EXHIBIT 4.1
BORROWER PLEDGE AGREEMENT
dated as of
July 19, 1994
among
Fleming Companies, Inc.
and
Morgan Guaranty Trust Company of New York,
as Collateral Agent
TABLE OF CONTENTS
Page
SECTION 1. Definitions 2
SECTION 2. Representations and Warranties 6
SECTION 3. The Security Interests 7
SECTION 4. Delivery of Pledged Stock 8
SECTION 5. Further Assurances 8
SECTION 6. Record Ownership of Pledged Stock 9
SECTION 7. Right to Receive Distributions on
Collateral 9
SECTION 8. Right to Vote Pledged Stock 10
SECTION 9. General Authority 10
SECTION 10. Remedies upon Event of Default 11
SECTION 11. Expenses 13
SECTION 12. Limitation on Duty of Collateral
Agent in Respect of Collateral 13
SECTION 13. Application of Proceeds 14
SECTION 14. Concerning the Collateral Agent 16
SECTION 15. Appointment of Co-Agents 16
SECTION 16. Termination of Security Interests;
Release of Collateral 17
SECTION 17. Collateral Account 20
SECTION 18. Notices 20
SECTION 19. Waivers, Non-Exclusive Remedies 21
SECTION 20. Successors and Assigns 21
SECTION 21. Changes in Writing 21
SECTION 22. New York Law 22
SECTION 23. Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial 22
SECTION 24. Severability 23
SECTION 25. Counterparts 23
Schedule 1 - Issuers and Original Pledge Stock
BORROWER PLEDGE AGREEMENT
AGREEMENT dated as of July 19, 1994 made by FLEMING
COMPANIES, INC., an Oklahoma corporation (with its successors, the
"Pledgor"), in favor of MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent.
R E C I T A L S
A. Pursuant to the credit agreement, dated as of July
19, 1994 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by
and among the Pledgor, the Banks listed therein, the Agents listed
therein and Morgan Guaranty Trust Company of New York, as Managing
Agent for the Banks, the Banks have agreed (i) to make loans to the
Pledgor up to an aggregate principal amount of $2,200,000,000 and
(ii) to issue letters of credit for the account of the Pledgor.
B. It is contemplated that the Pledgor may enter into
one or more agreements ("Interest Rate Protection Agreements") with
one or more of the Banks (as hereinafter defined) regarding the
interest rates with respect to loans under the Credit Agreement
(all obligations of the Pledgor now existing or hereafter arising
under such Interest Rate Protection Agreements, collectively, the
"Interest Rate Obligations").
C. It is contemplated that the Pledgor may have or
enter into one or more agreements ("Further Letter of Credit
Agreements") with one or more of the Banks to issue certain letters
of credit (in addition to those issuable pursuant to the Credit
Agreement) for the account of the Pledgor in an aggregate face
amount of up to $160,000,000.
D. It is a condition precedent to the obligations of
the Banks to make the loans under the Credit Agreement and a
condition precedent to any letters of credit being issued under the
Credit Agreement and may be a condition precedent to any Bank
entering into Interest Rate Protection Agreements or entering into
or maintaining Further Letter of Credit Agreements that the Pledgor
execute and deliver this Agreement.
E. In order to comply with certain negative pledge
clauses in other instruments and agreements by which it is bound,
the Pledgor must secure certain other obligations existing on the
date hereof equally and ratably with its obligations under the
Credit Agreement and the notes issued pursuant thereto.
F. This Agreement is given by the Pledgor in favor of
the Collateral Agent for its benefit and the benefit of the other
Secured Parties (as hereinafter defined) to secure the payment and
performance of all of the Secured Obligations (as hereinafter
defined).
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions
Capitalized terms used and not defined herein shall have the
meanings assigned to them in the Credit Agreement. The following
terms, as used herein, have the following meanings:
"Bank Secured Obligations" means the Secured Obligations
other than the Non-Bank Secured Obligations, provided that at any
time of determination no amount of the Pledgor's obligations under
any Interest Rate Protection Agreement shall be included in Bank
Secured Obligations that are Non-Contingent Secured Obligations
unless such obligations are then due and payable.
"Cash Distributions" means dividends and other payments
and distributions made upon or with respect to the Pledged Stock or
any other Collateral in cash.
"Collateral" has the meaning set forth in Section 3(a).
"Collateral Agent" means Morgan Guaranty Trust Company of
New York in its capacity as agent for the Secured Parties
hereunder, and its successors in such capacity.
"Contingent Secured Obligation" means at any time any
Secured Obligation (or portion thereof) that is at such time:
(i) an obligation to reimburse a Bank for drawings
not yet made under a letter of credit issued or to be issued by
such Bank, or
(ii) an obligation to provide collateral to or for
the benefit of a Bank to secure reimbursement obligations arising
from drawings not yet made under a letter of credit issued or to be
issued by such Bank or to make any other payment to the Issuing
Bank that the Issuing Bank would not be entitled to retain if no
drawings were made under the relevant letter of credit after the
time of determination.
"Credit Agreement Secured Obligations" means the Secured
Obligations arising under the Credit Agreement.
