PLAINBRIDGE, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of October 26,
1993 and entered into by and among PLAINBRIDGE, INC., a
Delaware corporation ("Company"), THE FINANCIAL INSTITUTIONS
LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "Lender" and collectively as
"Lenders"), and BANKERS TRUST COMPANY ("Bankers"), as agent
for Lenders (in such capacity, "Agent").
R E C I T A L S
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WHEREAS, in connection with the Spin-Off (this and
other capitalized terms used in these recitals without
definition being used as defined in subsection 1.1), Company
proposes to acquire certain assets, and assume certain
liabilities, of Pathmark and to enter into the Spin-Off
Agreements and certain other arrangements with SMG-II,
Holdings, PTKH, Pathmark and Chefmark;
WHEREAS, Company desires that Lenders extend certain
credit facilities to Company for working capital purposes of
Company and its Subsidiaries;
WHEREAS, concurrently with the execution of this
Agreement, Pathmark is entering into the Pathmark Credit
Agreement; and
WHEREAS, Company desires to secure all of the
Obligations hereunder and under the other Loan Documents by
granting to Agent, on behalf of Lenders, a first priority Lien
on certain unencumbered real, personal and mixed property of
Company;
NOW, THEREFORE, in consideration of the premises and
the agreements, provisions and covenants herein contained,
Company, Lenders and Agent agree as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
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The following terms used in this Agreement shall
have the following meanings:
"Adjusted Eurodollar Rate" means, for any Interest
Rate Determination Date with respect to a Eurodollar Rate
Loan, the rate obtained by dividing (i) the offered quotation
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(rounded upward to the nearest 1/16 of one percent) to first
class banks in the interbank Eurodollar market by Bankers for
U.S. dollar deposits of amounts in same day funds comparable
to the principal amount of the Eurodollar Rate Loan of Bankers
for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to the Interest Period
for which such Adjusted Eurodollar Rate will apply as of
approximately 10:00 A.M. (New York time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus
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the stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any
member bank of the Federal Reserve System in respect of
"Eurocurrency liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"Affected Lender" has the meaning assigned to that
term in subsection 2.6C.
"Affiliate", as applied to any Person, means any
other Person directly or indirectly controlling, controlled
by, or under common control with, that Person. For the
purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies
of that Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any
successor Agent appointed pursuant to subsection 9.6A, and the
term "Agent" shall include Agent acting in its capacity as
secured party under the Collateral Documents unless the
context otherwise requires.
"Agreement" means this Credit Agreement dated as of
October 26, 1993, as it may be amended, supplemented or
otherwise modified from time to time.
"Asset Sale" means (i) the sale by Company or any of
its Subsidiaries to any Person other than Company or any of
its wholly-owned Subsidiaries of (a) any of the stock of any
of Company's Subsidiaries or (b) any other assets (whether
tangible or intangible) of Company or any of its Subsidiaries
other than (1) inventory sold in the ordinary course of
business and (2) any other assets to the extent that the
aggregate fair market value of such assets sold in any single
transaction or related series of transactions is equal to
$1,000 or less, (ii) the assignment by Company or any of its
Subsidiaries to any Person other than Company or any of its
wholly-owned Subsidiaries of any lease, whether a Capital
Lease or an Operating Lease, to which it is a party as lessee,
(iii) the taking of any assets of Company or any of its
Subsidiaries, or any part thereof or interest therein, for
public or quasi-public use under the power of eminent domain,
condemnation or otherwise, other than any such taking to the
extent that the aggregate net cash proceeds received by
Company and its Subsidiaries in connection with such taking
and all other takings related to such taking are equal to or
less than $100,000, or (iv) the occurrence of any loss, damage
or destruction of any assets of Company or any of its
Subsidiaries giving rise to insurance proceeds, other than any
such occurrence to the extent that the aggregate insurance
proceeds received by Company and its Subsidiaries in
connection with such occurrence are equal to or less than
$5,000,000.
"Assignment and Acceptance" means an Assignment and
Acceptance entered into by a Lender and an Eligible Assignee,
and accepted by Agent, in substantially the form of
Exhibit XII annexed hereto.
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"Bankers" has the meaning assigned to that term in
the introduction to this Agreement.
"Bankruptcy Code" means Title 11 of the United
States Code entitled "Bankruptcy", as now and hereafter in
effect, or any successor statute.
"Base Rate" means, at any time, the higher of
(x) the Prime Rate or (y) the rate which is 1/2 of 1% in
excess of the Federal Funds Effective Rate.
"Base Rate Loans" means Loans bearing interest at
rates determined by reference to the Base Rate as provided in
subsection 2.2A.
"Borrowing Base" means, as at any date of
determination, an aggregate amount equal to up to fifty
percent (50%) of Eligible Inventory.
"Borrowing Base Certificate" means a certificate
substantially in the form annexed hereto as Exhibit VII
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delivered to Lenders by Company pursuant to subsection 4.1M or
subsection 6.1(v).
"Business Day" means (i) for all purposes other than
as covered by clause (ii) below, any day excluding Saturday,
Sunday and any day which is a legal holiday under the laws of
the State of New York or is a day on which banking institu-
tions located in such state are authorized or required by law
or other governmental action to close, and (ii) with respect
to all notices, determinations, fundings and payments in
connection with the Adjusted Eurodollar Rate or any Eurodollar
Rate Loans, any day that is a Business Day described in
clause (i) above and that is also a day for trading by and
between banks in Dollar deposits in the applicable interbank
Eurodollar market.
"Capital Lease", as applied to any Person, means any
lease of any property (whether real, personal or mixed) by
that Person as lessee that, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that
Person.
"Cash" means money, currency or a credit balance in
a Deposit Account.
"Cash Equivalents" means (i) marketable securities
issued or directly and 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 thereof; (ii) marketable direct obligations issued
by any state of the United States of America or any political
subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest
rating obtainable from either Standard & Poor's Corporation
("S&P") or Moody's Investors Service, Inc. ("Moody's");
(iii) commercial paper maturing no more than six months from
the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances
maturing within one year from the date of acquisition thereof
issued by any Lender or any commercial bank organized under
the laws of the United States of America or any state thereof
or the District of Columbia having unimpaired capital and
surplus of not less than $250,000,000 (each Lender and each
such commercial bank herein called a "Cash Equivalent Bank");
and (v) Eurodollar time deposits having a maturity of less
than one year purchased directly from any Cash Equivalent Bank
(whether such deposit is with such Cash Equivalent Bank or any
other Cash Equivalent Bank).
"Chefmark" means Chefmark, Inc., a Delaware
corporation.
"Closing Date" means the date on or before October
29, 1993, on which (i) the initial Loans are made or (ii) in
the event the initial Loans have not yet been made, the
initial Letters of Credit are issued.
"CO-AGENT" has the meaning assigned to that term in
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subsection 9.1B.
"Collateral" means, collectively, all real, personal
and mixed property collateral securing the Obligations
pursuant to the Collateral Documents.
"Collateral Account" has the meaning assigned to
that term in the Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral
Account Agreement executed and delivered by Company and Agent
on the Closing Date, substantially in the form of Exhibit XIV
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annexed hereto, as such Collateral Account Agreement may
hereafter be amended, supplemented or otherwise modified from
time to time.
"Collateral Agent" has the meaning assigned to that
term in subsection 9.1C.
"Collateral Documents" means the Company Pledge
Agreement, the Company Security Agreement, the Company
Trademark Security Agreement, the Collateral Account
Agreement, the Subsidiary Pledge Agreements, the Subsidiary
Security Agreements, the Subsidiary Trademark Security
Agreements, the Mortgages and all other instruments or
documents delivered by any Loan Party pursuant to this
Agreement or any of the other Loan Documents in order to grant
to Agent, on behalf of Lenders, Liens in real, personal or
mixed property of that Loan Party as security for the
Obligations.
"Commercial Letter of Credit" means any letter of
credit or similar instrument issued for the purpose of
providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by Company or any
of its Subsidiaries in the ordinary course of business of
Company or such Subsidiary.
"Commitments" means the commitments of Lenders to
make Loans as set forth in subsection 2.1A.
"Company" has the meaning assigned to that term in
the introduction to this Agreement.
"Company Pledge Agreement" means the Pledge
Agreement executed and delivered by Company on the Closing
Date, substantially in the form of Exhibit XV annexed hereto,
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as such Pledge Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"Company Security Agreement" means the Security
Agreement executed and delivered by Company on the Closing
Date, substantially in the form of Exhibit XVI annexed hereto,
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as such Security Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"Company Trademark Security Agreement" means the
Trademark Collateral Security Agreement and Conditional
Assignment executed and delivered by Company on the Closing
Date, substantially in the form of Exhibit XVII annexed
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hereto, as such Trademark Collateral Security Agreement and
Conditional Assignment may hereafter be amended, supplemented
or otherwise modified from time to time.
"Compliance Certificate" means a certificate
substantially in the form annexed hereto as Exhibit VIII
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delivered to Lenders by Company pursuant to subsection
6.1(iv).
"Consolidated Adjusted EBITDA" means, for any
period, the sum of the amounts for such period of
(i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) provisions for taxes based on income,
(iv) total depreciation and amortization expense,
(v) provisions for expenses related to the Restructuring, and
(vi) other non-cash items (including without limitation LIFO
charges) reducing Consolidated Net Income less other non-cash
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items increasing Consolidated Net Income, all of the foregoing
as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"Consolidated Capital Expenditures" means, for any
period, an amount equal to (i) the sum of (a) the aggregate of
all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of
Capital Leases which is capitalized on the consolidated
balance sheet of Company and its Subsidiaries) by Company and
its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated
statement of cash flows of Company and its Subsidiaries plus
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(b) to the extent not covered by clause (a) hereof, the
aggregate of all expenditures by Company and its Subsidiaries
during that period to acquire (by purchase or otherwise) the
business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person minus (ii) the
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aggregate amount of all Net Cash Proceeds of Asset Sale
received by Company and its Subsidiaries during that period in
connection with Sale and Lease-backs of Equipment all or a
portion of the purchase price of which was included in the
calculation of Consolidated Capital Expenditures for that
period or any prior period. For purposes of this definition
(1) the purchase price of any Equipment that is purchased
simultaneously with the trade-in or other disposition in the
ordinary course of business of existing Equipment or with
insurance proceeds received by Company and its Subsidiaries in
respect of the actual or constructive total loss of any
Equipment shall be included in Consolidated Capital
Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such
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Equipment for the Equipment being traded in at such time or
the amount of proceeds from such other disposition or the
amount of such insurance proceeds, as the case may be, and
(2) the amount of any expenditure for any Equipment (the "New
Equipment") that replaces existing leased Equipment (the
"Leased Equipment") that was purchased at the end of the
applicable lease term and then subsequently sold for a greater
amount shall be included in Consolidated Capital Expenditures
only to the extent of the gross amount of the expenditure for
the New Equipment less the excess of the proceeds received by
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Company or any of its Subsidiaries from the sale of the Leased
Equipment over the gross amount of the purchase price of the
Leased Equipment.
"Consolidated Interest Expense" means, for any
period, total interest expense (including that portion
attributable to Capital Leases in accordance with GAAP and
capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding
Indebtedness of Company 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 Interest
Rate Agreements, but excluding, however, (i) any amounts
referred to in subsection 2.3 payable to Agent and Lenders on
or before the Closing Date and (ii) any deferred financing
expenses amortized by Company and its Subsidiaries during such
period.
"Consolidated Net Income" means, for any period, the
net income (or loss) of Company and its Subsidiaries on a
consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP; provided
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that there shall be excluded (i) the income (or loss) of any
Person (other than a Subsidiary of Company) in which any other
Person (other than Company or any of its Subsidiaries) has a
joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or
any of its Subsidiaries by such Person during such period,
(ii) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Company or is merged into or
consolidated with Company or any of its Subsidiaries or that
Person's assets are acquired by Company or any of its
Subsidiaries, (iii) the income of any Subsidiary of Company to
the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not
at the time permitted by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that
Subsidiary, (iv) any after-tax gains or losses attributable to
Asset Sales or returned surplus assets of any Pension Plan,
and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash
extraordinary losses.
"Consolidated Net Worth" means, as at any date of
determination, the sum of the capital stock and additional
paid-in capital plus retained earnings (or minus accumulated
deficits) of Company and its Subsidiaries on a consolidated
basis determined in conformity with GAAP.
"Consolidated Rental Payments" means, for any
period, the aggregate amount of all rents paid or payable by
Company and its Subsidiaries on a consolidated basis during
that period under all Capital Leases and Operating Leases to
which Company or any of its Subsidiaries is a party as lessee
(in each case net of any sublease income received or
receivable by Company and its Subsidiaries on a consolidated
basis during that period with respect thereto), excluding,
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however, (i) any amount of rent for which Company or any
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Subsidiary of Company is contingently liable under any lease
as a result of the assignment thereof by Company or such
Subsidiary to any Person and (ii) any tax, insurance,
maintenance and similar expenses that Company or any
Subsidiary of Company is obligated to pay as lessee under the
terms of the applicable lease.
"Consolidated Tangible Net Worth" means, as at any
date of determination, an amount equal to (i) Consolidated Net
Worth minus (ii) the total amount of all assets of Company and
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its Subsidiaries, on a consolidated basis determined in
conformity with GAAP, consisting of goodwill, patents, trade
names, trademarks, copyrights, franchises, unamortized
research and development expense, unamortized organization
expense, unamortized debt discount and expense, deferred
assets (other than prepaid insurance, workers' compensation
insurance and prepaid Taxes), the excess of cost of shares
acquired over book value of related assets, and such other
assets as are properly classified as "intangible assets" in
accordance with GAAP.
"Consolidated Total Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of
all Indebtedness of Company and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP.
"Contingent Obligation", as applied to any Person,
means any direct or indirect liability, contingent or
otherwise, of that Person (i) with respect to any
Indebtedness, lease, dividend or other obligation of another
if the primary purpose or intent thereof by the Person
incurring the Contingent Obligation is to provide assurance to
the obligee of such obligation of another that such obligation
of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part)
against loss in respect thereof, (ii) with respect to any
letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements and Currency
Agreements. Contingent Obligations shall include, without
limitation, (a) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of
another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability
of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase,
repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise)
or (Y) to maintain the solvency or any balance sheet item,
level of income or financial condition of another if, in the
case of any agreement described under subclauses (X) or (Y) of
this sentence, the primary purpose or intent thereof is as de-
scribed in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less,
the amount to which such Contingent Obligation is specifically
limited.
"Contractual Obligation", as applied to any Person,
means any provision of any Security issued by that Person or
of any material indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is
bound or to which it or any of its properties is subject.
