Document:

Exhibit 4.3

 

 

INSPIRE MEDICAL SYSTEMS, INC.

 

 

INDENTURE

 

Dated as of            , 20  

 

 

[         ]

 

Trustee

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I.   DEFINITIONS AND INCORPORATION BY REFERENCE
    	
1
    
	
Section 1.1.
    	
Definitions
    	
1
    
	
Section 1.2.
    	
Other Definitions
    	
4
    
	
Section 1.3.
    	
Incorporation by   Reference of Trust Indenture Act
    	
4
    
	
Section 1.4.
    	
Rules of   Construction
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE II.   THE SECURITIES
    	
5
    
	
Section 2.1.
    	
Issuable in Series
    	
5
    
	
Section 2.2.
    	
Establishment of Terms   of Series of Securities
    	
6
    
	
Section 2.3.
    	
Execution and   Authentication
    	
8
    
	
Section 2.4.
    	
Registrar and Paying   Agent
    	
9
    
	
Section 2.5.
    	
Paying Agent to Hold   Money in Trust
    	
10
    
	
Section 2.6.
    	
Securityholder Lists
    	
10
    
	
Section 2.7.
    	
Transfer and Exchange
    	
10
    
	
Section 2.8.
    	
Mutilated, Destroyed,   Lost and Stolen Securities
    	
11
    
	
Section 2.9.
    	
Outstanding Securities
    	
11
    
	
Section 2.10.
    	
Treasury Securities
    	
12
    
	
Section 2.11.
    	
Temporary Securities
    	
12
    
	
Section 2.12.
    	
Cancellation
    	
12
    
	
Section 2.13.
    	
Defaulted Interest
    	
13
    
	
Section 2.14.
    	
Global Securities
    	
13
    
	
Section 2.15.
    	
CUSIP Numbers
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE III.   REDEMPTION
    	
15
    
	
Section 3.1.
    	
Notice to Trustee
    	
15
    
	
Section 3.2.
    	
Selection of Securities   to be Redeemed
    	
15
    
	
Section 3.3.
    	
Notice of Redemption
    	
15
    
	
Section 3.4.
    	
Effect of Notice of   Redemption
    	
16
    
	
Section 3.5.
    	
Deposit of Redemption   Price
    	
16
    
	
Section 3.6.
    	
Securities Redeemed in   Part
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE IV.   COVENANTS
    	
17
    
	
Section 4.1.
    	
Payment of Principal   and Interest
    	
17
    
	
Section 4.2.
    	
SEC Reports
    	
17
    
	
Section 4.3.
    	
Compliance Certificate
    	
17
    
	
Section 4.4.
    	
Stay, Extension and   Usury Laws
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE V.   SUCCESSORS
    	
18
    
	
Section 5.1.
    	
When Company   May Merge, Etc.
    	
18
    
	
Section 5.2.
    	
Successor Corporation   Substituted
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE VI.   DEFAULTS AND REMEDIES
    	
19
    
	
Section 6.1.
    	
Events of Default
    	
19
    

 

i

 

	
Section 6.2.
    	
Acceleration of   Maturity; Rescission and Annulment
    	
20
    
	
Section 6.3.
    	
Collection of   Indebtedness and Suits for Enforcement by Trustee
    	
21
    
	
Section 6.4.
    	
Trustee May File   Proofs of Claim
    	
21
    
	
Section 6.5.
    	
Trustee   May Enforce Claims Without Possession of Securities
    	
22
    
	
Section 6.6.
    	
Application of Money   Collected
    	
22
    
	
Section 6.7.
    	
Limitation on Suits
    	
23
    
	
Section 6.8.
    	
Unconditional Right of   Holders to Receive Principal and Interest
    	
23
    
	
Section 6.9.
    	
Restoration of Rights   and Remedies
    	
23
    
	
Section 6.10.
    	
Rights and Remedies   Cumulative
    	
24
    
	
Section 6.11.
    	
Delay or Omission Not   Waiver
    	
24
    
	
Section 6.12.
    	
Control by Holders
    	
24
    
	
Section 6.13.
    	
Waiver of Past Defaults
    	
25
    
	
Section 6.14.
    	
Undertaking for Costs
    	
25
    
	
 
    	
 
    	
 
    
	
ARTICLE VII.   TRUSTEE
    	
25
    
	
Section 7.1.
    	
Duties of Trustee
    	
25
    
	
Section 7.2.
    	
Rights of Trustee
    	
27
    
	
Section 7.3.
    	
Individual Rights of   Trustee
    	
28
    
	
Section 7.4.
    	
Trustee’s Disclaimer
    	
28
    
	
Section 7.5.
    	
Notice of Defaults
    	
28
    
	
Section 7.6.
    	
Reports by Trustee to   Holders
    	
28
    
	
Section 7.7.
    	
Compensation and   Indemnity
    	
28
    
	
Section 7.8.
    	
Replacement of Trustee
    	
29
    
	
Section 7.9.
    	
Successor Trustee by   Merger, Etc.
    	
30
    
	
Section 7.10.
    	
Eligibility;   Disqualification
    	
30
    
	
Section 7.11.
    	
Preferential Collection   of Claims Against Company
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII.   SATISFACTION AND DISCHARGE; DEFEASANCE
    	
31
    
	
Section 8.1.
    	
Satisfaction and   Discharge of Indenture
    	
31
    
	
Section 8.2.
    	
Application of Trust Funds;   Indemnification
    	
32
    
	
Section 8.3.
    	
Legal Defeasance of   Securities of any Series
    	
32
    
	
Section 8.4.
    	
Covenant Defeasance
    	
34
    
	
Section 8.5.
    	
Repayment to Company
    	
35
    
	
Section 8.6.
    	
Reinstatement
    	
35
    
	
 
    	
 
    	
 
    
	
ARTICLE IX.   AMENDMENTS AND WAIVERS
    	
36
    
	
Section 9.1.
    	
Without Consent of   Holders
    	
36
    
	
Section 9.2.
    	
With Consent of Holders
    	
36
    
	
Section 9.3.
    	
Limitations
    	
37
    
	
Section 9.4.
    	
Compliance with Trust   Indenture Act
    	
38
    
	
Section 9.5.
    	
Revocation and Effect   of Consents
    	
38
    
	
Section 9.6.
    	
Notation on or Exchange   of Securities
    	
38
    
	
Section 9.7.
    	
Trustee Protected
    	
38
    
	
 
    	
 
    	
 
    
	
ARTICLE X.   MISCELLANEOUS
    	
39
    
	
Section 10.1.
    	
Trust Indenture Act   Controls
    	
39
    
	
Section 10.2.
    	
Notices
    	
39
    

 

ii

 

	
Section 10.3.
    	
Communication by   Holders with Other Holders
    	
40
    
	
Section 10.4.
    	
Certificate and Opinion   as to Conditions Precedent
    	
40
    
	
Section 10.5.
    	
Statements Required in   Certificate or Opinion
    	
40
    
	
Section 10.6.
    	
Rules by Trustee   and Agents
    	
41
    
	
Section 10.7.
    	
Legal Holidays
    	
41
    
	
Section 10.8.
    	
No Recourse Against   Others
    	
41
    
	
Section 10.9.
    	
Counterparts
    	
41
    
	
Section 10.10.
    	
Governing Law; Waiver   of Jury Trial; Consent to Jurisdiction
    	
41
    
	
Section 10.11.
    	
No Adverse   Interpretation of Other Agreements
    	
42
    
	
Section 10.12.
    	
Successors
    	
42
    
	
Section 10.13.
    	
Severability
    	
42
    
	
Section 10.14.
    	
Table of Contents,   Headings, Etc.
    	
42
    
	
Section 10.15.
    	
Securities in a Foreign   Currency
    	
43
    
	
Section 10.16.
    	
Judgment Currency
    	
43
    
	
Section 10.17.
    	
Force Majeure
    	
44
    
	
Section 10.18.
    	
U.S.A. Patriot Act
    	
44
    
	
 
    	
 
    	
 
    
	
ARTICLE XI.   SINKING FUNDS
    	
44
    
	
Section 11.1.
    	
Applicability of   Article
    	
44
    
	
Section 11.2.
    	
Satisfaction of Sinking   Fund Payments with Securities
    	
44
    
	
Section 11.3.
    	
Redemption of   Securities for Sinking Fund
    	
45
    

 

iii

 

INSPIRE MEDICAL SYSTEMS, INC.

 

Reconciliation and tie between Trust Indenture Act of 1939 and
 Indenture, dated as of             , 20  

 

	
§ 310(a)(1)
    	
 
    	
 
    	
 
    	
7.10
    
	
(a)(2)
    	
 
    	
 
    	
 
    	
7.10
    
	
(a)(3)
    	
 
    	
 
    	
 
    	
Not Applicable
    
	
(a)(4)
    	
 
    	
 
    	
 
    	
Not Applicable
    
	
(a)(5)
    	
 
    	
 
    	
 
    	
7.10
    
	
(b)
    	
 
    	
 
    	
 
    	
7.10
    
	
§ 311(a)
    	
 
    	
 
    	
 
    	
7.11
    
	
(b)
    	
 
    	
 
    	
 
    	
7.11
    
	
(c)
    	
 
    	
 
    	
 
    	
Not Applicable
    
	
§ 312(a)
    	
 
    	
 
    	
 
    	
2.6
    
	
(b)
    	
 
    	
 
    	
 
    	
10.3
    
	
(c)
    	
 
    	
 
    	
 
    	
10.3
    
	
§ 313(a)
    	
 
    	
 
    	
 
    	
7.6
    
	
(b)(1)
    	
 
    	
 
    	
 
    	
7.6
    
	
(b)(2)
    	
 
    	
 
    	
 
    	
7.6
    
	
(c)(1)
    	
 
    	
 
    	
 
    	
7.6
    
	
(d)
    	
 
    	
 
    	
 
    	
7.6
    
	
§ 314(a)
    	
 
    	
 
    	
 
    	
4.2, 10.5
    
	
(b)
    	
 
    	
 
    	
 
    	
Not Applicable
    
	
(c)(1)
    	
 
    	
 
    	
 
    	
10.4
    
	
(c)(2)
    	
 
    	
 
    	
 
    	
10.4
    
	
(c)(3)
    	
 
    	
 
    	
 
    	
Not Applicable
    
	
(d)
    	
 
    	
 
    	
 
    	
Not Applicable
    
	
(e)
    	
 
    	
 
    	
 
    	
10.5
    
	
(f)
    	
 
    	
 
    	
 
    	
Not Applicable
    
	
§ 315(a)
    	
 
    	
 
    	
 
    	
7.1
    
	
(b)
    	
 
    	
 
    	
 
    	
7.5
    
	
(c)
    	
 
    	
 
    	
 
    	
7.1
    
	
(d)
    	
 
    	
 
    	
 
    	
7.1
    
	
(e)
    	
 
    	
 
    	
 
    	
6.14
    
	
§ 316(a)
    	
 
    	
 
    	
 
    	
2.10
    
	
(a)(1)(A)
    	
 
    	
 
    	
 
    	
6.12
    
	
(a)(1)(B)
    	
 
    	
 
    	
 
    	
6.13
    
	
(b)
    	
 
    	
 
    	
 
    	
6.8
    
	
§ 317(a)(1)
    	
 
    	
 
    	
 
    	
6.3
    
	
(a)(2)
    	
 
    	
 
    	
 
    	
6.4
    
	
(b)
    	
 
    	
 
    	
 
    	
2.5
    
	
§ 318(a)
    	
 
    	
 
    	
 
    	
10.1
    

 

Note:  This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.

 

iv

 

Indenture dated as of           , 20   between Inspire Medical Systems, Inc., a company incorporated under the laws of the State of Delaware (“Company”), and [      ] (“Trustee”).

 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Securities issued under this Indenture.

 

ARTICLE I.
 DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1.                                 Definitions.

 

“Affiliate” of any specified person means any other person directly or indirectly controlling or controlled by or under common control with such specified person.   For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities or by agreement or otherwise.

 

“Agent” means any Registrar, Paying Agent or Notice Agent.

 

“Board of Directors” means the board of directors of the Company or any duly authorized committee thereof.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been adopted by the Board of Directors or pursuant to authorization by the Board of Directors and to be in full force and effect on the date of the certificate and delivered to the Trustee.

 

“Business Day” means any day except a Saturday, Sunday or a legal holiday in The City of New York, New York (or in connection with any payment, the place of payment) on which banking institutions are authorized or required by law, regulation or executive order to close.

 

“Capital Stock” means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock.

 

“Company” means the party named as such above until a successor replaces it and thereafter means the successor.

 

“Company Order” means a written order signed in the name of the Company by an Officer.

 

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business related to this Indenture shall be principally administered.

 

 

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

 

“Depositary” means, with respect to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities, the person designated as Depositary for such Series by the Company, which Depositary shall be a clearing agency registered under the Exchange Act; and if at any time there is more than one such person, “Depositary” as used with respect to the Securities of any Series shall mean the Depositary with respect to the Securities of such Series.

 

“Discount Security” means any Security that provides for an amount less than the stated principal amount thereof to be due and payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.2.

 

“Dollars” and “$” means the currency of The United States of America.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Foreign Currency” means any currency or currency unit issued by a government other than the government of The United States of America.

 

“Foreign Government Obligations” means, with respect to Securities of any Series that are denominated in a Foreign Currency, direct obligations of, or obligations guaranteed by, the government that issued or caused to be issued such currency for the payment of which obligations its full faith and credit is pledged and which are not callable or redeemable at the option of the issuer thereof.

 

“GAAP” means accounting principles generally accepted in the United States of America set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect as of the date of determination.

 

“Global Security” or “Global Securities” means a Security or Securities, as the case may be, in the form established pursuant to Section 2.2 evidencing all or part of a Series of Securities, issued to the Depositary for such Series or its nominee, and registered in the name of such Depositary or nominee.

 

“Holder” or “Securityholder” means a person in whose name a Security is registered.

 

“Indenture” means this Indenture as amended or supplemented from time to time and shall include the form and terms of particular Series of Securities established as contemplated hereunder.

 

“interest” with respect to any Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

 

2

 

“Maturity,” when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

 

“Officer” means the Chief Executive Officer, President, the Chief Financial Officer, the Treasurer or any Assistant Treasurer, the Secretary or any Assistant Secretary, and any Vice President of the Company.

 

“Officer’s Certificate” means a certificate signed by any Officer.

 

“Opinion of Counsel” means a written opinion of legal counsel who is acceptable to the Trustee.  The counsel may be an employee of or counsel to the Company. The opinion may contain customary limitations, conditions and exceptions.

 

“person” means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

“principal” of a Security means the principal of the Security plus, when appropriate, the premium, if any, on the Security.

 

“Responsible Officer” means any officer of the Trustee in its Corporate Trust Office having responsibility for administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with a particular subject.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” means the debentures, notes or other debt instruments of the Company of any Series authenticated and delivered under this Indenture.

 

“Series” or “Series of Securities” means each series of debentures, notes or other debt instruments of the Company created pursuant to Sections 2.1 and 2.2 hereof.

 

“Stated Maturity” when used with respect to any Security, means the date specified in such Security as the fixed date on which the principal of such Security or interest is due and payable.

 

“Subsidiary” of any specified person means any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such person or one or more of the other Subsidiaries of that person or a combination thereof.

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the date of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “TIA” means, to the extent required by any such amendment, the Trust Indenture Act as so amended.

 

3

 

“Trustee” means the person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each person who is then a Trustee hereunder, and if at any time there is more than one such person, “Trustee” as used with respect to the Securities of any Series shall mean the Trustee with respect to Securities of that Series.

 

“U.S. Government Obligations” means securities which are direct obligations of, or guaranteed by, The United States of America for the payment of which its full faith and credit is pledged and which are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation evidenced by such depositary receipt.

 

Section 1.2.                                 Other Definitions.

 

	
 
    	
 
    	
DEFINED IN
    
	
TERM
    	
 
    	
SECTION
    
	
 
    	
 
    	
 
    
	
“Bankruptcy Law”
    	
 
    	
6.1
    
	
“Custodian”
    	
 
    	
6.1
    
	
“Event of Default”
    	
 
    	
6.1
    
	
“Judgment Currency”
    	
 
    	
10.16
    
	
“Legal Holiday”
    	
 
    	
10.7
    
	
“mandatory sinking fund   payment”
    	
 
    	
11.1
    
	
“New York Banking Day”
    	
 
    	
10.16
    
	
“Notice Agent”
    	
 
    	
2.4
    
	
“optional sinking fund   payment”
    	
 
    	
11.1
    
	
“Paying Agent”
    	
 
    	
2.4
    
	
“Registrar”
    	
 
    	
2.4
    
	
“Required Currency”
    	
 
    	
10.16
    
	
“Specified Courts”
    	
 
    	
10.10
    
	
“successor person”
    	
 
    	
5.1
    

 

Section 1.3.                                 Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities.

 

4

 

“indenture security holder” means a Securityholder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means the Trustee.

 

“obligor” on the indenture securities means the Company and any successor obligor upon the Securities.

 

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein are used herein as so defined.

 

Section 1.4.                                 Rules of Construction.

 

Unless the context otherwise requires:

 

(a)                                 a term has the meaning assigned to it;

 

(b)                                 an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)                                  “or” is not exclusive;

 

(d)                                 words in the singular include the plural, and in the plural include the singular; and

 

(e)                                  provisions apply to successive events and transactions.

 

ARTICLE II.
 THE SECURITIES

 

Section 2.1.                                 Issuable in Series.

 

The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.  The Securities may be issued in one or more Series. All Securities of a Series shall be identical except as may be set forth or determined in the manner provided in a Board Resolution, a supplemental indenture or an Officer’s Certificate detailing the adoption of the terms thereof pursuant to authority granted under a Board Resolution. In the case of Securities of a Series to be issued from time to time, the Board Resolution, Officer’s Certificate or supplemental indenture detailing the adoption of the terms thereof pursuant to authority granted under a Board Resolution may provide for the method by which specified terms (such as interest rate, maturity date, record date or date from which interest shall accrue) are to be determined.  Securities may differ between Series in respect of any matters, provided that all Series of Securities shall be equally and ratably entitled to the benefits of the Indenture.

 

5

 

Section 2.2.                                 Establishment of Terms of Series of Securities.

 

At or prior to the issuance of any Securities within a Series, the following shall be established (as to the Series generally, in the case of Subsection 2.2.1 and either as to such Securities within the Series or as to the Series generally in the case of Subsections 2.2.2 through 2.2.23) by or pursuant to a Board Resolution, and set forth or determined in the manner provided in a Board Resolution, supplemental indenture hereto or Officer’s Certificate:

 

2.2.1.                                          the title (which shall distinguish the Securities of that particular Series from the Securities of any other Series) and ranking (including the terms of any subordination provisions) of the Series;

 

2.2.2.                                          the price or prices (expressed as a percentage of the principal amount thereof) at which the Securities of the Series will be issued;

 

2.2.3.                                          any limit upon the aggregate principal amount of the Securities of the Series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);

 

2.2.4.                                          the date or dates on which the principal of the Securities of the Series is payable;

 

2.2.5.                                          the rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to determine such rate or rates (including, but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the Securities of the Series shall bear interest, if any, the date or dates from which such interest, if any, shall accrue, the date or dates on which such interest, if any, shall commence and be payable and any regular record date for the interest payable on any interest payment date;

 

2.2.6.                                          the place or places where the principal of and interest, if any, on the Securities of the Series shall be payable, where the Securities of such Series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of such Series and this Indenture may be delivered, and the method of such payment, if by wire transfer, mail or other means;

 

2.2.7.                                          if applicable, the period or periods within which, the price or prices at which and the terms and conditions upon which the Securities of the Series may be redeemed, in whole or in part, at the option of the Company;

 

2.2.8.                                          the obligation, if any, of the Company to redeem or purchase the Securities of the Series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

6

 

2.2.9.                                          the dates, if any, on which and the price or prices at which the Securities of the Series will be repurchased by the Company at the option of the Holders thereof and other detailed terms and provisions of such repurchase obligations;

 

2.2.10.                                   if other than denominations of $1,000 and any integral multiple thereof, the denominations in which the Securities of the Series shall be issuable;

 

2.2.11.                                   the forms of the Securities of the Series and whether the Securities will be issuable as Global Securities;

 

2.2.12.                                   if other than the principal amount thereof, the portion of the principal amount of the Securities of the Series that shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.2;

 

2.2.13.                                   the currency of denomination of the Securities of the Series, which may be Dollars or any Foreign Currency, and if such currency of denomination is a composite currency, the agency or organization, if any, responsible for overseeing such composite currency;

 

2.2.14.                                   the designation of the currency, currencies or currency units in which payment of the principal of and interest, if any, on the Securities of the Series will be made;

 

2.2.15.                                   if payments of principal of or interest, if any, on the Securities of the Series are to be made in one or more currencies or currency units other than that or those in which such Securities are denominated, the manner in which the exchange rate with respect to such payments will be determined;

 

2.2.16.                                   the manner in which the amounts of payment of principal of or interest, if any, on the Securities of the Series will be determined, if such amounts may be determined by reference to an index based on a currency or currencies or by reference to a commodity, commodity index, stock exchange index or financial index;

 

2.2.17.                                   the provisions, if any, relating to any security provided for the Securities of the Series;

 

2.2.18.                                   any addition to, deletion of or change in the Events of Default which applies to any Securities of the Series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.2;

 

2.2.19.                                   any addition to, deletion of or change in the covenants set forth in Articles IV or V which applies to Securities of the Series;

 

2.2.20.                                   any Depositaries, interest rate calculation agents, exchange rate calculation agents or other agents with respect to Securities of such Series if other than those appointed herein;

 

2.2.21.                                   the provisions, if any, relating to conversion or exchange of any Securities of such Series, including if applicable, the conversion or exchange price, the

 

7

 

conversion or exchange period, provisions as to whether conversion or exchange will be mandatory, at the option of the Holders thereof or at the option of the Company, the events requiring an adjustment of the conversion price or exchange price and provisions affecting conversion or exchange if such Series of Securities are redeemed;

 

2.2.22.                                   any other terms of the Series (which may supplement, modify or delete any provision of this Indenture insofar as it applies to such Series), including any terms that may be required under applicable law or regulations or advisable in connection with the marketing of Securities of that Series; and

 

2.2.23.                                   whether any of the Company’s direct or indirect Subsidiaries will guarantee the Securities of that Series, including the terms of subordination, if any, of such guarantees.

 

All Securities of any one Series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the Board Resolution, supplemental indenture hereto or Officer’s Certificate referred to above.

 

Section 2.3.                                 Execution and Authentication.

 

An Officer shall sign the Securities for the Company by manual or facsimile signature.

 

If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.

 

A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.  The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

 

The Trustee shall at any time, and from time to time, authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or Officer’s Certificate, upon receipt by the Trustee of a Company Order.  Each Security shall be dated the date of its authentication.

 

The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution, supplemental indenture hereto or Officer’s Certificate delivered pursuant to Section 2.2, except as provided in Section 2.8.

 

Prior to the issuance of Securities of any Series, the Trustee shall have received and (subject to Section 7.2) shall be fully protected in relying on:  (a) the Board Resolution, supplemental indenture hereto or Officer’s Certificate establishing the form of the Securities of that Series or of Securities within that Series and the terms of the Securities of that Series or of Securities within that Series, (b) an Officer’s Certificate complying with Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.

 

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The Trustee shall have the right to decline to authenticate and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines that such action may not be taken lawfully; or (b) if the Trustee in good faith by its board of directors or trustees, executive committee or a trust committee of directors and/or vice-presidents or a committee of Responsible Officers shall determine that such action would expose the Trustee to personal liability to Holders of any then outstanding Series of Securities.

 

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities.  An authenticating agent may authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.

 

Section 2.4.                                 Registrar and Paying Agent.

 

The Company shall maintain, with respect to each Series of Securities, at the place or places specified with respect to such Series pursuant to Section 2.2, an office or agency where Securities of such Series may be presented or surrendered for payment (“Paying Agent”), where Securities of such Series may be surrendered for registration of transfer or exchange (“Registrar”) and where notices and demands to or upon the Company in respect of the Securities of such Series and this Indenture may be delivered (“Notice Agent”).  The Registrar shall keep a register with respect to each Series of Securities and to their transfer and exchange.  The Company will give prompt written notice to the Trustee of the name and address, and any change in the name or address, of each Registrar, Paying Agent or Notice Agent.  If at any time the Company shall fail to maintain any such required Registrar, Paying Agent or Notice Agent or shall fail to furnish the Trustee with the name and address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands; provided, however, that any appointment of the Trustee as the Notice Agent shall exclude the appointment of the Trustee or any office of the Trustee as an agent to receive the service of legal process on the Company.

 

The Company may also from time to time designate one or more co-registrars, additional paying agents or additional notice agents and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligations to maintain a Registrar, Paying Agent and Notice Agent in each place so specified pursuant to Section 2.2 for Securities of any Series for such purposes.  The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the name or address of any such co-registrar, additional paying agent or additional notice agent.  The term “Registrar” includes any co-registrar; the term “Paying Agent” includes any additional paying agent; and the term “Notice Agent” includes any additional notice agent.  The Company or any of its Affiliates may serve as Registrar or Paying Agent.

 

The Company hereby appoints the Trustee the initial Registrar, Paying Agent and Notice Agent for each Series unless another Registrar, Paying Agent or Notice Agent, as the case may be, is appointed prior to the time Securities of that Series are first issued.

 

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Section 2.5.                                 Paying Agent to Hold Money in Trust.

 

The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust, for the benefit of Securityholders of any Series of Securities, or the Trustee, all money held by the Paying Agent for the payment of principal of or interest on the Series of Securities, and will notify the Trustee in writing of any default by the Company in making any such payment.  While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the Company) shall have no further liability for the money.  If the Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of Securityholders of any Series of Securities all money held by it as Paying Agent.  Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Securities.

 

Section 2.6.                                 Securityholder Lists.

 

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders of each Series of Securities and shall otherwise comply with TIA  § 312(a).  If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least ten days before each interest payment date and at such other times as the Trustee may request in writing a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Securityholders of each Series of Securities.

 

Section 2.7.                                 Transfer and Exchange.

 

Where Securities of a Series are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of the same Series, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met.  To permit registrations of transfers and exchanges, the Trustee shall authenticate Securities at the Registrar’s request.  No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or 9.6).

 

Neither the Company nor the Registrar shall be required (a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning at the opening of business fifteen days immediately preceding the sending of a notice of redemption of Securities of that Series selected for redemption and ending at the close of business on the day such notice is sent, or (b) to register the transfer of or exchange Securities of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part.

 

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Section 2.8.                                 Mutilated, Destroyed, Lost and Stolen Securities.

 

If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity bond as may be required by each of them to hold itself and any of its agents harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon receipt of a Company Order the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

 

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every new Security of any Series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series duly issued hereunder.

 

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

 

Section 2.9.                                 Outstanding Securities.

 

The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest on a Global Security effected by the Trustee in accordance with the provisions hereof and those described in this Section as not outstanding.

 

If a Security is replaced pursuant to Section 2.8, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser.

 

If the Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate of the Company) holds on the Maturity of Securities of a Series money sufficient to pay

 

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such Securities payable on that date, then on and after that date such Securities of the Series cease to be outstanding and interest on them ceases to accrue.

 

The Company may purchase or otherwise acquire the Securities, whether by open market purchases, negotiated transactions or otherwise.  A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security (but see Section 2.10 below).

 

In determining whether the Holders of the requisite principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of a Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.2.

 

Section 2.10.                          Treasury Securities.

 

In determining whether the Holders of the required principal amount of Securities of a Series have concurred in any request, demand, authorization, direction, notice, consent or waiver, Securities of a Series owned by the Company or any Affiliate of the Company shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver only Securities of a Series that a Responsible Officer of the Trustee knows are so owned shall be so disregarded.

 

Section 2.11.                          Temporary Securities.

 

Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities upon a Company Order.  Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall prepare and the Trustee upon receipt of a Company Order shall authenticate definitive Securities of the same Series and date of maturity in exchange for temporary Securities.  Until so exchanged, temporary securities shall have the same rights under this Indenture as the definitive Securities.

 

Section 2.12.                          Cancellation.

 

The Company at any time may deliver Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment.  The Trustee shall cancel all Securities surrendered for transfer, exchange, payment, replacement or cancellation and shall destroy such canceled Securities (subject to the record retention requirement of the Exchange Act and the Trustee) and deliver a certificate of such cancellation to the Company upon written request of the Company.  The Company may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for cancellation.

 

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Section 2.13.                          Defaulted Interest.

 

If the Company defaults in a payment of interest on a Series of Securities, it shall pay the defaulted interest, plus, to the extent permitted by law, any interest payable on the defaulted interest, to the persons who are Securityholders of the Series on a subsequent special record date.  The Company shall fix the record date and payment date.  At least 10 days before the special record date, the Company shall send to the Trustee and to each Securityholder of the Series a notice that states the special record date, the payment date and the amount of interest to be paid.  The Company may pay defaulted interest in any other lawful manner.

 

Section 2.14.                          Global Securities.

 

2.14.1.                                   Terms of Securities.  A Board Resolution, a supplemental indenture hereto or an Officer’s Certificate shall establish whether the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities and the Depositary for such Global Security or Securities.

 

2.14.2.                                   Transfer and Exchange.  Notwithstanding any provisions to the contrary contained in Section 2.7 of the Indenture and in addition thereto, any Global Security shall be exchangeable pursuant to Section 2.7 of the Indenture for Securities registered in the names of Holders other than the Depositary for such Security or its nominee only if (i) such Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Global Security or if at any time such Depositary ceases to be a clearing agency registered under the Exchange Act, and, in either case, the Company fails to appoint a successor Depositary registered as a clearing agency under the Exchange Act within 90 days of such event or (ii) the Company executes and delivers to the Trustee an Officer’s Certificate to the effect that such Global Security shall be so exchangeable.  Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Securities registered in such names as the Depositary shall direct in writing in an aggregate principal amount equal to the principal amount of the Global Security with like tenor and terms.

 

Except as provided in this Section 2.14.2, a Global Security may not be transferred except as a whole by the Depositary with respect to such Global Security to a nominee of such Depositary, by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such a successor Depositary.

 

2.14.3.                                   Legends.  Any Global Security issued hereunder shall bear a legend in substantially the following form:

 

“THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE

 

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DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH A SUCCESSOR DEPOSITARY.”

 

In addition, so long as the Depository Trust Company (“DTC”) is the Depositary, each Global Note registered in the name of DTC or its nominee shall bear a legend in substantially the following form:

 

“UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

 

2.14.4.                                   Acts of Holders.  The Depositary, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture.

 

2.14.5.                                   Payments.  Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.2, payment of the principal of and interest, if any, on any Global Security shall be made to the Holder thereof.

 

2.14.6.                                   Consents, Declaration and Directions.  The Company, the Trustee and any Agent shall treat a person as the Holder of such principal amount of outstanding Securities of such Series represented by a Global Security as shall be specified in a written statement of the Depositary or by the applicable procedures of such Depositary with respect to such Global Security, for purposes of obtaining any consents, declarations, waivers or directions required to be given by the Holders pursuant to this Indenture.

 

Section 2.15.                          CUSIP Numbers.

 

The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.

 

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ARTICLE III.
 REDEMPTION

 

Section 3.1.                                 Notice to Trustee.

 

The Company may, with respect to any Series of Securities, reserve the right to redeem and pay the Series of Securities or may covenant to redeem and pay the Series of Securities or any part thereof prior to the Stated Maturity thereof at such time and on such terms as provided for in such Securities.  If a Series of Securities is redeemable and the Company wants or is obligated to redeem prior to the Stated Maturity thereof all or part of the Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee in writing of the redemption date and the principal amount of Series of Securities to be redeemed.  The Company shall give the notice at least 15 days before the redemption date, unless a shorter period is satisfactory to the Trustee.

 

Section 3.2.                                 Selection of Securities to be Redeemed.

 

Unless otherwise indicated for a particular Series by a Board Resolution, a supplemental indenture hereto or an Officer’s Certificate, if less than all the Securities of a Series are to be redeemed, the Securities of the Series to be redeemed will be selected as follows:  (a) if the Securities are in the form of Global Securities, in accordance with the procedures of the Depositary, (b) if the Securities are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange, if any, on which the Securities are listed, or (c) if not otherwise provided for under clause (a) or (b) in the manner that the Trustee deems fair and appropriate, including by lot or other method, unless otherwise required by law or applicable stock exchange requirements, subject, in the case of Global Securities, to the applicable rules and procedures of the Depositary.  The Securities to be redeemed shall be selected from Securities of the Series outstanding not previously called for redemption.  Portions of the principal of Securities of the Series that have denominations larger than $1,000 may be selected for redemption.  Securities of the Series and portions of them it selected for redemption shall be in amounts of $1,000 or whole multiples of $1,000 or, with respect to Securities of any Series issuable in other denominations pursuant to Section 2.2.10, the minimum principal denomination for each Series and the authorized integral multiples thereof.  Provisions of this Indenture that apply to Securities of a Series called for redemption also apply to portions of Securities of that Series called for redemption.

 

Section 3.3.                                 Notice of Redemption.

 

Unless otherwise indicated for a particular Series by Board Resolution, a supplemental indenture hereto or an Officer’s Certificate, at least 15 days but not more than 60 days before a redemption date, the Company shall send or cause to be sent by first-class mail or electronically, in accordance with the procedures of the Depositary, a notice of redemption to each Holder whose Securities are to be redeemed.

 

The notice shall identify the Securities of the Series to be redeemed and shall state:

 

(a)                                 the redemption date;

 

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(b)                                 the redemption price;

 

(c)                                  the name and address of the Paying Agent;

 

(d)                                 if any Securities are being redeemed in part, the portion of the principal amount of such Securities to be redeemed and that, after the redemption date and upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion of the original Security shall be issued in the name of the Holder thereof upon cancellation of the original Security;

 

(e)                                  that Securities of the Series called for redemption must be surrendered to the Paying Agent to collect the redemption price;

 

(f)                                   that interest on Securities of the Series called for redemption ceases to accrue on and after the redemption date unless the Company defaults in the deposit of the redemption price;

 

(g)                                  the CUSIP number, if any; and

 

(h)                                 any other information as may be required by the terms of the particular Series or the Securities of a Series being redeemed.

 

At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at its expense, provided, however, that the Company has delivered to the Trustee, at least 10 days (unless a shorter time shall be acceptable to the Trustee) prior to the notice date, an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice.

 

Section 3.4.                                 Effect of Notice of Redemption.

 

Once notice of redemption is sent as provided in Section 3.3, Securities of a Series called for redemption become due and payable on the redemption date and at the redemption price.  Except as otherwise provided in the supplemental indenture, Board Resolution or Officer’s Certificate for a Series, a notice of redemption may not be conditional.  Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price plus accrued interest to the redemption date.

 

Section 3.5.                                 Deposit of Redemption Price.

 

On or before 11:00 a.m., New York City time, on the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest, if any, on all Securities to be redeemed on that date.

 

Section 3.6.                                 Securities Redeemed in Part.

 

Upon surrender of a Security that is redeemed in part, the Trustee shall authenticate for the Holder a new Security of the same Series and the same maturity equal in principal amount to the unredeemed portion of the Security surrendered.

 

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ARTICLE IV.
 COVENANTS

 

Section 4.1.                                 Payment of Principal and Interest.

 

The Company covenants and agrees for the benefit of the Holders of each Series of Securities that it will duly and punctually pay the principal of and interest, if any, on the Securities of that Series in accordance with the terms of such Securities and this Indenture.  On or before 11:00 a.m., New York City time, on the applicable payment date, the Company shall deposit with the Paying Agent money sufficient to pay the principal of and interest, if any, on the Securities of each Series in accordance with the terms of such Securities and this Indenture.

 

Section 4.2.                                 SEC Reports.

 

To the extent any Securities of a Series are outstanding, the Company shall deliver to the Trustee within 15 days after it files them with the SEC copies of the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.  The Company also shall comply with the other provisions of TIA § 314(a). Reports, information and documents filed with the SEC via the EDGAR system will be deemed to be delivered to the Trustee as of the time of such filing via EDGAR for purposes of this Section 4.2.

 

Delivery of reports, information and documents to the Trustee under this Section 4.2 are for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive or actual notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

 

Section 4.3.                                 Compliance Certificate.

 

To the extent any Securities of a Series are outstanding, the Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, an Officer’s Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his/her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which the Officer may have knowledge).

 

Section 4.4.                                 Stay, Extension and Usury Laws.

 

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or

 

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advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture or the Securities; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

 

ARTICLE V.
 SUCCESSORS

 

Section 5.1.                                 When Company May Merge, Etc.

 

The Company shall not consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its properties and assets to, any person (a “successor person”) unless:

 

(a)                                 the Company is the surviving corporation or the successor person (if other than the Company) is a corporation organized and validly existing under the laws of any U.S. domestic jurisdiction and expressly assumes the Company’s obligations on the Securities and under this Indenture; and

 

(b)                                 immediately after giving effect to the transaction, no Default or Event of Default, shall have occurred and be continuing.

 

The Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officer’s Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and any supplemental indenture comply with this Indenture.

 

Notwithstanding the above, any Subsidiary of the Company may consolidate with, merge into or transfer all or part of its properties to the Company. Neither an Officer’s Certificate nor an Opinion of Counsel shall be required to be delivered in connection therewith.

 

Section 5.2.                                 Successor Corporation Substituted.

 

Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.1, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor person has been named as the Company herein; provided, however, that the predecessor Company in the case of a sale, conveyance or other disposition (other than a lease) shall be released from all obligations and covenants under this Indenture and the Securities.

 

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ARTICLE VI.
 DEFAULTS AND REMEDIES

 

Section 6.1.                                 Events of Default.

 

“Event of Default,” wherever used herein with respect to Securities of any Series, means any one of the following events, unless in the establishing Board Resolution, supplemental indenture or Officer’s Certificate, it is provided that such Series shall not have the benefit of said Event of Default:

 

(a)                                 default in the payment of any interest on any Security of that Series when it becomes due and payable, and continuance of such default for a period of 30 days (unless the entire amount of such payment is deposited by the Company with the Trustee or with a Paying Agent prior to 11:00 a.m., New  York City time, on the 30th day of such period); or

 

(b)                                 default in the payment of principal of any Security of that Series at its Maturity; or

 

(c)                                  default in the performance or breach of any covenant or warranty of the Company in this Indenture (other than defaults pursuant to paragraphs (a) or (b) above or pursuant to a covenant or warranty that has been included in this Indenture solely for the benefit of Series of Securities other than that Series), which default continues uncured for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the outstanding Securities of that Series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

 

(d)                                 the Company pursuant to or within the meaning of any Bankruptcy Law:

 

(i)                                     commences a voluntary case,

 

(ii)                                  consents to the entry of an order for relief against it in an involuntary case,

 

(iii)                               consents to the appointment of a Custodian of it or for all or substantially all of its property,

 

(iv)                              makes a general assignment for the benefit of its creditors, or

 

(v)                                 generally is unable to pay its debts as the same become due; or

 

(e)                                  a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)                                     is for relief against the Company in an involuntary case,

 

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(ii)                                  appoints a Custodian of the Company or for all or substantially all of its property, or

 

(iii)                               orders the liquidation of the Company,

 

and the order or decree remains unstayed and in effect for 60 days; or

 

(f)                                   any other Event of Default provided with respect to Securities of that Series, which is specified in a Board Resolution, a supplemental indenture hereto or an Officer’s Certificate, in accordance with Section 2.2.18.

 

The term “Bankruptcy Law” means title 11, U.S. Code or any similar Federal or State law for the relief of debtors.  The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

The Company will provide the Trustee written notice of any Default or Event of Default within 30 days of becoming aware of the occurrence of such Default or Event of Default, which notice will describe in reasonable detail the status of such Default or Event of Default and what action the Company is taking or proposes to take in respect thereof.

 

Section 6.2.                                 Acceleration of Maturity; Rescission and Annulment.

 

If an Event of Default with respect to Securities of any Series at the time outstanding occurs and is continuing (other than an Event of Default referred to in Section 6.1(d) or (e)) then in every such case the Trustee or the Holders of not less than 25% in principal amount of the outstanding Securities of that Series may declare the principal amount (or, if any Securities of that Series are Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) of and accrued and unpaid interest, if any, on all of the Securities of that Series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) and accrued and unpaid interest, if any, shall become immediately due and payable.  If an Event of Default specified in Section 6.1(d) or (e) shall occur, the principal amount (or specified amount) of and accrued and unpaid interest, if any, on all outstanding Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

At any time after such a declaration of acceleration with respect to any Series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the outstanding Securities of that Series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if all Events of Default with respect to Securities of that Series, other than the non-payment of the principal and interest, if any, of Securities of that Series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 6.13.

 

No such rescission shall affect any subsequent Default or impair any right consequent thereon.

 

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Section 6.3.                                 Collection of Indebtedness and Suits for Enforcement by Trustee.

 

The Company covenants that if

 

(a)                                 default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or

 

(b)                                 default is made in the payment of principal of any Security at the Maturity thereof, or

 

(c)                                  default is made in the deposit of any sinking fund payment, if any, when and as due by the terms of a Security,

 

then, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and any overdue interest at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the compensation, reasonable expenses, disbursements and advances of the Trustee, its agents and counsel.

 

If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or deemed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.

 

If an Event of Default with respect to any Securities of any Series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

 

Section 6.4.                                 Trustee May File Proofs of Claim.

 

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,

 

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(a)                                 to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the compensation, reasonable expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

 

(b)                                 to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same,

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the compensation, reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7.

 

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 6.5.                                 Trustee May Enforce Claims Without Possession of Securities.

 

All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the compensation, reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

 

Section 6.6.                                 Application of Money Collected.

 

Any money or property collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money or property on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

 

First:                                                                     To the payment of all amounts due the Trustee under Section 7.7; and

 

Second:                                                    To the payment of the amounts then due and unpaid for principal of and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively; and

 

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Third:                                                               To the Company.

 

Section 6.7.                                 Limitation on Suits.

 

No Holder of any Security of any Series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

 

(a)                                 such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that Series;

 

(b)                                 the Holders of not less than 25% in principal amount of the outstanding Securities of that Series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

 

(c)                                  such Holder or Holders have offered to the Trustee indemnity or security satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by the Trustee in compliance with such request;

 

(d)                                 the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

 

(e)                                  no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the outstanding Securities of that Series;

 

it being understood, intended and expressly covenanted by the Holder of every Security with every other Holder and the Trustee that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders of the applicable Series.

 

Section 6.8.                                 Unconditional Right of Holders to Receive Principal and Interest.

 

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Security on the Maturity of such Security, including the Stated Maturity expressed in such Security (or, in the case of redemption, on the redemption date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

 

Section 6.9.                                 Restoration of Rights and Remedies.

 

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such

 

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case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

Section 6.10.                          Rights and Remedies Cumulative.

 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not, to the extent permitted by law, prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 6.11.                          Delay or Omission Not Waiver.

 

No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 6.12.                          Control by Holders.

 

The Holders of a majority in principal amount of the outstanding Securities of any Series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such Series, provided that

 

(a)                                 such direction shall not be in conflict with any rule of law or with this Indenture,

 

(b)                                 the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction,

 

(c)                                  subject to the provisions of Section 7.1, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability, and

 

(d)                                 prior to taking any action as directed under this Section 6.12, the Trustee shall be entitled to indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

 

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Section 6.13.                          Waiver of Past Defaults.

 

The Holders of not less than a majority in principal amount of the outstanding Securities of any Series may on behalf of the Holders of all the Securities of such Series, by written notice to the Trustee and the Company, waive any past Default hereunder with respect to such Series and its consequences, except a Default in the payment of the principal of or interest on any Security of such Series (provided, however, that the Holders of a majority in principal amount of the outstanding Securities of any Series may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration).  Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

Section 6.14.                          Undertaking for Costs.

 

All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the outstanding Securities of any Series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or interest on any Security on or after the Maturity of such Security, including the Stated Maturity expressed in such Security (or, in the case of redemption, on the redemption date).

 

ARTICLE VII.
 TRUSTEE

 

Section 7.1.                                 Duties of Trustee.

 

(a)                                 If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)                                 Except during the continuance of an Event of Default:

 

(i)                                     The Trustee need perform only those duties that are specifically set forth in this Indenture and no others.

 

(ii)                                  In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon Officer’s Certificates or Opinions of Counsel

 

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furnished to the Trustee and conforming to the requirements of this Indenture; however, in the case of any such Officer’s Certificates or Opinions of Counsel which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officer’s Certificates and Opinions of Counsel to determine whether or not they conform to the form requirements of this Indenture.

 

(c)                                  The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(i)                                     This paragraph does not limit the effect of paragraph (b) of this Section.

 

(ii)                                  The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

 

(iii)                               The Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it with respect to Securities of any Series in good faith in accordance with the direction of the Holders of a majority in principal amount of the outstanding Securities of such Series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such Series in accordance with Section 6.12.

 

(d)                                 Every provision of this Indenture that in any way relates to the Trustee is subject to paragraph (a), (b) and (c) of this Section.

 

(e)                                  The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in performing such duty or exercising such right or power.

 

(f)                                   The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)                                  No provision of this Indenture shall require the Trustee to risk its own funds or otherwise incur any financial liability in the performance of any of its duties, or in the exercise of any of its rights or powers, if adequate indemnity against such risk is not assured to the Trustee in its satisfaction.

 

(h)                                 The Paying Agent, the Registrar and any authenticating agent shall be entitled to the protections and immunities as are set forth in paragraphs (e), (f) and (g) of this Section and in Section 7.2, each with respect to the Trustee.

 

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Section 7.2.                                 Rights of Trustee.

 

(a)                                 The Trustee may rely on and shall be protected in acting or refraining from acting upon any document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper person.  The Trustee need not investigate any fact or matter stated in the document.

 

(b)                                 Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel.

 

(c)                                  The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.  No Depositary shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any act or omission by any Depositary.

 

(d)                                 The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers, provided that the Trustee’s conduct does not constitute willful misconduct or negligence.

 

(e)                                  The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder without willful misconduct or negligence, and in reliance thereon.

 

(f)                                   The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Securities unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

 

(g)                                  The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit.

 

(h)                                 The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities generally or the Securities of a particular Series and this Indenture.

 

(i)                                     In no event shall the Trustee be liable to any person for special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage.

 

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(j)                                    The permissive right of the Trustee to take the actions permitted by this Indenture shall not be construed as an obligation or duty to do so.

 

Section 7.3.                                 Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate of the Company with the same rights it would have if it were not Trustee.  Any Agent may do the same with like rights.  The Trustee is also subject to Sections 7.10 and 7.11.

 

Section 7.4.                                 Trustee’s Disclaimer.

 

The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement in the Securities other than its authentication.

 

Section 7.5.                                 Notice of Defaults.

 

If a Default or Event of Default occurs and is continuing with respect to the Securities of any Series and if it is known to a Responsible Officer of the Trustee, the Trustee shall send to each Securityholder of the Securities of that Series notice of a Default or Event of Default within 90 days after it occurs or, if later, after a Responsible Officer of the Trustee has knowledge of such Default or Event of Default.  Except in the case of a Default or Event of Default in payment of principal of or interest on any Security of any Series, the Trustee may withhold the notice if and so long as its corporate trust committee or a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Securityholders of that Series.

 

Section 7.6.                                 Reports by Trustee to Holders.

 

Within 60 days prior to each anniversary of the date of this Indenture, the Trustee shall transmit by mail to all Securityholders, as their names and addresses appear on the register kept by the Registrar, a brief report dated as of such anniversary date, in accordance with, and to the extent required under, TIA § 313.

 

A copy of each report at the time of its mailing to Securityholders of any Series shall be filed with the SEC and each national securities exchange on which the Securities of that Series are listed.  The Company shall promptly notify the Trustee in writing when Securities of any Series are listed on any national securities exchange.

 

Section 7.7.                                 Compensation and Indemnity.

 

The Company shall pay to the Trustee from time to time compensation for its services as the Company and the Trustee shall from time to time agree upon in writing.  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee upon request for all reasonable out of

 

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pocket expenses incurred by it.  Such expenses shall include the reasonable compensation and expenses of the Trustee’s agents and counsel.

 

The Company shall indemnify each of the Trustee and any predecessor Trustee (including for the cost of defending itself) against any cost, expense or liability, including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) incurred by it except as set forth in the next paragraph in the performance of its duties under this Indenture as Trustee or Agent.  The Trustee shall notify the Company promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder, unless and to the extent that the Company is materially prejudiced thereby.  The Company shall defend the claim and the Trustee shall cooperate in the defense.  The Trustee may have one separate counsel and the Company shall pay the reasonable fees and expenses of such counsel.  The Company need not pay for any settlement made without its consent, which consent will not be unreasonably withheld.  This indemnification shall apply to officers, directors, employees, shareholders and agents of the Trustee.

 

The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee or by any officer, director, employee, shareholder or agent of the Trustee through willful misconduct or negligence.

 

To secure the Company’s payment obligations in this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by the Trustee, except that held in trust to pay principal of and interest on particular Securities of that Series.

 

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1(d) or (e) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.

 

The provisions of this Section shall survive the termination of this Indenture.

 

Section 7.8.                                 Replacement of Trustee.

 

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.

 

The Trustee may resign with respect to the Securities of one or more Series by so notifying the Company at least 30 days prior to the date of the proposed resignation.  The Holders of a majority in principal amount of the Securities of any Series may remove the Trustee with respect to that Series by so notifying the Trustee and the Company.  The Company may remove the Trustee with respect to Securities of one or more Series if:

 

(a)                                 the Trustee fails to comply with Section 7.10;

 

(b)                                 the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

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(c)                                  a Custodian or public officer takes charge of the Trustee or its property; or

 

(d)                                 the Trustee becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee.  Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

 

If a successor Trustee with respect to the Securities of any one or more Series does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least a majority in principal amount of the Securities of the applicable Series may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Immediately after that, the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee subject to the lien provided for in Section 7.7, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee with respect to each Series of Securities for which it is acting as Trustee under this Indenture.  A successor Trustee shall mail a notice of its succession to each Securityholder of each such Series.  Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Company’s obligations under Section 7.7 hereof shall continue for the benefit of the retiring Trustee with respect to expenses and liabilities incurred by it for actions taken or omitted to be taken in accordance with its rights, powers and duties under this Indenture prior to such replacement.

 

Section 7.9.                                 Successor Trustee by Merger, Etc.

 

If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee, subject to Section 7.10.

 

Section 7.10.                          Eligibility; Disqualification.

 

This Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5).  The Trustee shall always have a combined capital and surplus of at least $25,000,000 as set forth in its most recent published annual report of condition.  The Trustee shall comply with TIA § 310(b).

 

Section 7.11.                          Preferential Collection of Claims Against Company.

 

The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

 

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ARTICLE VIII.
 SATISFACTION AND DISCHARGE; DEFEASANCE

 

Section 8.1.                                 Satisfaction and Discharge of Indenture.

 

This Indenture shall upon Company Order be discharged with respect to the Securities of any Series and cease to be of further effect as to all Securities of such Series (except as hereinafter provided in this Section 8.1), and the Trustee, at the expense of the Company, shall execute instruments acknowledging satisfaction and discharge of this Indenture, when

 

(a)                                 either

 

(i)                                     all Securities of such Series theretofore authenticated and delivered (other than Securities that have been destroyed, lost or stolen and that have been replaced or paid) have been delivered to the Trustee for cancellation; or

 

(ii)                                  all such Securities of such Series not theretofore delivered to the Trustee for cancellation

 

(1)                                 have become due and payable by reason of sending a notice of redemption or otherwise, or

 

(2)                                 will become due and payable at their Stated Maturity within one year, or

 

(3)                                 have been called for redemption or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or

 

(4)                                 are deemed paid and discharged pursuant to Section 8.3, as applicable;

 

and the Company, in the case of (1), (2) or (3) above, shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust an amount of money or U.S. Government Obligations, which amount shall be sufficient for the purpose of paying and discharging each installment of principal (including mandatory sinking fund or analogous payments) of and interest on all the Securities of such Series on the dates such installments of principal or interest are due;

 

(b)                                 the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

 

(c)                                  the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the satisfaction and discharge contemplated by this Section have been complied with.

 

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Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.7, and, if money shall have been deposited with the Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.4, 2.7, 2.8, 8.2 and  8.5 shall survive.

 

Section 8.2.                                 Application of Trust Funds; Indemnification.

 

(a)                                 Subject to the provisions of Section 8.5, all money and U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.1, 8.3 or 8.4 and all money received by the Trustee in respect of U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.1, 8.3 or 8.4, shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the persons entitled thereto, of the principal and interest for whose payment such money has been deposited with or received by the Trustee or to make mandatory sinking fund payments or analogous payments as contemplated by Sections 8.1, 8.3 or 8.4.

 

(b)                                 The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against U.S. Government Obligations or Foreign Government Obligations deposited pursuant to Sections 8.1, 8.3 or 8.4 or the interest and principal received in respect of such obligations other than any payable by or on behalf of Holders.

 

(c)                                  The Trustee shall deliver or pay to the Company from time to time upon Company Order any U.S. Government Obligations or Foreign Government Obligations or money held by it as provided in Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm of independent certified public accountants or investment bank expressed in a written certification thereof delivered to the Trustee, are then in excess of the amount thereof which then would have been required to be deposited for the purpose for which such U.S. Government Obligations or Foreign Government Obligations or money were deposited or received.  This provision shall not authorize the sale by the Trustee of any U.S. Government Obligations or Foreign Government Obligations held under this Indenture.

 

Section 8.3.                                 Legal Defeasance of Securities of any Series.

 

Unless this Section 8.3 is otherwise specified, pursuant to Section 2.2, to be inapplicable to Securities of any Series, the Company shall be deemed to have paid and discharged the entire indebtedness on all the outstanding Securities of any Series on the 91st day after the date of the deposit referred to in subparagraph (d) hereof, and the provisions of this Indenture, as it relates to such outstanding Securities of such Series, shall no longer be in effect (and the Trustee, at the expense of the Company, shall, upon receipt of a Company Order, execute instruments acknowledging the same), except as to:

 

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(a)                                 the rights of Holders of Securities of such Series to receive, from the trust funds described in subparagraph (d) hereof, (i) payment of the principal of and each installment of principal of and interest on the outstanding Securities of such Series on the Maturity of such principal or installment of principal or interest and (ii) the benefit of any mandatory sinking fund payments applicable to the Securities of such Series on the day on which such payments are due and payable in accordance with the terms of this Indenture and the Securities of such Series;

 

(b)                                 the provisions of Sections 2.4, 2.5, 2.7, 2.8, 7.7, 8.2, 8.3, 8.5 and 8.6; and

 

(c)                                  the rights, powers, trusts and immunities of the Trustee hereunder and the Company’s obligations in connection therewith;

 

provided that, the following conditions shall have been satisfied:

 

(d)                                 the Company shall have irrevocably deposited or caused to be deposited (except as provided in Section 8.2(c)) with the Trustee as trust funds specifically pledged as security for and dedicated solely to the benefit of the Holders of such Securities (i) in the case of Securities of such Series denominated in Dollars, cash in Dollars and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on such Trustee), not later than one day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent public accountants or investment bank expressed in a written certification thereof delivered to the Trustee, to pay and discharge each installment of principal of and interest, on and any mandatory sinking fund payments in respect of all the Securities of such Series on the dates such installments of principal or interest and such sinking fund payments are due;

 

(e)                                  such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound;

 

(f)                                   no Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date of such deposit or during the period ending on the 91st day after such date;

 

(g)                                  the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel to the effect that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Securities of such Series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to Federal income tax on the same amount and in the same

 

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manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred;

 

(h)                                 the Company shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and

 

(i)                                     the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance contemplated by this Section have been complied with.

 

Section 8.4.                                 Covenant Defeasance.

 

Unless this Section 8.4 is otherwise specified pursuant to Section 2.2 to be inapplicable to Securities of any Series, the Company may omit to comply with respect to the Securities of any Series with any term, provision or condition set forth under Sections 4.2, 4.3, 4.4 and 5.1 and, unless otherwise specified therein, any additional covenants specified in a supplemental indenture for such Series of Securities or a Board Resolution or an Officer’s Certificate delivered pursuant to Section 2.2 (and the failure to comply with any such covenants shall not constitute a Default or Event of Default with respect to such Series under Section 6.1) and the occurrence of any event specified in a supplemental indenture for such Series of Securities or a Board Resolution or an Officer’s Certificate delivered pursuant to Section 2.2 and designated as an Event of Default shall not constitute a Default or Event of Default hereunder, with respect to the Securities of such Series, but, except as specified above, the remainder of this Indenture and such Securities will be unaffected thereby; provided that the following conditions shall have been satisfied:

 

(a)                                 with reference to this Section 8.4, the Company has irrevocably deposited or caused to be irrevocably deposited (except as provided in Section 8.2(c)) with the Trustee as trust funds in trust for the purpose of making the following payments specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities (i) in the case of Securities of such Series denominated in Dollars, cash in Dollars and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on such Trustee), not later than one day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants or investment bank expressed in a written certification thereof delivered to the Trustee, to pay and discharge each installment of principal (including mandatory sinking fund or analogous payments) of and interest on all the Securities of such Series on the dates such installments of principal or interest are due;

 

(b)                                 such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound;

 

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(c)                                  no Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date of such deposit;

 

(d)                                 the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel to the effect that the Holders of the Securities of such Series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and covenant defeasance had not occurred;

 

(e)                                  The Company shall have delivered to the Trustee an Officer’s Certificate stating the deposit was not made by the Company with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and

 

(f)                                   The Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the covenant defeasance contemplated by this Section have been complied with.

 

Section 8.5.                                 Repayment to Company.

 

Subject to applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal and interest that remains unclaimed for two years.  After that, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person.

 

Section 8.6.                                 Reinstatement.

 

If the Trustee or the Paying Agent is unable to apply any money deposited with respect to Securities of any Series in accordance with Section 8.1 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Indenture with respect to the Securities of such Series and under the Securities of such Series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.1 until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 8.1; provided, however, that if the Company has made any payment of principal of or interest on any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent after payment in full to the Holders.

 

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ARTICLE IX.
 AMENDMENTS AND WAIVERS

 

Section 9.1.                                 Without Consent of Holders.

 

The Company and the Trustee may amend or supplement this Indenture or the Securities of one or more Series without the consent of any Securityholder:

 

(a)                                 to cure any ambiguity, defect or inconsistency;

 

(b)                                 to comply with Article V;

 

(c)                                  to provide for uncertificated Securities in addition to or in place of certificated Securities;

 

(d)                                 to add guarantees with respect to Securities of any Series or secure Securities of any Series;

 

(e)                                  to surrender any of the Company’s rights or powers under this Indenture;

 

(f)                                   to add covenants or events of default for the benefit of the holders of Securities of any Series;

 

(g)                                  to comply with the applicable procedures of the applicable depositary;

 

(h)                                 to make any change that does not adversely affect the rights of any Securityholder;

 

(i)                                     to provide for the issuance of and establish the form and terms and conditions of Securities of any Series as permitted by this Indenture;

 

(j)                                    to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee; or

 

(k)                                 to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA.

 

Section 9.2.                                 With Consent of Holders.

 

The Company and the Trustee may enter into a supplemental indenture with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities of each Series affected by such supplemental indenture (including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series), for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Securityholders of each such Series.  Except as provided in Section 6.13, the

 

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Holders of at least a majority in principal amount of the outstanding Securities of any Series by notice to the Trustee (including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series) may waive compliance by the Company with any provision of this Indenture or the Securities with respect to such Series.

 

It shall not be necessary for the consent of the Holders of Securities under this Section 9.2 to approve the particular form of any proposed supplemental indenture or waiver, but it shall be sufficient if such consent approves the substance thereof.  After a supplemental indenture or waiver under this section becomes effective, the Company shall send to the Holders of Securities affected thereby, a notice briefly describing the supplemental indenture or waiver.  Any failure by the Company to send such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

 

Section 9.3.                                 Limitations.

 

Without the consent of each Securityholder affected, an amendment or waiver may not:

 

(a)                                 reduce the principal amount of Securities whose Holders must consent to an amendment, supplement or waiver;

 

(b)                                 reduce the rate of or extend the time for payment of interest (including default interest) on any Security;

 

(c)                                  reduce the principal or change the Stated Maturity of any Security or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation;

 

(d)                                 reduce the principal amount of Discount Securities payable upon acceleration of the maturity thereof;

 

(e)                                  waive a Default or Event of Default in the payment of the principal of or interest, if any, on any Security (except a rescission of acceleration of the Securities of any Series by the Holders of at least a majority in principal amount of the outstanding Securities of such Series and a waiver of the payment default that resulted from such acceleration);

 

(f)                                   make the principal of or interest, if any, on any Security payable in any currency other than that stated in the Security;

 

(g)                                  make any change in Sections 6.8, 6.13 or 9.3 (this sentence); or

 

(h)                                 waive a redemption payment with respect to any Security, provided that such redemption is made at the Company’s option.

 

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Section 9.4.                                 Compliance with Trust Indenture Act.

 

Every amendment to this Indenture or the Securities of one or more Series shall be set forth in a supplemental indenture hereto that complies with the TIA as then in effect.

 

Section 9.5.                                 Revocation and Effect of Consents.

 

Until an amendment is set forth in a supplemental indenture or a waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent is not made on any Security.  However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if the Trustee receives the notice of revocation before the date of the supplemental indenture or the date the waiver becomes effective.

 

Any amendment or waiver once effective shall bind every Securityholder of each Series affected by such amendment or waiver unless it is of the type described in any of clauses (a) through (h) of Section 9.3.  In that case, the amendment or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security.

 

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the second immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to give such consent or to revoke any consent previously given or take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.

 

Section 9.6.                                 Notation on or Exchange of Securities.

 

The Company or the Trustee may place an appropriate notation about an amendment or waiver on any Security of any Series thereafter authenticated.  The Company in exchange for Securities of that Series may issue and the Trustee shall authenticate upon receipt of a Company Order in accordance with Section 2.3 new Securities of that Series that reflect the amendment or waiver.

 

Section 9.7.                                 Trustee Protected.

 

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.1) shall be fully protected in relying upon, an Officer’s Certificate or an Opinion of Counsel or both complying with Section 10.4.  The Trustee shall sign all supplemental indentures upon delivery of such an Officer’s Certificate or Opinion of Counsel or both, except that the Trustee need not sign any supplemental indenture that adversely affects its rights, duties, liabilities or immunities under this Indenture.

 

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ARTICLE X.
 MISCELLANEOUS

 

Section 10.1.                          Trust Indenture Act Controls.

 

If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required or deemed to be included in this Indenture by the TIA, such required or deemed provision shall control.

 

Section 10.2.                          Notices.

 

Any notice or communication by the Company or the Trustee to the other, or by a Holder to the Company or the Trustee, is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), facsimile transmission, email or overnight air courier guaranteeing next day delivery, to the others’ address:

 

if to the Company:

 

Inspire Medical Systems, Inc.

5500 Wayzata Blvd., Suite 1600

Golden Valley, MN 55416

Attention: Chief Financial Officer

Telephone: (844) 672-4357

 

with a copy to:

 

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Attention:  B. Shayne Kennedy and Nathan Ajiashvili

Telephone: (212) 906-1200

 

if to the Trustee:

 

[     ]

Attention: [    ]

Telephone: [    ]

 

with a copy to:

 

[     ]

Attention:  [    ]

Telephone: [    ]

 

The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

 

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Any notice or communication to a Securityholder shall be sent electronically or by first-class mail to his, her or its address shown on the register kept by the Registrar, in accordance with the procedures of the Depositary.  Failure to send a notice or communication to a Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to other Securityholders of that or any other Series.

 

If a notice or communication is sent or published in the manner provided above, within the time prescribed, it is duly given, whether or not the Securityholder receives it.

 

If the Company sends a notice or communication to Securityholders, it shall send a copy to the Trustee and each Agent at the same time.

 

Notwithstanding any other provision of this Indenture or any Security, where this Indenture or any Security provides for notice of any event (including any notice of redemption) to a Holder of a Global Security (whether by mail or otherwise), such notice shall be sufficiently given to the Depositary for such Security (or its designee) pursuant to the customary procedures of such Depositary.

 

Section 10.3.                          Communication by Holders with Other Holders.

 

Securityholders of any Series may communicate pursuant to TIA § 312(b) with other Securityholders of that Series or any other Series with respect to their rights under this Indenture or the Securities of that Series or all Series.  The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

 

Section 10.4.                          Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

 

(a)                                 an Officer’s Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(b)                                 an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

Section 10.5.                          Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:

 

(a)                                 a statement that the person making such certificate or opinion has read such covenant or condition;

 

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(b)                                 a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(c)                                  a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(d)                                 a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

 

Section 10.6.                          Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or a meeting of Securityholders of one or more Series.  Any Agent may make reasonable rules and set reasonable requirements for its functions.

 

Section 10.7.                          Legal Holidays.

 

A “Legal Holiday” is any day that is not a Business Day.  If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

 

Section 10.8.                          No Recourse Against Others.

 

A director, officer, employee or stockholder (past or present), as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  Each Securityholder by accepting a Security waives and releases all such liability.  The waiver and release are part of the consideration for the issue of the Securities.

 

Section 10.9.                          Counterparts.

 

This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 10.10.                   Governing Law; Waiver of Jury Trial; Consent to Jurisdiction.

 

THIS INDENTURE AND THE SECURITIES, INCLUDING ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THE INDENTURE OR THE SECURITIES, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

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THE COMPANY, THE TRUSTEE AND THE HOLDERS (BY THEIR ACCEPTANCE OF THE SECURITIES) EACH HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

Any legal suit, action or proceeding arising out of or based upon this Indenture or the transactions contemplated hereby may be instituted in the federal courts of the United States of America located in the City of New York or the courts of the State of New York in each case located in the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the non exclusive jurisdiction of such courts in any such suit, action or proceeding.  Service of any process, summons, notice or document by mail (to the extent allowed under any applicable statute or rule of court) to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court.  The Company, the Trustee and the Holders (by their acceptance of the Securities) each hereby irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim any such suit, action or other proceeding has been brought in an inconvenient forum.

 

Section 10.11.                   No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary of the Company.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 10.12.                   Successors.

 

All agreements of the Company in this Indenture and the Securities shall bind its successor.  All agreements of the Trustee in this Indenture shall bind its successor.

 

Section 10.13.                   Severability.

 

In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 10.14.                   Table of Contents, Headings, Etc.

 

The Table of Contents, Cross Reference Table, and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

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Section 10.15.                   Securities in a Foreign Currency.

 

Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officer’s Certificate delivered pursuant to Section 2.2 of this Indenture with respect to a particular Series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all Series or all Series affected by a particular action at the time outstanding and, at such time, there are outstanding Securities of any Series which are denominated in more than one currency, then the principal amount of Securities of such Series which shall be deemed to be outstanding for the purpose of taking such action shall be determined by converting any such other currency into a currency that is designated upon issuance of any particular Series of Securities.  Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officer’s Certificate delivered pursuant to Section 2.2 of this Indenture with respect to a particular Series of Securities, such conversion shall be at the spot rate for the purchase of the designated currency as published in The Financial Times in the “Currency Rates” section (or, if The Financial Times is no longer published, or if such information is no longer available in The Financial Times, such source as may be selected in good faith by the Company) on any date of determination.  The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a Series denominated in currency other than Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.

 

All decisions and determinations provided for in the preceding paragraph shall, in the absence of manifest error, to the extent permitted by law, be conclusive for all purposes and irrevocably binding upon the Trustee and all Holders.

 

Section 10.16.                   Judgment Currency.

 

The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of or interest or other amount on the Securities of any Series (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a New York Banking Day, then the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable, and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture.  For

 

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purposes of the foregoing, “New York Banking Day” means any day except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.

 

Section 10.17.                   Force Majeure.

 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, it being understood that the Trustee shall use reasonable best efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

Section 10.18.                   U.S.A. Patriot Act.

 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

ARTICLE XI.
 SINKING FUNDS

 

Section 11.1.                          Applicability of Article.

 

The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of a Series if so provided by the terms of such Securities pursuant to  Section 2.2 and except as otherwise permitted or required by any form of Security of such Series issued pursuant to this Indenture.

 

The minimum amount of any sinking fund payment provided for by the terms of the Securities of any Series is herein referred to as a “mandatory sinking fund payment” and any other amount provided for by the terms of Securities of such Series is herein referred to as an “optional sinking fund payment.”  If provided for by the terms of Securities of any Series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 11.2.  Each sinking fund payment shall be applied to the redemption of Securities of any Series as provided for by the terms of the Securities of such Series.

 

Section 11.2.                          Satisfaction of Sinking Fund Payments with Securities.

 

The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of such Securities (1) deliver outstanding Securities of such Series to which such sinking fund payment is applicable (other than any of such Securities previously called for mandatory sinking fund redemption) and (2) apply as credit Securities of such Series to which such sinking fund payment

 

44

 

is applicable and which have been repurchased by the Company or redeemed either at the election of the Company pursuant to the terms of such Series of Securities (except pursuant to any mandatory sinking fund) or through the application of permitted optional sinking fund payments or other optional redemptions pursuant to the terms of such Securities, provided that such Securities have not been previously so credited.  Such Securities shall be received by the Trustee, together with an Officer’s Certificate with respect thereto, not later than 15 days prior to the date on which the Trustee begins the process of selecting Securities for redemption, and shall be credited for such purpose by the Trustee at the price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.  If as a result of the delivery or credit of Securities in lieu of cash payments pursuant to this Section 11.2, the principal amount of Securities of such Series to be redeemed in order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities of such Series for redemption, except upon receipt of a Company Order that such action be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking fund payment, provided, however, that the Trustee or such Paying Agent shall from time to time upon receipt of a Company Order pay over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that Series purchased by the Company having an unpaid principal amount equal to the cash payment required to be released to the Company.

 

Section 11.3.                          Redemption of Securities for Sinking Fund.