"Existing Debt Indentures" means (i) the Indenture dated
as of December 1, 1989, as supplemented to the date hereof, from
the Pledgor to Morgan Guaranty Trust Company of New York, as
Trustee, and (ii) the Indenture dated as of March 15, 1986, as
supplemented to the date hereof, from the Pledgor to Morgan
Guaranty Trust Company of New York, as Trustee.
"Existing Indenture Obligations" means the notes and
debentures of the Pledgor outstanding from time to time under the
Existing Debt Indentures, provided that the term Existing Indenture
Obligations shall not include any such securities that are not
issued and outstanding on July 19, 1994 unless such securities have
been issued in exchange or substitution (which do not include any
refinancing or refunding) for any securities constituting Existing
Indenture Obligations that were outstanding on July 19, 1994.
"Issuer" means each Subsidiary of the Pledgor listed on
Schedule 1 hereto.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset.
"Liquid Investment" means (i) direct obligations of the
United States or any agency thereof, or obligations guaranteed by
the United States or any agency thereof, (ii) commercial paper
rated in the highest grade by a nationally recognized credit rating
agency or (iii) time deposits with, including certificates of
deposit issued by, any office located in the United States of any
bank or trust company (including a bank or trust company acting as
the Collateral Agent or a co-agent hereunder) which is organized
under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least
$1,000,000,000; provided in each case that (x) such Liquid
Investment matures within 90 days from the date of acquisition
thereof and (y) in order to provide the Collateral Agent, for the
benefit of the Secured Parties, with a perfected security interest
therein, such Liquid Investment is:
(1) evidenced by a certificate or instrument which is
negotiable, or if non-negotiable is issued in the name of the
Collateral Agent or its nominee, and which (together with any
appropriate instruments of transfer) is delivered to, and held by,
the Collateral Agent or an agent thereof (which shall not be the
Pledgor or any of its Affiliates) in the State of New York;
(2) issued by the U.S. Treasury in book-entry form and
subject to pledge under then-applicable state law and Treasury
regulations and held by the Collateral Agent at a Federal Reserve
Bank; provided that the books of the Collateral Agent reflect that
such Treasury securities are held as Collateral under this
Agreement in compliance with then applicable Treasury regulations
regarding the perfection of security interests in Treasury
securities; or
(3) otherwise issued, evidenced, registered or recorded
in such manner as will provide the Collateral Agent, for the
benefit of the Secured Parties, with a perfected security interest
therein.
"Non-Bank Percentage" means, as of any time of
determination, the percentage obtained by dividing the
then-outstanding principal amount of the Non-Bank Secured
Obligations by the sum of the then-outstanding principal amount of
(a) the Non-Bank Secured Obligations and (b) any Bank Secured
Obligations that are Non-Contingent Secured Obligations.
"Non-Bank Secured Obligations" means the Secured
Obligations held by the Non-Bank Secured Parties.
"Non-Bank Secured Parties" means the holders from time to
time of the Secured Obligations consisting of the Existing
Indenture Obligations.
"Non-Contingent Secured Obligation" means at any time any
Secured Obligation (or portion thereof) that is not a Contingent
Secured Obligation at such time.
"Original Pledged Stock" means the shares of stock of
each Issuer listed on Schedule 1 hereto.
"Pledged Stock" means (i) the Original Pledged Stock and
(ii) any other capital stock required to be pledged to the
Collateral Agent pursuant to Section 3(b).
"Responsible Officer" means the Chairman of the Board,
the Vice Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the Chief Operating Officer, the President
or the Treasurer of the Pledgor.
"Secured Obligations" means:
(i) all principal of and interest on the Notes, the
Letter of Credit Liabilities and all other sums payable by the
Pledgor under the Credit Agreement;
(ii) all sums payable by the Pledgor under this
Agreement and any other Operative Agreement;
(iii) all principal of and premium, if any, and
interest on the Existing Indenture Obligations;
(iv) all Interest Rate Obligations of the Pledgor
now or hereafter arising under or in respect of any Interest Rate
Protection Agreement; and
(v) all obligations of the Pledgor now existing or
hereafter arising under or in respect of any Further Letter of
Credit Agreement;
provided that an Interest Rate Protection Agreement or a Further
Letter of Credit Agreement, or any amount payable in connection
therewith, shall not constitute a Secured Obligation unless the
Pledgor has designated it as such (and any references herein to an
Interest Rate Protection Agreement or Further Letter of Credit
Agreement shall include only those that have been so designated) by
delivering to the Collateral Agent a certificate signed by a
Responsible Officer which shall identify the obligation so
designated and specify the name and address of the counter- party
thereto and, in the case of any Further Letter of Credit Agreement,
certify that, after giving effect to such designation, the
aggregate undrawn face amount of all letters of credit that are
outstanding on such date (or that a Bank is obligated to issue
after such date) under all Further Letter of Credit Agreements plus
the aggregate amount of all reimbursement obligations (but not any
interest thereon) for amounts previously drawn and remaining unpaid
under letters of credit issued pursuant to all Further Letter of
Credit Agreements does not exceed $160,000.000.