"Covered Real Property" means, at any time, any Real
Property Asset now owned or hereafter acquired by Company or
any of its Subsidiaries other than (i) any Real Property Asset
listed in Schedule 7.2 annexed hereto that is, at such time,
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subject to Liens permitted under subsection 7.2 securing
Indebtedness (other than the Obligations) of Company or any of
its Subsidiaries permitted under subsection 7.1 and (ii) any
Real Property Asset located in the State of New York.
"Currency Agreement" means any foreign exchange
contract, currency swap agreement, futures contract, option
contract, synthetic cap or other similar agreement or
arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in currency values.
"Default Period" has the meaning assigned to that
term in subsection 2.10.
"Defaulting Lender" has the meaning assigned to that
term in subsection 2.10.
"Deposit Account" means a demand, time, savings,
passbook or like account with a bank, savings and loan
association, credit union or like organization, other than an
account evidenced by a negotiable certificate of deposit.
"Dollars" and the sign "$" mean the lawful money of
the United States of America.
"Eligible Assignee" means (A) (i) a commercial bank
organized under the laws of the United States or any state
thereof; (ii) a savings and loan association or savings bank
organized under the laws of the United States or any state
thereof; (iii) a commercial bank organized under the laws of
any other country, or a political subdivision thereof;
provided that (x) such bank is acting through a branch or
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agency located in the United States or (y) such bank is
organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a
political subdivision of such country; and (iv) any other
entity which is an "accredited investor" (as defined in
Regulation D under the Securities Act) which extends credit or
buys loans as one of its businesses including, but not limited
to, insurance companies, mutual funds and lease financing
companies, in each case (under clauses (i) through (iv) above)
that is reasonably acceptable to Agent; and (B) any Lender and
any Affiliate of any Lender; provided that no Affiliate of
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Company shall be an Eligible Assignee.
"Eligible Inventory" means, as at any date of
determination, the Dollar value for Company, using a first-in,
first-out method of accounting, all in conformity with GAAP,
and increased to reflect the amount of any discounts granted
by suppliers to Company for payment in advance of normal trade
terms, of all Inventory which:
(i) does not constitute perishable items,
including without limitation (A) perishable fruit,
vegetables and other produce, (B) refrigerated
items, including dairy, delicatessen and meat
products, (C) frozen items, and (D) fresh baked
goods;
(ii) is owned by Company, is subject to a valid
and perfected first priority security interest in
favor of Agent on behalf of Lenders, and is free and
clear of all other Liens (other than Permitted
Encumbrances);
(iii) (A) is located on Company's premises
in the United States of America and is not in
transit or (B) is located in any warehouse (a "Third
Party Warehouse") owned and operated by any Person
other than Company (a "Third Party Warehouseman"),
is not in transit, and either is not covered by any
negotiable document of title issued by such Third
Party Warehouseman or is covered by a negotiable
document of title issued by such Third Party
Warehouseman that is in Agent's or Collateral
Agent's possession, so long as, in each case
described in this clause (iii)(B), (1) the only
goods, merchandise or other personal property stored
or warehoused in such Third Party Warehouse are
Inventory or, if goods, merchandise or other
personal property other than Inventory are stored or
warehoused in such Third Party Warehouse, all
Inventory stored or warehoused therein is at all
times segregated, pursuant to arrangements
satisfactory to Agent and CO-AGENT, from all other
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goods, merchandise or other personal property stored
or warehoused therein and (2) such Third Party
Warehouseman has executed an acknowledgement and
consent, in form and substance satisfactory to Agent
and CO-AGENT, acknowledging Agent's security
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interest in the Inventory located in such Third
Party Warehouse, waiving any rights in or claims
against such Inventory, and consenting to Agent's or
Collateral Agent's entering into and remaining in
such Third Party Warehouse and/or removing such
Inventory from such Third Party Warehouse, in either
case in connection with the enforcement of Agent's
security interest in such Inventory and addressing
such other matters as may be reasonably required by
Agent or Collateral Agent (any such Inventory that
is in compliance with all of the requirements set
forth in this clause (iii)(B) being referred to
herein as the "Qualified Third Party Warehouse
Inventory");
(iv) is not on lease or consignment from any
Person to Company;
(v) is not on lease or consignment to any
Person from Company;
(vi) is not (except in the case of Qualified
Third Party Warehouse Inventory) stored with a
bailee, warehouseman or similar party;
(vii) is not packaging or shipping
material, raw materials, components or work-in-
progress;
(viii) is not obsolete, damaged, unsalable
or otherwise unfit for use or sale; provided that
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salvage Inventory shall not be excluded to the
extent it may be returned to the vendor or
manufacturer thereof for a full refund; and
(ix) is not, in Agent's or Collateral Agent's
opinion, unacceptable in the exercise of its sole
discretion.
"Employee Benefit Plan" means any "employee benefit
plan" as defined in Section 3(3) of ERISA which is, or was at
any time, maintained or contributed to by Company or any of
its ERISA Affiliates.
"Environmental Claim" means any written notice of
material violation, claim, demand or abatement order by any
governmental authority or any Person for any damage,
including, without limitation, personal injury (including
sickness, disease or death), tangible or intangible property
damage, contribution, indemnity, indirect or consequential
damages, damage to the environment, nuisance, pollution,
contamination or other adverse effects on the environment, or
for fines, penalties or restrictions, in each case relating
to, resulting from or in connection with Hazardous Materials
and relating to Company, any of its Subsidiaries, or any of
their respective Affiliates.
"Environmental Laws" means all statutes, ordinances,
orders, rules, regulations, plans, policies or decrees and the
like relating to (i) environmental matters, including, without
limitation, those relating to fines, injunctions, penalties,
damages, contribution, cost recovery compensation, losses or
injuries resulting from the Release or threatened Release of
Hazardous Materials, or (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, in any
manner applicable to Company or any of its Subsidiaries or any
of the Facilities.
"Equipment" means all equipment (including without
limitation all distribution, retailing, data processing,
office and motor vehicle equipment) owned or leased by Company
or any of its Subsidiaries.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and any
successor statute.
"ERISA Affiliate", as applied to any Person, means
(i) any corporation which is, or was at any time, a member of
a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that
Person is, or was at any time, a member; (ii) any trade or
business (whether or not incorporated) which is, or was at any
time, a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is, or was at any time, a
member; and (iii) any member of an affiliated service group
within the meaning of Section 414(m) or (o) of the Internal
Revenue Code of which that Person, any corporation described
in clause (i) above or any trade or business described in
clause (ii) above is, or was at any time, a member.
"ERISA Event" means (i) a "reportable event" within
the meaning of Section 4043 of ERISA and the regulations
issued thereunder with respect to any Pension Plan (excluding
those for which the provision for 30-day notice to the PBGC
has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal
Revenue Code with respect to any Pension Plan (whether or not
waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal
Revenue Code with respect to any Pension Plan or the failure
to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent
to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Company or
any of its ERISA Affiliates from any Pension Plan with two or
more contributing sponsors or the termination of any such
Pension Plan resulting in liability pursuant to Sections 4063
or 4064 of ERISA; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, or the occurrence
of any event or condition which might constitute grounds under
ERISA for the termination of, or the appointment of a trustee
to administer, any Pension Plan; (vi) the imposition of
liability on Company or any of its ERISA Affiliates pursuant
to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal
by Company or any of its ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and
4205 of ERISA) from any Multiemployer Plan if there is any
potential liability therefor, or the receipt by Company or any
of its ERISA Affiliates of notice from any Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or
omission which could reasonably be expected to give rise to
the imposition on Company or any of its ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of
the Internal Revenue Code or under Section 409 or 502(c),
(i) or (l) or 4071 of ERISA in respect of any Employee Benefit
Plan; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan
other than a Multiemployer Plan or the assets thereof, or
against Company or any of its ERISA Affiliates in connection
with any such Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to
be qualified under Section 401(a) of the Internal Revenue
Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension
Plan to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (xi) the imposition of
a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any
Pension Plan.
"Eurodollar Rate Loans" means Loans bearing interest
at rates determined by reference to the Adjusted Eurodollar
Rate as provided in subsection 2.2A.
"Event of Default" means each of the events set
forth in Section 8.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"Extension Assignment and Acceptance" has the
meaning assigned to that term in subsection 2.1E.
"Facilities" means any and all real property
(including, without limitation, all buildings, fixtures or
other improvements located thereon) now or
hereafter during the term of this Agreement owned, leased or
operated or heretofore owned by (i) Company or any of its
Subsidiaries, (ii) any of Company's or any such Subsidiary's
predecessors by merger or consolidation, or (iii) any of
Company's Affiliates that are directly or indirectly
controlled by Company.
"Federal Funds Effective Rate" means, for any
period, a fluctuating interest rate equal for each day during
such period to 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 for
such day (or, if such day is not a Business Day, for the next
preceding 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 such day
on such transactions received by Agent from three Federal
funds brokers of recognized standing selected by Agent.
"Fiscal Year" means the fiscal year of Company and
its Subsidiaries ending on the Saturday closest to January 31
of each calendar year. For purposes of this Agreement, any
particular Fiscal Year shall be designated by reference to the
calendar year in which such Fiscal Year commences.
"Funding Date" means the date of the funding of a
Loan.
"GAAP" means, subject to the limitations on the
application thereof set forth in subsection 1.2, generally
accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the
accounting profession, in each case as the same are applicable
to the circumstances as of the date of determination.
"Governmental Authorization" means any permit,
license, authorization, plan, directive, consent order or
consent decree of or from any federal, state or local
governmental authority, agency or court.
"Hazardous Materials" means (i) any chemical,
material or substance at any time defined as or included in
the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", "infectious waste", "toxic
substances" or any other terms intended to define, list or
classify substances by reason of deleterious properties such
as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable
Environmental Laws or publications promulgated pursuant
thereto; (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids,
produced waters and other wastes associated with the
exploration, development or production of crude oil, natural
gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) asbestos in
any form that is or may become friable; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing levels
of polychlorinated biphenyls in excess of fifty parts per
million; (ix) pesticides; and (x) any other chemical, material
or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.
"Heller" means Heller Financial, Inc., a Delaware
corporation.
"Holdings" means Supermarkets General Holdings
Corporation, a Delaware corporation.
"Indebtedness", as applied to any Person, means
(i) all indebtedness for borrowed money, (ii) that portion of
obligations with respect to Capital Leases that is properly
classified as a liability on a balance sheet in conformity
with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for
all or any part of the deferred purchase price of property or
services (excluding any such obligations incurred under
ERISA), which purchase price is (A) due more than six months
(or a longer period up to one year, if such terms are
available from suppliers in the ordinary course of business)
from the date of incurrence of the obligation in respect
thereof or (B) evidenced by a note or similar written
instrument, and (v) all indebtedness secured by any Lien on
any property or asset owned or held by that Person regardless
of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that
Person. Obligations under Interest Rate Agreements and
Currency Agreements constitute Contingent Obligations and not
Indebtedness.
"Indemnitee" has the meaning assigned to that term
in subsection 10.3.
"Intellectual Property" means all patents,
trademarks, tradenames, copyrights, technology, know-how and
processes used in or necessary for the conduct of the business
of Company and its Subsidiaries as currently conducted that
are material to the condition (financial or otherwise),
business or operations of Company and its Subsidiaries, taken
as a whole.
"Interest Payment Date" means (i) with respect to
any Base Rate Loan, each January 15, April 15, July 15 and
October 15 of each year, commencing on the first such date to
occur after the Closing Date, and (ii) with respect to any
Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided that in the case of each
--------
Interest Period of six months, "Interest Payment Date" shall
also include the date that is three months after the
commencement of such Interest Period.
"Interest Period" has the meaning assigned to that
term in subsection 2.2B.
"Interest Rate Agreement" means any interest rate
swap agreement, interest rate cap agreement, interest rate
collar agreement or other similar agreement or arrangement.
"Interest Rate Determination Date" means, in respect
of an Interest Period, the second Business Day prior to the
first day of such Interest Period.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended to the date hereof and from time to
time hereafter.
"Inventory" means all goods, merchandise and other
personal property which are held by Company for sale or lease,
including those held for display or demonstration.
"Investment" means (i) any direct or indirect
purchase or other acquisition by Company or any of its
Subsidiaries of, or of a beneficial interest in, stock or
other Securities of any other Person, or (ii) any direct or
indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business)
or capital contribution by Company or any of its Subsidiaries
to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets
or did not arise from sales to that other Person in the ordi-
nary course of business. The amount of any Investment shall be
the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment.
"Issuing Lender" means, with respect to any Letter
of Credit, the Lender which agrees or is otherwise obligated
to issue such Letter of Credit, determined as provided in
subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership
or other similar arrangement, whether in corporate,
partnership or other legal form; provided that in no event
--------
shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"Lender" and "Lenders" means the persons identified
as "Lenders" and listed on the signature pages of this Agree-
ment, together with their successors and permitted assigns
pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise
requires; provided that the term "Lenders", when used in the
--------
context of a particular Commitment, shall mean Lenders having
that Commitment.
"Letter of Credit" or "Letters of Credit" means
Commercial Letters of Credit and Standby Letters of Credit
issued or to be issued by Issuing Lenders for the account of
Company pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount
which is or at any time thereafter may, pursuant to the terms
thereof, become available for drawing under all Letters of
Credit then outstanding plus (ii) the aggregate amount of all
----
drawings under Letters of Credit honored by Issuing Lenders
and not theretofore reimbursed by Company (including any such
reimbursement out of the proceeds of Revolving Loans pursuant
to subsection 3.3B).
"Lien" means any lien, mortgage, pledge, assignment
(to the extent such assignment is intended to secure an
obligation of any Person), security interest, charge or
encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and
any option, trust or other preferential arrangement having the
practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Revolving
Loans or Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes,
the Letters of Credit (and any applications for, or
reimbursement agreements or other documents or certificates
executed by Company in favor of an Issuing Lender relating to,
the Letters of Credit), the Subsidiary Guaranty and the
Collateral Documents.
"Loan Party" means each of Company and any of
Company's Subsidiaries from time to time executing a Loan
Document, and "Loan Parties" means all such Persons,
collectively.
"Margin Stock" has the meaning assigned to that term
in Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Material Adverse Effect" means (i) a material
adverse effect upon the business, operations, properties,
assets, condition (financial or otherwise) or prospects of
Company and its Subsidiaries, taken as a whole, (ii) the
impairment of the ability of any Loan Party to perform any
Obligations of a monetary nature, or (iii) the impairment of
the rights of Agent or Lenders to enforce any Obligations of a
monetary nature.
"Mortgage" means an instrument (whether designated
as a deed of trust, a trust deed or a mortgage or by any
similar title) executed and delivered by Company or any of its
Subsidiaries substantially in the form of Exhibit XXII annexed
------- ----
hereto encumbering a fee or leasehold interest in Real
Property Assets, as such instrument may be amended,
supplemented or otherwise modified from time to time, and
"Mortgages" means all such instruments, including the Closing
Date Mortgages (as defined in subsection 4.1B) and any
Additional Mortgages (as defined in subsection 6.9),
collectively.
