<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 April 29, 1995
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 No. 1-3381
------
The Pep Boys - Manny, Moe & Jack
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-0962915
------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer ID number)
incorporation or organization)
3111 W. Allegheny Ave. Philadelphia, PA 19132
---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
215-229-9000
----------------------------------------------------
(Registrant's telephone number, including area code)
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 and 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 ( )
As of April 29, 1995 there were 61,559,559 shares of the registrant's Common
Stock outstanding.
<PAGE>
<PAGE>2
- -------------------------------------------------------------------
Index Page
- -------------------------------------------------------------------
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Condensed Consolidated
Financial Statements (Unaudited)
Consolidated Balance Sheets -
April 29, 1995 and January 28, 1995 3
Consolidated Statements of Earnings -
Thirteen weeks ended April 29, 1995
and April 30, 1994 4
Condensed Consolidated Statements of
Cash Flows - Thirteen weeks ended
April 29, 1995 and April 30, 1994 5
Notes to Condensed Consolidated
Financial Statements 6
Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7-9
PART II - OTHER INFORMATION 10
- ---------------------------
SIGNATURE 11
- -------------------------------------------------------------------
<PAGE>
<PAGE>3
<TABLE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollar amounts in thousands, except per share amounts)
<CAPTION>
April 29, 1995 Jan. 28, 1995*
------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash....................................................... $ 16,359 $ 11,748
Accounts receivable, net................................... 3,389 3,804
Merchandise inventories.................................... 381,588 366,843
Deferred income taxes...................................... 12,000 12,000
Other...................................................... 11,723 16,914
------------- -------------
Total Current Assets.................................... 425,059 411,309
Property and Equipment-at cost:
Land....................................................... 227,743 215,623
Building and improvements.................................. 606,289 592,748
Furniture, fixtures and equipment.......................... 289,427 283,317
Construction in progress................................... 20,569 13,287
------------ -------------
1,144,028 1,104,975
Less accumulated depreciation and amortization............. 255,355 243,065
------------- -------------
Total Property and Equipment............................ 888,673 861,910
Other........................................................ 16,733 17,800
------------- -------------
Total Assets.................................................. $1,330,465 $1,291,019
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Checks outstanding......................................... $ 31,681 $ 8,422
Accounts payable........................................... 113,149 91,742
Accrued expenses........................................... 80,466 72,318
Short-term borrowings...................................... - 97,200
Income taxes payable....................................... 7,786 -
Current maturities of long-term debt....................... 114,311 19,769
------------- -------------
Total Current Liabilities............................... 347,393 289,451
Long-Term Debt, less current maturities...................... 264,755 294,537
Deferred Income Taxes........................................ 34,528 34,528
Convertible Subordinated Notes............................... 86,250 86,250
Commitments
Stockholders' Equity:
Common Stock, par value $1 per share:
Authorized 500,000,000 shares - Issued and
outstanding 61,559,559 and 61,501,679..................... 61,560 61,502
Additional paid-in capital................................. 131,278 130,732
Retained earnings.......................................... 467,675 454,288
------------- ------------
660,513 646,522
Less:
Treasury Stock, 100,000 shares, at cost.................. 2,705 -
Shares held in benefits trust, 2,232,500 shares, at cost. 60,269 60,269
------------- ------------
Total Stockholders' Equity.............................. 597,539 586,253
------------- ------------
Total Liabilities and Stockholders' Equity.................... $1,330,465 $1,291,019
============= ============
See notes to condensed consolidated financial statements.
*Taken from the audited financial statements at Jan. 28, 1995.
/TABLE
<PAGE>
<PAGE>4
<TABLE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(dollar amounts in thousands, except per share amounts)
UNAUDITED
<CAPTION>
Thirteen weeks ended
-------------------------------
April 29, 1995 April 30, 1994
-------------- ---------------
<S> <C> <C>
Merchandise Sales.................................... $307,549 $290,826
Service Revenue...................................... 53,660 46,874
------------- -------------
Total Revenues....................................... 361,209 337,700
Costs of Merchandise Sales........................... 217,261 208,223
Costs of Service Revenue............................. 43,561 38,950
------------- -------------
Total Costs of Revenues.............................. 260,822 247,173
Gross Profit from Merchandise Sales.................. 90,288 82,603
Gross Profit from Service Revenue.................... 10,099 7,924
------------- -------------
Total Gross Profit................................... 100,387 90,527
Selling, General and Administrative Expenses......... 67,055 57,926
------------- -------------
Operating Profit..................................... 33,332 32,601
Nonoperating Income.................................. 456 1,099
Interest Expense..................................... 7,965 5,720
------------- -------------
Earnings Before Income Taxes and Cumulative
Effect of Change in Accounting Principle............ 25,823 27,980
Income Taxes......................................... 9,619 10,423
------------- -------------
Earnings Before Cumulative Effect of Change in
Accounting Principle................................ 16,204 17,557
Cumulative Effect of Change in Accounting Principle.. - (4,300)
------------ -------------
Net Earnings......................................... 16,204 13,257
Retained Earnings, beginning of year................. 454,288 388,653
Cash Dividends....................................... 2,817 2,512
------------ -------------
Retained Earnings, end of period..................... $467,675 $399,398
============ =============
Earnings per Share Before Cumulative Effect
of Change in Accounting Principle................... $ .27 $ .29
Cumulative Effect of Change in Accounting Principle.. - (.07)
------------ -------------
Net Earnings per Share............................... $ .27 $ .22
============ =============
Cash Dividends per Share............................. $ .0475 $ .0425
============ =============
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>5
<TABLE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
UNAUDITED
<CAPTION>
Thirteen weeks ended
---------------------------------
April 29, 1995 April 30, 1994
-------------- --------------
<S> <C> <C>
Net Cash Provided by Operating Activities....................... $ 81,157 $3,150
Cash Flows from Investing Activities:
Capital expenditures............................................ (39,211) (30,032)
Other, net...................................................... 23 25
------------ ------------
Net Cash Used in Investing Activities........................... (39,188) (30,007)
Cash Flows from Financing Activities:
Net (payments) borrowings under line of credit agreements....... (18,800) 60,100
Reduction of long-term debt..................................... (13,640) (124)
Dividends paid.................................................. (2,817) (2,512)
Acquisition of treasury stock................................... (2,705) (28,339)
Proceeds from exercise of stock options
and dividend reinvestment plan................................ 604 1,788
------------ -----------
Net Cash (Used in) Provided by Financing Activities............. (37,358) 30,913
------------ -----------
Net Increase in Cash................................................. 4,611 4,056
Cash at Beginning of Year............................................ 11,748 12,050
------------ -----------
Cash at End of Period................................................ $ 16,359 $ 16,106
============ ===========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>6
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Condensed Consolidated Financial Statements
The consolidated balance sheet as of April 29, 1995, the consolidated
statements of earnings for the thirteen week periods ended April 29, 1995 and
April 30, 1994 and the condensed consolidated statements of cash flows for
the thirteen week periods ended April 29, 1995 and April 30, 1994 have been
prepared by the Company without audit. In the opinion of management, all
adjustments (which included only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows
at April 29, 1995 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's January 28,
1995 annual report to shareholders. The results of operations for the
thirteen week period ended April 29, 1995 are not necessarily indicative of
the operating results for the full year.
NOTE 2. Merchandise Inventories
Merchandise inventories are valued at the lower of cost (last-in, first-out)
or market. If the first-in, first-out method of valuing inventories had been
used by the Company, inventories would have been approximately $15,319,000
higher at April 29, 1995 and January 28, 1995.
<PAGE>
<PAGE>7
<TABLE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED April 29, 1995
Results of Operation -
The following table presents for the periods indicated certain items in the consolidated statements of earnings as a
percentage of total revenues (except as otherwise provided) and the percentage change in dollar amounts of such items
compared to the indicated prior period.
<CAPTION>
Percentage of Total Revenues Percentage Change
- ------------------------------------------------------ ---------------------------------- -----------------
Thirteen weeks ended April 29, 1995 April 30, 1994 Fiscal 1995 vs.
(Fiscal 1995) (Fiscal 1994) Fiscal 1994
- ------------------------------------------------------ -------------- ------------- -----------------
<S> <C> <C> <C>
Merchandise Sales..................................... 85.1% 86.1% 5.8%
Service Revenue (1)................................... 14.9 13.9 14.5
------ ------ ------
Total Revenues........................................ 100.0 100.0 7.0
Costs of Merchandise Sales (2)........................ 70.6 (3) 71.6 (3) 4.3
Costs of Service Revenue (2).......................... 81.2 (3) 83.1 (3) 11.8
------ ------ ------
Total Costs of Revenues............................... 72.2 73.2 5.5
Gross Profit from Merchandise Sales................... 29.4 (3) 28.4 (3) 9.3
Gross Profit from Service Revenue..................... 18.8 (3) 16.9 (3) 27.4
------ ------ ------
Total Gross Profit.................................... 27.8 26.8 10.9
Selling, General and Administrative Expenses.......... 18.6 17.1 15.8
------ ------ ------
Operating Profit...................................... 9.2 9.7 2.2
Nonoperating Income................................... .1 .3 (58.5)
Interest Expense...................................... 2.2 1.7 39.2
------ ------ ------
Earnings Before Income Taxes and Cumulative Effect
of Change in Accounting Principle.................... 7.1 8.3 (7.7)
Income Taxes.......................................... 37.2 (4) 37.3 (4) (7.7)
------ ------ ------
Earnings Before Cumulative Effect
of Change in Accounting Principle.................... 4.5 5.2 (7.7)
Cumulative Effect of Change in Accounting Principle... - (1.3) -
------ ------ ------
Net Earnings.......................................... 4.5 3.9 22.2
====== ====== ======
<FN>
(1) Service revenue consists of the labor charge for installing merchandise or maintaining or repairing vehicles, excluding the sale
of any installed parts or materials.
(2) Costs of merchandise sales include the cost of products sold, buying, warehousing and store occupancy costs. Costs of service
revenue include service center payroll and related employee benefits and service center occupancy costs. Occupancy costs include
utilities, rents, real estate and property taxes, repairs and maintenance and depreciation and amortization expenses.
(3) As a percentage of related sales or revenue, as applicable.
(4) As a percentage of earnings before income taxes.
</TABLE>
<PAGE>
<PAGE>8
Thirteen Weeks Ended April 29, 1995 vs. Thirteen Weeks Ended April 30, 1994
- ------------------------------------------------------------------------
Total revenues for the first quarter increased 7% due to a higher store count
(436 at April 29, 1995 compared with 387 at April 30, 1994) while comparable
store revenues (revenues generated by stores in operation during the same
months of each period) decreased 2%. Comparable store merchandise sales
decreased 3% while comparable service revenue increased 3%.
Gross profit from merchandise sales increased, as a percentage of merchandise
sales, due primarily to higher merchandise margins offset, in part, by an
increase in store occupancy costs.
Gross profit from service revenue increased, as a percentage of service
revenue, due primarily to a decrease in service employee benefits costs.
Selling, general and administrative expenses increased, as a percentage of
total revenues, due primarily to higher store expenses.
<TABLE>
Nonoperating income consisted of the following:
(in thousands)
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Rental revenue $ 378 $ 328
Investment income 44 474
Other income 34 297
------ ------
Total $ 456 $1,099
====== ======
</TABLE>
The 39% increase in interest expense was due primarily to higher debt levels
coupled with higher interest rates.
The 8% decrease in earnings before the cumulative effect of a change in
accounting principle in 1995 as compared with 1994, was due primarily to a
decrease in comparable store sales coupled with increases, as a percentage of
total revenues, in selling, general and administrative expenses and interest
expense offset, in part, by increases in gross profit from merchandise sales
and gross profit from service revenue, as a percentage of related sales and
revenues.
On January 30, 1994, the Company adopted SFAS No. 112, "Employers' Accounting
for Postemployment Benefits." This statement establishes accrual accounting
standards for employer-provided benefits which cover former or inactive
employees after employment, but before retirement. Adoption of this
accounting standard on January 30, 1994 resulted in a one-time charge to
earnings of $4,300,000 (net of income tax benefit of $2,552,000) or $.07 per
share recognized as a cumulative effect of a change in accounting principle.
<PAGE>
<PAGE>9
LIQUIDITY AND CAPITAL RESOURCES - April 29, 1995
- ----------------------------------------------
The Company's cash requirements arise principally from the need to finance
the acquisition, construction and equipping of new stores and to purchase
inventory. During the first quarter of 1995, the Company invested $39,211,000
in property and equipment while net inventory (the increase in
inventory less the net change in checks outstanding and accounts payable)
decreased $29,921,000. Working capital decreased from $121,858,000 at
January 28, 1995 to $77,666,000 at April 29, 1995. At April 29, 1995 the
Company had stockholders' equity of $597,539,000 and long-term debt of
$351,005,000. The Company's long-term debt was 37% of its total
capitalization at April 29, 1995 and 39% at January 28, 1995.
The Company plans to open approximately 71 new stores during the balance of
the current fiscal year. Management estimates that the cost of this
expansion, coupled with expenditures in existing stores, warehouses and
offices will be approximately $161,000,000. Funds required to finance the
store expansion including related inventory requirements are expected to come
primarily from operating activities with the remainder provided by unused
lines of credit which totalled $140,600,000 at April 29, 1995, or from
accessing traditional lending sources which may include the public capital
markets.
During the thirteen weeks ended April 29, 1995 the Company amended and
restated a revolving credit agreement it had with several major banks to
increase the amount of borrowings provided from up to $100,000,000 to up to
$200,000,000. Funds may be drawn and repaid anytime prior to April 21, 2000.
At the Company's option, the interest rate on any loan may be based on the
prime rate, a "LIBOR-based" rate or a negotiated rate based on market
conditions.
<PAGE>
<PAGE>10
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10.13) Credit Agreement amended and restated as of
April 21, 1995 between the Company and Chase
Manhattan Bank (Agent)
(11) Statement Re: Computation of Earnings Per
Share
(27) Financial Data Schedules
(b) Reports on Form 8-K. No reports on Form 8-K have been filed
during the quarter for which this report is filed.
<PAGE>
<PAGE>11
SIGNATURES
- ----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE PEP BOYS - MANNY, MOE & JACK
--------------------------------
(Registrant)
Date: May 25, 1995 By: /s/ Michael J. Holden
----------------------- -------------------------
Michael J. Holden
Senior Vice President &
Chief Financial Officer and Treasurer
<PAGE>
<PAGE>12
INDEX TO EXHIBITS
- -----------------
(10.13) Credit Agreement
(11) Computations of Earnings Per Share
(27) Financial Data Schedule
<PAGE>
<TABLE>
<PAGE>
THE PEP BOYS - MANNY, MOE & JACK AND SUBSIDIARIES Exhibit 11
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share data)
<CAPTION>
Thirteen weeks ended
----------------------------------
April 29, 1995 April 30, 1994
-------------- --------------
<S> <C> <C>
(a) Earnings Before Cumulative Effect
of Change in Accounting Principle.............. $16,204 $17,557
(b) Cumulative Effect of Change in
Accounting Principle........................... - (4,300)
------------- --------------
(c) Net Earnings..................................... $16,204 $13,257
============= ==============
Average number of Common Shares outstanding
during the period.............................. 59,300 59,242
Common Shares assumed issued upon exercise
of dilutive stock options, net of assumed
repurchase, at the average market price,
using the treasury stock method (1)............ 1,194 1,245
------------- -------------
(d) Average number of Common Shares assumed
outstanding during the period.................. 60,494 60,487
============= =============
Earnings per Share Before Cumulative Effect
of Change in Accounting Principle (a/d)........ $ .27 $ .29
Cumulative Effect of Change in Accounting
Principle (b/d)................................ - (.07)
------------ -------------
Net Earnings per Share (c/d)..................... $ .27 $ .22
============ =============
<FN>
(1) The number of Common Shares assumed issued upon exercise of dilutive stock options is essentially
the same for fully diluted earnings per share.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE
SHEET AS OF APRIL 29, 1995 AND THE CONSOLIDATED STATEMENT OF EARNINGS FOR THE THIRTEEN WEEK
PERIOD ENDED APRIL 29, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-3-1996
<PERIOD-END> APR-29-1995
<CASH> 16,359
<SECURITIES> 0
<RECEIVABLES> 3,476
<ALLOWANCES> 87
<INVENTORY> 381,588
<CURRENT-ASSETS> 425,059
<PP&E> 1,144,028
<DEPRECIATION> 255,355
<TOTAL-ASSETS> 1,330,465
<CURRENT-LIABILITIES> 347,393
<BONDS> 351,005
0
0
<COMMON> 61,560
<OTHER-SE> 535,979
<TOTAL-LIABILITY-AND-EQUITY> 1,330,465
<SALES> 307,549
<TOTAL-REVENUES> 361,209
<CGS> 217,261
<TOTAL-COSTS> 260,822
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,965
<INCOME-PRETAX> 25,823
<INCOME-TAX> 9,619
<INCOME-CONTINUING> 16,204
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,204
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
</TABLE>
***********************************************************
THE PEP BOYS -
MANNY, MOE & JACK
__________________
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 21, 1995
__________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
as Agent
***********************************************************
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 21, 1995
between: THE PEP BOYS - MANNY, MOE & JACK, a corporation duly organized and
validly existing under the laws of the State of Pennsylvania (the "Company");
each of the guarantors that is a signatory hereto (individually, a
"Guarantor" and collectively, the "Guarantors"); each of the banks that is a
signatory hereto (such banks, except the Terminating Banks, individually, a
"Bank" and, collectively, the "Banks"); and THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as agent for the Banks (in such capacity, together
with its successors in such capacity, the "Agent").