 

Not less than 45 days (unless otherwise indicated in the Board Resolution, supplemental indenture hereto or Officer’s Certificate in respect of a particular Series of Securities) prior to each sinking fund payment date for any Series of Securities, the Company will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing mandatory sinking fund payment for that Series pursuant to the terms of that Series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of Securities of that Series pursuant to Section 11.2, and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and the Company shall thereupon be obligated to pay the amount therein specified.  Not less than 30 days (unless otherwise indicated in the Board Resolution, Officer’s Certificate or supplemental indenture in respect of a particular Series of Securities) before each such sinking fund payment date the Securities to be redeemed upon such sinking fund payment date will be selected in the manner specified in Section 3.2 and the Company shall send or cause to be sent a notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in and in accordance with Section 3.3.  Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.4, 3.5 and 3.6.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

 

	
 
    	
Inspire   Medical Systems, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Its:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[     ],   as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Its:exhibit101a

Exhibit 10.1                                                                             EXECUTION COPY                              FORBEARANCE AND FIFTH AMENDMENT TO                        SECOND AMENDED AND RESTATED CREDIT AGREEMENT                   This  Forbearance  and  Fifth  Amendment  to  Second  Amended  and  Restated  Credit            Agreement (this “Fifth Amendment”), is made as of April 10, 2020 and effective as of March 29,             2020, by and among:                    SPECIALTY RETAILERS, INC., a Texas corporation (“Borrower”);                    STAGE STORES, INC., a Nevada corporation (“Parent”);                    WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Administrative Agent            (in  such  capacity,  the  “Administrative  Agent”)  and  Collateral  Agent  (in  such  capacity,  the             “Collateral Agent”) for the Lenders;                     WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Term Loan Agent for            the  Term  Loan  Lenders  (in  such  capacity,  the  “Term  Loan  Agent”,  and  together  with  the             Administrative Agent and the Collateral Agent, collectively, the “Agents”); and                    The LENDERS party hereto;                    In consideration of the mutual covenants herein contained and the benefits to be derived            herefrom.                                             BACKGROUND:                    WHEREAS,  reference  is  made  to  that  certain  Second  Amended  and  Restated  Credit            Agreement,  dated  as  of  October  6,  2014,  as  amended  by  the  First  Amendment  to  Second            Amended  and  Restated  Credit  Agreement,  dated  as  of  December  16,  2016,  by  the  Second            Amendment to Second Amended and Restated Credit Agreement and Amendment to Amended            and  Restated  Security  Agreement,  dated  as  of  April  21,  2017,  by  the  Third  Amendment  to            Second  Amended  and  Restated  Credit  Agreement,  Second  Amendment  to  Amended  and            Restated Security Agreement, and First Amendment to Amended and Restated Guaranty, dated            as  of  August  3,  2018,  and  that  certain  Fourth  Amendment  to  Second  Amended  and  Restated            Credit Agreement, dated as of January 11, 2019 (together with any modifications or amendments            thereto, collectively, the “Credit Agreement”);                    WHEREAS, certain Events of Default have occurred and are continuing as of the date            hereof;                    WHEREAS,  the  Borrower  and  the  Parent  have  requested  that  the  Agents  and  the             Required Lenders forbear from exercising their rights and remedies arising as a result of any             Events of Default that have (or may have) occurred and are continuing, as described on Schedule             I hereto (collectively, together with other Events of Default that the Agents agree (in their sole             and  exclusive  discretion,  but  subject  to  any  instructions  to  the  contrary  from  the  Required             Lenders)  in  writing  to  include  in  such  schedule  from  time  to  time,  the  “Specified  Events  of             Default”); and               2605661.8 

 

              WHEREAS, the Agents and the Lenders party hereto have agreed to modify and amend  certain terms and conditions of the Credit Agreement, and to so forbear, in each case subject to  the terms and conditions of this Amendment.                NOW, THEREFORE, the Borrower, the Parent, the Agents and the Lenders hereby agree  as follows:   1.    Definitions.   All  capitalized  terms  used  in  this  Fifth  Amendment  and  not  otherwise        defined shall have the same meanings herein as in the Credit Agreement.   2.    Amendments to Credit Agreement.  Subject to the satisfaction of the conditions precedent        specified in Section 5 below, the Credit Agreement shall be amended as follows:         (a)   Composite Credit Agreement.  By deleting the stricken text (indicated textually in              the  same  manner  as  the  following  example: stricken  text )  and  by  adding  the              double-underlined text (indicated textually in the same manner as the following              example: double-underlined text ) as reflected in the modifications identified in the              document annexed hereto as Annex A attached to this Fifth Amendment.         (b)   Updated  Schedules.   By  amending  the  Schedules  to  the  Credit  Agreement  as              follows:               (i)   By amending and restating each of Schedule 1.1 and Schedule 3.05(c)(i)                    thereof in its entirety and by substituting therefor the form of each such                    Schedule annexed hereto as Annex B to this Fifth Amendment; and               (ii)  By adding a new Schedule 1.4 thereto in the form of each such Schedule                    annexed hereto as Annex C to this Fifth Amendment.   3.    Forbearance; Discretionary Funding.           (a)   Each  Loan  Party  acknowledges  that  certain  Events  of  Default  exist  and  are              continuing as of the date hereof and agrees that the Agents and the Lenders have              the  right  to  immediately  commence  enforcement  of  their  rights  and  remedies              under the Loan Documents and under Applicable Law.  In consideration of the              Loan Parties’ performance in accordance with each and every term and condition              of  this  Fifth  Amendment,  as  and  when  due  (subject  to  any  applicable  grace              period), the Agents and the Lenders agree to forbear from demanding the payment              of the Obligations and exercising their rights and remedies against the Collateral,              until the earlier of: (i) April 24, 2020, (ii) the occurrence or existence of an Event              of Default (other than a Specified Event of Default), or (iii) the determination by              Agents that the Suspension Period has concluded (the period commencing as of              the Fifth Amendment Effective Date and ending on the earlier of (i), (ii) or (iii)              above  shall  be  referred  to  as  the  “Forbearance  Period’);  provided,  that  the              Forbearance  Period  may  be  extended  upon  the  written  consent  of  the  Agents              (which  may  be  by  e-mail),  which  consent  may  be  withheld,  delayed  or              conditioned in the Agents’ sole and exclusive discretion;  provided,  further,  any                                          2   

 

      extension  beyond  May  30,  2020  shall  also  require  the  written  consent  of  the        Required  Lenders  (which  may  be  by  e-mail),  which  consent  may  be  withheld,        delayed or conditioned in the Required Lenders’ sole and exclusive discretion.     (b)   Notwithstanding anything in the Credit Agreement or otherwise to the contrary,         each  Loan  Party  hereby  covenants  and  agrees  that,  as a result of the Events of         Default that are existing and continuing on the date hereof, the Lenders have no         obligation  whatsoever  to  make  Loans,  to  issue  any  Letters  of  Credit  or  to         otherwise  provide  financial  accommodations  of  any  kind  to  the  Borrowers.          Notwithstanding  the  foregoing,  from  and  after  the  Fifth  Amendment  Effective         Date, at the request of the Lead Borrower, the Revolving Loan Lenders may, in         their sole and absolute discretion, continue to make Revolving Loans and/or issue         Letters of Credit (hereinafter, such financial accommodations shall be referred to         collectively  as  “Discretionary  Financial  Accommodations”  and  singly  as  a        “Discretionary  Financial  Accommodation”),  subject, in  all  events,  to  the  terms        and conditions of this Fifth Amendment, the Credit Agreement (including but not        limited to, all borrowing base requirements) and the  other  Loan  Documents,  as        amended hereby.   (c)   Notwithstanding anything in the Credit Agreement or otherwise to the contrary,        each Loan Party hereby irrevocably covenants and agrees that a Cash Dominion        Event shall be deemed to have occurred and be continuing at all times from and        after the Fifth Amendment Effective Date.   (d)   Notwithstanding anything in the Credit Agreement or otherwise to the contrary,        each  Loan  Party  hereby  covenants  and  agrees  that,  as a result of the Events of        Default that are existing and continuing on the date hereof, the Agents and the        Lenders  are  entitled  to  charge  interest  based  on  Level  I  of  the  pricing  grid  set        forth in the definition of “Applicable Margin” and at the Default Rate, and the        Agents  and  the  Lenders  expressly  reserve  their  right  to  do  so,  in  each  case        retroactive to the date of first to occur of such Events of Default.   (e)   Notwithstanding anything in the Credit Agreement or otherwise to the contrary,        each  Loan  Party  hereby  covenants  and  agrees  that,  as a result of the Events of        Default that are existing and continuing on the date hereof, the Loan Parties shall        not pay any premiums in respect of directors’ and officers’ insurance unless and        until the conditions subsequent set forth in Section 7 hereof have been completed        to the satisfaction of the Agents and except as set forth in the Budget (subject to        Permitted  Variances).  The  Loan  Parties  hereby  acknowledge  and  agree  that  it        shall constitute an immediate Default and Event of Default in the event any Loan        Party  makes  payment  in  respect  of  such  directors’  and  officers’  insurance        premium except as provided herein, and the Loan Parties hereby waive any notice        requirements related thereto.   (f)   Notwithstanding anything in the Credit Agreement or otherwise to the contrary,        each  Loan  Party  hereby  covenants  and  agrees  that  the  Loan  Parties  shall  not        request  (i)  a  Revolving  Loan  Commitment  Increase  under  Section  2.02  of  the                                    3               

 

            Credit Agreement, and/or (ii) an Additional Term Loan(s) under Section 2.02A of              the  Credit  Agreement,  and  all  such  rights  to  request  any  such  commitments              increase(s) is hereby irrevocably waived.  The Loan Parties hereby acknowledge              and agree that it shall constitute an immediate Default and Event of Default in the              event  any  Loan  Party  makes  any  request  for  either  (i)  a  Revolving  Loan              Commitment Increase pursuant to Section 2.02 of the Credit Agreement, and/or              (ii)  an  Additional  Term  Loan(s)  pursuant  to  Section  2.02A  of  the  Credit              Agreement,  and  the  Loan  Parties  hereby  waive  any  notice  requirements  related              thereto.         (g)   Each Loan Party covenants and agrees nothing contained in or contemplated by              this  Fifth  Amendment  (including,  without  limitation,  the  making  of  any              Discretionary Financial Accommodation by the Revolving Loan Lenders in their              sole and exclusive discretion) shall (i) constitute a waiver of any Specified Event              of Default, or of any other Default or Event of Default which may now exist or              which may occur after the Fifth Amendment Effective Date under any of the Loan              Documents, (ii) constitute an agreement on the part of the Lenders to make any              further extensions of credit of any kind to any Borrower  at  a  later  date,  or  (iii)              preclude the exercise of rights and remedies by the Agents or the Lenders after the              termination of the Forbearance Period (or, with respect to interest, as provided in              Section 3(d) hereof).         (h)   Upon the expiration or termination of the Forbearance Period:  (i) the agreement              of  the  Agents  and  the  Lenders  to  forbear  as  set  forth in this Fifth Amendment              shall  automatically  terminate;  and  (ii)  the  Agents and  the  Lenders  may              immediately commence enforcing their rights and remedies pursuant to the Loan              Documents and  Applicable Law, in such order and manner as the Agents and the              Lenders  may  determine  appropriate  in  their  sole  and  exclusive  discretion,  and              without  prior  demand,  notice,  or  protest,  all  of  which  are  hereby  expressly              WAIVED by the Loan Parties.         (i)   Each  Loan  Party  represents,  warrants  and  acknowledges  that  the  Lenders  are              giving  fair  consideration  and  reasonably  equivalent  value  to  the  Loan  Parties              (including, without limitation, the Lenders’ agreements to forbear and to provide              other  financial  accommodations  to  or  for  the  benefit  of  the  Loan  Parties  as              provided in this Amendment) in exchange for the additional Collateral (including,              without limitation, as set forth in the Mortgages) and other agreements made by              the Loan Parties as set forth in this Amendment.   4.    Real Estate Collateral.           (a)   The  parties  hereto  acknowledge  and  agree  that,  upon  the  satisfaction  of  the              conditions set forth in Section 7 hereof, the Borrower shall have granted to the              Collateral  Agent,  for  the  ratable  benefit  of  the  Credit  Parties,  a  Lien  in  the              Mortgaged Property described in the Mortgages with respect to the Specified Real              Estate (as defined below).                                             4   

 

      (b)   Notwithstanding  the  foregoing  or  anything  in  the  Credit  Agreement  to  the              contrary:               (i)   the  Obligations  secured  by  any  Mortgaged  Property  with  respect  to  any                    Specified Real Estate shall not include any Obligations owing to a Lender                    that has not provided written notice to the Administrative Agent that (x)                    such  Lender  has  completed  its  flood  insurance  diligence  and  received                    copies of all flood insurance documentation, or (y)  such  Lender’s  flood                    insurance compliance has been completed as required by the Flood Laws                    or  as  otherwise  satisfactory  to  such  Lender  (each  such  Lender,  a  “Non-                   Mortgage Lender”); and               (ii)  all  proceeds  realized  on  account  of  any  Real  Estate  Collateral  shall  be                    applied, first, to payment of all reasonable costs and expenses incurred by                    Administrative  Agent  or  the  Collateral  Agent,  in  connection  with  such                    Real  Estate  Collateral,  including  all  court  costs  and  the  reasonable  fees                    and  expenses  of  its  agents  and  legal  counsel,  and  any  other  reasonable                    costs or expenses incurred in connection with the exercise of any right or                    remedy  hereunder,  under  any  other  Loan  Document,  and  second,  in                    accordance with Section 7.04 of the Credit Agreement; provided that no                    such proceeds shall be shared with any Non-Mortgage Lender.         (c)   Any  Non-Mortgage  Lender  may  cease  to  be  a  Non-Mortgage  Lender  after  the              Fifth Amendment Effective Date  at any time by providing written notice to the              Administrative Agent as to the matters set forth in the foregoing clause (b)(i)(x)              or (b)(i)(y).   5.    Ratification of Loan Documents; Representations and Warranties; Waiver of Claims.         (a)   Except  as  otherwise  expressly  provided  herein,  all terms  and  conditions  of  the              Credit Agreement and the other Loan Documents remain in full force and effect.               The Loan Parties hereby ratify, confirm, and reaffirm (i) all Loan Documents as              amended  hereby,  and  (ii)  that  all  representations  and  warranties  of  the  Loan              Parties contained in the Credit Agreement or any other Loan Document are true              and correct in all material respects on and as of the Fifth Amendment Effective              Date  (after  giving  effect  to  this  Amendment),  except to the extent that (i) such              representations and warranties relate solely to an earlier date, in which case such              representations  and  warranties  were  true,  correct, and  complete  in  all  material              respects  as  of  such  earlier  date,  or  (ii)  such  representations  and  warranties  are              already qualified by Material Adverse Effect, “materiality” or similar qualifier, in              which case, such representations and warranties are true, correct, and complete in              all  respects.   Without  limiting  the  foregoing,  the Loan  Parties  hereby  ratify,              confirm, reaffirm and restate their grant of security interest in the Collateral (as              defined in the Security Agreement) and acknowledge and agree that such security              interest  secures  all  of  the  Secured  Obligations  (as  defined  in  the  Security              Agreement).                                           5   

 

     (b)   The Loan Parties hereby represent and warrant as follows:              (i)   as of the Fifth Amendment Effective Date, and immediately after giving                   effect to the consummation of the transactions contemplated by this Fifth                   Amendment to occur on the Fifth Amendment Effective Date, no Default                   or  Event  of  Default  has  occurred  and  is  continuing (other  than  the                   Specified Events of Default, to the extent constituting Events of Default as                   of the date hereof); and              (ii)  all corporate and shareholder action on the part of the Loan Parties and all                   consents  and  approvals  necessary  for  the  valid  execution,  delivery  and                   performance  by  the  Loan  Parties  of  this  Fifth  Amendment  and  the                   documents, instruments and agreements delivered in connection herewith                   have  been  duly  and  effectively  taken  and  evidence  thereof  reasonably                   satisfactory to the Agents has been provided to the Agents.        (c)   Each  of  the  Loan  Parties  hereby  acknowledges  and  agrees  that,  as  of  the  Fifth             Amendment Effective Date, there is no basis or set of facts on the basis of which             any  amount  (or  any  portion  thereof)  owed  by  the  Loan  Parties  under  the  Loan             Documents  could  be  reduced,  offset,  waived,  or  forgiven,  by  rescission  or             otherwise; nor is there any claim, counterclaim, offset, or defense (or other right,             remedy, or basis having a similar effect) available to the Loan Parties with regard             thereto; nor is there any basis on which the terms and conditions of any of the             Obligations could be claimed to be other than as stated on the written instruments             which evidence such Obligations.        (d)   Each  of  the  Loan  Parties  hereby  acknowledges  and  agrees  that,  as  of  the  Fifth             Amendment Effective Date, it has no offsets, defenses, claims, or counterclaims             against  the  Agents  or  any  Lender,  or  any  of  their  respective  affiliates,             predecessors, successors, or assigns, or any of their respective officers, directors,             employees, attorneys, or representatives, with respect to the Obligations, and that             if  any  Loan  Party  now  has,  or  ever  did  have  prior  to  the  Fifth  Amendment             Effective Date, any offsets, defenses, claims, or counterclaims against the Agents             or any Lender, or their respective affiliates, predecessors, successors, or assigns,             or  their  respective  officers,  directors,  employees,  attorneys,  or  representatives,             with respect to the Obligations, whether known or unknown, at law or in equity,             from  the  beginning  of  the  world  through  this  date  and  through  the  time  of             execution of this Fifth Amendment, all of them are hereby expressly WAIVED ,             and each of the Loan Parties hereby RELEASES  the Agents and each Lender and             their  respective  officers,  directors,  employees,  attorneys,  representatives,             affiliates, predecessors, successors, and assigns from any liability therefor.   6.    Conditions to Effectiveness.  This Fifth Amendment shall not be effective until each of       the following conditions precedent has been fulfilled to the reasonable satisfaction of the       Agents (the first date on which each of such conditions precedent has been so fulfilled,       the “Fifth Amendment Effective Date”):                                          6               

 

(a)   The Agents shall have received counterparts of this Fifth Amendment, each duly        executed and delivered by each of the parties hereto.   (b)   All  necessary  consents  and  approvals  to  the  transactions  contemplated  hereby        shall have been obtained and shall be satisfactory to the Agents.   (c)   Each Loan Party shall have delivered the following to the Agents, in form and        substance reasonably satisfactory to the Agents:         (i)   Copies of such Loan Party’s Organizational Documents (or certifications              of no change since the Third Amendment Effective Date) and such other              documents  and  certifications  as  the  Agents  may  reasonably  require  to              evidence that such Loan Party is duly organized, and that such Loan Party              is validly existing, in good standing and qualified to engage in business in              each jurisdiction where its ownership, lease or operation of properties or              the conduct of its business requires such qualification, except to the extent              that  failure  to  so  qualify  in  such  jurisdiction  could  not  reasonably  be              expected to have a Material Adverse Effect; and         (ii)  Certificates of resolutions or other action, incumbency certificates and/or              other certificates of senior officers of such Loan Party as the Agents may              require evidencing (A) the authority of such Loan Party to enter into this              Fifth  Amendment  and  the  other  Loan  Documents  to  which  such  Loan              Party is a party or is to become a party and (B) the identity, authority and              capacity of each senior officer thereof authorized to act as a senior officer              in connection with this Fifth Amendment and the other Loan Documents              to which such Loan Party is a party or is to become a party.   (d)   All  filings,  recordations  and  searches  reasonably  requested  by  the  Collateral        Agent to be made in connection with the liens and security interests in the Loan        Parties’ properties shall have been duly made (except with respect to the Specified        Real Property as set forth in Section 7 hereof).     (e)   The  Collateral  Agent  shall  have  received,  and  be  reasonably  satisfied  with,        evidence of the Loan Parties’ insurance, together with such endorsements as are        required by the Loan Documents.   (f)   After giving effect to this Fifth Amendment, no Default or Event of Default (other        than the Specified Events of Default, to the extent constituting Events of Default        as of the date hereof) shall have occurred and be continuing.   (g)   Except as known to the Agents as of the Fifth Amendment  Effective  Date,  no        event  shall  have  occurred  since  February  1,  2020  that  could  reasonably  be        expected to have a Material Adverse Effect (as amended hereby).   (h)   After giving effect to the transactions contemplated hereby, Excess  Availability        on the Fifth Amendment Effective Date shall be not less than $35,000,000.  The        Agents  shall  have  received  a  Borrowing  Base  Certificate  dated  the  Fifth                                    7               

 

            Amendment Effective Date, relating to the week ended on March 28, 2020, and              executed by a Financial Officer of the Borrower.         (i)   The  Agents  and  the  Lenders  shall  have  received,  in form  and  substance              reasonably satisfactory to the Agents and the Lenders, such other information and              documents including, without limitation, such information and documents as may              be  required  by  any  Agent  or  any  Lender  in  order  to complete  “know  your              customer” and other compliance diligence, as may be reasonably requested by any              Agent or any Lender.         (j)   There shall be no material misstatements of fact in the written materials furnished              by the Loan Parties to the Agents or the Lenders prior to closing of this Fifth              Amendment,  or,  after  giving  effect  to  the  amendments  to  the  Schedules  made              pursuant  to  this  Amendment,  in  the  representations or  warranties  of  the  Loan              Parties made in the Credit Agreement or this Amendment.           (k)   All fees payable to the Agents and the Lenders required to be paid (or capitalized,              as applicable) on or before the Fifth Amendment Effective Date shall have been              paid(or capitalized, as applicable).         (l)   The  Agents  shall  have  been  reimbursed  by  the  Loan  Parties  for  all  reasonable              costs  and  expenses  of  the  Agents  (including,  without  limitation,  reasonable              attorneys’  fees)  in  connection  with  the  preparation,  negotiation,  execution,  and              delivery of this Fifth Amendment and related documents to the extent an invoice              has been provided to the Loan Parties.  The Loan Parties hereby acknowledge and              agree  that  the  Agents  may  charge  the  Loan  Account  to  pay  such  costs  and              expenses to the extent an invoice has been provided to the Loan Parties.   7.    Conditions Subsequent.  On or before April 11, 2020 (or such later date as the Agents        may agree in their sole discretion, which agreement may be by e-mail), the Loan Parties        shall deliver to the Agents, in form and substance reasonably satisfactory to the Agents,        with respect to the Real Estate located at each of:            a.  1020 Willowcreek Drive, Jacksonville, Texas 75766,            b.  506 Beall Boulevard (also known as 506 Bealls Boulevard), Jacksonville, Texas              75766,             c.  321 Stratton Street, Logan, West Virginia 25601, and            d.  307 Stratton Street, Logan, West Virginia 25601            (the Real Estate described in the foregoing clauses (a), (b), (c) and (d), collectively           the “Specified Real Estate”):         (i)   evidence  that  all  actions  (including,  without  limitation,  execution,  delivery  and              recording of the Mortgages with applicable recording offices) that the Agents may              deem necessary or desirable in order to create the valid first and subsisting Liens                                          8   

 

            on  the  property  described  in  the  Mortgages  with  respect  to  the  Specified  Real              Estate has been taken;          (ii)  evidence that the  Loan  Parties are in compliance with  Section  5.07  (including,              without limitation, clause (c) thereof) of the Credit Agreement with respect to the              Specified Real Estate; and         (iii)  to the extent requested by the Collateral Agent, satisfactory surveys, flood zone              certifications,  environmental  reports,  opinions  of counsel  and  commitments  for              title insurance, with such customary endorsements as the Collateral Agent may              reasonably  require,  together  with  such  additional  documents,  instruments  and              agreements  as  the  Collateral  Agent  may  reasonably  require,  in  each  case  with              respect to the Specified Real Estate.         The  Loan  Parties  acknowledge  and  agree  that  the  failure  to  comply  with  any  of  the        foregoing covenants shall constitute an Event of Default pursuant to Section 7.01(d) of        the Credit Agreement.          8.    Miscellaneous.         (a)   This Fifth Amendment may be executed in several counterparts and by each party              on a separate counterpart, each of which when so executed and delivered shall be              an original, and all of which together shall constitute one instrument.  Delivery of              an executed counterpart of a signature page to this Fifth Amendment by telecopy              or  other  electronic  transmission  shall  be  effective  as  delivery  of  a  manually              executed counterpart of this Fifth Amendment.         (b)   This Fifth Amendment, together with the other Loan Documents, expresses the              entire understanding of the parties with respect to the transactions contemplated              hereby.   No  prior  negotiations  or  discussions  shall  limit,  modify,  or  otherwise              affect the provisions hereof.         (c)   Any  provision  of  this  Fifth  Amendment  held  to  be  invalid,  illegal  or              unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to              the extent of such invalidity, illegality or unenforceability  without  affecting  the              validity, legality and enforceability of the remaining provisions hereof;  and the              invalidity of a particular provision in a particular jurisdiction shall not invalidate              such provision in any other jurisdiction.         (d)   The Loan Parties represent and warrant that they have consulted with independent              legal counsel of their selection in connection with this Fifth Amendment and are              not relying on any representations or warranties of the Agents or the Lenders or              their counsel in entering into this Fifth Amendment.          (e)   THIS  FIFTH  AMENDMENT  SHALL  BE  GOVERNED  BY,  AND               CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE  STATE  OF               NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF          LAWS                                          9   

 

PRINCIPLES THEREOF, BUT INCLUDING SECTION 5-1401 OF THE NEW  YORK GENERAL OBLIGATIONS LAW.                                                             [SIGNATURE PAGES FOLLOW]                               10               

 

         IN WITNESS WHEREOF, the parties have hereunto caused this Fifth Amendment to be  duly executed by their respective authorized officers as a sealed instrument as of the date first  above written.                                             BORROWER:                                           SPECIALTY RETAILERS, INC.                                           By:      /s/ Jason Curtis_________________                                          Name:   Jason Curtis                                           Title:  Executive  Vice  President,  Chief                                                  Financial  Officer,  Treasurer  and                                                  Secretary                                                                                     FACILITY GUARANTOR AND PARENT:                                           STAGE STORES, INC.                                           By:     /s/ Jason Curtis_________________                                          Name:   Jason Curtis                                           Title:  Executive  Vice  President,  Chief                                                  Financial  Officer,  Treasurer  and                                                  Secretary                                                                            Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement 

 

                                                                    WELLS     FARGO    BANK,    NATIONAL                                         ASSOCIATION,  as  Administrative  Agent,                                         Collateral  Agent,  Swingline  Lender,  and                                         Issuing Bank                                           By:      /s/ Jai Alexander________________                                         Name:   Jai Alexander                                         Title:  Director                                                Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement                                          

 

                                       WELLS     FARGO    BANK,    NATIONAL                                         ASSOCIATION, as Term Loan Agent                                           By:     /s/ Jai Alexander_______________                                         Name:   Jai Alexander                                         Title:  Director                                                Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement  

 

                                       WELLS     FARGO    BANK,    NATIONAL                                         ASSOCIATION, as a Revolving Loan Lender                                          By:     /s/ Jai Alexander_______________                                         Name:   Jai Alexander                                         Title:  Director                                                                                         Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement  

 

                                                      BANK  OF  AMERICA,  N.A.,  as  a  Revolving                                         Loan Lender                                          By:     _____________________________                                         Name:   _____________________________                                         Title:  _____________________________                                               Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement  

 

                                                      JPMORGAN  CHASE  BANK,  N.A.,  as  a                                         Revolving Loan Lender                                          By:     /s/ Blakely Engel_______________                                         Name:   Blakely Engel                                         Title:  Vice President                                               Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement  

 

                                                      REGIONS  BANK,  as  a  Revolving  Loan                                         Lender                                          By:     /s/ Bruce Kasper_______________                                         Name:   Bruce Kasper                                         Title:  Managing Director                                                                                      Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement  

 

                                       TRUIST  BANK  (as  successor  by  merger  to                                         SunTrust Bank), as a Revolving Loan Lender                                                                                  By:     /s/ Joseph A. Massaroni__________                                         Name:   Joseph A. Massaroni                                         Title:  Director    Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement  

 

              WELLS     FARGO    BANK,    NATIONAL  ASSOCIATION, as a Term Loan Lender   By:     /s/ Jai Alexander_______________  Name:   Jai Alexander  Title:  Director                                 

 

                                       PATHLIGHT  CAPITAL  FUND  I  LP,  as  a                                         Term Loan Lender                                          By:     Pathlight  Partners  GP  LLC,  its                                                 General Partner                                          By:     /s/ Kirk C. Shevele______________                                         Name:   Kirk Schevele                                         Title:  Managing Director       Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement  

 

                                       PATHLIGHT CAPITAL OFFSHORE FUND I                                         LP, as a Term Loan Lender                                          By:     Pathlight  Partners  GP  LLC,  its                                                 General Partner                                          By:     /s/ Kirk C. Shevele______________                                         Name:   Kirk Schevele                                         Title:  Managing Director                                                Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement  

 

                                       PATHLIGHT CAPITAL LLC, as a Term Loan                                         Lender                                          By:     /s/ Kirk C. Shevele______________                                         Name:   Kirk Schevele                                         Title:  Managing Director                                                                                                   Signature Page to Forbearance and Fifth Amendment to Second Amended and Restated Credit Agreement  

 

                                                                            EXECUTION COPY      ANNEX A TO   FOURTH   FORBEARANCE AND FIFTH        AMENDMENT TO SECOND AMENDED             AND RESTATED CREDIT AGREEMENT, DATED AS OF             JANUARY 11, 2019  APRIL 10, 2020 AND                                 EFFECTIVE AS OF MARCH 29, 2020                                                                    SECOND AMENDED AND RESTATED CREDIT AGREEMENT                                             dated as of                                         October 6, 2014              as amended, and as further amended effective  as of January 11 March 29 , 2019 2020                                            by and among                                   SPECIALTY RETAILERS, INC.                                           as Borrower                                       STAGE STORES, INC.                                       as Facility Guarantor                                     The LENDERS Party Hereto,                          WELLS FARGO BANK, NATIONAL ASSOCIATION                            as Administrative Agent and as Collateral Agent                          WELLS FARGO BANK, NATIONAL ASSOCIATION                                        as Term Loan Agent                                  JPMORGAN CHASE BANK, N.A.                                         REGIONS BANK                                    as Co-Documentation Agents                                    BANK OF AMERICA, N.A.                                       as Syndication Agent                                                                                               and                          WELLS FARGO BANK, NATIONAL ASSOCIATION                  MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED                                 J.P. MORGAN SECURITIES LLC                                         REGIONS BANK                         as Joint Lead Arrangers and Joint Bookrunning Managers                                  ___________________________  

 

                                                                                                              TABLE OF CONTENTS                                                                             Page   ARTICLE I Definitions .................................................................................................................. 2     SECTION 1.01.  Defined Terms................................................................................................2    SECTION 1.02.  Terms Generally ....................................................................................... 44 48     SECTION 1.03.  Accounting Terms; GAAP ....................................................................... 45 49     SECTION 1.04.  Rounding .................................................................................................. 45 50     SECTION 1.05.  Times of Day ............................................................................................ 45 50     SECTION 1.06.  Letter of Credit Amounts ......................................................................... 45 50     SECTION 1.07.  Divisions .................................................................................................. 46 50    ARTICLE II Amount and Terms of Credit............................................................................... 46 50      SECTION 2.01.  Commitments of the Lenders. .................................................................. 46 50     SECTION 2.02.  Increase in Aggregate Revolving Loan Commitments . ........................... 47 51     SECTION 2.02A.  Additional Term Loans ........................................................................... 49 53     SECTION 2.03.  Reserves; Changes to Reserves. ............................................................... 51 55     SECTION 2.04.  Making of Loans. .....................................................................................52 56     SECTION 2.05.  Overadvances ........................................................................................... 53 58     SECTION 2.06.  Swingline Loans. ...................................................................................... 54 58     SECTION 2.07.  Letters of Credit. ...................................................................................... 54 59     SECTION 2.08.  Settlements Amongst Revolving Loan Lenders. ...................................... 64 68     SECTION 2.09.  Notes; Repayment of Loans. .................................................................... 65 69     SECTION 2.10.  Interest on Loans. ..................................................................................... 66 70     SECTION 2.11.  Default Interest ......................................................................................... 66 70     SECTION 2.12.  Certain Fees.............................................................................................. 66 71     SECTION 2.13.  Unused Commitment Fee ......................................................................... 67 71     SECTION 2.14.  Letter of Credit Fees. ...............................................................................67 71     SECTION 2.15.  [Reserved] ................................................................................................ 68 72     SECTION 2.16.  Nature of Fees .......................................................................................... 68 72     SECTION 2.17.  Termination or Reduction of Revolving Loan Commitments. ................ 68 72     SECTION 2.18.  Alternate Rate of Interest ......................................................................... 68 73     SECTION 2.19.  Conversion and Continuation of Loans ................................................... 69 74     SECTION 2.20.  Mandatory Prepayment; Commitment Termination; Cash Collateral ..... 70 75     SECTION 2.21.  Optional Prepayment of Loans; Reimbursement of Lenders. .................. 71 76     SECTION 2.22.  Maintenance of Loan Account; Statements of Account. ......................... 74 79     SECTION 2.23.  Cash Receipts. .......................................................................................... 74 79     SECTION 2.24.  Application of Payments. ......................................................................... 76 81     SECTION 2.25.  Increased Costs. ....................................................................................... 77 82     SECTION 2.26.  Change in Legality. ..................................................................................78 83     SECTION 2.27.  Payments; Sharing of Setoff. ................................................................... 79 84     SECTION 2.28.  Taxes. ....................................................................................................... 80 85     SECTION 2.29.  Security Interests in Collateral .................................................................82 88     SECTION 2.30.  Mitigation Obligations; Replacement of Lenders. ................................... 82 88                                          (ii)   

 

                                                                                 ARTICLE III Representations and Warranties ......................................................................... 83 89      SECTION 3.01.  Organization; Powers ............................................................................... 83 89     SECTION 3.02.  Authorization; Enforceability .................................................................. 84 89     SECTION 3.03.  Governmental Approvals; No Conflicts .................................................. 84 89     SECTION 3.04.  Financial Condition ..................................................................................84 89     SECTION 3.05.  Properties. ................................................................................................ 84 90     SECTION 3.06.  Litigation and Environmental Matters. .................................................... 85 90     SECTION 3.07.  Compliance with Laws and Agreements ................................................. 85 90     SECTION 3.08.  Investment and Holding Company Status ................................................ 85 91     SECTION 3.09.  Taxes ........................................................................................................ 85 91     SECTION 3.10.  ERISA ...................................................................................................... 86 91     SECTION 3.11.  Disclosure.................................................................................................86 91     SECTION 3.12.  Subsidiaries. ............................................................................................. 86 91     SECTION 3.13.  Insurance .................................................................................................. 86 92     SECTION 3.14.  Labor Matters ........................................................................................... 86 92     SECTION 3.15.  Security Documents ................................................................................. 87 92     SECTION 3.16.  Federal Reserve Regulations .................................................................... 87 92     SECTION 3.17.  Solvency ................................................................................................... 87 93     SECTION 3.18.  OFAC; Anti-Corruption Laws; Anti-Money Laundering Laws .............. 87 93     SECTION 3.19.  Swap Obligations .....................................................................................88 93    ARTICLE IV Conditions .......................................................................................................... 88 93      SECTION 4.01.  Effective Date .......................................................................................... 88 93     SECTION 4.02.  Conditions Precedent to Each Revolving Loan and Each Letter of                   Credit........................................................................................................ 90 96    ARTICLE V Affirmative Covenants ........................................................................................ 91 97      SECTION 5.01.  Financial Statements and Other Information ........................................... 91 97     SECTION 5.02.  Notices of Material Events ..................................................................... 94 100     SECTION 5.03.  Information Regarding Collateral. ......................................................... 95 101     SECTION 5.04.  Existence; Conduct of Business ............................................................. 95 101     SECTION 5.05.  Payment of Obligations .......................................................................... 95 102     SECTION 5.06.  Maintenance of Properties ..................................................................... 96 102     SECTION 5.07.  Insurance. ............................................................................................... 96 102     SECTION 5.08.  Casualty and Condemnation .................................................................. 97 104     SECTION 5.09.  Books and Records; Inspection and Audit Rights; Appraisals;                    Accountants............................................................................................ 97 104     SECTION 5.10.  Physical Inventories. .............................................................................. 98 105    SECTION 5.11.  Compliance with Laws........................................................................... 98 105     SECTION 5.12.  Use of Proceeds and Letters of Credit ................................................... 98 105     SECTION 5.13.  Additional Subsidiaries .......................................................................... 99 106     SECTION 5.14.  Further Assurances. ................................................................................ 99 106     SECTION 5.15.  OFAC; Anti-Corruption Laws; Anti-Money Laundering Laws .......... 100 107     SECTION 5.16.  Performance Within Budget  ....................................................................... 107                                          (iii)   

 

                                                                                   SECTION 5.17.  Retention of and Communication with Consultants, Liquidators and                   Financial Advisors.  .................................................................................... 107    ARTICLE VI Negative Covenants ....................................................................................... 100 108      SECTION 6.01.  Indebtedness and Other Obligations. ................................................... 100 109     SECTION 6.02.  Liens ..................................................................................................... 101 110     SECTION 6.03.  Fundamental Changes. ......................................................................... 102 111     SECTION 6.04.  Investments, Loans, Advances, Guarantees and Acquisitions ............. 103 111     SECTION 6.05.  Asset Sales ........................................................................................... 104 112     SECTION 6.06.  Restricted Payments; Certain Payments of Indebtedness. ................... 105 114     SECTION 6.07.  Transactions with Affiliates .................................................................106 115     SECTION 6.08.  Restrictive Agreements ........................................................................ 106 115     SECTION 6.09.  Amendment of Material Documents .................................................... 106 115     SECTION 6.10.  Additional Subsidiaries ........................................................................ 107 116     SECTION 6.11.  Excess Availability .............................................................................. 107 116     SECTION 6.12.  Fiscal Year ........................................................................................... 107 116     SECTION 6.13.  Environmental Laws ............................................................................ 107 116    ARTICLE VII Events of Default .......................................................................................... 107 116      SECTION 7.01.  Events of Default ................................................................................. 107 116     SECTION 7.02.  When Continuing ................................................................................. 110 120     SECTION 7.03.  Remedies on Default . ........................................................................... 110 120     SECTION 7.04.  Application of Proceeds ....................................................................... 113 123     SECTION 7.05.  Additional Remedies on Default . ......................................................... 115 125     SECTION 7.06.  Separate Claims and Separate Classifications ..................................... 121 130    ARTICLE VIII The Agents .................................................................................................. 121 130      SECTION 8.01.  Administration by Administrative Agent ............................................. 121 130     SECTION 8.02.  The Collateral Agent; The Term Loan Agent. ..................................... 121 131     SECTION 8.03.  Agreements of Certain Requisite Lenders. .......................................... 122 131     SECTION 8.04.  Liability of Agents. .............................................................................. 122 132     SECTION 8.05.  Notice of Default; Actions on Default. ................................................ 123 133     SECTION 8.06.  Lenders’ Credit Decisions .................................................................... 124 133     SECTION 8.07.  Reimbursement and Indemnification ................................................... 124 133     SECTION 8.08.  Rights of Agents................................................................................... 124 134     SECTION 8.09.  Notice of Transfer ................................................................................ 125 134     SECTION 8.10.  Successor Agent ................................................................................... 125 134     SECTION 8.11.  Reports and Financial Statements. ....................................................... 125 135     SECTION 8.12.  Delinquent Lender................................................................................ 126 136     SECTION 8.13.  Arrangers, Documentation Agent and Co-Syndication Agents ........... 130 139     SECTION 8.14.  Agent for Perfection ............................................................................. 130 140     SECTION 8.15.  Relation Among the Lenders ............................................................... 130 140     SECTION 8.16.  Collateral and Guaranty Matters .......................................................... 130 140     SECTION 8.17.  Providers .............................................................................................. 131 141                                          (iv)   

 

                                                                                   SECTION 8.18.  Reserves. .............................................................................................. 132 141    ARTICLE IX Miscellaneous ................................................................................................ 132 142      SECTION 9.01.  Notices .................................................................................................132 142     SECTION 9.02.  Waivers; Amendments. ........................................................................ 133 143     SECTION 9.03.  Expenses; Indemnity; Damage Waiver ................................................ 136 146     SECTION 9.04.  Successors and Assigns. ....................................................................... 138 147     SECTION 9.05.  Survival ................................................................................................ 140 150     SECTION 9.06.  Counterparts; Integration; Effectiveness .............................................. 141 150     SECTION 9.07.  Severability .......................................................................................... 141 151     SECTION 9.08.  Right of Setoff ......................................................................................141 151     SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of Process. ............. 142 151     SECTION 9.10.  WAIVER OF JURY TRIAL ................................................................ 142 152     SECTION 9.11.  Headings............................................................................................... 142 152     SECTION 9.12.  Interest Rate Limitation ....................................................................... 143 152     SECTION 9.13.  Additional Waivers. ............................................................................. 143 152     SECTION 9.14.  Confidentiality ..................................................................................... 144 154     SECTION 9.15.  Patriot Act ............................................................................................ 145 155     SECTION 9.16.  Foreign Asset Control Regulations ...................................................... 146 155     SECTION 9.17.  No Advisory or Fiduciary Responsibility ............................................ 146 156     SECTION 9.18.  Existing Credit Agreement Amended and Restated. ........................... 147 156     SECTION 9.19.  Keepwell .............................................................................................. 148 157     SECTION 9.20.  Acknowledgement and Consent to Bail-In of EEA Financial                    Institutions............................................................................................ 148 158     SECTION 9.21.  QFC  ............................................................................................................ 158                                              (v)   

 

                                                                                                                    EXHIBITS   A.    Form of Assignment and Acceptance  B-1   Form of Revolving Note  B-2   Form of Swingline Note  B-3   Form of Term Note  C     Opinion of Counsel to Loan Parties  D     Form of Compliance Certificate  E     Form of Borrowing Base Certificate                                          (vi)   

 

                                                                                                                  SCHEDULES   1.1       Lenders and Commitments  1.3       Fiscal Months  1.4       Initial Budget  2.23(a)   DDAs  2.23(b)   Credit Card Arrangements  2.23(c)   Blocked Accounts   2.23(f)   Disbursement Accounts   3.04      Change Since Prior Fiscal Year End  3.05(c)(i)  Title to Properties; Real Estate Owned  3.05(c)(ii)  Leased Properties  3.06      Disclosed Matters  3.12      Subsidiaries  3.13      Insurance  5.01(i)   Financial Reporting Requirements  6.01      Indebtedness  6.02      Liens  6.04      Investments                                          (vii)   

 

                                                                                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 6, 2014,   as amended, and as further amended as of January 11, 2019, and as further amended effective as                               of March 29, 2020  among:          SPECIALTY RETAILERS, INC., a Texas corporation, having its principal place of        business at 2425 West Loop South, Houston, Texas 77027 (the “Borrower”);          STAGE STORES, INC., a Nevada corporation, having its principal place of business at        2425 West Loop South, Houston, Texas 77027 (the “Facility Guarantor”);          the LENDERS party hereto;           WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association        having a place of business at One Boston Place, Boston, Massachusetts 02108, as        Administrative Agent and as Collateral Agent for the Lenders;          WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association        having a place of business at One Boston Place, Boston, Massachusetts 02108, as Term        Loan Agent for the Term Loan Lenders;          JPMORGAN CHASE BANK, N.A. and REGIONS BANK, as Co-Documentation        Agents; and         BANK OF AMERICA, N.A., as Syndication Agent.                                  W I T N E S S E T H:          WHEREAS, the Borrower, among others, has entered into that certain Amended and  Restated Credit Agreement, dated as of June 30, 2011 (as amended and in effect on and prior to  the date hereof, the “Existing Credit Agreement”) by, among others, the Borrower, the Facility  Guarantors party thereto, the “Lenders” as defined therein, Bank of America, N.A. as  “Administrative Agent” and “Collateral Agent”, Wells Fargo Capital Finance, LLC as  “Documentation Agent”, and JPMorgan Chase Bank, N.A. and Regions Bank as “Co- Syndication Agents”; and         WHEREAS, in accordance with Section 9.02 of the Existing Credit Agreement, the  Borrower, the Facility Guarantors, the Lenders and the Agents desire to amend and restate the  Existing Credit Agreement as provided herein; and          WHEREAS,  prior to the  amendment and restatement of the Existing Credit Agreement,  among other things, Bank of America, N.A. resigned as Administrative Agent and Collateral  Agent, and the Lenders and the Borrower appointed Wells Fargo Bank, National Association as  successor Administrative Agent and Collateral Agent, and Wells Fargo Bank, National  Association has accepted such appointment.         NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth  in this Agreement, and for good and valuable consideration, the receipt and sufficiency of which  is hereby acknowledged, the undersigned hereby agree that the Existing Credit Agreement shall                                          1   

 

                                                                                 be amended and restated in its entirety to read as follows (it being agreed that this Agreement  shall not be deemed to evidence or result in a novation or repayment and reborrowing of the  Obligations under the Existing Credit Agreement):                                      ARTICLE I                                      Definitions         SECTION 1.01.  Defined Terms.  As used in this Agreement, the following terms have  the meanings specified below:         “Accelerated Borrowing Base Delivery Event” means either (i) the occurrence and  continuance of any Event of Default, or (ii) the failure of the Borrower to maintain Excess  Availability at least equal to twelve and one-half percent (12.5%) of the Adjusted Combined  Loan Cap.  For purposes of this Agreement, the occurrence of an Accelerated Borrowing Base  Delivery Event shall be deemed continuing (i) so long as such Event of Default is continuing,  and/or (ii) if the Accelerated Borrowing Base Delivery Event arises as a result of the Borrower's  failure to achieve Excess Availability as required hereunder, until Excess Availability has  exceeded twelve and one-half percent (12.5%) of the Adjusted Combined Loan Cap for thirty  (30) consecutive Business Days, in which case an Accelerated Borrowing Base Delivery Event  shall no longer be deemed to be continuing for purposes of this Agreement. The termination of  an Accelerated Borrowing Base Delivery Event as provided herein shall in no way limit, waive  or delay the occurrence of a subsequent Accelerated Borrowing Base Delivery Event in the event  that the conditions set forth in this definition again arise.         “ACH” shall mean automated clearing house transfers.         “Accommodation Payment” has the meaning provided therefor in Section 9.13.         “Account” shall mean “accounts” as defined in the UCC, and also all:  accounts, accounts  receivable, receivables, and rights to payment (whether or not earned by performance) for:  property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of;  services rendered or to be rendered; a policy of insurance issued or to be issued; a secondary  obligation incurred or to be incurred; arising out of the use of a credit or charge card or  information contained on or used with that card.         “Additional Revolving Loan Commitment Lender” has the meaning provided therefor in  Section 2.02(a).         “Additional Term Loan” has the meaning provided therefor in Section 2.02A(a).         “Additional Term Loan Commitment Lender” has the meaning provided therefor in  Section 2.02A(a).         “Additional Term Loan Commitment Requirements” means, with respect to any request  for an Additional Term Loan Commitment made pursuant to Section Error! Reference source  not found. A, no Default or Event of Default then exists.                                          2   

 

                                                                                       “Adjusted LIBO Rate” means,         (a)   with respect to any LIBO Borrowing for any Interest Period, an interest rate per  annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (i) the LIBO Rate for  such Interest Period multiplied by (ii) the Statutory Reserve Rate, solely to the extent the   Statutory Reserve Rate is greater than 0; and         (b)   with respect to any Prime Rate Loan for any interest rate calculation, an interest  rate per annum (rounded upwards, if necessary, to the next 1/100 of one percent) equal to (i) the  LIBO Rate for an Interest Period commencing on the date of such calculation and ending on the  date that is thirty (30) days thereafter multiplied by (ii) the Statutory Reserve Rate, solely to the  extent the Statutory Reserve Rate is greater than 0.         The Adjusted LIBO Rate will be adjusted automatically as to all Loans then outstanding  as of the effective date of any change. Notwithstanding the foregoing, the Adjusted LIBO Rate,  for purposes of the Term Loans, shall not be less than one percent (1.00%) per annum, and with  respect to the Term Loans, changes in the Adjusted LIBO Rate shall be determined by the  Administrative Agent as of the first day of each month.         “Adjusted Combined Loan Cap” means, at any time of determination, the sum of (i) the  Revolving Loan Cap (calculated without subtracting the Term Loan Reserve from the Revolving  Loan Borrowing Base), plus (ii) the lesser of (x) the outstanding amount of the Term Loan, or (y)  the Term Loan Borrowing Base.  This definition shall not be amended without the consent of  each Term Loan Lender.         “Adjusted Revolving Loan Commitments” shall mean, at any time, the sum of (i) the  aggregate of the Ordinary Commitments (as set forth on Schedule 1.1) for each Revolving Loan  Lender, subject to possible increase pursuant to Section 2.02, plus (ii) the Seasonal Commitment  Increase Utilized Amount.         “Adjusted LIBO Rate” shall mean the LIBO Rate.         “Adjusted Revolving Loan Commitments” shall mean the Aggregate Revolving Loan  Commitments.         “Adjustment Date” means (i) May 6, 2019, and (ii) thereafter, the first day of each fiscal  quarter of the Borrower.         “Administrative Agent” means Wells Fargo, in its capacity as administrative agent for the  Credit Parties hereunder.          “Affiliate” means, with respect to a specified Person, another Person that directly or  indirectly through one or more intermediaries, Controls or is Controlled by or is under common  Control with the Person specified or is a director or officer of such Person.          “Agents” shall mean collectively, the Administrative Agent, the Collateral Agent, and the  Term Loan Agent.                                          3   

 

                                                                                       “Agreement” means this Second Amended and Restated Credit Agreement, as modified,  amended, supplemented or restated, and in effect from time to time.          “Agreement Value” means, for each Hedging Agreement, on any date of determination,  an amount determined by the Administrative Agent equal to:                (a)   in the case of a Hedging Agreement documented pursuant to the Master         Agreement (Multicurrency-Cross Border) published by the International Swap and         Derivatives Association, Inc. (the “Master Agreement”), the amount, if any, that would         be payable by any Loan Party or any of its Subsidiaries to its counterparty to such         Hedging Agreement, as if (i) such Hedging Agreement was being terminated early on         such date of determination, (ii) such Loan Party or Subsidiary was the sole “Affected         Party”, and (iii) the Administrative Agent was the sole party determining such payment         amount (with the Administrative Agent making such determination pursuant to the         provisions of the form of Master Agreement); or                (b)   in the case of a Hedging Agreement traded on an exchange, the mark-to-       market value of such Hedging Agreement, which will be the unrealized loss on such        Hedging Agreement to the Loan Party or Subsidiary of a Loan Party to such Hedging        Agreement determined by the Administrative Agent based on the settlement price of such        Hedging Agreement on such date of determination; or                (c)   in all other cases, the mark-to-market value of such Hedging Agreement,        which will be the unrealized loss on such Hedging Agreement to the Loan Party or        Subsidiary of a Loan Party party to such Hedging Agreement determined by the        Administrative Agent as the amount, if any, by which (i) the present value of the future        cash flows to be paid by such Loan Party or Subsidiary exceeds (ii) the present value of        the future cash flows to be received by such Loan Party or Subsidiary pursuant to such        Hedging Agreement; capitalized terms used and not otherwise defined in this definition        shall have the respective meanings set forth in the above described Master Agreement.         “Aggregate Revolving Loan Commitments” means the Revolving Loan Commitments of  all the Revolving Loan Lenders, as reduced by the Borrower pursuant to Section 2.17 or  increased pursuant to Section 2.02.  As of the Fourth Fifth  Amendment Effective Date, the  Aggregate Revolving Loan Commitments are in the sum of $ 425,000,000 250,000,000 .         “Allocable Amount” has the meaning provided therefor in Section 9.13.         “Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended,  and all other applicable laws and regulations or ordinances concerning or relating to bribery ,  money laundering  or corruption in any jurisdiction in which any Loan Party or any of its  Subsidiaries or Affiliates is located or is doing business.          “Anti-Money Laundering Laws” means the applicable laws or regulations in any  jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing  business that relates to money laundering, any predicate crime to money laundering, or any  financial record keeping and reporting requirements related thereto.                                          4   

 

                                                                                        “Applicable Law” means as to any Person: (i) all laws, statutes, rules, regulations,  orders, or other requirements having the force of law and (ii) all court orders and injunctions,  and/or similar rulings, in each instance ((i) and (ii)) of or by any Governmental Authority, or  court, or tribunal which has jurisdiction over such Person, or any property of such Person, or of  any other Person for whose conduct such Person would be responsible.           “Applicable Margin” means:               (a)   From and after the Fourth Amendment Effective Date until the first         Adjustment Date, the percentages set forth in Level I of the pricing grid below; and                (b)   From and after the first Adjustment Date and on each Adjustment Date         thereafter, the Applicable Margin shall be determined from the following pricing grid         based upon the Average Daily Excess Availability for the fiscal quarter of the Borrower         ended immediately preceding such Adjustment Date; provided, however, that until the         first Adjustment Date, the Applicable Margin shall not be established at Level II (even if         Average Daily Excess Availability for Level II has been met); provided however that         notwithstanding anything to the contrary set forth herein, upon the occurrence and during         the continuance of an Event of Default, the Administrative Agent may, and at the         direction of the Required Lenders shall, immediately increase the Applicable Margin to         that set forth in Level I (even if the Average Daily Excess Availability requirements for a         different Level have been met) and interest shall be determined in the manner set forth in         Section 2.11 2.11 ; provided further if any Borrowing Base Certificates are at any time        restated or otherwise revised (including as a result of an audit) or if the information set        forth in any Borrowing Base Certificates otherwise proves to be false or incorrect such        that the Applicable Margin would have been higher than was otherwise in effect during        any period, without constituting a waiver of any Default or Event of Default arising as a        result thereof, interest due under this Agreement shall be immediately recalculated at        such higher rate for any applicable periods and shall be due and payable on demand.                     Average Daily Excess         Level       Availability Criteria   Prime Rate Loans   LIBO Loans           I   Less than 40% of the Revolving    0.50%            1.50%               Loan Cap          II   Equal to or greater than 40% of   0.25%            1.25%               the Revolving Loan Cap                       “Appraisal Percentage” shall mean , (i) during all times other than the period from June 1  through September 30 of each year, 90%, and (ii) during the period from June 1 through  September 30 of each year, 92.5%  90% .         “Appraised Value” means the net appraised liquidation value of the Borrower’s Eligible  Inventory as set forth in the Borrower’s inventory books and records as determined from time to  time by an independent appraiser satisfactory to the Administrative Agent and the Term Loan  Agent.                                          5   

 

                                                                                       “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b)  an Affiliate of a Lender (c) an entity or an Affiliate of an entity that administers or manages a  Lender, or (d) the same investment advisor or an advisor under common control with such  Lender, Affiliate or advisor, as applicable.         “Arrangers” means Wells Fargo, MLPFS, Regions Bank, and J.P. Morgan Securities  LLC.         “Assignment and Acceptance” means an assignment and acceptance entered into by a  Lender and an Eligible Assignee (with the consent of any party whose consent is required by  Section 9.04, and accepted by the Administrative Agent, in the form of Exhibit A or any other  form approved by the Administrative Agent.         “Availability Reserves” means such reserves as the Administrative Agent from time to  time determines in the Administrative Agent’s reasonable discretion as being appropriate to  reflect the impediments to the Agents’ ability to realize upon the Collateral  and the Real Estate  Collateral . Without limiting the generality of the foregoing, Availability Reserves may include  (but are not limited to) (a) the Consignor Payables Reserve, and (b) reserves based on (i) rent  (but in no event to exceed two months’ rent) for leased locations in the states of Virginia,  Washington, Pennsylvania and any other state in which Applicable Law provides a landlord with  a Lien for unpaid rent having priority over the Lien of the Collateral Agent and for distribution  centers for which the Loan Parties have not delivered a landlord’s waiver to the Collateral Agent;  (ii) Gift Certificates and Merchandise Credit Liability; (iii) customs, duties, and other costs to  release Inventory which is being imported into the United States; and (iv) past due Taxes and  other governmental charges, including, ad valorem, real estate, personal property, sales, and  other Taxes which might have priority over the interests of the Collateral Agent in the Collateral   or the Real Estate Collateral.  For the avoidance of doubt, Availability Reserves include the  Term Loan Reserve and the Restructuring Reserve .         “Average Daily Excess Availability” shall mean the average daily Excess Availability  for, as applicable, either (a) the immediately preceding fiscal quarter, (b) the immediately  preceding Fiscal Month, or (c) each Fiscal Month during any projected twelve (12) Fiscal  Months.         “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the  applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.          “Bail-In Legislation” means, with respect to any EEA Member Country implementing  Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the  European Union, the implementing law for such EEA Member Country from time to time which  is described in the EU Bail-In Legislation Schedule.          “Bank of America” shall mean Bank of America, N.A., a national banking association.         “Bank Products” means any services or facilities provided to any Loan Party by the  Administrative Agent, the Collateral Agent, the Term Loan Agent, any Revolving Lender or any  of their respective Affiliates, including, without limitation, on account of (a) Hedging  Agreements, (b) purchase cards, (c) credit and debit cards, (d) leasing, (e) Factored Receivables,                                          6   

 

                                                                                 and (f) supply chain finance services including, without limitation, trade payable services and  supplier accounts receivable purchases, but excluding Cash Management Services.          “Bank Products Cap” means the lesser of (i) the aggregate amount of Obligations in  respect of Bank Products then outstanding, or (ii) the sum of $2,000,000.           “Bankruptcy Code” means Title 11, U.S.C., as now or hereafter in effect, or any  successor thereto.         “Beneficial Owner” means each of the following:  (a) each individual, if any, who,  directly or indirectly, owns 25% or more of the equity interests in Borrower; (b) a single  individual with significant responsibility to control, manage, or direct Borrower, and (c) a  beneficial owner as otherwise defined in 31 C.F.R Section 1010.230.         “Benchmark Replacement” means the sum of: (a) the alternate benchmark rate (which  may include Term SOFR) that has been selected by the Administrative Agent and the Borrower  giving due consideration to (i) any selection or recommendation of a replacement rate or the  mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving  or then-prevailing market convention for determining a rate of interest as a replacement to the  LIBO Rate for United States dollar-denominated syndicated credit facilities and (b) the  Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so  determined would be less than zero, the Benchmark Replacement shall be deemed to be zero for  the purposes of this Agreement.         “Benchmark Replacement Adjustment” means, with respect to any replacement of the  LIBO Rate with an Unadjusted Benchmark Replacement for each applicable Interest Period, the  spread adjustment, or method for calculating or determining such spread adjustment, (which may  be a positive or negative value or zero) that has been selected by the Administrative Agent and  the Borrower giving due consideration to (i) any selection or recommendation of a spread  adjustment, or method for calculating or determining such spread adjustment, for the  replacement of the LIBO Rate with the applicable Unadjusted Benchmark Replacement by the  Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for  determining a spread adjustment, or method for calculating or determining such spread  adjustment, for the replacement of the LIBO Rate with the applicable Unadjusted Benchmark  Replacement for United States dollar-denominated syndicated credit facilities at such time.         “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark  Replacement, any technical, administrative or operational changes (including changes to the  definition of “Prime Rate”, the definition of “Interest Period”, timing and frequency of  determining rates and making payments of interest and other administrative matters) that the  Administrative Agent decides may be appropriate to reflect the adoption and implementation of  such Benchmark Replacement and to permit the administration thereof by the Administrative  Agent in a manner substantially consistent with market practice (or, if the Administrative Agent  decides that adoption of any portion of such market practice is not administratively feasible or if  the Administrative Agent determines that no market practice for the administration of the  Benchmark Replacement exists, in such other manner of administration as the Administrative  Agent decides is reasonably necessary in connection with the administration of this Agreement).                                          7   

 

                                                                                       “Benchmark Replacement Date” means the earlier to occur of the following events with  respect to the LIBO Rate:               (a)   in the case of clause (a) or (b) of the definition of “Benchmark Transition        Event,” the later of (i) the date of the public statement or publication of information        referenced therein and (ii) the date on which the administrator of the LIBO Rate        permanently or indefinitely ceases to provide the LIBO Rate; or               (b)   in the case of clause (c) of the definition of “Benchmark Transition        Event,” the date of the public statement or publication of information referenced therein.         “Benchmark Transition Event” means the occurrence of one or more of the following  events with respect to the LIBO Rate:               (a)   a public statement or publication of information by or on behalf of the        administrator of the LIBO Rate announcing that such administrator has ceased or will        cease to provide the LIBO Rate, permanently or indefinitely, provided that, at the time of        such statement or publication, there is no successor administrator that will continue to        provide the LIBO Rate;               (b)   a public statement or publication of information by the regulatory        supervisor for the administrator of the LIBO Rate, the Federal Reserve System of the        United States (or any successor), an insolvency official with jurisdiction over the        administrator for the LIBO Rate, a resolution authority with jurisdiction over the        administrator for the LIBO Rate or a court or an entity with similar insolvency or        resolution authority over the administrator for the LIBO Rate, which states that the        administrator of the LIBO Rate has ceased or will cease to provide the LIBO Rate        permanently or indefinitely, provided that, at the time of such statement or publication,        there is no successor administrator that will continue to provide the LIBO Rate; or               (c)   a public statement or publication of information by the regulatory        supervisor for the administrator of the LIBO Rate announcing that the LIBO Rate is no        longer representative.         “Benchmark Transition Start Date” means (a) in the case of a Benchmark Transition  Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark  Transition Event is a public statement or publication of information of a prospective event, the  90 th  day prior to the expected date of such event as of such public statement or publication of  information (or if the expected date of such prospective event is fewer than 90 days after such  statement or publication, the date of such statement or publication) and (b) in the case of an Early  Opt-in Election, the date specified by the Administrative Agent or the Required Lenders, as  applicable, by notice to the Borrower, the Administrative Agent (in the case of such notice by the  Required Lenders) and the Lenders.         “Benchmark Unavailability Period” means, if a Benchmark Transition Event and its  related Benchmark Replacement Date have occurred with respect to the LIBO Rate and solely to  the extent that the LIBO Rate has not been replaced with a Benchmark Replacement, the period  (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time,                                          8   

 

                                                                                 no Benchmark Replacement has replaced the LIBO Rate for all purposes hereunder in  accordance with Section 2.18(b) and (y) ending at the time that a Benchmark Replacement has  replaced the LIBO Rate for all purposes hereunder pursuant to Section 2.18(b).          “Beneficial Ownership Certification” means a certification regarding beneficial  ownership as required by the Beneficial Ownership Regulation.         “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.         “BHC Act Affiliate” of a Person means an “affiliate” (as such term is defined under, and  interpreted in accordance with, 12 U.S.C. 1841(k)) of such Person.         “Blocked Account Agreements” has the meaning set forth provided therefor  in Section  2.23(c).         “Blocked Account Banks” shall mean the banks with whom the Borrower has entered  into Blocked Account Agreements.         “Blocked Accounts” shall have has  the meaning set forth provided therefor  in Section  2.23(c).         “Borrower” means Specialty Retailers, Inc., a Texas corporation.         “Borrowing” shall mean (a) the incurrence of Loans of a single Type, on a single date  and having, in the case of LIBO Loans, a single Interest Period, or (b) a Swingline Loan.          “Borrowing Base” means, individually or collectively (as the context may require), the  Revolving Loan Borrowing Base and the Term Loan Borrowing Base.  Without the consent of  each Term Loan Lender, this definition (and any component definition used therein) may not be  amended or modified if as a result thereof the amounts available to be borrowed by the Borrower  would be increased, provided that  the foregoing shall not limit the discretion of the  Administrative Agent pursuant to clause (j) of the definition of Eligible Inventory, or to change,  establish or eliminate any Reserves in accordance with the terms hereof.         “Borrowing Base Certificate” has the meaning assigned to such term provided therefor  in  Section 5.01(f).         “Borrowing Request” means a request by the Borrower for a Borrowing in accordance  with Section 2.04.         “Breakage Costs” shall have the meaning set forth in Section 2.21(c).         “Budget” means the financial projections for the Loan Parties covering the thirteen-week  period commencing on the Fifth Amendment Effective Date on a weekly basis, which  projections shall include, at a minimum, cash receipts, operating disbursements, payroll  disbursements, a reasonably detailed professional fee budget, non-operating disbursements  (including, for the avoidance of doubt, professional fees) and inventory for the period covered  thereby, and any subsequent projections furnished pursuant to Section 5.01 hereof, all of the                                          9   

 

                                                                                 foregoing to be in form and substance reasonably satisfactory to the Agents (it being understood  that any update to the initial Budget (and any subsequently accepted Budget, which acceptance  may be by e-mail) pursuant to Section 5.01 shall be accepted by the Agents in their sole and  absolute discretion, and until any such update is accepted, the most recently accepted Budget  shall be the Budget for all purposes of this Agreement).  The initial Budget as of the Fifth  Amendment Effective Date is as set forth on Schedule 1.4.         “Business Day” means any day that is not a Saturday, Sunday or other day on which  commercial banks in Boston, Massachusetts, New York, New York or Houston, Texas are  authorized or required by law to remain closed, provided that, when used in connection with a  LIBO Loan, the term “Business Day” shall also exclude any day on which banks are not open for  dealings in dollar deposits in London or such other eurodollar interbank market as may be  selected by the Administrative Agent in its sole discretion acting in good faith.  Except as  otherwise provided herein, if any day on which a payment is due is not a Business Day, then the  payment shall be due on the next day following which is a Business Day and such extension of  time shall be included in computing interest and fees in connection with such payment.         “Capital Expenditures” means, for any period, (a) all expenditures made or costs incurred  (whether made in the form of cash or other property) for the acquisition, improvement or repair  of fixed or capital assets of the Parent and its Subsidiaries, in each case that are (or would be) set  forth in a Consolidated statement of cash flows of the Parent and its Subsidiaries for such period  prepared in accordance with GAAP as capital expenditures, and (b) Capital Lease Obligations  incurred by the Parent and its Subsidiaries during such period.  For purposes of this definition,  the purchase price of equipment that is purchased simultaneously with the trade-in of existing  equipment or with insurance proceeds shall be included in Capital Expenditures only to the  extent of the gross amount of such purchase price less the credit granted by the seller of such  equipment for the equipment being traded in at such time or the amount of the proceeds, as the  case may be.         “Capital Lease Obligations” of any Person means the obligations of such Person to pay  rent or other amounts under any lease of (or other arrangement conveying the right to use) real or  personal property, or a combination thereof, which obligations are required to be classified and  accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount  of such obligations shall be the capitalized amount thereof determined in accordance with  GAAP.         “Cash Collateral Account” shall mean an interest-bearing account established by the  Borrower with the Collateral Agent at Wells Fargo under the sole and exclusive dominion and  control of the Collateral Agent designated as the “Specialty Retailers Cash Collateral Account”.         “Cash Dominion Event” shall mean either (i) the occurrence and continuance of any  Event of Default, or (ii) the failure of the Borrower to maintain Excess Availability of at least the  greater of (i) $35,000,000 or (ii) twelve and one-half percent (12.5%) of the Adjusted Combined  Loan Cap for a period of five (5) consecutive Business Days.  For purposes of this Agreement,  the occurrence of a Cash Dominion Event shall be deemed continuing (i) so long as such Event  of Default is continuing, and/or (ii) if the Cash Dominion Event arises as a result of the  Borrower’s failure to achieve Excess Availability as required hereunder, until Excess                                          10   

 

                                                                                 Availability has exceeded the greater of (i) $35,000,000 or (ii) twelve and one-half percent  (12.5%) of the Adjusted Combined Loan Cap for thirty (30) consecutive Business Days, in  which case a Cash Dominion Event shall no longer be deemed to be continuing for purposes of  this Agreement,  provided that  a Cash Dominion Event shall be deemed continuing (even if an   Event of Default is no longer continuing and/or Excess Availability exceeds the required amount   for thirty (30) consecutive Business Days) at all times after a Cash Dominion Event has occurred   and been discontinued three (3) times in any period of 365 days.  The termination of a Cash   Dominion Event as provided herein shall in no way limit, waive or delay the occurrence of a   subsequent Cash Dominion Event in the event that the conditions set forth in this definition again   arise.  This definition shall not be amended or modified without the consent of the Required   Term Loan Lenders.           “Cash Management Services” means any cash management services or facilities provided  to any Loan Party by the Administrative Agent, the Collateral Agent, the Term Loan Agent or  any Revolving Lender or any of their respective Affiliates, including, without limitation: (a)  ACH transactions, (b) treasury and/or cash management services, including, without limitation,  controlled disbursement services, treasury, depository, overdraft, and electronic funds transfer  services, (c) foreign exchange facilities, and (d) credit card processing services.          “Cash Receipts” has the meaning provided therefor in Section 2.23(c).         “CERCLA” means the Comprehensive Environmental Response, Compensation, and  Liability Act, 42 U.S.C. § 9601 et seq.         “Certificate of Beneficial Ownership” means with respect to Borrower, a certificate in  form and substance reasonably satisfactory to the Administrative Agent, certifying, among other  things, the Beneficial Owner of Borrower.         “Change in Control” means, at any time, (a) during any period of twelve (12) months,  individuals who at the beginning of such period constituted the board of directors of the Parent  (together with any new directors whose election or appointment by such board of directors, or  whose nomination for election by shareholders of the Parent, as the case may be, was approved  by a vote of a majority of the directors still in office who were either directors 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 board of directors then in office; or (b) any person or  group (within the meaning of the Securities and Exchange Act of 1934, as amended) is or  becomes the beneficial owner (within the meaning of Rule 13d-3 and 13d-5 of the Securities and  Exchange Act of 1934, as amended, except that such person shall be deemed to have “beneficial  ownership” of all shares that such person has the right to acquire, whether such right is  exercisable immediately or only after the passage of time) directly or indirectly of thirty-five  percent (35%) or more of the total then outstanding voting power of the Voting Stock of the  Parent on a fully diluted basis, whether as a result of the issuance of securities of the Parent, any  merger, consolidation, liquidation or dissolution of the Parent, any direct or indirect transfers of  securities or otherwise, or has the right or ability to Control the Parent; or (c) the failure of the  Parent at any time to own, directly or indirectly, 100% of the capital stock or other equity  interests of the Borrower and other Loan Parties (other than the Parent) free and clear of all  Liens.                                          11   

