BRIDGE CREDIT AGREEMENT

 

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                                                                  EXHIBIT 99.1

 

                                  $400,000,000

 

                             BRIDGE CREDIT AGREEMENT

 

                            dated as of July 5, 2005,

 

                                  by and among

 

                                   BELK, INC.,

                and the Subsidiaries of Belk, Inc. party hereto,

                                  as Borrowers

 

                             BANK OF AMERICA, N.A.,

                      WACHOVIA BANK, NATIONAL ASSOCIATION

                    and the other Lenders referred to herein,

 

                                       and

 

                             BANK OF AMERICA, N.A.,

                             as Administrative Agent

 

                         BANC OF AMERICA SECURITIES LLC

                                       and

                          WACHOVIA CAPITAL MARKETS, LLC

                             as Joint Lead Arrangers

 

                         BANC OF AMERICA SECURITIES LLC

                              as Sole Book Manager

 

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                               TABLE OF CONTENTS

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ARTICLE I  DEFINITIONS .........................................................................        1

        Section 1.1        Definitions .........................................................        1

        Section 1.2        General .............................................................       15

        Section 1.3        Other Definitions and Provisions ....................................       15

 

ARTICLE II TERM LOAN ...........................................................................       15

        Section 2.1        Term Loan ...........................................................       15

        Section 2.2        Intentionally Omitted ...............................................       16

        Section 2.3        Procedure for Making of Term Loan ...................................       16

        Section 2.4        Repayment of Loans ..................................................       16

        Section 2.5        Notes ...............................................................       18

        Section 2.6        Mandatory Permanent Reduction of the Term Loan Commitments ..........       18

        Section 2.7        Termination of Credit Facility ......................................       18

 

ARTICLE III INTENTIONALLY OMITTED ..............................................................       20

 

ARTICLE IV GENERAL LOAN PROVISIONS .............................................................       20

         Section 4.1       Interest ............................................................       20

         Section 4.2       Notice and Manner of Conversion or Continuation of Loans ............       23

         Section 4.3       Continuation Fee ....................................................       23

         Section 4.4       Manner of Payment ...................................................       23

         Section 4.5       Crediting of Payments and Proceeds ..................................       24

         Section 4.6       Adjustments .........................................................       24

         Section 4.7       Nature of Obligations of Lenders Regarding Extensions of Credit;

                           Assumption by the Administrative Agent ..............................       25

         Section 4.8       Changed Circumstances ...............................................       25

         Section 4.9       Indemnity ...........................................................       27

         Section 4.10      Capital Requirements ................................................       28

         Section 4.11      Taxes ...............................................................       28

 

ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING .........................................       30

         Section 5.1       Closing .............................................................       30

         Section 5.2       Conditions to Closing ...............................................       30

         Section 5.3.      Conditions to All Extensions of Credit ..............................       31

 

ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWERS .....................................       31

         Section 6.1       Representations and Warranties ......................................       31

         Section 6.2       Survival of Representations and Warranties, Etc......................       40

 

ARTICLE VII FINANCIAL INFORMATION AND NOTICES ..................................................       40

         Section 7.1       Financial Statements and Projections ................................       40

         Section 7.2       Officer's Compliance Certificate ....................................       41

         Section 7.3       Accountants' Certificate ............................................       41

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        Section 7.4       Other Reports ........................................................       41

        Section 7.5       Notice of Litigation and Other Matters ...............................       42

        Section 7.6       Accuracy of Information ..............................................       43

 

ARTICLE VIII AFFIRMATIVE COVENANTS .............................................................       43

        Section 8.1       Preservation of Corporate Existence and Related Matters ..............       43

        Section 8.2       Maintenance of Property ..............................................       43

        Section 8.3       Insurance ............................................................       43

        Section 8 4       Accounting Methods and Financial Records .............................       44

        Section 8.5       Payment and Performance of Obligations ...............................       44

        Section 8.6       Compliance With Laws and Approvals ...................................       44

        Section 8.7       Environmental Laws ...................................................       44

        Section 8.8       Compliance with ERISA ................................................       45

        Section 8.9       Compliance With Agreements ...........................................       45

        Section 8.10      Visits and Inspections ...............................................       45

        Section 8.11      Additional Subsidiaries ..............................................       45

        Section 8.12      Use of Proceeds ......................................................       45

 

ARTICLE IX FINANCIAL COVENANTS .................................................................       46

        Section 9.1       Leverage Ratio .......................................................       46

        Section 9.2       Fixed Charge Coverage Ratio ..........................................       46

        Section 9.3       Modifications to Financial Covenants Following an Amendment of

                          the Existing Credit Agreement ........................................       46

 

ARTICLE X NEGATIVE COVENANTS ...................................................................       47

         Section 10.1     Limitations on Debt ..................................................       47