"Secured Parties" means (i) the holders from time to time
of the Secured Obligations and (ii) the Collateral Agent, provided
that for purposes of any notice to or consent required from the
Non-Bank Secured Parties, the Trustee under each Existing Debt
Indenture at the time in question shall be treated as the Non-Bank
Secured Party with respect to the Existing Indenture Obligations
thereunder and all payments to be made to or for the benefit of any
holder of an Existing Indenture Obligation shall be made to the
Trustee in question and the Collateral Agent shall have no further
responsibilities or liability with respect thereto.
"Security Interests" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.
Unless otherwise defined herein, or unless the context
otherwise requires, all terms used herein which are defined in the
New York Uniform Commercial Code as in effect on the date hereof
shall have the meanings therein stated.
SECTION 2. Representations and Warranties
The Pledgor represents and warrants as follows:
(a) The Pledgor is a corporation duly incorporated,
validly existing and in good standing under the laws of Oklahoma,
and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
(b) The execution, delivery and performance by the
Pledgor of this Agreement are within the Pledgor's corporate
powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or
constitute a default under any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the
Pledgor or of any judgment, injunction, orders or decree or any
material agreement or other material instrument binding upon the
Pledgor or result in the creation or imposition of any Lien (other
than Liens created by the Operative Agreements) on any asset of the
Pledgor or any Subsidiary.
(c) This Agreement constitutes a valid and binding
agreement of the Pledgor.
(d) The Pledgor owns all of the Original Pledged Stock,
free and clear of any Liens other than the Security Interests.
Except as set forth on Schedule l hereto, the Original Pledged
Stock includes all of the issued and outstanding capital stock of
each Issuer, and no Issuer has outstanding any security convertible
into or exchangeable for any shares of its capital stock or any
warrant, option or other instrument entitling the holder thereof to
acquire any such shares. All of the Original Pledged Stock has
been duly authorized and validly issued and is fully paid and
non-assessable, and is subject to no options to purchase or similar
rights of any Person. Other than this Agreement and the Existing
Debt Indentures, the Pledgor is not and will not become a party to
or otherwise bound by any agreement which restricts in any manner
the rights of the Secured Parties with respect to any of the
Pledged Stock.
(e) Upon the delivery of the certificates representing
the Pledged Stock to the Collateral Agent in accordance with
Section 4 hereof, the Collateral Agent will have valid and
perfected security interests in the Collateral to the extent a
security interest in such Collateral can be perfected under the
Uniform Commercial Code (and subject to the requirements of Section
9-306 of the Uniform Commercial Code with respect to any proceeds
of Collateral and to the further requirement that additional steps
may be necessary to perfect a security interest in dividends or
other distributions in kind), subject to no prior Lien. No
registration, recordation or filing with any governmental body,
agency or official is required in connection with the execution or
delivery of this Agreement or necessary for the validity or
enforceability hereof or for the perfection or enforcement of the
Security Interests. Neither the Pledgor nor any Subsidiary has
performed or will perform any acts which might prevent the
Collateral Agent from enforcing any of the terms and conditions of
this Agreement or which would limit the Collateral Agent in any
such enforcement.
(f) The chief executive office of the Pledgor is located
at its address set forth on the signature pages of this Agreement.
Under the Uniform Commercial Code as in effect in the State in
which such office is located, no local filing is required to
perfect a security interest in collateral consisting of general
intangibles.
SECTION 3. The Security Interests
In order to secure the full and punctual payment of the
Secured Obligations in accordance with the terms thereof, and to
secure the performance of all the obligations of the Pledgor
hereunder:
(a) The Pledgor hereby assigns and pledges to and with
the Collateral Agent for the equal and ratable benefit of the
Secured Parties and grants to the Collateral Agent for the equal
and ratable benefit of the Secured Parties security interests in
the Pledged Stock, and all of its rights and privileges with
respect to the Pledged Stock, and all income and profits thereon,
and all interest, dividends and other payments and distributions
with respect thereto, and the Collateral Account (as hereinafter
defined) and all cash deposited therein or other property held
therein from time to time, and all proceeds of the foregoing (the
"Collateral"). Contemporaneously with the execution and delivery
hereof, the Pledgor is delivering the certificates representing the
Original Pledged Stock in pledge hereunder.
(b) In the event that any Issuer at any time issues any
additional or substitute shares of capital stock of any class to
the Pledgor, the Pledgor will, within two Domestic Business Days
after the issuance thereof, pledge and deposit with the Collateral
Agent certificates representing all such shares. All such shares
constitute Pledged Stock and are subject to all provisions of this
Agreement.
(c) The Security Interests are granted as security only
and shall not subject the Collateral Agent or any Secured Party to,
or transfer or in any way affect or modify, any obligation or
liability of the Pledgor with respect to any of the Collateral or
any transaction in connection therewith.
SECTION 4. Delivery of Pledged Stock
All Pledged Stock shall be delivered to the Collateral
Agent by the Pledgor pursuant hereto indorsed to the order of the
Collateral Agent, and accompanied by any required transfer tax
stamps, all in form and substance satisfactory to the Collateral
Agent. All certificates representing Pledged Stock delivered to
the Collateral Agent by the Pledgor pursuant hereto shall be in
suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, and
accompanied by any required transfer tax stamps, all in form and
substance satisfactory to the Collateral Agent.