R E C I T A L S
WHEREAS, the Company and the Guarantors are party to that certain Credit
Agreement dated as of June 16, 1989 with the Agent and the banks signatory
thereto, as amended (the "Existing Credit Agreement");
WHEREAS, the Company has requested that the Existing Credit Agreement be
amended to, among other things, extend the Commitment Termination Date,
increase the aggregate amount of the Commitments, terminate the Commitments
of the Terminating Banks and add First Fidelity Bank, N.A., NatWest Bank,
N.A., PNC Bank, N.A.,Union Bank and Credit Suisse as Banks party to this
Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants contained herein, the Company, the Agent, the
Guarantors, the Banks and the Terminating Banks agree that the Existing
Credit Agreement is hereby amended and restated as follows:
Section 1. Definitions and Accounting Matters.
1.01Certain Defined Terms. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Acquisition" shall mean the purchase of (i) all or substantially all
of the assets of any Person or (ii) the stock or other ownership interest in
any Person such that, by such purchase, (x) such Person becomes an Affiliate
of the Company or any Subsidiary thereof or (y) the aggregate stock or other
ownership interest in such Person increases, through such purchases or by
aggregating such purchase with previous purchases during any relevant period,
to at least 5% of the outstanding stock or other ownership interest of such
Person.
"Affiliate" shall mean, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise), provided that, in any event, any Person which owns
directly or indirectly 5% or more of the securities having ordinary voting
power for the election of directors or other governing body of a corporation
or 5% or more of the partnership or other ownership interests of any other
Person (other than as a limited partner of such other Person) will be deemed
to control such corporation or other Person. Notwithstanding the foregoing,
no individual shall be deemed to be an Affiliate of a corporation solely by
reason of his or her being an officer or director of such corporation and a
Person and its Subsidiaries shall not be deemed to be Affiliates of each
other.
"Applicable Lending Office" shall mean, for each Bank and for each type
of Loan, the Lending Office of such Bank (or of an affiliate of such Bank)
designated for such type of Loan on the signature pages hereof or such other
office of such Bank (or of an affiliate of such Bank) as such Bank may from
time to time specify to the Agent and the Company as the office by which its
Loans of such type are to be made and maintained.
"Applicable Margin" shall mean with respect to a Eurodollar Loan, a rate
per annum determined in accordance with the Pricing Schedule.
"Base Rate" shall mean, with respect to any Base Rate Loan, for any day,
the higher of (a) the Federal Funds Rate for such day plus 1/4 of 1% per
annum or (b) the Prime Rate for such day. Each change in any interest rate
provided for herein based upon the Base Rate resulting from a change in the
Base Rate shall take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Syndicated Loans which bear interest at
rates based upon the Base Rate.
"Business Day" shall mean any day on which commercial banks are not
authorized or required to close in New York City and, if such day relates to
the giving of notices or quotes in connection with a LIBOR Auction or to a
borrowing of, a payment or prepayment of principal of or interest on, or the
Interest Period for, a Eurodollar Loan or a LIBOR Market Loan or a notice by
the Company with respect to any such borrowing, payment, prepayment or
Interest Period, which is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Lease Obligations" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property
which obligations are required to be classified and accounted for as a
capital lease on a balance sheet of such Person under GAAP (including State
of Financial Accounting Standards No. 13 of the Financial Accounting
Standards Board) and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP (including such Statement No. 13).
"Chase" shall mean The Chase Manhattan Bank (National Association).
"Closing Date" shall mean the date this Agreement has been executed by
the Company and the Guarantors.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" shall mean, as to each Bank, the obligation of such Bank to
make Syndicated Loans pursuant to Section 2.01 hereof in an aggregate amount
at any one time outstanding up to but not exceeding the amount set opposite
such Bank's name on the signature pages hereof under the caption "Commitment"
(as the same may be reduced at any time or from time to time pursuant to
Section 2.04 hereof).
"Commitment Termination Date" shall mean the Quarterly Date falling on
or nearest to the later of April 21, 2000 and the date to which the initial
Commitment Termination Date is extended pursuant to Section 2.10 hereof.
"Consolidated Subsidiary" shall mean, as to any Person, each Subsidiary
of such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been) consolidated
with the financial statements of such Person in accordance with GAAP.
"Debt to Capital Ratio" shall mean, at any time, the ratio of (a) Senior
Funded Debt at such time to (b) Senior Funded Debt, plus Tangible Net Worth
at such time.
"Default" shall mean an Event of Default or an event which with notice
or lapse of time or both would become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business which
is a member of the same controlled group of corporations (within the meaning
of Section 414(b) of the Code) as the Company or is under common control
(within the meaning of Section 414(c) of the Code) with the Company.
"Eurodollar Loans" shall mean Syndicated Loans the interest rates on
which are determined on the basis of the rate referred to in the definition
of "Fixed Base Rate" in this Section 1.01.
"Event of Default" shall have the meaning assigned to such term in
Section 10 hereof.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such
day shall be the average rate charged to Chase on such day on such
transactions as determined by the Agent.
"Fixed Base Rate" shall mean, with respect to any Fixed Rate Loan, the
arithmetic mean, as determined by the Agent, of the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) quoted by each Reference
Bank at approximately 11:00 a.m. London time (or as soon thereafter as
practicable) on the date two Business Days prior to the first day of the
Interest Period for such Loan for the offering by such Reference Bank to
leading banks in the London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to the
principal amount of the Eurodollar Loan or LIBOR Market Loan to be made by
such Reference Bank for such Interest Period.
If any Reference Bank is not participating in any Fixed Rate Loan, the Fixed
Base Rate for such Loan shall be determined by reference to the amount of the
Loan which such Reference Bank would have made had it been participating in
such Loan; provided that in the case of any LIBOR Market Loan, the Fixed Base
Rate for such Loan shall be determined with reference to deposits of
$25,000,000. If any Reference Bank does not timely furnish such information
for determination of any Fixed Base Rate, the Agent shall determine such
Fixed Base Rate on the basis of information timely furnished by the remaining
Reference Banks.
"Fixed Rate" shall mean, for any Fixed Rate Loan, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the
Agent to be equal to the Fixed Base Rate for such Loan for the Interest
Period for such Loan divided by 1 minus the Reserve Requirement for such Loan
for such Interest Period.
"Fixed Rate Loans" shall mean Eurodollar Loans and, for the purposes of
the definition of "Fixed Base Rate" herein and Section 5 hereof, LIBOR Market
Loans.
"GAAP" shall mean generally accepted accounting principles applied on a
basis consistent with those which, in accordance with the last sentence of
Section 1.02(a) hereof, are to be used in making the calculations for
purposes of determining compliance with the terms of this Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of,
or otherwise to be or become contingently liable under or with respect to,
the Indebtedness, other obligations, net worth, working capital or earnings
of any Person, or a guarantee of the payment of dividends or other
distributions upon the stock of any corporation, or an agreement to purchase,
sell or lease (as lessee or lessor) property, products, materials, supplies
or services primarily for the purpose of enabling a debtor to make payment of
his, her or its obligations or an agreement to assure a creditor against
loss, and including without limitation, causing a bank to open a letter of
credit for the benefit of another Person, but excluding endorsements for
collection or deposits in the ordinary course of business. The terms
"Guarantee" and "Guaranteed" used as a verb shall have a correlative meaning.
"Guarantor" shall have the meaning assigned to it in the preamble of
this Agreement.
"Indebtedness" shall mean, as to any Person: (a) indebtedness created,
issued or incurred by such Person for borrowed money (whether by loan or the
issuance and sale of debt securities); (b) obligations of such Person to pay
the deferred purchase or acquisition price of property or services, other
than trade accounts payable (other than for borrowed money) arising, and
accrued expenses incurred, in the ordinary course of business so long as such
trade accounts payable are payable within 90 days of the date the respective
goods are delivered or respective services rendered; (c) Indebtedness of
others secured by a Lien on the property of such Person, whether or not the
respective indebtedness so secured has been assumed by such Person; (d)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
the account of such Person; (e) Capital Lease Obligations of such Person; and
(f) Indebtedness of others Guaranteed by such Person.
"Interest Expense" shall mean, for any period, the sum of the following:
(a) all interest in respect of Indebtedness accrued or capitalized during
such period (whether or not actually paid during such period) plus (b) the
net amounts payable (or minus the net amounts receivable) under interest rate
protection agreements accrued during such period (whether or not actually
paid or received during such period).
"Interest Period" shall mean:
(a) With respect to any Eurodollar Loan, the period commencing on the
date such Eurodollar Loan is made and ending on the numerically corresponding
day in the first, second, third or sixth calendar month thereafter, as the
Company may select as provided in Section 2.02 hereof, except that each
Interest Period which commences on the last Business Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of
the appropriate subsequent calendar month;
(b) With respect to any Base Rate Loan, the period commencing on the
date such Base Rate Loan is made and ending on the date 30 days thereafter;
(c) With respect to any Set Rate Loan, the period commencing on the
date such Set Rate Loan is made and ending on any Business Day up to 180 days
thereafter, as the Company may select as provided in Section 2.03(b) hereof;
and
(d) With respect to any LIBOR Market Loan, the period commencing on the
date such LIBOR Market Loan is made and ending on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, as the Company may select as provided in Section 2.03(b) hereof,
except that each Interest Period which commences on the last Business Day of
a calendar month (or any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may commence before and
end after the Commitment Termination Date; (ii) each Interest Period which
would otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day (or, in the case of an Interest Period for
Eurodollar Loans or LIBOR Market Loans, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business
Day); and (iii) notwithstanding clause (i) above, no Interest Period for any
Fixed Rate Loans or LIBOR Market Loans shall have a duration of less than one
month and, if the Interest Period for any Fixed Rate Loans would otherwise be
a shorter period, such Loans shall not be available hereunder.
"Leverage Ratio" shall mean, at any time, the ratio of Total Liabilities
to Tangible Net Worth of the Company and its Consolidated Subsidiaries at
such time.
"LIBO Rate" shall mean, for any LIBOR Market Loan, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the
Agent to be equal to the rate of interest specified in the definition of
"Fixed Base Rate" in this Section 1.01 for the Interest Period for such Loan
divided by 1 minus the Reserve Requirement for such Loan for such Interest
Period.
"LIBOR Auction" shall mean a solicitation of Money Market Quotes setting
forth Money Market Margins based on the LIBO Rate pursuant to Section 2.03
hereof.
"LIBOR Market Loans" shall mean Money Market Loans the interest rates on
which are determined on the basis of LIBO Rates pursuant to a LIBOR Auction.
"Lien" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For purposes of this Agreement, the Company or any of its
Subsidiaries shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"Loans" shall mean Money Market Loans and Syndicated Loans.
"Majority Banks" shall mean Banks having at least 66-2/3% of the
aggregate amount of the Commitments; provided that, if the Commitments shall
have terminated, Majority Banks shall mean Banks holding at least 66-2/3% of
the aggregate unpaid principal amount of the Loans.
"Margin Stock" shall mean margin stock within the meaning of Regulations
U and X.
"Money Market Borrowing" shall have the meaning assigned to such term in
Section 2.03(b) hereof.
"Money Market Loans" shall mean the loans provided for by Section 2.03
hereof.
"Money Market Margin" shall have the meaning assigned to such term in
Section 2.03(c)(ii)(C) hereof.
"Money Market Quotes" shall mean the quotes requested pursuant to a
Money Market Quote Request.
"Money Market Quote Request" shall have the meaning assigned to such
term in Section 2.03(b) hereof.
"Money Market Rate" shall have the meaning assigned to such term in
Section 2.03(c)(ii)(D) hereof.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Company
or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Earnings" shall mean, for any period, the net earnings of the
Company and its Consolidated Subsidiaries determined in accordance with GAAP
for such period; provided that, if for any fiscal quarterly period such net
earnings shall be negative (i.e., a loss), "Net Earnings" for such period
shall be deemed to be zero.
"Net Operating Profit" shall mean, for any period for the Company and
its Consolidated Subsidiaries, (i) net sales minus (ii) total costs and
expenses (excluding costs of income taxes and Interest Expense), in each case
determined in accordance with GAAP for such period.
"NOP/Interest Charges Ratio" shall mean, as at any date of determination
thereof, the ratio of (i) Net Operating Profit for the period of four
consecutive fiscal quarters of the Company ending on or most recently ended
prior to such date of determination to (ii) Interest Expense for such period.
"Notes" shall mean the promissory notes provided for by Section 2.08
hereof.
"Obligor" shall mean collectively the Company, the Guarantors and any
Subsidiary of the Company which pursuant to Section 9.13 hereof shall
hereafter become a Guarantor.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization
or government (or any agency, instrumentality or political subdivision
thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and which is covered by
Title IV of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of any Loan
or any other amount payable by the Company under this Agreement or any Note
that is not paid when due (whether at stated maturity, by acceleration or
otherwise), a rate per annum during the period from and including the due
date to but excluding the date on which such amount is paid in full equal to
2% above the Base Rate as in effect from time to time (provided that, if the
amount so in default is principal of a Fixed Rate Loan or a Money Market Loan
and the due date thereof is a day other than the last day of the Interest
Period therefor, the "Post-Default Rate" for such principal shall be, for the
period from and including the due date to but excluding the last day of the
Interest Period therefor, 2% above the interest rate for such Loan as
provided in Section 3.02 hereof and, thereafter, the rate provided for above
in this definition).
"Pricing Schedule" shall mean the Schedule attached hereto identified as
such.
"Prime Rate" shall mean the rate of interest from time to time announced
by Chase at the Principal Office as its prime commercial lending rate.
"Principal Office" shall mean the principal office of the Agent and
Chase, presently located at 1 Chase Manhattan Plaza, New York, New York
10081.
"Quarterly Dates" shall mean the last Business Day of each March, June,
September and December in each year, the first of which shall be the first
such day after the date of this Agreement.
"Reference Banks" shall mean Chase, CoreStates Bank and Bank of America
National Trust and Savings Association (or their Applicable Lending Offices,
as the case may be).
"Regulations D, U and X" shall mean, respectively, Regulations D, U and
X of the Board of Governors of the Federal Reserve System (or any successor),
as the same may be amended or supplemented from time to time.
"Regulatory Change" shall mean, with respect to any Bank, any change
after the date of this Agreement in United States Federal, state or foreign
law or regulations (including, without limitation, Regulation D) or the
adoption or making after such date of any interpretation, directive or
request applying to a class of banks including such Bank of or under any
United States Federal, state or foreign law or regulations (whether or not
having the force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"Reserve Requirement" shall mean, for any Interest Period for any Fixed
Rate Loan or LIBOR Market Loan, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required to
be maintained during such Interest Period under Regulation D by member banks
of the Federal Reserve System in New York City with deposits exceeding one
billion Dollars against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall include any other reserves required to be maintained by
such member banks by reason of any Regulatory Change against (i) any category
of liabilities which includes deposits by reference to which the Fixed Base
Rate for Eurodollar Loans or LIBOR Market Loans (as the case may be) is to be
determined as provided in the definition of "Fixed Base Rate" or "LIBO Rate"
in this Section 1.01 or (ii) any category of extensions of credit or other
assets which includes either type of Fixed Rate Loan or LIBOR Market Loan.
"Senior Funded Debt" shall mean , as to any Person, Indebtedness of such
Person described in clause (a) of the definition of "Indebtedness", which is
not subordinated by its terms to the payment of any other Indebtedness of
such Person.
"Set Rate Auction" shall mean a solicitation of Money Market Quotes
setting forth Money Market Rates pursuant to Section 2.03 hereof.
"Set Rate Loans" shall mean Money Market Loans the interest rates on
which are determined on the basis of Money Market Rates pursuant to a Set
Rate Auction.
"Subsidiary" shall mean, as to any Person, any corporation of which at
least a majority of the outstanding shares of stock having by the terms
thereof ordinary voting power to elect a majority of the board of directors
of such corporation (irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time directly
or indirectly owned or controlled by such Person or one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries. "Wholly-
Owned Subsidiary" shall mean any such corporation of which all of such
shares, other than directors' qualifying shares, are so owned or controlled.
"Syndicated Loans" shall mean the loans provided for by Section 2.01
hereof.
"Syndicated Notes" shall mean the promissory notes provided for by
Section 2.08(a) hereof.
"Tangible Net Worth" shall mean, as at any date of determination
thereof, the sum of the following for any Person and its Consolidated
Subsidiaries determined (without duplication) in accordance with GAAP:
(a) the amount of capital stock, plus
(b) the amount of surplus and retained earnings (or, in the case of a
surplus or retained earnings deficit, minus the amount of such deficit),
minus
(c) the sum of the following: cost of treasury shares and the book
value of all assets of such Person and its Consolidated Subsidiaries which
should be classified as intangibles (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings) but in any event including good-will, research and development
costs, trade-marks, trade names, copyrights, patents and franchises, all
reserves and any write-up in the book value of assets resulting from a
revaluation thereof subsequent to January 28, 1989.
"Terminating Banks" shall mean The Fuji Bank, Ltd., First Interstate
Bank of Arizona, N.A. and Bank of America National Trust and Savings
Association.