         Section 10.2     Limitations on Liens .................................................       48

         Section 10.3     Limitations on Loans, Advances, Investments and Acquisitions .........       49

         Section 10.4     Limitations on Mergers and Liquidation ...............................       51

         Section 10.5     Limitations on Sale of Assets ........................................       52

         Section 10.6     Limitations on Dividends and Distributions ...........................       52

         Section 10.7     Limitations on Exchange and Issuance of Capital Stock ................       53

         Section 10.8     Transactions with Affiliates .........................................       53

         Section 10.9     Certain Accounting Changes; Organizational Documents .................       53

         Section 10.10    Amendments; Payments and Prepayments of Subordinated Debt ............       53

         Section 10.11    Restrictive Agreements ...............................................       54

         Section 10.12    Nature of Business ...................................................       54

         Section 10.13    Prepayment of Other Indebtedness, Etc.................................       54

 

ARTICLE XI DEFAULT AND REMEDIES ................................................................       55

         Section 11.1     Events of Default ....................................................       55

         Section 11.2     Remedies .............................................................       57

         Section 11.3     Rights and Remedies Cumulative; Non-Waiver; etc.......................       58

 

ARTICLE XII THE ADMINISTRATIVE AGENT ...........................................................       58

         Section 12.1     Appointment ..........................................................       58

         Section 12.2     Delegation of Duties .................................................       59

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        Section 12.3       Exculpatory Provisions ..............................................       59

        Section 12.4       Reliance by the Administrative Agent ................................       59

        Section 12.5       Notice of Default ...................................................       60

        Section 12.6       Non-Reliance on the Administrative Agent and Other Lenders ..........       60

        Section 12.7       Indemnification .....................................................       61

        Section 12.8       The Administrative Agent in Its Individual Capacity .................       61

        Section 12.9       Resignation of the Administrative Agent; Successor

                           Administrative Agent ................................................       61

        Section 12.10      Other Agents ........................................................       62

 

ARTICLE XIIII MISCELLANEOUS ....................................................................       62

        Section 13.1       Notices .............................................................       62

        Section 13.2       Expenses; Indemnity .................................................       63

        Section 13.3       Set-off .............................................................       64

        Section 13.4       Governing Law .......................................................       65

        Section 13.5       Jurisdiction and Venue ..............................................       65

        Section 13.6       Reversal of Payments ................................................       65

        Section 13.7       Injunctive Relief; Punitive Damages .................................       66

        Section 13.8       Accounting Matters ..................................................       66

        Section 13.9       Successors and Assigns; Participations ..............................       66

        Section 13.10      Amendments, Waivers and Consents ....................................       70

        Section 13.11      Performance of Duties ...............................................       71

        Section 13.12      All Powers Coupled with Interest ....................................       71

        Section 13.13      Survival of Indemnities .............................................       71

        Section 13.14      Titles and Captions .................................................       71

        Section 13.15      Severability of Provisions ..........................................       71

        Section 13.16      Counterparts ........................................................       71

        Section 13.17      Term of Agreement ...................................................       72

        Section 13.18      Advice of Counsel ...................................................       72

        Section 13.19      No Strict Construction ..............................................       72

        Section 13.20      Inconsistencies with Other Documents; Independent Effect of

                           Covenants ...........................................................       72

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EXHIBITS

 

Exhibit A         -        Form of Note

Exhibit B         -        Form of Notice of Borrowing

Exhibit C         -        Form of Notice of Account Designation

Exhibit D         -        Form of Notice of Repayment

Exhibit E         -        Form of Notice of Conversion/Continuation

Exhibit F         -        Form of Officer's Compliance Certificate

Exhibit G         -        Form of Assignment and Acceptance

 

SCHEDULES

 

Schedule 2.1               Commitments and Applicable Percentages

Schedule 6.1(a)   -        Jurisdictions of Organization and Qualification

Schedule 6.l(b)   -        Subsidiaries and Capitalization

Schedule 6.l(f)   -        Ongoing Tax Audits

Schedule 6.l(i)   -        ERISA Plans

Schedule 6.1(l)   -        Material Contracts

Schedule 6.1(m)   -        Labor and Collective Bargaining Agreements

Schedule 6.l(t)   -        Debt and Guaranty Obligations

Schedule 6.l(u)   -        Litigation

Schedule 8.3      -        Insurance

Schedule 10.2     -        Existing Liens

Schedule 10.3     -        Existing Investments

Schedule 10.8     -        Transactions with Affiliates

Schedule 13.9     -        Assignment Fee

 

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                                                                  EXECUTION COPY

 

      BRIDGE CREDIT AGREEMENT, dated as of the 5th day of July, 2005, by and

among BELK, INC., a Delaware corporation (the "Company"), the Subsidiaries of

the Company listed on the signature pages hereto and each additional Subsidiary

of the Company which hereafter becomes a Borrower pursuant to Section 8.11

(collectively, the "Subsidiary Borrowers" and together with the Company, the

"Borrowers"), BANK OF AMERICA, N.A., WACHOVIA BANK, NATIONAL ASSOCIATION, and

such other lenders who are or may become a party to this Agreement, as Lenders,

and BANK OF AMERICA, N.A., in its capacity as administrative agent for the

Lenders (the "Administrative Agent").