"Multiemployer Plan" means a "multiemployer plan",
as defined in Section 3(37) of ERISA, to which Company or any
of its ERISA Affiliates is contributing, or ever has
contributed, or to which Company or any of its ERISA
Affiliates has, or ever has had, an obligation to contribute.
"Net Cash Proceeds of Asset Sale" means, with
respect to any Asset Sale, Cash payments (including any Cash
received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as
and when so received) actually received from such Asset Sale
net of bona fide direct costs incurred in connection with such
Asset Sale, including without limitation (i) reasonable
brokerage commissions, underwriting fees and discounts, legal
fees and expenses, finder's fees and other similar fees,
expenses and commissions, (ii) taxes reasonably estimated to
be actually payable as a result of such Asset Sale within two
years of the date of such Asset Sale, (iii) payment of the
outstanding principal amount of, premium or penalty, if any,
and interest on any Indebtedness (other than the Loans)
secured by a Lien on the assets in question that is required
to be repaid under the terms thereof as a result of such Asset
Sale, and (iv) the costs and expenses of any repairs,
alterations or improvements made to the property sold in
connection with such Asset Sale to the extent such repairs,
alterations or improvements are required pursuant to the terms
of such Asset Sale.
"Non-Recourse Indebtedness" means, as applied to any
Person, all Indebtedness of that Person secured by Liens on
specified assets of that Person under the terms of which
(i) no recourse may be had against that or any other Person
for the payment of the principal of or interest or premium on
such Indebtedness or for any claim based thereon and (ii) the
enforcement of all obligations relating to such Indebtedness
is limited to foreclosure or other actions with respect to
such specified assets.
"Notes" means one or more of the Revolving Notes or
Swing Line Note or any combination thereof.
"Notice of Borrowing" means a notice substantially
in the form of Exhibit I annexed hereto delivered by Company
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to Agent pursuant to subsection 2.1B with respect to a
proposed borrowing.
"Notice of Conversion/Continuation" means a notice
substantially in the form of Exhibit II annexed hereto
------- --
delivered by Company to Agent pursuant to subsection 2.2D with
respect to a proposed conversion or continuation of the
applicable basis for determining the interest rate with
respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a
notice substantially in the form of Exhibit III annexed hereto
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delivered by Company to the proposed Issuing Lender pursuant
to subsection 3.1B(i) with respect to the proposed issuance of
a Letter of Credit.
"Obligations" means all obligations of every nature
of each Loan Party from time to time owed to Agent, Lenders or
any of them under the Loan Documents, whether for principal,
interest, reimbursement of amounts drawn under Letters of
Credit, fees, expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any
corporation, a certificate executed on behalf of such
corporation by its chairman of the board (if an officer) or
its president or one of its vice presidents and by its chief
financial officer or its treasurer or its controller; provided
--------
that every Officers' Certificate with respect to the
compliance with a condition precedent to the making of any
Loans hereunder shall include (i) a statement that the officer
or officers making or giving such Officers' Certificate have
read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement
that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to
whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.
"Operating Lease" means, as applied to any Person,
any lease (including, without limitation, leases that may be
terminated by the lessee at any time) of any property (whether
real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"Pathmark" means Pathmark Stores, Inc., a Delaware
corporation.
"Pathmark Credit Agreement" means that certain
Credit Agreement dated as of even date herewith among
Pathmark, the lenders party thereto and Bankers, as agent for
such lenders, as such agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"Pathmark Loan Documents" means the "Loan Documents"
as defined in the Pathmark Credit Agreement.
"PBGC" means the Pension Benefit Guaranty
Corporation (or any successor thereto).
"Pension Plan" means any Employee Benefit Plan,
other than a Multiemployer Plan, which is subject to Section
412 of the Internal Revenue Code or Section 302 of ERISA.
"Permitted Encumbrances" means the following types
of Liens (other than any such Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the
time, required by subsection 6.3;
(ii) statutory Liens of landlords and Liens of
carriers, workmen, repairmen, warehousemen, mechanics and
materialmen and other Liens imposed by law, in each case
incurred in the ordinary course of business and securing
obligations that are not overdue for a period of more
than 30 days or securing obligations that are overdue for
a period of more than 30 days that are being contested in
good faith, if (with respect to any such obligations that
are overdue for a period of more than 30 days) such
reserve or other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of
social security, or securing liability to insurance
carriers under insurance or self-insurance arrangements,
or obtaining utility service, or to secure the perfor-
mance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for
the payment of borrowed money);
(iv) any attachment or judgment Lien not consti-
tuting an Event of Default under subsection 8.8;
(v) leases or subleases granted to others not
interfering in any material respect with the ordinary
conduct of the business of Company or any of its Subsidi-
aries;
(vi) easements, rights-of-way, restrictions, minor
defects, encroachments or irregularities in title and
other similar charges or encumbrances not interfering in
any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries;
(vii) any (a) interest or title of a lessor or
sublessor under any lease permitted by subsection 7.9,
(b) restriction or encumbrance that the interest or title
of such lessor or sublessor may be subject to, or
(c) subordination of the interest of the lessee or
sublessee under such lease to any restriction or
encumbrance referred to in the preceding clause (b);
(viii) Liens arising from filing UCC financing
statements relating solely to leases permitted by this
Agreement; and
(ix) Liens in favor of customs and revenue author-
ities arising as a matter of law to secure payment of
customs duties in connection with the importation of
goods.
"Person" means and includes natural persons,
corporations, limited partnerships, general partnerships,
joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal
entities, and governments and agencies and political
subdivisions thereof.
"Potential Event of Default" means a condition or
event that, after notice or lapse of time or both, would
constitute an Event of Default.
"Prime Rate" means the rate that Bankers announces
from time to time as its prime lending rate, as in effect from
time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged
to any customer. Bankers or any other Lender may make
commercial loans or other loans at rates of interest at, above
or below the Prime Rate.
"Pro Rata Share" means, with respect to each Lender,
the percentage obtained by dividing (x) the Revolving Loan
--------
Exposure of that Lender by (y) the aggregate Revolving Loan
--
Exposure of all Lenders, as such percentage may be adjusted by
assignments permitted pursuant to subsection 10.1. The
initial Pro Rata Share of each Lender is set forth opposite
the name of that Lender in Schedule 2.1 annexed hereto.
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"PTKH" means PTK Holdings, Inc., a Delaware
corporation.
"Qualified Sale and Lease-back" means the sale,
pursuant to a Sale and Lease-back, of any Equipment within 180
days after the acquisition of such Equipment by Company or any
of its Subsidiaries.
"Real Property Assets" means interests in land,
buildings, improvements, and fixtures attached thereto or used
in the operation thereof, in each case owned or leased (as
lessee) by Company or any of its Subsidiaries.
"Refunded Swing Line Loans" has the meaning given to
that term in subsection 2.1A(ii).
"Regulation D" means Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Reimbursement Date" has the meaning assigned to
that term in subsection 3.3B.
"Release" means any release, spill, emission,
leaking, pumping, pouring, injection, escaping, deposit,
disposal, discharge or dumping of Hazardous Materials into the
environment (including, without limitation, the abandonment or
disposal of any barrels, containers or other closed
receptacles containing any Hazardous Materials).
"Requisite Lenders" means Lenders having or holding
51% or more of the aggregate Revolving Loan Exposure of all
Lenders.
"Restricted Junior Payment" means (i) any dividend
or other distribution, direct or indirect, on account of any
shares of any class of stock of Company now or hereafter
outstanding, except a dividend payable solely in shares of
that class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock of Company now or
hereafter outstanding, and (iii) any payment made to retire,
or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of
stock of Company now or hereafter outstanding.
"Revolving Loan Commitment" or "Revolving Loan
Commitments" means the commitment or commitments of a Lender
or Lenders to make Revolving Loans pursuant to subsection
2.1A(i).
"Revolving Loan Commitment Termination Date" means
October 31, 1996, or such later date as shall be determined
from time to time pursuant to subsection 2.1E.
"Revolving Loan Exposure" means, with respect to any
Lender as of any date of determination (i) prior to the
termination of the Revolving Loan Commitments, that Lender's
Revolving Loan Commitment and (ii) after the termination of
the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that
Lender plus (b) in the event that Lender is an Issuing Lender,
----
the aggregate amount of all drawings under Letters of Credit
honored by that Lender and not theretofore reimbursed by
Company (in each case net of any participations purchased by
other Lenders in the applicable Letters of Credit) plus
----
(c) the aggregate amount of all participations purchased by
that Lender in any drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed by Company plus
----
(d) the aggregate amount of all participations purchased by
that Lender in any outstanding Swing Line Loans plus (e) in
----
the case of Swing Line Lender, the aggregate outstanding
principal amount of all Swing Line Loans (net of any
participations therein purchased by other Lenders).
"Revolving Loans" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(i).
"Revolving Notes" means the promissory notes of
Company issued pursuant to subsection 2.1D on the Closing Date
or issued pursuant to subsection 2.1E or the last sentence of
subsection 10.1B(i) from time to time after the Closing Date,
in each case substantially in the form of Exhibit V annexed
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hereto, as they may be amended, supplemented or otherwise
modified from time to time.
"Sale and Lease-back" means any arrangement between
Company or any of its Subsidiaries and any other Person
providing for the leasing by Company or such Subsidiary of
personal property which has been or is to be sold or
transferred by Company or such Subsidiary to such other
Person.
"Securities" means any stock, shares, partnership
interests, voting trust certificates, certificates of interest
or participation in any profit-sharing agreement or
arrangement, options, warrants, bonds, debentures, notes, or
other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates
of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right
to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933,
as amended from time to time, and any successor statute.
"SMG-II" means SMG-II Holdings Corporation, a
Delaware corporation.
"Solvent" means, with respect to any Person, that as
of the date of determination both (A) (i) the then fair
saleable value of the property of such Person is (y) greater
than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount
that will be required to pay the probable liabilities on such
Person's then existing debts as they become absolute and
matured considering all financing alternatives and potential
asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and
(iii) such Person does not intend to incur, or believe that it
will incur, debts beyond its ability to pay such debts as they
become due; and (B) such Person is "solvent" within the
meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For
purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in
light of all of the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Spin-Off" means, collectively, (i) the contribution
by Pathmark to Company of the Rickel home center business of
Pathmark, certain warehouse, distribution and transportation
operations and facilities, and certain other real and personal
property assets of Pathmark on or prior to the Closing Date,
(ii) the distribution by Pathmark to PTKH of the capital stock
of Company after the contributions of assets described in
clause (i) above but on or prior to the Closing Date, and
(iii) to the extent not covered by clauses (i) and (ii) above,
the entering into of the Spin-Off Agreements by the parties
thereto and the consummation of the transactions contemplated
thereby.
"Spin-Off Agreements" means (i) that certain
Distribution and Transfer Agreement dated as of October 26,
1993, among Company, PTKH and Pathmark, (ii) that certain Tax
Indemnity Agreement dated as of October 26, 1993, between
Company and Pathmark, (iii) that certain Rickel Services
Agreement dated as of October 26, 1993, between Company and
Pathmark, (iv) that certain Logistical Services Agreement
dated as of October 26, 1993, between Company and Pathmark,
and (v) that certain Blair Services Agreement dated as of
October 26, 1993, between Company and Pathmark, in each case
in the form approved by Agent, CO-AGENT and Requisite Lenders
--------
pursuant to subsection 4.1P, and in each case as such
agreement may be amended from time to time after the Closing
Date to the extent permitted under subsection 7.15.
"Standby Letter of Credit" means any standby letter
of credit or similar instrument issued for the purpose of
supporting (i) Indebtedness of Company or any of its
Subsidiaries in respect of industrial revenue or development
bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations of
third party insurers of Company or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring
third party insurers, (iv) obligations with respect to Capital
Leases or Operating Leases of Company or any of its
Subsidiaries, (v) performance, payment, deposit or surety
obligations of Company or any of its Subsidiaries, in any case
if required by law or governmental rule or regulation or in
accordance with custom and practice in the industry, and
(vi) other obligations of Company and its Subsidiaries to the
extent consistent with past practices of Company and its
Subsidiaries or otherwise consistent with custom and practice
in the industry; provided that Standby Letters of Credit
--------
(other than Standby Letters of Credit with face amounts that
in the aggregate do not exceed $5,000,000 that are issued to
support Indebtedness in respect of Capital Leases that were
assigned by Pathmark to Company) may not be issued for the
purpose of supporting (a) trade payables or (b) Indebtedness
existing on the Closing Date that is not supported by a
previously issued Standby Letter of Credit.
"Stuart" means Eatontown Stuart, Inc., a New Jersey
corporation.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association, joint venture or other
business entity of which more than 50% of the total voting
power of shares of stock or other ownership interests entitled
(without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors,
managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction
of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person or a combination
thereof.
"Subsidiary Guaranty" means the Subsidiary Guaranty
executed and delivered by Subsidiaries of Company on the
Closing Date and to be executed and delivered by Subsidiaries
of Company from time to time in accordance with subsection
6.8, substantially in the form of Exhibit XVIII annexed
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hereto, as such Subsidiary Guaranty may be amended,
supplemented or otherwise modified from time to time.
"Subsidiary Pledge Agreement" means each Subsidiary
Pledge Agreement executed and delivered by Subsidiaries of
Company on the Closing Date or to be executed and delivered by
Subsidiaries of Company from time to time in accordance with
subsection 6.8, in each case substantially in the form of
Exhibit XIX annexed hereto, as such Subsidiary Pledge
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Agreement may be amended, supplemented or otherwise modified
from time to time, and "Subsidiary Pledge Agreements" means
all such Subsidiary Pledge Agreements, collectively.
"Subsidiary Security Agreement" means each
Subsidiary Security Agreement executed and delivered by
Subsidiaries of Company on the Closing Date or to be executed
and delivered by Subsidiaries of Company from time to time in
accordance with subsection 6.8, in each case substantially in
the form of Exhibit XX annexed hereto, as such Subsidiary
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Security Agreement may be amended, supplemented or otherwise
modified from time to time, and "Subsidiary Security
Agreements" means all such Subsidiary Security Agreements,
collectively.
"Subsidiary Trademark Security Agreement" means each
Subsidiary Trademark Collateral Security Agreement and
Conditional Assignment executed and delivered by Subsidiaries
of Company on the Closing Date or to be executed and delivered
by Subsidiaries of Company from time to time in accordance
with subsection 6.8, in each case substantially in the form of
Exhibit XXI annexed hereto, as such Subsidiary Trademark
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Collateral Security Agreement and Conditional Assignment may
be amended, supplemented or otherwise modified from time to
time, and "Subsidiary Trademark Security Agreements" means all
such Subsidiary Trademark Collateral Security Agreements and
Conditional Assignments, collectively.
