EXHIBIT 4(B)
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CREDIT AGREEMENT
dated as of June 30, 1994
among
FRED MEYER, INC.,
VARIOUS FINANCIAL INSTITUTIONS
and
CONTINENTAL BANK,
as Agent
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TABLE OF CONTENTS
PAGE
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . 1
1.2 Computations . . . . . . . . . . . . . . . . 9
1.3 Cross-References; Section Captions . . . . . 9
SECTION 2 COMMITMENTS OF THE LENDERS; TYPES OF LOANS;
BORROWING AND CONVERSION PROCEDURES.. . . . . . . 9
2.1 Commitments. . . . . . . . . . . . . . . . . 10
2.2 Various Types of Loans . . . . . . . . . . . 10
2.3 Borrowing Procedures . . . . . . . . . . . . 10
2.4 Continuation and Conversion Procedures . . . 11
2.5 Warranty upon Conversion or Continuation . . 11
2.6 Conditions . . . . . . . . . . . . . . . . . 11
2.7 Pro Rata Treatment . . . . . . . . . . . . . 11
2.8 Commitments Several. . . . . . . . . . . . . 11
2.9 Extension of Termination Date. . . . . . . . 12
SECTION 3 NOTES EVIDENCING LOANS. . . . . . . . . . . . . . . 12
3.1 Notes. . . . . . . . . . . . . . . . . . . . 12
3.2 Recordkeeping. . . . . . . . . . . . . . . . 12
SECTION 4 INTEREST. . . . . . . . . . . . . . . . . . . . . . 13
4.1 Interest Rates . . . . . . . . . . . . . . . 13
4.2 Interest Payment Dates . . . . . . . . . . . 13
4.3 Setting and Notice of Eurodollar Rates . . . 13
4.4 Computation of Interest. . . . . . . . . . . 14
SECTION 5 FEES. . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Facility Fee . . . . . . . . . . . . . . . . 14
5.2 Agent's Fee. . . . . . . . . . . . . . . . . 14
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS;
PREPAYMENTS . . . . . . . . . . . . . . . . . . . 14
6.1 Reduction or Termination of the Commitments . 14
6.2 Prepayments . . . . . . . . . . . . . . . . . 14
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES . . 15
7.1 Making of Payments. . . . . . . . . . . . . . 15
7.2 Application of Certain Payments . . . . . . . 15
7.3 Due Date Extension. . . . . . . . . . . . . . 15
7.4 Setoff. . . . . . . . . . . . . . . . . . . . 15
7.5 Proration of Payments . . . . . . . . . . . . 16
7.6 Taxes . . . . . . . . . . . . . . . . . . . . 16
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PAGE
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR
EURODOLLAR LOANS. . . . . . . . . . . . . . . . . 18
8.1 Increased Costs. . . . . . . . . . . . . . . 18
8.2 Basis for Determining Interest Rate
Inadequate or Unfair . . . . . . . . . . . 19
8.3 Changes in Law Rendering Eurodollar
Loans Unlawful . . . . . . . . . . . . . . 20
8.4 Funding Losses . . . . . . . . . . . . . . . 20
8.5 Right of Lenders to Fund through
Other Offices. . . . . . . . . . . . . . . 21
8.6 Discretion of Lenders as to Manner
of Funding . . . . . . . . . . . . . . . . 21
8.7 Mitigation of Circumstances; Replacement
of Affected Lender or Objecting Lender . . 21
8.8 Conclusiveness of Statements; Survival of
Provisions . . . . . . . . . . . . . . . . 22
SECTION 9 WARRANTIES. . . . . . . . . . . . . . . . . . . . . 22
9.1 Organization, etc. . . . . . . . . . . . . . 22
9.2 Authorization; No Conflict . . . . . . . . . 22
9.3 Validity and Binding Nature. . . . . . . . . 23
9.4 Financial Information. . . . . . . . . . . . 23
9.5 No Material Adverse Change . . . . . . . . . 23
9.6 Litigation and Contingent Liabilities. . . . 23
9.7 Ownership of Properties; Liens . . . . . . . 24
9.8 Subsidiaries . . . . . . . . . . . . . . . . 24
9.9 Pension and Welfare Plans. . . . . . . . . . 24
9.10 Regulated Industry . . . . . . . . . . . . . 24
9.11 Regulations G, U and X . . . . . . . . . . . 24
9.12 Taxes. . . . . . . . . . . . . . . . . . . . 24
9.13 Environmental and Safety and Health Matters. 24
9.14 Compliance with Law. . . . . . . . . . . . . 25
9.15 Information. . . . . . . . . . . . . . . . . 25
SECTION 10 COVENANTS. . . . . . . . . . . . . . . . . . . . . 25
10.1 Reports, Certificates and Other Information. 25
10.1.1 Audit Report . . . . . . . . . . . . 25
10.1.2 Interim Reports. . . . . . . . . . . 26
10.1.3 Compliance Certificate . . . . . . . 26
10.1.4 Reports to SEC . . . . . . . . . . . 26
10.1.5 Notice of Default, Litigation
and ERISA Matters. . . . . . . . . 26
10.1.6 Subsidiaries . . . . . . . . . . . . 27
10.1.7 Other Information. . . . . . . . . . 27
10.2 Books, Records and Inspections . . . . . . . 27
10.3 Insurance. . . . . . . . . . . . . . . . . . 27
10.4 Compliance with Law; Payment of Taxes and
Liabilities. . . . . . . . . . . . . . . . 27
10.5 Maintenance of Existence, etc. . . . . . . . 28
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PAGE
10.6 Financial Ratios and Restrictions. . . . . . 28
10.6.1 Minimum Consolidated Tangible
Net Worth. . . . . . . . . . . . . 28
10.6.2 Long-Term Liabilities to Net
Worth Ratio. . . . . . . . . . . . 28
10.6.3 Fixed Charge Coverage Ratio. . . . . 28
10.7 Limitation on Liens. . . . . . . . . . . . . 28
10.8 Debt . . . . . . . . . . . . . . . . . . . . 30
10.9 Guaranties, Loans and Advances . . . . . . . 30
10.10 Mergers, Consolidations, Sales . . . . . . . 31
10.11 Company's and Subsidiaries' Stock. . . . . . 32
10.12 Unconditional Purchase Obligations . . . . . 32
10.13 Employee Benefit Plans . . . . . . . . . . . 32
10.14 Purchase or Redemption of Company's
Securities; Dividend Restriction . . . . . 32
10.15 Use of Proceeds. . . . . . . . . . . . . . . 33
SECTION 11 CONDITIONS OF LENDING. . . . . . . . . . . . . . . 33
11.1 Initial Loan . . . . . . . . . . . . . . . . 33
11.1.1 Notes. . . . . . . . . . . . . . . . 34
11.1.2 Resolutions. . . . . . . . . . . . . 34
11.1.3 Consents, etc. . . . . . . . . . . . 34
11.1.4 Incumbency and Signature
Certificates . . . . . . . . . . . 34
11.1.5 Opinion of Counsel for the Company . 34
11.1.6 Other. . . . . . . . . . . . . . . . 34
11.2 All Loans. . . . . . . . . . . . . . . . . . 34
11.2.1 No Default . . . . . . . . . . . . . 34
11.2.2 Confirmatory Certificate . . . . . . 35
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT . . . . . . . . 35
12.1 Events of Default. . . . . . . . . . . . . . 35
12.1.1 Non-Payment of the Loans, etc. . . . 35
12.1.2 Non-Payment of Other Debt. . . . . . 35
12.1.3 Other Material Obligations . . . . . 35
12.1.4 Bankruptcy, Insolvency, etc. . . . . 35
12.1.5 Non-Compliance with Provisions of
This Agreement . . . . . . . . . . 36
12.1.6 Warranties . . . . . . . . . . . . . 36
12.1.7 Pension Plans. . . . . . . . . . . . 36
12.1.8 Withdrawal Liability Under
Multiemployer Plans. . . . . . . . 36
12.1.9 Judgments and Attachments. . . . . . 36
12.1.10 Change in Control. . . . . . . . . . 37
12.2 Effect of Event of Default . . . . . . . . . 37
SECTION 13 THE AGENT. . . . . . . . . . . . . . . . . . . . . 37
13.1 Authorization. . . . . . . . . . . . . . . . 37
13.2 Indemnification. . . . . . . . . . . . . . . 37
13.3 Exculpation. . . . . . . . . . . . . . . . . 38
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PAGE
13.4 Credit Investigation . . . . . . . . . . . . 38
13.5 Agent and Affiliates . . . . . . . . . . . . 38
13.6 Action on Instructions of the
Required Lenders . . . . . . . . . . . . . 38
13.7 Funding Reliance . . . . . . . . . . . . . . 39
13.8 Resignation. . . . . . . . . . . . . . . . . 39
SECTION 14 GENERAL. . . . . . . . . . . . . . . . . . . . . . 40
14.1 Waiver; Amendments . . . . . . . . . . . . . 40
14.2 Confirmations. . . . . . . . . . . . . . . . 41
14.3 Notices. . . . . . . . . . . . . . . . . . . 41
14.4 Subsidiary References. . . . . . . . . . . . 41
14.5 Regulation U . . . . . . . . . . . . . . . . 41
14.6 Costs, Expenses and Taxes. . . . . . . . . . 41
14.7 Indemnification by the Company . . . . . . . 42
14.8 Successors and Assigns . . . . . . . . . . . 42
14.9 Assignments; Participations. . . . . . . . . 43
14.9.1 Assignments. . . . . . . . . . . . . 43
14.9.2 Participations . . . . . . . . . . . 44
14.10 Governing Law. . . . . . . . . . . . . . . . 45
14.11 Counterparts . . . . . . . . . . . . . . . . 45
14.12 Termination of Existing Credit Agreement . . 45
14.13 Forum Selection and Consent to Jurisdiction. 45
14.14 OREGON LEGAL NOTICE. . . . . . . . . . . . . 45
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SCHEDULE I Commitments and Percentages
SCHEDULE II Schedule of Subsidiaries
EXHIBIT A Form of Note (Section 3.1)
EXHIBIT B Form of Extension Request (Section 2.9)
EXHIBIT C Form of Opinion of Counsel for the
Company and the Guarantors (Section 11.1.5)
EXHIBIT D Form of Assignment Agreement
(Section 14.9)
CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of June 30, 1994 (as amended
or otherwise modified from time to time, this "Agreement"), is
entered into among FRED MEYER, INC., a Delaware corporation (the
"Company"), the undersigned financial institutions (collectively
the "Lenders" and individually each a "Lender") and CONTINENTAL
BANK (in its individual capacity, together with its successors,
"Continental"), as agent for the Lenders.
In consideration of the mutual agreements herein contained,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1 DEFINITIONS AND INTERPRETATION.
1.1 Definitions. When used herein the following terms
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shall have the following meanings (such definitions to be
applicable to both the singular and plural forms of such terms):
Affected Lender means any Lender that has given notice to
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the Company (which has not been rescinded) of (i) any obligation
by the Company to pay any amount pursuant to Section 7.6 or 8.1
or (ii) the occurrence of any circumstance of the nature
described in Section 8.2 or 8.3.
Affected Loan - see Section 8.3.
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Agent means Continental in its capacity as agent for the
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Lenders hereunder and any successor thereto in such capacity.
Agreement - see the Preamble.
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Alternate Reference Rate means at any time the greater of
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(a) the Federal Funds Rate plus 0.25% and (b) the Reference Rate.
Assets Purchase Agreement means the Assets Purchase
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Agreement dated as of September 25, 1981, among the Company, FMI
Acquisition Corporation and Fred Meyer Real Estate Properties,
Ltd., as it may be amended from time to time.
Assignee - see Section 14.9.1.
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Assignment Agreement - see Section 14.9.1.
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Business Day means any day (other than a Saturday or Sunday)
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on which banks are open for commercial banking business in
Chicago, Illinois and Portland, Oregon and, in the case of a
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Business Day which relates to a Eurodollar Loan, on which
dealings are carried on in the interbank eurodollar market.
Capital Lease means any lease of property (whether real,
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personal or mixed) which would, in accordance with GAAP, be
required to be classified and accounted for on the books of the
lessee as a capital lease.
Change in Control means the acquisition by any Person, or
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two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the SEC under the Securities
Exchange Act of 1934, as amended) of outstanding shares of voting
stock of the Company representing in excess of 50% of voting
control of Company, which Person or Persons have beneficial
ownership of less than 5% of the outstanding shares of voting
stock of the Company as of the date of this Agreement.
Commitment as to any Lender means the commitment of such
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Lender to make Loans hereunder, as adjusted from time to time
pursuant to Section 6.1 or Section 14.9. The amount of the
initial Commitment of each Lender is set forth on Schedule I.
Company - see the Preamble.
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Consolidated Long-Term Liabilities means, as of the date of
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any determination thereof, consolidated Debt for Borrowed Money
of the Company and its Subsidiaries, secured or unsecured, (i)
payable more than one year from such date, plus (ii) the Loans
and Capital Leases to the extent maturing in a year or less, plus
(iii) all other Debt for Borrowed Money not classified as current
liabilities in the Company's financial reporting.
Consolidated Net Tangible Net Worth means Consolidated
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Tangible Net Worth less (unless otherwise taken into account in
determining consolidated net worth) the amounts of payments
(whether in cash or issuance of Debt) made to employees in
redemption of stock under Management Stock Agreements.
Consolidated Tangible Net Worth means the consolidated net
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worth of the Company and its Subsidiaries less (unless otherwise
deducted in determining consolidated net worth) the aggregate
amount of any intangible assets of the Company and its
Subsidiaries, including, without limitation, deferred financing
and organizational costs (net of amortization), goodwill,
franchises, licenses, patents, trademarks, trade names,
copyrights, service marks and brand names, but not subtracting
from consolidated net worth of the Company and its Subsidiaries
the unamortized amount of such intangible assets arising out of
the Assets Purchase Agreement and the purchase of Grand Central,
Inc. in 1984, as shown on Company's audited consolidated
financial statement as at January 29, 1994 referred to in
3
subsection 4.3 (such amount with respect to future calculations
thereof to be determined in the same manner as the unamortized
amount ($5,523,000) shown on such financial statement dated
January 29, 1994).
Consolidated Total Assets means the total consolidated
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assets of the Company and its Subsidiaries as shown on the most
recent consolidated balance sheet of the Company and its
Subsidiaries referred to in Section 9.4 or delivered to the
Lenders pursuant to Section 10.1.
Continental - see the Preamble.
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Debt of any Person means, without duplication, (a) all
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indebtedness of such Person for borrowed money, whether or not
evidenced by bonds, debentures, notes or similar instruments, (b)
all obligations of such Person as lessee under Capital Leases
which have been recorded as liabilities on a balance sheet of
such Person, (c) all obligations of such Person to pay the
deferred purchase price of property or services (other than
current accounts payable in the ordinary course of business), (d)
all indebtedness secured by a Lien on the property of such
Person, whether or not such indebtedness shall have been assumed
by such Person (it being understood that if such Person has not
assumed or otherwise become personally liable for any such
indebtedness, the amount of the Debt of such Person in connection
therewith shall be limited to the lesser of the face amount of
such indebtedness or the fair market value of all property of
such Person securing such indebtedness), (e) all obligations,
contingent or otherwise, with respect to the face amount of all
letters of credit (whether or not drawn) and banker's acceptances
issued for the account of such Person, (f) all obligations of
such Person in respect of Hedging Arrangements, (g) all
Suretyship Liabilities of such Person and (h) all Debt (as
defined above) of any partnership in which such Person is a
general partner. The amount of the Debt of any Person in respect
of Hedging Arrangements shall be deemed to be the unrealized net
loss position of such Person thereunder (determined for each
counterparty individually, but netted for all Hedging
Arrangements maintained with such counterparty).