 

                              STATEMENT OF PURPOSE

 

      The Borrowers have requested, and, subject to the terms and conditions

hereof, the Lenders have agreed, to extend certain credit facilities to the

Borrowers.

 

      NOW, THEREFORE, for good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged by the parties hereto, such parties

hereby agree as follows:

 

                                    ARTICLE I

 

                                   DEFINITIONS

 

      Section 1.1 Definitions.

 

      The following terms when used in this Agreement shall have the meanings

assigned to them below:

 

      "Acquired Assets" means, the assets used in the operation of the retail

department stores operating under the nameplates McRae's and Proffitt's, as more

fully described by the defined term "Assets" in the Purchase Agreement.

 

      "Add-On Term Loan" means that certain term loan facility to be documented

under the Existing Credit Agreement pursuant to an amendment thereto or

restatement thereof, the Net Cash Proceeds of which, together with the Net Cash

Proceeds of the Senior Notes and/or other similar financings or capital raising,

are expected to be sufficient to repay the Term Loan and all other Obligations

hereunder in full.

 

      "Additional Debt" means, with respect to any Borrower or any Subsidiary

and to the extent not included as a liability on the consolidated balance sheet

of such Borrower or Subsidiary, in accordance with GAAP, any monetary obligation

(including, without limitation, all outstanding payment, recourse, repurchase,

hold harmless, indemnity or similar obligations) with respect to any Synthetic

Lease transaction, tax retention or off-balance sheet lease transaction, asset

securitization transaction (including any accounts receivable purchase facility)

or any other monetary obligation arising with respect to any other transaction

which does not appear on the balance sheet of such Borrower or Subsidiary, but

which (i) upon the insolvency or bankruptcy of such Borrower or Subsidiary would

be characterized as debt of such Borrower or Subsidiary or (ii) is the

functional equivalent of or takes the place of borrowing.

 

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      "Adjusted Debt" means the sum of (i) Funded Debt and (ii) the product of

(x) Rental Expense and (y) eight (8).

 

      "Administrative Agent" means Bank of America, N.A., in its capacity as

Administrative Agent hereunder, and any successor thereto appointed pursuant to

Section 12.9.

 

      "Administrative Agent's Office" means the office of the Administrative

Agent specified in or determined in accordance with the provisions of Section

13.1(c).

 

      "Affiliate" means, with respect to any Person, any other Person (other

than a Borrower or a Subsidiary of a Borrower) which directly or indirectly

through one or more intermediaries, controls, or is controlled by, or is under

common control with, such first Person or any of its Subsidiaries. The term

"control" means (a) the power to vote five percent (5%) or more of the

securities or other equity interests of a Person having ordinary voting power,

or (b) the possession, directly or indirectly, of any other power to direct or

cause the direction of the management and policies of a Person, whether through

ownership of voting securities, by contract or otherwise.

 

      "Agreement" means this Bridge Credit Agreement, as amended, restated,

supplemented or otherwise modified from time to time.

 

      "Applicable Law" means all applicable provisions of constitutions, laws,

statutes, ordinances, rules, treaties, regulations, permits, licenses,

approvals, interpretations and orders of courts or Governmental Authorities and

all orders and decrees of all courts and arbitrators.

 

      "Approved Fund" means any Fund that is administered or managed by (a) a

Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an

entity that administers or manages a Lender.

 

      "Applicable Margin" shall have the meaning assigned thereto in Section

4.1(c).

 

      "Assignment and Acceptance" shall have the meaning assigned thereto in

Section 13.9.

 

      "Base Rate" means for any day a fluctuating rate per annum equal to the

higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest

in effect for such day as publicly announced from time to time by Bank of

America as its "prime rate." The "prime rate" 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 such rate announced by Bank of America shall take effect at

the opening of business on the day specified in the public announcement of such

change.

 

      "Base Rate Loan" means any Loan bearing interest at a rate based upon the

Base Rate as provided in Section 4.1(a).

 

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      "Benefited Lender" shall have the meaning assigned thereto in Section 4.6.

 

      "Borrowers" shall have the meaning assigned thereto in the preamble

hereof.