"Total Liabilities" shall mean, as at any date of determination thereof,
the sum, for the Company and its Consolidated Subsidiaries determined
(without duplication) in accordance with GAAP, of all Indebtedness of the
Company and its Consolidated Subsidiaries (including subordinated
Indebtedness) and all other liabilities of the Company and its Subsidiaries
which should be classified as liabilities on a balance sheet of the Company
and its Consolidated Subsidiaries prepared in accordance with GAAP and in any
event including all reserves (other than general contingency reserves) and
all deferred taxes and other deferred items.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to
the Banks hereunder shall (unless otherwise disclosed to the Bank in writing
at the time of delivery thereof in the manner described in subsection (b)
below) be prepared, in accordance with generally accepted accounting
principles applied on a basis consistent with those used in the preparation
of the latest financial statements furnished to the Bank hereunder after the
date hereof. All calculations made for the purposes of determining
compliance with the terms of this Agreement shall (except as otherwise
expressly provided herein) be made by application of generally accepted
accounting principles applied on a basis consistent with those used in the
preparation of the annual or quarterly financial statements furnished to the
Banks pursuant to Section 9.01 hereof unless (i) the Company shall have
objected to determining such compliance on such basis at the time of delivery
of such financial statements or (ii) the Majority Banks shall so object in
writing within 30 days after delivery of such financial statements, in either
of which events such calculations shall be made on a basis consistent with
those used in the preparation of the latest financial statements as to which
such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under Section 9.01
hereof, shall mean the financial statements referred to in Section 8.02
hereof)
(b) The Company shall deliver to the Banks at the same time as the
delivery of any annual or quarterly financial statement under Section 9.01
hereof a description in reasonable detail of any material variation between
the application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as
to which no objection has been made in accordance with the last sentence of
subsection (a) above, and reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance with
the covenants set forth in Section 9 hereof, the Company will not change the
last day of its fiscal year from the Saturday in each year falling closest to
January 31 of such year (the "Fiscal Date"), or the last day of the first
three fiscal quarters in each of its fiscal years from the thirteenth
Saturday of the year following the Fiscal Date, the twenty-sixth Saturday of
the year following the Fiscal Date and the thirty-ninth Saturday of the year
following the Fiscal Date, respectively.
Section 2. Commitments.
2.01 Syndicated Loans. Each Bank severally agrees, on the terms of
this Agreement, to make loans to the Company in Dollars during the period
from and including the date hereof to but not including the Commitment
Termination Date in an aggregate principal amount at any one time out-
standing up to but not exceeding the amount of such Bank's Commitment as then
in effect. Subject to the terms of this Agreement, during such period the
Company may borrow, repay and reborrow the amount of the Commitments;
provided that the aggregate principal amount of all Money Market Loans,
together with the aggregate principal amount of all Syndicated Loans, at any
one time outstanding shall not exceed the aggregate amount of the Commitments
at such time; and provided, further, that there may be no more than fifteen
different Interest Periods for both Syndicated Loans and Money Market Loans
outstanding at the same time (for which purpose each Interest Period
described in a different lettered clause of the definition of the term
"Interest Period" shall be deemed to be a different Interest Period even if
it is coterminous with another Interest Period). The Syndicated Loans may be
Base Rate Loans or Eurodollar Loans (each a "type" of Syndicated Loan).
2.02 Borrowings of Syndicated Loans. The Company shall give the Agent
(which shall promptly notify the Banks) notice of each borrowing hereunder of
Syndicated Loans, which notice shall be irrevocable and effective only upon
receipt by the Agent, shall specify with respect to the Syndicated Loans to
be borrowed (i) the aggregate amount (which shall be at least $10,000,000,
and incremental multiples of $1,000,000, in the case of Eurodollar Loans and
at least $250,000 and incremental multiples of $100,000 in the case of Base
Rate Loans), (ii) the type and date (which shall be a Business Day) and (iii)
(in the case of Fixed Rate Loans) the duration of the Interest Period
therefor and shall be given not later than 10:30 a.m. New York time (in the
case of Base Rate Loans) and 11:00 a.m. New York time (in the case of all
Eurodollar Loans) on the day which is not less than the number of Business
Days prior to the date of such borrowing specified below opposite the type of
such Loans:
TypeNumber of Business Days
Base Rate Loanssame day
Eurodollar Loans 3
Not later than 1:00 p.m. New York time on the date specified for each
borrowing of Syndicated Loans hereunder, each Bank shall make available the
amount of the Syndicated Loan to be made by it on such date to the Agent, at
account number NYAO-DI-900-9-000002 maintained by the Agent with Chase at the
Principal Office, in immediately available funds, for account of the Company.
The amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Company by depositing
the same, in immediately available funds, in an account of the Company
maintained with Chase at the Principal Office designated by the Company.
2.03 Money Market Loans.
(a) In addition to borrowings of Syndicated Loans, the Company may,
prior to the Commitment Termination Date and as set forth in this Section
2.03, request the Banks to make offers to make Money Market Loans to the
Company in Dollars. The Banks may, but shall have no obligation to, make
such offers and the Company may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section 2.03. Money Market Loans
may be LIBOR Market Loans or Set Rate Loans (each a "type" of Money Market
Loan), provided that:
(i) there may be no more than fifteen different Interest Periods for
both Syndicated Loans and Money Market Loans outstanding at the same time
(for which purpose each Interest Period described in a different lettered
clause of the definition of the term "Interest Period" shall be deemed to be
a different Interest Period even if it is coterminous with another Interest
Period); and
(ii) the aggregate principal amount of all Money Market Loans,
together with the aggregate principal amount of all Syndicated Loans, at any
one time outstanding shall not exceed the aggregate amount of the Commitments
at such time.
(b) When the Company wishes to request offers to make Money Market
Loans, it shall give the Agent (which shall promptly notify the Banks) notice
(a "Money Market Quote Request") so as to be received no later than 11:00
a.m. New York time on (x) the fifth Business Day prior to the date of
borrowing proposed therein, in the case of a LIBOR Auction or (y) the
Business Day next preceding the date of borrowing proposed therein, in the
case of a Set Rate Auction (or, in any such case, such other time and date as
the Company and the Agent, with the consent of the Majority Banks, may
agree). The Company may request offers to make Money Market Loans for up to
three different Interest Periods in a single notice (for which purpose each
Interest Period in a different lettered clause of the definition of the term
"Interest Period" shall be deemed to be a different Interest Period even if
it is coterminous with another Interest Period); provided that the request
for each separate Interest Period shall be deemed to be a separate Money
Market Quote Request for a separate borrowing ("Money Market Borrowing").
Each such notice shall be substantially in the form of Exhibit C hereto and
shall specify as to each Money Market Borrowing:
(i) the proposed date of such borrowing, which shall be a Business Day;
(ii) the aggregate amount of such Money Market Borrowing, which shall
be at least $10,000,000 (or in larger multiples of $1,000,000) but shall not
cause the limits specified in Section 2.03(a) hereof to be violated;
(iii) the duration of the Interest Period applicable thereto;
(iv) whether the Money Market Quotes requested are to set forth a Money
Market Margin or a Money Market Rate; and
(v) if the Money Market Quotes requested are to set forth a Money
Market Rate, the date on which the Money Market Quotes are to be submitted if
it is before the proposed date of borrowing (the date of which such Money
Market Quotes are to be submitted is called the "Quotation Date").
Except as otherwise provided in this Section 2.03(b), no Money Market Quote
Request shall be given within five Business Days (or such other number of
days as the Company and the Agent, with the consent of the Majority Banks,
may agree) of any other Money Market Quote Request.
(c) (i) Each Bank (or its Applicable Lending Office) may submit one or
more Money Market Quotes, each containing an offer to make a Money Market
Loan in response to any Money Market Quote Request; provided that, if the
Company's request under Section 2.03(b) hereof specified more than one
Interest Period, such Bank (or its Applicable Lending Office) may make a
single submission containing one or more Money Market Quotes for each such
Interest Period. Each Money Market Quote must be submitted to the Agent not
later than (x) 2:00 p.m. New York time on the fourth Business Day prior to
the proposed date of borrowing, in the case of a LIBOR Auction or (y) 10:00
a.m. New York time on the Quotation Date, in the case of a Set Rate Auction
(or, in any such case, such other time and date as the Company and the Agent,
with the consent of the Majority Banks, may agree); provided that any Money
Market Quote submitted by Chase (or its Applicable Lending Office) may be
submitted, and may only be submitted, if Chase (or such Applicable Lending
Office) notifies the Company of the terms of the offer contained therein not
later than (x) 1:00 p.m. New York time on the fourth Business Day prior to
the proposed date of borrowing, in the case of a LIBOR Auction or (y) 9:45
a.m. New York time on the Quotation Date, in the case of a Set Rate Auction.
Subject to Sections 5.02(b), 5.03, 7.02 and 10 hereof, any Money Market Quote
so made shall be irrevocable except with the written consent of the Agent
given on the instructions of the Company.
(ii) Each Money Market Quote shall be substantially in the form of
Exhibit D hereto and shall specify:
(A) the proposed date of borrowing and the Interest Period therefor;
(B) the principal amount of the Money Market Loan for which each such
offer is being made, which principal amount shall be at least $5,000,000 or
a larger multiple of $1,000,000; provided that the aggregate principal amount
of all Money Market Loans for which a Bank submits Money Market Quotes (x)
may be greater or less than the Commitment of such Bank but (y) may not
exceed the principal amount of the Money Market Borrowing for which offers
were requested;
(C) in the case of a LIBOR Auction, the margin above or below the
applicable LIBO Rate (the "Money Market Margin") offered for each such Money
Market Loan, expressed as a percentage (rounded upwards, if necessary, to the
nearest 1/10,000th of 1%) to be added to or subtracted from the applicable
LIBO Rate;
(D) in the case of a Set Rate Auction, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/10,000th of 1%) offered for
each such Money Market Loans (the "Money Market Rate"); and
(E) the identity of the quoting Bank.
Unless otherwise agreed by the Agent and the Company, no Money Market Quote
shall contain qualifying, conditional or similar language or propose terms
other than or in addition to those set forth in the applicable Money Market
Quote Request and, in particular, no Money Market Quote may be conditioned
upon acceptance by the Company of all (or some specified minimum) of the
principal amount of the Money Market Loan for which such Money Market Quote
is being made.
(d) The Agent shall (x) in the case of a Set Rate Auction, as promptly
as practicable after the Money Market Quote is submitted (but in any event
not later than 10:15 a.m. New York time) or (y) in the case of a LIBOR
Auction, by 4:00 p.m. New York time on the day a Money Market Quote is
submitted, notify the Company of the terms (i) of any Money Market Quote
submitted by a Bank that is in accordance with Section 2.03(c) hereof and
(ii) of any Money Market Quote that amends, modifies or is otherwise
inconsistent with a previous Money Market Quote submitted by such Bank with
respect to the same Money Market Quote Request. Any such subsequent Money
Market Quote Request shall be disregarded by the Agent unless such subsequent
Money Market Quote is submitted solely to correct a manifest error in such
former Money Market Quote. The Agent's notice to the Company shall specify
(A) the aggregate principal amount of the Money Market Borrowing for which
offers have been received and (B) the respective principal amounts and Money
Market Margins or Money Market Rates, as the case may be, so offered by each
Bank (identifying the Bank that made each Money Market Quote).
(e) Not later than 11:00 a.m. New York time on (x) the third Business
Day prior to the proposed date of borrowing, in the case of a LIBOR Auction
or (y) the Quotation Date, in the case of a Set Rate Auction (or, in any such
case, such other time and date as the Company and the Agent, with the consent
of the Majority Banks, may agree), the Company shall notify the Agent of its
acceptance or nonacceptance of the offers so notified to it pursuant to
Section 2.03(d) hereof (and the failure of the Company to give such notice by
such time shall constitute non-acceptance) and the Agent shall promptly
notify each affected Bank. In the case of acceptance, such notice shall
specify the aggregate principal amount of offers for each Interest Period
that are accepted. The Company may accept any Money Market Quote in whole or
in part (provided that any Money Market Quote accepted in part shall be at
least $5,000,000 or in larger multiples of $1,000,000); provided that:
(i) the aggregate principal amount of each Money Market Borrowing may
not exceed the applicable amount set forth in the related Money Market Quote
Request;
(ii) the aggregate principal amount of each Money Market Borrowing
shall be at least $10,000,000 (or in larger multiples of $1,000,000) but
shall not cause the limits specified in Section 2.03(a) hereof to be
violated;
(iii) acceptance of offers may be made only in ascending order of Money
Market Margins or Money Market Rates, as the case may be; and
(iv) the Company may not accept any offer where the Agent has advised
the Company that such offer fails to comply with Section 2.03(c)(ii) hereof
or otherwise fails to comply with the requirements of this Agreement
(including, without limitation, Section 2.03(a) hereof).
If offers are made by two or more Banks with the same Money Market Margins or
Money Market Rates, as the case may be, for a greater aggregate principal
amount than the amount in respect of which offers are accepted for the
related Interest Period, the principal amount of Money Market Loans in
respect of which such offers are accepted shall be allocated by the Company
among such Banks as nearly as possible (in multiples of $1,000,000) in
proportion to the aggregate principal amount of such offers. Determinations
by the Company of the amounts of Money Market Loans shall be conclusive in
the absence of manifest error.
(f) Any Bank whose offer to make any Money Market Loan has been
accepted shall, not later than 1:00 p.m. New York time on the date specified
for the making of such Loan, make the amount of such Loan available to the
Agent at account number NYAO-DI-900-9-000002 maintained by the Agent with
Chase at the Principal Office in immediately available funds, for account of
the Company. The amount so received by the Agent shall, subject to the terms
and conditions of this Agreement, be made available to the Company on such
date by depositing the same, in immediately available funds, in an account of
the Company maintained with Chase at the Principal Office designated by the
Company.
(g) Except for the purpose and to the extent expressly stated in
Section 2.05(a) hereof, the amount of any Money Market Loan made by any Bank
shall not constitute a utilization of such Bank's Commitment and except for
the purpose and to the extent expressly stated in Section 4.05(b) hereof, the
amount of any payment made on account of any Money Market Loan made by any
Bank shall be for account of such Bank.
2.04 Changes of Commitments.
(a) The aggregate amount of the Commitments shall be automatically
reduced to zero on the Commitment Termination Date.
(b) The Company shall have the right to terminate or reduce the
aggregate unused amount of the Commitments at any time or from time to time
upon not less than three Business Days' prior notice to the Agent (which
shall promptly notify the Banks) of each such termination or reduction, which
notice shall specify the effective date thereof and the amount of any such
reduction (which shall be at least $10,000,000 or any larger multiple of
$1,000,000) and shall be irrevocable and effective only upon receipt by the
Agent.
(c) The Commitments once terminated or reduced may not be reinstated.
2.05 Commitment Fee and Facility Fee. (a) The Company shall pay to the
Agent for account of each Bank a commitment fee on the daily average unused
amount of such Bank's Commitment (solely for which purpose the amount of any
Money Market Borrowing shall be deemed to be a pro rata (based on the
Commitments) utilization of each Bank's Commitment) for the period from and
including the date of this Agreement to but not including the earlier of the
date such Commitment is terminated or the Commitment Termination Date, at a
rate per annum in accordance with the Pricing Schedule.
(b) The Company shall pay to the Agent for account of each Bank a
facility fee on the daily average (whether used or unused) amount of such
Bank's Commitment for the period from and including the date of this
Agreement to but not including the earlier of the date the Commitments are
terminated or the Commitment Termination Date, at a rate per annum in
accordance with the Pricing Schedule.
(c) Accrued commitment fee and facility fee shall be payable on each
Quarterly Date and on the earlier of the date the Commitments are terminated
or the Commitment Termination Date.
2.06 Lending Offices. The Loans of each type made by each Bank shall
be made and maintained at such Bank's Applicable Lending Office for Loans of
such type.
2.07 Several Obligations; Remedies Independent. The failure of any
Bank to make any Loan to be made by it on the date specified therefor shall
not relieve any other Bank of its obligation to make its Loan on such date,
but neither any Bank nor the Agent shall be responsible for the failure of
any other Bank to make a Loan to be made by such other Bank. The amounts
payable by the Company at any time hereunder and under the Notes to each Bank
shall be a separate and independent debt and each Bank shall be entitled to
protect and enforce its rights arising out of this Agreement and the Notes
and it shall not be necessary for any other Bank or the Agent to consent to,
or be joined as an additional party in, any proceedings for such purposes.
2.08 Notes.
(a) The Syndicated Loans made by each Bank shall be evidenced by a
single promissory note of the Company in substantially in the form of Exhibit
A-1 hereto, dated the date of the delivery of such Note to the Agent under
this Agreement, payable to such Bank in a principal amount equal to the
amount of its Commitment as originally in effect and otherwise duly
completed. The date, amount, type, interest rate and maturity date of each
Syndicated Loan made by each Bank to the Company, and each payment made on
account of the principal thereof, shall be recorded by such Bank on its books
and, prior to any transfer of such Note held by it, endorsed by such Bank on
the schedule attached to such Note or any continuation thereof.
(b) The Money Market Loans made by any Bank shall be evidenced by a
single promissory note of the Company in substantially the form of Exhibit A-
2 hereto, dated the date of the delivery of such Note to the Agent under this
Agreement, payable to such Bank and otherwise duly completed. The date,
amount, type, interest rate and maturity date of each Money Market Loan made
by each Bank to the Company, and each payment made on account of the
principal thereof, shall be recorded by such Bank on its books and, prior to
any transfer of such Note held by it, endorsed by such Bank on the schedule
attached to such Note or any continuation thereof.
(c) No Bank shall be entitled to have its Note subdivided, by exchange
for promissory notes of lesser denominations or otherwise, except in
connection with a permitted assignment of all or any portion of such Bank's
Commitment, Loans and Notes pursuant to Section 12.06(b) hereof.
2.09 Prepayments.
(a) The Company may prepay Base Rate Loans upon not less than three
Business Days' prior notice to the Agent (which shall promptly notify the
Banks), which notice shall specify the prepayment date (which shall be a
Business Day) and the amount of the prepayment (which shall be at least (x)
$10,000,000 and in larger multiples of $1,000,000 or (y) the outstanding
principal amount of the Loan) and shall be irrevocable and effective only
upon receipt by the Agent, provided that interest on the principal prepaid,
accrued to the prepayment date, shall be paid on the prepayment date. The
Company may not prepay any Fixed Rate Loans or Money Market Loans (provided
that this sentence shall not affect the Company's obligation to prepay Loans
pursuant to paragraph (b) of this Section 2.09 or the obligations of the
Company pursuant to Section 10 hereof).
(b) If, after giving effect to any termination or reduction of the
Commitments pursuant to Section 2.04 hereof, the outstanding aggregate
principal amount of the Loans exceeds the aggregate amount of the
Commitments, the Company shall pay or prepay the Loans on the date of such
termination or reduction in an aggregate principal amount equal to the
excess, together with interest thereon accrued to the date of such payment or
prepayment and any amounts payable hereunder to Section 5.05 hereof in
connection therewith.
