ANNTAYLOR, INC.
________________________________________________
$150,000,000
CREDIT AGREEMENT
June 30, 1998
__________________________________________________
CITICORP USA,
FIRST UNION CAPITAL MARKETS,
as Syndication Agents
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
CITIBANK, N.A.,
FIRST UNION NATIONAL BANK,
as Issuing Banks
BANCAMERICA ROBERTSON STEPHENS,
as Arranger
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent
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CREDIT AGREEMENT, dated as of June 30, 1998 (as
amended, supplemented or modified from time to time, this
"Agreement"), among ANNTAYLOR, INC., a Delaware corporation (the
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"Borrower"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
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ASSOCIATION ("Bank of America"), CITICORP USA ("Citicorp"), FIRST
--------------- --------
UNION NATIONAL BANK and each other Person signatory hereto as a
Lender or which from time to time becomes a Lender party hereto
in accordance with Section 12.01(a) (together with its respective
---------------
successors and assigns, individually, a "Lender" and,
------
collectively, the "Lenders"), BANCAMERICA ROBERTSON STEPHENS, as
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Arranger (in such capacity, the "Arranger"), BANK OF AMERICA, in
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its separate capacity as administrative agent for the Lenders
hereunder (in such capacity, the "Administrative Agent"),
----------------------
CITICORP and FIRST UNION CAPITAL MARKETS ("First Union"), in
------------
their respective capacities as syndication agents (collectively,
in such capacities, the "Syndication Agents"), and BANK OF
-------------------
AMERICA, CITIBANK, N.A. and FIRST UNION NATIONAL BANK, as Issuing
Banks.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower has requested that the Lenders
make available to the Borrower a $150,000,000 senior secured
revolving credit facility (the "Revolving Credit Facility") the
-------------------------
proceeds of which will be used by the Borrower for the issuance
of commercial and standby letters of credit and to provide
revolving loans for other general corporate purposes; and
WHEREAS, the Lenders are willing to make available the
Revolving Credit Facility pursuant to this Agreement upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
Definitions
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1.01. Certain Defined Terms.
---------------------
The following terms used in this Agreement shall have
the following meanings (such meanings to be applicable, except to
the extent otherwise indicated in a definition of a particular
term, both to the singular and the plural forms of the terms
defined):
"Accommodation Obligation", as applied to any Person,
------------------------
shall mean any contractual obligation, contingent or otherwise,
of that Person with respect to any Indebtedness or other
obligation or liability of another, including any such
Indebtedness, obligation or liability directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in
the ordinary course of business), co-made or discounted or sold
with recourse by that Person, or in respect of which that Person
is otherwise directly or indirectly liable, including Contractual
Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such
Indebtedness, obligation or liability or any security therefor,
or to provide funds for the payment or discharge thereof (whether
in the form of loans, advances, stock purchases, capital
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contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition, or to make payment
other than for value received.
"Accounts" shall mean, as to any Person, any
--------
"account", as such term is defined in Section 9-106 of the UCC,
now or hereafter owned by such Person which is classified as a
receivable on a consolidated balance sheet of such Person in
accordance with GAAP.
"Account Debtor": any Person that is liable to make
--------------
payments with respect to a Credit Card Account.
"Administrative Agent" shall have the meaning ascribed
--------------------
to such term in the preamble and shall include any successor
Administrative Agent appointed pursuant to Section 11.09.
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"Administrative Agent's Payment Office" shall mean the
-------------------------------------
address for payments set forth on the signature page hereto
relating to the Administrative Agent or such other address as the
Administrative Agent may from time to time specify in accordance
with Section 12.10.
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"Advance Rate" shall mean with respect to Eligible
-------------
Accounts Receivable, 75%, with respect to Eligible Inventory,
65%, and with respect to Eligible Fixed Assets, 10%. The
Administrative Agent may, in its reasonable discretion, but
subject to Section 12.08(a)(vi), adjust the Advance Rate with
respect to Eligible Accounts Receivable based upon an increase or
decrease in the dilution of the Credit Card Accounts reflected in
the most recent collateral audit performed pursuant to Section
7.06.
"Affiliate", as applied to any Person, shall mean any
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other Person directly or indirectly controlling, controlled by,
or under common control with, that Person. For purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlling", "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly
or indirectly, of the power to vote 10% or more of the Securities
having voting power for the election of directors of such Person
or otherwise to direct or cause the direction of the management
and policies of that Person, whether through the ownership of
voting Securities or by contract or otherwise; provided that no
--------
financial institution, mutual fund or investment banking firm
shall be an Affiliate of the Borrower unless it owns, directly or
indirectly, at least 20% of such Securities of the Borrower.
"Agent-Related Person" shall mean Bank of America and
--------------------
any successor Administrative Agent pursuant to Section 11.09,
--------------
together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Agreement" shall have the meaning ascribed to such
---------
term in the preamble hereto.
"AnnTaylor Finance Trust" shall mean AnnTaylor Finance
-----------------------
Trust, a Delaware statutory business trust.
"Applicable Approved Issuance Amount" shall mean, as to
-----------------------------------
each Issuing Bank (other than Bank of America), the amount
notified from time to time by the Administrative Agent to such
Issuing Banks. The Applicable Approved Issuance Amount for each
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such Issuing Bank shall be equal unless otherwise agreed by the
Administrative Agent and each such Issuing Bank. The aggregate
Applicable Approved Issuance Amounts for such Issuing Banks shall
not at any time exceed the lesser of (i) the Commitments then in
effect less the aggregate principal amount of all outstanding
----
Loans and (ii) the Borrowing Base Amount then in effect less the
----
aggregate principal amount of all outstanding Loans.
"Applicable Lending Office" shall mean, with respect to
-------------------------
each Lender, such Lender's Domestic Lending Office, in the case
of a Base Rate Loan, and such Lender's Eurodollar Lending Office,
in the case of a Eurodollar Rate Loan.
"Arranger" shall have the meaning ascribed to such term
--------
in the preamble.
"Assignment and Acceptance" shall mean an Assignment
--------------------------
and Acceptance in the form of Exhibit 12.01 (with blanks appropri
-------------
ately filled in) delivered to the Administrative Agent and the
Borrower in connection with an assignment of a Lender's interest
under this Agreement pursuant to Section 12.01.
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"ATSC" shall mean AnnTaylor Stores Corporation, a
----
Delaware corporation.
"ATSC Guarantee Agreements" shall mean the Common
---------------------------
Securities Guarantee Agreement and the Preferred Securities
Guarantee Agreement.
"ATSC Guaranty" shall mean the Guaranty dated as of the
-------------
Initial Funding Date substantially in the form of, and on the
terms set forth in, Exhibit 4.01(a)(iv), as the same may be
-------------------
amended, modified or otherwise supplemented from time to time.
"ATSC Pledge Agreement" shall mean the Security and
----------------------
Pledge Agreement dated as of the Initial Funding Date
substantially in the form of, and on the terms set forth in,
Exhibit 4.01(a)(v), as the same may be amended, supplemented or
------------------
otherwise modified from time to time.
"Available Cash" shall mean, with respect to any Fiscal
--------------
Year, (a) the sum of (i) Net Income for such Fiscal Year, plus
(ii) to the extent Net Income for such Fiscal Year is reduced
thereby, all charges for amortization of intangibles and
depreciation and other non-cash charges, plus (iii) any decrease
----
in Working Capital during such Fiscal Year minus (b) the sum of
(i) Capital Expenditures during such Fiscal year plus (ii) any
----
increase in Working Capital during such Fiscal Year.
"Available In-Transit Amount" shall mean, as of any
---------------------------
Calculation Date, an amount equal to (a) 65% of the sum of (i)
the aggregate undrawn face amount of Commercial Letters of Credit
issued to finance the purchase of Inventory (other than Inventory
included in the determination of Eligible Inventory), and (ii)
the aggregate Inventory Value of Inventory financed with
Commercial Letters of Credit which have been fully drawn and the
Reimbursement Obligations in respect of which have been fully
paid so long as, in the case of clause (i) and (ii), (A) such
Inventory shall be in transit to properties owned or leased by
the Borrower or the Subsidiary Guarantors in the United States
and (B) such Inventory is not included in the calculation of
Eligible Inventory and, upon arrival in the United States, will
be included in the determination of the Eligible Inventory minus
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(b) the Stock-in-Transit Reserve with respect to all such
Inventory.
"Bank of America" shall mean Bank of America National
----------------
Trust and Savings Association, a national banking association.
"Bankruptcy Code" shall mean Title 11 of the United
----------------
States Code (11 U.S.C Section 101 et seq.), as amended from time to
time, or any successor statute.
"Base Rate" shall mean, for any day a fluctuating
----------
interest rate per annum equal to the higher of (a) the Reference
Rate in effect on such day and (b) the sum of the Federal Funds
Rate plus 0.50%.
"Base Rate Loans" shall mean all Loans outstanding
-----------------
which bear interest at a rate determined by reference to the Base
Rate as provided in Section 2.02.
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"Benefit Plan" shall mean a defined benefit plan as
-------------
defined in Section 3(35) of ERISA (other than a Multiemployer
Plan) which the Borrower or an ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or
under which the Borrower or any ERISA Affiliate may incur any
liability.
"Borrower" shall have the meaning ascribed to such term
--------
in the preamble hereto.
"Borrower Pledge Agreement" shall mean the Security and
-------------------------
Pledge Agreement dated as of the Initial Funding Date
substantially in the form of, and on the terms set forth in,
Exhibit 4.01(a)(iii), as the same may be amended, supplemented or
--------------------
otherwise modified from time to time.
"Borrowing" shall mean, except as otherwise provided in
---------
Section 2.07(c)(ii), a borrowing consisting of Loans of the same
-------------------
type, having the same Interest Period and made on the same day by
the Lenders.
"Borrowing Base Amount" shall mean, as of any
-----------------------
Calculation Date, the sum of (a) the product of (i) the Eligible
Accounts Receivable Amount at such Calculation Date times (ii)
the Advance Rate for Eligible Accounts Receivable, (b) the
product of (i) the Eligible Inventory Amount at such Calculation
Date times (ii) the Advance Rate for Eligible Inventory, (c) the
Available in-Transit Amount at such Calculation Date and (d) the
Eligible Fixed Asset Amount at such Calculation Date. The
Borrowing Base Amount as determined on any Calculation Date shall
remain in effect until the next succeeding Calculation Date.
"Borrowing Base Certificate" shall mean a certificate,
--------------------------
substantially in the form of Exhibit 6.01(o) delivered to the
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Administrative Agent by the Borrower pursuant to Section 6.01(o).
---------------
"Business Day" shall mean (a) for all purposes other
-------------
than as covered by clause (b) below, any day excluding Saturday,
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Sunday and any day which is a legal holiday under the laws of the
State of New York or the State of California, or is a day on
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which banking institutions located in either of those states are
required or authorized by law or other governmental action to
close and (b) with respect to all notices, determinations,
fundings and payments in connection with the Eurodollar Rate, any
day which is a Business Day described in clause (a) and which is
also a day for trading by and between banks in the London
interbank market.
"Calculation Date": at any time, the last day of any
----------------
period covered by the most recent Borrowing Base Certificate.
"Capital Expenditures" shall mean, for any period, on a
--------------------
consolidated basis for the Borrower and its Restricted
Subsidiaries, the aggregate of all expenditures (whether paid in
cash or accrued as liabilities during that period and including
that portion of Capital Leases (except any capitalized interest)
which is capitalized on the consolidated balance sheet of the
Borrower and its Restricted Subsidiaries) made by the Borrower or
any Restricted Subsidiary during such period that, in conformity
with GAAP, are required to be included in or reflected by
property, plant or equipment (including expenditures for
equipment purchased simultaneously with the trade-in of existing
equipment owned by the Borrower or any such Restricted Subsidiary
to the extent the gross amount of such purchase price exceeds the
book value of the equipment being traded in, but excluding
expenditures made in connection with the replacement or
restoration of assets, to the extent reimbursed or financed from
insurance proceeds or condemnation awards).
"Capital Lease", as applied to any Person, shall mean
-------------
any lease of any property (whether real, personal, or mixed) by
that Person as lessee which, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that
Person.
"Cash Collateral Account" shall have the meaning
-------------------------
ascribed to such term in Section 2.04.
------------
"Cash Equivalents" shall mean (a) marketable direct
-----------------
obligations issued or unconditionally guaranteed by the United
States Government or issued by an agency thereof and backed by
the full faith and credit of the United States of America or
having a rating of at least A-1 or P-1 from either S&P or
Moody's, in each case maturing within 360 days after the date of
acquisition thereof; (b) marketable direct obligations issued by
any state of the United States of America or any political
subdivision of any such state or any public instrumentality
thereof maturing within 180 days (or, if no Loans are outstanding
at the time of acquisition thereof and after giving effect
thereto, 360 days) after the date of acquisition thereof and, at
the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's (or, if at any time neither
S&P nor Moody's shall be rating such obligations, then from such
other nationally recognized rating services acceptable to the
Requisite Lenders) and not listed in Credit Watch published by
S&P; (c) commercial paper, other than commercial paper issued by
the Borrower or any Subsidiary of the Borrower or any of their
Affiliates, maturing no more than 180 days (or, if no Loans are
outstanding at the time of acquisition thereof and after giving
effect thereto, 270 days) after the date of creation thereof and,
at the time of acquisition thereof, having a rating of at least
A-1 or P-1 from either S&P or Moody's (or, if at any time neither
S&P nor Moody's shall be rating such obligations, then the
highest rating from other nationally recognized rating services
acceptable to the Requisite Lenders); and (d) domestic and
Eurodollar certificates of deposit or time deposits or bankers'
acceptances maturing within 180 days (or, if no Loans are
outstanding at the time of acquisition thereof and after giving
effect thereto, 360 days) after the date of acquisition thereof
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issued by any commercial bank organized under the laws of the
United States of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than
$500,000,000.
"Change in Control" shall have the meaning ascribed to
-----------------
such term in the Subordinated Note Indenture (as in effect on the
date hereof and as from time to time in effect) or any
Subordinated Debt Indenture.
"Claim" shall mean any claim or demand, by any Person,
-----
of whatsoever kind or nature for any actual or alleged
Liabilities and Costs, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil statute,
Permit, ordinance or regulation, common law or otherwise.
"Cleandown" shall have the meaning ascribed to such
---------
term in Section 2.01(a)(v).
"Cleandown Period" shall have the meaning ascribed to
----------------
such term in Section 2.01(a)(v).
-----------------
"Code" shall mean the Internal Revenue Code of 1986, as
----
amended from time to time, and any successor statute.
"Collateral" shall mean all property and interests in
----------
property now owned or hereafter acquired in or upon which a
security interest, pledge, lien or mortgage is granted or of
which a collateral assignment is made under the Collateral
Documents.
"Collateral Documents" shall mean the ATSC Guaranty,
---------------------
the ATSC Pledge Agreement, the Borrower Pledge Agreement, the
Trademark Security Agreement and the Subsidiary Guaranty and
Collateral Agreement, and any other document creating in favor of
the Administrative Agent, for the benefit of the Lenders, a
security interest in any property as security for the
Obligations, as any of the foregoing may be amended, supplemented
or otherwise modified from time to time.
"Commercial Letter of Credit" shall mean any Letter of
---------------------------
Credit which is drawable upon presentation of documents, drafts
at sight and time drafts evidencing the sale or shipment of goods
purchased by the Borrower in the ordinary course of its business.
"Commission" shall mean the Securities and Exchange
----------
Commission.
"Commitment" shall mean, with respect to each Lender as
----------
the context may require, (a) the amount set out opposite such
Lender's name under the heading "Commitment" in Schedule 1.01(b)
---------- -----------------
or assigned to it in accordance with Section 12.01(a), as such
---------------
amount may be reduced or otherwise adjusted from time to time
pursuant to the terms of this Agreement or (b) the obligation of
such Lender to make Loans hereunder and participate in Letters of
Credit up to the amount specified in the immediately preceding
clause (a), and "Commitments" shall mean the aggregate amount of
--------- -----------
the Commitments of all Lenders.
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"Commitment Letter" shall mean the Commitment Letter
------------------
dated May 7, 1998 from Bank of America, the Arranger, Citicorp
and CoreStates Bank, N.A. to the Borrower.
"Common Securities Guarantee Agreement" shall mean the
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Common Securities Guarantee Agreement, dated as of April 25,
1996, by ATSC for the benefit of the holders of the common
securities of AnnTaylor Finance Trust.
"Common Stock" shall mean the common stock of ATSC the
------------
par value of which is set forth in the ATSC Certificate of
Incorporation, as such certificate may be amended, restated or
otherwise modified from time to time.
"Compliance Certificate" shall mean a certificate
-----------------------
substantially in the form of Exhibit 6.01(d)(i) delivered to the
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Administrative Agent by the Borrower pursuant to Section
-------
6.01(d)(i) and covering the Borrower's compliance with the
----------
covenants contained in Article IX and certain of the covenants
----------
contained in Article VIII.
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"Contaminant" shall mean any pollutant, hazardous
-----------
substance, hazardous chemical, toxic substance, hazardous waste
or special waste, as those terms are defined in federal, state or
local laws and regulations, radioactive material, petroleum,
including crude oil or any petroleum-derived substance, or
breakdown or decomposition product thereof, or any constituent of
any such substance or waste, including polychlorinated biphenyls
and asbestos.
"Contractual Obligation", as applied to any Person,
-----------------------
shall mean any provision of any Securities issued by that Person
or any indenture, mortgage, deed of trust, contract, undertaking,
document, instrument or other agreement or instrument to which
that Person is a party or by which it or any of its properties is
bound, or to which it or any of its properties is subject
(including any restrictive covenant affecting such Person or any
of its properties).
"Convertible Debentures" shall mean 8-1/2% Convertible
-----------------------
Subordinated Debentures Due 2016 issued pursuant to the
Indenture, dated as of April 15, 1996, between ATSC and the Bank
of New York, as Trustee.
"Cost/Market Reserve" shall mean, as of any Calculation
-------------------
Date, the lower of cost or market reserve for the most recent
fiscal month calculated in accordance with the accounting
practices of the Borrower and the Subsidiary Guarantors.
"Credit Card Accounts": all accounts receivable
----------------------
arising out of any sale in the ordinary course of business
pursuant to proprietary credit card transactions.
"Credit Facility" shall mean the loan and letter of
----------------
credit facility provided to the Borrower pursuant to this
Agreement.
"Current Assets" shall mean, as at any date of
---------------
determination, the consolidated assets of the Borrower and its
Restricted Subsidiaries which may properly be classified as
current assets in conformity with GAAP.
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"Current Liabilities" shall mean, as at any date of
--------------------
determination, the consolidated liabilities of the Borrower and
its Restricted Subsidiaries which may properly be classified as
current liabilities in conformity with GAAP.
"Customary Permitted Liens" shall mean
-------------------------
(a) Liens (other than Environmental Liens and any
Lien imposed under ERISA) for claims, taxes, assessments or
charges of any Governmental Authority not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
(b) statutory Liens of landlords, bankers, carriers,
warehousemen, mechanics, materialmen and other Liens (other than
any Lien imposed under ERISA or any Environmental Lien) imposed
by law, arising in the ordinary course of business and for
amounts which (i) are not yet due, (ii) are not more than 30 days
past due as long as no notice of default has been given or other
action taken to enforce such Liens, or (iii)(A) are not more than
30 days past due and a notice of default has been given or other
action taken to enforce such Liens, or (B) are more than 30 days
past due, and, in the case of clause (A) or (B), are being
---------- ---
contested in good faith by appropriate proceedings which are
sufficient to prevent imminent foreclosure of such Liens and with
respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
(c) Liens (other than any Lien imposed under ERISA or
any Environmental Lien) incurred or deposits made in the ordinary
course of business (including surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and
other types of employment benefits or to secure the performance
of tenders, bids, leases, contracts (other than in respect of
Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under
government contracts;
(d) easements (including reciprocal easement
agreements and utility agreements), rights-of-way, covenants,
consents, rights of landlords, reservations, encroachments,
variations and other restrictions, charges or encumbrances
(whether or not recorded) affecting the use of real property,
which do not materially interfere with the ordinary conduct of
the business of the Borrower; and
(e) Liens on goods in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of such goods.
"DOL" shall mean the United States Department of Labor
---
and any successor department or agency.
"Dollars" and "$" shall mean the lawful money of the
------- -
United States of America.
"Domestic Lending Office" means, with respect to any
-----------------------
Lender, the office of such Lender specified as its "Domestic
--------
Lending Office" in Schedule 1.01(a) or in the Assignment and
--------------- ----------------
Acceptance by which it became a Lender or such other office of
such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
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"EBITDA" shall mean, for any period, the sum of the
------
amounts for such period, of (a) Net Income, plus (b) to the
----
extent Net Income is reduced thereby (i) all charges for
amortization of intangibles and depreciation, (ii) Interest
Expense, (iii) income tax expense and (iv) extraordinary losses,
minus (c) extraordinary gains (net of taxes).
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"EBITR" shall mean, for any period, the sum of the
-----
amounts for such period, of (a) Net Income, plus (b) to the
----
extent Net Income is reduced thereby (i) Interest Expense, (ii)
income tax expense and (iii) extraordinary losses, plus (c)
----
Rental Expense, minus (d) extraordinary gains (net of taxes).
"Eligible Accounts Receivable" shall mean, as of any
----------------------------
Calculation Date, all Credit Card Accounts of the Borrower and
the Subsidiary Guarantors that satisfy each of the following
criteria:
(a) such Credit Card Account has been adjusted to
reflect the return or rejection of, or any loss of or
damage to any of the Inventory giving rise to such
Credit Card Account, and is not subject to bona fide
set-offs, counterclaims, defenses, or disputes asserted
with respect to such Credit Card Account;
(b) to the best knowledge of the Borrower and the
Subsidiary Guarantors, the Account Debtor with respect
to such Credit Card Account is not insolvent or the
subject of any bankruptcy case or insolvency proceeding
of any kind, unless such Credit Card Account is due
from such Account Debtor as an administrative claim
under the Bankruptcy Code and the Administrative Agent,
in the exercise of its reasonable business judgment,
deems the Account Debtor to be creditworthy;
(c) the Account Debtor in respect of such Credit
Card Account has a mailing address within the United
States of America (excluding the Virgin Islands and any
other territory of the United States) or Puerto Rico;
(d) the Account Debtor in respect of such Credit
Card Account is not the United States of America or any
state, territory, subdivision, department, or agency
thereof;
(e) such Credit Card Account does not arise out
of transactions with a Subsidiary or Affiliate (other
than directors, officers and employees) of the Borrower
or any Subsidiary Guarantor;
(f) no amount payable in respect of such Credit
Card Account has remained unpaid for a period exceeding
sixty days after the due date stated on the customer
statement therefor;
(g) such Credit Card Account is owed by an
Account Debtor which does not then have balances on its
Credit Card Accounts which are more than 60 days past
due which exceed 50% of the total balance of all such
Credit Card Accounts owed by such Account Debtor;
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(h) such Credit Card Account has not been and is
not required to be charged off or written off as
uncollectible in accordance with the customary business
practice of the Borrower and the Subsidiary Guarantors;
(i) such Credit Card Account does not arise out
of any claim in tort, is not evidenced by chattel
paper, a promissory note, a negotiable instrument, or
any other instrument of any kind or, if such Credit
Card Account is evidenced by chattel paper, a
promissory note, a negotiable instrument or any other
instrument, such chattel paper, promissory note,
negotiable instrument or other instrument has been
delivered to the Administrative Agent and is subject to
a first priority security interest in favor of the
Administrative Agent;
(j) the amount of the face value of such Credit
Card Account listed on any schedule of Credit Card
Accounts and shown on all customer statements delivered
to the Administrative Agent with respect to such Credit
Card Account is not subject to any asserted bona fide
retainages or holdbacks of any type, is actually and
absolutely owing, and is not contingent on any
condition, in each case, other than in respect of
repurchase or return agreements that (i) arise in the
ordinary course of the Borrower's business and (ii) are
consistent with the Borrower or such Subsidiary
Guarantor's historical business practice;
(k) such Credit Card Account does not arise out
of a cash on delivery sale;
(l) such Credit Card Account does not arise out
of the sale of samples;
(m) such Credit Card Account is owned solely by
the Borrower or a Subsidiary Guarantor and is evidenced
by a customer statement and has arisen from the sale of
goods which have been shipped or delivered to an
Account Debtor on an absolute sale basis, have not been
shipped or delivered on a consignment, approval, or
sale-or-return basis, and are not subject to any
repurchase or return agreement or arrangement, other
than those repurchase or return agreements or
arrangements that (i) arise in the ordinary course of
the Borrower's business and (ii) are consistent with
the Borrower or such Subsidiary Guarantor's historical
business practices; and
(n) such Credit Card Account is subject to a Lien
in favor of the Administrative Agent and is not subject
to Liens other than Permitted Account Liens.
The Administrative Agent may, in its reasonable discretion,
adjust or change the foregoing eligibility criteria or add
additional reserves with respect to Eligible Accounts Receivable
based upon the results of the most recent collateral audit
performed pursuant to Section 7.06.
"Eligible Accounts Receivable Amount" shall mean, as of
-----------------------------------
any Calculation Date, (a) Eligible Accounts Receivable of the
Borrower and the Subsidiary Guarantors at such Calculation Date
minus (b) the Sales Tax Reserve at such Calculation Date.
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"Eligible Assignee" means (a) a commercial bank
------------------
organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at least
$100,000,000; (b) a commercial bank organized under the laws of
any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political
----
subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is
acting through a branch or agency located in the United States of
America; (c) a Person that is primarily engaged in the business
of commercial banking and that is (i) a Subsidiary of a Lender,
(ii) a Subsidiary of a Person of which a Lender is a Subsidiary,
or (iii) a Person of which a Lender is a Subsidiary; and (d) any
Person that in the ordinary course of business extends credit or
purchases loans of a character substantially similar to the
Loans.
"Eligible Fixed Assets" shall mean, as of any
-----------------------
Calculation Date, the net book value of all furniture and
fixtures (excluding leasehold improvements) of the Borrower and
the Subsidiary Guarantors as set forth on the most recent balance
sheet of the Borrower and the Subsidiary Guarantors prepared in
accordance with GAAP, which are subject to a perfected security
interest in favor of the Administrative Agent and are subject to
no other Liens other than Permitted Fixed Asset Liens. The
Administrative Agent may, in its reasonable discretion, add
additional eligibility criteria or reserves with respect to
Eligible Fixed Assets based upon the results of the most recent
collateral audit performed pursuant to Section 7.06.
"Eligible Fixed Asset Amount" shall mean, as of any
---------------------------
Calculation Date, the Eligible Fixed Assets of the Borrower and
the Subsidiary Guarantors at such Calculation Date times the
Advance Rate for Eligible Fixed Assets.
"Eligible Inventory Amount" shall mean, as of any
--------------------------
Calculation Date, (a) the Inventory Value of all Eligible
Inventory of the Borrower and the Subsidiary Guarantors at such
Calculation Date minus (b) the sum of (i) the Gift Certificate
-----
Liability Amount as of such Calculation Date, (ii) the
Merchandise Credit Amount as of such Calculation Date, (iii) the
Cost/Market Reserve as of such Calculation Date, (iv) the Shrink
Reserve as of such Calculation Date, and (v) the Positive Price
Variance Reserve as of such Calculation Date.
"Eligible Inventory" shall mean, as of the Calculation
------------------
Date, all Inventory of the Borrower and the Subsidiary Guarantors
consisting of finished goods available for sale that satisfies
each of the following criteria as of such day:
(a) such Inventory (i) is owned solely by the
Borrower or any such Subsidiary Guarantor and (ii) is
not leased by or on consignment to the Borrower or any
Subsidiary Guarantor;
(b) such Inventory is located at property that
is owned or leased by the Borrower or any Subsidiary
Guarantor, including Inventory which is in transit from
one property that is owned or leased by the Borrower or
any Subsidiary Guarantor (or a flow through center or a
distribution center) to another property that is owned
or leased by the Borrower or any Subsidiary Guarantor
(or a flow through center or a distribution center);
==================================================================
-12-
(c) such Inventory is not subject to a layaway
purchase by any customer;
(g) such Inventory is not located at any return
center used by the Borrower or any Subsidiary
Guarantor;
(h) such Inventory is located in the United
States of America (excluding territories and
possessions thereof) and Puerto Rico; and
(i) such Inventory is subject to a perfected
security interest in favor of the Administrative Agent
and is not subject to Liens other than Permitted
Inventory Liens.
The Administrative Agent may, in its reasonable discretion,
adjust or change the foregoing eligibility criteria or add
additional reserves with respect to Eligible Inventory based upon
the results of the most recent collateral audit performed
pursuant to Section 7.06.
"Environmental Lien" shall mean a Lien in favor of any
------------------
Governmental Authority for (a) any liability of the Borrower or
any Subsidiary of the Borrower under federal or state
environmental laws or regulations, or (b) damages arising from,
or costs incurred by such Governmental Authority in response to,
a Release or threatened Release of a Contaminant into the
environment.
"ERISA" shall mean the Employee Retirement Income
-----
Security Act of 1974, as amended from time to time, and any
successor statute.
"ERISA Affiliate" shall mean any (a) corporation which
---------------
is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as the Borrower or any
of its Subsidiaries, (b) partnership or other trade or business
(whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Code) with the Borrower or any
of its Subsidiaries, and (c) member of the same affiliated
service group (within the meaning of Section 414(m) of the Code)
as the Borrower or any of its Subsidiaries, any corporation
described in clause (a) above or any partnership or trade or
business described in clause (b) above.
"Eurodollar Lending Office" means, with respect to any
-------------------------
Lender, the office of such Lender specified as its "Eurodollar
----------
Lending Office" in Schedule 1.01(a) or in the Assignment and
--------------- ----------------
Acceptance by which it became a Lender (or, if no such office is
specified, its Domestic Lending Office) or such other office of
such Lender as such Lender may from time to time specify by
written notice to the Borrower and the Administrative Agent.
"Eurodollar Rate" shall mean, with respect to any
----------------
Interest Period applicable to a Borrowing of Eurodollar Rate
Loans, an interest rate per annum determined by the
Administrative Agent by dividing (a) the rate (rounded upward to
the next 1/16th of 1%) of interest per annum given to the
Administrative Agent by the Reference Bank as the rate at which
dollar deposits for such Interest Period and in an amount
approximately equal to the amount of the Reference Bank's
Eurodollar Rate Loan during such Interest Period would be offered
by its applicable Eurodollar Lending Office to major banks in the
London eurodollar market at or about 11:00 a.m. (London time) two
=================================================================
-13-
Business Days prior to the commencement of such Interest Period
by (b) a percentage equal to 1 minus the Eurodollar Reserve
-----
Percentage.
"Eurodollar Rate Loans" shall mean those Loans
-----------------------
outstanding which bear interest at a rate determined by reference
to the Eurodollar Rate as provided in Section 2.02.
------------
"Eurodollar Reserve Percentage" shall mean with respect
-----------------------------
to any Interest Period for any Eurodollar Rate Loan, that percent
age (expressed as a decimal rounded upwards to the nearest
1/100%) which is in effect on the date the Eurodollar Rate for
such Interest Period is determined as prescribed by the Federal
Reserve Board, for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System with
deposits exceeding $5,000,000,000 in respect of "Eurocurrency
liabilities" having a term equal to such Interest Period (or in
respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Eurodollar
Rate Loans is determined or any category of extensions of credit
or other assets which includes loans by a non-United States
office of any bank to United States residents).