Debt for Borrowed Money of any Person means all Debt of such
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Person described in (without duplication) clauses (a), (b), (c),
(d) and, to the extent constituting a Suretyship Liability in
respect of Debt for Borrowed Money of another Person, (g) of the
definition of Debt.
Dollar and the sign "$" mean lawful money of the United
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States of America.
Effective Date - see Section 11.1.
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Environmental Laws means the Resource Conservation and
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Recovery Act of 1987, the Comprehensive Environmental Response,
Compensation and Liability Act, any so-called "Superfund" or
"Superlien" law, the Toxic Substances Control Act, and any other
federal, state or local statute, law, ordinance, code, rule,
regulation order or decree regulating or relating to, or imposing
liability or standards of conduct concerning, any hazardous
materials or other hazardous or toxic substance, as now or at any
time hereafter in effect.
ERISA means the Employee Retirement Income Security Act of
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1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of ERISA also
refer to any successor sections.
ERISA Affiliate means any corporation, trade or business
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that is, along with the Company, a member of a controlled group
of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Internal Revenue Code of 1986, as
amended, or section 4001 of ERISA.
Eurocurrency Reserve Percentage means, with respect to any
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Eurodollar Loan for any Interest Period, a percentage (expressed
as a decimal) equal to the daily average during such Interest
Period of the percentage in effect on each day of such Interest
Period, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor), for determining the aggregate
maximum reserve requirements applicable to "Eurocurrency
Liabilities" pursuant to Regulation D or any other then
applicable regulation of such Board of Governors which prescribes
reserve requirements applicable to "Eurocurrency Liabilities" as
presently defined in Regulation D.
Eurodollar Loan means any Loan which bears interest at a
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rate determined by reference to the Eurodollar Rate (Reserve
Adjusted).
Eurodollar Office means with respect to any Lender the
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office or offices of such Lender which shall be making or
maintaining the Eurodollar Loans of such Lender hereunder or such
other office or offices through which such Lender determines its
Eurodollar Rate. A Eurodollar Office of any Lender may be, at
the option of such Lender, either a domestic or foreign office.
Eurodollar Rate means, with respect to any Eurodollar Loan
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for any Interest Period, the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the rates per annum
at which Dollar deposits in immediately available funds are
offered to the Eurodollar Office of each Reference Lender two
Business Days prior to the beginning of such Interest Period by
5
major banks in the interbank eurodollar market as at or about
10:00 a.m., Chicago time, for delivery on the first day of such
Interest Period, for the number of days comprised therein and in
an amount equal or comparable to the amount of the Eurodollar
Loan of such Reference Lender for such Interest Period.
Eurodollar Rate (Reserve Adjusted) means, with respect to
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any Eurodollar Loan for any Interest Period, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
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(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
Event of Default means any of the events described in
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Section 12.1.
Existing Credit Agreement - see Section 11.1.
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Extension Request - see Section 2.9.
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Federal Funds Rate means, for any day, the rate set forth in
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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 publication, the "Composite 3:30
p.m. Quotations") for such day under the caption "Federal Funds
Effective Rate". If such rate is not published in the Composite
3:30 p.m. Quotations for any Business Day, the rate for such day
will be the arithmetic mean of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m., New York
City time, on such day by each of three leading brokers of
Federal funds transactions in New York City, selected by the
Agent. The rate for any day which is not a Business Day shall be
the rate for the immediately preceding Business Day.
Fiscal Quarter means any fiscal quarter of a Fiscal Year.
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Fiscal Year means the fiscal year of the Company and its
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Subsidiaries, which period shall be the period of approximately
12 months ending on the Saturday closest to January 31 in each
year.
Fixed Charge Coverage Ratio means, as of the last day of any
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Fiscal Quarter, the ratio of (a) the sum of the Company's
consolidated net earnings before interest expense, taxes,
depreciation and amortization for the period of four Fiscal
Quarters ending on such day plus the Company's consolidated
rental expense on operating leases for such period to (b) the sum
of (i) the Company's consolidated interest expense for such
6
period plus (ii) the Company's consolidated rental expense on
operating leases for such period plus (iii) the amount classified
as the current portion of all long-term debt (excluding, if
applicable, the Loans) and lease obligations of the Company and
its Subsidiaries on a consolidated balance sheet prepared on such
day.
Floating Rate Loan means any Loan which bears interest at or
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by reference to the Alternate Reference Rate.
GAAP means those generally accepted accounting principles as
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in effect from time to time.
Group - see Section 2.2.
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Hedging Arrangement means any interest rate swap, cap or
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collar agreement, currency swap agreement, commodity swap
agreement or other arrangement designed to hedge interest rate
and/or currency risk or changes in commodity prices.
Interest Period means, with respect to any Eurodollar Loan,
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the period commencing on and including the date such Loan is made
or is converted from a Floating Rate Loan, or on the last day of
the immediately preceding Interest Period for such Loan, and
ending on but excluding the day which is one, two, three or six
months thereafter, as the Company shall specify in the related
notice of borrowing, conversion or continuation pursuant to
Section 2.3 or 2.4; provided, however, that
(a) if an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall
end on the immediately succeeding Business Day (unless
such succeeding Business Day would be the first
Business Day of a calendar month, in which case such
Interest Period shall end on the immediately preceding
Business Day);
(b) if there exists no day in the appropriate subsequent
calendar month numerically corresponding to the first
day of such Interest Period, such Interest Period shall
end on the last Business Day of such month; and
(c) the Company may not select any Interest Period which
extends beyond the scheduled Termination Date.
Lender - see the Preamble.
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Lien means, when used with respect to any Person, any
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interest of any other Person in any real or personal property,
asset or other right owned or being purchased or acquired by such
Person which secures payment or performance of any obligation and
7
shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a
matter of law, by judicial process or otherwise.
Loan - see Section 2.1.
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Management Stock Agreement means any agreement between the
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Company and key employees which provides for the sale of stock to
employees with repurchase rights of, and obligations in, the
Company.
Margin Stock means any "margin stock" as defined in
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Regulation U of the Board of Governors of the Federal Reserve
System.
Material Adverse Effect means a material adverse effect on
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the ability of the Company to timely and fully perform any of its
payment or other material obligations under this Agreement or any
Note.
Material Subsidiary means any Subsidiary which either (a)
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has assets which constitute 5% or more of the consolidated assets
of the Company and its Subsidiaries or (b) has revenues during
its most recently-ended fiscal year which constitute more than 5%
of the consolidated revenues of the Company and its Subsidiaries
during the most recently-ended Fiscal Year.
Multiemployer Plan means a "multiemployer plan" as defined
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in section 4001(a)(3) of ERISA which is maintained for employees
of the Company or any ERISA Affiliate of the Company or more.
Note - see Section 3.1.
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Objecting Lender - see Section 2.9.
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Occupational Safety and Health Law means the Occupational
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Safety and Health Act of 1970 and any other federal, state or
local statute, law, ordinance, code, rule, regulation, order or
decree regulating or relating to, or imposing liability or
standards of conduct concerning, employee health and/or safety,
as now or at any time hereafter in effect.
Participant - see Section 14.9.2.
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PBGC means the Pension Benefit Guaranty Corporation and any
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entity succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined
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in section 3(2) of ERISA, which is subject to title IV of ERISA
(other than a Multiemployer Plan), and to which the Company or
any ERISA Affiliate may have any liability, including any
8
liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
Percentage means as to any Lender the percentage which the
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amount of such Lender's Commitment is of the aggregate amount of
Commitments (or, if the Commitments have terminated, which the
principal amount of such Lender's outstanding Loans is of the
principal amount of all outstanding Loans). The Percentages of
the Lenders as of the Effective Date are set forth on Schedule I.
Person means any natural person, corporation, partnership,
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trust, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other
capacity.
Reference Lender means each of NationsBank, The Bank of New
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York, The Bank of Nova Scotia and Continental.
Reference Rate means at any time the rate per annum then
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most recently announced by Continental as its reference rate at
Chicago, Illinois.
Release means a "release", as such term is defined in
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CERCLA.
Required Lenders means Lenders having an aggregate
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Percentage of 66-2/3% or more.
SEC means the Securities and Exchange Commission.
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Subsidiary means, with respect to any Person, any
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corporation of which such Person and/or its other Subsidiaries
own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election
of directors. Unless the context otherwise requires, each
reference to Subsidiaries herein shall be a reference to
Subsidiaries of the Company.
Suretyship Liability means any agreement, undertaking or
--------------------
other contractual arrangement by which any Person guarantees,
endorses or otherwise becomes or is contingently liable upon (by
direct or indirect agreement, contingent or otherwise, to provide
funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any
indebtedness, obligation or other liability (including accounts
payable) of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of
any other Person. The amount of any Person's obligation under
9
any Suretyship Liability shall (subject to any limitation set
forth therein) be deemed to be the principal amount of the
indebtedness, obligation or other liability guaranteed thereby.
Termination Date means June 30, 1999, as such date is
----------------
extended from time to time pursuant to Section 2.9 or such other
date on which the Commitments shall terminate pursuant to Section
6.1 or 12.2.
Type of Loan or Borrowing - see Section 2.2. The types of
-------------------------
Loans or borrowings under this Agreement are as follows:
Floating Rate Loans or borrowings and Eurodollar Loans or
borrowings.
Unmatured Event of Default means any event which if it
--------------------------
continues uncured will, with lapse of time or notice or lapse of
time and notice, constitute an Event of Default.
Welfare Plan means a "welfare plan", as such term is defined
------------
in section 3(1) of ERISA.
1.2 Computations; Changes in GAAP. Where the character or
-----------------------------
amount of any asset or liability or any item of income or expense
is required to be determined, or any consolidation or other
accounting computation is required to be made, for purposes of
this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this
Agreement, be made in accordance with GAAP. If any change in
accounting principles from those used in the preparation of the
audited financial statements referred to in Section 9.4 hereafter
occasioned by the promulgation of any rule, regulation,
pronouncement or opinion by or required by the Financial
Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with
similar functions) results in a change in the method of
calculation of financial covenants, standards or terms found in
Section 1 or 10, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria
for evaluating the Company's financial condition shall be the
same after such change as if such change had not been made.
1.3 Cross-References; Section Captions. A Section, an
----------------------------------
Exhibit or a Schedule is, unless otherwise stated, a reference to
a section hereof or an exhibit or schedule hereto, as the case
may be. Section captions are for convenience only and shall not
affect the interpretation of this Agreement.
10
SECTION 2 COMMITMENTS OF THE LENDERS; TYPES OF LOANS;
BORROWING AND CONVERSION PROCEDURES.
2.1 Commitments. Subject to the terms and conditions of
-----------
this Agreement, each of the Lenders, severally and for itself
alone, agrees to make loans to the Company on a revolving basis
(collectively the "Loans" and individually each a "Loan") from
time to time before the Termination Date in such Lender's
Percentage of such aggregate amounts as the Company may from time
to time request from all Lenders; provided, however, that (i) the
aggregate principal amount of all Loans which any Lender shall be
committed to have outstanding hereunder shall not at any time
exceed the amount of such Lender's Commitment; and (ii) the
aggregate principal amount of all Loans which all Lenders shall
be committed to have outstanding hereunder shall not at any time
exceed $400,000,000 (as such amount is reduced from time to time
pursuant to Section 6.1).
2.2 Various Types of Loans. Each Loan shall be either a
----------------------
Floating Rate Loan or a Eurodollar Loan (each a "type" of Loan),
as the Company shall specify in the related notice of borrowing
or conversion pursuant to Section 2.3 or 2.4. Eurodollar Loans
having the same Interest Period are sometimes called a "Group" or
collectively "Groups". Floating Rate Loans and Eurodollar Loans
may be outstanding at the same time, provided that (i) not more
than eight different Groups of Loans shall be outstanding at any
one time and (ii) the aggregate principal amount of each Group of
Loans shall at all times (including after giving effect to any
conversion or continuation of any Loans) be at least $10,000,000
and an integral multiple of $1,000,000.
2.3 Borrowing Procedures. The Company shall give written
--------------------
or telephonic notice to the Agent of each proposed borrowing not
later than (a) in the case of a Floating Rate borrowing, 11:00
a.m., Chicago time, on the proposed date of such borrowing, and
(b) in the case of a Eurodollar borrowing, 11:00 a.m., Chicago
time, at least three Business Days prior to the proposed date of
such borrowing. Each such notice shall be effective upon receipt
by the Agent and shall specify the date, amount and type of
borrowing and, in the case of a Eurodollar borrowing, the initial
Interest Period therefor. Promptly upon receipt of such notice,
the Agent shall advise each Lender thereof. Not later than
1:00 p.m., Chicago time, on the date of a proposed borrowing,
each Lender shall provide the Agent at the principal office of
the Agent in Chicago with immediately available funds covering
such Lender's Percentage of such borrowing and, subject to the
satisfaction of the conditions precedent set forth in Section 11
with respect to such borrowing, the Agent shall pay over such
funds to the Company on the requested borrowing date. Each
borrowing shall be on a Business Day. Each borrowing shall be in
an aggregate amount of at least $1,000,000, in the case of
11
Floating Rate Loans, or $10,000,000, in the case of Eurodollar
Loans, and shall be in an integral multiple of $1,000,000.
2.4 Continuation and Conversion Procedures. Subject to the
--------------------------------------
provisions of the last sentence of Section 2.2, the Company may
convert all or any part of any outstanding Loan into a Loan of a
different type, or continue all or any part of any outstanding
Eurodollar Loan for a succeeding Interest Period beginning on the
last day of the current Interest Period for such Loan, by giving
written or telephonic notice to the Agent not later than (a) in
the case of conversion into a Floating Rate Loan, 11:00 a.m.,
Chicago time, on the proposed date of such conversion, and (b) in
the case of a conversion into or continuation of a Eurodollar
Loan, 11:00 a.m., Chicago time, at least three Business Days
prior to the proposed date of such conversion or continuation.
Each such notice shall be effective upon receipt by the Agent and
shall specify the date and amount of such conversion or
continuation, the Loan to be so converted or continued and, in
the case of a conversion into or continuation of a Eurodollar
Loan, the initial or subsequent Interest Period therefor, as
applicable. Promptly upon receipt of such notice, the Agent
shall advise each Lender thereof. Subject to Section 2.6, such
Loan shall be so converted or continued on the requested date of
conversion or continuation. Each conversion and continuation
shall be on a Business Day. If the Company fails to give timely
notice of continuation of a Eurodollar Loan, such Loan shall
automatically convert to a Floating Rate Loan on the last day of
the Interest Period therefor.
2.5 Warranty upon Conversion or Continuation. Each notice
----------------------------------------
of conversion or continuation pursuant to Section 2.4 shall
automatically constitute a warranty by the Company to the Agent
and each Lender to the effect that, on the date of such requested
conversion or continuation, no Event of Default or Unmatured
Event of Default shall exist.
2.6 Conditions. Notwithstanding any other provision of
----------
this Agreement, no Lender shall be obligated to make any Loan, or
to convert into or permit the continuation at the end of the
applicable Interest Period of any Eurodollar Loan, if an Event of
Default or Unmatured Event of Default exists.
2.7 Pro Rata Treatment. All borrowings, conversions and
------------------
repayments shall be effected so that after giving effect thereto
each Lender will have a pro rata share (according to its
Percentage) of all types and Groups of Loans.
