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$300,000,000
CREDIT AGREEMENT
among
THE GRAND UNION COMPANY,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
WARBURG DILLON READ LLC,
as Co-Advisor and Co-Arranger
UBS AG, STAMFORD BRANCH,
as Syndication Agent
LEHMAN BROTHERS INC.,
as Co-Advisor and Co-Arranger
LEHMAN COMMERCIAL PAPER INC.,
as Administrative Agent
and
LEHMAN COMMERCIAL PAPER INC.,
as Collateral Agent
Dated as of August 17, 1998
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................................... 2
1.1 Defined Terms............................................................... 2
1.2 Other Definitional Provisions............................................... 23
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS............................................... 23
2.1 Term Loan Commitments....................................................... 23
2.2 Procedure for Term Loan Borrowing........................................... 23
2.3 Repayment of Term Loans..................................................... 24
2.4 Revolving Credit Commitments................................................ 24
2.5 Procedure for Revolving Credit Borrowing.................................... 24
2.6 Swing Line Commitment....................................................... 25
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans........... 25
2.8 Repayment of Loans; Evidence of Debt........................................ 27
2.9 Commitment Fees, etc. ...................................................... 28
2.10 Termination or Reduction of Revolving Credit Commitments................... 28
2.11 Optional Prepayments....................................................... 28
2.12 Mandatory Prepayments and Commitment Reductions............................ 29
2.13 Conversion and Continuation Options........................................ 30
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches.................. 31
2.15 Interest Rates and Payment Dates........................................... 31
2.16 Computation of Interest and Fees........................................... 32
2.17 Inability to Determine Interest Rate....................................... 32
2.18 Pro Rata Treatment and Payments............................................ 33
2.19 Requirements of Law........................................................ 35
2.20 Taxes .................................................................... 36
2.21 Indemnity.................................................................. 38
2.22 Illegality................................................................. 38
2.23 Change of Lending Office................................................... 39
SECTION 3. LETTERS OF CREDIT............................................................. 39
3.1 L/C Commitment.............................................................. 39
3.2 Procedure for Issuance of Letter of Credit.................................. 39
3.3 Fees and Other Charges...................................................... 40
3.4 L/C Participations.......................................................... 40
3.5 Reimbursement Obligation of the Borrower.................................... 41
3.6 Obligations Absolute........................................................ 41
3.7 Letter of Credit Payments................................................... 42
3.8 Applications................................................................ 42
SECTION 4. REPRESENTATIONS AND WARRANTIES................................................ 42
4.1 Financial Condition......................................................... 42
4.2 No Change................................................................... 43
4.3 Corporate Existence; Compliance with Law.................................... 43
4.4 Corporate Power; Authorization; Enforceable Obligations..................... 43
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Page
4.5 No Legal Bar................................................................. 43
4.6 No Material Litigation....................................................... 44
4.7 No Default................................................................... 44
4.8 Ownership of Property; Liens................................................. 44
4.9 Intellectual Property........................................................ 44
4.10 Taxes ..................................................................... 44
4.11 Federal Regulations......................................................... 45
4.12 Labor Matters............................................................... 45
4.13 ERISA ..................................................................... 45
4.14 Investment Company Act; Other Regulations................................... 45
4.15 Subsidiaries................................................................ 46
4.16 Use of Proceeds............................................................. 46
4.17 Environmental Matters....................................................... 46
4.18 Accuracy of Information, etc................................................ 47
4.19 Security Documents.......................................................... 47
4.20 Solvency.................................................................... 48
4.21 Regulation H................................................................ 48
SECTION 5. CONDITIONS PRECEDENT........................................................... 48
5.1 Conditions to Initial Extension of Credit.................................... 48
5.2 Conditions to Each Extension of Credit....................................... 52
SECTION 6. AFFIRMATIVE COVENANTS.......................................................... 53
6.1 Financial Statements......................................................... 53
6.2 Certificates; Other Information.............................................. 54
6.3 Payment of Obligations....................................................... 55
6.4 Conduct of Business and Maintenance of Existence, etc. ...................... 55
6.5 Maintenance of Property; Insurance........................................... 55
6.6 Inspection of Property; Books and Records; Discussions; Collateral Audit..... 55
6.7 Notices ..................................................................... 56
6.8 Environmental Laws........................................................... 56
6.9 Interest Rate Protection..................................................... 57
6.10 Additional Collateral, etc.................................................. 57
6.11 Further Assurances.......................................................... 58
6.12 Survey, etc................................................................. 59
SECTION 7. NEGATIVE COVENANTS............................................................. 60
7.1 Financial Condition Covenants................................................ 61
7.2 Limitation on Indebtedness................................................... 62
7.3 Limitation on Liens.......................................................... 62
7.4 Limitation on Fundamental Changes............................................ 64
7.5 Limitation on Disposition of Property........................................ 64
7.6 Limitation on Restricted Payments............................................ 64
7.7 Limitation on Capital Expenditures........................................... 65
7.8 Limitation on Investments.................................................... 65
7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc... 66
7.10 Limitation on Transactions with Affiliates.................................. 66
7.11 Limitation on Sales and Leasebacks.......................................... 67
7.12 Limitation on Changes in Fiscal Periods..................................... 67
7.13 Limitation on Negative Pledge Clauses....................................... 67
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Page
7.14 Limitation on Restrictions on Subsidiary Distributions...................... 67
7.15 Limitation on Lines of Business............................................. 68
SECTION 8. EVENTS OF DEFAULT.............................................................. 68
SECTION 9. THE AGENTS..................................................................... 71
9.1 Appointment.................................................................. 71
9.2 Delegation of Duties......................................................... 71
9.3 Exculpatory Provisions....................................................... 71
9.4 Reliance by Administrative Agent............................................. 72
9.5 Notice of Default............................................................ 72
9.6 Non-Reliance on Agents and Other Lenders..................................... 73
9.7 Indemnification.............................................................. 73
9.8 Agent in Its Individual Capacity............................................. 73
9.9 Successor Administrative Agent............................................... 74
9.10 Authorization to Release Liens.............................................. 74
9.11 The Arranger................................................................ 74
SECTION 10. MISCELLANEOUS................................................................. 74
10.1 Amendments and Waivers...................................................... 74
10.2 Notices..................................................................... 75
10.3 No Waiver; Cumulative Remedies.............................................. 76
10.4 Survival of Representations and Warranties.................................. 77
10.5 Payment of Expenses......................................................... 77
10.6 Successors and Assigns; Participations and Assignments...................... 78
10.7 Adjustments; Set-off........................................................ 80
10.8 Counterparts................................................................ 80
10.9 Severability................................................................ 81
10.10 Integration................................................................ 81
10.11 GOVERNING LAW.............................................................. 81
10.12 Submission To Jurisdiction; Waivers........................................ 81
10.13 Acknowledgements........................................................... 82
10.14 Confidentiality............................................................ 82
10.15 WAIVERS OF JURY TRIAL...................................................... 82
10.16 Delivery of Lender Addenda................................................. 82
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ANNEX:
A Pricing Grid
SCHEDULES:
1.1 Mortgaged Property
4.15 Subsidiaries
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.8(h) Existing Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Weil, Gotshal & Manges LLP
F-2 Form of Local Counsel Opinion
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note
H Form of Prepayment Option Notice
I Form of Exemption Certificate
J Form of Lender Addendum
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CREDIT AGREEMENT, dated as of August 17, 1998, among THE
GRAND UNION COMPANY, a Delaware corporation (the "Borrower"), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), WARBURG DILLON READ LLC, as co-advisor and
co-arranger, UBS AG, STAMFORD BRANCH, as syndication agent (in such capacity,
the "Syndication Agent"), LEHMAN BROTHERS INC., as co-advisor and co-arranger
(together with Warburg Dillon Read LLC in their capacities as co-advisors and
co-arrangers, the "Arrangers"), LEHMAN COMMERCIAL PAPER INC., as administrative
agent (in such capacity, the "Administrative Agent"), and LEHMAN COMMERCIAL
PAPER INC., as collateral agent (in such capacity, the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, on June 24, 1998 (the "Petition Date"), the Borrower
filed a voluntary petition under Section 301 of the Bankruptcy Code with the
United States Bankruptcy Court for the District of New Jersey (the "Bankruptcy
Court") initiating its chapter 11 case (the "Case");
WHEREAS, on the Petition Date, following a prepetition
solicitation of votes for the acceptance or rejection of the Borrower's plan of
reorganization dated May 22, 1998 (the "Plan of Reorganization") pursuant to
Section 1126 of the Bankruptcy Code, the Borrower filed with the Bankruptcy
Court the Plan of Reorganization, together with a certification of its
balloting agent certifying that the Plan of Reorganization had been accepted by
the requisite number and amount of claims and amount of Preferred Stock
interests pursuant to Section 1126 of the Bankruptcy Code;
WHEREAS, the Borrower requested that the Lenders make
available a term loan and revolving credit and letter of credit facility in an
aggregate principal amount not to exceed $300,000,000, under which all of the
Borrower's obligations are guaranteed by the Subsidiary Guarantors, and the
proceeds of which will be used (a) to refinance revolving credit loans, and to
replace or cash collateralize letters of credit outstanding under the
Borrower's $172,022,020 secured debtor-in-possession credit facility (the "DIP
Credit Facility"), (b) to refinance the Supplemental Term Loans under the
Prepetition Credit Facility, (c) to pay fees and expenses in connection with
the Plan of Reorganization as confirmed by the Bankruptcy Court, (d) to finance
the working capital needs of the Borrower and the Subsidiary Guarantors in the
ordinary course of business and (e) for general corporate purposes, including,
without limitation, capital expenditures; and
WHEREAS, the Lenders are willing to make such credit
facilities available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
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SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"Accounts": as to any Person, all rights to receive payment
for goods sold or leased by such Person or for services rendered in
the ordinary course of business of such Person to the extent not
evidenced by an instrument or chattel paper, together with all
interest, finance charges and other amounts payable by an account
debtor in respect thereof.
"Adjustment Date": as defined in the Pricing Grid.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether
by contract or otherwise.
"Agents": the collective reference to the Syndication Agent,
the Administrative Agent and the Collateral Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of
such Lender's Commitments at such time and (b) thereafter, the sum of
(i) the aggregate then unpaid principal amount of such Lender's Term
Loans and (ii) the amount of such Lender's Revolving Credit Commitment
then in effect or, if the Revolving Credit Commitments have been
terminated, the amount of such Lender's Revolving Extensions of Credit
then outstanding.
"Aggregate Exposure Percentage" with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the Aggregate Exposure of all
Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": (a) during the period from and including
the Closing Date to the first Adjustment Date occurring on or after
the first anniversary of the Closing Date, (i) 2% per annum with
respect to Base Rate Loans and (ii) 3% per annum with respect to
Eurodollar Loans and (b) on and after the first Adjustment Date, the
Applicable Margin determined pursuant to the Pricing Grid.
3
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to
open a Letter of Credit.
"Asset Sale": any Disposition of Property or series of
related Dispositions of Property (excluding any such Disposition
permitted by clause (b), (c) or (d) of Section 7.5) which yields gross
proceeds to the Borrower or any of its Subsidiaries (valued at the
initial principal amount thereof in the case of non-cash proceeds
consisting of notes or other debt securities and valued at fair market
value in the case of other non-cash proceeds) in excess of $100,000.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment then in effect over (b)
such Lender's Revolving Extensions of Credit then outstanding;
provided, that in calculating any Lender's Revolving Extensions of
Credit for the purpose of determining such Lender's Available
Revolving Credit Commitment pursuant to Section 2.9(a), the aggregate
principal amount of Swing Line Loans then outstanding shall be deemed
to be zero.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. ss.ss.101
et seq.
"Bankruptcy Court": as defined in the Recitals.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by
Citibank N.A. as its prime or base rate in effect at its principal
office in New York City (the Prime Rate not being intended to be the
lowest rate of interest charged by Citibank N.A. in connection with
extensions of credit to debtors); "Base CD Rate" shall mean the sum of
(a) the product of (i) the Three-Month Secondary CD Rate and (ii) a
fraction, the numerator of which is one and the denominator of which
is one minus the C/D Reserve Percentage and (b) the C/D Assessment
Rate; and "Three- Month Secondary CD Rate" shall mean, for any day,
the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be
a Business Day, the next preceding Business Day) by the Board through
the public information telephone line of the Federal Reserve Bank of
New York (which rate will, under the current practices of the Board,
be published in Federal Reserve Statistical Release H.15(519) during
the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates
4
of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by Citibank N.A. from three New
York City negotiable certificate of deposit dealers of
recognized standing selected by it. Any change in the Base Rate
due to a change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate shall be effective as
of the opening of business on the effective day of such change
in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to
which is based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make
Loans hereunder.
"Business": as defined in Section 4.17.
"Business Day": (i) for all purposes other than as covered by
clause (ii) below, a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by
law to close and (ii) with respect to all notices and determinations
in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause
(i) and which is also a day for trading by and between banks in Dollar
deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital
lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period)
which should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the
obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a
balance sheet of such Person under GAAP, and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with
GAAP.