"Supplemental Collateral Agent" has the meaning
assigned to that term in subsection 9.1D.
"Swing Line Lender" means Bankers, or any Person
serving as a successor Agent hereunder, in its capacity as
Swing Line Lender hereunder.
"Swing Line Loan Commitment" means the commitment of
Swing Line Lender to make Swing Line Loans pursuant to
subsection 2.1A(ii).
"Swing Line Loans" means the Swing Line Loans made
by Swing Line Lender to Company pursuant to subsection
2.1A(ii).
"Swing Line Note" means (i) the promissory note of
Company issued pursuant to subsection 2.1D on the Closing Date
and (ii) any promissory note issued by Company to any
successor Agent and Swing Line Lender pursuant to subsection
2.1E or the last sentence of subsection 9.6B, in each case
substantially in the form of Exhibit VI annexed hereto, as it
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may be amended, supplemented or otherwise modified from time
to time.
"Tax" or "Taxes" means any present or future tax,
levy, impost, duty, charge, fee, deduction or withholding of
any nature and whatever called, by whomsoever, on whomsoever
and wherever imposed, levied, collected, withheld or assessed;
provided that "Tax on the overall net income" of a Person
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shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person's principal office (and/or,
in the case of a Lender, its lending office) is located or in
which that Person is deemed to be doing business on all or
part of the net income, profits or gains of that Person
(whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
"Total Utilization of Revolving Loan Commitments"
means, as at any date of determination, the sum of (i) the
aggregate principal amount of all outstanding Revolving Loans
plus (ii) the aggregate principal amount of all outstanding
----
Swing Line Loans plus (iii) the Letter of Credit Usage.
----
1.2 Accounting Terms; Utilization of GAAP for Purposes of
---------- ------ ----------- -- ---- --- -------- --
Calculations Under Agreement.
------------ ----- ---------
Except as otherwise expressly provided in this
Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with
GAAP. Financial statements and other information required to
be delivered by Company to Lenders pursuant to clauses (i),
(ii), (iii) and (xiv) of subsection 6.1 shall be prepared in
accordance with GAAP as in effect at the time of such
preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(vi)). Calculations
in connection with the definitions, covenants and other
provisions of this Agreement shall utilize accounting
principles and policies in conformity with those used to
prepare the financial statements referred to in subsection
5.3.
1.3 Other Definitional Provisions.
----- ------------ ----------
References to "Sections" and "subsections" shall be
to Sections and subsections, respectively, of this Agreement
unless otherwise specifically provided. Any of the terms
defined in subsection 1.1 may, unless the context otherwise
requires, be used in the singular or the plural, depending on
the reference.
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Loans.
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A. Commitments. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and
warranties of Company herein set forth, each Lender hereby
severally agrees to make the Revolving Loans described in
subsection 2.1A(i) and Swing Line Lender hereby agrees to make
the Swing Line Loans described in subsection 2.1A(ii).
(i) Revolving Loans. Each Lender severally agrees,
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subject to the limitations set forth below with respect
to the maximum amount of Revolving Loans permitted to be
outstanding from time to time, to lend to Company from
time to time during the period from the Closing Date to
but excluding the Revolving Loan Commitment Termination
Date an aggregate amount not exceeding its Pro Rata Share
of the aggregate amount of the Revolving Loan Commitments
to be used for the purposes identified in subsection
2.5A. The original amount of each Lender's Revolving
Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate original
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amount of the Revolving Loan Commitments is $50,000,000;
provided that the Revolving Loan Commitments of Lenders
--------
shall be adjusted to give effect to any assignments of
the Revolving Loan Commitments pursuant to subsection
10.1B; and provided, further that the amount of the
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Revolving Loan Commitments shall be reduced from time to
time by the amount of any reductions thereto made
pursuant to subsections 2.4A(ii) and 2.4A(iii). Each
Lender's Revolving Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with
respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than that
date; provided that each Lender's Revolving Loan
--------
Commitment shall expire immediately and without further
action on October 29, 1993 if the Closing Date has not
occurred on or before that date. Amounts borrowed under
this subsection 2.1A(i) may be repaid and reborrowed to
but excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving
Loan Commitments shall be subject to the following
limitations in the amounts and during the periods
indicated:
(a) the amount otherwise available to be
borrowed or maintained as Revolving Loans under the
Revolving Loan Commitments as of any time of
determination (other than to repay Swing Line Loans
or to reimburse any Issuing Lender for the amount of
any drawings under any Letters of Credit honored by
such Issuing Lender and not theretofore reimbursed
by Company) shall be reduced by (1) the aggregate
principal amount of Swing Line Loans outstanding as
of such time of determination plus (2) the Letter of
----
Credit Usage as of such time of determination;
(b) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the
Borrowing Base then in effect; and
(c) for 30 consecutive days during each
consecutive twelve-month period, there shall be no
Revolving Loans or Swing Line Loans outstanding.
(ii) Swing Line Loans. Swing Line Lender hereby
----- ---- -----
agrees, subject to the limitations set forth below with
respect to the maximum amount of Swing Line Loans
permitted to be outstanding from time to time, to make a
portion of the Revolving Loan Commitments available to
Company from time to time during the period from the
Closing Date to but excluding the Revolving Loan Commit-
ment Termination Date by making Swing Line Loans to
Company in an aggregate amount not exceeding the amount
of the Swing Line Loan Commitment to be used for the
purposes identified in subsection 2.5A, notwithstanding
the fact that such Swing Line Loans, when aggregated with
Swing Line Lender's outstanding Revolving Loans and Swing
Line Lender's Pro Rata Share of the Letter of Credit
Usage then in effect, may exceed Swing Line Lender's
Revolving Loan Commitment. The original amount of the
Swing Line Loan Commitment is $10,000,000; provided that
--------
the amount of the Swing Line Loan Commitment is subject
to reduction as provided in clause (c) of the next
paragraph. The Swing Line Loan Commitment shall expire
on the Revolving Loan Commitment Termination Date and all
Swing Line Loans and all other amounts owed hereunder
with respect to the Swing Line Loans shall be paid in
full no later than that date; provided that the Swing
--------
Line Loan Commitment shall expire immediately and without
further action on October 29, 1993 if the Closing Date
has not occurred on or before that date. Amounts
borrowed under this subsection 2.1A(ii) may be repaid and
reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line
Loan Commitment shall be subject to the following
limitations in the amounts and during the periods
indicated:
(a) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the
lesser of (1) the Revolving Loan Commitments then in
effect and (2) the Borrowing Base then in effect;
(b) for 30 consecutive days during each
consecutive twelve-month period, there shall be no
Revolving Loans or Swing Line Loans outstanding; and
(c) any reduction of the Revolving Loan
Commitments made pursuant to subsection 2.4A which
reduces the aggregate Revolving Loan Commitments to
an amount less than the then current amount of the
Swing Line Loan Commitment shall result in an
automatic corresponding reduction of the Swing Line
Loan Commitment to the amount of the Revolving Loan
Commitments, as so reduced, without any further
action on the part of Agent or Swing Line Lender.
With respect to any Swing Line Loans which have not
been voluntarily prepaid by Company pursuant to
subsection 2.4A(i), Swing Line Lender (i) shall, so long
as any Swing Line Loans are outstanding as of 1:00 P.M.
(New York time) on the first Business Day of any week,
deliver to Agent (with a copy to Company), no later than
2:00 P.M. (New York time) on the first Business Day in
advance of the second Business Day of such week (which
shall be the proposed Funding Date), and (ii) may, at any
other time in its sole and absolute discretion, deliver
to Agent (with a copy to Company), no later than 12:00
Noon (New York time) on the first Business Day in advance
of the proposed Funding Date, a notice (which shall be
deemed to be a Notice of Borrowing given by Company)
requesting Lenders to make Revolving Loans that are Base
Rate Loans on such Funding Date in an amount equal to the
amount of such Swing Line Loans (the "Refunded Swing Line
Loans") (a) in the case of clause (i) above, outstanding
as of 1:00 P.M. (New York time) on the date such notice
is given and (b) in the case of clause (ii) above,
outstanding on the date such notice is given which Swing
Line Lender requests Lenders to prepay. Anything
contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Revolving Loans
made by Lenders other than Swing Line Lender shall be
immediately delivered by Agent to Swing Line Lender (and
not to Company) and applied to repay a corresponding
portion of the Refunded Swing Line Loans and (ii) on the
day such Revolving Loans are made, Swing Line Lender's
Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan
made by Swing Line Lender and such portion of the Swing
Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans, shall no longer be due
under the Swing Line Note of Swing Line Lender and shall
be due under the Revolving Note of Swing Line Lender.
Company hereby authorizes Agent and Swing Line Lender to
charge Company's accounts with Agent and Swing Line
Lender (up to the amount available in each such account)
in order to immediately pay Swing Line Lender the amount
of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Loans made by Lenders,
including the Revolving Loan deemed to be made by Swing
Line Lender, are not sufficient to repay in full the
Refunded Swing Line Loans. If any portion of any such
amount paid (or deemed to be paid) to Swing Line Lender
should be recovered by or on behalf of Company from Swing
Line Lender in bankruptcy, by assignment for the benefit
of creditors or otherwise, the loss of the amount so
recovered shall be ratably shared among all Lenders in
the manner contemplated by subsection 10.5.
If, as a result of any bankruptcy or similar
proceeding with respect to Company, Revolving Loans are
not made pursuant to this subsection 2.1A(ii) in an
amount sufficient to repay any amounts owed to Swing Line
Lender in respect of any outstanding Swing Line Loans,
each Lender shall be deemed to, and hereby agrees to,
have purchased a participation in such outstanding Swing
Line Loans in an amount equal to its Pro Rata Share of
the unpaid amount together with accrued interest thereon.
Upon one Business Day's notice from Swing Line Lender,
each Lender shall deliver to Swing Line Lender an amount
equal to its respective participation in same day funds
at the office of Swing Line Lender located at One Bankers
Trust Plaza, New York, New York. In order to evidence
such participation each Lender agrees to enter into a
participation agreement at the request of Swing Line
Lender in form and substance reasonably satisfactory to
all parties. In the event any Lender fails to make
available to Swing Line Lender the amount of such
Lender's participation as provided in this paragraph,
Swing Line Lender shall be entitled to recover such
amount on demand from such Lender together with interest
thereon at the rate customarily used by Swing Line Lender
for the correction of errors among banks for three
Business Days and thereafter at the Base Rate.
Anything contained herein to the contrary
notwithstanding, (i) each Lender's obligation to make
Revolving Loans for the purpose of repaying any Refunded
Swing Line Loans pursuant to the second preceding
paragraph and each Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to
the immediately preceding paragraph shall be absolute and
unconditional and shall not be affected by any
circumstance, including without limitation (a) any set-
off, counterclaim, recoupment, defense or other right
which such Lender may have against Swing Line Lender,
Company or any other Person for any reason whatsoever;
(b) the occurrence or continuance of an Event of Default
or a Potential Event of Default; (c) any adverse change
in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries; (d) any breach of
this Agreement or any other Loan Document by any party
thereto; or (e) any other circumstance, happening or
event whatsoever, whether or not similar to any of the
foregoing; provided that such obligations of each Lender
--------
are subject to the condition that (X) Swing Line Lender
believed in good faith that all conditions under
Section 4 to the making of the applicable Refunded Swing
Line Loans or other unpaid Swing Line Loans, as the case
may be, were satisfied at the time such Refunded Swing
Line Loans or unpaid Swing Line Loans were made, (Y) such
Lender had actual knowledge, by receipt of any notices
required to be delivered to Lenders pursuant to
subsection 6.1(x) or otherwise, that any such condition
had not been satisfied and such Lender failed to notify
Swing Line Lender and Agent in writing that it had no
obligation to make Revolving Loans until such condition
was satisfied (any such notice to be effective as of the
date of receipt thereof by Swing Line Lender and Agent),
or (Z) the satisfaction of any such condition not
satisfied had been waived by Requisite Lenders prior to
or at the time such Refunded Swing Line Loans or other
unpaid Swing Line Loans were made; and (ii) Swing Line
Lender shall not be obligated to make any Swing Line
Loans if it has elected not to do so after the occurrence
and during the continuation of a Potential Event of
Default or Event of Default.
B. Borrowing Mechanics. Revolving Loans made on any
Funding Date (other than Revolving Loans made pursuant to a
request by Swing Line Lender pursuant to subsection 2.1A(ii)
for the purpose of repaying any Refunded Swing Line Loans or
Revolving Loans made pursuant to subsection 3.3B for the
purpose of reimbursing any Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it) shall be in an
aggregate minimum amount of $5,000,000 and integral multiples
of $1,000,000 in excess of that amount; provided that
--------
Revolving Loans made on any Funding Date as Eurodollar Rate
Loans with a particular Interest Period shall be in an
aggregate minimum amount of $5,000,000 and integral multiples
of $1,000,000 in excess of that amount. Swing Line Loans made
on any Funding Date shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $500,000 in excess of
that amount. Whenever Company desires that Lenders make
Revolving Loans under subsection 2.1A(i), it shall deliver to
Agent a Notice of Borrowing no later than 12:00 Noon (New York
time) at least three Business Days in advance of the proposed
Funding Date (in the case of a Eurodollar Rate Loan) or at
least one Business Day in advance of the proposed Funding Date
(in the case of a Base Rate Loan). Whenever Company desires
that Swing Line Lender make a Swing Line Loan under subsection
2.1A(ii), it shall deliver to Agent a Notice of Borrowing no
later than 12:00 Noon (New York time) on the proposed Funding
Date. The Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount
and type of Loans requested, (iii) in the case of Swing Line
Loans, that such Loans shall be Base Rate Loans, (iv) in the
case of Revolving Loans, whether such Loans shall be Base Rate
Loans or Eurodollar Rate Loans, (v) in the case of any Loans
requested to be made as Eurodollar Rate Loans, the initial
Interest Period requested therefor, and (vi) that the amount
of the proposed borrowing will not cause the Total Utilization
of Revolving Loan Commitments to exceed the Borrowing Base
then in effect. Revolving Loans may be continued as or
converted into Base Rate Loans and Eurodollar Rate Loans in
the manner provided in subsection 2.2D. In lieu of delivering
the above-described Notice of Borrowing, Company may give
Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such
--------
notice shall be promptly confirmed in writing by delivery of a
Notice of Borrowing to Agent on or before the applicable
Funding Date.
Neither Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice
referred to above that Agent believes in good faith to have
been given by a duly authorized officer or other person
authorized to borrow on behalf of Company or for otherwise
acting in good faith under this subsection 2.1B, and upon
receipt by Company of the proceeds of Loans made by Lenders in
accordance with this Agreement pursuant to any such telephonic
notice Company shall have effected Loans hereunder.
