day during the quarter (commencing
September 15, 1997) by applying the percentage fee per annum in effect on
such day, divided by 360, multiplied by the amount of the Commitment on
such day.
3. REPRESENTATIONS AND WARRANTIES. When the Borrower signs this
Amendment, the Borrower represents and warrants to the Bank that:
(a) There is no event which is, or with notice or lapse of time
or both would be, an event of default under the L/C Agreement;
(b) The representations and warranties in the L/C Agreement are
true and correct as of the date of this Amendment as if made on the date
of this Amendment;
<PAGE>
(c) This Amendment is within the Borrower's powers, has been
duly authorized, and does not conflict with any of the Borrower's
organizational papers; and
(d) This Amendment does not conflict with any law, agreement,
or obligation by which the Borrower is bound.
4. EFFECT OF AMENDMENT. Except as provided in this Amendment, all
of the terms and conditions of the L/C Agreement shall remain in full force
and effect.
5. COUNTERPARTS. This Amendment may be executed in counterparts,
each of which when so executed shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
This Amendment is executed as of the date first stated above.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Hagop V. Bouldoukian
-----------------------------------
Hagop V. Bouldoukian
Vice President
ROSS STORES, INC.
By /s/ J. Call
----------------------------------
Title SVP/CFO
-------------------------------
-2-
<PAGE>
EXHIBIT 11
ROSS STORES, INC.
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------------
November 1, 1997 November 2, 1996
<S> <C> <C> <C> <C>
Fully Fully
Primary Diluted Primary Diluted
Net earnings $25,055 $25,055 $16,354 $16,354
------- ------- ------- -------
------- ------- ------- -------
Weighted average shares outstanding:
Common shares 48,786 48,786 50,096 50,096
Common equivalent shares:
Stock options 1,055 1,134 1,154 1,258
------- ------- ------- -------
Weighted average common and common
equivalent shares outstanding 49,841 49,920 51,250 51,354
------- ------- ------- -------
------- ------- ------- -------
Earnings per common and common
equivalent share $.50 $.50 $.32 $.32
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------------------------------------
November 1, 1997 November 2, 1996
<S> <C> <C> <C> <C>
Fully Fully
Primary Diluted Primary Diluted
Net earnings $76,806 $76,806 $48,938 $48,938
------- ------- ------- -------
------- ------- ------- -------
Weighted average shares outstanding:
Common shares 49,325 49,325 50,250 50,250
Common equivalent shares:
Stock options 1,075 1,253 1,264 1,494
------- ------- ------- -------
Weighted average common and common
equivalent shares outstanding 50,400 50,578 51,514 51,744
------- ------- ------- -------
------- ------- ------- -------
Earnings per common and common
equivalent share $1.52 $1.52 $.95 $.95
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<PAGE>
EXHIBIT 15
December 10, 1997
Ross Stores, Inc.
Newark, California
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
condensed consolidated financial statements of Ross Stores, Inc. for the
three-month and nine-month periods ended November 1, 1997 and November 2,
1996, as indicated in our independent accountants' report dated November 21,
1997; because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended November 1, 1997, is
incorporated by reference in Registration Statements Nos. 33-61373, 33-51916,
33-51896, 33-51898, 33-41415, 33-41413, 33-29600 and 333-06119, of Ross
Stores, Inc. on Form S-8.
We are also aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act of 1933, is not considered a part of the
Registration Statement prepared or certified by an accountant or a report
prepared or certified by an accountant within the meaning of Sections 7 and
11 of that Act.
Yours truly,
Deloitte & Touche LLP
San Francisco, CA
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF EARNINGS FOR THE NINE
MONTHS ENDED NOVEMBER 1, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-02-1997
<PERIOD-END> NOV-01-1997
<CASH> 21,737
<SECURITIES> 0
<RECEIVABLES> 9,720
<ALLOWANCES> 0
<INVENTORY> 467,947
<CURRENT-ASSETS> 513,922
<PP&E> 362,098
<DEPRECIATION> 171,779
<TOTAL-ASSETS> 737,043
<CURRENT-LIABILITIES> 351,033
<BONDS> 0
0
0
<COMMON> 479
<OTHER-SE> 328,442
<TOTAL-LIABILITY-AND-EQUITY> 737,043
<SALES> 1,416,395
<TOTAL-REVENUES> 1,416,395
<CGS> 985,587
<TOTAL-COSTS> 1,288,386
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (277)
<INCOME-PRETAX> 128,009
<INCOME-TAX> 51,203
<INCOME-CONTINUING> 76,806
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 76,806
<EPS-PRIMARY> 1.52
<EPS-DILUTED> 1.52
</TABLE>