"Event of Default" shall mean any of the occurrences
------------------
set forth in Section 10.01 after the expiration of any applicable
-------------
grace period expressly provided therein.
"Existing Credit Agreement" means the Amended and
---------------------------
Restated Credit Agreement dated as of September 29, 1995 among
AnnTaylor, Inc., Bank of America and Fleet Bank, National
Association, as Co-Agents, BancAmerica Robertson Stephens
(formerly known as BA Securities, Inc.), as Arranger, Bank of
America, as Agent, and the financial institutions parties
thereto, as amended.
"Existing Letter of Credit" shall mean each Letter of
-------------------------
Credit identified in Schedule 3.01.
-------------
"Extension Period" shall have the meaning ascribed to
----------------
such term in Section 2.01(f).
---------------
"FDIC" shall mean the Federal Deposit Insurance
----
Corporation or any successor thereto.
"Federal Funds Rate" shall mean, for any day, the rate
------------------
set forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the Federal
Reserve Board (including any such successor, "H.15(519)") for
---------
such day opposite the caption "Federal Funds (Effective)". If on
------------------------
any relevant day such rate is not yet published in H.15(519), the
rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor
publication, published by the Federal Reserve Bank of New York
(including any such successor, the "Composite 3:30 p.m.
----------------------
Quotation") for such day under the caption "Federal Funds
--------- --------------
Effective Rate". If on any relevant day the appropriate rate for
--------------
such previous day is not yet published in either H.15(519) or the
Composite 3:30 p.m. Quotations, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the
rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York time) on that day by each
of three leading brokers of Federal funds transactions in New
York City selected by the Administrative Agent.
==================================================================
-14-
"Federal Reserve Board" shall mean the Board of Gover
---------------------
nors of the Federal Reserve System or any Governmental Authority
succeeding to its functions.
"Fee Letter" shall mean the Fee Letter dated May 7,
-----------
1998 between the Borrower, Bank of America, the Arranger,
Citicorp and CoreStates Bank, N.A.
"Final Maturity Date" shall mean June 30, 2000, as such
-------------------
date may be extended pursuant to Section 2.01(f).
---------------
"Fiscal Year" shall mean the fiscal year of the
------------
Borrower, which shall be the twelve-month period ending on the
Saturday closest to January 31 in each year or such other period
as the Borrower may designate and the Requisite Lenders may
approve (such approval not to be unreasonably withheld) in
writing. A Fiscal Year ending in January or February, as the
case may be, of any calendar year shall have the numerical
designation of the prior calendar year.
"Fixed Charge Coverage Ratio" shall mean, for any
-----------------------------
period, the quotient obtained by dividing (a) EBITR by (b) the
sum of (i) Interest Expense plus (ii) Rental Expense.
----
"Foreign Currency Exchange Contracts" shall mean any
-----------------------------------
foreign currency exchange agreement or other currency exchange
rate arrangement providing currency exchange rate protection,
entered into by the Borrower, ATSC or any of their respective
Restricted Subsidiaries.
"Foreign Subsidiary" shall mean any Subsidiary of the
------------------
Borrower organized under the laws of any jurisdiction outside the
United States of America.
"Funded Debt" shall mean, as at any date of determina
------------
tion, all Indebtedness then outstanding (a) for the principal of
Loans under this Agreement and (b) for money borrowed or under
any debt Securities issued by ATSC (other than the Convertible
Debentures), the Borrower or any Restricted Subsidiary (whether
or not subordinated, and specifically including the Subordinated
Notes or any Subordinated Debt).
"Funding Date" shall mean the date of borrowing any
-------------
Loan.
"GAAP" shall mean generally accepted accounting princi
----
ples 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 may be in general use by
significant segments of the accounting profession, which are
applicable to the circumstances as of the date of determination.
"Gift Certificate Liability Amount" shall mean, as of
---------------------------------
any Calculation Date, the aggregate amount of gift certificates
then outstanding entitling the holder thereof to use all or a
portion thereof to pay all or a portion of the purchase price for
any Inventory as of such day which are not being held for
escheatment or which have not been escheated as of such day.
"Governmental Acts" shall have the meaning ascribed to
-----------------
ssuch term in Section 3.09(a).
----------------
==================================================================
-15-
"Governmental Authority" shall mean any nation, state,
----------------------
sovereign, or government, any federal, regional, state, local or
political subdivision and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guarantors" shall mean ATSC and each Restricted
----------
Subsidiary (other than Foreign Subsidiaries and Nonmaterial
Domestic Subsidiaries) of the Borrower.
"HKSB Facility" shall mean the Amended and Restated
--------------
Credit Agreement, dated as of September 20, 1996, as amended,
between AnnTaylor Global Sourcing, Inc. and The Hongkong and
Shanghai Banking Corporation Limited.
"Indebtedness", as applied to any Person, shall mean
------------
(a) all indebtedness, obligations or other liabilities of such
Person for borrowed money or under any debt Securities, whether
or not subordinated, (b) all obligations with respect to
redeemable stock and redemption or repurchase obligations under
any equity securities or profit payment agreements, (c) all
reimbursement obligations and other liabilities of such Person
with respect to letters of credit issued for such Person's
account, (d) all obligations of such Person to pay the purchase
price of property or services, except trade payables incurred by
such Person in the ordinary course of business as presently
conducted, (e) all obligations in respect of Capital Leases of
such Person, (f) all Accommodation Obligations of such Person,
(g) all indebtedness, obligations or other liabilities of such
Person or others secured by a Lien on any asset of such Person,
whether or not such indebtedness, obligations or liabilities are
assumed by or are a personal liability of such Person, all as of
such time, and (h) all indebtedness, obligations or other
liabilities in respect of Interest Rate Contracts and Foreign
Currency Exchange Agreements. For purposes of determining
Indebtedness, the "principal amount" of the obligations of the
Borrower or any Subsidiary in respect of any Interest Rate
Contract or Foreign Currency Exchange Agreement at any time shall
be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Subsidiary would be
required to pay if such Contract or Agreement were terminated at
such time.
"Initial Funding" shall mean the funding of Loans on
---------------
the Initial Funding Date.
"Initial Funding Date" shall mean the date (on or
---------------------
before July 29, 1998) on which all conditions precedent set forth
in Section 4.01 have been satisfied or waived.
------------
"Initial Loans" shall have the meaning ascribed to such
-------------
term in Section 4.01.
------------
"Interest Expense" shall mean, for any period for ATSC,
----------------
the Borrower and its Restricted Subsidiaries on a consolidated
basis, total consolidated interest expense, whether paid or
accrued (including any amortization of discount and the interest
component of Capital Leases), for such period, including to the
extent included in interest expense, all commissions, discounts
and other fees and charges owed with respect to the letters of
credit, the fees payable under this Agreement and net costs under
Interest Rate Contracts, all as determined in conformity with
GAAP, plus (without duplication) all capitalized interest, minus
---- -----
payments received under Interest Rate Contracts and interest
income.
=================================================================
-16-
"Interest Payment Date" shall mean with respect to any
---------------------
Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided that in the case of an Interest
--------
Period of six months or longer, "Interest Payment Date" shall
----------------------
also include each date that is a three-month anniversary of the
first day of such Interest Period.
"Interest Period" shall have the meaning ascribed to
----------------
such term in Section 2.06.
------------
"Interest Rate Contracts" shall mean interest rate
-------------------------
exchange, collar, cap or similar agreements providing interest
rate protection, entered into by the Borrower, ATSC or any of
their respective Restricted Subsidiaries.
"Inventory" shall mean, as to any Person, any
---------
"inventory" as such term is defined in Section 9-109(4) of the
UCC, now or hereafter owned by such Person.
"Inventory Value" shall mean, with respect to any
----------------
Inventory of the Borrower or any Subsidiary Guarantor, the value
of such Inventory valued at cost on a basis consistent with the
Borrower's or such Subsidiary Guarantor's current and historical
accounting practice (without giving effect to markdowns,
intercompany profit, rebates and discounts and capitalized
inventory costs on the consolidated balance sheet of the Borrower
and the Subsidiary Guarantors in respect of Inventory (other than
capitalized costs recorded in accordance with GAAP)).
"Investment" shall mean, as applied to any Person, any
----------
direct or indirect purchase or other acquisition by that Person
of Securities, or of a beneficial interest in Securities, of any
other Person, and any direct or indirect loan, advance (other
than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, advances to employees and
similar items made or incurred in the ordinary course of
business), or capital contribution by such Person to any other
Person, including all Indebtedness and accounts owed by that
other Person which are not current assets or did not arise from
sales of goods or services to that Person in the ordinary course
of business. The amount of any Investment shall be determined in
conformity with GAAP.
"Investor Group" shall mean Merrill Lynch Capital
---------------
Partners, Inc. and its Affiliates.
"IRS" shall mean the Internal Revenue Service of the
---
United States or any Governmental Authority succeeding to the
functions thereof.
"Issuing Banks" shall mean First Union National Bank,
-------------
Citibank, N.A. and Bank of America (as to any Existing Letters of
Credit issued by it).
"Issuing Bank Agreement" shall mean, as to each Issuing
----------------------
Bank (other than Bank of America), any agreement entered into by
such Issuing Bank and the Borrower relating to Letters of Credit.
"Lender" shall have the meaning ascribed to such term
------
in the preamble and shall include Bank of America, in its
individual capacity, each Issuing Bank and each Person which at
any time becomes a Lender pursuant to Section 12.01(a).
----------------
==================================================================
-17-
"Letter of Credit" shall mean any Commercial Letter of
----------------
Credit or any Standby Letter of Credit issued by any Issuing Bank
for the account of the Borrower pursuant to Article III and
includes each Existing Letter of Credit.
"Letter of Credit Fee" shall have the meaning ascribed
--------------------
to such term in Section 2.03(d).
---------------
"Letter of Credit Obligations" shall mean, at any
------------------------------
particular time, the sum of (a) Reimbursement Obligations and (b)
the aggregate maximum amount then available for drawing under the
Letters of Credit.
"Level I Status" exists at any date if the Pricing
----------------
Ratio on such date is greater than or equal to 3.25 to 1.00.
"Level II Status" exists at any date if the Pricing
-----------------
Ratio on such date is less than 3.25 to 1.00 but greater than or
equal to 2.50 to 1.00.
"Level III Status" exists at any date if the Pricing
-----------------
Ratio on such date is less than 2.50 to 1.00 but greater than or
equal to 1.75 to 1.00.
"Level IV Status" exists at any date if the Pricing
-----------------
Ratio on such date is less than 1.75 to 1.00.
"Liabilities and Costs" shall mean all liabilities,
----------------------
claims, obligations, responsibilities, losses, damages, punitive
damages, consequential damages, treble damages, charges, costs
and expenses (including attorney's, expert's and consulting fees
and costs of investigation and feasibility studies), fines,
penalties and monetary sanctions, interest, direct or indirect,
known or unknown, absolute or contingent, past, present or
future.
"Lien" shall mean any mortgage, deed of trust, pledge,
----
hypothecation, assignment, deposit arrangement, security
interest, encumbrance (including, but not limited to, easements,
rights of way and the like), lien (statutory or other),
Environmental Lien, security agreement or transfer intended as
security, including any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement
(other than a financing statement filed pursuant to Section 9-408
of the Uniform Commercial Code not intended as security).
"Loan Account" shall have the meaning ascribed to such
------------
term in Section 2.01(d).
--------------
"Loan Documents" shall mean this Agreement, the
---------------
Collateral Documents and the Letters of Credit and all other
agreements delivered to the Administrative Agent, the Issuing
Banks or any Lender by or on behalf of the Borrower in
satisfaction of the requirements of this Agreement.
"Loan Party" shall mean ATSC, the Borrower and any
-----------
Restricted Subsidiary which is a party to any Loan Document.
=================================================================
-18-
"Loans" shall have the meaning ascribed to such term in
-----
Section 2.01(a).
--------------
"Margin Stock" shall have the meaning ascribed to such
------------
term in Regulation U.
"Material Adverse Effect" shall mean, with respect to
-----------------------
the Borrower, ATSC and its Restricted Subsidiaries, a material
adverse effect upon the business, assets or other properties,
liabilities or condition (financial or otherwise), results of
operations or prospects of the Borrower and its Restricted
Subsidiaries taken as a whole or ATSC and its Subsidiaries taken
as a whole, as the case may be, upon the ability of the Borrower
to repay the Loans, or upon the benefits provided to the
Administrative Agent or the Lenders under the Collateral
Documents.
"Maximum Loan Amount" shall mean, at any time, the
--------------------
lesser of (a) (i) the Commitments at such time (as reduced
pursuant to Section 2.01(e) and 2.04) less (ii) the sum of (A)
---------------- ---- ----
the then aggregate outstanding Letter of Credit Obligations and
(B) if applicable, the amount of any Cleandown, and (b)
$50,000,000.
"Merchandise Credit Amount" shall mean, as of any
--------------------------
Calculation Date, the aggregate amount of merchandise credits
then outstanding entitling the holder thereof to use all or a
portion thereof to pay all or a portion of the purchase price for
any Inventory as of such day which are not being held for
escheatment or which have not been escheated as of such day.
"Moody's" shall mean Moody's Investors Service, Inc.
-------
"Multiemployer Plan" shall mean a "multiemployer plan"
------------------
as defined in Section 4001(a)(3) of ERISA which is, or within the
immediately preceding six years was, contributed to by either the
Borrower or any ERISA Affiliate or under which the Borrower or
any ERISA Affiliate may incur any liability.
"Net Income" shall mean, for any period on a
-----------
consolidated basis for ATSC, the Borrower and its Restricted
Subsidiaries, the consolidated net income (or loss) of ATSC, the
Borrower and its Restricted Subsidiaries for such period taken as
a single accounting period, determined in conformity with GAAP.
"Net Worth" shall mean, as at any date of determi
----------
nation, the amount by which (a) the total consolidated assets of
ATSC, the Borrower and its Restricted Subsidiaries exceed (b) the
total consolidated liabilities of ATSC, the Borrower and its
Restricted Subsidiaries, as determined in conformity with GAAP
but excluding, for purposes of this definition, unrealized
foreign exchange translation gains and losses from Investments in
Foreign Subsidiaries.
"Nonmaterial Domestic Subsidiaries" shall mean any
----------------------------------
Restricted Subsidiary (other than a Foreign Subsidiary) which has
total assets of $250,000 or less, provided that the total assets
--------
of all Nonmaterial Domestic Subsidiaries shall not exceed
$1,000,000 in the aggregate and to the extent the aggregate total
assets of all such Restricted Subsidiaries exceeds $1,000,000,
one or more such Restricted Subsidiaries (in descending order
based upon their total assets) shall not be "Nonmaterial Domestic
Subsidiaries" until such excess is eliminated.
=================================================================
-19-
"Non-U.S. Lender" shall have the meaning ascribed to
----------------
such term in Section 2.08(e).
---------------
"Note" shall have the meaning ascribed to such term in
----
Section 2.01(d).
---------------
"Notice of Borrowing" shall mean, with respect to a
--------------------
proposed Borrowing pursuant to Section 2.01(b), a notice
----------------
substantially in the form of Exhibit 2.01.
------------
"Notice of Conversion/Continuation" shall mean, with
----------------------------------
respect to a proposed conversion or continuation of a Loan
pursuant to Section 2.02(c), a notice substantially in the form
--------------
of Exhibit 2.02.
------------
"Obligations" shall mean the principal of and all
-----------
interest on all Loans and Reimbursement Obligations, all fees,
expense reimbursements, taxes, compensation and indemnities
payable by the Borrower to the Administrative Agent, the Issuing
Banks, or any Lender pursuant to this Agreement and all other
present and future Indebtedness and other liabilities of the
Borrower owing to the Administrative Agent, the Issuing Banks,
any Lender (or, in the case of any Interest Rate Contract or
Foreign Currency Exchange Contract, any Affiliate of any Lender),
or any Person entitled to indemnification pursuant to Section
-------
12.04, or any of their respective successors, transferees or
-----
assigns, of every type and description, whether or not evidenced
by any note, guaranty or other instrument, arising under or in
connection with this Agreement, any other Loan Document, or any
Interest Rate Contract or Foreign Currency Exchange Contract,
whether or not for the payment of money, whether direct or
indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter
arising and however arising.
"Operating Lease" shall mean, as applied to any Person,
---------------
any lease of any Property by that Person as lessee which is not a
Capital Lease.
"Other Taxes" shall have the meaning ascribed to such
-----------
term in Section 2.08(b).
--------------
"PBGC" shall mean the Pension Benefit Guaranty Corpora
----
tion and any Person succeeding to the functions thereof.
"Permits" shall mean any permit, approval, consent,
-------
authorization, license, variance, or permission required from a
Governmental Authority under an applicable Requirement of Law.
"Permitted Account Liens" shall mean the collective
------------------------
reference to Liens permitted by clause (a) of the definition of
Customary Permitted Liens.
"Permitted Existing Indebtedness" shall mean the
---------------------------------
Indebtedness existing on the date hereof and set forth in
Schedule 8.01(k).
----------------
"Permitted Existing Liens" shall mean the Liens on any
------------------------
Property, other than any Environmental Liens, reflected on
Schedule 8.02(b).
----------------
=================================================================
-20-
"Permitted Fixed Asset Liens" shall mean the collective
---------------------------
reference to Liens permitted by clauses (a) and (b) of the
definition of Customary Permitted Liens.
"Permitted Inventory Liens" shall mean the collective
-------------------------
reference to Liens permitted by clauses (a), (b) and (e) of the
definition of Customary Permitted Liens.
"Person" shall mean any natural person, corporation,
------
limited partnership, general partnership, limited liability
company, joint stock company, joint venture, association,
company, trust, bank, trust company, land trust, business trust
or other organization, whether or not a legal entity, or any
other nongovernmental entity, or any Governmental Authority.
"Plan" shall mean an employee benefit plan defined in
----
Section 3(3) of ERISA which the Borrower or any ERISA Affiliate
maintains, administers, contributes to or is required to
contribute to, or under which the Borrower or any ERISA Affiliate
may incur any liability.
"Pledged Securities" shall mean the securities pledged
------------------
pursuant to the Collateral Documents.
"Positive Price Variance Reserve" shall mean, as of any
-------------------------------
Calculation Date, the reserve established by the Borrower and the
Subsidiary Guarantors for the most recently completed fiscal
quarter in accordance with the historical accounting practices of
the Borrower and the Subsidiary Guarantors in respect of the
excess, if any, of (a) the standard costs associated with the
importation of Inventory over (b) the actual costs associated
with the importation of Inventory.
"Potential Event of Default" shall mean an event which,
--------------------------
with the giving of notice or the lapse of time, or both, would
constitute an Event of Default.
"Preferred Securities" shall mean the 8-1/2% Convertible
---------------------
Trust Originated Preferred Securities issued April 25, 1996 by
AnnTaylor Finance Trust pursuant to the Offering Memorandum dated
April 18, 1996.
"Preferred Securities Guarantee Agreement" shall mean
----------------------------------------
the Preferred Securities Guarantee Agreement, dated as of
April 25, 1996, by ATSC and the Bank of New York, as Trustee for
the benefit of the holders of the Preferred Securities.
"Pricing Ratio" shall mean, during any fiscal quarter,
-------------
the Fixed Charge Coverage Ratio for the period of four
consecutive fiscal quarters ended on the last day of the
immediately preceding fiscal quarter. Changes in the Pricing
Ratio indicated by a Pricing Ratio Certificate shall become
effective on the first day of the fiscal quarter following the
fiscal quarter in respect of which such Pricing Ratio Certificate
is delivered; provided, however, that (a) if any payment of
-------- -------
interest, commitment fee or Letter of Credit Fee is made during
the period between the first day of a fiscal quarter (including
the fiscal quarter ending August 2, 1998) and the date which is
five Business Days after the date of delivery of the Pricing
Ratio Certificate for the immediately preceding fiscal quarter,
such payment shall be tentatively calculated on the basis of the
Pricing Ratio in effect during such immediately preceding fiscal
quarter until the Pricing Ratio is adjusted upon delivery of such
Pricing Ratio Certificate (it being agreed that Level IV Status
=================================================================
-21-
shall be deemed to exist in respect of the fiscal quarter ending
August 2, 1998) and (b) in the event that no Pricing Ratio
Certificate has been delivered for a fiscal quarter prior to the
last day of the next succeeding fiscal quarter, Level IV Status
shall be presumed to exist until delivery of such Pricing Ratio
Certificate. Changes in the rates of calculation of interest,
commitment fee or Letter of Credit Fee resulting from the
operation of either of clauses (a) or (b) above for any fiscal
quarter shall be given effect through adjustments to the next
payments to be made of interest, commitment fee or Letter of
Credit Fee, as the case may be, so as to give effect to such
changes retroactively to the beginning of such fiscal quarter.
"Pricing Ratio Certificate" shall have the meaning
---------------------------
given to such term in Section 6.01(d)(ii).
-------------------
"Property" shall mean with respect to any Person, any
---------
real or personal property, plant, building, facility, structure,
equipment or unit, or other asset (tangible or intangible) owned,
leased or operated by such Person.
"Pro Rata Share" shall mean, at any particular time and
--------------
with respect to any Lender, a fraction (expressed as a
percentage), the numerator of which shall be the then amount of
such Lender's Commitment (or, if the Commitments have been
terminated, such Lender's Commitment as in effect immediately
prior to such termination, after giving effect to any assignments
pursuant to Section 12.01) and the denominator of which shall be
-------------
the then aggregate amount of all Commitments (or, if the
Commitments have been terminated, the aggregate amount of all
Commitments as in effect immediately prior to such termination,
after giving effect to any assignments pursuant to Section
-------
12.01).
-----
"Qualified Capital Stock" shall mean common stock of
-----------------------
ATSC or preferred stock of ATSC which is not subject to any
mandatory redemption or repurchase, upon the happening of a
contingency or otherwise, and is not subject to any required
sinking fund or similar payments, at any time prior to March 31,
2005.
"Receivables Transaction" shall mean the transaction
------------------------
contemplated by that certain Receivables Financing Agreement,
dated as of January 27, 1994 among AnnTaylor Funding, Inc., the
Borrower, Clipper Receivables Corporation, State Street Boston
Capital Corporation and PNC Bank, National Association and the
other documents relating thereto.
"Reference Bank" shall mean Bank of America.
--------------
"Reference Rate" shall mean the rate of interest
---------------
publicly announced from time to time by Bank of America in San
Francisco, California, as its reference rate. It is a rate set
by Bank of America based upon various factors including Bank of
America'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 the Reference Rate shall take
effect at the opening of business on the date specified in the
public announcement of such change.
"Refinancing Date" shall have the meaning ascribed to
----------------
such term in Section 2.01(f).
---------------
===================================================================
-22-
"Register" shall have the meaning ascribed to such term
--------
in Section 12.01(c).
----------------
"Regulation D", "Regulation T", "Regulation U" and
------------- ------------ -------------
"Regulation X" shall mean Regulation D, Regulation T, Regulation
------------
U and Regulation X, respectively, of the Federal Reserve Board as
in effect from time to time.
"Reimbursement Obligations" shall mean the reimburse
-------------------------
ment or repayment obligations of the Borrower to the Issuing
Banks with respect to Letters of Credit, for amounts paid out
thereunder.
"Release" shall mean any release, spill, emission,
-------
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration from any Property into the
environment, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Property.
"Remedial Action" shall mean any action required to (i)
---------------
clean up, remove, treat or in any other way address Contaminants
in the indoor or outdoor environment; (ii) prevent a Release or
threat of Release or minimize the further Release of Contaminants
so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; or (iii)
perform preremedial studies and investigations and post-remedial
monitoring and care.
"Rental Expense" shall mean, for any period for ATSC,
--------------
the Borrower and its Restricted Subsidiaries, on a consolidated
basis, the aggregate base rental payments to lessors or their
assignees by such Persons for such period under agreements to
rent or lease any real property (excluding payments in respect of
Capital Leases) as recorded in accordance with GAAP.
"Reportable Event" shall mean the events described in
----------------
Section 4043 of ERISA with respect to which the 30-day notice
requirement is not waived.
"Requirements of Law" shall mean, as to any Person, the
-------------------
charter and by-laws or other organizational or governing
documents of such Person, and any law, rule or regulation,
Permit, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person
or any of its property is subject, including the Securities Act,
the Securities Exchange Act, Regulation T, Regulation U and
Regulation X, and any certificate of occupancy, zoning ordinance,
building, environmental or land use requirement or Permit or
occupational safety or health law, rule or regulation.
"Requisite Lenders" shall mean Lenders whose Pro Rata
-----------------
Shares, in the aggregate, are at least 51%, or after the
termination of the Commitments, at least 51% of the outstanding
Loans and Letter of Credit Obligations.
"Responsible Officer" shall mean, as to ATSC or the
-------------------
Borrower, its Senior Vice President-Chief Financial Officer, its
Treasurer or its Vice President-Controller.
==================================================================
-23-
"Restricted Payment" shall mean (a) any dividend or
-------------------
other distribution, direct or indirect, on account of any shares
of any class of capital stock of ATSC or the Borrower or any of
its Subsidiaries now or hereafter outstanding, including the
Common Stock, except a distribution of stock as part of a stock
split and except a dividend payable solely in shares of that
class of stock or in any junior class of stock to the holders of
that class, (b) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of capital stock of ATSC
or the Borrower or any of its Subsidiaries now or hereafter
outstanding, (c) any payment or prepayment of principal of,
premium, if any, or interest on, and any redemption, purchase,
retirement or defeasance of, or sinking fund or similar payment
with respect to, the Subordinated Notes, any Subordinated Debt,
the Convertible Debentures or any consideration paid to any
Person for the purpose of any of the foregoing, and (d) any
payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares
of any class of capital stock of ATSC or the Borrower or any of
the Borrower's Subsidiaries now or hereafter outstanding.
"Restricted Subsidiary" shall mean any Subsidiary of
----------------------
the Borrower which is not an Unrestricted Subsidiary. Whether or
not a Restricted Subsidiary is a "wholly-owned Restricted
Subsidiary" shall be determined without taking into account any
directors' qualifying shares or similar nominal requirements
under foreign laws.
"Sales Tax Reserve" shall mean, as of any Calculation
------------------
Date, an amount equal to 5% of Eligible Accounts Receivable at
such Calculation Date.
"S&P" shall mean Standard and Poor's Ratings Services.
---
"Securities" shall mean any stock, shares, voting trust
----------
certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as
"securities", or any certificates of interest, shares, or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include
any evidence of the Obligations.
"Securities Act" shall mean the Securities Act of 1933,
--------------
as amended to the date hereof and from time to time hereafter,
and any successor statute.
"Securities Exchange Act" shall mean the Securities
------------------------
Exchange Act of 1934, as amended to the date hereof and from time
to time hereafter, and any successor statute.
"Shareholders' Equity" shall mean, as at any date of
--------------------
determination, the amount which would be set forth under
shareholders' equity on a consolidated balance sheet of ATSC and
its Subsidiaries in accordance with GAAP at such date of
determination.
"Shrink Reserve" shall mean, as of any Calculation
---------------
Date, the shrink reserve for the most recent fiscal month
calculated in accordance with the accounting practices of the
Borrower and the Subsidiary Guarantors.
==================================================================
-24-
"Standby Letter of Credit" shall mean any Letter of
-------------------------
Credit which is not a Commercial Letter of Credit.
"Stock-in-Transit Reserve" shall mean, as of any
-------------------------
Calculation Date with respect to any Inventory, an amount equal
to the product of (a) the Inventory Value of such Inventory times
(b) a fraction the numerator of which is 100 and the denominator
of which is 85 times (c) 0.15.
"Subordinated Debt" shall mean any unsecured
-------------------
Indebtedness of the Borrower or ATSC (other than the Subordinated
Notes), no part of the principal of which is required to be paid
(whether by way of mandatory sinking fund, mandatory redemption
or mandatory prepayment), prior to March 31, 2005 (it being
understood that any required offer to purchase such Indebtedness
as a result of change of control or asset sale shall not violate
the foregoing restriction); the payment of principal of and
interest of which and other obligations of the Borrower or ATSC
in respect thereof are subordinated to the prior payment in full
of the principal of and interest (including post-petition
interest) on the Loans and all other Obligations on terms and
conditions no less favorable to the Agents and the Lenders in any
material respect than those applicable to the Subordinated Notes;
and the amount of and all other terms and conditions of which are
reasonably satisfactory to the Requisite Lenders.
"Subordinated Debt Indenture" shall mean, as to any
---------------------------
Subordinated Debt, the indenture or other agreements pursuant to
which such Subordinated Debt is issued or incurred.
"Subordinated Note Indenture" shall mean the indenture
---------------------------
dated as of June 15, 1993 between the Borrower and Fleet Bank,
N.A., as trustee pursuant to which the Subordinated Notes were
issued.
"Subordinated Notes" shall mean the 8 3/4% Subordinated
------------------
Notes due 2000 issued pursuant to the Subordinated Note
Indenture.
"Subsidiary" shall mean, with respect to any Person,
----------
any corporation, partnership, trust or other entity of which a
majority of the stock (or equivalent ownership or controlling
interest) having voting power to elect a majority of the Board of
Directors (if a corporation) or to select the trustee or
equivalent controlling interest is directly or indirectly owned
or controlled by such Person or one or more of the other
Subsidiaries of such Person or any combination thereof; provided,
--------
however, that for purposes of this Agreement, AnnTaylor Finance
-------
Trust and the charitable foundation permitted to be established
pursuant to Section 8.02(a)(viii) shall not be deemed to be
--------------------
Subsidiaries of the Borrower or ATSC.
"Subsidiary Guaranty and Collateral Agreement" shall
---------------------------------------------
mean the Subsidiary Guaranty and Collateral Agreement dated as of
the Initial Funding Date substantially in the form of, and on the
terms set forth in, Exhibit 4.01(a)(vi), as the same may be
------------------
amended, supplemented or otherwise modified from time to time.
"Subsidiary Guarantor" shall mean any Guarantor (other
--------------------
than ATSC).
"Taxes" shall have the meaning ascribed to such term in
-----
Section 2.08.
------------
==================================================================
-25-
"Termination Date" shall mean the earlier to occur of
----------------
(a) the Final Maturity Date and (b) the date of termination of
the Commitments pursuant to Section 2.01(f) or 10.02(a).
--------------- --------
"Termination Event" shall mean (i) a Reportable Event
-----------------
with respect to any Plan; (ii) the withdrawal of the Borrower or
any ERISA Affiliate from a Benefit Plan during a plan year in
which the Borrower or such ERISA Affiliate was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations which results in the termination of
employment of 20% of Benefit Plan participants who are employees
of the Borrower and its ERISA Affiliates; (iii) the imposition of
an obligation on the Borrower or any ERISA Affiliate under
Section 4041 of ERISA to provide affected parties written notice
of intent to terminate a Benefit Plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the termination of,
or the institution under ERISA of proceedings to terminate, a
Benefit Plan (including the giving of written notice thereof);
(v) any event or condition which constitutes grounds under
Section 4042 of ERISA (excluding Section 4042(a)(4)) for the
termination of, or the appointment of a trustee to administer,
any Benefit Plan (including the giving of written notice
thereof); (vi) the partial or complete withdrawal of the Borrower
or any ERISA Affiliate from a Multiemployer Plan or notification
that a Multiemployer Plan is in reorganization; (vii) any
"accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any
Plan; (viii) the Borrower or any ERISA Affiliate has incurred or
is likely to incur a liability in connection with any nonexempt
"prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan; (ix) the failure to
make a required contribution to a Benefit Plan if such failure is
sufficient to give rise to a lien under Section 302 (f) of ERISA;
or (x) the imposition of any liability under Title IV of ERISA,
other than PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Borrower or any ERISA Affiliate.