 

                                                                                       “Change in Law” means (a) the adoption of any law, rule or regulation after the date of  this Agreement, (b) any change in any law, rule or regulation or in the interpretation or  application thereof by any Governmental Authority after the date of this Agreement or  (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.25(b), by the  designated lending office of such Lender or by such Lender’s or the Issuing Bank’s holding  company, if any) with any request, guideline or directive (whether or not having the force of law)  of any Governmental Authority made or issued after the date of this Agreement; provided  however, for purposes of this Agreement, (i) all requests, guidelines or directives in connection  with the Dodd-Frank Wall Street Reform and Consumer Protection Act, and (ii) all rules,  guidelines or directives promulgated by the Bank for International settlements, the Basel  Committee on Banking Supervision (or any successor or similar authority) or the United States  regulatory authorities, in each case pursuant to Basel III, shall be deemed to have gone into effect  and been adopted after the date hereof.         “Charges” has the meaning provided therefor in Section 9.12.         “Code” means the Internal Revenue Code of 1986 and the Treasury regulations  promulgated thereunder, as amended from time to time.          “Collateral” means any and all “Collateral” (or similar term)  as defined in any applicable  Security Document  (other than the Mortgages) .         “Collateral Agent” means Wells Fargo, in its capacity as collateral agent under the  Security Documents.         “Comenity Bank” means Comenity Bank (formerly known as World Financial Network  National Bank) or its successors.         “Commercial Letter of Credit” means any Letter of Credit issued for the purpose of  providing the primary payment mechanism in connection with the purchase of any materials,  goods or services by the Borrower in the ordinary course of business of the Borrower and any  banker’s acceptances related thereto.         “Commercial Letter of Credit Agreement” means the Commercial Letter of Credit  Agreement relating to the issuance of a Commercial Letter of Credit in the form from time to  time in use by the Issuing Bank.         “Commitment” means, with respect to each Lender, its Revolving Loan Commitment or  its Term Loan Commitment, as applicable.         “Commitment Fee” has the meaning provided therefor in Section 2.13.         “Commitment Percentage” means, (a) with respect to each Loan or Letter of Credit under  the Revolving Loan Commitments, the Revolving Loan Commitment Percentage, (b) with  respect to each Loan under the Term Loan Commitments, the Term Loan Commitment  Percentage, and (c) with respect to each Lender, its percentage of the sum of the Adjusted  Revolving Loan Commitments represented by the sum of such Lender’s Revolving Loan  Commitment and the outstanding principal balance of such Lender’s portion of the Term Loan at                                          12   

 

                                                                                 such time, in each case as the context provides.  If the Revolving Loan Commitments have been  terminated pursuant to Section 2.17 or Section 7.01 or if the Revolving Loan Commitments have  expired, then the Commitment Percentage of each Revolving Loan Lender shall be determined  based on the Commitment Percentage of such Revolving Loan Lender most recently in effect,  giving effect to any subsequent assignments.  The Commitment Percentage of each Lender is set  forth opposite the name of such Lender on Schedule 1.1 hereto or as may subsequently be set  forth in the Register from time to time, as the same may be (i) be  reduced from time to time  pursuant to Section 2.17 or (ii) be  increased from time to time pursuant to Section 2.02 2.02   and/or Section 2.02A hereof, as the case may be.         “Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.),  as amended from time to time, and any successor statute.          “Concentration Account” shall have the meaning set forth in Section 2.23(c).         “Confidential Information” shall mean any earnings information, including sales and  profitability trends, as well as any other non-public information with respect to any aspect of the  Loan Parties’ business which is disclosed to the Agents or a Lender by any Loan Party, either  directly or indirectly, in writing, orally, electronically, graphically or otherwise.  Confidential  Information shall not include any information (a) which is in the possession of any Agent or  Lender (from a source which has no obligation of confidentiality to the Loan Parties, to the best  knowledge of such Agent or Lender) prior to disclosure thereof by the Loan Parties, (b) is  approved for release by written authorization of the Borrower, (c) is independently developed  and disclosed by a third party to any Agent or Lender, or (d) as has become generally available  to the public, not as a result of any action or inaction by any Agent or Lender.         “Conforming DIP” has the meaning provided therefor in Section 7.05(d).         “Consent” means actual consent given by a Lender from whom such consent is sought. If  ten (10) Business Days after receipt of written notice to a Lender from the Administrative Agent  of a proposed course of action to be followed by the Administrative Agent without such Lender’s  giving the Administrative Agent written notice of that Lender’s consent to such course of action,  such Lender shall be deemed not to have consented thereto.          “Consignor Payables Reserve” means such Availability Reserve as Administrative Agent  shall from time-to-time implement and maintain in its reasonable discretion, to reflect amounts  that are or may be payable by Loan Parties to Persons that, as consignors, have placed goods  with Loan Parties, as consignees, to be held for sale by Borrower on a consignment basis.          “Consolidated” means, when used to modify a financial term, test, statement, or report of  a Person, refers to the application or preparation of such term, test, statement or report (as  applicable) based upon the consolidation, in accordance with GAAP, of the financial condition  or operating results of such Person and its Subsidiaries.          “Consolidated EBITDA” means, at any date of determination, an amount equal to  Consolidated Net Income of the Parent and its Subsidiaries on a Consolidated basis for the most  recently completed Measurement Period, plus (a) the following to the extent deducted in  calculating such Consolidated Net Income: (i) Consolidated Interest Charges, (ii) the provision                                          13   

 

                                                                                 for Federal, state, local and foreign income Taxes, (iii) depreciation and amortization expense  and (iv) other non-recurring expenses reducing such Consolidated Net Income which do not  represent a cash item in such period or any future period (in each case of or by the Parent and its  Subsidiaries for such Measurement Period), minus (b) the following to the extent included in  calculating such Consolidated Net Income: (i) Federal, state, local and foreign income tax credits  and (ii) all non-cash items increasing Consolidated Net Income (in each case of or by the Parent  and its Subsidiaries for such Measurement Period), all as determined on a Consolidated basis in  accordance with GAAP.         “Consolidated Fixed Charge Coverage Ratio” means, at any date of determination, the  ratio of (a) (i) Consolidated EBITDA for the most recently completed Measurement Period  minus (ii) Capital Expenditures made during such period (net of any landlord contributions to  tenant improvements of the Parent and its Subsidiaries during such period), minus (iii) the  aggregate amount of Federal, state, local and foreign income taxes paid in cash during such  period (but not less than zero) to (b) Debt Service Charges in each case, of or by the Parent and  its Subsidiaries for the most recently completed Measurement Period, all as determined on a  Consolidated basis in accordance with GAAP.         “Consolidated Interest Charges” means, for any Measurement Period, the sum of (a) all  interest, premium payments, debt discount, fees, charges and related expenses in connection with  borrowed money (including capitalized interest) or in connection with the deferred purchase  price of assets, in each case to the extent treated as interest in accordance with GAAP, including,  without limitation, all commissions, discounts and other fees and charges owed with respect to  letters of credit and bankers’ acceptance financing and net costs under Hedging Agreements, but  excluding any non-cash or deferred interest financing costs, and (b) the portion of rent expense  with respect to such period under Capital Lease Obligations that is treated as interest in  accordance with GAAP minus (c) interest income during such period (excluding any portion of  interest income representing amounts accrued in a previous period and received in the current  period), in each case of or by the Parent and its Subsidiaries for the most recently completed  Measurement Period, all as determined on a Consolidated basis in accordance with GAAP.          “Consolidated Net Income” means, as of any date of determination, the net income of the  Parent and its Subsidiaries for the most recently completed Measurement Period, all as  determined on a Consolidated basis in accordance with GAAP, provided, however, that there  shall be excluded (a) extraordinary gains and extraordinary losses for such Measurement Period,  (b) the income (or loss) of the Parent and its Subsidiaries during such Measurement Period in  which any other Person has a joint interest, except to the extent of the amount of cash dividends  or other distributions actually paid in cash to the Parent and its Subsidiaries during such period,  (c) the income (or loss) of a Subsidiary during such Measurement Period and accrued prior to the  date it becomes a Subsidiary of the Parent or any of the Parent’s Subsidiaries or is merged into or  consolidated with the Parent or any of its Subsidiaries or that Person’s assets are acquired by the  Parent or any of its Subsidiaries, and (d) the income of any direct or indirect Subsidiary of the  Parent to the extent that the declaration or payment of dividends or similar distributions by that  Subsidiary of that income is not at the time permitted by operation of the terms of its  Organizational Documents or any agreement, instrument, judgment, decree, order, statute, rule or  governmental regulation applicable to that Subsidiary, except that the Parent’s equity in any net                                          14   

 

                                                                                 loss of any such Subsidiary for such Measurement Period shall be included in determining  Consolidated Net Income.         “Control” means the possession, directly or indirectly, of the power (a) to vote twenty  percent (20%) or more of the securities having ordinary voting power for the election of directors  of a Person, or (b) to direct or cause the direction of the management or policies of a Person,  whether through the ability to exercise voting power, by contract or otherwise. The terms  “Controlling” and “Controlled” have meanings correlative thereto.         “Cost” means the cost of purchases, as reported on the Borrower’s inventory books and  records, based upon the Borrower’s accounting practices which are in effect on the date of this  Agreement. “Cost” does not include inventory capitalization costs or other non-purchase price  charges (such as freight) used in the Borrower’s calculation of cost of goods sold.         “Covered Entity” means any of the following:               (a)   a “covered entity” as that term is defined in, and interpreted in accordance        with, 12 C.F.R. § 252.82(b);               (b)   a “covered bank” as that term is defined in, and interpreted in accordance        with, 12 C.F.R. § 47.3(b); or               (c)   a “covered FSI” as that term is defined in, and interpreted in accordance        with, 12 C.F.R. § 382.2(b).          “Covered Party” has the meaning provided therefor in Section 9.21.         “Credit Card Advance Rate” means 90%.         “Credit Card Agreement” shall mean, with respect to each Account  and/or Payment  Intangible which arises from a consumer revolving credit account arrangement, and collectively  with respect to all of such Accounts and/or Payment Intangibles, the agreements between the  Borrower and each Credit Card Processor, governing the terms and conditions of the  Account/and or Credit Card Processor, as such agreements may be amended, modified or  otherwise changed from time to time and as distributed (including any amendments and revisions  thereto) to holders of such consumer revolving credit card accounts.          “Credit Card Issuer” shall mean any Person (other than Borrower or other Loan Party)  who issues or whose members issue credit cards, including, without limitation, Comenity Bank  or any other third party administering a private label credit card program for any of the Loan  Parties and from Visa, MasterCard, American Express Co., Discovercard, and other major credit  card processors and other issuers approved by the Administrative Agent.          “Credit Card Processor” shall mean any servicing or processing agent or any factor or  financial intermediary who facilitates, services, processes or manages the credit authorization,  billing transfer and/or payment procedures with respect to Borrower’s sales transactions  involving credit card or debit card purchases by customers using credit cards or debit cards  issued by any Credit Card Issuer.                                          15   

 

                                                                                       “Credit Card Notifications” has the meaning provided therefor in Section 2.23(c).         “Credit Extensions” as of any day, shall be equal to the sum of (a) the principal balance  of all Loans then outstanding, and (b) the then amount of the Letter of Credit Outstandings.          “Credit Party” or “Credit Parties” means (a) individually, (i) each Lender and its  Affiliates, (ii) the Administrative Agent and the Collateral Agent, (iii) the Term Loan Agent, (iv)  the Issuing Bank, (v) the Arrangers, (vi) each beneficiary of each indemnification obligation  undertaken by any Loan Party under any Loan Document, (vii) any other Person to whom  Obligations under this Agreement and other Loan Documents are owing, and (viii) the  successors and assigns of each of the foregoing, and (b) collectively, all of the foregoing.           “Credit Party Expenses” means, without limitation, (a) all reasonable and documented  out-of-pocket expenses incurred by the Agents and their respective Affiliates, in connection with  this Agreement and the other Loan Documents, including without limitation, (i) the reasonable  and documented fees, charges and disbursements of (A) one counsel for the Administrative  Agent and the Collateral Agent and one counsel for the Term Loan Agent, (B) outside  consultants for the Administrative Agent and the Term Loan Agent, (C) appraisers, (D)  commercial finance examinations, (E) photocopying, notarization, couriers and messengers,  telecommunication, public record searches, filing fees, recording fees and publication, (F) the  Agents’ customary fees and charges imposed or incurred in connection with any background  checks or OFAC/PEP searches related to any Loan Party or its Subsidiaries, and (G) all such  documented and out-of-pocket expenses incurred during any workout, restructuring or  negotiations in respect of the Obligations, (ii) in connection with (A) the syndication of the credit  facilities provided for herein, (B) the preparation, negotiation, administration, management,  execution and delivery of this Agreement and the other Loan Documents or any amendments,  modifications or waivers of the provisions thereof (whether or not the transactions contemplated  hereby or thereby shall be consummated), (C) the enforcement or protection of their rights in  connection with this Agreement or the Loan Documents or efforts to preserve, protect, collect, or  enforce the Collateral and the Real Estate Collateral  (including, without limitation, in connection  with, during the continuation of an Event of Default, gaining possession of, maintaining,  handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the  Collateral  or the Real Estate Collateral , or any portion thereof, irrespective of whether a sale is  consummated), or (D) any workout, restructuring or negotiations in respect of any Obligations,  (iii) all customary fees and charges (as adjusted from time to time) of the Agents with respect to  the disbursement of funds (or the receipt of funds) to or for the account of the Borrower (whether  by wire transfer or otherwise), together with any documented and out-of-pocket costs and  expenses incurred in connection therewith, and (iv) customary charges imposed or incurred by  the Administrative Agent resulting from the dishonor of checks payable by or to any Loan Party;  (b) with respect to each Issuing Bank, and its Affiliates, all reasonable and documented out-of- pocket expenses incurred in connection with the issuance, amendment , renewal  or extension of  any Letter of Credit or any demand for payment thereunder; and (c) all reasonable and  documented out-of-pocket expenses incurred by the Credit Parties who are not the Agents, an  Issuing Bank, or any Affiliate of any of them, after the occurrence and during the continuance of  an Event of Default, provided that such Credit Parties shall be entitled to reimbursement for no  more than (x) one counsel representing all Revolving Loan Lenders (absent a conflict of interest  in which case the Revolving Loan Lenders may engage and be reimbursed for additional                                          16   

 

                                                                                 counsel) and (y) one counsel representing all Term Loan Lenders (absent a conflict of interest in  which case the Term Loan Lenders may engage and be reimbursed for one additional counsel).          “DDAs” means any checking or other demand deposit account maintained by the  Borrower.         “DDA Notification” has the meaning provided therefor in Section 2.23(c).         “Debt Service Charges” means for any Measurement Period, the sum of (a) Consolidated  Interest Charges paid or required to be paid for such Measurement Period, plus (b) principal  payments made or required to be made on account of Indebtedness (excluding the Obligations  and any obligations on account of Synthetic Leases but including, without limitation, Capital  Lease Obligations) for such Measurement Period, in each case determined on a Consolidated  basis in accordance with GAAP.         “Debtor Relief Laws” means the Bankruptcy Code and all other liquidation,  conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,  receivership, insolvency, reorganization, or similar debtor relief laws of the United States or  other applicable jurisdictions from time to time in effect and affecting the rights of creditors  generally.         “Default” means any event or condition that constitutes an Event of Default or that upon  notice, lapse of time or both would, unless cured or waived, become an Event of Default.         “Default Rate” means (a) when used with respect to Obligations other than Letter of  Credit Fees and Term Loans, an interest rate equal to (i) the Prime Rate plus (ii) the Applicable  Margin applicable to Prime Rate  Revolving Loans plus (iii) 2% per annum; provided, however,  that with respect to a LIBO Loan, the Default Rate shall be an interest rate equal to the interest  rate (including any Applicable Margin) otherwise applicable to such Loan plus 2% per annum,  (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Margin  otherwise payable pursuant to Section 2.14 plus 2% per annum and (c) when used with respect to  Term Loans, a rate equal to the Term Loan Interest Rate plus 2% per annum.         “Default Right” has the meaning assigned to that term in, and shall be interpreted in  accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.         “Delinquent Lender” has the meaning therefor provided therefor  in Section 8.12.         “Delinquent Lender’s Future Commitment” has the meaning therefor provided therefor  in  Section 8.12.         “Delinquent Lender Rate” means (a) for the first three (3) days from and after the date the  relevant payment is due, the Base Prime  Rate, and (b) thereafter, the interest rate then applicable  to Loans that are Prime Rate Loans (inclusive of the Applicable Margin applicable thereto).          “Deteriorating Lender” means any Delinquent Lender or any Revolving Loan Lender as  to which (a) the Issuing Bank or the Swingline Lender has a good faith belief that such  Revolving Loan Lender has defaulted in fulfilling its obligations under one or more other                                          17   

 

                                                                                 syndicated credit facilities, (b) (i)  becomes or is insolvent or has a parent company that has  become or is insolvent or (ii) becomes the subject of a bankruptcy or insolvency proceeding, or  has had a receiver, conservator, trustee, or custodian or appointed for it, or has taken any action  in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding  or appointment or has a parent company that has become the subject of a bankruptcy or  insolvency proceeding, or has had a receiver, conservator, trustee, or custodian appointed for it,  or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence  in any such proceeding or appointment,(c) has notified the Borrower, the Administrative Agent,  or any Lender in writing that it does not intend to comply with all or any portion of its funding  obligations under this Agreement, (d) has made a public statement to the effect that it does not  intend to comply with its funding obligations under the Agreement or under other agreements  generally (as reasonably determined by the Administrative Agent) under which it has committed  to extend credit, or (e) has failed, within two (2) Business Days after written request by the  Administrative Agent, to confirm that it will comply with the terms of the Agreement relating to  its obligations to fund any amounts required to be funded by it under the Agreement or (f) is the  subject of a Bail-In Action.         “DIP Financing” means, in connection with a proceeding under any Debtor Relief Laws  with respect to a Loan Party, the consensual use of cash collateral by, or the provision of  financing or financial accommodations to such Loan Party (including, in either event, all of the  terms and conditions established and/or approved in connection with the consensual use of cash  collateral, financing or financial accommodations) by one or more Credit Parties, permitted  under and subject to Applicable Law, and pursuant to an order of a court of competent  jurisdiction.         “Dollars” or “$” refers to lawful money of the United States of America.         “Drawing Document” means any Letter of Credit or other document presented for  purposes of drawing under any Letter of Credit, including by electronic transmission such as  SWIFT, electronic mail, facsimile or computer generated communication.         “Early Opt-in Election” means the occurrence of:               (a) (i) a determination by the Administrative Agent or (ii) a notification by the        Required Lenders to the Administrative Agent (with a copy to the Borrower) that the        Required Lenders have determined that United States dollar-denominated syndicated        credit facilities being executed at such time, or that include language similar to that        contained in Section 2.18(b) are being executed or amended, as applicable, to incorporate        or adopt a new benchmark interest rate to replace the LIBO Rate, and               (b) (i) the election by the Administrative Agent or (ii) the election by the Required        Lenders to declare that an Early Opt-in Election has occurred and the provision, as        applicable, by the Administrative Agent of written notice of such election to the        Borrower and the Lenders or by the Required Lenders of written notice of such election        to the Administrative Agent.                                           18   

 

                                                                                       “EEA Financial Institution” means (a) any credit institution or investment firm  established in any EEA Member Country which is subject to the supervision of an EEA  Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of  an institution described in clause (a) of this definition, or (c) any financial institution established  in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b)  of this definition and is subject to consolidated supervision with its parent.          “EEA Member Country” means any of the member states of the European Union,  Iceland, Liechtenstein, and Norway.         “EEA Resolution Authority” means any public administrative authority or any Person  entrusted with public administrative authority of any EEA Member Country (including any  delegee) having responsibility for the resolution of any EEA Financial Institution.          “Effective Date” means the date on which the conditions specified in Section 4.01 are  satisfied (or waived in accordance with Section 9.02).         “Eligible Assignee” means (a) a Credit Party or any of its Affiliates; (b) a bank, insurance  company, or company engaged in the business of making commercial loans having a combined  capital and surplus in excess of $300,000,000 (provided, that the requirement set forth in this  clause (b) shall not apply to assignments of the Term Loans made (x) during the occurrence and  during the continuation of an Event of Default, or (y) with the prior written consent of the  Borrower); (c) an Approved Fund; (d) any Person to whom a Credit Party assigns its rights and  obligations under this Agreement as part of an assignment and transfer of such Credit Party’s  rights in and to a material portion of such Credit Party’s portfolio of asset based credit facilities,  and (e) any other Person (other than a natural person) approved by (i) in the case of an  assignment in respect of Revolving Loans, the Administrative Agent, and (ii) in the case of an  assignment in respect of Term Loans, the Term Loan Agent (such approval not to be  unreasonably withheld or delayed in either case) and, so long as no Event of Default is  continuing, by Borrower (such approval not to be unreasonably withheld or delayed); provided  that notwithstanding the foregoing, “Eligible Assignee” shall not include a Loan Party or any of  the Loan Parties’ Affiliates or Subsidiaries.         “Eligible Credit Card Receivables” means either Accounts or Payment Intangibles due to  the Borrower on a non-recourse basis from Comenity Bank or any other third party administering  a private label credit card program for any of the Loan Parties and from Visa, MasterCard,  American Express Co., Discovercard, and other major credit card processors, in each case  reasonably acceptable to the Administrative Agent as arise in the ordinary course of business,  which have been earned by performance and are deemed by the Administrative Agent in its  reasonable discretion to be eligible for inclusion in the calculation of the Borrowing Base.  Without limiting the foregoing, none of the following shall be deemed to be Eligible Credit Card  Receivables:               (a)   Accounts and/or Payment Intangibles that have been outstanding for more        than five (5) Business Days from the date of sale;                                           19   

 

                                                                                             (b)   Accounts and/or Payment Intangibles with respect to which the Borrower        does not have good, valid and marketable title thereto, free and clear of any Lien (other        than Liens granted to the Collateral Agent, for its benefit and the ratable benefit of the        other Credit Parties, pursuant to the Security Documents);               (c)   Accounts and/or Payment Intangibles that are not subject to a perfected        first priority security interest in favor of the Collateral Agent, for the benefit of itself and        the other Credit Parties (it being the intent that chargebacks in the ordinary course by the        credit card processors shall not be deemed violative of this clause);               (d)   Accounts and/or Payment Intangibles which are disputed, are with         recourse, or with respect to which a claim, counterclaim, offset or chargeback has been         asserted (to the extent of such claim, counterclaim, offset or chargeback);                (e)   Accounts and/or Payment Intangibles which are acquired in a Permitted         Acquisition unless and until the Collateral Agent has completed an appraisal of such         Accounts and/or Payment Intangibles, establishes an advance rate and reserves (if         applicable) therefor, and otherwise agrees that such Accounts shall be deemed Eligible         Credit Card Receivables; or                 (f)   Accounts and/or Payment Intangibles which the Administrative Agent         determines in its reasonable discretion to be uncertain of collection.          “Eligible In-Transit Inventory” shall mean, as of the date of determination thereof,  without duplication of other Eligible Inventory, Inventory (a) which has been shipped from a  foreign location for receipt by the Borrower within sixty (60) days of the date of determination,  but which has not yet been delivered to the Borrower, (b) for which payment has been made by  the Borrower and title has passed to the Borrower, (c) for which the document of title reflects the  Borrower as consignee (along with delivery to the Borrower of the documents of title with  respect thereto), (d) as to which the Collateral Agent has control over the documents of title  which evidence ownership of the subject Inventory (such as by the delivery of a customs broker  agency agreement, satisfactory to the Collateral Agent), and (e) which otherwise would  constitute Eligible Inventory.         “Eligible Inventory” shall mean, as of the date of determination thereof, (a) Eligible In-  Transit Inventory, (b) Eligible L/C Inventory, and (c) items of Inventory of the Borrower that are  finished goods, merchantable and readily saleable to the public in the ordinary course deemed by  the Administrative Agent in its reasonable discretion to be eligible for inclusion in the  calculation of the Borrowing Base. Without limiting the foregoing, unless otherwise approved in  writing by the Administrative Agent and the Term Loan Agent, none of the following shall be  deemed to be Eligible Inventory:               (a)   Inventory that is not owned solely by the Borrower, or is leased or on         consignment or the Borrower does not have good and valid title thereto;                (b)   Inventory (other than Eligible In-Transit Inventory and Eligible L/C         Inventory) that is not located at a distribution center used by the Borrower in the ordinary         course or at a property that is owned or leased by the Borrower;                                          20   

 

                                                                                             (c)   Inventory that represents (i) goods damaged, defective or otherwise        unmerchantable, (ii) goods that do not conform in all material respects to the        representations and warranties contained in this Agreement or any of the Security        Documents, or (iii) goods to be returned to the vendor, including without limitation, such        goods at locations at which Borrower maintains such Inventory as specified in the        Borrowing Base Certificate delivered hereunder;               (d)   Inventory that is not located in the United States of America (excluding        territories and possessions thereof) other than Eligible In-Transit Inventory and Eligible        L/C Inventory;               (e)   Inventory that is not subject to a perfected first-priority security interest in         favor of the Collateral Agent for the benefit of the Credit Parties;                (f)   Inventory which consists of promotional or marketing materials, samples,         labels, bags, packaging, and other similar non-merchandise categories, including without         limitation, such Inventory at locations at which Borrower maintains such Inventory as         specified in the Borrowing Base Certificate delivered hereunder;                (g)   Inventory that is obsolete, unusable, or otherwise unavailable for sale;                (h)   Inventory as to which insurance in compliance with the provisions of         Section 5.07 hereof is not in effect;               (i)   Inventory which has been sold but not yet delivered or as to which the        Borrower has accepted a deposit; or               (j)   Inventory which is acquired in a Permitted Acquisition unless and until the         Collateral Agent has completed an appraisal of such Inventory, establishes an advance         rate and Inventory Reserves (if applicable) therefor, and otherwise agrees that such         Inventory shall be deemed Eligible Inventory.           “Eligible L/C Inventory” shall mean, as of the date of determination thereof, without  duplication of other Eligible Inventory, Inventory (a) not yet delivered to the Borrower, (b) the  purchase of which is supported by a Commercial Letter of Credit having an expiry within sixty  (60) days of such date of determination, (c) for which the document of title reflects the Borrower  as consignee (along with delivery to the Borrower of the documents of title with respect thereto),  (d) as to which the Collateral Agent has control over the documents of title which evidence  ownership of the subject Inventory (such as by the delivery of a customs broker agency  agreement, satisfactory to the Collateral Agent), and (e) which otherwise would constitute  Eligible Inventory.         “Enforcement Action” means the exercise by the Administrative Agent or the Collateral  Agent in good faith of any of its material enforcement rights and remedies as a secured creditor  hereunder or under the other Loan Documents, Applicable Law or otherwise at any time upon  the occurrence and during the continuance of an Event of Default (including, without limitation,  the solicitation of bids from third parties to conduct the liquidation of the Collateral  or the Real  Estate Collateral , the engagement or retention of sales brokers, marketing agents, investment                                          21   

 

                                                                                 bankers, accountants, appraisers, auctioneers or other third parties for the purposes of valuing,  marketing, promoting and selling the Collateral  or the Real Estate Collateral , the commencement  of any action to foreclose on the security interests or Liens of the Administrative Agent or the  Collateral Agent in all or any material portion of the Collateral  or the Real Estate Collateral ,  notification of account debtors to make payments to the Administrative Agent or the Collateral  Agent, any action to take possession of all or any material portion of the Collateral or the Real  Estate Collateral or  commencement of any legal proceedings or actions against or with respect to  all or any portion of the Collateral  or the Real Estate Collateral ).          “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,  decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered  into by or with any Governmental Authority, relating in any way to the environment,  preservation or reclamation of natural resources, handling, treatment, storage, disposal, Release  or threatened Release of any Hazardous Material or to health and safety matters.         “Environmental Liability” means any liability, contingent or otherwise (including any  liability for damages, natural resource damage, costs of environmental remediation,  administrative oversight costs, fines, penalties or indemnities), of any Person directly or  indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the  generation, use, handling, transportation, storage, treatment or disposal of any Hazardous  Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any  Hazardous Materials into the environment or (e) any contract, agreement or other consensual  arrangement pursuant to which liability is assumed or imposed with respect to any of the  foregoing.         “ERISA” means the Employee Retirement Income Security Act of 1974, as amended  from time to time and the regulations promulgated and rulings issued thereunder.         “ERISA Affiliate” means any trade or business (whether or not incorporated) that,  together with the Parent, is treated as a single employer under Section 414(b) or (c) of the Code  or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a  single employer under Section 414 of the Code.         “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA  or the regulations issued thereunder with respect to a Plan (other than an event for which the  30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated  funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether  or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA  of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the  incurrence by the Parent or any of its ERISA Affiliates of any liability under Title IV of ERISA  with respect to the termination of any Plan; (e) the receipt by the Parent or any ERISA Affiliate  from the PBGC or a plan administrator of any notice relating to an intention to terminate any  Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Parent or  any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal  from any Plan or Multiemployer Plan; or (g) the receipt by the Parent or any ERISA Affiliate of  any notice, or the receipt by any Multiemployer Plan from the Parent or any ERISA Affiliate of  any notice, concerning the imposition of Withdrawal Liability or a determination that a                                          22   

 

                                                                                 Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of  Title IV of ERISA.         “Event of Default” has the meaning assigned to such term provided therefor  in Section  7.01.  An Event of Default shall be deemed to have occurred and be continuing (solely as it  relates to the implementation of a default rate of interest under Section 2.11 for Obligations in  respect of the Term Loan and the exercise of rights and remedies pursuant to Section 7.05(b))  unless any waiver or modification of any event giving rise to such Event of Default shall have  been consented to by the Required Term Loan Lenders.  An Event of Default shall to deemed to  have occurred and be continuing (solely as it relates to the implementation of a default rate of  interest under Section 2.11 for Obligations other than those in respect of the Term Loan) unless  any waiver or modification of any event giving rise to such Event of Default shall have been  consented to by the Required Revolving Loan Lenders.          “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published  by the Loan Market Association (or any successor Person), as in effect from time to time.          “Excess Availability” means, as of any date of determination, the difference, if any,  between (a) the Revolving Loan Cap, and (b) the outstanding Credit Extensions (excluding those  made in respect of the Term Loan).         “Excluded Swap Obligation” means, with respect to any Facility Guarantor, any Swap  Obligation if, and to the extent that, all or a portion of the Guarantee of such Facility Guarantor  of, or the grant by such Facility Guarantor of a security interest to secure, such Swap Obligation  (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule,  regulation or order of the Commodity Futures Trading Commission (or the application or official  interpretation of any thereof) by virtue of such Facility Guarantor’s failure for any reason to  constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the  regulations thereunder at the time the Guarantee of such Facility Guarantor or the grant of such  security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation  arises under a master agreement governing more than one swap, such exclusion shall apply only  to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or  security interest is or becomes illegal.         “Excluded Taxes” means, with respect to the Agents, any Lender, the Issuing Bank or  any other recipient of any payment to be made by or on account of any obligation of the  Borrower hereunder, (a) income or franchise Taxes imposed on (or measured by) its gross or net  income by the United States of America, or by the jurisdiction under the laws of which such  recipient is organized or in which its principal office is located or, in the case of any Lender, in  which its applicable lending office is located, (b) any branch profits Taxes imposed by the  United States of America or any similar Tax imposed by any other jurisdiction in which the  Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a  request by the Borrower under Section 2.30(b)), any withholding Tax that (i) is imposed on  amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this  Agreement (or designates a new lending office), except to the extent that such Foreign Lender  (or its assignor, if any) was entitled, at the time of designation of a new lending office (or  assignment), to receive additional amounts from the Borrower with respect to such withholding                                          23   

 

                                                                                 Tax pursuant to Section 2.28(a), or (ii) is attributable to such Foreign Lender’s failure to comply  with Sections 2.28(e) or (f), and (d) any U.S. federal withholding tax imposed under FATCA.         “Existing Credit Agreement” has the meaning set forth in the recitals hereto.         “Factored Receivables” means any Accounts originally owed or owing by a Loan Party  to another Person which have been purchased by or factored with Wells Fargo or any of its  Affiliates pursuant to a factoring arrangement or otherwise with the Person that sold the goods or  rendered the services to the Loan Party which gave rise to such Account.          “Facility Guaranty” means the Amended and Restated Guaranty dated as of June 30,  2011 executed by the Facility Guarantors in favor of the Agents, the Issuing Bank and the other  Credit Parties.         “Facility Guarantors” means the Parent and each of its Subsidiaries, now existing or  hereafter created, other than (i) Foreign Subsidiaries and (ii) the Borrower.          “Facility Guarantors Collateral Documents” means all security agreements, mortgages,  pledge agreements, deeds of trust, and other instruments, documents or agreements executed and  delivered by any Facility Guarantor to secure the Obligations.          “FATCA” means Sections 1471 through 1474 of the Code, as of the Fourth Fifth   Amendment Effective Date (or any amended or successor version that is substantively  comparable and not materially more onerous to comply with), and (a) any current or future  regulations or official interpretations thereof, (b) any agreements entered into pursuant to Section  1471(b)(1) of the Code, and (c) any intergovernmental agreement entered into by the United  States (or any fiscal or regulatory legislation, rules, or practices adopted pursuant to any such  intergovernmental agreement entered into in connection therewith).          “FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and  regulations thereunder.         “Federal Funds Effective Rate” means, for any period, a fluctuating interest rate per  annum equal to, for each day during such period, the weighted average of the rates on overnight  Federal funds transactions with members of the Federal Reserve System, as published on the  next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not  so published for any day which is a Business Day, the average of the quotations for such day on  such transactions received by the Administrative Agent from three Federal funds brokers of  recognized standing selected by it (and, if any such rate is below zero, then the rate determined  pursuant to this definition shall be deemed to be zero).          “Federal Reserve Bank of New York’s Website” means the website of the Federal  Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.         “Fee Letter” means collectively, (i) means the letter entitled “Fee Letter” among the  Borrower and the Administrative Agent dated as of the Effective Date, (ii) the First Amendment  Fee Letter, (iii) the Fourth Amendment Term Loan  Fee Letter, and (iv) the Fourth Fifth   Amendment Term Loan Fee Letter, as each such letter may from time to time be amended.                                            24   

 

                                                                                       “Fifth Amendment” means that certain Forbearance and Fifth Amendment to Second  Amended and Restated Credit Agreement dated as of the Fifth Amendment Effective Date, by,  among others, the Loan Parties, the Agents, and the Lenders party thereto.         “Fifth Amendment Effective Date” has the meaning assigned to such term in the Fifth  Amendment.         “First Amendment Effective Date” means December 16, 2016.         “First Amendment Fee Letter” means that certain fee letter, dated as of the First  Amendment Effective Date, between the Borrower and Administrative Agent.          “Fiscal Month” means any fiscal month of the Parent and its Subsidiaries as set forth on  Schedule 1.3 hereto.         “Fiscal Year” means any period of 52 or 53 consecutive weeks ending on the Saturday  closest to January 31 of each calendar year.         “Fitch” means Fitch IBCA, Duff & Phelps, a division of Fitch, Inc., and its successors.         “Flood Laws” means, collectively, (i) the National Flood Insurance Reform Act of 1994  (which comprehensively revised the National Flood Insurance Act of 1968 and the Flood  Disaster Protection Act of 1973), (ii) the Flood Disaster Reform Act of 2004, (iii) the Biggert- Waters Flood Insurance Reform Act of 2012, and (iv) all laws, rules and regulations related to  any of the foregoing, in each case as to clauses (i) through (iv) including any amendments or  successor provisions.         “Forbearance Period” has the meaning assigned to such term in the Fifth Amendment.         “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction  other than the United States of America or any State thereof or the District of Columbia.          “Foreign Subsidiary” means any Subsidiary that is (a) organized under the laws of a  jurisdiction other than the United States of America or any State thereof or the District of  Columbia, and (b) all or substantially all of the property and assets of which are located outside  of the United States.         “Fourth Amendment Effective Date” means January 11, 2019.         “Fourth Amendment Fee Letter” means that certain fee letter dated as of the Fourth  Amendment Effective Date, by and between the Borrower and the Administrative Agent.         “Fourth Amendment Term Loan Fee Letter” means that certain fee letter dated as of the  Fourth Amendment Effective Date, by and between the Borrower and the Term Loan Agent.          “FRB” means the Board of Governors of the Federal Reserve System of the United States  of America.                                           25   

 

                                                                                       “Fronting Fee” means an amount equal to 0.25% per annum of the average Letter of  Credit Outstandings during each calendar quarter.         “Fund” means any Person (other than a natural person) that is (or will be) engaged in  making, purchasing, holding or otherwise investing in commercial loans and similar extensions  of credit in the ordinary course of its business.         “GAAP” means principles which are (a) consistent with those promulgated or adopted by  the Financial Accounting Standards Board and its predecessors (or successors) in effect and  applicable to that accounting period in respect of which reference to GAAP is being made, and  (b) consistently applied with past financial statements of the Parent and its Subsidiaries adopting  the same principles.         “Gift Certificate and Merchandise Credit Liability” means, at any time, the aggregate  face value at such time of (a) outstanding gift certificates and gift cards of the Borrower entitling  the holder thereof to use all or a portion of the certificate to pay all or a portion of the purchase  price for any Inventory, and (b) outstanding merchandise credits of the Borrower.          “Governmental Authority” means the government of the United States of America, any  other nation or any political subdivision thereof, whether state or local, and any agency,  authority, instrumentality, regulatory body, court, central bank or other entity exercising  executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or  pertaining to government.         “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or  otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any  Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner,  whether directly or indirectly, and including any obligation of the guarantor, direct or indirect,  (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such  Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase  of) any security for the payment thereof, (b) to purchase or lease property, securities or services  for the purpose of assuring the owner of such Indebtedness or other obligation of the payment  thereof, (c) to maintain working capital, equity capital or any other financial statement condition  or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness  or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty   issued to support such Indebtedness or obligation, provided that the term “Guarantee” shall not  include endorsements for collection or deposit in the ordinary course of business.  The amount of  any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of  the primary obligation for which the Guarantee is made (or, if less, the maximum amount of such  primary obligation for which such guarantor may be liable pursuant to the terms of the  instrument evidencing such Guarantee) or, if not stated or determinable, the maximum  reasonably anticipated liability in respect thereof (assuming such guarantor is required to  perform thereunder), as determined in good faith.         “Hazardous Materials” means all explosive or radioactive substances or wastes and all  hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum  distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,                                          26   

 

                                                                                 infectious or medical wastes, mold, fungi or similar bacteria, and all other substances or wastes  of any nature regulated pursuant to any Environmental Law, including any material listed as a  hazardous substance under Section 101(14) of CERCLA.          “Hedging Agreement” means any interest rate protection agreement, interest rate swap  agreement, interest rate cap agreement, interest rate collar agreement, foreign currency exchange  agreement, commodity price protection agreement, or other interest or currency exchange rate or  commodity price hedging arrangement designed to hedge against fluctuations in interest rates or  foreign exchange rates.         “Increased Pro Forma Availability Condition” shall mean, for any date of calculation  with respect to any transaction or payment, the Pro Forma Excess Availability as of the date of,  following, and after giving effect to, such transaction or payment, will be equal to or greater than  twenty-five percent (25%) of the Adjusted Combined Loan Cap.          “Incremental Revolving Loan Commitment Requirements” means, with respect to any  request for a Revolving Loan Commitment Increase made pursuant to Section Error! Reference  source not found.  or any provision of a Revolving Loan Commitment Increase on a given  Revolving Loan Commitment Increase Date, the satisfaction of each of the following conditions:   (i) no Default or Event of Default then exists, and (ii) the Borrower has not theretofore reduced  the Revolving Loan Commitments pursuant to Section 2.17 hereof.         “Indebtedness” of any Person means, without duplication, (a) all obligations of such  Person for borrowed money (including any obligations which are without recourse to the credit  of such Person) or with respect to deposits or advances of any kind, (b) all obligations of such  Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such  Person upon which interest charges are customarily paid, (d) all obligations of such Person under  conditional sale or other title retention agreements relating to property acquired by such Person,  (e) all obligations of such Person in respect of the deferred purchase price of property or services  (excluding current accounts payable incurred in the ordinary course of business), (f) all  Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing  right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such  Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by  such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all  obligations, contingent or otherwise, of such Person as an account party in respect of letters of  credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in  respect of bankers’ acceptances, (k) all Hedging Agreements, (l) the principal and interest  portions of all rental obligations of such Person under any Synthetic Lease, Tax retention  operating lease, off-balance sheet loan or similar off-balance sheet financing where such  transaction is considered borrowed money indebtedness for Tax purposes but is classified as an  operating lease in accordance with GAAP, and (m) all obligations of such Person to purchase,  redeem, retire, defease or otherwise make any payment in respect of capital stock or other  ownership or profit interests in such Person or in any other Person (or warrants, rights or options  to acquire such capital stock or ownership interests). The Indebtedness of any Person shall  include, without duplication, the Indebtedness of any other entity (including any partnership in  which such Person is a general partner) to the extent such Person is liable therefor as a result of                                          27   

 

                                                                                 such Person’s ownership interest in or other relationship with such entity, except to the extent the  terms of such Indebtedness provide that such Person is not liable therefor.          “Indemnified Taxes” means , (a)  Taxes , other than Excluded Taxes , imposed on or with  respect to any payment made by, or on account of any obligation of, any Loan Party under any  Loan Document, and (b) to the extent not otherwise described in the foregoing clause (a), Other  Taxes.         “Indemnitee” has the meaning provided therefor in Section 9.03(b).         “Initial Lender” means each of Wells Fargo, Bank of America, JPMorgan Chase, and  Regions Bank.         “Insolvency Increase Amount” means, at any time of determination, the result of (a) five  percent (5%) percent of the Revolving Loan Borrowing Base minus (b) all outstanding Permitted  Overadvances, other than (i) Unintentional Overadvances, and (ii) Permitted Overadvances made  to pay up to two (2) weeks of payroll expenses of the Loan Parties to the extent actually used for  such purpose (“Permitted Payroll Overadvances”), but in no event shall such Permitted Payroll  Overadvances exceed an amount equal to 3.5% of the sum of the Revolving Loan Borrowing  Base and the Term Loan Borrowing Base.         “Independent Consultant” means Berkeley Research Group, LLC (or another independent  third party consultant reasonably acceptable to the Agents).           “Intellectual Property” has the meaning assigned to such term in the Intellectual Property  Security Agreement.         “Intellectual Property Security Agreement” means the Intellectual Property Security  Agreement dated as of the Third Amendment Effective Date, among the Loan Parties and the  Collateral Agent for the benefit of the Credit Parties, as amended and in effect from time to time.          “Intercreditor Agreement” shall mean (a) that certain Intercreditor Agreement dated as of  September 12, 2003 by and among the Loan Parties, Bank of America (as successor by merger to  Fleet Retail Group, LLC (f/k/a Fleet Retail Finance Inc.)), and World Financial Network  National Bank, now known as Comenity Bank, as amended and in effect from time to time, and  (b) an intercreditor agreement with any third party administering a private label credit card  program for any of the Loan Parties in substitution for Comenity Bank, on terms reasonably  acceptable to the Administrative Agent (which agreement shall be deemed reasonably acceptable  if it contains the same terms as the intercreditor agreement with Comenity Bank).          “Interest Payment Date” means (a) with respect to any Prime Rate Loan (including a  Swingline Loan) and all Term Loans, the first day of each calendar month, and (b) with respect  to any LIBO Loan (other than any Term Loan), on the last day of the Interest Period applicable  to the Borrowing of which such Loan is a part, and, in addition, if such LIBO Loan has an  Interest Period of greater than ninety (90) days, on the last day of the third month of such Interest  Period.                                           28   

 

                                                                                       “Interest Period” means, with respect to any LIBO Borrowing, the period commencing on  the date of such Borrowing and ending on the numerically corresponding day in the calendar  month that is seven (7) days or one (1 ), two (2 ), three (3), or six (6) months thereafter, as the  Borrower may elect by notice to the Administrative Agent in accordance with the provisions of  this Agreement, provided that (a) if any Interest Period would end on a day other than a Business  Day, such Interest Period shall be extended to the next succeeding Business Day unless such next  succeeding Business Day would fall in the next calendar month, in which case such Interest  Period shall end on the immediately preceding Business Day, and (b) any Interest Period that  commences on the last Business Day of a calendar month (or on a day for which there is no  numerically corresponding day in the last calendar month during which such Interest Period  ends) shall end on the last Business Day of the calendar month of such Interest Period, (c) any  Interest Period which would otherwise end after the Termination Date shall end on the  Termination Date, and (d) notwithstanding the provisions of clause (c), except as set forth above,  no Interest Period shall, unless approved by the Administrative Agent and all of the Lenders,  have a duration of less than seven (7) days, and if, by reason of clause (c), any Interest Period  applicable to a LIBO Borrowing would be for a shorter period, such Interest Period shall not be  available hereunder. For purposes hereof, the date of a Borrowing initially shall be the date on  which such Borrowing is made and thereafter shall be the effective date of the most recent  conversion or continuation of such Borrowing.          “Inventory” has the meaning assigned to such term in the Security Agreement.         “Inventory Reserves” means such reserves as may be established from time to time by the  Administrative Agent in the Administrative Agent’s reasonable discretion with respect to the  determination of the saleability, at retail, of the Eligible Inventory or which reflect such other  factors as affect the market value of the Eligible Inventory. Without limiting the generality of the  foregoing, Inventory Reserves may include (but are not limited to) reserves based on changes in  the following since the date of the most recent Inventory appraisal or commercial finance  examination (i) seasonality; (ii) Shrink; (iii) imbalance; (iv) Inventory character; (v) Inventory  composition; (vi) Inventory mix; (vii) markdowns (both permanent and point of sale); and/or  (viii) promotional business practices.         “Investment” means (a) any stock, evidence of Indebtedness or other security of another  Person, (b) any loan, advance, contribution to capital, extension of credit (except for current  trade and customer accounts receivable for inventory sold or services rendered in the ordinary  course of business and payable in accordance with customary trade terms) to another Person, (c)  any purchase of (i) stock or other securities of another Person, or (ii) the assets comprising a  division or business unit or a substantial part of the business of any Person (whether by purchase  of assets or securities), (d) any commitment or option to make any such purchase, or (e) any  other investment, in all cases whether now existing or hereafter made.          “ISP” means, with respect to any Letter of Credit, the International Standby Practices  1998 (International Chamber of Commerce Publication No. 590) and any subsequent version or   revision thereof adopted by the International Chamber of Commerce on the date such Letter of  Credit is issued accepted by the Issuing Bank for use .                                           29   

 

                                                                                       “Issuer Documents” means with respect to any Letter of Credit, the Letter Credit  Application, the Standby Letter of Credit Agreement or Commercial Letter of Credit Agreement,  as applicable, and any other document, agreement and instrument entered into by the Issuing  Bank and the Borrower (or any Subsidiary) or in favor of the Issuing Bank and relating to any  such Letter of Credit.         “Issuing Bank” means each Initial Lender, in its capacity as the issuer of Letters of Credit  hereunder, and any successor (but not any assignee) to such Initial Lender in such capacity. The  Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by  Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such  Affiliate with respect to Letters of Credit issued by such Affiliate.          “JPMorgan Chase” means JPMorgan Chase Bank, N.A., a national banking association.         “L/C Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of  Credit.         “L/C Bank Obligations” means, as  at any date of determination, the sum of (a) the   aggregate undrawn amount available to be drawn under of  all outstanding Letters of Credit , plus  (b) the aggregate amount of outstanding reimbursement obligations with respect to Letters of  Credit which remain unreimbursed or which have not been paid through a Loan .  For purposes of  computing the amounts available to be drawn under any Letter of Credit, the amount of such  Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this  Agreement, if on any date of determination a Letter of Credit has expired by its terms but any  amount may still be drawn thereunder by reason of the operation of any Rule under the ISP or  any article of the UCP, such Letter of Credit shall be deemed to be “outstanding” in the amount  so remaining available to be drawn.         “Lease” means any agreement, whether written or oral, no matter how styled or  structured, pursuant to which the Borrower or any of its Affiliates are entitled to the use or  occupancy of any space in a structure, land, improvements or premises for any period of time.         “Lender Group Consultant” has the meaning specified in Section 5.17.         “Lenders” shall mean the Persons identified on Schedule 1.1 hereto, as modified to  include any Additional Revolving Loan Commitment Lender and/or Additional Term Loan  Commitment Lender, as applicable, and each assignee that becomes a party to this Agreement as  set forth in Section 9.04(b).         “Letter of Credit” means each letter of credit issued or deemed issued pursuant to this  Agreement, in an aggregate outstanding principal amount as to all such letters of credit not in  excess of the Letter of Credit Sublimit.           “Letter of Credit Application” means an application and agreement for the issuance or  amendment of a Letter of Credit in the form from time to time in use by the Issuing Bank.          “Letter of Credit Fees” shall mean the fees payable in respect of Letters of Credit  pursuant to Section 2.14.                                          30   

 

                                                                                       “Letter of Credit Indemnified Costs” has the meaning specified provided therefor  in  Section 2.07.         “Letter of Credit Outstandings” shall mean, at any date of determination, the sum of (a)  with respect to Letters of Credit outstanding at such time, the aggregate maximum amount that  then is or at any time thereafter may become available for drawing or payment thereunder plus  (b) all amounts theretofore drawn or paid under Letters of Credit for which the Issuing Bank has  not then been reimbursed. For all purposes of this Agreement, if on any date of determination a  Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason  of the operation of any Rule under the ISP or any article of the UCP, such Letter of Credit shall  be deemed to be “outstanding” in the amount so remaining available to be drawn.          “Letter of Credit Related Person” has the meaning specified provided therefor  in Section  2.07.         “Letter of Credit Sublimit” means an amount equal to $25,000,000.  The Letter of Credit  Sublimit is part of, and not in addition to, the Adjusted Aggregate  Revolving Loan Commitments.   A permanent reduction of the Aggregate Revolving Loan Commitments shall not require a  corresponding pro rata reduction in the Letter of Credit Sublimit; provided, however, that if the  Aggregate Revolving Loan Commitments are reduced to an amount less than the Letter of Credit  Sublimit, then the Letter of Credit Sublimit shall be reduced to an amount equal to (or, at  Borrower’s option, less than) the Aggregate Revolving Loan Commitments.          “LIBO Borrowing” shall mean a Borrowing comprised of LIBO Loans.         “LIBO Loan” shall mean any Loan bearing interest at a rate determined by reference to  the Adjusted LIBO Rate in accordance with the provisions of Article II.         “LIBO Rate” means the rate per annum as published by ICE Benchmark Administration  Limited (or any successor page or other commercially available source as the Administrative  Agent may designate from time to time) as of 11:00 a.m., London time, two Business Days prior  to the commencement of the requested Interest Period, for a term, and in an amount, comparable  to the Interest Period and the amount of the LIBO Rate Loan requested (whether as an initial  LIBO Rate Loan or as a continuation of a LIBO Rate Loan or as a conversion of a Base Prime   Rate Loan to a LIBO Rate Loan) by the Borrower in accordance with this Agreement, provided  that, if any such published rate is below zero, then the LIBO Rate shall be deemed to be zero.    Each determination of the LIBO Rate shall be made by the Administrative Agent and shall be  conclusive in the absence of manifest error.  Notwithstanding the foregoing, the LIBO Rate for  purposes of the Term Loan shall not be less than one percent (1.00%) per annum and, with  respect to the Term Loan, changes in the LIBO Rate shall be determined by the Administrative  Agent as of the first day of each month.          Each determination of the LIBO Rate shall be made by the Administrative Agent and  shall be conclusive in the absence of manifest error.  If such rate is not available at such time for  any reason, then the “LIBO Rate” for such Interest Period shall be the rate per annum determined  by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first  day of such Interest Period in same day funds in the approximate amount of the LIBO Rate Loan                                          31   

 

                                                                                 being made, continued or converted by Wells Fargo and with a term equivalent to such Interest  Period would be offered to Wells Fargo by major banks in the London interbank eurodollar  market in which Wells Fargo participates at their request at approximately 11:00 a.m. (London  time) two Business Days prior to the commencement of such Interest Period.          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,  hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of  a vendor or a lessor under any conditional sale agreement, capital lease or title retention  agreement (or any financing lease having substantially the same economic effect as any of the  foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or  similar right of a third party with respect to such securities.         “Liquidator” means Gordon Brothers Retail Partners, LLC (or another independent third  party nationally recognized liquidator acceptable to the Agents).           “Liquidation” means the exercise by the Administrative Agent or Collateral Agent of  those rights and remedies afforded to them under the Loan Documents and Applicable Law as a  creditor of the Loan Parties with respect to the realization on the Collateral  or the Real Estate  Collateral , including (after the occurrence and during the continuation of an Event of Default)  the conduct by the Loan Parties acting with the consent of the Administrative Agent, of any  public, private or “going-out-of-business”, “store closing” or other similar sale or any other  disposition of the Collateral or the Real Estate Collateral  for the purpose of liquidating the  Collateral  or the Real Estate Collateral .  Derivations of the word “Liquidation” (such as  “Liquidate”) are used with like meaning in this Agreement.         “Loan Account” has the meaning given to such term provided therefor  in Section 2.22(a).         “Loan Documents” means this Agreement, the Notes, the Letters of Credit, the Fee  Letter, all Borrowing Base Certificates, the Blocked Account Agreements, the DDA  Notifications, the Credit Card Notifications, the Security Documents, the Facility Guaranty, the  Facility Guarantors Collateral Documents , the Intercreditor Agreement  and any other instrument  or agreement now or hereafter executed and delivered in connection herewith or therewith,  including (i) any Cash Management Services provided by the Administrative Agent, the  Collateral Agent, any Lender or any of their respective Affiliates, and (ii) any Bank Product  provided by the Administrative Agent, the Collateral Agent, any Lender or any of their  respective Affiliates, each as amended and in effect from time to time.          “Loan Party” or “Loan Parties” means the Borrower and the Facility Guarantors.         “Loans” shall mean all loans (including Revolving Loans, Term Loans, and Swingline  Loans as the context may require) at any time made to the Borrower or for account of the  Borrower pursuant to this Agreement.         “London Business Day” means a day on which commercial banks are open for general  business (including dealings in foreign exchange and foreign currency deposits) in London,  England.         “Margin Stock” has the meaning assigned to such term in Regulation U.                                          32   

 

                                                                                       “Material Adverse Effect” means a material adverse effect on (a) the business,  operations, property, assets, prospects, or condition, financial or otherwise, of the Parent and its  Subsidiaries taken as a whole, (b) the ability of the Loan Parties to perform any material  obligation or to pay any Obligations under this Agreement or any of the other Loan Documents,  or (c) the validity or enforceability of this Agreement or any of the other Loan Documents or any  of the material rights or remedies of the Administrative Agent, the Collateral Agent or the  Lenders hereunder or thereunder. In determining whether any individual event would result in a  Material Adverse Effect, notwithstanding that such event in and of itself does not have such  effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of  such event and all other then existing events would result in a Material Adverse Effect .; provided  that solely during the Forbearance Period, any impact, direct or indirect or potential, arising as a  result of or related to (or could reasonably be expected to arise out of or result from) the COVID- 19 coronavirus pandemic in process as of the Fifth Amendment Effective Date shall not  constitute, result or otherwise have (or reasonably be expected to constitute, result or otherwise  have) a Material Adverse Effect.          “Material Indebtedness” means Indebtedness (other than the Loans, Letters of Credit and  obligations under Leases) of the Borrower in an aggregate principal amount exceeding  $25,000,000.  For purposes of determining the amount of Material Indebtedness at any time, the  amount of the obligations in respect of any Hedging Agreement at such time shall be Agreement  Value.         “Material Intellectual Property” means Intellectual Property material to the business or  operations of the Loan Parties.         “Maturity Date” means December 16, 2021.          “Maximum Rate” has the meaning provided therefor in Section 9.12.         “Maximum Revolving Insolvency Amount” has the meaning provided therefor in Section  7.05(d).         “Measurement Period” means, at any date of determination, the most recently completed  twelve Fiscal Months of the Parent.         “Minority Lenders” has the meaning provided therefor in Section 9.02(c).         “MLPFS” means Merrill Lynch, Pierce, Fenner & Smith Incorporated.         “Moody’s” means Moody’s Investors Service, Inc.         “Mortgage” means a fee and leasehold mortgage or deed of trust, security agreement and  assignment by and between the Loan Party owning or holding the leasehold interest in the Real  Estate encumbered thereby in favor of the Collateral Agent.         “Mortgage Policy” means a fully paid American Land Title Association Lender’s  Extended Coverage title insurance policy or marked-up title insurance commitment having the  effect of a policy of title insurance) in form and substance, with the endorsements reasonably                                          33   

 

                                                                                 required by the Collateral Agent (to the extent available at commercially reasonable rates) and in  amounts reasonably acceptable to the Collateral Agent, issued, coinsured and reinsured (to the  extent required by the Collateral Agent) by a title insurer reasonably acceptable to the Collateral  Agent, insuring the applicable Mortgage to be a valid first and subsisting Lien on the property or  leasehold interests described therein, free and clear of all defects (including, but not limited to,  mechanics’ and materialmen’s Liens) and encumbrances, excepting only Permitted  Encumbrances having priority over the Lien of the Collateral Agent under Applicable Law or  otherwise reasonably acceptable to the Collateral Agent.         “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of  ERISA to which the Parent or any ERISA Affiliate is making or accruing an obligation to make  contributions, or has within the preceding five (5) plan years made or accrued an obligation to  make contributions.         “Multiple Employer Plan” means a single employer plan, as defined in Section  4001(a)(15) of ERISA, that (a) is maintained for employees of the Parent or any of its  Subsidiaries or any ERISA Affiliate and at least one Person other than the Parent, any Subsidiary  or the ERISA Affiliate or (b) was so maintained and in respect of which the Parent, any  Subsidiary or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in  the event such plan has been or were to be terminated.          “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in  respect of such event, including (i) any cash received in respect of any non-cash proceeds, but  only as and when received, (ii) in the case of a casualty, insurance proceeds, and (iii) in the case  of a condemnation or similar event, condemnation awards and similar payments, in each case net  of (b) the sum of (i) all reasonable fees and out-of-pocket expenses (including appraisals, and  brokerage, legal, title and recording Tax expenses and commissions) paid by any Loan Party to  third parties (other than Affiliates) in connection with such event, and (ii) in the case of a sale or  other disposition of an asset (including pursuant to a casualty or condemnation), the amount of  all payments required to be made by any Loan Party as a result of such event to repay (or to  establish an escrow for the repayment of) Indebtedness (other than Loans) which is secured by  such asset and constitutes a Permitted Encumbrance that is senior to the Lien of the Collateral  Agent.         “Non-Delinquent Lender” means each Lender other than a Delinquent Lender.         “Notes” shall mean (a) the promissory notes of the Borrower substantially in the form of  Exhibit B-1, each payable to the order of any Revolving Loan Lender requesting such Note,  evidencing the Revolving Loans, (b) if requested by the Swingline Lender, the promissory note  of the Borrower substantially in the form of Exhibit B-2, payable to the Swingline Lender,  evidencing the Swingline Loans, and (c) the promissory notes of the Borrower substantially in  the form of Exhibit B-3, each payable to the order of any Term Loan Lender requesting such  Note, evidencing the Term Loan.         “Obligations” means (a) the due and punctual payment by the Loan Parties of (i) the  principal of, and interest (including all interest that accrues after the commencement of any  proceeding by or against any Loan Party under any Debtor Relief Laws, whether or not allowed                                          34   

 

                                                                                 in such case or proceeding) on the Loans, as and when due, whether at maturity, by acceleration,  upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made  by the Loan Parties under this Agreement in respect of any Letter of Credit, when and as due,  including payments in respect of reimbursement of disbursements, interest thereon and  obligations to provide cash collateral and (iii) all other monetary obligations, including fees,  costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or  otherwise, of the Loan Parties to the Credit Parties under this Agreement and the other Loan  Documents (including all fees, costs, expenses and indemnities that accrue after the  commencement of any proceeding by or against any Loan Party under any Debtor Relief Laws,  whether or not allowed in such case or proceeding), and (b) the due and punctual payment and  performance of all the covenants, agreements, obligations and liabilities of each Loan Party  under or pursuant to this Agreement, and the other Loan Documents, and (c) the payment and  performance under any transaction with any of the Arranger, Agents or any Lender, or any of  their respective Affiliates, which arises out of (i) any Cash Management Services, or (ii) Bank  Products; provided that the Obligations shall not include any Excluded Swap Obligations.         “OFAC” means the Office of Foreign Assets Control of the United States Department of  Treasury.         “Organizational Document” means, relative to any Loan Party, its limited partnership  agreement, its certificate of incorporation, formation or limited partnership, its operating  agreement, its by-laws and all shareholder or equity holder agreements, voting trusts and similar  arrangements to which such Loan Party is a party or which is applicable to its capital stock, its  limited partnership agreement and all other arrangements relating to the control or management  of such entity.         “Other Taxes” means any and all current or future stamp or documentary Taxes or any  other excise or property Taxes, charges or similar levies arising from any payment made under  any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect  to, any Loan Document.         “Overadvance” means, at any time of calculation, a circumstance in which the provision  of a Credit Extension (excluding those made in respect of the Term Loan) at such time (but not  any diminution of the value of assets included in the calculation of the Revolving Loan  Borrowing Base) causes the aggregate outstanding Credit Extension to exceed the Revolving  Loan Cap (or, solely, for purposes of determining the existence of a Permitted Overadvance, any  such Credit Extension (excluding those made in respect of the Term Loan) results in Excess  Availability being less than the amount required pursuant to Section 6.11).         “Parent” means Stage Stores, Inc., a Nevada corporation.         “Participation Register” has the meaning provided therefor in Section 9.04(e).         “Patriot Act” has the meaning provided therefor in Section 9.15.         “Payment Conditions” means, at the time of determination, that (a) no Default or Event  of Default then exists or would arise as a result of the making of the subject payment  and , (b )  except for purposes of Section 2.21(b), the Agents consented to such payment in writing (which                                          35   

 

                                                                                 consent may be withheld, delayed and/or conditioned in the Agents’ sole and exclusive  discretion), and (c ) after giving effect to such payment, either (1) (i) the Pro Forma Availability  Condition has been satisfied and (ii) the Consolidated Fixed Charge Coverage Ratio, as  calculated on a pro-forma basis for the twelve months prior to such payment, will be equal to or  greater than 1.0:1.0, or (2) the Increased Pro Forma Availability Condition has been satisfied.   Prior to undertaking any payment which is subject to the Payment Conditions, the Loan Parties  shall deliver to the Administrative Agent and the Lenders evidence of satisfaction of the  conditions contained in clause (b) above on a basis (including, without limitation, giving due  consideration to results for prior periods) reasonably satisfactory to the Administrative Agent;  provided that, so long as Excess Availability is equal to or greater than fifty percent (50%) of the  Adjusted Combined Loan Cap, the Loan Parties shall not be required to deliver to the  Administrative Agent and the Lenders evidence of satisfaction of the conditions contained in  clause (b) above with respect to the repurchase of the equity interests of the Parent on the open  market in the ordinary course of business (the “Ordinary Course Stock Buybacks”); provided  further that, nothing herein shall be deemed a waiver of the requirements set forth in clauses (a)  and (b) above as a condition to the Parent making any Ordinary Course Stock Buybacks, and the  making of any Ordinary Course Stock Buybacks shall be deemed a representation and warranty  by the Loan Parties that such requirements have been complied with.          “Payment Intangibles” has the meaning set forth in the UCC, together with all income,  payments and proceeds thereof, owed by a Credit Card Issuer or Credit Card Processor to a Loan  Party resulting from charges by a customer of a Loan Party on credit or debit cards issued by  such Credit Card Issuer in connection with the sale of goods by a Loan Party, or services  performed by a Loan Party, in each case in the ordinary course of its business.          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in  ERISA and any successor entity performing similar functions.          “Perfection Certificate” means a certificate in the form of Annex 1 to the Security  Agreement or any other form approved by the Collateral Agent.          “Permitted Acquisition” means an Investment in, a purchase of stock or equity interest in,  a purchase of all or a substantial part of the assets or properties of any Person, any exchange of  securities or equity interests with any Person, any transaction, merger or consolidation or  acquisition of all or a substantial portion of the assets of any Person, or any acquisition of any  retail store locations of any Person (each of the foregoing, an “Acquisition”) which satisfies each  of the following conditions:               (a)   The Acquisition is of a business permitted to be conducted by the        Borrower pursuant to Section 6.03(b) hereof and the Person to be acquired, or whose        assets are to be acquired, shall be a United States company; and                 (b)   Prior to and after giving effect to the Acquisition, no Default or Event of        Default will exist or will arise therefrom; and               (c)   The Person making the Acquisition must be a Loan Party or a Subsidiary        which will become a Loan Party in accordance with Section 5.13 hereof; and                                           36   

 

                                                                                 (d)   If the Parent or its Subsidiary shall merge with such other Person, such  Parent or Subsidiary shall be the surviving party of such merger; and         (e)   If such Person becomes a Subsidiary of a Loan Party, such Person shall  become a Loan Party in accordance with Section 5.13 hereof and the Loan Parties  (including such Person) shall take such steps as are necessary to grant to the Collateral  Agent, for the benefit of the Credit Parties, a legal, valid and enforceable perfected first  priority security interest in all of the assets (excluding capital stock or equity interests)  acquired in connection with such acquisition; and         (f)   The Payment Conditions shall have been satisfied; and         (g)   Such Acquisition shall have been approved by a majority of the board of  directors (or the equivalent governing body) of the Person which is the subject of such  Acquisition and such Person shall not have announced that it will oppose such  Acquisition or shall not have commenced any action which alleges that such Acquisition  will violate Applicable Law.   “Permitted Encumbrances” means:         (a)   Liens imposed by law for Taxes that are not yet due or are being contested  in compliance with Section 5.05;         (b)   carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and  other like Liens imposed by law, arising in the ordinary course of business and securing  obligations that are not overdue by more than thirty (30) days or are being contested in  compliance with Section 5.05;         (c)   (i) pledges and deposits made in the ordinary course of business in   compliance with workers’ compensation, unemployment insurance and other social   security laws or regulations, and (ii) UCC-1 filings by consignors (or lenders to such   consignors) of goods to any Loan Party that are so consigned pursuant to and in   accordance with the terms of this Agreement and the Security Agreement; provided, that,   such filings do not apply to any assets or properties of Loan Parties, but only to such   consigned goods;          (d)   deposits to secure the performance of bids, trade contracts, leases,   statutory obligations, surety and appeal bonds, performance bonds and other obligations   of a like nature, in each case in the ordinary course of business;           (e)   judgment liens in respect of judgments that do not constitute an Event of   Default under Section 7.01(k); and          (f)   easements, zoning restrictions, rights-of-way and similar encumbrances on  real property imposed by law or arising in the ordinary course of business that do not  secure any monetary obligations and do not materially detract from the value of the  affected property or interfere with the ordinary conduct of business of the Borrower or  any Subsidiary;  and                                     37               

 

                                                                                             (g)   encumbrances referred to in Schedule B of the Mortgage Policies insuring        the Mortgages;   provided that, except as provided in any one or more of clauses (a) through ( fg) above, the term  “Permitted Encumbrances” shall not include any Lien securing Indebtedness.          “Permitted Investments” means each of the following:               (a)   direct obligations of, or obligations the principal of and interest on which        are unconditionally guaranteed by, the United States of America (or by any agency        thereof to the extent such obligations are backed by the full faith and credit of the United        States of America), in each case maturing within ninety (90) days from the date of        acquisition thereof;               (b)   Investments in commercial paper (i) issued by a corporation (other than a        Loan Party or an Affiliate of a Loan Party) organized under the laws of any state of the        United States or the District of Columbia maturing within ninety (90) days from the date        of acquisition thereof and having, at such date of acquisition, the highest credit rating        obtainable from S&P, Moody’s, or Fitch, or (ii) issued by a Lender maturing within 270        days from the date of acquisition thereof;               (c)   Investments in insured certificates of deposit, banker’s acceptances and        time deposits maturing within ninety (90) days from the date of acquisition thereof issued        or guaranteed by or placed with, and demand deposit and money market deposit accounts        issued or offered by, (i) any domestic office of any commercial bank organized under the        laws of the United States of America or any State thereof that has a combined capital and        surplus and undivided profits of not less than $1,000,000,000, or (ii) any Lender;                (d)   fully collateralized repurchase agreements with a term of not more than         thirty (30) days for securities described in clause (a) above (without regard to the         limitation on maturity contained in such clause) and entered into with a financial         institution satisfying the criteria described in clause (c) above or with any primary dealer         and having a market value at the time that such repurchase agreement is entered into of         not less than 100% of the repurchase obligation of such counterparty entity with whom         such repurchase agreement has been entered into; and                (e)   Shares of investment companies that are registered under the Investment         Company Act of 1940, as amended, and invest solely in one or more of the types of         securities described in clauses (a) through (d) above,    provided that , notwithstanding the foregoing, no such Investments shall be permitted to   commence (i) after the occurrence of a Cash Dominion Event, unless no Loans are then   outstanding, and (ii) unless such Investments are pledged to the Collateral Agent as additional  collateral for the Obligations pursuant to such agreements as may be reasonably required by the  Collateral Agent ., and (iii) in the event of an Investment in respect of Material Intellectual  Property (or the equity interests of any Subsidiary that owns Material Intellectual Property), such  Investment shall not be permitted unless the purchaser, assignee or other transferee thereof  agrees in writing to be bound by a non-exclusive royalty-free worldwide license of such Material                                          38   

 