SECTION 5. Further Assurances
(a) The Pledgor agrees that it will, at its expense and
in such manner and form as the Collateral Agent may reasonably
require, execute, deliver, file and record any financing statement,
specific assignment or other paper and take any other action that
may be necessary or desirable, or that the Collateral Agent may
request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Collateral Agent to exercise and
enforce its rights hereunder with respect to any of the Collateral.
To the extent permitted by applicable law, the Pledgor hereby
authorizes the Collateral Agent to execute and file, in the name of
the Pledgor or otherwise, Uniform Commercial Code financing
statements (which may be carbon, photographic, photostatic or other
reproductions of this Agreement or of a financing statement
relating to this Agreement) which the Collateral Agent in its sole
discretion may deem necessary or appropriate to further perfect the
Security Interests.
(b) The Pledgor agrees that it will not change (i) its
name, identity or corporate structure in any manner or (ii) the
location of its chief executive office unless it shall have given
the Collateral Agent not less than 20 days' prior notice thereof.
SECTION 6. Record Ownership of Pledged Stock
Upon the occurrence and during the continuance of an
Event of Default, at the request of the Required Banks, the
Collateral Agent may cause any or all of the Pledged Stock to be
transferred of record into the name of the Collateral Agent or its
nominee. The Pledgor will promptly give to the Collateral Agent
copies of any notices or other communications received by it with
respect to Pledged Stock registered in the name of the Pledgor and
the Collateral Agent will promptly give to the Pledgor copies of
any notices and communications received by the Collateral Agent
with respect to Pledged Stock registered in the name of the
Collateral Agent or its nominee.
SECTION 7. Right to Receive Distributions on Collateral
The Collateral Agent shall have the right to receive and
to retain as Collateral hereunder all dividends, interest and other
payments and distributions made upon or with respect to the
Collateral and the Pledgor shall take all such action as the
Collateral Agent may deem necessary or appropriate to give effect
to such right, provided that unless an Event of Default has
occurred and is continuing and upon the request of the Required
Banks, the foregoing sentence shall not apply to Cash
Distributions. All such dividends, interest and other payments and
distributions which are received by the Pledgor (except Cash
Distributions received when no Event of Default has occurred and is
continuing) shall be received in trust for the benefit of the
Collateral Agent and the Secured Parties and, if the Collateral
Agent so directs during the continuance of an Event of Default,
shall be segregated from other funds of the Pledgor and shall,
forthwith upon demand by the Collateral Agent during the
continuance of an Event of Default, be paid over to the Collateral
Agent as Collateral in the same form as received (with any
necessary endorsement). After all Events of Defaults have been
cured or waived, the Collateral Agent's right to retain Cash
Distributions under this Section 7 shall cease and the Collateral
Agent shall pay over to the Pledgor any such Cash Distributions
retained by it during the continuance of an Event of Default.
SECTION 8. Right to Vote Pledged Stock
Unless an Event of Default shall have occurred and be
continuing and the Required Banks shall have so requested, the
Pledgor shall have the right, from time to time, to vote and to
give consents, ratification and waivers with respect to the Pledged
Stock, and the Collateral Agent shall, upon receiving a written
request from the Pledgor accompanied by a certificate signed by a
Responsible Officer stating that no Event of Default has occurred
and is continuing, deliver to the Pledgor or as specified in such
request such proxies, powers of attorney, consents, ratification
and waivers in respect of any of the Pledged Stock which is
registered in the name of the Collateral Agent or its nominee as
shall be specified in such request and be in form and substance
satisfactory to the Collateral Agent.
If an Event of Default shall have occurred and be
continuing, the Collateral Agent shall have the right to the extent
permitted by law and the Pledgor shall take all such action as may
be necessary or appropriate to give effect to such right, to vote
and to give consents, ratification and waivers, and take any other
action with respect to any or all of the Pledged Stock with the
same force and effect as if the Collateral Agent were the absolute
and sole owner thereof.
SECTION 9. General Authority
The Pledgor hereby irrevocably appoints the Collateral
Agent its true and lawful attorney, with full power of
substitution, in the name of the Pledgor, the Collateral Agent, the
Secured Parties or otherwise, for the sole use and benefit of the
Collateral Agent and the Secured Parties, but at the expense of the
Pledgor, to the extent permitted by law to exercise, at any time
and from time to time while an Event of Default has occurred and is
continuing and at the request of the Required Banks, all or any of
the following powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give
acquittance for any and all monies due or to become due upon or by
virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend
any action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or
with the same or the proceeds or avails thereof, as fully and
effectually as if the Collateral Agent were the absolute owner
thereof, and
(iv) to extend the time of payment of any or all thereof
and to make any allowance and other adjustments with reference
thereto;
provided that the Collateral Agent shall give the Pledgor not less
than ten days' prior written notice of the time and place of any
sale or other intended disposition of any of the Collateral except
any Collateral which threatens to decline speedily in value or is
of a type customarily sold on a recognized market. The Collateral
Agent and the Pledgor agree that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of
the Uniform Commercial Code.