 

      "Business Day" means (a) for all purposes other than as set forth in

clause (b) below, any day other than a Saturday, Sunday or legal holiday on

which banks in Charlotte, North Carolina and New York, New York, are open for

the conduct of their commercial banking business, and (b) with respect to all

notices and determinations in connection with, and payments of principal and

interest on, any LIBOR Rate Loan, any day that is a Business Day described in

clause (a) and that is also a day for trading by and between banks in Dollar

deposits in the London interbank market.

 

      "Calculation Date" shall have the meaning assigned thereto in Section

4.1(c).

 

      "Capital Asset" means, with respect to the Borrowers and their

Subsidiaries, any asset that should, in accordance with GAAP, be classified and

accounted for as a capital asset on a Consolidated balance sheet of the

Borrowers and their Subsidiaries.

 

      "Capital Lease" means any lease of any property by any of the Borrowers or

any of their Subsidiaries, as lessee, that should, in accordance with GAAP, be

classified and accounted for as a capital lease on a Consolidated balance sheet

of the Borrowers and their Subsidiaries.

 

      "Cash Equivalents" shall have the meaning assigned thereto in Section

10.3(b).

 

      "Change in Control" shall have the meaning assigned thereto in Section

11.1(h).

 

      "Closing Date" means the date of this Agreement or such later Business Day

upon which each condition described in Section 5.2 shall be satisfied or waived

in all respects in a manner acceptable to the Administrative Agent, in its sole

discretion.

 

      "Code" means the Internal Revenue Code of 1986, and the rules and

regulations thereunder, each as amended or modified from time to time.

 

      "Company" shall have the meaning assigned thereto in the preamble hereof.

 

      "Consolidated" means, when used with reference to financial statements or

financial statement items of the Borrowers and their Subsidiaries, such

statements or items on a consolidated basis in accordance with applicable

principles of consolidation under GAAP.

 

      "Credit Facility" means the credit facility established hereunder.

 

      "Debt" means, with respect to the Borrowers and their Subsidiaries at any

date and without duplication, the sum of the following calculated in accordance

with GAAP: (a) all Funded Debt, (b) all Additional Debt, (c) all obligations to

pay the deferred purchase price of property or services of any such Person

(including, without limitation, all obligations under non-competition

agreements), except trade payables arising in the ordinary course of business

not

 

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more than ninety (90) days past due, (d) all Debt of any other Person secured by

a Lien on any asset of any such Person, (e) all Guaranty Obligations of any such

Person, (f) all obligations, contingent or otherwise, of any such Person

relative to the face amount of letters of credit, whether or not drawn, and

banker's acceptances issued for the account of any such Person, (g) all

obligations of any such Person to redeem, repurchase, exchange, defease or

otherwise make payments in respect of capital stock or other securities or

partnership interests of such Person and (h) all net payment obligations

incurred by any such Person pursuant to Hedging Agreements.

 

      "Debt Issuance" means the issuance by the Company or any Subsidiary of any

Debt or Additional Debt other than Debt and Additional Debt permitted under

Section 10.1(a)-(m).

 

      "Default" means any of the events specified in Section 11.1 which with the

passage of time, the giving of notice or any other condition, would constitute

an Event of Default.

 

      "Disposition" or "Dispose" means the sale, transfer, license, lease or

other disposition (including any Sale and Leaseback Transaction) of any property

by the Borrowers or any of their Subsidiaries (including the capital stock of

any Subsidiary), including any sale, assignment, transfer or other disposal,

with or without recourse, of any notes or accounts receivable or any rights and

claims associated therewith, but excluding (a) the sale, lease, license,

transfer or other disposition of property in the ordinary course of business of

the Borrowers and their Subsidiaries (other than sales of government contracts

that are required by law or by any government agency to be sold as a result of

an organizational conflict of interest), (b) the sale, lease, license, transfer

or other disposition of machinery and equipment no longer used or useful in the

conduct of business of the Borrowers and their Subsidiaries, (c) any sale,

lease, license, transfer or other disposition of property by any Borrower or any

Subsidiary of any Borrower, and (d) any sale, transfer or other disposition of

Cash Equivalents.

 

      "Dollars" or "$" means, unless otherwise qualified, dollars in lawful

currency of the United States.

 

      "EBITDA" means, for any period, the sum of the following determined on a

Consolidated basis, without duplication, for the Borrowers and their

Subsidiaries in accordance with GAAP: (a) Net Income for such period plus (b)

the sum of the following to the extent deducted in determining Net Income: (i)

income and franchise taxes, (ii) Interest Expense, and (iii) amortization,

depreciation, and other non-cash charges, including those related to the closing

of store locations less (c) interest income and any extraordinary gains.