"Total Capitalization" means, as of any date of
---------------------
determination, the sum of (i) Funded Debt plus (ii) obligations
----
in respect of Capital Leases plus (iii) Shareholders' Equity.
----
"Total Debt" shall mean, as at any date of
------------
determination, the aggregate principal amount of all Funded Debt
of ATSC, the Borrower and its Restricted Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP.
"Trademark Security Agreement" shall mean a Trademark
----------------------------
Security Agreement substantially in the form of, and on the terms
set forth in, Exhibit 4.01(a)(iii), as the same may be amended,
--------------------
supplemented or otherwise modified from time to time.
"Transaction Costs" shall mean the fees, costs and
------------------
expenses payable by the Borrower or any of its Subsidiaries or
ATSC pursuant hereto or in connection herewith or in respect
hereof.
"UCC" shall mean the Uniform Commercial Code as from
---
time to time in effect in the State of New York.
"Unrestricted Subsidiary" shall mean a Subsidiary of
-----------------------
the Borrower which has been designated as such by resolution duly
adopted by the board of directors of the Borrower, which at the
time of such designation does not own or hold any Securities of
ATSC, the Borrower or any Restricted Subsidiary, provided (a) no
--------
=================================================================
-26-
Subsidiary of the Borrower shall be (or if already an
Unrestricted Subsidiary shall immediately cease to be) an
Unrestricted Subsidiary if, at any time, ATSC, the Borrower or
any other Restricted Subsidiary of the Borrower shall create,
incur, issue, assume, guarantee or in any other manner whatsoever
be or become liable with respect to any Claim against or any
Contractual Obligation or Indebtedness of, such Subsidiary which
is not permitted under Article VIII and (b) ATSC, the Borrower
and its Restricted Subsidiaries shall be deemed to have made an
Investment in an Unrestricted Subsidiary at the time of
designation of such Subsidiary as an "Unrestricted Subsidiary" in
an amount equal to the sum of (i) any Indebtedness owed by such
Subsidiary to ATSC, the Borrower and its Restricted Subsidiaries
at such time, (ii) any outstanding Guarantees or Liens created by
ATSC, the Borrower and its Restricted Subsidiaries in favor of or
for the benefit of such Subsidiary and (iii) the total assets of
such Subsidiary at such time as determined on a consolidated
basis in accordance with GAAP.
"Working Capital" shall mean, as at any date of
----------------
determination, the difference between Current Assets at such date
and Current Liabilities at such date.
"Year 2000 Compliance" shall have the meaning ascribed
--------------------
to such term in Section 7.12(c).
--------------
"Year 2000 Problem" shall have the meaning ascribed to
-----------------
such term in Section 5.01(q).
---------------
1.02. Computation of Time Periods. In this Agreement,
---------------------------
in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"
and the words "to" and "until" each mean "to but excluding".
Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed.
1.03. Accounting Terms. For purposes of this
-----------------
Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with GAAP.
1.04. Other Definitional Provisions. References to
-----------------------------
"Articles", "Sections", "subsections", "Schedules", "Exhibits"
and "the preamble" shall be to Articles, Sections, subsections,
Schedules, Exhibits and the preamble, respectively, of this
Agreement unless otherwise specifically provided. The words
"include" and "including" when used herein are not intended to be
exclusive and mean "include, without limitation" and "including,
without limitation."
ARTICLE II
Amounts and Terms of Loans
--------------------------
2.01. The Revolving Credit Facility.
-----------------------------
(a) Availability. (i) Subject to the terms and
------------
conditions set forth in this Agreement, each Lender hereby
severally and not jointly agrees to make to the Borrower from
==================================================================
-27-
time to time during the period from the Initial Funding Date to
the Termination Date, revolving loans (each individually, a
"Loan" and, collectively, the "Loans"), in an amount which,
---- -----
together with such Lender's Pro Rata Share of the outstanding
Letters of Credit Obligations, shall not exceed, in the aggregate
at any time outstanding, the lesser of (A) such Lender's
Commitment and (B) such Lender's Pro Rata Share of the Borrowing
Base Amount then in effect; provided that the aggregate principal
amount of all Loans outstanding at any one time shall not exceed
the then Maximum Loan Amount.
(ii) All Loans under this Agreement shall be made
by the Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender
shall be responsible for any failure by any other Lender to
perform its obligation to make a Loan hereunder and that the
Commitment of any Lender shall not be increased or decreased
without the prior written consent of such Lender as a result of
the failure by any other Lender to perform its obligation to make
a Loan. The failure of any Lender to make available to the
Administrative Agent any Borrowing of the Commitments shall not
relieve any other Lender of its obligation hereunder to make
available to the Administrative Agent such other Lender's Pro
Rata Share of any Borrowing of the Commitments on the date such
funds are to be made available pursuant to the terms of this
Agreement.
(iii) Loans may be prepaid pursuant to Section
-------
2.04, and, subject to the provisions of this Agreement, any
----
amounts so prepaid may be reborrowed, up to the amount available
under this Section 2.01(a) at the time of such Borrowing, until
--------------
the Business Day immediately preceding the Final Maturity Date.
Each Lender's Commitment shall expire, and each Loan then
outstanding shall mature and be repaid by the Borrower, without
further action on the part of the Lenders, on the Final Maturity
Date.
(iv) Loans made on any Funding Date shall be in the
aggregate minimum amount of $1,000,000 and in integral multiples
of $1,000,000 in excess thereof.
(v) During the period of 30 consecutive days
commencing each year on January 1 and ending on January 30 of
each year, the Borrower shall effect a prepayment of the
outstanding Loans (such amount, a "Cleandown") so as to cause no
---------
Loans to be outstanding during such period (each such period, a
"Cleandown Period"). Within 15 days after the end of any
-----------------
Cleandown Period, the Borrower shall notify the Administrative
Agent that a Cleandown Period has occurred and the Administrative
Agent shall notify the Lenders.
(b) Notice of Borrowing. Whenever the Borrower
---------------------
desires to borrow under this Section 2.01, the Borrower shall
------------
deliver to the Administrative Agent a Notice of Borrowing (i) no
later than 11:00 a.m. (New York time) on the proposed Funding
Date, in the case of a Borrowing of Base Rate Loans, and (ii) not
later than 11:00 a.m. (New York time) at least three Business
Days in advance of the proposed Funding Date, in the case of a
Borrowing of Eurodollar Rate Loans. The Notice of Borrowing
shall specify (A) the Funding Date (which shall be a Business
Day), (B) the amount of the proposed Borrowing, (C) whether the
proposed Borrowing will be of Base Rate Loans or Eurodollar Rate
Loans, and (D) in the case of Eurodollar Rate Loans, the
requested Interest Period. In lieu of delivering the
above-described Notice of Borrowing and only with the consent of
the Administrative Agent in its sole discretion at such time, the
Borrower may give the Administrative Agent telephonic notice of
================================================================
-28-
any proposed Borrowing by the time required under this Section
-------
2.01(b); provided that, in the event the Administrative Agent so
-------
consents, such notice shall be confirmed immediately by delivery
to the Administrative Agent of a Notice of Borrowing by
facsimile. Any Notice of Borrowing (or telephonic notice in lieu
thereof) pursuant to this Section 2.01(b) shall be irrevocable.
---------------
(c) Making of Loans. Promptly after receipt of a
---------------
Notice of Borrowing under Section 2.01(b) (or telephonic notice
--------------
in lieu thereof if the Administrative Agent consents to such
telephonic notice, immediately confirmed by facsimile), the
Administrative Agent shall notify each Lender by facsimile or
other similar form of teletransmission, of the proposed
Borrowing. Each Lender shall make the amount of its Loan
available to the Administrative Agent at the Administrative
Agent's Payment Office in Dollars and in immediately available
funds, not later than (i) 1:00 p.m. (New York time) on the
Funding Date, in the case of a Borrowing of Base Rate Loans and
(ii) 11:00 a.m. (New York time) on the Funding Date, in the case
of a Borrowing of Eurodollar Rate Loans. After the
Administrative Agent's receipt of the proceeds of such Loans, the
Administrative Agent shall make the proceeds of such Loans
available to the Borrower on such Funding Date in Dollars and in
immediately available funds to an account of the Borrower,
designated in writing by the Borrower.
(d) Loan Accounts; Notes. The Loans made by each
--------------------
Lender shall be evidenced by one or more loan accounts maintained
by the Administrative Agent and such Lender in the ordinary
course of business (each a "Loan Account"). The Loan Accounts or
------------
records maintained by the Administrative Agent and each Lender
shall be conclusive absent manifest error of the amount of the
Loans made by the Lenders to the Borrower and the interest and
payments thereon. Any failure so to record or any error in doing
so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to
the Loans. In case of a discrepancy between the entries in the
Administrative Agent's books and any Lender's books, such
Lender's books shall constitute prima facie evidence of the
-----------
accuracy of the information so recorded. Notwithstanding the
foregoing, the Borrower agrees that, upon request to the
Administrative Agent by any Lender, in order to evidence such
Lender's Loans, the Borrower will execute and deliver to such
Lender a promissory note substantially in the form of Exhibit
-------
2.01(d) (each, as amended, supplemented, replaced or otherwise
-------
modified from time to time, a "Note"), with appropriate
----
insertions therein as to payee, date and principal amount. Each
Note shall (i) be dated the Initial Funding Date, (ii) be payable
as provided in Section 2.01(g) and (iii) provide for the payment
--------------
of interest in accordance with Section 2.02.
------------
(e) Termination or Reduction of Commitments. The
----------------------------------------
Borrower shall have the right, at any time and from time to time,
(a) to terminate the Commitments in whole, without premium or
penalty, if no Loans or Letter of Credit Obligations are then out
standing, or (b) permanently to reduce in part, without premium
or penalty, the Commitments by an amount of up to (i) the then
maximum amount of the Commitments, less (ii) the aggregate
principal amount of Loans and Letter of Credit Obligations then
outstanding, provided that the Borrower shall pay any funding
--------
losses, breakfunding fees and related expenses in connection with
any prepayment made in respect thereof. The Borrower shall give
not less than three Business Days' prior irrevocable notice
thereof (not later than 11:00 a.m. (New York time) on such day)
to the Administrative Agent designating the date (which shall be
a Business Day) of such termination or reduction and the amount
of any partial reduction. Promptly after receipt of a notice of
such termination or reduction, the Administrative Agent shall
notify each Lender of the proposed termination or reduction.
================================================================
-29-
Such termination or partial reduction of the Commitments shall be
effective on the date specified in the Borrower's notice and
shall reduce the Commitment of each Lender proportionately in
accordance with its Pro Rata Share. Any such partial reduction
of the Commitments shall be in an aggregate minimum amount of
$2,000,000 and integral multiples of $1,000,000 in excess of that
amount.
(f) Special Termination or Extension of Commitments.
-----------------------------------------------
(i) If the Subordinated Notes shall not have been
repaid in full with the net cash proceeds of Subordinated Debt or
the issuance of Qualified Capital Stock by ATSC on or prior to
February 16, 2000 (the "Refinancing Date") on terms and
-----------------
conditions reasonably satisfactory to the Requisite Lenders,
then, unless all the Lenders otherwise agree, the Commitments
shall automatically terminate on the Refinancing Date. The
Borrower shall provide the Lenders with a period of at least 15
days to review and approve the terms and conditions of any
issuance of Subordinated Debt or Qualified Capital Stock.
(ii) If the Subordinated Notes shall have been repaid
in full with the net cash proceeds of Subordinated Debt or the
issuance of Qualified Capital Stock by ATSC on or prior to the
Refinancing Date on terms and conditions reasonably satisfactory
to the Requisite Lenders, the Final Maturity Date shall be
extended for an additional one-year (the "Extension Period")
-----------------
period commencing on the then current Final Maturity Date,
provided that (a) no Default or Event of Default shall have then
--------
occurred and be continuing and (b) the Borrower shall demonstrate
compliance on a pro forma basis through the end of the Extension
Period with the financial covenants contained in Article IX and
----------
shall have delivered an officer's certificate to the
Administrative Agent and the Lenders setting forth in reasonable
detail the calculations required to make such determination.
(g) Repayment of Loans. The Borrower hereby promises
------------------
to pay on the Final Maturity Date the then outstanding principal
amount of Loans.
2.02. Interest on the Loans.
---------------------
(a) Rate of Interest. The Borrower promises to pay
----------------
interest on the unpaid principal amount of all Loans from the
date made until paid in full at a fluctuating rate determined
from time to time by reference to the Base Rate or the Eurodollar
Rate. The applicable basis for determining the rate of interest
shall be selected by the Borrower at the time a Notice of
Borrowing is given by the Borrower pursuant to Section 2.01(b) or
---------------
at the time a Notice of Conversion/Continuation is delivered by
the Borrower pursuant to Section 2.02(c); provided that the
---------------
Borrower may not select the Eurodollar Rate as the applicable
basis for determining the rate of interest on a Loan if at the
time of such selection an Event of Default has occurred and is
continuing. If on any day a Loan is outstanding with respect to
which notice has not been delivered to the Administrative Agent
in accordance with the terms of this Agreement specifying the
basis for determining the rate of interest, then for each such
day such Loan shall be a Base Rate Loan. The Loans shall bear
interest, subject to Section 2.02(d), as follows:
---------------
Loans shall bear interest from the Initial Funding Date
until August 2, 1998 at a rate per annum for each day which is,
(A) in the case of Base Rate Loans, equal to the Base Rate plus
==================================================================
-30-
1.00% and (B) in the case of Eurodollar Rate Loans, equal to the
Eurodollar Rate determined for the applicable Interest Period
plus 2.00%; thereafter, Loans shall bear interest as follows:
1) in the case of Base Rate Loans, then at a
rate per annum for each day equal to the sum of (x) the Base
Rate as in effect from time to time as interest accrues and
(y) the applicable margin set forth below opposite the
Pricing Ratio in effect on such day:
Pricing Ratio Applicable Margin
-------------- -----------------
Level I Status 0.25%
Level II Status 0.50%
Level III Status 0.75%
Level IV Status 1.00%
2) in the case of Eurodollar Rate Loans, then at
a rate per annum for each day equal to the sum of (x) the
Eurodollar Rate determined for the applicable Interest
Period and (y) the applicable margin set forth below
opposite the Pricing Ratio in effect on such day:
Pricing Ratio Applicable Margin
------------- -----------------
Level I Status 1.25%
Level II Status 1.50%
Level III Status 1.75%
Level IV Status 2.00%
(b) Interest Payments. Subject to Section 2.02(d),
----------------- ---------------
(i) interest accrued on each Base Rate Loan shall be payable in
arrears (A) on the fifteenth day of each January, April, July and
October, for the three-month period ending on such date,
commencing on the first such day following the making of such
Base Rate Loan, and (B) at the Termination Date and (ii) interest
accrued on each Eurodollar Rate Loan shall be payable in arrears
on the earlier of (A) each Interest Payment Date applicable to
such Eurodollar Rate Loan, (B) upon the prepayment thereof on the
amount prepaid and (C) at the Termination Date.
(c) Conversion or Continuation. (i) Subject to the
--------------------------
provisions of Sections 2.06 and 2.07, the Borrower shall have the
------------- ----
option (A) to convert at any time all or any part of outstanding
Loans which comprise part of the same Borrowing and which, in the
aggregate, equal $1,000,000 or an integral multiple of $1,000,000
in excess of such amount from Base Rate Loans to Eurodollar Rate
Loans; or (B) to convert all or any part of outstanding Loans
which, in the aggregate, equal $1,000,000 or an integral multiple
of $1,000,000 in excess of that amount from Eurodollar Rate Loans
to Base Rate Loans on the expiration date of any Interest Period
applicable thereto, provided the remaining amount of Eurodollar
--------
Rate Loans with the same Interest Period shall not be less than
$1,000,000; or (C) upon the expiration of any Interest Period
applicable to a Borrowing of Eurodollar Rate Loans, to continue
all or any portion of such Loans equal to $1,000,000 or an
integral multiple of $1,000,000 in excess of such amount as
=================================================================
-31-
Eurodollar Rate Loans, and the succeeding Interest Period of such
continued Loans shall commence on the expiration date of the
Interest Period applicable thereto; provided that no outstanding
--------
Loan may be continued as, or be converted into, a Eurodollar Rate
Loan when any Event of Default has occurred and is continuing.
(ii) In the event the Borrower shall elect to
convert or continue a Loan under this Section 2.02(c), the
----------------
Borrower shall deliver an irrevocable Notice of
Conversion/Continuation to the Administrative Agent no later than
11:00 a.m. (New York time) at least three Business Days in
advance of the proposed conversion date or date of continuation
in the case of Eurodollar Rate Loans and on the conversion or
continuation date in the case of Base Rate Loans. A Notice of
Conversion/Continuation shall specify (w) the proposed
conversion/continuation date (which shall be a Business Day), (x)
the amount of the Loan to be converted/continued, (y) the nature
of the proposed conversion/continuation, and (z) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the
requested Interest Period. In lieu of delivering the
above-described Notice of Conversion/Continuation, the Borrower
may give the Administrative Agent telephonic notice of any
proposed conversion/continuation by the time required under this
Section 2.02(c); provided that such notice shall be confirmed
---------------- --------
immediately by delivery to the Administrative Agent by facsimile
of a Notice of Conversion/Continuation. No failure of the
Borrower to confirm any telephonic notice by facsimile shall
impair or in any way limit the Borrower's obligations with
respect to such Loans. Promptly after receipt of a Notice of
Conversion/Continuation under this Section 2.02(c) (or telephonic
---------------
notice in lieu thereof immediately confirmed by facsimile), the
Administrative Agent shall notify each Lender of the proposed
conversion/continuation.
(iii) Any Notice of Conversion/Continuation for
conversion to, or continuation of, a Loan (or telephonic notice
in lieu thereof) shall be irrevocable and the Borrower shall be
bound to convert or continue in accordance therewith.
(d) Default Interest. Notwithstanding the rates of
----------------
interest specified in Section 2.02(a) and the payment dates
---------------
specified in Section 2.02(b), effective immediately upon the
----------------
occurrence of any Event of Default of the type specified in
Section 10.01(a) or upon acceleration of maturity pursuant to
-----------------
Section 10.02(a) and for so long thereafter as any such Event of
----------------
Default or acceleration shall be continuing, the principal
balance of all Loans and Reimbursement Obligations then due and
payable (including all amounts due and payable pursuant to
Section 10.02(a)) and any interest payments on the Loans not paid
-----------------
when due, shall bear interest payable upon demand at a rate which
is 2 per cent per annum in excess of the rate of interest
otherwise payable under this Agreement.
(e) Computation of Interest. Interest on Base Rate
-----------------------
Loans and Reimbursement Obligations shall be computed on the
basis of the actual number of days elapsed in the period during
which interest accrues and a year of 365 or 366 days (except that
a year of 360 days shall be used if the Base Rate is derived from
the Federal Funds Rate), as applicable. Interest on Eurodollar
Rate Loans shall be computed on the basis of the actual number of
days elapsed in the period during which interest accrues and a
year of 360 days. In computing interest on any Loan, the date of
the making of the Loan or the first day of an Interest Period, as
the case may be, shall be included and the date of payment or the
expiration date of an Interest Period, as the case may be, shall
==================================================================
-32-
be excluded; provided that if a Loan is repaid on the same day on
--------
which it is made, one day's interest shall be paid on that Loan.
(f) Changes; Legal Restrictions. In the event that
---------------------------
after the date hereof (a) the adoption of or any change in any
law, treaty, rule, regulation, guideline or determination of a
Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority, or (b)
compliance by any Lender with any request or directive (whether
or not having the force of law and whether or not the failure to
comply therewith would be unlawful) from any central bank or
other Governmental Authority or quasi-governmental authority
exercising jurisdiction, power or control over banks or financial
institutions generally, does impose, modify, or hold applicable,
in the determination of a Lender, any reserve, special deposit,
compulsory loan, FDIC insurance, capital allocation or similar
requirement against assets held by, or deposits or other
liabilities (including those pertaining to Letters of Credit) in
or for the account of, advances or loans by, Commitments made, or
other credit extended by, or any other acquisition of funds by, a
Lender or any Applicable Lending Office of such Lender (except
(a) with respect to Base Rate Loans, so long as the Base Rate in
effect at the time is determined under clause (a) in the
-----------
definition of "Base Rate", (b) with respect to Base Rate Loans,
to the extent that the reserve and FDIC insurance requirements
are reflected in the definition of "Base Rate" and (c) with
respect to Eurodollar Rate Loans, to the extent that the reserve
requirements are reflected in the definition of "Eurodollar
Rate"), and the result of any of the foregoing is to increase the
cost to such Lender of making, renewing or maintaining the Loans
or its Commitment to the Borrower or issuing to the Borrower any
Letter of Credit or to reduce any amount receivable hereunder or
thereunder; then, in any such case, the Borrower shall upon
----
written notice from and demand by that Lender pay to such Lender,
within 15 Business Days of the date specified in such notice and
demand, such amount or amounts (based upon a reasonable
allocation thereof by such Lender to the financing transactions
contemplated by this Agreement and affected by this Section
-------
2.02(f)) as may be necessary to compensate that Lender for any
--------
such additional cost incurred or reduced amount received. Such
Lender shall deliver to the Borrower a written statement of the
costs or reductions claimed and the basis therefor, and the
allocation made by such Lender of such costs and reductions,
which statement shall, in the absence of manifest error, be
conclusive. If a Lender subsequently recovers from another
Person any amount previously paid by the Borrower pursuant to
this Section 2.02(f), such Lender shall, within 30 days after
----------------
receipt of such refund and to the extent permitted by applicable
law, pay to the Borrower, without interest, the amount of any
such recovery.
2.03. Fees.
----
(a) Fees to Bank of America. The Borrower shall pay
-----------------------
to Bank of America, for its own account and/or for the account of
the Arranger, fees in the amounts set forth in the Fee Letter,
payable on the Initial Funding Date. Except as contemplated by
the Fee Letter, no Person other than Bank of America and the
Arranger shall have any interest in such fees.
(b) Commitment Fee.
--------------
(i) The Borrower shall pay to the Administrative
Agent, for the account of each Lender, in accordance with their
Pro Rata Shares, a commitment fee accruing from and after the
Initial Funding Date to the Termination Date, calculated on the
basis of a year of 360 days, upon the difference between (A) the
=================================================================
-33-
Commitments in effect from time to time and (B) the Loans and
Letter of Credit Obligations outstanding from time to time. All
such commitment fees payable under this paragraph shall be
payable in arrears on the fifteenth day of each January, April,
July and October for the three-month period ending on such date,
beginning after the Initial Funding Date and in addition on the
Termination Date.
(ii) Commitment fees shall accrue from the Initial
Funding Date until August 2, 1998 at the rate of 0.50% per annum;
thereafter, commitment fees shall accrue for each day at a rate
per annum equal to the percentage per annum set forth below
opposite the Pricing Ratio in effect on such day:
Pricing Ratio Commitment Fee
------------- --------------
Level I Status 0.375%
Level II Status 0.50%
Level III Status 0.50%
Level IV Status 0.50%
(c) Agency Fee. The Borrower shall pay to the
-----------
Administrative Agent, solely for its own account, the agency fee
set forth in the Fee Letter in the amount per annum agreed
between the Administrative Agent and the Borrower payable in
advance on the Initial Funding Date and each one-year anniversary
of the Initial Funding Date. No Person other than the
Administrative Agent shall have any interest in such fee.
(d) Letter of Credit Fees. The Borrower shall pay to
---------------------
the Administrative Agent, for the account of the Lenders, or to
the relevant Issuing Bank, as applicable, a fee for each Letter
of Credit issued on behalf of the Borrower (the "Letter of Credit
----------------
Fee"), determined as set forth in Section 3.08(a) and (b).
--- --------------- ---
(e) Payment of Fees. The fees described in this
----------------
Section 2.03 represent compensation for services rendered and to
------------
be rendered separate and apart from the lending of money or the
provision of credit and do not constitute compensation for the
use, detention or forbearance of money, and the obligation of the
Borrower to pay each fee described herein shall be in addition
to, and not in lieu of, the obligation of the Borrower to pay
interest, other fees and expenses otherwise described in this
Agreement. Fees and expenses shall be payable when due in
immediately available funds. All fees and expenses shall be
nonrefundable when paid. All fees and expenses specified or
referred to in this Agreement due to the Administrative Agent,
the Issuing Banks or a Lender, including those referred to in
this Section 2.03 and in Section 12.03, shall constitute
------------- --------------
Obligations and shall be secured by all the Collateral. All fees
described in this Section 2.03 which are expressed as a per annum
------------
charge shall be calculated on the basis of the actual number of
days elapsed in a 360-day year.
==================================================================
-34-
2.04. Voluntary and Mandatory Prepayments. (a) The
-----------------------------------
Borrower may, (i) upon written or telephonic irrevocable notice
for any Base Rate Loan on the proposed prepayment date, or upon
not less than three Business Day's prior written or telephonic
notice for any Eurodollar Rate Loan (in each case not later than
11:00 a.m. (New York time) on the date such notice is given), and
if made by telephone, confirmed immediately by facsimile to the
Administrative Agent (which notice the Administrative Agent shall
promptly transmit by facsimile or telephone to each Lender), at
any time and from time to time, prepay any Loan in whole or in
part, without premium or penalty, in an aggregate minimum amount
of $1,000,000, and integral multiples of $1,000,000 in excess of
such amounts; provided that the Borrower may prepay such Loans in
--------
full without regard to such minimum amount; and provided,
--------
further, that if the Borrower prepays any Eurodollar Rate Loan on
-------
a date other than the expiration date of the Interest Period
applicable thereto, the Borrower shall pay to the Administrative
Agent the amounts described in Section 2.07(d). Any notice of
---------------
prepayment given to the Administrative Agent under this Section
-------
2.04(a) shall specify the date of prepayment and the aggregate
-------
principal amount of the prepayment. If a notice of prepayment
has been delivered as provided herein, such notice shall be
irrevocable and the principal amount of the Loans specified in
such notice shall become due and payable on the prepayment date
specified in such notice.
(b) If at any time the sum of (i) the aggregate
principal amount of Loans outstanding at such time plus (ii) the
Letter of Credit Obligations at such time exceed the Borrowing
Base Amount at such time, the Borrower shall, without notice or
demand, immediately repay Loans in an aggregate principal amount
equal to the lesser of (x) the amount of such excess and (y) the
aggregate principal amount of Loans then outstanding, in the case
of Eurodollar Rate Loans, together with interest accrued to the
date of such payment or prepayment on the principal so prepaid
and any amounts payable under Section 2.07(d) in connection
----------------
therewith. In the case of Base Rate Loans, interest shall be
payable at the next Interest Payment Date. To the extent that
after giving effect to any prepayment of Loans required by the
preceding sentence, the sum of (i) the aggregate principal amount
of Loans outstanding at such time plus (ii) the Letter of Credit
Obligations at such time exceed the Borrowing Base Amount at such
time, the Borrower shall, without notice or demand, immediately
deposit in a Cash Collateral Account upon terms reasonably
satisfactory to the Administrative Agent an amount equal to the
lesser of (i) the Letter of Credit Obligations at such time and
(ii) the amount of such remaining excess. The Administrative
Agent shall apply any cash deposited in the Cash Collateral
Account (to the extent thereof) to pay any Reimbursement
Obligations which become due thereafter, provided that the
--------
Administrative Agent shall release to the Borrower from time to
time such portion of the amount on deposit in the Cash Collateral
Account which is equal to the amount by which the sum of (A)
Borrowing Base Amount at such time plus (B) the amount on deposit
in the Cash Collateral Account at such time exceeds the sum of
(i) the aggregate principal amount of Loans outstanding at such
time plus (ii) the Letter of Credit Obligations at such time.
"Cash Collateral Account" means an account established by the
-------------------------
Borrower with the Administrative Agent and over which the
Administrative Agent shall have exclusive dominion and control,
including the right of withdrawal for application in accordance
with this Section 2.04(b). The Borrower shall also prepay the
---------------
Loans to the extent required to comply with Section 2.01(a)(v).
------------------
2.05. Payments.
--------
===================================================================
-35-
(a) Manner and Time of Payment. (i) All payments of
--------------------------
principal, interest, Reimbursement Obligations and fees hereunder
or any Letter of Credit payable to the Lenders shall be made
without condition or reservation of right, in Dollars and in
immediately available funds, delivered to the Administrative
Agent at the Administrative Agent's Payment Office not later than
1:00 p.m. (New York time) on the date due; and funds received by
the Administrative Agent after that time and date shall be deemed
to have been paid and received by the Administrative Agent on the
next succeeding Business Day. Payments actually received by the
Administrative Agent for the account of the Lenders shall be paid
to them promptly in like funds after receipt thereof by the
Administrative Agent.
(ii) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any
payment is due to the Lenders hereunder that the Borrower will
not make such payment in full, the Administrative Agent may
assume that the Borrower has made such payment in full to the
Administrative Agent on such date, and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to
each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Borrower shall not
have so made such payment in full to the Administrative Agent,
each Lender shall repay to the Administrative Agent forthwith on
demand the excess of the amount distributed to such Lender over
the amount, if any, paid by the Borrower for the account of such
Lender, together with interest thereon at the Federal Funds Rate,
for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the
Administrative Agent; provided, however, that if any Lender shall
-------- -------
fail to repay such amount within three Business Days after demand
therefor, such Lender shall, from and after such third Business
Day until payment is made to the Administrative Agent, pay
interest thereon at a rate per annum equal to the Base Rate.
(b) Apportionment of Payments. So long as there does
-------------------------
not exist an Event of Default, all payments of principal and
interest in respect of outstanding Loans, all payments of fees
constituting Obligations, and all payments in respect of any
other Obligations shall be allocated among such of the Lenders as
are entitled thereto, in proportion to their respective Pro Rata
Shares or otherwise as provided herein. After the occurrence and
during the continuance of an Event of Default, and after notice
by the Administrative Agent to the Borrower that payments and
proceeds shall be so applied, all payments remitted to the
Administrative Agent and all amounts and proceeds of Collateral
received by the Administrative Agent shall be applied, subject to
the provisions of this Agreement, (i) first, to pay Obligations
in respect of any fees or indemnities then due to the
Administrative Agent, the Issuing Banks and the Lenders; (ii)
second, to pay Obligations in respect of expense reimbursements
then due under Section 12.03; (iii) third, to pay or prepay
-------------
principal of and interest on any outstanding Reimbursement
Obligations and Loans, and to pay (or to the extent such
Obligations are contingent, prepay or provide cash collateral in
respect of) Letter of Credit Obligations; provided that if
--------
sufficient funds are not available to fund all payments to be
made to the holders of the Obligations described in this clause
(iii), the available funds shall be allocated to the payment of
such Obligations ratably, based on the proportion of each such
holder's interest in the aggregate outstanding Loans,
Reimbursement Obligations and other Letter of Credit Obligations
(in each instance whether or not due); and provided, further,
-------- -------
that matured and, to the extent permitted by law, unmatured
interest-bearing Obligations shall, in any event, be paid prior
to prepayment or provision of cash collateral for contingent
Letter of Credit Obligations; (iv) fourth, to the ratable payment
=================================================================
-36-
of all other Obligations then due and payable for expense
reimbursements; (v) fifth, to pay Obligations then due and
payable in respect of the Interest Rate Contracts, if any; and
(vi) sixth, to the ratable payment of all other Obligations due
to any and all holders of Obligations.
