<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 2, 1997
----------------------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ______________
Commission file number 1-11084
--------
KOHL'S CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
WISCONSIN 39-1630919
- -------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 703-7000
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 Days.
Yes X No ______
-----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: September 10, 1997 Common
-------------------------
Stock, Par Value $.01 per Share, 78,781,768 Shares Outstanding.
- --------------------------------------------------------------
<PAGE>
KOHL'S CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets at
August 2, 1997, February 1, 1997 and
August 3, 1996 3
Condensed Consolidated Statements of Income
for the Three Months and Six Months Ended
August 2, 1997 and August 3, 1996 4
Consolidated Statement of Changes in
Shareholders' Equity for the Six Months
Ended August 2, 1997 5
Condensed Consolidated Statements of
Cash Flows for the Six Months Ended
August 2, 1997 and August 3, 1996 6
Notes to Condensed Consolidated Financial
Statements 7-8
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 13
Signatures 14
-2-
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
August 2, February 1, August 3,
1997 1997 1996
(Unaudited) (Audited) (Unaudited)
---------------------------------------
<S> <C> <C> <C>
Assets
--------
Current assets:
Cash and cash equivalents $2,205 $8,906 $4,650
Merchandise inventories 553,242 423,207 441,236
Other 16,406 33,045 12,793
------------ --------- ---------
Total current assets 571,853 465,158 458,679
------------ --------- ---------
Property and equipment, at cost 828,148 725,082 586,496
Less accumulated depreciation 151,125 128,855 109,681
------------ --------- ---------
677,023 596,227 476,815
Other assets 8,254 7,615 5,636
Favorable lease rights 17,042 18,076 19,567
Goodwill 32,738 35,338 37,938
------------ ---------- ----------
Total assets $1,306,910 $1,122,414 $998,635
============ ========== ==========
Liabilities and Shareholders' Equity
-------------------------------------
Current liabilities:
Accounts payable $ 188,635 $ 126,548 $160,394
Accrued liabilities 83,496 79,594 57,311
Income taxes payable 11,156 25,470 6,362
Deferred income taxes - 2,544 6,865
Current portion of long-term debt 1,663 1,663 1,425
------------ ---------- ----------
Total current liabilities 284,950 235,819 232,357
Long-term debt 404,262 312,031 269,532
Deferred income taxes 39,954 38,731 32,189
Other long-term liabilities 20,447 18,362 23,161
Shareholders' equity
Common stock-$.01 par value, 400,000,000 shares
authorized, 74,136,042, 73,920,277 and 73,857,108
issued at August 2, 1997, February 1, 1997 and
August 3, 1996 respectively. 741 739 739
Paid-in capital 197,026 193,351 191,165
Retained earnings 359,530 323,381 249,492
------------ ---------- ----------
Total shareholders' equity 557,297 517,471 441,396
------------ ---------- ----------
Total liabilities and shareholders' equity $1,306,910 $1,122,414 $998,635
============ ========== ==========
See accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>
3
<PAGE>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
3 MONTHS 3 MONTHS 6 MONTHS 6 MONTHS
(13 WEEKS) (13 WEEKS) (26 WEEKS) (26 WEEKS)
ENDED ENDED ENDED ENDED
AUGUST 2, AUGUST 3, AUGUST 2, AUGUST 3,
1997 1996 1997 1996
----------------------------------------------------
(In thousands except per share data)
<S> <C> <C> <C> <C>
Sales $623,937 $474,598 $1,224,484 $943,236
Cost of merchandise sold 415,852 318,040 813,229 629,876
---------- --------- ---------- ---------
Gross margin 208,085 156,558 411,255 313,360
Operating expenses:
Selling, general, and administrative 152,245 117,439 298,996 233,329
Depreciation and amortization 12,821 9,064 24,521 17,729
Goodwill amortization 1,300 1,300 2,600 2,600
Preopening expenses 56 111 12,168 3,750
---------- --------- ---------- ---------
Operating income 41,663 28,644 72,970 55,952
Interest expense, net 6,986 3,640 12,822 7,742
---------- --------- ---------- ---------
Income before income taxes 34,677 25,004 60,148 48,210
Provision for income taxes 13,836 10,176 23,999 19,621
---------- --------- ---------- ---------
Net income $ 20,841 $ 14,828 $ 36,149 $ 28,589
========== ========= ========== =========
Earnings per share:
Net income $0.28 $0.20 $0.49 $0.39
========== ========= ========== =========
Weighted average number of common shares 74,095 73,824 74,043 73,798
========== ========= ========== =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
4
<PAGE>
KOHL'S CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Paid-In Retained
----------------------------------
Shares Amount Capital Earnings Total
------------------------------------------------------------------------------------------
(In thousands, except share data)
<S> <C> <C> <C> <C> <C>
Balance at February 1, 1997 73,920,277 $739 $193,351 $323,381 $517,471
Net income - - - 36,149 36,149
Exercise of stock options 215,765 2 3,675 - 3,677
------------------------------------------------------------------------------------------
Balance at August 2, 1997 74,136,042 $741 $197,026 $359,530 $557,297
==========================================================================================
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
5
<PAGE>
<TABLE>
<CAPTION>
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
6 Months 6 Months
(26 Weeks) (26 Weeks)
Ended Ended
August 2, 1997 August 3, 1996
--------------------------------
(In thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 36,149 $ 28,589
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 27,364 20,418
Deferred income taxes (1,321) 2,649
Other noncash charges 1,067 735
Changes in operating assets and liabilities (60,375) (48,949)
---------- ---------------
Net cash provided by operating activities 2,884 3,442
INVESTING ACTIVITIES
Acquisition of property and equipment, net (104,300) (84,090)
Other (1,098) (626)
---------- ---------------
Net cash used in investing activities (105,398) (84,716)
FINANCING ACTIVITIES
Net borrowings (repayments) under working capital loan 93,000 (17,500)
Proceeds from public debt offering - 100,000
Repayments of long-term debt (769) (667)
Payment of financing fees on debt (95) (897)
Net proceeds from issuance of common shares
(including stock options) 3,677 2,169
---------- ---------------
Net cash provided by financing activities 95,813 83,105
---------- ---------------
Net increase (decrease) in cash and cash equivalents (6,701) 1,831
Cash and cash equivalents at beginning of period 8,906 2,819
---------- ---------------
Cash and cash equivalents at end of period $ 2,205 $ 4,650
========== ===============
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
6
<PAGE>
KOHL'S CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for fiscal year end financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. For further information, refer to the financial statements and
footnotes thereto included in the Company's Form 10-K (Commission File No. 1-
11084) filed with the Securities and Exchange Commission.
2. INVENTORIES
The Company uses the last-in, first out (LIFO) method of accounting for
merchandise inventory because it results in a better matching of cost and
revenues. The following information is provided to show the effects of the LIFO
provision on the quarter, as well as to provide users with the information to
compare to other companies not on LIFO.
<TABLE>
<CAPTION>
LIFO Expense 6 Months Ended
------------ --------------
Quarter August 2, 1997 August 3, 1996
------- -------------- --------------
(In Thousands)
<S> <C> <C>
First $1,501 $1,171
Second 1,560 1,184
----- -----
Total $3,061 $2,355
</TABLE>
Inventories would have been $7,937,000, $4,876,000 and $2,016,000 higher at
August 2, 1997, February 1, 1997 and August 3, 1996, respectively if they had
been valued using the first-in, first-out (FIFO) method.
3. CONTINGENCIES
The Company is involved in various legal matters arising in the normal
course of business. In the opinion of management, the outcome of such
proceedings and litigation will not have a material adverse impact on the
Company's financial position or results of operations.
-7-
<PAGE>
The Internal Revenue Service (the "IRS") has audited the Company's federal
income tax returns for fiscal years ended August 1986, 1987 and 1988. In January
1994, the IRS proposed approximately $20 million of tax consisting primarily of
an adjustment to the LIFO inventory method used by the Company. The impact of
the proposed adjustments before interest had previously been reflected in the
Company's deferred income tax accounts. The Company contested the proposed
adjustments vigorously within the administrative appeals process of the IRS and
has reached a tentative resolution of the matter which, if finalized, would not
have a material adverse impact on the Company's results of operations or
liquidity.
4. NEW ACCOUNTING PRONOUNCEMENT
In February 1997, the FASB issued Statement No. 128, Earnings Per Share,
which specifies the computation, presentation and disclosure requirements for
earnings per share (EPS) for entities with publicly held common stock or
potential common stock. Statement 128 will require reporting of both basic and
diluted EPS effective for annual and interim periods ending after December 15,
1997.
If the Company were reporting pursuant to Statement 128, earnings per share
would have been $0.27 and $0.20 for the three months ended August 2, 1997 and
August 3, 1996, respectively. For the six months ended August 2, 1997 and
August 3, 1996, earnings per share would have been $0.48 and $0.38,
respectively. The dilutive effect is a result of unexercised stock options.
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
----------------------------------------------
THREE MONTHS AND SIX MONTHS ENDED AUGUST 2, 1997
------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
At August 2, 1997, the Company operated 172 stores compared with 138 stores
at the same time last year. The Company successfully opened two new stores
during the last week of the quarter: an additional store in the Philadelphia
market and its second store in Louisville, Kentucky.
Net sales increased $149.3 million or 31.5% to $623.9 million for the three
months ended August 2, 1997 from $474.6 million for the three months ended
August 3, 1996. Of the increase, $101.2 million is attributable to the
inclusion of 22 new stores opened in 1996 and 22 new stores opened in 1997. The
remaining $48.1 million is attributable to comparable store sales growth of
10.6% (excluding the discontinued electronics business).
Net sales increased $281.3 million or 29.8% to $1,224.5 million for the six
months ended August 2, 1997 from $943.2 million for the six months ended August
3, 1996. Of the increase, $193.4 million is attributable to the inclusion of 22
new stores opened in 1996 and 22 new stores opened in 1997. The remaining $87.8
million is attributable to comparable store sales growth of 10.1% (excluding the
discontinued electronics business).
Gross margin for the three months ended August 2, 1997 was 33.4% compared
to 33.0% in the three months ended August 3, 1996. Gross margin for the six
months ended August 2, 1997 was 33.6% compared to 33.2% in the six months ended
August 3, 1996. This increase is primarily attributable to the elimination of
the Company's electronics business in 1996.
Operating income for the three months ended August 2, 1997 increased $13.0
million or 45.5% over the three months ended August 3, 1996. Operating income
for the six months ended August 2, 1997, increased $17.0 million or 30.4% over
the six months ended August 3, 1996. These increases resulted primarily from
the increased sales and the Company's ability to leverage its selling, general
and administrative expenses as net sales increased. Selling, general and
administrative expenses declined to 24.4% of net sales for the three months
ended August 2, 1997 from 24.7% of net sales for the three months ended August
3, 1996. Selling, general and administrative expenses declined to 24.4% of net
sales for the six months ended August 2, 1997 from 24.7% of net sales for the
six months ended August 3, 1996.
-9-
<PAGE>
The Company expensed $0.1 million of preopening expenses for the quarters
ended August 2, 1997 and August 3, 1996. In the six months ended August 2,
1997, the Company expensed $12.2 million of preopening expenses associated with
the opening of 22 stores and the relocation of one store, with the balance of
the preopening expense of two stores to be expensed in the three months ended
November 1, 1997. The Company expensed $3.8 million of preopening expenses for
ten stores opened in the six months ended August 3, 1996. These expenses relate
to the costs associated with new store openings, including hiring and training
costs for new employees, Kohl's charge account solicitation, and processing and
transporting initial merchandise.
Net interest expense for the three months ended August 2, 1997 increased
$3.3 million from the three months ended August 3, 1996. Net interest expense
for the six months ended August 2, 1997 increased $5.1 million from the six
months ended August 3, 1996. The increase was due to higher interest rates
associated with the $100 million non-callable 7.375% unsecured senior notes
issued in October 1996, and increased capital spending and working capital
requirements of new stores.
For the three months ended August 2, 1997, net income increased 40.6% to
$20.8 million from $14.8 million in the three months ended August 3, 1996.
Earnings were $.28 per share for the three months ended August 2, 1997 compared
to $.20 per share for the three months ended August 3, 1996. Net income for the
six months ended August 2, 1997 increased 26.4% to $36.1 million or $.49 per
share from $28.6 million or $.39 per share in the six months ended August 3,
1996.
SEASONALITY & INFLATION
- -----------------------
The Company's business is seasonal, reflecting increased consumer buying in
the "back-to-school" and Christmas seasons. The Company's financial position
and operations are also affected by the timing of new store openings. Inflation
did not materially affect the Company's net income during the periods presented.
-10-
<PAGE>
FINANCIAL CONDITION AND LIQUIDITY
- ---------------------------------
The Company's primary ongoing cash requirements are for inventory
purchases, capital expenditures in connection with the Company's expansion and
remodeling programs and preopening expenses. The Company's primary sources of
funds for its business activities are cash flow from operations, borrowings
under its revolving credit facility and short-term trade credit. Short-term
trade credit, in the form of extended payment terms for inventory purchases or
third party factor financing, represents a significant source of financing for
merchandise inventories. The Company's working capital and inventory levels
typically build throughout the fall, peaking during the Christmas selling
season.
At August 2, 1997, the Company's merchandise inventories had increased
$130.0 million over the February 1, 1997 balance and $112.0 million over the
August 3, 1996 balance. These increases reflect the purchase of fall inventory
as well as inventory for new stores. The Company's working capital increased to
$286.9 million at August 2, 1997 from $229.3 million at February 1, 1997 and
$226.3 million at August 3, 1996. The increase is due primarily to higher
inventory levels offset in part by increased accounts payable. The Company
expects working capital levels to continue to grow as new stores are opened.
Cash provided by operating activities was $2.9 million for the six months
ended August 2, 1997 compared to $3.4 million for the six months ended August 3,
1996. Excluding changes in operating assets and liabilities, cash provided by
operating activities was $63.3 million for the six months ended August 2, 1997
compared to $52.4 million for the six months ended August 3, 1996.
Capital expenditures for the six months ended August 2, 1997 were $104.3
million compared to $84.1 million for the same period a year ago. The increase
in expenditures in 1997 is primarily attributable to the opening of 22 new
stores and the construction of a third distribution center for the six months
ended August 2, 1997 compared to ten new stores for the six months ended August
3, 1996 and the relocation of the Company's Corporate headquarters within
Menomonee Falls in July 1996 to an owned facility.
Total capital expenditures for fiscal 1997 are currently expected to be
approximately $200.0 to $220.0 million (excluding assets under capital leases).
The actual amount of the Company's future annual capital expenditures will
depend primarily on the number of new stores opened, whether such stores are
owned or leased by the Company and the number of existing stores remodeled or
refurbished.
-11-
<PAGE>
In August, 1997 the Company issued 4,570,300 of its common stock to the
public. Net proceeds of approximately $282.9 million will be used for general
corporate purposes, including financing the Company's continued store growth.
The Company anticipates that with current working capital, cash flows from
operations, seasonal borrowings under its revolving credit facility, short-term
trade credit and other lending facilities, it will be able to satisfy its
current operating needs, planned capital expenditures and debt service
requirements
Information in this document contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995, such as
statements relating to debt service requirements and planned capital
expenditures. Forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "expects", "may", "will",
"should" or "anticipates" or the negative thereof or other variations thereon.
No assurance can be given that the future results covered by the forward-looking
statements will be achieved.
-12-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
10.1 Revolving Credit Agreement dated as of June 13, 1997,
among Kohl's Corporation, Kohl's Department Stores, Inc.,
various commercial banking institutions, the Bank of New
York, as Administrative Agent, and The First National Bank
of Chicago, as Syndication Agent.
10.2 Amendment No. 2 to Receivables Purchase Agreement dated
as of May 3, 1997.
10.3 Amendment No. 3 to Receivables Purchase Agreement dated
as of July 24, 1997.
12.1 Statement regarding calculation of ratio of earnings to
fixed charges.
27 Financial Data Schedule - Article 5 of Regulation S-X
b) Reports on Form 8-K
There were no reports on Form 8-K filed for three months ended
August 2, 1997
-13-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Kohl's Corporation
(Registrant)
Date: September 11, 1997 /s/ William Kellogg
-----------------------------------
William Kellogg
Chairman, Chief Executive Officer
Date: September 11, 1997 /s/ Arlene Meier
-----------------------------------
Arlene Meier
Executive Vice President - Finance
Chief Financial Officer
-14-
<PAGE>
================================================================================
CREDIT AGREEMENT
by and among
KOHL'S CORPORATION,
KOHL'S DEPARTMENT STORES, INC.,
THE LENDERS PARTY HERETO,
THE FIRST NATIONAL BANK OF CHICAGO,
AS SYNDICATION AGENT
and
THE BANK OF NEW YORK,
AS SWING LINE LENDER AND AS ADMINISTRATIVE AGENT
with
BNY CAPITAL MARKETS, INC.,
AS ARRANGER
Dated as of June 13, 1997
================================================================================
<PAGE>
CREDIT AGREEMENT, dated as of June 13, 1997, by and among KOHL'S
CORPORATION, a Wisconsin corporation (the "Parent"), KOHL'S DEPARTMENT STORES,
------
INC., a Delaware corporation (the "Borrower"), the lenders party hereto
--------
(together with their respective assigns, the "Lenders", each a "Lender"), THE
------- ------
FIRST NATIONAL BANK OF CHICAGO, AS SYNDICATION AGENT and THE BANK OF NEW YORK
("BNY"), as agent for the Lenders (in such capacity, the "Administrative Agent")
--- --------------------
and as swing line lender (in such capacity, the "Swing Line Lender").
-----------------
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
------------------------------------------
1.1. Definitions
-----------
As used in this Agreement, terms defined in the preamble have the
meanings therein indicated, and the following terms have the following meanings:
"ABR Advances": the Revolving Credit Loans (or any portions thereof),
------------
at such time as they (or such portions) are made and/or being maintained at a
rate of interest based upon the Alternate Base Rate.
"Accountants": Ernst & Young (or any successor thereto), or such other
-----------
firm of certified public accountants of recognized national standing selected by
the Borrower and reasonably satisfactory to the Administrative Agent.
"Accumulated Funding Deficiency": as defined in Section 302 of ERISA.
------------------------------
"Acquisition": with respect to any Person, the purchase or other
-----------
acquisition by such Person, by any means whatsoever (including through a merger,
dividend or otherwise and whether in a single transaction or in a series of
related transactions), of (i) any Capital Stock of, or other equity securities
of, any other Person if, immediately thereafter, such other Person would be
either a Subsidiary of such Person or otherwise under the control of such
Person, (ii) any Operating Entity, or (iii) any Property of (A) any other Person
or (B) any Operating Entity, in either case other than in the ordinary course of
business, provided, however, that no acquisition of all or substantially all of
the assets of such other Person or Operating Entity shall be deemed to be in the
2
<PAGE>
ordinary course of business. For purposes of this definition, "control" shall
mean the ownership of 50% or more of any class or type of the Capital Stock of
any Person.
"Adjusted Net Income": in respect of any period, the net income of the
-------------------
Parent and its Subsidiaries during such period, determined on a Consolidated
basis in accordance with GAAP, excluding, without duplication, to the extent
included in the determination thereof, all interest income, interest expense,
Rent, depreciation, amortization, provision for income taxes and all other non-
cash items.
"Advance": with respect to a Revolving Credit Loan, an ABR Advance
-------
or a Eurodollar Advance, as the case may be.
"Affected Advance": as defined in Section 3.9.
----------------
"Affiliate": as to any Person, any other Person which, directly or
---------
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, control of a Person shall mean
the power, direct or indirect, (i) to vote 5% or more of the securities or other
interests having ordinary voting power for the election of directors or other
managing Persons thereof or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Aggregate Credit Exposure": at any time, the sum at such time of (i)
-------------------------
the outstanding principal balance of the Revolving Credit Loans and Competitive
Bid Loans of all Lenders, plus (ii) the outstanding principal balance of the
----
Swing Line Loans, plus (iii) an amount equal to the Letter of Credit Exposure of
----
all Lenders.
"Aggregate Revolving Credit Commitment Amount": at any time, the sum
--------------------------------------------
at such time of the Revolving Credit Commitment Amounts of all Lenders.
"Agreement": this Credit Agreement, as the same may be amended,
---------
supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per annum equal
-------------------
to the higher of (i) the Federal Funds Rate in effect on such date plus 1/2 of
----
1% or (ii) the BNY Rate in effect on such date.
3
<PAGE>
"Applicable Margin": (a) Subject to clause (b) of this definition, (i)
-----------------
with respect to the unpaid principal balance of Eurodollar Advances and the
Letter of Credit Commissions, at all times during which the applicable Pricing
Level set forth below is in effect, the percentage set forth below under the
heading "Applicable Eurodollar and LC Margin" and adjacent to such Pricing
Level, and (ii) with respect to the Facility Fee, at all times during which the
applicable Pricing Level set forth below is in effect, the percentage set forth
below under the heading "Applicable Fee Margin" and adjacent to such Pricing
Level:
<TABLE>
<CAPTION>
Applicable
Eurodollar Applicable
Fee Margin Pricing Level and LC Margin
- ---------- ------------- -------------
<S> <C> <C>
0.070% Pricing Level I 0.155%
0.080% Pricing Level II 0.170%
0.090% Pricing Level III 0.185%
0.125% Pricing Level IV 0.200%
0.150% Pricing Level V 0.275%
0.225% Pricing Level VI 0.375%
</TABLE>
(b) For purposes hereof, Pricing Level III shall be deemed to be in
effect on the Effective Date. Thereafter, decreases in the Applicable Margin
resulting from a change in Pricing Level shall become effective upon the
delivery by the Borrower to the Administrative Agent of a notice pursuant to
Section 7.1(h), and increases in the Applicable Margin resulting from a change
in Pricing Level shall become effective on the effective date of any downgrade
or withdrawal in the rating by Moody's or S&P of the senior unsecured long term
debt rating of the Parent. Notwithstanding the foregoing, no reduction in the
Applicable Margin shall become effective upon the occurrence or during the
continuance of any Event of Default.
4
<PAGE>
"Approved Bank": any bank whose (or whose parent company's) unsecured
-------------
non-credit supported long-term senior indebtedness rating from (i) S&P is at
least A- or the equivalent thereof or (ii) Moody's is at least A3 or the
equivalent thereof.
"Assignment and Acceptance Agreement": an assignment and acceptance
-----------------------------------
agreement executed by an assignor and an assignee, substantially in the form of
Exhibit H.
"Available Amount": as of any date, the excess, if any of (i) the
----------------
Aggregate Revolving Credit Commitment Amount on such date, over (ii) the
Aggregate Credit Exposure on such date.
"BNY Capital Markets": BNY Capital Markets, Inc.
-------------------
"BNY Rate": a rate of interest per annum equal to the rate of interest
--------
publicly announced in New York City by BNY from time to time as its prime
commercial lending rate, such rate to be adjusted automatically (without notice)
on the effective date of any change in such publicly announced rate.
"Borrowing Date": any Business Day on which (i) the Lenders make
--------------
Revolving Credit Loans, (ii) a Lender makes a Competitive Bid Loan, (iii) the
Swing Line Lender makes a Swing Line Loan, or (iv) an Issuing Bank issues a
Letter of Credit for the account of the Borrower.
"Borrowing Request": a request for Revolving Credit Loans or a Swing
-----------------
Line Loan in the form of Exhibit C-1.
"Business Day": for all purposes other than as set forth in clause
------------
(ii) below, (i) any day other than a Saturday, a Sunday or a day on which
commercial banks located in New York City are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Advances, any day which is a Business Day described in clause (i)
above and which is also a day on which eurodollar funding between banks may be
carried on in London, England.
"Capitalization": at any date, an amount equal to the sum of (i) Net
--------------
Worth as of the fiscal quarter ending on, or immediately prior to, such date,
and (ii) Total Debt as of
5
<PAGE>
the fiscal quarter ending on, or immediately prior to, such date.
"Capital Lease": a lease the obligations in respect of which are
-------------
required to be capitalized by the lessee thereunder for financial reporting
purposes in accordance with GAAP.
"Capital Stock": as to any Person, all shares, interests, partnership
-------------
interests, limited liability company interests, participations, rights in or
other equivalents (however designated) of such Person's equity (however
designated) and any rights, warrants or options exchangeable for or convertible
into such shares, interests, participations, rights or other equity.
"Cash Equivalents": (i) securities issued or directly and fully
----------------
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in full support thereof) having maturities of not more than one year from the
date of acquisition, (ii) Dollar denominated time deposits (including, without
limitation, eurodollar deposits), certificates of deposit and bankers
acceptances of (x) any Lender or (y) any Approved Bank, in any such case with
maturities of not more than six months from the date of acquisition, (iii)
dollar denominated commercial paper with an unsecured non-credit supported
short-term commercial paper rating of at least A-1 or the equivalent by S&P or
at least P-1 or the equivalent by Moody's, maturing within one year after the
date of acquisition, (iv) marketable direct obligations issued by any state of
the United States or any political subdivision of any such state or any public
instrumentality thereof maturing within six months from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's and (v) investments in dollar denominated
money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"Change of Control": any one or more of the following events: (i) any
-----------------
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) shall have become the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act) of Voting Shares entitled to
6
<PAGE>
exercise more than 50% of the total power of all outstanding Voting Shares of
the Borrower or the Parent (including any Voting Shares which are not then
outstanding of which such person or group is deemed the beneficial owner), or
(ii) a change in the composition of the Managing Person of the Borrower or the
Parent shall have occurred in which the individuals who constituted the Managing
Person of the Borrower or the Parent at the beginning of the two year period
immediately preceding such change (together with any other director whose
election by the Managing Person of the Borrower or the Parent or whose
nomination for election by the shareholders of the Borrower or the Parent was
approved by a vote of at least two-thirds of the members of such Managing Person
then in office who either were members of such Managing Person at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of such
Managing Person then in office. For purposes of this definition, the term
"Voting Shares" shall mean all outstanding shares of any class or classes
(however designated) of Capital Stock of the Borrower or the Parent entitled to
vote generally in the election of members of the Managing Person thereof.
"Code": the Internal Revenue Code of 1986, as the same may be amended
----
from time to time, or any successor thereto, and the rules and regulations
issued thereunder, as from time to time in effect.
"Collections": with respect to any Receivables, all cash collections
-----------
and other cash proceeds in respect of such Receivables, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivables.
"Commitment": a Revolving Credit Commitment or the Swing Line
----------
Commitment, as the case may be.
"Commitment Percentage": with respect to any Lender as of any date,
---------------------
the percentage as of such date equal to such Lender's Revolving Credit
Commitment Amount divided by the Aggregate Revolving Credit Commitment Amount
(or, if no Commitments then exist, the percentage equal to such Lender's
Revolving Credit Commitment Amount on the last day upon which Revolving Credit
Commitments did exist divided by the Aggregate Revolving Credit Commitment
Amount as in effect on such day).
7
<PAGE>
"Competitive Bid": an offer by a Lender to make a Competitive Bid
---------------
Loan, substantially in the form of Exhibit K.
"Competitive Bid Accept/Reject Letter": a notification given by the
------------------------------------
Borrower pursuant to Section 2.6(d) substantially in the form of Exhibit L.
"Competitive Bid Loan": a loan made pursuant to Section 2.6.
--------------------
"Competitive Bid Note" and "Competitive Bid Notes": as defined in
-------------------- ---------------------
Section 2.6(h).
"Competitive Bid Rate": with respect to any Competitive Bid made by a
--------------------
Lender pursuant to Section 2.6, the fixed rate of interest offered by such
Lender in connection therewith.
"Competitive Bid Request": a request by the Borrower for Competitive
-----------------------
Bids, substantially in the form of Exhibit I.
"Competitive Interest Period": with respect to any Competitive Bid
---------------------------
Loan, the period commencing on the Borrowing Date with respect to such
Competitive Bid Loan and ending on the date requested in the Competitive Bid
Request with respect to such Competitive Bid Loan, which date shall be neither
earlier than seven days, nor later than 90 days, after the Borrowing Date with
respect to such Competitive Bid Loan, provided, however, that if any Competitive
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day, unless such next
succeeding Business Day would be a date on or after the Scheduled Revolving
Credit Commitment Termination Date, in which case such Competitive Interest
Period shall end on the next preceding Business Day, and provided further that
no Competitive Interest Period shall end after the Scheduled Revolving Credit
Commitment Termination Date. Interest shall accrue from and including the first
day of a Competitive Interest Period to, but excluding, the last day of such
Competitive Interest Period.
"Compliance Certificate": a substantially in the form of Exhibit E.
----------------------
8
<PAGE>
"Consolidated": the Parent and its Subsidiaries on a consolidated
------------
basis in accordance with GAAP.
"Contingent Obligation": as to any Person (a "secondary obligor"), any
--------------------- -----------------
obligation of such secondary obligor (i) guaranteeing or in effect guaranteeing
any return on any investment made by another Person, or (ii) guaranteeing or in
effect guaranteeing any Indebtedness, lease, dividend or other obligation (a
"primary obligation") of any other Person (a "primary obligor") in any manner,
- ------------------- ---------------
whether directly or indirectly, including, without limitation, any obligation of
such secondary obligor, whether contingent, (A) to purchase any primary
obligation or any Property constituting direct or indirect security therefor,
(B) to advance or supply funds (x) for the purchase or payment of any primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of a primary obligor,
(C) to purchase Property, securities or services primarily for the purpose of
assuring the beneficiary of any primary obligation of the ability of a primary
obligor to make payment of a primary obligation, (D) otherwise to assure or hold
harmless the beneficiary of a primary obligation against loss in respect
thereof, and (E) in respect of the liabilities of any partnership in which a
secondary obligor is a general partner, except to the extent that such
liabilities of such partnership are nonrecourse to such secondary obligor and
its separate Property, provided, however, that the term "Contingent Obligation"
shall not include the indorsement of instruments for deposit or collection in
the ordinary course of business. The amount of any Contingent Obligation of a
Person shall be deemed to be an amount equal to the stated or determinable
amount of a primary obligation in respect of which such Contingent Obligation is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith.
"Contract": with respect to any Receivable, any and all instruments,
--------
agreements, leases, invoices or other writings pursuant to which such Receivable
arises or which evidences such Receivable.
"Control Person": as defined in Section 3.6.
--------------
"Conversion Date": the date on which: (i) a Eurodollar Advance is
---------------
converted to an ABR Advance, (ii) an ABR
9
<PAGE>
Advance is converted to a Eurodollar Advance or (iii) a Eurodollar Advance is
converted to a new Eurodollar Advance.
"Default": any event or condition which constitutes an Event of
-------
Default or which, with the giving of notice, the lapse of time, or any other
condition, would, unless cured or waived, become an Event of Default.
"Disposition": with respect to any Person, any sale, assignment,
-----------
transfer or other disposition by such Person, by any means, of (a) the Stock of,
or other equity interests of, any other Person, (b) any business, going concern
or division or segment thereof, or (c) any other Property of such Person other
than in the ordinary course of business.
"Dollars" and "$": lawful currency of the United States.
------- -
"Effective Date": June 13, 1997.
--------------
"Eligible Institution": a Lender, any affiliate of a Lender and any
--------------------
other bank, insurance company, pension fund, mutual fund or other financial
institution.
"Employee Benefit Plan": an employee benefit plan within the meaning
---------------------
of Section 3(3) of ERISA maintained, sponsored or contributed to by the Parent,
any of its Subsidiaries or any ERISA Affiliate.
"ERISA": the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the rules and regulations issued thereunder, as
from time to time in effect.
"ERISA Affiliate": when used with respect to an Employee Benefit Plan,
---------------
ERISA, the PBGC or a provision of the Code pertaining to employee benefit plans,
any Person which is a member of any group of organizations within the meaning of
Sections 414(b) or (c) of the Code (or, solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, Sections 414(m) or (o) of the Code) of which the Parent or any of its
Subsidiaries is a member.
"Eurodollar Advances": collectively, the Revolving Credit Loans (or
-------------------
any portions thereof), at such time as they
10
<PAGE>
(or such portions) are made and/or being maintained at a rate of interest based
upon the Eurodollar Rate.
"Eurodollar Interest Period": with respect to any Eurodollar Advance
--------------------------
requested by the Borrower, the period commencing on, as the case may be, the
Borrowing Date or Conversion Date with respect to such Eurodollar Advance and
ending seven or fourteen days, or one, two, three or six months thereafter, as
selected by the Borrower in its irrevocable Borrowing Request or its irrevocable
Notice of Conversion, provided, however, that (i) if any Eurodollar Interest
Period would otherwise end on a day which is not a Business Day, such Eurodollar
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Eurodollar Interest Period into
another calendar month, in which event such Eurodollar Interest Period shall end
on the immediately preceding Business Day and (ii) any Eurodollar Interest
Period which begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Eurodollar Interest Period) shall end on the last Business Day of a
calendar month. Eurodollar Interest Periods shall be subject to the provisions
of Section 3.4.
"Eurodollar Rate": with respect to the Eurodollar Interest Period
---------------
applicable to any Eurodollar Advance, a rate of interest per annum, as
determined by the Administrative Agent, obtained by dividing (and then rounding
to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, then to the
next higher 1/16 of 1%):
(a) the rate, as reported by BNY to the Administrative Agent,
quoted by BNY to leading banks in the interbank eurodollar market as the rate at
which BNY is offering Dollar deposits in an amount equal approximately to the
Eurodollar Advance of BNY to which such Eurodollar Interest Period shall apply
for a period equal to such Eurodollar Interest Period, as quoted at
approximately 11:00 a.m. two Business Days prior to the first day of such
Interest Period, by
(b) a number equal to 1.00 minus the aggregate of the then
-----
stated maximum rates during such Eurodollar Interest Period of all reserve
requirements (including, without limitation, marginal, emergency, supplemental
and
11
<PAGE>
special reserves), expressed as a decimal, established by the Board of Governors
of the Federal Reserve System and any other banking authority to which BNY and
other major United States money center banks are subject, in respect of
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board of Governors of the Federal Reserve System) or in
respect of any other category of liabilities including deposits by reference to
which the interest rate on Eurodollar Advances is determined or any category of
extensions of credit or other assets which includes loans by non-domestic
offices of any Lender to United States residents. Such reserve requirements
shall include, without limitation, those imposed under such Regulation D.
Eurodollar Advances shall be deemed to constitute Eurocurrency liabilities and
as such shall be deemed to be subject to such reserve requirements without
benefit of credits for proration, exceptions or offsets which may be available
from time to time to any Lender under such Regulation D. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any change in
any such reserve requirement.
"Event of Default": as defined in Section 9.1.
----------------
"Exchange Act": the Securities Exchange Act of 1934, as amended.