                                                                                 Intellectual Property in favor of the Collateral Agent for use in connection with the exercise of  the rights and remedies of the Credit Parties, which license shall be in form and substance  reasonably satisfactory to the Collateral Agent.  Notwithstanding anything to the contrary  contained herein, no Loan Party or any Subsidiary shall make any Investment consisting of a  license, sublicense or other transfer of Material Intellectual Property (or the equity interests of  any Subsidiary that owns Material Intellectual Property) (in each case, whether as a disposition  permitted under Section 6.05, a Permitted Investment, a Permitted Encumbrance or otherwise)  without the consent of the Agents and the Required Lenders.          “Permitted Overadvance” means an Overadvance determined by the Administrative  Agent, in its reasonable discretion, (a) which is made to maintain, protect or preserve the  Collateral or the Real Estate Collateral  and/or the Lenders’ rights under the Loan Documents or  which is otherwise for the benefit of the Credit Parties, or (b) which is made to enhance the  likelihood of, or to maximize the amount of, repayment of any Obligation, or (c) is made to pay  any other amount chargeable to any Loan Party hereunder; provided that Permitted  Overadvances shall not (i) exceed five percent (5%) of the then Revolving Loan Borrowing Base  in the aggregate outstanding at any time or (ii) unless a Liquidation is occurring, remain  outstanding for more than forty-five (45) consecutive Business Days, unless in case of this clause  (ii), the Required Supermajority Lenders and all Term Loan Lenders otherwise agree; and  provided further that the foregoing shall not (1) modify or abrogate any of the provisions of  Section 2.07(e) hereof regarding the Revolving Loan Lenders’ obligations with respect to L/C  Disbursements or the provisions of Sections 2.06 and 2.08 regarding the Revolving Loan  Lenders’ obligations with respect to Swingline Loans, or (2) result in any claim or liability  against the Administrative Agent (regardless of the amount of any Overadvance) for “inadvertent  Overadvances” (i.e. where an Overadvance results from changed circumstances beyond the  control of the Administrative Agent (such as a reduction in the collateral value)), and further  provided that in no event shall the Administrative Agent make an Overadvance, if after giving  effect thereto, the principal amount of the Credit Extensions (including any Overadvance or  proposed Overadvance, but excluding those made in respect of the Term Loan) would exceed the  Adjusted Aggregate  Revolving Loan Commitments.         “Permitted Payroll Overadvance” has the meaning specified provided therefor  in the  definition of “Insolvency Increase Amount”.         “Person” means any natural person, corporation, limited liability company, trust, joint  venture, association, company, partnership, Governmental Authority or other entity.          “Plan” means a Single Employer Plan or a Multiple Employer Plan.         “Portal” has the meaning specified provided therefor  in Section 2.04.         “Prime Rate” shall mean , for any day, a fluctuating rate per annum equal to the highest   the greatest  of (a) the Federal Funds Effective Rate for such day, plus 0.50 1⁄2%;, (b) the Adjusted  LIBO Rate for a 30 day interest period as (which rate shall be calculated based upon an Interest  Period of one month and shall be  determined on such day a daily basis) , plus 1.0% one percentage  point , and (c) the rate of interest announced, from time to time, within Wells Fargo at its  principal office in San Francisco as its “prime rate”, with the understanding that the “prime rate”                                          39   

 

                                                                                 is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the  basis upon which effective rates of interest are calculated for those loans making reference  thereto and is evidenced by the recording thereof after its announcement in such internal  publications as Wells Fargo may designate  (and, if any such announced rate is below zero, then  the rate determined pursuant to this clause (c) shall be deemed to be zero).  The “prime rate” is a  rate set by Wells Fargo based upon various factors including Wells Fargo's costs and desired  return, general economic conditions and other factors, and is used as a reference point for pricing  some loans, which may be priced at, above, or below such announced rate.  Any change in Wells  Fargo's prime rate, the Federal Funds Effective Rate, or the LIBO Rate, respectively, shall take  effect at the opening of business on the day specified in the public announcement of such  change. . Notwithstanding anything herein to the contrary, the Prime Rate for all purposes hereof  shall not be less than one percent (1.00%) per annum.          “Prime Rate Loan” shall mean any Loan bearing interest at a rate determined by  reference to the Prime Rate in accordance with the provisions of Article II.         “Pro Forma Availability Condition” shall mean, for any date of calculation with respect  to any transaction or payment, the Pro Forma Excess Availability as of the date of, following,  and after giving effect to, such transaction or payment, will be equal to or greater than fifteen  percent (15%) of the Adjusted Combined Loan Cap.         “Pro Forma Excess Availability” shall mean, for any date of calculation, after giving pro  forma effect to the transaction then to be consummated, the projected Excess Availability as of  the end of each Fiscal Month during any subsequent projected six (6) Fiscal Months.         “Provider” has the meaning specified provided therefor  in Section 8.17.          “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall  be interpreted in accordance with, 12 U.S.C. § 5390(c)(8)(D).          “QFC Credit Support” has the meaning provided therefor in Section 9.21.         “Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party  that has total assets exceeding $10,000,000 at the time the relevant Guarantee or grant of the  relevant security interest becomes effective with respect to such Swap Obligation or such other  person as constitutes an “eligible contract participant” under the Commodity Exchange Act or  any regulations promulgated thereunder and can cause another person to qualify as an “eligible  contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of  the Commodity Exchange Act.         “Real Estate” means all land, together with the buildings, structures, parking areas, and  other improvements thereon, now or hereafter owned by any Loan Party, including all  easements, rights-of-way, and similar rights relating thereto and all leases, tenancies, and  occupancies thereof.         “Real Estate Collateral” means any and all “Mortgaged Property” (or similar term) as  defined in any applicable Mortgage.                                          40   

 

                                                                                       “Register” has the meaning set forth provided therefor  in Section 9.04(c).         “Regulation U” means Regulation U of the FRB as from time to time in effect and all  official rulings and interpretations thereunder or thereof.          “Regulation X” means Regulation X of the FRB as from time to time in effect and all  official rulings and interpretations thereunder or thereof.          “Related Parties” means, with respect to any specified Person, such Person’s Affiliates  and the respective directors, officers, employees, agents and advisors of such Person and such  Person’s Affiliates.         “Release” has the meaning set forth in Section 101(22) of CERCLA.         “Relevant Governmental Body” means the Federal Reserve Board and/or the Federal  Reserve Bank of New York, or a committee officially endorsed or convened by the Federal  Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.         “Required Lenders” shall mean, subject to the provisions of Section 8.12, at any time,  Lenders having Commitments greater than 50% of the sum of the Adjusted Revolving Loan  Commitments and the aggregate outstanding principal balance of the Term Loan, or if the  Revolving Loan Commitments have been terminated, Lenders whose percentage of the  outstanding Credit Extensions (after settlement and repayment of all Swingline Loans by the  Revolving Loan Lenders) aggregate greater than 50% of all such Credit Extensions, it being  understood, for avoidance of doubt, that any provision hereof that requires the vote of the  Required Lenders shall not require the consent of the holders of the Obligations described in  clause (c) of the definition of Obligations (as such definition is in effect on the Effective Date);  provided that the Commitment of, and the portion of the Credit Extensions held or deemed held  by, any Delinquent Lender or Deteriorating Lender shall be excluded for purposes of making a  determination of Required Lenders.         “Required Revolving Loan Lenders” shall mean, subject to the provisions of Section  8.12, at any time, Revolving Loan Lenders having Revolving Loan Commitments greater than  50% of the Adjusted Revolving Loan Commitments, or if the Revolving Loan Commitments  have been terminated, Lenders whose percentage of the outstanding Credit Extensions (after  settlement and repayment of all Swingline Loans by the Revolving Loan Lenders, but excluding  Credit Extensions made in respect of the Term Loan) aggregate greater than 50% of all such  Credit Extensions, it being understood, for avoidance of doubt, that any provision hereof that  requires the vote of the Required Revolving Loan Lenders shall not require the consent of the  holders of the Obligations described in clause (c) of the definition of Obligations (as such  definition is in effect on the Effective Date); provided that the Commitment of, and the portion  of all such Credit Extensions held or deemed held by, any Delinquent Lender or Deteriorating  Lender shall be excluded for purposes of making a determination of Required Revolving Loan  Lenders.         “Required Supermajority Lenders” shall mean, subject to the provisions of Section 8.12,  at any time, Lenders having Commitments outstanding representing at least 66 2/3% of the sum  of the Adjusted Revolving Loan Commitments outstanding and Lenders holding at least 66 2/3%                                          41   

 

                                                                                 of the then aggregate outstanding principal balance of the Term Loan or, if the Revolving Loan  Commitments have been terminated, Lenders whose percentage of the outstanding Credit  Extensions (after settlement and repayment of all Swingline Loans by the Lenders) aggregate not  less than 66 2/3% of all such Credit Extensions, it being understood, for the avoidance of doubt,  that any provision hereof that requires the vote of the Required Supermajority Lenders shall not  require the consent of the holders of the Obligations described in clause (c) of the definition of  Obligations (as such definition is in effect on the Effective Date); provided that the Commitment  of, and the portion of the Credit Extensions held or deemed held by, any Delinquent Lender or  Deteriorating Lender shall be excluded for purposes of making a determination of Required  Supermajority Lenders.         “Required Term Loan Lenders” means, as of any date of determination, Term Loan  Lenders holding more than 50% of the then aggregate outstanding principal balance of the Term  Loan.         “Reserves” means all (if any) Inventory Reserves and Availability Reserves.         “Responsible Officer” means the chief executive officer, president, chief financial  officer, controller, treasurer or assistant treasurer of a Loan Party or any of the other individuals  designated in writing to the Administrative Agent by an existing Responsible Officer of a Loan  Party as an authorized signatory of any certificate or other document to be delivered hereunder,  including, with respect to the Portal, any person authorized and authenticated through the Portal  in accordance with the Administrative Agent’s procedures for such authentication.  Any  document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be  conclusively presumed to have been authorized by all necessary corporate, partnership and/or  other action on the part of such Loan Party and such Responsible Officer shall be conclusively  presumed to have acted on behalf of such Loan Party.          “Restricted Payment” means any dividend or other distribution (whether in cash,  securities or other property) with respect to any shares of any class of capital stock or equity  interests of any Loan Party or any Subsidiary, or any payment (whether in cash, securities or  other property), including any sinking fund or similar deposit, on account of the purchase,  redemption, retirement, acquisition, cancellation or termination of any such shares of capital  stock or equity interests of any Loan Party or any Subsidiary or any option, warrant or other right  to acquire any such shares of capital stock or equity interests of any Loan Party or any  Subsidiary. Without limiting the foregoing, “Restricted Payments” with respect to any Person  shall also include all payments (whether in cash, securities or other property) made by such  Person in respect of stock appreciation rights plans, equity incentive, achievement or similar  plans and all proceeds of a dissolution or liquidation of such Person.         “Restructuring Reserve” means such reserve (which shall be an Availability Reserve) as  the Administrative Agent from time to time determines in its discretion as being appropriate to  account for certain restructuring activities undertaken by the Loan Parties as of the Fifth  Amendment Effective Date, but subject to Section 2.03(c).           “Revolving Loan Borrowing Base” means, at any time of calculation, an amount equal to                                           42   

 

                                                                                             (a)   the Credit Card Advance Rate multiplied by the face amount of Eligible        Credit Card Receivables, plus               (b)   the Appraisal Percentage of the Appraised Value of Eligible Inventory, net         of Inventory Reserves; minus                (c)   the then amount of the Term Loan Reserve, minus               (d)   the then amount of the Restructuring Reserve, minus               (de)  the then amount of all other Availability Reserves.         “Revolving Loan Cap” means, at any time of determination, the lesser of (a) the  Adjusted Aggregate  Revolving Loan Commitments or (b) the Revolving Loan Borrowing Base.         “Revolving Loan Commitment” means, with respect to each Revolving Loan Lender, the  aggregate commitment of such Revolving Loan Lender to make Revolving Loans and participate  in Letters of Credit and Swingline Loans hereunder in the amount set forth opposite its name  under the heading “Revolving Loan Commitment” on Schedule 1.1 hereto or as may  subsequently be set forth in the Register from time to time, as the same may be (i) be  reduced  from time to time pursuant to Section 2.17 or (ii) increased from time to time pursuant to Section  2.02 hereof.         “Revolving Loan Commitment Increase” has the meaning provided therefor in Section  2.02(a).         “Revolving Loan Commitment Increase Date” has the meaning provided therefor in  Section 2.02(c).         “Revolving Loan Commitment Percentage” means, with respect to each Revolving Loan  Lender, that percentage of the Aggregate Revolving Loan Commitments in the amount set forth  opposite its name on Schedule 1.1 hereto or as may subsequently be set forth in the Register  from time to time, as the same may be (i) reduced from time to time pursuant to Section 2.17 or  (ii) increased from time to time pursuant to Section 2.02 hereof.         “Revolving Loan Lender” means each Lender having a Revolving Loan Commitment as  set forth on Schedule 1.1 hereto or in the Assignment and Acceptance by which such Person  becomes a Revolving Loan Lender.         “Revolving Loans” means all Loans at any time made by a Lender pursuant to Section  2.01(a).         “Revolving Priority Collateral” means all now owned or hereafter acquired Collateral and  Real Estate Collateral,  other than Term Loan Priority Collateral.         “Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of  the government of a country, (c) an organization directly or indirectly controlled by a country or  its government, or (d) a Person resident in or determined to be resident in a country, in each case                                          43   

 

                                                                                 of clauses (a) through (d) that is the subject of Sanctions, including the subject of any country  sanctions program administered and enforced by OFAC.          “Sanctioned Person” means, at any time, (a) any Person named on the list of Specially  Designated Nationals and Blocked Persons maintained by OFAC, or any other Sanctions-related  list maintained by any relevant Sanctions authority, (b) a Person or legal entity that is the subject  of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Entity, or (d) any  Person directly or indirectly owned or controlled (individually or in the aggregate) by or acting  on behalf of any such Person or Persons described in clauses (a) through (c) above.          “Sanction(s)” means individually and collectively, respectively, any and all economic,  trade, financial or other sanctions laws, regulations or embargoes imposed, administered or  enforced from time to time by:  (a) the United States of America, including, without limitation,  those administered by OFAC and/or the U.S. Department of State, (b) the United Nations  Security Council, (c) the European Union or any European Union member state, (d) Her  Majesty’s Treasury of the United Kingdom, or (d) any other governmental authority in any  jurisdiction in which any Loan Party or any of its Subsidiaries is located or doing business.         “Seasonal Commitment Increase Amount” means, solely during the Seasonal  Commitment Increase Period, the increase of the Ordinary Commitment (as set forth on  Schedule 1.1) of the Seasonal Commitment Increase Lender in an amount up to $25,000,000.         “Seasonal Commitment Increase Lender” means Wells Fargo.         “Seasonal Commitment Increase Utilized Amount” means that portion of the Seasonal  Commitment Increase Amount that the Borrower has elected to utilize during each Seasonal  Commitment Increase Period in accordance with the provisions of Section 2.01(d).         “Seasonal Incremental Loan Commitment Requirements” means, with respect to any  request by the Borrower to utilize the Seasonal Commitment Increase Amount made pursuant to  Section 2.01(d), the satisfaction of each of the following conditions:  (a) no Default or Event of  Default then exists, and (b) the Borrower has not theretofore reduced the Commitments pursuant  to Section 2.17 hereof.         “Seasonal Commitment Increase Period” means the period commencing on July 1 of each  calendar year and ending on December 31 of such calendar year.         “S&P” means Standard & Poor’s Rating Services, a division of the McGraw-Hill  Companies, Inc.         “SEC” means the Securities and Exchange Commission.         “Second Amendment Effective Date” means April 21, 2017.         “Security Agreement” means the Amended and Restated Security Agreement dated as of  June 30, 2011 among the Loan Parties and the Collateral Agent for the benefit of the Credit  Parties, as amended and in effect from time to time.                                           44   

 

                                                                                       “Security Documents” means the Security Agreement, the Intellectual Property Security  Agreement, the Mortgages, the  Facility Guarantors Collateral Documents, and each other  security agreement or other instrument or document executed and delivered pursuant to  Sections 5.13 or 5.14 to secure any of the Obligations.         “Settlement Date” has the meaning provided therefor  in Section 2.08(b)  hereof .         “Shrink” means Inventory which has been lost, misplaced, stolen, or is otherwise  unaccounted for.         “Single Employer Plan” means a single employer plan, as defined in Section 4001(a)(15)  of ERISA, that (a) is maintained for employees of the Parent or any of its Subsidiaries or any  ERISA Affiliate and no Person other than the Parent, its Subsidiaries or the ERISA Affiliate or  (b) was so maintained and in respect of which the Parent, any Subsidiary or any ERISA Affiliate  could have liability under Section 4069 of ERISA in the event such plan has been or were to be  terminated.         “SOFR” with respect to any day means the secured overnight financing rate published for  such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a  successor administrator) on the Federal Reserve Bank of New York’s Website.         “Solvent” means, with respect to any Person on a particular date, that on such date (a) at  fair valuations, all of the properties and assets of such Person are greater than the sum of the  debts, including contingent liabilities, of such Person, (b) the present fair saleable value of the  properties and assets of such Person is not less than the amount that would be required to pay the  probable liability of such Person on its debts as they become absolute and matured, (c) such  Person is able to realize upon its properties and assets and pay its debts and other liabilities,  contingent obligations and other commitments as they mature in the normal course of business,  (d) such Person does not intend to, and does not believe that it will, incur debts beyond such  Person’s ability to pay as such debts mature, and (e) such Person is not engaged in a business or  a transaction, and is not about to engage in a business or transaction, for which such Person’s  properties and assets would constitute unreasonably small capital after giving due consideration  to the prevailing practices in the industry in which such Person is engaged.  The amount of all  Guarantees at any time shall be computed as the amount that, in light of all the facts and  circumstances existing at the time, can reasonably be expected to become an actual or matured  liability.         “Standby Letter of Credit” means any Letter of Credit other than a Commercial Letter of  Credit.         “Standard Letter of Credit Practice” means, for the Issuing Bank, any domestic or foreign  Law or letter of credit practices applicable in the city in which the Issuing Bank issued the  applicable Letter of Credit or, for its branch or correspondent, such Laws and practices  applicable in the city in which it has advised, confirmed or negotiated such Letter of Credit, as  the case may be, in each case, (a) which letter of credit practices are of banks that regularly issue  letters of credit in the particular city, and (b) which laws or letter of credit practices are required  or permitted under ISP or UCP, as chosen in the applicable Letter of Credit.                                          45   

 

                                                                                       “Standby Letter of Credit” means any Letter of Credit that is not a Commercial Letter of  Credit and that (a) is used in lieu or in support of performance guaranties or performance, surety  or similar bonds (excluding appeal bonds) arising in the ordinary course of business, (b) is used  in lieu or in support of stay or appeal bonds, (c) supports the payment of insurance premiums for  reasonably necessary casualty insurance carried by any of the Loan Parties, or (d) supports  payment or performance for identified purchases or exchanges of products or services in the  ordinary course of business.         “Standby Letter of Credit Agreement” means the Standby Letter of Credit Agreement  relating to the issuance of a Standby Letter of Credit in the form from time to time in use by the  Issuing Bank.         “Stated Amount” means at any time the maximum amount for which a Letter of Credit  may be honored.         “Statutory Reserve Rate” means, for any Interest Period, the rate (expressed as a decimal)  applicable to the Administrative Agent during such Interest Period under regulations issued from  time to time by the FRB for determining the maximum reserve requirement (including any  marginal, special, emergency or supplemental reserves) expressed as a decimal established by  the FRB to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate,  for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of  the FRB). Such reserve percentages shall include those imposed pursuant to such Regulation D.  LIBO Loans shall be deemed to constitute eurocurrency funding and to be subject to such  reserve requirements without benefit of or credit for proration, exemptions or offsets that may be  available from time to time to any Lender under such Regulation D or any comparable  regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective  date of any change in any reserve percentage.         “Subordinated Indebtedness” means Indebtedness which is expressly subordinated in  right of payment, in form and on terms approved by the Agents in writing, to the prior payment  in full of the Obligations.  For the avoidance of doubt, the Term Loan shall not constitute  Subordinated Indebtedness.           “Subsidiary” means, with respect to any Person (the “parent”) at any date, any  corporation, limited liability company, partnership, association or other entity the accounts of  which would be consolidated with those of the parent in the parent’s Consolidated financial  statements if such financial statements were prepared in accordance with GAAP as of such date,  as well as any other corporation, limited liability company, partnership, association or other  entity (a) of which securities or other ownership interests representing more than 50% of the  equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than  50% of the general partnership interests are, as of such date, owned, controlled or held, or  (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the  parent or by the parent and one or more subsidiaries of the parent.         “Supported QFC” has the meaning provided therefor in Section 9.21.                                           46   

 

                                                                                       “Suspension Period” means the period commencing on the Fifth Amendment Effective  Date and continuing until the first resumption of the Loan Parties’ business operations  temporarily suspended due to concerns with respect to the COVID-19 coronavirus pandemic in  process as of the Fifth Amendment Effective Date.         “Swap Obligation” means, with respect to any Guarantor Loan Party , any obligation to  pay or perform under any agreement, contract or transaction that constitutes a “swap” within the  meaning of section 1a(47) of the Commodity Exchange Act.          “Swingline Lender” means Wells Fargo, in its capacity as lender of Swingline Loans  hereunder.         “Swingline Loan” shall mean a Revolving Loan made by the Swingline Lender to the  Borrower pursuant to Section 2.06 hereof.         “Synthetic Lease” means any lease or other agreement for the use or possession of  property creating obligations which does not appear as Indebtedness on the balance sheet of the  lessee thereunder but which, upon the insolvency or bankruptcy of such Person, may be  characterized as Indebtedness of such lessee without regard to the accounting treatment.           “Tax Agreement” means a tax sharing agreement among the Parent, the Borrower and its  Subsidiaries, in form and substance satisfactory to the Administrative Agent.          “Taxes” means any and all current or future taxes, levies, imposts, duties, deductions,  charges or withholdings imposed by any Governmental Authority.          “Term Loan” means, collectively (a) the Existing Term Loan, (b) the term loan made by  the Term Loan Lenders on the Fourth Amendment Effective Date pursuant to Section 2.01(b),  and (c) any Additional Term Loans made pursuant to Section 2.02A.  For all purposes hereof, the  Term Loan shall include all amounts which are, from time to time, capitalized and added to the  principal balance thereof.          “Term Loan Agent” means Wells Fargo Bank, National Association, in its capacity as  agent for the Term Loan Lenders.         “Term Loan Action Notice” shall have the meaning set forth in Section 7.03(b) hereof.         “Term Loan Borrowing Base” means, at any time of calculation, an amount equal to:               (a)   the face amount of Eligible Credit Card Receivables multiplied by the        Term Loan Credit Card Receivables Advance Rate; plus               (b)   the Term Loan Inventory Advance Rate multiplied by the Appraised        Value of Eligible Inventory, net of Inventory Reserves.          “Term Loan Commitment” means, as to each Term Loan Lender, its obligation to make a  portion of the Term Loan to the Borrower pursuant to Section 2.01(b) in an aggregate principal  amount not to exceed the amount set forth opposite such Term Loan Lender’s name on Schedule                                          47   

 

                                                                                 1.1.  As of the Fourth Notwithstanding anything included on such Schedule 1.1, as of the Fifth   Amendment Effective Date, the aggregate amount of Term Loan Commitments is $ 25,000,000 0  (it being understood and agreed that the (i)  initial Term Loan Commitments of $25,000,000 on  the Third Amendment Effective Date were reduced to $0 upon the funding of the Existing Term  Loans on the Third Amendment Effective Date , and (ii) the subsequent Term Loan  Commitments of $25,000,000 on the Fourth Amendment Effective Date were reduced to $0  upon the funding of the portion of the Term Loan in such amount on the Fourth Amendment  Effective Date ).         “Term Loan Commitment Percentage” means, with respect to each Term Loan Lender,  that percentage of the outstanding principal balance of the Term Loan represented by the  outstanding principal balance of such Term Loan Lender’s portion of the Term Loan at such time  (such percentage, as of the Fourth Amendment Effective Date, being set forth opposite its name  on Schedule 1.1 hereto).         “Term Loan Credit Card Receivables Advance Rate” means 10%.         “Term Loan Interest Rate” means, the rate per annum (unless an alternative rate of  interest shall apply pursuant to and in accordance with Section 2.18 or 2.26 hereof), determined  on the first day of each calendar month for any calendar month, equal to (a) (i) the Adjusted  LIBO Rate for an Interest Period of one-month duration determined as of such date plus (ii)  6.125%, or (b) if such alternative rate of interest shall apply pursuant to and in accordance with  Section 2.18 or 2.26 hereof, (i) the Prime Rate as of such date plus 5.125%.  For the avoidance of  any doubt, the Term Loan Interest Rate shall be calculated monthly, as of the beginning of each  month (or, in the case of the Fourth Amendment Effective Date, as of the Fourth Amendment  Effective Date).         “Term Loan Inventory Advance Rate” means 15% ; provided, however, that at all times  during the period from June 1 through September 30 of each calendar year, such percentage shall  be 14% .         “Term Loan Lender” means each Lender having a holding a portion of the outstanding  balance of the  Term Loan Commitment as set forth on Schedule 1.1 hereto or in the Assignment  and Acceptance by which such Person becomes a Term Loan Lender, or after the making of the  Term Loan, each Lender holding any portion of the Term Loan.          “Term Loan Priority Account” means a non-interest bearing account in the name of the  Agent established with a financial institution acceptable to the Term Loan Agent into which  solely the proceeds of the Term Loan Priority Collateral shall be deposited.           “Term Loan Priority Collateral” means all now owned or hereafter acquired Collateral  that constitutes:         (a)   Fixtures and Equipment (excluding any aircraft);          (b)   Intellectual Property;          (c)   Payment Intangibles that relate to Intellectual Property, Fixtures or Equipment;                                           48   

 

                                                                                       (d)   permits and licenses related to any of the foregoing (including any permits or  licenses related to ownership or operation of Fixtures or Equipment of any Loan Party);          (e)   all proceeds of insurance that relate to the foregoing;          (f)   all books and records related to the foregoing and not constituting Revolving  Priority Collateral; and         (g)   all products and proceeds of any of the foregoing.     All capitalized terms used in this definition and not defined elsewhere in this Agreement have  the meanings assigned to them in the UCC.         “Term Loan Reserve” means the amount, if any, by which the aggregate outstanding  principal balance of the Term Loan (excluding amounts which are capitalized and added to the  principal balance thereof on the Fifth Amendment Effective Date pursuant to the Fifth  Amendment Term Loan Fee Letter)  exceeds the Term Loan Borrowing Base as reflected in the  most recent Borrowing Base Certificate furnished by the Borrower, subject to Section 8.18(b).           “Term SOFR” means the forward-looking term rate based on SOFR that has been  selected or recommended by the Relevant Governmental Body.         “Termination Date” shall mean the earliest to occur of (i) the Maturity Date, or (ii) the  date on which the maturity of the Loans are accelerated and the Commitments are terminated, or  (iii) the date of the occurrence of any Event of Default pursuant to Section Sections  7.01(i) or  7.01(j) hereof.         “Testing Period” has the meaning provided therefor in Section 5.16 hereof.         “Total Disbursements” means the sum of total operating disbursements and total non- operating disbursements as provided in the Budget.         “Third Amendment Effective Date” means August 3, 2018.         “Third Amendment Fee Letter” means that certain fee letter, dated as of the Third  Amendment Effective Date, by and between the Borrower and the Administrative Agent.         “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of  interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to  the Adjusted LIBO Rate or the Prime Rate.         “Variance Report” has the meaning provided therefor in Section 5.01(m) hereof.         “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the  State of New York; provided, however, that if a term is defined in Article 9 of the Uniform  Commercial Code differently than in another Article thereof, the term shall have the meaning set  forth in Article 9; provided further that, if by reason of mandatory provisions of law, perfection,  or the effect of perfection or non-perfection, of a security interest in any Collateral or the                                          49   

 

                                                                                 availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect  in a jurisdiction other than New York, “Uniform Commercial Code” means the Uniform  Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof  relating to such perfection or effect of perfection or non-perfection or availability of such  remedy, as the case may be.         “UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for  Documentary Credits 2007 Revision, International Chamber of Commerce Publication No. 600  and any subsequent version or  revision thereof adopted by the International Chamber of  Commerce on the date such Letter of Credit is issued accepted by the Issuing Bank for use .         “UFCA” has the meaning provided therefor  in Section 9.13.         “UFTA” has the meaning provided therefor  in Section 9.13.         “Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding  the Benchmark Replacement Adjustment.         “Unintentional Overadvance” means an Overadvance which, to the Administrative  Agent’s knowledge, did not constitute an Overadvance when made but which has become an  Overadvance resulting from changed circumstances beyond the control of the Credit Parties,  including, without limitation, a reduction in the Appraised Value of property or assets included  in the Revolving Loan Borrowing Base, increase in Reserves or misrepresentation by the Loan  Parties.         “Unused Commitment” shall mean, on any day, with respect to Revolving Loan  Commitments, the then Adjusted Aggregate  Revolving Loan Commitments minus the sum of (a)  the principal amount of Revolving Loans then outstanding (including the principal amount of  Swingline Loans then outstanding) and (b) the then Letter of Credit Outstandings.         “U.S. Special Resolution Regimes” has the meaning provided therefor in Section 9.21.         “Use Period” means the period commencing on the date that the Administrative Agent  commences the liquidation and sale of the Revolving Priority Collateral and ending 180 days  thereafter.  If a court of competent jurisdiction has entered any stay or other order that prohibits  the Administrative Agent from commencing and continuing any Enforcement Action or  disposing of the Revolving Priority Collateral, such 180-day period shall be tolled during the  pendency of any such stay or other order and the Use Period shall be so extended.          “Wells Fargo” means Wells Fargo Bank, National Association, a national banking  association.         “Wells Fargo Disbursement Accounts” has the meaning provided therefor in Section  2.23(f).         “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete  or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of  Subtitle E of Title IV of ERISA.                                          50   

 

                                                                                       “Write-Down and Conversion Powers” means, with respect to any EEA Resolution  Authority, the write-down and conversion powers of such EEA Resolution Authority from time  to time under the Bail-In Legislation for the applicable EEA Member Country, which write- down and conversion powers are described in the EU Bail-In Legislation Schedule.          SECTION 1.02.  Terms Generally.                (a)   The definitions of terms herein shall apply equally to the singular and        plural forms of the terms defined. Whenever the context may require, any pronoun shall        include the corresponding masculine, feminine and neuter forms. The words “include”,        “includes” and “including” shall be deemed to be followed by the phrase “without        limitation”. The word “will” shall be construed to have the same meaning and effect as        the word “shall”. Unless the context requires otherwise (a) any definition of or reference        to any agreement, instrument or other document herein shall be construed as referring to        such agreement, instrument or other document as from time to time amended,        supplemented or otherwise modified (subject to any restrictions on such amendments,        supplements or modifications set forth herein), (b) any reference herein to any Person        shall be construed to include such Person’s successors and assigns, (c) the words        “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to        refer to this Agreement in its entirety and not to any particular provision hereof, (d) all        references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer        to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the        words “asset” and “property” shall be construed to have the same meaning and effect and        to refer to any and all tangible and intangible assets and properties, including cash,        securities, accounts and contract rights.                (b)   Any reference herein or in any other Loan Document to the satisfaction,        repayment, or payment in full of the Obligations shall mean (i) the repayment in Dollars        in full in cash or immediately available funds (or, in the case of contingent        reimbursement obligations with respect to Letters of Credit and Bank Products (other        than Hedging Agreements) and any other contingent Obligation, including        indemnification obligations, providing of cash collateral in an amount in cash equal to        103% of the Letter of Credit Outstandings and outstanding obligations in respect of such        Bank Products and other contingent Obligations as of the date of determination plus any        accrued and unpaid interest thereon) or other collateral as may be requested by the        Administrative Agent of all of the Obligations (including the payment of any termination        amount then applicable (or which would or could become applicable as a result of the        repayment of the other Obligations) under Hedging Agreements) other than (A)        unasserted contingent indemnification Obligations, (B) any Obligations relating to Bank        Products (other than Hedging Agreements) that, at such time, are allowed by the        applicable Provider to remain outstanding without being required to be repaid or so cash        collateralized or other collateral as may be requested by the Agent, and (C) any        Obligations relating to Hedging Agreements that, at such time, are allowed by the        applicable Provider to remain outstanding without being required to be repaid, and (ii) the        termination of the Commitments and the Loan Documents.                                           51   

 

                                                                                       SECTION 1.03.  Accounting Terms; GAAP. Except as otherwise expressly provided  herein, all terms of an accounting or financial nature shall be construed in accordance with  GAAP, as in effect on the Effective Date, provided that, if the Borrower notifies the  Administrative Agent that the Borrower requests an amendment to any provision hereof to  reflect the effect of any change occurring after the date hereof in GAAP or in the application  thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower  that the Required Lenders request an amendment to any provision hereof for such purpose),  regardless of whether any such notice is given before or after such change in GAAP or in the  application thereof, then such provision shall be interpreted on the basis of GAAP as in effect  and applied immediately before such change shall have become effective until such provision  shall have been amended in accordance herewith.  Notwithstanding the foregoing, any  obligations of a Person under a lease (whether existing now or entered into in the future) that is  not (or would not be) a Capital Lease Obligation under GAAP as in effect on the Effective Date,  shall not be treated as a Capital Lease Obligation solely as a result of the adoption of changes in  GAAP outlined by the Financial Accounting Standards Board in its press release dated March  19, 2009.         SECTION 1.04.  Rounding. Any financial ratios required to be maintained by the Loan  Parties pursuant to this Agreement shall be calculated by dividing the appropriate component by  the other component, carrying the result to one place more than the number of places by which  such ratio is expressed herein and rounding the result up or down to the nearest number (with a  rounding-up if there is no nearest number).         SECTION 1.05.  Times of Day. Unless otherwise specified, all references herein to times  of day shall be references to Eastern time (daylight or standard, as applicable).          SECTION 1.06.  Letter of Credit Amounts. Unless otherwise specified, all references  herein to the amount of a Letter of Credit at any time shall be deemed to be the Stated Amount of  such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of  Credit that, by its terms of any Issuer Documents related thereto, provides for one or more  automatic increases in the Stated Amount thereof, the amount of such Letter of Credit shall be  deemed to be the maximum Stated Amount of such Letter of Credit after giving effect to all such  increases, whether or not such maximum Stated Amount is in effect at such time.          SECTION 1.07.  Divisions. For all purposes under the Loan Documents, in connection  with any division or plan of division under Delaware law (or any comparable event under a  different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes  the asset, right, obligation or liability of a different Person, then it shall be deemed to have been  transferred from the original Person to the subsequent Person, and (b) if any new Person comes  into existence, such new Person shall be deemed to have been organized on the first date of its  existence by the holders of its capital stock at such time.                                           52   

 

                                                                                                                   ARTICLE II                               Amount and Terms of Credit         SECTION 2.01.  Commitments of the Lenders.               (a)   Each Revolving Loan Lender severally and not jointly with any other  Lender, agrees, upon the terms and subject to the conditions herein set forth, to extend credit to  the Borrower on a revolving basis, in the form of Revolving Loans and Letters of Credit and in  an amount not to exceed the lesser of such Revolving Loan Lender’s Revolving Loan  Commitment or such Revolving Loan Lender’s Revolving Loan Commitment Percentage of the  Revolving Loan Cap, subject to the following limitations:                     (i)   The aggregate outstanding amount of the Credit Extensions        (excluding those made in respect of the Term Loan) shall not at any time exceed the        Revolving Loan Cap.                     (ii)  No Lender (other than the Issuing Bank, acting in such capacity)        shall be obligated to issue any Letter of Credit, and Letters of Credit shall be available        from the Issuing Bank, subject to the ratable participation of all Revolving Loan Lenders,        as set forth in Section 2.07. The Borrower will not at any time permit the aggregate Letter        of Credit Outstandings to exceed $25,000,000.                     (iii)  Subject to all of the other provisions of this Agreement, Revolving         Loans that are repaid may be reborrowed prior to the Termination Date. No new Credit         Extension, however, shall be made to the Borrower after the Termination Date.                (b)   Subject to the terms and conditions set forth herein, on the Third   Amendment Effective Date, each Term Loan Lender then party to this Agreement severally   made a term loan (collectively, the “Existing Term Loan”) to the  Borrower in the aggregate  principal amount equal to $25,000,000.  Subject to the terms and conditions set forth herein,  each on the Fourth Amendment Effective Date, certain of the  Term Loan Lender severally agrees  to make Lenders made  a term loan (together with the Existing Term Loan, collectively, the “Term  Loan”) to the  Borrower on the Fourth Amendment Effective Date such date  in an aggregate  principal amount not equal  to exceed its Term Loan Commitment, such that as of the Fourth  Amendment Effective Date, the aggregate principal balance of the Term Loan hereunder shall  be was  $50,000,000.  Amounts repaid in respect of the Term Loan may not be reborrowed, and  upon Upon  each applicable Term Loan Lender’s making of such each applicable portion of the   Term Loan on the Third Amendment Effective Date or the  Fourth Amendment Effective Date , as  applicable , any then outstanding Term Loan Commitment of such Term Loan Lender shall  be was  terminated.  The failure of any Term Loan Lender to make any portion of the Term Loan  shall neither relieve any other Term Loan Lender of its obligation to fund its portion of the Term  Loan in accordance with the provisions of this Agreement nor increase the obligation of any such  other Term Loan Lender. Amounts repaid in respect of the Term Loan may not be reborrowed.   As of the Fifth Amendment Effective Date, the outstanding principal balance of the Term Loan  is $47,400,000 (which includes, for the avoidance of doubt, the capitalization and adding to the  principal amount of the Term Loan of certain fees owing to the Term Lenders as of the Fifth                                          53   

 

                                                                                 Amendment Effective Date, in such amount as set forth in the Fifth Amendment Term Loan Fee  Letter).                 (c)   Each Borrowing of Revolving Loans (other than Swingline Loans) shall   be made by the Revolving Loan Lenders pro rata in accordance with their respective Revolving  Loan Commitments.  The failure of any Revolving Loan Lender to make any Revolving Loan  shall neither relieve any other Revolving Loan Lender of its obligation to fund its Revolving  Loan in accordance with the provisions of this Agreement nor increase the obligation of any such  other Revolving Loan Lender.               (d) Notwithstanding the foregoing, so long as the Seasonal Incremental Loan  Commitment Requirements are satisfied, the Borrower shall have the right at any time after the  Effective Date, during the Seasonal Commitment Increase Period only, to utilize the Seasonal  Commitment Increase Amount.  In connection with the exercise of such Seasonal Commitment  Amount, Borrower shall notify the Seasonal Commitment Increase Lender in writing, not more  than two (2) times during each Seasonal Commitment Increase Period, of its election to so utilize  the Seasonal Commitment Increase.  Each such notice shall (i) be received by the Seasonal  Commitment Lender not less than ten (10) Business Days prior to the date on which the  Borrower intends to utilize the Seasonal Commitment Amount, and (ii) shall state the Seasonal  Commitment Increase Utilized Amount that Borrower has elected to utilize, provided, however,  that each such increase shall be not less than $10,000,000 during each Seasonal Commitment  Increase Period.  No Seasonal Commitment Increase shall become effective unless and until each  of the following conditions has been satisfied:                     (i) the Seasonal Incremental Loan Commitment Requirements shall have        been satisfied; and                     (ii) the Borrower shall have paid such fees and other compensation to the        Seasonal Commitment Increase Lender as set forth in the Fee Letter.           SECTION 2.02.  Increase in Aggregate Revolving Loan Commitments .               (a)   So long as the Incremental Revolving Loan Commitment Requirements  are satisfied, the Borrower shall have the right at any time after the Third Amendment Effective  Date, and from time to time after the Third Amendment Effective Date, to request an increase of  the Aggregate Revolving Loan Commitments up to an amount that will not cause the Aggregate  Revolving Loan Commitments to exceed $525,000,000 minus the amount of any previous  reduction of the Aggregate Revolving Loan Commitments implemented in accordance with  Section 2.17.  Any such requested increase shall be first made in writing to all existing  Revolving Loan Lenders on a pro rata  basis. In the event that any existing Revolving Loan   Lender does not notify the Administrative Agent within twenty-one (21) Business Days from the   receipt of the requested increase that the existing Revolving Loan Lender will increase its   Revolving Loan Commitment and the amount of its increase, the existing Revolving Loan   Lender shall be deemed to have declined the requested increase of its Revolving Loan   Commitment.  To the extent that one or more existing Revolving Loan Lenders decline to   increase their respective Revolving Loan Commitments, or decline to increase their Revolving   Loan Commitments to the amount requested by the Borrower, Wells Fargo may arrange for other                                          54   

 

                                                                                 Persons to become Revolving Loan Lenders hereunder and to issue commitments in an amount  equal to the amount of the increase in the Aggregate Revolving Loan Commitments requested by  the Borrower and not accepted by the existing Revolving Loan Lenders (each such increase by  either means, a “Revolving Loan Commitment Increase,” and each such Person issuing, or  Revolving Loan Lender increasing, its Commitment, an “Additional Revolving Loan  Commitment Lender”); provided, however,  that (i) no Lender shall be obligated to provide a  Revolving Loan Commitment Increase as a result of any such request by the Borrower, and (ii)  any Additional Revolving Loan Commitment Lender which is not an existing Lender shall be  subject to the approval of the Administrative Agent, the Issuing Bank, the Swingline Lender and,  provided no Event of Default has occurred and is continuing, the Borrower (which approval shall  not be unreasonably withheld), and (iii) nothing contained herein shall constitute the  unconditional obligation of Wells Fargo to provide or obtain commitments for such Revolving  Loan Commitment Increase, as Wells Fargo is only agreeing hereby to use its best efforts to  arrange for Additional Revolving Loan Commitment Lenders.  Each Revolving Loan  Commitment Increase shall be in a minimum aggregate amount of at least $10,000,000 and in  integral multiples of $10,000,000 in excess thereof.                (b)   No Revolving Loan Commitment Increase shall become effective unless  and until each of the following conditions has been satisfied:                     (i)   the Borrower, the Administrative Agent, and any Additional        Revolving Loan Commitment Lender shall have executed and delivered a joinder to the        Loan Documents in such form as the Administrative Agent may reasonably require;                     (ii)  the Incremental Revolving Loan Commitment Requirements shall        have been satisfied;                     (iii)  the Borrower shall have paid such fees and other compensation to        the Additional Revolving Loan Commitment Lenders as the Borrower and each such        Additional Revolving Loan Commitment Lenders may agree;                     (iv)  the Borrower shall have paid such arrangement fees to the        Administrative Agent and/or Wells Fargo as the Borrower and such Persons may agree;                     (v)   if requested by the Administrative Agent, the Borrower shall        deliver to the Administrative Agent, Term Loan Agent, and the Lenders an opinion or        opinions, in form and substance reasonably satisfactory to the Administrative Agent,        from counsel to the Borrower reasonably satisfactory to the Administrative Agent and        dated such date;                      (vi)  to the extent requested by any Additional Revolving Loan        Commitment Lender, a Note will be issued at the Borrower’s expense, to each such        Additional Revolving Loan Commitment Lender, to be in conformity with requirements        of Section 2.09 hereof (with appropriate modification) to the extent necessary to reflect        the new Revolving Loan Commitment of such Additional Revolving Loan Commitment        Lender;                                            55   

 

                                                                                                   (vii)  the Borrower and the Additional Revolving Loan Commitment        Lenders shall have delivered such other instruments, documents and agreements as the        Administrative Agent may reasonably have requested; and                      (viii)  if any Loan Party or any of its Subsidiaries owns any Margin        Stock, Borrower shall deliver to the Administrative Agent an updated Form U-1 (with        sufficient additional originals thereof for each Lender), duly executed and delivered by        the Borrower, together with such other documentation as the Administrative Agent shall        reasonably request, in order to enable the Agents and the Lenders to comply with any of        the requirements under Regulations T, U or X of the FRB.                 (c)   The Administrative Agent shall promptly notify each Revolving Loan  Lender as to the effectiveness of each Revolving Loan Commitment Increase (with each date of  such effectiveness being referred to herein as a “Revolving Loan Commitment Increase Date”),  and at such time (i) the Aggregate Revolving Loan Commitments under, and for all purposes of,  this Agreement shall be increased by the aggregate amount of such Revolving Loan  Commitment Increases, (ii) Schedule 1.1 shall be deemed modified, without further action, to  reflect the revised Revolving Loan Commitments and Revolving Loan Commitment Percentages  of the Revolving Loan Lenders, and (iii) this Agreement shall be deemed amended, without  further action, to the extent necessary to reflect such increased Aggregate Revolving Loan  Commitments (including, without limitation, Section 2.01(a)(i)).               (d)   In connection with Revolving Loan Commitment Increases hereunder, the  Revolving Loan Lenders and the Borrower agree that, notwithstanding anything to the contrary  in this Agreement, (i) the Borrower shall, in coordination with the Administrative Agent, (x)  repay outstanding Revolving Loans of certain Revolving Loan Lenders, and obtain Revolving  Loans from certain other Revolving Loan Lenders (including the Additional Revolving Loan  Commitment Lenders), but in no event in excess of each such Revolving Loan Lender’s  Revolving Loan Commitment, or (y) take such other actions as reasonably may be required by  the Administrative Agent, in each case to the extent necessary so that all of the Revolving Loan  Lenders effectively participate in each of the outstanding Revolving Loans pro rata on the basis  of their Revolving Loan Commitment Percentages (determined after giving effect to any increase  in the Aggregate Revolving Loan Commitments pursuant to this Section Error! Reference  source not found. ), and (ii) the Borrower shall pay to the Revolving Loan Lenders any costs of  the type referred to in Section 2.21 in connection with any repayment and/or Revolving Loans  required pursuant to preceding clause (i).         SECTION 2.02A .  Additional Term Loans .               (a)   So long as the Additional Term Loan Commitment Requirements are  satisfied, the Borrower shall have the right at any time after the Fourth Amendment Effective  Date, and from time to time after the Fourth Amendment Effective Date, to request additional  Term Loans up to an amount that will not cause the aggregate outstanding principal balance of  Term Loans to exceed $100,000,000 (each, an “Additional Term Loan” and collectively, the  “Additional Term Loans”).  Any such requested Additional Term Loans shall be first made in  writing to all existing Term Loan Lenders on a pro rata  basis. In the event that any existing  Term Loan Lender does not notify the Administrative Agent and Term Loan Agent within five                                          56   

 

                                                                                 (5) Business Days from the receipt of a request for the making of Additional Term Loans, the  existing Term Loan Lender shall be deemed to have declined to make any Additional Term  Loans.  To the extent that one or more existing Term Loan Lenders decline make any Additional  Term Loans, or decline to make any Additional Term Loans in the amount requested by the  Borrower, Term Loan Agent may arrange for other Persons to become Term Loan Lenders  hereunder and to make any Additional Term Loans in an amount equal to the amount of  Additional Term Loans requested by the Borrower and not accepted by the existing Term Loan  Lenders (each such Person making any Additional Term Loans, an “Additional Term Loan  Commitment Lender”); provided, however,  that (i) no Lender shall be obligated to provide an  Additional Term Loan as a result of any such request by the Borrower, (ii) any Person making an  Additional Term Loan which is not an existing Lender shall be subject to the approval of the  Administrative Agent, the Term Loan Agent, and the Swingline Lender and, provided no Event  of Default has occurred and is continuing, the Borrower (which approval shall not be  unreasonably withheld), and (iii) nothing contained herein shall constitute the unconditional  obligation of Wells Fargo or Term Loan Agent to provide or obtain Additional Term Loans, as  Term Loan Agent is only agreeing hereby to use its best efforts to arrange for the provision of  Additional Term Loans.  Each request for Additional Term Loans shall be in a minimum  aggregate amount of at least $5,000,000 and in integral multiples of $5,000,000 in excess  thereof.               (b)   No Additional Term Loans shall be provided unless and until each of the  following conditions has been satisfied:                       (i)   the Borrower, the Administrative Agent, the Term Loan Agent,         and any Person not an existing Lender that is making an Additional Term Loan shall have         executed and delivered a joinder to the Loan Documents in such form as the         Administrative Agent and the Term Loan Agent may reasonably require;                     (ii)  the Additional Term Loan Commitment Requirements shall have         been satisfied;                      (iii)  the Borrower shall have paid such fees and other compensation to         the Lenders making Additional Term Loans as the Borrower and each such Lenders may         agree;                      (iv)  the Borrower shall have paid such arrangement fees to the        Administrative Agent and/or Wells Fargo and/or Wells Fargo as the Borrower and such        Persons may agree;                     (v)   if requested by the Administrative Agent or Term Loan Agent, the         Borrower shall deliver to the Administrative Agent, Term Loan Agent, and the Lenders         an opinion or opinions, in form and substance reasonably satisfactory to the         Administrative Agent, from counsel to the Borrower reasonably satisfactory to the         Administrative Agent and the Term Loan Agent;                                            57   

 

                                                                                                   (vi)  to the extent requested by any Lender making an Additional Term        Loan, a Note will be issued at the Borrower’s expense, to each such Person, to be in        conformity with requirements of Section 2.09 hereof;                      (vii)  the Borrower and the Lenders making Additional Term Loans shall        have delivered such other instruments, documents and agreements as the Administrative        Agent may reasonably have requested;                      (viii)  the terms of the Additional Term Loan and the agreements,         documents, and instruments with respect thereto, shall be in all respects acceptable to the         Term Loan Agent and each Term Loan Lender; and                       (ix)  if any Loan Party or any of its Subsidiaries owns any Margin         Stock, Borrower shall deliver to the Administrative Agent an updated Form U-1 (with         sufficient additional originals thereof for each Lender), duly executed and delivered by         the Borrower, together with such other documentation as the Administrative Agent shall         reasonably request, in order to enable the Agents and the Lenders to comply with any of         the requirements under Regulations T, U or X of the FRB.            Notwithstanding anything to the contrary, at no time may any Additional Term Loan be         provided except with the prior written consent of the Required Revolving Loan Lenders         to the extent the then outstanding principal balance of the Term Loan (including without         limitation, the Additional Term Loan then being requested) exceeds $50,000,000.         (c) (c)  In connection with the Additional Term Loans, the Term Loan Lenders and the  Borrower agree that, notwithstanding anything to the contrary in this Agreement, (i) the  Borrower shall, in coordination with the Administrative Agent and the Term Loan Agent, (x)  repay outstanding Term Loans of certain Term Loan Lenders, and obtain Term Loans from  certain other Term Loan Lenders (including the Additional Term Loan Commitment Lenders),  but in no event in excess of each such Term Loan Lender’s Term Loan Commitment, or (y) take  such other actions as reasonably may be required by the Administrative Agent or the Term Loan  Agent, in each case to the extent necessary so that all of the Term Loan Lenders effectively  participate in the outstanding Term Loan pro rata  on the basis of their Term Loan Percentages  (determined after giving effect to any Additional Term Loans pursuant to this Section Error!  Reference source not found. A), and (ii) the Borrower shall pay to the Term Loan Lenders any  costs of the type referred to in Section 2.21 in connection with any repayment and/or Term  Loans required pursuant to preceding clause (i).         SECTION 2.03.  Reserves; Changes to Reserves.               (a)   The Inventory Reserves, Availability Reserves, and Term Loan Reserve as  of the  Fourth Fifth  Amendment Effective Date are those set forth in the Borrowing Base  Certificate delivered to the Administrative Agent on or as of the Fourth Fifth  Amendment  Effective Date.               (b)   After the Fourth Fifth  Amendment Effective Date, the Administrative  Agent may establish additional Reserves or change any of the Reserves described in Section  2.03(a), in the exercise of the reasonable discretion of the Administrative Agent, after furnishing                                          58   

 

                                                                                 five (5) days prior notice to, and after consultation with, the Borrower (whose consent to any  Reserve shall not be required) (provided that no such prior notice shall be required if a Cash  Dominion Event exists or for  (1) changes to any Reserves resulting solely by virtue of  mathematical calculations of the amount of the Reserve in accordance with the methodology of  calculation previously utilized (such as, but not limited to, rent and Gift Certificate and  Merchandise Credit Liabilities), or (2) changes to Reserves or establishment of additional  Reserves if a Material Adverse Effect has occurred or it would be reasonably likely that a  Material Adverse Effect to the Lenders would occur were such Reserve not changed or  established prior to the expiration of such five (5) day period).  The foregoing shall be subject to  the provisions of Section 8.18.               (c)   Notwithstanding anything to the contrary, solely during the Forbearance  Period, the Administrative Agent shall reduce the Restructuring Reserve in accordance with the  reduction schedule set forth in the Budget; provided, that if as of the proposed date of any  reduction, a Default or Event of Default (other than the Specified Events of Default (as defined  in the Fifth Amendment) or a Default that would be cured after giving effect to such reduction)  then exists, no such reduction shall occur, and the amount of any subsequent reduction shall be  adjusted in the Administrative Agent’s reasonable discretion.  Following the termination of the  Forbearance Period, the Administrative Agent shall have discretion to adjust the Restructuring  Reserve as provided in the definition of such term without any limitation set forth in the  preceding sentence.         SECTION 2.04.  Making of Loans.               (a)   Except as set forth in Sections 2.18 and 2.26, Revolving Loans (other than  Swingline Loans) shall be either Prime Rate Loans or LIBO Loans as the Borrower may request  subject to and in accordance with this Section 2.04, provided that all Swingline Loans shall be  only Prime Rate Loans. All such Loans made pursuant to the same Borrowing shall, unless  otherwise specifically provided herein, be Loans of the same Type. Each Lender may fulfill its  Commitment with respect to any such Loan by causing any lending office of such Lender to  make such Loan; but any such use of a lending office shall not affect the obligation of the  Borrower to repay such Loan in accordance with the terms of the applicable Note. Subject to the  other provisions of this Section 2.04 and the provisions of Section 2.26, Borrowings of Loans of  more than one Type may be incurred at the same time, but no more than six (6) Borrowings of  LIBO Loans may be outstanding at any time.               (b)   The Borrower shall give the Administrative Agent two (2) Business Days’  prior electronic notice (thereafter confirmed in writing) (unless the Administrative Agent notifies  the Borrower in writing that three (3) Business Days’ is required) of each LIBO Borrowing and  one (1) Business Day’s prior electronic notice (thereafter confirmed in writing) of each  Borrowing of Prime Rate Loans, in each case through Administrative Agent’s Commercial  Electronic Office Portal or through such other electronic portal provided by Administrative  Agent (the “Portal”).  Any such notice, to be effective, must be received by the Administrative  Agent not later than 1:00 p.m. on the second (or third if applicable) Business Day in the case of  LIBO Loans prior to the date on which, and on the first Business Day in the case of Prime Rate  Loans prior to the date on which, such Borrowing is to be made.  Such notice shall be irrevocable  and shall specify the amount of the proposed Borrowing (which shall be in an integral multiple                                          59   

 

                                                                                 of $500,000, but not less than $1,000,000 in the case of LIBO Loans and not less than $100,000  in the case of Prime Rate Loans) and the date thereof (which shall be a Business Day) and shall  contain disbursement instructions.  Such notice shall specify whether the Borrowing then being  requested is to be a Borrowing of Prime Rate Loans or LIBO Loans and, if LIBO Loans, the  Interest Period with respect thereto. If no election of Interest Period is specified in any such  notice for a Borrowing of LIBO Loans, such notice shall be deemed a request for an Interest  Period of one month. If no election is made as to the Type of Loan, such notice shall be deemed  a request for Borrowing of Prime Rate Loans. If the Borrower fails to give a timely notice with  respect to any continuation of a LIBO Loan, then the applicable Revolving Loans (or portion  thereof) shall be converted to Prime Rate Loans, effective as of the last day of the Interest Period  then in effect with respect to the applicable LIBO Loans.  All requests for a Revolving Loan  which are not made by electronic request of the Borrower through the Portal shall be subject to  (and unless the Administrative Agent elects otherwise in the exercise of its sole discretion, such  Revolving Loan, conversion or continuation shall not be made until the completion of) the  Administrative Agent’s authentication process (with results satisfactory to the Administrative  Agent) prior to the funding of any such requested Revolving Loan.  The Administrative Agent  shall promptly notify each Lender of its pro rata share of such Borrowing, the date of such  Borrowing, the Type of Borrowing being requested and the Interest Period or Interest Periods  applicable thereto, as appropriate. On the borrowing date specified in such notice, each Lender  shall make its share of the Borrowing available at the office of the Administrative Agent at One  Boston Place, Boston, Massachusetts 02108, no later than 1:00 p.m., in immediately available  funds. Unless the Administrative Agent shall have received notice from a Lender prior to the  proposed date of any Borrowing that such Lender will not make available to the Administrative  Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such  Lender has made such share available on such date in accordance with this Section and may, in  reliance upon such assumption, make available to the Borrower a corresponding amount. In such  event, if a Lender has not in fact made its share of the applicable Borrowing available to the  Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the  Administrative Agent forthwith on demand such corresponding amount with interest thereon, for  each day from and including the date such amount is made available to the Borrower to but  excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the  greater of the Federal Funds Effective Rate and a rate determined in good faith by the  Administrative Agent in accordance with banking industry rules on interbank compensation or  (ii) in the case of the Borrower, the interest rate applicable to Prime Rate Loans. If such Lender  pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s  Loan included in such Borrowing. Upon receipt of the funds made available by the Lenders to  fund any Borrowing hereunder, the Administrative Agent shall disburse such funds into a Wells  Fargo Disbursement Account or otherwise in the manner specified in the notice of borrowing  delivered by the Borrower and shall use reasonable efforts to make the funds so received from  the Lenders available to the Borrower no later than 4:00 p.m.                (c)   The Administrative Agent, without the request of the Borrower, may  advance any interest, fee, service charge (including direct wire fees), Credit Party Expenses (to  the extent then due and payable), or other payment to which any Agent or their Affiliates or any  Lender is entitled from the Borrower pursuant hereto or any other Loan Document and may  charge the same to the Loan Account notwithstanding that an Overadvance may result thereby.   The Administrative Agent shall advise the Borrower of any such advance or charge promptly                                          60   

 

                                                                                 after the making thereof. Such action on the part of the Administrative Agent shall not constitute  a waiver of the Administrative Agent’s rights and the Borrower’s obligations under Section  2.20(a). Any amount which is added to the principal balance of the Loan Account as provided in  this Section 2.04(c) shall bear interest at the interest rate then and thereafter applicable to Prime  Rate Loans.               (d)   Notwithstanding the foregoing or any other provision hereof (except   Section 2.11), all Term Loans shall bear interest at the Term Loan Interest Rate.                (e)   Anything to the contrary contained herein notwithstanding, no Agent,  Lender or Participant is required actually to acquire eurodollar deposits to fund or otherwise  match fund any Obligation as to which interest accrues at or by reference to the LIBO Rate.         SECTION 2.05.  Overadvances.  The Administrative Agent, the Collateral Agent, and  the Lenders have no obligation to make any Loan or to provide any Letter of Credit if an  Overadvance would result. The Administrative Agent may, in its discretion, make Permitted  Overadvances without the Consent of the Revolving Loan Lenders and each Revolving Loan  Lender shall be bound thereby. Any Permitted Overadvances may constitute Swingline Loans.  The making of any Permitted Overadvance is for the benefit of the Borrower; such Permitted  Overadvances constitute Revolving Loans and Obligations. The making of any such Permitted  Overadvances on any one occasion shall not obligate the Administrative Agent or any Revolving  Loan Lender to make or permit any Permitted Overadvances on any other occasion or to permit  such Permitted Overadvances to remain outstanding.  The making by the Administrative Agent  of a Permitted Overadvance shall not modify or abrogate any of the provisions of Section 2.07(e)  regarding the Revolving Loan Lenders’ obligations to purchase participations with respect to L/C  Disbursements or Section 2.08 regarding any Revolving Loan Lender’s reimbursement  obligations with respect to Swingline Loans.         SECTION 2.06.  Swingline Loans.               (a)   The Swingline Lender is authorized by the Revolving Loan Lenders, but is   not obligated, to make Swingline Loans up to (i) $15,000,000 plus (ii) the Permitted   Overadvances, in the aggregate outstanding at any time, consisting only of Prime Rate Loans,   upon a notice of Borrowing received by the Administrative Agent and the Swingline Lender   (which notice, at the Swingline Lender’s discretion, may be submitted prior to 1:00 p.m. on the   Business Day on which such Swingline Loan is requested); provided that the Swingline Lender  shall not be obligated to make any Swingline Loan in its reasonable discretion if any Revolving  Loan Lender at such time is a Deteriorating Lender, unless the Swingline Lender has entered into  satisfactory arrangements with the Borrower or such Revolving Loan Lender to eliminate the  Swingline Lender’s risk of full reimbursement with respect to such Swingline Loan.  Swingline  Loans shall be subject to periodic settlement with the Revolving Loan Lenders under Section  2.08 below.               (b)   Swingline Loans may be made only in the following circumstances: (A)   for administrative convenience, the Swingline Lender may, but is not obligated to, make   Swingline Loans in reliance upon the Borrower’s actual or deemed representations under Section  4.02, that the applicable conditions for borrowing are satisfied or (B) for Permitted                                          61   

 

                                                                                 Overadvances. If the conditions for borrowing under Section 4.02 cannot be fulfilled, the  Required Revolving Loan Lenders may direct the Swingline Lender to, and the Swingline  Lender thereupon shall, cease making Swingline Loans (other than Permitted Overadvances)  until such conditions can be satisfied or are waived in accordance with Section 9.02 hereof.  Unless the Required Revolving Loan Lenders so direct the Swingline Lender, the Swingline  Lender may, but is not obligated to, continue to make Swingline Loans notwithstanding that the  conditions for borrowing under Section 4.02 cannot be fulfilled. No Swingline Loans shall be  made pursuant to this subsection (b) (other than Permitted Overadvances) if the sum of the  aggregate outstanding amount of the Revolving Loans, Letter of Credit Outstandings, and  Swingline Loans would exceed the Revolving Loan Cap.          SECTION 2.07.  Letters of Credit.               (a)   Upon the terms and subject to the conditions herein set forth, the Borrower  may request the Issuing Bank, at any time and from time to time after the date hereof and prior to  the Termination Date, to issue, and subject to the terms and conditions contained herein, the  Issuing Bank shall issue, for the account of the Borrower, one or more Letters of Credit in  Dollars; provided that no Letter of Credit shall be issued if after giving effect to such issuance (i)  the aggregate Letter of Credit Outstandings shall exceed the Letter of Credit Sublimit, (ii) the  aggregate outstanding amount of the Revolving Loans, Letter of Credit Outstandings, and  Swingline Loans would exceed the Revolving Loan Cap, or (iii) the aggregate outstanding  amount of the Revolving Loans of any Revolving Loan Lender, plus such Revolving Loan  Lender’s Revolving Loan Commitment Percentage of the outstanding amount of all Letter of  Credit Outstandings, plus such Revolving Loan Lender’s Revolving Loan Commitment  Percentage of the outstanding amount of all Swingline Loans would exceed such Revolving  Loan Lender’s Revolving Loan Commitment; and provided, further, that no Letter of Credit shall  be issued if (A) the Issuing Bank shall have received notice from the Administrative Agent or the  Required Revolving Loan Lenders that the conditions to such issuance have not been met or (B)  there exists a Deteriorating and/or Delinquent Lender, unless (i) such Revolving Loan Lender’s  participation with respect to such Letter of Credit is reallocated pursuant to Section 8.12, or  (ii) the Issuing Bank has otherwise entered into arrangements reasonably satisfactory to it and the  Borrower to eliminate the Issuing Bank’s risk with respect to the participation in such Letter of  Credit of such Revolving Loan Lender, which arrangements may include the Borrower cash  collateralizing such Deteriorating and/or Delinquent Lender’s participation with respect to such  Letter of Credit in accordance with Section 8.12; and provided further that the Issuing Bank shall  not be required to issue any such Letter of Credit in its reasonable discretion if: (X) any order,  judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to  enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Applicable Law  relating to the Issuing Bank or any request or directive (whether or not having the force of law)  from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or  request that the Issuing Bank refrain from, the issuance of letters of credit generally or such  Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of  Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise  compensated hereunder) not in effect on the Effective Date, or shall impose upon the Issuing  Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date and  which the Issuing Bank in good faith deems material to it, or (Y) the issuance of such Letter of                                          62   

 

                                                                                 Credit would violate one or more policies of the Issuing Bank applicable to letters of credit  generally.         By submitting a request to the Issuing Bank for the issuance of a Letter of Credit, the  Borrower shall be deemed to have requested that the Issuing Bank issue the requested Letter of  Credit.  Each request for the issuance of a Letter of Credit, or the amendment , renewal,  or  extension of any outstanding Letter of Credit, shall be (i) irrevocable and shall be made in  writing pursuant to a Letter of Credit Application by a Responsible Officer of the Borrower, (ii)  delivered to the Issuing Bank and the Administrative Agent via telefacsimile or other electronic  method of transmission reasonably acceptable to the Issuing Bank not later than 11:00 a.m. at  least two Business Days (or such other date and time as the Administrative Agent and the Issuing  Bank may agree in a particular instance in their sole discretion) prior to the requested date of  issuance, amendment , renewal,  or extension, and (iii) subject to the Issuing Bank’s  authentication procedures with results satisfactory to the Issuing Bank.   Each such request shall  be in form and substance reasonably satisfactory to the Administrative Agent and the Issuing  Bank and (i) shall specify (A) the amount of such Letter of Credit, (B) the date of issuance,  amendment , renewal,  or extension of such Letter of Credit, (C) the proposed expiration date of  such Letter of Credit, (D) the name and address of the beneficiary of the Letter of Credit, and (E)  such other information (including, the conditions to drawing, and, in the case of an amendment ,  renewal,  or extension, identification of the Letter of Credit to be so amended , renewed,  or  extended) as shall be necessary to prepare, amend , renew,  or extend such Letter of Credit, and  (ii) shall be accompanied by such Issuer Documents as the Administrative Agent or the Issuing  Bank may request or require, to the extent that such requests or requirements are consistent with  the Issuer Documents that the Issuing Bank generally requests for Letters of Credit in similar  circumstances.  The Administrative Agent’s records of the content of any such request will be  conclusive.  Anything contained herein to the contrary notwithstanding, the Issuing Bank may,  but shall not be obligated to, issue a Letter of Credit that supports the obligations of a Loan Party  or one of its Subsidiaries in respect of an employment contract.            Each Letter of Credit shall be in form and substance reasonably acceptable to the Issuing  Bank, including the requirement that the amounts payable thereunder must be payable in Dollars.                 (b)   Each Except as otherwise agreed by the Administrative Agent and the  Issuing Bank in writing (which agreement may be by e-mail), each  Standby Letter of Credit shall  expire at or prior to the close of business on the earlier of (i) the date one (1) year after the date  of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one  (1) year after such renewal or extension) and (ii) the date that is five (5) Business Days prior to  the Maturity Date , provided that each Standby Letter of Credit may, upon the request of the  Borrower, include a provision whereby such Letter of Credit shall be renewed automatically for  additional consecutive periods of twelve (12) months or less (but not beyond the date that is five  (5) Business Days prior to the Maturity Date) unless the Issuing Bank notifies the beneficiary  thereof at least thirty (30) days prior to the then-applicable expiration date that such Letter of  Credit will not be renewed. .               (c)   Each Except as otherwise agreed by the Administrative Agent and the  Issuing Bank in writing (which agreement may be by e-mail), each  Commercial Letter of Credit  shall expire at or prior to the close of business on the earlier of (i) the date that is one hundred                                          63   

 

                                                                                 eighty twenty  (180 120 ) days after the date of the issuance of such Commercial Letter of Credit  and (ii) the date that is five (5) Business Days prior to the Maturity Date.                (d)   Any Issuing Bank (other than Wells Fargo or any of its Affiliates) shall  notify the Administrative Agent in writing no later than the Business Day prior to the Business  Day on which such Issuing Bank issues any Letter of Credit.  In addition, each Issuing Bank  (other than Wells Fargo or any of its Affiliates) shall, on the first Business Day of each week,  submit to the Administrative Agent a report detailing the daily undrawn amount of each Letter of  Credit issued by such Issuing Bank during the prior calendar week.  If the Issuing Bank makes a  payment under a Letter of Credit, the Borrower shall pay to the Administrative Agent an amount  equal to such L/C Disbursement not later than 12:00 p.m. on (i) the date that the Borrower shall  have received notice of such L/C Disbursement, if such notice is received prior to 10:00 a.m. on  such date, or (ii) the Business Day immediately following the day that the Borrower receives  such notice, if such notice is received after 10:00 a.m. on the day of such L/C Disbursement and,  in the absence of such payment, the amount of the L/C Disbursement immediately and  automatically shall be deemed to be a Revolving Loan hereunder (notwithstanding any failure to  satisfy any condition precedent set forth in Section 4.02) and, initially, shall bear interest at the  rate then applicable to Revolving Loans that are Prime Rate Loans. If an L/C Disbursement is  deemed to be a Revolving Loan hereunder, the Borrower’s obligation to pay the amount of such  L/C Disbursement to the Issuing Bank shall be automatically converted into an obligation to pay  the resulting Revolving Loan.  Promptly following receipt by the Administrative Agent of any  payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute  such payment to the Issuing Bank or, to the extent that Revolving Loan Lenders have made  payments pursuant to Section 2.07(e) to reimburse the Issuing Bank, then to such Revolving  Loan Lenders and the Issuing Bank as their interests may appear.                (e)   Promptly following receipt of a notice of an L/C Disbursement pursuant to   Section 2.07(d), each Revolving Loan Lender agrees to fund its Revolving Loan Commitment  Percentage of any Revolving Loan deemed made pursuant to Section 2.07(d) on the same terms  and conditions as if the Borrower had requested the amount thereof as a Revolving Loan and the  Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from  the Revolving Loan Lenders.  By the issuance of a Letter of Credit (or an amendment , renewal,   or extension of a Letter of Credit) and without any further action on the part of the Issuing Bank  or the Revolving Loan Lenders, the Issuing Bank shall be deemed to have granted to each  Revolving Loan Lender, and each Revolving Loan Lender shall be deemed to have purchased, a  participation in each Letter of Credit issued by the Issuing Bank, in an amount equal to its  Revolving Loan Commitment Percentage of such Letter of Credit, and each such Revolving  Loan Lender agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such  Revolving Loan Lender’s Revolving Loan Commitment Percentage of any L/C Disbursement  made by the Issuing Bank under the applicable Letter of Credit.  In consideration and in  furtherance of the foregoing, each Revolving Loan Lender hereby absolutely and unconditionally  agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Revolving  Loan Lender’s Revolving Loan Commitment Percentage of each L/C Disbursement made by the  Issuing Bank and not reimbursed by the Borrower on the date due as provided in Section 2.07(d),  or of any reimbursement payment that is required to be refunded (or that the Administrative  Agent or the Issuing Bank elects, based upon the advice of counsel, to refund) to the Borrower  for any reason.  Each Revolving Loan Lender acknowledges and agrees that its obligation to                                          64   