SECTION 10. Remedies upon Event of Default
If any Event of Default shall have occurred and be
continuing, the Collateral Agent, upon being instructed to do so by
the Required Banks, may exercise on behalf of the Secured Parties
all the rights of a secured party under the Uniform Commercial Code
(whether or not in effect in the jurisdiction where such rights are
exercised) and, in addition, the Collateral Agent may, without
being required to give any notice, except as herein provided or as
may be required by mandatory provisions of law, (i) apply the cash,
if any, then held by it as Collateral as specified in Section 13
and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Secured Obligations in full, sell the
Collateral or any part thereof at public or private sale or at any
broker's board or on any securities exchange, for cash, upon credit
or for future delivery, and at such price or prices as the
Collateral Agent may deem satisfactory. Any Secured Party may be
the purchaser of any or all of the Collateral so sold at any public
sale (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely
distributed standard price quotations, at any private sale). The
Collateral Agent is authorized, in connection with any such sale,
if it deems it advisable so to do, (i) to restrict the prospective
bidders on or purchasers of any of the Pledged Stock to a limited
number of sophisticated investors who will represent and agree that
they are purchasing for their own account for investment and not
with a view to the distribution or sale of any of such Pledged
Stock, (ii) to cause to be placed on certificates for any or all of
the Pledged Stock or on any other securities pledged hereunder a
legend to the effect that such security has not been registered
under the Securities Act of 1933 and may not be disposed of in
violation of the provision of said Act, and (iii) to impose such
other limitations or conditions in connection with any such sale as
the Collateral Agent dems necessary or advisable in order to comply
with said Act or any other law. The Pledgor covenants and agrees
that it will execute and deliver such documents and take such other
action as the Collateral Agent deems necessary or advisable in
order that any such sale may be made in compliance with law. Upon
any such sale the Collateral Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so
sold. Each purchaser at any such sale shall hold the Collateral so
sold absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Pledgor
which may be waived, and the Pledgor, to the extent permitted by
law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or
hereafter adopted. The notice (if any) of such sale required by
Section 9 shall (1) in case of a public sale, state the time and
place fixed for such sale, (2) in case of sale at a broker's board
or on a securities exchange, state the board or exchange at which
such sale is to be made and the day on which the Collateral, or the
portion thereof so being sold, will first be offered for sale at
such board or exchange, and (3) in the case of a private sale,
state the day after which such sale may be consummated. Any such
public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent
may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may determine. The Collateral
Agent shall not be obligated to make any such sale pursuant to any
such notice. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same
to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or
place to which the same may be so adjourned. In cse of any sale of
all or any part of the Collateral on credit or for future delivery,
the Collateral so sold may be retained by the Collateral Agent
until the selling price is paid by the purchaser thereof, but the
Collateral Agent shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may again be
sold upon like notice. The Collateral Agent, instead of exercising
the power of sale herein conferred upon it, may proceed by a suit
or suits at law or in equity to foreclose the Security Interests
and sell the Collateral, or any portion thereof, under a judgment
or decree of a court or courts of competent jurisdiction.
SECTION 11. Expenses
The Pledgor agrees that it will forthwith upon demand pay
to the Collateral Agent:
(i) the amount of any taxes which the Collateral Agent
may have been required to pay by reason of the Security Interests
or to free any of the Collateral from any Lien thereon, and
(ii) the amount of any and all out-of-pocket expenses,
including the reasonable fees and disbursements of counsel and of
any other experts, which the Collateral Agent may incur in
connection with (w) the administration or enforcement of this
Agreement, including such expenses as are incurred to preserve the
value of the Collateral and the validity, perfection, rank and
value of any Security Interest, (x) the collection, sale or other
disposition of any of the Collateral, (y) the exercise by the
Collateral Agent of any of the rights conferred upon it hereunder
or (z) any Default or Event of Default.
Any such amount not paid on demand shall bear interest at 1% plus
the rate that would be applicable to Tranche A Base Rate Loans
under the Credit Agreement. The Pledgor's obligations under this
Section shall survive the termination of this Agreement and the
discharge of the Pledgor's obligations under the Operative
Agreements.
SECTION 12. Limitation on Duty of Collateral
Agent in Respect of Collateral
Beyond the exercise of reasonable care in the custody
thereof, the Collateral Agent shall have no duty as to any
Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the
preservation of rights against prior parties or any other rights
pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own
property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any agent or bailee
selected by the Collateral Agent in good faith.