5
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in
a Person (other than a corporation) and any and all warrants, rights
or options to purchase any of the foregoing.
"Case": as defined in the Recitals.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit
of the United States, in each case maturing within one year from the
date of acquisition; (b) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities
of one year or less from the date of acquisition issued by any Lender
or by any commercial bank organized under the laws of the United
States of America or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services
("S&P") or P-2 by Moody's Investors Service, Inc. ("Moody's"), or
carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally, and maturing within six
months from the date of acquisition; (d) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the
United States government; (e) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at
least A by S&P or A by Moody's; (f) securities with maturities of six
months or less from the date of acquisition backed by standby letters
of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; or (g) shares of money
market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this
definition.
"C/D Assessment Rate": for any day as applied to any Base
Rate Loan, the annual assessment rate in effect on such day which is
payable by a member of the Bank Insurance Fund maintained by the
Federal Deposit Insurance Corporation (the "FDIC") classified as
well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12
C.F.R. ss. 327.4 (or any successor provision) to the FDIC (or any
successor) for the FDIC's (or such successor's) insuring time deposits
at offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any Base
Rate Loan, that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as
6
defined in Regulation D of the Board as in effect from time to time)
in respect of new non-personal time deposits in Dollars having a
maturity of 30 days or more.
"Closing Date": the date on which the conditions precedent
set forth in Section 5.1 shall have been satisfied.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commitment": as to any Lender, the sum of the Term Loan
Commitment and the Revolving Credit Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated July, 1998 and furnished to the Lenders.
"Confirmation Order": an order of the Bankruptcy Court
confirming the Plan of Reorganization in the Case.
"Consolidated Current Assets": at any date, all amounts
(other than cash and Cash Equivalents) which would, in conformity with
GAAP, be set forth opposite the caption "total current assets" (or any
like caption) on a consolidated balance sheet of the Borrower and its
Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts
which would, in conformity with GAAP, be set forth opposite the
caption "total current liabilities" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at
such date, but excluding (a) the current portion of any Funded Debt of
the Borrower and its Subsidiaries and (b) without duplication of
clause (a) above, all Indebtedness consisting of Revolving Credit
Loans or Swing Line Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net
Income for such period plus, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income
for such period, the sum of (a) income tax expense, (b)
7
interest expense, amortization or writeoff of debt discount and debt
issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including,
but not limited to, goodwill) and organization costs, (e) any
extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on
sales of assets outside of the ordinary course of business), (f)
Chapter 11 expenses or administrative costs reflecting Chapter 11
expenses and (g) any other non-cash charges, and minus, to the extent
included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income, (b) any extraordinary, unusual
or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated
Net Income for such period, gains on the sales of assets outside of
the ordinary course of business; it being understood that the
foregoing excludes up to $3,000,000 per fiscal year derived from
recurring asset sales) and (c) any other non-cash income, all as
determined on a consolidated basis.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Interest Expense": for any period, total
interest expense (including that attributable to Capital Lease
Obligations but excluding amortization of deferred financing costs) of
the Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries
(including, without limitation, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Hedge Agreements in respect
of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP).
"Consolidated Leverage Ratio": as at the last day of any
period of four consecutive fiscal quarters, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA for
such period; provided that for purposes of calculating Consolidated
EBITDA of the Borrower and its Subsidiaries for any period, the
Consolidated EBITDA of any Person acquired by the Borrower or its
Subsidiaries during such period shall be included on a pro forma basis
for such period (assuming the consummation of such acquisition and the
incurrence or assumption of any Indebtedness in connection therewith
occurred on the first day of such period) if the consolidated balance
sheet of such acquired Person and its consolidated Subsidiaries as at
the end of the period preceding the acquisition of such Person and the
related consolidated statements of income and stockholders' equity and
of cash flows for the period in respect of which Consolidated EBITDA
is to be calculated (i) have been previously provided to the
Administrative Agent and the Lenders and (ii) either (A) have been
reported on without a qualification arising out of the scope of the
audit by independent certified
8
public accountants of nationally recognized standing or (B) have been
found reasonably acceptable by the Administrative Agent.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any Person accrued
prior to the date it becomes a Subsidiary of the Borrower or is merged
into or consolidated with the Borrower or any of its Subsidiaries, (b)
the income (or deficit) of any Person (other than a Subsidiary of the
Borrower) in which the Borrower or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is
actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings
of any Subsidiary of the Borrower to the extent that the declaration
or payment of dividends or similar distributions by such Subsidiary is
not at the time permitted by the terms of any Contractual Obligation
(other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary.
"Consolidated Net Working Capital": at any date, the excess
of Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Funded Debt of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its Property is bound.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Disposition": with respect to any Property, any sale, sale
and leaseback, assignment, conveyance, transfer or other disposition
thereof; the terms "Dispose" and "Disposed of" shall have correlative
meanings.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States
of America.
"ECF Percentage": 75%; provided, that, with respect to each
fiscal year of the Borrower (commencing with the fiscal year in which
Closing Date occurs), the ECF Percentage shall be reduced to 50% if
the Consolidated Leverage Ratio on the last day of such fiscal year is
less than 3.25 to 1.0.
9
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or
other legally enforceable requirement (including, without limitation,
common law) of the United States or any other nation, or any state,
local, municipal or other governmental authority, regulating, relating
to or imposing liability or standards of conduct concerning protection
of the environment or of human health, or employee health and safety,
as has been, is now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and any other
authorization required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the
maximum rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by
a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Dow Jones Markets
screen as of 11:00 A.M., London time, two Business Days prior to the
beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Dow Jones Markets screen (or otherwise
on such screen), the "Eurodollar Base Rate" for purposes of this
definition shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative
Agent is offered Dollar deposits at or about 11:00 A.M., New York City
time, two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where its eurodollar and foreign
currency and exchange operations are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
10
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i)
Consolidated Net Income for such fiscal year, (ii) an amount equal to
the amount of all non-cash charges (including depreciation and
amortization) deducted in arriving at such Consolidated Net Income,
(iii) decreases in Consolidated Net Working Capital for such fiscal
year, (iv) an amount equal to the aggregate net non-cash loss on the
Disposition of Property by the Borrower and its Subsidiaries during
such fiscal year (other than sales of inventory in the ordinary course
of business), to the extent deducted in arriving at such Consolidated
Net Income and (v) the net increase during such fiscal year (if any)
in deferred tax accounts of the Borrower over (b) the sum, without
duplication, of (i) an amount equal to the amount of all non-cash
credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount actually paid by the Borrower and its Subsidiaries in
cash during such fiscal year on account of Capital Expenditures and
any such expenditures permitted to be carried over pursuant to Section
7.7 (excluding (A) the principal amount of Indebtedness incurred in
connection with such expenditures, (B) any such expenditures financed
with the proceeds of any Reinvestment Deferred Amount and (C) any such
expenditures permitted to be carried over from the prior fiscal year
pursuant to Section 7.7), (iii) the aggregate amount of all
prepayments of Revolving Credit Loans and Swing Line Loans during such
fiscal year to the extent accompanying permanent optional reductions
of the Revolving Credit Commitments and all optional prepayments of
the Term Loans during such fiscal year, (iv) the aggregate amount of
all regularly scheduled principal payments of Funded Debt (including,
without limitation, the Term Loans) of the Borrower and its
Subsidiaries made during such fiscal year (other than in respect of
any revolving credit facility to the extent there is not an equivalent
permanent reduction in commitments thereunder), (v) increases in
Consolidated Net Working Capital for such fiscal year, (vi) an amount
equal to the sum of (A) the aggregate net non-cash gain on the
Disposition of Property and (B) the aggregate net cash gain on the
first $5 million of proceeds on the Disposition of Property, by the
Borrower and its Subsidiaries during such fiscal year (other than
sales of inventory in the ordinary course of business), to the extent
included in arriving at such Consolidated Net Income, (vii) the net
decrease during such fiscal year (if
11
any) in deferred tax accounts of the Borrower, and (viii) cash
disbursements made in respect of liabilities to the extent reserved
against on the financial statements of the Borrower and its
Subsidiaries as of the Closing Date and not otherwise deducted in
determining Consolidated Net Income.
"Excess Cash Flow Application Date": as defined in Section
2.12(c).
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in
respect of which either (i) the pledge of all of the Capital Stock of
such Subsidiary as Collateral or (ii) the guaranteeing by such
Subsidiary of the Obligations, would, in the good faith judgment of
the Borrower, result in adverse tax consequences to the Borrower.
"Facility": each of (a) the Term Loan Commitments and the
Term Loans made thereunder (the "Term Loan Facility") and (b) the
Revolving Credit Commitments and the extensions of credit made
thereunder (the "Revolving Credit Facility").
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by Citibank N.A. from three
federal funds brokers of recognized standing selected by it.
"Fee Properties": the collective reference to the real
properties owned in fee by the respective Loan Parties described on
Part I of Schedule 1.1, including all buildings, improvements,
structures and fixtures now or subsequently located thereon.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation
or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year
from such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period
of more than one year from such date, including, without limitation,
all current maturities and current sinking fund payments in respect of
such Indebtedness whether or not required to be paid within one year
from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the
Borrower and the Lenders.
12
"GAAP": generally accepted accounting principles in the
United States of America as in effect from time to time, except that
for purposes of Section 7.1, GAAP shall be determined on the basis of
such principles in effect on the date hereof and consistent with those
used in the preparation of the most recent audited financial
statements delivered pursuant to Section 4.1(b). In the event that any
"Accounting Change" (as defined below) shall occur and such change
results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Borrower and
the Administrative Agent agree to enter into negotiations in order to
amend such provisions of this Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for
evaluating the Borrower's financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been
made. Until such time as such an amendment shall have been executed
and delivered by the Borrower, the Administrative Agent and the
Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such
Accounting Changes had not occurred. "Accounting Changes" refers to
changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the Securities and Exchange Commission
(or successors thereto or agencies with similar functions).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (including, without
limitation, the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase Property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary
13
obligation against loss in respect thereof; provided, however, that
the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing
person may be liable are not stated or determinable, in which case the
amount of such Guarantee Obligation shall be such guaranteeing
person's maximum reasonably anticipated liability in respect thereof
as determined by the Borrower in good faith.
"Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements entered into by the Borrower
providing for protection against fluctuations in interest rates or
currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
Property or services (other than current trade payables incurred in
the ordinary course of such Person's business), (c) all obligations of
such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such Property), (e) all Capital
Lease Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party under acceptance, letter
of credit or similar facilities, (g) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above; (i) all obligations of
the kind referred to in clauses (a) through (h) above secured by (or
for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on Property
(including, without limitation, accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable
for the payment of such obligation, (j) for the purposes of Section
8(e) only, all obligations of such Person in respect of Hedge
Agreements and (k) the liquidation value of any mandatorily redeemable
preferred Capital Stock of such Person or its Subsidiaries held by any
Person other than such Person and its Wholly Owned Subsidiaries.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
14
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December to occur while
such Loan is outstanding and the final maturity date of such Loan, (b)
as to any Eurodollar Loan having an Interest Period of three months or
less, the last day of such Interest Period, (c) as to any Eurodollar
Loan having an Interest Period longer than three months, each day
which is three months, or a whole multiple thereof, after the first
day of such Interest Period and the last day of such Interest Period
and (d) as to any Loan (other than any Revolving Credit Loan that is a
Base Rate Loan and any Swing Line Loan), the date of any repayment or
prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one, two,
three or six months thereafter, as selected by the Borrower in its
notice of borrowing or notice of conversion, as the case may be, given
with respect thereto; and (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months thereafter,
as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period would otherwise end
on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest
Period into another calendar month in which event such
Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise
extend beyond the scheduled Revolving Credit Termination Date
or beyond the date final payment is due on the Term Loans
shall end on the Revolving Credit Termination Date or such
due date, as applicable;
15
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods
so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such Loan.
"Inventory": all inventory of the Borrower and its
Subsidiaries as defined and classified by the Borrower and the
Subsidiary Guarantors on a basis consistent with the Borrower's and
Subsidiary Guarantors' current and historical accounting practices,
excluding perishables.
"Investments": as defined in Section 7.8.
"Issuing Lender": UBS AG, Stamford Branch, in its capacity as
issuer of any Letter of Credit.
"L/C Commitment": $50,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit
Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant
to Section 3.5.
"L/C Participants": the collective reference to all the
Revolving Credit Lenders other than the Issuing Lender.
"Leased Properties": the collective reference to the real
properties leased by the respective Loan Parties described on Part II
of Schedule 1.1, including all buildings, improvements, structures and
fixtures now or subsequently located thereon and owned or leased by
the respective Loan Parties.
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit J, to be
executed and delivered by such Lender on the Closing Date as provided
in Section 10.16.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference,
16
priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital
lease having substantially the same economic effect as any of the
foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents and
the Notes.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility,
the holders of more than 50% of the aggregate unpaid principal amount
of the Term Loans or the Total Revolving Extensions of Credit, as the
case may be, outstanding under such Facility (or, in the case of the
Revolving Credit Facility, prior to any termination of the Revolving
Credit Commitments, the holders of more than 50% of the Total
Revolving Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) of
the Borrower and its Subsidiaries taken as a whole or (b) the validity
or enforceability of this Agreement or any of the other Loan Documents
or the rights or remedies of the Agents or the Lenders hereunder or
thereunder.