2.8 Commitments Several. The failure of any Lender to make
-------------------
a requested Loan on any date shall not relieve any other Lender
of its obligation (if any) to make a Loan on such date, but no
12
Lender shall be responsible for the failure of any other Lender
to make any Loan to be made by such other Lender.
2.9 Extension of Termination Date. On or before May 1 of
-----------------------------
each year, commencing on May 1, 1995, the Company may, at its
option, deliver to the Agent (which shall promptly notify each
Lender) a signed copy of an extension request (an "Extension
Request") in the form of Exhibit B, requesting an extension of
the Termination Date for a period of one year. On or before June
1 of each year that the Company has delivered an Extension
Request, each Lender shall have the right, in its sole and
absolute discretion, to deliver a written notice to the Agent
consenting to or rejecting the requested extension. If a Lender
has not given such notice to the Agent by June 1 of such year,
such Lender shall be deemed not to have consented to such
extension. If all Lenders consent to an Extension Request, the
Termination Date shall be extended for an additional year
effective on June 1 of the applicable year. If any Lender (an
"Objecting Lender") rejects, or is deemed not to have consented
to, an Extension Request by June 1 of the applicable year, the
Termination Date shall not be so extended; provided that if
Lenders with an aggregate Percentage of 20% or less are Objecting
Lenders, then the Termination Date shall be so extended if, on or
before June 30 of the applicable year, the Company (a) replaces
each Objecting Lender pursuant to Section 8.7 with Lenders (which
may be existing or new Lenders) which consent to the applicable
Extension Request or (b) to the extent all Objecting Lenders have
not been so replaced, by notice to the Agent and each Objecting
Lender, terminates the Commitments of all Objecting Lenders (and
concurrently pays to the Agent for the account of each Objecting
Lender all amounts owed to such Objecting Lender hereunder) and
reduces the aggregate amount of all of the Commitments by a
corresponding amount.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Lender shall be evidenced by
-----
a promissory note (as amended, supplemented, replaced or
otherwise modified from time to time, individually each a "Note"
and collectively for all Lenders the "Notes") substantially in
the form set forth in Exhibit A, with appropriate insertions,
dated the Effective Date (or such other date as shall be
satisfactory to the Agent), payable to the order of such Lender
in the principal amount of the Commitment of such Lender (or, if
less, in the aggregate unpaid principal amount of such Lender's
Loans) on the Termination Date.
3.2 Recordkeeping. Each Lender shall record in its
-------------
records, or at its option on the schedule attached to its Note,
the date and amount of each Loan made by such Lender, each
repayment or conversion thereof and, in the case of each
Eurodollar Loan, the
13
dates on which each Interest Period for such Loan shall begin and
end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and
unpaid on such Note. The failure to so record any such amount or
any error in so recording any such amount shall not, however,
limit or otherwise affect the obligations of the Company
hereunder or under any Note to repay the principal amount of the
Loans evidenced by such Note together with all interest accruing
thereon.
SECTION 4 INTEREST.
4.1 Interest Rates. The Company promises to pay interest
--------------
on the unpaid principal amount of each Loan for the period
commencing on and including the date of such Loan to but
excluding the date such Loan is paid in full, as follows:
(a) at all times while such Loan is a Floating Rate
Loan, at a rate per annum equal to the Alternate Reference
Rate from time to time in effect; and
(b) at all times while such Loan is a Eurodollar Loan,
at a rate per annum equal to the Eurodollar Rate (Reserve
Adjusted) applicable to each Interest Period for such Loan
plus 0.275%;
provided, however, that if any principal of any Loan is not paid
when due (by acceleration or otherwise), such principal shall
thereafter bear interest at a rate per annum equal to the sum of
the Alternate Reference Rate from time to time in effect plus 1%.
4.2 Interest Payment Dates. Accrued interest on each
----------------------
Floating Rate Loan shall be payable on the last day of each
January, April, July and October and at maturity. Accrued
interest on each Eurodollar Loan shall be payable on the last day
of each Interest Period relating to such Loan (and, in the case
of any Eurodollar Loan with an Interest Period exceeding three
months, on each three-month anniversary of the first day of such
Interest Period) and at maturity. After maturity, accrued
interest on all Loans shall be payable on demand.
4.3 Setting and Notice of Eurodollar Rates. The applicable
--------------------------------------
Eurodollar Rate for each Interest Period shall be determined by
the Agent, and notice thereof shall be given by the Agent
promptly to the Company and each Lender. Each determination of
the applicable Eurodollar Rate by the Agent shall be conclusive
and binding upon the parties hereto, in the absence of
demonstrable error. The Agent shall, upon written request of the
Company or any Lender, deliver to the Company or such Lender a
statement showing the computations used by the Agent in
determining any applicable Eurodollar Rate hereunder.
14
Each Reference Lender agrees to use reasonable efforts to
timely notify the Agent of its applicable rate for each Interest
Period (as contemplated in the definition of Eurodollar Rate).
If, as to any Interest Period, any Reference Lender is unable or
fails to notify the Agent of its applicable rate by 11:00 a.m.,
Chicago time, two Business Days before such Interest Period, then
the Eurodollar Rate shall be determined on the basis of the rate
of the other Reference Lenders.
4.4 Computation of Interest. Interest shall be computed
-----------------------
for the actual number of days elapsed on the basis of a year of
360 days (or, in the case of Floating Rate Loans bearing interest
at the Reference Rate, 365 or 366 days, as appropriate). The
applicable interest rate for each Floating Rate Loan shall change
simultaneously with each change in the Reference Rate.
SECTION 5 FEES.
5.1 Facility Fee. The Company agrees to pay to the Agent
------------
for the account of each Lender a facility fee for the period from
and including the Effective Date to but excluding the Termination
Date in an amount equal to 0.15% per annum of the daily average
of the amount of such Lender's Commitment (whether used or
unused). Such facility fee shall be payable in arrears on the
last day of each calendar quarter and on the Termination Date for
any period then ending for which such facility fee shall not have
been theretofore paid. The facility fee shall be computed for
the actual number of days elapsed on the basis of a year of 360
days.
5.2 Agent's Fee. The Company agrees to pay to the Agent
-----------
for its own account such fees as are agreed to from time to time
by the Company and the Agent.
SECTION 6 REDUCTION OR TERMINATION OF THE COMMITMENTS;
PREPAYMENTS.
6.1 Reduction or Termination of the Commitments. The
-------------------------------------------
Company may from time to time on at least five Business Days'
prior written notice received by the Agent (which shall promptly
advise each Lender thereof) permanently reduce the amount of the
Commitments to an amount not less than the aggregate unpaid
principal amount of the Loans. Any such reduction shall be in an
amount that is an integral multiple of $10,000,000 and shall be
pro rata among the Lenders according to their respective
Percentages. The Company may at any time on like notice
terminate the Commitments upon payment in full of all Loans and
all other obligations of the Company hereunder.
6.2 Prepayments. The Company may from time to time prepay
-----------
the Loans in whole or in part, provided that (a) the Company
15
shall give the Agent (which shall promptly advise each Lender)
written notice thereof not later than 11:00 a.m., Chicago time,
on the date of such prepayment, in the case of Floating Rate
Loans, and not less than two Business Days prior to the date of
such prepayment, in the case of Eurodollar Loans, in each case
specifying the Loans to be prepaid and the date (which shall be a
Business Day) and amount of prepayment, (b) each partial
prepayment of Loans shall be in an aggregate principal amount of
at least $10,000,000 and an integral multiple of $1,000,000 and
(c) any prepayment of Eurodollar Loans on a day other than the
last day of an Interest Period therefor shall be subject to
Section 8.4. After giving effect to any prepayment of Eurodollar
Loans, each Group of Eurodollar Loans shall be at least
$10,000,000 and an integral multiple of $1,000,000.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or
------------------
interest on the Notes, and of all fees, shall be made by the
Company to the Agent in immediately available funds at its office
in Chicago not later than noon, Chicago time, on the date due;
and funds received after that hour shall be deemed to have been
received by the Agent on the immediately following Business Day.
The Agent shall promptly remit to each Lender its share of all
such payments received in collected funds by the Agent for the
account of such Lender.
All payments under Sections 8.1 and 8.4 shall be made by the
Company directly to the Lender entitled thereto.
7.2 Application of Certain Payments. Each payment of
-------------------------------
principal shall be applied to such Loans as the Company shall
direct by notice to be received by the Agent on or before the
date of such payment or, in the absence of such notice, as the
Agent shall determine in its discretion. Concurrently with each
remittance to any Lender of its share of any such payment, the
Agent shall advise such Lender as to the application of such
payment.
7.3 Due Date Extension. If any payment of principal or
------------------
interest with respect to any of the Notes, or of any fee, falls
due on a day which is not a Business Day, then such due date
shall be extended to the immediately following Business Day
(unless, in the case of a Eurodollar Loan, such immediately
following Business Day is the first Business Day of a calendar
month, in which case such due date shall be the immediately
preceding Business Day), and, in the case of principal,
additional interest shall accrue and be payable for the period of
any such extension.
16
7.4 Setoff. The Company agrees that the Agent and each
------
Lender have all rights of set-off and bankers' lien provided by
applicable law, and in addition thereto, the Company agrees that
at any time any Unmatured Event of Default under Section 12.1.4
or any Event of Default exists, the Agent and each Lender may
apply to the payment of any obligations of the Company hereunder,
whether or not then due), any and all balances, credits,
deposits, accounts or moneys of the Company (excluding amounts
held in trust accounts for the benefit of Persons other than the
Company) then or thereafter with the Agent or such Lender.
7.5 Proration of Payments. If any Lender shall obtain by
---------------------
payment or other recovery (whether voluntary, involuntary, by
application of offset or otherwise) on account of principal of or
interest on any Note in excess of its pro rata share of payments
and other recoveries obtained by all Lenders on account of
principal of and interest on all Notes (other than any non-pro
rata interest payment resulting from a Loan being an Affected
Loan or as a result of replacement of a Lender pursuant to
Section 8.7), such Lender shall purchase from the other Lenders
such participation in the Notes held by them as shall be
necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided,
however, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery.
7.6 Taxes.
-----
(a) All payments by the Company of principal, interest,
fees, indemnities and other amounts payable hereunder and under
the Notes shall be made to the recipient thereof without setoff
or counterclaim and free and clear of, and without withholding or
deduction for or on account of, any present or future Taxes
(other than Excluded Taxes) now or hereafter imposed on such
recipient or its income, property, assets or franchises (such
recipient's "Recipient Taxes"), except to the extent that such
withholding or deduction (i) is required by applicable law, (ii)
results from the breach by such recipient of its Exemption
Agreement (as defined below) or (iii) would not be required if
such recipient's Exemption Representation (as defined below) were
true. If any such withholding or deduction is required by
applicable law, the Company will:
(A) pay to the relevant authorities the full amount so
required to be withheld or deducted;
(B) promptly forward to the Agent an official receipt
or other documentation satisfactory to the Agent evidencing
such payment to such authorities; and
17
(C) except to the extent that such withholding or
deduction results from the breach, by the recipient of a
payment, of its Exemption Agreement or would not be required
if such recipient's Exemption Representation were true, pay
to the Agent for the account of the relevant recipient such
additional amount as is necessary to ensure that the net
amount actually received by such recipient will equal the
full amount such recipient would have received had no such
withholding or deduction been required.
For the purposes of this Section 7.6, (a) "Taxes" means, with
respect to any Person, taxes, assessments or other governmental
charges or levies imposed upon such Person, such Person's income
or any of such Person's properties, franchises or assets; and (b)
"Excluded Taxes" means, in the case of payments made to any
Lender or the Agent, all of the following: taxes imposed upon
the overall gross or net income or receipts of such Lender or the
Agent, franchise taxes imposed upon such Lender or the Agent with
respect to its gross or net income or receipts by the
jurisdiction under the laws of which such Lender or the Agent, as
the case may be, is organized or any political subdivision
thereof, and franchise taxes imposed upon such Lender or the
Agent with respect to its gross or net income or receipts by the
jurisdiction in which such Lender's or the Agent's applicable
lending office is located or any political subdivision thereof.
(b) In consideration of the Company's agreements in clause
(a) of this Section 7.6, each Lender which is not organized under
the laws of the United States or a State thereof hereby agrees
(such Lender's "Exemption Agreement"), to the extent permitted by
applicable law (including any applicable double taxation treaty
of the jurisdiction of its incorporation and the jurisdiction in
which its Eurodollar Office is located), to execute and deliver
to the Company (i) on or before the first date on which any
payment is to be made to such Lender hereunder, a United States
Internal Revenue Service Form 1001 or 4224 (or successor form)
and, if reasonably requested by the Company, Internal Revenue
Service Form W-8 or W-9 (or successor form), as appropriate, in
each case properly completed and claiming a complete exemption,
from withholding or deduction for or on account of Recipient
Taxes of such Lender, and (ii) a new Form 1001 or 4224 (or
successor form) and, if reasonably requested by the Company,
Internal Revenue Service Form W-8 or W-9 (or successor form), as
appropriate, upon the expiration or obsolescence of any
previously delivered Form.
(c) Each Lender hereby represents and warrants (such
Lender's "Exemption Representation") to the Company that on the
Effective Date (or, if later, the date such Lender becomes a
party to this Agreement) it is entitled to receive payments of
principal of, and interest on, Loans made by such Lender without
18
withholding or deduction for or on account of such Lender's
Recipient Taxes imposed by the United States of America or any
political subdivision thereof.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR
EURODOLLAR LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the
---------------
adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation (including, without
limitation, Regulation D of the Board of Governors of the Federal
Reserve System), or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any
Eurodollar Office of such Lender) with any request or directive
(whether or not having the force of law) of any such authority,
central bank or comparable agency
(A) shall subject any Lender (or any Eurodollar Office
of such Lender) to any tax, duty or other charge with
respect to its Eurodollar Loans, its Note or its obligation
to make Eurodollar Loans, or shall change the basis of
taxation of payments to any Lender of the principal of or
interest on its Eurodollar Loans or any other amounts due
under this Agreement in respect of its Eurodollar Loans or
its obligation to make Eurodollar Loans (except for taxes
imposed on or measured by the overall gross or net income or
receipts of such Lender or its Eurodollar Office imposed by
the jurisdiction, or any political subdivision thereof or
taxing authority therein, in which such Lender's principal
executive office or Eurodollar Office is located or in which
such Lender is incorporated); or
(B) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve imposed
by the Board of Governors of the Federal Reserve System, but
excluding any reserve included in the determination of
interest rates pursuant to Section 4), special deposit or
similar requirement against assets of, deposits with or for
the account of, or credit extended by any Lender (or any
Eurodollar Office of such Lender); or
(C) shall impose on any Lender (or its Eurodollar
Office) any other condition affecting its Eurodollar Loans,
its Note or its obligation to make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to
(or in the case of Regulation D referred to above, to impose a
cost on) such Lender (or any Eurodollar Office of such Lender) of
making or maintaining any Eurodollar Loan, or to reduce the
19
amount of any sum received or receivable by such Lender (or its
Eurodollar Office) under this Agreement or under its Note with
respect thereto, then within 15 days after demand by such Lender
(which demand shall be accompanied by a statement setting forth
the basis of such demand, a copy of which shall be furnished to
the Agent), the Company shall pay directly to such Lender such
additional amount or amounts as will compensate such Lender for
such increased cost or such reduction.