SECTION 13. Application of Proceeds
(a) Upon the occurrence and during the continuance of an
Event of Default, the proceeds of any sale of, or other realization
upon, all or any part of the Collateral (including any proceeds
received and held pursuant to Section 16) and any cash held in the
Collateral Account shall be applied by the Collateral Agent, upon
being instructed to do so by the Required Banks, in the following
order of priorities:
First, to the payment of all costs and expenses, fees,
commissions and taxes of such sale, collection or other
realization, including, without limitation, reasonable compensation
to the Collateral Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith, together with interest on
each such amount at 1% plus the rate of interest that would be
applicable to Tranche A Base Rate Loans under the Credit Agreement
from and after the date such amount is due, owing or unpaid until
paid in full;
Second, to pay the Secured Obligations ratably (or
provide for the payment thereof pursuant to subsection (b) of this
Section), until payment in full of all Secured Obligations shall
have been made (or so provided for), provided that before making
any payment pursuant to this clause Second ratably to the holders
of the Secured Obligations, the Collateral Agent shall first apply
solely to the Non-Bank Secured Obligations any amount held by it
pursuant to subclause (ii)(A) of Section 16(b) and provided further
that the principal amount outstanding to any Bank under any
Interest Rate Protection Agreement at the time any such payments
are to be distributed in accordance with this clause Second shall
be the amount of the Pledgor's obligations then due and payable
(including any early termination payments then due) to such Bank
under such Interest Rate Protection Agreement; and
Third, to the Pledgor, or its successors or assigns, or
to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
(b) If at any time any monies collected or received by
the Collateral Agent would, but for the provisions of this
subsection (b), be payable pursuant to subsection (a) of this
Section in respect of any Contingent Secured Obligation, the
Collateral Agent shall not apply such monies to pay such Contingent
Secured Obligation but instead shall hold such monies in the
Collateral Account. The Collateral Agent shall so hold all such
monies until such time as the holder of such Contingent Secured
Obligation advises the Collateral Agent (with at least three
Business Days' prior notice to the Pledgor) that all or a specified
part of such Contingent Secured Obligation has become a
Non-Contingent Secured Obligation, whereupon the Collateral Agent
shall apply the amount so held to pay such Non-Contingent Secured
Obligation; provided that, if the other Secured Obligations
theretofore paid pursuant to subsection (a) were not paid in full,
the Collateral Agent shall apply the amount so held to pay the same
percentage of such Non-Contingent Secured Obligation as the
percentage of such other Secured Obligations theretofore paid
pursuant to subsection (a). If (i) the holder of such Contingent
Secured Obligation shall advise the Collateral Agent (with at least
three Business Days' prior notice to the Pledgor) that no portion
thereof remains in the category of a Contingent Secured Obligation
and (ii) any amount held pursuant to this subsection (b) in
respect of such Contingent Secured Obligation remains after payment
of all ratable amounts payable pursuant to the preceding sentence
with respect to any portions thereof that became Non-Contingent
Secured Obligations, such remaining amount shall be applied by the
Collateral Agent in the order of priorities set forth in subsection
(a) of this Section.
(c) In making the payments and allocations required by
this Section, the Collateral Agent may, (1) as to any Secured
Obligations arising under an Interest Rate Protection Agreement or
Further Letter of Credit Agreement, rely upon information from the
applicable counterparty identified by the Pledgor pursuant to the
proviso in the definition of Secured Parties and (2) as to any
Existing Indenture Obligations, rely upon information from the
Trustee under the applicable Existing Debt Indenture, and shall
have no liability to the Pledgor or any other Secured Party for
actions taken in reliance on such information except in the case of
its gross negligence or willful misconduct. All distributions made
by the Collateral Agent pursuant to this Section shall be final
(except in the event of manifest error) and the Collateral Agent
shall have no duty to inquire as to the application by the Secured
Parties of any amount distributed to them.
SECTION 14. Concerning the Collateral Agent
(a) The Collateral Agent has been appointed as
Collateral Agent pursuant to the Credit Agreement. The actions of
the Collateral Agent hereunder are subject to the provisions of the
Credit Agreement. The obligations of the Collateral Agent
hereunder are only those expressly set forth herein. In any case
in which the Collateral Agent is authorized to exercise any power
or discretion, the Collateral Agent may refuse to do so unless
directed in writing by the Required Banks to act in the manner
specified in such direction.
(b) The Collateral Agent may resign at any time by
giving written notice thereof to the Secured Parties and the
Pledgor. Upon any resignation of the Collateral Agent, the
Required Banks shall have the right to appoint a successor
Collateral Agent. If no successor Collateral Agent shall have been
so appointed by the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Collateral Agent
gives notice of resignation, then the retiring Collateral Agent
may, on behalf of the Secured Parties, appoint a successor
Collateral Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of at least
$100,000,000. Upon the acceptance of its appointment as Collateral
Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and
obligations hereunder. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this
Section shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Collateral Agent.
SECTION 15. Appointment of Co-Agents
At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Collateral Agent may appoint
another bank or trust company or one or more other persons, either
to act as co-agent or co-agents, jointly with the Collateral Agent,
or to act as separate agent or agents on behalf of the Secured
Parties with such power and authority as may be necessary for the
effectual operation of the provisions hereof and may be specified
in the instrument of appointment (which may, in the discretion of
the Collateral Agent, include provisions for the protection of such
co-agent or separate agent similar to the provisions of Section
14). Notwithstanding any such appointment but only to the extent
not inconsistent with such legal requirements or, in the reasonable
judgment of the Collateral Agent, not unduly burdensome to it or
any such co-agent, the Pledgor shall, so long as no Event of
Default shall have occurred and be continuing, be entitled to deal
solely and directly with the Collateral Agent rather than any such
co-agent in connection with the Collateral Agent's rights and
obligations under this Agreement.
SECTION 16. Termination of Security Interests;
Release of Collateral
(a) When all the Credit Agreement Secured Obligations
have been paid in full and the Commitments of the Banks to make any
Loan or issue any Letter of Credit under the Credit Agreement have
expired, or if earlier the occurrence of the Rating Target Date,
this Agreement shall terminate, except as expressly set forth
herein, and all rights to the Collateral shall revert to the
Pledgor.