Except as otherwise provided in subsections 2.6B,
2.6C and 2.6G, a Notice of Borrowing for a Eurodollar Rate
Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a
borrowing in accordance therewith.
C. Disbursement of Funds. All Revolving Loans under
this Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares of the
Revolving Loan Commitments, it being understood that no Lender
shall be responsible for any default by any other Lender in
that other Lender's obligation to make a Loan requested
hereunder nor shall the Revolving Loan Commitment of any
Lender be increased or decreased as a result of a default by
any other Lender in that other Lender's obligation to make a
Loan requested hereunder. Promptly after receipt by Agent of
a Notice of Borrowing pursuant to subsection 2.1B (or tele-
phonic notice in lieu thereof), Agent shall notify each Lender
or Swing Line Lender, as the case may be, of the proposed
borrowing. Each Lender shall make the amount of its Loan
available to Agent not later than 12:00 Noon (New York time)
on the applicable Funding Date and Swing Line Lender shall
make the amount of its Swing Line Loan available to Agent not
later than 2:00 P.M. (New York time) on the applicable Funding
Date, in each case in same day funds, at the office of Agent
located at One Bankers Trust Plaza, New York, New York.
Except as provided in subsection 2.1A(ii) or subsection 3.3B
with respect to Revolving Loans used to repay Swing Line Loans
or to reimburse any Issuing Lender for the amount of a drawing
under a Letter of Credit issued by it, upon satisfaction or
waiver of the conditions precedent specified in subsections
4.1 (in the case of Loans made on the Closing Date) and 4.2
(in the case of all Loans), Agent shall make the proceeds of
such Loans available to Company on the applicable Funding Date
by causing an amount of same day funds equal to the proceeds
of all such Loans received by Agent from Lenders or Swing Line
Lender, as the case may be, to be credited to the account of
Company at the office of Agent specified in the preceding
sentence.
Unless Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does
not intend to make available to Agent the amount of such
Lender's Loan requested on such Funding Date, Agent may assume
that such Lender has made such amount available to Agent on
such Funding Date and Agent may, in its sole discretion, but
shall not be obligated to, make available to Company a
corresponding amount on such Funding Date. If such corre-
sponding amount is not in fact made available to Agent by such
Lender, Agent shall be entitled to recover such corresponding
amount on demand from such Lender together with interest
thereon, for each day from such Funding Date until the date
such amount is paid to Agent, at the customary rate set by
Agent for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. If such Lender
does not pay such corresponding amount forthwith upon Agent's
demand therefor, Agent shall promptly notify Company and
Company shall immediately pay such corresponding amount to
Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Agent, at
the rate payable under this Agreement for Base Rate Loans.
Nothing in this subsection 2.1C shall be deemed to relieve any
Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Company may have
against any Lender as a result of any default by such Lender
hereunder.
D. Notes. Company shall execute and deliver on the
Closing Date (i) to each Lender (or to Agent for that Lender)
a Revolving Note substantially in the form of Exhibit V
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annexed hereto to evidence that Lender's Revolving Loans, in
the principal amount of that Lender's Revolving Loan
Commitment and with other appropriate insertions, and (ii) to
Swing Line Lender (or to Agent for Swing Line Lender) a Swing
Line Note substantially in the form of Exhibit VI annexed
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hereto to evidence Swing Line Lender's Swing Line Loans, in
the principal amount of the Swing Line Loan Commitment and
with other appropriate insertions.
E. Extension of Revolving Loan Commitment Termination
Date. On or before the 90th day prior to each anniversary of
the Closing Date (the "Current Anniversary Date"), commencing
on the 90th day prior to the first anniversary of the Closing
Date, and prior to the termination of each Lender's
Commitment, Company may, at its option, deliver to Agent a
signed copy of an extension request (an "Extension Request"),
substantially in the form of Exhibit IV annexed hereto,
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requesting an extension of the Revolving Loan Commitment
Termination Date for a period (each an "Extension Period") of
one year from the current Revolving Loan Commitment
Termination Date (or, in the case of an Extension Request
requesting an extension of the Revolving Loan Commitment
Termination Date beyond the fourth anniversary of the Closing
Date, for a period commencing on the date immediately
following such fourth anniversary and ending on July 31,
1998); provided that in no event shall the Revolving Loan
--------
Commitment Termination Date be extended beyond July 31, 1998.
Agent shall promptly notify each Lender of its receipt of such
Extension Request.
On or before the 60th day prior to the Current
Anniversary Date (the "First Determination Date"), each Lender
shall have the right, in its sole discretion, subject to the
provisions of this subsection 2.1E, to (i) consent to the
extension of the Revolving Loan Commitment Termination Date
with respect to all of such Lender's Revolving Loan Commitment
(and, in the case of Swing Line Lender, the Swing Line Loan
Commitment) for the Extension Period or (ii) reject the
extension of the Revolving Loan Commitment Termination Date
with respect to all of such Lender's Revolving Loan Commitment
(and, in the case of Swing Line Lender, the Swing Line Loan
Commitment) for the Extension Period. If a Lender has replied
in writing to Company consenting to the Extension Request,
such Lender may not withdraw such consent for the Extension
Period. If a Lender has not replied in writing to Company
with respect to the Extension Request by the First
Determination Date, such Lender shall be deemed to have
rejected the extension of the Revolving Loan Commitment
Termination Date for the Extension Period.
If one or more Lenders (each a "Rejecting Lender")
shall have rejected or shall be deemed to have rejected such
extension for the Extension Period, then Company may request
that the Loans, Commitments, participations in Letters of
Credit and all other rights and obligations of each Rejecting
Lender be assumed, as of the Current Anniversary Date, by
(i) one or more Lenders (each a "Remaining Lender") consenting
to such extension for the Extension Period and/or (ii) one or
more other Eligible Assignees (each a "New Lender")
satisfactory to Company and Agent (or, if Agent is a Rejecting
Lender, the successor Agent). Each Remaining Lender notified
in writing of such request shall have the right to accept or
reject such request on or before the earlier of (a) the 30th
day prior to the Current Anniversary Date (the "Second
Determination Date") and (b) the date that Company notifies
such Remaining Lender that such request has been withdrawn
because one or more New Lenders have accepted such request.
If a Remaining Lender has not replied in writing to Company
with respect to such request by the Second Determination Date,
such Remaining Lender shall be deemed to have rejected such
request.
Anything contained in this subsection 2.1E to the
contrary notwithstanding, in no event shall the Revolving Loan
Commitment Termination Date be extended pursuant to this
subsection 2.1E for any proposed Extension Period unless
(i) all Lenders shall have consented to such extension in
accordance with the provisions of this subsection 2.1E or
(ii) if there shall be one or more Rejecting Lenders, then on
or before the Second Determination Date (a) one or more
Remaining Lenders and/or New Lenders shall have agreed to
assume and/or purchase, as of the Current Anniversary Date,
all of the Revolving Loans, Revolving Loan Commitments,
participations in Letters of Credit and other rights and
obligations of all Rejecting Lenders with respect to the
Revolving Loan Commitments by executing and delivering to
Agent a counterpart of an Extension Assignment and Acceptance
(the "Extension Assignment and Acceptance") substantially in
the form of Exhibit XIII annexed hereto and (b) if Agent is a
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Rejecting Lender, then a Remaining Lender or a New Lender
satisfactory to Requisite Lenders (determined as if the
transactions contemplated by the Extension Assignment and
Acceptance had been consummated) shall have agreed to
(1) become a successor Agent under the Loan Documents as of
the Current Anniversary Date pursuant to subsection 9.6A and
(2) become a successor Swing Line Lender under the Loan
Documents as of the Current Anniversary Date pursuant to
subsection 9.6B. If the Revolving Loan Commitment Termination
Date is extended in accordance with clause (ii) set forth in
the immediately preceding sentence, within 15 days after the
Second Determination Date, Company and each Rejecting Lender
shall execute and deliver to Agent a counterpart of the
Extension Assignment and Acceptance and upon receipt thereof
and any certificates, documents or other evidence with respect
to United States federal income tax withholding matters that
any New Lender may be required to deliver pursuant to
subsection 2.7B(iii), Agent shall, if such Extension
Assignment and Acceptance has been completed and is in
substantially the form of Exhibit XIII annexed hereto, accept
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such Extension Assignment and Acceptance by executing a
counterpart thereof as provided therein.
Anything contained in this Agreement to the contrary
notwithstanding, if an Extension Assignment and Acceptance
shall have been executed and delivered by each party thereto
as contemplated by the provisions of the immediately preceding
paragraph, in order to effect the transactions contemplated by
such Extension Assignment and Assignment, (i) during the
period commencing on the third Business Day immediately
preceding the Current Anniversary Date and ending on the
Current Anniversary Date, (a) no Loans shall be made or
prepaid, (b) no Letters of Credit shall be issued, and (c) no
Commitments shall be reduced or terminated by Company, and
(ii) during the period commencing on the date of execution and
delivery by each party thereto of such Extension Assignment
and Acceptance and ending on the Current Anniversary Date,
none of the Loans, Commitments, Letters of Credit or
participations therein or other Obligations may be assigned by
any Lender except pursuant to an assignment or a pledge
permitted under subsection 10.1D.
Unless the Revolving Loan Commitment Termination
Date is extended in accordance with the immediately preceding
paragraph, the Commitments of all Lenders shall terminate on
the current Revolving Loan Commitment Termination Date.
Subject to the immediately following paragraph, if
the Revolving Loan Commitment Termination Date is extended in
accordance with the provisions of this subsection 2.1E, then
the maturity date of the Note or Notes held by each Remaining
Lender shall be automatically extended for the applicable
Extension Period without any further action by Company, Agent
or Lenders.
In the event the Commitments of some or all of the
Rejecting Lenders are reallocated among one or more Remaining
Lenders pursuant to this subsection 2.1E, Company shall, on or
before the Current Anniversary Date, deliver to Agent, on
behalf of each such Remaining Lender, (i) a new Revolving Note
of such Remaining Lender evidencing the increased total
Revolving Loan Commitment of such Remaining Lender and (ii) if
such Remaining Lender shall be a successor Swing Line Lender,
a Swing Line Note evidencing the Swing Line Loan Commitment of
such Remaining Lender. Upon receipt by each Remaining Lender
of a new Revolving Note as provided in this paragraph, such
Remaining Lender shall promptly cancel and return to Company
the Revolving Note evidencing its former allocation of the
Revolving Commitments.
In the event one or more New Lenders become parties
to this Agreement pursuant to this subsection 2.1E, Company
shall, on or before the Current Anniversary Date, deliver to
Agent, on behalf of each such New Lender, (i) a Revolving Note
evidencing the Revolving Loan Commitment of such New Lender
and (ii) if such New Lender shall be a successor Swing Line
Lender, a Swing Line Note evidencing the total Swing Line Loan
Commitment of such New Lender.
Upon receipt by each Rejecting Lender of all amounts
payable to such Rejecting Lender under any applicable
Extension Assignment and Acceptance, such Rejecting Lender
shall promptly cancel and return to Company the Revolving Note
evidencing its former allocation of the Revolving Loan
Commitments.
2.2 Interest on the Loans.
-------- -- --- -----
A. Rate of Interest. Subject to the provisions of
subsections 2.6 and 2.7, each Revolving Loan shall bear
interest on the unpaid principal amount thereof from the date
made through maturity (whether by acceleration or otherwise)
at a rate determined by reference to the Base Rate or the
Adjusted Eurodollar Rate, as the case may be. Subject to the
provisions of subsection 2.7, each Swing Line Loan shall bear
interest on the unpaid principal amount thereof from the date
made through maturity (whether by acceleration or otherwise)
at a rate determined by reference to the Base Rate. The
applicable basis for determining the rate of interest with
respect to any Revolving Loan shall be selected by Company
initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B. The basis
for determining the interest rate with respect to any
Revolving Loan may be changed from time to time pursuant to
subsection 2.2D. If on any day a Revolving Loan is outstanding
with respect to which notice has not been delivered to Agent
in accordance with the terms of this Agreement specifying the
applicable basis for determining the rate of interest, then
for that day that Loan shall bear interest determined by
reference to the Base Rate.
Subject to the provisions of subsections 2.2E and
2.7, the Revolving Loans shall bear interest through maturity
as follows:
(i) if a Base Rate Loan, then at the sum of the
Base Rate plus 1.50% per annum; or
----
(ii) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus 2.50% per annum.
----
Subject to the provisions of subsections 2.2E and
2.7, the Swing Line Loans shall bear interest through maturity
at the sum of the Base Rate plus 1.00% per annum.
----
B. Interest Periods. In connection with each
Eurodollar Rate Loan, Company may, pursuant to the applicable
Notice of Borrowing or Notice of Conversion/Continuation, as
the case may be, select an interest period (each an "Interest
Period") to be applicable to such Loan, which Interest Period
shall be, at Company's option, a one, two, three or six month
period; provided that:
--------
(i) the initial Interest Period for any Eurodollar
Rate Loan shall commence on the Funding Date in respect
of such Loan, in the case of a Loan initially made as a
Eurodollar Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case
of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as
such pursuant to a Notice of Conversion/Continuation,
each successive Interest Period shall commence on the day
on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise
expire on a day that is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day;
provided that if any Interest Period would otherwise
--------
expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs
in such month, such Interest Period shall expire on the
next preceding Business Day;
(iv) 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, subject
to clause (v) of this subsection 2.2B, end on the last
Business Day of a calendar month;
(v) no Interest Period shall extend beyond the
Revolving Loan Commitment Termination Date;
(vi) there shall be no more than 5 Interest Periods
outstanding at any time; and
(vii) in the event Company fails to specify an
Interest Period for any Eurodollar Rate Loan in the
applicable Notice of Borrowing or Notice of Conversion/
Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of
subsection 2.2E, interest on each Loan shall be payable in
arrears on and to each Interest Payment Date applicable to
that Loan, upon any prepayment of that Loan (to the extent
accrued on the amount being prepaid) and at maturity
(including final maturity).
D. Conversion or Continuation. Subject to the
provisions of subsection 2.6, Company shall have the option
(i) to convert at any time after the Closing Date all or any
part of its outstanding Revolving Loans equal to $5,000,000
and integral multiples of $1,000,000 in excess of that amount
from Loans bearing interest at a rate determined by reference
to one basis to Loans bearing interest at a rate determined by
reference to an alternative basis, or (ii) upon the expiration
of any Interest Period applicable to a Eurodollar Rate Loan,
to continue all or any portion of such Loan equal to
$5,000,000 and integral multiples of $1,000,000 in excess of
that amount as a Eurodollar Rate Loan; provided, however, that
-------- -------
a Eurodollar Rate Loan may only be converted into a Loan
bearing interest at a rate determined by reference to an
alternative basis on the expiration date of an Interest Period
applicable thereto; and provided, further that no Loan may be
-------- -------
made as or converted into a Base Rate Loan during the period
from December 24 of any year to and including January 7 of the
immediately succeeding year for the purpose of investing in
securities bearing interest at a rate determined by reference
to any other basis for the purpose of arbitrage or
speculation.