 

      "EBITDAR" means, for any period, the sum of the following determined on a

Consolidated basis, without duplication, for the Borrowers and their

Subsidiaries in accordance with GAAP: (a) EBITDA for such period plus (b) Rental

Expense.

 

      "Eligible Assignee" means, (a) a Lender; (b) an Affiliate of a Lender; (c)

an Approved Fund; and (d) any other Person (other than a natural person)

approved by (i) the Administrative Agent, and (ii) unless an Event of Default

has occurred and is continuing, the Company (each such approval not to be

unreasonably withheld or delayed); provided that notwithstanding the

 

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foregoing, "Eligible Assignee" shall not include a Borrower or any of such

Borrower's Affiliates or Subsidiaries.

 

      "Employee Benefit Plan" means any employee benefit plan within the meaning

of Section 3(3) of ERISA which (a) is maintained for employees of any Borrower

or any ERISA Affiliate or (b) has at any time within the preceding six (6) years

been maintained for the employees of any Borrower or any current or former ERISA

Affiliate.

 

      "Environmental Claims" means any and all administrative, regulatory or

judicial actions, suits, demands, demand letters, claims, liens, accusations,

allegations, notices of noncompliance or violation, investigations (other than

internal reports prepared by any Person in the ordinary course of business and

not in response to any third party action or request of any kind) or proceedings

relating in any way to any actual or alleged violation of or liability under any

Environmental Law or relating to any permit issued, or any approval given, under

any such Environmental Law, including, without limitation, any and all claims by

Governmental Authorities for enforcement, cleanup, removal, response, remedial

or other actions or damages, contribution, indemnification cost recovery,

compensation or injunctive relief resulting from Hazardous Materials or arising

from alleged injury or threat of injury to human health or the environment.

 

      "Environmental Laws" means any and all federal, foreign, state, provincial

and local laws, statutes, ordinances, rules, regulations, permits, licenses,

approvals, interpretations and orders of courts or Governmental Authorities,

relating to the protection of human health or the environment, including, but

not limited to, requirements pertaining to the manufacture, processing,

distribution, use, treatment, storage, disposal, transportation, handling,

reporting, licensing, permitting, investigation or remediation of Hazardous

Materials.

 

      "Equity Issuance" means any issuance by the Borrowers or any Subsidiary to

any Person of shares of its capital stock, other than (a) any issuance of shares

of its capital stock pursuant to the exercise of options, warrants or other

purchase rights under any stock incentive plan, stock option plan, stock

purchase plan, stock grant plan or other equity-based compensation plan or

arrangement, (b) any issuance of shares of its capital stock pursuant to the

conversion of any debt securities to equity or the conversion of any class

equity securities to any other class of equity securities, (c) any issuance of

options or warrants relating to its capital stock, (d) any issuance by the

Borrowers of shares of their capital stock as consideration for an acquisition

permitted under Section 10.3 and (e) any issuance by a Subsidiary of shares of

its capital stock to the Borrowers or any Subsidiary. The term "Equity Issuance"

shall not be deemed to include any Disposition and vice versa.

 

      "ERISA" means the Employee Retirement Income Security Act of 1974, and the

rules and regulations thereunder, each as amended, or modified from time to

time.

 

      "ERISA Affiliate" means any Person who together with any Borrower is

treated as a single employer within the meaning of Section 414(b), (c), (m) or

(o) of the Code or Section 4001(b) of ERISA.

 

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      "Escrow Letter" means that certain Escrow Letter, dated as of April 27,

2005, addressed to Moore & Van Allen, PLLC from the Borrowers and the Lenders.

 

      "Eurodollar Base Rate" has the meaning specified in the definition of

LIBOR Rate.

 

      "Eurodollar Reserve Percentage" means, for any day during any Interest

Period, the reserve percentage (expressed as a decimal, carried out to five

decimal places) in effect on such day, whether or not applicable to any Lender,

under regulations issued from time to time by the FRB for determining the

maximum reserve requirement (including any emergency, supplemental or other

marginal reserve requirement) with respect to Eurocurrency funding (currently

referred to as "Eurocurrency liabilities"). The LIBOR Rate for each outstanding

LIBOR Rate Loan shall be adjusted automatically as of the effective date of any

change in the Eurodollar Reserve Percentage.

 

      "Event of Default" means any of the events specified in Section 11.1,

provided that any requirement for passage of time, giving of notice, or any

other condition, has been satisfied.

 

      "Existing Credit Agreement" means the Credit Agreement, dated as of

October 28, 2004 (as amended, restated or otherwise modified from time to time

prior to the date hereof), among the Borrowers and the lenders party thereto.

 

      "Extension of Credit" means, as to any Lender at any time, the making of

its portion of the Term Loan.

 

      "FDIC" means the Federal Deposit Insurance Corporation, or any successor

thereto.