------------
"Excluded Taxes": collectively, in the case of any Indemnified Tax
--------------
Person, (i) taxes imposed on the net income of such Indemnified Tax Person by
the jurisdiction in which such Indemnified Tax Person has its situs of
organization or in which such Indemnified Tax Person's lending office is
located, (ii) taxes imposed on the net income of such Indemnified Tax Person
other than those taxes described in clause (i), except to the extent that such
taxes would not have been incurred but for the situs of organization, any place
of business or the activities of any Borrower, in the jurisdiction imposing the
tax, (iii) taxes (other than withholding taxes) imposed on or measured by the
gross income, gross receipts or capital of such Indemnified Tax Person, except
to the extent that such taxes would not have been incurred but for the situs of
organization, any place of business or the activities of any Borrower, in the
jurisdiction imposing the tax, (iv) any withholding taxes imposed with respect
to a payment to a person who has become a Lender as a result of an Assignment to
the extent such withholding arises as a result of Section 881(c)(3)(A) of the
Code, (v) any tax imposed on a transfer of
12
<PAGE>
a Note, and (vi) any tax imposed as a result of the willful misconduct of such
Indemnified Tax Person.
"Existing Bank Debt": collectively, the Indebtedness of the Borrower
------------------
under the Revolving Credit Agreement, dated as of February 28, 1994, among the
Borrower, the lenders party thereto, the agents party thereto, and BNY, as
administrative agent thereunder, as amended, together with all outstanding
principal, accrued interest and fees and other sums then due and payable
thereunder.
"Existing Pension Plans": as defined in Section 4.8.
----------------------
"Facility Fee": as defined in Section 3.2(a).
------------
"Facility Obligations": all of the obligations and liabilities of the
--------------------
Borrower under the Loan Documents, whether fixed, contingent, now existing or
hereafter arising, created, assumed, incurred or acquired, and whether before or
after the occurrence of any bankruptcy or other insolvency of the Borrower
including, without limitation, (a) any obligation or liability in respect of any
breach of any representation or warranty, and (b) all post-petition interest and
funding losses, whether or not allowed as a claim in any proceeding in
connection with such bankruptcy or other insolvency.
"Federal Funds Rate": for any day, a rate per annum (expressed as a
------------------
decimal, rounded upwards, if necessary, to the next higher 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
of the quotations for such day on such transactions received by BNY as
determined by BNY and reported to the Administrative Agent.
"Fees": as defined in Section 2.13.
----
13
<PAGE>
"Financed Receivables" at any date of determination, Total Receivables
--------------------
minus Statement Receivables, in either case, as reflected on the Compliance
- -----
Certificate most recently delivered to the Administrative Agent and the Lenders
pursuant to Section 7.1(c).
"Financial Officer": as to any Person, the chief financial officer of
-----------------
such Person or such other officer as shall be satisfactory to the Administrative
Agent.
"Financial Statements": as defined in Section 4.9.
--------------------
"Fronting Fee": as defined in Section 3.2(c).
------------
"GAAP": generally accepted accounting principles as in effect from
----
time to time in the United States.
"Governmental Authority": any foreign, federal, state, municipal or
----------------------
other government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof, or any court or arbitrator.
"Guaranty": The guaranty provided by the Parent pursuant to Section
--------
12.
"Impermissible Qualification": means, relative to any opinion by the
---------------------------
Accountants as to any financial statement delivered pursuant hereto, any
qualification or exception to such opinion: (a) which is of a "going concern"
or a similar nature with respect to the Parent or any Significant Subsidiary,
(b) which relates to the limited scope of examination of matters relevant to
such financial statement (other than scope limitations included in the standard
form of opinion utilized by the Accountants or with respect to Persons other
than the Parent or such Significant Subsidiary), or (c) which relates to the
treatment or classification of any item in such financial statement and which,
as a condition to its removal, would require an adjustment to such item the
effect of which would be to cause the Borrower to be in default of any of its
obligations under Section 7.8.
"Included Indebtedness": as to any Person at a particular time, all
---------------------
items which constitute, without duplication, (a) Indebtedness of such Person
within the meaning of clauses (i), (ii), (iii), (vi), (vii), (viii) or (ix) of
the term "Indebtedness", and (b) all Contingent
14
<PAGE>
Obligations of such Person in respect of the items included in clause (a) of
this definition.
"Included Taxes": all taxes other than Excluded Taxes.
--------------
"Income Tax": as to any Person, an income tax or franchise tax imposed
----------
on all or part of the net income or net profits of such Person (including any
interest, fees, or penalties for late payment of such an income tax or franchise
tax) imposed by one of the following jurisdictions or by any political
subdivision or taxing authority thereof: (i) the United States, (ii) the
jurisdiction in which such Person is organized, (iii) the jurisdiction in which
such Person's principal office is located, or (iv) in the case of any Lender,
the Administrative Agent, the Swing Line Lender or any Issuing Bank, any
jurisdiction in which such Person is deemed to be doing business.
"Indebtedness": as to any Person, at a particular time, all items
------------
which constitute, without duplication, (i) indebtedness for borrowed money, (ii)
indebtedness in respect of the deferred purchase price of Property (other than
trade payables incurred in the ordinary course of business), (iii) indebtedness
evidenced by notes, bonds, debentures or similar instruments, (iv) obligations
with respect to any conditional sale or title retention agreement, (v)
indebtedness arising under acceptance facilities and the amount available to be
drawn under all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder to the extent such Person shall
not have reimbursed the issuer in respect of the issuer's payment thereof, (vi)
all liabilities secured by any Lien on any Property owned by such Person even
though such Person has not assumed or otherwise become liable for the payment
thereof (other than carriers', warehousemen's, mechanics', repairmen's or other
like non-consensual statutory Liens arising in the ordinary course of business),
(vii) obligations under Capital Leases, (viii) obligations under interest rate
or foreign currency hedging arrangements at market value, (ix) all obligations
of such Person in respect of Capital Stock subject to mandatory redemption or
redemption at the option of the holder thereof, in whole or in part, and (x) all
Contingent Obligations of such Person in respect of any of the foregoing.
15
<PAGE>
"Indemnified Liability": as defined in Section 11.20.
---------------------
"Indemnified Person": as defined in Section 11.7.
------------------
"Indemnified Tax Person": the Administrative Agent, the Swing Line
----------------------
Lender, any Issuing Bank or any Lender.
"Intercompany Indebtedness": loans or advances which are (i) made by
-------------------------
the Parent to any of its Subsidiaries or (ii) made by any Subsidiary of the
Parent to the Parent or to any other Subsidiary of the Parent.
"Interest Payment Date": (i) as to any ABR Advance, the last day of
---------------------
each March, June, September and December commencing on the first of such days to
occur after such ABR Advance is made or any Eurodollar Advance is converted to
an ABR Advance, (ii) as to any Swing Line Loan, the date on which the
outstanding principal balance of such Swing Line Loan shall become due and
payable in accordance with Section 2.3, (iii) as to any Eurodollar Advance as to
which the Borrower has selected a Eurodollar Interest Period of seven or
fourteen days, or one, two or three months, the last day of such Eurodollar
Interest Period, (iv) as to any Eurodollar Advance as to which the Borrower has
selected a Eurodollar Interest Period of six months, the last day of each three
month interval occurring during such Eurodollar Interest Period and the last day
of such Eurodollar Interest Period; (v) as to any Competitive Bid Loan, the last
day of the Competitive Interest Period with respect thereto, (vi) as to all
Advances and all Competitive Bid Loans, the Revolving Credit Maturity Date, and
(vii) as to all Swing Line Loans, the Swing Line Maturity Date.
"Interest Period": a Eurodollar Interest Period, a Competitive
---------------
Interest Period or a Swing Line Interest Period, as the case may be.
"Investments": as defined in Section 8.5.
-----------
"Invitation to Bid": an invitation to make Competitive Bids in the
-----------------
form of Exhibit J.
"Issuing Bank": (i) from the Effective Date to the original Scheduled
------------
Revolving Credit Commitment Termination Date, BNY and (ii) at any time and from
time to time, with the
16
<PAGE>
consent of the Administrative Agent (such consent not to be unreasonably denied)
and the Borrower, and any Lender (in the sole and absolute discretion of such
Lender), such Lender, to the extent such Lender issues Letters of Credit
pursuant to Section 2.10.
"Letter of Credit": as defined in Section 2.10.
----------------
"Letter of Credit Commissions": as defined in Section 3.2(b).
----------------------------
"Letter of Credit Commitment": the commitment of the Issuing Banks to
---------------------------
issue Letters of Credit having an aggregate outstanding face amount up to the
Letter of Credit Commitment Amount, and the commitment of the Lenders to
participate in the Letter of Credit Exposure as set forth in Section 2.11.
"Letter of Credit Commitment Amount": $60,000,000.
----------------------------------
"Letter of Credit Exposure": as of any date and in respect of any
-------------------------
Lender, an amount equal to (i) the sum as of such date, without duplication, of
(x) the aggregate undrawn face amount of all outstanding Letters of Credit, (y)
the aggregate amount of unpaid drafts drawn on all Letters of Credit, and (z)
the aggregate unpaid Reimbursement Obligations (after giving effect to any
Revolving Credit Loans made on such date to pay any such Reimbursement
Obligations), multiplied by (ii) such Lender's Commitment Percentage.
-------------
"Letter of Credit Request": a request in the form of Exhibit C- 2.
------------------------
"Leverage Ratio": at any date of determination, the ratio of (x) Total
--------------
Debt as of the fiscal quarter ending on, or immediately prior to, such date of
determination to (y) Capitalization on such date as of the fiscal quarter ending
on, or immediately prior to, such date of determination.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit or
----
preferential arrangement, encumbrance, lien (statutory or other), or other
security agreement or security interest of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement and any capital or financing lease having substantially the same
economic effect as any of the foregoing.
17
<PAGE>
"Loan": a Revolving Credit Loan, a Competitive Bid Loan, or a Swing
----
Line Loan, as the case may be.
"Loan Documents": collectively, this Agreement, the Notes and the
--------------
Reimbursement Agreements.
"Loans": the Revolving Credit Loans, the Competitive Bid Loans and/or
-----
the Swing Line Loans, as the case may be.
"Managing Person": with respect to any Person that is (i) a
---------------
corporation, its board of directors, (ii) a limited liability company, its board
of control, managing member or members, (iii) a limited partnership, its general
partner, (iv) a general partnership or a limited liability partnership, its
managing partner or executive committee or (v) any other Person, the managing
body thereof or other Person analogous to the foregoing.
"Margin Stock": any "margin stock", as defined in Regulation U of the
------------
Board of Governors of the Federal Reserve System, as amended, supplemented or
otherwise modified from time to time.
"Material Adverse Change": a material adverse change in the financial
-----------------------
condition, operations, business or Property of the Parent and its Subsidiaries
taken as a whole.
"Material Adverse Effect": a material adverse effect on (i) the
-----------------------
financial condition, operations, business or Property of the Parent and its
Subsidiaries taken as a whole, or (ii) the ability of the Parent or any of its
Subsidiaries to perform any of its payment obligations or other material
obligations under the Loan Documents to which it is a party.
"Minimum Coverage Ratio": at any fiscal quarter end, the ratio of (a)
----------------------
Adjusted Net Income, to (b) Rent minus interest income of the Parent and its
-----
Subsidiaries on a Consolidated basis, plus interest expense (exclusive of any
----
amounts included in Rent) of the Parent and its Subsidiaries on a Consolidated
basis, in each case referred to in this definition for the four consecutive
fiscal quarters then ended.
"Moody's": Moody's Investors Service, Inc., or any successor thereto.
-------
18
<PAGE>
"Multiemployer Plan": a Pension Plan which is a multiemployer plan as
------------------
defined in Section 4001(a)(3) of ERISA.
"Negotiated Rate": with respect to each Swing Line Loan, the rate per
---------------
annum agreed to by the Borrower and the Swing Line Lender (such rate not to
exceed the Alternate Base Rate) in accordance with section 2.5(b) as the
interest rate that such Swing Line Loan shall bear.
"Net Worth": as of any fiscal quarter end, the excess if any of total
---------
assets over total liabilities, in each case of the Parent and its Subsidiaries
on a Consolidated basis determined in accordance with GAAP.
"Note": a Revolving Credit Note, a Competitive Bid Note or the Swing
----
Line Note, as the case may be.
"Note Agreements": collectively, (i) the Note Agreement, dated as of
---------------
January 27, 1994, by and among the Parent, the Borrower and State of Wisconsin
Investment Board, and (ii) the Note Agreement, dated as of January 27, 1994, by
and among the Parent, the Borrower and The Northwestern Mutual Life Insurance
Company.
"Notes": the Revolving Credit Notes, the Competitive Bid Notes and/or
-----
the Swing Line Note, as the case may be.
"Notice of Conversion": a notice substantially in the form of
--------------------
Exhibit D.
"Operating Entity": any Person or any business or operating unit of a
----------------
Person which is, or could be, operated separate and apart from (i) the other
businesses and operations of such Person, or (ii) any other line of business or
business segment.
"Organizational Documents": as to any Person which is (i) a
------------------------
corporation, the certificate or articles of incorporation and by-laws of such
Person, (ii) a limited liability company, the limited liability company
agreement or similar agreement of such Person, (iii) a partnership, the
partnership agreement or similar agreement of such Person, or (iv) any other
form of entity or organization, the organizational documents analogous to the
foregoing.
19
<PAGE>
"Outstandings": as of any date, an amount equal to (a) with respect
------------
to any Issuing Bank, the excess of (i) the aggregate sum of all drafts honored
under all Letters of Credit of such Issuing Bank after the Effective Date, over
(ii) all payments made after the Effective Date to such Issuing Bank by the
Borrower and the Lenders in reimbursement thereof or participation therein, as
the case may be, (b) with respect to the Swing Line Lender, the outstanding
principal balance on such date of all Swing Line Loans minus the aggregate sum
-----
of all payments by any Lender in participation of such Swing Line Loans, and (c)
with respect to each Lender, the outstanding principal balance on such date of
all the Revolving Credit Loans and Competitive Bid Loans of such Lender plus the
----
excess of (i) the aggregate sum of all payments by such Lender in participation
of the Reimbursement Obligations and the Swing Line Loans, over (ii) all
reimbursements of such Lender in respect thereof.
"Outstanding Percentage": as of any date and with respect to each
----------------------
Lender, each Issuing Bank and the Swing Line Lender, as the case may be, a
fraction the numerator of which is the Outstandings of such Lender, such Issuing
Bank or the Swing Line Lender, as applicable, on such date, and the denominator
of which is the aggregate Outstandings of the Swing Line Lender, all Issuing
Banks, and all Lenders on such date.
"Parent Obligations": all of the obligations and liabilities of the
------------------
Parent under the Guaranty, whether fixed, contingent, now existing or hereafter
arising, created, assumed, incurred or acquired.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to
the functions thereof.
"Pension Plan": at any date of determination, any Employee Benefit
------------
Plan (including a Multiemployer Plan), the funding requirements of which (under
Section 302 of ERISA or Section 412 of the Code) are, or at any time within the
six years immediately preceding such date, were in whole or in part, the
responsibility of the Parent, any of its Subsidiaries or any ERISA Affiliate.
20
<PAGE>
"Person": any individual, firm, partnership, limited liability
------
company, joint venture, corporation, association, business enterprise, joint
stock company, unincorporated association, trust, Governmental Authority or any
other entity, whether acting in an individual, fiduciary, or other capacity, and
for the purpose of the definition of "ERISA Affiliate", a trade or business.
"Pricing Level": Pricing Level I, Pricing Level II, Pricing Level III,
-------------
Pricing Level IV, Pricing Level V, or Pricing Level VI, as the case may be.
"Pricing Level I": any time when the senior unsecured long term debt
---------------
rating of the Parent by (x) S&P is A or higher or (y) Moody's is A2 or higher.
"Pricing Level II": any time when (i) the senior unsecured long term
----------------
debt rating of the Parent by (x) S&P is A- or higher or (y) Moody's is A3 or
higher and (ii) Pricing Level I does not apply.
"Pricing Level III": any time when (i) the senior unsecured long term
-----------------
debt rating of the Parent by (x) S&P is BBB+ or higher or (y) Moody's is Baa1 or
higher and (ii) neither Pricing Level I nor Pricing Level II applies.
"Pricing Level IV": any time when (i) the senior unsecured long term
----------------
debt rating of the Parent by (x) S&P is BBB or higher or (y) Moody's is Baa2 or
higher and (ii) none of Pricing Level I, Pricing Level II or Pricing Level III
applies.
"Pricing Level V": any time when (i) the senior unsecured long term
---------------
debt rating of the Parent by (x) S&P is BBB- or higher or (y) Moody's is Baa3 or
higher and (ii) none of Pricing Level I, Pricing Level II, Pricing Level III or
Pricing Level IV applies.
"Pricing Level VI": any time when none of Pricing Level I, Pricing
----------------
Level II, Pricing Level III, Pricing Level IV or Pricing Level V applies.
"Prohibited Transaction": a transaction which is prohibited under
----------------------
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA.
21
<PAGE>
"Property": all types of real, personal, tangible, intangible or mixed
--------
property.
"Proposed Lender": as defined in Section 2.7(c).
---------------
"Receivable" of any Person means, as at any date of determination
----------
thereof, the unpaid principal portion of the obligation of any customer of such
Person to pay money to such Person (without giving effect to any transfer or
conveyance thereof pursuant to a Securitized Receivables Transaction), whether
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of goods or the rendering of services by
such Person, plus any finance charges, late fees or other similar charges
----
receivable with respect thereto, but shall be calculated net of all credits,
rebates and offsets owed to such customer by such Person (and for purposes
hereof, a credit or rebate paid by check or draft of such Person shall be deemed
to be outstanding until such check or draft shall have been debited to the
respective account of such Person on which such check or draft was drawn).
"Receivable Assets": with respect to any Person, the Receivables,
-----------------
Collections, Contracts, Records and Related Security of such Person.
"Receivable Debt": as defined in Section 8.1.
---------------
"Receivables Subsidiary": any special-purpose Subsidiary of the
----------------------
Borrower that deals exclusively with the securitization and financing of the
Receivables of the Parent or any of its Subsidiaries.
"Records": with respect to any Receivable, all Contracts and other
-------
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Receivable and any Related
Security therefor.
"Regulatory Change": the occurrence of any of the following after the
-----------------
Effective Date: (i) the adoption of any treaty, constitution, law, rule or
regulation, (ii) the issuance or promulgation of any directive, guideline or
request from any Governmental Authority (whether or not having
22
<PAGE>
the force of law), or (iii) any change in the interpretation of any existing
treaty, constitution, law, rule, regulation, directive, guideline or request by
any Governmental Authority.
"Reimbursement Agreement": as defined in Section 2.10(b).
-----------------------
"Reimbursement Obligation": the obligation of the Borrower to
------------------------
reimburse any Issuing Bank for amounts drawn under a Letter of Credit.
"Related Security": with respect to any Receivable:
----------------
(a) all interest of a Person in inventory and other goods
(including returned or repossessed inventory or goods), if any, the financing of
which by such Person gave rise to such Receivable, and all insurance contracts
with respect thereto,
(b) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(c) all guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Receivable whether pursuant to the Contract related to such
Receivable or otherwise,
(d) all service contracts and other contracts and agreements
associated with such Receivables,
(e) all Records related to such Receivable, and
(f) all proceeds of any of the foregoing.
"Rent": with respect to any period, all fixed rents (including as such
----
all payments which the lessee or sublessee is obligated to make to the lessor or
sublessor on termination of the lease or surrender of the property and including
all payments on Capital Leases) payable by the Parent or any Subsidiary thereof
on a Consolidated basis, as lessee or
23
<PAGE>
sublessee under a lease of real or personal property, but shall be exclusive of
any amounts required to be paid by the Parent or any such Subsidiary (whether or
not designated as rents or additional rents) on account of maintenance, repairs,
insurance, taxes and similar charges, provided that (a) fixed rents under any
so called "percentage leases" shall be computed not only on the basis of the
minimum rents, if any, required to be paid by the lessee but also on the basis
of any additional rents whether based on sales volume or gross revenues or
otherwise, and (b) with respect to leases providing for periods of free rent or
discounted rent, "Rent" means the amount of the actual cash payments required
under the lease, even though accounting convention may require that the rents be
accrued on an amortized basis over the term of the lease.
"Reportable Event": with respect to any Pension Plan, (i) any event
----------------
set forth in Sections 4043(c) (other than a Reportable Event as to which the 30
day notice requirement is waived by the PBGC under applicable regulations),
4062(c) or 4063(a) of ERISA or the regulations thereunder, (ii) an event
requiring the Parent, any of its Subsidiaries or any ERISA Affiliate to provide
security to a Pension Plan under Section 401(a)(29) of the Code, or (iii) any
failure to make any payment required by Section 412(m) of the Code.
"Required Lenders": at any time (i) prior to the Revolving Credit
----------------
Commitment Termination Date, Lenders having Revolving Credit Commitment Amounts
greater than or equal to 51% of the Aggregate Revolving Credit Commitment Amount
and (ii) on or after the Revolving Credit Commitment Termination Date, Lenders
having the aggregate of (x) outstanding Revolving Credit Loans and Competitive
Bid Loans, (y) Swing Line Exposure and (z) Letter of Credit Exposure greater
than or equal to 51% of the Aggregate Credit Exposure (or, if there are no
Revolving Credit Loans and Competitive Bid Loans then outstanding and no Swing
Line Exposure or Letter of Credit Exposure, Lenders having Revolving Credit
Commitment Amounts greater than or equal to 51% of the Aggregate Revolving
Credit Commitment Amount immediately prior to the termination of the
Commitments).
"Restricted Payment": as to any Person (i) any dividend or other
------------------
distribution, direct or indirect, on account of any shares of Capital Stock or
other equity interest in such Person now or hereafter outstanding (other than a
24
<PAGE>
dividend payable solely in shares of such Capital Stock to the holders of such
shares) and (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition, direct or indirect, of any shares of any class of
Capital Stock or other equity interest in such Person now or hereafter
outstanding.
"Revolving Credit Commitment": in respect of any Lender, such Lender's
---------------------------
undertaking during the Revolving Credit Commitment Period to make Revolving
Credit Loans, subject to the terms and conditions hereof, in an aggregate
outstanding principal amount not exceeding the Revolving Credit Commitment
Amount of such Lender.
"Revolving Credit Commitment Amount": as of any date and with respect
----------------------------------
to any Lender, the amount set forth adjacent to its name under the heading
"Revolving Credit Commitment Amount" in Exhibit A on such date or, in the event
that such Lender is not listed in Exhibit A, the "Revolving Credit Commitment
Amount" which such Lender shall have assumed from another Lender in accordance
with Section 11.6 on or prior to such date, as the same may be reduced from time
to time pursuant to Section 2.7.
"Revolving Credit Commitment Period": the period from the Effective
----------------------------------
Date until the Revolving Credit Commitment Termination Date.
"Revolving Credit Commitment Termination Date": the earlier of the
--------------------------------------------
Business Day immediately preceding the Scheduled Revolving Credit Commitment
Termination Date or such other date upon which the Revolving Credit Commitments
shall have been terminated in accordance with Section 2.7 or Section 9.2.
"Revolving Credit Exposure": with respect to any Lender as of any
-------------------------
date, the sum as of such date of (i) the outstanding principal balance of such
Lender's Revolving Credit Loans, (ii) such Lender's Swing Line Exposure, and
(iii) such Lender's Letter of Credit Exposure.
"Revolving Credit Increase Supplement": as defined in Section 2.7(c).
------------------------------------
"Revolving Credit Loan" and "Revolving Credit Loans": as defined in
--------------------------------------------------
Section 2.1.
25
<PAGE>
"Revolving Credit Maturity Date": the Scheduled Revolving Credit
------------------------------
Commitment Termination Date, or such earlier date on which the Revolving Credit
Notes shall become due and payable, whether by acceleration or otherwise.
"Revolving Credit Note" and "Revolving Credit Notes": as defined in
---------------------
Section 2.2.
"S&P": Standard & Poor's Ratings Services, a division of The McGraw-
---
Hill Companies, Inc., or any successor thereto.
"Scheduled Revolving Credit Commitment Termination Date": June 13,
------------------------------------------------------
2002.
"SEC": the Securities and Exchange Commission or any Governmental
---
Authority succeeding to the functions thereof.
"Securitized Receivables Transaction": the sale, transfer, conveyance,
-----------------------------------
lease, pledge, lien, conditional sale, assignment or other transfer in the
nature of a security interest or sale by the Parent or its Subsidiaries of
Receivables of the Parent or its Subsidiaries, in connection with any one or
more transactions involving the securitization of such Receivables.
"Security": as defined in Section 2(1) of the Securities Act of 1933,
--------
as amended.
"Significant Subsidiary": with respect to the Parent (i) the Borrower,
----------------------
and (ii) each "Significant Subsidiary" of the Borrower within the meaning of
Regulation S-X of the SEC as in effect from time to time.
"Special Counsel": Emmet, Marvin & Martin, LLP as, or such other
---------------
counsel selected by the Administrative Agent as, special counsel to the
Administrative Agent in connection with the Loan Documents.
"Standby Letters of Credit": as defined in Section 2.10(a).
-------------------------
"Statement Receivables": at any date of determination, the amount of
---------------------
Receivables reflected on the Consolidated balance sheet of the Parent and its
Subsidiaries
26
<PAGE>
most recently delivered to the Administrative Agent and the Lenders pursuant to
Section 7.1(a) or (b).
"Subsidiary": as to any Person, any corporation, association,
----------
partnership, limited liability company, joint venture or other business entity
of which such Person or any Subsidiary of such Person, directly or indirectly,
either (i) in respect of a corporation, owns or controls more than 50% of the
outstanding capital stock having ordinary voting power to elect a majority of
the Managing Person thereof, irrespective of whether a class or classes shall or
might have voting power by reason of the happening of any contingency, or (ii)
in respect of an association, partnership, limited liability company, joint
venture or other business entity, is entitled to share in more than 50% of the
profits and losses, however determined.
"Substitute Lender": as defined in Section 3.11.
-----------------
"Swing Line Commitment": the undertaking of the Swing Line Lender
---------------------
during the Swing Line Commitment Period to make Swing Line Loans, subject to the
terms and conditions hereof, in an aggregate outstanding principal amount not in
excess of the Swing Line Commitment Amount, and the commitment of the Lenders to
participate therein as set forth in Section 2.3, as the same may be reduced
pursuant to Section 2.7.
"Swing Line Commitment Amount": $15,000,000 .
----------------------------
"Swing Line Commitment Period": the period from the Effective Date to,
----------------------------
but excluding, the Swing Line Commitment Termination Date.
"Swing Line Commitment Termination Date": the earlier of the Business
--------------------------------------
Day immediately preceding the Revolving Credit Commitment Termination Date or
such other date upon which the Swing Line Commitments shall have been terminated
in accordance with Section 2.7 or Section 9.2.
"Swing Line Exposure": at any time, in respect of any Lender, an
-------------------
amount equal to the aggregate outstanding principal amount of the Swing Line
Loans at such time multiplied by such Lender's Commitment Percentage at such
time
27
<PAGE>
"Swing Line Interest Period": subject to the provisions of Section
--------------------------
3.4, with respect to any Swing Line Loan requested by the Borrower, the period
commencing on the Borrowing Date with respect to such Swing Line Loan and ending
not in excess of seven days thereafter, as selected by the Borrower in its
irrevocable Borrowing Request, provided, however, that (i) if any Swing Line
Interest Period would otherwise end on a day that is not a Business Day, such
Swing Line Interest Period shall be extended to the next succeeding Business
Day, and (ii) the Borrower shall select Swing Line Interest Periods so as not to
have more than three different Swing Line Interest Periods outstanding at any
one time for all Swing Line Loans.
"Swing Line Loan" and "Swing Line Loans": as defined in Section
--------------- ----------------
2.3(a).
"Swing Line Maturity Date": the date upon which the Swing Line
------------------------
Commitment shall have been terminated in accordance with Section 2.7 or Section
9.2, or such earlier date on which the Swing Line Note shall become due and
payable, whether by acceleration or otherwise.
"Swing Line Note": as defined in Section 2.4 .
---------------
"Swing Line Participation Amount": as defined in Section 2.3(c).
-------------------------------
"Tangible Net Worth": at any date of determination, Net Worth as of
------------------
the fiscal quarter ending on, or immediately prior to, such date minus all
-----
intangible assets of the Parent and its Subsidiaries on a Consolidated basis as
of the fiscal quarter ending on, or immediately prior to, such date, including,
without limitation, unamortized debt discount and expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names, copyrights
and organizational or developmental expenses.
"Tax": any present or future tax, levy, impost, duty, charge, fee,
---
deduction or withholding of any nature and whatever called, by a Governmental
Authority, on whomsoever and wherever imposed, levied, collected, withheld or
assessed.
"Termination Event": with respect to any Pension Plan, (i) a
-----------------
Reportable Event, (ii) the termination of a Pension Plan, or the filing of a
notice of intent to terminate
28
<PAGE>
a Pension Plan, or the treatment of a Pension Plan amendment as a termination
under Section 4041(c) of ERISA, (iii) the institution of proceedings to
terminate a Pension Plan under Section 4042 of ERISA, or (iv) the appointment of
a trustee to administer any Pension Plan under Section 4042 of ERISA.
"Total Debt": at any fiscal quarter end, the aggregate Included
----------
Indebtedness at such fiscal quarter end of the Parent and its Subsidiaries,
determined on a Consolidated basis in accordance with GAAP, plus the amount of
----
Financed Receivables at such fiscal quarter end, minus cash and Cash Equivalents
-----
of the Parent and its Subsidiaries as reflected on the Consolidated balance
sheet of the Parent and its Subsidiaries most recently delivered to the
Administrative Agent and the Lenders pursuant to Section 7.1(a) or (b).
"Total Receivables": as of any date, all Receivables of the Parent and
-----------------
its Subsidiaries on a Consolidated basis excluding any Receivables which have
been written off, as reflected on the Compliance Certificate most recently
delivered to the Administrative Agent and the Lenders pursuant to Section
7.1(c).
"Trade Letters of Credit": as defined in Section 2.10(a).
-----------------------
"Unfunded Pension Liabilities": with respect to any Pension Plan, at
----------------------------
any date of determination, the amount determined by taking the accumulated
benefit obligation, as disclosed in accordance with Statement of Accounting
Standards No. 87, "Employers' Accounting for Pensions", over the fair market
value of Pension Plan assets.
"United States": the United States of America.
-------------
"Unrecognized Retiree Welfare Liability": with respect to any Employee
--------------------------------------
Benefit Plan that provides postretirement benefits other than pension benefits,
the amount of the transition obligation, as determined in accordance with
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," as of the most recent valuation
date, that has not been recognized as an expense in an income statement of the
Parent and its Subsidiaries, provided that prior to the date such Statement is
applicable to the
29
<PAGE>
Borrower, such amount shall be based on an estimate made in good faith of such
transition obligation.
"U.S. Person": a citizen or resident of the United States, a
-----------
corporation, partnership or other entity created or organized in or under any
laws of the United States, or any estate or trust that is subject to United
States federal income taxation regardless of the source of its income.
1.2. Principles of Construction
--------------------------
(a) All terms defined in a Loan Document shall have the meanings given
such terms therein when used in the other Loan Documents or any certificate,
opinion or other document made or delivered pursuant thereto to the extent not
otherwise provided therein.
(b) As used in the Loan Documents and in any certificate, opinion or
other document made or delivered pursuant thereto, accounting terms not defined
in Section 1.1, and accounting terms partly defined in Section 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
If at any time any change in GAAP would affect the computation of any financial
ratio or requirement set forth in this Agreement, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to reflect such change in GAAP (subject to the approval of the
Required Lenders), provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Administrative Agent
and the Lenders financial statements and other documents required under this
Agreement (or such other items as the Administrative Agent may reasonably
request) setting forth a reconciliation between calculations of such ratio or
requirement before and after giving effect to such change in GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder" and similar
words when used in a Loan Document shall refer to such Loan Document as a whole
and not to any particular provision thereof, and Section, schedule and exhibit
references contained therein shall refer to Sections thereof or schedules or
exhibits thereto unless otherwise expressly provided therein.
30
<PAGE>
(d) The phrase "may not" is prohibitive and not permissive.
(e) Unless the context otherwise requires, words in the singular
number include the plural, and words in the plural include the singular.
(f) Unless specifically provided in a Loan Document to the contrary,
any reference to a time shall refer to such time in New York.
(g) Unless specifically provided in a Loan Document to the contrary,
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding".
(h) References in any Loan Document to a fiscal period shall refer to
that fiscal period of the Borrower.
2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT
-----------------------------------------------
2.1. Revolving Credit Loans
----------------------
Subject to the terms and conditions hereof, each Lender severally (and
not jointly) agrees to make revolving credit loans (each a "Revolving Credit
----------------
Loan" and, as the context may require, collectively with all other Revolving
- ----
Credit Loans of such Lender and with the Revolving Credit Loans of all other
Lenders, the "Revolving Credit Loans") to the Borrower from time to time during
----------------------
the Revolving Credit Commitment Period, provided that immediately after giving
effect thereto (i) such Lender's Revolving Credit Exposure would not exceed such
Lender's Revolving Credit Commitment Amount, and (ii) the Aggregate Credit
Exposure would not exceed the Aggregate Revolving Credit Commitment Amount.
During the Revolving Credit Commitment Period, the Borrower may borrow, prepay
in whole or in part and reborrow under the Revolving Credit Commitments, all in
accordance with the terms and conditions of this Agreement. Subject to the
provisions of Sections 2.5 and 3.3, at the option of the Borrower, Revolving
Credit Loans may be made as one or more (i) ABR Advances, (ii) Eurodollar
Advances or (iii) any combination thereof.
31
<PAGE>
2.2. Revolving Credit Notes
----------------------
The Revolving Credit Loans made by each Lender shall be evidenced by a
promissory note made by the Borrower, substantially in the form of Exhibit B-1,
payable to the order of such Lender, and dated the first Borrowing Date (each,
as indorsed or modified from time to time, a "Revolving Credit Note" and,
---------------------
collectively with the Revolving Credit Notes of all other Lenders, the
"Revolving Credit Notes"). The outstanding principal balance of the Revolving
----------------------
Credit Loans shall be due and payable on the Revolving Credit Maturity Date.
2.3. Swing Line Loans
----------------
(a) Subject to the terms and conditions of this Agreement, the Swing
Line Lender agrees to make swing line loans (each a "Swing Line Loan" and,
---------------
collectively, the "Swing Line Loans") to the Borrower from time to time during
----------------
the Swing Line Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed the Swing Line Commitment Amount, provided that
immediately after making each Swing Line Loan, (i) the Swing Line Lender's
Revolving Credit Exposure would not exceed the Swing Line Lender's Revolving
Credit Commitment Amount, (ii) the aggregate unpaid balance of the Swing Line
Loans would not exceed the Swing Line Commitment Amount, and (iii) the Aggregate
Credit Exposure would not exceed the Aggregate Revolving Credit Commitment
Amount. During the Swing Line Commitment Period, the Borrower may borrow,
prepay in whole or in part and reborrow under the Swing Line Commitment, all in
accordance with the terms and conditions of this Agreement. No Swing Line Loan
shall be made prior to the making of the first Revolving Credit Loans on the
first Borrowing Date.