The Administrative Agent shall promptly distribute to
each Lender at its primary address set forth in Schedule 1.01(a),
----------------
or at such other address as a Lender may request in writing, such
funds as it may be entitled to receive or as may be shown due to
it in the Administrative Agent's Loan Account, provided that the
Administrative Agent shall in any event not be bound to inquire
into or determine the validity, scope or priority of any interest
or entitlement of any Lender or any other holder of Obligations
and may suspend all payments or seek appropriate relief
(including instructions from the Requisite Lenders or an action
in the nature of interpleader) in the event of any doubt or
dispute as to any apportionment or distribution contemplated
hereby. The order of priority herein is set forth solely to
determine the rights and priorities of the holders of Obligations
as among themselves and may at any time or from time to time be
changed by the Lenders as they may elect, in writing in
accordance with Section 12.08 (except that no amendment shall
-------------
require prepayment or provision of cash collateral for contingent
Letter of Credit Obligations unless (as provided in clause (iii)
-------------
of Section 2.05(b)) matured and certain interest-bearing
------------------
unmatured Obligations shall have been paid), without necessity of
notice to or consent of or approval by the Borrower or any other
Person.
(c) Payments on Non-Business Days. Whenever any
------------------------------
payment to be made by the Borrower hereunder shall be stated to
be due on a day which is not a Business Day, payments shall be
made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section
-------
2.03, as the case may be.
----
(d) Payments by Lenders to the Administrative Agent.
-----------------------------------------------
Unless the Administrative Agent shall have been notified by any
Lender prior to any Funding Date that such Lender does not intend
to make available to the Administrative Agent such Lender's Loan
on such Funding Date (except that in the case of Base Rate Loans,
the Administrative Agent shall have been so notified no later
than 1:00 p.m. (New York time) on the Funding Date), the
Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such Funding Date
and the Administrative Agent in its sole discretion may, but
shall not be obligated to, make available to the Borrower a
corresponding amount on such Funding Date. If such corresponding
amount is not in fact made available to the Administrative Agent
by such Lender on or prior to a Funding Date, such Lender agrees
to pay and the Borrower agrees to repay severally to the
Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such
amount is paid or repaid to the Administrative Agent, at (A) in
the case of such Lender, the Federal Funds Rate for the first
three Business Days and thereafter at the Base Rate, and (B) in
the case of the Borrower, the interest rate applicable at the
time to a Borrowing of Base Rate Loans made on such Funding Date.
If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid shall constitute such
Lender's Loan, and if both such Lender and the Borrower shall
have paid and repaid, respectively, such corresponding amount,
the Administrative Agent shall promptly pay over to the Borrower
such corresponding amount in same day funds, but the Borrower
shall remain obligated for all interest thereon. Nothing in this
Section 2.05(d) shall be deemed to relieve any Lender of its
---------------
==================================================================
-37-
obligation hereunder to make its Loan on any Funding Date.
Notwithstanding any provision of this Agreement to the contrary,
the Administrative Agent may apply all funds and proceeds of
Collateral available for the payment of any Obligations first to
repay any amount owing by any Lender to the Administrative Agent
as a result of such Lender's failure to fund its Loan as required
hereunder.
2.06. Interest Periods. By giving notice as set forth
----------------
in Section 2.01(b) or 2.02(c)(ii) with respect to a Eurodollar
---------------- -----------
Borrowing of, conversion into or continuation of Eurodollar Rate
Loans, the Borrower shall have the option, subject to the other
provisions of this Section 2.06 and Section 2.07, to specify an
------------ ------------
interest period (each an "Interest Period") to apply to the
---------------
Borrowing described in such notice, which Interest Period shall
be either a 1-, 2-, 3-, or 6-month period. The determination of
Interest Periods shall be subject to the following provisions:
(a) In the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;
(b) If any Interest Period would otherwise expire on
a day which is not a Business Day, the Interest Period shall be
extended to expire on the next succeeding Business Day; provided
that if any such Interest Period would otherwise expire on a day
which is not a Business Day and no further Business Day occurs in
that month, that Interest Period shall expire on the immediately
preceding Business Day;
(c) The Borrower may not select an Interest Period in
respect of Loans which terminates later than the Final Maturity
Date; and
(d) Without the prior written consent of the
Administrative Agent and the Requisite Lenders, there shall be no
more than five Interest Periods under this Agreement at any time.
2.07. Special Provisions Governing Eurodollar Rate
----------------------------------------------
Loans. Notwithstanding other provisions of this Agreement, the
-----
following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
(a) Determination of Interest Rate. As soon as
-------------------------------
practicable two Business Days prior to the Funding Date or date
of conversion or continuation, the Administrative Agent shall
determine (which determination shall, absent manifest error, be
presumptively correct) the interest rate which shall apply to the
Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in
writing) to the Borrower and to each Lender.
(b) Interest Rate Unascertainable, Inadequate or
-----------------------------------------------
Unfair. With respect to any Interest Period, if (i) the
------
Reference Bank is not offering deposits in Dollars (in the
applicable amounts) in the London interbank Eurodollar market for
such Interest Period, or (ii) the Administrative Agent reasonably
determines that adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided
for in the definition of Eurodollar Rate, for any reason other
than the failure of the Reference Bank to offer deposits in
=================================================================
-38-
Dollars in the relevant market, then the Administrative Agent
shall forthwith give notice thereof to the Borrower, whereupon
until the Administrative Agent has determined that the
circumstances giving rise to such suspension no longer exist, (a)
the right of the Borrower to elect to have Loans bear interest
based upon the Eurodollar Rate, shall be suspended, and (b) each
outstanding Eurodollar Rate Loan, shall be converted into a Base
Rate Loan or a Eurodollar Rate Loan not covered by the notice
described above (as may be designated by the Borrower) on the
last day of the then current Interest Period therefor,
notwithstanding any prior election by the Borrower to the
contrary.
(c) Illegality. (i) In the event that on any date
----------
any Lender shall have determined (which determination shall, in
the absence of manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any
Eurodollar Rate Loan has become unlawful by compliance by that
Lender in good faith with any law, governmental rule, regulation
or order of any Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would
be unlawful), then, and in any such event, such Lender shall
promptly give notice (by facsimile or by telephone promptly
confirmed in writing) to the Borrower and the Administrative
Agent of that determination and the reasons therefor.
(ii) Upon the giving of the notice referred to in
Section 2.07(c)(i), (A) the Borrower's right to request of such
-------------------
Lender and such Lender's obligation to make Eurodollar Rate Loans
shall be immediately suspended, and such Lender shall make a
Loan, as part of any requested Borrowing of Eurodollar Rate
Loans, as a Base Rate Loan or as a Eurodollar Rate Loan not
covered by the notice described in Section 2.07(c)(i) (as
-------------------
designated by the Borrower), which Base Rate Loan or Eurodollar
Rate Loan shall, for all purposes, be considered a part of such
Borrowing, and (B) if the affected Eurodollar Rate Loan or Loans
are then outstanding, the Borrower shall immediately (or, if
permitted by applicable law, no later than the date permitted
thereby, upon at least one Business Day's written notice to the
Administrative Agent and the affected Lender) convert each such
Loan into a Base Rate Loan or a Eurodollar Rate Loan not covered
by such notice. If at any time notice is given under Section
-------
2.07(c)(i) by one or more Lenders, but not by all of them, the
----------
provisions of this Section 2.07(c)(ii) shall apply only in favor
-------------------
of the Lenders which gave such notice.
(iii) In the event that a Lender determines at any
time following its giving of a notice referred to in Section
-------
2.07(c)(i) that such Lender may lawfully make Eurodollar Rate
----------
Loans of the type(s) referred to in such notice, such Lender
shall promptly give notice (by facsimile or by telephone promptly
confirmed in writing) to the Borrower and the Administrative
Agent of that determination, whereupon the Borrower's right to
request of such Lender and such Lender's obligation to make
Eurodollar Rate Loans of such type(s) shall be restored.
(d) Compensation. In addition to such amounts as are
------------
required to be paid by the Borrower pursuant to Sections 2.02(a),
----------------
(d) and (f), the Borrower shall compensate each Lender, upon
--- ---
demand, for all losses, expenses and liabilities (including any
loss or expense incurred by reason of the liquidation or reemploy
ment of deposits or other funds acquired by such Lender to fund
or maintain such Lender's Eurodollar Rate Loans to the Borrower)
which such Lender may sustain (i) if for any reason (other than a
default by such Lender), a Borrowing of, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date
specified therefor in a Notice of Borrowing or a Notice of
Conversion/Continuation or in a telephonic request for borrowing
=================================================================
-39-
or conversion/continuation or a successive Interest Period does
not commence after notice therefor is given pursuant to Section
-------
2.02(c), (ii) if any prepayment or payment of any Eurodollar Rate
-------
Loan (including any prepayment pursuant to Section 2.04) occurs
------------
for any reason on a date which is not the last day of the
applicable Interest Period, (iii) as a consequence of any
required conversion of a Eurodollar Rate Loan to a Base Rate Loan
as a result of any of the events indicated in Section 2.07(c), or
---------------
(iv) as a consequence of any other failure by the Borrower to
prepay or repay Eurodollar Rate Loans when required by the terms
of this Agreement. Such Lender shall deliver to the Borrower
with a copy to the Administrative Agent, as a condition of the
Borrower's obligation to compensate such Lender, a written
statement as to such losses, expenses and liabilities which
statement, in the absence of manifest error, shall be conclusive
as to such amounts.
(e) Quotation of Eurodollar Rate. If the Reference
----------------------------
Bank shall have failed to provide offered quotations to the
Administrative Agent in accordance with the definition of
"Eurodollar Rate", the Administrative Agent shall give the
Borrower and each Lender prompt notice thereof and the Loans
requested shall be made or continued as, or converted into, Base
Rate Loans.
(f) Booking of Eurodollar Rate Loans. Any Lender may
--------------------------------
make, carry or transfer Eurodollar Rate Loans at, to, or for the
account of, any of its branch offices, agencies or the office of
an Affiliate of that Lender; provided that no such Lender shall
--------
be entitled to receive any greater amount under Section 2.02(f)
----------------
or Section 2.08 as a result of the transfer of any such Loan than
------------
such Lender would be entitled to immediately prior thereto unless
(i) such transfer occurred at a time when circumstances giving
rise to the claim for such greater amount did not exist and were
not reasonably foreseeable by such Lender, or (ii) such claim
would have arisen even if such transfer had not occurred.
2.08. Taxes.
-----
(a) Any and all payments by the Borrower hereunder
shall be made, in accordance with Section 2.05, free and clear of
------------
and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto but excluding, in the case of
each Lender and the Administrative Agent, taxes imposed on its
net income, branch profits taxes and franchise taxes imposed on
it by the United States of America or any Governmental Authority
(including Puerto Rico) and, in the case of each Lender, taxes
imposed on its income and franchise taxes imposed on it as a
result of making any Loan, by the Governmental Authority of the
jurisdiction of such Lender's Applicable Lending Office (all such
non-excluded taxes, levies, imposts, deductions, charges,
withholdings, and liabilities which a Lender determines to be
applicable to this Agreement, the Commitments, the Loans or the
Letters of Credit being hereinafter referred to as "Taxes"). If
-----
the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender or the
Administrative Agent, (i) so long as such Lender or the
Administrative Agent is in compliance with Section 2.08(e), the
---------------
sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable
to additional sums payable under this Section 2.08) such Lender
------------
or the Administrative Agent (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
=================================================================
-40-
deducted to the relevant taxation authority or other authority in
accordance with applicable law. If a withholding tax of the
United States of America or any other Governmental Authority
shall be or become applicable (y) after the date of this
Agreement, to such payments by the Borrower made to the
Applicable Lending Office or any other office that a Lender
specified on Schedule 1.01(a) to this Agreement may claim as its
----------------
Applicable Lending Office or (z) after such Lender's selection
and designation of any other Applicable Lending Office, to such
payments made to such other Applicable Lending Office, such
Lender shall, in good faith, use its reasonable best efforts to
make, fund and maintain its Loans, and to make, fund and maintain
its obligations under the Letters of Credit, through another
Applicable Lending Office of such Lender in another jurisdiction
so as to reduce the Borrower's liability hereunder, if the
making, funding or maintenance of such Loans or obligations under
the Letters of Credit through such other Applicable Lending
Office of such Lender does not, in the judgment of such Lender,
otherwise materially adversely affect such Loans, obligations
under the Letters of Credit or such Lender.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges, or similar levies which arise from
any payment made hereunder, from the issuance of Letters of
Credit hereunder, or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement, the
Commitments, the Loans or the Letters of Credit (hereinafter
referred to as "Other Taxes").
-----------
(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.08) paid by
------------
such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted by such
Governmental Authority. This indemnification shall be made
within 30 days after the date such Lender or the Administrative
Agent (as the case may be) makes written demand therefor. A
certificate as to any additional amount payable to any Lender
under this Section 2.08 submitted to such Borrower and the
-------------
Administrative Agent (if a Lender is so submitting) by such
Lender or the Administrative Agent shall show in reasonable
detail the amount payable and the calculations used to determine
such amount and shall, absent manifest error, be final,
conclusive and binding upon all parties hereto. Each Lender
agrees that, to the extent that such Lender is entitled to claim
an exemption in respect of all or a portion of any Taxes which
are otherwise required to be paid or deducted or withheld
pursuant to this Section 2.08 in respect of any payments under
------------
this Agreement such Lender shall within a reasonable time after
receiving written request by the Borrower provide the Borrower
with such certificates as such Lender in good faith may deem
appropriate to obtain the benefits of such exemption.
(d) Within 30 days after the date of any payment of
Taxes or Other Taxes by the Borrower, the Borrower will furnish
to the Administrative Agent, at its address referred to in
Section 12.10, the original or a certified copy of a receipt
--------------
evidencing payment thereof.
(e) Each Lender (or transferee of any Lender) that is
not a United States person (as defined in Section 7701(a)(30) of
the Code) (a "Non-U.S. Lender") shall deliver to the Borrower and
---------------
the Administrative Agent (or in the case of a participant, to the
Lender from which the related participation shall have been
purchased) two copies of U.S. Internal Revenue Service Form 1001,
=================================================================
-41-
Form 4224 or any subsequent versions thereof or successors
thereto, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c)
of the Code with respect to payments of "portfolio interest", a
Form W-8, or any subsequent versions thereof or successors
thereto (and, if such Non-U.S. Lender delivers a Form W-8, or any
subsequent versions thereof or successors thereto, an annual
certificate representing that such Non-U.S. Lender (i) is not a
"bank" for purposes of Section 881(c) of the Code (and is not
subject to regulatory or other legal requirements as a bank in
any jurisdiction, and has not been treated as a bank in any
filing with or submission made to any Governmental Authority or
rating agency), (ii) is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of the Borrower and
(iii) 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 Non-U.S. Lender
claiming complete exemption from U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other
Loan Documents, along with such other additional forms as the
Borrower or the Administrative Agent may reasonably request to
establish the availability of such exemption. Such forms shall
be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any
participant, on or before the date such participant purchases the
related participation) and on or before the date, if any, such
Non-U.S. Lender changes its Applicable Lending Office by
designating a different lending office (a "New Lending Office").
-------------------
In addition, each Non-U.S. Lender shall timely deliver such forms
(or any other form of certification adopted by U.S. taxing
authorities for such purpose) promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower
at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or
any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other
provision of Section 2.08, a Non-U.S. Lender shall not be
-------------
required to deliver any form pursuant to this Section 2.08(e)
---------------
that such Non-U.S. Lender is not legally able to deliver.
(f) The Borrower shall not be required to indemnify
any Non-U.S. Lender, or to pay any additional amounts to any Non-
U.S. Lender, in respect of United States federal withholding tax
pursuant to paragraph (a) or (c) above to the extent that the
obligation to withhold amounts with respect to United States
federal withholding tax existed on the date such Non-U.S. Lender
became a party to this Agreement (or, in the case of a
participant, on the date such participant became a transferee of
a participation interest hereunder) or, with respect to payments
to a New Lending Office, the date such Non-U.S. Lender designated
such New Lending Office with respect to a Loan.
(g) If the IRS or any other Governmental Authority of
the United States or of any other jurisdiction asserts a claim
that the Administrative Agent or the Borrower did not properly
withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not
properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstances which rendered
the exemption from withholding tax ineffective or for any other
reason), such Lender shall indemnify the Administrative Agent
and/or the Borrower, as applicable, fully for all amounts paid,
directly or indirectly, by the Administrative Agent and/or the
Borrower, as applicable, as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction
on the amounts payable to the Administrative Agent or the
=================================================================
-42-
Borrower, as applicable, under this Section 2.08, together with
------------
all costs and expenses, including, legal fees, incurred by the
Administrative Agent or the Borrower.
(h) If the Administrative Agent or any Lender
receives a refund, which in the good faith judgment of such
Lender is allocable to Taxes or Other Taxes paid by the Borrower,
it shall promptly pay such refund to the Borrower, net of all out-
of-pocket expenses of such Lender incurred in obtaining such Tax
Refund, provided, however, that the Borrower agrees to promptly
-------- -------
return such refund to the Administrative Agent or the applicable
Lender, as the case may be, if it receives notice from the
Administrative Agent or applicable Lender that such
Administrative Agent or Lender is required to repay such refund.
In addition, the Lender shall take such steps as the Borrower
shall reasonably request to recover or assist the Borrower in
recovering any Taxes or Other taxes paid by the Borrower pursuant
to paragraph (a) or (c) above.
(i) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.08 shall
------------
survive the payment in full of principal and interest hereunder,
the termination of the Letters of Credit and the termination of
this Agreement.
2.09. Increased Capital. If any Lender or Issuing
-----------------
Bank determines that either (a) the introduction of or any change
in any law, order or regulation or in the interpretation or
administration of any law, order or regulation by any
Governmental Authority charged with the interpretation or
administration thereof after the date hereof or (b) compliance
with any guideline or request issued or made after the date
hereof from any central bank or other Governmental Authority
(whether or not having the force of law) has or would have the
effect of reducing the rate of return on the capital of such
Lender or Issuing Bank or any corporation controlling such Lender
or Issuing Bank, as a consequence of or with reference to such
Lender's Commitment or its making or maintaining Loans or such
Issuing Bank's issuance or maintenance of, or such Lender's
participation in any Letter of Credit, below the rate which such
Lender or such Issuing Bank or such other corporation could have
achieved but for such compliance (taking into account the
policies of such Lender or such Issuing Bank or corporation with
regard to capital), then the Borrower shall from time to time,
upon demand by such Lender or Issuing Bank (with a copy of such
demand to the Administrative Agent), pay to such Lender or
Issuing Bank additional amounts sufficient to compensate such
Lender or Issuing Bank or other corporation for such reduction,
upon receipt by the Borrower (with a copy to the Administrative
Agent) of a certificate as to such amounts, by such Lender or
Issuing Bank, setting forth in reasonable detail the basis for,
and the calculations used by such Lender or Issuing Bank in
determining, any such amounts. Such certificate, in the absence
of manifest error shall be conclusive and binding for all
purposes. Each Lender and Issuing Bank agrees promptly to notify
the Borrower and the Administrative Agent of any circumstances
that would cause the Borrower to pay additional amounts pursuant
to this Section 2.09, provided that the failure to give such
------------ --------
notice shall not affect the Borrower's obligation to pay such
additional amounts hereunder, provided further that the Borrower
-------- -------
shall not be required to compensate a Lender or the Issuing Banks
pursuant to this Section for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender or
Issuing Bank, as the case may be, notifies the Borrower of the
circumstances giving rise to such increased costs or reductions
and of such Lender's or Issuing Bank's intention to claim
compensation therefor; provided further that, if the
-------- --------
circumstances giving rise to such increased costs or reductions
=================================================================
-43-
is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof.
2.10. Use of Proceeds of the Loans. The proceeds of
----------------------------
the Loans may be used for general corporate purposes.
2.11. Replacement of Lender in Event of Adverse
----------------------------------------------
Condition. If the Borrower becomes obligated to pay additional
---------
amounts to any Lender pursuant to Sections 2.02(f), 2.07(d), 2.08
---------------- ------- ----
or 2.09 as a result of any condition described in such Sections
----
which is not generally applicable to all Lenders, then, unless
such Lender has theretofore taken steps to remove or cure, and
has removed or cured, the conditions creating the cause for such
obligation to pay such additional amounts, or if any Lender
defaults in its obligation to fund Loans hereunder, the Borrower
may designate another bank which is reasonably acceptable to the
Administrative Agent and the Issuing Banks (such bank being
herein called a "Replacement Lender") to purchase for cash all of
------------------
the Obligations of such Lender and all of such Lender's rights
hereunder, without recourse to or warranty by, or expense to,
such Lender for a purchase price equal to the outstanding
principal amount payable to such Lender plus any accrued but
unpaid interest and accrued but unpaid commitment and other fees,
expense reimbursements and indemnities in respect of that
Lender's Commitment. Such Lender shall consummate such sale in
accordance with such terms (and, if such Lender is an Issuing
Bank, such other terms as may be necessary to compensate fully
such Lender) within a reasonable time not exceeding 60 days from
the date the Borrower designated a Replacement Lender, and upon
compliance with the provisions of Section 12.01 such Lender shall
-------------
no longer be a party hereto or have any obligations or rights
hereunder (except rights which, pursuant to the provisions of
this Agreement, survive the termination of this Agreement and the
repayment of the Loans), and the Replacement Lender shall succeed
to such obligations and rights.
2.12. Authorized Officers of the Borrower. The
---------------------------------------
Administrative Agent shall be entitled to rely conclusively on
the authority of any officer or employee designated pursuant to
Section 4.01(c) to request any Loan or Letter of Credit or any
conversion/continuation of any Loan until the Administrative
Agent receives written notice to the contrary. The
Administrative Agent shall have no duty to verify the
authenticity of the signature appearing on any written Notice of
Borrowing or Notice of Conversion/Continuation and, with respect
to an oral request for such a Loan or Letter of Credit or such
conversion/continuation, the Administrative Agent shall have no
duty to verify the identity of any person representing himself as
one of the officers or employees authorized to make such request
on behalf of the Borrower. Neither the Administrative Agent nor
any Lender shall incur any liability to the Borrower in acting
upon any telephonic notice referred to above which the
Administrative Agent believes in good faith to have been given by
a duly authorized officer or other person authorized to borrow on
behalf of the Borrower.
==================================================================
-44-
ARTICLE III
Letters of Credit
-----------------
3.01. Obligation to Issue. (a) Subject to the terms
-------------------
and conditions set forth in this Agreement, each Issuing Bank
(other than Bank of America) hereby agrees to issue, and each
Lender agrees to participate in, one or more Letters of Credit
for the account of the Borrower, up to an aggregate face amount
at any one time outstanding, together with the aggregate
principal amount of outstanding Loans, equal to the lesser of the
Commitments or the Borrowing Base Amount from time to time during
the period commencing on the Initial Funding Date and ending on
the Business Day which is five Business Days prior to the Final
Maturity Date.
(b) The Lenders acknowledge that the Existing Letters
of Credit have been issued for the account of the Borrower prior
to the Initial Funding Date and agree to participate in such
Letters of Credit to the same extent and on the same conditions
as if such Letters of Credit had been issued pursuant to
paragraph (a) above. Bank of America shall be the Issuing Bank
--------------
with respect to each Existing Letter of Credit but shall not have
any obligation to issue any Letters of Credit pursuant to Section
-------
3.01(a) after the Closing Date.
-------
3.02. Types and Amounts. Each Issuing Bank agrees not
-----------------
to issue any Letter of Credit at any time:
(a) if the aggregate maximum amount then available
for drawing under Letters of Credit issued by such Issuing Bank,
after giving effect to the issuance of such Letter of Credit,
would exceed any limit imposed by law or regulation upon such
Issuing Bank;
(b) if, immediately after the issuance of such Letter
of Credit, the aggregate amount of Letter of Credit Obligations
then existing (which amount shall be calculated without giving
effect to the participation of the Lenders pursuant to Section
-------
3.06) would exceed the lesser of (i) the Commitments then in
----
effect less the aggregate principal amount of all outstanding
----
Loans and (ii) the Borrowing Base Amount then in effect less the
----
aggregate principal amount of all outstanding Loans;
(c) which has an expiration date (i) more than one
year after the date of issuance, for Standby Letters of Credit
(provided that a Standby Letter of Credit may provide for an
--------
annual renewal on the terms set forth in Section 3.04(c)) or more
---------------
than 180 days after the date of issuance (subject to extension
for a maximum period of 60 days), for Commercial Letters of
Credit, or (ii) after four Business Days immediately preceding
the Final Maturity Date; or
(d) if such Issuing Bank has received written notice
from (i) the Requisite Lenders, (ii) the Administrative Agent or
(iii) the Borrower, on or prior to the Business Day prior to the
requested date of issuance of such Letter of Credit, that one or
more of the applicable conditions contained in Article IV has not
-----------
been then satisfied or waived.
3.03. Conditions. In addition to being subject to the
----------
satisfaction of the conditions precedent contained in Section
-------
4.02, the obligation of an Issuing Bank to issue any Letter of
----
Credit is subject to the condition that as of the date of
issuance, no order, judgment or decree of any court, arbitrator
=================================================================
-45-
or other Governmental Authority shall purport by its terms to
enjoin or restrain such Issuing Bank from issuing such Letter of
Credit and no law, rule or regulation applicable to such Issuing
Bank and no request or directive (whether or not having the force
of law and whether or not the failure to comply therewith would
be unlawful) from any Governmental Authority with jurisdiction
over such Issuing Bank shall prohibit or request such Issuing
Bank to refrain from the issuance of Letters of Credit generally
or the issuance of such Letter of Credit. No Issuing Bank shall
have any obligation to issue any Letter of Credit if (a) in the
case of a Commercial Letter of Credit, such Commercial Letter of
Credit does not provide for drafts or (b) in the case of any
Letter of Credit, such Letter of Credit is not otherwise in form
and substance reasonably acceptable to such Issuing Bank or the
issuance of such Letter of Credit would violate any applicable
policies of such Issuing Bank. No Issuing Bank shall violate
Section 3.02(b) in connection with the issuance of any Letter of
---------------
Credit by such Issuing Bank if, immediately after the issuance of
such Letter of Credit, the aggregate amount of Letter of Credit
Obligations then existing (which amount shall be calculated
without giving effect to the participation of the Lenders
pursuant to Section 3.06) in respect of Letters of Credit issued
------------
by such Issuing Bank are equal to or less than the Applicable
Approved Issuance Amount for such Issuing Bank. In the event
that the issuance of a Letter of Credit by an Issuing Bank would
cause the aggregate amount of Letter of Credit Obligations then
existing (which amount shall be calculated without giving effect
to the participation of the Lenders pursuant to Section 3.06) in
------------
respect of Letters of Credit issued by such Issuing Bank to
exceed the Applicable Approved Issuance Amount for such Issuing
Bank (or would increase such excess), such Issuing Bank shall
notify the Administrative Agent thereof prior to the issuance of
such Letter of Credit and shall verify with the Administrative
Agent whether the issuance of such Letter of Credit would violate
Section 3.02(b).
---------------
3.04. Issuance of Letters of Credit.
-----------------------------
(a) The Borrower shall give the relevant Issuing Bank
notice in accordance with the relevant Issuing Bank Agreement of
the requested issuance by such Issuing Bank of a Letter of Credit
under this Agreement. Such notice shall be irrevocable and shall
specify (A) the stated amount of the Letter of Credit requested
to be issued, (B) the effective date (which day shall be a
Business Day) of issuance of such Letter of Credit, (C) the date
on which such Letter of Credit is to expire (which date shall be
a Business Day and shall be subject to paragraph (c) of Section
------------- -------
3.02), (D) the Person for whose benefit the requested Letter of
-----
Credit is to be issued, (E) in the case of Standby Letters of
Credit, the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder and (F) such other
matters as are set forth in the relevant Issuing Bank Agreement
or as the relevant Issuing Bank may require.
(b) No Issuing Bank shall extend or amend any Letter
of Credit if the issuance of a new Letter of Credit having the
same terms as such Letter of Credit as so extended or amended
would be prohibited by Section 3.02. Any request for amendment
------------
to any previously issued Letter of Credit shall be given in
accordance with the relevant Issuing Bank Agreement. Each
request for an amendment to a previously issued Letter of Credit
shall not request an extension beyond four Business Days
immediately preceding the Final Maturity Date. Notwithstanding
any provision of any letter of credit application or Issuing Bank
Agreement to the contrary, in the event of any conflict between
the terms of any such letter of credit application or Issuing
Bank Agreement and the terms of this Agreement, the terms of this
=================================================================
-46-
Agreement shall control with respect to events of default,
representations and warranties, and covenants, except that such
letter of credit application or Issuing Bank Agreement may
provide for further warranties relating specifically to the
transaction or affairs underlying such Letter of Credit.
(c) The Issuing Banks and the Lenders agree that,
while a Standby Letter of Credit is outstanding and prior to the
Final Maturity Date, at the option of the Borrower and upon the
written request of the Borrower received by the relevant Issuing
Bank at least five days (or such shorter time as such Issuing
Bank may agree in a particular instance in its sole discretion)
prior to the proposed date of notification of renewal, such
Issuing Bank shall be entitled to authorize the automatic renewal
of any Letter of Credit issued by it so long as, immediately
after the renewal thereof, the aggregate amount of Letter of
Credit Obligations then existing (which amount shall be
calculated without giving effect to the participation of the
Lenders pursuant to Section 3.06) in respect of Letters of Credit
------------
issued by such Issuing Bank are equal to or less than the
Applicable Approved Issuance Amount for such Issuing Bank. Each
such request for renewal of a Letter of Credit shall be made in
accordance with the relevant Issuing Bank Agreement, and shall
specify in form and detail satisfactory to the relevant Issuing
Bank: (i) the Letter of Credit to be renewed; (ii) the proposed
date of notification of renewal of the Letter of Credit (which
shall be a Business Day); (iii) the revised expiry date of the
Letter of Credit; and (iv) such other matters as are set forth in
the relevant Issuing Bank Agreement or as such Issuing Bank may
require. No Issuing Bank shall so renew any Letter of Credit if:
(A) such Issuing Bank would have no obligation at such time to
issue or amend such Letter of Credit in its renewed form under
the terms of Section 3.02 or 3.03; or (B) the beneficiary of any
------------ ----
such Letter of Credit does not accept the proposed renewal of the
Letter of Credit. If any outstanding Existing Letter of Credit
shall provide that it shall be automatically renewed unless the
beneficiary thereof receives notice from the relevant Issuing
Bank that such Letter of Credit shall not be renewed, and if at
the time of renewal such Issuing Bank would be entitled to
authorize the automatic renewal of such Letter of Credit in
accordance with this paragraph (c) upon the request of the
------------
Borrower, but such Issuing Bank shall not have received any
amendment application from the Borrower with respect to such
renewal or other written direction by the Borrower with respect
thereto, such Issuing Bank shall nonetheless be permitted to
allow such Letter of Credit to renew, and the Borrower and the
Lenders hereby authorize such renewal, and, accordingly, such
Issuing Bank shall be deemed to have received an amendment
application from the Borrower requesting such renewal.