(b) If, after the Effective Date, any Lender shall
reasonably determine that the adoption or phase-in of any
applicable law, rule or regulation regarding capital adequacy, or
any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance
by any Lender (or its Eurodollar Office) or any Person
controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's
or such controlling Person's capital as a consequence of such
Lender's obligations hereunder (including, without limitation,
such Lender's Commitment) to a level below that which such Lender
or such controlling Person could have achieved but for such
adoption, change or compliance (taking into consideration such
Lender's or such controlling Person's policies with respect to
capital adequacy) by an amount deemed by such Lender or such
controlling Person to be material, then from time to time, within
15 days after demand by such Lender (which demand shall be
accompanied by a statement setting forth the basis of such
demand, a copy of which shall be furnished to the Agent), the
Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling Person
for such reduction.
8.2 Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If with respect to any Interest Period:
- - ------
(a) the Agent is advised by two or more Reference Lenders
that deposits in Dollars (in the applicable amounts) are not
being offered to such Reference Lenders in the relevant market
for such Interest Period, or the Agent otherwise reasonably
determines (which determination shall be binding and conclusive
on the Company) that by reason of circumstances affecting the
interbank eurodollar market adequate and reasonable means do not
exist for ascertaining the applicable Eurodollar Rate; or
(b) Lenders having an aggregate Percentage of 33% or more
advise the Agent that the Eurodollar Rate (Reserve Adjusted) as
determined by the Agent will not adequately and fairly reflect
20
the cost to such Lenders of maintaining or funding such Loans for
such Interest Period, or that the making or funding of Eurodollar
Loans has become impracticable as a result of an event occurring
after the date of this Agreement which in the reasonable opinion
of such Lenders materially affects such Loans,
then the Agent shall promptly notify the other parties thereof
and, so long as such circumstances shall continue, (i) no Lender
shall be under any obligation to make or convert into Eurodollar
Loans and (ii) on the last day of the current Interest Period for
each Eurodollar Loan, such Loan shall, unless then repaid in
full, automatically convert to a Floating Rate Loan.
8.3 Changes in Law Rendering Eurodollar Loans Unlawful.
--------------------------------------------------
In the event that any change in (including the adoption of any
new) applicable laws or regulations, or any change in the
interpretation of applicable laws or regulations by any
governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith
judgment of any Lender cause a substantial question as to whether
it is) unlawful for any Lender to make, maintain or fund
Eurodollar Loans, then such Lender shall promptly notify each of
the other parties hereto and, so long as such circumstances shall
continue, (a) such Lender shall have no obligation to make or
convert into Eurodollar Loans (but shall make Floating Rate Loans
concurrently with the making of or conversion into Eurodollar
Loans by the Lenders which are not so affected, in each case in
an amount equal to such Lender's Percentage of all Eurodollar
Loans which would be made or converted into at such time in the
absence of such circumstances) and (b) on the last day of the
current Interest Period for each Eurodollar Loan of such Lender
(or, in any event, if such Lender so requests, on such earlier
date as may be required by the relevant law, regulation or
interpretation), such Eurodollar Loan shall, unless then repaid
in full, automatically convert to a Floating Rate Loan. Each
Floating Rate Loan made by a Lender which, but for the
circumstances described in the foregoing sentence, would be a
Eurodollar Loan (an "Affected Loan") shall, notwithstanding any
other provision of this Agreement, remain outstanding for the
same period as the Group of Eurodollar Loans of which such
Affected Loan would be a part absent such circumstances.
8.4 Funding Losses. The Company hereby agrees that upon
--------------
demand by any Lender (which demand shall be accompanied by a
statement setting forth the basis for the calculations of the
amount being claimed, a copy of which shall be furnished to the
Agent) the Company will indemnify such Lender against any net
loss or expense which such Lender may sustain or incur
(including, without limitation, any net loss or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund or maintain any Eurodollar
21
Loan, but excluding any loss of margin), as reasonably determined
by such Lender, as a result of (a) any payment or prepayment or
conversion of any Eurodollar Loan of such Lender on a date other
than the last day of an Interest Period for such Loan (including,
without limitation, any conversion pursuant to Section 8.3) or
(b) any failure of the Company to borrow or convert any Loans on
a date specified therefor in a notice of borrowing or conversion
pursuant to this Agreement (other than as a result of a default
by such Lender or the Agent). For this purpose, all notices to
the Agent pursuant to this Agreement shall be deemed to be
irrevocable.
8.5 Right of Lenders to Fund through Other Offices.
----------------------------------------------
Each Lender may, if it so elects, fulfill its commitment as to
any Eurodollar Loan by causing a foreign branch or affiliate of
such Lender to make such Loan, provided that in such event for
the purposes of this Agreement such Loan shall be deemed to have
been made by such Lender and the obligation of the Company to
repay such Loan shall nevertheless be to such Lender and shall be
deemed held by it, to the extent of such Loan, for the account of
such branch or affiliate.
8.6 Discretion of Lenders as to Manner of Funding.
---------------------------------------------
Notwithstanding any provision of this Agreement to the contrary,
each Lender shall be entitled to fund and maintain its funding of
all or any part of its Loans in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Lender had
actually funded and maintained each Eurodollar Loan during each
Interest Period for such Loan through the purchase of deposits
having a maturity corresponding to such Interest Period and
bearing an interest rate equal to the Eurodollar Rate for such
Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected
----------------------------------------------------
Lender or Objecting Lender. (a) Each Lender shall promptly
- - --------------------------
notify the Company and the Agent of any event of which it has
knowledge which will result in, and will use reasonable
commercial efforts available to it (and not, in such Lender's
sole judgment, otherwise disadvantageous to such Lender) to
mitigate or avoid, (i) any obligation by the Company to pay any
amount pursuant to Section 7.6 or 8.1 (ii) the occurrence of any
circumstance of the nature described in Section 8.2 or 8.3 (and,
if any Lender has given notice of any such event described in
clause (i) or (ii) above and thereafter such event ceases to
exist, such Lender shall promptly so notify the Company and the
Agent). Without limiting the foregoing, each Lender will
designate a different funding office if such designation will
avoid (or reduce the cost to the Company of) any event described
in clause (i) or (ii) of the preceding sentence and such
22
designation will not, in such Lender's reasonable judgment, be
otherwise disadvantageous to such Lender.
(b) At any time any Lender is an Affected Lender or an
Objecting Lender, the Company may replace such Lender as a party
to this Agreement with one or more other bank(s) or financial
institution(s) reasonably satisfactory to the Agent, such bank(s)
or financial institution(s) to have a Commitment or Commitments,
as the case may be, in such amounts as shall be reasonably
satisfactory to the Agent (and upon notice from the Company such
Affected Lender or Objecting Lender shall assign, without
recourse or warranty, its Commitment, its Loans, its Note and all
of its other rights and obligations hereunder to such replacement
bank(s) or other financial institution(s) for a purchase price
equal to the sum of the principal amount of the Loans so
assigned, all accrued and unpaid interest thereon, its ratable
share of all accrued and unpaid non-use fees, any amounts payable
under Section 8.4 as a result of such Lender receiving payment of
any Eurodollar Loan prior to the end of an Interest Period
therefor and all other obligations owed to such Affected Lender
or Objecting Lender hereunder).
8.8 Conclusiveness of Statements; Survival of Provisions.
----------------------------------------------------
Determinations and statements of any Lender pursuant to Section
8.1, 8.2, 8.3 or 8.4 shall be conclusive absent demonstrable
error. Lenders may use reasonable averaging and attribution
methods in determining compensation under Sections 8.1 and 8.4,
and the provisions of such Sections shall survive repayment of
the Loans, cancellation of the Notes and any termination of this
Agreement (provided that any claim for compensation by a Lender
under such Sections shall be made to the Company not later than
45 days after the later to occur of repayment in full of the
Loans and termination of the Commitments).
SECTION 9 WARRANTIES.
To induce the Agent and the Lenders to enter into this
Agreement and to induce the Lenders to make Loans hereunder, the
Company warrants to the Agent and the Lenders that:
9.1 Organization, etc. The Company is a corporation duly
-----------------
organized, validly existing and in good standing under the laws
of the State of Delaware; each Subsidiary is duly organized and
validly existing under the laws of the jurisdiction of its
organization; and the Company and each Subsidiary is duly
qualified to do business in each other jurisdiction where the
nature of its business makes such qualification necessary, except
where such failure to so qualify would not have a Material
Adverse Effect.
23
9.2 Authorization; No Conflict. The execution and delivery
--------------------------
by the Company of this Agreement and each Note, the borrowings
hereunder, and the performance by the Company of its obligations
under this Agreement and each Note are within the corporate
powers of the Company, have been duly authorized by all necessary
corporate action on the part of the Company (including any
necessary shareholder action), have received all necessary
governmental approval, and do not and will not (a) violate any
provision of law, rule or regulation or any order, decree,
judgment or award which is binding on the Company or any
Subsidiary, (b) contravene or conflict with, or result in a
breach of, any provision of the Certificate of Incorporation, By-
Laws or other organizational documents of the Company or any
Subsidiary or of any agreement, indenture, instrument or other
document which is binding on the Company or any Subsidiary or (c)
result in, or require, the creation or imposition of any Lien on
any asset of the Company or any Subsidiary.
9.3 Validity and Binding Nature. This Agreement is, and
---------------------------
upon the execution and delivery thereof each Note will be, the
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
9.4 Financial Information. The Company's audited
---------------------
consolidated financial statements as at January 29, 1994 and
unaudited consolidated financial statements as at May 21, 1994,
copies of which have been furnished to the Lenders, have been
prepared in accordance with generally accepted accounting
principles (subject, in the case of such unaudited statements, to
the absence of footnotes and to normal year-end adjustments) and
fairly present the financial condition of the Company and its
Subsidiaries on a consolidated basis as of such dates and their
consolidated results of operations for the Fiscal Year and fiscal
period then ended.
9.5 No Material Adverse Change. Since the date of the
--------------------------
audited financial statements described in Section 9.4, there has
been no event or occurrence which has had or is reasonably likely
to have a Material Adverse Effect.
9.6 Litigation and Contingent Liabilities. Except as set
-------------------------------------
forth in the Company's Annual Report on Form 10-K for the Fiscal
Year ended January 29, 1994 and the Company's Quarterly Report on
Form 10-Q for the Fiscal Quarter ended May 21, 1994, no
litigation (including, without limitation, derivative actions),
arbitration proceeding or governmental proceeding is pending or,
to the Company's knowledge, threatened against the Company or any
Subsidiary which, if adversely decided, is reasonably likely to
result, either individually or collectively, in a Material
Adverse Effect. Other than any liability incident to such
litigation or proceedings, neither the Company nor any Subsidiary
24
has any material contingent liabilities not provided for or
disclosed in the financial statements referred to in Section 9.4.
9.7 Ownership of Properties; Liens. Each of the Company
------------------------------
and each Subsidiary owns good and sufficient title to, or a
subsisting leasehold interest in, all of its properties and
assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear of all Liens, except as permitted
pursuant to Section 10.7.
9.8 Subsidiaries. Set forth on Schedule II is a complete
------------
and accurate list of name and jurisdiction of organization of
each Subsidiary of the Company and the percentage ownership
interest of the Company and its other Subsidiaries in each such
Subsidiary.
9.9 Pension and Welfare Plans. During the twelve
-------------------------
consecutive-month period prior to the date of the execution and
delivery of this Agreement or the making of any Loan hereunder,
no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension
Plan sufficient to give rise to a lien under Section 302(f) of
ERISA. No condition exists or event or transaction has occurred
with respect to any Pension Plan which could result in the
incurrence by the Company of any material liability, fine or
penalty.
9.10 Regulated Industry. Neither the Company nor any
------------------
Subsidiary is (a) an "investment company" or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended, or (b) a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
9.11 Regulations G, U and X. Neither the Company nor any
----------------------
Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose
of purchasing or carrying Margin Stock, and no proceeds of any
Loan will be used for the purpose, whether immediate, incidental
or ultimate, of purchasing or carrying any Margin Stock or
maintaining or extending credit to others for such purpose.
9.12 Taxes. Each of the Company and each Subsidiary has
-----
filed all material tax returns and reports required by law to
have been filed by it and has paid all taxes and governmental
charges thereby shown to be owing, except any such taxes or
charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves shall
have been set aside on its books.
25
9.13 Environmental and Safety and Health Matters. To the
-------------------------------------------
best of the knowledge of the Company, after inquiry it has deemed
appropriate, the Company and each Subsidiary is in compliance
with all Environmental Laws and Occupational Safety and Health
Laws where failure to comply could have a Material Adverse
Effect. Neither the Company nor any Subsidiary has received
notice of any claims that any of them is not in compliance in all
material respects with any Environmental Law where failure to
comply could have a Material Adverse Effect.
9.14 Compliance with Law. Each of the Company and each
-------------------
Subsidiary is in compliance with all statutes, judicial and
administrative orders, permits and governmental rules and
regulations which are material to its business or the non-
compliance with which could result in any material fine, penalty
or liability.
9.15 Information. All information heretofore or
-----------
contemporaneously herewith furnished by the Company or any
Subsidiary to any Lender for purposes of or in connection with
this Agreement and the transactions contemplated hereby is, and
all information hereafter furnished by or on behalf of the
Company or any Subsidiary to any Lender pursuant hereto or in
connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or
certified, and such information, taken as a whole, does not and
will not omit to state any material fact necessary to make such
information, taken as a whole, not misleading.
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and
thereafter until all obligations hereunder and under the Notes
are paid in full, the Company agrees that, unless at any time the
Required Lenders shall otherwise expressly consent in writing, it
will:
10.1 Reports, Certificates and Other Information. Furnish
-------------------------------------------
to each Lender:
10.1.1 Audit Report. Promptly when available and in any
------------
event within 100 days after the close of each Fiscal Year, a copy
of the annual audit report of the Company and its Subsidiaries
for such Fiscal Year, including therein a consolidated balance
sheet of the Company and its Subsidiaries as of the end of such
Fiscal Year and consolidated statements of earnings and cash flow
of the Company and its Subsidiaries for such Fiscal Year
certified, without disclaimer of opinion and without
qualification as to going concern, by Deloitte & Touche or other
independent auditors of recognized national standing selected by
the Company, together with a certificate from such accountants to
26
the effect that, in making the examination necessary for the
signing of such annual report by such auditors, they have not
become aware of any Event of Default or Unmatured Event of
Default that has occurred and is continuing or, if they have
become aware of any such event, describing it in reasonable
detail.
10.1.2 Interim Reports. Promptly when available and in any
---------------
event within 60 days after the end of each Fiscal Quarter (except
the last Fiscal Quarter of each Fiscal Year), a consolidated
balance sheet of the Company and its Subsidiaries as of the end
of such quarter, and consolidated statements of earnings and cash
flow for such quarter and for the period beginning with the first
day of such Fiscal Year and ending on the last day of such
quarter, together with a certificate of the President, the Chief
Financial Officer, the Controller or the Treasurer of the Company
to the effect that such financial statements fairly present the
financial condition and results of operations of the Company and
its Subsidiaries as of the date and periods indicated (subject to
normal year-end adjustments).
10.1.3 Compliance Certificate. Concurrently with each set
----------------------
of financial statements delivered pursuant to Section 10.1.1 and
10.1.2, a certificate of the President, the Chief Financial
Officer, the Controller or the Treasurer of the Company (a) to
the effect that such officer is not aware of any Event of Default
or Unmatured Event of Default that has occurred and is continuing
or, if there is any such event, describing it in reasonable
detail, and (b) containing a computation of each of the financial
ratios and restrictions set forth in Section 10.6.
10.1.4 Reports to SEC. Promptly upon the filing or sending
--------------
thereof, a copy of any annual, periodic or special report or
registration statement (inclusive of exhibits thereto) filed by
the Company or any Subsidiary with the SEC or any securities
exchange and of each communication from the Company or any
Subsidiary to shareholders generally.