 

                                                                                 deliver to the Administrative Agent, for the account of the Issuing Bank, an amount equal to its  respective Revolving Loan Commitment Percentage of each L/C Disbursement pursuant to this  Section 2.07(e) shall be absolute and unconditional and such remittance shall be made  notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to  satisfy any condition set forth in Section 4.02.  If any such Revolving Loan Lender fails to make  available to Agent the amount of such Revolving Loan Lender’s Revolving Loan Commitment  Percentage of an L/C Disbursement as provided in this Section, such Revolving Loan Lender  shall be deemed to be a Delinquent Lender and the Administrative Agent (for the account of the  Issuing Bank) shall be entitled to recover such amount on demand from such Revolving Loan  Lender together with interest thereon at the greater of the Federal Funds Effective Rate and a rate  determined in good faith by the Administrative Agent in accordance with banking industry rules  on interbank compensation until paid in full.               (f)   Whenever the Borrower desires that the Issuing Bank issue a Letter of  Credit (or the amendment , renewal  or extension of an outstanding Letter of Credit), the Borrower  shall give to the Issuing Bank and the Administrative Agent at least two (2) Business Days’ prior  written (including telegraphic, telex, facsimile or cable communication) notice (or such shorter  period as may be agreed upon in writing by the Issuing Bank and the Borrower) specifying the  date on which the proposed Letter of Credit is to be issued, amended , renewed  or extended  (which shall be a Business Day), the stated amount of the Letter of Credit so requested, the  expiration date of such Letter of Credit, the name and address of the beneficiary thereof, and the  provisions thereof. If requested by the Issuing Bank, the Borrower shall also submit a Letter of  Credit Application in connection with any request for the issuance, amendment , renewal  or  extension of a Letter of Credit.               (g)   The reimbursement and payment obligations of the Borrower under this   Section 2.07 are absolute, unconditional and irrevocable and shall be performed strictly in  accordance with the terms of this Agreement under all circumstances whatsoever, including,  without limitation: (i) any lack of validity, enforceability or legal effect of any Letter of Credit,  any Issuer Document, this Agreement, or any other Loan Document, or any term or provision  therein or herein; (ii) the existence of any claim, setoff, defense or other right which any Loan  Party or any of its Subsidiaries may have at any time against a beneficiary or transferee  beneficiary, any assignee of proceeds, the Issuing Bank, or any other Person; (iii) any draft,  demand, certificate or other document presented under any Letter of Credit proving to be forged,  fraudulent, invalid or insufficient in any respect or any statement therein being untrue or  inaccurate in any respect, or which is signed, issued or presented by a Person or a transferee of  such Person purporting to be a successor or transferee of the beneficiary of such Letter of Credit;  (iv) payment by the Issuing Bank of any Letter of Credit against presentation of a demand, draft  or certificate or other document which does not comply in whole or in part with the terms of such  Letter of Credit; (v) the Issuing Bank or any correspondent honoring a drawing upon receipt of  an electronic presentation under a Letter of Credit requiring the same, regardless of whether the  original Drawing Documents arrive at the Issuing Bank’s counters or are different from the  electronic presentation; (vi) the fact that any Default or Event of Default shall have occurred and  be continuing; (vii) the Issuing Bank or any of its branches or Affiliates being the beneficiary of  any Letter of Credit; (viii) the Issuing Bank or any correspondent honoring a drawing against a  Drawing Document up to the amount available under any Letter of Credit even if such Drawing  Document claims an amount in excess of the amount available under the Letter of Credit; or (ix)                                          65   

 

                                                                                 any other event, circumstance or conduct whatsoever, whether or not similar to any of the  foregoing that might, but for this Section 2.07(g), constitute a legal or equitable defense to or  discharge of, or provide a right of set-off against, the Borrower’s or any of its Subsidiaries’  reimbursement and other payment obligations and liabilities, arising under, or in connection  with, any Letter of Credit, whether against the Issuing Bank, the beneficiary or any other Person.   None of the Administrative Agent, the Revolving Loan Lenders, the Issuing Bank or any of their  Affiliates shall have any liability or responsibility by reason of or in connection with the issuance  or transfer of any Letter of Credit or any payment or failure to make any payment thereunder  (irrespective of any of the circumstances referred to in the preceding sentence), or any error,  omission, interruption, loss or delay in transmission or delivery of any draft, notice or other  communication under or relating to any Letter of Credit (including any document required to  make a drawing thereunder), any error in interpretation of technical terms or any consequence  arising from causes beyond the control of the Issuing Bank, provided that the foregoing  provisions of this subparagraph (i) shall not be construed to excuse the Issuing Bank from  liability to the Borrower to the extent of any direct damages (as opposed to consequential  damages, claims in respect of which are hereby waived by the Borrower to the extent permitted  by Applicable Law) suffered by the Borrower that are caused by the Issuing Bank’s failure to  exercise care when determining whether drafts and other documents presented under a Letter of  Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of  gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by  a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in  each such determination. In furtherance of the foregoing and without limiting the generality  thereof, the parties agree that, with respect to documents presented that appear on their face to be  in compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,  either accept and make payment upon such documents without responsibility for further  investigation, regardless of any notice or information to the contrary, or refuse to accept and  make payment upon such documents if such documents are not in strict compliance with the  terms of such Letter of Credit.               (h)   If any Event of Default shall occur and be continuing, on the Business Day  that the Borrower receives notice from the Administrative Agent or the Required Revolving  Loan Lenders demanding the deposit of cash collateral pursuant to this paragraph, the Borrower  shall deposit in the Cash Collateral Account an amount in cash equal to 103% of the Letter of  Credit Outstandings as of such date plus any accrued and unpaid interest thereon. Each such  deposit shall be held by the Collateral Agent as collateral for the payment and performance of the  Obligations of the Borrower under this Agreement. The Collateral Agent shall have exclusive  dominion and control, including the exclusive right of withdrawal, over such Cash Collateral  Account. Other than any interest earned on the investment of such deposits, which investments  shall be made at the option and sole discretion of the Collateral Agent at the request of the  Borrower and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or  profits, if any, on such investments shall accumulate in such account. Moneys in such Cash  Collateral Account shall be applied by the Collateral Agent to reimburse the Issuing Bank for  payments on account of drawings under Letters of Credit for which it has not been reimbursed  and, to the extent not so applied, shall be held first for the satisfaction of the reimbursement  obligations of the Borrower for the Letter of Credit Outstandings at such time and thereafter be  applied to satisfy other Obligations of the Borrower under this Agreement.  In the event that all  reimbursement obligations and all other Obligations hereunder have been paid, any remaining                                          66   

 

                                                                                 funds in the Cash Collateral Account shall be released to the Borrower.  If Borrower fails to  provide cash collateral as required by this Section 2.07(h), the Revolving Loan Lenders may  (and, upon direction of the Administrative Agent, shall) advance, as Revolving Loans the amount  of the cash collateral required by this Section 2.07(h), so that the then existing Letter of Credit  Outstandings are cash collateralized in accordance with the terms of this Section 2.07(h)  (whether or not the Aggregate Revolving Loan Commitments have terminated, an Overadvance  exists or the conditions in Section 4.02 are satisfied).               (i)   The Borrower agrees to indemnify, defend and hold harmless each Credit  Party (including the Issuing Bank and its branches, Affiliates, and correspondents) and each such  Person’s respective directors, officers, employees, attorneys and agents (each, including the  Issuing Bank, a “Letter of Credit Related Person”) (to the fullest extent permitted by Law) from  and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities,  fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys,  experts, or consultants and all other costs and expenses actually incurred in connection therewith  or in connection with the enforcement of this indemnification (as and when they are incurred and  irrespective of whether suit is brought), which may be incurred by or awarded against any such  Letter of Credit Related Person (other than Taxes, which shall be governed by Section 2.28) (the  “Letter of Credit Indemnified Costs”), and which arise out of or in connection with, or as a result  of:                      (i)   any Letter of Credit or any pre-advice of its issuance;                      (ii)  any transfer, sale, delivery, surrender or endorsement (or lack        thereof)  of any Drawing Document at any time(s) held by any such Letter of Credit        Related Person in connection with any Letter of Credit;                     (iii)  any action or proceeding arising out of, or in connection with, any        Letter of Credit (whether administrative, judicial or in connection with arbitration),        including any action or proceeding to compel or restrain any presentation or payment        under any Letter of Credit, or for the wrongful dishonor of, or honoring a presentation        under, any Letter of Credit;                     (iv)  any independent undertakings issued by the beneficiary of any        Letter of Credit;                     (v)   any unauthorized instruction or request made to the Issuing Bank        in connection with any Letter of Credit or requested Letter of Credit, or any error,        omission, interruption or delay in such instruction or request, whether transmitted by        mail, courier, electronic transmission, SWIFT, or any other telecommunication including        communications through a correspondent;                     (vi)  an adviser, confirmer or other nominated person seeking to be        reimbursed, indemnified or compensated;                     (vii)  any third party seeking to enforce the rights of an applicant,        beneficiary, nominated person, transferee, assignee of Letter of Credit proceeds or holder        of an instrument or document;                                          67   

 

                                                                                                   (viii)  the fraud, forgery or illegal action of parties other than any Letter        of Credit Related Person;                     (ix)  any prohibition on payment or delay in payment of any amount        payable by the Issuing Bank to a beneficiary or transferee beneficiary of a Letter of        Credit arising out of Anti-Corruption Laws, Anti-Money Laundering Laws, or Sanctions;                     (x)   the Issuing Bank’s performance of the obligations of a confirming        institution or entity that wrongfully dishonors a confirmation; or                     (xi)  the acts or omissions, whether rightful or wrongful, of any present        or future de jure or de facto governmental or regulatory authority or cause or event        beyond the control of the Letter of Credit Related Person;   provided, however,  that such indemnity shall not be available to any Letter of Credit Related  Person claiming indemnification under clauses (i) through (x) above to the extent that such Letter  of Credit Indemnified Costs arise as a result of the gross negligence or willful misconduct of a  Letter of Credit Related Person as determined by a final, non-appealable judgment in a court of  competent jurisdiction.  The Borrower hereby agrees to pay the Letter of Credit Related Person  claiming indemnity on demand from time to time all amounts owing under this Section 2.07(i).   If and to the extent that the obligations of the Borrower under this Section 2.07(i) are  unenforceable for any reason, the Borrower agrees to make the maximum contribution to the  Letter of Credit Indemnified Costs permissible under applicable Law.  This indemnification  provision shall survive termination of this Agreement and all Letters of Credit.                (j)   The liability of the Issuing Bank (or any other Letter of Credit Related  Person) under, in connection with or arising out of any Letter of Credit (or pre-advice),  regardless of the form or legal grounds of the action or proceeding, shall be limited to direct  damages suffered by the Borrower that are caused directly by the Issuing Bank’s gross  negligence or willful misconduct in (i) honoring a presentation under a Letter of Credit that on its  face does not at least substantially comply with the terms and conditions of such Letter of Credit,  (ii) failing to honor a presentation under a Letter of Credit that strictly complies with the terms  and conditions of such Letter of Credit, or (iii) retaining Drawing Documents presented under a  Letter of Credit.  The Issuing Bank shall be deemed to have acted with due diligence and  reasonable care if the Issuing Bank’s conduct is in accordance with Standard Letter of Credit  Practice or in accordance with this Agreement.  The Borrower’s aggregate remedies against the  Issuing Bank and any Letter of Credit Related Person for wrongfully honoring a presentation  under any Letter of Credit or wrongfully retaining honored Drawing Documents shall in no event  exceed the aggregate amount paid by the Borrower to the Issuing Bank in respect of the honored  presentation in connection with such Letter of Credit under Section 2.07(d), plus interest at the  rate then applicable to Revolving Loans that are Prime Rate Loans hereunder.  The Borrower  shall take action to avoid and mitigate the amount of any damages claimed against the Issuing  Bank or any other Letter of Credit Related Person, including by enforcing its rights against the  beneficiaries of the Letters of Credit.  Any claim by the Borrower under or in connection with  any Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any)  saved by the Borrower as a result of the breach or alleged wrongful conduct complained of, and  (y) the amount (if any) of the loss that would have been avoided had the Borrower taken all                                          68   

 

                                                                                 reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically  and timely authorizing the Issuing Bank to effect a cure.               (k)   The Borrower is responsible for the final text of the Letter of Credit as  issued by the Issuing Bank, irrespective of any assistance the Issuing Bank may provide such as  drafting or recommending text or by the Issuing Bank’s use or refusal to use text submitted by  the Borrower.  The Borrower understands that the final form of any Letter of Credit may be  subject to such revisions and changes as are deemed necessary or appropriate by the Issuing  Bank consistent with the Issuing Bank’s standard practices, and the Borrower hereby consents to  such revisions and changes not materially different from the application executed in connection  therewith. The Borrower is solely responsible for the suitability of the Letter of Credit for the  Borrower’s purposes.  The Borrower will examine the copy of the Letter of Credit and any other  documents sent by the Issuing Bank in connection therewith and shall promptly notify the  Issuing Bank (not later than three (3) Business Days following the Borrower’s receipt of  documents from the Issuing Bank) of any non-compliance with the Borrower’s instructions and  of any discrepancy in any document under any presentment or other irregularity.  The Borrower  understands and agrees that the Issuing Bank is not required to extend the expiration date of any  Letter of Credit for any reason. With respect to any Letter of Credit containing an “automatic  amendment” to extend the expiration date of such Letter of Credit, the Issuing Bank, in its sole  and absolute discretion, may give notice of nonrenewal non-extension  of such Letter of Credit  and, if the Borrower does not at any time want such Letter of Credit to be renewed extended , the  Borrower will so notify the Administrative Agent and the Issuing Bank at least 30 calendar days  before the Issuing Bank is required to notify the beneficiary of such Letter of Credit or any  advising bank of such nonrenewal non-extension  pursuant to the terms of such Letter of Credit.               (l)   Without limiting any other provision of this Agreement, the Issuing Bank   and each other Letter of Credit Related Person (if applicable) shall not be responsible to the   Borrower for, and the Issuing Bank’s rights and remedies against the Borrower and the   obligation of the Borrower to reimburse the Issuing Bank for each drawing under each Letter of   Credit shall not be impaired by:                      (i)   honor of a presentation under any Letter of Credit that on its face         substantially complies with the terms and conditions of such Letter of Credit, even if the         Letter of Credit requires strict compliance by the beneficiary;                       (ii)  honor of a presentation of any Drawing Document that appears on         its face to have been signed, presented or issued (A) by any purported successor or         transferee of any beneficiary or other Person required to sign, present or issue such         Drawing Document or (B) under a new name of the beneficiary;                      (iii)  acceptance as a draft of any written or electronic demand or         request for payment under a Letter of Credit, even if nonnegotiable or not in the form of a         draft or notwithstanding any requirement that such draft, demand or request bear any or         adequate reference to the Letter of Credit;                      (iv)  the identity or authority of any presenter or signer of any Drawing         Document or the form, accuracy, genuineness or legal effect of any Drawing Document                                          69   

 

                                                                                     (other than the Issuing Bank’s determination that such Drawing Document appears on its       face to comply in all material respects with the terms and conditions of the Letter of       Credit);                    (v)   acting upon any instruction or request relative to a Letter of Credit       or requested Letter of Credit that the Issuing Bank in good faith believes to have been       given by a Person authorized to give such instruction or request;                    (vi)  any errors, omissions, interruptions or delays in transmission or       delivery of any message, advice or document (regardless of how sent or transmitted) or       for reasonable errors in interpretation of technical terms or in translation or any delay in       giving or failing to give notice to the Borrower;                    (vii)  any acts, omissions or fraud by, or the insolvency of, any       beneficiary, any nominated person or entity or any other Person or any breach of contract       between any beneficiary and the Borrower or any of the parties to the underlying       transaction to which the Letter of Credit relates;                    (viii)  assertion or waiver of any provision of the ISP or UCP that       primarily benefits an issuer of a letter of credit, including any requirement that any       Drawing Document be presented to it at a particular hour or place;                    (ix)  payment to any paying or negotiating presenting  bank (designated       or permitted by the terms of the applicable Letter of Credit) claiming that it rightfully       honored or is entitled to reimbursement or indemnity under Standard Letter of Credit       Practice applicable to it;                    (x)   acting or failing to act as required or permitted under Standard       Letter of Credit Practice applicable to where the Issuing Bank has issued, confirmed,       advised or negotiated such Letter of Credit, as the case may be;                    (xi)  honor of a presentation after the expiration date of any Letter of        Credit notwithstanding that a presentation was made prior to such expiration date and        dishonored by the Issuing Bank if subsequently the Issuing Bank or any court or other        finder of fact determines such presentation should have been honored;                     (xii)  dishonor of any presentation that does not strictly comply or that is        fraudulent, forged or otherwise not entitled to honor; or                     (xiii)  honor of a presentation that is subsequently determined by the        Issuing Bank to have been made in violation of international, federal, state or local        restrictions on the transaction of business with certain prohibited Persons.               (m)   Unless otherwise expressly agreed by the Issuing Bank and the Borrower  when a Letter of Credit is issued, (i) the rules of the ISP and the UCP shall apply to each Standby  Letter of Credit, and (ii) the rules of the UCP shall apply to each Commercial Letter of Credit.                                          70               

 

                                                                                             (n)   The Issuing Bank shall act on behalf of the Revolving Loan Lenders with   respect to any Letters of Credit issued by it and the documents associated therewith, and the   Issuing Bank shall have all of the benefits and immunities (A) provided to the Agent in Article  VIII with respect to any acts taken or omissions suffered by the Issuing Bank in connection with  Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to  such Letters of Credit as fully as if the term “Agent” as used in Article VIII included the Issuing  Bank with respect to such acts or omissions, and (B) as additionally provided herein with respect  to the Issuing Bank.               (o)   In the event of a direct conflict between the provisions of this Section 2.07  and any provision contained in any Issuer Document, it is the intention of the parties hereto that  such provisions be read together and construed, to the fullest extent possible, to be in concert  with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as  aforesaid, the terms and provisions of this Section 2.07 shall control and govern. The provisions  of this Section 2.07 shall survive the termination of this Agreement and the repayment in full of  the Obligations with respect to any Letters of Credit that remain outstanding.               (p)   At the Borrower’s costs and expense, the Borrower shall execute and  deliver to the Issuing Bank such additional certificates, instruments and/or documents and take  such additional action as may be reasonably requested by the Issuing Bank to enable the Issuing  Bank to issue any Letter of Credit pursuant to this Agreement and related Issuer Document, to  protect, exercise and/or enforce the Issuing Bank’s rights and interests under this Agreement or  to give effect to the terms and provisions of this Agreement or any Issuer Document.  The  Borrower irrevocably appoints the Issuing Bank as its attorney-in-fact and, at any time when an  Event of Default has occurred and is continuing, authorizes the Issuing Bank, without notice to  the Borrower, to execute and deliver ancillary documents and letters customary in the letter of  credit business that may include but are not limited to advisements, indemnities, checks, bills of  exchange and issuance documents.  The power of attorney granted by the Borrower is limited  solely to such actions related to the issuance, confirmation or amendment of any Letter of Credit  and to ancillary documents or letters customary in the letter of credit business.  This appointment  is coupled with an interest.         SECTION 2.08.  Settlements Amongst Revolving Loan Lenders.                (a)   The Swingline Lender may, at any time, and shall, not less frequently than  weekly, on behalf of the Borrower (which hereby authorizes the Swingline Lender to act on its  behalf in that regard) request the Administrative Agent to cause the Revolving Loan Lenders to  make a Revolving Loan (which shall be a Prime Rate Loan) in an amount equal to such  Revolving Loan Lender’s Revolving Loan Commitment Percentage of the outstanding amount of  Swingline Loans made in accordance with Section 2.06, which request may be made regardless  of whether the conditions set forth in Article IV have been satisfied. Upon such request, each  Revolving Loan Lender shall make available to the Administrative Agent the proceeds of such  Revolving Loan for the account of the Swingline Lender. If the Swingline Lender requires a  Revolving Loan to be made by the Revolving Loan Lenders and the request therefor is received  prior to 12:00 p.m. on a Business Day, such transfers shall be made in immediately available  funds no later than 3:00 p.m. that day; and, if the request therefor is received after 12:00 p.m.,  then no later than 3:00 p.m. on the next Business Day. The obligation of each Revolving Loan                                          71   

 

                                                                                 Lender to transfer such funds is irrevocable, unconditional and without recourse to or warranty  by the Administrative Agent or the Swingline Lender. If and to the extent any Revolving Loan  Lender shall not have so made its transfer to the Administrative Agent, such Revolving Loan  Lender agrees to pay to the Administrative Agent, forthwith on demand such amount, together  with interest thereon, for each day from such date until the date such amount is paid to the  Administrative Agent at the greater of the Federal Funds Effective Rate and a rate determined in  good faith by the Administrative Agent in accordance with banking industry rules on interbank  compensation.                (b)   The amount of each Revolving Loan Lender’s Revolving Loan   Commitment Percentage of outstanding Revolving Loans shall be computed weekly (or more   frequently in the Administrative Agent’s discretion) and shall be adjusted upward or downward   based on all Revolving Loans and repayments of Revolving Loans received by the   Administrative Agent as of 3:00 p.m. on the first Business Day following the end of the period   specified by the Administrative Agent (such date, the “Settlement Date”).               (c)   The Administrative Agent shall deliver to each of the Revolving Loan  Lenders promptly after the Settlement Date a summary statement of the amount of outstanding  Revolving Loans (including Swingline Loans) for the period and the amount of repayments  received for the period. As reflected on the summary statement, each Revolving Loan Lender  shall transfer to the Administrative Agent (as provided below), or the Administrative Agent shall  transfer to each Revolving Loan Lender, such amounts as are necessary to insure that, after  giving effect to all such transfers, the amount of Revolving Loans made by each Revolving Loan  Lender with respect to Revolving Loans (including Swingline Loans) shall be equal to such  Revolving Loan Lender’s applicable Revolving Loan Commitment Percentage of Revolving  Loans (including Swingline Loans) outstanding as of such Settlement Date. If the summary  statement requires transfers to be made to the Administrative Agent by the Revolving Loan  Lenders and is received prior to 12:00 p.m. on a Business Day, such transfers shall be made in  immediately available funds no later than 3:00 p.m. that day; and, if received after 12:00 p.m.,  then no later than 3:00 p.m. on the next Business Day. The obligation of each Revolving Loan  Lender to transfer such funds is irrevocable, unconditional and without recourse to or warranty  by the Administrative Agent. If and to the extent any Revolving Loan Lender shall not have so  made its transfer to the Administrative Agent, such Revolving Loan Lender agrees to pay to the  Administrative Agent, forthwith on demand such amount, together with interest thereon, for each  day from such date until the date such amount is paid to the Administrative Agent at the greater  of the Federal Funds Effective Rate and a rate determined in good faith by the Administrative  Agent in accordance with banking industry rules on interbank compensation.         SECTION 2.09.  Notes; Repayment of Loans.               (a)   Upon the request of (i) a Revolving Loan Lender or the Swingline Lender,   as applicable, the Loans made by each such Revolving Loan Lender or the Swingline Lender, as   applicable, shall be evidenced by a Note duly executed on behalf of the Borrower, dated the   Effective Date, in substantially the form attached hereto as Exhibit B-1 or B-2, as applicable,  payable to the order of each such Revolving Loan Lender or the Swingline Lender, as applicable,  in an aggregate principal amount equal to such Revolving Loan Lender’s Revolving Loan  Commitment (or, in the case of the Note evidencing the Swingline Loans, $15,000,000), and (ii)                                          72   

 

                                                                                 a Term Loan Lender the Term Loan made by each such Term Loan Lender shall be evidenced by  a Note duly executed on behalf of the Borrower, dated the Fourth Amendment Effective Date, in  substantially the form attached hereto as Exhibit B-3, payable to the order of each Term Loan  Lender (in an aggregate principal amount equal to such Term Loan Lender’s Term Loan  Commitment).               (b)   The Borrower shall make quarterly principal payments on the Term Loan,  each in the amount equal to the sum of (i) $1,250,000 plus (ii) two and one-half percent (2.5%)  of any Additional Term Loans made pursuant the terms hereof, in each case on the fifteenth  (15 th ) day of each March, June, September and December (unless such day is not a Business  Day, in which case on the immediately preceding Business Day), commencing on June 15, 2019.   The Borrower shall repay to the Term Loan Lenders on the Termination Date the aggregate  principal amount of Term Loan outstanding on such date.                (c)   The outstanding principal balance of all Swingline Loans shall be repaid  on the earlier of the Termination Date or on the date otherwise requested by the Swingline  Lender in accordance with the provisions of Section 2.08(a). The outstanding principal balance  of all other Obligations shall be payable on the Termination Date (subject to earlier repayment as  provided below). Each Note shall bear interest from the date thereof on the outstanding principal  balance thereof as set forth in this Article II. Each Lender is hereby authorized by the Borrower  to endorse on a schedule attached to each Note delivered to such Lender (or on a continuation of  such schedule attached to such Note and made a part thereof), or otherwise to record in such  Lender’s internal records, an appropriate notation evidencing the date and amount of each Loan  from such Lender, each payment and prepayment of principal of any such Loan, each payment of  interest on any such Loan and the other information provided for on such schedule; provided,  however, that the failure of any Lender to make such a notation or any error therein shall not  affect the obligation of the Borrower to repay the Loans made by such Lender in accordance with  the terms of this Agreement and the applicable Notes.               (d)   Upon receipt of an affidavit of a Lender as to the loss, theft, destruction or  mutilation of such Lender’s Note and upon appropriate indemnifications of Borrower, the  Borrower will issue, in lieu thereof, a replacement Note in favor of such Lender, in the same  principal amount thereof and otherwise of like tenor.         SECTION 2.10.  Interest on Loans.               (a)   Subject to Section 2.11, each Prime Rate Loan shall bear interest  (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate  per annum that shall be equal to the then Prime Rate, plus the Applicable Margin for Prime Rate  Loans.               (b)   Subject to Section Sections  2.11 , 2.18 and 2.26 , each LIBO Loan shall bear  interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a  rate per annum equal, during each Interest Period applicable thereto, to the Adjusted LIBO Rate  for such Interest Period, plus the Applicable Margin for LIBO Loans.                                           73   

 

                                                                                             (c)   Subject to Section Sections  2.11 , 2.18 and 2.26 , the Term Loans shall bear  interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a  rate per annum equal to the Term Loan Interest Rate.                (d)   Accrued interest on all Loans shall be payable in arrears on each Interest  Payment Date applicable thereto, at maturity (whether by acceleration or otherwise), after such  maturity on demand and (with respect to LIBO Loans) upon any repayment or prepayment  thereof (on the amount prepaid).         SECTION 2.11.  Default Interest.  Effective upon the occurrence of any Event of Default  and at all times thereafter while such Event of Default is continuing, (i) at the option of the  Administrative Agent or upon the direction of the Required Revolving Loan Lenders, interest  shall accrue on all outstanding Loans Obligations ( other than the Term Loan  (including Swingline  Loans ), and (ii) at the option of the Term Loan Agent or upon the direction of the Required Term  Loan Lenders, interest shall accrue on the Term Loan, in each case as to all Loans such  Obligations  after as well as before judgment (as and to the extent permitted by law), at a rate per  annum (computed on the basis of the actual number of days elapsed over a year of 360 days)  equal to the rate (including the Applicable Margin for Loans) in effect from time to time plus  2.00% per annum, and Default Rate; provided however that if any amount payable under any  Loan Document is not paid when due (without regard to any applicable grace periods), whether  at stated maturity, by acceleration or otherwise, then such amount shall from thereafter (without  any further action or request of or notice to any Person) bear interest at a fluctuating interest rate  per annum at all times equal to the Default Rate to the fullest extent permitted by applicable  Laws.  All  such interest shall be payable on demand.         SECTION 2.12.  Certain Fees.                 (a)   The Borrower shall pay to the Administrative Agent for the account of the  applicable Credit Parties, the fees set forth in the Fee Letter as and when payment of such fees  are due as therein set forth.                (b)   The Borrower shall pay to the Term Loan Agent, for the account of the  Term Loan Lenders, the fees set forth in the Fourth Amendment Term Loan Fee Letter , the Fifth  Amendment Term Loan Fee Letter,  as and when payment of such fees are due as therein set  forth.         SECTION 2.13.  Unused Commitment Fee.  The Borrower shall pay to the  Administrative Agent for the account of the Revolving Loan Lenders, a commitment fee (the  “Commitment Fee”) equal to 0.25% per annum on the basis of actual days elapsed in a year of  360 days multiplied by the average daily balance of the Unused Commitment during the period  commencing on and including the Effective Date and ending on but excluding the Termination  Date.  Upon the occurrence of an Event of Default, at the option of the Administrative Agent or  at the direction of the Required Revolving Loan Lenders, the Commitment Fee shall be  determined at the rate set forth in Section 2.11.  The Commitment Fee so accrued in any calendar  quarter shall be payable on the first day of the next calendar quarter, in arrears, except that all  Commitment Fees so accrued as of the Termination Date shall be payable on the Termination                                           74   

 

                                                                                 Date.  The Administrative Agent shall pay the Commitment Fee to the Revolving Loan Lenders  based upon their Revolving Loan Commitment Percentage.          SECTION 2.14.  Letter of Credit Fees.               (a)   The Borrower shall pay the Administrative Agent, for the account of the  Revolving Loan Lenders, on the first Business Day of each calendar quarter, in arrears, a fee  (each, a “Letter of Credit Fee”) equal to the following per annum percentages of the face amount  of the following categories of Letters of Credit outstanding during the subject quarter:                      (i)   Standby Letters of Credit:  At a per annum rate equal to the then        Applicable Margin for LIBO Loans.                     (ii)  Commercial Letters of Credit: At a per annum rate equal to the        then Applicable Margin for LIBO Loans minus 0.50%.                     (iii)  After the occurrence and during the continuance of an Event of        Default, at the option of the Administrative Agent or upon the direction of the Required        Revolving Loan Lenders, the Letter of Credit Fee shall be increased by an amount equal        to two percent (2%) per annum accrue at the Default Rate as provided in Section 2.11 .               (b)   The Borrower shall pay to the applicable Issuing Bank (i) the Fronting Fee  on the first Business Day of each calendar quarter, in arrears, and (ii) such other customary  commissions, fees and charges then in effect imposed by, and any and all expenses incurred by,  such Issuing Bank, or by any adviser, confirming institution or entity or other nominated person  relating to Letters of Credit, at the time of issuance of any Letter of Credit and upon the  occurrence of any other activity with respect to any Letter of Credit (including transfers,  assignments of proceeds, amendments, drawings, renewals extensions  or cancellations).               (c)   All Letter of Credit Fees shall be calculated on the basis of a 360-day year  and actual days elapsed.         SECTION 2.15.  [Reserved]         SECTION 2.16.  Nature of Fees.  All fees shall be paid on the dates due, in immediately  available funds, to the Administrative Agent, for the respective accounts of the Administrative  Agent, Term Loan Agent, the Issuing Bank, and the Lenders, as provided herein. All fees shall  be fully earned on the date when due and shall not be refundable under any circumstances.          SECTION 2.17.  Termination or Reduction of Revolving Loan Commitments.               (a)   Upon at least three (3) Business Days’ prior written notice to the  Administrative Agent, the Borrower may, at any time, in whole permanently terminate, or from  time to time in part permanently reduce, the Revolving Loan Commitments. Each such reduction  shall be in the principal amount of $5,000,000 or any integral multiple of $1,000,000 in excess  thereof. Each such reduction or termination shall (i) be applied ratably to the Revolving Loan  Commitments of each Revolving Loan Lender and (ii) be irrevocable when given (provided,  that, to the extent that such notice states that it is conditioned upon the consummation of any                                          75   

 

                                                                                 other transaction or the occurrence of any event (including an acquisition or a Change in  Control), such notice may be revoked by the Borrower (by written notice to Administrative  Agent on or prior to the specified effective date) if such condition is not satisfied). At the  effective time of each such reduction or termination, the Borrower shall pay to the  Administrative Agent for application as provided herein (i) all Commitment Fees accrued on the  amount of the Revolving Loan Commitments so terminated or reduced through the date thereof,  (ii) any amount by which the Credit Extensions (excluding those made in respect of the Term  Loan) outstanding on such date exceed the amount to which the Revolving Loan Commitments  are to be reduced effective on such date, in each case pro rata based on the amount prepaid, and  (iii) any Breakage Costs, if applicable.  Except as specified in this Section 2.17, no fee, penalty  or premium shall be payable in connection with any termination or reduction of the Revolving  Loan Commitments.               (b)   In  connection  with  any  reduction  in  the  Revolving  Loan  Commitments  prior to the Maturity Date, if any Loan Party or any of its Subsidiaries owns any Margin Stock,  the Borrower shall deliver to the Administrative Agent  an updated  Form U-1 (with sufficient  additional  originals  thereof  for  each  Lender),  duly  executed  and  delivered  by  the  Borrower,  together with such other documentation as the Administrative Agent shall reasonably request, in  order  to  enable  the  Agents  and  the  Lenders  to  comply  with  any  of  the  requirements  under  Regulations T, U or X of the FRB.         SECTION 2.18.  Alternate Rate of Interest.  If                (a)   General.  Subject to clause (b) below, if  prior to the commencement of any        Interest Period for a LIBO Borrowing or prior to the first day of a calendar month        regarding any reference to the Term Loan Interest Rate:                     (i)   (a) the Administrative Agent or Term Loan Agent, as applicable,              determines (which determination shall be conclusive absent manifest error) that              adequate and reasonable means do not exist for ascertaining the Adjusted LIBO              Rate for such Interest Period or the Term Loan Interest Rate, respectively; or                     (ii)  (b) the Administrative Agent is advised by the Required Lenders or              the Term Loan Agent is advised by the Required Term Loan Lenders that, as a              result of a Change in Law after the Effective Date, the Adjusted LIBO Rate for              such Interest Period or calendar month, as applicable, will not adequately and              fairly reflect the cost to such Lenders of making or maintaining their Loans              included in such Borrowing for such Interest Period or calendar month, as              applicable;         then (1) in the case of a LIBO Borrowing, the Administrative Agent shall give notice        thereof to the Borrower and the applicable Lenders by telephone or telecopy as promptly        as practicable thereafter and, until the Administrative Agent notifies the Borrower and the        applicable Lenders that the circumstances giving rise to such notice no longer exist,        (i) any Borrowing Request that requests the conversion of any Borrowing to, or        continuation of any Borrowing as, a LIBO Borrowing shall be ineffective and (ii) if any        Borrowing Request requests a LIBO Borrowing, such Borrowing shall be made as a                                          76   

 

                                                                           Borrowing of Prime Rate Loans and (2) in the case of the interest rate regarding the Term  Loan, the Term Loan Agent shall give notice thereof to the Borrower by telephone or  telecopy as promptly as practicable thereafter and, until the Term Loan Agent notifies the  Borrower that the circumstances giving rise to such notice no longer exist the Term Loan  shall bear interest with reference to the Prime Rate as set forth in the definition of “Term  Loan Interest Rate.”         (b)   Effect of Benchmark Transition Event.               (i)   Notwithstanding anything to the contrary herein or in any other        Loan Document, upon the occurrence of a Benchmark Transition Event or an        Early Opt-in Election, as applicable, the Administrative Agent and the Borrower        may amend this Agreement to replace the LIBO Rate with a Benchmark        Replacement. Any such amendment with respect to a Benchmark Transition        Event will become effective at 5:00 p.m. on the fifth (5th) Business Day after the        Administrative Agent has posted such proposed amendment to all Lenders and the        Borrower so long as the Administrative Agent has not received, by such time,        written notice of objection to such amendment from Lenders comprising the        Required Lenders.  Any such amendment with respect to an Early Opt-in Election        will become effective on the date that Lenders comprising the Required Lenders        have delivered to the Administrative Agent written notice that such Required        Lenders accept such amendment. No replacement of the LIBO Rate with a        Benchmark Replacement pursuant to this Section 2.18(b) will occur prior to the        applicable Benchmark Transition Start Date.               (ii)  Benchmark Replacement Conforming Changes. In connection with        the implementation of a Benchmark Replacement, the Administrative Agent will        have the right to make Benchmark Replacement Conforming Changes from time        to time and, notwithstanding anything to the contrary herein or in any other Loan        Document, any amendments implementing such Benchmark Replacement        Conforming Changes will become effective without any further action or consent        of any other party to this Agreement.               (iii)  Notices; Standards for Decisions and Determinations. The        Administrative Agent will promptly notify the Borrower and the Lenders of (1)        any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as        applicable, and its related Benchmark Replacement Date and Benchmark        Transition Start Date, (2) the implementation of any Benchmark Replacement, (3)        the effectiveness of any Benchmark Replacement Conforming Changes and (4)        the commencement or conclusion of any Benchmark Unavailability Period.  Any        determination, decision or election that may be made by the Administrative Agent        or Lenders pursuant to this Section 2.18(b) including any determination with        respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an        event, circumstance or date and any decision to take or refrain from taking any        action, will be conclusive and binding absent manifest error and may be made in        its or their sole discretion and without consent from any other party hereto,        except, in each case, as expressly required pursuant to this Section 2.18(b).                                    77               

 

                                                                                                   (iv)  Benchmark Unavailability Period. Upon the Borrower’s receipt of              notice of the commencement of a Benchmark Unavailability Period, the Borrower              may revoke any request for a LIBO Borrowing of, conversion to or continuation              of LIBO Loans to be made, converted or continued during any Benchmark              Unavailability Period and, failing that, the Borrower will be deemed to have              converted any such request into a request for a Borrowing of or conversion to              Prime Rate Loans. During any Benchmark Unavailability Period, the component              of the Prime Rate based upon the LIBO Rate will not be used in any              determination of the Prime Rate.               (c)   Notwithstanding anything to the contrary, any amendment contemplated        by Section 2.18(b) in connection with a Benchmark Transition Event or an Early Opt-in        Election shall be effective as contemplated by such Section 2.18(b).         SECTION 2.19.  Conversion and Continuation of Loans.  The Borrower shall have the  right at any time, on two (2) Business Days’ prior irrevocable notice (unless the Administrative  Agent notifies the Borrower in writing that three (3) Business Days’ is required) to the  Administrative Agent (which notice, to be effective, must be received by the Administrative  Agent not later than 1:00 p.m. on the second (or third if applicable) Business Day preceding the  date of any conversion), (x) to convert any outstanding Borrowings of Loans (but in no event  Swingline Loans or Term Loans) of one Type (or a portion thereof) to a Borrowing of Loans of  the other Type or (y) to continue an outstanding Borrowing of LIBO Loans for an additional  Interest Period, subject to the following:               (a)   no Borrowing of Loans may be converted into, or continued as, LIBO         Loans at any time when an Event of Default has occurred and is continuing;                (b)   if less than a full Borrowing of Loans is converted, such conversion shall         be made pro rata among the Lenders based upon their applicable Commitment        Percentages in accordance with the respective principal amounts of the Loans comprising        such Borrowing held by such Lenders immediately prior to such conversion;                (c)   the aggregate principal amount of Loans being converted into or continued        as LIBO Loans shall be in an integral of $500,000 and at least $1,000,000;               (d)   each Lender shall effect each conversion by applying the proceeds of its         new LIBO Loan or Prime Rate Loan, as the case may be, to its Loan being so converted;                (e)   the Interest Period with respect to a Borrowing of LIBO Loans effected by         a conversion or in respect to the Borrowing of LIBO Loans being continued as LIBO         Loans shall commence on the date of conversion or the expiration of the current Interest         Period applicable to such continuing Borrowing, as the case may be;                (f)   a Borrowing of LIBO Loans may be converted only on the last day of an         Interest Period applicable thereto;                (g)   each request for a conversion or continuation of a Borrowing of a         Revolving Loan that is a LIBO Loan, or of a portion of the Term Loan that is a LIBO                                          78   

 

                                                                                       Loan, which fails to state an applicable Interest Period shall be deemed to be a request for        an Interest Period of one (1) month; and               (h)   no more than six (6)  Borrowings of LIBO Loans may be outstanding at        any time.   If the Borrower does not give notice to convert any Borrowing of LIBO Loans, or does not give  notice to continue, or does not have the right to continue, any Borrowing as LIBO Loans, in each  case as provided above, such Borrowing shall automatically be converted to a Borrowing of  Prime Rate Loans at the expiration of the then-current Interest Period. The Administrative Agent  shall, after it receives notice from the Borrower, promptly give each Lender notice of any  conversion, in whole or part, of any Loan made by such Lender.         SECTION 2.20.  Mandatory Prepayment; Commitment Termination; Cash Collateral.   The outstanding Obligations shall be subject to payment and mandatory prepayment as follows:                (a)   If at any time the amount of the Credit Extensions (excluding those made        in respect of the Term Loan) exceeds the Revolving Loan Cap, the Borrower will        immediately upon notice from the Administrative Agent (A) prepay the Revolving Loans        in an amount necessary to eliminate such excess, and (B) if, after giving effect to the        prepayment in full of all outstanding Revolving Loans such excess has not been        eliminated, deposit cash into the Cash Collateral Account in an amount equal to 103% of        the Letters of Credit Outstanding.               (b)   Except as set forth in clause (c) below, the Loans shall be repaid in        accordance with the provisions of Section 2.24 hereof.               (c)   In the event that any of the Agents or any Loan Party shall receive Net        Proceeds of any sale or other disposition of Term Loan Priority Collateral outside of the        ordinary course of business, which Net Proceeds exceed in any period of twelve (12)        consecutive calendar months the aggregate sum of $250,000 or any Net Proceeds from        any casualty, condemnation or any similar event with respect to Term Loan Priority        Collateral, unless the Agents and the Term Loan Lenders otherwise consent in writing        (which consent may be withheld or conditioned in the Agents’ and the Term Loan        Lenders’ sole discretion) , all amounts in excess of such aggregate sum shall be remitted        to the Term Loan Agent within ten one  (10 1) Business Days Day  for application to the        outstanding principal balance of the Term Loan in inverse order of maturity ; provided,        that if any Loan Party or Subsidiary applies (or commits pursuant to a binding contractual        arrangement (including pursuant to a letter of intent) to apply) such Net Proceeds (or a        portion thereof) within 12 months after receipt of such Net Proceeds to reinvest such Net        Proceeds in the business, including in assets of the general type used or useful in the        business of the Facility Guarantor and its Subsidiaries (including in connection with an        acquisition or capital expenditures), then no prepayment shall be required pursuant to this        clause (c) in respect of such Net Proceeds except to the extent of any such Net Proceeds        therefrom that have not been so applied by the end of the 12-month (or, if committed to        be so applied within 12 months of the receipt of such Net Proceeds, 18-month) period        following receipt of such Net Proceeds, at the end of which period a prepayment shall be                                          79   

 

                                                                                       required in an amount equal to such Net Proceeds that have not been so applied.  For the        avoidance of doubt, (i) amounts received by any Agent that are not required to be applied        to the outstanding principal balance of the Term Loan in accordance with this clause (c)        shall be remitted to the Borrower or applied in accordance with Section 7.04, as        applicable, and (ii) in no event will any casualty, condemnation or any similar event be        deemed to be a sale or disposition for purposes of this clause (c) and in no event will        insurance, condemnation or similar proceeds be subject to this clause (c) unless an Event        of Default shall exist or have occurred and be continuing, in which event such Net        Proceeds shall be remitted to the Term Loan Agent for application to the Term Loan as        provided above .  This Section 2.20(c) shall not be amended without the consent of each        Term Loan Lender.               (d)   Subject to the provisions of Sections 2.20(a) and (b), outstanding Prime        Rate Loans shall be prepaid before outstanding LIBO Loans are prepaid. Each partial        prepayment of LIBO Loans shall be in an integral multiple of $500,000. No prepayment        of LIBO Loans shall be permitted pursuant to this Section 2.20 other than on the last day        of an Interest Period applicable thereto, unless the Borrower simultaneously reimburses        the Lenders for all “Breakage Costs” (as defined in Section 2.21(c) below) associated        therewith. In order to avoid such Breakage Costs, as long as no Event of Default has        occurred and is continuing, at the request of the Borrower, the Administrative Agent shall        hold all amounts required to be applied to LIBO Loans in the Cash Collateral Account        and will apply such funds to the applicable LIBO Loans at the end of the then pending        Interest Period therefor and such LIBO Loans shall continue to bear interest at the rate set        forth in Section 2.10 until the amounts in the Cash Collateral Account have been so        applied (provided that the foregoing shall in no way limit or restrict the Agents’ rights        upon the subsequent occurrence of an Event of Default). No partial prepayment of a        Borrowing of LIBO Loans shall result in the aggregate principal amount of the LIBO        Loans remaining outstanding pursuant to such Borrowing being less than $1,000,000.        Except as provided in Section 2.17, any prepayment of the Revolving Loans shall not        permanently reduce the Revolving Loan Commitments.                  (e)   All amounts required to be applied to all Loans hereunder (other than         Swingline Loans) shall be applied ratably in accordance with each applicable Lender’s         Commitment Percentage with respect thereto.                  (f)   Upon the Termination Date, the Revolving Loan Commitments and the         credit facility provided hereunder shall be terminated in full and the Borrower shall pay,         in full and in cash, all outstanding Loans and all other outstanding Obligations.          SECTION 2.21.  Optional Prepayment of Loans; Reimbursement of Lenders.               (a)   The Borrower shall have the right at any time and from time to time to  prepay outstanding Revolving Loans in whole or in part, (x) with respect to LIBO Loans, upon at  least two (2) Business Days’ prior written, telex or facsimile notice to the Administrative Agent  prior to 1:00 p.m., and (y) with respect to Prime Rate Loans, on the same Business Day if  written, telex or facsimile notice is received by the Administrative Agent prior to 1:00 p.m.,  subject to the following limitations:                                          80   

 

                                                                                                   (i)   Subject to Section 2.24, all prepayments shall be paid to the        Administrative Agent for application, first, to the prepayment of outstanding Swingline        Loans, second, to the prepayment of other outstanding Revolving Loans ratably in        accordance with each Revolving Loan Lender’s Revolving Loan Commitment        Percentage, and third, to the funding of a cash collateral deposit in the Cash Collateral        Account in an amount equal to 103% of all Letter of Credit Outstandings.                      (ii)  Subject to the foregoing, outstanding Prime Rate Loans shall be        prepaid before outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO        Loans shall be in an integral multiple of $500,000. No prepayment of Revolving Loans        that are LIBO Loans shall be permitted pursuant to this Section 2.21 other than on the last        day of an Interest Period applicable thereto, unless the Borrower simultaneously        reimburses the Revolving Loan Lenders for all “Breakage Costs” (as defined in Section        2.21(c) below) associated therewith. No partial prepayment of a Borrowing of Revolving        Loans that are LIBO Loans shall result in the aggregate principal amount of the        Revolving Loans that are LIBO Loans remaining outstanding pursuant to such Borrowing        being less than $1,000,000.                     (iii)  Each notice of prepayment shall specify the prepayment date, the         principal amount and Type of the Revolving Loans to be prepaid and, in the case of         Revolving Loans that are LIBO Loans, the Borrowing or Borrowings pursuant to which         such Revolving Loans were made. Each notice of prepayment shall be irrevocable         (provided, that, to the extent that such notice states that it is conditioned upon the        consummation of any other transaction or the occurrence of any event (including an        acquisition or a Change in Control), such notice may be revoked by the Borrower (by        written notice to Administrative Agent on or prior to the specified effective date) if such        condition is not satisfied) and shall commit the Borrower to prepay such Loan by the        amount and on the date stated therein. The Administrative Agent shall, promptly after        receiving notice from the Borrower hereunder, notify each Revolving Loan Lender of the        principal amount and Type of the Revolving Loans held by such Revolving Loan Lender        which are to be prepaid, the prepayment date and the manner of application of the        prepayment.               (b)   Subject to Section 2.12 and the satisfaction of the Payment Conditions, the  Borrower may, upon irrevocable notice from the Borrower to the Administrative Agent and the  Term Loan Agent (provided, that, to the extent that such notice states that it is conditioned upon  the consummation of any other transaction or the occurrence of any event (including an  acquisition or a Change in Control), such notice may be revoked by the Borrower (by written  notice to Administrative Agent on or prior to the specified effective date) if such condition is not  satisfied), at any time or from time to time, voluntarily prepay the Term Loan in whole or in part;  provided that such notice must be received by the Agent and the Term Loan Agent not later than  11:00 a.m. on the date of such prepayment of the Term Loan.  Each such notice shall specify the  date and amount of such prepayment.  The Term Loan Agent will promptly notify each Term  Loan Lender of its receipt of each such notice, and of the amount of such Term Loan Lender’s  Term Loan Commitment Percentage of such prepayment.  If such notice is given by the  Borrower, the Borrower shall make such prepayment, together with all applicable fees, costs, and  expenses then due, and the payment amount specified in such notice shall be due and payable on                                          81   

 

                                                                                 the date specified therein.  Each such prepayment shall be applied to the Term Loan first to the  amount due on the Maturity Date and then in inverse order of the payments due pursuant to  Section 2.09(b).               (c)   The Borrower shall reimburse each Lender on demand for any loss  incurred or to be incurred by it in the reemployment of the funds released (i) resulting from any  prepayment (for any reason whatsoever, including, without limitation, conversion to Prime Rate  Loans or acceleration by virtue of, and after, the occurrence of an Event of Default) of any LIBO  Loan required or permitted under this Agreement, if such Loan is prepaid other than on the last  day of the Interest Period for such Loan or (ii) in the event that after the Borrower delivers a  notice of borrowing under Section 2.04 in respect of LIBO Loans, such Loans are not made on  the first day of the Interest Period specified in such notice of borrowing for any reason other than  a breach by such Lender of its obligations hereunder or the delivery of any notice pursuant to  Section 2.18. Such loss shall be the amount as reasonably determined by such Lender as the  excess, if any, of (A) the amount of interest which would have accrued to such Lender on the  amount so paid or not borrowed at a rate of interest equal to the Adjusted LIBO Rate for such  Loan, for the period from the date of such payment or failure to borrow to the last day (x) in the  case of a payment or refinancing with Prime Rate Loans other than on the last day of the Interest  Period for such Loan, of the then current Interest Period for such Loan or (y) in the case of such  failure to borrow, of the Interest Period for such Loan which would have commenced on the date  of such failure to borrow, over (B) the amount of interest which would have accrued to such  Lender on such amount by placing such amount on deposit for a comparable period with leading  banks in the London interbank market (collectively, “Breakage Costs”). Any Lender demanding  reimbursement for such loss shall deliver to the Borrower from time to time one or more  certificates setting forth the amount of such loss as determined by such Lender and setting forth  in reasonable detail the manner in which such amount was determined.                (d)   In the event the Borrower fails to prepay any Loan on the date specified in  any prepayment notice delivered pursuant to Section 2.21(a), the Borrower on demand by any  Lender shall pay to the Administrative Agent for the account of such Lender any amounts  required to compensate such Lender for any loss incurred by such Lender as a result of such  failure to prepay, including, without limitation, any loss, cost or expenses incurred by reason of  the acquisition of deposits or other funds by such Lender to fulfill deposit obligations incurred in  anticipation of such prepayment. Any Lender demanding such payment shall deliver to the  Borrower from time to time one or more certificates setting forth the amount of such loss as  determined by such Lender and setting forth in reasonable detail the manner in which such  amount was determined.               (e)   Whenever any partial prepayment of Loans is to be applied to LIBO  Loans, such LIBO Loans shall be prepaid in the chronological order of their Interest Payment  Dates.         SECTION 2.22.  Maintenance of Loan Account; Statements of Account.               (a)   The Administrative Agent shall maintain an account on its books in the   name of the Borrower (the “Loan Account”) which will reflect (i) all Swingline Loans, all  Revolving Loans, the Term Loan, and other advances made by the Lenders to the Borrower or                                          82   

 

                                                                                 for the Borrower’s account, (ii) all L/C Disbursements, fees and interest that have become  payable as herein set forth, and (iii) any and all other Obligations that have become payable.                 (b)   The Loan Account will be credited with all amounts received by the  Administrative Agent from the Borrower or otherwise for the Borrower’s account, including all  amounts received from the Blocked Account Banks and any Concentration Account, and the  amounts so credited shall be applied as set forth in Section 2.24(a). After the end of each  calendar month, the Administrative Agent shall send to the Borrower a statement accounting for  the charges, loans, advances and other transactions occurring among and between the  Administrative Agent, the Lenders and the Borrower during that month. The monthly statements  shall, absent manifest error, be final, conclusive and binding on the Borrower, unless otherwise  objected to in writing by the Borrower within fifteen (15) days after receipt of the monthly  statement.         SECTION 2.23.  Cash Receipts.               (a)   Annexed hereto as Schedule 2.23(a) is a list of all present DDAs, which  Schedule includes, with respect to each depository (i) the name and address of that depository;  (ii) the account number(s) maintained with such depository; and (iii) to the extent known, a  contact person at such depository.                (b)   Annexed hereto as Schedule 2.23(b) is a list describing all arrangements to  which the Borrower is a party with respect to the payment to the Borrower of the proceeds of all  credit card charges for sales by the Borrower.                (c)   The Borrower shall (i) at the request of the Administrative Agent, at any   time after the occurrence and during the continuance of a Cash Dominion Event, deliver to the   Administrative Agent notifications executed on behalf of the Borrower to each depository   institution with which any DDA is maintained in form satisfactory to the Administrative Agent,   of the Administrative Agent’s interest in such DDA (each, a “DDA Notification”), and (ii) to the  extent not previously delivered, deliver to the Administrative Agent on the Third Amendment  Effective Date notifications to each of the Borrower’s credit card clearinghouses and processors  of notice in form satisfactory to the Administrative Agent, (each, a “Credit Card Notification”),  and (iii) to the extent not previously delivered, within ninety (90) days after the Third  Amendment Effective Date, enter into agency agreements with the banks maintaining the deposit  accounts identified on Schedule 2.23(c) (collectively, the “Blocked Accounts”), which  agreements (the “Blocked Account Agreements”) shall be in form and substance satisfactory to  the Administrative Agent. The DDA Notifications, Credit Card Notifications and Blocked  Account Agreements shall require, after the occurrence and during the continuance of a Cash  Dominion Event, the sweep on each Business Day of all available cash receipts from the sale of  Inventory and other assets, all collections of Accounts, all Net Proceeds, and all other cash  payments received by the Borrower from any Person or from any source or on account of any  sale or other transaction or event ( including any Net Proceeds from any casualty, condemnation  or any similar event with respect to Revolving Priority Collateral; provided, that anything herein  to the contrary notwithstanding, any such amounts arising from any casualty, condemnation or  any similar event shall be remitted to the Administrative Agent within one (1) Business Day for  application to the outstanding principal balance of the Revolving Loans )( all such cash receipts                                          83   

 

                                                                                 and collections, “Cash Receipts”), to a concentration account maintained by the Borrower at  Wells Fargo or with another Lender reasonably satisfactory to the Administrative Agent with  whom a Blocked Account Agreement has been executed (the “Concentration Account”). In that  regard, after the occurrence and during the continuance of a Cash Dominion Event, the Borrower  shall cause the ACH or wire transfer to a Blocked Account or to the Concentration Account  maintained at Wells Fargo, no less frequently than daily (and whether or not there is then an  outstanding balance in the Loan Account) of (A) the then contents of each DDA, each such  transfer to be net of any minimum balance, not to exceed $5,000, as may be required to be  maintained in the subject DDA by the bank at which such DDA is maintained; and (B) the  proceeds of all credit card charges not otherwise provided for pursuant hereto.  Further, after the  occurrence and during the continuance of a Cash Dominion Event, whether or not any  Obligations are then outstanding, the Borrower shall cause the ACH or wire transfer to the  Concentration Account maintained at Wells Fargo, no less frequently than daily, of the then  entire ledger balance of each Blocked Account and other Concentration Account, net of such  minimum balance, not to exceed $5,000, as may be required to be maintained in the subject  Blocked Account or Concentration Account by the bank at which such Blocked Account or  Concentration Account is maintained. In the event that, notwithstanding the provisions of this  Section 2.23, after the occurrence and during the continuance of a Cash Dominion Event, the  Borrower receives or otherwise has dominion and control of any such proceeds or collections,  such proceeds and collections shall be held in trust by the Borrower for the Administrative Agent  and shall not be commingled with any of the Borrower’s other funds or deposited in any account  of the Borrower and shall, within one (1) Business Day after receipt, either be deposited into a  Blocked Account or the Concentration Account maintained at Wells Fargo, or dealt with in such  other fashion as the Borrower may be instructed by the Administrative Agent. For purposes of  clarity, until a Cash Dominion Event has occurred and has not been discontinued, the Borrower  shall have full control and dominion over, and may use, any and all cash and Cash Receipts as  the Borrower may determine in its sole discretion and shall not be required to deposit or transfer,  or cause to be deposited or transferred, any cash or Cash Receipts into a Concentration Account.                (d)   The Borrower shall accurately report to the Administrative Agent all   amounts deposited in the Blocked Accounts and Concentration Accounts to ensure the proper   transfer of funds as set forth above. If at any time after the occurrence and during the   continuance of a Cash Dominion Event, any cash or cash equivalents owned by the Borrower are   deposited to any account, or held or invested in any manner, otherwise than in a Blocked   Account or Concentration Account that is subject to a Blocked Account Agreement, the   Administrative Agent shall require the Borrower to close such account and have all funds therein   transferred to an account maintained by the Administrative Agent at Wells Fargo and all future   deposits made to a Blocked Account or Concentration Account which is subject to a Blocked   Account Agreement.                (e)   The Borrower may close DDAs upon prior written notice to the   Administrative Agent and may open new DDAs by providing the Administrative Agent written   notice thereof, together with, at the request of the Administrative Agent, at any time after the   occurrence and during the continuance of a Cash Dominion Event, a copy of the appropriate   DDA Notification for the new depository consistent with the provisions of this Section 2.23 and  otherwise satisfactory to the Administrative Agent.  The Borrower may close a Blocked Account  or Concentration Account (other than the Concentration Account maintained with Wells Fargo)                                          84   

 

                                                                                 upon prior written notice to the Administrative Agent, together with written confirmation that the  funds in the closed Blocked Account or Concentration Account have been, or are then being,  transferred to another Blocked Account or another Concentration Account and may open new  Blocked Accounts or Concentration Accounts by providing the Administrative Agent written  notice thereof, together with a Blocked Account Agreement with the new depository consistent  with the provisions of this Section 2.23 and otherwise satisfactory to the Administrative Agent.               (f)   The Borrower may also maintain with the Administrative Agent at Wells  Fargo one or more disbursement accounts (the “Wells Fargo Disbursement Accounts”) to be  used by the Borrower for disbursements and payments (including payroll) in the ordinary course  of business or as otherwise permitted hereunder. The only Disbursement Accounts as of the  Fourth Amendment Effective Date are those described in Schedule 2.23(f).               (g)   The Concentration Account maintained at Wells Fargo is, and shall   remain, under the sole dominion and control of the Collateral Agent. The Borrower   acknowledges and agrees that (i) the Borrower has no right of withdrawal from such   Concentration Account, (ii) the funds on deposit in each Concentration Account shall continue to   be collateral security for all of the Obligations and (iii) the funds on deposit in the Concentration   Accounts shall be applied as provided in Section 2.24(a).                (h)   No Loan Party shall deposit, or cause to be deposited, any funds into the  Term Loan Priority Account other than proceeds of the Term Loan Priority Collateral.         SECTION 2.24.  Application of Payments.               (a)   As long as the Obligations have not been accelerated and no Liquidation  has commenced, all amounts received by the Administrative Agent from any source, including  the Blocked Account Banks and the Concentration Accounts, and all prepayments made by the  Borrower shall be applied in the following order: first, to pay interest due and payable on Credit  Extensions (excluding those made in respect of the Term Loan) and to pay fees and expense  reimbursements, indemnification, and Credit Party Expenses then due and payable to the  Administrative Agent, the Arrangers, the Issuing Bank, the Collateral Agent, and the Lenders  other than the Term Loan Lenders (other than fees, expenses and indemnifications relating to  Obligations described in clause SIXTH of this Section 2.24(a)); second to repay outstanding  Swingline Loans; third, to repay other outstanding Revolving Loans that are Prime Rate Loans  and all outstanding reimbursement obligations under Letters of Credit; fourth, to repay  outstanding Revolving Loans that are LIBO Loans and all Breakage Costs due in respect of such  repayment pursuant to Section 2.21(c) or, at the Borrower’s option (if no Event of Default has  occurred and is then continuing), to fund a cash collateral deposit to the Cash Collateral Account  sufficient to pay, and with direction to pay, all such outstanding LIBO Loans on the last day of  the then-pending Interest Period therefor; fifth if an Event of Default then exists, to fund a cash  collateral deposit in the Cash Collateral Account in an amount equal to 103% of all Letter of  Credit Outstandings; sixth, to pay all other Obligations that are then outstanding and then due  and payable, including without limitation, all Obligations arising out of any Cash Management  Services and Bank Products which are then due and payable; seventh, to pay interest due and  payable on the Term Loan and to pay fees and expense reimbursements, indemnification, and   Credit Party Expenses then due and payable to the Term Loan Agent; and eighth, to repay the                                          85   

 

                                                                                 outstanding principal balance and other Obligations in respect of the Term Loan.  If all  Obligations then due and owing are paid and Letters of Credit Outstandings cash collateralized,  any excess amounts shall be deposited in a separate cash collateral account, and as long as no  Event of Default then exists, shall be released to the Borrower upon the request of the Borrower  and utilized by the Borrower prior to any further Revolving Loans being made. Any other  amounts received by the Administrative Agent, the Issuing Bank, the Collateral Agent, or any  Lender as contemplated by Sections 2.17, 2.20, 2.21 and 2.23 shall also be applied in the order  set forth above in this Section 2.24.               (b)   All credits against the Obligations shall be conditioned upon final payment  to the Administrative Agent of the items giving rise to such credits. If any item credited to the  Loan Account is dishonored or returned unpaid for any reason, whether or not such return is  rightful or timely, the Administrative Agent shall have the right to reverse such credit and charge  the amount of such item to the Loan Account and the Borrower shall indemnify the  Administrative Agent, the Collateral Agent, the Term Loan Agent, the Issuing Bank and the  Lenders against all claims and losses resulting from such dishonor or return.         SECTION 2.25.  Increased Costs.               (a)   If any (x) Change in Law, or (y) compliance by any Lender or Issuing   Bank with any direction, request, or requirement (irrespective of whether having the force of   law) of any Governmental Authority or monetary authority (including Regulation D of the FRB),   shall:                      (i)   impose, modify or deem applicable any reserve, special deposit or         similar requirement against assets of, deposits with or for the account of, or credit         extended by, any Lender or any holding company of any Lender (except any such reserve        requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or                     (ii)  impose on any Lender or the Issuing Bank or the London interbank        market any other condition (not including, for the avoidance of doubt, any condition with        respect to Taxes, which shall only give rise to additional payments to the extent provided        by Section 2.28) affecting this Agreement or LIBO Loans made by such Lender or any        Letter of Credit or participation therein;   and the result of any of the foregoing shall be to increase the cost to such Lender of making or  maintaining any LIBO Loan (or of maintaining its obligation to make any such Loan) or to  increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining  any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or  the Issuing Bank hereunder (whether of principal, interest or otherwise), then such Lender shall  promptly notify the Borrower thereof, and the Borrower will pay to such Lender or the Issuing  Bank, as the case may be, such additional amount or amounts as will compensate such Lender or  the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered ,  together with interest on such amount from the date of such demand until payment in full thereof  at the rate then applicable to Prime Rate Loans hereunder .                                             86   

 

                                                                                             (b)   If any Lender or the Issuing Bank reasonably determines that any Change   in Law regarding capital or liquidity requirements has or would have the effect of reducing the   rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or   the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans   made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit   issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such   Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in   Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of   such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy or   liquidity), then such Lender shall promptly notify the Borrower thereof, and from time to time   the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional   amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the   Issuing Bank’s holding company for any such reduction suffered.                (c)   A certificate of a Lender or the Issuing Bank setting forth the amount or   amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as   the case may be, as specified in paragraph (a) or (b) of this Section and setting forth in   reasonable detail the manner in which such amount or amounts were determined shall be   delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay   such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such   certificate within ten (10) Business Days after receipt thereof.                 (d)   Failure or delay on the part of any Lender or the Issuing Bank to demand   compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the   Issuing Bank’s right to demand such compensation so long as such Lender or the Issuing Bank,   as applicable, has complied with the provisions of this Section 2.25.         SECTION 2.26.  Change in Legality.               (a)   Notwithstanding anything to the contrary contained elsewhere in this   Agreement, but subject to Section 2.18,  if (x) any Change in Law shall make it unlawful for a  Lender to make or maintain a LIBO Loan or to give effect to its obligations as contemplated  hereby with respect to a LIBO Loan or (y) at any time any Lender reasonably determines that the  making or continuance of any of its LIBO Loans has become impracticable as a result of a  contingency occurring after the date hereof which adversely affects the London interbank market  or the position of such Lender in the London interbank market, then, by written notice to the  Borrower, such Lender may (i) declare that LIBO Loans will not thereafter be made by such  Lender hereunder, whereupon any request by the Borrower for a LIBO Borrowing shall, as to  such Lender only, be deemed a request for a Prime Rate Loan unless such declaration shall be  subsequently withdrawn; and (ii) require that all outstanding LIBO Loans made by it be  converted to Prime Rate Loans, in which event all such LIBO Loans shall be automatically  converted to Prime Rate Loans as of the effective date of such notice as provided in paragraph  (b) below. In the event any Lender shall exercise its rights under clause (i) or (ii) of this  paragraph (a), all payments and prepayments of principal which would otherwise have been  applied to repay the LIBO Loans that would have been made by such Lender or the converted  LIBO Loans of such Lender shall instead be applied to repay the Prime Rate Loans made by  such Lender in lieu of, or resulting from the conversion of, such LIBO Loans.                                          87   

 

                                                                                             (b)   For purposes of this Section 2.26, a notice to the Borrower by any Lender  pursuant to paragraph (a) above shall be effective, if any LIBO Loans shall then be outstanding,  on the last day of the then-current Interest Period or such earlier date as may be legally required;  and otherwise such notice shall be effective on the date of receipt by the Borrower.          SECTION 2.27.  Payments; Sharing of Setoff.               (a)   The Borrower shall make each payment required to be made by it  hereunder or under any other Loan Document (whether of principal, interest, fees or  reimbursement of drawings under Letters of Credit, or of amounts payable under Sections  2.21(c), 2.25 or 2.28, or otherwise) prior to 12:00 p.m. on the date when due, in immediately  available funds, without setoff or counterclaim. Any amounts received after such time on any  date may, in the discretion of the Administrative Agent, be deemed to have been received on the  next succeeding Business Day for purposes of calculating interest thereon. All such payments  shall be made to the Administrative Agent at its offices at One Boston Place, 19 th  Floor, Boston,   Massachusetts 02108, except payments to be made directly to the Issuing Bank or Swingline   Lender as expressly provided herein and except that payments pursuant to Sections 2.21(c), 2.25,  2.28 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to  other Loan Documents shall be made to the Persons specified therein. The Administrative Agent  shall distribute any such payments received by it for the account of any other Person to the  appropriate recipient promptly following receipt thereof. If any payment under any Loan  Document shall be due on a day that is not a Business Day, except with respect to LIBO  Borrowings, the date for payment shall be extended to the next succeeding Business Day, and, in  the case of any payment accruing interest, interest thereon shall be payable for the period of such  extension. All payments under each Loan Document shall be made in dollars.                (b)   All funds received by and available to the Administrative Agent to pay  principal, unreimbursed drawings under Letters of Credit, interest and fees then due hereunder,  shall be applied in accordance with the provisions of Section 2.24(a) or 7.03 hereof, as  applicable, ratably among the parties entitled thereto in accordance with the amounts of  principal, unreimbursed drawings under Letters of Credit, interest, and fees then due to such  respective parties.               (c)   If any Lender shall, by exercising any right of setoff or counterclaim or   otherwise, obtain payment in respect of any principal of or interest on any of its Loans or   participations in drawings under Letters of Credit or Swingline Loans resulting in such Lender’s   receiving payment of a greater proportion of the aggregate amount of its Loans and participations   in drawings under Letters of Credit and Swingline Loans and accrued interest thereon than the   proportion received by any other Lender, then the Lender receiving such greater proportion shall   purchase (for cash at face value) participations in the Loans and participations in drawings under   Letters of Credit and Swingline Loans of other Lenders to the extent necessary so that the benefit   of all such payments shall be shared by the Lenders ratably in accordance with the aggregate   amount of principal of and accrued interest on their respective Loans and participations in   drawings under Letters of Credit and Swingline Loans, provided that (i) if any such  participations are purchased and all or any portion of the payment giving rise thereto is  recovered, such participations shall be rescinded and the purchase price restored to the extent of  such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to                                          88   

 