 

      "Federal Funds Rate" means, for any day, the rate per annum equal to the

weighted average of the rates on overnight Federal funds transactions with

members of the Federal Reserve System arranged by Federal funds brokers on such

day, as published by the Federal Reserve Bank of New York on the Business Day

next succeeding such day; provided that (a) if such day is not a Business Day,

the Federal Funds Rate for such day shall be such rate on such transactions on

the next preceding Business Day as so published on the next succeeding Business

Day, and (b) if no such rate is so published on such next succeeding Business

Day, the Federal Funds Rate for such day shall be the average rate (rounded

upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of

America on such day on such transactions as determined by the Administrative

Agent.

 

      "Fiscal Year" means the fiscal year of the Borrowers and their

Subsidiaries ending on the Saturday closest to January 31 (whether such Saturday

occurs in January or February).

 

      "Fixed Charges" means, for any period, the sum of the following determined

on a Consolidated basis, without duplication, for the Borrowers and their

Subsidiaries in accordance with GAAP: (a) Interest Expense, (b) Rental Expense

and (c) cash dividends and distributions (excluding repurchases of the Company's

stock permitted pursuant to Section 10.6(d)).

 

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      "Fixed Charge Coverage Ratio" means, as of the end of any fiscal quarter

of the Borrowers, the ratio of (a) EBITDAR for the period of four (4)

consecutive fiscal quarters ending on or immediately prior to such date to (b)

Fixed Charges for the period of four (4) consecutive fiscal quarters ending on

or immediately prior to such date.

 

      "FRB" means the Board of Governors of the Federal Reserve System of the

United States.

 

      "Fund" means any Person (other than a natural person) that is (or will be)

engaged in making, purchasing, holding or otherwise investing in commercial

loans and similar extensions of credit in the ordinary course of its business.

 

      "Funded Debt" means all liabilities, obligations and indebtedness of the

Borrowers for borrowed money including, but not limited to, obligations

evidenced by bonds, debentures, notes or other similar instruments and all

obligations under Capital Leases.

 

      "GAAP" means generally accepted accounting principles, as recognized by

the American Institute of Certified Public Accountants and the Financial

Accounting Standards Board, consistently applied and maintained on a consistent

basis for the Borrowers and their Subsidiaries throughout the period indicated

and (subject to Section 13.8) consistent with the prior financial practice of

the Borrowers and their Subsidiaries.

 

      "Governmental Approvals" means all authorizations, consents, approvals,

licenses and exemptions of, registrations and filings with, and reports to, all

Governmental Authorities.

 

      "Governmental Authority" means any nation, province, state or political

subdivision thereof, and any government or any Person exercising executive,

legislative, regulatory or administrative functions of or pertaining to

government, and any corporation or other entity owned or controlled, through

stock or capital ownership or otherwise, by any of the foregoing.

 

      "Guaranty Obligation" means, with respect to the Borrowers and their

Subsidiaries, without duplication, any obligation, contingent or otherwise, of

any such Person pursuant to which such Person has directly or indirectly

guaranteed any Debt or other obligation of any other Person and, without

limiting the generality of the foregoing, any obligation, direct or indirect,

contingent or otherwise, of any such Person (a) to purchase or pay (or advance

or supply funds for the purchase or payment of) such Debt or other obligation

(whether arising by virtue of partnership arrangements, by agreement to keep

well, to purchase assets, goods, securities or services, to take-or-pay, or to

maintain financial statement condition or otherwise) or (b) entered into for the

purpose of assuring in any other manner the obligee of such Debt or other

obligation of the payment thereof or to protect such obligee against loss in

respect thereof (in whole or in part); provided, that the term Guaranty

Obligation shall not include endorsements for collection or deposit in the

ordinary course of business.

 

      "Hazardous Materials" means any substances or materials (a) which are or

become defined as hazardous wastes, hazardous substances, pollutants,

contaminants, chemical substances or mixtures or toxic substances under any

Environmental Law, (b) which are toxic,

 

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explosive, corrosive, flammable, infectious, radioactive, carcinogenic,

mutagenic or otherwise harmful to human health or the environment and are or

become regulated by any Governmental Authority, (c) the presence of which

require investigation or remediation under any Environmental Law or common law,

(d) the discharge or emission or release of which requires a permit or license

under any Environmental Law or other Governmental Approval, (e) which are deemed

to constitute a nuisance or a trespass which pose a health or safety hazard to

Persons or neighboring properties, (f) which consist of underground or

aboveground storage tanks, whether empty, filled or partially filled with any

substance, or (g) which contain, without limitation, asbestos, polychlorinated

biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum

derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic

gas.