(b) The Swing Line Lender shall not be obligated to make any Swing
Line Loan at a time when any Lender shall be in default of its obligations under
this Agreement unless arrangements to eliminate the Swing Line Lender's risk
with respect to such defaulting Lender's participation in such Swing Line Loan
shall have been made for the benefit of the Swing Line Lender and such
arrangements are satisfactory to the Swing Line Lender. The Swing Line Lender
will not make a Swing Line Loan if the Administrative Agent, or any Lender by
notice to the Swing Line Lender and the Borrower no later than one Business Day
prior to the Borrowing Date with respect to such Swing Line Loan, shall have
determined that the
32
<PAGE>
conditions set forth in Section 6 have not been satisfied and such conditions
remain unsatisfied as of the requested time of the making of such Loan. Each
Swing Line Loan shall be due and payable on the earliest to occur of the last
day of the Swing Line Interest Period applicable thereto, the Revolving Credit
Commitment Termination Date, the date on which the Swing Line Commitment shall
have been voluntarily terminated by the Borrower or the Swing Line Lender in
accordance with Section 2.7, and the date on which the Swing Line Loans shall
become due and payable pursuant to the provisions hereof, whether by
acceleration or otherwise.
(c) Upon each receipt by a Lender of notice of an Event of Default
from the Administrative Agent pursuant to Section 10.5, such Lender shall
purchase unconditionally, irrevocably, and severally (and not jointly) from the
Swing Line Lender a participation in the outstanding Swing Line Loans (including
accrued interest thereon) in an amount (the "Swing Line Participation Amount")
-------------------------------
equal to the product of (i) its Commitment Percentage, and (ii) the aggregate
outstanding principal balance of the Swing Line Loans plus all accrued and
unpaid interest thereon. Each Lender shall also be liable for an amount equal
to the product of its Commitment Percentage and any amounts paid by the Borrower
pursuant to this Section 2.3 that are subsequently rescinded or avoided, or must
otherwise be restored or returned. Such liabilities shall be absolute and
unconditional and without regard to the occurrence of any Default or the
compliance by the Borrower with any of its obligations under the Loan Documents.
(d) In furtherance of subsection (c) immediately above, upon each
receipt by a Lender of notice of an Event of Default from the Administrative
Agent pursuant to Section 10.5, such Lender shall promptly make available to the
Administrative Agent for the account of the Swing Line Lender its Swing Line
Participation Amount at the office of the Administrative Agent specified in
Section 11.2, in lawful money of the United States and in immediately available
funds. The Administrative Agent shall deliver the payments made by each Lender
pursuant to the immediately preceding sentence to the Swing Line Lender promptly
upon receipt thereof in like funds as received. Each Lender shall indemnify and
hold harmless the Administrative Agent and the Swing Line Lender from and
against any and all losses, liabilities (including liabilities for penalties),
actions, suits, judgments, demands, costs and expenses resulting from any
failure on the
33
<PAGE>
part of such Lender to pay, or from any delay in paying the Administrative Agent
any amount such Lender is required to pay in accordance with this Section 2.3
(except in respect of losses, liabilities or other obligations suffered by the
Administrative Agent or the Swing Line Lender, as the case may be, resulting
from the gross negligence or willful misconduct of the Administrative Agent or
the Swing Line Lender, as the case may be), and such Lender shall be required to
pay interest to the Administrative Agent for the account of the Swing Line
Lender from the date such amount was due until paid in full, on the unpaid
portion thereof, at a rate of interest per annum equal to (i) from the date such
amount was due until the third day therefrom, the Federal Funds Rate, and (ii)
thereafter, the Federal Funds Rate plus 2%, payable upon demand by the Swing
Line Lender. The Administrative Agent shall distribute such interest payments to
the Swing Line Lender upon receipt thereof in like funds as received.
(e) Whenever the Administrative Agent is reimbursed by the Borrower,
for the account of the Swing Line Lender, for any payment in connection with
Swing Line Loans and such payment relates to an amount previously paid by a
Lender pursuant to this Section, the Administrative Agent will promptly pay over
such payment to such Lender.
2.4. Swing Line Note
---------------
The Swing Line Loans made by the Swing Line Lender shall be evidenced
by a promissory note made by the Borrower, substantially in the form of Exhibit
B-2, payable to the order of the Swing Line Lender, and dated the first
Borrowing Date (as indorsed or modified from time to time, including all
replacements thereof and substitutions therefor, the "Swing Line Note").
---------------
2.5. Procedure for Borrowing
-----------------------
(a) Revolving Credit Loans. The Borrower may borrow under the
----------------------
Revolving Credit Commitments on any Business Day during the Revolving Credit
Commitment Period, provided that the Borrower shall notify the Administrative
Agent by the delivery of a Borrowing Request, which shall be sent by facsimile
and shall be irrevocable (confirmed promptly, and in any event within five
Business Days, by the delivery to the Administrative Agent of a Borrowing
Request manually signed by the Borrower), no later than: 12:00 noon, three
Business Days
34
<PAGE>
prior to the requested Borrowing Date, in the case of Eurodollar Advances, and
12:00 noon on the requested Borrowing Date, in the case of ABR Advances,
specifying (A) the aggregate principal amount to be borrowed under the Revolving
Credit Commitments, (B) the requested Borrowing Date, (C) whether such borrowing
is to consist of one or more Eurodollar Advances, ABR Advances, or a combination
thereof and (D) if the borrowing is to consist of one or more Eurodollar
Advances, the amount of, and the length of the Interest Period for, each such
Eurodollar Advance. Each (i) Eurodollar Advance to be made on a Borrowing Date,
when aggregated with all amounts to be converted to a Eurodollar Advance on such
date and having the same Interest Period as such first Eurodollar Advance, shall
equal no less than $5,000,000 or such amount plus a whole multiple of $1,000,000
----
in excess thereof and (ii) each ABR Advance made on each Borrowing Date shall
equal no less than $5,000,000 or such amount plus a whole multiple of $1,000,000
----
in excess thereof or, if less, the unused portion of the Aggregate Revolving
Credit Commitment Amount.
(b) Swing Line Loans. The Borrower may borrow under the Swing Line
----------------
Commitment on any Business Day during the Swing Line Commitment Period, provided
that the Borrower shall notify the Administrative Agent and the Swing Line
Lender (by telephone or facsimile confirmed promptly, and in any event within
five Business Days, by the delivery to the Administrative Agent and the Swing
Line Lender of a Borrowing Request manually signed by the Borrower) no later
than: 3:00 p.m., on the requested Borrowing Date, specifying (i) the aggregate
principal amount to be borrowed under the Swing Line Commitment, (ii) the
requested Borrowing Date, and (iii) the amount of, and the length of the Swing
Line Interest Period for, each Swing Line Loan, provided, however, that no such
Swing Line Interest Period shall end after the Swing Line Termination Date. The
Swing Line Lender will then, subject to its determination that the terms and
conditions of this Agreement have been satisfied and subject to its agreement
with the Borrower on the Negotiated Rate to be applicable thereto, make the
requested amount available promptly on that same day, to the Administrative
Agent who, thereupon, will promptly make such amount available to the Borrower
at the office of the Administrative Agent specified in Section 11.2 by crediting
the account of the Borrower at such office. Each borrowing of Swing Line Loans
shall be in an aggregate principal amount equal to $300,000 or such amount plus
a whole
35
<PAGE>
multiple of $50,000 in excess thereof or, if less, the unused portion of the
Swing Line Commitment Amount.
(c) Funding of Revolving Credit Loans. Upon receipt of each Borrowing
---------------------------------
Request requesting Revolving Credit Loans, the Administrative Agent shall
promptly notify each Lender thereof. Subject to its receipt of the notice
referred to in the preceding sentence, each Lender will make the amount of its
Commitment Percentage of the requested Revolving Credit Loans available to the
Administrative Agent for the account of the Borrower at the office of the
Administrative Agent set forth in Section 11.2 not later than 2:00 p.m., on the
relevant Borrowing Date requested by the Borrower, in funds immediately
available to the Administrative Agent at such office. The amounts so made
available to the Administrative Agent on such Borrowing Date will then, subject
to the satisfaction of the terms and conditions of this Agreement, as determined
by the Administrative Agent, be promptly made available on such date to the
Borrower by the Administrative Agent at the office of the Administrative Agent
specified in Section 11.2 by crediting the account of the Borrower at such
office or elsewhere as the Borrower may from time to time instruct the
Administrative Agent in writing.
(d) Failure to Fund. Unless the Administrative Agent shall have
---------------
received prior notice from a Lender (by telephone or otherwise, such notice to
be promptly confirmed by facsimile or other writing) that such Lender will not
make available to the Administrative Agent such Lender's Commitment Percentage
of the Revolving Credit Loans requested by the Borrower, the Administrative
Agent may assume that such Lender has made such share available to the
Administrative Agent on the Borrowing Date in accordance with this Section, and
the Administrative Agent may, in reliance upon such assumption, make available
to the Borrower on the Borrowing Date a corresponding amount. If and to the
extent such Lender shall not have so made its Commitment Percentage of such
Revolving Credit Loans available to the Administrative Agent, such Lender and
the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount (to the extent not previously paid by the
other), together with interest thereon for each day from the date such amount is
made available to the Borrower to the date such amount is paid to the
Administrative Agent, at a rate per annum equal to, in the case of the Borrower,
the applicable interest rate payable by the Borrower in respect of such Loans
36
<PAGE>
as set forth in Section 3.1, and, in the case of such Lender, at a rate of
interest per annum equal to the Federal Funds Rate for the first three days
after the due date of such payment and the Federal Funds Rate plus 2% thereafter
until the date such payment is received by the Administrative Agent. Such
payment by the Borrower, however, shall be without prejudice to its rights
against such Lender. If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid shall constitute such Lender's
Revolving Credit Loan as part of the Revolving Credit Loans for purposes of this
Agreement, which Loan shall be deemed to have been made by such Lender on the
Borrowing Date applicable to such Revolving Credit Loans.
(e) Netting. If a Lender makes a new Loan on a Borrowing Date on
-------
which the Borrower is to repay an existing Loan from such Lender, such Lender
shall apply the proceeds of such new Loan to make such repayment, and only the
excess of the proceeds of such new Loan over the outstanding principal balance
of the existing Loan being repaid need be made available to the Administrative
Agent.
2.6. Competitive Bid Procedure
-------------------------
(a) The Borrower may, at any time and from time to time during the
Revolving Credit Commitment Period, provided that no Event of Default shall have
occurred and then be continuing, request Competitive Bids by delivering by hand
or telecopy to the Administrative Agent a duly completed Competitive Bid
Request. A request for Competitive Bids that does not conform substantially to
the format of Exhibit I may be rejected in the Administrative Agent's sole
discretion, and the Administrative Agent shall promptly notify the Borrower of
such rejection by telecopy. Each Competitive Bid Request shall specify (i) the
aggregate amount of Competitive Bid Loans upon which the Borrower desires
Competitive Bids under this Section 2.6, which amount shall not be in excess of
the Available Amount, (ii) a proposed Borrowing Date for such Competitive Bid
Loans, which date shall not be earlier than one Business Days after the date of
delivery to the Administrative Agent of such Competitive Bid Request, provided
that any Competitive Bid Request delivered to the Administrative Agent after
11:00 a.m., on any Business Day shall be deemed to have been given on the
immediately succeeding Business Day, (iii) the proposed Competitive Interest
Period(s) requested, provided that the number of
37
<PAGE>
different Competitive Interest Periods requested in a single Competitive Bid
Request shall not exceed three, and (iv) in the event that more than one
Competitive Interest Period shall have been so requested, the amount of the
requested Competitive Bid Loan (in no event less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof) in respect of each such Competitive
Interest Period. Promptly after its receipt of each Competitive Bid Request that
is not rejected as aforesaid, the Administrative Agent shall send to each Lender
an Invitation to Bid, appropriately completed by the Administrative Agent with
reference to such Competitive Bid Request.
(b) Each Lender may, in its sole and absolute discretion, make one or
more Competitive Bids to the Borrower in response to each Invitation to Bid.
Each Competitive Bid by a Lender must be received by the Administrative Agent
not later than 10:00 a.m., on such proposed Borrowing Date. Competitive Bids
that do not conform substantially to the format of Exhibit K may be rejected by
the Administrative Agent after conferring with, and upon the instruction of, the
Borrower, and the Administrative Agent shall notify the Lender making such
nonconforming bid of such rejection as soon as practicable. Each Competitive
Bid shall be irrevocable and, with respect to each Competitive Interest Period
requested by the Borrower, shall specify (i) the Competitive Interest Period
offered by such Lender, and (ii) with respect to each such Competitive Interest
Period offered by such Lender, the Competitive Bid Rate and the amount (which
amount (A) shall not be less than $5,000,000, or a whole multiple of $1,000,000
in excess thereof, and (B) may not exceed the Competitive Bid Loan requested by
the Borrower in respect of such Competitive Interest Period) of the Competitive
Bid Loan with respect thereto. If any Lender shall elect not to make a
Competitive Bid, such Lender shall so notify the Administrative Agent by
telecopy not later than 10:00 a.m., on such proposed Borrowing Date therefor,
provided, however, that the failure by any Lender to give any such notice shall
not obligate such Lender to make any Competitive Bid Loan in connection with the
relevant Competitive Bid Request.
(c) With respect to each Invitation to Bid sent to the Lenders, the
Administrative Agent shall (i) promptly notify the Borrower by telecopy of the
amount of each Competitive Bid Loan offered thereby, and the Competitive
Interest Period and Competitive Bid Rate applicable thereto,
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<PAGE>
and the identity of the Lender that made such offer, and (ii) send a list of all
Competitive Bids to the Borrower for its records as soon as practicable after
completion of the bidding process.
(d) The Borrower may in its sole and absolute discretion, subject
only to the provisions of this Section 2.6(d), accept or reject any Competitive
Bid made in accordance with the procedures set forth in this Section 2.6, and
the Borrower shall notify the Administrative Agent by telephone, confirmed by
telecopy in the form of a Competitive Bid Accept/Reject Letter, whether and to
what extent it has decided to accept or reject any or all of such Competitive
Bids, not later than 11:00 a.m., on the proposed Borrowing Date therefor,
provided, however, that the failure by the Borrower to give such notice shall be
conclusively deemed to be a rejection of all such Competitive Bids. In
connection with each acceptance of one or more Competitive Bids by the Borrower:
(i) the Borrower shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if the Borrower has decided to reject
another Competitive Bid made at a lower Competitive Bid Rate and having the
same Competitive Interest Period as such Competitive Bid,
(ii) the aggregate amount of the Competitive Bids accepted by the
Borrower shall not exceed the aggregate principal amount of the Competitive
Bid Loans specified in the related Competitive Bid Request,
(iii) if the Borrower shall desire to accept a Competitive Bid made at
a particular Competitive Bid Rate and Competitive Interest Period, it must
accept all other Competitive Bids at such Competitive Bid Rate and
Competitive Interest Period, provided, however, that if the acceptance of
all such other Competitive Bids would cause the aggregate amount of all
accepted Competitive Bids to exceed the aggregate principal amount of the
Competitive Bid Loans specified in the related Competitive Bid Request,
then such acceptance shall be made pro rata in accordance with the amount
of each such Competitive Bid at such Competitive Bid Rate and Competitive
Interest Period, and
39
<PAGE>
(iv) except pursuant to Section 2.6(d)(iii), no Competitive Bid shall
be accepted unless the Competitive Bid Loan with respect thereto shall be
in (A) a minimum principal amount of $5,000,000, or a whole multiple of
$1,000,000 in excess thereof, or (B) if less, an aggregate principal amount
equal to the excess of the Aggregate Revolving Credit Commitment Amount
over the Aggregate Credit Exposure.
(e) The Administrative Agent shall promptly notify each bidding
Lender whether or not each Competitive Bid of such Lender has been accepted by
telecopy sent by the Administrative Agent, and, if such Competitive Bid has been
accepted by the Borrower, in whole or in part, such bidding Lender shall, after
its receipt of such notice and no later than 2:00 p.m., on the related Borrowing
Date, make immediately available funds available to the Administrative Agent at
the address therefor set forth in Section 11.2, in the amount in which each such
Competitive Bid of such Lender was accepted by the Borrower, and the amount so
made available to the Administrative Agent on such Borrowing Date will then,
subject to the satisfaction of the terms and conditions of this Agreement, as
determined by the Administrative Agent, be promptly made available on such
Borrowing Date to the Borrower by the Administrative Agent at such office by
crediting the account of the Borrower on the books of such office (or elsewhere
as the Borrower may from time to time instruct the Administrative Agent in
writing) with the aggregate of said amount received by the Administrative Agent.
Notwithstanding anything to the contrary contained herein, no Lender shall be
obligated to make a Competitive Bid Loan if immediately after making such
Competitive Bid Loan, the Aggregate Credit Exposure would exceed the Aggregate
Revolving Credit Commitment Amount.
(f) A Competitive Bid Request shall not be made within four Business
Days after the date of any previous Competitive Bid Request, unless the Borrower
has accepted one or more Competitive Bids pursuant to a Competitive Bid Request
made within such five Business Days.
(g) If the Administrative Agent shall elect to submit a Competitive
Bid in its capacity as a Lender, it shall submit such bid directly to the
Borrower fifteen minutes earlier than the latest time at which the other Lenders
are
40
<PAGE>
required to submit their bids to the Administrative Agent pursuant to Section
2.6(b).
(h) The Competitive Bid Loans made by each Lender shall be evidenced
by a promissory note of the Borrower, substantially in the form of Exhibit B-3,
payable to the order of such Lender, and dated the Effective Date (each, as
indorsed or modified from time to time, a "Competitive Bid Note"). Each
--------------------
Competitive Bid Loan shall be due and payable on the last day of the Competitive
Interest Period applicable thereto.
2.7. Termination, Reduction or Increases in Commitments
--------------------------------------------------
(a) Voluntary Termination or Reductions. The Borrower shall have the
-----------------------------------
right, upon at least three Business Days' prior written notice to the
Administrative Agent, (A) at any time when the Aggregate Credit Exposure shall
be zero, to terminate the Revolving Credit Commitments of all of the Lenders,
and (B) at any time and from time to time when the Aggregate Revolving Credit
Commitment Amount shall exceed the Aggregate Credit Exposure, to permanently
reduce the Aggregate Revolving Credit Commitment Amount by a sum not greater
than the amount of such excess, provided, however, that each such reduction
shall be in the amount of $10,000,000 or such amount plus a whole multiple of
----
$1,000,000 in excess thereof. Each of the Borrower and the Swing Line Lender
shall have the right, upon at least thirty Business Days' prior written notice
to the other and the Administrative Agent, to terminate the Swing Line
Commitment and/or permanently reduce the Swing Line Commitment Amount, provided,
however, that each such reduction shall be in the amount of $5,000,000 or such
amount plus a whole multiple of $1,000,000 in excess thereof.
----
(b) Reductions in General. Each reduction of the Aggregate Revolving
---------------------
Credit Commitment Amount shall be made by reducing each Lender's Revolving
Credit Commitment Amount by an amount equal to such Lender's Commitment
Percentage of such reduction. Simultaneously with each reduction of the
Aggregate Revolving Credit Commitment Amount, the Borrower shall pay the
Facility Fee accrued and unpaid on the amount by which the Aggregate Revolving
Credit Commitment Amount is being reduced.
(c) Increases of Revolving Credit Commitments. The Borrower may at
-----------------------------------------
any time and from time to time, at its sole
42
<PAGE>
cost and expense, request (i) any Lender to increase (such decision to increase
to be within the sole and absolute discretion of such Lender) its Revolving
Credit Commitment Amount, or (ii) any other Eligible Institution (each a
"Proposed Lender"; each such Proposed Lender to be reasonably satisfactory to
---------------
the Administrative Agent) to provide a new Revolving Credit Commitment, by
submitting a supplement to this Agreement in the form of Exhibit M (each a
"Revolving Credit Increase Supplement"), duly executed by the Borrower and each
------------------------------------
such Lender or Proposed Lender, as the case may be. If such Revolving Credit
Increase Supplement is in all respects reasonably satisfactory to the
Administrative Agent, the Administrative Agent shall execute such Revolving
Credit Increase Supplement and deliver a copy thereof to the Borrower and each
such Lender or Proposed Lender, as the case may be. Upon execution and delivery
of such Revolving Credit Increase Supplement, (i) in the case of each such
Lender, such Lender's Revolving Credit Commitment Amount shall be increased to
the amount set forth in such Revolving Credit Increase Supplement, (ii) in the
case of each such Proposed Lender, such Proposed Lender shall become a party
hereto and shall for all purposes of the Loan Documents be deemed a "Lender"
with a Revolving Credit Commitment Amount in the amount set forth in such
Revolving Credit Increase Supplement, (iii) in each case, such Proposed Lenders
shall be added to Exhibit A and the Revolving Credit Commitment Amounts set
forth in Exhibit A shall be adjusted accordingly by the Administrative Agent,
and a new Exhibit A shall be distributed by the Administrative Agent to the
Borrower and each Lender and (iv) the Borrower shall have executed and delivered
to the Administrative Agent a Revolving Credit Note and a Competitive Bid Note
for each Proposed Lender providing a new Revolving Credit Commitment; provided,
however, that:
(A) immediately after giving effect thereto, the Aggregate
Revolving Credit Commitment Amount shall not exceed $400,000,000;
(B) immediately before and after giving effect thereto no
Default shall exist;
(C) each such increase shall be in an amount not less than
$25,000,000 or such amount plus an integral multiple of $5,000,000;
42
<PAGE>
(D) if Revolving Credit Loans shall be outstanding immediately
after giving effect to such increase, each such Lender and each such Proposed
Lender shall enter into a master assignment and acceptance agreement with the
other Lenders in all respects reasonably satisfactory to such other Lenders,
pursuant to which each such other Lender shall assign to it a portion of its
Revolving Credit Loans necessary to reflect the Revolving Credit Commitments as
adjusted in accordance with clause (iii) of this subsection (c), and in
connection with such master assignment and acceptance agreement each such other
Lender may treat the assignment of Eurodollar Advances as a prepayment of such
Eurodollar Advances for purposes of Section 3.5;
(E) each Proposed Lender shall have delivered to the
Administrative Agent and the Borrower all forms, if any, that are required to be
delivered by such Proposed Lender pursuant to section 3.10(c); and
(F) the Administrative Agent shall have received such
certificates, legal opinions and other documents as it shall reasonably request
in connection with such increase.
2.8. Prepayments
-----------
(a) Voluntary Prepayments. The Borrower may, at its option, prepay
---------------------
the Revolving Credit Loans without premium or penalty (but subject to Section
3.5), in full at any time or in part from time to time by delivering to the
Administrative Agent an irrevocable written notice thereof on the proposed
prepayment date, in the case of Revolving Credit Loans consisting of ABR
Advances, and at least three Business Days prior to the proposed prepayment
date, in the case of Revolving Credit Loans consisting of Eurodollar Advances,
specifying whether the Revolving Credit Loans to be prepaid consist of ABR
Advances, Eurodollar Advances, or a combination thereof, the amount to be
prepaid and the date of prepayment, whereupon the amount specified in such
notice shall be due and payable on the date specified. Upon receipt of such
notice, the Administrative Agent shall promptly notify each Lender thereof. Each
partial prepayment of the Revolving Credit Loans pursuant to this subsection (a)
shall be in an aggregate principal amount of $10,000,000 or such amount plus a
----
whole multiple of $1,000,000 in excess thereof, or, if less, the outstanding
principal balance of the Revolving Credit Loans.
43
<PAGE>
After giving effect to any partial prepayment with respect to Eurodollar
Advances which were made (whether as the result of a borrowing or a conversion)
on the same date and which had the same Interest Period, the outstanding
principal balance of such Eurodollar Advances shall exceed $5,000,000. Neither
Swing Line Loans nor Competitive Bid Loans may be prepaid.
(b) In General. Simultaneously with each prepayment of a Revolving
----------
Credit Loan, the Borrower shall prepay all accrued interest on the amount
prepaid through the date of prepayment. Unless otherwise specified by the
Borrower, each prepayment of Revolving Credit Loans shall first be applied to
ABR Advances. If any prepayment is made in respect of any Eurodollar Advance,
any Competitive Bid Loan or any Swing Line Loan, in whole or in part, prior to
the last day of the applicable Interest Period, the Borrower agrees to indemnify
the Lenders in accordance with Section 3.5.
2.9. Use of Proceeds
---------------
The Borrower agrees that the proceeds of the Loans shall be used
solely (i) to repay the Existing Bank Debt, (ii) to pay all of the Fees due
hereunder, (iii) to pay the reasonable out-of-pocket fees and expenses incurred
by the Borrower in connection with the Loan Documents, (iv) for the Borrower's
working capital purposes in the ordinary course of business and (v) for the
Borrower's general corporate purposes not inconsistent with the provisions
hereof. Notwithstanding anything to the contrary contained in any Loan
Document, the Borrower further agrees that no part of the proceeds of any Loan,
and no Letter of Credit, will be used, directly or indirectly, for a purpose
which violates any law, rule or regulation of any Governmental Authority,
including, without limitation, the provisions of Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System, as amended.
2.10. Letter of Credit Sub-Facility
-----------------------------
(a) Subject to the terms and conditions of this Agreement, each
Issuing Bank agrees, in reliance on the agreement of the other Lenders set forth
in Section 2.11, to issue standby letters of credit (the "Standby Letters of
------------------
Credit") or commercial (trade) letters of credit (the "Trade Letters of Credit",
- ------ -----------------------
and together with the Standby Letters of Credit, the "Letters of Credit"; each,
-----------------
individually, a "Letter of Credit") denominated in Dollars during the Revolving
----------------
Credit
44
<PAGE>
Commitment Period for the account of the Borrower, provided that immediately
after the issuance of each Letter of Credit (i) the Letter of Credit Exposure of
all Lenders (whether or not the conditions for drawing under any Letter of
Credit have or may be satisfied) would not exceed the Letter of Credit
Commitment Amount and (ii) the Aggregate Credit Exposure would not exceed the
Aggregate Revolving Credit Commitment Amount. Each Letter of Credit shall have
an expiration date which shall be not later than the earlier of (i) twelve
months after the date of issuance thereof or (ii) (A) with respect to each
Standby Letter of Credit, one Business Days before the Scheduled Revolving
Credit Commitment Termination Date, and (B) with respect to each Trade Letter of
Credit, thirty days before the Scheduled Revolving Credit Commitment Termination
Date. No Letter of Credit shall be issued if the Administrative Agent, or any
Lender by notice to the Administrative Agent no later than 1:00 p.m., one
Business Day prior to the requested date of issuance of such Letter of Credit,
shall have determined that any condition set forth in Sections 5 or 6 has not
been satisfied.
(b) Each Letter of Credit shall be issued for the account of the
Borrower in support of an obligation of the Parent or any Subsidiary thereof in
favor of a beneficiary who has requested the issuance of such Letter of Credit
as a condition to a transaction entered into in the ordinary course of business.
The Borrower shall give the Administrative Agent a Letter of Credit Request for
the issuance of each Letter of Credit by no later than 11:00 a.m., three
Business Days prior to the requested date of issuance. Each Letter of Credit
Request shall be accompanied by such Issuing Bank's standard letter of credit
application, standard reimbursement agreement (each a "Reimbursement Agreement")
-----------------------
and such other documentation as such Issuing Bank may reasonably require,
executed by the Borrower. Upon receipt of such Letter of Credit Request from
the Borrower, the Administrative Agent shall promptly notify such Issuing Bank
and each other Lender thereof. Each Letter of Credit shall be in form and
substance reasonably satisfactory to such Issuing Bank, with such provisions
with respect to the conditions under which a drawing may be made thereunder and
the documentation required in respect of such drawing as such Issuing Bank shall
reasonably require. Such Issuing Bank shall, on the proposed date of issuance
and subject to the terms and conditions of the Reimbursement Agreement and to
the other terms and
45
<PAGE>
conditions of this Agreement, issue the requested Letter of Credit.
(c) Upon each payment by an Issuing Bank of a draft drawn under a
Letter of Credit, the Borrower shall pay to the Administrative Agent, for the
account of such Issuing Bank, an amount equal to such payment.
(d) Notwithstanding anything to the contrary contained herein or in
any Reimbursement Agreement, to the extent that the terms of this Agreement
shall be inconsistent with the terms of such Reimbursement Agreement, the terms
of this Agreement shall govern.
2.11. Letter of Credit Participation and Funding Commitments
------------------------------------------------------
(a) Each Lender hereby unconditionally, irrevocably and severally
(and not jointly) for itself only and without any notice to or the taking of any
action by such Lender, takes an undivided participating interest in the
obligations of each Issuing Bank under and in connection with each Letter of
Credit in an amount equal to such Lender's Commitment Percentage of the amount
of such Letter of Credit. Each Lender shall be liable to each Issuing Bank for
its Commitment Percentage of (i) the unreimbursed amount of any draft drawn and
honored under each of its Letters of Credit, and (ii) any amounts paid by the
Borrower pursuant to Sections 2.10(c) or 2.12 that are subsequently rescinded or
avoided, or must otherwise be restored or returned. Such liabilities shall be
unconditional and without regard to the occurrence of any Default or the
compliance by the Borrower with the Loan Documents.
(b) Each Issuing Bank will promptly notify the Administrative Agent,
and the Administrative Agent will promptly notify each Lender (which notice
shall be promptly confirmed in writing) of the date and the amount of any draft
presented under each of its Letters of Credit with respect to which full
reimbursement is not made as provided in Section 2.10(c), and forthwith upon
receipt of each such notice, such Lender (other than such Issuing Bank in its
capacity as a Lender) shall make available to the Administrative Agent for the
account of such Issuing Bank its Commitment Percentage of the amount of such
unreimbursed draft at the office of the Administrative Agent specified in
Section 11.2, in lawful
46
<PAGE>
money of the United States and in immediately available funds, before 4:00 p.m.,
on the day such notice was given by the Administrative Agent, if the relevant
notice was given by the Administrative Agent at or prior to 1:00 p.m., on such
day, and before 12:00 noon, on the next Business Day, if the relevant notice was
given by the Administrative Agent after 1:00 p.m., on such day. The
Administrative Agent shall distribute the payments made pursuant to the
immediately preceding sentence to such Issuing Bank promptly upon receipt
thereof in like funds as received. Each Lender shall indemnify and hold harmless
the Administrative Agent and such Issuing Bank from and against any and all
losses, liabilities (including liabilities for penalties), actions, suits,
judgments, demands, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses and an administration fee of not less
than $100 payable to such Issuing Bank as the issuer of the relevant Letter of
Credit) resulting from any failure on the part of such Lender to perform its
obligations under this Section 2.11 (except in respect of losses, liabilities or
other obligations suffered by such Issuing Bank to the extent resulting from the
gross negligence or willful misconduct of such Issuing Bank). If a Lender does
not make any payment required under this Section 2.11 when due, such Lender
shall be required to pay interest to the Administrative Agent for the account of
such Issuing Bank (upon demand therefor) the amount of such payment at a rate of
interest per annum equal to the Federal Funds Rate for the first three days
after the due date of such payment and the Federal Funds Rate plus 2% thereafter
until the date such payment is received by the Administrative Agent. The
Administrative Agent shall distribute such interest payments to such Issuing
Bank upon receipt thereof in like funds as received.
(c) Whenever any Issuing Bank is reimbursed by the Borrower or the
Administrative Agent is reimbursed by the Borrower, for the account of such
Issuing Bank, for any payment under a Letter of Credit and such payment relates
to an amount previously paid by a Lender pursuant to this Section 2.11, the
Administrative Agent (or such Issuing Bank, to the extent that it has received
the same) will pay over such payment to such Lender (i) before 4:00 p.m. on the
day such payment from the Borrower is received, if such payment is received at
or prior to 1:00 p.m. on such day, or (ii) before 12:00 noon on the next
succeeding Business Day, if such
47
<PAGE>
payment from the Borrower is received after 1:00 p.m. on such day.
2.12. Absolute Obligation With Respect to Letter of Credit Payments
-------------------------------------------------------------
The Borrower's obligation to reimburse the Administrative Agent for
the account of each Issuing Bank in respect of each payment under or in respect
of such Issuing Bank's Letters of Credit shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which the Borrower may have or have had against the
beneficiary of such Letter of Credit, the Administrative Agent, any Issuing
Bank, as issuer of such Letter of Credit, any Lender or any other Person,
including, without limitation, any defense based on the failure of any drawing
to conform to the terms of such Letter of Credit, any drawing document proving
to be forged, fraudulent or invalid, or the legality, validity, regularity or
enforceability of such Letter of Credit; provided, that, with respect to any
Letter of Credit, the foregoing shall not relieve any Issuing Bank of any
liability it may have to the Borrower for any actual damages sustained by the
Borrower arising from a wrongful payment under such Letter of Credit made as a
result of such Issuing Bank's gross negligence or willful misconduct.
2.13. Payments
--------
(a) Except as otherwise expressly provided herein, each payment,
including each prepayment, of principal and interest on the Loans, of the
Facility Fee, the Letter of Credit Commissions, the Fronting Fees and of all of
the other fees to be paid to the Administrative Agent and the Lenders in
connection with the Loan Documents (the Facility Fee, the Letter of Credit
Commissions and the Fronting Fees, together with all of such other fees, being
sometimes hereinafter collectively referred to as the "Fees") shall be made
----
prior to 1:00 p.m., on the date such payment is due to the Administrative Agent
for the account of the applicable Lenders at the Administrative Agent's office
specified in Section 11.2, in each case in lawful money of the United States, in
immediately available funds and without set-off or counterclaim. The failure of
the Borrower to make any such payment by such time shall not constitute a
Default, provided that such payment is made on such due date, but any such
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payment made after 1:00 p.m., on such due date shall be deemed to have been made
on the next Business Day for the purpose of calculating interest. Promptly upon
receipt thereof by the Administrative Agent, each payment of principal and
interest on the Loans shall be remitted by the Administrative Agent in like
funds as received to the Swing Line Lender, each Issuing Bank and each Lender
(i) first, pro rata according to its Outstanding Percentage of the amount of
interest which is then due and payable under the Loan Documents, and (ii)
second, pro rata according to its Outstanding Percentage of the amount of
principal which is then due and payable under the Loan Documents. Promptly upon
receipt thereof by the Administrative Agent, each payment of the Facility Fee
shall be remitted by the Administrative Agent in like funds as received to each
Lender pro rata according to such Lender's Revolving Credit Commitment Amount
or, if the Revolving Credit Commitments shall have terminated or been
terminated, according to the outstanding principal balance of such Lender's
Revolving Credit Loans.