                                                                                 apply to any payment made by the Borrower pursuant to and in accordance with the express  terms of this Agreement or any payment obtained by a Lender as consideration for the  assignment of or sale of a participation in any of its Loans or participations in drawings under  Letters of Credit to any assignee or participant, other than to the Borrower or any Affiliate  thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the  foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any  Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the  Borrower rights of setoff and counterclaim with respect to such participation as fully as if such  Lender were a direct creditor of the Borrower in the amount of such participation.                (d)   Unless the Administrative Agent shall have received notice from the  Borrower prior to the date on which any payment is due to the Administrative Agent for the  account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such  payment, the Administrative Agent may assume that the Borrower has made such payment on  such date in accordance herewith and may, in reliance upon such assumption, distribute to the  Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower  has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may  be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so  distributed to such Lender or Issuing Bank with interest thereon, for each day from and including  the date such amount is distributed to it to but excluding the date of payment to the  Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined  by the Administrative Agent in accordance with banking industry rules on interbank  compensation.         SECTION 2.28.  Taxes.               (a)   Any and all payments by or on account of any obligation of the Borrower  hereunder or under any other Loan Document shall be made free and clear of and without  deduction for any Indemnified Taxes, provided that if the Borrower shall be required to deduct  any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as  necessary so that after making all required deductions for Indemnified Taxes (including  deductions for Indemnified Taxes applicable to additional sums payable under this Section) the  Agents, such Lender or the Issuing Bank (as the case may be) receives an amount equal to the  sum it would have received had no such deductions been made, (ii) the Borrower shall make  such deductions, and (iii) the Borrower shall pay the full amount deducted to the relevant  Governmental Authority in accordance with Applicable Law.                 (b)   In addition, the Borrower shall pay any Other Taxes to the relevant   Governmental Authority in accordance with Applicable Law.                (c)   The Borrower shall indemnify the Agents, each Lender and the Issuing   Bank, within ten (10) Business Days after written demand therefor, for the full amount of any   Indemnified Taxes or Other Taxes paid by the Agents, such Lender or the Issuing Bank, as the   case may be, on or with respect to any payment by or on account of any obligation of the   Borrower hereunder or under any other Loan Document (including Indemnified Taxes or Other   Taxes imposed or asserted on or attributable to amounts payable under this Section) and any   penalties, interest and reasonable expenses arising therefrom or with respect thereto. A certificate                                          89   

 

                                                                                 as to the amount of such payment or liability delivered to the Borrower by a Lender or the  Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of an Agent, a  Lender or the Issuing Bank setting forth in reasonable detail the manner in which such amount  was determined, shall be conclusive absent manifest error.                (d)   As soon as practicable after any payment of Indemnified Taxes or Other  Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the  Administrative Agent the original or a certified copy of a receipt issued by such Governmental  Authority evidencing such payment, a copy of the return reporting such payment or other  evidence of such payment reasonably satisfactory to the Administrative Agent.                (e)   Any Foreign Lender that is entitled to an exemption from or reduction in  U.S. Federal withholding tax shall deliver to the Borrower and the Administrative Agent two  copies of either United States Internal Revenue Service Form W-8BEN or Form W-8ECI, or any  subsequent versions thereof or successors thereto, or, in the case of a Foreign Lender claiming  exemption from in U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code with  respect to payments of “portfolio interest”, a (i) Form W-8BEN, or any subsequent versions  thereof or successors thereto and (ii) a certificate representing that such Foreign Lender is not  (A) a bank for purposes of Section 881(c) of the Code, (B) is not a 10-percent shareholder  (within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and (C) is not a  controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4)  of the Code)), properly completed and duly executed by such Foreign Lender claiming, as  applicable, complete exemption from or reduced rate of, U.S. Federal withholding Tax on  payments by the Borrower under this Agreement and the other Loan Documents, or in the case  of a Foreign Lender claiming exemption for “portfolio interest” certifying that it is not a foreign  corporation, partnership, estate or trust. Such forms shall be delivered by each Foreign Lender on  or before the date it becomes a party to this Agreement (or, in the case of a transferee that is a  participation holder, on or before the date such participation holder becomes a transferee  hereunder) and on or before the date, if any, such Foreign Lender changes its applicable lending  office by designating a different lending office (a “New Lending Office”). In addition, each  Foreign Lender shall deliver such forms promptly upon the obsolescence or invalidity of any  form previously delivered by such Foreign Lender. Notwithstanding any other provision of this  Section 2.28(e), a Foreign Lender shall not be required to deliver any form pursuant to this  Section 2.28(e) that such Foreign Lender is not legally able to deliver.               (f)   Upon the request of the Borrower, any Lender that is not a Foreign Lender  shall deliver to the Borrower two copies of United States Internal Revenue Service Form W-9 or  any subsequent versions thereof or successors thereto, properly completed and duly executed.  If  any Lender fails to deliver Form W-9 or any subsequent versions thereof or successors thereto as  required herein, then the Borrower may withhold from any payment to such party an amount  equivalent to the applicable backup withholding Tax imposed by the Code, without reduction.               (g)   The Borrower shall not be required to indemnify any Lender or to pay any  additional amounts to any Lender in respect of U.S. Federal withholding tax pursuant to  paragraph (a) or (c) above to the extent that the obligation to pay such additional amounts would  not have arisen but for a failure by such Lender to comply with the provisions of paragraphs (e)  or (f) above. Should a Lender become subject to Taxes because of its failure to deliver a form                                          90   

 

                                                                                 required hereunder, the Borrower shall, at such Lender’s expense, take such steps as such Lender  shall reasonably request to assist such Lender to recover such Taxes.               (h)   Each of the Lenders agrees that upon the occurrence of any circumstances  entitling such party to indemnification or additional amounts pursuant to Section 2.28(a) or (c),  such party shall use reasonable efforts to take any action (including designating a new lending  office and signing any prescribed forms or other documentation appropriate in the  circumstances) if such action would reduce or eliminate any Tax (including penalties or interest,  as applicable) with respect to which such indemnification or additional amounts may thereafter  accrue.               (i)   If any Lender reasonably determines that it has actually and finally  realized, by reason of a refund, deduction or credit of any Taxes paid or reimbursed by the  Borrower pursuant to subsection (a) or (c) above in respect of payments under the Loan  Documents, a current monetary benefit that it would otherwise not have obtained and that would  result in the total payments under this Section 2.28 exceeding the amount needed to make such  Lender whole, such Lender shall pay to the Borrower, with reasonable promptness following the  date upon which it actually realizes such benefit, an amount equal to the lesser of the amount of  such benefit or the amount of such excess, in each case net of all out-of-pocket expenses incurred  in securing such refund, deduction or credit.               (j)   If a payment made to a Lender under any Loan Document would be  subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to  comply with the applicable reporting requirements of FATCA (including those contained in  Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the  Borrower and the Administrative Agent, at the time or times prescribed by Applicable Law and  at such time or times reasonably requested by the Borrower or the Administrative Agent, such  documentation prescribed by Applicable Law (including as prescribed by Section  1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the  Borrower or the Administrative Agent as may be necessary for the Borrower or the  Administrative Agent to comply with its obligations under FATCA, to determine that such  Lender has complied with such Lender’s obligations under FATCA or to determine the amount  to deduct and withhold from such payment. Solely for purposes of this clause (j), “FATCA” shall  include any amendments made to FATCA after the Third Amendment Effective Date.         SECTION 2.29.  Security Interests in Collateral.  To secure their Obligations under this  Agreement and the other Loan Documents, pursuant to the Existing Credit Agreement, the Loan  Parties have granted to the Collateral Agent, for its benefit and the ratable benefit of the other  Credit Parties, a perfected first-priority security interest in all of the Collateral and the Real  Estate Collateral  pursuant to the Security Documents.  The Loan Parties hereby ratify and  confirm the security interest granted pursuant to the Security Documents.          SECTION 2.30.  Mitigation Obligations; Replacement of Lenders.                (a)   If any Lender requests compensation under Section 2.25, or if the  Borrower is required to pay any additional amount to any Lender or any Governmental Authority  for the account of any Lender pursuant to Section 2.28, then such Lender shall use reasonable                                          91   

 

                                                                                 efforts to designate a different lending office for funding or booking its Loans hereunder or to  assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in  the judgment of such Lender, such designation or assignment (i) would eliminate or reduce  amounts payable pursuant to Section 2.25 or 2.28, as the case may be, in the future and  (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise  be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and  expenses incurred by any Lender in connection with any such designation or assignment;  provided, however, that the Borrower shall not be liable for such costs and expenses of a Lender  requesting compensation if (i) such Lender becomes a party to this Agreement on a date after the  Fourth Amendment Effective Date and (ii) the relevant Change in Law occurs on a date prior to  the date such Lender becomes a party hereto.               (b)   If any Lender requests compensation under Section 2.25, or if the  Borrower is required to pay any additional amount to any Lender or any Governmental Authority  for the account of any Lender pursuant to Section 2.28, or if any Lender is a Delinquent Lender,  then the Borrower may, at its sole expense and effort, upon notice to such Lender and the  Administrative Agent, require such Lender to assign and delegate, without recourse (in  accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights  and obligations under this Agreement to an assignee that shall assume such obligations (which  assignee may be another Lender, if a Lender accepts such assignment or to an Eligible  Assignee), provided that (i) the Borrower shall have received the prior written consent of the  Administrative Agent, the Issuing Bank and Swingline Lender, which consent shall not unrea- sonably be withheld, (ii) such Lender shall have received payment of an amount equal to the  outstanding principal of its Loans and participations in unreimbursed drawings under Letters of  Credit and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable  to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest  and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such  assignment resulting from a claim for compensation under Section 2.25 or payments required to  be made pursuant to Section 2.28, such assignment will result in a reduction in such  compensation or payments. A Lender shall not be required to make any such assignment and  delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the  circumstances entitling the Borrower to require such assignment and delegation cease to apply.                                     ARTICLE III                              Representations and Warranties         Each Loan Party represents and warrants to the Agents and the Lenders that:          SECTION 3.01.  Organization; Powers.  Each Loan Party is duly organized, validly  existing and in good standing under the laws of the jurisdiction of its organization, has all  requisite power and authority to carry on its business as now conducted and, except where the  failure to do so, individually or in the aggregate, could not reasonably be expected to result in a  Material Adverse Effect, is qualified to do business in, and is in good standing in, every juris- diction where such qualification is required.                                            92   

 

                                                                                       SECTION 3.02.  Authorization; Enforceability.  The transactions contemplated hereby  and by the other Loan Documents to be entered into by each Loan Party are within such Loan  Party’s corporate, limited partnership, limited liability company and other powers and have been  duly authorized by all necessary action. This Agreement has been duly executed and delivered  by each Loan Party that is a party hereto and constitutes, and each other Loan Document to  which any Loan Party is a party, when executed and delivered by such Loan Party will  constitute, a legal, valid and binding obligation of such Loan Party (as the case may be),  enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,  reorganization, moratorium or other laws affecting creditors’ rights generally and subject to  general principles of equity, regardless of whether considered in a proceeding in equity or at law.          SECTION 3.03.  Governmental Approvals; No Conflicts.  The transactions to be entered  into contemplated by the Loan Documents (a) do not require any consent or approval of,  registration or filing with, or any other action by, any Governmental Authority, except for such  as have been obtained or made and are in full force and effect and except filings and recordings  necessary to perfect Liens created under the Loan Documents, (b) will not violate any Applicable  Law or the Organizational Documents of any Loan Party or any order of any Governmental  Authority, (c) will not violate or result in a default under any indenture, agreement or other   instrument binding upon any Loan Party or its assets, or give rise to a right thereunder to require  any payment to be made by any Loan Party, and (d) will not result in the creation or imposition  of any Lien on any asset of any Loan Party, except Liens created under the Loan Documents.          SECTION 3.04.  Financial Condition.  On or before the Fourth Fifth  Amendment  Effective Date, the Parent has furnished to the Lenders the Consolidated balance sheet, and  statements of income, stockholders’ equity, and cash flows for the Parent and its Subsidiaries as  of and for the Fiscal Year ending ended  February 32, 2018 2019  and as of and for the fiscal  quarters ending May 32, 2018 2019 , August 4, 2018 and November 3, 2018 2019 and November  2, 2019 , in each case certified by a Financial Officer of the Borrower.  Such financial statements  present fairly, in all material respects, the financial position, results of operations and cash flows   of the Parent and its Subsidiaries as of such dates and for such periods in accordance with   GAAP, subject to year-end audit adjustments and the absence of footnotes.  Except as disclosed   in Schedule 3.04  or otherwise known to the Agents as of the Fifth Amendment Effective Date ,  since February 31, 2018 2020 , there have been no changes in the assets, liabilities, financial  condition, business or prospects of the Parent and its Subsidiaries other than changes in the  ordinary course of business  or, solely during the Forbearance Period, as a result of concerns with  respect to the COVID-19 coronavirus pandemic in process as of the Fifth Amendment Effective  Date .         SECTION 3.05.  Properties.               (a)   Except as disclosed in Schedules 3.05(c)(i) and 3.05(c)(ii), each Loan  Party has good title to, or valid leasehold interests in, all its real and personal property material to  its business, except for defects which could not reasonably be expected to have a Material  Adverse Effect.               (b)   Each Loan Party owns, or is licensed to use, all trademarks, trade names,   copyrights, patents and other intellectual property material to its business, and, to the best of each                                          93   

 

                                                                                 Loan Party’s knowledge, the use thereof by the Loan Parties does not infringe upon the rights of  any other Person, except for any such infringements that, individually or in the aggregate, could  not reasonably be expected to result in a Material Adverse Effect.               (c)   Schedule 3.05(c)(i) sets forth the address (including county) of all Real  Estate that is owned by the Loan Parties, together with a list of the holders of any mortgage or  other Lien thereon as of the Fourth Fifth  Amendment Effective Date. Schedule 3.05(c)(ii) sets  forth the address (including county) of all Leases of the Loan Parties, together with a list of the  holders of any mortgage or other Lien on the Borrower’s interest in such Lease as of the Fourth  Amendment Effective Date.  Each of such Leases is in full force and effect, and the Loan Parties  are not in default of the terms thereof, except for any such defaults that, individually or in the  aggregate, could not reasonably be expected to result in liability in excess of $1,000,000.         SECTION 3.06.  Litigation and Environmental Matters.                (a)   There are no actions, suits or proceedings by or before any arbitrator or   Governmental Authority pending against or, to the knowledge of the Borrower, threatened   against or affecting any Loan Party (i) that, if adversely determined, could reasonably be   expected, individually or in the aggregate, to result in a Material Adverse Effect, or (ii) that   involve any of the Loan Documents.                (b)   Except for the matters set forth on Schedule 3.06 and except with respect  to any other matters that, individually or in the aggregate, could not reasonably be expected to  result in a Material Adverse Effect, to the knowledge of the Borrower, no Loan Party (i) has  failed to comply in all material respects with any Environmental Law or to obtain, maintain or  comply with any permit, license or other approval required under any Environmental Law,  (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim  with respect to any Environmental Liability or (iv) knows of any basis for any Environmental  Liability.               (c)   Since the date of this Agreement, there has been no change in the status of  the matters set forth on Schedule 3.06 that, individually or in the aggregate, has resulted in, or  could reasonably be expected to result in, a Material Adverse Effect.          SECTION 3.07.  Compliance with Laws and Agreements.  Each Loan Party is in  compliance with all Applicable Law and all indentures, material agreements and other  instruments binding upon it or its property, except where the failure to do so, individually or in  the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No  Default has occurred and is continuing.         SECTION 3.08.  Investment and Holding Company Status.  No Loan Party is (a) an  “investment company” as defined in, or subject to regulation under, the Investment Company  Act of 1940 or (b) a “holding company” as defined in, or subject to regulation under, the Public  Utility Holding Company Act of 2005.         SECTION 3.09.  Taxes.  Each Loan Party has timely filed, or caused to be filed, all  federal and state Tax returns and reports required to have been filed and has paid, or caused to be  paid, all Taxes required to have been paid by it, except (a) Taxes that are being contested in good                                          94   

 

                                                                                 faith by appropriate proceedings, for which such Loan Party has set aside on its books adequate  reserves, and as to which no Lien has been filed, or (b) to the extent that the failure to do so  could not reasonably be expected to result in a Material Adverse Effect.  The Loan Parties do not  intend to treat any of the transactions contemplated by the Loan Documents as being a  “reportable transaction” within the meaning of 26 CFR 1.6011-4.  Neither any Loan Party nor  any of its Subsidiaries is party to any tax sharing agreement other than the Tax Agreement.          SECTION 3.10.  ERISA.  To the knowledge of the Borrower, no ERISA Event has  occurred or is reasonably expected to occur that, when taken together with all other such ERISA  Events for which liability is reasonably expected to occur, could reasonably be expected to result  in a Material Adverse Effect.         SECTION 3.11.  Disclosure.  The Borrower has disclosed to the Lenders all agreements,  instruments and corporate or other restrictions to which any Loan Party is subject, and all other  matters known to any of them, that, individually or in the aggregate, could reasonably be  expected to result in a Material Adverse Effect. None of any of the reports, financial statements,  certificates or other information furnished by or on behalf of any Loan Party to the  Administrative Agent or any Lender in connection with the negotiation of this Agreement or any  other Loan Document or delivered hereunder or thereunder (as modified or supplemented by  other information so furnished) contains any material misstatement of fact or omits to state any  material fact necessary to make the statements therein, in the light of the circumstances under  which they were made, not misleading.         SECTION 3.12.  Subsidiaries.                 (a)   Schedule 3.12 sets forth the name of, and the ownership interest of each  Loan Party in each Subsidiary as of the Fourth Amendment Effective Date.  There is no other  capital stock or ownership interest of any class outstanding as of the Fourth Amendment  Effective Date. The Loan Parties are not party to any joint venture, general or limited  partnership, or limited liability company, agreements or any other business ventures or entities as  of the Fourth Amendment Effective Date.               (b)   The Parent and its Subsidiaries have received the consideration for which  the capital stock and other ownership interests was authorized to be issued and have otherwise  complied in all material respects with all legal requirements relating to the authorization and  issuance of shares of stock and other ownership interests, and all such shares and ownership  interests are validly issued, fully paid, and non-assessable.         SECTION 3.13.  Insurance.  Schedule 3.13 sets forth a description of all insurance  maintained by or on behalf of the Loan Parties and their Subsidiaries as of the Fourth  Amendment Effective Date.  Each of such policies is in full force and effect.  All premiums in  respect of such insurance that are due and payable have been paid.          SECTION 3.14.  Labor Matters.  There are no strikes, lockouts or slowdowns against  any Loan Party pending or, to the knowledge of the Borrower, threatened. The hours worked by  and payments made to employees of the Loan Parties have not been in violation of the Fair  Labor Standards Act or any other applicable federal, state, local or foreign law dealing with such                                          95   

 

                                                                                 matters to the extent that any such violation could reasonably be expected to have a Material  Adverse Effect. All payments due from any Loan Party, or for which any claim may be made  against any Loan Party, on account of wages and employee health and welfare insurance and  other benefits, have been paid or accrued as a liability on the books of such member, except  where the failure to do so, individually or in the aggregate, could not reasonably be expected to  result in a Material Adverse Effect.  The consummation of the transactions contemplated by the  Loan Documents will not give rise to any right of termination or right of renegotiation on the  part of any union under any collective bargaining agreement to which any Loan Party is bound.          SECTION 3.15.  Security Documents.                 (a)   The Security Documents create in favor of the Collateral Agent, for the        ratable benefit of the Credit Parties, a legal, valid and enforceable security interest in the        Collateral, and the Security Documents constitute the creation of a fully perfected first        priority Lien on, and security interest in, all right, title and interest of the Loan Parties        thereunder in such Collateral, in each case prior and superior in right to any other Person        (other than Permitted Encumbrances having priority under Applicable Law).               (b)   Upon execution thereof, the Mortgages shall create in favor of the        Collateral Agent, for the ratable benefit of the Credit Parties, a legal, valid and        enforceable security interest in the Real Estate Collateral, the enforceability of which is        subject to applicable Debtor Relief Laws.  Upon the filing or recording of the Mortgages        with the appropriate Governmental Authorities, the Collateral Agent will have a perfected        Lien on, and security interest in, to and under all right, title and interest of the grantors        thereunder in all Mortgaged Property that may be perfected by such filing (including        without limitation the proceeds of such Mortgaged Property), in each case prior and        superior in right to any other Person (other than Permitted Encumbrances having priority        under Applicable Law).         SECTION 3.16.  Federal Reserve Regulations.  (a)  No Loan Party is engaged  principally, or as one of its important activities, in the business of extending credit for the  purpose of buying or carrying Margin Stock.               (b)   No part of the proceeds of any Loan or any Letter of Credit will be used,  whether directly or indirectly, and whether immediately, incidentally or ultimately, (i) to buy or  carry Margin Stock or to extend credit to others for the purpose of buying or carrying Margin  Stock or to refund indebtedness originally incurred for such purpose or (ii) for any purpose that  entails a violation of, or that is inconsistent with, the provisions of the Regulations of the FRB,  including Regulation T, U or X. Neither any Loan Party nor any of its Subsidiaries expects to  acquire any Margin Stock.         SECTION 3.17.  Solvency.  To the best of the knowledge of each of the Loan Parties, on  the Fourth Amendment Effective Date and after giving effect to each Credit Extension  hereunder, the Borrower and each other Loan Party is, and will be, Solvent ; provided that the  foregoing representation and warranty shall not be required to be made or deemed made during  the Forbearance Period . No transfer of property is being made by any Loan Party and no  obligation is being incurred by any Loan Party in connection with the transactions contemplated                                          96   

 

                                                                                 by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud  either present or future creditors of any Loan Party.          SECTION 3.18.  OFAC; Anti-Corruption Laws; Anti-Money Laundering Laws.  No  Loan Party nor any of its Subsidiaries is in violation of any Sanctions.  No Loan Party nor any of  its Subsidiaries nor, to the knowledge of such Loan Party, any director, officer, employee, agent  or Affiliate of such Loan Party or such Subsidiary (a) is a Sanctioned Person or a Sanctioned  Entity, (b) has any assets located in Sanctioned Entities, or (c) derives revenues from investments  in, or transactions with Sanctioned Persons or Sanctioned Entities.  Each of the Loan Parties and  its Subsidiaries has implemented and maintains in effect policies and procedures designed to  promote and achieve compliance by the Loan Parties and their Subsidiaries and their respective  directors, officers, employees, agents and Affiliates with all Sanctions, Anti-Corruption Laws  and Anti-Money Laundering Laws.  Each of the Loan Parties and its Subsidiaries, and to the  knowledge of each such Loan Party, each director, officer, employee, agent and Affiliate of each  such Loan Party and each such Subsidiary, is in compliance with all Sanctions, Anti-Corruption  Laws and Anti-Money Laundering Laws.  No proceeds of any loan made or Letter of Credit  issued hereunder will be used to fund, directly or indirectly, any operations in, finance any  investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned  Entity, or otherwise used in any manner that would result in a violation of any applicable  Sanctions, Anti-Corruption Laws or Anti-Money Laundering Laws by any Person (including any  Credit Party or other individual or entity participating in any transaction).          SECTION 3.19.  Swap Obligations.  On each date that any agreement or instrument  giving rise to and Swap Obligation is executed by any Provider, each Loan Party satisfies all  eligibility, suitability and other requirements under the Commodity Exchange Act and the  Commodity Futures Trading Commission regulations.                                     ARTICLE IV                                      Conditions         SECTION 4.01.  Effective Date.  The effectiveness of this Agreement was subject as of  the Effective Date to the following conditions precedent:                (a)   The Administrative Agent and the Collateral Agent (or their counsel) shall        have received from each party hereto either (i) a counterpart of this Agreement and all        other Loan Documents (or ratifications thereof) (including, without limitation, the        Security Documents) signed on behalf of such party or (ii) written evidence satisfactory        to the Administrative Agent and the Collateral Agent (which may include telecopy        transmission of a signed signature page of this Agreement) that such party has signed a        counterpart of this Agreement and all other Loan Documents (or ratifications thereof).                (b)   The Administrative Agent and the Collateral Agent shall have received a         favorable written opinion (addressed to each Agent and the Lenders and dated the         Effective Date) of McAfee & Taft A Professional Corporation, counsel for the Loan         Parties, and such local counsel of the Loan Parties, as applicable, substantially in the         form of Exhibit C, and covering such other matters relating to the Loan Parties, the Loan                                          97   

 

                                                                           Documents or the transactions contemplated thereby as the Required Lenders shall  reasonably request. The Borrower hereby requests such counsel to deliver such opinion.          (c)   The Administrative Agent and the Collateral Agent shall have received   such documents and certificates as the Administrative Agent and the Collateral Agent or   their counsel may reasonably request relating to the organization, existence and good   standing of each Loan Party, the authorization of the transactions contemplated by the   Loan Documents and any other legal matters relating to the Loan Parties, the Loan   Documents or the transactions contemplated thereby, all in form and substance   reasonably satisfactory to the Administrative Agent and the Collateral Agent and their   counsel.          (d)   After giving effect to the transactions contemplated hereby, Excess   Availability on the Effective Date shall be not less than $150,000,000. The   Administrative Agent and the Collateral Agent shall have received a Borrowing Base   Certificate dated the Effective Date, relating to the Fiscal Month ended on August 30,   2014, and executed by a financial officer of the Borrower.          (e)   The Administrative Agent and the Collateral Agent shall have received a   certificate, reasonably satisfactory in form and substance to the Agents, (i) with respect to   the Solvency of the Loan Parties as of the Effective Date, and (ii) certifying that, as of the   Effective Date, the representations and warranties made by the Loan Parties in the Loan   Documents and otherwise are true and complete and that no Default or Event of Default   exists.          (f)   All necessary consents and approvals to the transactions contemplated   hereby shall have been obtained and shall be satisfactory to the Agents.           (g)   The Administrative Agent and the Collateral Agent shall be reasonably   satisfied that any financial statements delivered to them fairly present the business and   financial condition of the Parent and its Subsidiaries, and that there has been no material   adverse change in the assets, business, financial condition, income or prospects of the   Parent and its Subsidiaries since the date of the most recent financial information   delivered to the Agents.          (h)   The Administrative Agent shall have received and be satisfied with such   diligence and other information (financial or otherwise) reasonably requested by the   Administrative Agent.          (i)   There shall not be pending any litigation or other proceeding, the result of   which could reasonably be expected to have a Material Adverse Effect.          (j)   There shall not have occurred any default of any material contract or   agreement of any Loan Party which could reasonably be expected to have a Material   Adverse Effect.          (k)   The Collateral Agent shall have received results of searches or other   evidence reasonably satisfactory to the Collateral Agent (in each case dated as of a date                                    98               

 

                                                                                       reasonably satisfactory to the Collateral Agent) indicating the absence of Liens on the        assets of the Loan Parties, except for Permitted Encumbrances and Liens for which        termination statements and releases reasonably satisfactory to the Collateral Agent are        being tendered concurrently with such extension of credit.                (l)   The Collateral Agent shall have received (i) all documents and        instruments, including Uniform Commercial Code financing statements, required by law        or reasonably requested by the Collateral Agent to be filed, registered or recorded to        create or perfect the first priority Liens intended to be created under the Loan Documents        and all such documents and instruments shall have been so filed, registered or recorded to        the satisfaction of the Collateral Agent, and (ii) the Credit Card Notifications and        Blocked Account Agreements to the extent required pursuant to Section 2.23(c) hereof.               (m)   The Collateral Agent shall have received, and be reasonably satisfied with,        evidence of the Loan Parties’ insurance, together with such endorsements as are required        by the Loan Documents.               (n)   All fees due at or immediately after the Effective Date and all costs and        expenses incurred by the Administrative Agent and the Collateral Agent in connection        with the establishment of the credit facility contemplated hereby (including the fees and        expenses of counsel to the Agents) shall have been paid in full.               (o)   The consummation of the transactions contemplated hereby shall not        (a) violate any Applicable Law or (b) conflict with, or result in a default or event of        default under, any material agreement of any Loan Party. No event shall exist which is, or        solely with the passage of time, the giving of notice or both, would be a default under any        material agreement of any Loan Party.               (p)   No material changes in governmental regulations or policies affecting the         Loan Parties, the Agents, the Arrangers or any Lender involved in this transaction shall         have occurred prior to the Effective Date.                 (q)   There shall have been delivered to the Administrative Agent such         additional instruments and documents as the Administrative Agent and the Collateral         Agent or counsel to the Administrative Agent and the Collateral Agent reasonably may         require or request.     The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and   such notice shall be conclusive and binding.          SECTION 4.02.  Conditions Precedent to Each Revolving Loan and Each Letter of  Credit.  In addition to those conditions described in Section 4.01, the obligation of the Revolving  Loan Lenders to make each Revolving Loan and of the Issuing Bank to issue , renew  or extend  each Letter of Credit, is subject to the following conditions precedent:               (a)   Notice. The Administrative Agent shall have received a notice with        respect to such Borrowing or issuance, as the case may be, as required by Article II.                                          99   

 

                                                                                             (b)   Representations and Warranties. All representations and warranties        contained in this Agreement and the other Loan Documents or otherwise made in writing        in connection herewith or therewith shall be true and correct in all material respects on        and as of the date of each Borrowing or the issuance of each Letter of Credit hereunder        with the same effect as if made on and as of such date, except (i) to the extent that such        representations and warranties specifically refer to an earlier date, in which case they        shall be true and correct as of such earlier date, (ii) in the case of any representation and        warranty qualified by materiality, they shall be true and correct in all respects (without        the deletion of such materiality qualification) and (iii) for purposes of this Section 4.02,        the representations and warranties contained in Section 3.04 shall be deemed to refer to        the most recent statements furnished pursuant to clauses (a), (b) or (c), as applicable, of        Section 5.01.               (c)   No Default. On the date of each Borrowing hereunder and the issuance of        each Letter of Credit, and after giving effect thereto, no Default or Event of Default shall        have occurred and be continuing.               (d)   Borrowing Base Certificate. The Administrative Agent and Term Loan        Agent shall have received the timely delivery of the most recently required Borrowing        Base Certificate, with each such Borrowing Base Certificate including schedules as        required by the Administrative Agent and Term Loan Agent.   Each request by the Borrower for a Credit Extension shall be deemed to be a representation and  warranty by the Borrower that the conditions specified in Sections 4.02(b) and (c) have been  satisfied on and as of the date of the applicable Credit Extension and that after giving effect to  such Credit Extension the Borrower shall continue to be in compliance with the Revolving Loan  Borrowing Base and the Term Loan Borrowing Base.  The conditions set forth in this Section  4.02 are for the sole benefit of the Credit Parties but until the Required Lenders otherwise direct  the Administrative Agent to cease making Revolving Loans and the Issuing Bank to cease   issuing Letters of Credit, the Revolving Loan Lenders will fund their Commitment Percentage of  all Revolving Loans and participate in all Swing Line Loans and Letters of Credit whenever  made or issued, which are requested by the Borrower and which, notwithstanding the failure of  the Loan Parties  to comply with the provisions of this Article IV, are agreed to by the  Administrative Agent, provided, however, the making of any such Loans or the issuance of any  Letters of Credit shall not be deemed a modification or waiver by any Credit Party of the  provisions of this Article IV on any future occasion or a waiver of any rights or the Credit Parties  as a result of any such failure to comply.  Notwithstanding the immediately preceding sentence,  other than in connection with (i) Permitted Overadvances and (ii) a Conforming DIP, the  Administrative Agent and the Lenders will not waive any condition in this Section 4.02 or make  any Credit Extension if such Persons have actual knowledge that the Loan Parties would breach  Section 6.11 after giving effect to the applicable extension of credit.  The immediately preceding  sentence shall not be amended without the consent of each Term Loan Lender.                                          100   

 

                                                                                                                   ARTICLE V                                 Affirmative Covenants         Until (i) the Commitments have expired or been terminated, and (ii) the principal of and  interest on each Loan and all fees and other Obligations payable hereunder shall have been paid  in full, and (iii) all Letters of Credit shall have expired or terminated or been collateralized, to the  extent of 103% of the then Letter of Credit Outstandings, by cash or a letter of credit issued by a  financial institution and on terms reasonably satisfactory to the Administrative Agent, and (iv) all  L/C Disbursements shall have been reimbursed payment in full of the Obligations , each Loan  Party covenants and agrees with the Agents and the Lenders that:          SECTION 5.01.  Financial Statements and Other Information.  The Borrower will  furnish to the Agents:               (a)   within ninety (90) days (or, solely with respect to the Fiscal Year ended        February 1, 2020, one hundred eighty (180) days)  after the end of each Fiscal Year of the        Parent, its Consolidated balance sheet and related statements of operations, stockholders’        equity and cash flows as of the end of and for such year, setting forth in each case in        comparative form the figures for the previous Fiscal Year, all audited and reported on by        Deloitte & Touche or another independent public accountants of recognized national        standing (without a “going concern” or like qualification or exception and without a        qualification or exception as to the scope of such audit) to the effect that such        Consolidated financial statements present fairly in all material respects the financial        condition and results of operations of the Parent and its Subsidiaries on a Consolidated        basis in accordance with GAAP consistently applied;               (b)   within forty-five (45) days after the end of each fiscal quarter of the        Parent, its Consolidated balance sheet and related statements of operations, stockholders’        equity and cash flows, as of the end of and for such fiscal quarter and the elapsed portion        of the Fiscal Year, setting forth in each case in comparative form the figures for the        previous Fiscal Year and the figures as set forth in the projections delivered pursuant to        Section 5.01(e) hereof, all certified by one of its Responsible Officers as presenting in all        material respects the financial condition and results of operations of the Parent and its        Subsidiaries on a Consolidated basis in accordance with GAAP consistently applied,        subject to normal year end audit adjustments and the absence of footnotes;                (c)   within thirty (30) days after the end of each Fiscal Month of the Parent, its        Consolidated balance sheet and related statements of operations, stockholders’ equity and        cash flows, as of the end of and for such Fiscal Month and the elapsed portion of the        Fiscal Year, setting forth in each case in comparative form the figures for the previous        Fiscal Year and the figures as set forth in the projections delivered pursuant to Section        5.01(e) hereof, all certified by one of its Responsible Officers as presenting in all material        respects the financial condition and results of operations of the Parent and its Subsidiaries        on a Consolidated basis in accordance with GAAP consistently applied, subject to normal        year-end audit adjustments and the absence of footnotes;                                         101   

 

                                                                                 (d)   concurrently with any delivery of financial statements under clause (a),  (b), or (c) above, a certificate of a Responsible Officer of the Borrower in the form of  Exhibit D (i) certifying as to whether a Default has occurred and, if a Default has  occurred, specifying the details thereof and any action taken or proposed to be taken with  respect thereto, and (ii) setting forth reasonably detailed calculations (A) with respect to  the Average Daily Excess Availability for such period, and (B) demonstrating  compliance with Section 6.11, and (iii) stating whether any change in GAAP or in the  application thereof has occurred since the date of the Parent’s audited financial  statements referred to in Section 3.04 and, if any such change has occurred, specifying  the effect of such change on the financial statements accompanying such certificate;         (e)   (i)   within forty-five (45) days after the commencement of each Fiscal  Year of the Parent, a preliminary detailed Consolidated budget by Fiscal Quarter for such  Fiscal Year (including a projected Consolidated balance sheet and related statements of  projected operations and cash flow as of the end of and for such Fiscal Year), (ii) within  seventy-five (75) days after the commencement of each Fiscal Year of the Parent, a final  detailed Consolidated budget by Fiscal Quarter for such Fiscal Year (including a  projected Consolidated balance sheet and related statements of projected operations and  cash flow as of the end of and for such Fiscal Year), and (iii) promptly when available,  any significant revisions of such budgets ;, and (iv) prior to the earliest to occur of (x) the  end of the period covered by the Budget most recently delivered to the Agents in  accordance with the terms hereof, (y) April 24, 2020, and (z) the end of the Suspension  Period, an updated Budget including such details as the Agents may reasonably request,  such Budget to be in form and substance satisfactory to the Agents in their exclusive  discretion;          (f)   on the fifth day after the end of each Fiscal Month Wednesday of each  week (or, if Wednesday is not a Business Day, on the next succeeding Business Day) , a  certificate in the form of Exhibit E (a “Borrowing Base Certificate”) showing the  Borrowing Base as of the close of business on the last day of the immediately preceding  Fiscal Month Saturday , each Borrowing Base Certificate to be certified as complete and  correct on behalf of the Borrower by a Responsible Officer of the Borrower; provided  that at any time that an Accelerated Borrowing Base Delivery Event has occurred and is  continuing upon the Administrative Agent’s request, on each Business Day , such  Borrowing Base Certificate shall be provided weekly on Wednesday of each week (or, if  Wednesday is not a Business Day, on the next succeeding Business Day) showing the  Borrowing Base as of the close of business on the immediately preceding  Saturday; updated to provide a roll-forward of Inventory contained therein;          (g)   promptly after the same become publicly available, copies of all periodic  and other reports, proxy statements and other materials filed in final form by any Loan  Party with the Securities and Exchange Commission (including, without limitation,  Forms 10-K and 10-Q but excluding any registration statement on Form S-8 or its  equivalent), or any Governmental Authority succeeding to any or all of the functions of  said Commission, as the case may be; provided that the information required to be  delivered pursuant to this paragraph shall be deemed to have been delivered on the date                                   102               

 

                                                                           on which the Borrower provides notice to the Agents that such information has been  posted on the Internet and is accessible by the Agents without charge;          (h)   notice of the incurrence of any Material Indebtedness permitted hereunder,  reasonably promptly after the incurrence thereof;         (i)   promptly after the Administrative Agent’s or any Lender’s request  therefor, (i) confirmation of the accuracy of the information set forth in the most recent  Certificate of Beneficial Ownership Certification  for the Borrower provided to the  Administrative Agent and the Lenders; (ii) a new Certificate of Beneficial Ownership  Certification  for the Borrower, in form and substance acceptable to the Administrative  Agent, when the individual(s) to be identified as a Beneficial Owner beneficial owner   have changed; and (iii) such information as requested pursuant to Section 9.15 hereof;         (j)   the financial and collateral reports described on Schedule 5.01(i) hereto, at  the times set forth in such Schedule;          (k)   notice of any intended Permitted Acquisition, at least ten (10) Business  Days prior to the intended date of the consummation thereof, together with (i) copies of  the most recent audited, and if later, unaudited financial statements of the Person which is  the subject of the Permitted Acquisition, (ii) a description of the proposed Permitted  Acquisition in such detail as the Administrative Agent may reasonably request, including  copies of letters of intent and purchase and sale agreements or other acquisition  documents (including Lien search reports) executed in connection with the proposed  Permitted Acquisition, (iii) an unaudited pro forma Consolidated balance sheet and  income statement of the Parent and its Subsidiaries as of the end of the most recently  completed fiscal quarter but prepared as though the Permitted Acquisition had occurred  on such date and related pro forma calculations of average Excess Availability for the  subsequent four fiscal quarters period, and (iv) unaudited projections of balance sheets  and income statements and related calculations for the following four fiscal quarters,  assuming the Permitted Acquisition has closed;         (l)   notice of any intended sale or other disposition of assets of any Loan Party  permitted under Sections 6.05(c) or 6.05(d) (but only if such disposition relates to more  than ten (10) stores in a single transaction), at least ten (10) Business Days prior to the  date of consummation such sale or disposition;          (m) promptly when due, a copy of each Store Payment Allocation (as defined in  the Intercreditor Agreement) in accordance with the provisions of Section 2.04(b) of the  Intercreditor Agreement; and         (m)   every Wednesday (or such later date as may be agreed in the Agents’ sole  discretion and, if given, may be by e-mail), commencing on the Wednesday following the  first full calendar week after the Fifth Amendment Effective Date, a variance report  prepared by a Responsible Officer of the Borrower (the “Variance Report”) setting forth  actual cash receipts and disbursements of the Loan Parties for the preceding one calendar  week period and setting forth all the variances, on a line-item and aggregate basis, from                                   103               

 

                                                                                       the amount set forth for such calendar week as compared to the Budget and the most        recent weekly cash flow forecast delivered by the Loan Parties, in each case, for each        Testing Period (and each such Variance Report shall include reasonably detailed        explanations for all material variances (including Permitted Variances) and shall be        certified by a Responsible Officer of the Borrower;                (n)   commencing on the Fifth Amendment Effective Date, the Borrower shall        deliver to the Agents a daily (or such later date as may be agreed in the Agents’ sole        discretion and, if given, may be by e-mail) report of all proposed disbursements under the        Budget, together with a reconciliation identifying which specific line item in the Budget        such disbursement(s) relate to; and               (o)   (n) promptly following any request therefor, such other information        regarding the operations, business affairs and financial condition of any Loan Party, or        compliance with the terms of any Loan Document, as the Agents or any Lender may        reasonably request.         The  Borrower and the Agents hereby agree that the delivery of a Borrowing Base        Certificate through the Portal, subject to the Administrative Agent’s authentication        process (with results satisfactory to the Administrative Agent), by such other electronic        method as may be approved by the Administrative Agent from time to time in its sole        discretion, or by such other electronic input of information necessary to calculate the        Borrowing Base as may be approved by the Administrative Agent from time to time in its        sole discretion, shall in each case be deemed to satisfy the obligation of the Borrower to        deliver such Borrowing Base Certificate, with the same legal effect as if such Borrowing        Base Certificate had been manually executed by the Borrower and delivered to the        Administrative Agent.         SECTION 5.02.  Notices of Material Events.  The Borrower will furnish to the Agents  prompt written notice of the following:               (a)   the occurrence of any Default or Event of Default  (other than any        Specified Event of Default (as defined in the Fifth Amendment) existing as of the Fifth        Amendment Effective Date) ;               (b)   the filing or commencement of any action, suit or proceeding by or before        any arbitrator or Governmental Authority against or affecting any Loan Party or any        Affiliate thereof that, if adversely determined, could reasonably be expected to result in a        Material Adverse Effect;                (c)   the occurrence of any ERISA Event that, alone or together with any other        ERISA Events that have occurred, could reasonably be expected to result in a Material        Adverse Effect;                (d)   any other development that results in, or could reasonably be expected to        result in, a Material Adverse Effect;                                          104   

 

                                                                                             (e)   any change in any Loan Party’s senior executive officers (Executive Vice        President or higher) that must be reported to the SEC;               (f)   any failure by any Loan Party to pay rent at any of such Loan Party’s        locations, which failure continues for more than ten (10) days following the day on which        such rent first came due, which failure could reasonably likely have a Material Adverse        Effect; provided that the Loan Parties shall not be required to comply with this clause (f)        during the Forbearance Period;                (g)   the discharge by any Loan Party of its present independent accountants or        any withdrawal or resignation by such independent accountants , or the resignation or        termination of the engagement of the Independent Consultant or the Liquidator ;               (h)   any collective bargaining agreement or other labor contract to which a        Loan Party becomes a party, or the application for the certification of a collective        bargaining agent;                (i)   the filing of any Lien for unpaid Taxes in an amount exceeding $500,000         against any Loan Party that would reasonably be expected to have priority over the Lien         of the Collateral Agent in the Collateral or the Real Estate Collateral ; and               (j)   the renewal or extension of the term of the private label credit card        program with Comenity Bank or the termination of such program and the replacement of        Comenity Bank with any other third party administering a private label credit card        program for any of the Loan Parties.   Each notice delivered under this Section shall be accompanied by a statement of a Responsible  Officer of the Borrower setting forth the details of the event or development requiring such  notice and, if applicable, any action taken or proposed to be taken with respect thereto.         SECTION 5.03.  Information Regarding Collateral.               (a)   The Borrower will furnish to the Agents at least ten (10) days prior written  notice of any change (i) in any Loan Party’s corporate name or in any trade name used to identify  it in the conduct of its business or in the ownership of its properties, (ii) in the location of any  Loan Party’s chief executive office, its principal place of business, any office in which it  maintains books or records relating to Collateral or Real Estate Collateral  owned by it or any  office or facility at which Collateral or Real Estate Collateral  owned by it is located (including  the establishment of any such new office or facility), (iii) in any Loan Party’s corporate structure  or jurisdiction of incorporation or formation, or (iv) in any Loan Party’s Federal Taxpayer  Identification Number or organizational identification number assigned to it by its state of  organization. The Borrower also agrees promptly to notify the Agents if any material portion of  the Collateral or Real Estate Collateral  is damaged or destroyed.               (b)   Each year, at the time of delivery of annual financial statements with   respect to the preceding Fiscal Year pursuant to clause (a) of Section 5.01, the Borrower shall  deliver to the Agents a certificate of a Responsible Officer of the Borrower setting forth the  information required pursuant to Section 2 of the Perfection Certificate or confirming that there                                         105   

 

                                                                                 has been no change in such information since the date of the Perfection Certificate delivered on  the Fourth Amendment Effective Date or the date of the most recent certificate delivered  pursuant to this Section.          SECTION 5.04.  Existence; Conduct of Business.  Each Loan Party will, and will cause  each of its Subsidiaries to, do or cause to be done all things necessary to comply with its  respective Organizational Documents, as applicable, and to preserve, renew and keep in full  force and effect its legal existence and the rights, licenses, permits, privileges, franchises,  patents, copyrights, trademarks and trade names material to the conduct of its business (except to  the extent the failure to so preserve, renew and keep in full force and effect such rights, licenses,  permits, privileges, franchises, patents, copyrights, trademarks and trade names could not  reasonably be expected to result in a Material Adverse Effect), provided that the foregoing shall  not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.         SECTION 5.05.  Payment of Obligations.                 (a)   Each Loan Party will, and will cause each of the Subsidiaries to, pay its        Indebtedness and other obligations, including Tax liabilities, and claims for labor,        materials, or supplies, before the same shall become delinquent or in default, except        where ( ai) the validity or amount thereof is being contested in good faith by appropriate        proceedings, ( bii ) such Loan Party or such Subsidiary has set aside on its books adequate        reserves with respect thereto in accordance with GAAP, ( ciii ) such contest effectively        suspends collection of the contested obligation and enforcement of any Lien securing        such obligation, ( div ) no Lien has been filed with respect thereto, and ( ev) the failure to        make payment pending such contest could not reasonably be expected to result in a        Material Adverse Effect .; provided that the Loan Parties shall not be required to comply        with this clause (a) during the Forbearance Period; and               (b)   During the Forbearance Period, each Loan Party will, and will cause each        of the Subsidiaries to, absent the prior written consent of the Agents (which may be        withheld in the Agents’ sole discretion and, if given, may be by e-mail), pay its        Indebtedness and other obligations, including Tax liabilities, and claims for labor,        materials, or supplies, before the same shall become delinquent or in default (except as        set forth in the Budget), in each case as, when and to the extent provided in the Budget.               (c)   Nothing contained herein shall be deemed to limit the rights of the        Administrative Agent under Section 2.03(b) hereof.         SECTION 5.06.  Maintenance of Properties.  Each Loan Party will, and will cause each  of the Subsidiaries to, keep and maintain all property material to the conduct of its business in  good working order and condition, ordinary wear and tear excepted and with the exception of  store closings and asset dispositions permitted hereunder.          SECTION 5.07.  Insurance.               (a)   Each Loan Party shall (i) maintain insurance with financially sound and  reputable insurers reasonably acceptable to the Administrative Agent (or, to the extent consistent  with prudent business practice, a program of self-insurance) on such of its property and in at                                         106   

 

                                                                                 least such amounts and against at least such risks as is customary with companies in the same or  similar businesses operating in the same or similar locations, including public liability insurance  against claims for personal injury or death occurring upon, in or about or in connection with the  use of any properties owned, occupied or controlled by it (including the insurance required  pursuant to the Security Documents); (ii) maintain such other insurance as may be required by  law; and (iii) furnish to the Administrative Agent, upon written request, full information as to the  insurance carried.               (b)   Fire and extended coverage policies maintained with respect to any   Collateral and Real Estate Collateral  shall be endorsed or otherwise amended to include (i) a  mortgagee clause (regarding improvements to real property) and lenders’ loss payable clause  (regarding personal property), in form and substance satisfactory to the Collateral Agent, which  endorsements or amendments shall provide that the insurer shall pay all proceeds otherwise  payable to the Loan Parties under the policies directly to the Collateral Agent, (ii) a provision to  the effect that none of the Loan Parties, the Administrative Agent, the Collateral Agent, or any  other party shall be a coinsurer and (iii) such other provisions as the Collateral Agent may  reasonably require from time to time to protect the interests of the Lenders. Commercial general  liability policies shall be endorsed to name the Collateral Agent as an additional insured.  Business interruption policies shall name the Collateral Agent as a loss payee and shall be  endorsed or amended to include (x) a provision that, from and after the Effective Date, the  insurer shall pay all proceeds otherwise payable to the Loan Parties under the policies directly to  the Administrative Agent or the Collateral Agent, (y) a provision to the effect that none of the  Loan Parties, the Administrative Agent, the Collateral Agent or any other party shall be a  co-insurer and (z) such other provisions as the Collateral Agent may reasonably require from  time to time to protect the interests of the Lenders. Each such policy referred to in this paragraph  also shall provide that it shall not be canceled, modified or not renewed (A) by reason of  nonpayment of premium except upon not less than ten (10) days’ prior written notice thereof by  the insurer to the Collateral Agent (giving the Collateral Agent the right to cure defaults in the  payment of premiums) or (B) for any other reason except upon not less than sixty (60) days’  prior written notice thereof by the insurer to the Collateral Agent. The Borrower shall deliver to  the Agents, prior to the cancellation, modification or nonrenewal of any such policy of insurance,  a copy of a renewal or replacement policy (or other evidence of renewal of a policy previously  delivered to the Collateral Agent, including an insurance binder) together with evidence  satisfactory to the Collateral Agent of payment of the premium therefor.               (c)   If at any time the area in which any Real Estate that is subject to a  Mortgage is located is designated a “flood hazard area” in any Flood Insurance Rate Map  published by the Federal Emergency Management Agency (or any successor agency), (i) obtain  and maintain with financially sound and reputable insurance companies, such flood insurance in  such reasonable total amount as the Agents and the Lenders may from time to time reasonably  require and otherwise sufficient to comply with all applicable Flood Laws, and (ii) promptly  upon request of any Agent or any Lender, deliver to the Agents or such Lender as applicable,  evidence of such compliance in form and substance reasonably acceptable to the Agents or such  Lender, including, without limitation, evidence of annual renewals of such flood insurance.               (d)   Notwithstanding anything to the contrary contained herein (but subject to  the provisions of Section 5.14(d)), each of the parties hereto acknowledges and agrees that, if any                                         107   

 

                                                                                 Real Estate is subject to a Mortgage, any increase, extension or renewal of any of the  Commitments or Loans or any other incremental or additional credit facilities hereunder, but  excluding (i) any continuation or conversion of borrowings, (ii) the making of any Revolving  Loans, or (iii) the issuance or extension of Letters of Credit shall be subject to and conditioned  upon the prior delivery of all flood hazard determination certifications, acknowledgements and  evidence of flood insurance and other flood-related documentation with respect to such Real  Estate as required by the Flood Laws and as otherwise reasonably required by the Agents.         SECTION 5.08.  Casualty and Condemnation.  The Borrower will furnish to the Agents  and the Lenders prompt written notice of any casualty or other insured damage to any material  portion of the Collateral or Real Estate Collateral or  the commencement of any action or  proceeding for the taking of any interest in a material portion of the Collateral or Real Estate  Collateral  under power of eminent domain or by condemnation or similar proceeding.         SECTION 5.09.  Books and Records; Inspection and Audit Rights; Appraisals;  Accountants.                 (a)   Each Loan Party will, and will cause each of the Subsidiaries to, keep  proper books of record and account in accordance with GAAP and in which full, true and correct  entries are made of all dealings and transactions in relation to its business and activities. Each  Loan Party will, and will cause each of the Subsidiaries to, permit any representatives designated  by any Agent, upon reasonable prior notice, to visit and inspect its properties, to examine and  make extracts from its books and records, and to discuss its affairs, finances and condition with  its officers and its independent accountants, all at such reasonable times and as often as  reasonably requested.                (b)   Each Loan Party will, and will cause each of the Subsidiaries to, from time  to time upon the request of the Collateral Agent or the Required Lenders through the  Administrative Agent and after reasonable prior notice, permit any Agent or professionals  (including investment bankers, consultants, accountants, lawyers and appraisers) retained by the  Agents to conduct Inventory appraisals, Real Estate appraisals,  commercial finance examinations  and other evaluations, including, without limitation, of (i) the Borrower’s practices in the  computation of the Borrowing Base and (ii) the assets included in the Borrowing Base and  related financial information such as, but not limited to, sales, gross margins, payables, accruals  and reserves, and pay the reasonable fees and expenses of the Agents or such professionals with  respect to such evaluations and appraisals; provided that prior to the occurrence and continuation  of an Event of Default, the Loan Parties shall only be required to pay the fees and expenses for  (i) one four (4)  commercial finance examination and one examinations during each twelve month  period following the Fifth Amendment Effective Date, (ii) one (1) Inventory appraisal each  month, and (iii) one (1) Real Estate  appraisal during each twelve month period following the  Third Fifth  Amendment Effective Date so long as the conditions set forth in clauses (ii) or (iii)  below do not apply, (ii) two commercial finance examinations and two appraisals during each  twelve month period following the Third Amendment Effective Date if Excess Availability is at  any time for five (5) consecutive days or more, less than twenty-five percent (25%) of the  Adjusted Combined Loan Cap but equal to or greater than twelve and one-half percent (12.5%)  of the Adjusted Combined Loan Cap, and (iii) three (3) commercial finance examinations and  three (3) appraisals during each twelve (12) month period following the Third Amendment                                         108   

 

                                                                                 Effective Date if Excess Availability is at any time for five (5) consecutive days or more, less  than twelve and one-half percent (12.5%) of the Adjusted Combined Loan Cap with respect to  Real Estate subject to a Mortgage in favor of the Collateral Agent .  Notwithstanding the  foregoing limitations on the Loan Parties’ obligation to pay the expenses for appraisals and  commercial finance examinations prior to the occurrence of an Event of Default, the  Administrative Agent may (i) undertake such additional appraisals and commercials finance  examinations prior to the occurrence of an Event of Default as it, in its reasonable discretion,  deems necessary, at the expense of the Lenders, and (ii) if an Event of Default shall have  occurred and be continuing, undertake such additional appraisals and commercial finance  examinations at the Loan Parties’ expense as it deems appropriate.  In all events, if the Collateral  Agent has not undertaken the commercial finance examinations or inventory appraisals permitted  to be undertaken as set forth above, the Term Loan Agent may, in its discretion, direct the  Collateral Agent to do so upon written notice to the Collateral Agent.                  (c)   The Loan Parties shall, at all times, retain independent certified public  accountants who are reasonably satisfactory to the Administrative Agent and the Term Loan  Agent and instruct such accountants to cooperate with, and be available to, the Administrative  Agent and the Term Loan Agent, or their representatives, to discuss the Loan Parties’ financial  performance, financial condition, operating results, controls, and such other matters, within the  scope of the retention of such accountants, as may be raised by the Administrative Agent or the  Term Loan Agent.          SECTION 5.10.  Physical Inventories.               (a)   The Collateral Agent, at the expense of the Loan Parties, may observe   each physical count and/or inventory of so much of the Collateral as consists of Inventory which   is undertaken on behalf of the Borrower so long as such participation does not disrupt the normal   inventory schedule or process.                 (b)   The Borrower, at its own expense (either through the use of its employees   or third party inventory services), shall cause not less than one physical inventory of the   Borrower’s Inventory to be undertaken in each twelve (12) month period during which this   Agreement is in effect, using practices consistent with practices in effect on the date hereof.                (c)   The Borrower, within thirty (30) days following the completion of such   inventory, shall provide the Collateral Agent with a reconciliation of the results of each such   inventory (as well as of any other physical inventory undertaken by the Borrower) and shall post   such results to the Borrower’s stock ledger and general ledger, as applicable.                (d)   The Collateral Agent, in its discretion, if any Default exists, may cause   such additional inventories to be taken as the Collateral Agent determines (each, at the expense   of the Borrower).           SECTION 5.11.  Compliance with Laws.  Each Loan Party will, and will cause each of  the Subsidiaries to, comply with all Applicable Laws, except where the failure to do so,  individually or in the aggregate, could not reasonably be expected to result in a Material Adverse  Effect.                                          109   

 

                                                                                       SECTION 5.12.  Use of Proceeds and Letters of Credit.  The proceeds of Loans made  hereunder and Letters of Credit issued hereunder will be used only (a) to finance the acquisition  of working capital assets of the Borrower, including the purchase of Inventory, in the ordinary  course of business, (b) to finance Capital Expenditures of the Borrower, (c) for general corporate  purposes, including repurchases of capital stock of the Parent, payment of dividends and  Permitted Acquisitions, and (d) to pay transaction costs, fees and expenses, all of the foregoing  to the extent permitted herein.  No part of the proceeds of any Loan will be used, whether  directly or indirectly, and whether immediately, incidentally or ultimately, (w) to purchase or  carry Margin Stock or to extend credit to others for the purpose of purchasing or carrying any  such Margin Stock or extending credit to others for the purpose of purchasing or carrying any  such Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the  FRB; (x) to make any payments to a Sanctioned Entity or a Sanctioned Person, to finance any  investments in a Sanctioned Entity or a Sanctioned Person, to fund, directly or indirectly, any  investments, loans or contributions in, or otherwise make such proceeds available to, a  Sanctioned Entity or a Sanctioned Person, to fund, directly or indirectly, any operations,  activities or business of a Sanctioned Entity or a Sanctioned Person, or in any other manner that  would result in a violation of Sanctions by any Person; (y) in furtherance of an offer, payment,  promise to pay, or authorization of the payment or giving of money, or anything else of value, to  any Person in violation of any Sanctions, Anti-Corruption Laws or Anti-Money Laundering  Laws; or (z) for purposes other than those permitted under this Agreement.          SECTION 5.13.  Additional Subsidiaries.  If any additional Subsidiary of any Loan Party  is formed or acquired after the Third Amendment Effective Date, the Borrower will notify the  Agents and the Lenders thereof and, if such Subsidiary is not a Foreign Subsidiary, the Borrower  will cause such Subsidiary to become a Loan Party hereunder and under each applicable Security  Document in the manner provided therein within ten (10) Business Days after such Subsidiary is  formed or acquired and promptly take such actions to create and perfect Liens on such  Subsidiary’s assets to secure the Obligations as any Agent or the Required Lenders shall  reasonably request.           SECTION 5.14.  Further Assurances.               (a)   Each Loan Party will execute any and all further documents, financing  statements, agreements and instruments, and take all such further actions (including the filing  and recording of financing statements and other documents), that may be required under any  Applicable Law, or which any Agent may reasonably request, to effectuate the transactions  contemplated by the Loan Documents or to grant, preserve, protect or perfect the Liens created  or intended to be created by the Security Documents or the validity or priority of any such Lien,  all at the expense of the Loan Parties. The Loan Parties also agree to provide to the Agents, from  time to time upon request, evidence reasonably satisfactory to the Agents as to the perfection and  priority of the Liens created or intended to be created by the Security Documents.               (b)   If any material assets are acquired by any Loan Party after the Third  Amendment Effective Date (other than assets constituting Collateral under the Security  Agreement that become subject to the Lien of the Security Agreement upon acquisition thereof),  the Borrower will notify the Agents and the Lenders thereof, and the Loan Parties will cause  such assets to be subjected to a Lien securing the Obligations and will take such actions as shall                                         110   

 

                                                                                 be necessary or reasonably requested by any Agent to grant and perfect such Liens, including  actions described in paragraph (a) of this Section, all at the expense of the Loan Parties.                (c)   Upon the request of the Administrative Agent, the Borrower shall cause   each of its customs brokers to deliver an agreement to the Administrative Agent covering such   matters and in such form as the Administrative Agent may reasonably require.               (d)   Notwithstanding anything to the contrary contained herein (including  Section 5.13 hereof and this Section 5.14) or in any other Loan Document, (x) the Administrative  Agent shall not record any Mortgage from any Loan Party unless each of the Lenders has  received fifteen (15) days’ prior written notice thereof (which may be delivered electronically) or  the Administrative Agent has received confirmation from each Lender (not to be unreasonably  conditioned, withheld or delayed) that such Lender has completed its flood insurance diligence,  has received copies of all flood insurance documentation or has confirmed that flood insurance  compliance has been completed as required by the Flood Laws or as otherwise satisfactory to  such Lender, and (y) the Administrative Agent shall not accept delivery of any joinder to any  Loan Document with respect to any Subsidiary of any Loan Party that is not a Loan Party, if  such Subsidiary that qualifies as a “legal entity customer” under the Beneficial Ownership  Regulation unless such Subsidiary has delivered a Beneficial Ownership Certification in relation  to such Subsidiary and the Administrative Agent has completed its Patriot Act searches,  OFAC/PEP searches and customary individual background checks for such Subsidiary, the  results of which shall be reasonably satisfactory to the Administrative Agent.         SECTION 5.15.  OFAC; Anti-Corruption Laws; Anti-Money Laundering Laws.  Each  Loan Party will, and will cause each of its Subsidiaries to, comply with all applicable Sanctions,  Anti-Corruption Laws and Anti-Money Laundering Laws.  Each of the Loan Parties and its  Subsidiaries shall implement and maintain in effect policies and procedures designed to ensure  compliance by the Loan Parties and their Subsidiaries and their respective directors, officers,  employees, agents and Affiliates with all Sanctions, Anti-Corruption Laws and Anti-Money  Laundering Laws.  Each of the Loan Parties shall and shall cause their respective Subsidiaries to  comply with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.          SECTION 5.16.  Performance Within Budget.  At all times following the Fifth  Amendment Effective Date, each Loan Party will, and will cause each of its Subsidiaries to,  strictly perform in accordance with the Budget (subject to Permitted Variances (as defined  below)), including having made all scheduled payments to the Credit Parties as applicable as and  when required.  Furthermore, the Loan Parties agree that, absent the prior written consent of the  Agents (which may be withheld in the Agents’ sole discretion and, if given, may be by e-mail),  the Borrower’s (a) aggregate Cash Receipts on a cumulative basis shall not be less than 95% of  the projected amounts set forth in the Budget with respect thereto and (b) Total Disbursements  on a cumulative basis shall not exceed in the aggregate 105% of the projected amounts set forth  in the Budget with respect thereto (the “Permitted Variances”), although in each case the  variances under the Variance Report in accordance with Section 5.01(m) shall be reported on a  line-item (and not an aggregate) basis and tested on an aggregate basis.  The foregoing shall be  reported on Wednesday of each week on a cumulative basis commencing with the first such day  to occur after the second full calendar week following the Fifth Amendment Effective Date, and  thereafter on a weekly and a cumulative basis (each of the foregoing periods, a “Testing Period”)                                         111   

 

                                                                                 pursuant to the Variance Report delivered by the Borrower to the Agents in accordance with  Section 5.01(m).            SECTION 5.17.  Retention of and Communication with Consultants, Liquidators and  Financial Advisors.                                       ARTICLE VI                                    Negative Covenants               (a)   Until (i) the Commitments have expired or been terminated, and (ii) the  principal of and interest on each Loan and all fees and other Each Loan Party will, and will cause  each of its Subsidiaries to, continue to retain the Independent Consultant and the Liquidator, the  scope and terms of such engagement to be reasonably satisfactory to the Agents.  Until such time  as all  Obligations payable hereunder shall have been paid in full, and (iii) all Letters of Credit  shall have expired or terminated or been collateralized, to the extent of 103% of the then Letter  of Credit Outstandings, by cash or a letter of credit issued by a financial institution and on  terms the Loan Parties shall continue to retain (i) the Independent Consultant to assist the Loan  Parties with the preparation of the Budget and the other financial and Collateral reporting  required to be delivered to the Agents and the Lenders pursuant to this Agreement, and (ii) the  Liquidator to conduct Liquidations (including, without limitation, store conversions) as provided  in liquidation agreements in form and substance  reasonably satisfactory to the Administrative  Agent, and (iv) all L/C Disbursements shall have been reimbursed Agents.                 (b)   Each Loan Party will, and will cause each of its Subsidiaries to allow the  Agents and the Lenders access to, upon reasonable notice during normal business hours, all  financial professionals engaged by the Loan Parties, including, but not limited to, the  Independent Consultant (which engagement, with respect to any financial professionals engaged  after the Fifth Amendment Effective Date, shall be on terms and conditions reasonably  satisfactory to the Agents).               (c)   The Loan Parties authorize the Agents and each Lender Group Consultant  (as defined below) to communicate directly with its independent certified public accountants,  appraisers, financial advisors, investment bankers and consultants (including the Independent  Consultant and the Liquidator), which have been engaged from time to time by the Loan Parties,  and authorizes and shall instruct those accountants, appraisers, financial advisors, investment  bankers and consultants to communicate to the Agents information relating to each Loan Party  with respect to the business, results of operations, prospects and financial condition of such Loan  Party.  Senior management of the Loan Parties and such financial and restructuring consultants  shall (unless the Agents otherwise consent, which consent may be by e-mail) participate in  weekly telephonic calls with the Agents and Lenders (and/or their advisors and counsel) to  discuss various matters, including the Budget and Permitted Variances.               (d)   Each Loan Party acknowledges that the Agents shall be permitted to  engage such outside consultants and advisors (each, a “Lender Group Consultant”), for the sole  benefit of the Agents and the other Credit Parties, as the Agents may determine to be necessary  or appropriate in their sole discretion.  Each Loan Party and agrees that (i) such Loan Party shall                                         112   

 

                                                                                 provide its complete cooperation during business hours with any Lender Group Consultant  (including, without limitation, providing reasonable access to such Loan Party’s business, books  and records; provided that no Loan Party shall be required to disclose to the Lender Group  Consultant any information (x) restricted by a third party confidentiality agreement, (y) in  respect of which disclosure to the Lender Group Consultant is prohibited by applicable law, or  (z) that is subject to attorney-client or similar privilege or constitutes attorney work product;  provided further that in the event that information is withheld as a result of any such  confidentiality agreement or attorney-client or similar privilege, the Loan Parties shall (1) use  commercially reasonable efforts to obtain waivers of such confidentiality obligations or  eliminate any such restriction and to communicate, to the extent permitted, the applicable  information in a way that would not violate such restrictions, and (2) notify the Administrative  Agent to the extent the Loan Parties are not providing otherwise requested information); and (ii)  all reasonable costs and expenses of any such Lender Group Consultant shall be Credit Party  Expenses; and (iii) all reports, determinations and other written and verbal information provided  by any Lender Group Consultant shall be confidential and no Loan Party shall be entitled to have  access to same.                                     ARTICLE VI                                  Negative Covenants         Until payment in full of the Obligations , each Loan Party covenants and agrees with the  Agents and the Lenders that:         SECTION 6.01.  Indebtedness and Other Obligations.               (a)   The Loan Parties will not, and will not permit any Subsidiary to, create,  incur, assume or permit to exist any Indebtedness, except:                     (i)   Indebtedness created under the Loan Documents;                     (ii)  Indebtedness set forth in Schedule 6.01 and extensions, renewals        and replacements of any such Indebtedness provided that after giving effect to the        refinancing (i) the principal amount of the outstanding Indebtedness is  not increased, (ii)        neither the tenor nor the average life is reduced, and (iii) the holders of such refinancing        Indebtedness are not afforded covenants, defaults, rights or remedies more burdensome in        any material respect to the obligor or obligors than those contained in the Indebtedness        being refinanced;                     (iii)  Indebtedness of any Loan Party to any other Loan Party, all of         which Indebtedness shall be reflected in the Loan Parties’ books and records in         accordance with GAAP;                      (iv)  Indebtedness of any Loan Party (A) to finance the acquisition of         any fixed or capital assets, including Capital Lease Obligations, (B) incurred pursuant to         a financing of any fixed or capital assets which are owned and unencumbered at the time         of such financing, or (C) assumed in connection with the acquisition of any such assets or                                         113   

 

                                                                                       secured by a Lien on any such assets prior to the acquisition thereof, and extensions,        renewals and replacements of any of the foregoing Indebtedness that do not increase the        outstanding principal amount thereof or result in an earlier maturity date or decreased        weighted average life thereof, provided that the aggregate principal amount of        Indebtedness permitted by this clause (iv) shall not exceed $100,000,000 at any time        outstanding;                     (v)   Indebtedness incurred to finance or refinance any Real Estate        owned by any Loan Party or incurred in connection with sale-leaseback transactions        permitted hereunder;                     (vi)  Indebtedness under Hedging Agreements, other than for        speculative purposes, entered into in the ordinary course of business;                     (vii)  Contingent liabilities under surety bonds or similar instruments        incurred in the ordinary course of business in connection with the construction or        improvement of stores;                     (viii)  Indebtedness incurred to finance insurance premiums in the        ordinary course of business;                      (ix)  Guarantees by a Loan Party of any obligations of another Loan        Party, as long as such obligations are not otherwise prohibited hereunder;                      (x)   any Indebtedness arising under any Leases of the Loan Parties;                     (xi)  any Indebtedness assumed by the Parent, the Borrower, or any of        their Subsidiaries in connection with a Permitted Acquisition; and                     (xii)  other unsecured Indebtedness, including Subordinated        Indebtedness, in an aggregate principal amount not exceeding $100,000,000 at any time        outstanding, provided that the terms of such Indebtedness are reasonably acceptable to        the Administrative Agent (such consent of Administrative Agent not to be unreasonably        withheld).               (b)   None of the Loan Parties will, nor will they permit any Subsidiary to,  issue any preferred stock (except for preferred stock (i) all dividends in respect of which are to  be paid (and all other payments in respect of which are to be made) in additional shares of such  preferred stock, in lieu of cash, (ii) that is not subject to redemption other than redemption at the  option of the Loan Party issuing such preferred stock and (iii) all payments in respect of which  are expressly subordinated to the Obligations) or be or become liable in respect of any obligation  (contingent or otherwise) to purchase, redeem, retire, acquire or make any other payment in  respect of (A) any shares of capital stock of any Loan Party or (B) any option, warrant or other  right to acquire any such shares of capital stock, except for obligations related to agreements or  plans existing as of the Fourth Amendment Effective Date.         SECTION 6.02.  Liens.  The Loan Parties will not, and will not permit any Subsidiary to,  create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter                                         114   

 