2.10 Extension of Commitment Termination Date. (a) At least 60 days
but not more than 90 days prior to each anniversary date of the Closing Date,
the Company and the Guarantors may request, by written notice to the Agent in
the form of Exhibit E hereto, that the Commitment Termination Date be
extended for an additional year from the then current Commitment Termination
Date. The Agent shall promptly notify the Banks of such request for an
extension and each Bank shall notify the Agent of its decision to consent or
not to consent to the request within 30 days from the date of its receipt of
the Agent's notice. The Agent shall promptly notify the Company of the
decisions of the Banks.
(b) If the Agent and all the Banks consent to the request, the
Commitment Termination Date shall thereupon be extended for an additional
year from the then current Commitment Termination Date; provided that if any
Bank shall not consent to the requested extension (each such Bank a "Non-
Consenting Bank"), the Company may, with the consent of the Agent, designate
another bank (including a Bank) (each such bank a "Replacement Bank") to
replace, and assume the Commitment of, such Non-Consenting Bank. Each Non-
Consenting Bank shall thereupon assign all its Commitment and interests
hereunder pursuant to the procedure set forth in Section 12.06 hereof to the
Replacement Bank designated by the Company for such Non-Consenting Bank. If
the Company has replaced each Non-Consenting Bank with a Replacement Bank,
then the Commitment Termination Date shall thereupon be extended as requested
by the Company and consented to by the Banks (other than the Non-Consenting
Banks) pursuant to Section 2.10(a) hereof.
2.11 Terminating Banks. The parties hereto hereby agree that,
simultaneously with the execution and delivery hereof, the Company shall pay
to each Terminating Bank all amounts then due and unpaid to such Terminating
Bank under the Existing Credit Agreement and the respective Commitment of
each Terminating Bank under the Existing Credit Agreement shall thereupon be
terminated and the Terminating Banks shall cease to be parties to this
Agreement. The parties hereto hereby further agree that First Fidelity Bank,
N.A., NatWest Bank, N.A., Union Bank, Credit Suisse and PNC Bank, N.A. shall
each become party to this Agreement, each as a "Bank", with a respective
Commitment as set forth opposite its name on the signature pages hereof under
the caption, "Commitment".
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. The Company will pay to the Agent for account
of each Bank the principal of each Loan made by such Bank, and each Loan
shall mature, on the last day of the Interest Period therefor.
3.02 Interest. The Company will pay to the Agent for account of each
Bank interest on the unpaid principal amount of each Loan made by such Bank
for the period from and including the date of such Loan to but excluding the
date such Loan shall be paid in full, at the following rates per annum:
(a) if such Loan is a Base Rate Loan, the Base Rate (as in effect from
time to time);
(b) if such Loan is a Fixed Rate Loan, the Fixed Rate for such Loan for
the Interest Period therefor plus the Applicable Margin;
(c) if such Loan is a LIBOR Market Loan, the LIBO Rate for such Loan
for the Interest Period therefor plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.03 hereof;
and
(d) if such Loan is a Set Rate Loan, the Money Market Rate for such
Loan for the Interest Period therefor quoted by the Bank making such Loan in
accordance with Section 2.03 hereof.
Notwithstanding the foregoing, the Company will pay to the Agent for account
of each Bank interest at the applicable Post-Default Rate on any principal of
any Loan made by such Bank, and (to the fullest extent permitted by law) on
any other amount payable by the Company hereunder or under the Note held by
such Bank to or for account of such Bank, which shall not be paid in full
when due (whether at stated maturity, by acceleration or otherwise), for the
period from and including the due date thereof to but excluding the date the
same is paid in full. Accrued interest on each Loan shall be payable on the
last day of the Interest Period therefor and, if such Interest Period is
longer than three months, at three-month intervals following the first day
of such Interest Period, except that interest payable at the Post-Default
Rate shall be payable from time to time on demand and interest on any
Eurodollar Loan that is converted into a Base Rate Loan (pursuant to Section
5.04 hereof) shall be payable on the date of conversion (but only to the
extent so converted). Promptly after the determination of any interest rate
provided for herein or any change therein, the Agent shall give notice to the
Banks to which such interest is payable and the Company.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Company under this
Agreement and the Notes shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Agent at account
number NYAO-DI-900-9-000002 maintained by the Agent with Chase at the
Principal Office, not later than 1:00 p.m. New York time on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day),
provided that, if a new Loan is to be made by any Bank on a date the Company
is to repay any principal of an outstanding Loan of such Bank, such Bank
shall apply the proceeds of such new Loan to the payment of the principal to
be repaid and only an amount equal to the excess of the principal to be
borrowed over the principal to be repaid shall be made available by such Bank
to the Agent as provided in Section 2.02 hereof or paid by the Company to the
Agent pursuant to this Section 4.01, as the case may be.
(b) Any Bank for whose account any such payment is to be made, may (but
shall not be obligated to) debit the amount of any such payment which is not
made by such time to any ordinary deposit account of the Company with such
Bank (with notice to the Company).
(c) The Company shall, at the time of making each payment under this
Agreement or any Note, specify to the Agent the Loans or other amounts
payable by the Company hereunder to which such payment is to be applied (and
in the event that it fails to so specify, or if an Event of Default has
occurred and is continuing, the Agent may distribute such payment to the
Banks in such manner as it or the Majority Banks may determine to be
appropriate, subject to Section 4.02 hereof).
(d) Each payment received by the Agent under this Agreement or any Note
for account of a Bank shall be paid promptly to such Bank, in immediately
available funds, for account of such Bank's Applicable Lending Office for the
Loan in respect of which such payment is made.
(e) If the due date of any payment under this Agreement or any Note
would otherwise fall on a day which is not a Business Day such date shall be
extended to the next succeeding Business Day and interest shall be payable
for any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Banks under Section 2.01 hereof shall be
made from the Banks, each payment of commitment fee and facility fee under
Section 2.05 hereof shall be made for account of the Banks, and each
termination or reduction of the amount of the Commitments under Section 2.04
hereof shall be applied to the Commitments of the Banks, pro rata according
to the amounts of their respective Commitments; (b) each payment of principal
of Syndicated Loans by the Company shall be made for account of the Banks pro
rata in accordance with the respective unpaid principal amounts of the
Syndicated Loans held by the Banks; and (c) each payment of interest on
Syndicated Loans by the Company shall be made for account of the Banks pro
rata in accordance with the amounts of interest on Syndicated Loans due and
payable to the respective Banks.
4.03 Computations. Interest on Money Market Loans, Fixed Rate Loans,
commitment fee and facility fee shall be computed on the basis of a year of
360 days and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable and interest on Base Rate
Loans shall be computed on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed (including the first day but excluding
the last day) occurring in the period for which payable.
4.04 Non-Receipt of Funds by the Agent. Unless the Agent shall have
been notified by a Bank or the Company (the "Payor") prior to the date on
which the Payor is to make payment to the Agent of (in the case of a Bank)
the proceeds of a Loan to be made by it hereunder or (in the case of the
Company) a payment to the Agent for account of one or more of the Banks
hereunder (such payment being herein called the "Required Payment"), which
notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient(s) on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient(s) of such payment shall, on demand,
repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers
such amount at a rate per annum equal to the Federal Funds Rate for such day
and, if such recipient(s) shall fail promptly to make such payment, the Agent
shall be entitled to recover such amount, on demand, from the Payor, together
with interest as aforesaid.
4.05 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and without limitation of)
any right of set-off, bankers' lien or counterclaim a Bank may otherwise
have, each Bank shall be entitled, at its option, to offset balances held by
it for account of the Company at any of its offices, in Dollars or in any
other currency, against any principal of or interest on any of such Bank's
Loans, or any other amount payable to such Bank hereunder, upon the
occurrence of an Event of Default (regardless of whether such balances are
then due to the Company), in which case it shall promptly notify the Company
and the Agent thereof, provided that such Bank's failure to give such notice
shall not affect the validity thereof.
(b) If any Bank shall obtain payment of any principal of or interest on
any Loan made by it to the Company under this Agreement through the exercise
of any right of set-off, banker's lien or counterclaim or similar right or
otherwise, and, as a result of such payment, such Bank shall have received a
greater percentage of the principal or interest then due hereunder by the
Company to such Bank in respect of Loans than the percentage received by any
other Banks, it shall promptly purchase from such other Banks participations
in (or, if and to the extent specified by such Bank, direct interests in) the
Loans made by such other Banks (or in interest due thereon, as the case may
be) in such amounts, and make such other adjustments from time to time as
shall be equitable, to the end that all the Banks shall share the benefit of
such excess payment (net of any expenses which may be incurred by such Bank
in obtaining or preserving such excess payment) pro rata in accordance with
the unpaid principal and/or interest on the Loans held by each of the Banks.
To such end all the Banks shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if such payment is
rescinded or must otherwise be restored.
(c) The Company agrees that any Bank so purchasing a participation (or
direct interest) in the Loans made by other Banks (or in interest due
thereon, as the case may be) may exercise all rights of set-off, bankers'
lien, counterclaim or similar rights with respect to such participation as
fully as if such Bank were a direct holder of Loans in the amount of such
participation.
(d) Nothing contained herein shall require any Bank to exercise any
such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness
or obligation of the Company.
(e) If, under any applicable bankruptcy, insolvency or other similar
law, any Bank receives a secured claim in lieu of a set-off to which this
Section 4.05 applies, such Bank shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Banks entitled under this Section 4.05 to share in the benefits
of any recovery on such secured claim.
Section 5. Yield Protection and Illegality.
Section 5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from time to time such
amounts as such Bank may determine to be necessary to compensate it for any
costs which such Bank determines are attributable to its making or
maintaining of any Fixed Rate Loans or its obligation to make any Fixed Rate
Loans hereunder, or any reduction in any amount receivable by such Bank
hereunder in respect of any of such Loans or such obligation (such increases
in costs and reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such Bank
under this Agreement or its Notes in respect of any of such Loans (other than
taxes imposed on or measured by the overall net income of such Bank or of its
Applicable Lending Office for any of such Loans by the jurisdiction in which
such Bank has its principal office or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Fixed Rate or LIBO Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Bank (including any of such Loans or any deposits
referred to in the definition of "Fixed Base Rate" in Section 1.01 hereof),
or any commitment of such Bank (including the Commitment of such Bank
hereunder); or
(iii) imposes any other condition affecting this Agreement or its Note
(or any of such extensions of credit or liabilities) or Commitment.
If any Bank requests compensation from the Company under this Section
5.01(a), the Company may, by notice to such Bank (with a copy to the Agent),
suspend the obligation of such Bank to make additional Loans of the type with
respect to which such compensation is requested until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.04 hereof shall be applicable).
(b) Without limiting the effect of the provisions of Section 5.01(a)
hereof, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs Additional Costs based on or measured by the excess above
a specified level of the amount of a category of deposits or other
liabilities of such Bank which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement
or a category of extensions of credit or other assets of such Bank which
includes Eurodollar Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may hold, then,
if such Bank so elects by notice to the Company (with a copy to the Agent),
the obligation of such Bank to make additional Loans of such type hereunder
shall be suspended until such Regulatory Change ceases to be in effect (in
which case the provisions of Section 5.04 hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to
each Bank from time to time on request such amounts as such Bank may
determine to be necessary to compensate such Bank for any costs which it
determines are attributable to the maintenance by such Bank (or any
Applicable Lending Office), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the force of law)
of any court or governmental or monetary authority following any Regulatory
Change, or pursuant to any risk-based capital guideline or other requirement
(whether or not having the force of law and whether or not the failure to
comply therewith would be unlawful) heretofore or hereafter issued by any
government or governmental or supervisory authority, including any
implementing at the national level the Basle Accord (including without
limitation, the Final Risk-Based Capital Guidelines of the Board of Governors
of the Federal Reserve System (12 CFR Part 208, Appendix A; 12 CFR Part 225,
Appendix A) and the Final Risk-Based Capital Guidelines of the Office of the
Comptroller of the Currency (12 CFR Part 3, Appendix A), of capital in
respect of its Commitment or Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets
or equity of such Bank (or any Applicable Lending Office) to a level below
that which such Bank (or any Applicable Lending Office) could have achieved
but for such law, regulation, interpretation, directive or request). For the
purposes of this Section 5.01(c), "Basle Accord" shall mean the proposals for
a risk-based capital framework described by the Basle Committee on Banking
Regulations and Supervisory Practices in its paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated July 1988, as
amended, modified and supplemented and in effect from time to time.
(d) Each Bank will notify the Company of any event occurring after the
date of this Agreement that will entitle such Bank to compensation under
paragraph (a) or (c) of this Section 5.01 as promptly as practicable, but in
any event within 45 days, after such Bank obtains actual knowledge thereof;
provided, however, that if any Bank fails to give such notice within 45 days
after it obtains actual knowledge of such an event, such Bank shall, with
respect to compensation payable pursuant to this Section 5.01 in respect of
any costs resulting from such event, only be entitled to payment under this
Section 5.01 for costs incurred from and after the date 45 days prior to the
date that such Bank does give such notice; and provided, further, that each
Bank will designate a different Applicable Lending Office for the Loans of
such Bank affected by such event if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion
of such Bank, be disadvantageous to such Bank, except that such Bank shall
have no obligation to designate an Applicable Lending Office located in the
United States of America. Each Bank will furnish to the Company a
certificate setting forth the basis and amount of each request by such Bank
for compensation under paragraph (a) or (c) of this Section 5.01.
Determinations and allocations by any Bank for purposes of this Section
5.01(a) or (b) hereof, or of the effect of capital maintained pursuant to
Section 5.01(c) hereof, on its costs or rate of return of maintaining Loans
or its obligation to make Loans, or on amounts receivable by it in respect of
Loans, and of the amounts required to compensate such Bank under this Section
5.01, shall be conclusive, provided that such determinations and allocations
are made on a reasonable basis.
5.02 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Fixed Base Rate
for any Interest Period:
(a) the Agent determines (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in the
definition of "Fixed Base Rate" in Section 1.01 hereof are not being provided
in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for any type of Fixed Rate Loans as provided
herein; or
(b) the Majority Banks determine (or any Bank that has outstanding a
Money Market Quote with respect to a LIBOR Market Loan determines), which
determination shall be conclusive, and notify (or notifies, as the case may
be) the Agent that the relevant rates of interest referred to in the
definition of "Fixed Base Rate" in Section 1.01 hereof upon the basis of
which the rate of interest for Eurodollar Loans (or LIBOR Market Loans, as
the case may be) for such Interest Period is to be determined are not likely
adequate to cover the cost to such Banks (or to such quoting Bank) of making
or maintaining such type of Loans;
then the Agent shall give the Company and each Bank prompt notice thereof,
and so long as such condition remains in effect, the Banks (or such quoting
Bank) shall be under no obligation to make additional Loans of such type.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its
Applicable Lending Office to honor its obligation to make or maintain
Eurodollar Loans or LIBOR Market Loans hereunder, then such Bank shall
promptly notify the Company thereof (with a copy to the Agent) and such
Bank's obligation to make Eurodollar Loans shall be suspended until such time
as such Bank may again make and maintain Eurodollar Loans (in which case the
provisions of Section 5.04 hereof shall be applicable), and such Bank shall
no longer be obligated to make any LIBOR Market Loan that it has offered to
make.
5.04 Treatment of Affected Loans. If the obligation of any Bank to
make either type of Fixed Rate Loans shall be suspended pursuant to Section
5.01 or 5.03 hereof (Loans of such type being herein called "Affected Loans"
and such type being herein called the "Affected Type"), all Loans (other than
Money Market Loans) which would otherwise be made by such Bank as Loans of
the Affected Type shall be made instead as Base Rate Loans and, if an event
referred to in Section 5.01(b) or 5.03 hereof has occurred and such Bank so
requests by notice to the Company with a copy to the Agent, all Affected
Loans of such Bank then outstanding shall be automatically converted into
Base Rate Loans on the date specified by such Bank in such notice and, to the
extent that Affected Loans are so made (or converted), all payments of
principal which would otherwise be applied to such Bank's Affected Loans
shall be applied instead to such Loans.
5.05 Compensation. The Company shall pay to the Agent for account of
each Bank, upon the request of such Bank through the Agent, such amount or
amounts as shall be sufficient (in the reasonable opinion of such Bank) to
compensate it for any loss, cost or expense which such Bank determines is
attributable to:
(a) any payment or conversion of a Fixed Rate Loan or a Set Rate Loan
made by such Bank for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 10 hereof) on a date other than
the last day of the Interest Period for such Loan; or
(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Section 7 hereof to be satisfied) to borrow a Fixed Rate Loan or a Set Rate
Loan (with respect to which, in the case of a Money Market Loan, the Company
has accepted a Money Market Quote) from such Bank on the date for such
borrowing specified in the relevant notice of borrowing given pursuant to
Section 2.02 or 2.03(b) hereof.
Without limiting the effect of the preceding sentence, such compensation
shall include an amount equal to the excess, if any, of (i) the amount of
interest which otherwise would have accrued on the principal amount so paid
or converted or not borrowed for the period from the date of such payment,
conversion or failure to borrow to the last day of the Interest Period for
such Loan (or, in the case of a failure to borrow, the Interest Period for
such Loan which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided for
herein over (ii) the interest component of the amount such Bank would have
bid in the London interbank market (if such Loan is a Eurodollar Loan or a
LIBOR Market Loan) or the United States secondary certificate of deposit
market (if such Loan is a Set Rate Loan) for Dollar deposits of leading banks
in amounts comparable to such principal amount and with maturities comparable
to such period (as reasonably determined by such Bank).
Section 6. Guarantee.