Company shall deliver a Notice of Conversion/
Continuation to Agent no later than 12:00 Noon (New York time)
at least one Business Day in advance of the proposed
conversion date (in the case of a conversion to a Base Rate
Loan) and at least three Business Days in advance of the
proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan).
A Notice of Conversion/Continuation shall specify (i) the
proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount of the Loan to be converted/
continued, (iii) the nature of the proposed conversion/
continuation, (iv) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, that no Potential
Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice
of Conversion/Continuation, Company may give Agent telephonic
notice by the required time of any proposed conversion/
continuation under this subsection 2.2D; provided that such
--------
notice shall be promptly confirmed in writing by delivery of a
Notice of Conversion/Continuation to Agent on or before the
proposed conversion/continuation date.
Neither Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice
referred to above that Agent believes in good faith to have
been given by a duly authorized officer or other person
authorized to act on behalf of Company or for otherwise acting
in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the
interest rate with respect to any Loans in accordance with
this Agreement pursuant to any such telephonic notice Company
shall have effected a conversion or continuation, as the case
may be, hereunder.
Except as otherwise provided in subsections 2.6B,
2.6C and 2.6G, a Notice of Conversion/Continuation for
conversion to, or continuation of, a Eurodollar Rate Loan (or
telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation
in accordance therewith.
E. Post-Maturity Interest. Any principal payments on
the Loans not paid when due and, to the extent permitted by
applicable law, any interest payments on the Loans or any fees
or other amounts owed hereunder not paid when due, in each
case whether at stated maturity, by notice of prepayment, by
acceleration or otherwise, shall thereafter bear interest
(including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable
on demand at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement with
respect to the applicable Loans (or, in the case of any such
fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans); provided that, in the case of
--------
Eurodollar Rate Loans, upon the expiration of the Interest
Period in effect at the time any such increase in interest
rate is effective such Eurodollar Rate Loans shall thereupon
become Base Rate Loans and shall thereafter bear interest
payable upon demand at a rate which is 2% per annum in excess
of the interest rate otherwise payable under this Agreement
for Base Rate Loans. Payment or acceptance of the increased
rates of interest provided for in this subsection 2.2E is not
a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Agent or any
Lender.
F. Computation of Interest. Interest on the Loans
shall be computed on the basis of a 360-day year, in each case
for the actual number of days elapsed in the period during
which it accrues. In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest
Period applicable to such Loan or, with respect to a Base Rate
Loan being converted from a Eurodollar Rate Loan, the date of
conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest
Period applicable to such Loan or, with respect to a Base Rate
Loan being converted to a Eurodollar Rate Loan, the date of
conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided that if
--------
a Loan is repaid on the same day on which it is made, one
day's interest shall be paid on that Loan.
2.3 Fees.
----
A. Commitment Fees. (i) Company agrees to pay to
Agent, for distribution to each Lender, a commitment fee for
the period commencing on the earlier of the date of delivery
to Agent of an executed commitment letter of such Lender with
respect to the Revolving Loan Commitment of such Lender
hereunder and August 23, 1993 to and excluding the Closing
Date, equal to the aggregate amount of the Revolving Loan
Commitment of such Lender as set forth in Schedule 2.1 annexed
-------- ---
hereto multiplied by 1/2 of 1% per annum, such commitment fees
---------- --
to be calculated on the basis of a 360-day year and the actual
number of days elapsed and to be payable in arrears on the
earlier of the Closing Date or the termination of the
Commitments; and (ii) Company agrees to pay to Agent, for
distribution to each Lender in proportion to that Lender's Pro
Rata Share, commitment fees for the period from and including
the Closing Date to and excluding the Revolving Loan
Commitment Termination Date equal to the average of the daily
excess of the Revolving Loan Commitments over the sum of the
aggregate principal amount of Revolving Loans outstanding (but
not any Swing Line Loans outstanding) plus the Letter of
----
Credit Usage (other than the Letter of Credit Usage in respect
of Standby Letters of Credit) multiplied by 1/2 of 1% per annum,
---------- --
such commitment fees to be calculated on the basis of a 360-
day year and the actual number of days elapsed and to be
payable quarterly in arrears on January 15, April 15, July 15
and October 15 of each year, commencing on January 15, 1994,
and on the Revolving Loan Commitment Termination Date.
B. Other Fees. Company agrees to pay to Agent such
other fees in the amounts and at the times separately agreed
upon between Company and Agent, as set forth in that certain
letter dated August 19, 1993 from Agent to Company.
2.4 Prepayments and Reductions in Commitments; General
----------- --- ---------- -- ------------ -------
Provisions Regarding Payments.
---------- --------- --------
A. Prepayments and Reductions in Commitments.
(i) Voluntary Prepayments. Company may, upon
--------- -----------
written or telephonic notice to Agent on or prior to
12:00 Noon (New York time) on the date of prepayment,
which notice, if telephonic, shall be promptly confirmed
in writing, at any time and from time to time prepay any
Swing Line Loan in whole or in part on any Business Day
in an aggregate minimum amount of $1,000,000 and integral
multiples of $500,000 in excess of that amount (or such
lesser amount as shall constitute the aggregate amount of
all outstanding Swing Line Loans). Company may, upon not
less than one Business Day's prior written or telephonic
notice, in the case of Base Rate Loans, and three
Business Days' prior written or telephonic notice, in the
case of Eurodollar Rate Loans, in each case confirmed in
writing to Agent (which notice Agent will promptly
transmit by telecopy or telephone to each Lender), at any
time and from time to time prepay any Revolving Loans in
whole or in part on any Business Day in an aggregate
minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount (or, in each such
case, such lesser amount as shall constitute the
aggregate amount of all outstanding Revolving Loans);
provided, however, that a Eurodollar Rate Loan may only
-------- -------
be prepaid on the expiration of the Interest Period
applicable thereto. Notice of prepayment having been
given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on
the prepayment date specified therein. Any such
voluntary prepayment shall be applied as specified in
subsection 2.4A(iv).
(ii) Voluntary Reductions of Revolving Loan
--------- ---------- -- --------- ----
Commitments. Company may, upon not less than three
-----------
Business Days' prior written or telephonic notice
confirmed in writing to Agent (which notice Agent will
promptly transmit by telecopy or telephone to each
Lender), at any time and from time to time terminate in
whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up
to the amount by which the Revolving Loan Commitments
exceed the Total Utilization of Revolving Loan
Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of
--------
the Revolving Loan Commitments shall be in an aggregate
minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount. Company's notice to
Agent shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of
any partial reduction, and such termination or reduction
of the Revolving Loan Commitments shall be effective on
the date specified in Company's notice and shall reduce
the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments of Loans and
--------- ----------- -- ----- ---
Mandatory Reductions of Revolving Loan Commitments.
--------- ---------- -- --------- ---- -----------
(a) Prepayments and Reductions from Asset
----------- --- ---------- ---- -----
Sales. No later than the second Business Day
-----
following the date of receipt by Company or any of
its Subsidiaries or, in the case of insurance
proceeds paid to Agent pursuant to subsection 6.4,
Agent of any Net Cash Proceeds of Asset Sale (other
than any Net Cash Proceeds of Asset Sale from any
Qualified Sale and Lease-back), (1) Company shall
prepay first the Swing Line Loans to the full extent
thereof and second the Revolving Loans to the full
extent thereof in an amount equal to such Net Cash
Proceeds of Asset Sale minus any such Net Cash
-----
Proceeds of Asset Sale (the "Proposed Reinvestment
Amount") received by Company or such Subsidiary or,
in the case of insurance proceeds paid to Agent
pursuant to subsection 6.4, Agent in connection with
(X) any taking of assets described in clause (iii)
of the definition of the term "Asset Sale" or
(Y) any loss, damage or destruction of assets
described in clause (iv) of the definition of the
term "Asset Sale," in either case that Company or
such Subsidiary intends to use within 180 days of
such date of receipt to repair or restore the
portion of the assets so taken, lost, damaged or
destroyed that is remaining after such taking, loss,
damage or destruction or to replace the assets so
taken, lost, damaged or destroyed; provided that
--------
Company shall have delivered to Agent on or before
such second Business Day an Officers' Certificate
setting forth the proposed use of the Proposed
Reinvestment Amount and such other information with
respect to such proposed use as Agent may reasonably
request, and (2) to the extent such Net Cash
Proceeds of Asset Sale minus the Proposed
-----
Reinvestment Amount, if any, exceed the aggregate
outstanding principal amount of the Loans, Company
shall cash collateralize outstanding Letters of
Credit pursuant to the Collateral Account Agreement
in an amount equal to the lesser of (y) such excess
and (z) (I) if no Event of Default or Potential
Event of Default shall have occurred and be
continuing on the date of such cash
collateralization, then the amount by which the
Letter of Credit Usage then in effect exceeds the
Revolving Loan Commitments then in effect (after
giving effect to the permanent reduction in the
Revolving Loan Commitments in an amount equal to
such Net Cash Proceeds of Asset Sale as provided
below) or (II) if an Event of Default or Potential
Event of Default shall have occurred and be
continuing on the date of such cash
collateralization, then the Letter of Credit Usage
then in effect, and, in any event, the Revolving
Loan Commitments shall be permanently reduced in an
amount equal to such Net Cash Proceeds of Asset
Sale; provided, however, that the first $10,000,000
-------- -------
of Net Cash Proceeds of Asset Sale (other than any
Net Cash Proceeds of Asset Sale from any Qualified
Sale and Lease-back and other than any Proposed
Reinvestment Amount to the extent such Proposed
Reinvestment Amount is used to repair, restore or
replace assets of Company or any of its Subsidiaries
as provided above) received by Company or any of its
Subsidiaries in any Fiscal Year shall not be
required to be applied to prepay any Loans or cash
collateralize any outstanding Letters of Credit or
reduce the Revolving Loan Commitments pursuant to
this subsection 2.4A(iii)(a). With respect to any
Proposed Reinvestment Amount, on the one hundred and
eighty-first day after receipt thereof by Company or
any of its Subsidiaries, subject to the last proviso
in the immediately preceding sentence, (1) Company
shall prepay first the Swing Line Loans to the full
-----
extent thereof and second the Revolving Loans to the
------
full extent thereof in an amount (the "Unused
Reinvestment Amount") equal to 100% of any portion
of such Proposed Reinvestment Amount that has not
been used to repair, restore or replace the assets
of Company or such Subsidiary as provided above and
(2) to the extent the Unused Reinvestment Amount
exceeds the aggregate outstanding principal amount
of the Loans, Company shall cash collateralize
outstanding Letters of Credit pursuant to the
Collateral Account Agreement in an amount equal to
the lesser of (y) such excess and (z) (I) if no
Event of Default or Potential Event of Default shall
have occurred and be continuing on the date of such
cash collateralization, then the amount by which the
Letter of Credit Usage then in effect exceeds the
Revolving Loan Commitments then in effect (after
giving effect to the permanent reduction in the
Revolving Loan Commitments in an amount equal to the
Unused Reinvestment Amount as provided below) or
(II) if an Event of Default or a Potential Event of
Default shall have occurred and be continuing on the
date of such cash collateralization, then the Letter
of Credit Usage then in effect, and, in any event,
the Revolving Loan Commitments shall be permanently
reduced in an amount equal to the Unused
Reinvestment Amount. Concurrently with any
prepayment of the Loans, cash collateralization of
outstanding Letters of Credit and/or reduction of
the Revolving Loan Commitments pursuant to this
subsection 2.4A(iii)(a), Company shall deliver to
Agent an Officers' Certificate demonstrating the
derivation of the Net Cash Proceeds of Asset Sale of
the correlative Asset Sale from the gross sales
price thereof. In the event that Company shall, at
any time after receipt of any Net Cash Proceeds of
Asset Sale in connection with any Asset Sale,
determine that the prepayments, cash
collateralization of Letters of Credit and/or
reductions of the Revolving Loan Commitments, if
any, previously made in respect of such Asset Sale
were in an aggregate amount less than that required
by the terms of this subsection 2.4A(iii)(a),
Company shall promptly make an additional prepayment
of the Swing Line Loans or Revolving Loans or cash
collateralize outstanding Letters of Credit pursuant
to the Collateral Account Agreement, as the case may
be (and the Revolving Loan Commitments shall be
permanently reduced), in the manner described above
in an amount equal to the amount of any such
deficit, and Company shall concurrently therewith
deliver to Agent an Officers' Certificate
demonstrating the derivation of the additional Net
Cash Proceeds of Asset Sale resulting in such
deficit. Any mandatory prepayments pursuant to this
subsection 2.4A(iii)(a) shall be applied as
specified in subsection 2.4A(iv).
(b) Prepayments and Reductions Due to
----------- --- ---------- --- --
Reversion of Surplus Assets of Pension Plans. No
--------- -- ------- ------ -- ------- -----
later than the second Business Day following the
date of return to Company or any of its Subsidiaries
of any surplus assets of any pension plan of Company
or any of its Subsidiaries, (1) Company shall prepay
in an amount (the "Net Reversion Amount") equal to
100% of such returned surplus assets, net of
transaction costs and expenses incurred in obtaining
such return, including incremental taxes payable as
a result thereof, first the Swing Line Loans to the
-----
full extent thereof and second the Revolving Loans
------
to the full extent thereof and (2) to the extent
such Net Reversion Amount exceeds the aggregate
outstanding principal amount of the Loans, Company
shall cash collateralize outstanding Letters of
Credit pursuant to the Collateral Account Agreement
in an amount equal to the lesser of (y) such excess
and (z) (I) if no Event of Default or Potential
Event of Default shall have occurred and be
continuing on the date of such cash
collateralization, then the amount by which the
Letter of Credit Usage then in effect exceeds the
Revolving Loan Commitments then in effect (after
giving effect to the permanent reduction in the
Revolving Loan Commitments in an amount equal to
such Net Reversion Amount as provided below) or
(II) if an Event of Default or Potential Event of
Default shall have occurred and be continuing on the
date of such cash collateralization, then the Letter
of Credit Usage then in effect, and, in any event,
the Revolving Loan Commitments shall be permanently
reduced in an amount equal to such Net Reversion
Amount. Any such mandatory prepayments shall be
applied as specified in subsection 2.4A(iv).