"Material Environmental Amount": an amount payable by the
Borrower and/or its Subsidiaries for investigative and remedial costs,
compliance costs, compensatory damages, natural resource damages,
punitive damages, fines, penalties or any combination thereof which,
in the aggregate, exceed $5,000,000.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other
substances or forces of any kind, whether or not any such substance or
force is defined as hazardous or toxic under any Environmental Law,
that is regulated pursuant to or could give rise to liability under
any Environmental Law.
"Mortgaged Properties": the collective reference to each of
the Fee Properties and the Leased Properties.
"Mortgages": the collective reference to each of the
mortgages, deeds of trust and deeds to secure debt encumbering each of
the Mortgaged Properties to be executed and
17
delivered by the respective Loan Parties in favor of, or for the
benefit of, the Administrative Agent for the benefit of the Lenders,
substantially in the form of Exhibit D (with such changes thereto as
shall be advisable under the law of the jurisdiction in which such
mortgage, deed to secure debt or deed of trust is to be recorded), as
the same may be amended, supplemented or otherwise modified from time
to time.
"Multiemployer Plan": a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and
when received) of such Asset Sale or Recovery Event, net of attorneys'
fees, accountants' fees, investment banking fees, amounts required to
be applied to the repayment of Indebtedness secured by a Lien
expressly permitted hereunder on any asset which is the subject of
such Asset Sale or Recovery Event and other customary fees and
expenses actually incurred in connection therewith and net of taxes
paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any
tax sharing arrangements) and (b) in connection with any issuance or
sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith.
"New Lending Office": as defined in Section 2.17(d).
"Non-Excluded Taxes": as defined in Section 2.20(a).
"Non-U.S. Lender": as defined in Section 2.20(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to the Administrative
Agent or to any Lender (or, in the case of Hedge Agreements, any
affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Hedge
Agreement entered into with any Lender or any affiliate of any Lender
or any other
18
document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all
fees, charges and disbursements of counsel to the Administrative Agent
or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Loan Document.
"Participant": as defined in Section 10.6(b).
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the
Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Liens": Liens permitted to exist under Section 7.3.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Petition Date": as defined in the Recitals.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Plan of Reorganization": as defined in the Recitals.
"Prepetition Credit Facility": the prepetition $250,000,000
senior secured credit facility agented by Bankers Trust Company.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
19
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation
proceeding relating to any asset of the Borrower or any of its
Subsidiaries.
"Refunded Swing Line Loans": as defined in Section 2.7.
"Refunding Date": as defined in Section 2.7.
"Register": as defined in Section 10.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the
Borrower or any of its Subsidiaries in connection therewith which are
not applied to prepay the Term Loans or reduce the Revolving Credit
Commitments pursuant to Section 2.12(b) as a result of the delivery of
a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and
is continuing and that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of
the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire
assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount expended prior to the relevant Reinvestment Prepayment
Date to acquire assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring one year
after such Reinvestment Event and (b) the date on which the Borrower
shall have determined not to, or shall have otherwise ceased to,
acquire assets useful in the Borrower's business with all or any
portion of the relevant Reinvestment Deferred Amount.
20
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .27, .28, .29, .30, .31,
.32, .34 or .35 of PBGC Reg. ss. 4043.
"Required Lenders": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments and (b) thereafter, the
sum of (i) the aggregate unpaid principal amount of the Term Loans
then outstanding and (ii) the Total Revolving Credit Commitments then
in effect or, if the Revolving Credit Commitments have been
terminated, the Total Revolving Extensions of Credit then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders
in respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is
subject.
"Responsible Officer": the chief executive officer,
president, chief administrative officer or chief financial officer of
the Borrower, but in any event, with respect to financial matters, the
chief financial officer, the treasurer and controller of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Swing Line Loans and Letters of Credit, in an aggregate
principal and/or face amount not to exceed the amount set forth under
the heading "Revolving Credit Commitment" opposite such Lender's name
on Schedule 1 to the Letter Addendum delivered by such Lender, or, as
the case may be, in the Assignment and Acceptance pursuant to which
such Lender became a party hereto, as the same may be changed from
time to time pursuant to the terms hereof. The original amount of the
Total Revolving Credit Commitments is $70,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
21
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving
Credit Commitment then constitutes of the Total Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).
"Revolving Credit Termination Date": August 17, 2003.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender
then outstanding, (b) such Lender's Revolving Credit Percentage of the
L/C Obligations then outstanding and (c) such Lender's Revolving
Credit Percentage of the aggregate principal amount of Swing Line
Loans then outstanding.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other
security documents hereafter delivered to the Administrative Agent
granting a Lien on any Property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured,
(c) such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such
22
power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary.
"Swing Line Commitment": the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.6 in an
aggregate principal amount at any one time outstanding not to exceed
$10,000,000.
"Swing Line Lender": Lehman Commercial Paper Inc., in its
capacity as the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
"Swing Line Participation Amount": as defined in Section 2.7.
"Term Loans": as defined in Section 2.1.
"Term Loan Commitment": as to any Term Loan Lender, the
obligation of such Lender, if any, to make a Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth
under the heading "Term Loan Commitment" opposite such Lender's name
on Schedule 1 to the Letter Addendum delivered by such Lender, or, as
the case may be, in the Assignment and Acceptance pursuant to which
such Lender became a party hereto, as the same may be changed from
time to time pursuant to the terms hereof. The original aggregate
amount of the Term Loan Commitments is $230,000,000.
"Term Loan Lender": each Lender which has a Term Loan
Commitment or which is the holder of a Term Loan.
"Term Loan Percentage": as to any Lender at any time, the
percentage which such Lender's Term Loan Commitment then constitutes
of the aggregate Term Loan Commitments (or, at any time after the
Closing Date, the percentage which the aggregate principal amount of
such Lender's Term Loans then outstanding constitutes of the aggregate
principal amount of the Term Loans then outstanding).
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
23
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the
Revolving Credit Lenders outstanding at such time.
"Transferee": as defined in Section 10.15.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Underlying Lease": as defined in Section 4.8.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or
through other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. (a) Subject to the terms and
conditions hereof, each Term Loan Lender severally agrees to make a term loan
(a "Term Loan") to the Borrower on the Closing Date in an amount not to exceed
the amount of the Term Loan Commitment of
24
such Lender. The Term Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.13.
2.2 Procedure for Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 10:00 A.M., New York City time, one
Business Day prior to the anticipated Closing Date) requesting that the Term
Loan Lenders make the Term Loans on the Closing Date and specifying the amount
to be borrowed. The Term Loans made on the Closing Date shall initially be Base
Rate Loans, and no Term Loan may be converted into or continued as a Eurodollar
Loan prior to the date which is 90 days after the Closing Date, or, if earlier,
the date on which the Syndication Agent completes the syndication of the
Facilities and the entities selected in such syndication process become parties
to this Agreement. Upon receipt of such notice the Administrative Agent shall
promptly notify each Term Loan Lender thereof. Not later than 12:00 Noon, New
York City time, on the Closing Date, each Term Loan Lender shall make available
to the Administrative Agent at the Funding Office an amount in immediately
available funds equal to the Term Loan to be made by such Lender. The
Administrative Agent shall credit to the account of the Borrower on the books
of the Funding Office the aggregate of the amounts made available to the
Administrative Agent by the Term Loan Lenders in immediately available funds.
2.3 Repayment of Term Loans. The Term Loan of each Lender
shall mature and be payable in one payment on August 17, 2003.
2.4 Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of the sum of (i) the L/C Obligations then outstanding and
(ii) the aggregate principal amount of the Swing Line Loans then outstanding,
does not exceed the amount of such Lender's Revolving Credit Commitment then in
effect. During the Revolving Credit Commitment Period the Borrower may use the
Revolving Credit Commitments by borrowing, prepaying the Revolving Credit Loans
in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.5 and 2.13, provided
that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The Borrower
may borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give
the Administrative Agent irrevocable notice
25
(which notice must be received by the Administrative Agent prior to 12:00 Noon,
New York City time, (a) three Business Days prior to the requested Borrowing
Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the
requested Borrowing Date, in the case of Base Rate Loans), specifying (i) the
amount and Type of Revolving Credit Loans to be borrowed, (ii) the requested
Borrowing Date and (iii) in the case of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Period therefor. Any Revolving Credit Loans made on the Closing Date
shall initially be Base Rate Loans, and no Revolving Credit Loan may be made
as, converted into or continued as a Eurodollar Loan prior to the date which is
90 days after the Closing Date, or, if earlier, the date on which the
Syndication Agent completes the syndication of the Facilities and the entities
selected in such syndication process become parties to this Agreement. Each
borrowing under the Revolving Credit Commitments shall be in an amount equal to
(x) in the case of Base Rate Loans, $1,000,000 or a whole multiple thereof (or,
if the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided, that
the Swing Line Lender may request, on behalf of the Borrower, borrowings under
the Revolving Credit Commitments which are Base Rate Loans in other amounts
pursuant to Section 2.7. Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Revolving Credit Lender
thereof. Each Revolving Credit Lender will make the amount of its pro rata share
of each borrowing available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent crediting the account of the Borrower on
the books of the Funding Office with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Credit Lenders and in
like funds as received by the Administrative Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees to make a portion of the credit
otherwise available to the Borrower under the Revolving Credit Commitments from
time to time during the Revolving Credit Commitment Period by making swing line
loans ("Swing Line Loans") to the Borrower; provided that (i) the aggregate
principal amount of Swing Line Loans outstanding at any time shall not exceed
the Swing Line Commitment then in effect (notwithstanding that the Swing Line
Loans outstanding at any time, when aggregated with the Swing Line Lender's
other outstanding Revolving Credit Loans hereunder, may exceed the Swing Line
Commitment then in effect) and (ii) the Borrower shall not request, and the
Swing Line Lender shall not make, any Swing Line Loan if, after giving effect
to the making of such Swing Line Loan, the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. During the Revolving
Credit Commitment Period, the Borrower may use the Swing Line Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans
on the Revolving Credit Termination Date.
26
2.7 Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans. (a) Whenever the Borrower desires that the Swing Line Lender make
Swing Line Loans it shall give the Swing Line Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the Swing Line Lender not later than 1:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Credit Commitment Period). Each borrowing under the Swing Line Commitment shall
be in an amount equal to $500,000 or a whole multiple of $100,000 in excess
thereof. Not later than 3:00 P.M., New York City time, on the Borrowing Date
specified in a notice in respect of Swing Line Loans, the Swing Line Lender
shall make available to the Administrative Agent at the Funding Office an
amount in immediately available funds equal to the amount of the Swing Line
Loan to be made by the Swing Line Lender. The Administrative Agent shall make
the proceeds of such Swing Line Loan available to the Borrower on such
Borrowing Date by depositing such proceeds in the account of the Borrower with
the Administrative Agent on such Borrowing Date in immediately available funds.
(b) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of the Borrower (which
hereby irrevocably directs the Swing Line Lender to act on its behalf), on one
Business Day's notice given by the Swing Line Lender no later than 12:00 Noon,
New York City time, request each Revolving Credit Lender to make, and each
Revolving Credit Lender hereby agrees to make, a Revolving Credit Loan, in an
amount equal to such Revolving Credit Lender's Revolving Credit Percentage of
the aggregate amount of the Swing Line Loans (the "Refunded Swing Line Loans")
outstanding on the date of such notice, to repay the Swing Line Lender. Each
Revolving Credit Lender shall make the amount of such Revolving Credit Loan
available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one Business
Day after the date of such notice. The proceeds of such Revolving Credit Loans
shall be immediately made available by the Administrative Agent to the Swing
Line Lender for application by the Swing Line Lender to the repayment of the
Refunded Swing Line Loans. The Borrower irrevocably authorizes the Swing Line
Lender to charge the Borrower's accounts with the Administrative Agent (up to
the amount available in each such account) in order to immediately pay the
amount of such Refunded Swing Line Loans to the extent amounts received from
the Revolving Credit Lenders are not sufficient to repay in full such Refunded
Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest
in the then outstanding Swing Line Loans by paying to the Swing Line Lender an
amount (the "Swing Line Participation Amount") equal to (i) such Revolving
Credit Lender's Revolving Credit Percentage times (ii) the sum of the
27
aggregate principal amount of Swing Line Loans then outstanding which were to
have been repaid with such Revolving Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Lender's Swing Line
Participation Amount, the Swing Line Lender receives any payment on account of
the Swing Line Loans, the Swing Line Lender will distribute to such Lender its
Swing Line Participation Amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender's
participating interest was outstanding and funded and, in the case of principal
and interest payments, to reflect such Lender's pro rata portion of such
payment if such payment is not sufficient to pay the principal of and interest
on all Swing Line Loans then due); provided, however, that in the event that
such payment received by the Swing Line Lender is required to be returned, such
Revolving Credit Lender will return to the Swing Line Lender any portion
thereof previously distributed to it by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the
Loans referred to in Section 2.7(b) and to purchase participating interests
pursuant to Section 2.7(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender or Term Loan Lender, as the
case may be, (i) the then unpaid principal amount of each Revolving Credit Loan
of such Revolving Credit Lender on the Revolving Credit Termination Date (or
such earlier date on which the Loans become due and payable pursuant to Section
8), (ii) the then unpaid principal amount of each Swing Line Loan of such Swing
Line Lender on the Revolving Credit Termination Date (or such earlier date on
which the Loans become due and payable pursuant to Section 8) and (iii) the
principal amount of each Term Loan of such Term Loan Lender as set forth in
Section 2.3 (or on such earlier date on which the Loans become due and payable
pursuant to Section 8). The Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Loans from time to time outstanding from the
date hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in Section 2.15.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
28
(c) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 10.6(e), and a subaccount
therein for each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder and any Note evidencing such Loan, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made
to such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Term Loans,
Revolving Credit Loans or Swing Line Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit G-1, G-2 or G-3, respectively, with
appropriate insertions as to date and principal amount.