6.01 Guarantee. Each Guarantor hereby jointly and severally guarantees
to each Bank and the Agent and their respective successors and assigns the
prompt payment in full when due (whether at stated maturity, by acceleration
or otherwise) of the principal of and interest on the Loans made by the Banks
to, and the Note held by each Bank of, the Company and all other amounts from
time to time owing to the Banks or the Agent by the Company under this
Agreement and under the Notes, in each case strictly in accordance with the
terms hereof and thereof (such obligations being herein collectively called
the "Guaranteed Obligations"). Each Guarantor hereby further jointly and
severally agrees that if the Company shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, such Guarantor will promptly pay the same, without
any demand or notice whatsoever, and that in the case of any extension of
time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.
6.02 Obligations Unconditional. The obligations of each Guarantor
under Section 6.01 hereof are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Company under this Agreement, the
Notes or any other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guarantee of or security
for any of the Guaranteed Obligations, and, to the fullest extent permitted
by applicable law, irrespective of any other circumstance whatsoever which
might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 6.02 that the
obligations of each Guarantor hereunder shall be absolute and unconditional,
joint and several, under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not affect the liability of any Guarantor
hereunder:
(i) at any time or from time to time, without notice to such Guarantor,
the time for any performance of or compliance with any of the Guaranteed
Obligations shall be extended, or such performance or compliance shall be
waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in this respect, or any right under this Agreement or
the Notes or any other agreement or instrument referred to herein or therein
shall be waived or any other guarantee of any of the Guaranteed Obligations
or any security therefor shall be released or exchanged in whole or in part
or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Agent or any Bank or Banks as security for any of the Guaranteed Obligations
shall fail to be perfected.
Each Guarantor hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that the
Agent or any Bank exhaust any right, power or remedy or proceed against the
Company under this Agreement or the Notes or any other agreement or
instrument referred to herein or therein, or against any other Person under
any other guarantee of, or security for, any of the Guaranteed Obligations.
6.03 Reinstatement. The obligations of each Guarantor under this
Section 6 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Company in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise and the Guarantors
jointly and severally agree that they will indemnify the Agent and each Bank
on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by the Agent or such Bank in connection
with such rescission or restoration.
6.04 Subrogation. The Guarantors hereby agree that until the payment
and satisfaction in full of all Guaranteed Obligations and the expiration and
termination of the Commitments of the Banks under this Agreement they shall
not exercise any right or remedy arising by reason of any performance by them
of their guarantee in Section 6.01 hereof, whether by subrogation or
otherwise, against the Company or any other guarantor of any of the
Guaranteed Obligations or any security for any of the Guaranteed Obligations.
6.05 Remedies. The Guarantors jointly and severally agree that, as
between the Guarantors and the Banks, the obligations of the Company under
this Agreement and the Notes may be declared to be forthwith due and payable
as provided in Section 10 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section
10) for purposes of Section 6.01 hereof notwithstanding any stay, injunction
or other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against the Company and that, in
the event of such declaration (or such obligations being deemed to have
become automatically due and payable), such obligations (whether or not due
and payable by the Company) shall forthwith become due and payable by such
Guarantor for purposes of said Section 6.01.
Section 6.06 Continuing Guarantee. The guarantee in this Section 6 is
a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
Section 6.07 Rights of Contribution. The Guarantors hereby agree, as
between themselves, that if any Guarantor (an "Excess Funding Guarantor")
shall pay Guaranteed Obligations in excess of the Excess Funding Guarantor's
Pro Rata Share (as hereinafter defined) of such Guaranteed Obligations, the
other Guarantors shall, on demand (but subject to the next sentence hereof),
pay to the Excess Funding Guarantor an amount equal to their respective
relative Pro Rata Shares of such Excess Funding Guarantor's payment. The
payment obligation of any Guarantor to any Excess Funding Guarantor under
this Section 6.07 shall be subordinate and subject in right of payment to the
prior payment in full of the obligations of such Guarantor under the other
provisions of this Section 6 and such Excess Funding Guarantor shall not
exercise any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations. For the purposes hereof,
"Pro Rata Share" shall mean, for any Guarantor, a percentage equal to the
percentage that such Guarantor's Tangible Net Worth as at January 28, 1995 is
of the aggregate Tangible Net Worth of all of the Guarantors as at such date.
Section 7. Conditions Precedent.
7.01 Conditions to Effectiveness. The effectiveness of this Agreement
is subject to the receipt by the Agent of the following documents, each of
which shall be satisfactory to the Agent in form and substance:
(a) Corporate Action. A certificate of each Obligor dated the Closing
Date attesting to all corporate action taken by each Obligor approving this
Agreement and, in the case of the Company, the Notes and borrowings hereunder
(including, without limitation, a certificate setting forth the resolutions
of the Board of Directors of each Obligor adopted in respect of the
transactions contemplated hereby).
(b) Incumbency. A certificate of each Obligor dated the Closing Date
in respect of each of the officers (i) who is authorized to sign on its
behalf this Agreement or the Notes, as the case may be, and (ii) who will,
until replaced by another officer or officers duly authorized for that
purpose, act as its representative for the purposes of signing documents and
giving notices and other communications in connection with this Agreement and
the transactions contemplated hereby (and the Agent and each Bank may
conclusively rely on such certificate until it receives notice in writing
from the Company to the contrary).
(c) Officer's Certificate. A certificate of a senior officer of the
Company to the effect set forth in the first sentence of Section 7.02 hereof.
(d) Opinion of Counsel to the Obligors. An opinion of Willkie Farr &
Gallagher, counsel to the Obligors, substantially in the form of Exhibit B
hereto.
(e) Notes. The Notes, duly completed and executed.
(f) Other Documents. Such other documents relating to the transactions
contemplated hereby as the Agent or any Bank or special New York counsel to
the Banks may reasonably request.
7.02 Initial and Subsequent Loans. The obligation of any Bank to make
any Loan (including any Money Market Loan and such Bank's initial Syndicated
Loan) to the Company upon the occasion of each borrowing hereunder is subject
to the further conditions precedent that, both immediately prior to such Loan
and also after giving effect thereto: (a) no Event of Default and, if such
borrowing is a Money Market Loan or will increase the outstanding principal
amount of the Syndicated Loans, no Default shall have occurred and be
continuing; and (b) the representations and warranties made by the Company in
Section 8 hereof (other than, if such borrowing is not a Money Market Loan
and will not increase the outstanding amount of the Syndicated Loans, the
last sentence of Section 8.02 hereof and Section 8.03 hereof) shall be true
and correct in all material respects on and as of the date of the making of
such Loan with the same force and effect as if made on and as of such date.
Each notice of borrowing by the Company hereunder shall constitute a
certification by the Company to the effect set forth in the preceding
sentence (both as of the date of such notice and, unless the Company
otherwise notifies the Agent prior to the date of such borrowing, as of the
date of such borrowing).
Section 8. Representations and Warranties. The Company represents and
warrants to the Banks that:
8.01 Corporate Existence. Each of the Company and its Subsidiaries:
(a) is a corporation duly organized and validly existing under the laws of
the jurisdiction of its incorporation; (b) has all requisite corporate power,
and has all material governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being
or as proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would have a material
adverse effect on the consolidated financial condition, operations, business
or prospects taken as a whole of the Company and its Consolidated
Subsidiaries.
8.02 Financial Condition. The consolidated balance sheet of the
Company and its Consolidated Subsidiaries as at January 28, 1995 and the
related consolidated statements of income, stockholders' equity and cash
flows of the Company and its Consolidated Subsidiaries for the fiscal year
ended on said date, with the opinion thereon of Deloitte & Touche LLP.,
heretofore furnished to each of the Banks, are complete and correct and
fairly present the consolidated financial condition of the Company and its
Consolidated Subsidiaries as at said date and the consolidated results of
their operations for the fiscal year ended on said date, all in accordance
with generally accepted accounting principles and practices applied on a
consistent basis. Neither the Company nor any of its Subsidiaries had on
said date any material contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided for
in said balance sheet as at said date. Since January 28, 1995, there has
been no material adverse change in the consolidated financial condition,
operations, business or prospects taken as a whole of the Company and its
Consolidated Subsidiaries from that set forth in said financial statements as
at said date.
8.03 Litigation. Except as disclosed to the Banks in writing prior to
the date of this Agreement, there are no legal or arbitral proceedings or any
proceedings by or before any governmental or regulatory authority or agency,
now pending or (to the knowledge of the Company) threatened against the
Company or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to have a material adverse effect on the consolidated
financial condition, operations, business or prospects taken as a whole of
the Company and its Consolidated Subsidiaries.
8.04 No Breach. None of the execution and delivery of this Agreement
and the Notes, the consummation of the transactions herein contemplated and
compliance with the terms and provisions hereof will conflict with or result
in a breach of, or require any consent under, the charter or by-laws of any
Obligor, or any applicable law or regulation, or any order, writ, injunction
or decree of any court or governmental authority or agency, or any agreement
or instrument to which any Obligor is a party or by which any of them is
bound or to which any of them is subject, or constitute a default under any
such agreement or instrument, or result in the creation or imposition of any
Lien upon any of the revenues or assets of any of them pursuant to the terms
of any such agreement or instrument, except in each case for such conflicts,
breaches, consents, defaults or Liens which would not have a material adverse
effect on the consolidated financial condition, operations, business or
prospects taken as a whole of the Company and its Consolidated Subsidiaries.
8.05 Corporate Action. Each Obligor has all necessary corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and, in the case of the Company, the Notes; the execution delivery
and performance by each Obligor of this Agreement and, in the case of the
Company, the Notes have been duly authorized by all necessary corporate
action on its part; and this Agreement has been duly and validly executed and
delivered by each Obligor and constitutes, and each of the Notes when
executed and delivered for value by the Company will constitute, its legal,
valid and binding obligation, enforceable against such Obligor in accordance
with its terms.
8.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency are necessary for the execution, deliver or performance by any Obligor
of this Agreement or, in the case of the Company, the Notes or for the
validity or enforceability thereof.
8.07 Use of Loans. Neither the Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business
of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying Margin Stock and no part of the proceeds of
any Loan hereunder will be used to buy or carry any margin Stock.
8.08 ERISA. The Company and the ERISA Affiliates have fulfilled their
respective obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and are in compliance in all material respects
with the presently applicable provisions of ERISA and the Code, and have not
incurred any liability to the PBGC or any Plan or Multiemployer Plan (other
than to make contributions in the ordinary course of business).
8.09 Taxes. United States Federal income tax returns of the Company
and its Subsidiaries have been closed through the fiscal year of the Company
ended February 2, 1991. The Company and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant
to such returns or pursuant to any assessment received by the Company or any
of its Subsidiaries, except for taxes contested in good faith by appropriate
proceedings. The charges, accruals and reserves on the books of the Company
and its Subsidiaries in respect of taxes and other governmental charges are,
in the opinion of the Company, adequate.
8.10 Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
8.11 Credit Agreements and Liens. Schedule I hereto is a complete and
correct list, as of the date of this Agreement, of each credit agreement,
loan agreement, indenture, purchase agreement, guarantee or other arrangement
providing for or otherwise relating to any Indebtedness or any extension of
credit (or commitment for any extension of credit) to, or guarantee by, the
Company or any of its Subsidiaries the aggregate principal or face amount of
which equals or exceeds (or may equal or exceed) $500,000 and (i) the
aggregate principal or face amount outstanding or which may become
outstanding under each such arrangement and (ii) the asset(s), if any,
securing such Indebtedness or extensions of credit, is correctly described in
said Schedule I. The aggregate carrying value (computed in accordance with
GAAP) of the assets of the Company and its Subsidiaries subject to a Lien on
the date hereof does not exceed $25,000,000.
8.12 Subsidiaries. Set forth in Schedule II hereto is a complete and
correct list, as of the date of this Agreement, of all Subsidiaries of the
Company (and this respective jurisdiction or incorporation of each such
Subsidiary) and the percentage of ownership by the Company (or any Subsidiary
thereof) of each of the same. Except as disclosed in said Schedule II, the
Company owns, free and clear of Liens, all outstanding shares of such
Subsidiaries (and each such Subsidiary owns, free and clear of Liens, all
outstanding shares of its Subsidiaries) and all such shares are validly
issued, fully paid and non-assessable. Each Subsidiary of the Company is a
Guarantor.
Section 9. Covenants of the Company. The Company agrees that, so long
as any of the Commitments are in effect and until payment in full of all
Loans hereunder, all interest thereon and all other amounts payable by the
Company hereunder:
9.01 Financial Statements. The Company shall deliver to each of the
Banks:
(a) as soon as available and in any event within 60 days after the end
of each of the first three quarterly fiscal periods of each fiscal year of
the Company, consolidated statements of income, stockholders' equity and cash
flows of the Company and its Consolidated Subsidiaries for such period and
for the period from the beginning of the respective fiscal year to the end of
such period, and the related consolidated balance as at the end of such
period, setting forth in comparative form the corresponding consolidated
figures for the corresponding period in the preceding fiscal year,
accompanied by a certificate of a senior financial officer of the Company,
which certificate shall state that said financial statements fairly present
the consolidated financial condition and results of operations of the Company
and its Consolidated Subsidiaries in accordance with generally accepted
accounting principles, consistently applied, as at the end of, and for, such
period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 120 days after the end
of each fiscal year of the Company, consolidated statements of income,
stockholders' equity and cash flows of the Company and its Consolidated
Subsidiaries for such year and the related consolidated balance sheet as at
the end of such year, setting forth in comparative form the corresponding
consolidated figures for the preceding fiscal year, and accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall state that said consolidated financial
statements fairly present the consolidated financial condition and results of
operations of the Company and its Consolidated Subsidiaries as at the end of,
and for, such fiscal year, and a certificate of such accountants stating
that, in making the examination necessary for their opinion, they obtained no
knowledge, except as specifically stated, of any Default;
(c) promptly upon their becoming publicly available, copies of all
registration statements and regular periodic reports, if any, which the
Company shall have filed with the Securities and Exchange Commission (or any
governmental agency substituted therefor) or any national securities
exchange;
(d) promptly upon the mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports and proxy statements
so mailed;
(e) as soon as possible, and in any event within ten days after the
Company knows or has reason to know that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan have occurred
or exist, a statement signed by a senior financial officer of the Company
setting forth details respecting such event or condition and the action, if
any, which the Company or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with or
given to PBGC by the Company or an ERISA Affiliate with respect to such event
or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA and the
regulations issued thereunder, with respect to a Plan, as to which PBGC has
not by regulation waived the requirement of Section 4043(a) of ERISA that it
be notified within 30 days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by PBGC with respect to
such Multiemployer Plan;
(iv) the complete or partial withdrawal by the Company or any ERISA
Affiliate under Section 4201 or 4204 of ERISA from a Multiemployer Plan, or
the receipt by the Company or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA; and
(v) the institution of a proceeding by a fiduciary of any Multiemployer
Plan against the Company or any ERISA Affiliate to enforce Section 515 of
ERISA, which proceeding is not dismissed within 30 days;
(f) promptly after the Company knows or has reason to know that any
Default has occurred, a notice of such Default describing the same in
reasonable detail and, together with such notice or as soon thereafter as
possible, a description of the action that the Company has taken and proposes
to take with respect thereto; and
(g) from time to time such other information regarding the business,
affairs or financial condition of the Company or any of its Subsidiaries
(including, without limitation, any Plan or Multiemployer Plan and any
reports or other information required to be filed under ERISA) as any Bank or
the Agent may reasonably request.
The Company will furnish to each Bank, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate of
a senior financial officer of the Company (i) to the effect that no Default
has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail and describing the
action that the Company has taken and proposes to take with respect thereto)
and (ii) setting forth in reasonable detail the computations necessary to
determine whether the Company is in compliance with Sections 9.07 through and
including 9.10 hereof as of the end of the respective quarterly fiscal
periods or fiscal year.
9.02 Litigation. The Company will promptly give to each Bank notice of
all legal or arbitral proceedings, and of all proceedings by or before any
governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Company or any
of its Subsidiaries, except proceedings which, if adversely determined, would
not have a material adverse effect on the consolidated financial condition,
operations, business or prospects taken as a whole of the Company and its
Consolidated Subsidiaries.
9.03 Corporate Existence, Etc. The Company will, and will cause each
of its Subsidiaries to: preserve and maintain its corporate existence and all
of its material rights, privileges and franchises (provided that nothing in
this Section 9.03 shall prohibit any transaction expressly permitted under
Section 9.05 hereof); comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities if
failure to comply with such requirements would materially and adversely
affect the consolidated financial condition, operations, business or
prospects taken as a whole of the Company and its Consolidated Subsidiaries;
pay and discharge all taxes, assessments and governmental charges or levies
imposed on it or on its income or profits or on any of its property prior to
the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good
faith and by proper proceedings and against which adequate reserves are being
maintained; maintain all of its properties used or useful in its business in
good working order and condition, ordinary wear and tear excepted; and permit
representatives of any Bank or the Agent, subject to at least two Business
Days' advance notice (which notice shall not be required at any time a
Default shall be continuing) and during normal business hours, to examine,
copy and make extracts from its books and records, to inspect its properties,
and to discuss its business and affairs with its officers, all to the extent
reasonably requested by such Bank or the Agent (as the case may be).
9.04 Insurance. The Company will, and will cause each of its
Subsidiaries to, keep insured by financially sound and reputable insurers all
property of a character usually insured by corporations engaged in the same
or similar business similarly situated against loss or damage of the kinds
and in the amounts customarily insured against by such corporations and carry
such other insurance as is usually carried by such corporations; provided
that the Company and any of its Subsidiaries may self-insure to the extent
determined by management to be consistent with prudent business practice.
9.05 Prohibition of Fundamental Changes. The Company will not, nor
will it permit any of its Subsidiaries to, enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution). The Company will not, and
will not permit any of its Subsidiaries to, make any Acquisition (in one
transaction or a series of related transactions) in excess of $50,000,000.