(c) Prepayments Due to Reductions or
----------- --- -- ---------- --
Restrictions of Revolving Loan Commitments or Due to
------------ -- --------- ---- ----------- -- --- --
Insufficient Borrowing Base. Company shall from
------------ --------- ----
time to time first prepay the Swing Line Loans,
-----
second prepay the Revolving Loans and third cash
------ -----
collateralize outstanding Letters of Credit to the
extent necessary (1) so that the Total Utilization
of Revolving Loan Commitments then in effect minus
-----
the aggregate amount of cash collateral then on
deposit pursuant to the Collateral Account Agreement
as collateral for outstanding Letters of Credit
shall not at any time exceed the lesser of (X) the
Revolving Loan Commitments then in effect and
(Y) the Borrowing Base then in effect and (2) to
give effect to the limitations set forth in clause
(c) of the second paragraph of subsection 2.1A(i)
and in clause (b) of the second paragraph of
subsection 2.1A(ii). Any such mandatory prepayments
shall be applied as specified in subsection
2.4A(iv).
(iv) Application of Prepayments.
----------- -- -----------
(a) Application of Voluntary Prepayments by
----------- -- --------- ----------- --
Type of Loans and Order of Maturity. Any voluntary
---- -- ----- --- ----- -- --------
prepayments pursuant to subsection 2.4A(i) shall be
applied as specified by Company in the applicable
notice of prepayment; provided that in the event
--------
Company fails to specify the Loans to which any such
prepayment shall be applied, such prepayment shall
be applied first to repay outstanding Swing Line
-----
Loans to the full extent thereof, second to repay
------
outstanding Revolving Loans to the full extent
thereof, and third to cash collateralize outstanding
-----
Letters of Credit to the full extent thereof
pursuant to the Collateral Account Agreement.
(b) Application of Prepayments to Base Rate
----------- -- ----------- -- ---- ----
Loans and Eurodollar Rate Loans. Considering
----- --- ---------- ---- -----
Revolving Loans and Swing Line Loans being prepaid
separately, any prepayment shall be applied first to
Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, in each case
in a manner which minimizes the amount of any
payments required to be made by Company pursuant to
subsection 2.6D.
B. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by
------ --- ---- -- -------
Company of principal, interest, fees and other
Obligations hereunder, under the Notes and under the
other Loan Documents shall be made in same day funds and
without defense, set-off or counterclaim, free of any
restriction or condition, and delivered to Agent not
later than 1:00 P.M. (New York time) on the date due at
its office located at One Bankers Trust Plaza, New York,
New York, for the account of Lenders; funds received by
Agent after that time on such due date shall be deemed to
have been paid by Company on the next succeeding Business
Day. Company hereby authorizes Agent to charge its
accounts with Agent in order to cause timely payment to
be made to Agent of all principal, interest, fees and
expenses due hereunder (subject to sufficient funds being
available in its accounts for that purpose).
(ii) Application of Payments to Principal and
----------- -- -------- -- --------- ---
Interest. All payments in respect of the principal
--------
amount of any Loan shall include payment of accrued
interest on the principal amount being repaid or prepaid,
and all such payments shall be applied to the payment of
interest before application to principal.
(iii) Apportionment of Payments. Aggregate
------------- -- --------
principal and interest payments shall be apportioned
among all outstanding Loans to which such payments
relate, in each case proportionately to Lenders'
respective Pro Rata Shares. Agent shall promptly
distribute to each Lender, at its primary address set
forth below its name on the appropriate signature page
hereof or at such other address as such Lender may
request, its Pro Rata Share of all such payments received
by Agent and the commitment fees of such Lender when
received by Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this
subsection 2.4B(iii), if, pursuant to the provisions of
subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected
Lender makes Base Rate Loans in lieu of its Pro Rata
Share of any Eurodollar Rate Loans, Agent shall give
effect thereto in apportioning payments received
thereafter.
(iv) Payments on Business Days. Whenever any
-------- -- -------- ----
payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be
made on the next succeeding Business Day and such
extension of time shall be included in the computation of
the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that
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before disposing of any Note held by it, or any part
thereof (other than by granting participations therein),
that Lender will make a notation thereon of all Loans
evidenced by that Note and all principal payments
previously made thereon and of the date to which interest
thereon has been paid; provided that the failure to make
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(or any error in the making of) a notation of any Loan
made under such Note shall not limit or otherwise affect
the obligations of Company hereunder or under such Note
with respect to any Loan or any payments of principal or
interest on such Note.
2.5 Use of Proceeds.
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A. Loans. The proceeds of any Loans shall be applied
by Company for working capital purposes, which may include the
repayment of the Swing Line Loans pursuant to subsection
2.1A(ii), the reimbursement to any Issuing Lender of any
amounts drawn under any Letters of Credit issued by such
Issuing Lender as provided in subsection 3.3 and the making of
intercompany loans to any of Company's wholly-owned
Subsidiaries, in accordance with subsection 7.1(iv), for their
own working capital purposes.
B. Margin Regulations. No portion of the proceeds of
any borrowing under this Agreement shall be used by Company or
any of its Subsidiaries in any manner that might cause the
borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T or Regulation X of
the Board of Governors of the Federal Reserve System or any
other regulation of such Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
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Notwithstanding any other provision of this
Agreement to the contrary, the following provisions shall
govern with respect to Eurodollar Rate Loans as to the matters
covered:
A. Determination of Applicable Interest Rate. As soon
as practicable after 10:00 A.M. (New York time) on each Inter-
est Rate Determination Date, Agent shall determine (which
determination shall, absent manifest error (including
arithmetical error), be final, conclusive and binding upon all
parties) the interest rate that shall apply to the Eurodollar
Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in
writing) to Company and each Lender.
B. Inability to Determine Applicable Interest Rate. In
the event that Agent shall have determined (which
determination shall be final and conclusive and binding upon
all parties hereto), on any Interest Rate Determination Date
with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided
for in the definition of Adjusted Eurodollar Rate, Agent shall
on such date give notice (by telecopy or by telephone
confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans until such time as Agent
notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of
Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such
determination was made shall be deemed to be rescinded by
Company.
C. Illegality or Impracticability of Eurodollar Rate
Loans. In the event that on any date any Lender shall have
determined (which determination shall be final and conclusive
and binding upon all parties hereto but shall be made only
after consultation with Company and Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans
(i) has become unlawful as a result of compliance by such
Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order
not having the force of law even though the failure to comply
therewith would not be unlawful) or (ii) has become
impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the interbank
Eurodollar market or the position of such Lender in that
market, then, and in any such event, such Lender shall be an
"Affected Lender" and it shall on that day give notice (by
telecopy or by telephone confirmed in writing) to Company and
Agent of such determination (which notice Agent shall promptly
transmit to each other Lender). Thereafter (a) the obligation
of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender, (b) to the extent
such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/
Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan,
(c) the Affected Lender's obligation to maintain its
outstanding Eurodollar Rate Loans (the "Affected Loans"),
shall be terminated at the earlier to occur of the expiration
of the Interest Period then in effect with respect to the
Affected Loans or when required by law, and (d) the Affected
Loans shall automatically convert into Base Rate Loans on the
date of such termination. Notwithstanding the foregoing, to
the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested
by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Company shall have the option,
subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/Continuation as to
all Lenders by giving notice (by telecopy or by telephone
confirmed in writing) to Agent of such rescission on the date
on which the Affected Lender gives notice of its determination
as described above (which notice of rescission Agent shall
promptly transmit to each other Lender). Except as provided
in the immediately preceding sentence, nothing in this
subsection 2.6C shall affect the obligation of any Lender
other than an Affected Lender to make or maintain Loans as, or
to convert Loans to, Eurodollar Rate Loans in accordance with
the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of
Interest Periods. Company shall compensate each Lender, upon
written request by that Lender (which request shall set forth
the basis for requesting such amounts), for all reasonable
losses, expenses and liabilities (including, without
limitation, any interest paid by that Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender) a borrowing of
any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a tele-
phonic request for conversion or continuation, (ii) if any
prepayment or conversion of any of its Eurodollar Rate Loans
occurs on a date that is not the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any
of its Eurodollar Rate Loans is not made on any date specified
in a notice of prepayment given by Company, or (iv) as a
consequence of any other default by Company to repay its
Eurodollar Rate Loans when required by the terms of this
Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may
make, carry or transfer Eurodollar Rate Loans at, to, or for
the account of any of its branch offices or the office of an
Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate
Loans. Calculation of all amounts payable to a Lender under
this subsection 2.6 and under subsection 2.7A shall be made as
though that Lender had actually funded each of its relevant
Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to
clause (i) of the definition of Adjusted Eurodollar Rate in an
amount equal to the amount of such Eurodollar Rate Loan and
having a maturity comparable to the relevant Interest Period
and through the transfer of such Eurodollar deposit from an
offshore office of that Lender to a domestic office of that
Lender in the United States of America; provided, however,
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that each Lender may fund each of its Eurodollar Rate Loans in
any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable
under this subsection 2.6 and under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the
occurrence of and during the continuation of a Potential Event
of Default or an Event of Default, (i) Company may not elect
to have a Loan be made or maintained as, or converted to, a
Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Loan and (ii) subject to the
provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation
that has not yet occurred shall be deemed to be rescinded by
Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
--------- ------ ------ ------- --------
A. Compensation for Increased Costs and Taxes. Subject
to the provisions of subsection 2.7B(iii), in the event that
any Lender shall determine (which determination shall, absent
manifest error (including arithmetical error), be final and
conclusive and binding upon all parties hereto) that any law,
treaty or governmental rule, regulation or order, or any
change therein or in the interpretation, administration or
application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any
determination of a court or governmental authority, in each
case that becomes effective after the date hereof, or
compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central
bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the
overall net income of such Lender) with respect to this
Agreement or any of the Loans or any of its obligations
hereunder;
(ii) imposes, modifies or holds applicable any
reserve (including without limitation any marginal,
emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or
advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender
(other than any such reserve or other requirements with
respect to Eurodollar Rate Loans that are reflected in
the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than
with respect to a Tax matter) on or affecting such Lender
(or its applicable lending office) or its obligations
hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost
to such Lender of agreeing to make, making or maintaining
Loans hereunder or to reduce any amount received or receivable
by such Lender (or its applicable lending office) with respect
thereto; then, in any such case, Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the
immediately succeeding sentence, such additional amount or
amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Lender in
its sole discretion shall determine) as may be necessary to
compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such
Lender shall deliver to Company a written statement, setting
forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error (including arithmetical
error).
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums
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payable by Company under this Agreement and the other
Loan Documents shall be paid free and clear of and
(except to the extent required by law) without any
deduction or withholding on account of any Tax imposed,
levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in
or of the United States of America or any other
jurisdiction from or to which a payment is made by or on
behalf of Company or by any federation or organization of
which the United States of America or any such
jurisdiction is a member at the time of payment (other
than a Tax on the overall net income of a Lender).
(ii) Grossing-up of Payments. If Company or any
----------- -- --------
other Person is required by law to make any deduction or
withholding on account of any such Tax from any sum paid
or payable by Company to Agent or any Lender under any of
the Loan Documents:
(a) Company shall notify Agent of any such
requirement or any change in any such requirement as
soon as Company becomes aware of it;
(b) Company shall pay any such Tax before the
date on which penalties attach thereto, such payment
to be made (if the liability to pay is imposed on
Company) for its own account or (if that liability
is imposed on Agent or such Lender, as the case may
be) on behalf of and in the name of Agent or such
Lender;
(c) the sum payable by Company in respect of
which the relevant deduction, withholding or payment
is required shall be increased to the extent
necessary to ensure that, after the making of that
deduction, withholding or payment, Agent or such
Lender, as the case may be, receives on the due date
a net sum equal to what it would have received had
no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date
of payment of any Tax which it is required by clause
(b) above to pay, Company shall deliver to Agent, to
the extent reasonably available, evidence reasonably
satisfactory to the other affected parties of such
deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other
authority;
provided that no such additional amount shall be required
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to be paid to any Lender under clause (c) above except to
the extent that any change after the date hereof (in the
case of each Lender listed on the signature pages hereof)
or after the date of the Assignment and Acceptance
pursuant to which such Lender became a Lender (in the
case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at
the date of this Agreement or at the date of such
Assignment and Acceptance, as the case may be, in respect
of payments to such Lender.
(iii) U.S. Tax Certificates. Each Lender that
---- --- ------------
is organized under the laws of any jurisdiction other
than the United States or any state or other political
subdivision thereof shall deliver to Agent for
transmission to Company, on or prior to the Closing Date
(in the case of each Lender listed on the signature pages
hereof) or on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be
necessary in the determination of Company or Agent (each
in the reasonable exercise of its discretion), such
certificates, documents or other evidence, properly
completed and duly executed by such Lender (including,
without limitation, Internal Revenue Service Form 1001 or
Form 4224 or any other certificate or statement of
exemption required by Treasury Regulations Section
1.1441-4(a) or Section 1.1441-6(c) or any successor
thereto) to establish that such Lender is not subject to
deduction or withholding of United States federal income
tax under Section 1441 or 1442 of the Internal Revenue
Code or otherwise (or under any comparable provisions of
any successor statute) with respect to any payments to
such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents. Company shall
not be required to pay any additional amount to any such
Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of
the immediately preceding sentence; provided that if such
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Lender shall have satisfied such requirements on the
Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
and Acceptance pursuant to which it became a Lender (in
the case of each other Lender), nothing in this
subsection 2.7B(iii) shall relieve Company of its
obligation to pay any additional amounts pursuant to
clause (c) of subsection 2.7B(ii) in the event that, as a
result of any change in applicable law, such Lender is no
longer properly entitled to deliver certificates,
documents or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in the immediately preceding
sentence.
(iv) Notice of Assessment. In the event that any
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Lender or Agent receives any written communication from
any taxing authority with respect to an assessment or
proposed assessment of any Taxes in respect of which
Company is obligated to make any payments pursuant to
this subsection 2.7B, such Lender or Agent, as the case
may be, shall promptly so notify Company in writing and
provide a copy of such communication to Company.
C. Capital Adequacy Adjustment. If any Lender shall
have determined that the adoption, effectiveness, phase-in or
applicability after the date hereof of any law, rule or
regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having
the force of law) of any such governmental authority, central
bank or comparable agency, has or would have the effect of
reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of,
or with reference to, such Lender's Loans or Commitments or
Letters of Credit or participations therein or other
obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such
controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or
compliance (taking into consideration the policies of such
Lender or such controlling corporation with regard to capital
adequacy), then from time to time, within five Business Days
after receipt by Company from such Lender of the statement
referred to in the immediately succeeding sentence, Company
shall pay to such Lender such additional amount or amounts as
will compensate such Lender or such controlling corporation on
an after-tax basis for such reduction. Each Lender, upon
determining in good faith that any additional amounts will be
payable pursuant to this subsection 2.7C, will give a written
statement thereof to Company (with a copy of such statement to
Agent), which statement shall set forth in reasonable detail
the basis of the calculation of such additional amounts.