 

      "Hedging Agreement" means any agreement with respect to any Interest Rate

Contract, agreement, commodity swap, forward foreign exchange agreement,

currency swap agreement, cross-currency rate swap agreement, currency option

agreement or other agreement or arrangement designed to alter the risks of any

Person arising from fluctuations in rates, currency values or commodity prices,

all as amended, restated, supplemented or otherwise modified from time to time.

 

      "Interest Expense" means, with respect to the Borrowers and their

Subsidiaries for any period, the gross interest expense (including, without

limitation, interest expense attributable to Capital Leases and all net payment

obligations pursuant to Hedging Agreements) of the Borrowers and their

Subsidiaries, all determined for such period on a Consolidated basis, without

duplication, in accordance with GAAP.

 

      "Interest Period" shall have the meaning assigned thereto in Section

4.1(b).

 

      "Interest Rate Contract" means any interest rate swap agreement, interest

rate cap agreement, interest rate floor agreement, interest rate collar

agreement, interest rate option or any other agreement regarding the hedging of

interest rate risk exposure executed in connection with hedging the interest

rate exposure of any Person and any confirming letter executed pursuant to such

agreement, all as amended, restated, supplemented or otherwise modified from

time to time.

 

      "Joinder Agreement" means, collectively, each joinder agreement in form

and substance acceptable to the Administrative Agent executed in favor of the

Administrative Agent for the ratable benefit of itself and the Lenders.

 

      "Lender" means each Person executing this Agreement as a Lender set forth

on the signature pages hereto, each Person that hereafter becomes a party to

this Agreement as a Lender pursuant to Section 13.9.

 

      "Lending Office" means, with respect to any Lender, the office of such

Lender maintaining such Lender's Extensions of Credit.

 

      "Leverage Ratio" shall have the meaning assigned thereto in Section 9.1.

 

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<PAGE>

 

      "LIBOR Rate" means for any Interest Period with respect to any LIBOR Rate

Loan, a rate per annum determined by the Administrative Agent pursuant to the

following formula:

 

     LIBOR Rate = Eurodollar Base Rate / 1.00 - Eurodollar Reserve Percentage

 

      Where,

 

            "Eurodollar Base Rate" means, for such Interest Period, the rate per

      annum equal to the British Bankers Association LIBOR Rate ("BBA LIBOR"),

      as published by Reuters (or other commercially available source providing

      quotations of BBA LIBOR as designated by the Administrative Agent from

      time to time) at approximately 11:00 a.m., London time, two Business Days

      prior to the commencement of such Interest Period, for Dollar deposits

      (for delivery on the first day of such Interest Period) with a term

      equivalent to such Interest Period. If such rate is not available at such

      time for any reason, then the "Eurodollar Base Rate" for such Interest

      Period shall be the rate per annum determined by the Administrative Agent

      to be the rate at which deposits in Dollars for delivery on the first day

      of such Interest Period in same day funds in the approximate amount of the

      LIBOR Rate Loan being made, continued or converted by Bank of America and

      with a term equivalent to such Interest Period would be offered by Bank of

      America's London Branch to major banks in the London interbank eurodollar

      market at their request at approximately 11:00 a.m. (London time) two

      Business Days prior to the commencement of such Interest Period.

 

      "LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the

LIBOR Rate as provided in Section 4.1(a).

 

      "Lien" means, with respect to any asset, any mortgage, leasehold mortgage,

lien, pledge, charge, security interest, hypothecation or encumbrance of any

kind in respect of such asset. For the purposes of this Agreement, a Person

shall be deemed to own subject to a Lien any asset which it has acquired or

holds subject to the interest of a vendor or lessor under any conditional sale

agreement, Capital Lease or other title retention agreement relating to such

asset.

 

      "Loan Documents" means, collectively, this Agreement, the Notes, each

Joinder Agreement and each other document, instrument, certificate and agreement

executed and delivered by the Borrowers or any of their Subsidiaries in

connection with any of the foregoing or otherwise referred to herein or

contemplated hereby (excluding any Hedging Agreement), all as may be amended,

restated, supplemented or otherwise modified from time to time.

 

      "Loans" and "Loan" means the Term Loan or any component thereof.

 

      "Material Adverse Effect" means a material adverse effect on (a) the

properties, business, prospects, operations or condition (financial or

otherwise) of (i) a Borrower or any of its Subsidiaries or (ii) the Acquired

Assets, or (b) the ability of a Borrower or any of its Subsidiaries to perform

its obligations under the Loan Documents or Material Contracts, in each case to

which it is a party.

 

                                       9

 

<PAGE>

 

      "Material Contract" means (a) any contract or other agreement, written or

oral, of any Borrower or any of its Subsidiaries involving monetary liability of

or to any such Person in an amount in excess of $10,000,000 per annum, or (b)

any other contract or agreement, written or oral, of any Borrower or any of its

Subsidiaries the failure to comply with which could reasonably be expected to

have a Material Adverse Effect.