The Company will not, and will not permit any of its Subsidiaries to, convey,
sell, lease, transfer or otherwise dispose of, in one transaction or a series
of transactions, all or a substantial part of its business or assets, whether
now owned or hereafter acquired (including, without limitation, receivables
and leasehold interests, but excluding (i) any inventory or other assets
(including real property) sold or disposed of in the ordinary course of
business and (ii) obsolete or worn-out property, tools or equipment no longer
used or useful in its business). Notwithstanding the foregoing provisions of
this Section 9.05:
(a) any Subsidiary of the Company may be merged or consolidated with or
into: (i) the Company if the Company shall be the continuing or surviving
corporation or (ii) any other such Subsidiary; provided that if any such
transaction shall be between a Subsidiary and a Wholly-Owned Subsidiary, the
Wholly-Owned Subsidiary shall be the continuing or surviving corporation; and
(b) any such Subsidiary may sell, lease, transfer or otherwise dispose
of any or all of its assets (upon voluntary liquidation or otherwise) to the
Company or a Wholly-Owned Subsidiary of the Company.
9.06 Limitation on Liens. The Company will not, nor will it permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except:
(a) Liens imposed by any governmental authority for taxes, assessments
or charges not yet due or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or any of its Subsidiaries, as the
case may be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in
good faith and by appropriate proceedings;
(c) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) Liens on assets of corporations which become Subsidiaries of the
Company after the date of this Agreement, provided that such Liens are in
existence at the time the respective corporations become Subsidiaries of the
Company and were not created in anticipation thereof;
(f) Liens upon real property, fixtures and equipment (excluding
equipment that constitutes inventory) acquired after the date hereof (by
purchase, construction or otherwise) by the Company or any of its
Subsidiaries;
(g) Liens upon the assets of the Company and its Subsidiaries in
existence on the date hereof; and
(h) any extension, renewal or replacement of the foregoing, provided,
however, that the Liens permitted hereunder shall not be spread to cover any
additional Indebtedness or property (other than a substitution of like
property).
9.07 Leverage Ratio. The Company will not permit the Leverage Ratio to
exceed 1.5 to 1.0.
9.08 Tangible Net Worth. The Company will not permit its Tangible Net
Worth to be on any date of determination thereof less than the sum of (x)
$520,000,000 plus (y) 25% of the aggregate amount of Net Earnings for each
quarterly period occurring during the period commencing January 29,1 995 and
ending on the date that is the last day of the Company's fiscal quarter next
preceding such date of determination.
9.09 Current Ratio. The Company will not permit the ratio of
consolidated current assets of the Company and its Consolidated Subsidiaries
to consolidated current liabilities of the Company and its Consolidated
Subsidiaries to be at any time less than 1 to 1. For purposes hereof, the
terms "current assets" and "current liabilities" shall have the respective
meanings assigned to them by GAAP.
9.10 NOP/Interest Charges Ratio. The Company will not at any time
permit the NOP/Interest Charges Ratio to be less than 2.5 to 1.0.
9.11 Lines of Business. Neither the Company nor any of its
Subsidiaries shall engage in any substantial extent in any line or lines of
business activity other than the business of owning and operating retail
stores.
9.12 Use of Proceeds. The Company will use the proceeds of the Loans
hereunder solely to refinance certain of the Indebtedness described in
Schedule I hereof and to finance the expansion of the Company's stores and
for general working capital purposes (in compliance with all applicable legal
and regulatory requirements); provided, that neither the Agent nor any Bank
shall have any responsibility as to the use of any of such proceeds.
9.13 Additional Guarantors. The Company will take such action, and
will cause each of its Subsidiaries to take such action, from time to time as
shall be necessary to ensure that all such Subsidiaries are Guarantors and,
thereby, "Obligors" hereunder. Without limiting the generality of the
foregoing, in the event that the Company or any of its Subsidiaries shall
form any new Subsidiary, which is a "Material Subsidiary" (as defined below),
after the date hereof, the Company or the respective Subsidiary will cause
such new Subsidiary to become a "Guarantor" (and, thereby, an "Obligor")
hereunder pursuant to a written instrument in form and substance satisfactory
to each Bank and the Agent, and to deliver such proof of corporate action,
incumbency of officers, opinions of counsel and other documents as is
comparable to those delivered by each Obligor pursuant to Section 7.01 hereof
upon the making of the initial Loan hereunder or as any Bank or the Agent
shall have reasonably requested. For the purposes of this Section 9.13,
"Material Subsidiary" shall mean any Subsidiary of the Company (a) whose
assets equal 10% or more of the total assets of the Company and its
consolidated Subsidiaries, or (b) whose revenues equal 10% or more of the
total revenues of the Company and its consolidated Subsidiaries; in each
case, as of the end of the most recently completed fiscal year of the
Company.
Section 10. Events of Default. If one or more of the following events
(herein called "Events of Default") shall occur and be continuing:
(a) The Company shall default in the payment when due of any principal
of any Loan; or the Company shall default in the payment when due of any
interest or any other amount payable by it hereunder and such default shall
continue for a period of two Business Days; or
(b) The Company or any of its Subsidiaries shall default in the payment
when due of any principal of or interest on any of its other Indebtedness
aggregating $5,000,000 or more; or any event specified in any note,
agreement, indenture or other document evidencing or relating to any such
Indebtedness shall occur if the effect of such event is to cause, or (with
the giving of any notice or the lapse of time or both) to permit the holder
or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause, such Indebtedness to become due, or to be
required to be prepaid in full (whether by redemption, purchase or
otherwise), prior to its stated maturity; or
(c) Any representation, warranty or certification made or deemed made
herein (or in any modification or supplement hereto) by the Company, or any
certificate furnished to any Bank or the Agent pursuant to the provisions
hereof (or thereof), shall prove to have been false or misleading as of the
time made or furnished in any material respect; or
(d) The Company shall default in the performance of any of its
obligations under Section 9.01(f), or any of Sections 9.03 through and
including 9.12 hereof; or the Company shall default in the performance of any
of its other obligations in this Agreement and such default shall continue
unremedied for a period of thirty days after notice thereof to the Company by
the Agent or any Bank (through the Agent); or
(e) The Company or any of its Subsidiaries shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become
due; or
(f) The Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of
its property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code (as now
or hereafter in effect), (iv) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or readjustment of debts, (v) fail to controvert in a timely
and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code, or (vi) take any
corporation action for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application or
consent of the Company or any of its Subsidiaries, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of the
Company or such Subsidiary or of all or any substantial part of its assets,
or (iii) similar relief in respect of the Company or such Subsidiary under
any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in effect,
for a period of 60 or more days; or an order for relief against the Company
or such Subsidiary shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in excess of
$1,000,000 in the aggregate shall be rendered by a court or courts against
the Company and/or any of its Subsidiaries and the same shall not be
discharged (or provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within 30 days from the date of
entry thereof and the Company or the relevant Subsidiary shall not, within
said period of 30 days, or such longer period during which execution of the
same shall have been stayed, appeal therefrom and cause the execution thereof
to be stayed during such appeal; or
(i) An event or condition specified in Section 9.01(e) hereof shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur or in the opinion
of the Majority Bank shall be reasonably likely to incur a liability to a
Plan, a Multiemployer Plan or PBGC (or any combination of the foregoing)
which is, in the determination of the Majority Banks, material in relation to
the consolidated financial condition, operations, business or prospects taken
as a whole of the Company and its Consolidated Subsidiaries; or
(j) During any period of 12 consecutive calendar months, individuals
who were directors of the Company on the first day of such period shall no
longer (other than by reason of death) constitute a majority of the board of
directors of the Company;
THEREUPON: (i) in the case of an Event of Default other than one referred to
in clause (f) or (g) of this Section 10 with respect to the Company, the
Agent may and, upon request of the Majority Banks, shall, by notice to the
Company, cancel the Commitments and/or declare the principal amount then
outstanding of, and the accrued interest on, the Loans and all other amounts
payable by the Company hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.05 hereof) to be forthwith
due and payable, whereupon such amounts shall be immediately due and payable
without presentment, demand, protest or other formalities of any kind, all of
which are hereby expressly waived by the Company; and (ii) in the case of the
occurrence of an Event of Default referred to in clause (f) or (g) of this
Section 10 with respect to the Company, the Commitments shall automatically
be canceled and the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts payable by the Company hereunder
and under the Notes (including, without limitation, any amounts payable under
Section 5.05 hereof) shall automatically become immediately due and payable
without presentment, demand, protest or other formalities of any kind, all of
which are hereby expressly waived by the Company.
Section 11. The Agent.
11.01 Appointment, Powers and Immunities. Each Bank hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder with such
powers as are specifically delegated to the Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 11.05
and the first sentence of Section 11.06 hereof shall include reference to its
affiliates and its own and its affiliates' officers, directors, employees and
agents): (a) shall have no duties or responsibilities except those expressly
set forth in this Agreement, and shall not by reason of this Agreement be a
trustee for any Bank; (b) shall not be responsible to the Banks for any
recitals, statements, representations or warranties contained in this
Agreement, or in any certificate or other document referred to or provided
for in, or received by any of them under, this Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any other document referred to or provided for herein
or for any failure by the Company or any other Person to perform any of its
obligations hereunder or thereunder; (c) except as otherwise expressly set
forth herein, shall not be required to initiate or conduct any litigation or
collection proceedings hereunder; and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other
document or instrument referred to or provided for herein or in connection
herewith, except for its own gross negligence or willful misconduct. The
Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Agent, together with the written consent of the Company to such assignment or
transfer.
11.02 Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement, the Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Majority Banks, and such
instructions of the Majority Banks and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.
11.03 Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans or of commitment fees) unless the Agent has
received notice from a Bank or the Company specifying such Default and
stating that such notice is a "Notice of Default". In the event that the
Agent receives such a notice of the occurrence of a Default, the Agent shall
give prompt notice thereof to the Bank (and shall give each Bank prompt
notice of each such non-payment). The Agent shall (subject to Section 11.07
hereof) take such action with respect to such Default as shall be directed by
the Majority Banks, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
as it shall deem advisable in the best interest of the Banks.
11.04 Rights as a Bank. With respect to its Commitment and the Loans
made by it, Chase (and any successor acting as Agent) in its capacity as a
Bank hereunder shall have the same rights and powers hereunder as any other
Bank and may exercise the same as though it were not acting as the Agent, and
the term "Bank" or "Banks" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. Chase (and any successor
acting as Agent) and its affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with the Company (and any of its
Subsidiaries or Affiliates) as if it were not acting as the Agent, and Chase
and its Subsidiaries or Affiliates may accept fees and other consideration
from the Company for services in connection with this Agreement or otherwise
without having to account for the same to the Banks.
11.05 Indemnification. The Banks agree to indemnify the Agent (to the
extent not reimbursed under Section 12.03 hereof, but without limiting the
obligations of the Company under said Section 12.03), ratably in accordance
with their respective Commitments, for any and all liabilities obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement or any other documents contemplated by or referred to
herein or the transactions contemplated hereby (including, without
limitation, the costs and expenses which the Company is obligated to pay
under Section 12.03 hereof but excluding, unless a Default has occurred and
is continuing, normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or of any such other documents, provided that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Agent and other Banks. Each Bank agrees that it
has, independently and without reliance on the Agent or other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Company and its Subsidiaries and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement. The Agent
shall not be required to keep itself informed as to the performance or
observance by the Company of this Agreement or any other document referred to
or provided for herein or to inspect the properties or books of the Company
or any of its Subsidiaries. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition or business of the Company or any of its Subsidiaries (or any of
their affiliates) which may come into the possession of the Agent or any of
its affiliates.
11.07 Failure to Act. Except for action expressly required of the
Agent hereunder, the Agent shall in all cases be fully justified in failing
or refusing to act hereunder unless it shall receive further assurances to
its satisfaction from the Banks of their indemnification obligations under
Section 11.05 hereof against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.
11.08 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving notice thereof to the Banks and the Company, and the Agent
may be removed at any time without cause by the Majority Banks. Upon any
such resignation or removal, the Majority Banks shall have the right to
appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or
the Majority Banks' removal of the retiring Agent, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a bank
with a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After
any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Section 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as the Agent.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Agent or any Bank to
exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of
any remedies provided by law.
12.02 Notices. All notices and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, telecopy,
telegraph, cable or in writing (or, with respect to notices given pursuant to
Section 2.03 hereof, by telephone, confirmed in writing by telex by the close
of business on the day the notice is given) and telexed, telecopied,
telegraphed, cabled, mailed or delivered (or telephoned, as the case may be)
to the intended recipient at the "Address for Notices" specified below its
name on the signature pages hereof; or, as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such communications shall
be deemed to have been duly given when transmitted by telex or telecopier,
delivered to the telegraph or cable office of personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
12.03 Expenses, Etc. The Company agrees to pay or reimburse each of
the Banks and the Agent for paying: (a) all reasonable out-of-pocket costs
and expenses for the Agent (including, without limitation, the reasonable
fees and expenses of external counsel to the Agent and costs allocated by
the Agent's internal legal department (which, for the purposes of this
Section 12.03(a), shall constitute out-of-pocket expenses), in connection
with (i) the negotiation, preparation, execution and delivery of this
Agreement and the Notes and the making of the Loans hereunder and (ii) any
amendment, modification or waiver of any of the terms of this Agreement or
any of the Notes; (b) all reasonable costs and expenses of the Banks and the
Agent (including reasonable counsels' fees and costs allocated by their
respective internal legal departments) in connection with any Default and any
enforcement or collection proceedings resulting therefrom; and (c) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement,
any of the Notes or any other document referred to herein.
12.04 Amendments, Etc. Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be amended or modified only by
an instrument in writing signed by the Company, the Guarantors, the Agent and
the Majority Banks, or by the Company, the Guarantors and the Agent acting
with the consent of the Majority Banks, and any provision of this Agreement
may be waived by the Majority Banks or by the Agent acting with the consent
of the Majority Banks; provided that no amendment, modification or waiver
shall, unless by an instrument signed by all of the Banks or by the Agent
acting with the consent of all of the Banks: (i) increase or extend the term,
or extend the time or waive any requirement for the reduction or termination,
of the Commitments, (ii) extend any date fixed for the payment of principal
of or interest on any Loan, (iii) reduce the amount of any payment of
principal thereof or the rate at which interest is payable thereon or any fee
is payable hereunder, (iv) alter the terms of this Section 12.04, (v) amend
the definition of the term "Majority Banks", (vi) waive any of the conditions
precedent set forth in Section 7 hereof or (vii) alter the form of Exhibit E
hereto; and provided, further, that any amendment of Section 11 hereof, or
which increases the obligations of the Agent hereunder, shall require the
consent of the Agent.
12.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
12.06 Assignments and Participations.
(a) The Company may not assign its rights or obligations hereunder or
under the Notes without the prior consent of all of the Banks and the Agent.
(b) Except as otherwise provided in Section 2.10(b) hereof, no Bank may
assign any of its Loans, its Notes or its Commitment without the prior
consent of the Company and the Agent; provided that: (i) without the consent
of the Company or the Agent, any Bank may assign to another Bank all or
(subject to the further clauses below) any portion of its Commitment; (ii)
any such partial assignment shall be in multiples of $5,000,000; and (iii)
such assigning Bank shall also simultaneously assign to such assignee Bank
the same proportion of each of its Loans then outstanding (together with the
same proportion of its Notes then outstanding). Upon written notice to the
Company and the Agent of an assignment permitted by the preceding sentence
(which notice shall identify the assignee Bank, the amount of the assigning
Bank's Commitment and Loans assigned in detail reasonably satisfactory to the
Agent) and upon the effectiveness of any assignment consented to by the
Company and the Agent, the assignee shall have, to the extent of such
assignment (unless otherwise provided in such assignment with the consent of
the Company and the Agent), the obligations, rights and benefits of a Bank
hereunder holding the Commitment and Loans (or portions thereof) assigned to
it (in addition to the Commitment and Loans, if any, theretofore held by such
assignee) and the assigning Bank shall, to the extent of such assignment, be
released from the Commitment (or portions thereof) so assigned.
(c) A Bank may sell or agree to sell to one or more other Persons a
participation in all or any part of any Loan held by it or Loans made or to
be made by it, in which event each such participant shall be entitled to the
rights and benefits of the provisions of Section 9.01(g) hereof with respect
to its participation in such Loan as if (and the Company shall be directly
obligated to such participant under such provisions as if) such participant
were a "Bank" for purposes of said Section, but shall not have any other
rights or benefits under this Agreement or any Note (the participant's rights
against such Bank in respect of such participation to be those set forth in
the agreement (the "Participation Agreement") executed by such Bank in favor
of the participant). All amounts payable by the Company to any Bank under
Section 5 hereof shall be determined as if such Bank had not sold or agreed
to sell any participations in such Loan and as if such Bank were funding all
of such Loan in the same way that it is funding the portion of such Loan in
which no participations have been sold. In no event shall a Bank that sells
a participation be obligated to the participant under the Participation
Agreement to take or refrain from taking any action hereunder or under such
Bank's Note except that such Bank may agree in the Participation Agreement
that it will not, without the consent of the participant, agree to (i) the
increase or extension of the term, or the extension of the time or waiver of
any requirement for the reduction or termination, of such Bank's Commitment,
(ii) the extension of any date fixed for the payment of principal of or
interest on the related Loan or Loans or any portion of any fees payable to
the participant, (iii) the reduction of any payment of principal thereof, or
(iv) the reduction of the rate at which either interest is payable thereon or
(if the participant is entitled to any part thereof) commitment fee is
payable hereunder to a level below the rate at which the participant is
entitled to receive interest or commitment fee (as the case may be) in
respect of such participation.
(d) A Bank may furnish any information concerning the Company or any of
its Subsidiaries in the possession of such Bank from time to time to assignee
and participants (including prospective assignees and participants), subject,
however, to the provisions of Section 12.11 hereof.