(b) If any payment hereunder, under the Notes or under any
Reimbursement Agreement shall be due and payable on a day which is not a
Business Day, the due date thereof (except as otherwise provided in the
definition of Eurodollar Interest Period) shall be extended to the next Business
Day and (except with respect to payments in respect of the Fees) interest shall
be payable at the applicable rate specified herein during such extension,
provided, however that if such next Business Day is after the Maturity Date, any
such payment shall be due on the immediately preceding Business Day.
2.14. Extension of Revolving Credit Commitment Period
-----------------------------------------------
(a) The Borrower may at any time and from time to time (but not more
frequently than once per annum) request that the Lenders agree (the decision so
to agree to be within the sole and absolute discretion of each Lender) to extend
the Revolving Credit Commitment Period by one year per each such request by
giving written notice thereof to the Administrative Agent. Upon receipt of each
such notice, the Administrative Agent shall promptly send each Lender a copy
thereof. In the event that Lenders then having Revolving Credit Commitment
Amounts equal to or greater than $150,000,000 shall have consented to such
extension request, the then existing Scheduled Revolving Credit Commitment
Termination Date shall
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<PAGE>
be extended to the day which is one year following the then existing Scheduled
Termination Date (or, if such day is not a Business Day, the Business Day
immediately preceding such day), provided, however, that (A) immediately before
and after giving effect thereto, no Default shall exist, and (B) the
Administrative Agent shall have received such certificates, legal opinions and
other documents as it shall reasonably request in connection with such
extension. In all other events, the then existing Scheduled Revolving Credit
Commitment Termination Date shall not be extended and shall remain in full force
and effect until such time, if any, as the same may be extended pursuant to a
subsequent extension request.
(b) With respect to each extension request approved in accordance
with Section 2.14(a), on the existing Scheduled Revolving Credit Commitment
Termination Date with respect thereto (i) with respect to each Lender which (A)
shall not have so consented to such extension request, and (B) shall not have
transferred its Revolving Credit Commitment pursuant to Section 3.11, the
Aggregate Revolving Credit Commitment Amount shall be automatically reduced by
an amount equal to the sum of the Revolving Credit Commitment Amounts of each
such Lender (each a "Non-Extending Lender"), and (ii) the Revolving Credit
--------------------
Commitment of each Non-Extending Lender shall automatically terminate, and (iii)
the Borrower shall pay to the Administrative Agent for the account of each Non-
Extending Lender all principal, interest, Fees and other sums owing to such Non-
Extending Lender under the Loan Documents, whether or not then otherwise due.
3. INTEREST, FEES, YIELD PROTECTIONS, ETC.
---------------------------------------
3.1. Interest Rate and Payment Dates
-------------------------------
(a) Prior to Default. Except as otherwise provided in Section 3.1(b)
----------------
and 3.1(c), (i) each Competitive Bid Loan shall bear interest at the applicable
Competitive Bid Rate therefor, and (ii) Revolving Credit Loans and Swing Line
Loans shall bear interest on the outstanding principal balance thereof at the
applicable interest rate or rates per annum set forth below:
ADVANCES RATE
-------- ----
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<PAGE>
Each ABR Advance Alternate Base Rate.
Each Eurodollar Advance Eurodollar Rate for the applicable
Interest Period plus the Applicable Margin
----
applicable to Eurodollar Advances.
Each Swing Line Loan Negotiated Rate applicable to such Swing
Line Loan for the applicable Interest Period.
(b) Default Rate. Upon the occurrence and during the continuance of
------------
an Event of Default under Section 9.1(a), the unpaid principal balance of the
Loans shall bear interest at a rate per annum (whether before or after the entry
of a judgment thereon) equal to 2% plus the rate which would otherwise be
----
applicable under Section 3.1(a), and any overdue interest or other amount
payable under the Loan Documents shall bear interest (whether before or after
the entry of a judgment thereon) at a rate per annum equal to the Alternate Base
Rate plus 2%. For purposes of the preceding sentence, the rate applicable
----
pursuant to Section 3.1(a), as the case may be, to any overdue principal,
interest or other amount payable under the Loan Documents shall be (i) in the
case of an overdue principal balance of any Eurodollar Advance, the applicable
Eurodollar Rate plus the Applicable Margin until the last day of the applicable
----
Interest Period (or the earlier termination thereof pursuant to this Agreement)
and thereafter at the Alternate Base Rate, (ii) in the case of an overdue
principal balance of any Competitive Bid Loan, the applicable Competitive Bid
Rate until the last day of the applicable Competitive Interest Period (or the
earlier termination thereof pursuant to this Agreement) and thereafter at the
Alternate Base Rate, (iii) in the case of an overdue principal balance of any
Swing Line Loan, the applicable Negotiated Rate until the last day of the
applicable Swing Line Interest Period (or the earlier termination thereof
pursuant to this Agreement) and thereafter at the Alternate Base Rate and (iv)
in all other cases, the Alternate Base Rate. All such interest shall be payable
on demand.
(c) In General. Interest on (i) ABR Advances to the extent based on
----------
the BNY Rate shall be calculated on the basis of a 365 or 366-day year (as the
case may be), and (ii) ABR
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<PAGE>
Advances to the extent based on the Federal Funds Rate, Eurodollar Advances,
Competitive Bid Loans and Swing Line Loans shall be calculated on the basis of a
360-day year, in each case, for the actual number of days elapsed. Except as
otherwise expressly provided herein, interest shall be payable in arrears on
each Interest Payment Date and upon each payment (including prepayment) of the
Loans. Any change in the interest rate on the Loans resulting from a change in
the Alternate Base Rate or reserve requirements shall become effective as of the
opening of business on the day on which such change shall become effective. The
Administrative Agent shall, as soon as practicable, notify the Borrower and the
Lenders of the effective date and the amount of each such change in the BNY
Rate, but any failure to so notify shall not in any manner affect the obligation
of the Borrower to pay interest on the Loans in the amounts and on the dates
required. Each determination of the Alternate Base Rate or a Eurodollar Rate by
the Administrative Agent pursuant to this Agreement shall be conclusive and
binding on all parties hereto absent manifest error. The Borrower acknowledges
that to the extent interest payable on ABR Advances is based on the BNY Rate,
such rate is only one of the bases for computing interest on loans made by the
Lenders, and by basing interest payable on ABR Advances on the BNY Rate, the
Lenders have not committed to charge, and the Borrower has not in any way
bargained for, interest based on a lower or the lowest rate at which any Lender
may now or in the future make loans to other borrowers.
3.2. Fees
----
(a) Facility Fees. The Borrower agrees to pay to the Administrative
-------------
Agent, for the account of the Lenders in accordance with each Lender's
Commitment Percentage, a fee (the "Facility Fee"), during the period from the
------------
Effective Date through the Revolving Credit Commitment Termination Date, at a
rate per annum equal to the Applicable Margin on the average daily Aggregate
Revolving Credit Commitment Amount, regardless of usage. The Facility Fee shall
be payable (i) quarterly in arrears on the last day of each March, June,
September and December during such period commencing on the first such day
following the Effective Date, (ii) on the date of any reduction in the Aggregate
Revolving Credit Commitment Amount (to the extent of such reduction) and (iii)
on the Revolving Credit Maturity Date. The Facility Fee shall be
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<PAGE>
calculated on the basis of a 360- day year for the actual number of days
elapsed.
(b) Letter of Credit Commissions. The Borrower agrees to pay to the
----------------------------
Administrative Agent, for the account of the Lenders in accordance with each
Lender's Commitment Percentage, commissions (the "Letter of Credit Commissions")
----------------------------
with respect to the Letters of Credit for the period from and including the date
of issuance of each thereof to the expiration date thereof, at a rate per annum
equal to (A) with respect to Standby Letters of Credit, the Applicable Margin in
effect on the date of issuance thereof, and (B) with respect to Trade Letters of
Credit, the Applicable Margin in effect on the date of issuance thereof
multiplied by 30%, in each case on the average daily maximum amount available
under any contingency to be drawn under such Letter of Credit. The Letter of
Credit Commissions shall be (i) calculated on the basis of a 360-day year for
the actual number of days elapsed and (ii) payable quarterly in arrears on the
last day of each March, June, September and December of each year and on the
Revolving Credit Commitment Termination Date.
(c) Letter of Credit Fronting Fees. The Borrower agrees to pay to
------------------------------
Administrative Agent, for the account of each Issuing Bank, a fee (the "Fronting
--------
Fees") with respect to the Letters of Credit issued by such Issuing Bank for
- ----
the period from and including the date of issuance of each thereof to the
expiration date thereof, at a rate per annum equal to 0.10% on the average daily
maximum amount available under any contingency to be drawn under such Letters of
Credit. The Fronting Fees shall be (i) calculated on the basis of a 360-day
year for the actual number of days elapsed and (ii) payable quarterly in arrears
on the last day of each March, June, September and December of each year and on
the Revolving Credit Commitment Termination Date. In addition to the Fronting
Fees, the Borrower agrees to pay to each Issuing Bank, for its own account, its
standard fees and charges customarily charged to customers similar to the
Borrower with respect to any of its Letters of Credit.
(d) Administrative Agent's Fees. The Borrower agrees to pay to the
---------------------------
Administrative Agent, for its own account, such other fees as have been agreed
to in writing by the Borrower and the Administrative Agent.
3.3. Conversions
-----------
53
<PAGE>
(a) The Borrower may elect from time to time to convert one or more
Eurodollar Advances to ABR Advances by delivering to the Administrative Agent by
facsimile a Notice of Conversion (confirmed promptly, and in any event within
five Business Days, by the delivery to the Administrative Agent of a Notice of
Conversion manually signed by the Borrower) at least one Business Day's prior
irrevocable notice of such election, specifying the amount to be converted,
provided, that any such conversion shall only be made on a Business Day and on
the last day of the Eurodollar Interest Period applicable thereto. In addition,
the Borrower may elect from time to time to convert ABR Advances to Eurodollar
Advances or existing Eurodollar Advances to new Eurodollar Advances by
delivering to the Administrative Agent by facsimile a Notice of Conversion
(confirmed promptly, and in any event within five Business Days, by the delivery
to the Administrative Agent of a Notice of Conversion manually signed by the
Borrower) at least three Business Days' prior irrevocable notice of such
election, specifying the amount to be so converted and the initial Eurodollar
Interest Period relating thereto, provided that any such conversion shall only
be made on a Business Day and, in the case of existing Eurodollar Advances being
converted to new Eurodollar Advances, on the last day of the Eurodollar Interest
Period applicable thereto. The Administrative Agent shall promptly provide the
Lenders with notice of each such election. Advances may be converted pursuant
to this Section in whole or in part, provided that the amount to be converted to
each Eurodollar Advance, when aggregated with any Eurodollar Advance to be made
on such date in accordance with Section 2.5 and having the same Eurodollar
Interest Period as such first Eurodollar Advance, shall equal no less than
$5,000,000 or such amount plus a whole multiple of $1,000,000 in excess thereof.
(b) Notwithstanding anything in this Agreement to the contrary, upon
the occurrence and during the continuance of an Event of Default, the Borrower
shall have no right to elect to convert any existing ABR Advance to a new
Eurodollar Advance or to convert any existing Eurodollar Advance to a new
Eurodollar Advance. In such event, all ABR Advances shall be automatically
continued as ABR Advances and all Eurodollar Advances shall be automatically
converted to ABR Advances on the last day of the Eurodollar Interest Period
applicable to such Eurodollar Advance.
54
<PAGE>
(c) Each conversion shall be effected by each Lender by applying the
proceeds of its new ABR Advance or Eurodollar Advance, as the case may be, to
its Advances (or portion thereof) being converted (it being understood that any
such conversion shall not constitute a borrowing for purposes of Sections 4, 5
or 6).
(d) Competitive Bid Loans may not be converted.
3.4. Concerning Eurodollar Interest Periods and Swing Line Interest Periods
----------------------------------------------------------------------
Notwithstanding any other provision of any Loan Document:
(a) If the Borrower shall have failed to elect a Eurodollar Advance
under Section 2.5 or 3.3, as the case may be, in connection with any borrowing
of new Revolving Credit Loans or expiration of an Eurodollar Interest Period
with respect to any existing Eurodollar Advance, the amount of the Revolving
Credit Loans subject to such borrowing or such existing Eurodollar Advance shall
thereafter be an ABR Advance until such time, if any, as the Borrower shall
elect a new Eurodollar Advance pursuant to Section 3.3.
(b) No Interest Period selected in respect of the conversion of any
Eurodollar Advance comprising a Revolving Credit Loan, and no Interest Period
selected in respect of any Swing Line Loan, shall end after the Scheduled
Revolving Credit Commitment Termination Date.
(c) The Borrower shall not be permitted to have more than ten
Eurodollar Advances outstanding at any one time, it being agreed that each
borrowing of a Eurodollar Advance pursuant to a single Borrowing Request shall
constitute the making of one Eurodollar Advance for the purpose of calculating
such limitation.
3.5. Indemnification for Loss
------------------------
Notwithstanding anything contained herein to the contrary, if the
Borrower shall fail for any reason to borrow a Revolving Credit Loan in respect
of which it shall have requested a Eurodollar Advance or to convert an Advance
to a Eurodollar Advance after it shall have notified the Administrative Agent of
its intent to do so, or if the Bor-
55
<PAGE>
rower shall fail for any reason to borrow a Competitive Bid Loan in any instance
in which it shall have accepted one or more Competitive Bids, or if the Borrower
shall fail to borrow a Swing Line Loan after the Swing Line Lender shall have
agreed to a Negotiated Rate with respect thereto, or if a Eurodollar Advance,
Competitive Bid Loan or Swing Line Loan shall terminate for any reason prior to
the last day of the Interest Period applicable thereto, or if the Borrower shall
for any reason prepay or repay all or any part of the principal amount of a
Eurodollar Advance, Competitive Bid Loan or Swing Line Loan prior to the last
day of the Interest Period applicable thereto, the Borrower shall indemnify each
Lender against, and pay on demand directly to such Lender the amount (calculated
by such Lender using any reasonable method chosen by such Lender which is
customarily used by such Lender for such purpose) equal to any loss or out-of-
pocket expense suffered by such Lender as a result of such failure to borrow or
convert, or such termination, repayment or prepayment, including any loss, cost
or expense suffered by such Lender in liquidating or employing deposits acquired
to fund or maintain the funding of such Eurodollar Advance, Competitive Bid Loan
or Swing Line Loan, as the case may be, or redeploying funds prepaid or repaid,
in amounts which correspond to such Eurodollar Advance, Competitive Bid Loan or
Swing Line Loan, as the case may be, and any internal processing charge
customarily charged by such Lender in connection therewith.
3.6. Capital Adequacy
----------------
If the amount of capital required or expected to be maintained by any
Lender or any Issuing Bank or any Person directly or indirectly owning or
controlling such Lender or such Issuing Bank (each a "Control Person"), shall be
--------------
affected by the occurrence of a Regulatory Change and such Lender or such
Issuing Bank shall have determined that such Regulatory Change shall have had or
will thereafter have the effect of reducing the rate of return on such Lender's,
such Issuing Bank's, or such Control Person's capital in respect of the Loans,
Revolving Credit Commitment or Letter of Credit or Swing Line Loan
participations made or maintained by such Lender, or of the Reimbursement
Obligations owed to such Issuing Bank, in any case to a level below that which
such Lender, such Issuing Bank or such Control Person could have achieved or
would thereafter be able to achieve but for such Regulatory Change (after taking
into account such Lender's, such Issuing Bank's or such Control Person's
policies
56
<PAGE>
regarding capital adequacy) by an amount deemed by such Lender or such Issuing
Bank to be material, then, within ten days after demand by such Lender or such
Issuing Bank, the Borrower shall pay to such Lender, such Issuing Bank or such
Control Person, as the case may be, such additional amount or amounts as shall
be sufficient to compensate such Lender, such Issuing Bank or such Control
Person for such reduction.
3.7. Reimbursement for Increased Costs
---------------------------------
If any Lender, the Administrative Agent, the Swing Line Lender or any
Issuing Bank shall determine that a Regulatory Change:
(a) does or shall (i) subject it to any Tax of any kind
whatsoever with respect to any Eurodollar Advances or its obligations under this
Agreement to make Eurodollar Advances, or (ii) change the basis of taxation of
payments to it of principal, interest or any other amount payable hereunder in
respect of its Eurodollar Advances, or impose on the Administrative Agent, such
Issuing Bank, the Swing Line Lender or such Lender any other condition regarding
the Letters of Credit including any Tax required to be withheld from any amounts
payable under the Loan Documents (except for imposition of, or change in the
rate of, any Income Tax applicable to such Lender); or
(b) does or shall impose, modify or make applicable any reserve,
special deposit, compulsory loan, assessment, increased cost or similar
requirement against assets held by, or deposits of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Lender in respect of its Eurodollar Advances which is not otherwise
included in the determination of a Eurodollar Rate or against any Letters of
Credit issued by such Issuing Bank or participated in by any Lender;
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing, converting or maintaining its Eurodollar Advances or its
commitment to make such Eurodollar Advances, or to reduce any amount receivable
hereunder in respect of its Eurodollar Advances, or to increase the cost to such
Issuing Bank of issuing or maintaining the Letters of Credit or the cost to any
Lender of participating therein or the cost to the Administrative Agent or such
Issuing Bank of performing its respective functions
57
<PAGE>
hereunder with respect to the Letters of Credit, then, in any such case, the
Borrower shall pay such Lender, the Administrative Agent, or such Issuing Bank,
as the case may be, within ten days after demand therefor, such additional
amounts as is sufficient to compensate such Lender, such Issuing Bank or the
Administrative Agent, as the case may be, for such additional cost or reduction
in such amount receivable which such Lender deems to be material as determined
by such Lender, such Issuing Bank or the Administrative Agent, as the case may
be; provided, however, that nothing in this Section shall require the Borrower
to indemnify the Lenders, the Administrative Agent, or such Issuing Bank, as the
case may be, with respect to withholding Taxes for which the Borrower has no
obligation under Section 3.10. No failure by any Lender or the Administrative
Agent, or such Issuing Bank to demand, and no delay in demanding, compensation
for any increased cost shall constitute a waiver of its right to demand such
compensation at any time. A statement setting forth the calculations of any
additional amounts payable pursuant to this Section submitted by a Lender, the
Administrative Agent or such Issuing Bank, as the case may be, to the Borrower
shall be conclusive absent manifest error.
3.8. Illegality of Funding
---------------------
Notwithstanding any other provision hereof, if any Lender shall
reasonably determine that any Regulatory Change shall make it unlawful for such
Lender to make or maintain any Eurodollar Advance as contemplated by this
Agreement, such Lender shall promptly notify the Borrower and the Administrative
Agent thereof, and (i) the commitment of such Lender to make such Eurodollar
Advances or convert ABR Advances to Eurodollar Advances shall forthwith be
suspended, (ii) such Lender shall fund its portion of each requested Eurodollar
Advance as an ABR Advance and (iii) such Lender's Revolving Credit Loans then
outstanding as such Eurodollar Advances, if any, shall be converted
automatically to an ABR Advance on the last day of the then current Eurodollar
Interest Period applicable thereto or at such earlier time as may be required.
If the commitment of any Lender with respect to Eurodollar Advances is suspended
pursuant to this Section and such Lender shall have obtained actual knowledge
that it is once again legal for such Lender to make or maintain Eurodollar
Advances, such Lender shall promptly notify the Administrative Agent and the
Borrower thereof and, upon
58
<PAGE>
receipt of such notice by each of the Administrative Agent and the Borrower,
such Lender's commitment to make or maintain Eurodollar Advances shall be
reinstated.
3.9. Substituted Interest Rate
-------------------------
In the event that (i) the Administrative Agent shall have determined
(which determination shall be conclusive and binding) that by reason of
circumstances affecting the interbank eurodollar market either adequate or
reasonable means do not exist for ascertaining the Eurodollar Rate, or (ii)
Required Lenders shall have notified the Administrative Agent that they have
determined (which determination shall be conclusive and binding absent manifest
error) that the applicable Eurodollar Rate will not adequately and fairly
reflect the cost to such Lenders of maintaining or funding loans bearing
interest based on such Eurodollar Rate, with respect to any portion of the
Revolving Credit Loans that the Borrower has requested be made as Eurodollar
Advances or Eurodollar Advances that will result from the requested conversion
of any portion of the Advances into Eurodollar Advances (each, an "Affected
--------
Advance"), the Administrative Agent shall promptly notify the Borrower and the
- -------
Lenders (by telephone or otherwise, to be promptly confirmed in writing) of such
determination, on or, to the extent practicable, prior to the requested
Borrowing Date or Conversion Date for such Affected Advances. If the
Administrative Agent shall give such notice, (a) any Affected Advances shall be
made as ABR Advances, (b) the Advances (or any portion thereof) that were to
have been converted to Affected Advances shall be converted to ABR Advances and
(c) any outstanding Affected Advances shall be converted, on the last day of the
then current Eurodollar Interest Period with respect thereto, to ABR Advances.
Until any notice under clauses (i) or (ii), as the case may be, of this Section
has been withdrawn by the Administrative Agent (by notice to the Borrower
promptly upon either (x) the Administrative Agent having determined that such
circumstances affecting the interbank eurodollar market no longer exist and that
adequate and reasonable means do exist for determining the Eurodollar Rate, or
(y) the Administrative Agent having been notified by such Required Lenders that
circumstances no longer render the Advances (or any portion thereof) Affected
Advances), no further Eurodollar Advances shall be required to be made by the
Lenders, nor shall the Borrower have the right to convert all or any
59
<PAGE>
portion of the Revolving Credit Loans to or as Eurodollar Advances.
3.10. Taxes; Net Payments
-------------------
(a) All payments made by the Borrower under the Loan Documents shall
be made free and clear of, and without reduction for or on account of, any
Included Taxes required by law to be withheld from any amounts payable under the
Loan Documents. In the event that the Borrower is prohibited by law from making
payments under the Loan Documents free of deductions or withholdings in respect
of Included Taxes, then the Borrower shall pay such additional amounts to the
Administrative Agent, for the benefit of the Indemnified Tax Persons, as may be
necessary in order that the actual amounts received by each Indemnified Tax
Person in respect of interest and any other amount payable under the Loan
Documents after deduction or withholding (and after payment of any additional
taxes or other charges due as a consequence of the payment of such additional
amounts) shall equal the amount that would have been received if such deduction
or withholding were not required. In the event that any such deduction or
withholding with respect to Included Taxes can be reduced or nullified as a
result of the application of any relevant double taxation convention, the
relevant Indemnified Tax Person will cooperate with the Borrower (at the sole
expense of the Borrower) in making application to the relevant taxing
authorities to seek to obtain such reduction or nullification, so long as it
would not be disadvantageous to such Indemnified Tax Person, provided, however,
that no Indemnified Tax Person shall have any obligation to engage in litigation
with respect thereto. If the Borrower shall make any payments under this
Section 3.10 or shall make any deductions or withholdings from amounts paid in
accordance with this Section 3.10, the Borrower shall, as promptly as
practicable thereafter, forward to the Administrative Agent original or
certified copies of official receipts or other evidence acceptable to the
Administrative Agent establishing such payment and the Administrative Agent in
turn shall distribute copies of such receipts to each Indemnified Tax Person.
If payments under the Loan Documents to any Indemnified Tax Person are or become
subject to any withholding, such Indemnified Tax Person shall (unless otherwise
required by a Governmental Authority or as a result of any treaty, convention,
law, rule, regulation, order or similar directive applicable to such Indemnified
Tax Person) use its best efforts to designate a different office or branch
60
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to which payments are to be made under the Loan Documents from that initially
selected thereby, if such designation would avoid or mitigate such withholding
and would not be disadvantageous to such Indemnified Tax Person. In the event
that any Indemnified Tax Person shall have determined that it received a refund
or credit for Included Taxes paid by the Borrower under this Section 3.10, such
Indemnified Tax Person shall promptly notify the Administrative Agent and the
Borrower of such fact and shall remit to the Borrower the amount of such refund
or credit applicable to the payments made by the Borrower in respect of such
Indemnified Tax Person under this Section 3.10.
(b) Each Indemnified Tax Person shall deliver to the Borrower such
certificates, documents, or other evidence as the Borrower may reasonably
require from time to time as are necessary to establish that such Indemnified
Tax Person is not subject to withholding under Section 1441, 1442 or 3406 of the
Code or as may be necessary to establish, under any law imposing upon the
Borrower, hereafter, an obligation to withhold any portion of the payments made
by the Borrower under the Loan Documents, that payments to the Administrative
Agent on behalf of such Indemnified Tax Person are not subject to withholding.
Notwithstanding any provision herein to the contrary, the Borrower shall not
have any obligation to pay to the Administrative Agent for the benefit of any
Indemnified Tax Person any amount which the Borrower is required to withhold
(and shall have no obligation to otherwise indemnify any Lender with respect to
such amount) to the extent that the Borrower's obligation to withhold is due to
the failure of such Indemnified Tax Person to file any required statement,
certificate or other document with respect to exemption which such Borrower
requested of it.
(c) Each Indemnified Tax Person not incorporated under the laws of
the United States or any State thereof shall deliver to the Borrower such
certificates, documents, or other evidence as the Borrower may reasonably
require from time to time as are necessary to establish that such Indemnified
Tax Person is not subject to withholding under Section 1441, 1442 or 3406 of the
Code or as may be necessary to establish, under any law imposing upon the
Borrower, hereafter, an obligation to withhold any portion of the payments made
by the Borrower under the Loan Documents, that payments to the Administrative
Agent on behalf of such Indemnified Tax Person are not subject to withholding.
Notwithstanding any provision herein to the
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contrary, the Borrower shall not have any obligation to pay to the
Administrative Agent for the benefit of any Indemnified Tax Person any amount
which the Borrower is liable to withhold due to the failure of such Indemnified
Tax Person to file any statement of exemption required by the Code.
3.11. Substitution of Lenders
-----------------------
Notwithstanding anything to the contrary contained herein, if any
Lender shall request compensation pursuant to Sections 3.6, 3.7 or 3.10, or if
any Lender shall not have consented to any request for the extension of the
Revolving Credit Commitment Period which request was approved in accordance with
Section 2.14, then, in each such case, provided that no Event of Default shall
then exist and be continuing, the Borrower may require that such Lender transfer
all of its right, title and interest under the Loan Documents to one or more of
the other Lenders (in the sole and absolute discretion of each such Lender) or
any other Eligible Institution identified by the Borrower and reasonably
acceptable to the Administrative Agent, the Swing Line Lender and each Issuing
Bank (a "Substitute Lender"), if such Substitute Lender agrees to assume all of
-----------------
the obligations of such Lender under the Loan Documents for consideration equal
to all principal, interest, Fees and other sums owing to such Lender under the
Loan Documents, whether or not then otherwise due. Subject to the execution and
delivery by the Borrower at its expense of a new Revolving Credit Note and a new
Competitive Bid Note, an instrument of assignment and assumption, and such other
documents as such Lender may reasonably require, such Substitute Lender shall be
a "Lender" for all purposes hereunder. Without prejudice to the survival of any
other agreement of the Borrower hereunder, the agreements of the Borrower
contained in Sections 3.5, 3.6, 3.7, 11.7 and 11.20 (without duplication of any
payments made to such Lender by the Borrower or the Substitute Lender) shall
survive for the benefit of any Lender replaced under this Section with respect
to the time prior to such replacement.
4. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Administrative Agent and the Lenders to enter into
this Agreement, the Lenders to make the Revolving Credit Loans, each Issuing
Bank to issue the Letters of Credit and the Lenders to participate therein, and
the
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Swing Line Lender to make the Swing Line Loans and the Lenders to participate
therein, each of the Parent and the Borrower makes the following representations
and warranties to the Administrative Agent, each Issuing Bank, the Swing Line
Lender and each Lender:
4.1. Existence and Power
-------------------
Each of the Parent and each Significant Subsidiary has been duly
organized and is validly existing in good standing under the laws of the
jurisdiction of its incorporation or formation, has all requisite power and
authority to own its Property and to carry on its business as now conducted, and
is in good standing and authorized to do business in each jurisdiction in which
the nature of the business conducted therein or the Property owned by it therein
makes such qualification necessary, except where such failure to qualify would
not reasonably be expected to have a Material Adverse Effect.
4.2. Authority and Execution
-----------------------
Each of the Parent and each Significant Subsidiary has full legal
power and authority to own its Property, conduct its business and enter into,
execute, deliver and perform the terms of the Loan Documents to which it is a
party all of which have been duly authorized by all proper and necessary
corporate, partnership or other applicable action and are in full compliance
with its Organizational Documents. The Parent and each Significant Subsidiary
has duly executed and delivered each Loan Document to which it is a party.
4.3. Binding Agreement
-----------------
The Loan Documents (other than the Notes) constitute, and the Notes,
when issued and delivered pursuant hereto for value received, will constitute,
the valid and legally binding obligations of the Parent and the Borrower, in
each case to the extent it is a party thereto, enforceable in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles.
4.4. Litigation
----------
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Except as set forth on Schedule 4.4, there are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority
(whether purportedly on behalf of the Parent or any of its Subsidiaries) pending
or, to the knowledge of the Parent or the Borrower, threatened against the
Parent or any of its Subsidiaries or maintained by the Parent or any of its
Subsidiaries or which may affect the Property of the Parent or any of its
Subsidiaries or any of their respective Properties or rights, which would
reasonably be expected to have a Material Adverse Effect.
4.5. Absence of Defaults; No Conflicting Agreements
----------------------------------------------
Neither the Parent nor any of its Subsidiaries is in default under any
judgment, order, writ, injunction, decree or decision of any Governmental
Authority or any mortgage, indenture, contract or agreement to which it is a
party or by which it or any of its Property is bound, the effect of which
default would reasonably be expected to have a Material Adverse Effect. The
execution, delivery and performance of the terms of the Loan Documents will not
constitute a default under or result in a breach of or require the mandatory
repayment of or other acceleration of payment under or pursuant to the terms of,
any such mortgage, indenture, contract or agreement.
4.6. Compliance with Applicable Laws
-------------------------------
The Parent and each of its Subsidiaries is complying with all laws,
regulations, rules and orders of all Governmental Authorities, except to the
extent a violation thereof would not reasonably be expected to have a Material
Adverse Effect.
4.7. Governmental Regulations
------------------------
Neither the Parent nor any of its Subsidiaries nor any Person
controlled by, controlling, or under common control with, the Parent or any of
its Subsidiaries, is subject to regulation under the Public Utility Holding
Company Act of 1935, as amended, the Federal Power Act, as amended, or the
Investment Company Act of 1940, as amended. Neither the Parent nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
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Margin Stock. No part of the proceeds of any Loan, nor any Letter of Credit,
will be used, directly or indirectly, for a purpose which violates any law, rule
or regulation of any Governmental Authority, including, without limitation, the
provisions of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System, as amended. After giving effect to the making of each Loan,
Margin Stock will constitute less than 25% of the assets (as determined by any
reasonable method) of the Parent and its Subsidiaries.
4.8. Plans
-----
The only Pension Plans in effect as of the Effective Date (the
"Existing Pension Plans") are listed on Schedule 4.8. Each Employee Benefit
----------------------
Plan is in compliance with ERISA and the Code, where applicable, in all material
respects. As of the Effective Date, (i) the amount of all Unfunded Pension
Liabilities under the Pension Plans does not exceed $5,000, and (ii) there are
no Employee Benefit Plans under which there is Unrecognized Retiree Welfare
Liability. Neither the Borrower nor any of its Subsidiaries or ERISA Affiliates
(i) is a party to any Multiemployer Plan or (ii) has incurred any liability in
connection with any Multiemployer Plan. The Parent and its Subsidiaries and
ERISA Affiliates have, as of the Effective Date, made all contributions or
payments to or under each such Pension Plan required by law or the terms of such
Pension Plan or any contract or agreement with respect thereto. No material
liability to the PBGC has been, or is expected by the Borrower, any of its
Subsidiaries or any ERISA Affiliate to be, incurred by the Borrower, any such
Subsidiary or any ERISA Affiliate. Liability, as referred to in this Section
includes any joint and several liability. Each Employee Benefit Plan which is a
group health plan within the meaning of Section 5000(b)(1) of the Code is in
material compliance with the continuation of health care coverage requirements
of Section 4980B of the Code.
4.9. Financial Statements
--------------------
The Parent has heretofore delivered to the Administrative Agent and
the Lenders copies of the audited Consolidated Balance Sheets of the Parent as
of February 1, 1997, and the related Consolidated Statements of Operations,
Stockholder's Equity and Cash Flows for the fiscal year then ended (with the
related notes and schedules, the "Financial Statements"). The Financial
--------------------
Statements fairly present in all
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material respects the Consolidated financial condition and results of the
operations of the Parent and its Subsidiaries as of the dates and for the
periods indicated therein and have been prepared in conformity with GAAP. Since
February 1, 1997, there has been no Material Adverse Change.
4.10. Absence of Certain Restrictions
-------------------------------
No indenture, certificate of designation for preferred stock,
agreement or instrument to which the Parent or any of its Subsidiaries is a
party (other than this Agreement and the Note Agreements), prohibits or limits
in any way, directly or indirectly the ability of any Subsidiary of the Parent
to make Restricted Payments, or to make loans or advances or repay any such
loans or advances to the Parent or to any other Subsidiary of the Parent.
4.11. No Misrepresentation
--------------------
No representation or warranty contained in any Loan Document and no
certificate or report from time to time furnished by the Parent or any of its
Subsidiaries in connection with the transactions contemplated thereby, contains
or will contain a misstatement of material fact, or omits or will omit to state
a material fact required to be stated in order to make the statements therein
contained not misleading in the light of the circumstances under which made.
5. CONDITIONS TO FIRST LOANS OR FIRST LETTER OF CREDIT
---------------------------------------------------
In addition to the conditions precedent set forth in Section 6, the
obligation of each Lender (including the Swing Line Lender) to make Loans and
each Issuing Bank to issue Letters of Credit on the first Borrowing Date and the
Lenders to participate therein shall be subject to the fulfillment of the
following conditions precedent:
5.1. Evidence of Action
------------------
The Administrative Agent shall have received a certificate, dated the
first Borrowing Date, of the Secretary or Assistant Secretary or other analogous
counterpart of each of the Parent and the Borrower (i) attaching a true and
complete copy of the resolutions of its Managing Person and of all documents
evidencing all necessary corporate, partnership
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or similar action (in form and substance satisfactory to the Administrative
Agent) taken by it to authorize the Loan Documents to which it is a party and
the transactions contemplated thereby, (ii) attaching a true and complete copy
of its Organizational Documents, (iii) setting forth the incumbency of its
officer or officers or other analogous counterpart who may sign the Loan
Documents, including therein a signature specimen of such officer or officers
and (iv) attaching a certificate of good standing of the Secretary of State of
the jurisdiction of its formation and of each other jurisdiction in which it is
qualified to do business.
5.2. Notes
-----
The Administrative Agent shall have received the Revolving Credit
Notes, the Competitive Bid Notes and the Swing Line Note.