                                                                                 acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights  in respect of any thereof, except:               (a)   Liens created under the Loan Documents;               (b)   Permitted Encumbrances;                (c)   any Lien on any property or asset of any Loan Party set forth in Schedule        6.02, provided that (i) such Lien shall not apply to any other property or asset of any        Loan Party and (ii) such Lien shall secure only those obligations that it secures as of the        Third Amendment Effective Date, and extensions, renewals and replacements thereof that        do not increase the outstanding principal amount thereof;                (d)   Liens on fixed or capital assets acquired by any Loan Party, provided that        (i) such Liens secure Indebtedness permitted by clause (iv) of Section 6.01(a), (ii) such        Liens and the Indebtedness secured thereby are incurred prior to or within ninety        (90) days after such acquisition or the completion of such construction or improvement,        (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring such        fixed or capital assets and (iv) such Liens shall not extend to any other property or assets        of the Loan Parties;                (e)   Liens to secure Indebtedness permitted by clause (v) of Section 6.01(a)        provided that such Liens shall not apply to any property or assets of the Loan Parties        other than the Real Estate so financed or refinanced or which is the subject of a sale-       leaseback transaction;                (f)   Liens on proceeds of credit card charges created or contemplated by any        agreements with Comenity Bank or any other third party administering a private label        credit card program for any of the Loan Parties, Visa, MasterCard, American Express,        Discovercard and any other major credit card processors, held by such processor to        secure chargebacks and fees arising in the ordinary course of business with respect to the        processing of credit card charges; and               (g)   licenses and sublicenses of Intellectual Property granted on a non-       exclusive basis in the ordinary course of business ; provided that such licenses and        sublicenses do not interfere with the Collateral Agent’s exercise of rights and remedies        under the Loan Documents .         SECTION 6.03.  Fundamental Changes.                 (a)   The Loan Parties will not merge into or consolidate with any other Person,  or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except  that, if at the time thereof and immediately after giving effect thereto no Default or Event of  Default shall have occurred and be continuing, (i) any Facility Guarantor may merge into any  other Facility Guarantor, provided that in any such transaction involving the Parent, the Parent  shall be the surviving entity, and (ii) mergers may take place in connection with Permitted  Acquisitions, and (iii) any Facility Guarantor (other than the Parent) may liquidate or dissolve  voluntarily into the Parent, further provided that neither the Parent nor any of its Subsidiaries                                         115   

 

                                                                                 shall be required to preserve any right, permit, license, approval, privilege or franchise if the  board of directors of the Parent or the board of directors, board of members, manager(s) or  general partners, as applicable, of such Subsidiary shall determine that the presentation thereof is  no longer desirable in the conduct of the business of the Parent or such Subsidiary, as the case  may be, and the loss thereof could not reasonably be expected to result in a Material Adverse  Effect.               (b)   The Loan Parties will not engage, to any material extent, in any business   other than businesses substantially the same as, reasonably related to, or complementary to one   or more lines of business conducted by the Loan Parties on the Third Amendment Effective Date   (as, for example, physical and online retail stores with inventory categories comparable to those   in Borrower’s existing stores but in formats with different retail pricing structures); provided that  any Inventory in such stores shall not be considered Eligible Inventory unless and until the  Collateral Agent has completed an appraisal of such Inventory, establishes an advance rate and  Inventory Reserves (if applicable) therefor, and otherwise agrees that such Inventory shall be  deemed Eligible Inventory.         SECTION 6.04.  Investments, Loans, Advances, Guarantees and Acquisitions.  The  Loan Parties will not purchase, hold or acquire (including pursuant to any merger with any  Person that was not a wholly owned Subsidiary prior to such merger) any capital stock,  evidences of Indebtedness or other securities (including any option, warrant or other right to  acquire any of the foregoing) of, make or permit to exist any loans or advances to, guarantee any  obligations of, or make or permit to exist any Investment or any other interest in, any other  Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets  of any other Person constituting a business unit, except:                (a)   Permitted Investments;                (b)   Investments existing on the Third Amendment Effective Date, and set        forth on Schedule 6.04;               (c)   loans or advances made by any Facility Guarantor to any other Loan        Party;               (d)   Guarantees constituting Indebtedness permitted by Section 6.01;               (e)   Investments received in connection with the bankruptcy or reorganization        of, or settlement of delinquent accounts and disputes with, customers and suppliers, in        each case in the ordinary course of business;                (f)   Permitted Acquisitions;               (g)   loans or advances to employees in the ordinary course of business in an        amount not to exceed $2,500,000 in the aggregate at any time outstanding;               (h)   Investments in Subsidiaries that have become Loan Parties by compliance         with Section 5.13;                                          116   

 

                                                                                             (i)   Investments consisting of the acquisition of credit card receivables from         Comenity Bank or any other third party administering a private label credit card program         for any of the Loan Parties, in the ordinary course of business in connection with the         termination of such private label credit card program;                 (j)   Trade credit extended on usual and customary terms in the ordinary course         of business;                (k)   Investments in the nonqualified deferred compensation plans sponsored by         one or more Loan Parties from time to time; and                (l)   other Investments not to exceed $25,000,000 in the aggregate at any time         outstanding.          SECTION 6.05.  Asset Sales.  The Loan Parties will not, and will not permit any of the  Subsidiaries to, sell, transfer, lease or otherwise dispose of  (including by an allocation of assets  among newly divided limited liability companies pursuant to a “plan of division”) any asset,  including any capital stock, nor will the Loan Parties permit any of the Subsidiaries to issue any  additional shares of its capital stock or other ownership interest in such Subsidiary, except:                (a)   (i) sales of Inventory, or (ii) sales of used, uneconomical, obsolete, worn        out or surplus assets (other than Collateral or Real Estate  Collateral) and equipment, or        (iii)  Permitted Investments, in each case ((i) through (iii)) in the ordinary course of        business;                (b)   sales, transfers and dispositions among the Loan Parties and their        Subsidiaries, provided that (i) any such sales, transfers or dispositions involving a        Subsidiary that is not a Loan Party shall be made in compliance with Section 6.07 and (ii)        in the event of a sale, transfer or disposition of material Material  Intellectual Property        used in connection with the assets included in the Borrowing Base, the Revolving Loan        Borrowing Base or the Term Loan Borrowing Base to a Foreign Subsidiary, the        purchaser, assignee or other transferee thereof agrees in writing to be bound by a non-       exclusive royalty-free worldwide license of such Material  Intellectual Property in favor        of the Collateral Agent for use in connection with the exercise of the rights and remedies        of the Credit Parties, which license shall be in form and substance reasonably satisfactory        to the Collateral Agent;               (c)   sale-leaseback transactions involving any Loan Party’s Real Estate as long        as if the Administrative Agent so requests (in advance of the consummation of such        transaction to the extent the Administrative Agent received written notice of such sale-       leaseback transaction prior to such consummation), the Administrative Agent shall have        received an intercreditor agreement executed by the purchaser of such Real Estate on        terms and conditions reasonably satisfactory to the Administrative Agent;               (d)   as long as no Overadvance shall result after giving effect thereto, the sale        or disposition of any Inventory or other Collateral (other than Intellectual Property) in        connection with the closure of any locations at which the Borrower maintains, offers for        sale or stores any of its Inventory or other Collateral; provided that (i)  any such sale or                                         117   

 

                                                                                       disposition shall be conducted by such Persons and on such terms as the Borrower and        the Collateral Agent may agree, and (ii) the aggregate amount of Inventory which may be        sold or disposed of shall not exceed ten percent (10%) of the Cost of the Borrower’s        Eligible Inventory as of the Fourth Amendment Effective Date;                 (e)   any issuance of shares of capital stock of the Parent in accordance with the        existing restricted stock and stock option plans or agreements or in connection with any        Permitted Acquisition; and               (f)   sales, transfers or other dispositions of credit card receivables to Comenity        Bank pursuant to its private label credit card program with the Loan Parties or to any        other third party replacing Comenity Bank and administering a private label credit card        program for any of the Loan Parties;   provided that all sales, transfers, leases and other dispositions permitted hereby shall be made at  arm’s length and for fair value and solely for cash consideration; and further provided that the  authority granted under clauses (b) through (d) hereof, with respect to any transactions described  therein that have not then been consummated, may be terminated in whole or in part by the  Agents upon the occurrence and during the continuance of any Event of Default.   Notwithstanding anything to the contrary contained herein, (i) in the event of a sale, transfer,  lease or other disposition in respect of Material Intellectual Property (or the equity interests of  any Subsidiary that owns Material Intellectual Property), such transaction shall not be permitted  unless the purchaser, assignee or other transferee thereof agrees in writing to be bound by a non- exclusive royalty-free worldwide license of such Material Intellectual Property in favor of the  Collateral Agent for use in connection with the exercise of the rights and remedies of the Credit  Parties, which license shall be in form and substance reasonably satisfactory to the Collateral  Agent, and (ii) no Loan Party or any Subsidiary shall sell, transfer, lease or otherwise dispose of  any Material Intellectual Property (or the equity interests of any Subsidiary that owns Material  Intellectual Property) (in each case, whether as a disposition permitted under this Section 6.05, a  Permitted Investment, a Permitted Encumbrance or otherwise) without the consent of the Agents  and the Required Lenders.         SECTION 6.06.  Restricted Payments; Certain Payments of Indebtedness.           (a)   The Loan Parties will not, and will not permit any Subsidiary to, declare or make,  or agree to pay or make, directly or indirectly, any Restricted Payment, except as long as no  Default or Event of Default exists or would arise therefrom (i) the Loan Parties may declare and  pay dividends with respect to their capital stock payable solely in additional shares of or warrants  to purchase their common stock, (ii) the Loan Parties may declare splits, reverse splits or  reclassifications of their stock into additional or other shares of their common stock, (iii) the  Borrower may pay cash dividends or otherwise transfer funds to the Parent for operating  expenses incurred in the normal course of business by the Parent or paid by the Parent on behalf  of the Borrower (including all payroll and benefits costs for all Subsidiaries of the Parent,  telephone, travel, rent and other occupancy costs, professional expenses, including consulting,  audit, accounting and legal expenses, corporate insurance expenses, data processing costs and  other operating expenses), and  (iv ) the Parent may pay cash dividends in an amount not to                                         118   

 

                                                                                 exceed $30,000,000 in each Fiscal Year, and (v ) only if the Payment Conditions are then  satisfied, (x) the Parent may repurchase its capital stock and/or declare and pay other cash  dividends to its shareholders, and (y) the Subsidiaries of the Parent may declare and pay cash  dividends to the Parent or to any other Loan Party which is its stockholder.               (b)   The Loan Parties will not, and will not permit any Subsidiary to, make or  agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash,  securities or other property) of or in respect of principal of, interest on, or fees or other charges  with respect to any Indebtedness, or any payment or other distribution (whether in cash,  securities or other property), including any sinking fund or similar deposit, on account of the  purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness  (other than the Obligations), except as long as no Event of Default has occurred and is  continuing or would result from such payments:                     (i)   payment of regularly scheduled interest, fees, and charges and        principal payments as and when due in respect of any other Indebtedness permitted        hereunder; and                     (ii)  refinancings of Indebtedness to the extent permitted by        Section 6.01.               (c)   Notwithstanding any of the restrictions or limitations described in Sections  6.06(a) or 6.06(b ), but subject to Section 6.06(d ), the Parent and its Subsidiaries may repurchase  its respective capital stock and equity interests and/or declare and pay cash dividends to its  shareholders and members solely with the proceeds received and tax benefits realized by the  Parent or such Subsidiary resulting from or related to the exercise of stock options granted  pursuant to stock option plans adopted by the Parent or such Subsidiary, which options are  exercised in accordance with the terms and conditions described in such plans.               (d)   Notwithstanding anything to the contrary contained herein, (i) in the event  of a Restricted Payment in respect of Material Intellectual Property (or the equity interests of any  Subsidiary that owns Material Intellectual Property), such Restricted Payment shall not be  permitted unless the recipient thereof agrees in writing to be bound by a non-exclusive royalty- free worldwide license of such Material Intellectual Property in favor of the Collateral Agent for  use in connection with the exercise of the rights and remedies of the Credit Parties, which license  shall be in form and substance reasonably satisfactory to the Collateral Agent, and (ii) no Loan  Party or any Subsidiary shall make any Restricted Payment in respect of Material Intellectual  Property (or the equity interests of any Subsidiary that owns Material Intellectual Property) (in  each case, whether as a disposition permitted under Section 6.05, a Permitted Investment, a  Permitted Encumbrance or otherwise) without the consent of the Agents and the Required  Lenders.         SECTION 6.07.  Transactions with Affiliates.  The Loan Parties will not, and will not  permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase,  lease or otherwise acquire any property or assets from, or otherwise engage in any other  transactions with, any of its Affiliates, except transactions in the ordinary course of business that                                          119   

 

                                                                                 are at prices and on terms and conditions not less favorable to the Loan Parties or such  Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties.            SECTION 6.08.  Restrictive Agreements.  The Loan Parties will not, and will not permit  any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or  other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the  Loan Parties or any Subsidiary to create, incur or permit to exist any Lien upon any of its  property or assets or (b) the ability of any Subsidiary to pay dividends or other distributions with  respect to any shares of its capital stock or to make or repay loans or advances to the Loan  Parties or any other Subsidiary or to guarantee Indebtedness of the Loan Parties or any other  Subsidiary, provided that (i) the foregoing shall not apply to restrictions and conditions imposed  by law or by any Loan Document, (ii) clause (a) of the foregoing shall not apply to restrictions or  conditions imposed by any agreement relating to secured Indebtedness permitted by this  Agreement if such restrictions or conditions apply only to the property or assets securing such  Indebtedness, and (iii) clause (a) of the foregoing shall not apply to customary provisions in  leases restricting the assignment or subleasing thereof.          SECTION 6.09.  Amendment of Material Documents.  The Loan Parties will not, and  will not permit any Subsidiary to, amend, modify or waive any of their rights under term,  provision or condition of  (i) their Organizational Documents, to the extent that such amendment,  modification or waiver would reasonably likely have a Material Adverse Effect, (ii) any  Subordinated Indebtedness, except to the extent such amendment, modification or waiver is  expressly permitted pursuant to the subordination terms governing such  Subordinated  Indebtedness, or (iii) any other instruments, documents or agreements, in each case with respect  to this clause (iii), to the extent that such amendment, modification or waiver would be  materially adverse to the interests of the Lenders.  The Loan Parties will not, and will not permit  any Subsidiary to, terminate the private label credit card program with Comenity Bank (other  than at the expiration of the term thereof in the ordinary course of business), except to the extent  the Loan Parties replace Comenity Bank with another third party administering a private label  credit card program for any of the Loan Parties and such third party enters into an Intercreditor  Agreement intercreditor agreement  with the Administrative Agent , which intercreditor agreement  shall be in form and substance reasonably satisfactory to the Administrative Agent .         SECTION 6.10.  Additional Subsidiaries.  The Loan Parties will not, and will not permit  any Subsidiary to, create any additional Subsidiary unless no Default or Event of Default would  arise therefrom and the requirements of Section 5.13 are satisfied.         SECTION 6.11.  Excess Availability.  The Borrower shall not at any time permit Excess  Availability to be less than (i) from the Fifth Amendment Effective Date through and including  the last day of the Forbearance Period, $30,000,000, and (ii) at all other times,  the greater of (a)  $35,000,000 or (b) ten percent (10%) of the Adjusted Combined Loan Cap.          SECTION 6.12.  Fiscal Year.  The Parent and its Subsidiaries shall not change their  Fiscal Year without the prior written consent of the Administrative Agent, which consent shall  not be unreasonably withheld, conditioned or delayed.                                          120   

 

                                                                                       SECTION 6.13.  Environmental Laws.  The Loan Parties shall not (a) fail to comply  with any Environmental Law or to obtain, maintain or comply with any permit, license or other  approval required under any Environmental Law, or (b) become subject to any Environmental  Liability except, in each case, to the extent the same could not reasonably be expected to result in  a Material Adverse Effect.                                     ARTICLE VII                                   Events of Default         SECTION 7.01.  Events of Default.  If any of the following events (“Events of Default”)  shall occur:               (a)   the Loan Parties shall fail to pay any principal of any Loan or any        reimbursement obligation in respect of any L/C Disbursement when and as the same shall        become due and payable, whether at the due date thereof or at a date fixed for prepay-       ment thereof or otherwise;                (b)   the Loan Parties shall fail to pay any interest on any Loan or any fee or         any other amount (other than an amount referred to in clause (a) of this Article) payable         under this Agreement or any other Loan Document, when and as the same shall become         due and payable;                (c)   any representation or warranty made or deemed made by or on behalf of         any Loan Party in or in connection with any Loan Document (including, without         limitation, any Borrowing Base Certificate), or in completing any request for a         Borrowing via the Portal, or in any amendment or modification thereof or waiver         thereunder, or in any report, certificate, financial statement or other document furnished         pursuant to or in connection with any Loan Document or any amendment or modification         thereof or waiver thereunder, shall prove to have been (i)  incorrect or misleading  in any        material respect when made or deemed made , or (ii) with respect to any representation or        warranty qualified by materiality, incorrect or misleading in any respect ;               (d)   the Loan Parties shall fail to observe or perform any covenant, condition        or agreement contained in Sections 2.23, 5.01(e),  5.01(f), 5.01(m), 5.01(n),  5.02(a), 5.07        (with respect to insurance covering the Collateral  or Real Estate Collateral ), 5.09, or 5.12,        5.16 or 5.17  or in Article VI;               (e)   any Loan Party shall fail to observe or perform any covenant, condition or         agreement contained in Sections 5.01 (other than Section 5.01(f)), Sections 5.01(e),         5.01(f), 5.01(m) or 5.01(n)),  5.02 (other than Section 5.02(a)), or 5.03, and such failure        shall continue unremedied for a period of ten (10) days after notice thereof from the        Administrative Agent to the Borrower;               (f)   any Loan Party shall fail to observe or perform any covenant, condition or         agreement contained in any Loan Document (other than those specified in clause (a), (b),                                          121   

 

                                                                           (c), (d), or (e) of this Article), and such failure shall continue unremedied for a period of  thirty (30) days after notice thereof from the Administrative Agent to the Borrower;          (g)   any Loan Party shall fail to make any payment (whether of principal or   interest and regardless of amount) in respect of any Material Indebtedness when and as   the same shall become due and payable (after giving effect to the expiration of any grace   or cure period set forth therein);          (h)   any event or condition occurs that results in any Material Indebtedness   becoming due prior to its scheduled maturity or that enables or permits (with or without   the giving of notice, the lapse of time or both) the holder or holders of any such Material   Indebtedness or any trustee or agent on its or their behalf to cause any such Material   Indebtedness to become due, or to require the prepayment, repurchase, redemption or   defeasance thereof, prior to its scheduled maturity;         (i)   an involuntary proceeding shall be commenced or an involuntary petition  shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Loan  Party or its debts, or of a substantial part of its assets, under any Debtor Relief Law or  (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar  official for any Loan Party or for a substantial part of its assets, and, in any such case,  such proceeding or petition shall continue undismissed for forty-five (45) days or an  order or decree approving or ordering any of the foregoing shall be entered;         (j)   any Loan Party shall (i) voluntarily commence any proceeding or file any   petition seeking liquidation, reorganization or other relief under any Debtor Relief Law,   (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any   proceeding or petition described in clause (i) of this Section 7.01, (iii) apply for or  consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or  similar official for any Loan Party or for a substantial part of its assets, (iv) file an answer  admitting the material allegations of a petition filed against it in any such proceeding,  (v) make a general assignment for the benefit of creditors or (vi) take any action for the  purpose of effecting any of the foregoing;         (k)   any Loan Party shall become unable, admit in writing its inability or fail  generally to pay its debts as they become due;         (l)   (i) one or more final judgments for the payment of money in an aggregate  amount in excess of $10,000,000 shall be entered against any Loan Party or any of its  Subsidiaries and the same is not satisfied, discharged, vacated, bonded or stayed pending  appeal within a period of thirty (30) consecutive days following the date of entry;               (ii)  any non-monetary final judgment or order shall have been entered  against any Loan Party or any of its Subsidiaries that is reasonably likely to have a  Material Adverse Effect and the same is not discharged, vacated, bonded or stayed  pending appeal within a period of thirty (30) consecutive days following the date of  entry;                                    122               

 

                                                                                 (m)   an ERISA Event shall have occurred that when taken together with all  other ERISA Events that have occurred, could reasonably be expected to result in liability  of the Loan Parties in an aggregate amount exceeding $10,000,000;          (n)   (i) any challenge by or on behalf of any Loan Party to the validity of any  Loan Document or the applicability or enforceability of any Loan Document strictly in  accordance with the subject Loan Document’s terms or which seeks to void, avoid, limit,  or otherwise adversely affect any security interest created by or in any Loan Document or  any payment made pursuant thereto;               (ii)  any challenge by or on behalf of any other Person to the validity of  any Loan Document or the applicability or enforceability of any Loan Document strictly  in accordance with the subject Loan Document’s terms or which seeks to void, avoid,  limit, or otherwise adversely affect any security interest created by or in any Loan  Document or any payment made pursuant thereto, which challenge the Administrative  Agent has determined is reasonable likely to have a Material Adverse Effect;               (iii)  any Lien purported to be created under any Security Document  shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected  Lien on any Collateral  or Real Estate Collateral , with the priority required by the  applicable Security Document, except as a result of any acts or omissions of any Agent or  the sale or other disposition of the applicable Collateral or Real Estate Collateral  in a  transaction permitted under the Loan Documents;         (o)   the occurrence of any uninsured loss to any material portion of the  Collateral  or Real Estate Collateral ;          (p)   the indictment of, or institution of any legal process or proceeding against,  any Loan Party, under any federal, state, municipal, and other civil or criminal statute,  rule, regulation, order, or other requirement having the force of law where the relief,  penalties, or remedies sought or available include the forfeiture of any material property  of any Loan Party and/or the imposition of any stay or other order, the effect of which  could reasonably be to restrain in any material way the conduct by the Loan Parties, taken  as a whole, of their business in the ordinary course, in each case which the  Administrative Agent has determined is reasonably likely to have a Material Adverse  Effect;          (q)   the determination by the Borrower, whether by vote of the Borrower’s   partners or otherwise , to : (i)  suspend the operation of the Borrower’s business in the  ordinary course, (ii)  liquidate all or a material portion of the Borrower’s assets (other than  a sale of its private label credit card portfolio) or store locations, or (iii) without the prior  written consent of the Agents (which may be by e-mail),  employ an agent or other third  party to conduct a program of closings, liquidations or “Going-Out-Of-Business” sales of  any material portion of the business; or provided that the occurrence of any event  described in the foregoing clause (i) shall not constitute an Event of Default during the  Suspension Period;                                     123               

 

                                                                                             (r)   Any Change in Control;  or                (s)   (i)  The subordination provisions of the documents evidencing or        governing any Subordinated Indebtedness (the foregoing, the “Subordination        Provisions”) shall, in whole or in part, terminate, cease to be effective or cease to be        legally valid, binding and enforceable; or (ii) the Borrower or any other Loan Party shall,        directly or indirectly, (A) make any payment on account of any Subordinated        Indebtedness that has been contractually subordinated in right of payment to the payment        of the Obligations, except to the extent that such payment is permitted by the terms of the        Subordination Provisions applicable to such Subordinated Indebtedness or (B) disavow or        contest in any manner (x) the effectiveness, validity or enforceability of any of the        Subordination Provisions, (y) that the Subordination Provisions exist for the benefit of        the Credit Parties, or (z) that all payments of principal of or premium and interest on the        applicable Subordinated Indebtedness, or realized from the liquidation of any property of        any Loan Party, shall be subject to any of the Subordination Provisions;    then, and in every such event (other than an event with respect to any Loan Party described in  clause (i) or (j) of this Section 7.01), and at any time thereafter during the continuance of such  event, the Administrative Agent may, and at the request of the Required Lenders shall, by written  notice to the Borrower, take any or all of the following actions, at the same or different  times:  (i) terminate all or any portion of the Commitments, and thereupon all or such portion of  the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due  and payable in whole (or in part, in which case any principal not so declared to be due and  payable may thereafter be declared to be due and payable), and thereupon the principal of the  Loans so declared to be due and payable, together with accrued interest thereon and all fees and  other Obligations of the Loan Parties accrued hereunder, shall become due and payable  immediately, without presentment, demand, protest or other notice of any kind, all of which are  hereby waived by the Loan Parties, and (iii) require the Borrower to furnish cash collateral in an  amount equal to 103% of the Letter of Credit Outstandings; and in case of any event with respect  to any Loan Party described in clause (i) or (j) of this Section 7.01, (x) the Commitments shall  automatically terminate, (y) the principal of the Loans then outstanding, together with accrued  interest thereon and all fees and other Obligations of the Loan Parties accrued hereunder, shall  automatically become due and payable, without presentment, demand, protest or other notice of  any kind, all of which are hereby waived by the Loan Parties, and (z) the Borrower shall  automatically be obligated to furnish, and the Borrower agrees that it shall promptly furnish, cash  collateral in an amount equal to 103% of the Letter of Credit Outstandings.          SECTION 7.02.  When Continuing.  For all purposes under this Agreement, each  Default and Event of Default that has occurred shall be deemed to be continuing at all times  thereafter unless it either (a) with respect to any Default, is cured or corrected to the reasonable  written satisfaction of the Required Lenders, or (b) with respect to any Default or Event of  Default, is waived in writing in accordance with Section 9.02.         SECTION 7.03.  Remedies on Default.                 (a)   In case any one or more of the Events of Default shall have occurred and         be continuing, and whether or not the maturity of the Loans shall have been accelerated                                         124   

 

                                                                           pursuant hereto, the Administrative Agent may proceed to protect and enforce its rights  and remedies under this Agreement, the Notes or any of the other Loan Documents by  suit in equity, action at law or other appropriate proceeding, whether for the specific  performance of any covenant or agreement contained in this Agreement and the other  Loan Documents or any instrument pursuant to which the Obligations are evidenced, and,  if such amount shall have become due, by declaration or otherwise, proceed to enforce  the payment thereof or any other legal or equitable right of the Agents or the Lenders. No  remedy herein is intended to be exclusive of any other remedy and each and every  remedy shall be cumulative and shall be in addition to every other remedy given  hereunder or now or hereafter existing at law or in equity or by statute or any other  provision of law.         (b)   Notwithstanding anything to the contrary contained herein, except as the   Required Term Loan Lenders shall otherwise agree with respect to any action to be taken   by the Administrative Agent pursuant to this Section 7.03, the Administrative Agent shall  demand payment of the Obligations and the Administrative Agent and Collateral Agent  shall take any or all of the actions set forth in Section 7.03(a) and commence and pursue  such other Enforcement Actions as the Administrative Agent in good faith deems  appropriate within sixty (60) days (except with respect to Events of Default described in  Sections 7.01(a), 7.01(i) and 7.01(j), the Administrative Agent and the Collateral Agent  shall take such Enforcement Actions as such Person deems appropriate under the  circumstances promptly upon receipt of notice, or, with respect to the Term Loan Priority  Collateral, as directed by the Required Term Loan Lenders) after the date of the receipt  by the Administrative Agent of written notice executed and delivered by the Required  Term Loan Lenders or by the Term Loan Agent on behalf of Required Term Loan  Lenders requesting that the Administrative Agent and Collateral Agent commence  Enforcement Actions (the “Term Loan Action Notice”); provided, that, (1) such Event of  Default has not been waived by the requisite Lenders or cured, (2) in the good faith  determination of the Administrative Agent, taking an Enforcement Action is permitted  under the terms of the Loan Documents and Applicable Law, (3) taking an Enforcement  Action shall not result in any liability of any Credit Party to any Loan Party or any other  Person, (4) the Administrative Agent and the Collateral Agent shall be entitled to all of  the benefits of Article VIII hereof, and (5) neither the Administrative Agent nor the  Collateral Agent shall be required to take an Enforcement Action so long as, within the  period provided above, such Person shall, at its option, either (a) appoint the Term Loan  Agent, as an agent of such Person for purposes of exercising the rights of such Person to  take an Enforcement Action, subject to the terms hereof or (b) resign as Administrative  Agent or Collateral Agent, as applicable, and Term Loan Agent shall automatically be  deemed to be the successor Administrative Agent or Collateral Agent, as applicable,  hereunder and under the other Loan Documents for purposes hereof or thereof, except  with respect to the provisions of Article II hereof and in connection with all matters  relating to the determination of the Borrowing Base and each of its components  (including Eligible Credit Card Receivables, Eligible Inventory (including Eligible In- Transit Inventory), Eligible L/C Inventory, Reserves and receiving reports in respect of  Collateral and conducting field examinations and appraisals with respect to the Collateral  and similar matters).                                   125               

 

                                                                                 (c)   Without limiting any rights any Agent or any Revolving Loan Lender may  otherwise have under applicable law or by agreement, in the event of any sale or other  disposition (including, without limitation, by means of a sale pursuant to Section 363 of  the Bankruptcy Code) of the Revolving Priority Collateral, the Administrative Agent, the  Collateral Agent, or any other Person (including any Revolving Loan Lender) acting with  the consent, or on behalf, of the Administrative Agent, shall have the right during the Use  Period, to use the Term Loan Priority Collateral (including, without limitation,  Equipment, Fixtures and Intellectual Property), in order to assemble, inspect, copy or  download information stored on, take actions to perfect its Lien on, complete a  production run of Inventory involving, take possession of, move, prepare and advertise  for sale, sell (by public auction, private sale or a “store closing”, “going out of business”  or similar sale, whether in bulk, in lots or to customers in the ordinary course of business  or otherwise and which sale may include augmented Inventory of the same type sold in  any Loan Party’s business), store or otherwise deal with the Revolving Priority  Collateral, in each case without the involvement of or interference by the Term Loan  Agent or any Term Loan Lender or liability to the Term Loan Agent or any Term Loan  Lender.  The Term Loan Agent may not sell, assign or otherwise transfer the related  Term Loan Priority Collateral prior to the expiration of the Use Period, unless the  purchaser, assignee or transferee thereof agrees to be bound by the provisions of this  Section 7.04 7.03 (c).  None of the Administrative Agent, the Collateral Agent nor any  Revolving Loan Lender shall be obligated to pay any rent, fee or other amounts to the  Term Loan Agent or the Term Loan Lenders (or any person claiming by, through or  under any of them, including any purchaser of the Term Loan Priority Collateral) or to  the Loan Parties, for or in respect of the use by the Administrative Agent, the Collateral  Agent and the Revolving Loan Lenders of the Term Loan Priority Collateral.  The  Administrative Agent, the Collateral Agent and the Revolving Loan Lenders shall (i) use  the Term Loan Priority Collateral in accordance with Applicable Law; (ii) insure the  Term Loan Priority Collateral for damage to property and liability to persons, including  property and liability insurance for the benefit of the Term Loan Agent and the Term  Loan Agent shall be named as an additional insured and loss payee thereon; and (iii)  indemnify the Term Loan Lenders from any claim, loss, damage, cost or liability  (including reasonable attorneys’ fees and expenses) arising from the Administrative  Agent’s, the Collateral Agent’s and the Revolving Loan Lenders’ use of the Term Loan  Priority Collateral (except for those arising from the gross negligence or willful  misconduct of the Term Loan Agent or any Term Loan Lender).          (d)   Notwithstanding anything to the contrary contained in this Agreement or   any other Loan Document, if any Loan Party shall be subject to any proceeding with   respect to any Debtor Relief Laws:                (i)   No Revolving Loan Lender will provide or offer to provide any         DIP Financing, with such DIP Financing to be secured by all or any portion of the         Collateral (including assets that, but for the application of Section 552 of the         Bankruptcy Code or other Applicable Law would be Collateral), to the Loan         Parties unless (x) the terms of such DIP Financing complies with the terms and         conditions of this Agreement, including, without limitation, (a) the sum of (1) all         then outstanding Credit Extensions (excluding those made in respect of the Term                                   126               

 

                                                                     Loan) plus (2) outstanding loans and unfunded commitments under the DIP  Financing do not exceed the sum of (A) the then existing Adjusted Combined  Loan Cap, plus (B) the Insolvency Increase Amount, and (b) the minimum Excess  Availability covenant set forth in Section 6.11 is satisfied at the level provided  therein (subject to any adjustment as a result of the increase in Revolving Loan  Commitments caused by the Insolvency Increase Amount), (y) the Collateral  Agent retains its Lien on the Collateral to secure the Obligations with respect to  the Term Loan, subordinate to the DIP Financing (and any other Lien securing  any claim for diminution in value in connection therewith), including any DIP  Financing budget approved by the Administrative Agent, but otherwise with the  same priority as existed immediately prior to the commencement of any such  proceeding, and (z) the DIP Financing is subject to the applicable rights of the  Term Loan Agent under this Agreement (provided that, for the avoidance of  doubt, each of the Term Loan Agent and the Term Loan Lenders agrees that it  will raise no objection and will not support any objection to such DIP Financing  or to the Liens securing the same (or securing any claim for diminution in value in  connection therewith) on any grounds, that meet the foregoing conditions set forth  in this clause (i) and in clause (iii) below).         (ii)  The Term Loan Agent and the Term Loan Lenders, in their  capacities as such, hereby agree that they shall not (a) provide or offer to provide  any DIP Financing to the Loan Parties or (b) endorse the provision of any DIP  Financing to the Loan Parties, in each case of (a) and (b), to which Liens that are  senior or pari passu in priority to the Liens securing the Obligations are granted  on the Collateral.           (iii)  All adequate protection granted to the Administrative Agent and   the Collateral Agent in any proceeding with respect to any Debtor Relief Laws,   including all Liens granted to the Collateral Agent in any such proceeding as   adequate protection, are intended to be for the benefit of all Credit Parties and   shall be subject to the priorities set forth in Section 7.04, subject to any court  order affecting the rights and interests of the parties hereto not in conflict with the  terms hereof. Without limiting the foregoing, subject to this Section 7.03(c), the  Term Loan Lenders shall have the right to request the Administrative Agent  and/or the Collateral Agent to seek adequate protection for the Term Loan in the  form of payment of interest at the non-Default Rate on the Term Loan and  reimbursement of expenses of the Term Loan Agent, provided that the Term Loan  Lenders may continue to accrue interest on the Term Loan at the Default Rate,  subject to any order entered in the proceeding. Neither the Administrative Agent  nor the Collateral Agent shall be required to seek such adequate protection for the  Term Loan in accordance with the immediately preceding sentence so long as the  Administrative Agent or the Collateral Agent shall have appointed the Term Loan  Agent as an agent of the Administrative Agent or the Collateral Agent, as  applicable, for purposes of exercising the rights of the Administrative Agent or  the Collateral Agent, as applicable, to seek such adequate protection.                              127               

 

                                                                                       SECTION 7.04.  Application of Proceeds.  After the occurrence of an Event of Default  and acceleration of the Obligations, all proceeds realized from any Loan Party or on account of  any Collateral shall be applied as follows:               (a)   With respect to any and all proceeds, other than the proceeds from Term        Loan Priority Collateral:               FIRST, to payment of that portion of the Obligations hereunder (excluding        Obligations set forth in clause (c) of the definition thereof) constituting fees and        indemnities due to the Administrative Agent, the Collateral Agent, the Revolving Loan        Lenders and the Issuing Bank under the Loan Documents, and the payment of all        reasonable costs and expenses incurred by Administrative Agent or the Collateral Agent,        in connection with such collection or sale or otherwise in connection with this Agreement        or any of the Obligations, including all court costs and the reasonable fees and expenses        of its agents and legal counsel, the repayment of all advances made by the Administrative        Agent and the Collateral Agent hereunder or under any other Loan Document on behalf        of any Loan Party and any other reasonable costs or expenses incurred in connection with        the exercise of any right or remedy hereunder, under any other Loan Document;               SECOND, to the payment of accrued and unpaid interest and principal on the        Swingline Loans;               THIRD, to the payment of accrued and unpaid interest on the Revolving Loans;               FOURTH,  pro rata  to Revolving Loan Lenders, to the payment of outstanding        principal on the Revolving Loans;               FIFTH, to the Cash Collateral Account as collateral for Letter of Credit        Outstandings up to 103% thereof;               SIXTH, to the payment of all Obligations of the Loan Parties set forth in clause        (c)(i) of the definition of Obligations;               SEVENTH,   to the payment of all Obligations of the Loan Parties set forth in        clause (c)(ii) of the definition of Obligations up to the amount of the Bank Products Cap;                 EIGHTH, to the payment of any fees due to the Term Loan Agent under the Loan         Documents;                NINTH, to the payment of any fees and indemnities due to the Term Loan         Lenders under the Loan Documents;                TENTH, to the payment of accrued and unpaid interest on the Term Loan;                ELEVENTH, to the payment of outstanding principal on the Term Loan;                                           128   

 

                                                                                 TWELFTH, to the payment of all Obligations of the Loan Parties set forth in  clause (c)(i) of the definition of Obligations to the extent in excess of the Bank Products  Cap; and         THIRTEENTH, to the Borrower, its successors or assigns, or as a court of   competent jurisdiction may otherwise direct.          (b)   With respect to any and all proceeds from Term Loan Priority Collateral:          FIRST, to payment of that portion of the Obligations hereunder constituting fees   and indemnities due to the Term Loan Agent and the Term Loan Lenders under the Loan   Documents, and the payment of all reasonable costs and expenses incurred by the Term   Loan Agent in connection with such collection or sale or otherwise in connection with   this Agreement or any of the Obligations, including all court costs and the reasonable   fees and expenses of its agents and legal counsel, the repayment of all advances made by   the Term Loan Agent hereunder or under any other Loan Document on behalf of any   Loan Party and any other reasonable costs or expenses incurred in connection with the   exercise of any right or remedy hereunder, under any other Loan Document;         SECOND, to the payment of accrued and unpaid interest on the Term Loan;         THIRD, to the payment of outstanding principal on the Term Loan;         FOURTH, to the payment of any fees and indemnities due to the Administrative  Agent, the Collateral Agent, the Issuing Bank, and the Revolving Loan Lenders under the  Loan Documents;         FIFTH, to the payment of accrued and unpaid interest and principal on the  Swingline Loans;         SIXTH, to the payment of accrued and unpaid interest on the Revolving Loans;         SEVENTH,   pro rata  to Revolving Loan Lenders, to the payment of outstanding  principal on the Revolving Loans;         EIGHTH, to the Cash Collateral Account as collateral for Letter of Credit   Outstandings up to 103% thereof;          NINTH, to the payment of all Obligations of the Loan Parties set forth in clause   (c)(i) of the definition of Obligations;          TENTH,  to the payment of all Obligations of the Loan Parties set forth in clause   (c)(ii) of the definition of Obligations; and          ELEVENTH, to the Borrower, its successors or assigns, or as a court of   competent jurisdiction may otherwise direct.                                    129               

 

                                                                           SECTION 7.05.  Additional Remedies on Default.           (a)   In case any one or more of the Events of Default shall have occurred and   be continuing, and whether or not the maturity of the Loans shall have been accelerated   pursuant hereto, the Administrative Agent may (and at the direction of the Required   Lenders shall) proceed to protect and enforce its rights and remedies under this   Agreement, the Notes or any of the other Loan Documents by suit in equity, action at law   or other appropriate proceeding, whether for the specific performance of any covenant or   agreement contained in this Agreement and the other Loan Documents or any instrument   pursuant to which the Obligations are evidenced, and, if such amount shall have become   due, by declaration or otherwise, proceed to enforce the payment thereof or any other   legal or equitable right of the Agents or the Lenders. No remedy herein is intended to be   exclusive of any other remedy and each and every remedy shall be cumulative and shall   be in addition to every other remedy given hereunder or now or hereafter existing at law   or in equity or by statute or any other provision of law.         (b)   Notwithstanding anything to the contrary contained herein, except as the   Required Term Loan Lenders shall otherwise agree with respect to any action to be taken   by the Administrative Agent pursuant to this Section 7.05, the Administrative Agent shall  demand payment of the Obligations and the Administrative Agent and Collateral Agent  shall take any or all of the actions set forth in Section 7.05(a) and commence and pursue  such other Enforcement Actions as the Administrative Agent in good faith deems  appropriate within sixty (60) days (except that (x) with respect to Events of Default  described in Sections 7.01(a), 7.01(i) and 7.01(j), the Administrative Agent and the  Collateral Agent shall take such Enforcement Actions as such Person deems appropriate  under the circumstances promptly upon receipt of notice, or (y) the Administrative Agent  and the Collateral Agent shall, with respect to the Term Loan Priority Collateral,  promptly take such Enforcement Actions as directed by the Required Term Loan Lenders  in any Term Loan Action Notice) after the date of the receipt by the Administrative  Agent of a Term Loan Action Notice; provided, that, (1) such Event of Default has not  been waived by the requisite Lenders or cured, (2) in the good faith determination of the  Administrative Agent, taking an Enforcement Action is permitted under the terms of the  Loan Documents and Applicable Law, (3) taking an Enforcement Action shall not result  in any liability of any Credit Party to any Loan Party or any other Person, (4) the  Administrative Agent and the Collateral Agent shall be entitled to all of the benefits of  Article VIII hereof, and (5) neither the Administrative Agent nor the Collateral Agent  shall be required to take an Enforcement Action so long as, within the period provided  above, such Person shall, at its option, either (a) appoint the Term Loan Agent, as an  agent of such Person for purposes of exercising the rights of such Person to take an  Enforcement Action, subject to the terms hereof or (b) resign as Administrative Agent or  Collateral Agent, as applicable, and Term Loan Agent shall automatically be deemed to  be the successor Administrative Agent or Collateral Agent, as applicable, hereunder and  under the other Loan Documents for purposes hereof or thereof, except with respect to  the provisions of Article II hereof and in connection with all matters relating to the  determination of the Borrowing Base and each of its components (including Eligible  Credit Card Receivables, Eligible Inventory (including Eligible In-Transit Inventory),  Eligible L/C Inventory, Reserves and receiving reports in respect of Collateral and                                   130               

 

                                                                           conducting field examinations and appraisals with respect to the Collateral and Real  Estate Collateral and  similar matters).         (c)   Without limiting any rights any Agent or any Revolving Loan Lender may  otherwise have under applicable law or by agreement, in the event of any sale or other  disposition (including, without limitation, by means of a sale pursuant to Section 363 of  the Bankruptcy Code) of the Revolving Priority Collateral, the Administrative Agent, the  Collateral Agent, or any other Person (including any Revolving Loan Lender) acting with  the consent, or on behalf, of the Administrative Agent, shall have the right during the Use  Period, to use the Term Loan Priority Collateral (including, without limitation,  Equipment, Fixtures and Intellectual Property), in order to assemble, inspect, copy or  download information stored on, take actions to perfect its Lien on, complete a  production run of Inventory involving, take possession of, move, prepare and advertise  for sale, sell (by public auction, private sale or a “store closing”, “going out of business”  or similar sale, whether in bulk, in lots or to customers in the ordinary course of business  or otherwise and which sale may include augmented Inventory of the same type sold in  any Loan Party’s business), store or otherwise deal with the Revolving Priority  Collateral, in each case without the involvement of or interference by the Term Loan  Agent or any Term Loan Lender or liability to the Term Loan Agent or any Term Loan  Lender.  The Term Loan Agent may not sell, assign or otherwise transfer the related  Term Loan Priority Collateral prior to the expiration of the Use Period, unless the  purchaser, assignee or transferee thereof agrees in writing to be bound by the provisions  of this Section 7.05(c).  None of the Administrative Agent, the Collateral Agent nor any  Revolving Loan Lender shall be obligated to pay any rent, fee or other amounts to the  Term Loan Agent or the Term Loan Lenders (or any person claiming by, through or  under any of them, including any purchaser of the Term Loan Priority Collateral) or to  the Loan Parties, for or in respect of the use by the Administrative Agent, the Collateral  Agent and the Revolving Loan Lenders of the Term Loan Priority Collateral.  The  Administrative Agent, the Collateral Agent and the Revolving Loan Lenders shall (i) use  the Term Loan Priority Collateral in accordance with Applicable Law; (ii) insure the  Term Loan Priority Collateral for damage to property and liability to persons, including  property and liability insurance for the benefit of the Term Loan Agent and the Term  Loan Agent shall be named as an additional insured and loss payee thereon; and (iii)  indemnify the Term Loan Lenders from any claim, loss, damage, cost or liability  (including reasonable attorneys’ fees and expenses) arising from the Administrative  Agent’s, the Collateral Agent’s and the Revolving Loan Lenders’ use of the Term Loan  Priority Collateral (except for those arising from the gross negligence or willful  misconduct of the Term Loan Agent or any Term Loan Lender).          (d)   Notwithstanding anything to the contrary contained in this Agreement or   any other Loan Document, if any Loan Party shall be subject to any proceeding with   respect to any Debtor Relief Laws:                (i)   If the Administrative Agent or any Revolving Loan Lender shall         seek to provide any Loan Party with, or consent to a third party providing, any         DIP Financing, with such DIP Financing to be secured by all or any portion of the         Collateral or Real Estate Collateral  (including assets that, but for the application                                   131               

 

                                                                     of Section 552 of the Bankruptcy Code or other Applicable Law would be  Collateral or Real Estate  Collateral), then each of the Term Loan Agent and the  Term Loan Lenders agrees that it will raise no objection and will not support any  objection to such DIP Financing or to the Liens securing the same (or securing  any claim for diminution in value in connection therewith) on any grounds, so  long as (x) the terms of such DIP Financing complies with the terms and  conditions of this Agreement, including, without limitation, (A) the sum of (I) all  then outstanding Credit Extensions (excluding those made in respect of the Term  Loan) plus (II) outstanding loans and unfunded commitments under the DIP  Financing do not exceed an amount equal to (the “Maximum Revolving  Insolvency Amount”) (1) the then existing Adjusted Combined Loan Cap, plus (2)  the Insolvency Increase Amount, minus, (3) the outstanding amount of the Term  Loans, minus (4) the minimum Availability required to be maintained under  Section 6.11, (B) the agreement governing such DIP Financing contains a  minimum Excess Availability no less restrictive than contained the covenant  contained in Section 6.11 of this Agreement (and such covenant is satisfied at the  level provided therein (subject to any adjustment as a result of the increase in  Revolving Loan Commitments caused by the Insolvency Increase Amount), (C)  the agent under such DIP Financing shall implement, and maintain, at all times, a  reserve against all borrowing bases in the amount of any carve out amount  granted with respect to professional fees and expenses, court costs, filing fees, and  fees and costs of the Office of the United States Trustee as granted by the court or  as agreed to by the Administrative Agent in its reasonable discretion, (D) to the  extent any term or condition contained in such DIP Financing (I) corresponds to a  term or condition contained in this Agreement the modification or waiver of  which would require the consent of the Term Loan Agent or any Term Loan  Lender and (II) would be less restrictive to the Loan Parties than the  corresponding term or condition contained in this Agreement, such term or  condition shall be approved by the Term Loan Agent or such Term Loan Lender,  as applicable, in its respective reasonable discretion, (E) the Collateral Agent  retains its Lien on the Collateral and Real Estate Collateral  to secure the  Obligations owing to the Term Loan Lenders and the Term Loan Agent (in each  case, including Proceeds thereof arising after the commencement of the case  under any Debtor Relief Laws) and (I) as to the Term Loan Priority Collateral  only, such Lien has the same priority as existed prior to the commencement of the  case under the subject Debtor Relief Laws and any Lien on the Term Loan  Priority Collateral securing such DIP Financing is junior and subordinate to the  Lien of the Collateral Agent on the Term Loan Priority Collateral and (II) as to  the Revolving Priority Collateral, such Lien has the same relative priority as  existed prior to the commencement of the case under the subject Debtor Relief  Laws, subject only to the senior Liens granted to the (1) Administrative Agent or  any Revolving Loan Lender securing the Obligations owing to the Administrative  Agent, the Collateral Agent, the Revolving Loan Lenders and the Issuing Banks  and (2) Administrative Agent or any such Revolving Loan Lender securing any  such DIP Financing, and (y) the DIP Financing is subject to the applicable rights  of the Term Loan Agent under this Agreement (a DIP Financing complying with                             132               

 

                                                                     the provisions of this paragraph referred to herein as a “Conforming DIP”). For  purposes of determining whether a DIP Financing is a Conforming DIP (in  addition, for certainty, to any approval of the lenders or borrowers party to such  DIP Financing):  (i) the “Maximum Revolving Insolvency Amount” shall be  calculated as it and all component terms are defined herein, mutatis mutandis  with  respect to the DIP Financing, and any changes thereto which would result in an  amount greater than the Maximum Revolving Insolvency Amount being available  to be borrowed by the Borrower shall be subject to the prior written consent of the  Term Loan Agent and (ii) any changes to the minimum Excess Availability  covenant in any such DIP Financing which would result in a greater amount  available to be borrowed by the Loan Parties shall be subject to the prior written  consent of the Term Loan Agent.  If the Term Loan Agent and any applicable  Term Loan Lenders consent to any change in any term or condition contained in  this Agreement as hereinabove provided (including, without limitation, modifying  the definition of “Maximum Revolving Insolvency Amount” in a manner that  would result in a greater amount available to be borrowed by the Borrower as  hereinabove provided), then the Term Loan Agent and each Term Loan Lender  agrees that it will raise no objection, and will not support any objection, to such  DIP Financing or to the Liens securing the same (or securing any claim for  diminution in value in connection therewith).         (ii)  The Term Loan Agent and the Term Loan Lenders, in their  capacities as such, hereby agree that they shall not (a) provide or offer to provide  any DIP Financing to the Loan Parties or (b) endorse (except as provided in  clause (i) above) the provision of any DIP Financing to the Loan Parties, in each  case of (a) and (b), to which Liens that are senior or pari passu in priority to the  Liens on the Revolving Priority Collateral securing the Obligations owing to the  Administrative Agent, the Collateral Agent, the Revolving Loan Lenders and the  Issuing Banks are granted.  The Administrative Agent, the Collateral Agent, the  Revolving Loan Lenders and the Issuing Banks hereby agree that they shall not  offer, and shall not permit any their respective Affiliates to offer, to provide any  DIP Financing to the Loan Parties in any proceeding under any Debtor Relief  Law or endorse the provision of any DIP Financing to the Loan Parties in any  proceeding under any Debtor Relief Law pursuant to which Liens that are senior  or pari passu in priority to the Liens on the Term Loan Priority Collateral securing  the Obligations owing to the Term Loan Lenders and the Term Loan Agent are  granted.           (iii)  All adequate protection granted to the Administrative Agent and   the Collateral Agent in any proceeding with respect to any Debtor Relief Laws,   including all Liens granted to the Collateral Agent in any such proceeding as   adequate protection, are intended to be for the benefit of all Credit Parties and   shall be subject to the priorities set forth in Section 7.04, subject to any court  order affecting the rights and interests of the parties hereto not in conflict with the  terms hereof. Without limiting the foregoing, subject to this Section 7.05(c), the  Term Loan Lenders shall have the right to request the Administrative Agent  and/or the Collateral Agent to seek adequate protection for the Term Loan in the                             133               

 

                                                                                 form of payment of interest at the then applicable rate on the Term Loan and        reimbursement of expenses of the Term Loan Agent; provided, however, that the        Administrative Agent, on behalf of itself and the Credit Parties (other than the        Term Loan Agent and the Term Loan Lenders), may contest (or support any other        Person contesting) any request by the Term Loan Agent or any Term Loan Lender        for such adequate protection from proceeds of Revolving Priority Collateral        unless each of the following conditions is satisfied: (w) such payments are        approved by a final order of the United States Bankruptcy Court approving a DIP        Financing consented to by the Administrative Agent, (x) the Credit Parties (other        than the Term Loan Agent and the Term Loan Lenders) are also receiving        adequate protection payments covering their interest, fees and expenses, (y) the        amount of all such payments is added to the Maximum Revolving Insolvency        Amount, and (z) the Term Loan Agent and the Term Loan Lenders agree to pay        over an amount not to exceed the payments so received if the Obligations entitled        to priority over the Obligations in respect of the Term Loan under SECTION 7.04        are not paid in full in such proceeding.  Neither the Administrative Agent nor the        Collateral Agent shall be required to seek such adequate protection for the Term        Loan in accordance with the immediately preceding sentence so long as the        Administrative Agent or the Collateral Agent shall have appointed the Term Loan        Agent as an agent of the Administrative Agent or the Collateral Agent, as        applicable, for purposes of exercising the rights of the Administrative Agent or        the Collateral Agent, as applicable, to seek such adequate protection.         (e)   Each of the Term Loan Agent and the Term Loan Lenders agrees not to (i)   seek (or support any other Person seeking) relief from the automatic stay or any other   stay in any proceeding under any Debtor Relief Law in respect of any Revolving Priority   Collateral of any Loan Party, without the prior written consent of the Administrative   Agent, or (ii) oppose any request by the Administrative Agent or any Credit Party (other   than the Term Loan Agent and the Term Loan Lenders) for relief from the automatic stay   or any other stay in any proceeding under any Debtor Relief Law in respect of any   Revolving Priority Collateral of any Loan Party.  Each of the Administrative Agent and   the Revolving Loan Lenders agrees not to (i) seek (or support any other Person seeking)   relief from the automatic stay or any other stay in any proceeding under any Debtor   Relief Law in respect of any Term Loan Priority Collateral of any Loan Party, without   the prior written consent of the Term Loan Agent, or (ii) oppose any request by the Term   Loan Agent or any Credit Party (other than the Administrative Agent and the Revolving   Loan Lenders) for relief from the automatic stay or any other stay in any proceeding   under any Debtor Relief Law in respect of any Term Loan Priority Collateral of any Loan   Party.          (f)   For the avoidance of doubt and notwithstanding anything to the contrary   contained herein or in Section 7.03, the foregoing provisions of this Section 7.05 shall  control so long as any principal balance of the Term Loan is outstanding (in the event of  any conflict between the provisions of Section 7.03 and Section 7.05), and the  Administrative Agent, the Collateral Agent and the Term Loan Agent hereby agree that  any references to Section 7.03 in the Loan Documents shall be deemed to refer to this  Section 7.05.                                   134               

 

                                                                                             (g)   This Section 7.05 shall not be amended without the consent of each Term        Loan Lender.         SECTION 7.06.  Separate Claims and Separate Classifications.  Each of the Credit  Parties hereto acknowledges and agrees that because of, among other things, their differing rights  and priorities in the Collateral  and Real Estate Collateral , the claims of the Revolving Loan  Lenders and the Term Loan Lenders in respect of the Collateral and Real Estate Collateral  are  fundamentally different from each other, and the claims of the Revolving Loan Lenders and the  Term Loan Lenders in respect of any Collateral and Real Estate  Collateral must be separately  classified in any bankruptcy or other insolvency proceeding.  To further effectuate the intent of  the parties as provided in the immediately preceding sentence, if it is held that, in respect of any  Collateral  or Real Estate Collateral , the Revolving Loan Lenders and the Term Loan Lenders in  respect of such Collateral or Real Estate Collateral  constitute only one secured claim (rather than  separate classes of secured claims), then all distributions shall be made as if there were separate  classes of secured claims in respect of any Collateral or Real Estate Collateral  and, to the extent  that any holder of the Revolving Loans or Term Loan receives distributions in respect of the  Collateral  or Real Estate Collateral , such distributions shall be held in trust by the receiving party  and distributed giving effect to the foregoing.                                     ARTICLE VIII                                      The Agents         SECTION 8.01.  Administration by Administrative Agent.  Each Lender, the Collateral  Agent, the Term Loan Agent, and the Issuing Bank hereby designate Wells Fargo as  Administrative Agent under this Agreement and the other Loan Documents.  The general  administration of the Loan Documents shall be by the Administrative Agent.  The Lenders, the  Collateral Agent, the Term Loan Agent, and the Issuing Bank each hereby irrevocably authorizes  the Administrative Agent (a) to enter into the Loan Documents to which it is a party and (b) at its  discretion, to take or refrain from taking such actions as agent on its behalf and to exercise or  refrain from exercising such powers under the Loan Documents and the Notes as are delegated  by the terms hereof or thereof, as appropriate, together with all powers reasonably incidental  thereto. The Administrative Agent shall have no duties or responsibilities except as set forth in  this Agreement and the remaining Loan Documents, nor shall it have any fiduciary relationship  with any Lender, and no implied covenants, responsibilities, duties, obligations, or liabilities  shall be read into the Loan Documents or otherwise exist against the Administrative Agent.          SECTION 8.02.  The Collateral Agent; The Term Loan Agent.               (a)   Collateral Agent.  Each Lender, the Administrative Agent, the Term Loan        Agent, and the Issuing Bank hereby (i) designate Wells Fargo as Collateral Agent under        this Agreement and the other Loan Documents, (ii) authorize the Collateral Agent to        enter into the Security Documents and the other Loan Documents to which it is a party        and to perform its duties and obligations thereunder, together with all powers reasonably        incidental thereto, and (iii) agree and consent to all of the provisions of the Security        Documents. All Collateral and Real Estate Collateral  shall be held or administered by the        Collateral Agent (or its duly-appointed agent) for its benefit and for the ratable benefit of                                         135   

 

                                                                                       the other Credit Parties. Any proceeds received by the Collateral Agent from the        foreclosure, sale, lease or other disposition of any of the Collateral and any other        proceeds received pursuant to the terms of the Security Documents or the other Loan        Documents shall be paid over to the Administrative Agent for application as provided in        Sections 2.21, 2.24, or Error! Reference source not found. , as applicable. The        Collateral Agent shall have no duties or responsibilities except as set forth in this        Agreement and the remaining Loan Documents, nor shall it have any fiduciary        relationship with any Lender, and no implied covenants, responsibilities, duties,        obligations, or liabilities shall be read into the Loan Documents or otherwise exist against        the Collateral Agent.               (b)   Term Loan Agent. Each Term Loan Lender hereby (i) designates Wells        Fargo as Term Loan Agent under this Agreement and the other Loan Documents, (ii)        authorizes the Term Loan Agent to enter into the Loan Documents to which it is a party        and (iii) authorizes the Term Loan Agent, at its discretion, to take or refrain from taking        such actions as agent on its behalf and to exercise or refrain from exercising such powers        under the Loan Documents as are delegated by the terms hereof or thereof, as        appropriate, together with all powers reasonably incidental thereto. The Term Loan        Agent shall have no duties or responsibilities except as set forth in this Agreement and        the remaining Loan Documents, nor shall it have any fiduciary relationship with any        Lender, and no implied covenants, responsibilities, duties, obligations, or liabilities shall        be read into the Loan Documents or otherwise exist against the Term Loan Agent.         SECTION 8.03.  Agreements of Certain Requisite Lenders.               (a)   Upon any occasion requiring or permitting an approval, consent, waiver,  election or other action on the part of only the Required Lenders, the Required Revolving Loan  Lenders or the Required Term Loan Lenders, action shall be taken by the Agents for and on  behalf or for the benefit of all Lenders upon the direction of the Required Lenders, the Required  Revolving Loan Lenders or the Required Term Loan Lenders, as applicable, and any such action  shall be binding on all Lenders, and (b) upon any occasion requiring or permitting an approval,  consent, waiver, election or other action on the part of the Required Supermajority Lenders,  action shall be taken by the Agents for and on behalf or for the benefit of all Lenders upon the  direction of the Required Supermajority Lenders and any such action shall be binding on all  Lenders. No amendment, modification, consent, or waiver shall be effective except in  accordance with the provisions of Section 9.02.         SECTION 8.04.  Liability of Agents.               (a)   Each of the Agents, when acting on behalf of the Lenders (or any subset   thereof) and the Issuing Bank, may execute any of its respective duties under this Agreement by   or through any of its respective officers, agents and employees, and none of the Agents nor their   respective directors, officers, agents or employees shall be liable to the Lenders or the Issuing   Bank or any of them for any action taken or omitted to be taken in good faith, or be responsible   to the Lenders or the Issuing Bank or to any of them for the consequences of any oversight or   error of judgment, or for any loss, except to the extent of any liability imposed by law by reason   of such Agent’s own gross negligence or willful misconduct. The Agents and their respective                                         136   

 

                                                                                 directors, officers, agents and employees shall in no event be liable to the Lenders or the Issuing  Bank or to any of them for any action taken or omitted to be taken by them pursuant to  instructions received by them from the Required Lenders, the Required Revolving Loan Lenders,  the Required Term Loan Lenders, or Required Supermajority Lenders, or all Lenders, as  applicable, or in reliance upon the advice of counsel selected by it. Without limiting the  foregoing, none of the Agents, nor any of their respective directors, officers, employees, or  agents (i) shall be responsible to any Lender or the Issuing Bank for the due execution, validity,  genuineness, effectiveness, sufficiency, or enforceability of, or for any recital, statement,  warranty or representation in, this Agreement, any Loan Document or any related agreement,  document or order, or (ii) shall be required to ascertain or to make any inquiry concerning the  performance or observance by any Loan Party of any of the terms, conditions, covenants, or  agreements of this Agreement or any of the Loan Documents, or (iii) shall be responsible to any  Lender or the Issuing Bank for the state or condition of any properties of the Borrower or any  other obligor hereunder constituting Collateral or Real Estate Collateral  for the Obligations of  the Borrower hereunder, or any information contained in the books or records of the Borrower;  or (iv) shall be responsible to any Lender or the Issuing Bank for the validity, enforceability,  collectibility, effectiveness or genuineness of this Agreement or any other Loan Document or  any other certificate, document or instrument furnished in connection therewith; or (v) shall be  responsible to any Lender or the Issuing Bank for the validity, priority or perfection of any Lien  securing or purporting to secure the Obligations or the value or sufficiency of any of the  Collateral  or Real Estate Collateral .               (b)   The Agents may execute any of their duties under this Agreement or any   other Loan Document by or through their agents or attorneys-in-fact, and shall be entitled to the   advice of counsel concerning all matters pertaining to its rights and duties hereunder or under the   Loan Documents.  The Agents shall not be responsible for the negligence or misconduct of any   agents or attorneys-in-fact selected by them with reasonable care.                (c)   None of the Agents nor any of their respective directors, officers,   employees, or agents shall have any responsibility to the Loan Parties on account of the failure or   delay in performance or breach by any Lender (other than by the Agent in its capacity as a   Lender) or the Issuing Bank of any of their respective obligations under this Agreement or the   Notes or any of the Loan Documents or in connection herewith or therewith.               (d)   The Agents shall be entitled to rely, and shall be fully protected in relying,  upon any notice, consent, certificate, affidavit, or other document or writing believed by them to  be genuine and correct and to have been signed, sent or made by the proper person or persons,  and upon the advice and statements of legal counsel (including, without, limitation, counsel to  the Loan Parties), independent accountants and other experts selected by the Agents.  The Agents  shall be fully justified in failing or refusing to take any action under this Agreement or any other  Loan Document unless they shall first receive such advice or concurrence of the Required  Lenders as they deem appropriate or they shall first be indemnified to their satisfaction by the  Lenders against any and all liability and expense which may be incurred by them by reason of  the taking or failing to take any such action.                                           137   

 

                                                                                       SECTION 8.05.  Notice of Default; Actions on Default.                 (a)   The Agents shall not be deemed to have knowledge or notice of the  occurrence of any Default or Event of Default unless the Agents have actual knowledge of the  same or has received notice from a Lender or the Loan Parties referring to this Agreement,  describing such Default or Event of Default and stating that such notice is a “notice of default”.   In the event that the Agents obtain such actual knowledge or receive such a notice, the Agents  shall give prompt notice thereof to each of the Lenders.                 (b)   The Agents shall (subject to the provisions of Section 9.02) take such  action with respect to any Default or Event of Default as shall be reasonably directed by the  Required Lenders.  Unless and until the Agents shall have received such direction, the Agents  may (but shall not be obligated to) take such action, or refrain from taking such action, with  respect to any such Default or Event of Default as they shall deem advisable in the best interest  of the Lenders. In no event shall the Agents be required to comply with any such directions to  the extent that the Agents believe that their compliance with such directions would be unlawful.          SECTION 8.06.  Lenders’ Credit Decisions.  Each Lender acknowledges that it has,  independently and without reliance upon the Agents or any other Lender, and based on the  financial statements prepared by the Loan Parties and such other documents and information as it  has deemed appropriate, made its own credit analysis and investigation into the business, assets,  operations, property, and financial and other condition of the Loan Parties and has made its own  decision to enter into this Agreement and the other Loan Documents and agrees that the Agents  shall bear no responsibility therefor.  Each Lender also acknowledges that it will, independently  and without reliance upon the Agents or any other Lender, and based on such documents and  information as it shall deem appropriate at the time, continue to make its own credit decisions in  determining whether or not conditions precedent to closing any Loan hereunder have been  satisfied and in taking or not taking any action under this Agreement and the other Loan  Documents.         SECTION 8.07.  Reimbursement and Indemnification.  Without limiting the Loan  Parties’ obligations hereunder, each Lender agrees (a) to reimburse (i) each Agent for such  Lender’s Commitment Percentage of any expenses and fees incurred by such Agent for the  benefit of the Lenders or the Issuing Bank under this Agreement, the Notes and any of the Loan  Documents, including, without limitation, counsel fees and compensation of agents and  employees paid for services rendered on behalf of the Lenders or the Issuing Bank, and any other  expense incurred in connection with the operations or enforcement thereof not reimbursed by the  Loan Parties and (ii) each Agent for such Lender’s Commitment Percentage of any expenses of  such Agent incurred for the benefit of the Lenders or the Issuing Bank that the Loan Parties have  agreed to reimburse pursuant to Section 9.03 and has failed to so reimburse and (b) to indemnify  and hold harmless the Agents and any of their directors, officers, employees, or agents, on  demand, in the amount of such Lender’s Commitment Percentage, from and against any and all  liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or  disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or  asserted against it or any of them in any way relating to or arising out of this Agreement, the  Notes or any of the Loan Documents or any action taken or omitted by it or any of them under  this Agreement, the Notes or any of the Loan Documents to the extent not reimbursed by the                                         138   

 

                                                                                 Loan Parties (except such as shall result from their respective gross negligence or willful  misconduct).  The provisions of this Section 8.07 shall survive the repayment of the Obligations  and the termination of the Commitments.         SECTION 8.08.  Rights of Agents.  It is understood and agreed that Wells Fargo shall  have the same rights and powers hereunder (including the right to give such instructions) as the  other Lenders and may exercise such rights and powers, as well as its rights and powers under  other agreements and instruments to which it is or may be party, and engage in other transactions  with the Borrower, as though it were not the Administrative Agent, the Collateral Agent, or the  Term Loan Agent under this Agreement.  Each Agent and its affiliates may accept deposits from,  lend money to, and generally engage in any kind of commercial or investment banking, trust,  advisory or other business with the Loan Parties and their Subsidiaries and Affiliates as if it were  not an Agent hereunder.         SECTION 8.09.  Notice of Transfer.  The Agents may deem and treat a Lender party to  this Agreement as the owner of such Lender’s portion of the Loans for all purposes, unless and  until, and except to the extent, an Assignment and Acceptance shall have become effective as set  forth in Section 9.04(b).         SECTION 8.10.  Successor Agent.  Any Agent may resign at any time by giving five (5)  Business Days’ written notice thereof to the Lenders, the Issuing Bank, the other Agents and the  Borrower. Upon any such resignation of any Agent, the Required Lenders (or, in the case of the  resignation of the Term Loan Agent, the Required Term Loan Lenders) shall have the right to  appoint a successor Agent, which so long as there is no Default or Event of Default, shall be  reasonably satisfactory to the Borrower (whose consent shall not be unreasonably withheld or  delayed). If no successor Agent shall have been so appointed by the Required Lenders (or, in the  case of a successor Term Loan Agent, the Required Term Loan Lenders) and shall have accepted  such appointment, within thirty (30) days after the retiring Agent’s giving of notice of  resignation, the retiring Agent may, on behalf of the Lenders, the other Agents and the Issuing  Bank, appoint a successor Agent which shall be a Person capable of complying with all of the  duties of such Agent (and the Issuing Bank), hereunder (in the opinion of the retiring Agent and  as certified to the Lenders in writing by such successor Agent) which, so long as there is no  Default or Event of Default, shall be reasonably satisfactory to the Borrower (whose consent  shall not be unreasonably withheld or delayed).  Upon the acceptance of any appointment as  Agent by a successor Agent, such successor Agent shall thereupon succeed to and become vested  with all the rights, powers, privileges and duties of the retiring Agent and the retiring Agent shall  be discharged from its duties and obligations under this Agreement. After any retiring Agent’s  resignation hereunder as such Agent, the provisions of this Article VIII shall inure to its benefit  as to any actions taken or omitted to be taken by it while it was such Agent under this  Agreement.          SECTION 8.11.  Reports and Financial Statements.               (a)   Promptly after receipt thereof from the Borrower, the Administrative        Agent shall remit to each Lender and the Collateral Agent copies of all financial        statements required to be delivered by the Borrower hereunder and all commercial        finance examinations and appraisals of the Collateral or Real Estate Collateral  received                                         139   

 

                                                                           by the Administrative Agent and all notices received by the Administrative Agent under  Section 5.02 hereof, and a copy of any Borrowing Base Certificate so received  (collectively, the “Reports”).  The Reports required to be delivered pursuant to this  paragraph shall be deemed to have been delivered on the date on which the  Administrative Agent provides notice to the Lenders and the Collateral Agent that such  information has been posted on the Internet and is accessible by the Lenders and the  Collateral Agent without charge.         (b)   By signing this Agreement, each Lender:               (i)   agrees to furnish the Administrative Agent and the Term Loan        Agent with a summary of all Bank Products (including, without limitation, all        Hedging Agreements) and Cash Management Services due from a Loan Party or        to become due to such Lender from time to time. In connection with any        distributions to be made hereunder, the Administrative Agent and the Term Loan        Agent shall be entitled to assume that no amounts are due from a Loan Party to        any Lender on account of any Bank Products or Cash Management Services        unless the Administrative Agent and/or the Term Loan Agent, as applicable, has        received written notice thereof from such Lender;               (ii)  expressly agrees and acknowledges that neither the Administrative        Agent nor the Term Loan Agent makes any representation or warranty as to the        accuracy of the Reports, and shall not be liable for any information contained in        any Report;               (iii)  expressly agrees and acknowledges that the Reports are not         comprehensive audits or examinations, that the Agents or any other party         performing any audit or examination will inspect only specific information         regarding the Loan Parties and will rely significantly upon the Borrower’s books         and records, as well as on representations of the Borrower’s personnel;               (iv)  agrees to keep all Reports confidential in accordance with the        provisions of Section 9.14 hereof; and               (v)   without limiting the generality of any other indemnification        provision contained in this Agreement, agrees: (i) to hold the Agents and any such        other Lender preparing a Report harmless from any action the indemnifying        Lender may take or conclusion the indemnifying Lender may reach or draw from        any Report in connection with any Credit Extensions that the indemnifying        Lender has made or may make to the Borrower, or the indemnifying Lender's        participation in, or the indemnifying Lender's purchase of, a Loan or Loans; and        (ii) to pay and protect, and indemnify, defend, and hold the Agents and any such        other Lender preparing a Report harmless from and against, the claims, actions,        proceedings, damages, costs, expenses, and other amounts (including attorney        costs) incurred by the Agents and any such other Lender preparing a Report as the        direct or indirect result of any third parties who might obtain all or part of any        Report through the indemnifying Lender.                                   140               