(e) In addition to the assignments and participations permitted under
this Section 12.06, any Bank may assign and pledge all or any portion of its
Loans and Notes to (i) any affiliate of such Bank or (ii) any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the assigning
Bank from its obligations hereunder.
12.07 Survival. The obligations of the Company under Section 5.01,
5.05 and 12.03 hereof shall survive the repayment of the Loans and the
termination of the Commitments.
12.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any provision of this
Agreement.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
12.10 Governing Law; Submission to Jurisdiction; Wavier of Jury Trial.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH OBLIGOR HEREBY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING
IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
OBLIGOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
EACH OBLIGOR, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
12.11 Confidentiality. Each Bank and the Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices, any non-public information supplied to it by the Company pursuant
to this Agreement which is identified by the Company as being confidential at
the time the same is delivered to the Banks or the Agent, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any of the Banks or the Agent, (iii) to bank examiners, auditors
or accountants, (iv) to the Agent or any other Bank (or an Affiliate of such
Bank), (v) in connection with any litigation to which any one or more of the
Banks is a party or (vi) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers to the
respective Bank a Confidentiality Agreement in substantially the form of
Exhibit F hereto; and provided finally that in no event shall any Bank or the
Agent be obligated or required to return any materials furnished by the
Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE PEP BOYS - MANNY, MOE & JACK
By_____________________________________
Title:
Address for Notices:
3111 W. Allegheny Avenue
Philadelphia, Pennsylvania 19132
Telecopier No.:(215) 227-8078
Telephone No.:(215) 227-9202
Attention:Michael J. Holden
Senior Vice President and
Chief Financial Officer
With a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53d Street
New York, New York 10022-4677
Attention: Daniel D. Rubino, Esq.
<PAGE>
THE PEP BOYS - MANNY, MOE & JACK
OF CALIFORNIA, as a Guarantor
By_____________________________________
Title:
Address for Notices:
1122 W. Washington Boulevard
Los Angeles, California 90015
Telecopier No.:(215) 227-8078
Telephone No.:(215) 227-9202
Attention:Michael J. Holden
Senior Vice President and
Chief Financial Officer
<PAGE>
PBY CORPORATION, as a Guarantor
By_____________________________________
Title:
Address for Notices:
1105 North Market Street, Suite 1300
Wilmington, Delaware 19899
Telecopier No.: (215) 227-8078
Telephone No.: (215) 227-9202
Attention:Michael J. Holden
Senior Vice President and
Chief Financial Officer
<PAGE>
THE PEP BOYS - MANNY, MOE & JACK
OF DELAWARE, INC., as a Guarantor
By__________________________________
Title:
Address for Notices:
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
Telecopier No.: (215) 227-8078
Telephone No.: (215) 227-9202
Attention:Michael J. Holden
Senior Vice President
Chief Financial Officer
<PAGE>
THE PEP BOYS - MANNY, MOE & JACK
OF PUERTO RICO, INC., as a Guarantor
By___________________________________
Title:
Address for Notices:
3111 West Allegheny Avenue
Philadelphia, Pennsylvania 19132
Telecopier No.: (215) 227-8078
Telephone No.: (215) 227-9202
Attention:Michael J. Holden
Senior Vice President and
Chief Financial Officer
<PAGE>
COLCHESTER INSURANCE COMPANY,
as a Guarantor
By__________________________________
Title:
Address for Notices:
7 Burlington Square
Burlington, Vermont 05401
Telecopier No.: (215) 227-8078
Telephone No.: (215) 227-9202
Attention:Michael J. Holden
Senior Vice President and
Chief Financial Officer
<PAGE>
CARRUS SUPPLY CORPORATION,
as a Guarantor
By_________________________________
Title:
Address for Notices:
32 Loockerman Square, Suite L-100
Dover, Delaware 19901
Telecopier No.: (215) 227-8078
Telephone No.: (215) 227-9202
Attention:Michael J. Holden
Senior Vice President and
Chief Financial Officer
<PAGE>
Commitment THE CHASE MANHATTAN BANK
$25,000,000 (NATIONAL ASSOCIATION)
By_____________________________________
Title:
Lending Office for All Loans:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Address for Notices:
The Chase Manhattan Bank
(National Association)
c/o Chase National Corporate Services
Heights Plaza
777 Terrace Avenue - 3rd Floor
Hasbrouck Heights, New Jersey 07604
Telecopier No.: (201) 288-8231
Telephone No.: (201) 393-7286
Attention: Stephen Van Besien
Vice President
<PAGE>
Commitment CORESTATES BANK, as successor in
$25,000,000 interest to Philadelphia National Bank
By_____________________________________
Title:
Lending Office for All Loans:
CoreStates Bank
Eastern Corporate
1339 Chestnut Street
F.C. 1-8-3-16
P.O. Box 7618
Philadelphia, PA 19101-7618
Address for Notices for Business/Credit Matters:
CoreStates Bank
1339 Chestnut Street
F.C. 1-8-3-16
P.O. Box 7618
Philadelphia, PA 19101-7618
Telecopier No.:(215) 973-6745
Telephone No.:(215) 973-3858
Attention:Randy Southern
Vice President
Address for Notices for Administrative/Operations
Matters:
CoreStates Bank
1339 Chestnut Street
F.C. 1-8-3-16
P.O. Box 7618
Philadelphia, PA 19101-7618
Telecopier No.:(215) 973-2045
Telephone No.:(215) 973-4448
Attention:Sharon Burgess
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Terminating
Bank
By_____________________________________
Title:
<PAGE>
Commitment BANK OF AMERICA ILLINOIS, as successor in
$25,000,000 interest to Continental Bank
By_____________________________________
Title:
Lending Office for Syndicated Loans:
Bank of America Illinois
c/o 333 S. Beaudry Avenue, Dept. #5583
Los Angeles, CA 90017
Lending Office for Money Market Loans:
Bank of America N.T. % S.A.
555 California Street, 10th Fl.
San Francisco, CA 94104
Address for Notices for Business/Credit Matters
(not funding requests):
Bank of America Illinois
c/o 555 S. Flower Street, Dept. #5618, 11th Fl.
Los Angeles, CA 90017
Telecopier No.: (213) 228-2756
Telephone No.: (213) 228-2666
Attention:Yvonne C. Dennis
Address for Notices for Administrative/Operations
Matters,
including Fund Requests :
Bank of America Illinois
c/o 333 S. Beaudry Avenue, Dept. #5583
Los Angeles, CA 90017
Telecopier No.: (213) 345-6550
Telephone No.: (213) 345-6312
Attention:Jackie Holland
<PAGE>
FIRST INTERSTATE BANK OF ARIZONA, N.A.,
as a Terminating Bank
By_____________________________________
Title:
<PAGE>
Commitment NATIONSBANK, N.A. (CAROLINAS)
$25,000,000
By_____________________________________
Title:
Lending Office for All Loans:
NationsBank , N.A. (Carolinas)
100 North Tyron Street, 8th Floor
NC1-007-8-04
Charlotte, North Carolina 28255
Address for Notices:
NationsBank , N.A. (Carolinas)
100 North Tyron Street, 8th Floor
NC1-007-8-04
Charlotte, North Carolina 28255
Telecopier No.:(704) 386-3271
Telephone No.:(704) 386-1265
Attention:Greg Seaton
Senior Vice President
<PAGE>
Commitment TRUST COMPANY BANK, ATLANTA
$15,000,000
By_____________________________________
Title:
Lending Office for All Loans:
Trust Company Bank, Atlanta
25 Park Place
Atlanta, Georgia 30303
Address for Notices for Business/Credit Matters:
Trust Company Bank, Atlanta
25 Park Place
Atlanta, Georgia 30303
Telecopier No.:(404 ) 588-8833
Telephone No.:(404) 588-7546
Attention:Elizabeth A. Muse
Assistant Vice President
Address for Notices for Administrative/Operations
Matters:
Trust Company Bank, Atlanta
25 Park Place
Atlanta, Georgia 30303
Telecopier No.: (404) 588-8833
Telephone No.: (404) 588-8341
Attention:Sharon Judge
<PAGE>
THE FUJI BANK, LTD., as a Terminating Bank
By___________________________________
Title:
<PAGE>
Commitment FIRST FIDELITY BANK, N.A.
$15,000,000
By_____________________________________
Title:
Lending Office for All Loans:
First Fidelity Bank, N.A.
Borad & Chestnut Streets, 6th Fl.
Philadelphia, PA 19609
Address for Notices for Business/Credit Matters:
First Fidelity Bank, N.A.
123 South Broad Street
Philadelphia, Pennsylvania 19109
Telecopier No.: (215) 985-8793
Telephone No.: (215) 985-8133
Attention:Thomas C. Woodward
Vice President
Address for Notices for Administrative/Operations
Matters:
First Fidelity Bank, N.A.
123 South Broad Street, Suite 630
Philadelphia, PA 19109
Telecopier No.: (215) 985-8793
Telephone No.: (215) 985-3011
Attention:Anita L. Munce
<PAGE>
Commitment PNC BANK, N.A.
$25,000,000
By_____________________________________
Title:
Lending Office for All Loans:
PNC Bank, N.A.
100 S. Broad Street
Philadelphia, PA 19110
Address for Notices for Business/Credit Matters:
PNC Bank, N.A.
100 S. Broad Street
Philadelphia, PA 19110
Telecopier No.: (215) 585-6037
Telephone No.:(215) 585-7484
Attention:Robert Q. Reilly
Vice President
Address for Notices for Administrative/Operations
Matters:
PNC Bank, N.A.
100 S. Broad Street
Philadelphia, PA 19110
Telecopier No.: (215) 585-6037
Telephone No.:(215) 585-5286
Attention:Joyce Sanders
<PAGE>
Commitment NATWEST BANK, N.A., formerly known as
$25,000,000 National Westminster Bank
By_____________________________________
Title:
Lending Office for All Loans:
10 Exchange Place
Jersey City, NJ 07302
Address for Notices for Business/Credit Matters:
NatWest Bank, N.A.
One Presidential Boulevard, Suite 229
Bala Cynwyd, Pennsylvania 19004
Telecopier No.:(610) 660-9976
Telephone No.:(610) 660-9337
Attention:William K. Lacy
Vice President
Address for Notices for Administrative/Operations
Matters:
Natwest Bank, N.A.
22 Route 70 West
Cherry Hill, NJ 08002
Telecopier No.: (609) 795-4847
Telephone No.: (609) 795-3209
Attention:Monica Szczepankiewicz
<PAGE>
Commitment UNION BANK
$10,000,000
By_____________________________________
Title:
Lending Office for All Loans:
Union Bank
250 California Street, 11th Fl.
San Francisco, California 94104
Address for Notices for Business/Credit Matters:
Union Bank
350 California Streeet, 11th Floor
San Francisco, California 94104
Telecopier No.: (415) 705-7092
Telephone No.: (415) 705-7042
Attention:Cecilia M. Valente,
Vice President
With a copy to:
Union Bank
445 South Figueroa Street, 16th Floor
Los Angeles, California 90071
Telecopier No.:(213) 236-7636
Telephone No.:(213) 236-6604
Attention:Ann Yasuda, Vice President
Address for Notices for Administrative/Operations
Matters:
Union Bank
350 California Street, 10th Fl.
San Francisco, California 94104
Telecopier No.: (415) 705-7111
Telephone No.: (415) 705-7325
Attention:Mark McElwain
<PAGE>
Commitment CREDIT SUISSE
$10,000,000
By__________________________________
Title:
Lending Office for All Loans:
Credit Suisse
12 East 49th Street
New York, New York 10017
Address for Notices for Business/Credit Matters:
Credit Suisse
12 East 49th Street
New York, New York 10017
Telecopy No.: (212) 238-5389
Telephone No.: (212) 238-5359
Attention:Andres E. Shkane
Vice President
Address for Notices for Administrative/Operations
Matters:
Credit Suisse
12 East 49th Street
New York, New York 10017
Telecopier No.: (212) 238-5389
Telephone No.: (212) 238-5362
Attention:Yvette McQueen
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Agent
By_____________________________________
Title:
Address for Notices to Chase as Agent:
The Chase Manhattan Bank
(National Association)
4 Chase Metrotech Centerc, 13th Fl.
Brooklyn, New York 11245
Telecopier No.:(718) 242-6909
Telephone No.:(718) 242-7944
Attention:New York Agency Office
Laura Rebecca
<PAGE>
PRICING SCHEDULE
Each of the "Applicable Margin", "Commitment Fee Rate" and "Facility Fee
Rate" means, for any day, the per annum rates set forth below in the column
under such term and in the row corresponding to the "Debt to Capital Ratio"
that exists on such day.
Debt to Capital Applicable Commitment Facility
Ratio Eurodollar Fee Rate Fee Rate
Loans
- --------------- ---------- ---------- --------
<0.30 0.125% 0.000% 0.125%
>0.30 but 0.225% 0.000% 0.125%
LTE 0.35
<0.35 but 0.325% 0.025% 0.125%
LTE 0.40
>0.40 but 0.400% 0.050% 0.150%
LTE 0.45
>.045 0.625% 0.050% 0.200%
<PAGE>
<TABLE>
SCHEDULE I
THE PEP BOYS - MANNY, MOE & JACK
CREDIT AGREEMENTS/LIENS
AS OF APRIL 11, 1995
<CAPTION>
MATURITY HOLDER ENCUMBRANCE INTEREST PRINCIPLE
DATE RATE @ BALANCE AT
4/11/95 4/11/95
---------- ---------------- -------------- ---------------- ------------
<S> <C> <C> <C> <C>
I. MORTGAGES
08/01/16 Gale or Ida Cook Frederick, MD 8.000% $408,655
Prime minus 1/2%
05/31/96 IRB 1 - Brown Brothers Montgomeryville 6.500% $1,030,529
901 N. Wales Road Variable-Resets
N. Wales, PA 19454 Quarterly
07/3102 A & J Realty East Brunswick 7.500% $1,125,092
577 Route 18 Fixed
E. Brunswich, NJ 08816
-----------
TOTAL MORTGAGES $2,564,276
===========
II. NOTES PAYABLE
05/30/97 Senior Notes 9.330% $16,071,429
05/15/03 75 MIL 6 5/8% Notes 6.625% $75,000,000
04/15/96 125 MIL 8 7/8% Notes 8.875% $107,040,000
------------
TOTAL NOTES PAYABLE $198,111,429
============
III. UNSECURED LINES
MAXIMUM LINE USAGE
Bank of America $20,000,000 0
Brown Brothers $4,000,000 0
Chase Revolver $100,000,000 $100,000,000
Citibank $25,000,000 0
Corestates $15,000,000 0
Fidelity $50,000,000 $50,000,000
NationsBank $20,000,000 0
Natwest $20,000,000 $20,000,000
PNC $50,000,000 $600,000
-----------
TOTAL UNSECURED LINES $280,000,000 $170,600,000
============= ============
IV. CONVERTIBLE DEBT
09/01/99 4% Convertible Debt 4.000% $86,250,000
------------
TOTAL CONVERTIBLE DEBT~ $86,250,000
============
TOTAL DEBT $457,525,705
============
</TABLE>
<PAGE>
SCHEDULE II
SUBSIDIARIES OF THE PEP BOYS - MANNY, MOE & JACK
MARCH, 30, 1995
NAME WHERE % OF SHARES
INCORPORATED WHERE INCORPORATED
- -------------------------- ------------- ------------------
OWNED BY COMPANY
THE PEP BOYS-MANNY, MOE & CALIFORNIA 100%
JACK OF CALIFORNIA
1122 W. WASHINGTON BLVD.
LOS ANGELES, CA 90015
PEP BOYS - MANNY, MOE & JACK DELAWARE 100%
OF DELAWARE, INC.
3111 WEST ALLEGHENY AVENUE
PHILADELPHIA, PA 19132
PEP BOYS - MANNY, MOE & JACK DELAWARE 100%
OF PUERTO RICO, INC.
3111 WEST ALLEGHENY AVENUE
PHILADELPHIA, PA 19132
COLCHESTER INSURANCE COMPANY VERMONT 100%
7 BURLINGTON SQUARE
BURLINGTON, VT 05401
PBY CORPORATION DELAWARE 100%
SUITE 1300
1105 NORTH MARKET STREET
WILMINGTON, DE 19899
MMJ CORPORATION DELAWARE 100%
32 LOOCKERMAN SQUARE
SUITE L-100
DOVER, DE 19901
CARRUS SUPPLY CORPORATION DELAWARE 100%
32 LOOCKERMAN SQUARE
SUITE L-100
DOVER, DE 19901
<PAGE>
Exhibit A-1
[Form of Note for Syndicated Loans]
PROMISSORY NOTE
$_____________ April 21,
1995
New York, New York
FOR VALUE RECEIVED, THE PEP BOYS - MANNY, MOE & JACK, a Pennsylvania
corporation (the "Company"), hereby promises to pay to
____________________________ (the "Bank"), for account of its respective
Applicable Lending Offices provided for by the Credit Agreement referred to
below, at the principal office of The Chase Manhattan Bank (National
Association) at 1 Chase Manhattan Plaza, New York, New York 10081, the
principal sum of ____________ Dollars (or such lesser amount as shall equal
the aggregate unpaid principal under the Credit Agreement), in lawful money
of the United States of America and in immediately available funds, on the
dates and in the principal amounts provided in the Credit Agreement, and to
pay interest on the unpaid principal amount of each such Syndicated Loan, at
such office, in like money and funds, for the period commencing on the date
of such Syndicated Loan until such Syndicated Loan shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, type, interest rate and maturity date of each Syndicated
Loan made by the Bank to the Company, and each payment made on account of the
principal thereof, shall be recorded by the Bank on its books and, prior to
any transfer of this Note, endorsed by the Bank on the schedule attached
hereto or any continuation thereof.