(d) Each Issuing Bank shall notify the
Administrative Agent and the Administrative Agent shall notify
the Lenders on the first Business Day of each week and calendar
quarter of the total face amount of all of the Letters of Credit
issued by it on each Business Day of the preceding week or
calendar quarter, as the case may be.
3.05. Reimbursement Obligations; Duties of the Issuing
------------------------- ---------------------
Banks.
-----
(a) (i) The Borrower shall reimburse each Issuing
Bank for drawings under a Letter of Credit issued by it no later
than 1:00 p.m. (New York time) on each date that any amount is
paid by such Issuing Bank under any Letter of Credit in an amount
equal to the amount so paid by such Issuing Bank.
==================================================================
-47-
(ii) Any Reimbursement Obligation with respect to
any Letter of Credit shall bear interest from the date of the
relevant drawing at the interest rate applicable to Base Rate
Loans until the first Business Day after the date on which the
relevant Issuing Bank gives notice of such drawing to the
Borrower and thereafter at the interest rate for past due Base
Rate Loans in accordance with Section 2.02(d).
--------------
(b) No action taken or omitted to be taken by an
Issuing Bank under or in connection with any Letter of Credit
issued by it shall put such Issuing Bank under any resulting
liability to any Lender or relieve such Lender of its obligations
hereunder to such Issuing Bank except in the event of such
Issuing Bank's gross negligence or wilful misconduct. Without
limiting the foregoing, in determining whether to pay under any
Letter of Credit, an Issuing Bank shall have no obligation to the
Lenders other than to confirm that any documents required to be
delivered under such Letter of Credit have been delivered and
that they appear on their face to comply with the requirements of
such Letter of Credit.
(c) The obligations of the Borrower under this
Agreement and any Letter of Credit to reimburse an Issuing Bank
for a drawing under a Letter of Credit issued by it, and to repay
any drawing under a Letter of Credit issued by it, shall be
unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement and such Letter of
Credit under all circumstances, including the following:
(i) any lack of validity or enforceability of this
Agreement or any Letter of Credit;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
obligations of the Borrower in respect of any Letter of
Credit or any other amendment or waiver of or any consent to
departure from all or any Letter of Credit;
(iii) the existence of any claim, set-off, defense
or other right that the Borrower may have at any time
against any beneficiary or any transferee of any Letter of
Credit (or any Person for whom any such beneficiary or any
such transferee may be acting), any Issuing Bank or any
other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the Letter of Credit
or any unrelated transaction;
(iv) 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 any loss or delay in the transmission or
otherwise of any document required in order to make a
drawing under any Letter of Credit;
(v) any payment by any Issuing Bank under any
Letter of Credit against presentation of a draft or certifi
cate that does not strictly comply with the terms of any
Letter of Credit; or any payment made by any Issuing Bank
under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for
the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any
==================================================================
-48-
transferee of any Letter of Credit, including any arising in
connection with any insolvency proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or
consent to departure from any other guarantee, for all or
any of the obligations of the Borrower in respect of any
Letter of Credit; or
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the
Borrower or a guarantor.
3.06. Participations.
--------------
(a) Immediately upon issuance by an Issuing Bank of
any Letter of Credit for the account of the Borrower in
accordance with the procedures set forth in this Article III,
------------
each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from such Issuing Bank,
without recourse or warranty, an undivided interest in the amount
of such Lender's Pro Rata Share in such Letter of Credit
(including all obligations of the Borrower with respect thereto
other than amounts owing to such Issuing Bank under Section
-------
3.08(b)) and any security therefor or guaranty pertaining
--------
thereto.
(b) If an Issuing Bank makes any payment under any
Letter of Credit and the Borrower does not repay such amount to
such Issuing Bank pursuant to Section 3.05(a) or 3.07, such
--------------- ----
Issuing Bank shall promptly notify the Administrative Agent and
the Administrative Agent shall promptly notify each Lender of
such failure, and each Lender shall promptly and unconditionally
pay to the Administrative Agent for the account of such Issuing
Bank the amount of such Lender's Pro Rata Share of such payment,
in Dollars and in immediately available funds, and the
Administrative Agent shall promptly pay such amount, and any
other amounts received by the Administrative Agent for such
Issuing Bank's account pursuant to this Section 3.06(b), to such
---------------
Issuing Bank. If the Administrative Agent so notifies such
Lender prior to 11:00 a.m. (New York time) on any Business Day,
such Lender shall make available to the Administrative Agent for
the account of the relevant Issuing Bank its Pro Rata Share of
the amount of such payment on such Business Day in Dollars and in
immediately available funds at the Administrative Agent's Payment
Office. If and to the extent such Lender shall not have so made
its Pro Rata Share of the amount of such payment available to the
Administrative Agent for the account of such Issuing Bank, such
Lender agrees to pay to the Administrative Agent for the account
of such Issuing Bank forthwith on demand such amount together
with interest thereon, for each day from the date such payment
was first due until the date such amount is paid to the
Administrative Agent for the account of such Issuing Bank, at the
Federal Funds Rate for three Business Days and then at the Base
Rate. The failure of any Lender to make available to the
Administrative Agent for the account of an Issuing Bank its Pro
Rata Share of any such payment shall not relieve any other Lender
of its obligation hereunder to make available to the
Administrative Agent for the account of such Issuing Bank its Pro
Rata Share of any payment on the date such payment is to be made.
(c) Whenever an Issuing Bank receives a payment from
the Borrower on account of a Reimbursement Obligation, including
any interest thereon, as to which the Administrative Agent has
=================================================================
-49-
previously received payments from the Lenders for the account of
such Issuing Bank pursuant to this Section 3.06, it shall
-------------
promptly pay to the Administrative Agent at the Administrative
Agent's Payment Office and the Administrative Agent shall
promptly pay to each Lender which has funded its participating
interest therein in Dollars and in the kind of funds so received,
an amount equal to such Lender's Pro Rata Share thereof. Each
such payment shall be made by the relevant Issuing Bank or the
Administrative Agent, as the case may be, on the Business Day on
which such Person receives the funds paid to such Person pursuant
to the preceding sentence, if received prior to 11:00 a.m. (New
York time) on such Business Day, and otherwise on the next
succeeding Business Day.
(d) Upon the request of the Administrative Agent,
each Issuing Bank shall furnish to the Administrative Agent
copies of any Letter of Credit or Letter of Credit application
form to which such Issuing Bank is party and such other
documentation as may reasonably be requested by the
Administrative Agent.
(e) The obligations of a Lender to make payments to
the Administrative Agent for the account of an Issuing Bank with
respect to a Letter of Credit issued by it on behalf of the
Borrower in accordance with the terms hereof shall be
irrevocable, shall not be subject to any qualification or
exception whatsoever (except in the event of such Issuing Bank's
gross negligence or wilful misconduct), and shall be honored in
accordance with the terms and conditions of this Agreement under
all circumstances (subject to Section 3.02), including any of the
------------
following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or
other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of any
Letter of Credit (or any Person for whom any such transferee may
be acting), the Administrative Agent, any Issuing Bank, any
Lender, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transactions between the Borrower and the beneficiary named in
any Letter of Credit);
(iii) any draft, certificate of any other document
presented under the 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;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of the
Loan Documents;
(v) any failure by the Administrative Agent or any
Issuing Bank to make any reports required pursuant to Section
-------
3.04; or
----
(vi) the occurrence of any Event of Default or
Potential Event of Default.
3.07. Payment of Reimbursement Obligations.
------------------------------------
==================================================================
-50-
(a) The Borrower agrees to pay to the relevant
Issuing Bank the amount of all Reimbursement Obligations,
interest and other amounts payable to such Issuing Banks under or
in connection with any Letter of Credit issued on behalf of the
Borrower immediately when due, irrespective of any claim, setoff,
defense or other right which the Borrower may have at any time
against any Issuing Bank or any other Person.
(b) In the event any payment by the Borrower received
by an Issuing Bank with respect to any Letter of Credit issued by
it and distributed by the Administrative Agent to the Lenders on
account of their participations is thereafter set aside, avoided
or recovered from such Issuing Bank in connection with any
receivership, liquidation or bankruptcy proceeding or otherwise,
each Lender which received such distribution shall, upon demand
by such Issuing Bank, contribute such Lender's Pro Rata Share of
the amount set aside, avoided or recovered together with interest
at the rate required to be paid by such Issuing Bank upon the
amount required to be repaid by it.
3.08. Compensation for Letters of Credit.
----------------------------------
(a) Letter of Credit Fees. (i) The Borrower shall
---------------------
pay with respect to each Letter of Credit issued as a Standby
Letter of Credit quarterly in arrears, on the fifteenth day of
each January, April, July and October for the three-month period
ending on such date, beginning after the Initial Funding Date and
also on the Termination Date, a Letter of Credit Fee equal to the
percentage per annum set forth below based on the Pricing Ratio
in effect from time to time, applied (on the basis of actual days
elapsed in a 360-day year) to the maximum amount available to be
drawn under such Standby Letter of Credit from day to day during
such quarter. This fee shall be paid to the Administrative
Agent, for the account of the Lenders in proportion to their
respective Pro Rata Shares.
Pricing Ratio Standby Letter of Credit Fee
------------- ----------------------------
Level I Status 1.25%
Level II Status 1.50%
Level III Status 1.75%
Level IV Status 2.00%
On the Business Day preceding the fifteenth day of each January,
April, July or October, each Issuing Bank will report to the
Administrative Agent the aggregate daily outstanding Standby
Letter of Credit amounts for the three-month period ending on the
fifteenth of such January, April, July or October.
(ii) The Borrower shall pay with respect to each
Letter of Credit issued as a Commercial Letter of Credit
quarterly in arrears, on the fifteenth day of each January,
April, July and October for the three-month period ending on such
date, beginning after the Initial Funding Date and also on the
Termination Date, a Letter of Credit Fee equal to the percentage
per annum set forth below based on the Pricing Ratio in effect
from time to time, applied (on the basis of actual days elapsed
in a 360-day year) to the maximum amount available to be drawn
under such Commercial Letter of Credit from day to day during
such quarter. This fee shall be paid to the Administrative
=================================================================
-51-
Agent, for the account of the Lenders in proportion to their
respective Pro Rata Shares.
Pricing Ratio Commercial Letter of Credit
-------------- ---------------------------
Level I Status 0.625%
Level II Status 0.750%
Level III Status 0.875%
Level IV Status 1.000%
On the Business Day preceding the fifteenth day of each January,
April, July or October, each Issuing Bank will report to the
Administrative Agent the aggregate daily outstanding Commercial
Letter of Credit amounts for the three-month period ending on the
fifteenth of such January, April, July or October.
(iii) Any Letter of Credit Fees accrued under the
Existing Credit Agreement for the period prior to the Initial
Funding Date shall be payable as provided in the Existing Credit
Agreement.
(b) Issuing Bank Charges. The Borrower shall
--------------------
directly pay to each Issuing Bank, solely for its own account,
(i) quarterly in arrears on the fifteenth day of each January,
April, July and October beginning after the Initial Funding Date
and also on the Termination Date, a fronting fee equal to 0.25%
per annum applied (on the basis of actual days elapsed in a
360-day year) to the maximum amount available to be drawn from
day to day during the immediately preceding fiscal quarter under
each Letter of Credit issued by it, and (ii) on demand the
standard charges assessed by such Issuing Bank including charges
assessed in connection with the negotiation, amendment or
cancellation of Letters of Credit.
3.09. Indemnification; Exoneration.
----------------------------
(a) In addition to amounts payable as elsewhere
provided in this Article III, the Borrower hereby agrees to
-----------
protect, indemnify, pay and save the Administrative Agent, each
Issuing Bank and each Lender harmless from and against any and
all Liabilities and Costs which the Administrative Agent or such
Issuing Bank or Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of the
Letter of Credit other than, in the case of such Issuing Bank, as
a result of its gross negligence or willful misconduct, as
determined by the final judgment of a court of competent
jurisdiction or (ii) the failure of such Issuing Bank to honor a
drawing under such Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future
de jure or de facto Governmental Authority (all such acts or
omissions herein called "Governmental Acts").
-----------------
(b) As between the Borrower, the Administrative
Agent, the Lenders and the Issuing Banks, the Borrower assumes
all risks of the acts and omissions of, or misuse of such Letter
of Credit by, the beneficiary of such Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing
Banks, the Administrative Agent and the Lenders shall not be
responsible (except, in the case of an Issuing Bank, for such
Issuing Bank's gross negligence or willful misconduct in
=================================================================
-52-
connection therewith): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted
by any party in connection with the application for and issuance
of the Letters of Credit, even if it should in fact prove to be
in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of
any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) for
errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex,
facsimile, or other similar form of teletransmission or
otherwise, whether or not they be in cipher; (iv) for errors in
interpretation of technical terms; (v) for any loss or delay in
the transmission or otherwise of any document required in order
to make a drawing under any Letter of Credit or of the proceeds
thereof; (vi) for the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter
of Credit; and (vii) for any consequences arising from causes
beyond the control of the Administrative Agent, the Issuing Banks
and the Lenders including any Governmental Acts. None of the
above shall affect, impair, or prevent the vesting of any Issuing
Bank's rights or powers under this Section 3.09.
------------
(c) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any
action taken or omitted by an Issuing Bank under or in connection
with Letters of Credit issued on behalf of the Borrower or any
related certificates, if taken or omitted in good faith, shall
not, in the absence of gross negligence or willful misconduct,
put such Issuing Bank, the Administrative Agent or any Lender
under any resulting liability to the Borrower or relieve the
Borrower of any of its obligations hereunder to any such Person.
ARTICLE IV
Conditions To Loans and Letters of Credit
-----------------------------------------
4.01. Conditions Precedent to the Initial Funding.
---------------------------------------------
The obligation of each Lender to make any Loan requested to be
made by it on the Initial Funding Date (individually, an "Initial
Loan" and collectively, the "Initial Loans") and of the Issuing
-------------
Banks to issue any Letter of Credit pursuant hereto on the
Initial Funding Date, and the effectiveness of this Agreement on
the Initial Funding Date, shall be subject to satisfaction of all
of the following conditions precedent (unless waived by all the
Lenders):
(a) Certain Documents and Other Items. The
------------------------------------
Administrative Agent shall have received on or before the Initial
Funding Date all of the following, all of which, except as
provided below, shall be in form and substance satisfactory to
the Administrative Agent and the Lenders and in sufficient copies
for each Lender:
(i) This Agreement, executed by the Borrower and
each of the Lenders, together with all Exhibits and Schedules;
(ii) Evidence that (A) the Existing Credit
Agreement shall have been terminated and all amounts due and
payable thereunder (other than the Existing Letters of Credit
issued thereunder) shall have been paid and all Liens granted in
=================================================================
-53-
connection therewith shall have been released, and (B) the HKSB
Facility shall have been terminated and all amounts due and
payable thereunder shall have been paid, all letters of credit
issued thereunder shall have been terminated or collateralized
and all Liens granted in connection therewith shall have been
released, and (C) the Receivables Transaction shall have been
terminated;
(iii) (A) The Borrower Pledge Agreement and (B)
the Trademark Security Agreement, in each case, executed by the
Borrower, together with stock certificates and appropriate stock
powers (endorsed in blank) in respect of any securities pledged
pursuant to the Borrower Pledge Agreement;
(iv) The ATSC Guaranty executed by ATSC;
(v) The ATSC Pledge Agreement executed by ATSC,
together with stock certificates and appropriate stock powers
(endorsed in blank) in respect of any securities pledged pursuant
to the ATSC Pledge Agreement;
(vi) The Subsidiary Guaranty and Collateral
Agreement executed by each Restricted Subsidiary (other than
Foreign Subsidiaries), together with stock certificates and
appropriate stock powers (endorsed in blank) in respect of any
securities pledged pursuant to the Subsidiary Guaranty and
Collateral Agreement;
(vii) The Borrower's Certificate of Incorporation,
as amended, modified or supplemented to the Initial Funding Date,
certified to be true, correct and complete by the Secretary of
State of Delaware as of a date not more than ten Business Days
prior to the Initial Funding Date, together with a good standing
certificate from the Secretary of State of Delaware dated a date
not more than ten Business Days prior to the Initial Funding
Date;
(viii) ATSC's Certificate of Incorporation, as
amended, modified or supplemented, to the Initial Funding Date,
certified to be true, correct and complete by the Secretary of
State of Delaware as of a date not more than ten Business Days
prior to the Initial Funding Date, together with a good standing
certificate from the Secretary of State of Delaware dated as of a
date not more than ten Business Days prior to the Initial Funding
Date;
(ix) A certificate of the Secretary or Assistant
Secretary of the Borrower dated the Initial Funding Date
certifying (A) the names and true signatures of the incumbent
officers of the Borrower authorized to sign this Agreement, the
other Loan Documents and any notice or certificate to be
delivered hereunder, (B) the By-Laws of the Borrower as in effect
on the date of such certification, (C) the resolutions of the
Borrower's Board of Directors approving and authorizing (x) the
execution, delivery and performance of this Agreement, and all
other Loan Documents executed by the Borrower, (y) the extensions
of credit contemplated hereunder and (z) the granting by the
Borrower of the Liens created by the security documents related
hereto and (D) that there have been no changes in the Certificate
of Incorporation of the Borrower since the date of the most
recent certification thereof by the Secretary of State of
Delaware;
(x) A certificate of the Secretary or Assistant
Secretary of ATSC dated the Initial Funding Date certifying (A)
the names and true signatures of the incumbent officers of ATSC
==================================================================
-54-
authorized to sign the ATSC Guaranty and the ATSC Pledge
Agreement, (B) the By-Laws of ATSC as in effect on the date of
such certification, (C) the resolutions of ATSC's Board of
Directors approving and authorizing the execution, delivery and
performance of the ATSC Guaranty and the ATSC Pledge Agreement
and all other Loan Documents executed by ATSC, and (D) that there
have been no changes in the Certificate of Incorporation of ATSC
since the date of the most recent certification thereof by the
Secretary of the State of Delaware;
(xi) A favorable legal opinion, dated the Initial
Funding Date, addressed to the Administrative Agent, the Issuing
Banks and the Lenders from Skadden, Arps, Slate, Meagher & Flom
LLP, special counsel to the Borrower and ATSC, in substantially
the form of Exhibit 4.01(a)(xi), with such changes thereto as may
-------------------
be approved by the Administrative Agent;
(xii) UCC-1 financing statements signed by the
Borrower or ATSC, as the case may be, as debtor naming the
Administrative Agent as secured party to be filed in the
jurisdictions listed on Schedule 4.01; provided, that no fixture
------------- --------
filings shall be required to be made;
(xiii) A certificate dated the Initial Funding Date
executed by a Responsible Officer of each of the Borrower and
ATSC to the effect that there has been no material adverse change
in the condition (financial or otherwise), business, operations,
properties or prospects of the Borrower or ATSC, from the date of
the last available financial statements;
(xiv) A collateral appraisal of certain assets of
the Borrower and its Subsidiaries issued by M.R. Weiser;
(xv) A Borrowing Base Certificate for the Borrower
and the Subsidiary Guarantors, dated the Initial Funding Date,
with appropriate insertions and attachments executed by a
Responsible Officer of the Borrower and setting forth the
Borrowing Base Amount as of May 30, 1998.
(xvi) The results of a recent lien search in each
of the jurisdictions where assets of the Borrower and its
Subsidiaries are located revealing that no liens on any assets of
the Borrower or its Subsidiaries except for liens permitted by
Section 8.02(b); and
---------------
(xvii) Such additional items as the Administrative
Agent or the Requisite Lenders may reasonably require.
(b) Fees and Expenses Paid. All costs, fees and
----------------------
expenses (including the costs and expenses of one outside counsel
and, without duplication, the allocated cost of in-house counsel)
for which invoices have been delivered at least three Business
Days prior to the Initial Funding Date and other compensation
payable to the Arranger, the Syndication Agents, the
Administrative Agent, the Issuing Banks and the Lenders shall
have been paid.
(c) Authorized Officers of the Borrower. The Borrower
-----------------------------------
shall have notified the Administrative Agent in writing of the
names of the officers and employees authorized to request Loans
and Letters of Credit and to request a conversion/continuation of
any Loan and shall provide the Administrative Agent with a
specimen signature of each such officer or employee.
=================================================================
-55-
The acceptance by the Borrower of the proceeds of the
Initial Loans made hereunder shall constitute a representation
and warranty by the Borrower as of the Initial Funding Date in
respect of such Loans that all the conditions contained in this
Section 4.01 have been satisfied or waived in writing pursuant to
Section 12.08.
-------------
4.02. Conditions Precedent to all Loans and Letters of
------------------------------------------------
Credit. The obligation of the Lenders to make any Loan requested
------
to be made by it, and of any Issuing Bank to issue any Letter of
Credit, on any date, is subject to the following conditions
precedent as of such date:
(a) Notice of Borrowing. The Administrative
---------------------
Agent shall have received in accordance with the provisions of
Section 2.01(b), on or before any Funding Date for any Loan, a
----------------
Notice of Borrowing.
(b) Additional Matters. As of the Funding Date
-------------------
for any Loan or the date of issuance of any Letter of Credit:
(i) Representations and Warranties. All of
------------------------------
the representations and warranties of the Borrower contained in
or repeated pursuant to Section 5.02 and in any other Loan
------------
Document (other than representations and warranties which
expressly speak only as of a different date) shall be true and
complete in all material respects on and as of such Funding Date
or issuance date, as though made on and as of such date;
(ii) No Default. No Event of Default or
-----------
Potential Event of Default shall have occurred and be continuing
or would result from the making of the requested Loan or the
issuance of the Letter of Credit; and
(iii) No Material Adverse Change. No event
--------------------------
shall have occurred after January 31, 1998 which, in the
reasonable judgment of the Requisite Lenders, has had or is
likely to have a Material Adverse Effect.
(c)Supplemental Documentation. Such additional
----------------------------
documentation (including opinions of counsel) as the
Administrative Agent or any Lender through the Administrative
Agent may reasonably require.
(d) Compliance with Borrowing Base. After giving
--------------------------------
effect to the making of such Loans or the issuance of such
Letters of Credit, the sum of (i) the aggregate principal amount
of Loans then outstanding plus (ii) the Letter of Credit
obligations at such time does not exceed the Borrowing Base
Amount at such time.
The acceptance by the Borrower of the proceeds of each
Loan made on any Funding Date other than the Initial Funding Date
or the issuance of any Letter of Credit in accordance with this
Agreement shall constitute a representation and warranty by the
Borrower as of such Funding Date or issuance date that all the
conditions contained in this Section 4.02 have been satisfied or
------------
waived in writing pursuant to Section 12.08.
-------------
=================================================================
-56-
ARTICLE V
Representations and Warranties
------------------------------
5.01. Representations and Warranties on the Initial
----------------------------------------------
Funding Date. In order to induce the Lenders to enter into this
------------
Agreement and to make the Initial Loans, the Borrower hereby
represents and warrants to each Lender, each Issuing Bank, the
Syndication Agents and the Administrative Agent that the
following statements are true and correct:
(a) Organization; Corporate Powers. Each of
------------------------------
ATSC, the Borrower and each Subsidiary of the Borrower (i) is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) is
duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction in which it
owns or leases real property or in which the nature of its
business requires it to be so qualified, except those
jurisdictions where the failure to be in good standing or to so
qualify has not had or will not have a Material Adverse Effect,
and (iii) has all requisite corporate power and authority to own,
operate and encumber its property and assets and to conduct its
business as presently conducted and as proposed to be conducted
in connection with and following the consummation of the
transactions contemplated by the Loan Documents.
(b) Authority. (i) Each Loan Party has the
---------
requisite corporate power and authority to execute, deliver and
perform its obligations under each of the Loan Documents executed
by it, or to be executed by it.
(ii) The execution, delivery and performance (or
filing or recording, as the case may be) of each of the Loan
Documents to which it is party and the consummation of the
transactions contemplated thereby, have been duly authorized by
all necessary corporate action on the part of each Loan Party and
no other corporate proceedings on the part of such Loan Party are
necessary to consummate such transactions.
(iii) Each of the Loan Documents (other than those
not in effect on the date of the making of this representation)
to which it is a party has been duly executed and delivered by
each Loan Party and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms,
is in full force and effect and no term or condition thereof has
been amended, modified or waived from the terms and conditions
contained therein delivered to the Administrative Agent pursuant
to Article IV without the prior written consent of the
-----------
Administrative Agent and the Requisite Lenders, and each Loan
Party and, to the best of the Borrower's knowledge, the other
parties thereto have performed and complied in all material
respects with all the material terms, provisions, agreements and
conditions set forth therein and required to be performed or
complied with by such parties on or before the effective date
thereof, and no default by any such party exists thereunder.
(c) No Conflict. The execution, delivery and
-----------
performance of each Loan Document to which it is a party by each
Loan Party and each of the transactions contemplated thereby do
not and will not (i) constitute a tortious interference with any
Contractual Obligation of any Person, any liability resulting
from which would have or be reasonably expected to have a
Material Adverse Effect, or (ii) conflict with or violate such
Person's Certificate of Incorporation or By-Laws or (iii)
=================================================================
-57-
conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any
Requirement of Law or material Contractual Obligation of ATSC or
of the Borrower or any Subsidiary of the Borrower or (iv) result
in or require the creation or imposition of any Lien whatsoever
upon any of the properties or assets of ATSC, the Borrower or any
Subsidiary of the Borrower (other than Liens in favor of the
Administrative Agent or the Issuing Banks arising pursuant to the
Loan Documents or Liens permitted pursuant to Section 8.02(b)),
-----------------
or (v) require any approval of stockholders, unless such approval
has been obtained.
(d) Governmental Consents. The execution,
----------------------
delivery and performance of each Loan Document to which it is a
party, by each Loan Party and the transactions contemplated
thereby do not and will not require any registration with,
consent or approval of, or notice to, or other action, with or by
any Governmental Authority, except filings, consents or notices
which have been, or will in due course be, made, obtained or
given.
(e) Governmental Regulation. None of ATSC, the
-----------------------
Borrower or any of its Subsidiaries is subject to regulation
under the Public Utility Holdings Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, the Investment
Company Act of 1940 or any other statute or regulation of any
Governmental Authority such that its ability to incur
indebtedness is limited or its ability to consummate the
transactions contemplated hereby is materially impaired.
(f) Financial Position. All quarterly and
-------------------
annual financial statements of ATSC, the Borrower or of the
Borrower and any of its Restricted Subsidiaries delivered to the
Administrative Agent were prepared in conformity with GAAP,
except as otherwise noted therein, and fairly present the
financial position of ATSC, the Borrower or the consolidated
financial position of ATSC, the Borrower and such Subsidiaries,
as the case may be, as at the respective dates thereof and the
results of operations and changes in cash flows for each of the
periods covered thereby, subject, in the case of any unaudited
interim financial statements, to changes resulting from audit and
normal year-end adjustments. Except as contemplated in the Loan
Documents, none of ATSC, the Borrower or any of its Restricted
Subsidiaries has any material obligations, contingent liabilities
or liabilities for taxes, long term leases or material or unusual
forward or long term commitments which are not reflected in such
financial statements and the notes thereto.
(g) Permitted Indebtedness. All Obligations
-----------------------
hereunder constitute "Permitted Indebtedness", "Senior
Indebtedness" and "Designated Senior Indebtedness" as such terms
are defined in the Subordinated Note Indenture and any
Subordinated Debt Indenture. As of the Initial Funding Date, no
Indebtedness (other than the Obligations) is designated as
"Designated Senior Indebtedness" under and as defined in the
Subordinated Note Indenture. No Event of Default (as defined in
the Subordinated Note Indenture) has occurred and is continuing
under the Subordinated Note Indenture and, after issuance of any
Subordinated Debt, no event of default has occurred and is
continuing with respect to such Subordinated Debt.
(h) Litigation; Adverse Effects. (i) There is
---------------------------
no action, suit, proceeding, investigation of any Governmental
Authority or arbitration, at law or in equity, or before or by
any Governmental Authority, pending, or, to the best knowledge of
the Borrower, threatened against ATSC, the Borrower or any
================================================================
-58-
Subsidiary of the Borrower or any property of any of them, which
would be reasonably expected to (A) result in any Material
Adverse Effect, (B) materially and adversely affect the ability
of any party to any of the Loan Documents to perform its
obligations thereunder, or (C) materially and adversely affect
the ability of the Borrower to perform its Obligations or the
Lenders' ability to enforce such Obligations.
(ii) None of ATSC, the Borrower or any Subsidiary
of the Borrower is (A) in violation of any applicable law which
violation has or might reasonably be expected to have a Material
Adverse Effect, or (B) subject to or in default with respect to
any final judgment, writ, injunction, decree, order, rule or
regulation of any court or Governmental Authority which has or
might have a Material Adverse Effect. There is no action, suit,
proceeding or investigation pending or, to the knowledge of the
Borrower, threatened against or affecting ATSC, the Borrower or
any Subsidiary of the Borrower challenging the validity or the
enforceability of any of the Loan Documents.
(i) No Material Adverse Change. There has
----------------------------
occurred no event since January 31, 1998 which has or would be
reasonably expected to have a Material Adverse Effect.
(j) Payment of Taxes. All tax returns and
------------------
reports of each of ATSC, the Borrower and its Subsidiaries
required to be filed (including extensions), have been timely
filed, and all taxes, assessments, fees and other charges of
Governmental Authorities thereupon and upon their respective
properties, assets, income and franchises which are shown on such
returns as being due and payable, have been paid when due and
payable, except such taxes, if any, that are reserved against in
accordance with GAAP, such taxes which are not yet delinquent,
such taxes which are payable in installments so long as paid
before any penalty accrues with respect thereto and such taxes as
are being contested in good faith by appropriate proceedings.
(k) Material Adverse Agreements. None of ATSC,
---------------------------
the Borrower or any of its Subsidiaries is a party to or subject
to any Contractual Obligation or other restriction contained in
its charter or By-laws which has or would reasonably be expected
to have a Material Adverse Effect after giving effect to the
consummation of the transactions contemplated in the Loan
Documents or otherwise.
(l) Securities Activities. None of ATSC, the
---------------------
Borrower or any of its Subsidiaries is engaged in the business of
extending credit for the purpose of purchasing or carrying any
Margin Stock and the Borrower shall not use the proceeds of any
Loan in violation of Regulation T, U or X of the Federal Reserve
Board.
(m) Disclosure. Subject to changes in facts or
----------
conditions which are required or permitted under this Agreement,
the representations and warranties of ATSC and the Borrower
contained in the Loan Documents, and all certificates and other
documents delivered to the Administrative Agent in connection
therewith, taken as a whole do not contain any untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not
misleading.
==================================================================
-59-
(n) Patents, Trademarks, Permits, Etc. The
-----------------------------------
Borrower and each of its Restricted Subsidiaries owns, is
licensed or otherwise has the lawful right to use, or has all
permits and other approvals of Governmental Authorities, patents,
trademarks, service marks, trade names, copyrights, technology,
know-how and processes used in or necessary for the conduct of
its business as currently conducted which are material to its
financial condition, business, operations, assets and prospects,
individually or taken as a whole. The use of such permits and
other approvals of Governmental Authorities, patents, trademarks,
service marks trade names, copyrights, technology, know-how and
processes by the Borrower or any such Subsidiary does not
infringe on the rights of any Person, subject to such claims and
infringements the existence of which do not have or are not
reasonably expected to have a Material Adverse Effect. The
transactions contemplated by the Loan Documents will not impair
the ownership of or rights under (or the license or other right
to use, as the case may be) any permits and governmental
approvals, patents, trademarks, service marks, trade names,
copyrights, technology, know-how or processes by the Borrower or
any such Subsidiary in any manner which has or might have a
Material Adverse Effect.