2.9 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment
of such Lender during the period for which payment is made, payable quarterly
in arrears on the last day of each March, June, September and December and on
the Revolving Credit Termination Date, commencing on the first of such dates to
occur after the Closing Date.
(b) The Borrower agrees to pay to the Agents the fees in the
amounts and on the dates agreed to in writing by the Borrower and the Agents.
2.10 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the Revolving
Credit Commitments or, from time to time, to reduce the amount of the Revolving
Credit Commitments; provided that no such termination or reduction of Revolving
Credit Commitments shall be permitted if, after giving effect thereto and to
any prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Credit Commitments. Any such reduction shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Credit Commitments then in effect.
29
2.11 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, upon irrevocable
notice delivered to the Administrative Agent at least three Business Days prior
thereto in the case of Eurodollar Loans and at least one Business Day prior
thereto in the case of Base Rate Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or Base
Rate Loans; provided, that if a Eurodollar Loan is prepaid on any day other
than the last day of the Interest Period applicable thereto, the Borrower shall
also pay any amounts owing pursuant to Section 2.21; and provided, further that
Swing Line Loans may be prepaid on the same day as such notice. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, together with
(except in the case of Revolving Credit Loans which are Base Rate Loans and
Swing Line Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Term Loans and Revolving Credit Loans shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof. Partial prepayments
of Swing Line Loans shall be in an aggregate principal amount of $100,000 or a
whole multiple thereof. Prepayments of the Term Loans shall, subject to the
right of each Term Loan Lender to decline all or any portion of any optional
prepayment applicable thereto pursuant to Section 2.18(d), be in the amounts
set forth below during the periods set forth below:
Prepayment Amount
(expressed as a % of
Period Principal Amount)
- ------ ----------------------
August 17, 1998 to August 17, 1999 102%
August 18, 1999 to February 18, 2000 101%
February 19, 2000 and Thereafter 100%
2.12 Mandatory Prepayments and Commitment Reductions. (a)
Unless the Required Prepayment Lenders shall otherwise agree, if any Capital
Stock shall be issued, or Indebtedness incurred, by the Borrower or any of its
Subsidiaries (excluding any Indebtedness incurred in accordance with Section
7.2 and excluding Capital Lease Obligations), an amount equal to 50% of the Net
Cash Proceeds thereof, in the case of any Capital Stock issued, and an amount
equal to 100% of the Net Cash Proceeds thereof, in the case of any Indebtedness
incurred, shall be applied on the date of such issuance or incurrence toward
the prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.12(e).
(b) Unless the Required Prepayment Lenders shall otherwise
agree, if on any date the Borrower or any of its Subsidiaries shall receive Net
Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect thereof as set forth in clause (ii) below,
such Net Cash Proceeds shall be applied on the next Business Day toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.12(d); provided, that, notwithstanding
the foregoing, (i) the aggregate Net Cash Proceeds of (A) Asset Sales up to
$5,000,000 in any fiscal year of the
30
Borrower and (B) Recovery Events may be excluded from the foregoing requirement
pursuant to a Reinvestment Notice in any fiscal year of the Borrower and (ii)
on each Reinvestment Prepayment Date, an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event shall be
applied toward the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in Section 2.12(e).
(c) Unless the Required Prepayment Lenders shall otherwise
agree, if, for any fiscal year of the Borrower commencing with the fiscal year
ending March 27, 1999, there shall be Excess Cash Flow, the Borrower shall, on
the relevant Excess Cash Flow Application Date, apply the ECF Percentage of
such Excess Cash Flow toward the prepayment of the Term Loans and the reduction
of the Revolving Credit Commitments as set forth in Section 2.12(c). Each such
prepayment and commitment reduction shall be made on a date (an "Excess Cash
Flow Application Date") no later than five days after the earlier of (i) the
date on which the financial statements of the Borrower referred to in Section
6.1(a), for the fiscal year with respect to which such prepayment is made, are
required to be delivered to the Lenders and (ii) the date such financial
statements are actually delivered.
(d) If, at any time during the Revolving Credit Commitment
Period, the Total Revolving Extensions of Credit exceed the amount of the Total
Revolving Credit Commitments, the Borrower shall, without notice of demand,
immediately prepay the Revolving Credit Loans and/or Swing Line Loans in an
aggregate principal amount equal to such excess, together with interest accrued
to the date of such payment or prepayment.
(e) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section 2.12 shall be applied,
first, to the prepayment of the Term Loans and, second, to reduce permanently
the Revolving Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving Credit Loans
and/or Swing Line Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Credit
Commitments as so reduced, provided that if the aggregate principal amount of
Revolving Credit Loans and Swing Line Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion thereof),
the Borrower shall, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account established with the Administrative Agent for the benefit of
the Lenders on terms and conditions satisfactory to the Administrative Agent.
The application of any prepayment pursuant to this Section 2.12 shall be made
first to Base Rate Loans and second to Eurodollar Loans. Each prepayment of the
Loans under this Section 2.12 (except in the case of Revolving Credit Loans
that are Base Rate Loans and Swing Line Loans) shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid. Prepayments of
the Term Loans (except with respect to prepayments pursuant to Section 2.12
(c)) shall, subject to the right of each Term Loan Lender to decline all or any
portion of any mandatory prepayment applicable thereto pursuant to Section
2.18(d), be in the amounts set forth below during the periods set forth below:
31
Prepayment Amount
(expressed as a % of
Period Principal Amount)
- ------ --------------------
August 17, 1998 to August 17, 1999 102%
August 18, 1999 to February 18, 2000 101%
February 19, 2000 and Thereafter 100%
2.13 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to Base Rate Loans by
giving the Administrative Agent at least two Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
may only be made on the last day of an Interest Period with respect thereto.
The Borrower may elect from time to time to convert Base Rate Loans to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election (which notice shall specify the
length of the initial Interest Period therefor), provided that no Base Rate
Loan under a particular Facility may be converted into a Eurodollar Loan (i)
when any Event of Default has occurred and is continuing and the Administrative
Agent or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such conversions or
(ii) after the date that is one month prior to the final scheduled termination
or maturity date of such Facility. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has or the Majority Facility Lenders in respect of
such Facility have determined in its or their sole discretion not to permit
such continuations or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility, and provided, further,
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to Base Rate
Loans on the last day of such then expiring Interest Period. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
2.14 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans hereunder and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, (a) after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of
32
$1,000,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
2.15 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a
rate per annum which is equal to (x) in the case of the Loans, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section 2.15 plus 2%, or (y) in the case of Reimbursement Obligations, the
rate applicable to Base Rate Loans under the Revolving Credit Facility plus 2%,
and (ii) if all or a portion of any interest payable on any Loan or
Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do
not relate to a particular Facility, the rate then applicable to Base Rate
Loans under the Revolving Credit Facility plus 2%), in each case, with respect
to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section 2.15 shall be payable from time to time on demand.
2.16 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed with respect to Eurodollar Loans and
on the basis of a 365- (or 366-, as the case may be) day year for the actual
days elapsed with respect to Base Rate Loans. The Administrative Agent shall as
soon as practicable notify the Borrower and the relevant Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.15(a).
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2.17 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that
the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans, (y) any Loans under the relevant Facility that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
under the relevant Facility shall be converted, on the first day of such
Interest Period, to Base Rate Loans. Until such notice has been withdrawn by
the Administrative Agent, no further Eurodollar Loans under the relevant
Facility shall be made or continued as such, nor shall the Borrower have the
right to convert Loans under the relevant Facility to Eurodollar Loans.
2.18 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Commitments of the
Lenders shall be made pro rata according to the respective Term Loan
Percentages or Revolving Credit Percentages, as the case may be, of the
relevant Lenders. Each payment (other than prepayments) in respect of principal
or interest in respect of the Loans, each payment in respect of fees payable
hereunder, and each payment in respect of Reimbursement Obligations, shall be
applied to the amounts of such obligations owing to the Lenders pro rata
according to the respective amounts then due and owing to the Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Term Loans shall be made pro
rata according to the respective outstanding principal amounts of the Term
Loans then held by the Term Loan Lenders (except as otherwise provided in
Section 2.18(d)). Amounts prepaid on account of the Term Loans may not be
reborrowed.
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders.
34
(d) Notwithstanding anything to the contrary in Sections
2.11, 2.12 or 2.18, each Term Loan Lender may, at its option, decline all or
any portion of any partial prepayment applicable to the Term Loans of such
Lender; accordingly, with respect to the amount of any prepayment described in
Section 2.11 or 2.12 that is allocated to Term Loans (such amounts, the
"Prepayment Amount"), the Borrower will, in the case of any prepayment required
to be made pursuant to Section 2.11 or 2.12, in lieu of applying such amount to
the prepayment of Term Loans, on the date specified in Section 2.11 or 2.12 for
such prepayment, give the Administrative Agent telephonic notice (promptly
confirmed in writing) requesting that the Administrative Agent prepare and
provide to each Term Loan Lender a notice (each, a "Prepayment Option Notice")
as described below. As promptly as practicable after receiving such notice from
the Borrower, the Administrative Agent will send to each Term Loan Lender a
Prepayment Option Notice, which shall be in the form of Exhibit H, and shall
include an offer by the Borrower to prepay on the date (each a "Prepayment
Date") that is 10 Business Days after the date of the Prepayment Option Notice,
the relevant Term Loans of such Lender by an amount equal to the portion of the
Prepayment Amount indicated in such Lender's Prepayment Option Notice as being
applicable to such Lender's Term Loans and such further amount, if any, as may
be available to additionally prepay such Lender's Term Loans from the portion
of the Prepayment Amount not accepted by the Accepting Lenders. On the
Prepayment Date, (i) the Borrower shall pay to the Administrative Agent the
aggregate amount necessary to prepay that portion of the outstanding relevant
Term Loans in respect of which Lenders have accepted prepayment as described
above (such Lenders, the "Accepting Lenders"), and such amount shall be applied
to reduce the Prepayment Amounts with respect to each Accepting Lender, (ii)
the Borrower shall pay to the Administrative Agent an amount equal to the
portion of the Prepayment Amount not accepted by the Accepting Lenders
(excluding such amount required to be prepaid pursuant to Section 2.12(c)), and
such amount shall be applied, first, to prepay the Term Loans of each Accepting
Lender, pro rata, agreeing to accept prepayment of such additional amount as
described above and, second, to the permanent reduction of the Revolving Credit
Commitments, and (iii) the Borrower shall be entitled to retain the remaining
portion of the Prepayment Amount not accepted by the Accepting Lenders.
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 1:00 p.m., New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Payment Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
35
(f) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error. If such Lender's share of
such borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to Base Rate Loans under the relevant Facility, on demand,
from the Borrower.
(g) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment being made
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days of such
required date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.19 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.20 and changes in the rate of
taxes based on or measured by net income and franchise taxes imposed
in lieu thereof of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other
36
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.19, it
shall promptly notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter
of Credit to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor, the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section 2.19 submitted by any Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive in the absence of
manifest error. The obligations of the Borrower pursuant to this Section 2.19
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.
2.20 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding taxes based on or measured by net income and franchise
taxes (imposed in lieu thereof) imposed on any Agent or any Lender as a result
of a present or former connection between such Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such non-excluded
taxes, levies, imposts, duties, charges,
37
fees, deductions or withholdings ("Non-Excluded Taxes") or Other Taxes are
required to be withheld from any amounts payable to any Agent or any Lender
hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such Lender (after
payment of all Non- Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any
Non-Excluded Taxes (i) that are attributable to such Lender's failure to comply
with the requirements of paragraph (d) or paragraph (e) of this Section 2.20 or
(ii) to the extent that the obligation to withhold amounts with respect to
United States federal withholding tax existed on the date such Lender became a
party to this Agreement (or, in the case of a Participant, on the date such
Participant became a Participant hereunder) or, with respect to payments to a
New Lending Office, the date such Lender designated such New Lending Office
with respect to a Loan, except to the extent that such Lender's assignor (if
any) was entitled, at the time of assignment or such Lender was entitled at the
time the New Lending Office was designated, to receive additional amounts from
the Borrower with respect to such Non-Excluded Taxes pursuant to this Section
2.20(a).