This Note is one of the Notes referred to in the Amended and Restated Credit
Agreement (as modified and supplemented and in effect from time to time, the
"Credit Agreement") dated as of April 21, 1995 between the Company, the
Guarantors named therein, the banks named therein (including the Bank) and
The Chase Manhattan Bank (National Association), as Agent, and evidences
Syndicated Loans made by the Bank thereunder. Capitalized terms used in this
Note have the respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of Loans upon
the terms and conditions specified therein.
Except as permitted by Section 12.06(b) of the Credit Agreement, this Note
may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
THE PEP BOYS - MANNY, MOE & JACK
By______________________________________
Title:
<PAGE>
SCHEDULE OF LOANS
This Note evidences Loans made under the within-described Credit Agreement to
the Company, on the dates, in the principal amounts, of the types, bearing
interest at the rates and maturing on the dates set forth below, subject to
the payments and prepayments of principal set forth below:
<PAGE>
EXHIBIT A-2
[Form of Note for Money Market Loans]
PROMISSORY NOTE
April 21, 1995
New York, New York
FOR VALUE RECEIVED, THE PEP BOYS - MANNY, MOE & JACK, a Pennsylvania
corporation (the "Company"), hereby promises to pay to
____________________________ (the "Bank"), for account of its respective
Applicable Lending Offices provided for by the Credit Agreement referred to
below, at the principal office of The Chase Manhattan Bank (National
Association) at 1 Chase Manhattan Plaza, New York, New York 10081, the
aggregate unpaid principal amount of the Money Market Loans made by the Bank
to the Company under the Credit Agreement, in lawful money of the United
States of America and in immediately available funds, on the dates and in the
principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Money Market Loan, at such office,
in like money and funds, for the period commencing on the date of such Money
Market Loan until such Money Market Loan shall be paid in full, at the rates
per annum and on the dates provided in the Credit Agreement.
The date, amount, type, interest rate and maturity date of each Money Market
Loan made by the Bank to the Company, and each payment made on account of the
principal thereof, shall be recorded by the Bank on its books and, prior to
any transfer of this Note, endorsed by the Bank on the schedule attached
hereto or any continuation thereof.
This Note is one of the Notes referred to in the Amended and Restated Credit
Agreement (as modified and supplemented and in effect from time to time, the
"Credit Agreement") dated as of April 21, 1995 between the Company, the
Guarantors named therein, the banks named therein (including the Bank) and
The Chase Manhattan Bank (National Association), as Agent, and evidences
Money Market Loans made by the Bank thereunder. Capitalized terms used in
this Note have the respective meanings assigned to them in the Credit
Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of Loans upon
the terms and conditions specified therein.
Except as permitted by Section 12.06(b) of the Credit Agreement, this Note
may not be assigned by the Bank to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
THE PEP BOYS - MANNY, MOE & JACK
By___________________________________
Title:
<PAGE>
SCHEDULE OF LOANS
This Note evidences Loans made under the within-described Credit Agreement to
the Company, on the dates, in the principal amounts, of the types, bearing
interest at the rates and maturing on the dates set forth below, subject to
the payments and prepayments of principal set forth below:
<PAGE>
EXHIBIT B
[Form of Opinion of Willkie Farr & Gallagher, Counsel to the Obligors]
April 21, 1995
To: The Banks party to the Credit
Agreement referred to below and
The Chase Manhattan Bank
(National Association), as Agent
Ladies and Gentlemen:
We have acted as counsel to The Pep Boys - Manny, Moe & Jack (the "Company")
in connection with the Amended and Restated Credit Agreement (the "Credit
Agreement"), dated as of April 21, 1995, between the Company, the Guarantors
named therein (the "Guarantors", and together with the Company, the
"Obligors"), the Banks named therein (the "Banks") and The Chase Manhattan
Bank (National Association), as Agent (the "Agent"), providing for loans to
be made by such Banks to the Company in an aggregate principal amount not
exceeding $200,000,000. Terms defined in the Credit Agreement are used
herein as defined therein.
In rendering the opinion expressed below, we have examined the originals or
conformed copies of such corporate records, agreements and instruments of the
Company and the Guarantors, certificates of public officials and other
officers of the Company and the Guarantors, and such other documents and
records, and such matters of law, as we have deemed appropriate as a basis
for the opinions hereinafter expressed. As to various questions of fact
material to such opinions, we have relied without independent check or
verification upon representations contained in the Credit Agreement and in
certificates of, or communications with, officers of the Obligors and of
public officials.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania and has the
necessary corporate power to make and perform its obligations under the
Credit Agreement and the Notes and to borrow under the Credit Agreement.
Each Guarantor is a corporation duly incorporated, validly existing and in
good standing under the laws of the jurisdiction indicated opposite its name
on Schedule II to the Credit Agreement and has the necessary corporate power
to make and perform its obligations under the Credit Agreement. Each of the
Company and the Guarantors is duly qualified to transact business as a
foreign corporation in good standing in the jurisdictions set forth in
Exhibit A hereto, an officer of the Company having furnished to us a
certificate annexed as Exhibit B hereto that such jurisdictions are the sole
jurisdictions in which the property owned, leased or operated or the business
conducted is material to the Company and its Subsidiaries, taken as a whole.
2.The making and performance by the Company of its obligations under the
Credit Agreement and the Notes and the borrowings thereunder and the making
and performance by each Guarantor of its obligations under the Credit
Agreement have been duly authorized by all necessary corporate action by each
such party, and do not and will not violate any provision of law or
regulation or any provision of their respective charter or by-laws or result
in the breach of, or constitute a default or require any consent under, or
result in the creation of any Lien under any of their respective properties
or assets pursuant to, any indenture or other agreement or instrument known
to us (after due inquiry) to which any of them is a party or by which any of
them or their properties may be bound, except in each case set forth above
for such violations, breaches, defaults, consents or Liens which would not
have a material adverse effect on the consolidated financial condition,
operations, business or prospects taken as a whole of the Company and its
Consolidated Subsidiaries.
3.The Credit Agreement constitutes (assuming due authorization, execution and
delivery by the Banks and the Agent), and the Notes, when executed and
delivered for value, will constitute, legal, valid and binding obligations of
the Obligors party thereto enforceable in accordance with their respective
terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws of general
applicability affecting the enforcement of creditors' rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and the
discretion of the court before which any proceeding therefor may be brought.
We express no opinion as to (i) Section 4.05(c) of the Credit Agreement, (ii)
the effect of the law of any jurisdiction (other than the State of New York)
wherein any Bank (including any of its Applicable Lending Offices) may be
located which limits rates of interest which may be charged or collected by
such Bank, (iii) whether a federal or state court outside of the State of New
York would give effect to the choice of New York law provided for in the
Credit Agreement and the Notes, (iv) the second sentence of Section 12.10 of
the Credit Agreement, insofar as such sentence relates to the subject matter
jurisdiction of the United States District Court for the Southern District of
New York to adjudicate any controversy related to the Credit Agreement or the
Notes, (v) the waiver of inconvenient forum set forth in Section 12.10 of the
Credit Agreement with respect to proceedings in the United States District
Court for the Southern District of New York or (vi) the last sentence of
Section 12.10. In addition, we understand that you have considered the
applicability of fraudulent transfer laws, as to which we express no opinion,
to the transactions contemplated by the Credit Agreement, and have satisfied
yourself with respect thereto. Without limiting the generality of the
foregoing, we have assumed, in rendering the opinion expressed in this
paragraph, that, at the time of the execution and delivery of the Credit
Agreement by each of the Guarantors, each Guarantor is, and after giving
effect to any payment by such Guarantor under the Guarantee set forth in
Section 6 of the Credit Agreement (or any other provision of the Credit
Agreement under which such Guarantor agrees to be liable for the payment of
amounts from time to time owing to the Banks or the Agent by the Company)
such Guarantor will be, solvent and that adequate consideration exists, in
the case of each Guarantor, for its execution, delivery and performance of
such Guarantee (and its agreement in respect of any such other provision).
4.To our knowledge, there are no legal or arbitral proceedings, and no
proceedings by or before any governmental or regulatory authority or agency,
pending or threatened against or affecting the Company or any of its
Subsidiaries, or any properties or rights of the Company or any of its
Subsidiaries, which, if adversely determined, would have a material adverse
effect on the consolidated financial condition, operations, business or
prospects taken as a whole of the Company and its Consolidated Subsidiaries.
5.No authorizations, consents, approvals, licenses, filings or registrations
with, any governmental or regulatory authority or agency are required in
connection with the execution, delivery or performance by any Obligor of its
obligations under the Credit Agreement or the Notes.
We are members of the Bar of the State of New York and the Commonwealth of
Pennsylvania and do not purport to be experts in, or to render any opinions
with respect to, the laws of any state or jurisdiction other than the laws of
the State of New York, the Commonwealth of Pennsylvania and the federal laws
of the United States of America. The opinions expressed herein are given as
of the date hereof, and we assume no obligation to update or supplement such
opinions to reflect any fact or circumstance that may hereafter come to our
attention or any change in law that may hereafter occur or hereafter become
effective.
This opinion is limited to matters expressly set forth herein and no opinion
is to be implied or may be inferred beyond the matters expressly stated
herein. This opinion is furnished to you only and is solely for your benefit
and may not be relied upon by any other person, firm, corporation or entity
without our express written consent in each instance.
Very truly yours,
<PAGE>
Exhibit A
FOREIGN QUALIFICATIONS
The Pep Boys - Manny, Moe & Jack
Alabama Kentucky Ohio
Arkansas Louisiana Oklahoma
Colorado Maryland Pennsylvania
Delaware Massachusetts Rhode Island
District of Columbia Missouri South Carolina
Florida New Jersey Tennessee
Georgia New York Texas
Indiana North Carolina Virginia
The Pep Boys - Manny, Moe & Jack of California
Arizona Kansas Utah
California Nevada New Mexico
Illinois Texas
The Pep Boys - Manny, Moe & Jack of Delaware, Inc.
[to come based on asset transfers]
<PAGE>
Exhibit B
THE PEP BOYS - MANNY, MOE & JACK
Secretary's Certificate
I, Frederick A. Stampone, Secretary of The Pep Boys - Manny, Moe & Jack, a
Pennsylvania corporation (the "Company"), DO HEREBY CERTIFY that set forth
below is a complete and accurate list of the jurisdictions in which the
property owned, leased or operated or the business conducted by the Company
or any of its subsidiaries is material to the Company and its subsidiaries,
taken as a whole:
The Pep Boys - Manny, Moe & Jack
Alabama Kentucky Ohio
Arkansas Louisiana Oklahoma
Colorado Maryland Pennsylvania
Delaware Massachusetts Rhode Island
District of Columbia Missouri South Carolina
Florida New Jersey Tennessee
Georgia New York Texas
Indiana North Carolina Virginia
The Pep Boys - Manny, Moe & Jack of California
Arizona Kansas Utah
California Nevada New Mexico
Illinois Texas
The Pep Boys - Manny, Moe & Jack of Delaware, Inc.
[to come based on asset transfers]
IN WITNESS WHEREOF, I have executed this certificate as of this ___ day of
April, 1995.
THE PEP BOYS - MANNY, MOE & JACK
BY:
Name: Frederick A. Stampone
Title: Secretary
<PAGE>
EXHIBIT C
[Form of Money Market Quote Request]
[Date]
To: The Chase Manhattan Bank, N.A.,
as Agent
From: The Pep Boys - Manny, Moe & Jack
Re: Money Market Quote Request
Pursuant to Section 2.03 of the Amended and Restated Credit Agreement (the
"Credit Agreement") dated as of April 21, 1995 between The Pep Boys - Manny,
Moe & Jack, the Guarantors named therein, the Banks named therein and The
Chase Manhattan Bank, N.A., Agent, we hereby give notice that we request
Money Market Quotes for the following proposed Money Market Borrowing(s):
Borrowing Quotation Interest
Date Date 1/ Amount 2/ Type 3/ Period 4/
Terms used herein have the meanings assigned to them in the Credit Agreement.
The Pep Boys - Manny, Moe & Jack
By______________________________
Title:
______________
*All numbered footnotes appear on the last page of this
Exhibit.______________
1/ For use if a Money Market Rate in a Set Rate Auction is requested to be
submitted before the Borrowing Date.
2/ Each amount must be $10,000,000 or a larger multiple of $1,000,000.
3/ Insert either "Margin" (in the case of LIBOR Market Loans) or "Rate" (in
the case of Set Rate Loans).
4/ 1, 2, 3 or 6 months, in the case of a LIBOR Market Loan or, in the case of
a Set Rate Loan, a period of up to 180 days after the making of such Set Rate
Loan and ending on a Business Day.
<PAGE>
EXHIBIT D
[Form of Money Market Quote]
The Chase Manhattan Bank, N.A., as Agent
90 William Street -- 16th Floor
New York, New York 10081
Attention:
Re: Money Market Quote to
The Pep Boys - Manny, Moe & Jack (the "Borrower")
This Money Market Quote is given in accordance with Section 2.03(c) of the
Amended and Restated Credit Agreement (the "Credit Agreement") dated as of
April 21, 1995 between The Pep Boys - Manny, Moe & Jack, the Guarantors named
therein, the Banks named therein and The Chase Manhattan Bank, N.A., as
Agent. Terms defined in the Credit Agreement are used herein as defined
therein.
In response to the Borrower's invitation dated _________, 19__, we hereby
make the following Money Market Quote(s) on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Borrowing Quotation Interest
Date Date 1/ Amount 2/ Type 3/ Period 4/ Rate 5/
_______________
*All number footnotes appear on the last page of this Exhibit.
We understand and agree that the offer(s) set forth above, subject
to the satisfaction of the applicable conditions set forth in the Credit
Agreement, irrevocably obligate(s) us to make the Money Market Loan(s) for
which any offer(s) [is] [are] accepted, in whole or in part (subject to the
third sentence of Section 2.03(e) of the Credit Agreement).
Very truly yours,
[Name of Bank]
Dated: By:_____________________________
Authorized Officer
_________________
1/ As specified in the related Money Market Quote Request
2/ The principal amount bid for each Interest Period may not exceed the
principal amount requested. Bids must be made for at least $5,000,000 or a
larger multiple of $1,000,000.
3/ Indicate "Margin" (in the case of LIBOR Market Loans) or "Rate" (in the
case of Set Rate Loans).
4/ 1, 2, 3 or 6 months in the case of a LIBOR Market Loan or, in the case of
a Set Rate Loan, a period of up to 180 days after the making of such Set Rate
Loan and ending on a Business Day, as specified in the related Money Market
Quote Request.
5/ For a LIBOR Market Loan, specify margin over or under the London interbank
offered rate determined for the applicable Interest Period. Specify
percentage (rounded to the nearest 1/10,000 of 1%) and specify whether "PLUS"
or "MINUS". For a Set Rate Loan, specify rate of interest per annum (rounded
to the nearest 1/10,000 of 1%).
<PAGE>
EXHIBIT E
[Form of Request for Extension of Commitment Termination Date]
[Date]
To the Banks Party to the credit
Agreement Referred to Below
We hereby request an extension of the Commitment Termination Date
currently specified in the definition of "Commitment Termination Date" in
Section 1.01 of the Amended and Restated Credit Agreement dated as of April
21, 1995 (as amended) between the undersigned, the Guarantors party thereto
(the "Guarantors"), the banks party thereto (the "Banks") and The Chase
Manhattan Bank (National Association) to April 21, 199_ (the "New Commitment
Termination Date"). Upon the Agent's receipt of a counterpart of this letter
by each Bank and each Guarantor indicating its consent to this request, the
"Commitment Termination Date" specified in the definition thereof in Section
1.01 of such Credit Agreement shall be the New Commitment Termination Date.
THE PEP BOYS - MANNY, MOE & JACK
By______________________________
Title:
[GUARANTOR A]
By______________________________
Title:
Consented:
[BANK A]
By_________________________________
Title:
THE CHASE MANHATTAN BANK, as Agent
By__________________________________
Title:
<PAGE>
EXHIBIT F
[Form of Confidentiality Agreement]
[Date]
CONFIDENTIALITY AGREEMENT
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Amended and Restated Credit Agreement dated as of
April 21, 1995 between The Pep Boys - Manny, Moe & Jack, the Guarantors party
thereto, the banks party thereto, and The Chase Manhattan Bank (National
Association), as Agent.
Dear__________:
As a Bank party to the above-referenced Amended and Restated
Credit Agreement (the "Credit Agreement"), we have agreed with The Pep Boys -
Manny, Moe & Jack (the "Company") pursuant to Section 12.11 of the Credit
Agreement to use reasonable precautions to keep confidential, except as
otherwise provided therein, all non-public information identified by the
Company as being confidential at the time same is delivered to us pursuant to
the Credit Agreement.
As provided in said Section 12.11, we are permitted to provide
you, as a prospective [holder of a participation in the Loans (as defined in
the Credit Agreement)] [assignee Bank], with certain of such non-public
information subject to the execution and delivery by you, prior to receiving
such non-public information, of a Confidentiality Agreement in this form.
Such information will not be made available to you until your execution and
return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on
behalf of yourself and each of your affiliates, directors, officers,
employees and representatives) that (A) such information will not be used by
you except in connection with the proposed [participation] [assignment]
mentioned above and (B) you shall use reasonable precautions, in accordance
with your customary procedures for handling confidential information and in
accordance with safe and sound banking practices, to keep such information
confidential, provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to your counsel or to counsel for any of the Banks or
the Agent, (iii) to bank examiners, auditors or accountants, (iv) to the
Agent or any other Bank, (v) in connection with any litigation to which you
or any one or more of the Banks is a party; provided, further, that in no
event shall you be obligated to return any materials furnished to you
pursuant to this Confidentiality Agreement.
Would you please indicate your agreement to the foregoing by
signing at the place provided below the enclosed copy of this Confidentiality
Agreement.
Very truly yours,
[Insert Name of Bank]
By:________________________
Title:
The foregoing is agreed to
as of the date of this letter.
[Insert name of prospective
participant or assignee]
By:_______________________
<PAGE>