(b)(i) The Pledgor may from time to time prior to the
termination of this Agreement request the Collateral Agent to
release all or any of the Collateral, which request shall be
accompanied by a certificate of a Responsible Officer stating (A)
whether such release is requested in connection with an Asset Sale,
(B) whether a Default has occurred and is continuing, (C) if such
release is requested in connection with an Asset Sale, identifying
the cash, Temporary Cash Investments and instruments comprising the
Net Proceeds of such Asset Sale that, in the good faith
determination of such Responsible Officer, are allocable to the
Collateral requested to be released (the "Collateral Net Proceeds")
and (D) if such release is requested in connection with an Asset
Sale, the amount, if any, of the cash and Temporary Cash
Investments included in the Collateral Net Proceeds that is
required to be applied by the Pledgor to the prepayment of the
principal amount of the Loans pursuant to Section 2.09(b)(i) of the
Credit Agreement within 14 days after the consummation of such
Asset Sale and the date on which such prepayment is to be made. If
such request is not in connection with an Asset Sale, the
Collateral Agent shall release Collateral pursuant to such request
but only with the consent of the Releasing Banks and the Non-Bank
Secured Parties.
(ii) If such request is in connection with an Asset Sale
and such certificate states that no Default has occurred and is
continuing, the Collateral Agent shall release Collateral pursuant
to such request without the consent of any Secured Party but only
against delivery to the Collateral Agent of (A) the Non-Bank
Percentage of each element (cash, Temporary Cash Investments and
instruments) of the Collateral Net Proceeds and (B) all other
Collateral Net Proceeds.
(iii) If such request is in connection with an Asset Sale
and such certificate states that a Default has occurred and is
continuing, the Collateral Agent shall release Collateral pursuant
to such request without the consent of any Secured Party but only
against delivery to the Collateral Agent of all cash and other
property constituting the portion of the Net Proceeds of such Asset
Sale allocable to the Collateral to be released (as set forth in
such certificate).
(iv) All such cash shall be held in the Collateral
Account and any such other property shall be held by the Collateral
Agent as Proceeds, subject to the Lien hereof, and
(A) in all cases, even if any other subclause below would
otherwise apply, if an Event of Default shall occur and be
continuing, applied pursuant to Section 11 hereof;
(B) in the case of any cash or Temporary Cash
Investments included in Collateral Net Proceeds held pursuant to
subclause (ii)(B), applied for the account of the Pledgor (after
reducing any such Temporary Cash Investments to cash) to make
prepayments of the Loans pursuant to Section 2.09(b)(i) of the
Credit Agreement as set forth in the related certificate of a
Responsible Officer;
(C) in the case of any instrument included in Collateral
Net Proceeds held pursuant to subclause (ii)(B), all income thereon
or other payments in respect thereof shall be applied for the
account of the Pledgor to make prepayments of the Loans pursuant to
Section 2.09(b)(i) of the Credit Agreement as shall be specified
from time to time in a certificate of a Responsible Officer;
(D) in the case of any cash, Temporary Cash Investments
and instruments held pursuant to clause (iii),
(1) an amount equal to the Non-Bank
Percentage of each element of the Collateral Net Proceeds
(determined as of the date the Collateral Agent received such
Proceeds) shall be retained by the Collateral Agent until the
termination of this Agreement (and then paid to the Pledgor or as
it shall direct), provided that if the Collateral Agent receives a
certificate of a Responsible Officer stating that the Non-Bank
Secured Obligations have been paid in full, any such cash and
Temporary Cash Investments shall be applied for the account of the
Pledgor to make prepayments of the Loans to the extent required by
Section 2.09(b)(i) of the Credit Agreement and the balance, if any,
paid to the Pledgor or as it shall direct and any instruments shall
be applied as set forth in the immediately preceding clause (C),
and
(2) as to the balance, if a Responsible Officer
shall subsequently certify that no Default has occurred and is
continuing, any such cash and temporary Cash Investments shall be
applied for the account of the Pledgor to make prepayments of the
Loans to the extent required by Section 2.09(b)(i) of the Credit
Agreement and the balance, if any, paid to the Pledgor or as it
shall direct and any instruments shall be applied as set forth in
the immediately preceding clause (C), and
(E) in the case of any cash or other property held
pursuant to subclause (ii)(A), applied as set forth in subclause
(1) of the immediately preceding clause (D).
(c) Upon any such termination of the Security Interests
or release of Collateral, the Collateral Agent will, at the expense
of the Pledgor, deliver any certificates evidencing Pledged Stock
and any other Collateral held by it to the Pledgor, and execute and
deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be.
SECTION 17. Collateral Account.
(a) There is hereby established with the Collateral Agent
a cash collateral account (the "Collateral Account") in the name
and under the control of the Collateral Agent into which there
shall be deposited from time to time the cash proceeds of the
Collateral required to be delivered to the Collateral Agent
pursuant to any provision of this Agreement. Any income received
by the Collateral Agent with respect to the balance from time to
time standing to the credit of the Collateral Account, including
any interest or capital gains on Liquid Investments, shall remain,
or be deposited, in the Collateral Account. All right, title and
interest in and to the cash amounts on deposit from time to time in
the Collateral Account together with any Liquid Investments from
time to time made pursuant to subsection (c) of this Section shall
vest in the Collateral Agent, shall constitute part of the
Collateral hereunder and shall not constitute payment of the
Secured Obligations until applied thereto as hereinafter provided.