(o) Environmental Matters. To the best of the
---------------------
Borrower's knowledge, the operations of the Borrower and its
Restricted Subsidiaries comply in all material respects with all
applicable environmental, health and safety Requirements of Law
except where any failure to comply is not reasonably likely to
have a Material Adverse Effect.
(p) ERISA. Each Plan is in compliance in all
-----
material respects with its terms and with ERISA, the Code and any
applicable law. Each Plan which is intended to be qualified
under Section 401(a) of the Code is so qualified and has received
a determination letter to that effect, or will promptly be
submitted to the IRS for a determination that it is so qualified
and that the trust related to any such Plan is exempt from
Federal income tax under Section 501(a) of the Code as currently
in effect. Neither the Borrower nor any ERISA Affiliate has
breached any of the responsibilities, obligations or duties
imposed on it by ERISA or regulations promulgated thereunder with
respect to any Plan which breach would have or would be
reasonably expected to have a Material Adverse Effect. No
Benefit Plan has incurred any accumulated funding deficiency (as
defined in Sections 302(a)(2) of ERISA and 412(a) of the Code) or
is reasonably likely to have such a deficiency whether or not
waived which would have or would be reasonably expected to have a
Material Adverse Effect, and no application for a funding waver
or extension of any amortization period pursuant to Section 412
of the Code has been made with respect to any Plan. None of the
Borrower, any ERISA Affiliate or any fiduciary of any Plan which
is not a Multiemployer Plan has taken or failed to take any
action which would constitute or result in a Termination Event
that would have or would be reasonably expected to have a
Material Adverse Effect. There are no premium payments which
have become due to the PBGC which are unpaid. Neither the
Borrower nor any ERISA Affiliate has (i) failed to make a
required contribution or payment to a Multiemployer Plan which
would have or would be reasonably expected to have a Material
Adverse Effect or (ii) made a complete or partial withdrawal
under Section 4203 or 4205 of ERISA from a Multiemployer Plan
which would have or would be reasonably expected to have a
Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate has failed to make a required installment or any other
required payment under Section 412 of the Code on or before the
due date for such installment or other payment which would have
or would be reasonably expected to have a Material Adverse
Effect. Neither the Borrower nor any ERISA Affiliate is required
=================================================================
-60-
to provide security to a Benefit Plan under Section 401(a)(29) of
the Code due to a Plan amendment that results in an increase in
current liability for,the plan year.
(q) Year 2000. The Borrower has been conducting
---------
a comprehensive review of its computer systems to identify those
that could be adversely affected by the "Year 2000 problem" (that
is, the inability of computers, as well as embedded microchips in
non-computing devices, to perform properly date-sensitive
functions with respect to certain dates prior to and after
December 31, 1999) and is developing an implementation plan to
resolve any problem identified in such review. The Borrower
reasonably believes that any reprogramming and testing of its
computer systems required in respect of the "Year 2000 problem"
will be completed by March 31, 1999, and that the Year 2000
problem as it relates to the Borrower's computer systems,
including costs of remediation, will not result in a material
adverse change in the operations, business, properties, condition
(financial or otherwise) or prospects of the Borrower and its
Restricted Subsidiaries.
5.02. Subsequent Funding Representations and
--------------------------------------------
Warranties. In order to induce the Lenders to make any Loans
----------
after the Initial Funding Date, and the Issuing Banks to issue
Letters of Credit, the Borrower hereby represents and warrants to
each Lender, each Issuing Bank, and the Administrative Agent that
the statements set forth in Section 5.01 (except to the extent
------------
that such statements expressly are made only as of the Initial
Funding Date), are true, correct and complete in all material
respects as though made on and as of the Funding Date in respect
of each Borrowing after the Initial Funding Date and the date of
issuance of each Letter of Credit, except that the
representations and warranties need not be true and correct to
the extent that changes in the facts and conditions on which such
representations and warranties are based are required or
permitted under this Agreement.
ARTICLE VI
Reporting Covenants
-------------------
6.01. Financial Statements. So long as the Borrower
--------------------
shall have any Obligation or any Lender shall have any Commitment
hereunder or any Letter of Credit shall be outstanding, the
Borrower shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound
business practices and consistent with past practice to permit
preparation of financial statements in conformity with GAAP, and
each of the financial statements described below shall be
prepared from such system and records. The Borrower shall
deliver or cause to be delivered to the Administrative Agent
(with a sufficient number of copies for each Lender):
(a) (i) As soon as practicable, and in any event
within 45 days after the end of each of ATSC's first three fiscal
quarters on a consolidated basis for ATSC, the Borrower and its
Restricted Subsidiaries, a balance sheet, income statement and
cash flow statement for such fiscal quarter and a year-to-date
balance sheet, income statement and cash flow statement of ATSC,
the Borrower and its Restricted Subsidiaries, and (ii) as soon as
practicable, and in any event within 30 days after the end of
each fiscal month of ATSC (other than a fiscal month which is the
last fiscal month of a fiscal quarter), on a consolidated basis
=================================================================
-61-
for ATSC, the Borrower and its Restricted Subsidiaries, a balance
sheet, income statement and cash flow statement for such fiscal
month and a year-to-date balance sheet, income statement and cash
flow statement for ATSC, the Borrower and its Restricted
Subsidiaries, all certified by a Responsible Officer;
(b) As soon as practicable, and in any event
within 90 days after the end of each Fiscal Year, annual
financial statements on a consolidated basis for ATSC, the
Borrower and its Subsidiaries, consisting of a balance sheet,
income statement and cash flow statement, certified without
qualification by the firm of independent certified public
accountants of recognized national standing regularly retained by
ATSC and acceptable to the Administrative Agent, and accompanied
by such firm's certification that, in the course of its audit
(conducted in accordance with generally accepted auditing
standards), it obtained no knowledge that an Event of Default or
Potential Event of Default has occurred as a result of a
violation of any of the covenants set forth in Article IX;
-----------
(c) As soon as practicable, and in any event
within 45 days after the end of each Fiscal Year, on a
consolidated basis for ATSC, the Borrower and its Subsidiaries,
detailed financial projections for the Fiscal Year next
succeeding such Fiscal Year, including a written explanation of
the principal assumptions made with respect thereto;
(d) (i) Together with each delivery of the financial
statements pursuant to paragraphs (a)(i) and (b) above, a
------------------ ---
Compliance Certificate of the Borrower substantially in the form
of Exhibit 6.01(d)(i), stating that the executive officers
-------------------
signatory thereto have reviewed the terms of this Agreement and
the Collateral Documents, and have made, or caused to be made
under their supervision, a review in reasonable detail of the
transactions and condition of the Borrower and its Subsidiaries,
during the accounting period covered by such financial
statements, and that such review has not disclosed the existence
during or at the end of such accounting period, and that the
signers do not have knowledge of the existence as at the date of
such certificate, of any condition or event which constitutes an
Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Borrower has
taken, is taking and proposes to take with respect thereto;
provided, however, that Attachment 2 to Exhibit 6.01(d)(i), need
-------- ------- ------------ ------------------
not be included in the Compliance Certificate provided together
with the financial statements delivered pursuant to paragraph (a)
-------------
above and (ii) not later than 45 days after the end of each
fiscal quarter (including the fourth fiscal quarter), a Pricing
Ratio Certificate, substantially in the form of
Exhibit 6.01(d)(ii) (a "Pricing Ratio Certificate"), calculating
------------------ -------------------------
the Pricing Ratio for the four consecutive fiscal quarters ending
with such fiscal quarter.
(e) Promptly upon the Borrower obtaining
knowledge (A) of any condition or event which constitutes an
Event of Default or Potential Event of Default, (B) of any
condition or event which constitutes an event of default or
which, with the giving of notice or lapse of time or both, would
constitute an event of default under the Subordinated Note
Indenture or any Subordinated Debt Indenture or (C) of any
condition or event which has or in the Borrower's judgment is
likely to have a Material Adverse Effect, a certificate of a
Responsible Officer specifying the nature and period of existence
of any such condition or event, or specifying the notice given or
action taken by any lender or holder of the Subordinated Notes or
any Subordinated Debt and the nature of such claimed default,
================================================================
-62-
Event of Default, Potential Event of Default, event or condition,
and what action the Borrower has taken, is taking and proposes to
take with respect thereto;
(f) (A) Promptly after learning thereof, notice of
the institution of, or threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting
ATSC, the Borrower or any Restricted Subsidiary of the Borrower
involving claims in excess of $5,000,000, or any Property of
ATSC, the Borrower or any Restricted Subsidiary of the Borrower
valued in excess of $5,000,000 except, in each case, where the
same is fully covered by insurance (other than any applicable
deductible) or has been previously disclosed in writing by the
Borrower and of any material adverse change in any existing
action, suit, proceeding, governmental investigation or
arbitration; and (B) promptly upon learning thereof, notice of
any investigation or proceeding before or by any Governmental
Authority, the effect of which might limit, prohibit or restrict
materially the manner in which it currently conducts its business
or to declare any substance contained in the products
manufactured or distributed by it to be dangerous, if such
declaration is reasonably likely to have a Material Adverse
Effect;
(g) As soon as possible, and in any event within
ten Business Days after either the Borrower or any ERISA
Affiliate knows or has reason to know that a Termination Event
has occurred, a written statement of a Responsible Officer of the
Borrower describing such Termination Event and the action, if
any, which the Borrower or such ERISA Affiliate has taken, is
taking or proposes to take with respect thereto, and when known,
any action taken or threatened by the IRS, DOL or PBGC with
respect thereto;
(h) Promptly upon, and in any event within ten
Business Days after, receipt by the Borrower or an ERISA
Affiliate of the PBGC's intention to terminate a Benefit Plan or
to have a trustee appointed to administer a Benefit Plan, copies
of each such notice;
(i) Promptly upon, and in any event within ten
Business Days after, receipt by the Borrower or any ERISA
Affiliate of any unfavorable determination letter from the IRS
regarding the qualification of a Plan under Section 401(a) of the
Code, copies of such letter;
(j) Promptly upon, and in any event within ten
Business Days after, receipt by the Borrower or an ERISA
Affiliate of a notice from a Multiemployer Plan regarding the
imposition of withdrawal liability, copies of each such notice;
(k) Promptly upon, and in any event within ten
Business Days, after the Borrower or any ERISA Affiliate knows
(A) a Multiemployer Plan has been terminated, (B) the
administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or (C) the PBGC has instituted or
will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan a notification of such
information;
(l) Such other information respecting the
financial condition of ATSC, the Borrower or any Restricted
Subsidiary of the Borrower, business, operations, assets,
performance or prospects as the Administrative Agent or the
Requisite Lenders may, from time to time, reasonably request
including financial projections and including monthly balance
sheets, income statements and cash flow statements;
=================================================================
-63-
(m) On a timely basis consistent with the
Borrower's legal obligations to release such materials, copies of
all financial statements, reports and notices, if any, sent or
made available generally by the Borrower to the holders of its
publicly held Securities or sent or made available generally to a
holder of the Subordinated Notes or any Subordinated Debt or the
trustee under the Subordinated Note Indenture or any Subordinated
Debt Indenture or filed with the Commission and of all press
releases made available generally by the Borrower to the public
concerning material developments in the business of the Borrower;
(n) Upon the request of the Administrative Agent
or any Lender, copies of any management reports prepared by the
Borrower's independent certified public accountants in connection
with the annual audit;
(o) As soon as available, but in any event no
later than 15 days after the end of each fiscal month of the
Borrower, a Borrowing Base Certificate of the Borrower dated as
of the last day of such fiscal month with appropriate insertions
and attachments certified by a Responsible Officer;
(p) (i) Promptly upon sending or receiving copies, any
and all management letters and correspondence relating to
management letters, sent or received by the Borrower to or from
the Borrower's independent certified public accountants, and (ii)
upon request, (A) a copy of the Borrower's plan, timetable and
budget to address the Year 2000 problem, together with periodic
updates thereof and expenses incurred to date, (B) any third
party assessment of the Borrower's Year 2000 remediation efforts,
and (C) any Year 2000 contingency plans; and
(q) Promptly to the Administrative Agent notice of the
Refinancing Date if such Refinancing Date occurs.
ARTICLE VII
Affirmative Covenants
---------------------
The Borrower covenants and agrees that, on and after
the date hereof and so long as any Lender shall have any
Commitment hereunder or any Letter of Credit shall be outstanding
hereunder and until payment in full of all of the Obligations:
7.01. Corporate Existence, Etc. The Borrower shall,
-----------------------
and shall cause ATSC and each of its Restricted Subsidiaries to,
at all times maintain its corporate existence and preserve and
keep in full force and effect its rights and franchises except as
permitted under Section 8.08.
------------
7.02. Corporate Powers, Etc. The Borrower shall, and
---------------------
shall cause ATSC and each Restricted Subsidiary of the Borrower
to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its business requires it to
be so qualified, except in those jurisdictions where the failure
to so qualify does not have or would not reasonably be expected
to have a Material Adverse Effect.
================================================================
-64-
7.03. Compliance with Laws. The Borrower shall, and
--------------------
shall cause ATSC and each Restricted Subsidiary of the Borrower
to, comply with all Requirements of Law, and all restrictive
covenants affecting it or its business, properties, assets or
operations, where the failure so to comply would reasonably be
expected to have Material Adverse Effect.
7.04. Payment of Taxes and Claims. The Borrower
-----------------------------
shall, and shall cause ATSC and each Restricted Subsidiary of the
Borrower, to pay (a) all material taxes, assessments and other
governmental charges imposed upon it or on any of its properties
or assets or in respect of any of its franchises, business,
income or property before any material penalty or interest in a
material amount accrues thereon, and (b) all claims (including
claims for labor, services, materials and supplies) for sums,
material in the aggregate, which have become due and payable and
which by law have or may become a Lien (other than a Customary
Permitted Lien) upon any of its properties or assets, prior to
the time when any material penalty or fine shall be incurred with
respect thereto; provided that no such taxes, assessments and
--------
governmental charges referred to in clause (a) above or claims
----------
referred to in clause (b) above need be paid if being contested
---------
in good faith by appropriate proceedings instituted and
diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
7.05. Maintenance of Properties; Insurance. The
---------------------------------------
Borrower shall and shall cause ATSC and each Restricted
Subsidiary of the Borrower to, maintain or cause to be maintained
in good repair, working order and condition, excepting ordinary
wear and tear and damage due to casualty or condemnation, all
Property material to its operations and will make or cause to be
made all appropriate repairs, renewals and replacements thereof,
consistent with past practice. The Borrower shall, and shall
cause each of its Restricted Subsidiaries to, maintain such
insurance as it may be required to maintain under its leases and
other contracts and, to the extent not inconsistent with such
requirements, shall also maintain with financially sound
insurance companies, insurance policies and programs against loss
or damage by fire, theft, burglary, pilferage and loss in
transit, together with such other hazards as is reasonably
consistent with prudent industry practice, and maintain product
and other liability insurance consistent with prudent industry
practice with financially sound insurance companies.
7.06. Inspection of Property; Books and Records;
---------------------------------------------
Discussions. The Borrower shall, and shall cause ATSC and each
-----------
Restricted Subsidiary of the Borrower to, permit (a) any
authorized representative(s) designated by the Administrative
Agent to visit and inspect any of its properties, including
financial and accounting records, and to make copies and take
extracts therefrom, and to discuss its affairs, finances and
accounts with its officers, employees, representatives, agents or
independent certified public accountants, all upon reasonable
notice and at such reasonable time and as often as may be
reasonably requested and (b) the Administrative Agent and its
representatives to perform collateral audits with respect to the
Credit Card Accounts, Inventory and Eligible Fixed Assets of the
Borrower and the Subsidiary Guarantors, provided that, unless an
-------------
Event of Default shall have occurred and be continuing, the
Administrative Agent shall have the right to perform or cause to
be performed only one such collateral audit per year, except that
at any time while the sum of (i) the aggregate outstanding
principal amount of Loans and (ii) the Letter of Credit
Obligations exceeds $100,000,000, the Administrative Agent shall
have the right to perform or cause to be performed up to one such
collateral audit per quarter. Each such visitation, inspection
=================================================================
-65-
or collateral audit made by or on behalf of the Administrative
Agent shall be at the Borrower's expense. The Borrower will keep
proper books of record and account in which entries in conformity
with GAAP shall be made to prepare the financial statements
described in Section 6.01 and to satisfy all Requirements of Law.
7.07. Labor Matters. The Borrower shall notify the
-------------
Administrative Agent in writing, promptly, of any material labor
dispute to which it may become a party, any strikes or walkouts
relating to any of its facilities and the expiration of any labor
contract to which it is a party or by which it is bound.
7.08. Maintenance of Permits. The Borrower shall
-----------------------
obtain and maintain, and shall cause each of its Restricted
Subsidiaries to obtain and maintain, in full force and effect all
Permits or other rights necessary for the operation of its
business, except where the failure to obtain or maintain such
Permits or rights would not have or would not reasonably be
expected to have a Material Adverse Effect.
7.09. ERISA. The Borrower shall establish, maintain
-----
and operate and cause each of its ERISA Affiliates to establish,
maintain and operate, all Plans in all material respects in
compliance with their terms and with the applicable provisions of
ERISA, the Code, and all other Requirements of Law.
7.10. Pledge of After-Acquired Property; Additional
----------------------------------------------
Guarantors. (a) With respect to any property acquired after the
----------
Initial Funding Date by ATSC, the Borrower or any of the
Subsidiary Guarantors (other than (x) any property described in
paragraph (b), (c) or (d) below, (y) any property subject to a
Lien expressly permitted by Section 8.02(b)(iv) and (z) property
-------------------
acquired by any Foreign Subsidiary) as to which the
Administrative Agent, for the benefit of the Lenders, does not
have a perfected Lien, the Borrower shall, or shall cause ATSC or
the relevant Subsidiary Guarantors to, promptly (i) execute and
deliver to the Administrative Agent such amendments to the
Collateral Documents or such other documents as the
Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security
interest in such property and (ii) take all actions necessary or
advisable to grant to the Administrative Agent, for the benefit
of the Lenders, a perfected first priority security interest in
such property, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by
the Collateral Documents or by law or as may be requested by the
Administrative Agent.
(b) With respect to any fee interest in any real
property having a value (together with improvements thereof) of
at least $1,000,000 acquired after the Initial Funding Date by
ATSC, the Borrower or any of the Subsidiary Guarantors (other
than (x) any such real property subject to a Lien expressly
permitted by Section 8.02(b)(iv) and (z) real property acquired
by any Foreign Subsidiary), the Borrower shall, or shall cause
ATSC or the relevant Subsidiary Guarantors to, promptly (i)
execute and deliver a first priority mortgage, in favor of the
Administrative Agent, for the benefit of the Lenders, covering
such real property, (ii) if requested by the Administrative
Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real property in an amount at least equal
to the purchase price of such real property (or such other amount
as shall be reasonably specified by the Administrative Agent) as
well as a current ALTA survey thereof, together with a surveyor's
certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection
=================================================================
-66-
with such mortgage or deed of trust, each of the foregoing in
form and substance reasonably satisfactory to the Administrative
Agent and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Restricted Subsidiary
(other than a Foreign Subsidiary or a Nonmaterial Domestic
Subsidiary) created or acquired (or any Subsidiary which ceases
to be a Nonmaterial Domestic Subsidiary in accordance with the
definition thereof) after the Initial Funding Date by ATSC, the
Borrower or any of its Restricted Subsidiaries, the Borrower
shall, or shall cause ATSC or the relevant Restricted
Subsidiaries to, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Collateral Documents
as the Administrative Agent deems necessary or advisable to grant
to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Securities of
such new Subsidiary that are owned by ATSC, the Borrower or any
Subsidiary Guarantor, (ii) deliver to the Administrative Agent
the certificates, if any, representing such Securities, together
with undated stock powers, in blank, executed and delivered by a
duly authorized officer of ATSC, the Borrower or such Subsidiary
Guarantor, as the case may be, (iii) cause such new Subsidiary
(A) to become a party to the Subsidiary Guaranty and Collateral
Agreement, (B) to take such actions necessary or advisable to
grant to the Administrative Agent for the benefit of the Lenders
a perfected first priority security interest in the Collateral
described in the Subsidiary Guaranty and Collateral Agreement
with respect to such new Subsidiary, including the filing of
Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Subsidiary Guaranty and
Collateral Agreement or by law or as may be requested by the
Administrative Agent and (C) to deliver to the Administrative
Agent a certificate of such Subsidiary of the type described in
Section 4.01(a)(ix) in form and substance satisfactory to the
-------------------
Administrative Agent, and (iv) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory
to the Administrative Agent.
(d) With respect to any new Foreign Subsidiary
created or acquired after the Initial Funding Date by ATSC, the
Borrower or any of the Subsidiary Guarantors, the Borrower shall,
or shall cause ATSC or the relevant Subsidiary Guarantors to,
promptly (i) execute and deliver to the Administrative Agent such
amendments to the Collateral Documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority
security interest in the Securities of such new Subsidiary that
is owned by ATSC, the Borrower or any Subsidiary Guarantor
(provided that in no event shall more than 65% of the total
outstanding voting equity Securities of any such new Subsidiary
be required to be so pledged), (ii) deliver to the Administrative
Agent the certificates, if any, representing such Securities,
together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of ATSC, the Borrower or
such Subsidiary Guarantor, as the case may be, and take such
other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Administrative
Agent's security interest therein, and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
==================================================================
-67-
7.11. Further Assurances. At any time and from time
------------------
to time, upon the Administrative Agent's request and at the
expense of the Borrower, promptly and duly execute and deliver or
cause to be executed and delivered any and all further
instruments and documents and take such further action as the
Administrative Agent may reasonably request to effect the purpose
of the Collateral Documents, including, without limitation, the
filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction. In
addition, the Borrower shall use reasonable commercial efforts to
obtain a waiver, in form and substance reasonably satisfactory to
the Administrative Agent, from each landlord in respect of any
lease of real property entered into by the Borrower or any
Subsidiary Guarantor after the date hereof.
7.12. Year 2000. The Borrower shall:
---------
(a) By March 31, 1999, make inquiries of material
suppliers, vendors and customers of the Borrower, to ascertain
whether such persons are aware of the need to address the Year
2000 problem and whether they are taking appropriate steps to do
so;
(b) By March 31, 1999, prepare a project plan and
budget for ensuring that the Year 2000 problem is successfully
addressed in all material respects as it pertains to the
Borrower's own business, properties or operations, and containing
contingency plans to mitigate to the extent practicable the
effects of any third party's unexpected failure to address the
Year 2000 problem;
(c) By September 30, 1999, renovate all material
systems and equipment of the Borrower affected by the Year 2000
problem to cause them to perform correctly date-sensitive
functions for relevant data from before and after December 31,
1999 ("Year 2000 Compliance") or replace them with technology not
--------------------
so affected; and
(d) By September 30, 1999, complete testing and
installation of all material systems and equipment of the
Borrower to ensure timely Year 2000 Compliance.
ARTICLE VIII
Negative Covenants
------------------
The Borrower covenants and agrees that, on and after
the date hereof and so long as any Lender shall have any
Commitment hereunder or any Letter of Credit shall be outstanding
hereunder and until payment in full of all of the Obligations:
8.01. Indebtedness. The Borrower shall not, and shall
------------
not permit ATSC or any Restricted Subsidiary to, create, incur,
assume or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness, except:
(a) the Obligations;
=================================================================
-68-
(b) Indebtedness in the form of bank overdrafts
in the ordinary course of business;
(c) the Subordinated Notes and any other
Subordinated Debt;
(d) (i) Indebtedness incurred by the Borrower or any
Restricted Subsidiary to finance Capital Expenditures and (ii)
Capital Lease obligations of the Borrower or any Restricted
Subsidiary;
(e) Indebtedness in respect of Accommodation
Obligations permitted under Section 8.04;
------------
(f) Indebtedness of ATSC to the Borrower and any
Restricted Subsidiary in connection with any advances made
pursuant to Section 8.03(b);
---------------
(g) Indebtedness in respect of Interest Rate
Contracts and Foreign Currency Exchange Agreements entered into
in the ordinary course of business and not for speculative
purposes;
(h) subject to Section 8.03(d), intercompany
---------------
Indebtedness among the Borrower and its Restricted Subsidiaries;
(i) Indebtedness arising out of Liens permitted
under clauses (iii), (vi) and (ix) of Section 8.02(b);
---------------
(j) Indebtedness of ATSC under the Convertible
Debentures and the ATSC Guarantee Agreements;
(k) Permitted Existing Indebtedness and refinancings,
renewals or extensions thereof so long as the principal amount of
any such Permitted Existing Indebtedness is not increased as a
result of any such refinancing, renewal or extension (other than
by an amount equal to the amount of fees and expenses payable in
connection with such refinancing, renewal or extension);
(l) other Indebtedness of the Borrower and its
Restricted Subsidiaries not exceeding in the aggregate principal
amount of $10,000,000 at any one time outstanding; and
(m) Indebtedness of the Borrower in respect of the
intercompany note described in Section 8.05(i).
---------------
8.02. Sales of Assets; Liens.
----------------------
(a) Sales. The Borrower shall not, and shall
-----
not permit ATSC or any Restricted Subsidiary to, sell, assign,
transfer, lease, convey or otherwise dispose of, any properties
or assets, whether now owned or hereafter acquired, or any income
or profits therefrom, except among ATSC, the Borrower and any
Restricted Subsidiary and except:
=================================================================
-69-
(i) sales of inventory and subleases of real
property in the ordinary course of business (and with respect to
such subleases consistent with its past practices);
(ii) subleases of real property not in the
ordinary course of business, but only to the extent the aggregate
annual rental payments accrued under all such subleases do not
exceed $1,000,000;
(iii) other sales of assets, including the
sale of Securities of Subsidiaries, whether or not in the
ordinary course of business, and excluding the sale of obsolete,
unused or unnecessary equipment, having an aggregate fair market
value of not more than $1,000,000 pursuant to any one single
disposition or $2,000,000 in the aggregate pursuant to several
dispositions in any one Fiscal Year;
(iv) licenses of trademarks to the extent
necessary to maintain or protect such trademarks in jurisdictions
outside the United States of America;
(v) sales or dispositions of Cash
Equivalents;
(vi) licenses of trademarks to third parties
in exchange for royalty or other similar payments made on an arms-
length basis for use in connection with products not marketed
under such trademarks as of the date hereof;
(vii) Investments permitted under Section
-------
8.03; and
----
(viii) so long as no Event of Default shall
have then occurred and be continuing or would result therefrom,
transfer of cash or property in an amount not to exceed 1% of
EBITDA for each Fiscal Year to a charitable foundation
established by the Borrower or ATSC;
provided, that no disposition (other than transfers permitted by
-------- ----
clause (vii) or (viii)) in excess of $1,000,000 shall be
------------- -------
permitted unless the price to be received therefor represents the
then fair market value of the asset or property sold at the time
of such disposition and at least 80% of the price is to be paid
in cash at the closing of the disposition.
(b) Liens. The Borrower shall not, and shall not
permit ATSC or any Restricted Subsidiary to, create, incur,
assume or permit to exist, directly or indirectly, any Lien on or
with respect to any of its Property except:
(i) Liens securing the Obligations;
(ii) Liens upon the interest or title of a lessor or
secured by a lessor's interest under any lease under which the
Borrower or any Restricted Subsidiary is the lessee and the
interest of the lessee under any lease under which the Borrower
or any Restricted Subsidiary is the lessor;
(iii) Customary Permitted Liens;
===================================================================
-70-
(iv) Liens granted by the Borrower or any Restricted
Subsidiary (including the interest of a lessor under a Capital
Lease) and Liens on Property existing at the time of acquisition
thereof by the Borrower or any Restricted Subsidiary securing
Indebtedness permitted by Section 8.01(d)(i), provided that such
------------------ --------
Liens are limited to the assets financed with such Indebtedness;
(v) Liens on Property of any Person existing at the
time such Person becomes a Restricted Subsidiary securing
Indebtedness permitted by Section 8.01;
------------
(vi) Liens with respect to judgments or attachments
which do not result in an Event of Default or Potential Event of
Default hereunder;
(vii) Permitted Existing Liens and any extensions,
renewals and replacements thereof so long as (i) the amount of
the obligations secured thereby is not increased in connection
with any such extension, renewal or replacement and (ii) such
Lien is limited to the property subject thereto prior to such
extension, renewal or replacement;
(viii) Liens in respect of Indebtedness permitted
pursuant to Section 8.01(l); and
---------------
(ix) to the extent Indebtedness secured thereby is
permitted to be extended, renewed, replaced or refinanced, a
future Lien upon any Property which is subject to a Lien
described in clause (vii) above, if such future Lien attaches
------------
only to the same Property, secures only such permitted
extensions, renewals, replacements or refinancings and is of like
quality, character and extent.
8.03. Investments. The Borrower shall not, and shall
-----------
not permit ATSC or any Restricted Subsidiary to, make or own,
directly or indirectly, any Investment in any Person except:
(a)Investments by the Borrower or any Restricted
Subsidiary in Cash Equivalents;
(b)Investments by the Borrower or any Restricted
Subsidiary resulting from advances to ATSC to fund any of the
items set forth in Section 8.05(a), (b), (g) or (i);
-------------- --- --- ---
(c)Investments by ATSC in the Borrower;
(d)Investments by ATSC, the Borrower and Restricted
Subsidiaries in the Borrower or any other Restricted
Subsidiaries, provided that, after giving effect to such
--------
Investment, the aggregate then outstanding amount of all such
Investments by the Borrower and the Subsidiary Guarantors
(including Investments in the nature of sales and transfers of
assets for less than fair market value and Accommodation
Obligations) made subsequent to the Initial Funding Date in
Foreign Subsidiaries shall not exceed $5,000,000, provided,
further, that the conversion of any Indebtedness owed to the
Borrower or any Restricted Subsidiary by any Foreign Subsidiary
into equity of such Foreign Subsidiary shall not constitute an
additional Investment in such Foreign Subsidiary by the Borrower
==================================================================
-71-
or such Restricted Subsidiary for purposes of the limitation
contained in the immediately preceding proviso; notwithstanding
the foregoing, no Investments in Foreign Subsidiaries shall be
made upon the occurrence and during the continuance of an Event
of Default;
(e)Investments in joint ventures (in the form of
corporations, partnerships or otherwise) and Unrestricted
Subsidiaries in a maximum amount not exceeding $15,000,000 at any
one time outstanding; provided that no Investments in joint
--------
ventures and Unrestricted Subsidiaries shall be made upon the
occurrence and during the continuation of an Event of Default;
(f)Investments not exceeding $5,000,000 at any one time
outstanding in respect of loans to senior executives and key
employees of ATSC, the Borrower or any Restricted Subsidiary;
provided that no such Investments shall be made upon the
--------
occurrence and during the continuation of an Event of Default;
(g)Investments in the form of advance payments to
suppliers not in excess of an aggregate amount of $10,000,000
outstanding at any one time;
(h)Investments by ATSC in AnnTaylor Finance Trust
arising out of payments under the ATSC Guarantee Agreements; and
(i)other Investments by the Borrower or any Restricted
Subsidiary not in excess of an aggregate amount of $500,000
outstanding at any one time.