(b) In addition, the Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for the account of the relevant Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Agents the required receipts or other
required documentary evidence, the Borrower shall indemnify the Administrative
Agent and the Lenders for any incremental taxes, interest or penalties that may
become payable by any Agent or any Lender as a result of any such failure. The
agreements in this Section 2.20 shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a United States
person as defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (or, in the case of
a Participant, to the Lender from which the related participation shall have
been purchased) (x) two copies of either U.S. Internal Revenue Service Form
1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from
U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest" a statement substantially in the
form of Exhibit I and a Form W-8, or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrower under this Agreement and the
other Loan Documents and (y) any other related documents reasonably requested
by the Borrower. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation) and on or before the date, if any, such Non-U.S. Lender changes
its
38
applicable lending office by designating a different lending office (a "New
Lending Office"). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered
by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the
Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate,
provided that such Lender is legally entitled to complete, execute and deliver
such documentation and in such Lender's reasonable judgment such completion,
execution or submission would not materially prejudice the legal position of
such Lender.
(f) If any Agent or any Lender determines that it has
received a refund in respect of any Non-Excluded Taxes or Other Taxes as to
which indemnification has been paid by the Borrower pursuant to Section 2.20,
it shall promptly remit such refund (including any interest) to the Borrower,
net of all out-of-pocket expenses of such Agent or such Lender; provided,
however, that the Borrower, upon the request of such Agent or such Lender,
agrees promptly to return such refund (plus any interest) to such party in the
event such party is required to repay such refund to the relevant taxing
authority requiring prepayment or such refund. Such Agent or Lender shall
provide the Borrower with a copy of any notice or assessment from the relevant
taxing authority (deleting any confidential information contained therein)
requiring repayment of such refund.
2.21 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included
therein, if
39
any) over (ii) the amount of interest (as reasonably determined by
such Lender) which would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank eurodollar market. A certificate as to any amounts payable pursuant
to this Section 2.21 submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.22 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
2.21.
2.23 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.19 or
2.20(a) with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the good faith judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
2.23 shall affect or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to Section 2.19 or 2.20(a).
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue letters
of credit ("Letters of Credit") for the account of the Borrower on any Business
Day during the Revolving Credit Commitment Period in such form as may be
approved from time to time by the Issuing Lender; provided that the Issuing
Lender shall have no obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the aggregate amount of the Available Revolving Credit
Commitments would be less than zero. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date which is three
Business Days prior to the Revolving Credit Termination Date, provided that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).
40
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed
by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an Application therefor, completed to the satisfaction of the Issuing Lender,
and such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days but no later than five
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof. The Issuing Lender shall promptly furnish to
the Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).
3.3 Fees and Other Charges. (a) The Borrower shall pay a fee
on the daily average undrawn amount of all outstanding Letters of Credit at a
per annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Credit Facility shared ratably among the
Revolving Credit Lenders and payable quarterly in arrears on each L/C Fee
Payment Date after the issuance date. In addition, the Borrower shall pay to
the Issuing Lender for its own account a fronting fee of 1/8 of 1% per annum,
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date.
(b) In addition to the foregoing fees, the Borrower shall pay
or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a
41
draft is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Revolving Credit Percentage of the amount of such draft,
or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans under the Revolving Credit
Facility. A certificate of the Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this Section 3.4 shall be conclusive in
the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant
its pro rata share of such payment in accordance with Section 3.4(a), the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied thereto by the Issuing Lender), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro
rata share thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by the Issuing Lender in connection with such payment. Each such
payment shall be made to the Issuing Lender at its address for notices
specified herein in lawful money of the United States of America and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Section 3.4 from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate set forth in (i) until the second
Business Day following the date of the applicable drawing, Section 2.15(b) and
(ii) thereafter, Section 2.15(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
42
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply) constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.5 of Base Rate Loans (or, at the option
of the Administrative Agent and the Swing Line Lender in their sole discretion,
a borrowing pursuant to Section 2.7 of Swing Line Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the date of
such drawing.
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with the Issuing Lender that the Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of the Issuing Lender. The Borrower agrees that any action taken or omitted by
the Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in
the Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender to the
Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The responsibility
of the Issuing Lender to the Borrower in connection with any draft presented
for payment under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower represents and warrants to each Agent and each Lender
that:
4.1 Financial Condition. (a) The pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at August
15, 1998 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies
of which have heretofore been furnished to each Lender, has been prepared
giving effect (as if such events had occurred on such date) to (i) the Loans to
be made on the Closing Date and the use of proceeds thereof and (ii) the
payment of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet has been prepared based on the best information available to the
Borrower as of the date of delivery thereof, and presents fairly on a pro forma
basis the estimated financial position of Borrower and its consolidated
Subsidiaries as at August 15, 1998, assuming that the events specified in the
preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower
and its Subsidiaries as at March 28, 1998, March 29, 1997 and March 30, 1996
and the related consolidated statements of income and of cash flows for the
fiscal years ended on such dates, reported on by and accompanied by a report
from Price Waterhouse LLP, present fairly the consolidated financial condition
of the Borrower and its Subsidiaries as at such date, and the consolidated
results of its operations and its consolidated cash flows for the respective
fiscal years then ended. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). The Borrower and its
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, which are not reflected in the most recent financial
statements referred to in this paragraph. During the period from March 28, 1998
to and including the date hereof there has been no Disposition by the Borrower
of any material part of its business or Property.
4.2 No Change. Since March 28, 1998 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, other than the commencement of the Case.
4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification and (d) is in compliance with
44
all Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to borrow hereunder. Each Loan Party has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrower,
to authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the transactions and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except the filings referred to in Section 4.19.
Each Loan Document has been duly executed and delivered on behalf of each Loan
Party thereto. This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of each Loan
Party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance
of this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or any Contractual Obligation of the Borrower or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and
its Subsidiaries has title in fee simple to, or a
45
valid leasehold interest in, all its real property, and good title to, or a
valid leasehold interest in, all its other Property, and none of such Property
is subject to any Lien except Permitted Liens. The Fee Properties as listed on
Part I of Schedule 1.1 constitute all the real properties owned in fee by the
respective Loan Parties set forth therein, the Leased Properties as listed on
Part II of Schedule 1.1 constitute all of the real properties leased by the
respective Loan Parties set forth therein which may be made subject to a
recorded Lien either (a) without violating the terms of the applicable
Underlying Lease or (b) with the consent of the landlord thereunder, and each
lease agreement under which an interest in a Leased Property is held (as
amended, an "Underlying Lease") is in full force and effect.
4.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use
of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim. The use of Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of any Person in any material
respect.
4.10 Taxes. Each of the Borrower and each of its Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns which are required to be filed and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
Property and all other material taxes, fees or other charges imposed on it by
any Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be).
4.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose which violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
4.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with such matters that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. All
payments due from the Borrower or any of its Subsidiaries on account of
employee health and welfare insurance that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect if not paid have
been paid or accrued as a liability on the books of the Borrower or the
relevant Subsidiary.
46
4.13 ERISA. Except for the voluntary petition filed by the
Borrower under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for
the District of Delaware in 1995 and except for the commencement of the Case,
neither a Reportable Event nor an "accumulated funding deficiency" (within the
meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during
the five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. The present value of
all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by a material amount. Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan which has
resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made. To the knowledge of the
Borrower, no such Multiemployer Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan
Party is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of the Borrower at the date hereof.
4.16 Use of Proceeds. The proceeds of the Loans shall be used
(a) to refinance the DIP Credit Facility, (b) to pay fees and expenses in
connection with the Plan of Reorganization as confirmed by the Bankruptcy
Court, (c) to finance the working capital needs of the Borrower and the
Subsidiary Guarantors in the ordinary course of business, (d) to refinance the
Supplemental Term Loans under the Prepetition Credit Facility, and (e) for
general corporate purposes, including, without limitation, capital
expenditures.
4.17 Environmental Matters. Other than exceptions to any of
the following that could not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect or result in the payment of
a Material Environmental Amount:
(a) Each of the Borrower and its Subsidiaries: (i) is, and
within the period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; (ii) holds all Environmental
Permits (each of which is in full force and effect) required for any of its
current or intended operations or required of it with respect to any property
owned, leased, or otherwise operated by it; (iii) is, and within the period of
all applicable statutes of
47
limitation has been, in compliance with all of its Environmental Permits; and
(iv) reasonably believes that: each of its Environmental Permits will be timely
renewed and complied with, without material expense; any additional
Environmental Permits that may be required of any of it will be timely obtained
and complied with, without material expense; and compliance with any
Environmental Law that is or is expected to become applicable to it will be
timely attained and maintained, without material expense.
(b) Materials of Environmental Concern are not present at,
on, under, in, or about any real property now or formerly owned and, to the
knowledge of the Borrower, are not present at, on, under, in, or about any
property now or formerly leased or operated, by the Borrower or any of its
Subsidiaries or at any other location (including, without limitation, any
location to which Materials of Environmental Concern have been sent for re-use
or recycling or for treatment, storage, or disposal) which could reasonably be
expected to (i) give rise to liability of the Borrower or any of its
Subsidiaries under any applicable Environmental Law or otherwise result in
costs to the Borrower or any of its Subsidiaries, or (ii) interfere with the
Borrower's or any of its Subsidiaries' continued operations, or (iii) impair
the fair saleable value of any real property owned or leased by the Borrower or
any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Borrower or any of its
Subsidiaries is, or to the knowledge of the Borrower will be, named as a party
that is pending or, to the knowledge of the Borrower, threatened.
(d) Neither the Borrower nor any of its Subsidiaries has
received any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal Comprehensive
Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or other
agreement, nor is subject to any judgment, decree, or order or other agreement,
in any judicial, administrative, arbitral, or other forum, relating to
compliance with or liability under any Environmental Law.
(f) Neither the Borrower nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities of any
kind, fixed or contingent, known or unknown, under any Environmental Law or
with respect to any Material of Environmental Concern.
(g) For the purpose of Section 8 of this Agreement, each of
the foregoing representations and warranties contained in this Section 4.17
that are qualified in any way by the knowledge of the Borrower shall be deemed
not to be so qualified.
4.18 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document, the Plan of
Reorganization and the disclosure statement related thereto, the Confidential
Information Memorandum or any other document, certificate or statement
furnished to the Arrangers, the Agents, the Lenders or any of them, by or on
behalf of
48
any Loan Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which such statements are made.
The projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed
by management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact
known to any Loan Party that could reasonably be expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other
documents, certificates and statements furnished to the Arrangers, the Agents
or the Lenders for use in connection with the transactions contemplated hereby
and by the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Agents and the Lenders, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds thereof. In the case
of the Pledged Stock described in the Guarantee and Collateral Agreement, when
stock certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 3 of the Guarantee and
Collateral Agreement, the Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case prior and superior in right to any other Person
(except as otherwise set forth herein).
(b) Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Agents and the Lenders, a
legal, valid and enforceable Lien on the Mortgaged Properties described therein
and proceeds thereof, and when the Mortgages are filed in the offices specified
on Schedule 4.19(b), each such Mortgage shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in the Mortgaged Properties and the proceeds thereof, as security for the
Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person (except as otherwise set forth in any
such Mortgage).
4.20 Solvency. Each Loan Party is, and after giving effect to
the transaction contemplated hereby and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be and
will continue to be, Solvent.
4.21 Regulation H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development
49
as an area having special flood hazards and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction, prior to or concurrently with the making of
such extension of credit on the Closing Date, of the following conditions
precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, (ii) the Guarantee and Collateral
Agreement, executed and delivered by a duly authorized officer of the
Borrower and each Subsidiary Guarantor, (iii) a Mortgage covering each
of the Mortgaged Properties, executed and delivered by a duly
authorized officer of each party thereto, and (iv) for the account of
each relevant Lender, Notes conforming to the requirements hereof and
executed and delivered by a duly authorized officer of the Borrower.
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(b) Confirmation of Plan of Reorganization. The Bankruptcy
Court shall have entered on or before August 31, 1998 a final order in
form and substance reasonably satisfactory to the Agents confirming in
accordance with Section 1129 of the Bankruptcy Code the Plan of
Reorganization, which order shall be in full force and effect and
shall not have been stayed, reversed, vacated or otherwise modified.
(c) Pro Forma Balance Sheet; Financial Statements. The
Lenders shall have received (i) the Pro Forma Balance Sheet, (ii) the
audited consolidated financial statements of the Borrower for the 1998
fiscal year and (iii) reasonably satisfactory unaudited interim
consolidated financial statements of the Borrower for each fiscal
month and quarterly period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clause (ii) of
this paragraph as to which such financial statements are available,
and such financial statements shall not, in the reasonable judgment of
the Lenders, reflect any material adverse change in the consolidated
financial condition of the Borrower, from that reflected in the
financial statements or projections contained in the Confidential
Information Memorandum.