5.3. Absence of Litigation
---------------------
There shall be no injunction, writ, preliminary restraining order or
other order of any nature issued by any Governmental Authority in any respect
affecting the transactions provided for in the Loan Documents and no action or
proceeding by or before any Governmental Authority shall have been commenced or
threatened seeking to prevent or delay the transactions contemplated by the Loan
Documents or challenging any term or provision thereof or seeking any damages in
connection therewith, and the Administrative Agent shall have received a
certificate, in all respects satisfactory to the Administrative Agent, of an
executive officer of the Borrower to the foregoing effects.
5.4. Existing Bank Debt
------------------
Prior to or simultaneously with the making of the Loans or the
issuance of Letters of Credit on the first Borrowing Date, the Borrower shall
have fully repaid all Existing Bank Debt and all agreements with respect thereto
shall have been cancelled or terminated, all Liens, if any, securing the same
shall have been terminated, and the Administrative Agent shall have received
satisfactory evidence thereof.
5.5. Opinions
--------
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The Administrative Agent shall have received (a) an opinion of Godfrey
& Kahn, counsel to the Borrower, dated the first Borrowing Date and
substantially in the form of Exhibit F, it being understood that such opinion is
being delivered upon the direction of the Borrower, and that the addressees
thereof may and will rely on such opinion, and (b) an opinion of Special
Counsel, dated the first Borrowing Date and substantially in the form of Exhibit
G.
5.6. Fees and Expenses
-----------------
All fees payable to the Administrative Agent, the Issuing Banks and
the Lenders on or prior to the first Borrowing Date shall have been paid, and
the reasonable fees and expenses of Special Counsel in connection with the
preparation, negotiation and closing of the Loan Documents shall have been paid.
5.7. Other Documents
---------------
The Administrative Agent shall have received such other documents,
each in form and substance reasonably satisfactory to the Administrative Agent,
as the Administrative Agent shall reasonably require in connection with the
making of Loans or the issuance of Letters of Credit on the first Borrowing
Date.
6. CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF CREDIT
-------------------------------------------------------
The obligation of each Lender (including the Swing Line Lender) to make any
Loan or each Issuing Bank to issue any Letter of Credit on a Borrowing Date and
each Lender to participate therein is subject to the satisfaction of the
following conditions precedent as of the date of such Loan or the issuance of
such Letter of Credit, as the case may be:
6.1. Compliance
----------
On each Borrowing Date and after giving effect to the Loans to be made
and the Letters of Credit to be issued thereon (i) there shall exist no Default
and (ii) the representations and warranties contained in the Loan Documents
shall be true and correct with the same effect as though such representations
and warranties had been made on such Borrowing Date. Each borrowing by the
Borrower and each request by the
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Borrower for the issuance of a Letter of Credit shall constitute a
representation and warranty by the Borrower as of such Borrowing Date that each
of the foregoing matters is true and correct in all respects.
6.2. Borrowing Request; Letter of Credit Request; Competitive Bid Request
--------------------------------------------------------------------
With respect to the Loans to be made, and the Letters of Credit to be
issued, on each Borrowing Date, the Administrative Agent shall have received,
(i) in the case of Revolving Credit Loans or Swing Line Loans, a Borrowing
Request, (ii) in the case of Letters of Credit, a Letter of Credit Request, and
(iii) in the case Competitive Bid Loans, a Competitive Bid Request and such
other documents required to be delivered pursuant to Section 2.6, in each case
duly executed by the Borrower.
7. AFFIRMATIVE COVENANTS
---------------------
Each of the Parent and the Borrower agrees that, so long as this Agreement
is in effect, any Loan or Reimbursement Obligation (contingent or otherwise) in
respect of any Letter of Credit remains outstanding, or any other amount is
owing under any Loan Document to any Lender, any Issuing Bank or the
Administrative Agent, the Parent shall:
7.1. Financial Statements and Information
------------------------------------
Furnish or cause to be furnished to the Administrative Agent and each
Lender:
(a) As soon as available, but in any event within 90 days after
the end of each fiscal year, a copy of (i) its Consolidated balance sheet as at
the end of such fiscal year, together with the related Consolidated statements
of operations, stockholders' equity and cash flows as of and through the end of
such fiscal year, setting forth in each case in comparative form the figures for
the preceding fiscal year, such Consolidated financial statements to be audited
and certified without Impermissible Qualification by the Accountants, or (ii)
the Parent's annual report on Form 10-K in respect of such fiscal year, together
with the financial statements required to be attached thereto, provided the
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Parent is required to file such annual report on Form 10-K with the SEC and such
filing is actually made.
(b) As soon as available, but in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year, a copy
of (i) the Consolidated balance sheet of the Parent as at the end of each such
quarterly period, together with the related Consolidated statements of
operations, stockholders' equity and cash flows for such period and for the
elapsed portion of the fiscal year through such date, setting forth in each case
in comparative form the figures for the corresponding periods of the preceding
fiscal year, certified by a Financial Officer of the Parent as being complete
and correct in all material respects and as presenting fairly the Consolidated
financial condition and the Consolidated results of operations of the Parent
(subject to normal year-end adjustments), or (ii) the Parent's quarterly report
on Form 10-Q in respect of such fiscal quarter, together with the financial
statements required to be attached thereto, provided the Parent is required to
file such quarterly report on Form 10-Q with the SEC and such filing is actually
made.
(c) Within 45 days after the end of each of the first three
fiscal quarters, and within 90 days after the end of the last fiscal quarter, of
each fiscal year a Compliance Certificate, certified by a Financial Officer of
the Borrower.
(d) Prompt written notice if: (i) the Parent or any Subsidiary
shall fail (1) to pay, or, if required to purchase or otherwise acquire, shall
fail to purchase or otherwise acquire, any part of the principal of, the
premium, if any, or the interest on, or any other payment of money due under or
in respect of, any Indebtedness or operating lease obligations in a then
outstanding aggregate amount of $3,000,000 or more, on or prior to the
expiration of any period of grace with respect thereto, whether or not such
default has been waived by the holders of such Indebtedness, or (2) to perform
or observe any other agreement, term or condition contained in any document
evidencing or securing such Indebtedness or operating lease obligations, or in
any agreement under which any such Indebtedness or operating lease obligation
was issued or created, if the effect of such failure is (x) to cause, or permit
such holders (or a trustee on behalf of such holders) to cause, any payment in
respect of
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such Indebtedness or operating lease obligations to become due prior to the
stated date of maturity thereof, or (y) to cause the Parent or any Subsidiary to
be required to purchase or otherwise acquire such Indebtedness or operating
lease obligations, (ii) there shall occur and be continuing a Default or (iii) a
Change of Control should occur.
(e) Prompt written notice of any citation, summons, subpoena,
order to show cause or other document naming the Parent or any of its
Subsidiaries a party to any proceeding before any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect or which calls
into question the validity or enforceability of any of the Loan Documents, and
include with such notice a copy of such citation, summons, subpoena, order to
show cause or other document.
(f) Promptly upon becoming available, copies of all registration
statements, Annual Reports to shareholders, 10-Ks, 10-Qs, 8- Ks, proxy materials
and other material documents which the Parent or any of its Subsidiaries may now
or hereafter be required to deliver to shareholders or file with or deliver to
any securities exchange or the SEC.
(g) Prompt written notice in the event that the Parent, any of
its Subsidiaries or any ERISA Affiliate knows, or has reason to know, that any
event shall have occurred or will occur, or any condition exists, with respect
to a Pension Plan the result of which could reasonably be expected to have a
Material Adverse Effect.
(h) Prompt written notice upon the Parent or the Borrower
becoming aware of any change in the Pricing Level.
(i) Such other information as the Administrative Agent or any
Lender shall reasonably request from time to time.
7.2. Legal Existence
---------------
Except as may otherwise be permitted by Section 8.3, maintain, and
cause each Significant Subsidiary to maintain, its corporate, partnership or
analogous existence, as the case may be, in good standing in the jurisdiction of
its incorporation or formation and in each other jurisdiction in
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which the failure so to do would reasonably be expected to have a Material
Adverse Effect; provided, however, that any Subsidiary of the Borrower may be
dissolved if such dissolution would not reasonably be expected to have a
Material Adverse Effect.
7.3. Insurance
---------
Maintain, and cause each of its Subsidiaries to maintain, with
financially sound and reputable insurance companies insurance on all its
Property in at least such amounts, having such deductibles and against at least
such risks (but including in any event public liability, product liability and
business interruption coverage) as are usually insured against in the same
general area by companies engaged in the same or a similar business, and furnish
to the Administrative Agent upon request full information as to all such
insurance carried.
7.4. Performance of Obligations
--------------------------
Pay and discharge when due, and cause each of its Subsidiaries so to
do, all lawful Indebtedness, obligations and claims for labor, materials and
supplies or otherwise which, if unpaid, (i) would reasonably be expected to have
a Material Adverse Effect, or (ii) become a Lien upon Property of the Parent or
any of its Subsidiaries other than a Lien permitted under Section 8.2, unless
and to the extent only that the validity of such Indebtedness, obligation or
claim shall be contested in good faith and by appropriate proceedings diligently
conducted, and provided that the Borrower shall give the Administrative Agent
prompt notice of any such contest and that such reserve or other appropriate
provision as may be required by GAAP shall have been made therefor.
7.5. Condition of Property
---------------------
At all times, maintain, protect and keep in good repair, working order
and condition (ordinary wear and tear excepted), and cause each of its
Subsidiaries so to do, all Property necessary to the operation of the Parent's
or such Subsidiary's business except to the extent that the failure so to do
would not reasonably be expected to have a Material Adverse Effect.
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7.6. Observance of Legal Requirements
--------------------------------
Observe and comply in all respects, and cause each of its Subsidiaries
so to do, with all laws, ordinances, orders, judgments, rules, regulations,
certifications, franchises, permits, licenses, directions and requirements of
all Governmental Authorities, which now or at any time hereafter may be
applicable to it, except to the extent a violation thereof would not reasonably
be expected to have a Material Adverse Effect, and except such violations
thereof as shall be contested in good faith and by appropriate proceedings
diligently conducted by it, provided that the Borrower shall give the
Administrative Agent prompt notice of such contest and that such reserve or
other appropriate provision as shall be required in accordance with GAAP shall
have been made therefor.
7.7. Inspection of Property; Books and Records; Discussions
------------------------------------------------------
Keep proper books of record and account, and cause each of its
Subsidiaries so to do, in which full, true and correct entries in conformity
with GAAP and all requirements of law shall be made in all dealings and
transactions in relation to its business and activities; and at all reasonable
times, upon reasonable prior notice, permit representatives of the
Administrative Agent and each Lender to visit the offices of the Parent and each
of its Subsidiaries, to examine the books and records thereof and Accountants'
reports relating thereto, and to make copies or extracts therefrom, to discuss
the affairs of the Parent and each such Subsidiary with the respective officers
thereof, and to examine and inspect the Property of the Parent and each such
Subsidiary and to meet and discuss the affairs of the Parent and each such
Subsidiary with the Accountants.
7.8. Financial Covenants
-------------------
(a) Leverage Ratio. Maintain at all times a Leverage Ratio of not more
--------------
than 0.67:1.00.
(b) Minimum Tangible Net Worth. Maintain at all times Tangible Net
--------------------------
Worth in an amount not less than $325,000,000.
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(c) Minimum Coverage Ratio. Maintain as of the last day of each fiscal
----------------------
quarter, a Minimum Coverage Ratio of not less than 2.50:1.00.
8. NEGATIVE COVENANTS
------------------
Each of the Parent and the Borrower agrees that, so long as this Agreement
is in effect, any Loan or Reimbursement Obligation (contingent or otherwise) in
respect of any Letter of Credit remains outstanding and unpaid, or any other
amount is owing under any Loan Document to any Lender, any Issuing Bank or the
Administrative Agent, the Parent shall not:
8.1. Subsidiary Indebtedness
-----------------------
Permit any Subsidiary of the Parent (other than the Borrower) to
create, incur, assume or suffer to exist any liability for Indebtedness, except
(i) the Indebtedness set forth on Schedule 8.1, and any refinancing (but not
increase) thereof, (ii) Intercompany Indebtedness, (iii) Indebtedness incurred
for the sole purpose of financing Receivables of retail Subsidiaries
(hereinafter "Receivable Debt") in an amount not to exceed (A) if all such
---------------
Receivable Debt is secured by such Receivables, the sum of 100% of such
Receivables and any Collections thereof securing such Receivable Debt, or (B) if
all or any part of such Receivable Debt is not secured by such Receivables, the
sum of 85% of such Receivables and Collections thereof which have not yet been
applied to the reduction of such Receivable Debt in accordance with the terms
governing such Receivable Debt, and (iv) other Indebtedness in an aggregate
principal amount at any one time outstanding not in excess of 10% of Tangible
Net Worth.
8.2. Liens
-----
Create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, or permit any of its
Subsidiaries so to do, except (i) Liens for Taxes in the ordinary course of
business which are not delinquent or which are being contested in accordance
with Section 7.4, provided that enforcement of such Liens is stayed pending such
contest, (ii) Liens in connection with workers' compensation, unemployment
insurance or other social security obligations (but not ERISA), (iii) deposits
or
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pledges to secure bids, tenders, contracts (other than contracts for the payment
of money), leases, statutory obligations, surety and appeal bonds and other
obligations of like nature arising in the ordinary course of business, (iv)
zoning ordinances, easements, rights of way, minor defects, irregularities, and
other similar restrictions affecting real Property which do not adversely affect
the value of such real Property or impair its use for the operation of the
business of the Parent or such Subsidiary, (v) mechanics', materialmen's,
carriers', warehousemen's and other similar Liens arising by operation of law
and incurred in the ordinary course of business which are not delinquent or
which are being contested in accordance with Section 7.4, provided that
enforcement of such Liens is stayed pending such contest, (vi) Liens arising out
of judgments or decrees which are being contested in accordance with Section
7.4, provided that enforcement of such Liens is stayed pending such contest,
(vii) Liens in favor of the Administrative Agent, the Issuing Bank and the
Lenders under the Loan Documents, (viii) Liens on Margin Stock to the extent
that a prohibition on such Liens would result in the Administrative Agent and
the Lenders being deemed to be "indirectly secured" by Margin Stock under
Regulation U of the Board of Governors of the Federal Reserve System, as
amended, taking into account the value of Margin Stock owned by the Parent and
its Subsidiaries and any other relevant facts and circumstances, (ix) Liens on
Property of the Parent and its Subsidiaries existing on the Effective Date as
set forth on Schedule 8.2 as renewed from time to time, but not any increases in
the amounts secured thereby or extensions thereof to additional Property, (x)
Liens under Capital Leases permitted by Section 8.1, (xi) Liens under leases of
real Property provided that such Liens attach only to the Property so leased or
any fixtures or other equipment located on such real Property, (xii) Liens on
Property (including, in the event such Property constitutes capital stock of a
newly acquired Subsidiary, Liens on the Property of such Subsidiary) acquired
after the Effective Date and either existing on such Property when acquired, or
created contemporaneously with, or within 180 days of, such acquisition, to
secure the payment or financing of the purchase price thereof, provided that
such Liens attach only to the Property so purchased or acquired (or the Property
of such acquired Subsidiary, as the case may be) and provided further that any
Indebtedness secured by such Liens is permitted by Section 8.1, and (xiii) (A)
Liens encumbering the retail Receivable Assets of the Borrower incurred pursuant
to a Securitized Receivables Transaction,
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and (B) Liens encumbering the Receivable Assets of the Parent and the Parent's
other retail Subsidiaries incurred pursuant to Securitized Receivables
Transactions so long as the obligations secured by such Receivable Assets do not
exceed 100% of the net book value of the Receivables of the Parent and the
Parent's other retail Subsidiaries and Collections of such Receivables securing
such obligations, plus costs of collection (including without limitation,
attorneys fees).
8.3. Merger, Consolidations and Acquisitions
---------------------------------------
Consolidate with, be acquired by, merge into or with any Person, make
any Acquisition or enter into any binding agreement to do any of the foregoing
which is not contingent on obtaining the consent of the Required Lenders, or
permit any of its Subsidiaries so to do, except:
(a) provided that immediately before and after giving effect
thereto no Default shall exist, any direct or indirect wholly-owned Subsidiary
of the Parent (other than the Borrower) may merge or consolidate with the Parent
or any other direct or indirect wholly-owned Subsidiary of the Parent, provided
that in the event of a merger involving the Parent or the Borrower, the Parent
or the Borrower, as the case may be, shall be the survivor;
(b) mergers involving Subsidiaries as part of an Acquisition
permitted by subsection (e) below;
(c) Investments permitted by Section 8.5;
(d) other mergers involving the Borrower, provided that (i) the
Borrower is the survivor thereof, (ii) immediately before and after giving
effect to any such merger, no Default shall or would exist and all of the
representations and warranties contained in Section 4 shall be true and correct
as if then made, (iii) the Parent and the Borrower will be in compliance with
each of the financial covenants contained in Section 7.8 on a pro-forma basis
after giving effect to any such merger and any Indebtedness or other obligation
incurred or assumed in connection therewith, and (iv) each consummation of a
merger contemplated by this subsection shall be deemed to be a representation
and warranty by the Borrower on the date of such merger as to the facts
specified in clauses (i), (ii) and (iii) of this subsection
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(d), and (v) the Administrative Agent shall have received such other information
or documents as the Administrative Agent or Required Lenders shall have
reasonably requested; and
(e) Acquisitions, provided that (i) immediately before and after
giving effect to any such Acquisition, no Default shall or would exist and all
of the representations and warranties contained in Section 4 shall be true and
correct as if then made, (ii) the Parent and the Borrower will be in compliance
with each of the financial covenants contained in Section 7.8 on a pro-forma
basis after giving effect to any such Acquisition and any Indebtedness or other
obligation incurred or assumed in connection therewith, (iii) each consummation
of an Acquisition contemplated by this subsection shall be deemed to be a
representation and warranty by the Borrower on the date of such Acquisition as
to the facts specified in clauses (i) and (ii) of this subsection (e), and (iv)
the Administrative Agent shall have received such other information or documents
as the Administrative Agent or Required Lenders shall have reasonably requested.
8.4. Dispositions
------------
Make any Disposition, or permit any of its Subsidiaries so to do,
except:
(a) Dispositions of any Investments permitted under Sections
8.5(a), 8.5(b), 8.5(d), 8.5(e), 8.5(g), 8.5(h), 8.5(i) or 8.5(k); and
(b) Dispositions (other than a Disposition of all or
substantially all assets of the Parent, the Borrower or any Significant
Subsidiary), provided that (i) immediately before and after giving effect to any
such Disposition, no Default shall or would exist, (ii) the Parent and the
Borrower will be in compliance with each of the financial covenants contained in
Section 7.8 on a pro-forma basis after giving effect to any such Disposition and
any simultaneous repayment of Indebtedness in connection therewith, (iii) each
consummation of a Disposition contemplated by this subsection shall be deemed to
be a representation and warranty by the Borrower on the date of such Disposition
as to the facts specified in clauses (i) and (ii) of this subsection (b), and
(iv) the Administrative Agent shall have received such other information or
documents as the Administrative Agent or Required Lenders shall have reasonably
requested.
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8.5. Investments, Loans, Etc.
------------------------
At any time, directly or indirectly purchase, hold, own or otherwise
acquire or invest in any Capital Stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person, or make
or permit to exist any loans, advances or other extensions of credit to, or any
investment (whether in cash or other Property) in, any other Person, or enter
into any arrangement for the purpose of providing funds or credit to any other
Person, or become a partner or joint venturer in any partnership or joint
venture, or make any other investment, whether by way of capital contribution,
time deposit or otherwise, in or with any Person, or make any commitment or
otherwise agree to do any of the foregoing (all of which are sometimes referred
to herein as "Investments"), or permit any of its Subsidiaries so to do, except:
-----------
(a) Investments in cash and Cash Equivalents;
(b) Investments by the Parent or any of its Subsidiaries
consisting of loans or advances to any officer, director or employee of the
Parent or any of its Subsidiaries made in the ordinary course of business;
(c) Investments existing on the Effective Date as set forth on
Schedule 8.4;
(d) normal business banking accounts in federally insured
institutions in amounts not exceeding the limits of such insurance;
(e) Investments by the Parent or any Subsidiary of the Parent in
Intercompany Indebtedness;
(f) Investments by the Parent or any of its Subsidiaries in the
Capital Stock of any Subsidiary of the Parent;
(g) Receivables arising from the sale of goods and services in
the ordinary course of business of the Parent and its Subsidiaries;
(h) at any time when a Person becomes a Subsidiary, all
Investments of such Person at such time, pro-
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vided that the Borrower shall have thirty (30) days after such Person becomes a
Subsidiary to replace all such Investments of such Subsidiary with Investments
permitted under this Section 8.5 (other than under this subsection (h));
(i) Investments in (A) any Security having (1) a short- term
rating of A-2 or higher by S&P or P-2 or higher by Moody's, or a long- term
rating of A or higher by S&P or A-2 or higher by Moody's, and (2) a maturity, or
exercisable put-option, within 190 days from the date of acquisition thereof,
and (B) any bond fund or money-market fund substantially all of whose assets are
comprised of such Securities of the type as described in the preceding clause
(A) of this sentence;
(j) Acquisitions permitted by Section 8.3(e);
(k) Investments by the trustee of any trust (established by the
Parent or any of its Subsidiaries, the assets of which are generally unavailable
to the Parent or such Subsidiary but which would be available to creditors of
the Parent or such Subsidiary) in which deferred compensation for the benefit of
certain officers or directors of the Parent or such Subsidiary has been
contributed; provided that the contribution of assets to any such trust shall
not be deemed to be an Investment; and
(l) other Investments by the Parent or any of its Subsidiaries,
provided such Investments in the aggregate at any time outstanding shall not
exceed 15% of Net Worth.
8.6. Restricted Payments
-------------------
Declare or pay any Restricted Payment, or permit any of its
Subsidiaries so to do, except: (i) the Borrower or any of its Subsidiaries may
declare and pay Restricted Payments to the Parent or any of its Subsidiaries,
and (ii) the Parent may make Restricted Payments at any time and from time to
time, provided that immediately before and after making each such Restricted
Payment, no Default or Event of Default shall or would exist.
8.7. Business Changes
----------------
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Materially change the nature of the business of the Parent and its
Subsidiaries as conducted on the Effective Date.
8.8. Transactions with Affiliates
----------------------------
Become, or permit any Subsidiary of the Parent to become, a party to
any transaction with any Affiliate thereof unless the terms and conditions
relating thereto are as favorable to the Parent or such Subsidiary as those
which would be obtainable at the time in a comparable arms-length transaction
with a Person other than an Affiliate thereof.
8.9. Limitation on Upstream Payments by Subsidiaries
-----------------------------------------------
Permit or cause any of its Subsidiaries to enter into or agree, or
otherwise be or become subject, to any agreement, contract or other arrangement
(other than this Agreement and the Note Agreements) with any Person pursuant to
the terms of which such Subsidiary is or would be prohibited from making, or
restricted in its ability to make, any Restricted Payment or any loan or advance
to the Parent or any Subsidiary thereof or prohibited from repaying, or
restricted in its ability to repay, any loan or advance from the Parent or any
Subsidiary thereof.
9. DEFAULT
-------
9.1. Events of Default
-----------------
The following shall each constitute an "Event of Default" hereunder:
----------------
(a) The failure of the Borrower to make any payment (i) of
principal on any Note when due and payable, or (ii) with respect to any
Reimbursement Obligation when due and payable; or
(b) The failure of the Borrower to make any payment of interest,
Fees, expenses or other amounts payable under any Loan Document or otherwise to
the Administrative Agent with respect to the loan facilities established
hereunder within three Business Days of the date when due and payable; or
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(c) The failure of the Parent or the Borrower to observe or
perform any covenant or agreement contained in Sections 2.9, 2.14(b), 7.2, 7.8,
Section 8 or Section 12; or
(d) The failure of the Parent or the Borrower to observe or
perform any other term, covenant, or agreement contained in any Loan Document
and such failure shall have continued unremedied for a period of 30 days after
the Parent or the Borrower shall have become aware thereof; or
(e) Any representation or warranty made by the Parent or the
Borrower (or by an officer thereof on its behalf) in any Loan Document or in any
certificate, report, opinion (other than an opinion of counsel) or other
document delivered or to be delivered pursuant thereto, shall prove to have been
incorrect or misleading (whether because of misstatement or omission) in any
material respect when made; or
(f) The Parent or any Subsidiary shall fail (i) to pay, or, if
required to purchase or otherwise acquire, shall fail to purchase or otherwise
acquire, any part of the principal of, the premium, if any, or the interest on,
or any other payment of money due under, any Indebtedness or operating lease
obligations in a then outstanding aggregate principal amount of $5,000,000 or
more, on or prior to the expiration of any period of grace with respect thereto,
whether or not such default has been waived by the holders of such Indebtedness,
or (ii) to perform or observe any other agreement, term or condition contained
in any document evidencing or securing such Indebtedness or operating lease
obligations, or in any agreement under which any such Indebtedness or operating
lease obligation was issued or created, if the effect of such failure is (x) to
cause, or permit such holders (or a trustee on behalf of such holders) to cause,
any payment in respect of such Indebtedness or operating lease obligations to
become due prior to the stated date of maturity thereof, or (y) to cause the
Parent or any Subsidiary to be required to purchase or otherwise acquire such
Indebtedness or operating lease obligations; or
(g) The Parent or any Significant Subsidiary shall (i) suspend or
discontinue its business, (ii) make an assignment for the benefit of creditors,
(iii) generally not be paying its debts as such debts become due, (iv) admit in
writing its inability to pay its debts as they become due, (v)
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file a voluntary petition in bankruptcy, (vi) become insolvent (however such
insolvency shall be evidenced), (vii) file any petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment of debt,
liquidation or dissolution or similar relief under any present or future
statute, law or regulation of any jurisdiction, (viii) petition or apply to any
tribunal for any receiver, custodian or any trustee for any substantial part of
its Property, (ix) be the subject of any such proceeding filed against it which
remains undismissed for a period of 45 days, (x) file any answer admitting or
not contesting the material allegations of any such petition filed against it or
any order, judgment or decree approving such petition in any such proceeding,
(xi) seek, approve, consent to, or acquiesce in any such proceeding, or in the
appointment of any trustee, receiver, sequestrator, custodian, liquidator, or
fiscal agent for it, or any substantial part of its Property, or an order is
entered appointing any such trustee, receiver, custodian, liquidator or fiscal
agent and such order remains in effect for 45 days, or (xii) take any formal
action for the purpose of effecting any of the foregoing or looking to the
liquidation or dissolution of the Parent or any Significant Subsidiary; or
(h) An order for relief is entered under the United States
bankruptcy laws or any other decree or order is entered by a court having
jurisdiction (i) adjudging the Parent or any Significant Subsidiary bankrupt or
insolvent, (ii) approving as properly filed a petition seeking reorganization,
liquidation, arrangement, adjustment or composition of or in respect of the
Parent or any Significant Subsidiary under the United States bankruptcy laws or
any other applicable Federal or state law, (iii) appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Parent or any Significant Subsidiary or of any substantial part
of the Property of any thereof, or (iv) ordering the winding up or liquidation
of the affairs of the Parent or any Significant Subsidiary, and any such decree
or order continues unstayed and in effect for a period of 45 days; or
(i) Judgments or decrees against the Parent or any Significant
Subsidiary aggregating in excess of $3,000,000 shall remain unpaid, unstayed on
appeal, undischarged, unbonded or undismissed for a period of 30 days; or
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(j) The occurrence of a Change of Control; or
(k) Any Loan Document shall cease, for any reason, to be in full
force and effect, or the Parent or the Borrower shall so assert in writing or
shall disavow any of its obligations thereunder; or
(l) (i) any Termination Event shall occur; (ii) any Accumulated
Funding Deficiency, whether waived, shall exist with respect to any Pension
Plan; (iii) any Person shall engage in any Prohibited Transaction involving any
Employee Benefit Plan; (iv) the Parent, any of its Subsidiaries or any ERISA
Affiliate shall fail to pay when due an amount which is payable by it to the
PBGC or to a Pension Plan under Title IV of ERISA; (v) the imposition of any tax
under Section 4980B(a) of the Code; (vi) the assessment of a civil penalty with
respect to any Employee Benefit Plan under Section 502(c) of ERISA; or (vii) any
other event or condition shall occur or exist with respect to an Employee
Benefit Plan which in the case of clauses (i) through (vii) would, individually
or in the aggregate, have a Material Adverse Effect.
9.2. Contract Remedies
-----------------
(a) Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof, (i) if it is an Event of Default
specified in Sections 9.1(g) or 9.1(h), all Revolving Credit Commitments, the
Swing Line Commitment and the Letter of Credit Commitment shall immediately and
automatically terminate and the Loans, all accrued and unpaid interest thereon,
any Reimbursement Obligations owing or contingently owing in respect of all
outstanding Letters of Credit and all other amounts owing under the Loan
Documents shall immediately become due and payable, and the Borrower shall
forthwith deposit an amount equal to the Letter of Credit Exposure in a cash
collateral account with and under the exclusive control of the Administrative
Agent, and (ii) if it is any other Event of Default, upon the direction of the
Required Lenders the Administrative Agent shall (A) by notice to the Borrower,
declare all Revolving Credit Commitments, the Swing Line Commitment, and the
Letter of Credit Commitment to be terminated forthwith, whereupon such Revolving
Credit Commitments, the Swing Line Commitment and the Letter of Credit
Commitment shall immediately terminate, and/or (B) by notice of default to the
Borrower, declare the Loans, all accrued and unpaid
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interest thereon, any Reimbursement Obligations owing or contingently owing in
respect of all outstanding Letters of Credit and all other amounts owing under
the Loan Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable, and the Borrower shall forthwith deposit an
amount equal to the Letter of Credit Exposure in a cash collateral account with
and under the exclusive control of the Administrative Agent. Except as otherwise
provided in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived. The Borrower hereby further expressly
waives and covenants not to assert any appraisement, valuation, stay, extension,
redemption or similar laws, now or at any time hereafter in force which might
delay, prevent or otherwise impede the performance or enforcement of any Loan
Document.
(b) In the event that the Revolving Credit Commitments of all the
Lenders, the Swing Line Commitment of the Swing Line Lender and the Letter of
Credit Commitment shall have been terminated or the Loans, all accrued and
unpaid interest thereon, any Reimbursement Obligations owing or contingently
owing in respect of all outstanding Letters of Credit and all other amounts
owing under the Loan Documents shall have been declared due and payable pursuant
to the provisions of this Section, any funds received by the Administrative
Agent, Swing Line Lender, the Issuing Banks and the Lenders from or on behalf of
the Borrower or the Parent shall be remitted to and applied by the
Administrative Agent in the following manner and order: (i) first, to the
payment of interest on, and then the principal portion of, any Loans which the
Administrative Agent may have advanced on behalf of any Lender for which the
Administrative Agent has not then been reimbursed, (ii) second, to the payment
of any fees or expenses due the Administrative Agent from the Borrower, (iii)
third, to reimburse the Administrative Agent, the Swing Line Lender, the Issuing
Banks and the Lenders for any expenses (to the extent not paid pursuant to
clause (ii) above) due from the Borrower pursuant to the provisions of Section
11.20 and the Reimbursement Agreements, (iv) fourth, to the payment of the
Reimbursement Obligations and the outstanding principal amount of the Swing Line
Loans (together with all interest thereon), (v) fifth, to the payment of the
Fees, (vi) sixth, to the payment of any other fees, expenses or amounts (other
than the principal of and interest on the Loans) payable by the Parent or the
Borrower to the Administrative Agent, any Issuing Bank, the Swing Line Lender or
any of the Lenders
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under the Loan Documents, (vii) seventh, to the payment, pro rata according to
the Outstanding Percentage of each Lender, of interest due on the Loans (other
than the Swing Line Loans), (viii) eighth, to the payment, pro rata according to
Outstanding Percentage of each Lender, of principal on the Loans (other than the
Swing Line Loans), and (ix) ninth, any remaining funds shall be paid to
whomsoever shall be entitled thereto or as a court of competent jurisdiction
shall direct.
10. THE ADMINISTRATIVE AGENT
------------------------
10.1. Appointment
-----------
Each of the Issuing Banks and each Lender hereby irrevocably
designates and appoints BNY as the Administrative Agent of such Issuing Bank and
such Lender under the Loan Documents and each of the Issuing Bank and each
Lender hereby irrevocably authorizes the Administrative Agent to take such
action on its behalf under the provisions of the Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of the Loan Documents, together with such
other powers as are reasonably incidental thereto. The duties of the
Administrative Agent shall be mechanical and administrative in nature, and,
notwithstanding any provision to the contrary elsewhere in any Loan Document,
the Administrative Agent shall not have any duties or responsibilities other
than those expressly set forth therein, or any fiduciary relationship with, or
fiduciary duty to, any Issuing Bank or any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into the Loan Documents or otherwise exist against the Administrative Agent.
10.2. Delegation of Duties
--------------------
The Administrative Agent may execute any of its duties under the Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to
rely upon, and shall be fully protected in, and shall not be under any liability
for, relying upon, the advice of counsel concerning all matters pertaining to
such duties.
10.3. Exculpatory Provisions
----------------------
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Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with the Loan Documents (except the Administrative Agent for its own
gross negligence or willful misconduct), or (ii) responsible in any manner to
any Issuing Bank or any of the Lenders for any recitals, statements,
representations or warranties made by the Parent or the Borrower, or any officer
thereof, contained in the Loan Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, the Loan Documents or for the
value, validity, effectiveness, genuineness, perfection, enforceability or
sufficiency of any of the Loan Documents or for any failure of the Borrower or
any other Person to perform its obligations thereunder. The Administrative
Agent shall not be under any obligation to any Issuing Bank or any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, the Loan Documents, or to inspect the
Property, books or records of the Parent or the Borrower. The Issuing Banks and
the Lenders acknowledge that the Administrative Agent shall not be under any
duty to take any discretionary action permitted under the Loan Documents unless
the Administrative Agent shall be instructed in writing to do so by the Issuing
Banks and Required Lenders and such instructions shall be binding on the Issuing
Banks and all Lenders and all holders of the Notes; provided, however, that the
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or is contrary to law or any
provision of the Loan Documents. The Administrative Agent shall not be under
any liability or responsibility whatsoever, as Administrative Agent, to the
Borrower or any other Person as a consequence of any failure or delay in
performance, or any breach, by any Issuing Bank or any Lender of any of its
obligations under any of the Loan Documents.