8.04. Accommodation Obligations. The Borrower shall
-------------------------
not, and shall not permit ATSC or any Restricted Subsidiary to,
create or become or be liable, directly or indirectly, with
respect to any Accommodation Obligation except:
(a)guaranties resulting from endorsement of negotiable
instruments for collection in the ordinary course of business;
(b)obligations, warranties and indemnities, not
relating to Indebtedness of any Person, which have been or are
undertaken or made in the ordinary course of business and not for
the benefit or in favor of an Affiliate of the Borrower or such
Subsidiary;
(c)guaranties of obligations of the Borrower or any of
its Restricted Subsidiaries in connection with the leasing or
financing of materials handling equipment, computer equipment,
furniture and fixtures in the ordinary course of business;
(d)Accommodation Obligations arising in connection with
the Borrower's agreement to provide one or more Letters of Credit
issued for the benefit of any joint venture to the extent
permitted by Section 8.03(e);
--------------
(e)with respect to ATSC, Accommodation Obligations
arising in connection with (i) the ATSC Guaranty (ii) the ATSC
Pledge Agreement, (iii) the ATSC Guarantee Agreements or (iv)
Accommodation Obligations for Indebtedness of the Borrower or its
wholly-owned Restricted Subsidiaries permitted to be incurred
under Section 8.01; and
------------
=================================================================
-72-
(f)Accommodation Obligations under the Subsidiary
Guaranty and Collateral Agreement.
8.05. Restricted Payments. The Borrower shall not,
-------------------
and shall not permit any of its Restricted Subsidiaries or ATSC,
to declare or make any Restricted Payment except:
(a)scheduled payments (but not prepayments) of interest
due on the Subordinated Notes or any Subordinated Debt, if such
scheduled payments are permitted to be made pursuant to the terms
of such Subordinated Notes or Subordinated Debt;
(b)dividends paid and declared in any Fiscal Year by
the Borrower to ATSC to fund (i) income and franchise taxes
payable in such Fiscal Year owed by ATSC pursuant to the Tax
Sharing Agreement dated as of July 12, 1989 between ATSC and the
Borrower; (ii) other ordinary operating expenses of ATSC not in
excess of $500,000 in any Fiscal Year; (iii) ATSC's share of
expenses incurred in connection with, any public offering of
Common Stock; and (iv) payments permitted under Section 8.05(e);
---------------
(c)any Restricted Payment made by any Subsidiary on its
capital stock;
(d)payments by ATSC to the Investor Group of its share
of expenses incurred in connection with any public offering of
the Common Stock held by the Investor Group;
(e)payments by ATSC or the Borrower to acquire shares
of Common Stock from employees of ATSC, the Borrower or any
Restricted Subsidiary in an aggregate amount not exceeding
$100,000 in any Fiscal Year;
(f)scheduled payments of dividends on the Preferred
Securities; provided that the Borrower will cause AnnTaylor
Finance Trust to exercise its right to defer payments of
dividends at any time when an Event of Default or Potential Event
of Default shall have occurred and be continuing or would result
therefrom;
(g)(i) dividends paid and declared by the Borrower to
ATSC to the extent necessary to pay interest under the
Convertible Debentures and (ii) interest paid by ATSC in respect
of the Convertible Debentures financed with such dividends;
provided that (i) no such dividend shall be declared or paid and
--------
no such interest shall be paid at any time when an Event of
Default or Potential Event of Default shall have occurred and be
continuing or would result therefrom, and at any such time, the
Borrower will cause ATSC to exercise its right to defer payment
of such interest and (ii) no such dividends shall be paid prior
to the due date of the corresponding interest payment on the
Convertible Debentures;
(h) repurchases of the Subordinated Notes pursuant to
Section 2.01(f); and
---------------
(i) a one-time dividend in the form of an intercompany
note in an amount of up to $100,625,000 by the Borrower to ATSC
and interest payments on such intercompany note, provided that
--------
(i) such intercompany note is pledged by ATSC pursuant to the
ATSC Pledge Agreement, (ii) such intercompany note is
subordinated to the Obligations on terms and conditions
satisfactory to the Administrative Agent, (iii) no principal
=================================================================
-73-
payments are made in respect of such intercompany note without
the consent of the Requisite Lenders and (iv) interest payments
shall be made only to the extent necessary to provide funds for
the payment of interest on the Convertible Debentures (ATSC shall
be permitted to pay interest in respect of the Convertible
Debentures financed with such interest payments); provided
--------
further that (A) no such interest shall be paid on such
-------
intercompany note at any time when an Event of Default or
Potential Event of Default shall have occurred and be continuing
or would result therefrom, and at any such time, the Borrower
will cause ATSC to exercise its right to defer payment of
interest on the Convertible Debentures, and (B) no such interest
shall be paid on such intercompany note prior to the due date of
the corresponding interest payment on the Convertible Debentures.
8.06. Conduct of Business. The Borrower shall not,
-------------------
and shall not permit any of its Restricted Subsidiaries to,
engage in any business other than (a) the business engaged in by
the Borrower or such Subsidiary on the date hereof; and (b) any
business activities substantially similar or related thereto.
8.07. Transactions with Affiliates. The Borrower
-----------------------------
shall not, and shall not permit ATSC or any Restricted Subsidiary
to, at any time after the Initial Funding Date directly or
indirectly enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property
or the rendering of any service) with any of its Affiliates on
terms that are less favorable to it than those fair and
reasonable terms that might be obtained in a comparable arms-
length transaction at the time; provided that the foregoing
--------
restriction shall not apply to transactions among ATSC, the
Borrower and its wholly-owned Restricted Subsidiaries, customary
fees paid to members of the Board of Directors of the Borrower or
ATSC or payments permitted under Section 8.03(g) or the business
---------------
contemplated by the joint ventures permitted under Section
-------
8.03(e).
-------
8.08. Restriction on Fundamental Changes.
----------------------------------
(a)The Borrower shall not, and shall not permit any
Restricted Subsidiary to, enter into any merger or consolidation,
or liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution), discontinue its business or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its business or
Property, whether now or hereafter acquired, except (i) as
otherwise permitted under Section 8.02(a), (ii) that any
----------------
Restricted Subsidiary may merge into or convey, sell, lease or
transfer all or substantially all of its assets to, the Borrower
or any other Restricted Subsidiary (provided that if any such
Restricted Subsidiary is a Subsidiary Guarantor, the surviving
entity of any such merger or the entity to which such assets are
conveyed, sold, leased or transferred must be the Borrower or a
Subsidiary Guarantor) and (iii) that nothing contained herein
shall prohibit the Borrower from dissolving or liquidating any
Subsidiary if in the reasonable opinion of the Borrower's senior
management such dissolution or liquidation has no reasonable
likelihood of having a Material Adverse Effect.
(b)The Borrower shall not and shall not permit ATSC or
any Restricted Subsidiary to, amend its Certificate of
Incorporation or By-Laws in a manner that is in any way adverse
to the rights of the Administrative Agent and the Lenders
hereunder.
================================================================
-74-
8.09. ERISA. The Borrower shall not, and shall not
-----
permit any of its ERISA Affiliates to, do any of the following to
the extent that such act or failure to act would in the
aggregate, after taking into account any other such acts or
failures to act, have a Material Adverse Effect.
(a)Engage, or permit any ERISA Affiliate to engage, in
any prohibited transaction described in Sections 406 of ERISA or
4975 of the Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained
from the DOL;
(b)permit to exist any accumulated funding deficiency
(as defined in Sections 302 of ERISA and 412 of the Code),
whether or not waived;
(c)terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan which would result in any liability
of the Borrower or any ERISA Affiliate under Title IV of ERISA;
(d)fail, or permit any ERISA Affiliate to fail, to make
any contribution or payment to any Multiemployer Plan which the
Borrower or any ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or any law
pertaining thereto;
(e)fail, or permit any ERISA Affiliate to fail, to pay
any required installment or any other payment required under
Section 412 of the Code on or before the due date for such
installment or other payment; or
(f)amend, or permit any ERISA Affiliate to amend, a
Plan resulting in an increase in current liability for the plan
year such that the Borrower or any ERISA Affiliate is required to
provide security to such Plan under Section 401(a)(29) of the
Code.
8.10. Sales and Leasebacks. The Borrower shall not,
--------------------
and shall not permit any Restricted Subsidiary to, become liable,
directly or by way of any Accommodation Obligation, with respect
to any lease, whether an Operating Lease or a Capital Lease, of
any Property whether now owned or hereafter acquired, (a) which
the Borrower or any Restricted Subsidiary has sold or transferred
or is to sell or transfer to any other Person, or (b) which the
Borrower or any such Restricted Subsidiary intends to use for
substantially the same purposes as any other Property which has
been or is to be sold or transferred by that entity to any other
Person in connection with such lease.
8.11. Subordinated Indebtedness and other
------------------------------------------
Indebtedness.
------------
(a)No Change. The Borrower shall not, and shall not
----------
permit ATSC to, amend, supplement or modify the terms of the
Subordinated Notes, any Subordinated Debt, the Convertible
Debentures, the Preferred Securities or the ATSC Guarantees (i)
which relate to subordination, interest (including options to pay
in kind), principal, tenor, extension of maturity, payments in
respect of redemptions, repurchases, sinking fund, principal,
interest or other payments, or the acceleration thereof or any
rescission of acceleration or (ii) except if necessary to comply
with the provisions of the Trust Indenture Act of 1939 or (iii)
by making more restrictive, or adding, covenants, breaches,
defaults, or events of default, or (iv) by shortening cure
=================================================================
-75-
periods, or (v) if the benefits to the Borrower or the
Administrative Agent or the Lenders would thereby be in any
material respect limited, restricted or diminished.
(b) Notices. The Borrower shall deliver to the
-------
Administrative Agent (i) a copy of each notice or other written
communication delivered by or on behalf of the Borrower to any
trustee under the Subordinated Note Indenture, any Subordinated
Debt Indenture or the Convertible Debentures, such delivery to be
made at the same time and by the same means as such notice or
other written communication is delivered to such Person, and (ii)
a copy of each notice or other written communication received by
the Borrower from the trustee under the Subordinated Note
Indenture, any Subordinated Debt Indenture or the Convertible
Debentures, such delivery to be made promptly after such notice
or other written communication is received by the Borrower.
(c) Designated Senior Indebtedness. The Borrower
-------------------------------
shall not (i) borrow $20,000,000 or more in respect of any single
issue of "Senior Indebtedness" under and as defined in the
Subordinated Note Indenture or any Subordinated Debt Indenture or
(ii) designate any Indebtedness (other than the Obligations) as,
or cause any such Indebtedness to become, "Designated Senior
Indebtedness" under and as defined in the Subordinated Note
Indenture or any Subordinated Debt Indenture.
8.12. Margin Regulations. No portion of the proceeds
------------------
of any credit extended under this Agreement shall be used in any
manner which might cause the extension of credit or the
application of such proceeds to violate Regulation T, Regulation
U or Regulation X or any other regulation of the Federal Reserve
Board or to violate the Securities Exchange Act or the Securities
Act, in each case as in effect on the date or dates of such
Borrowing and such use of proceeds.
8.13. Change of Fiscal Year. The Borrower shall not
---------------------
change its Fiscal Year.
8.14. Subsidiaries. (a) The Borrower shall not
------------
permit, without the consent of the Administrative Agent, any
Unrestricted Subsidiary to enter into any Accommodation
Obligation with respect to any Indebtedness of ATSC, the Borrower
or any Restricted Subsidiary or to grant or permit to exist any
Lien on its Property to secure any such Indebtedness.
(b)The Borrower shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise become effective
any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to pay dividends or make any
other distribution, in respect of its stock or make any other
Restricted Payment, pay any Indebtedness or other Obligation owed
to the Borrower or any other Restricted Subsidiary, make loans or
advances or other Investments in the Borrower or any other
Restricted Subsidiary or sell, transfer or otherwise convey any
of its Property to the Borrower or any other Restricted
Subsidiary.
8.15. Capital Expenditures. The Borrower shall not
--------------------
make Capital Expenditures in any Fiscal Year, commencing with
Fiscal Year 1998, exceeding (a) during Fiscal Year 1998,
$52,000,000, (b) during Fiscal Year 1999, the lesser of (1)
$55,000,000 and (b) the sum of (A) $35,000,000 plus (B) the
Available Cash for Fiscal Year 1998 and (c) during Fiscal Year
2000, the lesser of (i) $73,000,000 and (ii) the sum of (A)
$35,000,000 and (B) the Available Cash for Fiscal Year 1999,
================================================================
-76-
provided that in the event that comparable store sales growth for
--------
Fiscal Year 1998 is 0.0%, Capital Expenditures in Fiscal Year
1999 may not exceed the sum of (x) $25,000,000 plus (y) the
Available Cash Amount for Fiscal Year 1998.
The Borrower will not, at any time when it is not in compliance
with Section 9.03, commit to make any Capital Expenditures, and
------------
during such time as the Borrower is not in compliance with
Section 9.03, the Borrower will make only such Capital
--------------
Expenditures as were legally committed at a time when the
Borrower was in compliance with Section 9.03. For purposes
-------------
hereof, it is agreed that the Borrower shall be in compliance
with Section 9.03 at any time that a breach thereunder has been
------------
effectively waived or cured.
8.16. Consignment of Title Documents. At any time at
------------------------------
the request of the Administrative Agent or the Requisite Lenders
after the occurrence and during the continuation of an Event of
Default, the Borrower shall deliver or cause to be delivered to
the Administrative Agent for the benefit of the Lenders any title
or similar documents (including, without limitation, warehouse
receipts) in respect of goods covered or originally covered by a
Letter of Credit (including any Existing Letter of Credit).
ARTICLE IX
Financial Covenants
-------------------
The Borrower covenants and agrees that, on and after
the date hereof and so long as any Lender has any Commitment
hereunder or any Letter of Credit shall be outstanding hereunder
and until payment in full of all the Obligations:
9.01. Minimum Net Worth. The Borrower shall not
-------------------
permit Net Worth at the end of any fiscal quarter to be less than
the sum of (a) $350,000,000 plus (b) 50% of Net Income for each
fiscal quarter ending after April 30, 1998 (without deducting
from such cumulative amount the amount of any net loss incurred
in any such fiscal quarter except extraordinary losses associated
with the redemption or repurchase of Indebtedness).
9.02. Leverage Ratio. The Borrower shall not permit
--------------
the ratio of (a) the sum of (i) Total Debt plus (ii) the product
of (A) Rental Expense for the most recent period of four
consecutive fiscal quarters times (B) six to (b) the sum of (i)
Total Capitalization plus (ii) the product of (A) Rental Expense
----
for the most recent period of four consecutive fiscal quarters
times (B) six to exceed .60 to 1 at the end of any fiscal
quarter.
9.03. Minimum Fixed Charge Coverage Ratio. The
---------------------------------------
Borrower shall not permit the Fixed Charge Coverage Ratio, as
determined at the end of any fiscal quarter for the preceding
four fiscal quarters, to be less than the ratio set forth
opposite the month in which such fiscal quarter ends:
Quarter Ended Minimum Ratio
------------- -------------
July 1998 1.15 to 1.00
=================================================================
-77-
October 1998 1.20 to 1.00
January 1999 1.25 to 1.00
April 1999 1.30 to 1.00
July 1999 through
January 2000 1.35 to 1.00
Thereafter 1.40 to 1.00
9.04. Minimum Current Ratio. The Borrower shall not
---------------------
permit the ratio of Current Assets to the sum of, without
duplication, (a) Current Liabilities plus (b) the aggregate
outstanding principal amount of Loans to be less than 2.00:1.00
at the end of any fiscal quarter.
9.05. Minimum EBITDA. The Borrower shall not permit
--------------
EBITDA to be less than $100,000,000 for Fiscal Year 1998.
ARTICLE X
Events of Default; Right and Remedies
-------------------------------------
10.01. Events of Default. Each of the following
------------------
occurrences shall constitute an Event of Default under this
Agreement:
(a) Failure to Make Payments When Due. (i) The
Borrower shall fail to pay when due any principal of any Loan or
Reimbursement Obligation, or
(ii) the Borrower shall fail to pay any interest on
any Loan or Reimbursement Obligation, or any fee or other amount
payable under this Agreement, within the earlier of (A) five
Business Days after the same shall become due in accordance with
terms hereof or (B) in the event that a principal or interest
payment shall be due under the terms of the Subordinated Notes or
any Subordinated Debt within such five Business Day period, one
Business Day prior to such payment date in respect of the
Subordinated Notes or such Subordinated Debt if the payments are
due on the same date.
(b) Breach of Certain Covenants. The Borrower
---------------------------
shall fail duly and punctually to perform or observe (or cause
ATSC or any Restricted Subsidiary to perform or observe) any
agreement, covenant or obligation binding on the Borrower, ATSC
or any Restricted Subsidiary under Section 6.01(e)(A), Article
----------------- -------
VIII or Article IX or binding on the Borrower, ATSC or any
---- -----------
Subsidiary Guarantor under any section of the Collateral
Documents for which a grace period is provided (which failure
continues after the expiration of any grace period specified
under such section of the Collateral Documents).
(c) Breach of Representation or Warranty. Any
------------------------------------
representation or warranty made or deemed made by the Borrower,
ATSC or any Subsidiary Guarantor to the Administrative Agent, any
Issuing Bank or any Lender herein or in any of the other Loan
Documents or in any written statement or certificate at any time
given by the Borrower, ATSC or any Subsidiary Guarantor pursuant
to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made or deemed made.
==================================================================
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(d) Other Defaults. Either the Borrower, ATSC
--------------
or any Restricted Subsidiary shall fail duly and punctually to
perform or observe any agreement, covenant or obligation arising
under this Agreement or under any of the other Loan Documents
(except those described in Sections 10.01(a), (b) and (c)), and
----------------- --- ----
such failure shall continue for 20 days (or, in the case of Loan
Documents other than this Agreement, any longer period of grace
expressly set forth therein).
(e) Default as to Other Indebtedness. ATSC, the
--------------------------------
Borrower or any Restricted Subsidiary shall fail to make any
payment when due (whether by scheduled maturity, required prepay
ment, acceleration, demand or otherwise) on any Indebtedness of
ATSC, the Borrower or any such Subsidiary, other than an Obliga
tion, if the aggregate amount of all such Indebtedness is
$5,000,000 or more; or any breach, default or event of default
shall occur, or any other event shall occur or condition shall
exist, under any instrument, agreement or indenture pertaining
thereto, if the effect thereof is to accelerate, or permit the
holder(s) of such Indebtedness to accelerate, the maturity of any
such Indebtedness; or any such Indebtedness shall be declared to
be due and payable or required to be prepaid (other than by a
regularly scheduled required prepayment prior to the stated
maturity thereof); or the holder of any Lien (other than Liens
upon property leased to ATSC, the Borrower or such Restricted
Subsidiary which were created by the landlord prior to the
commencement of the lease), in any amount, shall commence
foreclosure of such Lien upon property of ATSC, the Borrower or
any Restricted Subsidiary having a value in excess of $5,000,000
in the aggregate.
(f) Involuntary Bankruptcy; Appointment of
-----------------------------------------
Receiver, Etc. (i) An involuntary case shall be commenced
--------------
against the Borrower or ATSC or any Restricted Subsidiary, and
the petition shall not be dismissed within 60 days after
commencement of the case, or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of
the Borrower or ATSC or any Restricted Subsidiary in an
involuntary case, under any applicable bankruptcy, insolvency or
other similar law now or hereinafter in effect; or any other
similar relief shall be granted under any applicable federal,
state or foreign law.
(ii) A decree or order of a court having jurisdic
tion in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer
having similar powers over the Borrower or ATSC or any Restricted
Subsidiary, or over all or a substantial part of the property of
the Borrower or ATSC or any Restricted Subsidiary, shall be
entered; or an interim receiver, trustee or other custodian of
the Borrower or ATSC or any Restricted Subsidiary, or of all or a
substantial part of the property of the Borrower or ATSC or any
Restricted Subsidiary, shall be appointed or a warrant of
attachment, execution or similar process against any substantial
part of the property of the Borrower or ATSC or any Restricted
Subsidiary, shall be issued and any such event shall not be
stayed, vacated, dismissed, bonded or discharged within 60 days
of entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of
----------------------------------------
Receiver, Etc. The Borrower or ATSC or any Restricted Subsidiary
-------------
shall have an order for relief entered with respect to it or
commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to
a voluntary case, under any such law, or shall consent to the
appointment of or taking of possession by a receiver, trustee or
=================================================================
-79-
other custodian for all or a substantial part of its property;
the Borrower or ATSC or any Restricted Subsidiary shall make any
assignment for the benefit of creditors or shall be unable or
generally fail, or admit in writing its inability, to pay its
debts as such debts become due; or the Board of Directors (or any
committee thereof) of the Borrower or ATSC or any Restricted
Subsidiary adopts any resolution to approve any of the foregoing.
(h) Judgments and Attachments. Any money
---------------------------
judgment (other than a money judgment covered by insurance, but
only if the insurer has admitted liability with respect to such
money judgment), writ or warrant of attachment, or similar
process involving in any case an amount in excess of $5,000,000
shall be entered or filed against the Borrower or ATSC or any
Restricted Subsidiary or any of their Property, and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60
days.
(i) Dissolution. Any order, judgment or decree
-----------
shall be entered against the Borrower or ATSC or any Restricted
Subsidiary decreeing its involuntary dissolution or split-up and
such order shall remain undischarged and unstayed for a period in
excess of 60 days; or the Borrower or ATSC or any Restricted
Subsidiary shall otherwise dissolve or cease to exist except as
permitted by Section 8.08.
(j) Collateral Documents; Failure of Security or
--------------------------------------------
Subordination. For any reason other than a release of Liens or
-------------
the failure of the Administrative Agent and the Lenders to take
any action unilaterally available to them to maintain the
perfection of the Liens created in favor of the Administrative
Agent pursuant to this Agreement and the Collateral Documents,
any Collateral Document ceases to be in full force and effect or
any Lien intended to be created thereby ceases to be or is not
valid and perfected; or any Lien in favor of the Administrative
Agent contemplated by this Agreement or any Collateral Document,
or the subordination provisions of the Subordinated Notes or any
Subordinated Debt shall, at any time, be invalidated or otherwise
cease to be in full force and effect; or any such Lien or any
Obligation shall be subordinated or shall not have the priority
contemplated by this Agreement, the Collateral Documents or such
subordination provisions, for any reason.
(k) Change in Control. (i) Any Change in
-------------------
Control shall occur or (ii) ATSC shall cease to own all of the
outstanding equity Securities of the Borrower.
(l) ERISA Liabilities. Any Termination Event
-----------------
occurs which will or is reasonably likely to subject either the
Borrower or an ERISA Affiliate to a liability which will or is
reasonably expected to have a Material Adverse Effect.
An Event of Default shall be deemed "continuing" until
cured or waived in writing in accordance with Section 12.08.
-------------
10.02. Rights and Remedies.
-------------------
(a) Acceleration. Upon the occurrence of any
------------
Event of Default described in Section 10.01(f) or 10.01(g) with
---------------- --------
respect to the Borrower, the Commitments shall automatically and
immediately terminate and the unpaid principal amount of and any
and all accrued interest on the Loans and all Letter of Credit
Obligations shall automatically become immediately due and
=================================================================
-80-
payable, with all additional interest from time to time accrued
thereon and without presentment, demand, or protest or other
requirements of any kind (including valuation and appraisement,
diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by
the Borrower, and the obligation of each Lender to make any Loan
hereunder and of any Issuing Bank to issue any Letter of Credit
shall thereupon terminate; and upon the occurrence and during the
continuance of any other Event of Default, the Administrative
Agent shall at the request, or may with the consent, of the
Requisite Lenders, by written notice to the Borrower, (i) declare
that the Commitments are terminated, whereupon the Commitments
and the obligation of each Lender to make any Loan hereunder and
of any Issuing Bank to issue any Letter of Credit shall
immediately terminate, and (ii) declare the unpaid principal
amount of and any and all accrued and unpaid interest on the
Loans and all Letter of Credit Obligations to be, and the same
shall thereupon be, immediately due and payable with all
additional interest from time to time accrued thereon and without
presentment, demand, or protest or other requirements of any kind
(including valuation and appraisement, diligence, presentment,
notice of intent to demand or accelerate and of acceleration),
all of which are hereby expressly waived by the Borrower.
(b) Deposit for Letters of Credit. In addition,
-----------------------------
upon demand by the Requisite Lenders after the occurrence and
during the continuance of any Event of Default, the Borrower
shall deposit with the Administrative Agent for the benefit of
such Issuing Bank with respect to each Letter of Credit issued by
it then outstanding, cash or Cash Equivalents in an amount equal
to the greatest amount for which such Letter of Credit may be
drawn. Such deposit shall be held by the Administrative Agent
for the benefit of such Issuing Bank as security for, and to
provide for the payment of, the Reimbursement Obligations.
Pending the application of such deposit to payment of the
Reimbursement Obligations, the Administrative Agent may invest
such deposit in an open account or similar immediately available
savings deposit and all interest accrued thereon shall be held
with such deposit as additional security for the Reimbursement
Obligations.
(c) Rescission. If at any time after
----------
acceleration of the maturity of the Loans, the Borrower shall pay
all arrears of interest and all payments on account of principal
of the Loans and Reimbursement Obligations which shall have
become due otherwise than by acceleration (with interest on
principal and on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of
Default (other than nonpayment of principal of and accrued
interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section
-------
12.08, then by written notice to the Borrower, the Requisite
-----
Lenders may elect, in the sole discretion of such Requisite
Lenders, to rescind and annul the acceleration and its
consequences and thereupon shall release any deposit made
pursuant to Section 10.02(b); provided, however, that no
---------------- ------------------
rescission shall occur after the earlier of 30 days after the
date of acceleration or any Event of Default specified in
paragraph (f) or (g) of Section 10.01. No action pursuant to
------------- --- -------------
this paragraph (c) shall affect any subsequent Event of Default
-------------
or Potential Event of Default or impair any right or remedy
consequent thereon. The provisions of the preceding sentence are
intended merely to bind the Lenders to a decision which may be
made at the election of the Requisite Lenders; they are not
intended to benefit the Borrower and do not give the Borrower the
right to require the Lenders to rescind or annul any acceleration
hereunder, even if the conditions set forth herein are met.
=================================================================
-81-
ARTICLE XI
The Administrative Agent
------------------------
11.01. Appointment and Authorization. Each Lender and
-----------------------------
Issuing Bank hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or
any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth
herein, nor shall the Administrative Agent have or be deemed to
have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent.
11.02. Delegation of Duties. The Administrative Agent
--------------------
may execute any of its duties under this Agreement or any other
Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence
or misconduct of any agent or attorney-in-fact that it selects
with reasonable care.
11.03. Liability of Administrative Agent. None of the
---------------------------------
Agent-Related Persons shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (b) be responsible in
any manner to any of the Lenders or Issuing Banks for any
recital, statement, representation or warranty made by ATSC,
Borrower or any Subsidiary or Affiliate of ATSC or the Borrower,
or any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report, statement or
other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement
or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of ATSC, the Borrower
or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person
shall be under any obligation to any Lender or Issuing Bank to
ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the
Properties, books or records of ATSC, the Borrower or any of the
Subsidiaries or Affiliates of ATSC or the Borrower.
11.04. Reliance by Administrative Agent.
--------------------------------
(a) The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit,
letter, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants and
other experts selected by the Administrative Agent. The
=================================================================
-82-
Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or
concurrence of the Requisite Lenders as it deems appropriate and,
if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Requisite Lenders and
such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders and the Issuing
Banks.
(b) For purposes of determining compliance with
the conditions specified in Section 4.01, each Lender that has
------------
executed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or
other matter either sent by the Administrative Agent to such
Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or
acceptable or satisfactory to such Lender.
11.05. Notice of Default. The Administrative Agent
-----------------
shall not be deemed to have knowledge or notice of the occurrence
of any Potential Event of Default or Event of Default, except
with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the
account of the Lenders, unless the Administrative Agent shall
have received written notice from a Lender or the Borrower
referring to this Agreement, describing such Potential Event of
Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Potential Event of Default
or Event of Default as shall be requested by the Requisite
Lenders; provided, however, that unless and until the
-------- -------
Administrative Agent shall have received any such request, the
Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to
such Potential Event of Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.
11.06. Credit Decision. Each Lender expressly
----------------
acknowledges that none of the Agent-Related Persons has made any
representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of
the affairs of ATSC and the Borrower and its Subsidiaries shall
be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent and based on such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and
creditworthiness of ATSC and the Borrower and its Subsidiaries,
and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to
enter into this Agreement and extend credit to the Borrower
hereunder. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and
==================================================================
-83-
other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly herein required to
be furnished to the Lenders by the Administrative Agent, the
Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information
concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower
which may come into the possession of any of the Agent-Related
Persons.
11.07. Indemnification. Whether or not the
---------------
transactions contemplated hereby shall be consummated, the
Lenders shall indemnify upon demand the Agent-Related Persons (to
the extent not reimbursed by or on behalf of the Borrower and
without limiting the obligation of the Borrower to do so),
ratably from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind whatsoever which may at
any time (including at any time following the repayment of the
Loans and the termination or resignation of the related
Administrative Agent) be imposed on, incurred by or asserted
against any such Person any way relating to or arising out of
this Agreement or any document contemplated by or referred to
herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by any such Person under
or in connection with any of the foregoing; provided, however,
-------- -------
that no Lender shall be liable for the payment to the
Agent-Related Persons of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such
Person's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including legal fees and the
allocated cost of staff counsel) incurred by the Administrative
Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or
legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated
by or referred to herein to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the
Borrower. Without limiting the generality of the foregoing, if
the IRS or any other Governmental Authority of the United States
of America or other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate
form was not delivered, was not properly executed, or because
such Lender failed to notify the Administrative Agent of a change
in circumstances which rendered the exemption from, or reduction
of, withholding tax ineffective, or for any other reason) such
Lender shall indemnify the Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent
as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section 11.07,
together with all costs and expenses and attorneys' fees
(including legal fees and the allocated cost of staff counsel).
The obligation of the Lenders in this Section shall survive the
payment of all Obligations hereunder.
11.08. Administrative Agent in Individual Capacity.
--------------------------------------------
Bank of America and its Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory or other business with ATSC
and the Borrower and its Subsidiaries and Affiliates as though
Bank of America were not the Administrative Agent hereunder and
without notice to or consent of the Lenders. With respect to its
Loans, Bank of America shall have the same rights and powers
=================================================================
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under this Agreement as any other Lender and may exercise the
same as though it were not the Administrative Agent, and the
terms "Lender" and "Lenders" shall include Bank of America in its
individual capacity.
11.09. Successor Administrative Agent. The
----------------------------------
Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Lenders. If the Administrative Agent shall
resign as Administrative Agent under this Agreement, the
Requisite Lenders shall appoint from among the Lenders a
successor agent for the Lenders which successor agent shall be
approved by the Borrower. If no successor agent is appointed
prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Borrower, a successor agent
from among the Lenders. Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed
to all the rights, powers and duties of the retiring
Administrative Agent and the term "Administrative Agent" shall
mean such successor agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of
this Article XI and Sections 12.03 and 12.04 shall inure to its
---------- -------------- -----
benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement. If no
successor agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative
Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor agent as provided for
above.