(d) Approvals. All governmental, shareholder and third party
approvals (including landlords' and other consents) necessary in
connection with the continuing operations of the Borrower and its
Subsidiaries and the transactions contemplated hereby shall have been
obtained and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the transaction or the
financing contemplated hereby.
(e) Related Agreements. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Agents, with a copy
for each Lender, true and correct copies, certified as to authenticity
by the Borrower, of each Underlying Lease and such other documents or
instruments as may be reasonably requested by the Agents, including,
without limitation, a copy of any other debt instrument, security
agreement or other material contract to which the Loan Parties may be
a party.
(f) Fees. The Lenders, the Arrangers and the Agents shall
have received all fees required to be paid, and all expenses
(including, without limitation, legal fees and expenses, title
premiums, survey charges and recording taxes and fees) for which
invoices have been presented, on or before the Closing Date. All such
amounts will be paid with proceeds of Loans made on the Closing Date
and will be reflected in the funding instructions given by the
Borrower to the Administrative Agent on or before the Closing Date.
(g) Business Plan. The Lenders shall have received a business
plan for fiscal years 1999-2003 and a written analysis of the business
and prospects of the Borrower and its Subsidiaries for the period from
the Closing Date through March 31, 2003.
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(h) Termination of Prepetition Credit Facility. The
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent and Syndication Agent that the Prepetition Credit
Facility shall be simultaneously terminated, all amounts thereunder
shall be simultaneously paid in full and arrangements satisfactory the
Syndication Agent and the Administrative agent shall have been made
for the termination or assignment in favor of the Collateral Agent, as
the case may be, of Liens and security interests granted in connection
therewith.
(i) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions where assets of the Loan Parties are located, and such
search shall reveal no liens on any of the assets of the Borrower or
its Subsidiaries except for (i) Permitted Liens, (ii) liens to be
discharged or assigned to the Collateral Agent on or prior to the
Closing Date pursuant to documentation reasonably satisfactory to the
Agents or (iii) liens which in the aggregate are reasonably determined
by the Agents to be immaterial.
(j) Environmental Assessment. The Administrative Agent shall
have received an environmental assessment with respect to the Borrower
and its Subsidiaries specified by the Administrative Agent.
(k) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit C, with appropriate insertions and attachments.
(l) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Weil, Gotshal &
Manges LLP, counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit F-1; and
(ii) the legal opinion of local counsel in each
of New Jersey, Vermont, Connecticut, New Hampshire,
Pennsylvania, Tennessee and Georgia and of such other special
and local counsel as may be required by the Administrative
Agent, substantially in the form of Exhibit F-2.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative
Agent may reasonably require.
(m) Pledged Stock; Stock Power; Pledged Notes. The
Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the
Guarantee and Collateral Agreement, together with an undated stock
power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof and (ii) each promissory note pledged
to the Administrative Agent pursuant to the Guarantee and Collateral
Agreement endorsed (without recourse) in blank
52
(or accompanied by an executed transfer form in blank satisfactory to
the Syndication Agent) by the pledgor thereof.
(n) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Agents and the Lenders, a
perfected Lien on the Collateral described therein, prior and superior
in right to any other Person (other than Permitted Liens), shall be in
proper form for filing, registration or recordation.
(o) Title Insurance; Flood Insurance. (i) If requested by the
Administrative Agent, the Administrative Agent shall have received,
and the title insurance companies issuing the policies referred to in
clause (ii) below (collectively, the "Title Insurance Company") shall
have received, maps or plats of an as-built survey of the sites of the
Fee Properties certified to the Administrative Agent and the Title
Insurance Company in a manner satisfactory to them, dated a date
satisfactory to the Administrative Agent and the Title Insurance
Company by an independent professional licensed land surveyor
satisfactory to the Administrative Agent and the Title Insurance
Company, which maps or plats and the surveys on which they are based
shall be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and adopted by
the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality of
the foregoing, there shall be surveyed and shown on such maps, plats
or surveys the following: (A) the locations on such sites of all the
buildings, structures and other improvements and the established
building setback lines; (B) the lines of streets abutting the sites
and width thereof; (C) all access and other easements appurtenant to
the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances
affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building structures and
improvements on the sites; (F) if the site is described as being on a
filed map, a legend relating the survey to said map; and (G) the flood
zone designations, if any, in which the Fee Properties are located.
(ii) The Administrative Agent shall have received in respect
of each Mortgaged Property a mortgagee's title insurance policy (or
policies) or marked up unconditional binder for such insurance. Each
such policy shall (A) be in an amount satisfactory to the
Administrative Agent; (B) be issued at ordinary rates; (C) insure that
the Mortgage insured thereby creates a valid first Lien on such
Mortgaged Property free and clear of all defects and encumbrances,
except as disclosed therein; (D) name the Administrative Agent for the
benefit of the Lenders as the insured thereunder; (E) be in the form
of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or
equivalent policies); (F) contain such endorsements and affirmative
coverage as the Administrative Agent may reasonably request and (G) be
issued by title companies satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or
reinsurers, at the
53
option of the Administrative Agent). The Administrative Agent shall
have received evidence satisfactory to it that all premiums
in respect of each such policy, all charges for mortgage recording
tax, and all related expenses, if any, have been paid.
(iii) If requested by the Administrative Agent, the
Administrative Agent shall have received (A) a policy of flood
insurance which (1) covers any parcel of improved real property which
is encumbered by any Mortgage (2) is written in an amount not less
than the outstanding principal amount of the indebtedness secured by
such Mortgage which is reasonably allocable to such real property or
the maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance Act of
1968, whichever is less, and (3) has a term ending not later than the
maturity of the Indebtedness secured by such Mortgage and (B)
confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(iv) The Administrative Agent shall have received a copy of
all recorded documents referred to, or listed as exceptions to title
in, the title policy or policies referred to in clause (ii) above and
a copy of all other material documents affecting the Mortgaged
Properties.
(p) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of
the Guarantee and Collateral Agreement and of Section 5 of each
Mortgage.
(q) Estoppel Certificate. The Administrative Agent shall have
received, with a copy for each Lender, a certificate in form and
substance satisfactory to Agent and its counsel from the landlord
under each Underlying Lease with respect to each Leased Property
consenting to the Mortgage encumbering such Leased Property and
certifying (i) that the Loan Party who is the tenant under the
Underlying Lease is not in default in the performance of any of its
obligations under such Underlying Lease and (ii) to such other matters
as may be requested by the Administrative Agent.
5.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant
to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
54
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or any Agent hereunder, the Borrower shall and
shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Agent and each
Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Price Waterhouse LLP or other independent certified
public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 45
days after the end of each month occurring during each fiscal year of
the Borrower (other than the third, sixth, ninth and twelfth such
month), the unaudited consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and of cash flows for such month and
the portion of the fiscal year through the end of such month, setting
forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
55
6.2 Certificates; Other Information. Furnish to each Agent
and each Lender, or, in the case of clause (g), to the relevant Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 6.1(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except
as specified in such certificate;
(b) concurrently with the delivery of any financial
statements pursuant to Section 6.1, (i) a certificate of a Responsible
Officer stating that, to the best of each such Responsible Officer's
knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and (ii) in the case of quarterly or annual financial
statements, (x) a Compliance Certificate containing all information
necessary for determining compliance by the Borrower and its
Subsidiaries with the provisions of this Agreement referred to therein
as of the last day of the fiscal quarter or fiscal year of the
Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agent, a listing of any county or
state within the United States where any Loan Party keeps inventory or
equipment and of any Intellectual Property acquired by any Loan Party
since the date of the most recent list delivered pursuant to this
clause (y) (or, in the case of the first such list so delivered, since
the Closing Date);
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as
available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by
a certificate of a Responsible Officer stating that such Projections
are based on reasonable estimates, information and assumptions and
that such Responsible Officer has no reason to believe that such
Projections are incorrect or misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of
the Borrower, a narrative discussion and analysis of the financial
condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, as compared to the portion of the Projections covering such
periods and to the comparable periods of the previous year;
56
(e) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to the
holders of any class of its debt securities or public equity
securities and, within five days after the same are filed, copies of
all financial statements and reports which the Borrower may make to,
or file with, the Securities and Exchange Commission or any successor
or analogous Governmental Authority; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc.
(a) (i) Preserve, renew and keep in full force and effect its corporate
existence and (ii) take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 7.4 and
except, in the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all Property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its Property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
6.6 Inspection of Property; Books and Records; Discussions;
Collateral Audit. (a) Keep proper books of records and account in which full,
true and correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its business and
activities, (b) permit representatives of any Lender to visit and inspect any
of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Borrower and its Subsidiaries with officers and employees of the
Borrower and its Subsidiaries and with its independent certified public
accountants and (c) permit a firm satisfactory to the Administrative Agent (it
being understood that Arthur Anderson & Co. shall be deemed to be satisfactory)
to perform, at the expense of the Borrower, an annual independent audit with
respect to Accounts and Inventory of the Borrower and its Subsidiaries as may
be directed by the Administrative Agent; provided that the Lenders shall have
the right, to the extent the Administrative Agent
57
determines, in its reasonable judgment, that it is necessary to have such an
audit performed more frequently than once a year, to have such an audit so
performed, at the expense of the Borrower.
6.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount involved is $500,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan; and
(e) any development or event which has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 Environmental Laws. (a) (i) Comply in all material
respects with all Environmental Laws applicable to it, and obtain, comply in
all material respects with and maintain any and all Environmental Permits
necessary for its operations as conducted and as planned; and (ii) ensure that
all of its tenants, subtenants, contractors, subcontractors, and invitees
comply in all material respects with all Environmental Laws, and obtain, comply
with and maintain any and all Environmental Permits, applicable to any of them
insofar as any failure to so comply, obtain or maintain reasonably could be
expected to adversely affect the Borrower.
(b) Prior to acquiring any ownership or leasehold interest in
real property, either directly or indirectly (including without limitation a
stock purchase) the Borrower shall evaluate, based on the property's current
and prior use, whether such property could reasonably result in a
58
potential liability under any Environmental Law. Where such evaluation
indicates the possibility of such a potential liability, the Borrower shall
take all measures to satisfy itself reasonably that such property's potential
liability under any Environmental Law, when added to all other such liabilities
of the Borrower and its Subsidiaries at all properties of which the Borrower is
aware at which the Borrower or any Subsidiary may have liability under any
Environmental Law (whether or not the Borrower or any Subsidiary has or
formerly had any ownership or leasehold interest in such property either
directly or indirectly), shall not exceed a Material Environmental Amount; and,
if the Borrower cannot be so reasonably satisfied, it shall not acquire such
interest.
6.9 Interest Rate Protection. In the case of the Borrower,
within 90 days after the Closing Date, enter into Hedge Agreements to the
extent necessary to provide that at least 50% of the aggregate principal amount
of the Term Loans is subject to interest rate protection for a period of not
less than three years, which Hedge Agreements shall have terms and conditions
reasonably satisfactory to the Administrative Agent.
6.10 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than (x) any Property described in paragraph (b), (c) or
(d) below and (y) any Property subject to a Permitted Lien) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such Property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in such Property, including without limitation, the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may
be requested by the Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $500,000
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than any such real property subject to a Permitted Lien), promptly (i)
execute and deliver a first priority Mortgage in favor of the Administrative
Agent, for the benefit of the Agents and Lenders, covering such real property,
(ii) if requested by the Administrative Agent, provide the Lenders with (x)
title and extended coverage insurance covering such real property in an amount
at least equal to the purchase price of such real estate (or such other amount
as shall be reasonably specified by the Administrative Agent) as well as a
current ALTA survey thereof, together with a surveyor's certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
59
(c) With respect to any new Subsidiary (other than an
Excluded Foreign Subsidiary) created or acquired after the Closing Date (which,
for the purposes of this paragraph, shall include any existing Subsidiary that
ceases to be an Excluded Foreign Subsidiary), by the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for
the benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by the Borrower or any of
its Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement and (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Lenders a perfected first priority security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, including, without limitation, the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent, and (iv) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable in order to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in the Capital Stock of such new Subsidiary which is owned by the
Borrower or any of its Subsidiaries (provided that in no event shall more than
65% of the total outstanding Capital Stock of any such new Subsidiary be
required to be so pledged), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
Borrower or such Subsidiary, as the case may be, and take such other action as
may be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Lien of the Administrative Agent thereon, and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
6.11 Further Assurances. In the case of the Borrower, from
time to time execute and deliver, or cause to be executed and delivered, such
additional instruments, certificates or documents, and take all such actions,
as the Administrative Agent may reasonably request, for the purposes of
implementing or effectuating the provisions of this Agreement and the other
Loan Documents, or of more fully perfecting or renewing the rights of the
Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the Borrower
which may be deemed to be part of the Collateral) pursuant hereto or
60
thereto. Upon the exercise by the Administrative Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be required to obtain from the Borrower
or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
6.12 Survey, etc. (a) To the extent not delivered by the
Closing Date, Borrower shall, within 45 days of the Closing Date, deliver to
the Administrative Agent and the Title Insurance Company surveys of the Fee
Properties meeting the requirements of Section 5.1(o)(i) such that the Title
Company will omit corresponding survey exceptions on the relevant title
insurance policies issued pursuant to Section 5.1(o)(ii) or to be issued
pursuant to Section 6.12(d) and will issue those endorsements to such title
insurance policies (such as survey and access) that cannot be issued without
such surveys.