 

      "Multiemployer Plan" means a "multiemployer plan" as defined in Section

4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is making, or

is accruing an obligation to make, or has accrued an obligation to make

contributions within the preceding six (6) years.

 

      "Net Cash Proceeds" means the aggregate cash or Cash Equivalents proceeds

received by the Company or any Subsidiary in respect of any Disposition, Equity

Issuance or Debt Issuance, net of (a) direct costs, fees and expenses incurred

in connection therewith (including, without limitation, legal, accounting and

investment banking fees and expenses, and sales commissions), (b) taxes paid or

payable as a result thereof and (c) in the case of any Disposition, the amount

necessary to retire any Debt secured by a Lien permitted by Section 10.2 on the

related property; it being understood that "Net Cash Proceeds" shall include,

without limitation, any cash or Cash Equivalents received upon the sale or other

disposition of any consideration that is not cash or Cash Equivalents received

by the Company or any Subsidiary in any Disposition, Equity Issuance or Debt

Issuance.

 

      "Net Income" means, with respect to the Borrowers and their Subsidiaries,

for any period of determination, the net income (or loss) of the Borrowers and

their Subsidiaries for such period, determined on a Consolidated basis in

accordance with GAAP; provided that there shall be excluded from Net Income (a)

the net income (or loss) of any Person (other than a Subsidiary which shall be

subject to clause (c) below), in which any Borrower or any of its Subsidiaries

has a joint interest with a third party, except to the extent such net income is

actually paid to such Borrower or any of its Subsidiaries by dividend or other

distribution during such period, (b) the net income (or loss) of any Person

accrued prior to the date it becomes a Subsidiary of such Person or is merged

into or consolidated with such Person or any of its Subsidiaries or that

Person's assets are acquired by such Person or any of its Subsidiaries except to

the extent included pursuant to the foregoing clause (a), (c) the net income (if

positive) of any Subsidiary to the extent that the declaration or payment of

dividends or similar distributions by such Subsidiary to any Borrower or any of

its Subsidiaries of such net income (i) is not at the time permitted by

operation of the terms of its charter or any agreement, instrument, judgment,

decree, order, statute rule or governmental regulation applicable to such

Subsidiary or (ii) would be subject to any taxes payable on such dividends or

distributions.

 

      "Net Worth" means the amount of assets shown on the Consolidated balance

sheet of the Borrowers and their Subsidiaries (including any items which would

be treated as intangibles under GAAP, including, but not limited to capitalized

interest, debt discount and expense, goodwill, patents, trademarks, copyrights,

licenses and franchises), less all liabilities of the Borrowers and their

Subsidiaries, all computed in accordance with GAAP, applied on a consistent

basis (such calculation shall exclude any non-cash increase or decrease to the

Prepaid Pension Asset account, as required by GAAP).

 

                                       10

 

<PAGE>

 

      "Notes" means the Notes made by the Borrowers payable to the order of each

Lender, substantially in the form of Exhibit A hereto, evidencing the Term Loan,

and any amendments, supplements and modifications thereto, any substitutes

therefor, and any replacements, restatements, renewals or extensions thereof, in

whole or in part; "Note" means any of such Notes.

 

      "Notice of Account Designation" shall have the meaning assigned thereto in

Section 2.3(b).

 

      "Notice of Borrowing" shall have the meaning assigned thereto in Section

2.3(a).

 

      "Notice of Conversion/Continuation" shall have the meaning assigned

thereto in Section 4.2.

 

      "Notice of Repayment" shall have the meaning assigned thereto in Section

2.4(c).

 

      "Obligations" means, in each case, whether now in existence or hereafter

arising: (a) the principal of and interest on (including interest accruing after

the filing of any bankruptcy or similar petition) the Loans, (b) all existing or

future payment and other obligations owing by any Borrower under any Hedging

Agreement (which such Hedging Agreement is permitted hereunder) with any Person

that is a Lender hereunder at the time such Hedging Agreement is executed (all

such obligations with respect to any such Hedging Agreement, "Hedging

Obligations") and (c) all other fees and commissions (including attorneys'

fees), charges, indebtedness, loans, liabilities, financial accommodations,

obligations, covenants and duties owing by any Borrower or any of its

Subsidiaries to the Lenders or the Administrative Agent, in each case under or

in respect of this Agreement, any Note or any of the other Loan Documents of

every kind, nature and description, direct or indirect, absolute or contingent,

due or to become due, contractual or tortious, liquidated or unliquidated, and

whether or not evidenced by any note.

 

      "Officer's Compliance Certificate" shall have the meaning as