10.4. Reliance by Administrative Agent
--------------------------------
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been
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signed, sent or made by a proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Parent or the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may treat each Issuing Bank
or each Lender, as the case may be, or the Person designated in the last notice
filed with it under this Section, as the holder of all of the interests of such
Issuing Bank or such Lender, as the case may be, in its Loans, Notes, the
Letters of Credit and the Reimbursement Obligations, as applicable, until
written notice of transfer, signed by such Issuing Bank or such Lender (or the
Person designated in the last notice filed with the Administrative Agent) and by
the Person designated in such written notice of transfer, in form and substance
satisfactory to the Administrative Agent, shall have been filed with the
Administrative Agent. The Administrative Agent shall not be under any duty to
examine or pass upon the validity, effectiveness, enforceability or genuineness
of the Loan Documents or any instrument, document or communication furnished
pursuant thereto or in connection therewith, and the Administrative Agent shall
be entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under the Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under the Loan Documents in accordance with a request or direction of
the Required Lenders, and such request or direction and any action taken or
failure to act pursuant thereto shall be binding upon the Issuing Banks, all the
Lenders and all future holders of the Notes and the Reimbursement Obligations.
10.5. Notice of Default
-----------------
The Administrative Agent shall be deemed not to have knowledge or
notice of the occurrence of any Default unless the Administrative Agent has
received written notice thereof from an Issuing Bank, a Lender, the Parent or
the Borrower. In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall promptly give notice thereof to the
Issuing Banks, the Lenders and the Borrower.
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10.6. Non-Reliance on Administrative Agent and Other Lenders
------------------------------------------------------
Each of the Issuing Banks and each Lender expressly acknowledges that
neither the Administrative Agent nor any of its respective officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Administrative Agent hereinafter,
including any review of the affairs of the Parent or the Borrower, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each of the Issuing Banks and each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent, any Issuing Bank or any Lender, and based on such
documents and information as it has deemed appropriate made its own evaluation
of and investigation into the business, operations, Property, financial and
other condition and creditworthiness of the Parent and the Borrower and the
value and Lien status of any collateral security and made its own decision to
enter into this Agreement. Each of the Issuing Banks and each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent, any Issuing Bank or any Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, evaluations and decisions in taking or not taking
action under any Loan Document, and to make such investigation as it deems
necessary to inform itself as to the business, operations, Property, financial
and other condition and creditworthiness of the Parent and the Borrower and the
value and Lien status of any collateral security. Except for notices, reports
and other documents expressly required to be furnished to the Issuing Banks
and/or the Lenders by the Administrative Agent hereunder, the Administrative
Agent shall not have any duty or responsibility to provide any Issuing Bank or
any Lender with any credit or other information concerning the business,
operations, Property, financial and other condition or creditworthiness of the
Parent or the Borrower which at any time may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7. Indemnification
---------------
Each Lender agrees to indemnify and hold harmless the Administrative
Agent in its capacity as such (to the
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extent not promptly reimbursed by the Parent or the Borrower and without
limiting the obligation of the Parent or the Borrower to do so), pro rata
according to the aggregate of the outstanding principal balance of the Loans and
any unpaid Reimbursement Obligations (or at any time when no Loans are
outstanding and there are no unpaid Reimbursement Obligations, according to its
Commitment Percentage), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever including, without limitation, any amounts
paid to the Lenders (through the Administrative Agent) by the Parent or the
Borrower pursuant to the terms of the Loan Documents, that are subsequently
rescinded or avoided, or must otherwise be restored or returned) which may at
any time (including, without limitation, at any time following the payment of
the Loans, the Notes and the Reimbursement Obligations) be imposed on, incurred
by or asserted against the Administrative Agent in any way relating to or
arising out of the Loan Documents or any other documents contemplated by or
referred to therein or the transactions contemplated thereby or any action taken
or omitted to be taken by the Administrative Agent under or in connection with
any of the foregoing; provided, however, that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the finally adjudicated gross negligence or willful
misconduct of the Administrative Agent. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent promptly upon demand
for its pro rata share of any unpaid fees owing to the Administrative Agent, and
any costs and expenses (including, without limitation, reasonable fees and
expenses of counsel) payable by the Borrower under Section 11.20, to the extent
that the Administrative Agent has not been paid such fees or has not been
reimbursed for such costs and expenses by the Borrower. The failure of any
Lender to reimburse the Administrative Agent promptly upon demand for its pro
rata share of any amount required to be paid by the Lenders to the
Administrative Agent as provided in this Section shall not relieve any other
Lender of its obligation hereunder to reimburse the Administrative Agent for its
pro rata share of such amount, but no Lender shall be responsible for the
failure of other Lender to reimburse the Administrative Agent for such other
Lender's pro rata share of such amount. The agreements in this Section shall
survive the termination of
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the Revolving Credit Commitments of all of the Lenders, the Swing Line
Commitment of the Swing Line Lender, the Letter of Credit Commitment, and the
payment of all amounts payable under the Loan Documents.
10.8. Administrative Agent in Its Individual Capacity
-----------------------------------------------
BNY and its affiliates may make secured or unsecured loans to, accept
deposits from, issue letters of credit for the account of, act as trustee under
indentures of, and generally engage in any kind of business with, the Parent and
the Borrower as though BNY were not Administrative Agent hereunder and BNY
Capital Markets did not arrange the transactions contemplated hereby. With
respect to the Revolving Credit Commitment, Swing Line Commitment and Letter of
Credit Commitment made or renewed by BNY and the Notes issued to, and the
Reimbursement Obligations owing to, BNY, BNY shall have the same rights and
powers under the Loan Documents as any Lender and may exercise the same as
though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall in each case include BNY.
10.9. Successor Administrative Agent
------------------------------
If at any time the Administrative Agent deems it advisable, in its
sole discretion, it may submit to each Issuing Bank and each of the Lenders a
written notice of its resignation as Administrative Agent under the Loan
Documents, such resignation to be effective upon the earlier of (i) the written
acceptance of the duties of the Administrative Agent under the Loan Documents by
a successor Administrative Agent and (ii) on the 30th day after the date of such
notice. Upon any such resignation, the Required Lenders shall have the right to
appoint from among the Lenders a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and accepted such appointment in writing within 30 days after the
retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Issuing Banks and the
Lenders, appoint a successor Administrative Agent, which successor
Administrative Agent shall be a commercial bank organized under the laws of the
United States or any State thereof and having a combined capital, surplus, and
undivided profits of at least $100,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
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Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent's rights, powers,
privileges and duties as Administrative Agent under the Loan Documents shall be
terminated. The Parent, the Borrower, the Issuing Banks and the Lenders shall
execute such documents as shall be necessary to effect such appointment. After
any retiring Administrative Agent's resignation as Administrative Agent, the
provisions of the Loan Documents shall inure to its benefit as to any actions
taken or omitted to be taken by it, and any amounts owing to it, while it was
Administrative Agent under the Loan Documents. If at any time there shall not
be a duly appointed and acting Administrative Agent, the Parent and the Borrower
agree to make each payment due under the Loan Documents directly to the Issuing
Banks and the Lenders entitled thereto during such time. Notwithstanding
anything to the contrary contained in this Section 10.9, the appointment of any
successor Administrative Agent shall be consented to by the Borrower (such
consent not to be unreasonably withheld and such consent not to be required
during the occurrence and continuance of any Default).
11. OTHER PROVISIONS
----------------
11.1. Amendments and Waivers
----------------------
With the written consent of the Required Lenders, the Administrative
Agent, the Issuing Banks, the Swing Line Lender, the Parent and the Borrower
may, from time to time, enter into written amendments, supplements or
modifications of the Loan Documents and, with the consent of the Required
Lenders, the Administrative Agent on behalf of the Issuing Banks and the Lenders
may execute and deliver to any such parties a written instrument waiving or a
consent to a departure from, on such terms and conditions as the Administrative
Agent may specify in such instrument, any of the requirements of the Loan
Documents or any Default and its consequences; provided, however, that:
(a) no such amendment, supplement, modification, waiver or consent
shall, without the consent of all of the Lenders, (i) increase (other than as
expressly provided in Section 2.7) the Revolving Credit Commitment Amount of any
Lender or the Aggregate Revolving Credit Commitment Amount,
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(ii) extend (other than as provided in Section 2.14) the Scheduled Revolving
Credit Commitment Termination Date, (iii) decrease the rate, or extend the time
of payment, of interest of, or change or forgive the principal amount or extend
the time of payment of, or change the pro rata allocation of payments under, any
Note, or decrease the rate, or extend the time of payment, or change the pro
rata allocation of payments in respect of the Facility Fee or the Letter of
Credit Commissions, (iv) change the provisions of Sections 2.7(c)(A), 3.5, 3.6,
3.7, 3.8, 3.9, 3.10, 11.1, 11.6(a) or 11.8, (v) change the definition of
"Required Lenders", or (vi) release the Parent from all or substantially all its
obligations under the Guaranty;
(b) without the written consent of each Issuing Bank, no such
amendment, supplement, modification or waiver shall change the Letter of Credit
Commitment, change the amount or the time of payment of the Letter of Credit
Commissions or the Fronting Fees or change any other term or provision which
relates to the Letter of Credit Commitment or the Letters of Credit or any other
rights of any Issuing Bank under any Loan Document;
(c) without the written consent of the Administrative Agent, no such
amendment, supplement, modification or waiver shall amend, modify or waive any
provision of Section 10 or otherwise change any of the rights or obligations of
the Administrative Agent hereunder or under the Loan Documents; and
(d) without the written consent of the Swing Line Lender, no such
amendment, supplement, modification or waiver shall change the Swing Line
Commitment or change any other term or provision that relates to the Swing Line
Commitment or the Swing Line Loans.
Any such amendment, supplement, modification or waiver shall apply
equally to the Administrative Agent, the Swing Line Lender, each Issuing Bank
and each of the Lenders and shall be binding upon the parties to the applicable
Loan Document, the Lenders, the Swing Line Lender, the Issuing Banks, the
Administrative Agent and all future holders of the Notes and the Reimbursement
Obligations. In the case of any waiver, the parties to the applicable Loan
Document, the Issuing Banks, the Lenders, the Swing Line Lender and the
Administrative Agent shall be restored to their former
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position and rights hereunder and under the outstanding Notes and other Loan
Documents to the extent provided for in such waiver, and any Default waived
shall not extend to any subsequent or other Default, or impair any right
consequent thereon. The Loan Documents may not be amended orally or by any
course of conduct.
11.2. Notices
-------
Except as otherwise provided in each Loan Document, all notices,
requests and demands to or upon the respective parties to such Loan Document to
be effective shall be in writing and shall be deemed to have been duly given or
made when delivered by hand, one Business Day after having been sent by
overnight courier service or deposited in the mail, first-class postage prepaid,
or, in the case of notice by facsimile, when sent, addressed as follows in the
case of the Parent, the Borrower and the Administrative Agent, addressed as set
forth on Schedule 11.2, in the case of each Lender and each Issuing Bank, or
addressed to such other addresses as to which the Administrative Agent may be
hereafter notified by the respective parties thereto or any future holders of
the Notes:
The Parent:
Kohl's Corporation
c/o Kohl's Department Stores, Inc.
N56W17000 Ridgewood Drive
Menomonee Falls, Wisconsin 53051
Attention: Chief Financial Officer
and
Chief Executive
Officer
Telephone: (414) 703-1646
Facsimile: (414) 703-6143
The Borrower:
Kohl's Department Stores, Inc.
N56W17000 Ridgewood Drive
Menomonee Falls, Wisconsin 53051
Attention: Chief Financial Officer
and
Chief Executive
Officer
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Telephone: (414) 703-1646
Facsimile: (414) 703-6143
The Administrative Agent:
The Bank of New York
One Wall Street
Agency Function Administration
18th Floor
New York, New York 10286
Attention: Carolyn Surles
Telephone: (212) 635-4695
Facsimile: (212) 635-6365 or 6366 or 6367
with a copy to:
The Bank of New York
One Wall Street
New York, New York 10286
Attention: Michael V. Flannery,
Vice President
Telephone: (212) 635-7885
Facsimile: (212) 635-1483,
except that any notice, request or demand by the Borrower to or upon the
Administrative Agent, the Swing Line Lender, the Issuing Banks or the Lenders
pursuant to Sections 2.5, 2.6, 2.10 or 3.3 shall not be effective until
received. Any party to a Loan Document may rely on signatures of the parties
thereto which are transmitted by facsimile or other electronic means as fully as
if originally signed.
11.3. No Waiver; Cumulative Remedies
------------------------------
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent, the Swing Line Lender, any Issuing Bank or any Lender, any
right, remedy, power or privilege under any Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege under any Loan Document preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges under the Loan Documents are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
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11.4. Survival of Representations and Warranties and Certain
------------------------------------------------------
Obligations
- -----------
(a) All representations and warranties made under the Loan Documents
and in any document, certificate or statement delivered pursuant thereto or in
connection therewith shall survive the execution and delivery of the Loan
Documents.
(b) The obligations of the Borrower under Sections 3.5, 3.6, 3.7,
3.10, 11.7 and 11.20 shall survive the termination of the Revolving Credit
Commitments of all of the Lenders, the Letter of Credit Commitment, the Swing
Line Commitment and the payment of the Loans, the Reimbursement Obligations and
all other amounts payable under the Loan Documents.
11.5. Lending Offices
---------------
Each Lender agrees that, upon the occurrence of any event giving rise
to any increased cost or indemnity under Sections 3.6, 3.7 and 3.10 with respect
to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section shall affect or postpone any of the obligations of the
Borrower or the right of any Lender provided in Sections 3.6, 3.7 and 3.10.
11.6. Successors and Assigns
----------------------
(a) This Agreement, the Notes and the other Loan Documents to which
the Parent or the Borrower is a party shall be binding upon and inure to the
benefit of the Parent or the Borrower (as the case may be), the Lenders, the
Swing Line Lender, each Issuing Bank, the Administrative Agent, all future
holders of the Notes and their respective successors and assigns. Neither the
Parent nor the Borrower shall assign any right, nor delegate any duty, under any
Loan Document without the prior written consent of the Administrative Agent,
each Issuing Bank, the Swing Line Lender, and each Lender and
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any such attempted assignment or delegation without each such consent shall be
void.
(b) Subject to Section 11.6(e), each Lender, the Swing Line Lender and
each Issuing Bank may at any time assign all or any portion of its rights under
one or more of the Loan Documents to any Federal Reserve Bank.
(c) In addition to its rights under Section 11.6(b), each Lender shall
have the right to sell, assign, transfer or negotiate (each an "Assignment") one
----------
hundred percent, or any lesser percentage, of its Loans, its Revolving Credit
Commitment and its Notes to any Affiliate of such Lender, to any other Lender,
or, with the consent of the Administrative Agent, the Swing Line Lender, each
Issuing Bank and the Borrower (which consent shall not be unreasonably withheld
and shall not be required of the Borrower, if, at the time of such Assignment,
an Event of Default shall exist), to any other bank, insurance company,
financial institution, pension fund, mutual fund or other similar fund (each an
"Eligible Institution"), provided that (i) each such Assignment shall be of a
--------------------
constant, and not a varying, percentage of the assignor Lender's rights and
obligations under the Loan Documents, (ii) the Revolving Credit Commitment
Amount of the Revolving Credit Commitment assigned, shall be not less than
$10,000,000, or the full Revolving Credit Commitment Amount of such assignor
Lender's Revolving Credit Commitment, (iii) the assignor Lender's Revolving
Credit Loans and Competitive Bid Loans shall be assigned in equal percentages,
and (iv) the assignor Lender and such assignee shall deliver to the
Administrative Agent three copies of an Assignment and Acceptance Agreement
executed by each of them, along with an assignment fee in the sum of $3,500 for
the account of the Administrative Agent. Upon receipt of such number of
executed copies of each such Assignment and Acceptance Agreement, together with
the assignment fee therefor, and the Borrower's consent to such Assignment, if
required, the Administrative Agent shall record the same and execute not less
than two copies of such Assignment and Acceptance Agreement, deliver one such
copy to the assignor and one such copy to the assignee, and deliver one
photocopy thereof, as executed, to the Borrower. From and after the Assignment
Effective Date specified in, and as defined in, such Assignment and Acceptance
Agreement, the assignee thereunder shall be a party hereto and shall for all
purposes of this Agreement and the other Loan Documents be deemed a
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"Lender" and, to the extent provided in such Assignment and Acceptance
Agreement, the assignor Lender thereunder shall be released from its obligations
under this Agreement and the other Loan Documents subject to Section 11.6(e).
The Borrower agrees that, in connection with each such Assignment, it shall at
its own cost and expense execute and deliver to the Administrative Agent for the
account of such assignee a Revolving Credit Note and a Competitive Bid Note. The
Administrative Agent shall be entitled to rely upon the representations and
warranties made by the assignee under each Assignment and Acceptance Agreement.
(d) In addition to the participations provided for in Section
11.10(b), each Lender may grant participations in all or any part of its Loans,
its Notes and its Revolving Credit Commitment to one or more Eligible
Institutions, provided that (i) such Lender's obligations under this Agreement
and the other Loan Documents shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties to this Agreement and the other
Loan Documents for the performance of such obligations, (iii) the Parent, the
Borrower, the Administrative Agent, each Issuing Bank, the Swing Line Lender and
the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents
and such Lender shall retain the sole right to enforce the obligations of the
Borrower and the Parent relating to the Loan Documents and to approve any
modification, amendment, or waiver of any provision of the Loan Documents,
subject to the provisions of Section 11.6(d)(vi), (iv) no sub-participations
shall be permitted, (v) the granting of such participation does not require that
any out-of-pocket cost or expense be borne by the Borrower, and (vi) the voting
rights of any holder of any participation shall be limited to the right to
consent to any action taken or omitted to be taken by such Lender under the Loan
Documents which would (A) increase the Revolving Credit Commitment Amount of any
Lender (provided that no waiver of a Default or of any mandatory reduction of
any of the foregoing shall be deemed to constitute such a change), (B) extend
the Revolving Credit Commitment Period (other than as provided in Section 2.14),
(C) reduce the amount or extend the time of payment of any Fee, (D) reduce the
rate or extend the time of payment of interest on any Loan or any Note (other
than the applicability of any post-default increase in such rate of interest),
(E) reduce the amount or extend the time of payment of any installment or other
payment
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of principal on any Loan or any Note, (F) decrease or forgive the principal
amount of any Loan or any Note, or (G) consent to any assignment or delegation
by the Parent or the Borrower of all of its rights or obligations under all of
the Loan Documents, or (H) release any collateral or any security interest
thereon (other than in connection with (1) a Disposition permitted under Section
8.4, or (2) any release specifically provided for in the Collateral Documents).
(e) No Lender shall, as between and among the Parent, the Borrower,
the Administrative Agent, and such Lender, be relieved of any of its obligations
under the Loan Documents as a result of any assignment of or granting of
participations in, all or any part of its Loans, its Revolving Credit Commitment
and its Notes, except that a Lender shall be relieved of its obligations to the
extent of any such Assignment of all or any part of its Loans, its Revolving
Credit Commitment or its Notes pursuant to Section 11.6(c).
11.7. Indemnity
---------
The Borrower agrees to defend, protect, indemnify, and hold harmless
the Administrative Agent, BNY Capital Markets, the Swing Line Lender, each
Issuing Bank and each and all of the Lenders, each of their respective
Affiliates and each of the respective officers, directors, employees and agents
of each of the foregoing (each an "Indemnified Person" and, collectively, the
------------------
"Indemnified Persons") from and against any and all liabilities, obligations,
- --------------------
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel to such Indemnified
Persons) in connection with any investigative, administrative or judicial
proceeding, whether direct, indirect or consequential and whether based on any
federal or state laws or other statutory regulations, including, without
limitation, securities and commercial laws and regulations, under common law or
at equitable cause, or on contract or otherwise, including any liabilities and
costs under environmental laws, Federal, state or local health or safety laws,
regulations, or common law principles, arising from or in connection with the
past, present or future operations of the Borrower or its predecessors in
interest, or the past, present or future environmental condition of the Property
of the Borrower or any of its Subsidiaries, the presence of asbestos-containing
materials at any such
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Property, or the release or threatened release of any hazardous substance into
the environment from any such Property) in any manner relating to or arising out
of the Loan Documents, any commitment letter or fee letter executed and
delivered by the Borrower or any of its Subsidiaries, the Swing Line Lender, any
Issuing Bank and/or the Administrative Agent, the capitalization of the Borrower
or any of its Subsidiaries, the Revolving Credit Commitments, the Letter of
Credit Commitment, the making of, issuance of, management of and participation
in the Loans or the Letters of Credit, or the use or intended use of the Letters
of Credit and the proceeds of the Loans hereunder, provided that the Borrower
shall have no obligation under this Section to an Indemnified Person with
respect to any of the foregoing to the extent found in a final judgment of a
court having jurisdiction to have resulted primarily out of the gross negligence
or wilful misconduct of such Indemnified Person or arising solely from claims
between one such Indemnified Person and another such Indemnified Person. The
indemnity set forth herein shall be in addition to any other obligations or
liabilities of the Borrower to each Indemnified Person under the Loan Documents
or at common law or otherwise, and shall survive any termination of the Loan
Documents, the expiration of the Revolving Credit Commitments of all of the
Lenders, the Letter of Credit Commitment and the payment of all Indebtedness of
the Borrower under the Loan Documents.
11.8. Limitation of Liability
-----------------------
No claim may be made by the Parent, any of its Subsidiaries, any
Lender or other Person against the Administrative Agent, any Lender, or any
directors, officers, employees, or agents of any of them for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by any Loan Document, or any act, omission or event
occurring in connection therewith, and each of the Parent, its Subsidiaries, any
such Lender or other Person hereby waives, releases and agrees not to sue upon
any claim for any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor.
11.9. Counterparts
------------
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Each Loan Document (other than the Notes) may be executed by one or
more of the parties thereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
document. It shall not be necessary in making proof of any Loan Document to
produce or account for more than one counterpart signed by the party to be
charged. A counterpart of any Loan Document or to any document evidencing, and
of any an amendment, modification, consent or waiver to or of any Loan Document
transmitted by facsimile shall be deemed to be an originally executed
counterpart. A set of the copies of the Loan Documents signed by all the
parties thereto shall be deposited with each of the Borrower and the
Administrative Agent. Any party to a Loan Document may rely upon the signatures
of any other party thereto which are transmitted by facsimile or other
electronic means to the same extent as if originally signed.
11.10. Adjustments; Set-off
--------------------
(a) In addition to any rights and remedies of each Lender provided by
law, upon the occurrence of an Event of Default and acceleration of the Notes,
or at any time upon the occurrence and during the continuance of an Event of
Default under Sections 9.1(a) or 9.1(b), each Lender, the Swing Line Lender and
each Issuing Bank shall have the right, without prior notice to the Borrower or
the Parent, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, to set-off and apply against any indebtedness or
other liability, whether matured or unmatured, of the Borrower or the Parent to
such Lender, the Swing Line Lender or such Issuing Bank arising under the Loan
Documents, any amount owing from such Lender, the Swing Line Lender or such
Issuing Bank to the Borrower or the Parent, as the case may be. To the extent
permitted by applicable law, the aforesaid right of set-off may be exercised by
such Lender, the Swing Line Lender or such Issuing Bank against the Parent, the
Borrower or against any trustee in bankruptcy, custodian, debtor in possession,
assignee for the benefit of creditors, receiver, or execution, judgment or
attachment creditor of the Borrower or the Parent, or against anyone else
claiming through or against the Borrower, the Parent or such trustee in
bankruptcy, custodian, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditors,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender, the
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Swing Line Lender or such Issuing Bank prior to the making, filing or issuance
of, service upon such Lender, the Swing Line Lender or such Issuing Bank of, or
notice to such Lender, the Swing Line Lender or such Issuing Bank of, any
petition, assignment for the benefit of creditors, appointment or application
for the appointment of a receiver, or issuance of execution, subpoena, order or
warrant. Each Lender, the Swing Line Lender and each Issuing Bank agrees
promptly to notify the Borrower, the Parent and the Administrative Agent after
each such set-off and application made by such Lender, the Swing Line Lender or
such Issuing Bank, as the case may be, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
(b) If any Lender, the Swing Line Lender or any Issuing Bank shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of its Loans, its Notes or
Reimbursement Obligations in excess of its Outstanding Percentage of payments
then due and payable on account of the Loans, the Notes or Reimbursement
Obligations received by all the Lenders, the Swing Line Lender and all the
Issuing Banks, such Lender, the Swing Line Lender or such Issuing Bank, as the
case may be, shall forthwith purchase, without recourse, for cash, from the
other Lenders, the Swing Line Lender and other Issuing Banks such participations
in their Loans, Notes and Reimbursement Obligations as shall be necessary to
cause such purchaser to share such excess payment with each of them according to
their Outstanding Percentages, provided, however, that if all or any portion of
such excess payment is thereafter recovered from such purchaser, such purchase
shall be rescinded and the related seller shall repay to such purchaser the
purchase price to the extent of such recovery, together with an amount equal to
such seller's pro rata share (according to the proportion of (i) the amount of
all other related required repayments to (ii) the total amount so recovered from
the purchaser) of any interest or other amount paid or payable by the purchaser
in respect of the total amount so recovered.
11.11. Construction
------------
Each party to a Loan Document represents that it has been represented
by counsel in connection with the Loan Documents and the transactions
contemplated thereby and that
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the principle that agreements are to be construed against the party drafting the
same shall be inapplicable.
11.12. Governing Law
-------------
The Loan Documents and the rights and obligations of the parties
thereunder shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of New York, without regard to principles
of conflict of laws, but including Section 5-1401 of the General Obligations
Law.
11.13. Headings Descriptive
--------------------
Section headings have been inserted in the Loan Documents for
convenience only and shall not be construed to be a part thereof.
11.14. Severability
------------
Every provision of the Loan Documents is intended to be severable, and
if any term or provision thereof shall be invalid, illegal or unenforceable for
any reason, the validity, legality and enforceability of the remaining
provisions thereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.
11.15. Integration
-----------
All exhibits to a Loan Document shall be deemed to be a part thereof.
Except for agreements between the Administrative Agent, the Swing Line Lender,
and/or any Issuing Bank and the Borrower or the Parent with respect to certain
fees, the Loan Documents embody the entire agreement and understanding among the
Parent, the Borrower, the Administrative Agent, the Swing Line Lender, the
Issuing Banks and the Lenders with respect to the subject matter thereof and
supersede all prior agreements and understandings among them with respect to the
subject matter thereof.
11.16. Consent to Jurisdiction
-----------------------
Each party to a Loan Document hereby irrevocably submits to the
jurisdiction of any New York State or Federal
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court sitting in the City of New York over any suit, action or proceeding
arising out of or relating to the Loan Documents. Each party to a Loan Document
hereby irrevocably waives, to the fullest extent permitted or not prohibited by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding brought in such a court and any claim
that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum. The Parent and the Borrower hereby agree that
a final judgment in any such suit, action or proceeding brought in such a court,
after all appropriate appeals, shall be conclusive and binding upon each of
them.
11.17. Service of Process
------------------
Each party to a Loan Document hereby irrevocably consents to the
service of process in any suit, action or proceeding by sending the same by
first class mail, return receipt requested or by overnight courier service, to
the address of such party set forth in Section 11.2 of the applicable Loan
Document executed by such party. Each party to a Loan Document hereby agrees
that any such service (i) shall be deemed in every respect effective service of
process upon it in any such suit, action, or proceeding, and (ii) shall to the
fullest extent enforceable by law, be taken and held to be valid personal
service upon and personal delivery to it.
11.18. No Limitation on Service or Suit
--------------------------------
Nothing in the Loan Documents or any modification, waiver, consent or
amendment thereto shall affect the right of the Administrative Agent, the Swing
Line Lender, any Issuing Bank or any Lender to serve process in any manner
permitted by law or limit the right of the Administrative Agent, the Swing Line
Lender, any Issuing Bank or any Lender to bring proceedings against the Parent
or the Borrower in the courts of any jurisdiction or jurisdictions in which the
Parent or the Borrower may be served.
11.19. WAIVER OF TRIAL BY JURY
-----------------------
EACH OF THE ADMINISTRATIVE AGENT, THE SWING LINE LENDER, THE ISSUING
BANKS, THE LENDERS, THE PARENT AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
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ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREIN. FURTHER, THE PARENT AND THE BORROWER
EACH HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF THE SWING LINE LENDER,
THE ISSUING BANKS, THE ADMINISTRATIVE AGENT, OR THE LENDERS, OR COUNSEL TO THE
ISSUING BANKS, THE ADMINISTRATIVE AGENT OR THE LENDERS, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE SWING LINE LENDER, THE ISSUING BANKS, THE
ADMINISTRATIVE AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION,
SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. THE PARENT AND
THE BORROWER ACKNOWLEDGE THAT THE SWING LINE LENDER, THE ISSUING BANK, THE
ADMINISTRATIVE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
----- ----
11.20. Expenses
--------
The Borrower agrees, promptly after presentation of a statement or
invoice therefor, and whether any Loan is made or any Letter of Credit is issued
(i) to pay or reimburse the Administrative Agent and BNY Capital Markets for all
their respective out-of-pocket costs and expenses reasonably incurred in
connection with the development, preparation and execution of, the Loan
Documents and any amendment, supplement or modification thereto (whether or not
executed or effective), any other documents prepared in connection therewith and
the consummation of the transactions contemplated thereby, including the
reasonable fees and disbursements of Special Counsel, (ii) to pay or reimburse
each Issuing Bank, the Administrative Agent, the Swing Line Lender and each
Lender for all of its costs and expenses, including reasonable fees and
disbursements of counsel, incurred in connection with the preservation or
enforcement of any rights under the Loan Documents and any such other documents,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent, the Swing Line Lender, the several Issuing Banks
and the several Lenders, (iii) to pay, indemnify, and hold each of the Issuing
Bank, the Swing Line Lender, the Lenders and the Administrative Agent harmless
from and against any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation of any
of the transactions contemplated by, or any amendment, supplement or
modification
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of, or any waiver or consent under or in respect of, the Loan Documents and any
such other documents, and (iv) to pay, indemnify and hold each of the Issuing
Bank, the Swing Line Lender, the Lenders and the Administrative
Agent and each of its officers, directors and employees harmless from and
against any and all other liabilities, obligations, claims, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including reasonable counsel fees and disbursements)
with respect to the execution, delivery, performance, enforcement and
administration of, or in any other way arising out of or relating to, the Loan
Documents (all the foregoing, collectively, the "Indemnified Liabilities");
-----------------------
provided, however, that the Borrower shall have no obligation to pay Indemnified
- -------- -------
Liabilities to the Administrative Agent, the Swing Line Lender, any Issuing Bank
or any Lender to the extent arising from the gross negligence or willful
misconduct of the Administrative Agent, the Swing Line Lender, such Issuing Bank
or such Lender. The agreements in this Section shall survive the performance by
the Borrower and the Parent of all of their other obligations under the Loan
Documents.
11.21. Treatment of Certain Information
--------------------------------
Each Lender, each Issuing Bank, the Swing Line Lender and the
Administrative 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 the same nature, all non-public
information supplied by the Parent or any of its Subsidiaries pursuant to this
Agreement which (a) is identified by such Person as being confidential at the
time the same is delivered to such Lender, such Issuing Bank, the Swing Line
Lender or the Administrative Agent, or (b) constitutes any financial statement,
financial projections or forecasts, budget, compliance certificate, audit
report, management letter or accountants' certification delivered hereunder,
provided, however, that nothing herein shall limit the disclosure of any such
information (i) to the extent required by law, rule, regulation or judicial
process, (ii) on a confidential basis, to counsel to any Lender, any Issuing
Bank, the Swing Line Lender or the Administrative Agent, (iii) to bank
examiners, auditors or accountants, and any analogous counterpart thereof, (iv)
to the Administrative Agent, the Lenders, the Swing Line Lender or the Issuing
Banks, (v) in connection
105
<PAGE>
with any litigation to which any one or more of the Lenders, the Issuing Banks,
the Swing Line Lender or the Administrative Agent is a party, (vi) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) agrees to keep
such information confidential on substantially the same basis as set forth in
this Section, or (vii) to affiliates of the Administrative Agent, the Swing Line
Lender, each Lender and each Issuing Bank.
12. PARENT GUARANTY
---------------
12.1. Guaranty
--------
The Parent hereby absolutely, irrevocably and unconditionally
guarantees the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of the Facility Obligations. This Guaranty
constitutes a guaranty of payment, and neither the Administrative Agent, any
Issuing Bank, the Swing Line Lender nor any Lender shall have any obligation to
enforce any Loan Document or exercise any right or remedy with respect
thereunder by any action, including making or perfecting any claim against any
Person or any collateral security for any of the Facility Obligations prior to
being entitled to the benefits of this Guaranty. The Administrative Agent may,
at its option, proceed against the Parent, in the first instance, to enforce the
Parent Obligations without first proceeding against the Borrower or any other
Person, and without first resorting to any other rights or remedies, as the
Administrative Agent may deem advisable. In furtherance hereof, if the
Administrative Agent, any Issuing Bank, the Swing Line Lender or any Lender is
prevented by law from collecting or otherwise hindered from collecting or
otherwise enforcing any Facility Obligation in accordance with its terms, the
Administrative Agent, such Issuing Bank, the Swing Line Lender or such Lender,
as the case may be, shall be entitled to receive hereunder from the Parent after
demand therefor, the sums which would have been otherwise due had such
collection or enforcement not been prevented or hindered.
12.2. Absolute Obligation
-------------------
The Parent shall be liable under this Guaranty, and this Guaranty
shall not be affected or impaired, irrespective
106
<PAGE>
of (A) the validity or enforceability of any Loan Document or any agreement,
instrument or document executed or delivered in connection therewith, or the
collectability of any of the Facility Obligations, (B) the preference or
priority ranking with respect to any of the Facility Obligations, (C) the
existence, validity, enforceability or perfection of any security interest or
collateral security (if any exists at any time) under any Loan Document, or the
release, exchange, substitution or loss or impairment of any such security
interest or collateral security, (D) any failure, delay, neglect or omission by
the Administrative Agent, any Issuing Bank, the Swing Line Lender or any Lender
to realize upon or protect any direct or indirect collateral security,
indebtedness, liability or obligation, any Loan Document, or any agreement,
instrument or document executed or delivered in connection therewith, or any of
the Facility Obligations, (E) the existence or exercise of any right of set-off
by the Administrative Agent, any Issuing Bank, the Swing Line Lender or any
Lender, (F) the existence, validity or enforceability of any other guaranty with
respect to any of the Facility Obligations, the liability of any other Person in
respect of any of the Facility Obligations, or the release of any such Person or
any other guarantor of any of the Facility Obligations, (G) any act or omission
of the Administrative Agent, any Issuing Bank, the Swing Line Lender or any
Lender in connection with the administration of any Loan Document or any of the
Facility Obligations, (H) the bankruptcy, insolvency, reorganization or
receivership of, or any other proceeding for the relief of debtors commenced by
or against, any Person, (I) the disaffirmance or rejection, or the purported
disaffirmance or purported rejection, of any of the Facility Obligations, any
Loan Document, or any agreement, instrument or document executed or delivered in
connection therewith, in any bankruptcy, insolvency, reorganization or
receivership, or any other proceeding for the relief of debtor, relating to any
Person, (J) any law, regulation or decree now or hereafter in effect which might
in any manner affect any of the terms or provisions of any Loan Document or any
agreement, instrument or document executed or delivered in connection therewith
or any of the Facility Obligations, or which might cause or permit to be invoked
any alteration in the time, amount, manner or payment or performance of any of
the Borrower's obligations and liabilities (including, without limitation, the
Facility Obligations), (K) the merger or consolidation of the Borrower into or
with any Person, (L) the sale by the Borrower of all or any part of its assets,
(M) the
107
<PAGE>
fact that at any time and from time to time none of the Facility Obligations may
be outstanding or owing to the Administrative Agent, any Issuing Bank, the Swing
Line Lender or any Lender, (N) any amendment or modification of, or supplement
to, any Loan Document, or (O) any other reason or circumstance which might
otherwise constitute a defense available to or a discharge of the Borrower in
respect of its obligations or liabilities (including, without limitation, the
Facility Obligations) or of the Parent in respect of any of the Parent
Obligations (other than by the performance in full thereof).