(b) To the extent not delivered by the Closing Date, Borrower
shall use best efforts to obtain estoppel certificates meeting the requirements
of Section 5.1(q) in respect of each Underlying Lease by December 1, 1998. On
the first Business Day of each calendar month commencing October 1, 1998 and
ending on December 1, 1998, Borrower shall (i) deliver to the Administrative
Agent and the Title Company all such estoppel certificates received by Borrower
to such date, (ii) deliver to the Administrative Agent (A) a Mortgage covering
each Leased Property to which such estoppel certificate relates, executed by a
duly authorized officer of Borrower and (B) a mortgagee's title insurance
policy in respect of each such corresponding Leased Property meeting all of the
requirements of Section 5.1(o)(ii), dated a date satisfactory to the
Administrative Agent, together with all recorded documents referred to, or
listed as exceptions to title in, the title policy or policies referred to in
clause (B) above and a copy of all other material documents affecting each such
Leased Property.
(c) With respect to Leased Properties with respect to which
the corresponding Underlying Lease is not of record (pursuant to a recorded
memorandum thereof or as may otherwise be required in accordance with
applicable law of such state), Borrower shall use best efforts to cause such
Underlying Lease to be of record. Promptly after such Underlying Lease shall be
of record, Borrower shall deliver to the Administrative Agent (i) a Mortgage
covering each such corresponding Mortgaged Property, executed by a duly
authorized officer of Borrower and (ii) a mortgagee's title insurance policy in
respect of each such corresponding Mortgaged Property meeting all of the
requirements of Section 5.1(o)(ii), dated a date satisfactory to the
Administrative Agent, together with all recorded documents referred to, or
listed as exceptions to title in, the title policy or policies referred to in
clause (B) above and a copy of all other material documents affecting each such
Mortgaged Property.
(d) For each Mortgaged Property set forth on Schedule
6.12(d), Borrower shall, within 45 days of the Closing Date, deliver to the
Administrative Agent (i) a Mortgage covering each such Leased Property,
executed by a duly authorized officer of Borrower, (ii) a mortgagee's title
insurance policy in respect of each such corresponding Leased Property meeting
61
all of the requirements of Section 5.1(o)(ii), dated a date satisfactory to the
Administrative Agent, together with all recorded documents referred to, or
listed as exceptions to title in, the title policy or policies referred to in
clause (B) above and a copy of all other material documents affecting each such
Mortgaged Property, and (iii) the legal opinion of local counsel in each of
Tennessee, Georgia and Texas in substantially in the form of Exhibit F-2.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or any Agent hereunder, the Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower (or, if less, the number of full fiscal quarters
subsequent to the Closing Date) ending with any fiscal quarter set forth below
to exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
- -------------- --------------
October 16, 1999 4.60
January 8, 2000 4.50
April 1, 2000 4.50
July 22, 2000 4.45
October 14, 2000 4.30
January 6, 2001 4.15
March 31, 2001 4.00
July 21, 2001 4.00
October 13, 2001 4.00
January 5, 2002 3.75
March 30, 2002 3.75
July 20, 2002 3.75
October 12, 2002 3.75
January 4, 2003 3.75
March 29, 2003 3.75
July 19, 2003 3.75
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower (or, if less, the
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number of full fiscal quarters subsequent to the Closing Date) ending with any
fiscal quarter set forth below to be less than the ratio set forth below
opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
- -------------- ---------------------
January 2, 1999 1.60
April 3, 1999 1.65
July 24, 1999 1.75
October 16, 1999 1.80
January 8, 2000 1.90
April 1, 2000 1.90
July 22, 2000 1.90
October 14, 2000 1.95
January 6, 2001 2.00
March 31, 2001 2.00
July 21, 2001 2.10
October 13, 2001 2.20
January 5, 2002 2.25
March 30, 2002 2.30
July 20, 2002 2.40
October 12, 2002 2.40
January 4, 2003 2.40
March 29, 2003 2.40
July 19, 2003 2.40
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary;
(c) Indebtedness (including, without limitation, Capital
Lease Obligations other than as set forth in Section 7.2(f)) secured
by Permitted Liens in an aggregate principal amount not to exceed
$15,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount
thereof or any shortening of the maturity of any principal amount
thereof);
63
(e) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of
the Borrower or any Subsidiary Guarantor;
(f) Capital Lease Obligations with respect to vehicles, new
stores and office equipment leased in the ordinary course of the
Borrower's business; and
(g) Letters of credit outstanding under the Prepetition
Credit Facility.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, insurance and social security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business and letters of credit outstanding under the Prepetition
Credit Facility;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), provided
that no such Lien is spread to cover any additional Property after the
Closing Date and that the amount of Indebtedness secured thereby is
not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the
acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any Property
64
other than the Property financed by such Indebtedness and (iii) the
amount of Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased; and
(j) with the consent of the Administrative Agent, Liens in
respect of deposits with utilities in the ordinary course of business;
provided, however, that (i) the Borrower shall use its best efforts
not to make any such deposits with utilities, (ii) the Borrower shall
use its best efforts to terminate all such deposit arrangements and
(iii) the aggregate amount of such deposits at any time shall not
exceed $4,000,000.
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be
the continuing or surviving corporation); and
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the
Borrower or any Subsidiary Guarantor.
7.5 Limitation on Disposition of Property. Dispose of any of
its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Sections 7.4(b) or 7.11;
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Subsidiary Guarantor;
(e) the Disposition of other assets (including, without
limitation, the surrender or termination of leases or the non-exercise
of lease extensions) having a fair market value not to exceed
$5,000,000 in the aggregate for any fiscal year of the Borrower; and
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(f) any Asset Sale (subject to the limitation contained in
Section 7.5(e)) or Recovery Event, provided, that the requirements of
Section 2.12(b) are complied with in connection therewith.
7.6 Limitation on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in common stock of the Person
making such dividend) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any Capital Stock of the
Borrower or any Subsidiary, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether
in cash or property or in obligations of the Borrower or any Subsidiary
(collectively, "Restricted Payments"), except that any Subsidiary may make
Restricted Payments to the Borrower or any Subsidiary Guarantor.
7.7 Limitation on Capital Expenditures. Make or commit to
make any Capital Expenditure, except (a) Capital Expenditures of the Borrower
and its Subsidiaries in the ordinary course of business not exceeding for any
fiscal year of the Borrower set forth below the amount set forth below opposite
such fiscal year
Fiscal Year Amount
----------- ------
1999 $60,000,000
2000 80,000,000
2001 52,500,000
2002 55,000,000
2003 57,500,000
; provided, that (i) any such amount referred to above, if not so expended in
the fiscal year for which it is permitted, may be carried over for expenditure
in the next succeeding fiscal year but such amount shall not exceed 25% of the
amount for such fiscal year set forth above, (ii) to the extent the Borrower
retains Excess Cash Flow in any fiscal year pursuant to this Agreement, the
amount referred to above for the fiscal year following the fiscal year in which
the Borrower retains Excess Cash Flow shall be increased by the amount of
Excess Cash Flow so retained by the Borrower and (iii) Capital Expenditures
made pursuant to this clause (a) during any fiscal year shall be deemed made,
first, in respect of amounts permitted for such fiscal year as provided above
and, second, in respect of amounts carried over from the prior fiscal year
pursuant to subclause (i) above, (b) Capital Expenditures made with the
proceeds of any Reinvestment Deferred Amount and (c) Capital Expenditures with
respect to Capital Lease Obligations with respect to vehicles, new stores and
office equipment leased in the ordinary course of the Borrower's business.
7.8 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
66
(b) investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b) and (e) ;
(d) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and
relocation expenses) in an aggregate amount for the Borrower and
Subsidiaries of the Borrower not to exceed $500,000 at any one time
outstanding;
(e) the transaction contemplated pursuant to the Plan of
Reorganization;
(f) Investments in assets useful in the Borrower's business
made by the Borrower or any of its Subsidiaries with the proceeds of
any Reinvestment Deferred Amount;
(g) Investments (other than those relating to the incurrence
of Indebtedness permitted by Section 7.8(c)) by the Borrower or any of
its Subsidiaries in the Borrower or any Person that, prior to such
investment, is a Subsidiary Guarantor;
(h) Investments in existence on the date hereof listed on
Schedule 7.8(h);
(i) loans and advances to developers in connection with the
construction of new store locations not exceeding $10,000,000 at any
one time outstanding; provided that such advances are evidenced by
promissory notes in favor if the Borrower and such notes are pledged
to the Collateral Agent for the ratable benefit of the Lenders
pursuant to the Security Documents;
(j) notes payable from purchasers of stores to the extent
permitted pursuant to this Agreement, so long as (i) the amount of any
such note with respect to any store shall note exceed $500,000, (ii)
the aggregate amounts of all such notes shall not exceed $5,000,000
and (iii) all such notes are pledged to the Collateral Agent for the
ratable benefit of the Lenders pursuant to the Security Documents; and
(k) debt or equity securities received in connection with the
bankruptcy or reorganization of suppliers and/or customers and in
settlement if delinquent obligations of, and other disputes with,
customers and/or suppliers in the ordinary course of business; and
(l) additional Investments of a nature not contemplated
pursuant to the foregoing clauses (a) through (k); provided that all
Investments pursuant to this clause (l) shall not exceed $1,000,000 at
any one time.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Amend, modify or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms of any
Indebtedness (other than
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Indebtedness pursuant to this Agreement) (other than any such amendment,
modification, waiver or other change which (i) would extend the maturity or
reduce the amount of any payment of principal thereof, reduce the rate or
extend the date for payment of interest thereon or relax any covenant or other
restriction applicable to the Borrower or any of its Subsidiaries and (ii) does
not involve the payment of a consent fee in excess of 1% of the amount of
Indebtedness affected), or (b) amend its certificate of incorporation in any
manner determined by the Administrative Agent to be adverse to the Lenders.
7.10 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of the
Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate.
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary, except any sale by the Borrower or any of its Subsidiaries of (x)
the Borrower's stores located at New Fairfield, Connecticut; Corinth, New York;
Vestal, New York; Vestal Plaza, New York; and Manchester Center, Vermont, (y) a
store or facility, and in each case related land, to the extent acquired or
constructed after the Closing Date or (z) equipment acquired or constructed
after the Closing Date, in each case within 270 days of such acquisition or the
substantial completion of such construction, which is then leased back to the
respective seller (pursuant to, in the case of any such equipment, a capital
lease); provided that the proceeds of the respective sale shall be entirely
cash and shall not be less than 95% of the fair market value of the respective
asset being sold (as determined by the Borrower in good faith), and the
respective lease shall provide for substantially equal annual payments (except
that a balloon payment shall be permitted at the end of the lease term) (i)
based upon an amortization schedule of at least 15 years and with a minimum
term of at least 15 years or at least 5 years in the case of personal property,
provided that such a transaction shall be permitted only if the anticipated
lease payments are such that, when aggregated with the existing lease
obligations of the Borrower and its Subsidiaries, are not projected to cause a
violation of any other provision of this Agreement.
7.12 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than the Saturday closest to
the last day in March or change the Borrower's method of determining fiscal
periods.
7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its Property or
68
revenues, whether now owned or hereafter acquired, to secure the Obligations
or, in the case of any guarantor, its obligations under the Guarantee and
Collateral Agreement, other than (a) this Agreement and the other Loan
Documents and (b) any agreements governing any purchase money Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby).
7.14 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary, (b) make
Investments in the Borrower or any other Subsidiary or (c) transfer any of its
assets to the Borrower or any other Subsidiary, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing under
the Loan Documents and (ii) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement which has been entered into in connection with
the Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary.