10.1.5 Notice of Default, Litigation and ERISA Matters.
-----------------------------------------------
Immediately upon becoming aware of any of the following, written
notice describing the same and the steps being taken by the
Company or the Subsidiary affected thereby with respect thereto:
(a) the occurrence of an Event of Default or an Unmatured Event
of Default; (b) any litigation, arbitration or governmental
investigation or proceeding not previously disclosed by the
Company to the Lenders which has been instituted or, to the
knowledge of the Company, is threatened against the Company or
any Subsidiary or to which any of the assets of any thereof is
subject which, if adversely determined, is reasonably likely to
have a Material Adverse Effect; (c) the institution of any steps
by the Company, any of its Subsidiaries or any other Person to
27
terminate any Pension Plan, or the failure to make a required
contribution to any Pension Plan if such failure is sufficient to
give rise to a lien under Section 302(f) of ERISA, or the taking
of any action with respect to a Pension Plan which could result
in the requirement that the Company furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence of
any event with respect to any Pension Plan which could result in
the incurrence by the Company of any material liability, fine or
penalty, or any material increase in the contingent liability of
the Company with respect to any post-retirement Welfare Plan
benefit; and (d) any other event or occurrence which has had or
is reasonably likely to have a Material Adverse Effect.
10.1.6 Subsidiaries. Promptly from time to time a written
------------
report of any change in the list of its Subsidiaries.
10.1.7 Other Information. From time to time such other
-----------------
information concerning the Company and its Subsidiaries as any
Lender or the Agent may reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each
------------------------------
Subsidiary to keep, its books and records reflecting all of its
business affairs and transactions in accordance with sound
business practices sufficient to allow the preparation of the
Company's consolidated financial statements in accordance with
GAAP; and permit, and cause each Subsidiary to permit, any Lender
or the Agent or any representative thereof, at such Lender's or
the Agent's expense unless an Event of Default exists, during
reasonable business hours and on reasonable notice, to visit any
or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and the Company hereby
authorizes such independent auditors to discuss such financial
matters with any Lender or the Agent or any representative
thereof), and to examine (and make copies of) any of its books or
other corporate records.
10.3 Insurance. Maintain, and cause each Subsidiary to
---------
maintain, with responsible and financially-sound insurance
companies or associations, insurance in such amounts and covering
such risks (and having such deductibles and self-insurance) as is
usually maintained by companies engaged in similar businesses and
owning similar properties similarly situated.
10.4 Compliance with Law; Payment of Taxes and Liabilities.
-----------------------------------------------------
(a) Comply, and cause each Subsidiary to comply, in all material
respects with all applicable laws, rules, regulations and orders
the non-compliance with which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
and (b) pay, and cause each Subsidiary to pay, prior to
delinquency, all taxes and other governmental charges against it
or any of its assets, provided, however, that the foregoing shall
28
not require the Company or any Subsidiary to pay any such tax or
charge so long as it shall contest the validity thereof in good
faith by appropriate proceedings and shall set aside on its books
adequate reserves with respect thereto.
10.5 Maintenance of Existence, etc. Maintain and preserve,
-----------------------------
and (subject to Section 10.10) cause each Subsidiary to maintain
and preserve, (a) its existence and good standing in the
jurisdiction of its organization and (b) its foreign
qualification in each other jurisdiction where the nature of its
business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good
standing will not have a Material Adverse Effect).
10.6 Financial Ratios and Restrictions.
---------------------------------
10.6.1 Minimum Consolidated Tangible Net Worth. Not at any
---------------------------------------
time permit Consolidated Tangible Net Worth to be less than the
sum of (a) $425,000,000 plus (b) 50% of the Company's cumulative
consolidated net earnings for all Fiscal Quarters ending after
January 30, 1994 (but disregarding any Fiscal Quarter in which
there is a loss) plus (c) 50% of the amount by which the
shareholders' equity of the Company is increased by the issuance
of capital stock (or the exercise of warrants or options in
respect thereof) after January 30, 1994.
10.6.2 Long-Term Liabilities to Net Worth Ratio. Not at
----------------------------------------
any time permit the ratio of Consolidated Long-Term Liabilities
to Consolidated Tangible Net Worth to exceed 1.5 to 1.
10.6.3 Fixed Charge Coverage Ratio. Not permit the Fixed
---------------------------
Charge Coverage Ratio as of the last day of any Fiscal Quarter to
be less than 1.4 to 1.
10.7 Limitation on Liens. Not, and not permit any Material
-------------------
Subsidiary to, create or permit to exist any Lien with respect to
any assets now owned or hereafter acquired, except:
(a) Liens existing on the date of this Agreement;
(b) Liens created by or resulting from any litigation or
legal proceeding which is currently being contested in
good faith by appropriate proceedings unless the
judgment secured thereby shall not have been stayed,
bonded or discharged within 60 days;
(c) Liens incidental to the normal conduct of business of
the Company or any Material Subsidiary or the ownership
of their respective assets and Liens to secure the
performance of bids, tenders or trade contracts,
materialmens' and mechanics' liens, and Liens to secure
29
statutory obligations, surety or appeal bonds or other Liens
of like general nature, in each case which are not incurred
in connection with the incurrence of Debt and which do not
in the aggregate impair the use of any such asset in the
operation of the business of the Company or any Material
Subsidiary or the value of any such asset for the purposes
of any such business;
(d) pledges or deposits to secure obligations under
workers' compensation and unemployment compensation
laws or similar legislation to secure public or
statutory obligations of the Company or any Material
Subsidiary;
(e) any Lien (i) on assets (including Liens arising under
Capital Leases) imposed in connection with the
financing of all or part of the purchase price therefor
on the cost of the construction, extension or
improvement of any new or existing asset created
contemporaneously with, or within 270 days after, such
acquisition, completion of such construction, such
extension or such improvement, (ii) existing on assets
at the time of the acquisition thereof by the Company
or any Material Subsidiary, (iii) existing on assets or
the outstanding shares or Debt of a corporation at the
time such corporation is merged into or consolidated
with the Company or any Material Subsidiary or at the
time of a sale, lease or other disposition of the
assets or outstanding shares of Debt of a corporation
or firm as an entirety to the Company or any Material
Subsidiary, or (iv) arising in connection with the
purchase of inventory, supplies or services from trade
creditors on customary business terms; provided that
the amount secured by any Lien described in this clause
(e) shall not exceed the lesser of the fair market
value or cost of the related asset at the time of the
imposition of such Lien;
(f) Liens associated with any tenant's leasehold interest
in any asset of the Company or a Material Subsidiary
incurred solely in conjunction with leasing such asset;
(g) Liens for taxes or assessments or other governmental
charges on levies which either are not yet due and
payable or are currently being contested in good faith
by appropriate proceedings;
(h) Liens securing Debt of a Material Subsidiary owing to
the Company or another Material Subsidiary;
30
(i) the extension, renewal or replacement of any Lien
permitted by the foregoing clauses of this Section 10.7
in respect of the same asset subject to such Lien (but
without increase in the principal amount of the Debt
secured thereby);
(j) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or
zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the
activities of the Company and its Material Subsidiaries
or which customarily exist on properties of Persons
engaged in similar activities and similarly situated
and which do not in any event materially impair their
use in the operation of the business of the Company and
its Material Subsidiaries; and
(k) Liens not otherwise permitted by the foregoing clauses
of this Section 10.7 so long as the sum, without
duplication, of (x) all obligations secured by such
Liens and (y) Debt of Material Subsidiaries permitted
solely by clause (f) of Section 10.8 does not exceed
15% of Consolidated Total Assets.
10.8 Debt. Not permit any Material Subsidiary to incur or
----
permit to exist any Debt, except:
(a) Debt owed to the Company or to another Material
Subsidiary;
(b) Debt outstanding on the date hereof;
(c) Debt secured by Liens permitted by clause (e) of
Section 10.7;
(d) Debt outstanding when such entity becomes a Material
Subsidiary or is merged or consolidated with another
Material Subsidiary;
(e) Debt in respect of commercial letters of credit issued
to support the purchase of goods by the applicable
Material Subsidiary in the ordinary course of business;
and
(f) Debt not otherwise permitted by the foregoing clauses
of this Section 10.8 so long as the sum, without
duplication, of (x) all such Debt and (y) all
obligations secured by Liens permitted solely by
clause (k) of Section 10.7 does not exceed 15% of
Consolidated Total Assets.
31
10.9 Guaranties, Loans and Advances. Not, and not permit
------------------------------
any Material Subsidiary to, become or be a guarantor or surety
of, or otherwise become or be responsible in any manner (whether
by agreement to purchase any obligations, stock, assets, goods or
services, or to supply or advance any funds, assets, goods or
services, or otherwise) with respect to, any undertaking of any
other Person or make or permit to exist any loans or advances to
any other Person, except for (i) the endorsement, in the ordinary
course of collection, of instruments payable to it or to its
order, (ii) loans or advances constituting indebtedness of
Subsidiaries to the Company or to other Subsidiaries or of the
Company to Subsidiaries, guaranties by the Company of the
obligations of Subsidiaries and guaranties by Subsidiaries of
obligations of the Company and of other Subsidiaries,
(iii) advances not to exceed, in the aggregate for Company and
all Material Subsidiaries at any one time outstanding, $100,000
to officers, employees, subcontractors or suppliers, (iv) loans
or advances to employees in connection with the purchase of the
Company's stock under Management Stock Agreements, (v) advances
to employees for moving and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business,
(vi) notes to the Company from Frontier Associates in the amount
of $5,000,000, (vii) guaranties provided for in Section 1.9 of
the Assets Purchase Agreement, (viii) continuing obligations of
the Company or any Subsidiary, not exceeding $9,000,000 in the
aggregate for the Company and all Subsidiaries payable during any
Fiscal Year, as assignor of any lease or other agreement which
has been assigned to any other Person, (ix) guaranties by Company
or any Subsidiary of the performance of obligations of
Subsidiaries (other than obligations constituting Debt for
Borrowed Money except for obligations under Capital Leases)
entered into in the ordinary course of business, and (x) letters
of credit issued to Multiemployer Plans.
10.10 Mergers, Consolidations, Sales. Not, and not permit
------------------------------
any Material Subsidiary (or Subsidiary that would become a
Material Subsidiary as a result of such transaction) to, be a
party to any merger or consolidation, or, except in the ordinary
course of its business, sell, transfer, convey or lease all or
any substantial part of its assets or sell or assign with or
without recourse any receivables, except that (a) the Company may
be a party to a merger or consolidation if the Company is the
surviving corporation and no Event of Default or Unmatured Event
of Default exists or would result from such merger or
consolidation, and (b) any Subsidiary may be a party to a merger
or consolidation, or sell all or substantially all of its assets,
if the Company (directly or indirectly through its Subsidiaries)
maintains a percentage of ownership of the surviving or acquiring
corporation similar to its percentage of ownership of the prior
or selling Subsidiary and no Event of Default or Unmatured Event
of Default, exists or would result from such merger,
32
consolidation or sale. Notwithstanding the foregoing, the
Company or any Material Subsidiary may contribute all of the
stock of, or all or substantially all of the assets of, a
Material Subsidiary to a joint venture which is at least 50%
owned by the Company or a Material Subsidiary so long as (i) no
Event of Default or Unmatured Event of Default exists or would
result therefrom and (ii) the aggregate amount so contributed by
the Company or any Material Subsidiary in any Fiscal Year will
not exceed 5% of the assets of the Company and its Subsidiaries
as of the end of the preceding Fiscal Year.
10.11 Company's and Subsidiaries' Stock. Not permit any
---------------------------------
Subsidiary to purchase or otherwise acquire any shares of capital
stock of the Company; and not take any action, or permit any
Subsidiary to take any action, which will, so long as any shares
of capital stock or Debt of any corporation which is a Subsidiary
at the date of this Agreement are owned by the Company or any
Subsidiary, result in a decrease in the percentage of the
outstanding shares of capital stock of such corporation owned at
the date of this Agreement by the Company and its other
Subsidiaries, except that the Company or any Subsidiary may sell
or otherwise dispose of stock or ownership interests in any
Subsidiary that is not a Material Subsidiary for arms-length
consideration. Notwithstanding the foregoing, the Company or any
Material Subsidiary may contribute all of the stock of, or all or
substantially all of the assets of, a Material Subsidiary to a
joint venture which is at least 50% owned by the Company or a
Material Subsidiary so long as (i) no Event of Default or
Unmatured Event of Default exists or would result therefrom and
(ii) the aggregate amount so contributed by the Company or any
Material Subsidiary in any Fiscal Year will not exceed 5% of the
assets of the Company and its Subsidiaries as of the end of the
preceding Fiscal Year.
10.12 Unconditional Purchase Obligations. Not, and not
----------------------------------
permit any Material Subsidiary to, enter into or be a party to
any contract for the purchase of materials, supplies or other
property or services, if such contract requires that payment be
made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services.
10.13 Employee Benefit Plans. Maintain, and cause each
----------------------
Subsidiary to maintain, each Pension Plan in compliance in all
material respects with all applicable requirements of law and
regulations, and make all required contributions to Multiemployer
Plans.
33
10.14 Purchase or Redemption of Company's Securities;
-----------------------------------------------
Dividend Restriction. Not purchase or redeem any shares of
- - --------------------
capital stock of the Company, declare or pay any dividends
thereon (other than stock dividends or cash dividends as provided
for below), make any distribution to stockholders or set aside
any funds for any such purpose, and not prepay, purchase, defease
or redeem, and not permit any Subsidiary to purchase, any
subordinated Debt of the Company; provided that, so long as no
Event of Default or Unmatured Event of Default exists or could
result therefrom, the Company may (a) redeem shares from
employees upon termination of employment or thereafter as
provided in the Management Stock Agreements in amounts paid in
cash (including amounts paid on account of principal of Debt
issued in redemption of such stock) not exceeding in any Fiscal
Year the greater of $10,000,000 or 5% of Consolidated Net
Tangible Net Worth as of the end of the preceding Fiscal Year;
(b) repurchase or redeem shares from persons upon the exercise of
stock options in amounts (including amounts paid on account of
principal of Debt issued in redemption of such stock) not
exceeding, in any Fiscal Quarter, the sum of $500,000 plus the
additional amount, if any, that, when added to the $500,000
amount, would cause the shareholders' equity of the Company
(measured at the end of the Fiscal Quarter in which such
redemption or repurchase takes place) to be not lower than at the
end of the immediately preceding quarter; and (c) pay cash
dividends to its shareholders or repurchase its stock in an
aggregate amount, in any Fiscal Year, not exceeding 40% of its
consolidated net earnings for the prior Fiscal Year.
10.15 Use of Proceeds. Use the proceeds of the Loans for
---------------
working capital and for other general corporate purposes; and not
use or permit any proceeds of any Loan to be used, either
directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of (a) "purchasing or carrying" any
Margin Stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, as amended from time to
time, or (b) purchasing or otherwise acquiring any stock of any
Person if such Person (or its board of directors) has (i)
announced that it will oppose such purchase or other acquisition
or (ii) commenced any litigation which alleges that such purchase
or other acquisition violates, or will violate, any applicable
law.
SECTION 11 CONDITIONS OF LENDING.