12.3. Repayment in Bankruptcy, etc.
----------------------------
If, at any time or times subsequent to the payment of all or any part
of the Facility Obligations or the Parent Obligations, the Administrative Agent,
any Issuing Bank, the Swing Line Lender or any Lender shall be required to repay
any amounts previously paid by or on behalf of the Borrower or the Parent in
reduction thereof by virtue of an order of any court having jurisdiction in the
premises, including, without limitation, as a result of an adjudication that
such amounts constituted preferential payments or fraudulent conveyances, the
Parent unconditionally agrees to pay to the Administrative Agent within 10 days
after demand a sum in cash equal to the amount of such repayment, together with
interest on such amount from the date of such repayment by the Administrative
Agent, such Issuing Bank, the Swing Line Lender or such Lender, as the case may
be, to the date of payment to the Administrative Agent at the applicable default
rate set forth in this Agreement.
12.4. No Subrogation
--------------
Until the Facility Obligations have been indefeasibly paid in full,
the Parent expressly waives any and all rights of subrogation, reimbursement,
indemnity, exoneration, contribution or any other claim which the Parent may now
or hereafter have against the Borrower, any other guarantor or any other Person
directly or contingently liable for the Facility Obligations, or against or with
respect to the Borrower's or such other guarantor's Property, arising from the
existence or performance of this Guaranty.
12.5. Miscellaneous
-------------
108
<PAGE>
(a) Except as otherwise expressly provided in this Guaranty, the
Parent hereby waives presentment, demand for payment, notice of default,
nonperformance and dishonor, protest and notice of protest of or in respect of
this Guaranty, the other Loan Documents, and the Facility Obligations, notice of
acceptance of this Guaranty and reliance hereupon by the Administrative Agent,
each Issuing Bank, the Swing Line Lender and each Lender, and the incurrence of
any of the Facility Obligations, notice of any sale of collateral security or
any default of any sort.
(b) The Parent agrees that any statement of account with respect to
the Facility Obligations from the Administrative Agent, any Issuing Bank, the
Swing Line Lender or any Lender to the Borrower which binds the Borrower shall
also be binding upon the Parent, and that copies of said statements of account
maintained in the regular course of the Administrative Agent's, such Issuing
Bank's, the Swing Line Lender's or such Lender's business, as the case may be,
may be used in evidence against the Parent in order to establish the Parent
Obligations.
109
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
KOHL'S CORPORATION
By: /s/ William S. Kellogg
----------------------------------------
Name: William S. Kellogg
--------------------------------------
Title: Chief Executive Officer
-------------------------------------
KOHL'S DEPARTMENT STORES, INC.
By: /s/ William S. Kellogg
----------------------------------------
Name: William S. Kellogg
--------------------------------------
Title: Chief Executive Officer
-------------------------------------
110
<PAGE>
THE BANK OF NEW YORK, in its
individual capacity, as Swing Line
Lender and as Administrative Agent
By: /s/ Michael V. Flannery
----------------------------------------
Name: Michael V. Flannery
--------------------------------------
Title: Vice President
-------------------------------------
111
<PAGE>
THE FIRST NATIONAL BANK OF
CHICAGO, in its individual capacity
and as Syndication Agent
By: /s/ Paul E. Rigby
----------------------------------------
Name: Paul E. Rigby
--------------------------------------
Title: Manager Director
-------------------------------------
112
<PAGE>
BANK OF AMERICA ILLINOIS
By: /s/ M.H. Claggett
----------------------------------------
Name: M.H. Claggett
--------------------------------------
Title: Vice President
-------------------------------------
113
<PAGE>
BANK ONE, WISCONSIN
By: /s/ Cindy L. Wavrunek
----------------------------------------
Name: Cindy L. Wavrunek
--------------------------------------
Title: Vice President
-------------------------------------
114
<PAGE>
FIRST BANK NATIONAL ASSOCIATION
By: /s/ Mark R. Olman
----------------------------------------
Name: Mark R. Olman
--------------------------------------
Title: Vice President
-------------------------------------
115
<PAGE>
COMERICA BANK
By: /s/ Harve C. Light
----------------------------------------
Name: Harve C. Light
--------------------------------------
Title: Assistant Vice President
-------------------------------------
116
<PAGE>
CORESTATES BANK, N.A.
By: /s/ AnneMarie Fitzsimmions
----------------------------------------
Name: Anne Marie Fitzsimmions
--------------------------------------
Title: Vice President
-------------------------------------
117
<PAGE>
FIRST UNION NATIONAL BANK
By: /s/ Jane W. Workman
----------------------------------------
Name: Jane W. Workman
--------------------------------------
Title: Senior Vice President
-------------------------------------
118
<PAGE>
FIRSTAR BANK MILWAUKEE, N.A.
By: /s/ James Spredemann
----------------------------------------
Name: James Spredemann
--------------------------------------
Title: Vice President
-------------------------------------
119
<PAGE>
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
----------------------------------------
Name: Peter L. Chinnici
--------------------------------------
Title: Joint General Manager
-------------------------------------
120
<PAGE>
KOHL'S EXHIBIT A
LIST OF COMMITMENT AMOUNTS
--------------------------
<TABLE>
<CAPTION>
Revolving Credit
Commitment Amount
-----------------
<S> <C>
The Bank of New York $ 46,000,000.00
The First National Bank
of Chicago $ 40,000,000.00
Bank of America Illinois $ 33,000,000.00
Bank One, Wisconsin $ 33,000,000.00
First Bank National Association $ 33,000,000.00
Comerica Bank $ 25,000,000.00
CoreStates Bank, N.A. $ 25,000,000.00
First Union National Bank $ 25,000,000.00
Firstar Bank Milwaukee, N.A. $ 25,000,000.00
The Fuji Bank, Limited $ 15,000,000.00
TOTAL $300,000,000.00
===============
</TABLE>
<PAGE>
Margin and Interest Period (if any) applicable to each Eurodollar Advance, and
(iv) the date and amount of each conversion of, and each payment or prepayment
of principal of, any such Revolving Credit Loan. No failure to so record or any
error in so recording shall affect the obligation of the Borrower to repay the
Revolving Credit Loans, together with interest thereon, as provided in the
Credit Agreement, and the outstanding principal balance of the Revolving Credit
Loans made by the Lender as set forth in such schedule shall be presumed to be
correct absent manifest error.
Except as specifically otherwise provided in the Credit Agreement, the
Borrower hereby waives presentment, demand, notice of dishonor, protest, notice
of protest and all other demands, protests and notices in connection with the
execution, delivery, performance, collection and enforcement of this Revolving
Credit Note.
This Revolving Credit Note may only be amended by an instrument in
writing executed pursuant to the provisions of Section 11.1 of the Credit
Agreement.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS, BUT INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW.
KOHL'S DEPARTMENT STORES, INC.
By:___________________________
Name:_________________________
Title:________________________
-2-
<PAGE>
KOHL'S EXHIBIT B-1
FORM OF REVOLVING CREDIT NOTE
-----------------------------
$________ June 13, 1997
New York, New York
FOR VALUE RECEIVED, the undersigned, KOHL'S DEPARTMENT STORES, INC., a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
--------
________________ (the "Lender"), on the Revolving Credit Maturity Date, the
lesser of $________ or the outstanding principal balance of the Revolving Credit
Loans made by the Lender, and to pay interest from the date hereof on the
principal balance thereof from time to time outstanding, at the rate or rates,
and at the times, set forth in the Credit Agreement, dated as of June 13, 1997,
among Kohl's Corporation, the Borrower, the Lenders party thereto, the
Syndication Agent, the Swing Line Lender and The Bank of New York, as
Administrative Agent (the "Administrative Agent") (as the same may be amended,
--------------------
supplemented or otherwise modified from time to time, the "Credit Agreement"),
----------------
in each case at the office of the Administrative Agent located at One Wall
Street, New York, New York, or at such other place as the Administrative Agent
may specify from time to time, in lawful money of the United States of America
in immediately available funds.
Capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
The Revolving Credit Loans evidenced by this Revolving Credit Note are
prepayable in the amounts and under the circumstances, and its maturity is
subject to acceleration upon the terms, set forth in the Credit Agreement. This
Revolving Credit Note is one of the Revolving Credit Notes under, and as such
term is defined in, the Credit Agreement, and is subject to, and should be
construed in accordance with, the provisions thereof, and is entitled to the
benefits and security set forth in the Loan Documents.
The Lender is hereby authorized to record on the schedule annexed
hereto, and any continuation sheets which the Lender may attach hereto, (i) the
date and amount of each Revolving Credit Loan made by the Lender, (ii) the
character thereof as an ABR Advance, a Eurodollar Advance, or a combination
thereof, (iii) the interest rate (without regard to the Applicable
<PAGE>
SCHEDULE TO
-----------
REVOLVING CREDIT NOTE
---------------------
<TABLE>
<CAPTION>
Interest
Rate on
Eurodollar
Amount of Advances
Type of principal (without Interest
Advance converted, regard to Period (if
(ABR or Amount of paid or Applicable Eurodollar Notation
Date Eurodollar) Advance prepaid Margin) Advance) Made By
- ---- ---------- --------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
-3-
<PAGE>
KOHL'S EXHIBIT B-2
FORM OF SWING LINE NOTE
-----------------------
$ June 13, 1997
New York, New York
FOR VALUE RECEIVED, the undersigned, KOHL'S DEPARTMENT STORES, INC., a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
--------
THE BANK OF NEW YORK (the "Swing Line Lender"), on the Swing Line Commitment
-----------------
Termination Date, the lesser of $_________ or the outstanding principal balance
of the Swing Line Loans made by the Swing Line Lender, and to pay interest from
the date hereof on the principal balance thereof from time to time outstanding,
at the rate or rates, and at the times, set forth in the Credit Agreement, dated
as of June 13, 1997, among Kohl's Corporation, the Borrower, the Lenders party
thereto, the Syndication Agent, the Swing Line Lender and The Bank of New York,
as Administrative Agent (the "Administrative Agent") (as the same may be
--------------------
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement"), in each case at the office of the Administrative Agent located at
- ---------
One Wall Street, New York, New York, or at such other place as the
Administrative Agent may specify from time to time, in lawful money of the
United States of America in immediately available funds.
Capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
The Swing Line Loans evidenced by this Swing Line Note are prepayable
in the amounts and under the circumstances, and its maturity is subject to
acceleration upon the terms, set forth in the Credit Agreement. This Swing Line
Note is the Swing Line Note under, and as such term is defined in, the Credit
Agreement, and is subject to, and should be construed in accordance with, the
provisions thereof, and is entitled to the benefits and security set forth in
the Loan Documents.
The Swing Line Lender is hereby authorized to record on the schedule
annexed hereto, and any continuation sheets which the Swing Line Lender may
attach hereto, (i) the date and amount of each Swing Line Loan made by it, (ii)
the
<PAGE>
Interest Period and the Negotiated Rate applicable to each Swing Line Loan and
(iii) each payment and prepayment of the principal of each Swing Line Loan. No
failure to so record or any error in so recording shall affect the obligation of
the Borrower to repay the Swing Line Loans, together with interest thereon, as
provided in the Credit Agreement, and the outstanding principal balance of the
Swing Line Loans made by the Swing Line Lender as set forth in such schedule
shall be presumed to be correct absent manifest error.
Except as specifically otherwise provided in the Credit Agreement, the
Borrower hereby waives presentment, demand, notice of dishonor, protest, notice
of protest and all other demands, protests and notices in connection with the
execution, delivery, performance, collection and enforcement of this Swing Line
Note.
This Swing Line Note may only be amended by an instrument in writing
executed pursuant to the provisions of Section 11.1 of the Credit Agreement.
THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS, BUT INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW.
KOHL'S DEPARTMENT STORES, INC.
By:______________________________
Name:____________________________
Title:___________________________
-2-
<PAGE>
SCHEDULE TO
-----------
SWING LINE NOTE
---------------
<TABLE>
<CAPTION>
Amount of
principal
Amount of paid or Negotiated Interest Notation
Date Advance prepaid Rate Period Made By
- ---- ------- ------- ---- ------ -------
<S> <C> <C> <C> <C> <C>
</TABLE>
-3-
<PAGE>
KOHL'S EXHIBIT B-3
FORM OF COMPETITIVE BID NOTE
----------------------------
June 13, 1997
New York, New York
FOR VALUE RECEIVED, the undersigned, KOHL'S DEPARTMENT STORES, INC., a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
--------
________________ (the "Lender"), the outstanding principal balance of the
------
Lender's Competitive Bid Loans at the time or times provided for in the Credit
Agreement, dated as of June 13, 1997, among Kohl's Corporation, the Borrower,
the Lenders party thereto, the Syndication Agent, the Swing Line Lender and The
Bank of New York, as Administrative Agent (the "Administrative Agent") (as the
--------------------
same may be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") and to pay interest from the date hereof on the principal
----------------
balance thereof from time to time outstanding, at the rate or rates, and at the
times, set forth in the Credit Agreement, in each case at the office of the
Administrative Agent located at One Wall Street, New York, New York, or at such
other place as the Administrative Agent may specify from time to time, in lawful
money of the United States of America in immediately available funds.
Capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
The maturity of the Competitive Bid Loans evidenced by this
Competitive Bid Note is subject to acceleration upon the terms set forth in the
Credit Agreement. This Competitive Bid Note is one of the Competitive Bid Notes
under, and as such term is defined in, the Credit Agreement, and is subject to,
and should be construed in accordance with, the provisions thereof, and is
entitled to the benefits and security set forth in the Loan Documents.
The Lender is hereby authorized to record on the schedule annexed
hereto, and any continuation sheets which the Lender may attach hereto, (i) the
date and amount of each Competitive Bid Loan made by the Lender, (ii) the
Competitive Bid Rate and Competitive Interest Period applicable thereto and
(iii) the date and amount each repayment of the principal
<PAGE>
of any such Competitive Bid Loan. No failure to so record or any error in so
recording shall affect the obligation of the Borrower to repay the Competitive
Bid Loans, together with interest thereon, as provided in the Credit Agreement,
and the outstanding principal balance of the Competitive Bid Loans made by the
Lender as set forth in such schedule shall be presumed to be correct absent
manifest error.
Except as specifically otherwise provided in the Credit Agreement, the
Borrower hereby waives presentment, demand, notice of dishonor, protest, notice
of protest and all other demands, protests and notices in connection with the
execution, delivery, performance, collection and enforcement of this Competitive
Bid Note.
This Competitive Bid Note may only be amended by an instrument in
writing executed pursuant to the provisions of Section 11.1 of the Credit
Agreement.
THIS COMPETITIVE BID NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS, BUT INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW.
KOHL'S DEPARTMENT STORES, INC.
By:___________________________
Name:_________________________
Title:________________________
-2-
<PAGE>
SCHEDULE TO
-----------
COMPETITIVE BID NOTE
--------------------
Amount of
Amount of Competitive Competitive Principal
Competitive Interest Bid Payment or Notation
Date Bid Loan Period Rate Prepayment Made by
- ---- --------- -------- ------ ----------- -------
-3-
<PAGE>
KOHL'S EXHIBIT C-1
FORM OF BORROWING REQUEST
-------------------------
[Date]
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Carolyn Surles,
______________ Agency Function Administration
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Michael V. Flannery,
______________ Vice President
Reference is made to the Credit Agreement, dated as of June 13, 1997 ,
among Kohl's Corporation, Kohl's Department Stores, Inc. (the "Borrower"), the
--------
Lenders party thereto, the Syndication Agent, the Swing Line Lender and The Bank
of New York, as Administrative Agent (as the same may be amended, supplemented
or otherwise modified from time to time, the "Agreement"). Capitalized terms
---------
used herein that are defined in the Agreement shall have the meanings therein
defined.
1. Pursuant to Section 2.5 of the Agreement, the Borrower hereby gives
notice of its intention to borrow Revolving Credit Loans and/or Swing Line
Loans in an aggregate principal amount of $_______ on __________, which
borrowing(s) shall consist of the following Advances and/or Swing Line Loans:
A) Revolving Credit Loans:
<TABLE>
<CAPTION>
Initial Interest
Type of Advance Period for
(Eurodollar and/or Eurodollar
or ABR Advance) Amount Advances
- --------------- ------ --------
<S> <C> <C>
</TABLE>
<PAGE>
___ Advance $ ________ __ months
[DAYS]
___ Advance $ ________ __ months
[DAYS]
___ Advance $ ________ __ months
[DAYS]
B) Swing Line Loans:
<TABLE>
<CAPTION>
Swing Line
Amount Interest Period Requested
------ --------------- ---------
Negotiated Rate
- ---------------
<S> <C> <C>
$______ ______ days _.__%
$______ ______ days _.__%
$______ ______ days _.__%
</TABLE>
2. The Borrower hereby certifies that on the date hereof and on the
Borrowing Date set forth above, and after giving effect to the Loans requested
hereby (i) there exists and shall exist no Default or Event of Default, (ii)
each of the representations and warranties contained in each Loan Document is
and shall be true and correct, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties were true and correct at such earlier date, and
(iii) each of the Parent and the Borrower is and shall be in compliance with all
of the terms, covenants and conditions of each Loan Document to which it is a
party.
IN WITNESS WHEREOF, the Borrower has caused this Borrowing Request to be
duly executed as of the date and year first written above.
KOHL'S DEPARTMENT STORES, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
-2-
<PAGE>
KOHL'S EXHIBIT C-2
FORM OF LETTER OF CREDIT REQUEST
--------------------------------
[Date]
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Carolyn Surles,
______________ Agency Function Administration
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Michael V. Flannery,
______________ Vice President
Reference is made to the Credit Agreement, dated as of June 13, 1997 ,
among Kohl's Corporation, Kohl's Department Stores, Inc. (the "Borrower"), the
--------
Lenders party thereto, the Syndication Agent, the Swing Line Lender and The Bank
of New York, as Administrative Agent (as the same may be amended, supplemented
or otherwise modified from time to time, the "Agreement"). Capitalized terms
---------
used herein that are defined in the Agreement shall have the meanings therein
defined.
1. Pursuant to Sections 2.10 of the Agreement, the Borrower hereby
requests that the above-named Issuing Bank issue the Letter(s) of Credit on
________ __, ____, in accordance with the information annexed hereto (attach
additional sheets if necessary).
2. The Borrower hereby certifies that on the date hereof and on the
Borrowing Date set forth above, and after giving effect to the Letters of Credit
requested hereby (i) there exists and shall exist no Default or Event of
Default, (ii) each of the representations and warranties contained in each Loan
Document is and shall be true and correct, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties were true and correct at such earlier
date, and (iii) each of the Parent and the Borrower is and shall be in
<PAGE>
compliance with all of the terms, covenants and conditions of each Loan Document
to which it is a party.
-2-
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Letter of Credit
Request to be duly executed as of the date and year first written above.
KOHL'S DEPARTMENT STORES, INC.
By:____________________________
Name:__________________________
Title:_________________________
-3-
<PAGE>
LETTER OF CREDIT INFORMATION
1. Name of Beneficiary: ____________________________________________.
2. Address of Beneficiary to which Letter of Credit will be sent:
_________________________________________________________________.
3. Obligations in respect of which the Letter of Credit is to be issued:
_______________________________________________________________________.
4. Conditions under which a drawing may be made (specify any documentation
required to be delivered with any drawing request):__________________
_______________________________________________________________________.
5. Maximum amount to be available under such Letter of Credit: $ .
------
6. Requested date of issuance: _________ __, ____.
7. Requested date of expiration: _______ __, ____.
-4-
<PAGE>
KOHL'S EXHIBIT D
----------------
FORM OF NOTICE OF CONVERSION
----------------------------
[Date]
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Carolyn Surles,
______________ Agency Function Administration
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Michael V. Flannery,
______________ Vice President
Reference is made to the Credit Agreement, dated as of June 13, 1997, among
Kohl's Corporation, Kohl's Department Stores, Inc. (the "Borrower"), the Lenders
--------
party thereto, the Syndication Agent, the Swing Line Lender and The Bank of New
York, as Administrative Agent (as the same may be amended, supplemented or
otherwise modified from time to time, the "Agreement"). Capitalized terms used
---------
herein that are defined in the Agreement shall have the meanings therein
defined.
1. Pursuant to Section 3.3 of the Agreement, the Borrower hereby gives
notice of its request to convert Advances as set forth below:
(a) on ____ __, ___, to convert $_______ in principal amount of
presently outstanding Eurodollar Advances having an Interest Period that expires
on ____ __, ____ to ABR Advances.
(b) on ____ __, ____, to convert $_______ in principal amount of
presently outstanding Eurodollar Advances having an Interest Period that expires
on ____ __, ____ to new Eurodollar Advances that have an initial Interest Period
of __ months;
(c) on ____ __, ____, to convert $_______ in principal amount of
presently outstanding ABR Advances to
<PAGE>
Eurodollar Advances that have an initial Interest Period of __ months.
2. The Borrower hereby certifies that on the date hereof and on the
requested Conversion Dates set forth above, there exists and there shall exist
no Default or Event of Default.
IN WITNESS WHEREOF, the Borrower has caused this Notice of Conversion
to be duly executed as of the date and year first written above.
KOHL'S DEPARTMENT STORES, INC.
By:___________________________
Name:_________________________
Title:________________________
-2-
<PAGE>
KOHL'S EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
------------------------------
I, ______________, do hereby certify that I am the _______ of Kohl's
Department Stores, Inc. (the "Borrower"), and that, as such, I am duly
--------
authorized to execute and deliver this Compliance Certificate on the Borrower's
behalf pursuant to Section 7.1(c) of the Credit Agreement, dated as of June 13,
1997, among Kohl's Corporation, the Borrower, the Lenders party thereto, the
Syndication Agent, the Swing Line Lender and The Bank of New York, as
Administrative Agent (as the same may be amended, supplemented or otherwise
modified from time to time, the "Agreement"). Capitalized terms used herein
---------
that are defined in the Agreement shall have the meanings therein defined.
I hereby certify that:
1. The Minimum Coverage Ratio as of the fiscal quarter end date of
_______________ (the "Fiscal Quarter End Date") is _.__:1.00, calculated as set
-----------------------
forth on Schedule 1.
2. The Leverage Ratio as of the Fiscal Quarter End Date is
_.__:1.00, calculated as set forth on Schedule 2.
3. Tangible Net Worth as of the Fiscal Quarter End Date is
$_________, calculated as set forth on Schedule 3.
4. There exists no violation of any covenant or agreement contained
in any Loan Document, and no condition or event has occurred which would
constitute a Default or Event of Default under the Agreement[, EXCEPT AS
FOLLOWS:
[SPECIFY ALL SUCH VIOLATIONS, CONDITIONS AND EVENTS AND THE
NATURE AND STATUS THEREOF].
IN WITNESS WHEREOF, I have executed this Compliance Certificate on this ___
day of _________, ____.
_______________________
<PAGE>
Schedule 1 to Compliance Certificate
dated __/__/__
CALCULATION OF THE MINIMUM COVERAGE RATIO
-----------------------------------------
1. Net income of the Parent and its Subsidiaries,
determined on Consolidated basis in accordance with
GAAP, for the period comprised of the four fiscal
quarters ended on the Fiscal Quarter End Date (the
"Period") $__________
------
2. All interest income of the Parent and its
Subsidiaries, to the extent utilized in
determining Item 1 $__________
3. All interest expense of the Parent and its
Subsidiaries, to the extent utilized in determining
Item 1 $__________
4. All Rent of the Parent and its Subsidiaries,
to the extent utilized in delivering Item 1
$__________
5. Provisions for income taxes of the Parent and
its Subsidiaries, to the extent utilized in
delivering Item 1 $__________
6. Depreciation, amortization and other non-cash charges of
the Parent and its Subsidiaries, to the extent utilized
in determining Item 1 $__________
7. Adjusted Net Income
(Item 1 minus Item 2 plus the sum of Items
----- ----
3 through 6) $__________
8. Rent of the Parent and its Subsidiaries,
determined on a Consolidated basis in
accordance with GAAP, for the Period $__________
-2-
<PAGE>
9. Interest income of the Parent and its
Subsidiaries, determined on a Consolidated
basis in accordance with GAAP, for the
Period $__________
10. Interest expense of the Parent and its
Subsidiaries, determined on a Consolidated
basis in accordance with GAAP, for the
Period $__________
11. Item 8 minus Item 9 plus Item 10 $__________
----- ----
12. Minimum Coverage Ratio
(Item 7:Item 11) _.__:1.00
13. Minimum required Minimum Coverage Ratio
pursuant to Section 7.8(c) of the Agreement 2.50:1.00
-3-
<PAGE>
Schedule 2 to Compliance Certificate
dated __/__/__
CALCULATION OF THE LEVERAGE RATIO
---------------------------------
1. Included Indebtedness of the Parent and its
Subsidiaries, on a Consolidated basis in
accordance with GAAP, as of the Fiscal Quarter
End Date $__________
2. Total Receivables, as of the Fiscal Quarter
End Date $__________
3. Statement Receivables, as of the Fiscal Quarter
End Date $__________
4. Financed Receivables
(Item 2 minus Item 3) $__________
-----
5. Cash and Cash Equivalents of the Parent and its
Subsidiaries, on a Consolidated basis in accordance
with GAAP, as of the Fiscal Quarter End Date $__________
6. Total Debt
(Item 1 plus Item 4 minus Item 5) $__________
---- -----
7. Net Worth: The excess, if any, of total assets over total
liabilities , in each case of the Parent and its
Subsidiaries, on a Consolidated basis in accordance
with GAAP, as of the Fiscal Quarter End $__________
8. Capitalization
(Item 7 plus Item 6) $__________
----
9. Leverage Ratio
(Item 6:Item 8) _.__:1.00
10. Maximum permitted Leverage Ratio pursuant to
Section 7.8(a) of the Agreement 0.67:1.00
-4-
<PAGE>
Schedule 3 to Compliance Certificate
dated __/__/__
CALCULATION OF TANGIBLE NET WORTH
---------------------------------
1. Net Worth
(Schedule 2, Item 7) $__________
2. All intangible assets of the Parent and its
Subsidiaries, determined on a Consolidated basis in
accordance with GAAP, as of the Fiscal Quarter End
Date, including, without limitation, unamortized
debt discount and expense, unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade
names, copyrights and organization or developmental
expenses $__________
3. Tangible Net Worth
(Item 1 minus Item 2) $__________
4. Minimum Tangible Net Worth required by
Section 7.8(b) of the Agreement $325,000,000
-5-
<PAGE>
OUTLINE OF LEGAL OPINIONS TO BE INCLUDED IN EXHIBIT F
-----------------------------------------------------
In connection with the Credit Agreement (the "Agreement"), to be
---------
entered, by and among KOHL'S DEPARTMENT STORES, INC. (the "Borrower"), KOHL'S
--------
CORPORATION (the "Parent"), the Lenders party thereto, the Syndication Agent,
------
the Swing Line Lender and THE BANK OF NEW YORK, as Administrative Agent (the
"Administrative Agent") set forth below is an outline of opinions (the
- ---------------------
"Opinions") to be included in, or covered by, the legal opinions to be delivered
--------
to the Administrative Agent, pursuant to Section 5.5 of the Agreement by counsel
to the Parent, the Borrower and its Subsidiaries. Capitalized terms used in the
Opinions and which are not otherwise defined therein shall have the respective
meanings ascribed thereto in the Agreement.
1. Each of the Parent and each Significant Subsidiary has been duly
organized and is validly existing in good standing under the laws of the
jurisdiction of its incorporation or formation, has all requisite power and
authority to own its Property and to carry on its business as now conducted, and
is in good standing and authorized to do business in each jurisdiction in which
the nature of the business conducted therein or the Property owned by it therein
makes such qualification necessary, except where such failure to qualify would
not reasonably be expected to have a Material Adverse Effect.
2. Each of the Parent and each Significant Subsidiary has full legal
power and authority to own its Property, conduct its business and enter into,
execute, deliver and perform the terms of the Loan Documents to which it is a
party all of which have been duly authorized by all proper and necessary
corporate, partnership or other applicable action and are in full compliance
with its Organizational Documents. The Parent and each Significant Subsidiary
has duly executed and delivered each Loan Document to which it is a party.
3. The Loan Documents (other than the Notes) constitute, and the
Notes, when issued and delivered pursuant to the Agreement for value received,
will constitute, the valid and legally binding obligations of the Parent and the
Borrower, in each case to the extent it is a party thereto, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization moratorium or other
<PAGE>
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
4. To the best of our knowledge, except as set forth on Schedule 4.4
to the Agreement, there are no actions, suits or proceedings at law or in equity
or by or before any Governmental Authority (whether purportedly on behalf of the
Parent or any of its Subsidiaries) pending or threatened against the Parent or
any of its Subsidiaries or maintained by the Parent or any of its Subsidiaries
or which may affect the Property of the Parent or any of its Subsidiaries or any
of their respective Properties or rights, which would reasonably be expected to
have a Material Adverse Effect.
5. To the best of our knowledge, neither the Parent nor any of its
Subsidiaries is in default under any judgment, order, writ, injunction, decree
or decision of any Governmental Authority or any mortgage, indenture, contract
or agreement to which it is a party or by which it or any of its Property is
bound, the effect of which default would reasonably be expected to have a
Material Adverse Effect. To the best of our knowledge, the execution, delivery
and performance of the terms of the Loan Documents will not constitute a default
under or result in a breach of or require the mandatory repayment of or other
acceleration of payment under or pursuant to the terms of, any such mortgage,
indenture, contract or agreement.
6. The Parent and each of its Subsidiaries is complying with all
laws, regulations, rules and orders of all Governmental Authorities, except to
the extent a violation thereof would not reasonably be expected to have a
Material Adverse Effect.
7. Neither the Parent nor any of its Subsidiaries nor any Person
controlled by, controlling, or under common control with, the Parent or any of
its Subsidiaries, is subject to regulation under the Public Utility Holding
Company Act of 1935, as amended, the Federal Power Act, as amended, or the
Investment Company Act of 1940, as amended. Neither the Parent nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock. No part of the proceeds of any Loan, nor any Letter of Credit,
will be used, directly or indirectly, for a purpose which violates any law, rule
or regulation of any Governmental Authority, including, without limitation, the
provisions of Regulations G, T, U or X of the Board of
-2-
<PAGE>
Governors of the Federal Reserve System, as amended. After giving effect to the
making of each Loan, Margin Stock will constitute less than 25% of the assets
(as determined by any reasonable method) of the Parent and its Subsidiaries.
8. To the best of our knowledge, no indenture, certificate of
designation for preferred stock, agreement or instrument to which the Parent or
any of its Subsidiaries is a party (other than this Agreement), prohibits or
limits in any way, directly or indirectly the ability of any Subsidiary of the
Parent to make Restricted Payments, or to make loans or advances or repay any
such loans or advances to the Parent or to any other Subsidiary of the Parent.
-3-
<PAGE>
KOHL'S EXHIBIT G
FORM OF OPINION OF SPECIAL COUNSEL
----------------------------------
June 13, 1997
The Bank of New York, as
Administrative Agent, the
Swing Line Lender and the Lenders
from time to time under the
Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as Special Counsel to the Administrative Agent in connection
with the Credit Agreement, dated as of June 13, 1997, by and among Kohl's
Corporation (the "Parent"), Kohl's Department Stores, Inc. (the "Borrower"), the
------ --------
Lenders party thereto and The Bank of New York, as Administrative Agent (the
"Agreement"). Capitalized terms used herein that are defined in the Agreement
---------
shall have the meanings therein defined.
We have examined originals or copies certified to our satisfaction of the
documents required to be delivered pursuant to the provisions of Sections 5 and
6 of the Agreement. In conducting such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, and the conformity to originals of all documents submitted to us
as copies.
Based upon the foregoing examination, and relying with your permission upon
(i) the opinion of Godfrey & Kahn, counsel to the Parent, the Borrower and its
Subsidiaries, and the opinion of Sigrid E. Dynek, Esq., General Counsel of the
Parent and the Borrower, and all of the assumptions, qualifications and other
limitations contained in such opinions, and (ii) the representations and
warranties of the Administrative Agent, we are of the opinion that all legal
preconditions to the making of the Loans on the first Borrowing Date have been
satisfactorily met or waived.
This opinion is rendered solely for your benefit in connection with the
transactions referred to herein and may not be relied upon by any other Person.
<PAGE>
We express no opinion as to laws other than the laws of the State of New
York and the federal laws of the United States of America.
Very truly yours,
Emmet, Marvin &
Martin, LLP
-2-
<PAGE>
KOHL'S EXHIBIT H
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
-------------------------------------------
Assignment and Acceptance Agreement (as the same may be amended,
supplemented or otherwise modified from time to time, this "Assignment and
--------------
Acceptance Agreement"), dated as of _____________, by and between [NAME OF
- --------------------
ASSIGNOR], a Lender under the Agreement referred to below (the "Assignor"), and
--------
[NAME OF ASSIGNEE] (the "Assignee").
--------
R E C I T A L S
- - - - - - - -
A. Reference is made to the Credit Agreement, dated as of June 13, 1997,
among Kohl's Corporation, Kohl's Department Stores, Inc. (the "Borrower"), the
--------
Lenders party thereto, the Syndication Agent, the Swing Line Lender and The Bank
of New York, as Administrative Agent (as the same may be amended, supplemented
or otherwise modified from time to time, the "Agreement"). Capitalized terms
---------
used herein that are defined in the Agreement shall have the meanings therein
defined.
B. Pursuant to the Agreement and subject to the limitations set forth
therein (i) the Lenders agreed to make Revolving Credit Loans, (ii) the Issuing
Banks agreed to issue Letters of Credit and each Lender agreed to participate in
such Letters of Credit issued by the Issuing Banks, (iii) the Swing Line Lender
agreed to make Swing Line Loans and each Lender agreed to purchase a
participation therein and (iv) each Lender may, in its sole discretion and upon
the Borrower's request, make Competitive Bid Loans to the Borrower from time to
time (the "Competitive Bid Loans" and, together with the Revolving Credit Loans,
---------------------
the "Loans").