7.15 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement or which are reasonably related thereto.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within three days after any such
interest or other amount becomes due in accordance with the terms
hereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party in any Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it
at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any
material respect on or as of the date made or deemed made; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained Section 6.4(a)(i) and (ii)
(with respect to the Borrower only), Section 6.7(a) or Section 7 of
this Agreement, or Section 5.5(a), Section 5.6, Section 5.7, Section
5.8(a), Section 5.8(b), Section 5.9(a) or Section 5.10(b) of the
Guarantee and Collateral Agreement or (ii) an "Event of Default" under
and as defined in any Mortgage shall have occurred and be continuing;
or
69
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section 8), and such default shall continue unremedied for
a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Loans)
on the scheduled or original due date with respect thereto; or (ii)
default in making any payment of any interest on any such Indebtedness
beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (iii) default
in the observance or performance of any other agreement or condition
relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or beneficiary
of such Indebtedness (or a trustee or agent on behalf of such holder
or beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the
case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; provided, that a default, event or condition described
in clause (i), (ii) or (iii) of this paragraph (e) shall not at any
time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $5,000,000; or
(f) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of
its assets, or the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Borrower or any of its Subsidiaries any
case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall
be commenced against the Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Borrower or any of its Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the
70
Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts
as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion
of the Required Lenders, likely to result in the termination of such
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Borrower or
any Commonly Controlled Entity shall, or in the reasonable opinion of
the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
relevant insurance company has acknowledged coverage) of $5,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or
(i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by
any of the Security Documents shall cease to be enforceable and of the
same effect and priority purported to be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force
and effect or any Loan Party or any Affiliate of any Loan Party shall
so assert; or
(k) Any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become, or obtain rights (whether
by means or warrants, options or otherwise) to become, the "beneficial
owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of more than 50% of the outstanding
common stock of the Borrower;
71
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and
(ii) with the consent of the Required Lenders, the Administrative Agent may, or
upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit. Amounts held in such
cash collateral account shall be applied by the Administrative Agent to the
payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other obligations of the Borrower
hereunder and under the other Loan Documents. After all such Letters of Credit
shall have expired or been fully drawn upon, all Reimbursement Obligations
shall have been satisfied and all other obligations of the Borrower hereunder
and under the other Loan Documents shall have been paid in full, the balance,
if any, in such cash collateral account shall be returned to the Borrower (or
such other Person as may be lawfully entitled thereto).
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Agents as the agents of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes each
Agent, in such capacity, to take such action on its behalf under the provisions
of this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the such Agent by the terms
of this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
72
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Agents under or in connection with, this Agreement
or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. The Agents shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4 Reliance by Administrative Agent. Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Loan Parties), independent
accountants and other experts selected by the Administrative Agent. The Agents
may deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. Each Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.
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9.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section 9.6 (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
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relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements which are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The agreements in
this Section 9.7 shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent was not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor
agent has accepted appointment as Administrative Agent by the date that is 10
days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. The Syndication Agent may, at
any time, by notice to the Lenders and the Administrative Agent, resign as
Syndication Agent hereunder, whereupon the duties, rights, obligations and
responsibilities hereunder shall automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the
Syndication Agent, the Administrative Agent or any Lender. After any retiring
Agent's resignation as Agent, the provisions of this Section 9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.
9.10 Authorization to Release Liens. The Administrative Agent
is hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the
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Borrower or any of its Subsidiaries that is the subject of a Disposition which
is permitted by this Agreement or which has been consented to in accordance
with Section 10.1.
9.11 The Arrangers. The Arrangers, in their capacity as such,
shall have no duties or responsibilities, and shall incur no liability, under
this Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party to the relevant Loan
Document may, or (with the written consent of the Required Lenders) the Agents
and each Loan Party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders, or the Agents, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan, reduce the stated rate of any interest
or fee payable hereunder or extend the scheduled date of any payment thereof,
or increase the amount or extend the expiration date of any Commitment of any
Lender, in each case without the consent of each Lender directly affected
thereby; (ii) amend, modify or waive any provision of this Section 10.1 or
reduce any percentage specified in the definition of Required Lenders or
Required Prepayment Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the
other Loan Documents, release all or substantially all of the Collateral or
release all or substantially all of the Subsidiary Guarantors from their
obligations under the Guarantee and Collateral Agreement, in each case without
the consent of all Lenders; (iii) amend, modify or waive any condition
precedent to any extension of credit under the Revolving Credit Facility set
forth in Section 5.2 (including, without limitation, in connection with any
waiver of an existing Default or Event of Default) without the consent of the
Majority Revolving Credit Facility Lenders; (iv) reduce the percentage
specified in the definition of Majority Facility Lenders with respect to any
Facility without the written consent of all Lenders under such Facility; (v)
amend, modify or waive any provision of Section 9 without the consent of the
Agents; (vi) amend, modify or waive any provision of Section 2.6 or 2.7 without
the written consent of the Swing Line Lender; (vii) amend, modify or waive any
provision of Section 2.18 without the consent of each Lender directly affected
thereby; or (viii) amend, modify or waive any provision of Section 3 without
the consent of the Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Loan Parties, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, the Loan Parties, the
Lenders and the Administrative Agent shall be restored to their
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former position and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section 10.1; provided, that delivery of an executed signature page of any
such instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.
10.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed (a) in the case of the Borrower, the Syndication Agent
and the Administrative Agent, as follows and (b) in the case of the Lenders, as
set forth on Schedule 1 to the Letter Addendum to which such Lender is a party
or, in the case of a Lender which becomes a party to this Agreement pursuant to
an Assignment and Acceptance, in such Assignment and Acceptance or (c) in the
case of any party, to such other address as such party may hereafter notify to
the other parties hereto:
The Borrower: The Grand Union Company
201 Willowbrook Boulevard
Wayne, New Jersey 07470-0466
Attention: Chief Financial Officer
Telecopy: (973) 890-6551
Telephone: (973) 890-6340
with a copy to: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Ted S. Waksman, Esq.
Telecopy: (212) 310-8007
Telephone: (212) 310-8000
The Administrative Agent: Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Michael O'Brien
Telecopy: (212) 528-0819
Telephone: (212) 526-0437
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The Syndication Agent: UBS AG, Stamford Branch
677 Washington Blvd.
Stamford, Conn. 06912
Attention: Denise Clerkin
Telecopy: (203) 719-4176
Telephone: (203) 719-3146
provided that any notice, request or demand to or upon the either Agent or any
Lender shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the either Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agents (b) to pay or reimburse each Lender and
the Agents for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel (including the allocated fees and expenses of
in-house counsel), consultants and other experts to each Lender and of counsel
to the Agents, (c) to pay, indemnify, and hold each Lender and the Agents
harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and the Agents and their respective
officers, directors, employees, affiliates, agents and controlling persons
(each, an "Indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and
78
administration of this Agreement, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower any of its Subsidiaries or any of the Properties (all the foregoing in
this clause (d), collectively, the "Indemnified Liabilities"), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries so to
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or otherwise against
any Indemnitee. The agreements in this Section 10.5 shall survive repayment of
the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or
any other interest of such Lender hereunder and under the other Loan Documents.
In the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Agents shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event
shall any Participant under any such participation have any right to approve
any amendment or waiver of any provision of any Loan Document, or any consent
to any departure by any Loan Party therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on, the
Loans or any fees payable hereunder, or postpone the date of the final maturity
of the Loans, in each case to the extent subject to such participation. The
Borrower agrees that if amounts outstanding under this Agreement and the Loans
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall, to
the maximum extent permitted by applicable law, be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to
have agreed to share with the Lenders the proceeds thereof as provided in
Section 10.7(a) as fully as if
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it were a Lender hereunder. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.19, 2.20 and 2.21 with respect
to its participation in the Commitments and the Loans outstanding from time to
time as if it was a Lender; provided, that no Participant shall be entitled to
receive any greater amount pursuant to any such Section than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law, at any time and from time to time assign to any Lender or any
Affiliate thereof or, with the consent of the Borrower, the Agents and, with
respect to Revolving Credit Loans, the Issuing Lender, which, in each case,
shall not be unreasonably withheld or delayed, to a bank, financial institution
or other entity (an "Assignee") all or any part of its rights and obligations
under this Agreement pursuant to an Assignment and Acceptance, substantially in
the form of Exhibit E, executed by such Assignee and such Assignor and delivered
to the Administrative Agent for its acceptance and recording in the Register;
provided that no such assignment to an Assignee shall be in an aggregate
principal amount of less than $2,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement). Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto).
Notwithstanding any provision of this Section 10.6, the consent of the Borrower
shall not be required for any assignment which occurs at any time when any
Event of Default shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Agents and the Lenders shall treat each Person whose name is recorded in the
Register as the owner of the Loans and any Notes evidencing such Loans recorded
therein for all purposes of this Agreement. Any assignment of any Loan, whether
or not evidenced by a Note, shall be effective only upon appropriate entries
with respect thereto being made in the Register (and each Note shall expressly
so provide). Any assignment or transfer of all or part of a Loan evidenced by a
Note shall be registered on the Register only upon surrender for registration
of assignment or transfer of the Note evidencing such Loan, accompanied by a
duly executed Assignment and Acceptance; thereupon one or more new Notes in the
same aggregate principal amount shall be issued to the designated Assignee, and
the old Notes shall be returned by the Administrative Agent to the Borrower
marked "cancelled". The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
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(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 10.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (except that no such registration and processing fee shall be payable
(y) in connection with an assignment involving Lehman Commercial Paper Inc. or
Swiss Bank Corporation or (z) in the case of an Assignee which is already a
Lender or is an affiliate of a Lender or a Person under common management with
a Lender), the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give notice of
such acceptance and recordation to the Lenders and the Borrower. On or prior to
such effective date, the Borrower, at its own expense, upon request, shall
execute and deliver to the Administrative Agent (in exchange for the Revolving
Credit Note and/or applicable Term Notes, as the case may be, of the assigning
Lender) a new Revolving Credit Note and/or applicable Term Notes, as the case
may be, to the order of such Assignee in an amount equal to the Revolving
Credit Commitment and/or applicable Term Loans, as the case may be, assumed or
acquired by it pursuant to such Assignment and Acceptance and, if the Assignor
has retained a Revolving Credit Commitment and/or Term Loans, as the case may
be, upon request, a new Revolving Credit Note and/or Term Notes, as the case
may be, to the order of the Assignor in an amount equal to the Revolving Credit
Commitment and/or applicable Term Loans, as the case may be, retained by it
hereunder. Such new Note or Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender or to
the Lenders under a particular Facility, if any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of the Obligations owing
to it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly
81
waived by the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise), to set off and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or
the account of the Borrower, as the case may be. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such setoff and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth
or referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate
courts from any thereof;
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(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, as the case may be at its address set forth
in Section 10.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section 10.12 any special, exemplary,
punitive or consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
10.14 Confidentiality. Each of the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any
Lender from disclosing any such information (a) to any other Agent, any other
Lender or any affiliate of any Lender, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee which agrees to comply with
the provisions of this Section 10.14, (c) any of its employees, directors,
agents, attorneys, accountants and other professional advisors, (d) upon the
request or demand of any Governmental Authority having jurisdiction over it,
(e) in response to any order of any court or other Governmental Authority or as
may otherwise be required pursuant to any Requirement of Law, (f) if requested
or required to do so in connection with any litigation or similar proceeding,
(g) which has been publicly
83
disclosed other than in breach of this Section 10.14, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender or (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document.
10.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.16 Delivery of Lender Addenda. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent and
the Syndication Agent a Letter Addendum duly executed by such Lender, the
Borrower and each Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
THE GRAND UNION COMPANY
By: /s/ Francis E. Nicastro
-----------------------------------
Name: Francis E. Nicastro
Title: Vice President and Treasurer
LEHMAN BROTHERS INC.,
as Co-Arranger
By: /s/ William Gallagher
-----------------------------------
Name: William Gallagher
Title:
LEHMAN COMMERCIAL PAPER INC., as
Administrative Agent and as a Lender
By: /s/ William Gallagher
-----------------------------------
Name: William Gallagher
Title:
LEHMAN COMMERCIAL PAPER INC.,
as Collateral Agent
By: /s/ William Gallagher
-----------------------------------
Name: William Gallagher
Title:
85
WARBURG DILLON READ LLC, as
Co-Arranger
By: /s/ Michael R. Grayer
-----------------------------------
Name: Michael R. Grayer
Title: Managing Director
Leveraged Finance
By: /s/ David W. Barth
-----------------------------------
Name: David W. Barth
Title: Associate Director
Leveraged Finance
UBS AG, STAMFORD BRANCH,
as Syndication Agent and as a Lender
By: /s/ Michael R. Grayer
-----------------------------------
Name: Michael R. Grayer
Title: Managing Director
Leveraged Finance
By: /s/ Thomas R. Salzano
-----------------------------------
Name: Thomas R. Salzano
Title: Associate Director
Annex A
PRICING GRID FOR REVOLVING CREDIT LOANS,
SWING LINE LOANS AND TERM LOANS
=============================================================================
Consolidated Applicable Margin Applicable Margin for
Leverage Ratio for Eurodollar Loans Base Rate Loans
- -----------------------------------------------------------------------------
[greater than] 3.75X 3.00% 2.00%
- -----------------------------------------------------------------------------
[greater than] 3.25X 2.75% 1.75%
- -----------------------------------------------------------------------------
[less than] 3.25X 2.50% 1.50%
=============================================================================
Changes in the Applicable Margin with respect to Loans resulting from changes
in the Consolidated Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to Section 6.1 (but in any event not later than the 45th day after the
end of each of the first three quarterly periods of each fiscal year or the
90th day after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial statements
are delivered, the Consolidated Leverage Ratio as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
definition be deemed to be greater than 3.75 to 1. In addition, at all times
while an Event of Default shall have occurred and be continuing, the
Consolidated Leverage Ratio shall for the purposes of this definition be deemed
to be greater than 3.75 to 1. Each determination of the Consolidated Leverage
Ratio pursuant to this definition shall be made with respect to the period of
four consecutive fiscal quarters of the Borrower ending at the end of the
period covered by the relevant financial statements.