The obligation of each Lender to make its Loans is subject
to the following conditions precedent:
11.1 Initial Loan. The obligation of each Lender to make
------------
its initial Loan is, in addition to the conditions precedent
specified in Section 11.2, subject to the conditions precedent
34
(and the date on which all such conditions precedent have been
satisfied or waived in writing by the Lenders is herein called
the "Effective Date") that the Agent shall have received (a)
evidence, reasonably satisfactory to the Agent, that all
obligations of the Company under the Credit Agreement (the
"Existing Credit Agreement") dated as of June 15, 1990 with
various financial institutions and Continental, as agent, have
been paid in full and (b) all of the following documents, each
duly executed and dated the Effective Date (or such other date as
shall be satisfactory to the Agent), in form and substance
satisfactory to the Agent, and each (except for the Notes, of
which only the originals shall be signed) in sufficient number of
signed counterparts to provide one for each Lender:
11.1.1 Notes. The Notes of the Company payable to
-----
the order of the Lenders.
11.1.2 Resolutions. Certified copies of resolutions of the
-----------
Board of Directors of the Company authorizing or ratifying the
execution, delivery and performance by the Company of this
Agreement, the Notes and the other documents to be executed by
the Company pursuant hereto.
11.1.3 Consents, etc. Certified copies of all
-------------
documents evidencing any consents and governmental approvals (if
any) required for the execution, delivery and performance by the
Company of this Agreement and the Notes.
11.1.4 Incumbency and Signature Certificates. An
-------------------------------------
incumbency and signature certificate of the Company certifying
the names of the officer or officers of the Company authorized to
sign this Agreement, the Notes and the other documents required
to be delivered by the Company in connection with this Agreement,
together with a sample of the true signature of each such officer
(it being understood that the Agent and each Lender may
conclusively rely on such certificate until formally advised by a
like certificate of any changes therein).
11.1.5 Opinion of Counsel for the Company. The opinion of
----------------------------------
Stoel Rives Boley Jones & Grey, counsel to the Company,
substantially in the form of Exhibit C.
11.1.6 Other. Such other documents as the Agent or any
-----
Lender may reasonably request.
11.2 All Loans. The obligation of each Lender to make each
---------
Loan is subject to the following further conditions precedent
that:
11.2.1 No Default. (a) No Event of Default or
----------
Unmatured Event of Default has occurred and is continuing or will
35
result from the making of such Loan and (b) the warranties of the
Company contained in Section 9 (excluding Sections 9.6 and 9.8)
are true and correct in all material respects as of the date of
such requested Loan, with the same effect as though made on such
date.
11.2.2 Confirmatory Certificate. If requested by the Agent
------------------------
or any Lender, the Agent shall have received (in sufficient
counterparts to provide one to each Lender) a certificate dated
the date of such requested Loan and signed by a duly authorized
officer of the Company as to the matters set out in Section
11.2.1 (it being understood that each request by the Company for
the making of a Loan shall be deemed to constitute a warranty by
the Company that the conditions precedent set forth in Section
11.2.1 will be satisfied at the time of the making of such Loan),
together with such other documents as the Agent or any Lender may
reasonably request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following
-----------------
shall constitute an Event of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the
-----------------------------
payment when due of any principal of any Loan; or default, and
continuance thereof for five days, in the payment when due of any
interest on any Loan or any fee or other amount payable by the
Company hereunder.
12.1.2 Non-Payment of Other Debt. Any default shall occur
-------------------------
under the terms applicable to any Debt of the Company or any
Subsidiary in an aggregate amount (for all Debt so affected)
exceeding $5,000,000 and such default shall (a) consist of the
failure to pay such Debt when due (subject to any applicable
grace period), whether by acceleration or otherwise, or (b)
accelerate the maturity of such Debt or permit the holder or
holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable prior to
its expressed maturity.
12.1.3 Other Material Obligations. Default in the payment
--------------------------
when due of any obligation of $5,000,000 or more of the Company
or any Subsidiary with respect to any material purchase or lease
of goods or services (except only to the extent that the
existence of any such default is being contested by the Company
or such Subsidiary in good faith and by appropriate proceedings
and appropriate reserves have been made in respect of such
default), and continuance of such default for 30 days after
notice thereof from the Agent or any Lender.
36
12.1.4 Bankruptcy, Insolvency, etc. The Company or any
---------------------------
Material Subsidiary becomes insolvent or generally fails to pay,
or admits in writing its inability or refusal to pay, debts as
they become due; or the Company or any Material Subsidiary
applies for, consents to, or acquiesces in the appointment of a
trustee, receiver or other custodian for the Company or such
Material Subsidiary or any property thereof, or makes a general
assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for the Company or any Material
Subsidiary or for a substantial part of the property of any
thereof and is not discharged within 60 days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding
under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding, is commenced in respect of the Company or
any Material Subsidiary, and if such case or proceeding is not
commenced by the Company or such Material Subsidiary, it is
consented to or acquiesced in by the Company or such Material
Subsidiary, or remains for 60 days undismissed; or the Company or
any Material Subsidiary takes any corporate action to authorize,
or in furtherance of, any of the foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement.
------------------------------------------------
Failure by the Company to comply with or to perform any provision
of this Agreement (and not constituting an Event of Default under
any of the other provisions of this Section 12) and continuance
of such failure for 30 days after notice thereof to the Company
from the Agent or any Lender.
12.1.6 Warranties. Any warranty made by the Company herein
----------
is breached or is false or misleading in any material respect, or
any schedule, certificate, financial statement, report, notice or
other writing furnished by the Company to the Agent or any Lender
is false or misleading in any material respect on the date as of
which the facts therein set forth are stated or certified.
12.1.7 Pension Plans. (i) Institution of any steps by the
-------------
Company or any other Person to terminate a Pension Plan if as a
result of such termination the Company could be required to make
a contribution to such Pension Plan, or could incur a liability
or obligation to such Pension Plan, in excess of $5,000,000, or
(ii) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of
ERISA.
12.1.8 Withdrawal Liability Under Multiemployer Plans. The
----------------------------------------------
Company or any ERISA Affiliate shall make a complete or partial
withdrawal from a Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall notify such withdrawing employer that
such employer has incurred a withdrawal liability in an annual
amount exceeding $5,000,000, unless and only for as long as such
37
liability shall be contested in good faith and such reserve or
other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor.
12.1.9 Judgments and Attachments. Any money judgment, writ
-------------------------
or warrant of attachment or similar process involving in any case
a final judgment in an amount in excess of $5,000,000 shall be
entered or filed against the Company or any Material Subsidiary
or any of their respective assets and shall remain unsatisfied,
undischarged, unvacated, unbonded or unstayed for a period of
60 days or in any event later than five days prior to the date of
any proposed sale thereunder.
12.1.10 Change in Control. Any Change in Control shall
-----------------
occur.
12.2 Effect of Event of Default. If any Event of Default
--------------------------
described in Section 12.1.4 shall occur, the Commitments (if they
have not theretofore terminated) shall immediately terminate and
the Notes and all other obligations hereunder shall become
immediately due and payable, all without presentment, demand,
protest or notice of any kind; and if any other Event of Default
occurs and is continuing, the Agent may, and upon written request
of the Required Lenders shall, by written notice to the Company
declare the Commitments (if they have not theretofore terminated)
to be terminated and/or declare all Notes and all other
obligations hereunder to be due and payable, whereupon the
Commitments (if they have not theretofore terminated) shall
immediately terminate and/or all Notes and all other obligations
hereunder shall become immediately due and payable, all without
presentment, demand, protest or other notice of any kind.
Notwithstanding the foregoing, the effect as an Event of Default
of any event described in Section 12.1.1 or Section 12.1.4 may be
waived by the written concurrence of all of the Lenders, and the
effect as an Event of Default of any other event described in
this Section 12 may be waived by the written concurrence of the
Required Lenders.
SECTION 13 THE AGENT.
13.1 Authorization. Each Lender authorizes the Agent to
-------------
act on behalf of such Lender to the extent provided herein or any
other document or instrument delivered hereunder or in connection
herewith, and to take such other action as may be reasonably
incidental thereto.
13.2 Indemnification. Each Lender agrees to reimburse and
---------------
indemnify the Agent for, and hold the Agent harmless against, a
share (determined in accordance with such Lender's Percentage) of
any loss, damage, penalty, action, judgment, obligation, cost,
disbursement, liability or expense (including reasonable
38
attorneys' fees) which may at any time be incurred by the Agent
(and for which the Agent is not reimbursed by the Company)
arising out of or in connection with the performance of its
obligations or the exercise of its powers hereunder or any other
document or instrument delivered hereunder or in connection
herewith, as well as the costs and expenses of defending against
any claim against the Agent arising hereunder or thereunder,
provided that no Lender shall be liable for any of the foregoing
which are determined by a court of competent jurisdiction in a
final proceeding to have resulted solely from the Agent's gross
negligence or willful misconduct. The provisions of this
Section 13.2 shall survive repayment of the Loans, cancellation
of the Notes and any termination of this Agreement.
13.3 Exculpation. The Agent shall be entitled to rely upon
-----------
advice of counsel concerning legal matters, and upon this
Agreement and any schedule, certificate, statement, report,
notice or other writing which it believes to be genuine or to
have been presented by a proper person. Neither the Agent nor
any of its directors, officers, employees or agents shall (i) be
responsible for any recitals, representations or warranties
contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of, this Agreement or any other
instrument or document delivered hereunder or in connection
herewith, (ii) be responsible for the validity, genuineness,
perfection, effectiveness, enforceability, existence, value or
enforcement of any collateral security, (iii) be under any duty
to inquire into or pass upon any of the foregoing matters, or to
make any inquiry concerning the performance by the Company or any
other obligor of its obligations, or (iv) in any event, be liable
as such for any action taken or omitted by it or them, except for
its or their own gross negligence or willful misconduct. The
agency hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations upon,
the Agent in its individual capacity.
13.4 Credit Investigation. Each Lender acknowledges that
--------------------
it has made such inquiries and taken such care on its own behalf
as would have been the case had such Lender's Commitment been
granted and such Lender's Loans been made directly by such Lender
to the Company without the intervention of the Agent or any other
Lender. Each Lender agrees and acknowledges that the Agent makes
no representations or warranties about the creditworthiness of
the Company or any other party to this Agreement or with respect
to the legality, validity, sufficiency or enforceability of this
Agreement or any Note or the value of any security therefor.
13.5 Agent and Affiliates. The Agent in its individual
--------------------
capacity shall have the same rights and powers hereunder as any
other Lender and may exercise or refrain from exercising the same
as though it were not the Agent, and the Agent and its affiliates
39
may accept deposits from and generally engage in any kind of
business with the Company or any affiliate thereof as if the
Agent were not the Agent hereunder.
13.6 Action on Instructions of the Required Lenders. As to
----------------------------------------------
any matters not expressly provided for by this Agreement
(including, without limitation, enforcement of this Agreement and
collection of the Loans), the Agent shall not be required to
exercise any discretion or take any action, but the Agent shall
in all cases be fully protected in acting or refraining from
acting upon the written instructions (i) from the Required
Lenders, except for instructions which under the express
provisions hereof must be received by the Agent from all Lenders,
and (ii) in the case of such instructions, from all Lenders. In
no event will the Agent be required to take any action which
exposes the Agent to personal liability or which is contrary to
this Agreement or applicable law. The relationship between the
Agent and the Lenders is and shall be that of agent and principal
only and nothing herein contained shall be construed to
constitute the Agent a trustee for any holder of a Note or of a
participation therein nor to impose on the Agent duties and
obligations other than those expressly provided for herein.
13.7 Funding Reliance. (a) Unless the Agent receives
----------------
notice from a Lender by 1:00 p.m., Chicago time, on the day of a
proposed borrowing that such Lender will not make available to
the Agent the amount which would constitute its Percentage of
such borrowing in accordance with Section 2.3, the Agent may
assume that such Lender has made such amount available to the
Agent and, in reliance upon such assumption, make a corresponding
amount available to the Company. If and to the extent such
Lender has not made any such amount available to the Agent, such
Lender and the Company jointly and severally agree to repay such
amount to the Agent forthwith on demand, together with interest
thereon (i) in the case of the Company, the interest rate
applicable to Loans comprising such borrowing and (ii) in the
case of such Lender, the Federal Funds Rate (or, beginning on the
third
40
Business Day after demand, the rate set forth in clause (i)).
Nothing set forth in this clause (a) shall relieve any Lender of
any obligation it may have to make any Loan hereunder.
(b) Unless the Agent receives notice from the Company prior
to the due date for any payment hereunder that the Company does
not intend to make such payment, the Agent may assume that the
Company has made such payment and, in reliance upon such
assumption, make available to each Lender its share of such
payment. If and to the extent that the Company has not made any
such payment to the Agent, each Lender which received a share of
such payment shall repay such share (or the relevant portion
thereof) to the Agent forthwith on demand, together with interest
thereon at the Federal Funds Rate (or, beginning on the third
Business Day after demand, at the Alternate Reference Rate).
Nothing set forth in this clause (b) shall relieve the Company of
any obligation it may have to make any payment hereunder.
13.8 Resignation. The Agent may resign as such at any time
-----------
upon at least 30 days' prior notice to the Company and the
Lenders. In the event of any such resignation, the Required
Lenders (with, so long as no Event of Default or Unmatured Event
of Default exists, the consent of the Company, which consent
shall not be unreasonably delayed or withheld) shall as promptly
as practicable appoint a successor Agent. If no successor shall
have been so appointed, and shall have accepted such appointment,
within 30 days after the giving of notice of such resignation,
then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a commercial bank organized under
the laws of the United States of America having a combined
capital, surplus and undivided profits of at least $500,000,000.
Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to
and become vested with all rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged
from all further duties and obligations under this Agreement.
After any resignation pursuant to this Section 13.8, the
provisions of this Section 13 shall inure to the benefit of the
retiring Agent as to any actions taken or omitted to be taken by
it while it was Agent hereunder.
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of the Agent
------------------
or any Lender in the exercise of any right, power or remedy shall
operate as a waiver thereof, nor shall any single or partial
exercise by any of them of any right, power or remedy preclude
other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of,
or consent with respect to, any provision of this Agreement or
the Notes shall in any event be effective unless the same shall
be in writing and signed and delivered by the Agent and signed
and delivered by Lenders having an aggregate Percentage of not
less than the aggregate Percentage expressly designated herein
with respect thereto or, in the absence of such designation as to
any provision of this Agreement or the Notes, by the Required
Lenders, and then any such amendment, modification, waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which given. No amendment,
modification, waiver or consent shall (i) extend or increase the
amount of the Commitments, (ii) extend the date for payment of
any principal of or interest on the Loans or any fees payable
hereunder, (iii) reduce the principal amount of any Loan, the
rate of interest thereon or any fees payable hereunder, (iv)
change the definition of Required Lenders or otherwise reduce the
41
aggregate Percentage required to effect an amendment,
modification, waiver or consent or (v) amend this sentence
without, in each case, the consent of all Lenders. No provisions
of Section 13 shall be amended, modified or waived without the
written consent of the Agent.
14.2 Confirmations. The Company and each holder of a Note
-------------
agree from time to time, upon written request received by it from
the other, to confirm to the other in writing (with a copy of
each such confirmation to the Agent) the aggregate unpaid
principal amount of the Loans then outstanding under such Note.
14.3 Notices. Except as otherwise provided in Sections 2.3
-------
and 2.4, all notices hereunder shall be in writing (including,
without limitation, facsimile transmission) and shall be sent to
the applicable party at its address shown below its signature
hereto or at such other address as such party may, by written
notice received by the other party, have designated as its
address for such purpose. Notices sent by facsimile transmission
shall be deemed to have been given when receipt is confirmed by
confirming transmission equipment or acknowledged by the
addressee; notices sent by mail shall be deemed to have been
given three Business Days after the date when sent by registered
or certified mail, postage prepaid; and notices sent by hand
delivery shall be deemed to have been given when received. For
purposes of Sections 2.3 and 2.4, the Agent shall be entitled to
rely on telephonic instructions from any person that the Agent in
good faith believes is an authorized officer or employee of the
Company, and the Company shall hold the Agent and each Lender
harmless from any loss, cost or expense resulting from any such
reliance.