 

                                                                           SECTION 8.12.  Delinquent Lender.         (a)   If for any reason any Revolving Loan Lender shall become a Deteriorating   Lender or shall fail or refuse to abide by its obligations under this Agreement, including   without limitation its obligation to make available to Administrative Agent its Revolving   Loan Commitment Percentage of any Revolving Loans, expenses or setoff or purchase its   Revolving Loan Commitment Percentage of a participation interest in the Swingline   Loans or Letters of Credit (a “Delinquent Lender”) and such failure is not cured within  two (2) Business Days after receipt from the Administrative Agent of written notice  thereof, then, in addition to the rights and remedies that may be available to the Agents,  the Revolving Loan Lenders, the Loan Parties or any other party at law or in equity, and  not at limitation thereof, such Deteriorating Lender or Delinquent Lender’s right to  participate in the administration of, or decision-making rights related to, the Revolving  Loans, this Agreement or the other Loan Documents shall be suspended during the  pendency of such failure or refusal.   Further, notwithstanding the provisions of Section  2.08 hereof, the Administrative Agent shall not be obligated to transfer to a Delinquent  Lender any payments made by the Borrower to the Administrative Agent for the  Delinquent Lender’s benefit or any proceeds of Collateral or Real Estate Collateral  that  would otherwise be remitted hereunder to the Delinquent Lender, and, in the absence of  such transfer to the Delinquent Lender, the Administrative Agent shall transfer any such  payments (i) first, to the Swingline Lender to the extent of any Swingline Loans that were  made by the Swingline Lender and that were required to be, but were not, paid by the  Delinquent Lender, (ii) second, to the Issuing Bank, to the extent of the portion of an L/C  Disbursement that was required to be, but was not, paid by the Delinquent Lender, (iii)  third, to each Non-Delinquent Lender ratably in accordance with their Revolving Loan  Commitments (but, in each case, only to the extent that such Delinquent Lender’s portion  of a Revolving Loan (or other funding obligation) was funded by such other Non- Delinquent Lender), (iv) to the Cash Collateral Account, the proceeds of which shall be  retained by the Administrative Agent and may be made available to be re-advanced to or  for the benefit of the Borrower (upon the request of the Borrower and subject to the  conditions set forth in Section 4.02) as if such Delinquent Lender had made its portion of  the Revolving Loans (or other funding obligations) hereunder, and (v) from and after the  date on which all other Obligations (other than in respect of the Term Loan) have been  paid in full, to such Delinquent Lender.  Subject to the foregoing, the Administrative  Agent may hold and, in its discretion, re-lend to the Borrower for the account of such  Delinquent Lender the amount of all such payments received and retained by the  Administrative Agent for the account of such Delinquent Lender.  Solely for the purposes  of voting or consenting to matters with respect to the Loan Documents (including the  calculation of Revolving Loan Commitment Percentages in connection therewith) and for  the purpose of calculating the fees payable under Section 2.13 and 2.14, such Delinquent  Lender shall be deemed not to be a “Revolving Loan Lender” and such Revolving Loan  Lender’s Revolving Loan Commitment shall be deemed to be zero; provided, that the  foregoing shall not apply to any of the matters governed by subclauses (i), (ii) or (iii)  under Section 9.02(b).  The provisions of this Section 8.12 shall remain effective with  respect to such Delinquent Lender until the earlier of (y) the date on which all of the  Non-Delinquent Lenders, the Administrative Agent, the Issuing Bank, and the Borrower  shall have waived, in writing, the application of this Section 8.12 to such Delinquent                                   141               

 

                                                                           Lender, or (z) the date on which such Delinquent Lender pays to the Administrative  Agent all amounts owing by such Delinquent Lender in respect of the amounts that it was  obligated to fund hereunder, and, if requested by the Administrative Agent, provides  adequate assurance of its ability to perform its future obligations hereunder (on which  earlier date, so long as no Event of Default has occurred and is continuing, any remaining  cash collateral held by the Administrative Agent pursuant to Section 8.12(b) shall be  released to the Borrower).  The operation of this Section 8.12 shall not be construed to  increase or otherwise affect the Revolving Loan Commitment of any Revolving Loan  Lender, to relieve or excuse the performance by such Delinquent Lender or any other  Revolving Loan Lender of its duties and obligations hereunder, or to relieve or excuse the  performance by the Borrower of its duties and obligations hereunder to any Agent, the  Issuing Bank, the Swingline Lender, or to the Revolving Loan Lenders other than such  Delinquent Lender.  Any failure by a Delinquent Lender to fund amounts that it was  obligated to fund hereunder shall constitute a material breach by such Delinquent Lender  of this Agreement and shall entitle the Borrower, at their option, upon written notice to  the Administrative Agent, to arrange for a substitute Revolving Loan Lender to assume  the Revolving Loan Commitment of such Delinquent Lender, such substitute Revolving  Loan Lender to be reasonably acceptable to the Administrative Agent.  In connection  with the arrangement of such a substitute Revolving Loan Lender, the Delinquent Lender  shall have no right to refuse to be replaced hereunder, and agrees to execute and deliver a  completed form of Assignment and Acceptance in favor of the substitute Revolving Loan  Lender (and agrees that it shall be deemed to have executed and delivered such document  if it fails to do so) subject only to being paid its share of the outstanding Obligations  (including (1) all interest, fees (except any Commitment Fees or Letter of Credit Fees not  due to such Delinquent Lender in accordance with the terms of this Agreement), and  other amounts that may be due and payable in respect thereof, and (2) an assumption of  its Commitment Percentage of its participation in the Letters of Credit, but excluding  Obligations in respect of the Term Loan); provided, that any such assumption of the  Revolving Loan Commitment of such Delinquent Lender shall not be deemed to  constitute a waiver of any of the Credit Parties’ or the Loan Parties’ rights or remedies  against any such Delinquent Lender arising out of or in relation to such failure to fund.   In the event of a direct conflict between the priority provisions of this Section 8.12 and  any other provision contained in this Agreement or any other Loan Document, it is the  intention of the parties hereto that such provisions be read together and construed, to the  fullest extent possible, to be in concert with each other.  In the event of any actual,  irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of  this Section 8.12 shall control and govern. The Delinquent Lender’s decision-making and  participation rights and rights to payments as set forth above shall be restored only upon  the payment by the Delinquent Lender of its Revolving Loan Commitment Percentage of  any Revolving Loans, any participation obligation, or expenses as to which it is  delinquent, together with interest thereon at the rate set forth in Section 2.11 hereof from  the date when originally due until the date upon which any such amounts are actually  paid.         (b)   If any Swingline Loan or Letter of Credit is outstanding at the time that a  Revolving Loan Lender becomes a Delinquent Lender, then:                                   142               

 

                                                                                       (i)   such Delinquent Lender’s participation interest in any Swingline   Loan or Letter of Credit shall be reallocated among the Non-Delinquent Lenders in   accordance with their respective Revolving Loan Commitment Percentages but only to   the extent (x) the outstanding amount sum of all Non-Delinquent Lenders’ Credit   Extensions (excluding those made in respect of the Term Loan) after giving effect to such   reallocation does not exceed the total of all Non-Delinquent Lenders’ Revolving Loan   Commitments and (y) the conditions set forth in Section 4.02 are satisfied at such time;               (ii)  if the reallocation described in clause (b)(i) above cannot, or can  only partially, be effected, the Borrower shall within one Business Day following notice  by the Administrative Agent (x) first, prepay such Delinquent Lender’s participation in  any outstanding Swingline Loans (after giving effect to any partial reallocation pursuant  to clause (b)(i) above) and (y) second, cash collateralize such Delinquent Lender’s  participation in Letters of Credit (after giving effect to any partial reallocation pursuant to  clause (b)(i) above), pursuant to a cash collateral agreement to be entered into in form  and substance reasonably satisfactory to the Administrative Agent, for so long as such  L/C Bank Obligations are outstanding; provided, that the Borrower shall not be obligated  to cash collateralize any Delinquent Lender’s participations in Letters of Credit if such  Delinquent Lender is also the Issuing Bank;               (iii)  if the Borrower cash collateralizes any portion of such Delinquent   Lender’s participation in Letters of Credit pursuant to this Section 8.12(b), the Borrower  shall not be required to pay any Letter of Credit Fees to the Administrative Agent for the  account of such Delinquent Lender pursuant to Section 2.07 with respect to such cash  collateralized portion of such Delinquent Lender’s participation in Letters of Credit  during the period such participation is cash collateralized;                (iv)  to the extent the participation by any Non-Delinquent Lender in the   Letters of Credit is reallocated pursuant to this Section 8.12(b), then the Letter of Credit  Fees payable to the Non-Delinquent Lenders pursuant to Section 2.07 shall be adjusted in  accordance with such reallocation;               (v)   to the extent any Delinquent Lender’s participation in Letters of  Credit is neither cash collateralized nor reallocated pursuant to this Section 8.12(b), then,  without prejudice to any rights or remedies of the Issuing Bank or any Revolving Loan  Lender hereunder, all Letter of Credit Fees that would have otherwise been payable to  such Delinquent Lender under Section 2.07 with respect to such portion of such  participation shall instead be payable to the Issuing Bank until such portion of such  Delinquent Lender’s participation is cash collateralized or reallocated;                (vi)  so long as any Revolving Loan Lender is a Delinquent Lender, the  Swingline Lender shall not be required to make any Swingline Loan and the Issuing Bank  shall not be required to issue, amend, or increase any Letter of Credit, in each case, to the  extent (x) the Delinquent Lender’s Revolving Loan Commitment Percentage of such  Swingline Loans or Letter of Credit cannot be reallocated pursuant to this Section 8.12(b)  or (y) the Swingline Lender or the Issuing Bank, as applicable, has not otherwise entered  into arrangements reasonably satisfactory to the Swingline Lender or the Issuing Bank, as                                   143               

 

                                                                                       applicable, and the Borrower to eliminate the Swingline Lender’s or Issuing Bank’s risk        with respect to the Delinquent Lender’s participation in Swingline Loans or Letters of        Credit; and                     (vii)  The Administrative Agent may release any cash collateral provided         by the Borrower pursuant to this Section 8.12(b) to the Issuing Bank and the Issuing        Bank may apply any such cash collateral to the payment of such Delinquent Lender’s        Revolving Loan Commitment Percentage of any L/C Disbursement that is not reimbursed        by the Borrower pursuant to Section 2.07.               (c)   The non-delinquent Revolving Loan Lenders shall also have the right, but        not the obligation, in their respective, sole and absolute discretion, to acquire for no cash        consideration (pro rata, based on the respective Revolving Loan Commitments of those        Lenders electing to exercise such right) the Deteriorating Lender’s or Delinquent        Lender’s Commitment to fund future Loans (the “Delinquent Lender’s Future        Commitment”).  Upon any such purchase of the Revolving Loan Commitment        Percentage of any Deteriorating Lender’s or Delinquent Lender’s Future Commitment,        the Deteriorating Lender’s or Delinquent Lender’s share in future Revolving Loans and        its rights under the Loan Documents with respect thereto shall terminate on the date of        purchase, and the Deteriorating Lender’s or Delinquent Lender shall promptly execute all        documents reasonably requested to surrender and transfer such interest, including, if so        requested, an Assignment and Acceptance.  Each Deteriorating Lender and Delinquent        Lender shall indemnify the Agents and each non-delinquent Lender from and against any        and all loss, damage or expenses, including but not limited to reasonable attorneys’ fees        and funds advanced by any Agent other than Term Loan Agent or by any non-delinquent        Revolving Loan Lender, on account of a Deteriorating Lender’s or Delinquent Lender’s        failure to timely fund its Revolving Loan Commitment Percentage of a Revolving Loan        or to otherwise perform its obligations under the Loan Documents.         SECTION 8.13.  Arrangers, Documentation Agent and Co-Syndication Agents.   Notwithstanding the provisions of this Agreement or any of the other Loan Documents, the  Documentation Agent, the Co-Syndication Agents, and, except as provided in Section  2.02  hereof, the Arrangers shall have no powers, rights, duties, responsibilities or liabilities with  respect to this Agreement and the other Loan Documents in their capacities as such.          SECTION 8.14.  Agent for Perfection.  Each Lender hereby appoints each other Lender  as agent for the purpose of perfecting Liens for the benefit of the Agents and the Lenders, in  assets which, in accordance with Article 9 of the UCC or any other Applicable Law of the United  States can be perfected only by possession or control.  Should any Lender (other than the  Agents) obtain possession or control of any such Collateral, such Lender shall notify the Agents  thereof, and, promptly upon the Collateral Agent’s request therefor shall deliver such Collateral  to the Collateral Agent or otherwise deal with such Collateral in accordance with the Collateral  Agent’s instructions.         SECTION 8.15.  Relation Among the Lenders.  The Lenders are not partners or co- venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set  forth herein in case of the Agents) authorized to act for, any other Lender.                                         144   

 

                                                                                       SECTION 8.16.  Collateral and Guaranty Matters.  The Credit Parties irrevocably  authorize the Administrative Agent and the Collateral Agent, at their option and in their  discretion,               (a)   to release any Lien on any property granted to or held by the Collateral        Agent under any Loan Document (i) upon termination of the Revolving Loan        Commitments and (A) payment in full of all Obligations and (B)(x) the expiration or        termination of all Letters of Credit, or (y) the deposit of cash collateral with the        Administrative Agent in an amount equal to 103% of the Letter of Credit Outstandings,        (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder        or under any other Loan Document, or (iii) if approved, authorized or ratified in writing        by the applicable Lenders in accordance with Section 9.02;               (b)   to subordinate any Lien on any property granted to or held by the         Collateral Agent under any Loan Document to the holder of any Lien on such property         that is permitted by Section 6.02(d); and               (c)   to release any Facility Guarantor that is a Subsidiary from its obligations        under the Facility Guaranty if such Person ceases to be a Subsidiary as a result of a        transaction permitted hereunder.         Upon request by the Administrative Agent or the Collateral Agent at any time, the  applicable Lenders will confirm in writing such Agent’s authority to release or subordinate its  interest in particular types or items of property, or to release any Facility Guarantor from its  obligations under the Facility Guaranty pursuant to this Section 8.16.  In each case as specified in  this Section 8.16, the Administrative Agent and the Collateral Agent will, at the Borrower’s  expense, execute and deliver to the applicable Loan Party such documents as such party may  reasonably request to evidence the release of such item of Collateral or Real Estate Collateral   from the assignment and security interest granted under the Security Documents or to  subordinate its interest in such item, or to release such Facility Guarantor from its obligations  under the Facility Guaranty, in each case in accordance with the terms of the Loan Documents  and this Section 8.16.         Notwithstanding the provisions of this Section 8.16, the Administrative Agent shall be  authorized, without the consent of any Lender and without the requirement that an asset sale  consisting of the sale, transfer or other disposition having occurred, to release any security  interest in any building, structure or improvement located in an area determined by the Federal  Emergency Management Agency to have special flood hazards.         SECTION 8.17.  Providers.  Each provider of Bank Products or Cash Management  Services (each, a “Provider”) in its capacity as such shall be deemed a third party beneficiary  hereof and of the provisions of the other Loan Documents for purposes of any reference in a  Loan Document to the parties for whom the Agents are acting.  Each Agent hereby agrees to act  as agent for such Providers and, by virtue of entering into an agreement in respect of Bank  Products or Cash Management Services (each, a “Specified Agreement”), the applicable  Provider shall be automatically deemed to have appointed each Agent as its agent and to have  accepted the benefits of the Loan Documents.  It is understood and agreed that the rights and                                         145   

 

                                                                                 benefits of each Provider under the Loan Documents consist exclusively of such Provider’s  being a beneficiary of the Liens and security interests (and, if applicable, guarantees) granted to  the Collateral Agent and the right to share in payments and collections out of the Collateral or  Real Estate Collateral  as more fully set forth herein. In addition, each Provider, by virtue of  entering into a Specified Agreement, shall be automatically deemed to have agreed that the  Administrative Agent shall have the right, but shall have no obligation, to establish, maintain,  relax, or release Reserves in accordance with Section 2.03 hereof, and that if reserves are  established there is no obligation on the part of the Administrative Agent to determine or insure  whether the amount of any such reserve is appropriate or not.  The Administrative Agent shall  have no obligation to calculate the amount due and payable with respect to any Obligations on  account of Bank Products or Cash Management Services, but may rely upon a written notice  from the applicable Provider provided pursuant to Section 9.01.  In the absence of an updated  written notice, the Administrative Agent shall be entitled to assume that the amount due and  payable to the applicable Provider is the amount last certified to the Administrative Agent by  such Provider as being due and payable (less any distributions made to such Provider on account  thereof).  The Borrower may obtain Bank Products or Cash Management Services from any  Provider, although the Borrower is not required to do so.  The Borrower acknowledges and  agrees that no Provider has committed to provide any Bank Products or Cash Management  Services and that the providing of Bank Products or Cash Management Services by any Provider  is in the sole and absolute discretion of such Provider.         SECTION 8.18.  Reserves.                 (a)   Notwithstanding anything to the contrary contained in this Agreement, as         long as the Term Loan remains outstanding, the Administrative Agent shall maintain         Reserves of the type existing on the Fourth Amendment Effective Date, which Reserves         shall be calculated using the same methodology used prior to the Fourth Amendment         Effective Date; provided that (x) the Administrative Agent may eliminate any Reserve         concurrent with, or after elimination of, the event or circumstance that gave rise to the         establishment of such Reserve and (y) the Administrative Agent may in its reasonable         discretion change the methodology used to calculate any Reserve if the effect of such         change is to increase the amount of such Reserve.  For clarity, the foregoing shall not         limit the right of the Administrative Agent (i) to modify the amount of any of the         Reserves based upon mathematical calculations, including reducing the amount of any         such Reserves to an amount less than those Reserves in effect on the Fourth Amendment         Effective Date, or (ii) without regard to clause (i) hereof, to increase any Reserve from         the level in effect at the time of the Fourth Amendment Effective Date and thereafter to         reduce the amount of such Reserve to an amount not less than the amount thereof in         effect on the Fourth Amendment Effective Date, in the case of each of clauses (i) and (ii),         in a manner otherwise permitted by this Agreement.                 (b)   If the Term Loan Agent determines in good faith that there has been a         mathematical error in calculating the Term Loan Reserve, the Term Loan Agent may         notify the Administrative Agent (and shall notify the Borrower) thereof, setting forth the         amount of the Term Loan Reserve to be established as calculated by the Term Loan         Agent and the basis for its determination, together with its detailed calculation.  Within         one (1) Business Day after receipt of such notice from the Term Loan Agent, the                                         146   

 

                                                                                       Administrative Agent shall establish a Term Loan Reserve in the amount requested by        the Term Loan Agent (in the absence of manifest error).  The Administrative Agent shall        have no obligation to investigate the basis for the Term Loan Agent’s dispute or        calculation, may conclusively rely on the notice furnished by the Term Loan Agent with        respect thereto, and shall have no liability to any Loan Party or Credit Party for following        the instructions of the Term Loan Agent.               (c)   This Section 8.18 shall not be amended without the consent of the        Required Term Loan Lenders.                                     ARTICLE IX                                     Miscellaneous         SECTION 9.01.  Notices.  Except in the case of notices and other communications  expressly permitted to be given by telephone, all notices and other communications provided for  herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by  certified or registered mail or sent by telecopy, as follows:               (a)   if to any Loan Party, to it at 2425 West Loop South, Houston Texas        77027, Attention:  Chief Financial Officer (Telecopy No. (713) 300-0923), with a copy to        the attention of the Chief Legal Officer of the Loan Party at the same mailing address        (emailed e-mailed  to LegalNotices@StageStores.com);               (b)   if to the Administrative Agent, the Collateral Agent, the Term Loan Agent        or the Swingline Lender to Wells Fargo Bank, National Association, One Boston Place,        Boston, Massachusetts 02108, Attention:  Mr. Jai Alexander (Telecopy No. (855) 735        2006), with a copy to Riemer & Braunstein LLP, Seven Times Square, Suite 2506, New        York, New York 10036, Attention: Lon M. Singer Steven E. Fox , Esquire (Telecopy No.        (617) 880-3456);               (c)   if to any other Lender, to it at its address (or telecopy number) set forth on        the signature pages hereto or on any Assignment and Acceptance for such Lender.   Any party hereto may change its address or telecopy number for notices and other communi- cations hereunder by notice to the other parties hereto. All notices and other communications  given to any party hereto in accordance with the provisions of this Agreement shall be deemed to  have been given on the date of receipt.         SECTION 9.02.  Waivers; Amendments.               (a)   No failure or delay by the Agents, the Issuing Bank or any Lender in        exercising any right or power hereunder or under any other Loan Document shall operate        as a waiver thereof, nor shall any single or partial exercise of any such right or power, or        any abandonment or discontinuance of steps to enforce such a right or power, preclude        any other or further exercise thereof or the exercise of any other right or power. The        rights and remedies of the Agents, the Issuing Bank and the Lenders hereunder and under        the other Loan Documents are cumulative and are not exclusive of any rights or remedies                                         147   

 

                                                                           that they would otherwise have. No waiver of any provision of any Loan Document or  consent to any departure by any Loan Party therefrom shall in any event be effective  unless the same shall be permitted by paragraph (b) of this Section, and then such waiver  or consent shall be effective only in the specific instance and for the purpose for which  given. Without limiting the generality of the foregoing, the making of a Loan or issuance  of a Letter of Credit shall not be construed as a waiver of any Default, regardless of  whether the Agents, any Lender or the Issuing Bank may have had notice or knowledge  of such Default at the time.         (b)   Neither this Agreement nor any other Loan Document nor any provision  hereof or thereof may be waived, amended or modified except, in the case of this  Agreement, pursuant to an agreement or agreements in writing entered into by the  Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant  to an agreement or agreements in writing entered into by the Agents and the Loan Parties  that are parties thereto, in each case with the Consent of the Required Lenders; except,  that, no such agreement shall:               (i)   increase the Commitment of any Lender without the Consent of        such Lender, or increase the Aggregate Revolving Loan Commitments (except as        provided in Section 2.02) without the consent of each Revolving Loan Lender, or        increase the aggregate principal balance of the Term Loans (except as provided in        Section 2.02A) without the consent of the Required Revolving Loan Lenders and        each Term Loan Lender,                (ii)  reduce the principal amount of any Loan or L/C Disbursement or        reduce the rate of interest thereon, or reduce any fees payable hereunder, without        the Consent of each Lender affected thereby,                (iii)  postpone the scheduled date of payment of the principal amount of        any Revolving Loan or L/C Disbursement, or any interest thereon, or any fees        payable hereunder, or reduce the amount of, waive or excuse any such payment,        or postpone the scheduled date of expiration of the Commitments or the Maturity        Date, without the Consent of each Lender affected thereby,                (iv)  change Sections 2.02 2.02 , 2.02A, 2.21 2.21 , 2.23 2.23 , 2.24 2.24 ,        7.03, or 7.04 without the Consent of each Lender,               (v)   change any of the provisions of this Section 9.02 or the definition        of the terms “Required Lenders”, “Required Revolving Loan Lenders”, “Required        Term Loan Lenders” or “Required Supermajority Lenders” or any other provision        of any Loan Document specifying the number or percentage of Lenders required        to waive, amend or modify any rights thereunder or make any determination or        grant any consent thereunder, without the Consent of each Lender,                (vi)  except as set forth in Section 8.16, release any Loan Party from its        obligations under any Loan Document, or limit its liability in respect of such Loan        Document, without the Consent of each Lender,                                    148               

 

                                                                           (vii)  except for sales described in Section 6.05 or as permitted in  Section 8.16 or the Security Documents, release any material portion of the  Collateral from the Liens of the Security Documents, without the Consent of each  Lender,          (viii)  without the consent of all Revolving Loan Lenders and all Term  Loan Lenders, amend the definition of “Revolving Loan Borrowing Base”, or any  component definition of any of the foregoing if as a result thereof the amounts  available to be borrowed by the Borrower would be increased, provided that  the  foregoing shall not limit the discretion of the Administrative Agent pursuant to  clause (j) of the definition of Eligible Inventory, or to change, establish or  eliminate any Reserves,          (ix)  without the consent of all Term Loan Lenders, amend the  definition of “Term Loan Borrowing Base” or any component definition of any of  the foregoing if as a result thereof the amounts available to be borrowed by the  Borrower would be increased, except that if such amendment would directly or  indirectly increase the Term Loan Credit Card Receivables Advance Rate or the  Term Loan Inventory Advance Rate to more than 15% each, then the consent  thereto of the Required Revolving Loan Lenders shall also be required; provided  that  the foregoing shall not limit the discretion of the Administrative Agent  pursuant to clause (j) of the definition of Eligible Inventory, or to change,  establish or eliminate any Reserves,         (x)   without the consent of Required Revolving Loan Lenders and   Required Term Loan Lenders (and without limitation upon clause (b)(ii) above),           (1)   amend the definitions of “Adjusted LIBO Rate”, “Commitment         Percentage”, “Appraised Value”, “Approved Fund”, “Bank Products”,         “Bank Products Cap”, “Excess Availability”, “Prime Rate”, “Cash         Management Services”, “Default Rate”, “Eligible Assignee”,         “Enforcement Action”, “Insolvency Increase Amount”, “Interest Payment         Date”, “LIBO Rate”, “Material Adverse Effect”, “Measurement Period”,         “Payment Conditions”, “Restricted Payments”, “Reserves” (or any defined         term included therein), “Revolving Loan Priority Collateral”, “Term Loan         Action Notice”, “Term Loan Priority Collateral”, “Term Loan Reserve”,         or “Unintentional Overadvance”, or           (2)   amend Sections 5.01, 5.02, 5.09, 5.10, 6.05, 7.01,  7.02,  9.03,  or        any provision of Article VI,         (xi)  modify the definition of “Permitted Overadvance” so as to increase  the amount thereof or, except as provided in such definition, the time period for  which a Permitted Overadvance may remain outstanding, in each case without the  Consent of each Lender, or                              149               

 

                                                                                                   (xii)  subordinate the Obligations hereunder, or the Liens granted               hereunder or under the other Loan Documents, to any other Indebtedness or Lien,               as the case may be without the prior Consent of each Lender;    provided further that no such agreement shall amend, modify or otherwise affect the rights or  duties of any Agent, the Issuing Bank or the Swingline Lender without the prior written consent  of such Agent, the Issuing Bank or the Swingline Lender, as the case may be.  Notwithstanding  anything to the contrary contained in this Section 9.02, amendment of the definition of the term  “Term Loan Interest Rate” shall only require the Consent of all Term Loan Lenders, except that  if such amendment would increase the amount thereof by more than 3.50 percentage points, then  the consent thereto of the Required Revolving Loan Lenders shall also be required. For the  avoidance of doubt, the Administrative Agent shall be permitted to modify the amount of any of  the Reserves based upon mathematical calculations (e.g., the application of a “shrink” reserve)  without the consent of the Term Loan Agent or any other Person.                  (c)   Notwithstanding anything to the contrary contained in this Section 9.02, in        the event that the Borrower requests that this Agreement or any other Loan Document be        modified, amended or waived in a manner which would require the Consent of the        Lenders pursuant to Section 9.02(b) and such amendment is approved by the Required        Lenders, but not by the percentage of the Lenders set forth in said Section 9.02(b), the        Borrower, and the Required Lenders shall be permitted to amend this Agreement without        the Consent of the Lender or Lenders which did not agree to the modification or        amendment requested by the Borrower (such Lender or Lenders, collectively the        “Minority Lenders”) to provide for (w) the termination of the Commitment of each of the        Minority Lenders, (x) the addition to this Agreement of one or more Eligible Assignees,        or an increase in the Commitment of one or more of the Required Lenders, so that the        aggregate Commitments after giving effect to such amendment shall be in the same        amount as the aggregate Commitments immediately before giving effect to such        amendment, (y) if any Loans are outstanding at the time of such amendment, the making        of such additional Loans by such new or increasing Lender or Lenders, as the case may        be, as may be necessary to repay in full the outstanding Loans (including principal,        interest, fees, and all other Obligations) owing to the Minority Lenders immediately        before giving effect to such amendment, and (z) such other modifications to this        Agreement or the Loan Documents as may be appropriate and incidental to the foregoing.                (d)   No notice to or demand on any Loan Party shall entitle any Loan Party to        any other or further notice or demand in the same, similar or other circumstances. Each        holder of a Note shall be bound by any amendment, modification, waiver or consent        authorized as provided herein, whether or not a Note shall have been marked to indicate        such amendment, modification, waiver or consent and any consent by a Lender, or any        holder of a Note, shall bind any Person subsequently acquiring a Note, whether or not a        Note is so marked. No amendment to this Agreement or any other Loan Document shall        be effective against the Borrower unless signed by the Borrower or other applicable Loan        Party.         SECTION 9.03.  Expenses; Indemnity; Damage Waiver.  Except as expressly set forth in  the Fee Letter, (a) the Loan Parties shall jointly and severally pay all Credit Party Expenses and,                                         150   

 

                                                                                 without duplication: (i)  actual reasonable out-of-pocket expenses incurred by the Agents and  their Affiliates, including the actual reasonable fees, charges and disbursements of counsels for  the Agents, for Inventory appraisers, and for commercial finance examinations, in connection  with the syndication of the credit facilities provided for herein, the preparation and  administration of the Loan Documents or any amendments, modifications or waivers of the  provisions thereof (whether or not the transactions contemplated hereby or thereby shall be  consummated), (ii) all actual reasonable out-of-pocket expenses incurred by the Issuing Bank in  connection with the issuance, amendment , renewal  or extension of any Letter of Credit or any  demand for payment thereunder, and (iii) all actual reasonable out-of-pocket expenses incurred  by the Agents, the Issuing Bank or any Lender, including the reasonable fees, charges and  disbursements of any counsels and any outside consultants for the Agents, the Issuing Bank or  any Lender, for Inventory appraisals and for commercial finance examinations, in connection  with the enforcement or protection of its rights in connection with the Loan Documents,  including its rights under this Section, or in connection with the Loans made or Letters of Credit  issued hereunder, including all such actual reasonable out-of-pocket expenses incurred during  any workout, restructuring or negotiations in respect of such Credit Extensions; provided that the  Lenders who are not the Agents or the Issuing Bank shall not be entitled to reimbursement for  counsel except after the occurrence and during the continuance of an Event of Default and in  such event shall be entitled to reimbursement for no more than (x) one counsel representing all  Revolving Loan Lenders (absent a conflict of interest in which case the Revolving Loan Lenders  may engage and be reimbursed for additional counsel) and (y) one counsel representing all Term  Loan Lenders (absent a conflict of interest in which case the Term Loan Lenders may engage  and be reimbursed for one additional counsel).                (b)   The Loan Parties shall, jointly and severally, indemnify the Agents, the  Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each  such Person being called an “Indemnitee”), against, and hold each Indemnitee harmless from,  any and all losses, claims, damages, liabilities and related expenses, including the reasonable  fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted  against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or  delivery of any Loan Document or any other agreement or instrument contemplated hereby, the  performance by the parties to the Loan Documents of their respective obligations thereunder or  the consummation of the transactions contemplated by the Loan Documents or any other  transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds  therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a  Letter of Credit if the documents presented in connection with such demand do not strictly  comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of  Hazardous Materials on or from any property currently or formerly owned or operated by any  Loan Party or any of the Subsidiaries, or any Environmental Liability related in any way to any  Loan Party or any of the Subsidiaries, or (iv) any actual or prospective claim, litigation,  investigation or proceeding relating to any of the foregoing, whether based on contract, tort or  any other theory and regardless of whether any Indemnitee is a party thereto, provided that such  indemnity shall not, as to any Indemnitee, be available to the extent that (x) such losses, claims,  damages, liabilities or related expenses resulted from the gross negligence, willful misconduct or  bad faith of such Indemnitee (or of any officer, director, employee, advisor or agent of such  Indemnitee),  (y) the Loan Parties were not given notice of the subject claim and the opportunity  to participate in the defense thereof, at their expense (except that each Loan Party shall remain                                         151   

 

                                                                                 liable to the extent such failure to give notice does not result in a loss to such Loan Party), or  (z) if the same results from a compromise or settlement agreement entered into without the  consent of the Borrower, which shall not be unreasonably withheld.  In connection with any  indemnified claim hereunder, the Indemnitee shall be entitled to select its own counsel.                (c)   To the extent that any Loan Party fails to pay any amount required to be   paid by it to the Agents or the Issuing Bank under paragraph (a) or (b) of this Section, each   Revolving Loan Lender severally agrees to pay to the Agents or the Issuing Bank, as the case   may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed   expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed  expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was  incurred by or asserted against the Agents or the Issuing Bank. For purposes hereof, a Revolving  Loan Lender’s “pro rata share” shall be determined based upon its Commitment Percentage at  the time.               (d)   To the extent permitted by Applicable Law, no Loan Party shall assert,   and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special,   indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out   of, in connection with, or as a result of, this Agreement or any agreement or instrument   contemplated hereby, the transactions contemplated by the Loan Documents, any Loan or Letter   of Credit or the use of the proceeds thereof.  The Loan Parties further agree that no Indemnitee   shall have any liability to the Loan Parties, any Person asserting claims by or on behalf of any   Loan Party or any other Person in connection with this Agreement or the other Loan Documents   except (i) for breach of the Indemnitee’s obligations under this Agreement and the other Loan   Documents, or (ii) the Indemnitee’s gross negligence, willful misconduct or bad faith.               (e)   All amounts due under this Section shall be payable promptly after written  demand therefor.         SECTION 9.04.  Successors and Assigns.               (a)   The provisions of this Agreement shall be binding upon and inure to the  benefit of the parties hereto and their respective successors and assigns permitted hereby  (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that no Loan  Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior  written consent of each Lender (and any such attempted assignment or transfer without such  consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be  construed to confer upon any Person (other than the parties hereto, their respective successors  and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter  of Credit) and, to the extent expressly contemplated hereby, the Related Parties of each of the  Agents, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or  by reason of this Agreement.               (b)   Any Lender may assign to one or more Eligible Assignees all or a portion   of its rights and obligations under this Agreement (including all or a portion of its Commitment   and the Loans at the time owing to it), provided that (i) except in the case of an assignment to a  Lender or an Affiliate of a Lender, or an Approved Fund, the Borrower (but only if no Event of                                         152   

 

                                                                                 Default then exists), the Administrative Agent, the Collateral Agent and, to the extent the  assignment is of a Revolving Loan or a Revolving Loan Commitment, the Issuing Bank must  give their prior written consent to such assignment (which consent shall not be unreasonably  withheld, conditioned, or delayed), (ii) except in the case of an assignment to a Lender,  an  Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of  the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the  assigning Lender subject to each such assignment (determined as of the date the Assignment and  Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not  be less than $10,000,000 (or, in the case of the Term Loan, $1,000,000) unless the  Administrative Agent otherwise consents, (iii) each partial assignment shall be made as an  assignment of a proportionate part of all the assigning Lender’s rights and obligations, (iv) the  parties to each assignment shall execute and deliver to the Administrative Agent an Assignment  and Acceptance, together with a processing and recordation fee of $3,500.  Subject to acceptance  and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date  specified in each Assignment and Acceptance the Eligible Assignee thereunder shall be a party  hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the  rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder  shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from  its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering  all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall  cease to be a party hereto but shall continue to be entitled to the benefits of Section 9.03). Any  assignment or transfer by a Lender of rights or obligations under this Agreement that does not  comply with this paragraph shall be treated for purposes of this Agreement as a sale by such  Lender of a participation in such rights and obligations in accordance with paragraph (e) of this  Section.               (c)   The Administrative Agent, acting for this purpose as an agent of the Loan  Parties, shall maintain at one of its offices in Boston, Massachusetts a copy of each Assignment  and Acceptance delivered to it and a register for the recordation of the names and addresses of  the Lenders, and the Commitment of, and principal amount of the Loans and L/C Disbursements  owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The  entries in the Register shall be conclusive and the Loan Parties, the Administrative Agent, the  Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register  pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,  notwithstanding notice to the contrary. The Register shall be available for inspection by the  Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon  reasonable prior notice.               (d)   Upon its receipt of a duly completed Assignment and Acceptance   executed by an assigning Lender and an assignee, the processing and recordation fee referred to   in paragraph (b) of this Section and any written consent to such assignment required by   paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and   Acceptance and record the information contained therein in the Register. No assignment shall be   effective for purposes of this Agreement unless it has been recorded in the Register as provided   in this paragraph.                                          153   

 

                                                                                             (e)   Any Lender may, without the consent of the Loan Parties, the Agents, and  the Issuing Bank, sell participations to one or more banks or other entities, other than a Loan  Party (a “Participant”) in all or a portion of such Lender’s rights and obligations under this  Agreement (including all or a portion of its Commitment and the Loans owing to it), provided  that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender  shall remain solely responsible to the other parties hereto for the performance of such obligations  and (iii) the Loan Parties, the Agents, the Issuing Bank and the other Lenders shall continue to  deal solely and directly with such Lender in connection with such Lender’s rights and obligations  under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a  participation in the Commitments, the Loans and the Letters of Credit Outstandings shall provide  that such Lender shall retain the sole right to enforce the Loan Documents and to approve any  amendment, modification or waiver of any provision of the Loan Documents, provided that such  agreement or instrument may provide that such Lender will not, without the consent of the  Participant, agree to any amendment, modification or waiver described in the first proviso to  Section 9.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the Loan  Parties agree that each Participant shall be entitled to the benefits of Sections 2.25, 2.27 and 2.28  to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to  paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be  entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant  agrees to be subject to Section 2.27(c) as though it were a Lender.  Each Lender, acting for this  purpose as an agent of the Loan Parties, shall maintain at its offices a record of each agreement  or instrument effecting any participation and a register for the recordation of the names and  addresses of its Participants and their rights with respect to principal amounts and other  Obligations from time to time (each a “Participation Register”). The entries in each Participation  Register shall be conclusive and the Loan Parties, the Administrative Agent, the Issuing Bank  and the Lenders may treat each Person whose name is recorded in a Participant Register as a  Participant for all purposes of this Agreement (including, for the avoidance of doubt, for  purposes of entitlement to benefits under Sections 2.25, 2.27, 2.28 or 9.08), and such Participants  shall be subject to Section 2.28(h) and Section 2.30. The Participation Register shall be available  for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and  from time to time upon reasonable prior notice.               (f)   A Participant shall not be entitled to receive any greater payment under  Section 2.25 or 2.28 than the applicable Lender would have been entitled to receive with respect  to the participation sold to such Participant, unless the sale of the participation to such Participant  is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender  if it were a Lender shall not be entitled to the benefits of Section 2.28 unless (i) the Borrower is  notified of the participation sold to such Participant and such Participant agrees, for the benefit of   the Borrower, to comply with Section 2.28(e) as though it were a Lender and (ii) such Participant  is eligible for exemption from the withholding Tax referred to therein, following compliance  with Section 2.28(e).               (g)   Any Lender may at any time pledge or assign a security interest in all or  any portion of its rights under this Agreement to secure obligations of such Lender, including  any pledge or assignment to secure obligations to any of the twelve Federal Reserve Banks  organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341, and this Section  shall not apply to any such pledge or assignment of a security interest, provided that no such                                         154   

 

                                                                                 pledge or assignment of a security interest shall release a Lender from any of its obligations  hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.           SECTION 9.05.  Survival.  All covenants, agreements, representations and warranties  made by the Loan Parties in the Loan Documents and in the certificates or other instruments  delivered in connection with or pursuant to this Agreement or any other Loan Document shall be  considered to have been relied upon by the other parties hereto and shall survive the execution  and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of  Credit, regardless of any investigation made by any such other party or on its behalf and  notwithstanding that the Agents, the Issuing Bank or any Lender may have had notice or  knowledge of any Default or incorrect representation or warranty at the time any credit is  extended hereunder, and shall continue in full force and effect as long as the principal of or any  accrued interest on any Loan or any fee or any other amount payable under this Agreement is  outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments  have not expired or terminated. The provisions of Sections 2.25, 2.28, 9.03, and 9.14 and  Article VIII shall survive and remain in full force and effect regardless of the consummation of  the transactions contemplated hereby, the repayment of the Loans, the expiration or termination  of the Letters of Credit and the Commitments or the termination of this Agreement or any  provision hereof.  In connection with the termination of this Agreement and the release and  termination of the security interests in the Collateral  and Real Estate Collateral , the Agents may  require such indemnities and collateral security as they shall reasonably deem necessary or  appropriate under the circumstances to protect the Credit Parties against (x) loss on account of  credits previously applied to the Obligations that may subsequently be reversed or revoked, (y)  any obligations that may thereafter arise with respect to Bank Products or Cash Management  Services, and (z) any Obligations that may thereafter arise under Section 9.03 hereof.         SECTION 9.06.  Counterparts; Integration; Effectiveness.  This Agreement may be  executed in counterparts (and by different parties hereto on different counterparts), each of which  shall constitute an original, but all of which when taken together shall constitute a single  contract. This Agreement, the other Loan Documents and any separate letter agreements with  respect to fees payable to the Agents constitute the entire contract among the parties relating to  the subject matter hereof and supersede any and all contemporaneous or previous agreements  and understandings, oral or written, relating to the subject matter hereof. Except as provided in  Section 4.01, this Agreement shall become effective when it shall have been executed by the  Agents and the Lenders and when the Administrative Agent shall have received counterparts  hereof that, when taken together, bear the signatures of each of the other parties hereto, and  thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective  successors and assigns. Delivery of an executed counterpart of a signature page of this  Agreement by telecopy, pdf or other electronic transmission shall be effective as delivery of a  manually executed counterpart of this Agreement.         SECTION 9.07.  Severability.  Any provision of this Agreement held to be invalid,  illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the  extent of such invalidity, illegality or unenforceability without affecting the validity, legality and  enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a  particular jurisdiction shall not invalidate such provision in any other jurisdiction.                                          155   

 

                                                                                       SECTION 9.08.  Right of Setoff.  If an Event of Default shall have occurred and be  continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time  to time, after obtaining the prior written consent of the Administrative Agent or the Required  Lenders, to the fullest extent permitted by Applicable Law, to set off and apply any and all  deposits (general or special, time or demand, provisional or final) at any time held and other  obligations at any time owing by such Lender or Affiliate to or for the credit or the account of  the Loan Parties against any of and all the obligations of the Loan Parties now or hereafter  existing under this Agreement held by such Lender, irrespective of whether or not such Lender  shall have made any demand under this Agreement and although such obligations may be  unmatured. The rights of each Lender under this Section are in addition to other rights and  remedies (including other rights of setoff) that such Lender may have.          SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of Process.                (a)   THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED  IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT  GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF, BUT  INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.               (b)   The Loan Parties agree that any suit for the enforcement of this Agreement  or any other Loan Document may be brought in any court of the State of New York sitting in the  Borough of Manhattan or any federal court sitting therein as the Administrative Agent may elect  in its sole discretion and consent to the non-exclusive jurisdiction of such courts.  The Loan  Parties hereby waive any objection which they may now or hereafter have to the venue of any  such suit or any such court or that such suit is brought in an inconvenient forum. The Loan  Parties agree that any action commenced by any Loan Party asserting any claim or counterclaim  arising under or in connection with this Agreement or any other Loan Document shall be brought  solely in a court of the State of New York sitting in the Borough of Manhattan or any federal  court sitting therein as the Administrative Agent may elect in its sole discretion and consent to  the exclusive jurisdiction of such courts with respect to any such action.                (c)   Each party to this Agreement irrevocably consents to service of process in  the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan  Document will affect the right of any party to this Agreement to serve process in any other  manner permitted by law.         SECTION 9.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT  TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH ANY LOAN  PARTY, ANY AGENT, ANY LENDER OR ANY PARTICIPANT IS OR BECOMES A  PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST  ANY LOAN PARTY, ANY AGENT, AND/OR SUCH LENDER OR PARTICIPANT OR IN  WHICH THE BORROWER, THE AGENTS, OR SUCH LENDER OR PARTICIPANT, IS  JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF  OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN ANY LOAN  PARTY OR ANY OTHER PERSON AND THE AGENTS, OR SUCH LENDER OR  PARTICIPANT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,                                         156   

 

                                                                                 AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR  OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF  LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND  (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN  INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE  MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.         SECTION 9.11.  Headings.  Article and Section headings and the Table of Contents used  herein are for convenience of reference only, are not part of this Agreement and shall not affect  the construction of, or be taken into consideration in interpreting, this Agreement.          SECTION 9.12.  Interest Rate Limitation.  Notwithstanding anything herein to the  contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges  and other amounts that are treated as interest on such Loan under Applicable Law (collectively  the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be  contracted for, charged, taken, received or reserved by the Lender holding such Loan in  accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder,  together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and,  to the extent lawful, the interest and Charges that would have been payable in respect of such  Loan but were not payable as a result of the operation of this Section shall be cumulated and the  interest and Charges payable to such Lender in respect of other Loans or periods shall be  increased (but not above the Maximum Rate therefor) until such cumulated amount, together  with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have  been received by such Lender.         SECTION 9.13.  Additional Waivers.                (a)   The Obligations are the joint and several obligations of each Loan Party.  To the fullest extent permitted by Applicable Law, the obligations of each Loan Party hereunder  shall not be affected by (i) the failure of any Agent or any other Credit Party to assert any claim  or demand or to enforce or exercise any right or remedy against any other Loan Party under the  provisions of this Agreement, any other Loan Document or otherwise, (ii) any rescission, waiver,  amendment or modification of, or any release from any of the terms or provisions of, this  Agreement, any other Loan Document, or any other agreement, including with respect to any  other Loan Party, or (iii) the failure to perfect any security interest in, or the release of, any of the  security held by or on behalf of the Collateral Agent or any other Credit Party.               (b)   To the fullest extent permitted by Applicable Law, the obligations of each  Loan Party hereunder shall not be subject to any reduction, limitation, impairment or termination  for any reason (other than the indefeasible payment in full in cash of the Obligations), including  any claim of waiver, release, surrender, alteration or compromise of any of the Obligations, and  shall not be subject to any defense or set-off, counterclaim, recoupment or termination  whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or  otherwise. Without limiting the generality of the foregoing, the obligations of each Loan Party  hereunder shall not be discharged or impaired or otherwise affected by any default, failure or  delay, willful or otherwise, in the performance of the Obligations, or by any other act or  omission that may or might in any manner or to any extent vary the risk of any Loan Party or that                                         157   

 

                                                                                 would otherwise operate as a discharge of any Loan Party as a matter of law or equity (other than  the indefeasible payment in full in cash of all the Obligations).                 (c)   To the fullest extent permitted by Applicable Law, each Loan Party  waives any defense based on or arising out of any defense of any other Loan Party or the  unenforceability of the Obligations or any part thereof from any cause, or the cessation from any  cause of the liability of any other Loan Party, other than the indefeasible payment in full in cash  of all the Obligations. The Collateral Agent and the other Credit Parties may, at their election,  foreclose on any security held by one or more of them by one or more judicial or nonjudicial  sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any  part of the Obligations, make any other accommodation with any other Loan Party, or exercise  any other right or remedy available to them against any other Loan Party, without affecting or  impairing in any way the liability of any Loan Party hereunder except to the extent that all the  Obligations have been indefeasibly paid in full in cash. Pursuant to Applicable Law, each Loan  Party waives any defense arising out of any such election even though such election operates,  pursuant to Applicable Law, to impair or to extinguish any right of reimbursement or  subrogation or other right or remedy of such Loan Party against any other Loan Party, as the case  may be, or any security.               (d)   Upon payment by any Loan Party of any Obligations, all rights of such   Loan Party against any other Loan Party arising as a result thereof by way of right of   subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be   subordinate and junior in right of payment to the prior indefeasible payment in full in cash of all   the Obligations. In addition, any indebtedness of any Loan Party now or hereafter held by any   other Loan Party is hereby subordinated in right of payment to the prior payment in full of the   Obligations. Notwithstanding the foregoing, prior to the occurrence of an Event of Default, any   Loan Party may make payments to any other Loan Party on account of any such indebtedness.   After the occurrence and during the continuance of an Event of Default, none of the Loan Parties   will demand, sue for, or otherwise attempt to collect any such indebtedness.  If any amount shall   erroneously be paid to any Loan Party on account of (i) such subrogation, contribution,   reimbursement, indemnity or similar right or (ii) any such indebtedness of any Loan Party, such   amount shall be held in trust for the benefit of the Credit Parties and shall forthwith be paid to   the Administrative Agent to be credited against the payment of the Obligations, whether matured   or unmatured, in accordance with the terms of this Agreement and the other Loan Documents.    To the extent that any Loan Party shall, under this Agreement as a joint and several obligor,   repay any of the Obligations constituting Revolving Loans made to another Loan Party   hereunder (an “Accommodation Payment”), then the Loan Party making such Accommodation  Payment shall be entitled to contribution and indemnification from, and be reimbursed by, each  of the other Loan Parties in an amount equal to a fraction of such Accommodation Payment, the  numerator of which fraction is such other Loan Party’s Allocable Amount and the denominator  of which is the sum of the Allocable Amounts of all of the Loan Parties.  As of any date of  determination, the “Allocable Amount” of each Loan Party shall be equal to the maximum  amount of liability for Accommodation Payments which could be asserted against such Loan  Party hereunder without (a) rendering such Loan Party “insolvent” within the meaning of Section  101 (31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”)  or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”), (b) leaving such Loan Party  with unreasonably small capital or assets, within the meaning of Section 548 of the Bankruptcy                                         158   

 

                                                                                 Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Loan Party unable  to pay its debts as they become due within the meaning of Section 548 of the Bankruptcy Code  or Section 4 of the UFTA, or Section 5 of the UFCA.          SECTION 9.14.  Confidentiality.  Each of the Lenders agrees that it will use its best  efforts not to disclose without the prior consent of the Borrower (other than to its employees,  auditors, counsel or other professional advisors, to affiliates or to another Lender if the Lender or  such Lender’s holding or parent company in its sole discretion determines that any such party  should have access to such Confidential Information) any Confidential Information with respect  to the Borrower or any other Loan Party which is furnished pursuant to this Agreement, provided  that any Lender may disclose any such Confidential Information (a) as may be required or  appropriate in any report, statement or testimony submitted to any municipal, state or federal  regulatory body having or claiming to have jurisdiction over such Lender or to the Federal  Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in  the United States or elsewhere) or their successors, (b) as may be required or appropriate in  response to any summons or subpoena or in connection with any litigation, provided that if the  Lender is able to do so prior to complying with the summons or subpoena, such Lender shall  provide the Borrower with prompt notice of such requested disclosure so that the Borrower may  seek a protective order or other appropriate remedy (nothing contained herein however shall  result in such Lender’s non-compliance with Applicable Law), (c) in order to comply with any  law, order, regulation or ruling applicable to such Lender, (d) in connection with the enforcement  of remedies under this Agreement and the other Loan Documents, (e) to any Lender’s limited  and general partners and/or members (to the extent such Lender or any such Affiliate is a  partnership, limited partnership, limited liability company or other similar organization),  investors and credit providers provided that each such Person described in this clause (e) agrees  to be bound by the provisions of this Section, and (f) to any prospective transferee in connection  with any contemplated transfer of any of the Loans or Notes or any interest therein by such  Lender provided that such prospective transferee agrees to be bound by the provisions of this  Section.  The Loan Parties hereby agree that the failure of a Lender to comply with the  provisions of this Section 9.14 shall not relieve the Loan Parties of any of its obligations to such  Lender under this Agreement and the other Loan Documents.  Notwithstanding anything to the  contrary herein contained, and except to the extent reasonably necessary to comply with  applicable securities laws, each party (and their respective employees, representatives and other  agents) may disclose to any Person the tax treatment and tax structure of the transactions  contemplated by this Agreement and all materials (including opinions or other tax analyses) that  are provided to such part relating to such tax treatment and tax structure.  Unless sooner  terminated by agreement of the parties, the agreements contained in this Section 9.14 shall  terminate, as to any Lender, one (1) year after the date that such Lender holds no Obligations,  provided that any such termination shall not relieve the parties of their obligations under this  Section 9.14 with respect to Confidential Information disclosed prior to the termination hereof.   Notwithstanding the foregoing, each Loan Party consents to the publication by Administrative  Agent, any Lender or their respective representatives of advertising material, including any  “tomb stone”, press release or comparable advertising, on its website or in other marketing  materials of Administrative Agent any Lender or their respective representatives  relating to the  financing transactions contemplated by this Agreement using any Loan Party’s name, product  photographs, logo, trademark or other insignia; provided, however, that the parties hereto  acknowledge and agree that any such advertising or marketing materials shall include only                                         159   

 

                                                                                 publicly available information and any Loan Party’s trademarks and logos may be used only if  appearing as provided by such Loan Party from time to time.  The Administrative Agent shall  provide a draft reasonably in advance of any press release to the Borrower for review and  comment prior to the publication thereof.  The Administrative Agent reserves the right to provide  to industry trade organizations and loan syndication and pricing reporting services information  necessary and customary for inclusion in league table measurements.          SECTION 9.15.  Patriot Act.  Each Lender that is subject to the requirements of the USA  PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Patriot   Act”) hereby notifies the Loan Parties that pursuant to the requirements of the Patriot  Act, it is  required to obtain, verify and record information that identifies each Loan Party, which  information includes the name and address of each Loan Party and other information that will  allow such Lender to identify each Loan Party in accordance with the Patriot  Act.  In addition,  the Administrative Agent and each Lender shall have the right to periodically conduct due  diligence (including, without limitation, in respect of information and documentation as may  reasonably be requested by the Administrative Agent or any Lender from time to time for  purposes of compliance by the Administrative Agent or such Lender with applicable Laws  (including, without limitation, the Patriot  Act and other “know your customer” and Anti-Money  Laundering Laws), and any policy or procedure implemented by the Administrative Agent or  such Lender to comply therewith) on all Loan Parties, their senior management and key  principals and legal and beneficial owners.  Each Loan Party agrees to cooperate in respect of the  conduct of such due diligence and further agrees that the reasonable costs and charges for any  such due diligence by the Administrative Agent shall constitute Credit Party Expenses hereunder  and be for the account of the Borrower.         SECTION 9.16.  Foreign Asset Control Regulations.  Neither of the advance of the  Loans nor the use of the proceeds of any thereof will violate the Trading With the Enemy Act  (50 U.S.C. § 1 et seq., as amended) (the “Trading With the Enemy Act”) or any of the foreign  assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter  V, as amended) (the “Foreign Assets Control Regulations”) or any enabling legislation or  executive order relating thereto (which for the avoidance of doubt shall include, but shall not be  limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property and Prohibiting  Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed.  Reg. 49079 (2001)) (the “Executive Order”) and (b) the Patriot  Act.  Furthermore, none of the  Loan Parties or their Affiliates (a) is or will become a “blocked person” as described in the  Executive Order, the Trading With the Enemy Act or the Foreign Assets Control Regulations or  (b) engages or will engage in any dealings or transactions, or be otherwise associated, with any  such “blocked person” or in any manner violative of any such order.  No Loan Party nor any of  its Subsidiaries nor, to the knowledge of such Loan Party, any director, officer, employee, agent  or Affiliate of such Loan Party or such Subsidiary (a) is a Sanctioned Person or a Sanctioned  Entity, (b) has any assets located in Sanctioned Entities, or (c) derives revenues from investments  in Sanctioned Persons or Sanctioned Entities.  Each of the Loan Parties and its Subsidiaries has  implemented and maintains in effect policies and procedures, in the Loan Parties’ reasonable  business judgment, designed to promote and achieve compliance by the Loan Parties and their  Subsidiaries with the Anti-corruption Laws.  Each of the Loan Parties and its Subsidiaries have  conducted their business in material compliance with the Anti-corruption Laws.                                         160   

 

                                                                                       SECTION 9.17.  No Advisory or Fiduciary Responsibility.  In connection with all  aspects of each transaction contemplated hereby, the Loan Parties each acknowledge and agree  that: (i) the credit facility provided for hereunder and any related arranging or other services in  connection therewith (including in connection with any amendment, waiver or other  modification hereof or of any other Loan Document) are an arm’s-length commercial transaction  between the Loan Parties, on the one hand, and the Credit Parties, on the other hand, and each of  the Loan Parties is capable of evaluating and understanding and understands and accepts the  terms, risks and conditions of the transactions contemplated hereby and by the other Loan  Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in  connection with the process leading to such transaction, each Credit Party is and has been acting  solely as a principal and is not the financial advisor, agent or fiduciary, for the Loan Parties or  any of their respective Affiliates, stockholders, creditors or employees or any other Person; (iii)  none of the Credit Parties has assumed or will assume an advisory, agency or fiduciary  responsibility in favor of the Loan Parties with respect to any of the transactions contemplated  hereby or the process leading thereto, including with respect to any amendment, waiver or other  modification hereof or of any other Loan Document (irrespective of whether any of the Credit  Parties has advised or is currently advising any Loan Party or any of its Affiliates on other  matters) and none of the Credit Parties has any obligation to any Loan Party or any of its  Affiliates with respect to the transactions contemplated hereby except those obligations expressly  set forth herein and in the other Loan Documents; (iv) the Credit Parties and their respective  Affiliates may be engaged in a broad range of transactions that involve interests that differ from  those of the Loan Parties and their respective Affiliates, and none of the Credit Parties has any  obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary  relationship; and (v) the Credit Parties have not provided and will not provide any legal,  accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby  (including any amendment, waiver or other modification hereof or of any other Loan Document)  and each of the Loan Parties has consulted its own legal, accounting, regulatory and tax advisors  to the extent it has deemed appropriate.  Each of the Loan Parties hereby waives and releases, to  the fullest extent permitted by law, any claims that it may have against each of the Credit Parties  with respect to any breach or alleged breach of agency or fiduciary duty.          SECTION 9.18.  Existing Credit Agreement Amended and Restated.               (a)   On the Effective Date, (a) this Agreement shall amend and restate the  Existing Credit Agreement in its entirety and (b) the rights and obligations of the parties under  the Existing Credit Agreement shall be subsumed within, and be governed by, this Agreement;  provided, however, that the Borrower hereby agrees that (i) the Letter of Credit Outstandings  under, and as defined in, the Existing Credit Agreement on the Effective Date shall be Letter of  Credit Outstandings hereunder, and (ii) all Obligations of the Loan Parties under, and as defined  in, the Existing Credit Agreement (as amended and restated by this Agreement) shall remain  outstanding, shall constitute continuing Obligations secured by the Collateral  and Real Estate  Collateral , and this Agreement shall not be deemed to evidence or result in a novation or  repayment and reborrowing of such obligations and other liabilities.  Each Loan Party party to  the Facility Guaranty and/or the Security Documents acknowledges and agrees that (i) the  Obligations shall include the Obligations of the Borrower under this Agreement after giving  effect to the Effective Date, and (ii) the Liens as granted under the applicable Security  Documents securing payment of such Obligations are in all respects continuing and in full force                                         161   

 

                                                                                 and effect pursuant to the terms therein and are reaffirmed hereby.  Each Loan Party is   absolutely and unconditionally indebted under the Existing Credit Agreement and the other Loan  Documents (in each case as amended and restated by this Agreement) and that all Obligations (as  defined therein and as amended and restated in this Agreement) constitute Obligations hereunder  pursuant to the terms herein, and none of them have any offsets, defenses, or counterclaims  under the Existing Credit Agreement or the other Loan Documents immediately prior to the  Effective Date, and, to the extent that any such offsets, defenses or counterclaims exist or may  have existed immediately prior to the Effective Date, the each Loan Party hereby WAIVES and  RELEASES the same.  The Agents represent and warrant to each Loan Party that the Agents  have no knowledge of any Default or Event of Default under the Existing Credit Agreement.   Each Lender represents and warrants to each Loan Party that such Lender has, by either an  assignment by such Lender to one or more other Lenders or by the receipt by such Lender of an  assignment from one or more other Lenders, the Commitment (or Loans)  attributable to such  Lender as set forth on Schedule 1.1.               (b)   The parties hereto acknowledge and agree that on and after the Effective  Date, (i) all references to the Existing Credit Agreement or the Credit Agreement or any similar  term in the Loan Documents (other than this Agreement) shall be deemed to refer to the Existing  Credit Agreement, as amended and restated hereby, (ii) all references to any section (or  subsection) of the Existing Credit Agreement or the Credit Agreement or any similar term in any  Loan Document (but not herein) shall be amended to become, mutatis mutandis, references to the  corresponding provisions of this Agreement; (iii) all references to Bank of America as the  Administrative Agent and or Collateral Agent (or in its capacity as the Administrative Agent  and/or Collateral Agent or other similar term) in the Loan Documents shall be deemed to refer to  Wells Fargo in its capacity as the Administrative Agent and/or Collateral Agent and its successor  and permitted assigns.               (c)   The parties hereto acknowledge and agree that this Agreement is an  amendment and restatement limited as written and, except as expressly provided herein or in any  other Loan Document, is not a consent to any other amendment, restatement or waiver or other  modification, whether or not similar and, except as expressly provided herein or in any other  Loan Document, all terms and conditions of the Loan Documents remain in full force and effect  unless otherwise specifically amended hereby or by any other Loan Document.         SECTION 9.19.  Keepwell.  Each Qualified ECP Guarantor hereby jointly and severally  absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as  may be needed from time to time by each other Loan Party to honor all of its obligations under  the Facility Guaranty in respect of Swap Obligations (provided, however, that each Qualified  ECP Guarantor shall only be liable under this Section 9.19 for the maximum amount of such  liability that can be hereby incurred without rendering its obligations under this Section 9.19, or  otherwise under the Facility Guaranty, voidable under applicable Law relating to fraudulent  conveyance or fraudulent transfer, and not for any greater amount). The obligations of each  Qualified ECP Guarantor under this Section shall remain in full force and effect until payment in  full of the Obligations. Each Qualified ECP Guarantor intends that this Section 9.19 constitutes,  and this Section 9.19 shall be deemed to constitute, a “keepwell, support, or other agreement” for  the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the  Commodity Exchange Act.                                         162   

 

                                                                                       SECTION 9.20.  Acknowledgement and Consent to Bail-In of EEA Financial  Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other  agreement, arrangement or understanding among any such parties, each party hereto  acknowledges that any liability of any Lender that is an EEA Financial Institution arising under  any Loan Document, to the extent such liability is unsecured, may be subject to the write-down  and conversion powers of an EEA Resolution Authority and agrees and consents to, and  acknowledges and agrees to be bound by:               (a)   the application of any Write-Down and Conversion Powers by an EEA  Resolution Authority to any such liabilities arising hereunder which may be payable to it by any  Lender that is an EEA Financial Institution; and               (b)   the effects of any Bail-in Action on any such liability, including, if  applicable:                     (i)   a reduction in full or in part or cancellation of any such liability;                     (ii)  a conversion of all, or a portion of, such liability into shares or  other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a  bridge institution that may be issued to it or otherwise conferred on it, and that such shares or  other instruments of ownership will be accepted by it in lieu of any rights with respect to any  such liability under this Agreement or any other Loan Document; or                     (iii)  the variation of the terms of such liability in connection with the  exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.         SECTION 9.21.  QFC.  To the extent that the Loan Documents provide support, through  a guarantee or otherwise, for Hedging Agreements or any other agreement or instrument that is a  QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties  acknowledge and agree as follows with respect to the resolution power of the Federal Deposit  Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank  Wall Street Reform and Consumer Protection Act (together with the regulations promulgated  thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC  Credit Support (with the provisions below applicable notwithstanding that the Loan Documents  and any Supported QFC may in fact be stated to be governed by the laws of the State of New  York and/or of the United States or any other state of the United States): In the event a Covered  Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a  proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the  benefit of such QFC Credit Support (and any interest and obligation in or under such Supported  QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or  such QFC Credit Support) from such Covered Party will be effective to the same extent as the  transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and  such QFC Credit Support (and any such interest, obligation and rights in property) were  governed by the laws of the United States or a state of the United States.  In the event a Covered  Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S.  Special Resolution Regime, Default Rights under the Loan Documents that might otherwise  apply to such Supported QFC or any QFC Credit Support that may be exercised against such                                         163   

 

                                                                                 Covered Party are permitted to be exercised to no greater extent than such Default Rights could  be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan  Documents were governed by the laws of the United States or a state of the United States.   Without limitation of the foregoing, it is understood and agreed that rights and remedies of the  parties with respect to a Deteriorating Lender or a Delinquent Lender shall in no event affect the  rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.                            [SIGNATURE PAGES FOLLOW]                                         164   

 

                                                                                       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly  executed by their respective authorized officers as a sealed instrument as of the day and year first  above written.                                             SPECIALTY RETAILERS, INC.                                            as Borrower                                              By:   _________________________                                            Name: Jason Curtis                                            Title: Interim Chief Financial Officer and                                                  Treasurer                                                                                                                                    STAGE STORES, INC., as Parent and as a                                            Facility Guarantor                                             By:   _________________________                                            Name: Jason Curtis                                            Title: Interim Chief Financial Officer and                                                  Treasurer                Signature Page to Second Amended and Restated Credit Agreement   

 

                                                                                                   WELLS FARGO BANK, NATIONAL                                ASSOCIATION,                                 as Administrative Agent, as Collateral                                Agent, as Swingline Lender, as Issuing Bank                                and as a Revolving Loan Lender                                 By:   _________________________                                Name: _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                   BANK OF AMERICA, N.A.,                                as Syndication Agent and as a Revolving                                Loan Lender                                 By:   _________________________                                Name: _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                   JPMORGAN CHASE BANK, N.A.,                                as Co-Documentation Agent and as a                                Revolving Loan Lender                                 By:   _________________________                                Name: _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                   REGIONS BANK, as Co-Documentation                                Agent and as a Revolving Loan Lender                                 By:   _________________________                                Name: _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                   TRUIST BANK (as successor by merger to                                SunTrust Bank), as a Revolving Loan                                Lender                                 By:   _________________________                                Name:  _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                   WELLS FARGO BANK, NATIONAL                                ASSOCIATION, as Term Loan Agent                                  By:   _________________________                                Name: _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                   WELLS FARGO BANK, NATIONAL                                ASSOCIATION, as a Term Loan Lender                                 By:   _________________________                                Name: _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                   PATHLIGHT CAPITAL FUND I LP, as a                                Term Loan Lender                                 By:   Pathlight  Partners  GP  LLC,  its                                      General Partner                                 By:   _________________________                                Name: _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                   PATHLIGHT CAPITAL LLC, as a Term                                Loan Lender                                 By:   _________________________                                Name: _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                   PATHLIGHT CAPITAL OFFSHORE                                FUND I LP, as a Term Loan Lender                                 By:   Pathlight  Partners  GP  LLC,  its                                      General Partner                                 By:   _________________________                                Name:  _________________________                                Title:  _________________________    Signature Page to Second Amended and Restated Credit Agreement               

 

                                                                                                                                        Schedule 1.1                                          Lenders and Commitments              Lender    Revolving Loan Commitment                               Revolving Loan Commitment                                                                     Percentage   Lender    Ordinary    Seasonal Revolving Loan Outstanding Principal Ordinary  Seasonal   Term Loan            Revolving   Commitment Increase  Balance of  Term Loan  Revolving   Revolving  Commitment            Loan        Period Commitment    Commitment (as of Fifth Loan       Loan       Percentage            Commitment                       Amendment Effective    Commitment  Commitment                                             Date)                  Percentage  Increase                                                                                Period                                                                                Commitment                                                                                Percentage   Wells     $133,300,000  $158,300,000 83,312,500  $25,000,000* 23,700,000.00  33.325% x/y 50%  Fargo  Bank,  National  Association   JPMorgan  $75,000,000 $75,000,000 46,875,000  $0                  18.750%     x/y        0%  Chase  Bank, N.A.  Regions   $75,000,000 $75,000,000 46,875,000  $0                  18.750%     x/y        0%  Bank  Bank of   $66,700,000 $66,700,000 41,687,500  $0                  16.675%     x/y        0%  America,  N.A.   Truist    $50,000,000 $50,000,000 31,250,000  $0                  12.250 12.50 % x/y     0%  Bank (as  successor  by merger  to  SunTrust  Bank )   Pathlight $0          $0                   $12,775,000 16,328,825.82  0%      0%         25.55 34.45 %  Capital  Fund I LP   Pathlight Capital Offshore $0              $2,101,874.49          0%                     4.43%  Fund I LLC   Pathlight $0          $0                   $12,225,000 5,269,299.70  0%       0%         24.45 11.12 %  Capital  LLC             $400,000,000  $425,000,000 250,000,000  $50,000,000 47,400,000  100% 100%      100%                                  

 

                                                                                       * = funded and terminated as of the Third Amendment Effective Date          x = as to each Revolving Loan Lender, other than the Seasonal Increase Commitment Lender,  such Revolving Loan Lender's Ordinary Commitment, and as to the Seasonal Increase Commitment  Lender,  the sum of such Revolving Loan Lender's Ordinary Commitment plus the Seasonal Commitment  Increase Utilized Amount.         y = Adjusted Revolving Loan Commitments   2424924.11           2605641.11

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