-----
C. The Assignor's Revolving Credit Commitment Amount (without giving
effect to the assignment effected hereby or to other assignments thereof which
have not yet become effective) is specified in Item 1 of Schedule 1 hereto. The
outstanding principal amount of the Assignor's Loans (without giving effect to
the assignment effected hereby or to other assignments thereof which have not
yet become effective) is specified in Item 2 of Schedule 1 hereto.
<PAGE>
D. The Assignor wishes to sell and assign to the Assignee, and the
Assignee wishes to purchase and assume from the Assignor, (i) the portion of the
Assignor's rights and obligations under the Agreement, including its Revolving
Credit Commitment Amount specified in Item 3 of Schedule 1 hereto (the "Assigned
--------
Commitment"), and (ii) the portion of the Assignor's Loans specified in Item 4
- ----------
of Schedule 1 hereto (the "Assigned Loans").
--------------
The parties agree as follows:
2. Assignment
----------
Subject to the terms and conditions set forth herein and in the
Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, without recourse, on
the date hereof, (i) all right, title and interest of the Assignor in and to the
Assigned Loans and (ii) all obligations of the Assignor under the Loan Documents
with respect to the Assigned Commitment. As full consideration for the sale of
the Assigned Loans and the Assigned Commitment, the Assignee shall pay to the
Assignor on the date hereof the principal amount of the Assigned Loans (the
"Purchase Price")[, AND THE ASSIGNOR SHALL PAY TO THE ASSIGNEE ON THE DATE
--------------
HEREOF THE FEE SPECIFIED IN ITEM 5 OF SCHEDULE 1 HERETO].
3. Representations and Warranties
------------------------------
(a) Each of the Assignor and the Assignee represents and warrants to
the other that (i) it has full power and legal right to execute and deliver this
Assignment and Acceptance Agreement and to perform the provisions of this
Assignment and Acceptance Agreement; (ii) the execution, delivery and
performance of this Assignment and Acceptance Agreement have been authorized by
all action, corporate or otherwise, and do not violate any provisions of its
organizational documents or any contractual obligations or requirement of law
binding on it; and (iii) this Assignment and Acceptance Agreement constitutes
its legal, valid and binding obligation, enforceable against it in accordance
with its terms. The Assignor further represents that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor.
-2-
<PAGE>
(b) The Assignee represents and warrants to the Assignor (i) it is an
"accredited investor" within the meaning of Regulation D of the Securities and
Exchange Commission, as amended, [AND] (ii) it has, independently and without
reliance upon the Assignor, and based on such documents and information as it
has deemed appropriate, made its own evaluation of, and investigation into, the
business, operations, Property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries and made its own decision
to enter into this Agreement[, AND (III) IT IS A LENDER OR AN AFFILIATE OF A
LENDER].
4. Effect of Assignment.
--------------------
(a) Upon the date hereof, (i) the Administrative Agent shall record
the assignment contemplated hereby, (ii) the Assignee shall be a Lender, and
(iii) the Assignor, to the extent of the assignment provided for herein, shall
be released from its obligations under the Loan Documents.
(b) The Assignee hereby appoints and authorizes the Administrative
Agent to take such action, on and after the date hereof, as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto.
(c) From and after the date hereof, the Administrative Agent shall
make all payments in respect of the interest assigned hereby (including payments
of principal, interest, fees and other amounts) to the Assignee. The Assignor
and the Assignee shall make all appropriate adjustments with respect to amounts
under the Loan Documents which accrued prior to the date hereof and which were
paid thereafter, directly between themselves.
5. Method of Payment
-----------------
All payments to be made either to the Assignor or the Assignee by the
other hereunder shall be made by wire transfer in immediately available funds to
the account designated the Assignor or the Assignee, as the case may be.
6. Notices
-------
-3-
<PAGE>
All notices, requests and demands to or upon the Assignee in
connection with this Assignment and Acceptance Agreement and the Loan Documents
are to be sent or delivered to the place set forth adjacent to its name on the
signature page(s) hereof.
7. Miscellaneous
-------------
(a) For purposes of this Assignment and Acceptance Agreement, all
calculations and determinations with respect to the Assigned Loans, the Assigned
Commitment, and all other similar calculations and determinations, shall be made
and shall be deemed to be made as of the commencement of business on the date of
such calculation or determination, as the case may be.
(b) Section headings have been inserted herein for convenience only
and shall not be construed to be a part hereof.
(c) This Assignment and Acceptance Agreement embodies the entire
agreement and understanding between the Assignor, the Assignee, the Borrower,
the Administrative Agent, the Issuing Banks and the Swing Line Lender with
respect to the subject matter hereof and supersedes all other prior arrangements
and understandings between the Assignor and the Assignee with respect to the
subject matter hereof.
(d) This Assignment and Acceptance Agreement may be executed in any
number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same agreement. It shall not be
necessary in making proof of this Assignment and Acceptance Agreement to produce
or account for more than one counterpart signed by the party to be charged.
(e) Every provision of this Assignment and Acceptance Agreement is
intended to be severable, and if any term or provision hereof shall be invalid,
illegal or unenforceable for any reason, the validity, legality and
enforceability of the remaining provisions hereof shall not be affected or
impaired thereby, and any invalidity, illegality or unenforceability in any
jurisdiction shall not affect the validity, legality or enforceability of any
such term or provision in any other jurisdiction.
-4-
<PAGE>
(f) This Assignment and Acceptance Agreement shall be binding upon
and inure to the benefit of the Assignor and the Assignee and their respective
successors and permitted assigns, except that neither party may assign or
transfer any of its rights or obligations hereunder (i) without the prior
written consent of the other party, and (ii) in contravention of the Credit
Agreement.
(g) This Assignment and Acceptance Agreement and the rights and
obligations of the parties hereunder shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of New York
without regard to principles of conflicts of law.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
[NAME OF ASSIGNOR], as Assignor
By:___________________________
Name:_________________________
Title:________________________
Address for notices: [NAME OF
ASSIGNEE], as Assignee
______________________________ By:___________________________
______________________________ Name:_________________________
______________________________ Title:________________________
Attention: __________________
Telephone: (___) ___-____
Facsimile: (___) ___-____
[CONSENTED TO:
THE BANK OF NEW YORK, AS AN ISSUING BANK,
SWING LINE LENDER AND ADMINISTRATIVE AGENT
BY:________________________________
NAME:______________________________
TITLE:______________________________________
KOHL'S DEPARTMENT STORES, INC.
BY:________________________________
NAME:______________________________
TITLE:______________________________________
-6-
<PAGE>
[ISSUING BANKS]/1/
BY:________________________________
NAME:______________________________
TITLE:______________________________________]/2/
__________________
Include the names of any other Issuing Banks
/1/ Such consents shall be required when assigning to any Person other than
another Lender or an Affiliate of any Lender.
/2/ Without giving effect to the assignment contemplated hereby or to other
assignments which have not yet become effective.
-7-
<PAGE>
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT,
dated as of _____ __, 199_,
between [NAME OF ASSIGNOR], as Assignor
and
[NAME OF ASSIGNEE], as Assignee,
relating to the
Credit Agreement, dated as of June 13, 1997,
by and among
Kohl's Corporation
Kohl's Department Stores, Inc.,
the Lenders party thereto,
the Syndication Agent,
the Swing Line Lender
and
The Bank of New York, as Administrative Agent
Item 1. Assignor's Revolving Credit Commitment Amount/3/
$___________
Item 2. Outstanding principal balance of the Assignor's Loans:/1/
(a) Revolving Credit Loans consisting of:
ABR Advances $___________
Eurodollar Advances $___________
(b) Competitive Bid Loans:
(i) Amount: $___________
Last day of Competitive
Interest Period: ______, ____
Competitive Bid Rate: ___________%
(ii) Amount: $___________
Last day of Competitive
Interest Period: ______, ____
-8-
<PAGE>
Competitive Bid Rate: ___________%
Item 3. Assigned Revolving Credit Commitment
Amount $___________
Item 4. Outstanding principal balance of the Assigned Loans:
(a) Revolving Credit Loans consisting of:
ABR Advances $___________
Eurodollar Advances $___________
(b) Competitive Bid Loans:
(i) Amount: $___________
Last day of Competitive
Interest Period: ______, ____
Competitive Bid Rate: ___________%
(ii) Amount: $___________
Last day of Competitive
Interest Period: ______, ____
Competitive Bid Rate: ___________%
[ITEM 5. AMOUNT OF FEE PAYABLE TO ASSIGNEE $___________]
-9-
<PAGE>
KOHL'S EXHIBIT I
FORM OF COMPETITIVE BID REQUEST
-------------------------------
[Date]
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Carolyn Surles,
______________ Agency Function Administration
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Michael V. Flannery,
______________ Vice President
Reference is made to the Credit Agreement, dated as of June 13, 1997 ,
among Kohl's Corporation, Kohl's Department Stores, Inc. (the "Borrower"), the
--------
Lenders party thereto, the Syndication Agent, the Swing Line Lender and The Bank
of New York, as Administrative Agent (as the same may be amended, supplemented
or otherwise modified from time to time, the "Agreement"). Capitalized terms
---------
used herein that are defined in the Agreement shall have the meanings therein
defined.
1. Pursuant to Section 2.6 of the Agreement, the Borrower hereby gives
notice of the Borrower's request to borrow Competitive Bid Loans in the
aggregate sum of $____________ on ____________, which borrowing shall consist of
the following Competitive Interest Periods and amounts corresponding thereto:
<TABLE>
<CAPTION>
Competitive
Interest Period Amount
--------------- ---------
<S> <C>
_____ days $___________
_____ days $___________
_____ days $___________
</TABLE>
<PAGE>
2. The Borrower hereby certifies that on the date hereof and on the
Borrowing Date set forth above, and after giving effect to the Competitive Bid
Loans requested hereby (i) there exists and shall exist no Default or Event of
Default, (ii) each of the representations and warranties contained in each Loan
Document is and shall be true and correct, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties were true and correct at such earlier
date, and (iii) each of the Parent and the Borrower is and shall be in
compliance with all of the terms, covenants and conditions of each Loan Document
to which it is a party.
IN WITNESS WHEREOF, the Borrower has caused this Competitive Bid Request to
be duly executed as of the date and year first written above.
KOHL'S DEPARTMENT STORES, INC.
By:___________________________
Name:_________________________
Title:________________________
-2-
<PAGE>
KOHL'S EXHIBIT J
FORM OF INVITATION TO BID
-------------------------
[Date]
To the Lenders under the
Credit Agreement referred to below
Reference is made to the Credit Agreement, dated as of June 13, 1997 ,
among Kohl's Corporation, Kohl's Department Stores, Inc. (the "Borrower"), the
--------
Lenders party thereto, the Syndication Agent, the Swing Line Lender and The Bank
of New York, as Administrative Agent (as the same may be amended, supplemented
or otherwise modified from time to time, the "Agreement"). Capitalized terms
---------
used herein that are defined in the Agreement shall have the meanings therein
defined.
Pursuant to a Competitive Bid Request, the Borrower gave notice of its
request to borrow Competitive Bid Loans in the aggregate sum of $____________ on
______, which borrowing would consist of the following:
Competitive
Interest Period Amount
--------------- ---------
_____ days $___________
_____ days $___________
_____ days $___________
The Lenders are hereby invited to bid, pursuant to the terms and conditions
of the Agreement, on such requested Competitive Bid Loans.
Very truly yours,
THE BANK OF NEW YORK,
as Administrative Agent
By: ___________________________
Name: _________________________
Title: ________________________
<PAGE>
KOHL'S EXHIBIT K
----------------
FORM OF COMPETITIVE BID
-----------------------
[Date]
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Carolyn Surles,
______________ Agency Function Administration
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Michael V. Flannery,
______________ Vice President
Reference is made to the Credit Agreement, dated as of June 13, 1997 ,
among Kohl's Corporation, Kohl's Department Stores, Inc. (the "Borrower"), the
--------
Lenders party thereto, the Syndication Agent, the Swing Line Lender and The Bank
of New York, as Administrative Agent (as the same may be amended, supplemented
or otherwise modified from time to time, the "Agreement"). Capitalized terms
---------
used herein that are defined in the Agreement shall have the meanings therein
defined.
In response to a Competitive Bid Request, the undersigned Lender hereby
offers to make Competitive Bid Loans in the aggregate sum of $____________ on
____________, which borrowing shall consist of the following Competitive
Interest Periods and the amounts and Competitive Bid Rates corresponding
thereto:
<TABLE>
Competitive
Interest Period Amount Bid Rate
- ----------------- ------------ ---------
<S> <C> <C>
_____ days $___________ __.__%
_____ days $___________ __.__%
_____ days $___________ __.__%
</TABLE>
Very truly yours,
[LENDER]
By: _________________________
Name: _______________________
Title: ______________________
<PAGE>
KOHL'S EXHIBIT L
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
--------------------------------------------
[Date]
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Carolyn Surles,
______________ Agency Function Administration
The Bank of New York, as
Administrative Agent
One Wall Street
New York, New York 10286
Attention: Michael V. Flannery,
______________ Vice President
Reference is made to the Credit Agreement, dated as of June 13, 1997 ,
among Kohl's Corporation, Kohl's Department Stores, Inc. (the "Borrower"), the
--------
Lenders party thereto, the Syndication Agent, the Swing Line Lender and The Bank
of New York, as Administrative Agent (as the same may be amended, supplemented
or otherwise modified from time to time, the "Agreement"). Capitalized terms
---------
used herein that are defined in the Agreement shall have the meanings therein
defined.
1. Pursuant to Section 2.6(d) of the Agreement, the Borrower hereby
gives notice of its acceptance of the following Competitive Bids and its
rejection of all other Competitive Bids, in each case made pursuant to the
Competitive Bid Request, dated __________:
Competitive
<TABLE>
<CAPTION>
Competitive
Lender Amount Interest Period Bid Rate
- ------ ------ --------------- --------
<S> <C> <C> <C>
_________ $_________ ___ days __.__%
_________ $_________ ___ days __.__%
_________ $_________ ___ days __.__%
</TABLE>
<PAGE>
IN WITNESS WHEREOF, the Borrower hereby has caused this Competitive Bid
Accept/Reject Letter to be duly executed as of the date and year first written
above.
KOHL'S DEPARTMENT STORES, INC.
By: __________________________
Name: ________________________
Title: _______________________
-2-
<PAGE>
KOHL'S EXHIBIT M
FORM OF REVOLVING CREDIT INCREASE SUPPLEMENT
---------------------------------------------
SUPPLEMENT, dated as of ____________, to the Credit Agreement, dated as of
June 13, 1997, among Kohl's Corporation, Kohl's Department Stores, Inc. (the
"Borrower"), the Lenders party thereto, the Syndication Agent, the Swing Line
- ---------
Lender and The Bank of New York, as Administrative Agent (as the same may be
amended, supplemented or otherwise modified from time to time, the "Agreement").
---------
Capitalized terms used herein which are not defined herein and which are
defined in the Agreement shall have the same meanings as therein defined.
1. The Borrower hereby proposes to increase (the "Increase") the Aggregate
--------
Revolving Credit Commitment Amount from $___________ to $___________.
2. The following undersigned Lender(s) have been invited by the Borrower,
and are ready, willing and able, to increase the amount of their respective
Revolving Credit Commitment Amounts as follows:
<TABLE>
<S> <C>
Revolving Credit Commitment
Amount (after giving effect
to the Increase) Name of Lender
------------------------------ --------------
</TABLE>
3. The following undersigned Proposed Lender(s) have been invited by the
Borrower to, and are ready, willing and able to, become "Lenders" and extend a
Revolving Credit Commitment under the Agreement as follows:
<TABLE>
<S> <C>
Revolving Credit Commitment
Amount (after giving effect Name of
to the Increase) Proposed Lender
---------------------------- ---------------
</TABLE>
<PAGE>
4. The proposed effective date for the Increase is ____________.
5. The Borrower hereby represents and warrants to the Administrative
Agent, each Issuing Bank, the Swing Line Lender, each Lender and each Proposed
Lender as follows:
(a) immediately before and after giving effect to the Increase no
Default or Event of Default shall exist, and
(b) the Aggregate Revolving Credit Commitment Amount immediately after
giving effect to the Increase shall not exceed $400,000,000.
6. Attached hereto is a revised Exhibit A, after giving effect to the
Increase, listing each Lender's Revolving Credit Commitment Amount.
7. Pursuant to Section 2.4(c) of the Agreement, by execution and delivery
of this Supplement, together with the satisfaction of all of the other
requirements set forth in Section 2.4(c), each undersigned Lender and Proposed
Lender (i) shall have, on and as of the effective date of the Increase, a
Revolving Credit Commitment Amount equal to the amount set forth next to its
name on the revised Exhibit A attached hereto and (ii) in the event it is a
Proposed Lender, shall be, and shall be deemed to be, a "Lender" under, and as
such term is defined in, the Agreement and shall have made, and shall be deemed
to have made, the representations, warranties and covenants of a Lender
contained in the Agreement on and as of the date hereof.
KOHL'S DEPARTMENT STORES, INC.
By: ____________________
Name: __________________
Title: _________________
THE BANK OF NEW YORK, as
Administrative Agent
By:_____________________
Name:___________________
Title:__________________
-2-
<PAGE>
[EXISTING LENDER INCREASING ITS
REVOLVING CREDIT COMMITMENT AMOUNT]
By: __________________________
Name: ________________________
Title: _________________________________
[PROPOSED LENDER]
By: __________________________
Name: ________________________
Title: _________________________________
<TABLE>
<CAPTION>
Applicable Applicable
Lending Lending Office
Office for for Eurodollar Address
ABR Advances Advances for Notices
- -------------- -------------- -----------
<S> <C> <C>
______________ ______________ ___________
______________ ______________ ___________
Attention: Attention: Attention:
Telephone: Telephone: Telephone:
Facsimile: Facsimile: Facsimile:
</TABLE>
-4-
<PAGE>
KOHL'S SCHEDULE 8.1
TO CREDIT AGREEMENT DATED JUNE 13, 1997
LIST OF EXISTING INDEBTEDNESS
-----------------------------
None
-4-
<PAGE>
KOHL'S SCHEDULE 8.2
TO CREDIT AGREEMENT DATED JUNE 13, 1997
LIST OF EXISTING LIENS
----------------------
<TABLE>
<CAPTION>
Debtor Creditor Store Address
------ -------- -------------
<S> <C> <C>
Kohl's Department Stores Inc. GMAC Commercial Mortgage 5700 N. Port Washington Road
Glendale, Wisconsin 53217
</TABLE>
5
<PAGE>
KOHL'S SCHEDULE 8.4
TO CREDIT AGREEMENT DATED JUNE 13, 1997
LIST OF EXISTING INVESTMENTS
----------------------------
Loans to the Following Executive Officers
Balance as of 4/1/97
Caryn Blanc 223,867
Kevin Mansell 476,887
R. Lawrence Montgomery 477,525
Donald L. Rouse 231,437
-6-
<PAGE>
KOHL'S SCHEDULE 11.2
TO CREDIT AGREEMENT DATED JUNE 13, 1997
LIST OF ADDRESSES FOR NOTICE
----------------------------
1. The Bank of New York
One Wall Street
8th Floor
New York, New York 10286
Attention: Michael V. Flannery
Telephone: (212) 635-7885
Telecopy: (212) 635-1483
2. The Fuji Bank, Limited
225 West Wacker Drive
Suite 2000
Chicago, IL 60606
Attention: Stephen P. Peca
Telephone: (312) 621-9484
Telecopy: (312) 621-0539 or
(312) 419-3677
3. Bank One, Wisconsin
111 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Cindy Wavrunek
Telephone: (414) 765-2109
Telecopy: (414) 765-2176
4. The First National Bank of Chicago
One First National Plaza
Mail Suite 0086
Chicago, Illinois 60670
Attention: John Runger
Telephone: (312) 732-7101
Telecopy: (312) 732-1117
5. First Bank National Association
601 Second Avenue South
Minneapolis, Minnesota 55480
Attention: Mark Olman
Telephone: (612) 973-1085
-7-
<PAGE>
Telecopy: (612) 973-0825
6. Comerica Bank
One Mid America Plaza
Suite 612ard Avenue MC3279
Oak Brook Terrace, Illinois 60181
Attention: Harve C. Light
Telephone: (630) 575-2160
Telecopy: (630) 575-2164
7. Bank of America Illinois
Mail Code 915
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Margaret Claggett
Telephone: (312) 828-1549
Telecopy: (312) 987-1276
8. CoreStates Bank, N.A.
1345 Chestnut Street
FC 1-8-8-14
Philadelphia, Pennsylvania 19101
Attention: Rodger Levenson
Telephone: (215) 973-3843
Telecopy: (215) 973-7671
9. First Union National Bank
301 South Collect Street
1 First Union Center
Charlotte, North Carolina 28288-0745
Attention: Kevin Shea
Telephone: (704) 383-6734
Telecopy: (704) 374-2802
10. Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: James Spredemann
Telephone: (414) 765-6626
Telecopy: (414) 765-5367
-8-
<PAGE>
AMENDMENT NO. 2 TO
RECEIVABLES PURCHASE AGREEMENT
THIS AMENDMENT NO. 2 (this "AMENDMENT"), is entered into as of May 3,
1997, by and among KOHL'S RECEIVABLES CORPORATION, a Wisconsin corporation (the
"SELLER"), the INVESTORS, PREFERRED RECEIVABLES FUNDING CORPORATION ("PREFCO"),
and THE FIRST NATIONAL BANK OF CHICAGO, as Agent (in such capacity, the
"AGENT"), with respect to the RECEIVABLES PURCHASE AGREEMENT, dated as of
January 31, 1997, by and among the Seller, the Investors, PREFCO and the Agent
(the "RECEIVABLES PURCHASE AGREEMENT"). Unless defined elsewhere herein,
capitalized terms used in this Amendment shall have the meanings assigned to
such terms in the Receivables Purchase Agreement.
PRELIMINARY STATEMENT
The parties desire to amend the Receivables Purchase Agreement in
certain respects as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree to as
follows:
SECTION 1. AMENDMENTS. Subject to the terms and conditions hereinafter
----------
set forth, and in reliance on the representations and warranties set forth in
Section 2 hereof, each of the parties hereby agrees to amend the Receivables
Purchase Agreement as follows:
1.1. Section 7.2(f) of the Agreement is hereby amended and restated in
its entirety to read as follows:
(f) The Loss-to-Liquidation Ratio for the 3 most recent consecutive
calendar months shall exceed 3.5%.
1.2. Exhibit I to the Agreement is hereby amended to add the following
new definition in its appropriate alphabetical order:
"LOSS-TO-LIQUIDATION RATIO" means, as of any date of determination, a
percentage equal to (i) the amount of Receivables which became Charged-Off
Receivables during the period of 3 consecutive calendar months then most
recently ended less any cash recoveries received during such period with
respect to any Charged-Off Receivables, divided by (ii) the aggregate
amount of Collections during such 3-month period.
<PAGE>
1.3. The definitions of "LIBO RATE" and "LOSS RECOURSE PERCENTAGE" set
forth in Exhibit I to the Agreement are hereby amended and restated in their
entirety to read, respectively, as follows:
"LIBO RATE" means the rate per annum equal to the sum of (i) (a) the
rate at which deposits in U.S. Dollars are offered by the Reference Bank to
first-class banks in the London interbank market at approximately 11:00
a.m. (London time) two Business Days prior to the first day of the relevant
Tranche Period, such deposits being in the approximate amount of the
Capital of the Receivable Interest to be funded or maintained, divided by
(b) one minus the Reserve Requirement (expressed as a decimal) applicable
to such Tranche Period plus (ii) 0.300% per annum. The LIBO Rate shall be
rounded, if necessary, to the next higher 1/16 of 1% and shall be computed
for actual days elapsed on the basis of a year consisting of 360 days.
"LOSS RECOURSE PERCENTAGE" means, at any time, the greater of (i) 3
times the Loss-to-Liquidation Ratio for the three-month period then most
recently ended, or (ii) 10%.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
------------------------------
2.1. Seller Representations. As of the date hereof, the Seller
----------------------
represents and warrants to the Agent and the Purchasers that:
(a) Corporate Existence and Power. Each of the Seller and its
-----------------------------
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, and has all
corporate power and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which
its business is conducted, except for such failures which will not,
individually or in the aggregate, have a Material Adverse Effect.
(b) No Conflict. The execution, delivery and performance by the
-----------
Seller of this Amendment, and the Seller's use of the proceeds of purchases
made under the Receivables Purchase Agreement, as amended hereby, are
within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate of
incorporation or by-laws, (ii) any law, rule or regulation applicable to
it, (iii) any restrictions under any agreement, contract or instrument to
which it is a party or by which it
2
<PAGE>
or any of its property is bound, or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not
result in the creation or imposition of any Adverse Claim on assets of the
Seller (except created under the Receivables Purchase Agreement); and no
transaction contemplated by the Receivables Purchase Agreement, as amended
hereby, requires compliance with any bulk sales act or similar law. This
Amendment, and each of the Transaction Documents to which the Seller is a
party, have been duly executed and delivered by the Seller.
(c) Governmental Authorization. Other than the filing of the
--------------------------
financing statements required under the Receivables Purchase Agreement, all
of which filings have previously been made, no authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery
and performance by the Seller of the Receivables Purchase Agreement, as
amended hereby.
(d) Binding Effect. The Receivables Purchase Agreement, as amended
--------------
hereby, constitutes the legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors'
rights generally or general equitable principles.
(e) Absence of Certain Events. After giving effect to the waiver and
-------------------------
amendments contained herein, no Servicer Default, Potential Servicer
Default, Termination Event or Potential Termination Event exists and is
continuing as of the date hereof.
2.2. Investor Representations. As of the date hereof, each of the
------------------------
Investors represents and warrants to the other parties hereto that:
(a) Due Execution. This Amendment has been duly executed and
-------------
delivered by such Investor.
(b) Binding Effect. The Receivables Purchase Agreement, as amended
--------------
hereby, constitutes the legal, valid and binding obligation of such
Investor, enforceable against it in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors'
rights generally or general equitable principles.
3
<PAGE>
SECTION 3. CONDITIONS PRECEDENT. This Amendment shall become effective as
--------------------
of the date first above written only upon receipt by the Agent of counterparts
of this Amendment duly executed by each of the parties hereto.
SECTION 4. MISCELLANEOUS.
-------------
4.1. Choice of Law. This Amendment shall be construed in accordance
-------------
with the internal laws (and not the law of conflicts) of the State of Illinois.
4.2. Counterparts; Severability. This Amendment may be executed in any
--------------------------
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same Agreement. Any
provisions of this Amendment which are prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
4.3. Ratification. Except as expressly amended hereby, each of the
------------
Transaction Documents shall remain unaltered and in full force and effect and is
hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their duly authorized officers as of the date
hereof.
KOHL'S RECEIVABLES CORPORATION
By: /s/ Arlene Meier
--------------------------------
Name: Arlene Meier
------------------------------
Title: CFO
-----------------------------
4
<PAGE>
PREFERRED RECEIVABLES FUNDING
CORPORATION
By: /s/ Mark R. Matthews
--------------------------------
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO,
as an Investor and as Agent
By: /s/ Mark R. Matthews
--------------------------------
Authorized Signatory
5
<PAGE>
AMENDMENT NO. 3 TO
RECEIVABLES PURCHASE AGREEMENT
THIS AMENDMENT NO. 3 (this "AMENDMENT"), is entered into as of July
24, 1997, by and among KOHL'S RECEIVABLES CORPORATION, a Wisconsin corporation
(the "SELLER"), the INVESTORS, PREFERRED RECEIVABLES FUNDING CORPORATION
("PREFCO"), and THE FIRST NATIONAL BANK OF CHICAGO, as Agent (in such capacity,
the "AGENT"), with respect to the RECEIVABLES PURCHASE AGREEMENT, dated as of
January 31, 1997, by and among the Seller, the Investors, PREFCO and the Agent
(the "RECEIVABLES PURCHASE AGREEMENT"). Unless defined elsewhere herein,
capitalized terms used in this Amendment shall have the meanings assigned to
such terms in the Receivables Purchase Agreement.
PRELIMINARY STATEMENT
The parties desire to amend the Receivables Purchase Agreement in
certain respects as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree to as
follows:
SECTION 1. AMENDMENTS. Subject to the terms and conditions hereinafter
----------
set forth, and in reliance on the representations and warranties set forth in
Section 2 hereof, each of the parties hereby agrees to amend the Receivables
Purchase Agreement as follows:
1.1. The Commitment amount set forth opposite The First National Bank
of Chicago's name on the signature page of the Receivables Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
"225,000,000.00".
1.2. The definition of "REQUIRED INVESTORS" as set forth in Exhibit I
to the Agreement is hereby amended and restated in its entirety to read as
follows:
"REQUIRED INVESTORS" means, at any time, Investors with Commitments in
excess of 66-2/3% of the Purchase Limit, but in no event comprising fewer
than two (2) Investors, if there are two (2) or more Investors.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
------------------------------
2.1. Seller Representations. As of the date hereof, the Seller
----------------------
represents and warrants to the Agent and the Purchasers that:
<PAGE>
(a) Corporate Existence and Power. Each of the Seller and its
-----------------------------
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, and has all
corporate power and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which
its business is conducted, except for such failures which will not,
individually or in the aggregate, have a Material Adverse Effect.
(b) No Conflict. The execution, delivery and performance by the
-----------
Seller of this Amendment, and the Seller's use of the proceeds of purchases
made under the Receivables Purchase Agreement, as amended hereby, are
within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate of
incorporation or by-laws, (ii) any law, rule or regulation applicable to
it, (iii) any restrictions under any agreement, contract or instrument to
which it is a party or by which it or any of its property is bound, or (iv)
any order, writ, judgment, award, injunction or decree binding on or
affecting it or its property, and do not result in the creation or
imposition of any Adverse Claim on assets of the Seller (except created
under the Receivables Purchase Agreement); and no transaction contemplated
by the Receivables Purchase Agreement, as amended hereby, requires
compliance with any bulk sales act or similar law. This Amendment, and
each of the Transaction Documents to which the Seller is a party, have been
duly executed and delivered by the Seller.
(c) Governmental Authorization. Other than the filing of the
--------------------------
financing statements required under the Receivables Purchase Agreement, all
of which filings have previously been made, no authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery
and performance by the Seller of the Receivables Purchase Agreement, as
amended hereby.
(d) Binding Effect. The Receivables Purchase Agreement, as amended
--------------
hereby, constitutes the legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors'
rights generally or general equitable principles.
(e) Absence of Certain Events. After giving effect to the waiver and
-------------------------
amendments contained herein, no Servicer Default, Potential Servicer
Default, Termination Event or Potential Termination Event exists and is
continuing as of the date hereof.
2
<PAGE>
2.2. Investor Representations. As of the date hereof, each of the
------------------------
Investors represents and warrants to the other parties hereto that:
(a) Due Execution. This Amendment has been duly executed and
-------------
delivered by such Investor.
(b) Binding Effect. The Receivables Purchase Agreement, as amended
--------------
hereby, constitutes the legal, valid and binding obligation of such
Investor, enforceable against it in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors'
rights generally or general equitable principles.
SECTION 3. CONDITIONS PRECEDENT. This Amendment shall become effective as
--------------------
of the date first above written only upon receipt by the Agent of counterparts
of this Amendment duly executed by each of the parties hereto.
SECTION 4. MISCELLANEOUS.
-------------
4.1. Choice of Law. This Amendment shall be construed in accordance
-------------
with the internal laws (and not the law of conflicts) of the State of Illinois.
4.2. Counterparts; Severability. This Amendment may be executed in
--------------------------
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Amendment which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
4.3. Ratification. Except as expressly amended hereby, each of the
------------
Transaction Documents shall remain unaltered and in full force and effect and is
hereby ratified and confirmed.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their duly authorized officers as of the date
hereof.
KOHL'S RECEIVABLES CORPORATION
By: /s/ Arlene Meier
-------------------------------------
Name: Arlene Meier
-----------------------------------
Title: Chief Financial Officer
----------------------------------
PREFERRED RECEIVABLES FUNDING
CORPORATION
By: /s/ Mark R. Matthews
-------------------------------------
Authorized Signatory
THE FIRST NATIONAL BANK OF CHICAGO,
as an Investor and as Agent
By: /s/ Mark R. Matthews
-------------------------------------
Authorized Signatory
4
<PAGE>
Exhibit 12.1
Kohl's Corporation
Ratio of Earnings to Fixed Charges
($000s)
<TABLE>
<CAPTION>
26 Weeks Ended
-------------------- Fiscal Year (1)
August 2, August 3, --------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
- --------
Income before income taxes and extraordinary
items $60,148 $48,210 $171,368 $122,729 $117,451 $ 96,691 $50,134
Fixed charges 28,656 19,696 44,054 30,770 19,758 16,144 21,503
Less interest capitalized during period (1,118) (1,264) (2,829) (1,287) (603) (376) 0
-------- ------- -------- -------- -------- -------- -------
$87,686 $66,642 $212,593 $152,212 $136,606 $112,459 $71,637
======= ======= ======== ======== ======== ======== =======
Fixed Charges
- -------------
Interest (expensed or capitalized) $14,082 $ 9,225 $ 21,822 $ 14,895 $ 7,911 $ 6,253 $13,648
Portion of rent expense representative of
Interest 14,331 10,381 22,031 15,798 11,777 9,113 6,794
Amortization of deferred financing fees 243 90 201 77 70 778 1,061
------- ------ -------- -------- -------- -------- -------
$28,656 $19,696 $ 44,054 $ 30,770 $ 19,758 $ 16,144 $21,503
======= ======= ======== ======== ======== ======== =======
Ratio of earnings to fixed charges 3.06 3.38 4.83 4.95 (2) 6.91 6.97 3.33
======= ======= ======== ======= ======== ======== ======
</TABLE>
(1) Fiscal 1996, 1994, 1993 and 1992 are 52 week years and fiscal 1995 is a 53
week year.
(2) Excluding the credit operations non-recurring expense of $14,052, the ratio
of earnings to fixed charges would be 5.40.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-02-1996
<PERIOD-END> AUG-02-1997
<CASH> 2,205
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 553,242
<CURRENT-ASSETS> 571,853
<PP&E> 828,148
<DEPRECIATION> 151,125
<TOTAL-ASSETS> 1,306,910
<CURRENT-LIABILITIES> 284,950
<BONDS> 404,262
0
0
<COMMON> 741
<OTHER-SE> 556,556
<TOTAL-LIABILITY-AND-EQUITY> 1,306,910
<SALES> 1,224,484
<TOTAL-REVENUES> 1,224,484
<CGS> 813,229
<TOTAL-COSTS> 1,151,514
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,822
<INCOME-PRETAX> 60,148
<INCOME-TAX> 23,999
<INCOME-CONTINUING> 36,149
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,149
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.48
</TABLE>