14.4 Subsidiary References. The provisions of this
---------------------
Agreement relating to Subsidiaries shall apply only during such
times as the Company has one or more Subsidiaries.
14.5 Regulation U. Each Lender represents that it in good
------------
faith is not relying, either directly or indirectly, upon any
Margin Stock as collateral security for the extension or
maintenance by it of any credit provided for in this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay
-------------------------
on demand all reasonable out-of-pocket costs and expenses of the
Agent (including the fees and charges of counsel for the Agent
and of local counsel, if any, who may be retained by said
counsel) in connection with the preparation, execution and
delivery of this Agreement and all other documents provided for
herein or delivered or to be delivered hereunder or in connection
herewith (including, without limitation, any amendment,
supplement or waiver to this Agreement or any such other
document). The Company further agrees to pay all reasonable out-
42
of-pocket costs and expenses (including reasonable attorneys'
fees, court costs and other legal expenses and allocated costs of
staff counsel) incurred by the Agent and each Lender after the
occurrence of an Event of Default in enforcing any right
hereunder or in connection with the negotiation of any
restructuring or "work-out" (whether or not consummated) of the
obligations of the Company hereunder. In addition, the Company
agrees to pay, and to save the Agent and the Lenders harmless
from all liability for, any stamp, transfer or other similar
taxes which may be payable in connection with the execution and
delivery of this Agreement, the borrowings hereunder, the
issuance of the Notes or the execution and delivery of any other
document provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided
for in this Section 14.6 shall survive repayment of the Loans,
cancellation of the Notes and any termination of this Agreement.
14.7 Indemnification by the Company. In consideration of
------------------------------
the execution and delivery of this Agreement by the Agent and the
Lenders and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to indemnify, exonerate and
hold the Agent, each Lender and each of the officers, directors,
employees and agents of the Agent and each Lender (collectively
the "Lender Parties" and individually each a "Lender Party") free
and harmless from and against any and all actions, causes of
action, suits, losses, liabilities, damages and expenses,
including, without limitation, reasonable attorneys' fees and
charges and allocated costs of staff counsel (collectively called
the "Indemnified Liabilities"), incurred by the Lender Parties or
any of them as a result of, or arising out of, or relating to,
(i) any tender offer, merger, purchase of stock, purchase of
assets or other similar transaction financed or proposed to be
financed in whole or in part, directly or indirectly, with the
proceeds of any of the Loans, (ii) the use, handling, release,
discharge, transportation, storage, treatment or disposal of any
"hazardous waste" or "hazardous material" (each as defined in any
applicable Environmental Law) at any real property owned or
leased by the Company or any Subsidiary or used by the Company or
any Subsidiary in its business or operations or (iii) the
enforcement of this Agreement or any Note by any of the Lender
Parties, except for any such Indemnified Liabilities arising on
account of any such Lender Party's bad faith, gross negligence or
willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. All obligations provided for
in this Section 14.7 shall survive repayment of the Loans,
cancellation of the Notes and any termination of this Agreement.
43
14.8 Successors and Assigns. This Agreement shall
----------------------
be binding upon the Company, the Lenders and the Agent and their
respective successors and assigns, and shall inure to the benefit
of the Company, the Lenders and the Agent and the successors and
assigns of the Lenders and the Agent. The Company may not assign
its rights or obligations hereunder without the prior written
consent of all Lenders.
14.9 Assignments; Participations.
---------------------------
14.9.1 Assignments. Any Lender may, with the prior written
-----------
consents of the Company and the Agent (which consents shall not
be unreasonably delayed or withheld), at any time assign and
delegate to one or more commercial banks or other financial
institutions (any Person to whom such an assignment and
delegation is to be made being herein called an "Assignee"), all
or any fraction of such Lender's Loans and Commitment (which
assignment and delegation shall be of a constant, and not a
varying, percentage of all the assigning Lender's Loans) in a
minimum aggregate amount equal to the lesser of (i) the assigning
Lender's remaining Commitment and (ii) $10,000,000; provided,
however, that (a) no assignment and delegation may be made to any
Person if, at the time of such assignment and delegation, the
Company would be obligated to pay any greater amount under
Section 7.6 or Section 8 to the Assignee than the Company is then
obligated to pay to the assigning Lender under such Section and
(b) the Company and the Agent shall be entitled to continue to
deal solely and directly with such Lender in connection with the
interests so assigned and delegated to an Assignee until the date
when all of the following conditions shall have been met:
(x) five Business Days (or such lesser period of time
as the Agent and the assigning Lender shall agree) shall
have passed after written notice of such assignment and
delegation, together with payment instructions, addresses
and related information with respect to such Assignee, shall
have been given to the Company and the Agent by such
assigning Lender and the Assignee,
(y) the assigning Lender and the Assignee shall have
executed and delivered to the Company and the Agent an
assignment agreement substantially in the form of Exhibit D
(an "Assignment Agreement"), together with any documents
required to be delivered thereunder, which Assignment
Agreement shall have been accepted by the Agent and the
Company, and
(z) the assigning Lender or the Assignee shall have
paid the Agent a processing fee of $2,500.
44
From and after the date on which the conditions described above
have been met, (x) such Assignee shall be deemed automatically to
have become a party hereto and, to the extent that rights and
obligations hereunder have been assigned and delegated to such
Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder, and (y) the
assigning Lender, to the extent that rights and obligations
hereunder have been assigned and delegated by it pursuant to such
Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any
assignment and delegation, the Company shall execute and deliver
to the Agent (for delivery to the Assignee and the Assignor, as
applicable) a new Note in the principal amount of the Assignee's
Commitment and, if the assigning Lender has retained a Commitment
hereunder, a replacement Note in the principal amount of the
Commitment retained by the assigning Lender (such Note to be in
exchange for, but not in payment of, the predecessor Note held by
such assigning Lender). Each such Note shall be dated the
effective date of such assignment. The assigning Lender shall
mark the predecessor Note "exchanged" and deliver it to the
Company. Accrued interest on that part of the predecessor Note
being assigned shall be paid as provided in the Assignment
Agreement. Accrued interest and fees on that part of the
predecessor Note not being assigned shall be paid to the
assigning Lender. Accrued interest and accrued fees shall be
paid at the same time or times provided in the predecessor Note
and in this Agreement. Any attempted assignment and delegation
not made in accordance with this Section 14.9.1 shall be null and
void.
Notwithstanding the foregoing provisions of this Section
14.9.1 or any other provision of this Agreement, any Lender may
at any time assign all or any portion of its Loans and its Note
to a Federal Reserve Bank (but no such assignment shall release
any Lender from any of its obligations hereunder).
14.9.2 Participations. Any Lender may at any time sell to
--------------
one or more commercial banks or other Persons participating
interests in any Loan owing to such Lender, the Note held by such
Lender, the Commitment of such Lender or any other interest of
such Lender hereunder (any Person purchasing any such
participating interest being herein called a "Participant"). In
the event of a sale by a Lender of a participating interest to a
Participant, (x) such Lender shall remain the holder of its Note
for all purposes of this Agreement and (y) the Company and the
Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations
hereunder. No Participant shall have any direct or indirect
voting rights hereunder (except that a Lender may grant a
Participant rights with respect to any of the events described in
the penultimate sentence of Section 14.1). The Company agrees
45
that if amounts outstanding under this Agreement and the Notes
are due and payable (as a result of acceleration or otherwise),
each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this
Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender
under this Agreement or such Note; provided that such right of
setoff shall be subject to the obligation of each Participant to
share with the Lenders, and the Lenders agree to share with each
Participant, as provided in Section 7.5. The Company also agrees
that each Participant shall be entitled to the benefits of
Section 7.6 and Section 8 as if it were a Lender (provided that
no Participant shall receive any greater compensation pursuant to
such Sections than would have been paid to the participating
Lender if no participation had been sold).
14.10 Governing Law. This Agreement and each Note shall be
-------------
a contract made under and governed by the laws of the State of
Illinois applicable to contracts made and to be performed
entirely within the State of Illinois. Whenever possible each
provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of
this Agreement. All obligations of the Company and rights of the
Agent and the Lenders expressed herein or in the Notes shall be
in addition to and not in limitation of those provided by
applicable law.
14.11 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the different parties hereto on
separate counterparts and each such counterpart shall be deemed
to be an original, but all such counterparts shall together
constitute but one and the same Agreement. When counterparts
executed by all of the parties hereto shall have been lodged with
the Agent (or, in the case of any Lender as to which an executed
counterpart shall not have been so lodged, the Agent shall have
received confirmation from such Lender of execution of a
counterpart hereof by such Lender), this Agreement shall become
effective as of the date hereof, and at such time the Agent shall
notify the Company and each Lender.
14.12 Termination of Existing Credit Agreement. The
----------------------------------------
Company and all Lenders that are also "Banks" under and as
defined in the Existing Credit Agreement agree that the
"Commitments" under and as defined in the Existing Credit
Agreement shall be terminated in their entirety on the date of
the effectiveness of this Agreement.
46
14.13 Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT OR NOTE, MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS
TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF
THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH
ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE COMPANY
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
14.14 OREGON LEGAL NOTICE. WITHOUT LIMITING THE VALIDITY
-------------------
OF THE CHOICE OF ILLINOIS LAW PROVIDED HEREIN, UNDER OREGON LAW,
MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY THE LENDERS
AFTER THE EFFECTIVE DATE OF THE ACT SPECIFIED HEREIN CONCERNING
LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL,
FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY THE LENDERS TO BE ENFORCEABLE. THE ACT SPECIFIED HEREIN MEANS
CHAPTER 967 OREGON LAWS 1989, THE EFFECTIVE DATE OF WHICH WAS
OCTOBER 3, 1989.
47
Delivered at Chicago, Illinois, as of the day and year first
above written.
FRED MEYER, INC.
By MICHAEL H. DON
------------------------------
Vice President and Corporate
Treasurer
3800 S.E. 22nd Avenue
P.O. Box 42121
Portland, Oregon 97242
Attention: Michael H. Don
Vice President and
Corporate Treasurer
Facsimile: 503-797-5299
CONTINENTAL BANK, individually and
as Agent
By ELIZABETH M. NOLAN
------------------------------
Vice President
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Elizabeth M. Nolan
Vice President
Facsimile: 312-765-2080
BANK OF AMERICA
By STEPHEN J. DEMARTI
------------------------------
Vice President
P.O. Box 37000 (94137)
San Francisco, California 94104
Attention: James R. MacGregor
Senior Vice President
Facsimile: 415-622-4585
48
THE BANK OF CALIFORNIA, N.A.
By WILLIAM R. WILEY
------------------------------
Senior Vice President
P.O. Box 45000
San Francisco, California 94145
Attention: Thomas C. Ludlow
Vice President
Facsimile: 415-765-3146
THE BANK OF NEW YORK
By ROBERT LOUK
------------------------------
Vice President
10990 Wilshire Boulevard,
Suite 1700
Los Angeles, CA 90024
Attention: Mr. Robert Louk
Vice President
Facsimile: 310-996-8667
THE BANK OF NOVA SCOTIA
By ERRETT HUMMEL
------------------------------
Account Officer
888 S.W. 5th Avenue, Suite 750
Portland, OR 97204-2098
Attention: Errett Hummel
Account Officer
Facsimile: 503-222-5502
49
BANK OF TOKYO, LTD.
By M.W. KRINGLEN
------------------------------
Vice President
2300 Pacwest Center
1211 S.W. 5th Avenue
Portland, OR 97204
Attention: Mr. M.W. Kringlen
Vice President
Facsimile: 503-227-5372
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A, "RABOBANK
NEDERLAND"
NEW YORK BRANCH
By ROBERT B. BENOIT
------------------------------
Senior Vice President
245 Park Avenue
36th Floor
New York, NY 10167
Attention: Ms. Marla Lerner
Facsimile: 212-916-7880
CREDIT LYONNAIS LOS ANGELES BRANCH
By THIERRY VINCENT
------------------------------
Vice President
515 South Flower Street
Los Angeles, CA 90071
Attention: Mr. Francois Coussot
Vice President
Facsimile: 213-623-3437
or
213-623-8067
50
CREDIT LYONNAIS CAYMAN
ISLAND BRANCH
By THIERRY VINCENT
------------------------------
Authorized Signatory
c/o Credit Lyonnais
Los Angeles Branch
515 South Flower Street
Los Angeles, CA 90071
Attention: Mr. Francois Coussot
Vice President
Facsimile: 213-623-3437
or
213-623-8067
FIRST INTERSTATE BANK OF
OREGON, N.A.
By MARCIA J. JANNER
------------------------------
Vice President
P.O. Box 3131
Portland, OR 97208-3131
Attention: Ms. Marcia J. Janner
Vice President
Facsimile: 503-225-4698
FIRST SECURITY BANK OF UTAH, N.A.
By D. KEVIN IMLAY
------------------------------
Vice President
15 East 100 South, 2nd FL.
Salt Lake City, Ut 84111
Attention: Mr. Kevin Imlay
Vice President
Facsimile: 801-246-5532
51
THE FUJI BANK, LTD.
By SHIGEO MATSUMOTO
------------------------------
General Manager
601 California Street
San Francisco, CA 94108
Attention: Mr. Michael Rogers
Vice President
Facsimile: 415-362-4613
THE HONG KONG AND SHANGHAI BANKING
CORPORATION LIMITED
By B. DANIEL DUTTON
------------------------------
Vice President
900 S.W. 5th Avenue, Suite 1550
Portland, OR 97204-1298
Attention: Mr. B. Daniel Dutton
Vice President
Facsimile: 503-242-2413
THE INDUSTRIAL BANK OF JAPAN, LTD.
By MAKOTO MASUDO
------------------------------
Deputy General Manager
555 California Street, Suite 1610
San Francisco, CA 94104
Attention: Mr. Clifford B. White
Vice President
Facsimile: 415-982-1917
52
KEY BANK OF WASHINGTON
By BARRY BOOHER
------------------------------
Vice President
P.O. Box 21145
Seattle, WA 98111-3145
Attention: Mr. Barry Booher
Vice President
Facsimile: 206-223-7834
NATIONSBANK OF TEXAS, N.A.
By WILLIAM B. GUFFEY
------------------------------
Vice President
444 S. Flower Street, Suite 1500
Los Angeles, CA 90071
Attention: Mr. William B. Guffey
Vice President
Facsimile: 213-624-5815
SEATTLE FIRST NATIONAL BANK
By EDWARD FORMAN
------------------------------
Asst. Vice President ?
701 Fifth Ave. - 12th Floor
Seattle, WA 98104
Attention: Mr. Gordon H. Gray
Vice President
Facsimile: 206-358-3113
53
UNITED STATES NATIONAL BANK
OF OREGON
By ANN C. SMITH
------------------------------
Vice President
P.O. Box 8837
Portland, OR 97208-8837
Attention: Ms. Ann C. Smith
Vice President
Facsimile: 503-275-5428
WEST ONE BANK, IDAHO
By JAMES C. AALBERG
------------------------------
Vice President
P.O. Box 2882 (97208)
234 S.W. Broadway
Portland, OR 97205
Attention: Mr. James C. Aalberg
Vice President
Facsimile: 503-248-6939
54
SCHEDULE I
COMMITMENTS AND PERCENTAGES
Lender Commitment Percentage
- - ------ ---------- ----------
Bank of America $25,000,000 6.25%
The Bank of California, N.A. 15,000,000 3.75
The Bank of New York 25,000,000 6.25
The Bank of Nova Scotia 35,000,000 8.75
Bank of Tokyo, Ltd. 30,000,000 7.50
Continental Bank 30,000,000 7.50
Cooperatieve Centrale
Raiffeinsen-Boerenleenbank B.A. 25,000,000 6.25
Credit Lyonnais Los Angeles 12,000,000 3.00
Branch and Credit Lyonnais
Cayman Island Branch
First Interstate Bank 30,000,000 7.50
of Oregon, N.A.