11.10. The Arranger. The Arranger shall have no
-------------
right, power, obligation, liability, responsibility or duty under
this Agreement other than the right to receive the fee referred
to in Section 2.03(a) and the right to indemnity under Section
-------------- -------
12.04
-----
11.11. Syndication Agents. None of the Lenders
-------------------
identified on the facing page or signature pages of this
Agreement as a "Syndication Agent" shall have any right or power,
-----------------
obligations, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such.
Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.
11.12. Collateral Matters.
------------------
(a) Each Lender and Issuing Bank authorizes and
directs the Administrative Agent to enter into the Collateral
Documents for the benefit of the Lenders and the Issuing Banks.
Each Lender and Issuing Bank agrees that any action taken by the
Administrative Agent or the Requisite Lenders in accordance with
the provisions of this Agreement or the Collateral Documents, and
the exercise by the Administrative Agent or the Requisite Lenders
of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders and the Issuing
Banks.
(b) The Administrative Agent is hereby
authorized on behalf of all of the Lenders and the Issuing Banks,
without the necessity of any notice to or further consent from
=================================================================
-85-
any Lender or Issuing Bank from time to time prior to an Event of
Default, to take any action with respect to any Collateral or
Collateral Documents which may be necessary to perfect and
maintain perfected the Liens upon the Collateral granted pursuant
to the Collateral Documents.
(c) Each Lender and Issuing Bank hereby irrevoca
bly authorize the Administrative Agent to release any Lien
granted to or held by the Administrative Agent upon any
Collateral upon (i) any sale of such Collateral permitted under
this Agreement (or any waiver hereof) and (ii) termination of the
Commitments and payment and satisfaction of all Loans, Reimburse
ment Obligations, other Letter of Credit Obligations (whether or
not due) and all other Obligations which have matured and which
the Administrative Agent has been notified in writing are then
due and payable.
11.13. Relations Among Lenders.
-----------------------
(a) Each Lender agrees that it will not take any
action, nor institute any actions or proceedings, against the
Borrower or any other obligor hereunder or any other Loan
Document or with respect to any Collateral, without the prior
written consent of the Requisite Lenders.
(b) 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 Administrative Agent) authorized to act for, any other
Lender.
ARTICLE XII
Miscellaneous
-------------
12.01. Assignments and Participations.
------------------------------
(a) At any time after the Initial Funding Date,
each 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, Loans or interest
in the Letters of Credit); provided, that (i) each such
assignment in respect of Commitments or Loans shall cover the
same percentage of such Lender's Commitment, Loans and Letter of
Credit Obligations, (ii) unless the Administrative Agent and the
Borrower otherwise consent, the aggregate amount of the
Commitment of the assigning Lender being assigned pursuant to
each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event
be less than $5,000,000 and shall be an integral multiple of
$100,000 (unless the assigning Lender's Commitment, Loans and
Letter of Credit Obligations are less than $5,000,000, in which
case the assignment may be in the amount of such Commitment,
Loans and Letter of Credit Obligations) provided that assignments
between Lenders shall have no minimum amount, (iii) except in
respect of assignments between Lenders and their Affiliates or
any assignment by a Lender in connection with the sale of all or
substantially all of its assets, the Borrower shall consent
(which consent shall not be unreasonably withheld) and the
Administrative Agent and the Issuing Banks shall consent to such
assignment (which shall not be unreasonably withheld) and (iv)
the parties to each such assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together
=================================================================
-86-
with processing and recordation fee of $3,000. From and after
the effective date specified in each Assignment and Acceptance,
(A) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned
to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder as fully as if such
assignee had been named as a Lender in accordance with the terms
of this Agreement and (B) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under
this Agreement. Notwithstanding any provision of this Section
-------
12.01, the consent of the Borrower shall not be required for any
-----
assignment that occurs when an Event of Default pursuant to
Section 10.01(f) or 10.01(g) shall have occurred and be
----------------- --------
continuing with respect to the Borrower.
(b) By executing and delivering an Assignment
and Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) the assignment made under such
Assignment and Acceptance is made without recourse and, other
than as provided in such Assignment and Acceptance, such
assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto; (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its
obligations under any Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with
copies of the financial statements delivered pursuant to Article
-------
VI and such other Loan Documents and other documents and
--
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or
any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other
Loan Documents as are delegated to the Administrative Agent by
the terms hereof and thereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that
it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to
be performed by it as a Lender; and (vii) such an assignee is an
Eligible Assignee.
(c) The Administrative Agent, on behalf of the
Borrower, shall maintain at the address of the Administrative
Agent referred to in Section 12.10 a copy of each Assignment and
-------------
Acceptance delivered to it and a register (the "Register") for
--------
the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, each
Lender from time to time whether or not evidenced by a Note. The
entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder for
all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder shall be effective only
upon appropriate entries with respect thereto being made in the
=================================================================
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Register. Any assignment or transfer of all or part of a Loan
evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment
and Acceptance, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the designated
assignee and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "cancelled." The
Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender, the Administrative
Agent shall, if such Assignment and Acceptance has been properly
completed and is in substantially the form of Exhibit 12.01 and
-------------
if the conditions for the assignment referred to in the
Assignment and Acceptance set forth in Section 12.01(a) have been
----------------
met, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and the
Administrative Agent's Loan Account and (iii) give prompt notice
thereof to the Borrower and the other Lenders.
(e) Each Lender may sell participations to one
or more banks or other entities as to all or a portion of its
rights and obligations under this Agreement (including all or a
portion of its Commitment, the Loans owing to it, and the Letter
of Credit Obligations); provided, that (i) such Lender's
--------
obligations under this Agreement (including its Commitment) shall
remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of
such obligations, (iii) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this Agreement and with regard to any and all
payments to be made under this Agreement, (iv) the holder of any
such participation shall not be entitled to voting rights under
this Agreement; provided, however, that the participation
-------- -------
agreement between a Lender and any of its participants may
provide that such Lender will obtain the approval of such
participant prior to any amendment or waiver of any provisions of
this Agreement which would (A) extend the Final Maturity Date of
any Loan, (B) reduce the interest rate or any fees hereunder
payable in respect of any Loan or Commitment, or (C) increase the
Commitment of the Lender granting the participation if such
increase affects such participant, and (v) the sale of any such
participations which require the Borrower to file a registration
statement with the Commission or under the securities regulation
laws of any state shall not be permitted.
(f) The holder of any participation shall be
entitled to the benefits of Sections 2.02(f), 2.07(d), 2.08 and
2.09 as though it were also a Lender hereunder; provided that no
--------
participant shall be entitled to receive any payment or
compensation in excess of that to which such participant's
selling Lender would have been entitled with respect to the
amount of the participation if such Lender had not sold such
participation.
(g) Each Lender agrees to take normal and
reasonable precautions and exercise due care to maintain the
confidentiality of all information provided to it by ATSC or the
Borrower or any Subsidiary of the Borrower, or by the
Administrative Agent on ATSC's or the Borrower's or such
Subsidiary's behalf, in connection with this Agreement or any
other Loan Document, and neither it nor any of its Affiliates
shall use any such information for any purpose or in any manner
other than pursuant to the terms contemplated by this Agreement;
except to the extent such information (i) was or becomes
generally available to the public other than as a result of a
=================================================================
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disclosure by such Lender, or (ii) was or becomes available on a
non-confidential basis from a source other than the Borrower,
provided such source is not bound by fiduciary duty or a
--------
confidentiality agreement with the Borrower known to such Lender;
provided further, however, that any Lender may disclose such
-------- -------
information (A) at the request or pursuant to any requirement of
any Governmental Authority to which such Lender is subject or in
connection with an examination of such Lender by any such
authority; (B) pursuant to subpoena or other court process; (C)
when required to do so in accordance with the provisions of any
applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which
the Administrative Agent, any Lender or their respective
Affiliates may be party, (E) to the extent reasonably required in
connection with the exercise of any remedy hereunder or under any
other Loan Document, and (F) to such Lender's independent
auditors and other professional advisors which are required to
keep such information confidential. If any Lender becomes
compelled to disclose any information pursuant to clause (B), (C)
or (D) of the immediately preceding sentence, such Lender shall
provide prior written notice thereof to the Borrower to the
extent practicable and permitted by law and shall cooperate with
the Borrower to take, at the Borrower's expense, all reasonably
available actions to limit disclosure to the extent permitted by
law. Notwithstanding the foregoing, the Borrower authorizes each
Lender to disclose to any participant or assignee and to any
prospective participant or assignee, such financial and other
information in such Lender's possession concerning ATSC or the
Borrower or its Subsidiaries which has been delivered to
Administrative Agent or the Lenders pursuant to this Agreement or
which has been delivered to the Administrative Agent or the
Lenders by the Borrower in connection with the Lenders' credit
evaluation of the Borrower prior to entering into this Agreement;
provided that, unless otherwise agreed by the Borrower, such
--------
participant or assignee agrees in writing to such Lender to keep
such information confidential to the same extent required of the
Lenders hereunder.
12.02. Assignments to Federal Reserve Banks. Nothing
------------------------------------
herein shall prohibit any Lender from pledging or assigning all
or any portion of its Loans to any Federal Reserve Bank in
accordance with applicable law. In order to facilitate such
pledge or assignment, the Borrower hereby agrees that, upon
request of any Lender at any time and from time to time after the
Borrower has made its initial borrowing hereunder, the Borrower
shall provide to such Lender, at the Borrower's own expense, a
promissory note evidencing the Loans owing to such Lender.
12.03. Expenses.
--------
(a) Generally. Whether or not any Funding Date
---------
shall have occurred, the Borrower agrees upon demand to pay, or
reimburse the Administrative Agent for, all the Administrative
Agent's and any of its Affiliates' costs and expenses of every
type and nature (including the reasonable fees, expenses and
disbursements of counsel to the Administrative Agent (including
the costs and expenses of one outside counsel and, without
duplication, the allocated costs of in-house counsel)) and all
fees, taxes (except income and franchise taxes), assessments and
duties incurred by the Administrative Agent or its Affiliates in
connection with (i) the negotiation, preparation and execution of
this Agreement (including the satisfaction or attempted
satisfaction of any of the conditions set forth in Article IV),
------------
the Collateral Documents and the other Loan Documents and the
making of the Loans hereunder; (ii) the administration of this
Agreement, the Loan Documents, the Loans and the Collateral; and
(iii) the protection, collection or enforcement of any of the
Obligations or the Collateral.
=================================================================
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(b) After Default. The Borrower further agrees
-------------
to pay, or reimburse the Administrative Agent, the Issuing Banks
and the Lenders for, all out-of-pocket costs and expenses,
including the reasonable fees and disbursements of counsel to the
Administrative Agent, the Lenders and the Issuing Banks
(including, without duplication, the allocated cost of staff
counsel) and also including all costs of settlement after the
occurrence of an Event of Default, (i) in enforcing any
Obligation or in foreclosing against the Collateral or exercising
or enforcing any other right or remedy available by reason of
such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or in any insolvency or
bankruptcy proceeding, including any costs related to the hiring
of consultants or experts; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding
relating to the Borrower and related to or arising out of the
transactions contemplated hereby or by any of the Loan Documents
(other than, with respect to any Lender, to the extent resulting
from or arising out of any litigation by the Borrower against
such Lender in respect of a breach by such Lender of its
obligations under this Agreement if such Lender is found by a
court of competent jurisdiction to have breached its obligations
under this Agreement (it being agreed that, to the extent that
the Borrower shall have paid any fees and expenses of such Lender
relating to any such litigation, such amounts shall be refunded
to the Borrower upon such decision of such court); (iv) in taking
any other action in or with respect to any suit or proceeding
(whether in bankruptcy or otherwise); (v) in protecting,
preserving, collecting, leasing, selling, taking possession of,
or liquidating any of the Collateral; or (vi) attempting to
enforce or enforcing any security interest in any of the
Collateral or any other rights under the Collateral Documents.
Any payments made by the Borrower or received by the
Administrative Agent and applied as reimbursements for costs and
expenses under this Section 12.03(b) shall be apportioned among
----------------
the Administrative Agent, the Issuing Banks and the Lenders in
the order of priority set forth in Section 2.05(b).
---------------
12.04. Indemnity. The Borrower further agrees to
---------
defend, protect, indemnify, and hold harmless the Administrative
Agent, the Arranger, the Issuing Banks and each and all of the
Lenders, each of their respective Affiliates and each of the
respective officers, directors, employees and agents of each of
the foregoing (collectively, the "Indemnified Parties") from and
-------------------
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including the
fees and disbursements of one counsel (including, without
duplication, the allocated cost of staff counsel) for such
Indemnified Parties (except that, in the event of any actual or
apparent conflicts of interest between or among any Indemnified
Parties, such Indemnified Parties shall be entitled to retain
separate counsel the fees and disbursements of which will be paid
by the Borrower) in connection with any investigative,
administrative or judicial proceeding, whether or not such
Indemnified Parties shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnified Parties in
any manner relating to or arising out of the Commitment Letter,
the transactions contemplated hereby (whether or not
consummated), the capitalization of the Borrower, the
Subordinated Notes, any Subordinated Debt, the Convertible
Debentures, this Agreement, the Collateral Documents or any of
the other Loan Documents, the Commitments, the making of the
Loans and the making of and participation in the Letters of
Credit, or the use or intended use of the Letters of Credit and
the proceeds of the Loans hereunder (collectively, the
"Indemnified Matters"); provided, that the Borrower shall have no
------------------- --------
obligation to an Indemnified Party hereunder with respect to (a)
matters for which such Indemnified Party has been compensated
=================================================================
-90-
pursuant to or for which an exemption is provided in Section
-------
2.02(f), 2.07(d) or any other provision of this Agreement and (b)
------- -------
Indemnified Matters caused by or resulting from the gross
negligence or willful misconduct of that Indemnified Party or an
Affiliate of such Indemnified Party, as determined by a final
judgment of a court of competent jurisdiction. To the extent
that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it
is violative of any law or public policy, the Borrower shall
contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of
all Indemnified Matters incurred by the Indemnified Parties.
12.05. Change in Accounting Principles. Except as
-------------------------------
otherwise provided herein and except for the change from the
retail method of accounting to the cost method of accounting
adopted by the Borrower in February 1998, if any changes in
accounting principles from those used by ATSC or the Borrower in
the preparation of the financial statements dated as of January
31, 1998 are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial
Accounting Standards Board of the American Institute of Certified
Public Accountants (or successors thereto or agencies with
similar functions) and are adopted by ATSC or the Borrower with
the agreement of its independent certified public accountants and
such changes result in a change in the method of calculation of
any of the financial covenants, standards or terms found in
Articles VIII and IX hereof, the parties hereto agree to enter
-------------- --
into negotiations in order to amend such provisions so as to
reflect equitably such changes with the desired result that the
criteria for evaluating ATSC's or the Borrower's financial
condition shall be the same after such changes as if such changes
had not been made; provided, however, that no change in generally
-------- -------
accepted accounting principles that would affect the method of
calculation of any of the financial covenants, standards or terms
shall be given effect in such calculations until such provisions
are amended, in a manner satisfactory to the Requisite Lenders,
to so reflect such change in accounting principles.
12.06. Setoff. In addition to any Liens granted to
------
the Administrative Agent, the Issuing Banks or the Lenders and
any rights now or hereafter granted under applicable law and not
by way of limitation of any such Lien or rights, upon the
occurrence and during the continuance of any Event of Default,
each Lender and Issuing Bank is hereby authorized by the Borrower
at any time or from time to time, without notice to the Borrower,
or to any other Person (any such notice being hereby expressly
waived) to set off and to appropriate and to apply any and all
deposits (general or special, including indebtedness evidenced by
certificates of deposit, whether matured or unmatured but not
including trust accounts) and any other Indebtedness at any time
held or owing by that Lender or Issuing Bank to or for the credit
or the account of the Borrower against and on account of the
Obligations of the Borrower to that Lender or Issuing Bank
including, but not limited to, all Loans and Letter of Credit
Obligations and all claims of any nature or description arising
out of or connected with this Agreement or any of the other Loan
Documents, irrespective of whether or not (a) that Lender or
Issuing Bank shall have made any demand hereunder or (b) the
Administrative Agent shall have declared the principal of and
interest on the Loans and other amounts due hereunder to be due
and payable as permitted by Article X and although said
----------
obligations and liabilities, or any of them, may be contingent or
unmatured. Each Lender and Issuing Bank agrees that it shall
not, without the express consent of the Administrative Agent, and
that it shall, to the extent it is lawfully entitled to do so
during the continuation of an Event of Default, upon the request
of the Administrative Agent, exercise its set-off rights
=================================================================
-91-
hereunder against any accounts of the Borrower now or hereafter
maintained with such Lender or Issuing Bank.
12.07. Ratable Sharing. Subject to Section 2.05(b),
--------------- ---------------
the Lenders agree among themselves that (a) with respect to all
amounts received by them which are applicable to the payment of
the Obligations (excluding the fees described or referred to in
Section 2.03), equitable adjustment will be made so that, in
-------------
effect, all such amounts will be shared among them ratably in
accordance with their Pro Rata Shares, whether received by
voluntary payment, by the exercise of the right of set-off or
banker's lien, by counterclaim or cross action or by the
enforcement of any or all of the Obligations (excluding the fees
described or referred to in Section 2.03) or the Collateral, (b)
------------
if any of them shall by voluntary payment or by the exercise of
any right of counterclaim, setoff, banker's lien or otherwise,
receive payment of a proportion of the aggregate amount of the
Obligations held by it which is greater than its Pro Rata Share
of the payments on account of the Obligations (excluding the fees
described or referred to in Section 2.03), the one receiving such
------------
excess payment shall purchase, without recourse or warranty, an
undivided interest and participation (which it shall be deemed to
have done simultaneously upon the receipt of such payment) in
such Obligations owed to the others so that all such recoveries
with respect to such Obligations shall be applied ratably in
accordance with their Pro Rata Shares; provided, however, that if
-------- -------
all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be
rescinded and the purchase prices paid for such participations
shall be returned to that party to the extent necessary to adjust
for such recovery, but without interest except to the extent the
purchasing party is required to pay interest in connection with
such recovery. The Borrower agrees that any Lender so purchasing
a participation from another Lender pursuant to this Section
-------
12.07 may, to the fullest extent permitted by law, exercise all
-----
its rights of payment (including, subject to Section 12.06, the
-------------
right of setoff) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the
amount of such participation.
12.08. Amendments and Waivers. (a) No amendment or
----------------------
modification of any provision of this Agreement shall be
effective without the written agreement of the Requisite Lenders
and the Borrower, and no termination or waiver of any provision
of this Agreement or any other Loan Document, or consent to any
departure by the Borrower therefrom, shall in any event be
effective without the written concurrence of the Requisite
Lenders, which the Requisite Lenders shall have the right to
grant or withhold at their sole discretion provided, however,
-------- -------
that no amendment, modification or waiver shall, unless evidenced
by a writing signed by or on behalf of all the Lenders, do any of
the following: (i) increase the Commitment of any Lender (other
than by assignment); (ii) reduce the principal of, or rate of
interest on, the Loans or the amount of any fees payable
hereunder; (iii) extend the Final Maturity Date or the expiration
date of any Letter of Credit beyond the Final Maturity Date; (iv)
release the ATSC Guaranty or release all or substantially all of
the Collateral under the Collateral Documents (other than as
specifically provided hereunder); (v) change the definitions of
"Pro Rata Shares" or "Requisite Lenders"; (vi) increase any of
the percentages set forth in the definition of "Advance Rate"; or
(vii) amend this Section 12.08(a), Section 2.01(f)(i) or Section
---------------- ------------------ -------
9.05.
----
(b) No amendment, modification, termination, or
waiver of any provision of this Agreement or any Loan Documents
shall, unless in writing and signed by the Administrative Agent
or the Issuing Banks, as the case may be, in addition to the
Requisite Lenders or Lenders, as the case may be, affect the
=================================================================
-92-
rights or duties of the Administrative Agent or the Issuing
Banks, as the case may be, under this Agreement or any Loan
Documents. The Administrative Agent may, but shall have no
obligation to, with the concurrence of any Lender or Issuing
Bank, execute amendments, modifications, waivers or consents on
behalf of such Lender or Issuing Bank.
(c) Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for
which it was given. No notice to or demand on the Borrower in
any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.
(d) Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 12.08
--------------
shall be binding on each assignee, transferee, recipient of a
Lender's Commitment or Loans, each future assignee, transferee,
recipient of a Lender's Commitment or Loans and, if signed by the
Borrower, on the Borrower.
12.09. Independence of Covenants. All covenants hereunder
-------------------------
shall be given independent effect so that if a particular action
or condition is not permitted by any of such covenants, the fact
that it would be permitted by an exception to, or be otherwise
within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default
if such action is taken or condition exists.
12.10. Notices.
-------
(a) Unless otherwise specifically provided
herein, all notices, requests and other communications provided
for hereunder shall be in writing (including by facsimile
transmission), provided that any matter transmitted by the
--------
Borrower by facsimile shall be immediately confirmed by a
telephone call to the recipient at the number specified in
Schedule 1.01(a) and mailed, faxed or delivered: if to the
----------------
Borrower or the Administrative Agent, to the address or facsimile
number specified on the signature pages hereof and, if to any
Lender, to the address or facsimile number specified for notices
in Schedule 1.01(a) or in the applicable Assignment and
----------------
Acceptance or, as to the Borrower or the Administrative Agent, to
such other address as shall be designated by such party in a
written notice to the other parties, and as to each other party,
at such other address as shall be designated by such party in a
written notice to the Borrower and the Administrative Agent.
(b) All such notices, requests and
communications shall, when transmitted by overnight (next-day)
delivery or faxed, be effective on the next day or when
transmitted by facsimile machine, respectively; if mailed, be
effective upon the third Business Day after the date deposited
into the U.S. mail, or if delivered, be effective upon delivery;
except that notices pursuant to Article II or XI shall not be
---------- --
effective until actually received by the Administrative Agent.
(c) Any notice, request or communication
permitted to be given by telephone shall be confirmed immediately
in writing, including by facsimile.
=================================================================
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(d) The Borrower acknowledges and agrees that
any agreement of the Administrative Agent and the Lenders to
receive certain notices by telephone and facsimile is solely for
the convenience and at the request of the Borrower. The
Administrative Agent and the Lenders shall be entitled to rely on
the authority of any Person purporting to be a Person authorized
by the Borrower to give such notice and the Administrative Agent
and the Lenders shall not have any liability to the Borrower or
any other Person on account of any action taken or not taken by
the Administrative Agent or the Lenders in reliance upon such
telephonic or facsimile notice. The obligation of the Borrower
to repay the Loans shall not be affected in any way or to any
extent by any failure by the Administrative Agent and the Lenders
to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Administrative Agent and the Lenders
of a confirmation which is at variance with the terms understood
by the Administrative Agent and the Lenders to be contained in
the telephonic or facsimile notice.
12.11. Survival of Warranties and Agreements. All
--------------------------------------
agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the
other Loan Documents and the making of the Loans hereunder.
12.12. Failure or Indulgence Not Waiver; Remedies
----------------------------------
Cumulative. No failure or delay on the part of the
Administrative Agent, any Issuing Bank or any Lender in the
exercise of any power, right or privilege under any of the Loan
Documents shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right
or privilege preclude any other or further exercise thereof or of
any other right, power or privilege. All rights and remedies
existing under the Loan Documents are cumulative to and not
exclusive of any rights or remedies otherwise available.
12.13. Marshalling; Recourse to Security; Payments Set
-----------------------------------------------
Aside. Neither any Lender nor the Administrative Agent shall be
-----
under any obligation to marshal any assets in favor of the
Borrower or any other party or against or in payment of any or
all of the Obligations. Recourse to security shall not be
required at any time. To the extent that the Borrower makes a
payment or payments to the Administrative Agent or the Lenders,
or the Administrative Agent or the Lenders enforce their security
interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied, and all Liens,
right and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
12.14. Severability. In case any provision in or
------------
obligation under this Agreement or the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
=================================================================
-94-
12.15. Headings. Article and Section headings in this
--------
Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
12.16. Governing Law. THIS AGREEMENT SHALL BE
--------------
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
12.17. Successors and Assigns. This Agreement and the
----------------------
other Loan Documents shall be binding upon the parties hereto and
their respective successors and permitted assigns and shall inure
to the benefit of the parties hereto and the successors and
permitted assigns of the Lenders. The terms and provisions of
this Agreement shall inure to the benefit of any permitted
assignee or transferee of the Loans and the Commitments of any
Lender (to the extent such assignment or transfer is effected in
accordance with Section 12.01), and in the event of such transfer
-------------
or assignment, the rights and privileges herein conferred upon
Lenders shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions
hereof. The Borrower's rights or any interest therein hereunder,
and the Borrower's duties and Obligations hereunder, may not be
assigned without the written consent of all the Lenders.
12.18. Consent to Jurisdiction and Service of Process;
----------------------------------------------
Waiver of Jury Trial. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
---------------------
THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANKS, THE
ARRANGER, THE SYNDICATION AGENTS AND THE LENDERS WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANKS, THE
ARRANGER, THE SYNDICATION AGENTS AND THE LENDERS EACH ACCEPT, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE
ISSUING BANKS, THE ARRANGER, THE SYNDICATION AGENTS AND THE
LENDERS IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ITS RESPECTIVE NOTICE ADDRESSES SPECIFIED ON
THE SIGNATURE PAGES HEREOF, SUCH SERVICE TO BECOME EFFECTIVE TEN
DAYS AFTER SUCH MAILING. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE ISSUING BANKS, THE ARRANGER, THE
SYNDICATION AGENTS AND THE LENDERS IRREVOCABLY WAIVES (A) TRIAL
BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (B) ANY OBJECTION
(INCLUDING ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
--------------------
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
================================================================
-95-
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF ANY PARTY HERETO TO BRING PROCEEDINGS
AGAINST ANY OTHER PARTY HERETO IN THE COURTS OF ANY OTHER
JURISDICTION.
12.19. Counterparts; Effectiveness; Inconsistencies.
--------------------------------------------
(a) This Agreement and any amendments, waivers, consents, or
supplements may be executed in counterparts, each of which when
so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument.
(b) This Agreement shall become effective
against each of the Borrower, each Lender, each Issuing Bank, the
Arranger, the Syndication Agents and the Administrative Agent
hereto on the date (the "Effective Date") when all of such
--------------
parties have duly executed and delivered this Agreement to each
other (delivery by the Borrower to the Syndication Agents, the
Issuing Banks and the Lenders and by any Syndication Agent,
Issuing Bank or Lender to the Borrower being deemed to have been
made by delivery to the Administrative Agent).
(c) This Agreement and each of the other Loan
Documents shall be construed to the extent reasonable to be
consistent one with the other, but to the extent that the terms
and conditions of this Agreement are actually inconsistent with
the terms and conditions of any other Loan Document, this
Agreement shall govern.
==================================================================
IN WITNESS WHEREOF, this Agreement has been duly
executed on the date set forth above.
ANNTAYLOR, INC., as Borrower
By: /s/ Walter J. Parks
---------------------
Name: Walter J. Parks
Title: Senior Vice President-
Chief Financial Officer
Address for Notices:
142 West 57th Street
New York, New York 10019
Attention: Senior Vice President
and General Counsel
Facsimile No.: (212) 541-3299
Telephone No.: (212) 541-3318
With a copy to:
AnnTaylor, Inc.
414 Chapel Street
New Haven, CT 06511
Attention: Senior Vice President -
Chief Financial Officer
Facsimile No.: (203) 865-2756
Telephone No.: (203) 865-0811
===================================================================
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By: /s/ Dietmar Schiel
---------------------
Name: Dietmar Schiel
Title: Vice President
Address for notices of borrowing,
prepayments and
other administrative matters:
1850 Gateway Boulevard, 5th Floor
Concord, CA 94520
Attn: Agency Administrative Services #5596
Josephine T. Flores,
Assistance Vice President
Facsimile No.: (510) 675-8500
Telephone No.: (510) 675-8374
Address for all other notices
(including with respect
to amendments and waivers):
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attention: Agency Management #10831
Dietmar Schiel, Vice President
Facsimile No.: (415) 436-3425
Telephone No.: (415) 436-2769
Payment Instructions:
ABA #1210-0035-8
Credit to Account Number: 12333-15386
Reference: AnnTaylor
=======================================================================
BANCAMERICA ROBERTSON STEPHENS,
As Arranger
By: /s/ Catherine Drake
-------------------
Name: Catherine Drake
Title: Vice President
=======================================================================
CITICORP USA,
as Syndication Agent
By: /s/ Brenda Cotsen
------------------
Name: Brenda Cotsen
Title: Vice President
=====================================================================
FIRST UNION CAPITAL MARKETS,
as Syndication Agent
By: /s/ Paul Hogan
--------------------
Name: Paul Hogan
Title: Director
=====================================================================
CITIBANK, N.A.
as an Issuing Bank
By: /s/ Brenda Cotsen
---------------------
Name: Brenda Cotsen
Title: Vice President
=====================================================================
FIRST UNION NATIONAL BANK
as an Issuing Bank
By: /s/ Irene Rosen Marks
----------------------
Name: Irene Rosen Marks
Title: Vice President
=====================================================================
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Lender
By: /s/ Jody A. Pritchard
---------------------
Name: Jody A. Pritchard
Title: Vice President
====================================================================
CITICORP USA
as a Lender
By: /s/ Brenda Cotsen
---------------------
Name: Brenda Cotsen
Title: Vice President
===================================================================
FIRST UNION NATIONAL BANK
as a Lender
By: /s/ Irene Rosen Marks
---------------------
Name: Irene Rosen Marks
Title: Vice President
=====================================================================
TRANSAMERICA BUSINESS CREDIT
CORPORATION, as a Lender
By: /s/ Steven R. Fischer
---------------------
Name: Steven R. Fischer
Title: Executive Vice President
=====================================================================
LASALLE NATIONAL BANK,
as a Lender
By: /s/ Robert Corsentino
----------------------
Name: Robert Corsentino
Title: Senior Vice President
======================================================================
HELLER FINANCIAL, INC.
as a Lender
By: /s/ George Grieco
--------------------
Name: George Grieco
Title: Vice President
=====================================================================
AT&T COMMERCIAL FINANCE
CORPORATION, as a Lender
By: /s/ Paul Seidenwar
--------------------
Name: Paul Seidenwar
Title: Vice President
=====================================================================
AMSOUTH BANK,
as a Lender
By: /s/ Emmanuel Darmanin
-----------------------
Name: Emmanuel Darmanin
Title: Attorney in Fact
=====================================================================
FREEMONT FINANCIAL CORPORATION,
as a Lender
By: /s/ John Neher
------------------
Name: John Neher
Title: Senior Vice President
=====================================================================
NATIONAL CITY COMMERCIAL FINANCE, INC.
as a Lender
By: /s/ Elizabeth M. Lynch
-----------------------
Name: Elizabeth M. Lynch
Title: Vice President
=====================================================================
SUMMIT BANK,
as a Lender
By: /s/ William V. Burian
----------------------
Name: William V. Burian
Title: Vice President
$150,000,000 Credit Agreement - AnnTaylor Inc., Citicorp USA, First Union Capital Markets, Bank of America NT&SA, Citibank NA, First Union National Bank and BancAmerica Robertson Stephens
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