(b) Upon the occurrence and during the continuation of an
Event of Default, the Collateral Agent shall, if so instructed by
the Required Banks, apply or cause to be applied (subject to
collection) any or all of the balance from time to time standing to
the credit of the Collateral Account in the manner specified in
Section 13. Upon the cure of such Event of Default, all Liquid
Investments held by the Collateral Agent in the Collateral Account
shall be reduced to cash and all cash amounts held in the
Collateral Account shall be promptly returned to the Pledgor,
provided that any Liquid Investments or cash held in the Collateral
Account arising out of matters of the character described in
Section 7 or 16 shall be applied as provided therein.
(c) Amounts on deposit in the Collateral Account shall be
invested and re-invested from time to time in such Liquid
Investments as the Pledgor shall determine, which Liquid
Investments shall be held in the name and be under the control of
the Collateral Agent, provided that, if an Event of Default has
occurred and is continuing, the Collateral Agent shall, if
instructed by the Required Banks, liquidate any such Liquid
Securities and apply or cause to be applied in the proceeds thereof
to the payment of the Secured Obligations in the manner specified
in Section 13.
SECTION 18. Notices
All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to
such party at its address or telex or facsimile number set forth on
the signature pages hereof. Each such notice, request or other
communication shall be effective (i) if given by telex, when such
telex is transmitted to the telex number specified in this Section
and the appropriate answerback is received, (ii) if given by
facsimile transmission, when receipt of such transmission is
confirmed either orally or in writing, by the party receiving such
transmission, (iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iv) if given by any other
means, when delivered at the address specified in this Section;
provided that notices to the Collateral Agent shall not be
effective until received.
SECTION 19. Waivers, Non-Exclusive Remedies
No failure on the part of the Collateral Agent to
exercise, and no delay in exercising and no course of dealing with
respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the
Managing Agent of any right under the Credit Agreement or the
Collateral Agent under this Agreement or any other Operative
Agreement preclude the Collateral Agent from any other or further
exercise or the exercise of any other right. The rights in this
Agreement and the Credit Agreement are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 20. Successors and Assigns
This Agreement is for the benefit of the Collateral Agent
and the Secured Parties and their successors and assigns, and in
the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such
indebtedness, provided that no counterparty to an Interest Rate
Protection Agreement or a Further Letter of Credit Agreement shall
be entitled to the benefits hereof unless it is also a Bank. This
Agreement shall be binding on the Pledgor and its successors and
assigns.
SECTION 21. Changes in Writing
Other than in respect of any release of Collateral
pursuant to Section 16 hereof, no amendment, modification,
supplement, termination or waiver of or to any provision of this
Agreement, nor consent to any departure by the Pledgor therefrom,
shall be effective unless in writing and signed by the Collateral
Agent and the Pledgor (with the requisite consent, if any, of the
Banks, the Required Banks or the Releasing Banks required by
Section 9.04 of the Credit Agreement); provided that without the
consent of the Banks to whom a majority of the Interest Rate
Obligations are owed, no such amendment, modification, supplement,
termination or waiver may (i) exclude the Interest Rate Obligations
from the definition of Secured Obligations or (ii) change the
provisions of clause Second of Section 13 hereof; provided further
that without the consent of the Banks to whom a majority of the
obligations under Further Letter of Credit Agreements are owed, no
such amendment, modification, supplement, termination or waiver may
(i) exclude any Further Letter of Credit Agreement from the
definition of Secured Obligations or (ii) change the provisions of
clause Second of Section 13 hereof. Any amendment, modification or
supplement of or to any provision of this Agreement, any waiver of
any provision of this Agreement, and any consent to any departure
by the Pledgor from the terms of any provision of this Agreement,
shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is
specifically required by this Agreement or any other Operative
Agreement, no notice to or demand on the Pledgor in any case shall
entitle the Pledgor to any other or further notice or demand in
similar or other circumstances.
SECTION 22. New York Law
This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, except as otherwise
required by mandatory provisions of law and except to the extent
that remedies provided by the laws of any jurisdiction other than
New York are governed by the laws of such jurisdiction.
SECTION 23. Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial
THE PLEDGOR HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
THE PLEDGOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PLEDGOR AND THE
COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 24. Severability
If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i)
the other provisions hereof shall remain in full force and effect
in such jurisdiction and shall be liberally construed in favor of
the Collateral Agent and the Secured Parties in order to carry out
the intentions of the parties hereto as nearly as may be possible;
and (ii) the invalidity or unenforceability of any provision hereof
in any jurisdiction shall not affect the validity or enforceability
of such provision in any other jurisdiction.
SECTION 25. Counterparts.
This Agreement may be signed in any number of
counterparts, each of which shall be an original, and all of which
taken together shall constitute a single instrument, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
FLEMING COMPANIES, INC.
By /s/ John M. Thompson
Name: John M. Thompson
Title: Vice President
P. O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
Attn: Treasurer
Telecopier: (405) 840-7202
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Collateral Agent
By /s/ Michael C. Mauer
Name: Michael C. Mauer
Title: Vice President
60 Wall Street
New York, New York 10260
Attention: Loan Department
Telex number: 177615
Telecopier: (212) 648-5016