First Security Bank
of Utah, N.A. 15,000,000 3.75
The Fuji Bank, Ltd. 12,000,000 3.00
The Hong Kong and
Shanghai Banking
Corporation Limited 25,000,000 6.25
The Industrial Bank
of Japan, Ltd. 12,000,000 3.00
Key Bank of Washington 12,000,000 3.00
NationsBank of Texas, N.A. 35,000,000 8.75
United States National 20,000,000 5.00
Bank of Oregon
Seattle First National Bank 30,000,000 7.50
West One Bank, Idaho 12,000,000 3.00
___________ ____
TOTAL $400,000,000 100%
/TABLE
SCHEDULE II
SCHEDULE OF SUBSIDIARIES
Percentage
Jurisdiction Owned By The
Of Company And
Subsidiary Organization Its Subsidiaries
---------- ------------ ----------------
B&B Stores, Inc. Montana 100%
B&B Pharmacy, Inc. Montana 100%
CB&S Advertising Agency, Inc. Oregon 100%
Distribution Trucking Company Oregon 100%
FM Holding Corporation Delaware 100%
Grand Central, Inc. Utah 100%
FM Retail Services, Inc. Washington 100%
Fred Meyer (HK) Limited Hong Kong 100%
Fred Meyer, Inc.
(a Washington Corporation) Washington 100%
Fred Meyer of Alaska, Inc. Alaska 100%
Fred Meyer of California, Inc. California 100%
Natur Glo, Inc. Oregon 100%
Roundup Co. Washington 100%
EXHIBIT A
FORM OF
NOTE
$__________ ___________, 199_
Chicago, Illinois
FOR VALUE RECEIVED, the undersigned promises to pay to the
order of __________________ at the principal office of Continental
Bank (the "Agent"), in Chicago, Illinois, on the date set forth in
the Credit Agreement referred to below,
_______________________________________ Dollars ($__________) or, if
less, the aggregate unpaid amount of all Loans made by the payee to
the undersigned pursuant to the Credit Agreement (as shown in the
records of the payee or, at the payee's option, on the schedule
attached hereto and any continuation thereof).
The undersigned further promises to pay interest on the unpaid
principal amount of each Loan evidenced hereby from the date of such
Loan until such Loan is paid in full, payable at the rate(s) and at
the time(s) set forth in the Credit Agreement. Payments of both
principal and interest are to be made in lawful money of the United
States of America.
This Note evidences indebtedness incurred under, and is subject
to the terms and provisions of, the Credit Agreement, dated as of
June 30, 1994 (herein, as amended or otherwise modified from time to
time, called the "Credit Agreement"), among the undersigned, certain
financial institutions (including the payee) and the Agent, to which
Credit Agreement reference is hereby made for a statement of the
terms and provisions under which this Note may or must be paid prior
to its due date or may have its due date accelerated.
In addition to and not in limitation of the foregoing and the
provisions of the Credit Agreement, the undersigned further agrees,
subject only to any limitation imposed by applicable law, to pay all
reasonable expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder of this Note in endeavoring to
collect any amounts payable hereunder which are not paid when due,
whether by acceleration or otherwise. Each of the Company and each
guarantor hereof waives demand, presentment, protest, diligence,
notice of dishonor and any other formality in connection with this
Note.
2
This Note is made under and governed by the internal
laws of the State of Illinois applicable to contracts made and to be
performed entirely within such State.
FRED MEYER, INC.
By ______________________________
Vice President and Corporate
Treasurer
3
Schedule Attached to Note dated _______, 199_ of FRED MEYER, INC.
_________ payable to the order of ____________________________.
Date and Date and
Amount of Amount of
Loan or of Repayment or of
conversion from conversion into Unpaid
another type of another type of Interest Principal Notation
Loan Loan Period Balance Made by
1. FLOATING RATE LOANS
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2. EURODOLLAR LOANS
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
EXHIBIT B
FORM OF REQUEST FOR EXTENSION OF
TERMINATION DATE
[Date]
[Name and Address of Lender]
Pursuant to the Credit Agreement dated as of June 30, 1994
(the "Credit Agreement") among Fred Meyer, Inc. (the "Company"),
various financial institutions and Continental Bank, as Agent,
this represents the Company's request to extend the Termination
Date (as defined in the Credit Agreement) to June 30, ____.
Please indicate whether you consent to such extension of the
Termination Date by signing the attached copy of this Extension
Request in the space provided below and returning the same to the
undersigned by June 1, ____.
Very truly yours,
FRED MEYER, INC.
By: ___________________________
Title: ______________________
[Name of Lender]
Date:_______________
ACCEPTS ____
REJECTS ____
By:___________________________
Title: ____________________
EXHIBIT C
FORM OF
OPINION OF COUNSEL
[Letterhead of Stoel Rives Boley Jones & Grey]
June , 1994
Continental Bank,
individually and as Agent, and
the other Lenders which are
parties to the Credit Agreement
referred to below
231 South LaSalle Street
Chicago, Illinois 60697
Re: Credit Agreement dated as of June 30 , 1994 among
Fred Meyer, Inc., various financial institutions
and Continental Bank, as Agent
-------------------------------------------------
Gentlemen:
We have acted as counsel to Fred Meyer, Inc., a
Delaware corporation (the "Company"), in connection with the
Credit Agreement dated as of June 30, 1994 among the Company,
various financial institutions (the "Lenders") and Continental
Bank, as Agent (the "Credit Agreement"), and the initial loans
made this date by the Lenders to the Company under the Credit
Agreement. This opinion letter is rendered to you pursuant to
Section 11.1.5 of the Credit Agreement. Unless otherwise defined
herein, capitalized terms used herein shall have the respective
meanings set forth in the Credit Agreement.
For the purpose of rendering our opinions herein, we
have examined (i) the Credit Agreement and the Notes, (ii)
certificates of public officials and of officers of the Company,
(iii) certified copies of the Company's Restated Certificate of
Incorporation and Amended and Restated Bylaws, (iv) board of
directors' resolutions of the Company authorizing the Company's
participation in the transactions contemplated by the Credit
Agreement, and (v) the agreements referred to as "material
agreements" in the attached Officer's Certificate of the Company
(the "Certificate"). We have also examined such other documents
and records, and have made such investigations of law, as we have
deemed necessary to enable us to render this opinion. As to the
accuracy of certain factual matters, we have relied on
certificates and written statements of officers of the Company
and factual representations made by the Company within the Credit
Agreement.
2
For purposes of this opinion, "actual knowledge" means
the conscious awareness of facts or other information by Gary R.
Barnum or MardiLyn Saathoff, the persons at this firm principally
involved with the transactions contemplated by the Credit
Agreement.
Based on the foregoing and subject to the
qualifications below, we are of the opinion that:
(1) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power
and authority to own and operate its properties, to
carry on its business as described in the Company's
Annual Report on Form 10-K for the fiscal year ended
January 29, 1994, to enter into the Credit Agreement,
to issue the Notes and to carry out the transactions
contemplated thereby.
(2) The Credit Agreement and the Notes have been duly
authorized by all necessary corporate action on the
part of the Company, and the Credit Agreement and the
Notes have been duly executed and delivered by the
Company and constitute legally valid and binding
obligations of the Company, enforceable against the
Company in accordance with their respective terms.
(3) None of the execution and delivery by the Company of
the Credit Agreement, the consummation by the Company
of the transactions contemplated by the Credit
Agreement or compliance by the Company with the terms
and conditions of the Credit Agreement and the Notes
(a) conflicts with, results in a breach of, or
constitutes a default under any of the terms,
conditions or provisions of the Restated Certificate of
Incorporation or Amended and Restated Bylaws of the
Company or, to our actual knowledge, any "material
agreement" referred to in the Certificate or judicial
order by which the Company or any Subsidiary is bound,
or (b) to our actual knowledge, results in the creation
of any Lien upon any of the properties or assets of the
Company or any Subsidiary under any such agreement or
order.
(4) Neither the execution and delivery of the Credit
Agreement and the Notes nor the payment of the Notes
conflicts with any present federal statute binding on
the Company or any Delaware statute, rule or regulation
contained in or promulgated under the General
Corporation Law of the State of Delaware binding on the
Company.
3
(5) To our actual knowledge, no governmental consents,
approvals, authorizations, registrations, declarations
or filings are required by the Company in connection
with the extensions of credit under the Credit
Agreement.
(6) The Company is not an "investment company" as such term
is defined in the Investment Company Act of 1940, as
amended.
For the purposes of our opinions set forth in
paragraphs (2) and (3), we have assumed that all amounts owed by
the Company under the existing Credit Agreement referred to in
Section 10.1(a) of the Credit Agreement have been paid and that
such existing Credit Agreement has been cancelled.
The opinions set forth above are subject to (a) the
effect of bankruptcy, insolvency, reorganization, moratorium, and
other similar laws generally affecting creditors' rights and (b)
the application of general principles of equity, including,
without limitations, the right to specific performance. A court
might not enforce certain covenants or allow acceleration of the
due date of the Notes if it concludes that such enforcement or
acceleration would be unreasonable or not undertaken in good
faith under the then existing circumstances, but the inclusion of
such remedies does not, in our opinion, affect the validity of
the Credit Agreement or the Notes. In addition, no opinion is
expressed herein as to Section 14.7 of the Credit Agreement.
We express no opinion as to (a) the enforceability
under certain circumstances of any provision imposing penalties,
late payment charges or increases in interest rate upon
delinquency in payment or the occurrence of Events of Default,
(b) the enforceability of any choice of law provision, (c) the
compliance with certain financial covenants under the "material
agreements" set forth in the Certificate, or (d) the compliance
with applicable anti-fraud provisions of federal or state
securities laws.
The opinions herein expressed are limited to the
matters governed by the laws of the United States of America and
the State of Oregon and, as to the opinions expressed in
paragraphs (1), (2), and (4) above, the General Corporation Law
of the State of Delaware, in each case as it exists at the date
hereof, and we express no opinion as to the law of any other
jurisdiction. In rendering the opinions set forth in paragraph
(2) above, we have assumed, as to matters purported to be
governed by the laws of the State of Illinois, that the laws of
the State of Oregon and the State of Illinois do not differ in
any material respect.
This opinion is rendered only to the Agent and the
Lenders and is solely for their benefit in connection with the
4
above transactions. This opinion may not be relied upon by the
Agent or any Lender for any other purpose or quoted to or relied
upon by any other person, firm or corporation for any purpose
without our prior written consent.
Very truly yours,
STOEL RIVES BOLEY JONES & GREY
By: GARY R. BARNUM
-----------------------------
Gary R. Barnum
EXHIBIT D
FORM OF
ASSIGNMENT AGREEMENT
Date:_________________
To: Fred Meyer, Inc.
and
Continental Bank, as Agent
Re: Assignment under the Credit Agreement referred to below
-------------------------------------------------------
Gentlemen and Ladies:
We refer to Section 14.9 of the Credit Agreement dated as of
June 30, 1994 (as amended or otherwise modified, the "Credit
Agreement") among Fred Meyer, Inc. (the "Company"), various
financial institutions and Continental Bank, as agent (the
"Agent"). Unless otherwise defined herein or the context
otherwise requires, terms used herein have the meanings provided
in the Credit Agreement.
(the "Assignor") hereby sells and
assigns to (the "Assignee"), and the Assignee
hereby purchases and assumes from the Assignor, that interest in
and to the Assignor's rights and obligations under the Credit
Agreement as of the date hereof equal to % of all of the
Loans and Commitments, such sale, purchase, assignment and
assumption to be effective as of , 199 , or such
later date on which the Company and the Agent shall have
consented hereto (the "Effective Date"). After giving effect to
such sale, purchase, assignment and assumption, the Assignee's
Percentage for purposes of the Credit Agreement will be as set
forth opposite the Assignee's name on the signature pages hereof.
The Assignor hereby instructs the Agent to make all payments
from and after the Effective Date in respect of the interest
assigned hereby directly to the Assignee. The Assignor and the
Assignee agree that all interest and fees accrued up to, but not
including, the Effective Date are the property of the Assignor,
and not the Assignee. The Assignee agrees that, upon receipt of
any such interest or fees, the Assignee will promptly remit the
same to the Assignor.
The Assignee hereby confirms that it has received a copy of
the Credit Agreement and the exhibits related thereto, together
with copies of the documents which were required to be delivered
under the Credit Agreement as a condition to the making of the
initial Loans thereunder. The Assignee acknowledges and agrees
2
that it (i) has made and will continue to make such inquiries and
has taken and will take such care on its own behalf as would have
been the case had its Commitment been granted and its Loans been
made directly by the Assignee to the Company without the
intervention of the Agent, the Assignor or any other Lender and
(ii) has made and will continue to make, independently and
without reliance upon the Agent, the Assignor or any other Lender
and based on such documents and information as it has deemed
appropriate, its own credit analysis and decisions relating to
the Credit Agreement. The Assignee further acknowledges and
agrees that neither the Agent nor the Assignor has made any
representation or warranty about the creditworthiness of the
Company or any other party to the Credit Agreement or with
respect to the legality, validity, sufficiency or enforceability
of the Credit Agreement or any Note or the value of any security
therefor. This assignment shall be made without recourse to the
Assignor.
The Assignor represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim.
The Assignee represents and warrants to the Company and the
Agent that, as of the date hereof, the Company will not be
obligated to pay any greater amount under Section 7.6 or 8.1 of
the Credit Agreement than the Company is obligated to pay to the
Assignor under such Section.
Except as otherwise provided in the Credit Agreement,
effective as of the Effective Date:
(a) the Assignee (i) shall be deemed automatically to have
become a party to the Credit Agreement and have all the
rights and obligations of a "Lender" under the Credit
Agreement as if it were an original signatory thereto
to the extent specified in the second paragraph hereof;
and (ii) agrees to be bound by the terms and conditions
set forth in the Credit Agreement as if it were an
original signatory thereto; and
(b) the Assignor shall be released from its obligations
under the Credit Agreement to the extent specified in
the second paragraph hereof.
The Assignor and the Assignee hereby agree that the
[Assignor] [Assignee] will pay to the Agent the processing fee
referred to in Section 14.9 of the Credit Agreement. The payment
of the processing fee shall be a condition to the effectiveness
of this assignment.
3
The Assignee hereby advises each of you of the following
administrative details with respect to the assigned Loans and
Commitment:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
The Assignee has delivered to the Company and the Agent (or
is delivering to the Company and the Agent concurrently herewith)
the tax forms referred to in Section 7.6 of the Credit Agreement.
Please evidence your receipt hereof and consent to the sale,
assignment, purchase and assumption set forth herein by signing
and returning counterparts hereof to the Assignor and the
Assignee.
Percentage = % [ASSIGNEE]
By: ___________________________
Title:
[ASSIGNOR]
By: ___________________________
Title:
ACKNOWLEDGED AND CONSENTED TO
this ____ day of ________, 199_
CONTINENTAL BANK, as Agent
By: ___________________________
Title: _____________________
4
ACKNOWLEDGED AND CONSENTED TO
this day of , 199
FRED MEYER, INC.
By: ________________________________
Title: __________________________