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
---------- -- ------- --- ------- ------- -- --------
Each Lender and Issuing Lender agrees that, as
promptly as practicable after the officer of such Lender or
Issuing Lender responsible for administering the Loans or
Letters of Credit of such Lender or Issuing Lender, as the
case may be, becomes aware of the occurrence of an event or
the existence of a condition that would cause such Lender to
become an Affected Lender or that would entitle such Lender or
Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with
the internal policies of such Lender or Issuing Lender and any
applicable legal or regulatory restrictions, use reasonable
efforts (i) to make, issue, fund or maintain the Commitments
of such Lender or the affected Loans or Letters of Credit of
such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or
(ii) take such other measures as such Lender or Issuing Lender
may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would
cease to exist or the additional amounts which would otherwise
be required to be paid to such Lender or Issuing Lender
pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or
Issuing Lender in its sole discretion, the making, issuing,
funding or maintaining of such Commitments or Loans or Letters
of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case
may be, would not otherwise materially adversely affect such
Commitments or Loans or Letters of Credit or the interests of
such Lender or Issuing Lender; provided that such Lender or
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Issuing Lender will not be obligated to utilize such other
lending or letter of credit office pursuant to this subsection
2.8 unless Company agrees to pay all incremental expenses
incurred by such Lender or Issuing Lenders as a result of
utilizing such other lending or letter of credit office as
described in clause (i) above. A certificate as to the amount
of any such expenses payable by Company pursuant to this
subsection 2.8 (setting forth in reasonable detail the basis
for requesting such amount) submitted by such Lender or
Issuing Lender to Company shall be conclusive absent manifest
error (including arithmetical error).
2.9 Removal of a Lender.
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A. In the event that any Lender shall give notice to
Company that such Lender is an Affected Lender or that such
Lender is entitled to receive payments under subsection 2.7 or
subsection 3.6, and unless the circumstances which have caused
such Lender to be an Affected Lender or which entitle such
Lender to receive such payments are no longer in effect,
Company may, if such Lender is not then an Issuing Lender and
such Lender shall fail to withdraw such notice within 5
Business Days after Company's request for such withdrawal,
upon thirty days' prior written notice by Company to Agent and
such Lender, elect (i) to terminate the Commitments of such
Lender upon receipt by such Lender of such notice and prepay
on the date of such termination any outstanding Loans made by
such Lender, together with accrued and unpaid interest thereon
and any other amounts payable to such Lender hereunder
pursuant to subsection 2.7 or subsection 3.6 or otherwise;
provided that if there are any Loans of such Lender
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outstanding at the time of such termination, the written
consent of Agent and Requisite Lenders, which consent shall
not be unreasonably withheld, shall be required in order for
Company to make the foregoing election; or (ii) to cause such
Lender to assign its Loans and Commitments in full to an
Eligible Assignee in accordance with the provisions of
subsection 10.1B.
B. In the event that any Lender is a Defaulting Lender,
and unless the Default Period for such Defaulting Lender is no
longer continuing, Company may, if such Lender is not then an
Issuing Lender and such Lender shall fail to cure the default
as a result of which it has become a Defaulting Lender within
five Business Days after Company's request that it cure such
default, elect to cause such Lender to assign its Loans and
Commitments in full to an Eligible Assignee in accordance with
the provisions of subsection 10.1B.
2.10 Defaulting Lenders.
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Anything contained herein to the contrary
notwithstanding, in the event that any Lender (a "Defaulting
Lender") defaults (a "Funding Default") in its obligation to
fund any Revolving Loan (a "Defaulted Revolving Loan") in
accordance with subsection 2.1, then (i) during any Default
Period (as defined below) with respect to such Defaulting
Lender, such Defaulting Lender shall be deemed not to be a
"Lender" for purposes of voting on any matters (including
without limitation the granting of any consents or waivers)
with respect to any of the Loan Documents; (ii) to the extent
permitted by applicable law, until such time as the Default
Excess (as defined below) with respect to such Defaulting
Lender shall have been reduced to zero (a) any voluntary
prepayment of the Revolving Loans pursuant to subsection
2.4A(i) shall, if Company so directs at the time of making
such voluntary prepayment, be applied to the Revolving Loans
of other Lenders as if such Defaulting Lender had no Revolving
Loans outstanding and the Revolving Loan Exposure of such
Defaulting Lender were zero and (b) any mandatory prepayment
of the Revolving Loans pursuant to subsection 2.4A(iii) shall,
if Company so directs at the time of making such mandatory
prepayment, be applied to the Revolving Loans of other Lenders
(but not to the Revolving Loans of such Defaulting Lender) as
if such Defaulting Lender had funded all Defaulted Revolving
Loans of such Defaulting Lender, it being understood and
agreed that Company shall be entitled to retain any portion of
any mandatory prepayment of the Revolving Loans that is not
paid to such Defaulting Lender solely as a result of the
operation of the provisions of this clause (b); provided that
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the provisions of this clause (b) shall not affect any
mandatory reductions of the Revolving Loan Commitment of such
Defaulting Lender pursuant to subsection 2.4A(iii); (iii) such
Defaulting Lender's Revolving Loan Commitment and outstanding
Revolving Loans and such Defaulting Lender's Pro Rata Share of
the Letter of Credit Usage in respect of Commercial Letters of
Credit shall be excluded for purposes of calculating the
commitment fee payable to Lenders pursuant to subsection 2.3A
in respect of any day during any Default Period with respect
to such Defaulting Lender, and such Defaulting Lender shall
not be entitled to receive any commitment fee pursuant to
subsection 2.3A with respect to such Defaulting Lender's
Revolving Loan Commitment in respect of any Default Period
with respect to such Defaulting Lender; and (iv) the Total
Utilization of Revolving Loan Commitments as at any date of
determination shall be calculated as if such Defaulting Lender
had funded all Defaulted Revolving Loans of such Defaulting
Lender.
For purposes of this Agreement (A) "Default Period"
means, with respect to any Defaulting Lender, the period
commencing on the date of the applicable Funding Default and
ending on the earliest of the following dates: (a) the date
on which all Revolving Loan Commitments are cancelled or
terminated and/or the Obligations are declared or become
immediately due and payable, (b) the date on which (1) the
Default Excess with respect to such Defaulting Lender shall
have been reduced to zero (whether by the funding by such
Defaulting Lender of any Defaulted Revolving Loans of such
Defaulting Lender or by the non-pro rata application of any
voluntary or mandatory prepayments of the Revolving Loans in
accordance with the terms of this subsection 2.10 or by a
combination thereof) and (2) such Defaulting Lender shall have
delivered to Company and Agent a written reaffirmation of its
intention to honor its obligations under this Agreement with
respect to its Revolving Loan Commitment, and (c) the date on
which Company, Agent and Requisite Lenders waive all Funding
Defaults of such Defaulting Lender in writing, and
(B) "Default Excess" means, with respect to any Defaulting
Lender, the excess, if any, of such Defaulting Lender's Pro
Rata Share of the aggregate outstanding principal amount of
Revolving Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had
funded all of their respective Defaulted Revolving Loans) over
the aggregate outstanding principal amount of Revolving Loans
of such Defaulting Lender.
No Commitment of any Lender shall be increased or
otherwise affected, and, except as otherwise expressly
provided in this subsection 2.10, performance by Company of
its obligations under this Agreement and the other Loan
Documents shall not be excused or otherwise modified, as a
result of any Funding Default or the operation of this
subsection 2.10. The rights and remedies against a Defaulting
Lender under this subsection 2.10 are in addition to other
rights and remedies which Company may have against such
Defaulting Lender with respect to any Funding Default and
which Agent or any Lender may have against such Defaulting
Lender with respect to any Funding Default.
Section 3. LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of
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Participations Therein.
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A. Letters of Credit. In addition to Company
requesting that Lenders make Revolving Loans pursuant to
subsection 2.1A(i) and that Swing Line Lender make Swing Line
Loans pursuant to subsection 2.1A(ii), Company may request, in
accordance with the provisions of this subsection 3.1, from
time to time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date, that
one or more Lenders issue Letters of Credit for the account of
Company for the purposes specified in the definitions of
Commercial Letters of Credit and Standby Letters of Credit.
Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company
herein set forth, any one or more Lenders may, but (except as
provided in subsection 3.1B(ii)) shall not be obligated to,
issue such Letters of Credit in accordance with the provisions
of this subsection 3.1; provided that Company shall not
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request that any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to
such issuance, the Total Utilization of Revolving Loan
Commitments would exceed the lesser of (a) the Revolving
Loan Commitments then in effect and (b) the Borrowing
Base then in effect;
(ii) any Letter of Credit if, after giving effect to
such issuance, (a) the Letter of Credit Usage would
exceed $35,000,000 or (b) the Letter of Credit Usage in
respect of Commercial Letters of Credit would exceed
$10,000,000;
(iii) any Standby Letter of Credit having an
expiration date later than the earlier of (a) the
Revolving Loan Commitment Termination Date and (b) the
date which is one year from the date of issuance of such
Standby Letter of Credit; provided that the immediately
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preceding clause (b) shall not prevent any Issuing Lender
from agreeing that a Standby Letter of Credit will
automatically be extended for one or more successive
periods not to exceed one year each unless such Issuing
Lender elects not to extend for any such additional
period; provided, further that such Issuing Lender shall
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deliver a written notice to Agent setting forth the last
day on which such Issuing Lender may give notice that it
will not extend such Standby Letter of Credit (the
"Notification Date" with respect to such Standby Letter
of Credit) at least ten Business Days prior to such
Notification Date; and provided, further that, unless
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Requisite Lenders otherwise consent, such Issuing Lender
shall give notice that it will not extend such Standby
Letter of Credit if it has knowledge that an Event of
Default has occurred and is continuing on such
Notification Date;
(iv) any Commercial Letter of Credit having an
expiration date (a) later than the earlier of (X) the
Revolving Loan Commitment Termination Date and (Y) the
date which is 180 days from the date of issuance of such
Commercial Letter of Credit or (b) that is otherwise
unacceptable to the applicable Issuing Lender in its
reasonable discretion; or
(v) any Letter of Credit denominated in a currency
other than Dollars.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires
------ -- --------
the issuance of a Letter of Credit, it shall deliver to
the proposed Issuing Lender (with a copy to Agent if
Agent is not the proposed Issuing Lender) a Notice of
Issuance of Letter of Credit no later than 12:00 Noon
(New York time) at least five Business Days (or such
shorter period as may be agreed to by the Issuing Lender
in any particular instance) in advance of the proposed
date of issuance. The Notice of Issuance of Letter of
Credit shall specify (a) the Lender requested to issue
the Letter of Credit, (b) the proposed date of issuance
(which shall be a Business Day), (c) the face amount of
the Letter of Credit, (d) the expiration date of the
Letter of Credit, (e) the name and address of the
beneficiary, (f) that the proposed issuance will not
cause the Total Utilization of Revolving Loan Commitments
to exceed the Borrowing Base then in effect, and (g) the
verbatim text of the proposed Letter of Credit or the
proposed terms and conditions, including a precise
description of any documents and the verbatim text of any
certificates to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date
of the Letter of Credit, would require the Issuing Lender
to make payment under the Letter of Credit; provided that
--------
the Issuing Lender, in its reasonable discretion, may
require changes in the text of the proposed Letter of
Credit or any such documents or certificates; and
provided, further that no Letter of Credit shall require
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payment against a conforming draft to be made thereunder
on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to
which such draft is required to be presented is located)
that such draft is presented if such presentation is made
after 10:00 A.M. (in the time zone of such office of the
Issuing Lender) on such business day.
(ii) Determination of Issuing Lender. Upon receipt
------------- -- ------- ------
by a proposed Issuing Lender of a Notice of Issuance of
Letter of Credit pursuant to subsection 3.1B(i)
requesting the issuance of a Letter of Credit, (a) in the
event Agent is the proposed Issuing Lender, Agent shall
be the Issuing Lender with respect to such Letter of
Credit, notwithstanding the fact that the Letter of
Credit Usage with respect to such Letter of Credit and
with respect to all other Letters of Credit issued by
Agent, when aggregated with Agent's outstanding Revolving
Loans and Swing Line Loans, may exceed Agent's Revolving
Loan Commitment then in effect, and (b) in the event any
other Lender is the proposed Issuing Lender, such Lender
shall promptly notify Company and Agent whether or not,
in its sole discretion, it has elected to issue such
Letter of Credit, and (1) if such Lender so elects to
issue such Letter of Credit it shall be the Issuing
Lender with respect thereto and (2) if such Lender fails
to so promptly notify Company and Agent or declines to
issue such Letter of Credit, Company may request Agent or
another Lender to be the Issuing Lender with respect to
such Letter of Credit in accordance with the provisions
of this subsection 3.1B.
(iii) Notification to Lenders. Promptly after
------------ -- -------
receipt of a Notice of Issuance of Letter of Credit and
the determination of the Issuing Lender with respect to
the proposed Letter of Credit, (a) Agent shall notify
each Lender of the proposed issuance of such Letter of
Credit, the Issuing Lender and the amount of such
Lender's respective participation therein, determined in
accordance with subsection 3.1C, and (b) the Issuing
Lender shall deliver to each other Lender a copy of such
Notice of Issuance of Letter of Credit.
(iv) Issuance of Letter of Credit. Upon
-------- -- ------ -- ------
satisfaction or waiver (in accordance with subsection
10.6) of the conditions set forth in subsection 4.3, the
Issuing Lender shall issue the requested Letter of Credit
in accordance with the Issuing Lender's standard
operating procedures, and upon its issuance of such
Letter of Credit the Issuing Lender shall promptly notify
Agent and each Lender of such issuance, which notice
shall be accompanied by a copy of such Letter of Credit.
(v) Report to Lenders. Within 15 days after the
------ -- -------
end of each calendar quarter ending after the Closing
Date, so long as any Letter of Credit shall have been
outstanding during such calendar quarter, each Issuing
Lender shall deliver to each other Lender a report
setting forth the average for such calendar quarter of
the daily maximum amount available to be drawn under the
Letters of Credit issued by such Issuing Lender that were
outstanding during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of
Credit. Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby agrees to,
have irrevocably purchased from the Issuing Lender a
participation in such Letter of Credit and drawings thereunder
in an amount equal to such Lender's Pro Rata Share of the
maximum amount which is or at any time may become available to
be drawn thereunder.
3.2 Letter of Credit Fees.
------ -- ------ ----
Company agrees to pay the following amounts to each
Issuing Lender with respect to Letters of Credit issued by it:
(i) with respect to each Standby Letter of Credit,
(a) a fronting fee equal to 0.25% per annum of the
average daily maximum amount available to be drawn under
such Standby Letter of Credit; provided that in any event
--------
the minimum fronting fee for any Standby Letter of Credit
shall be $500 (it being agreed that, at the time of any
cancellation or expiration of a Standby Letter of Credit,
if $500 exceeds the amount of fronting fees theretofore
paid or then accrued with respect to such Standby Letter
of Credit, the amount of such excess shall be payable on
the next date upon which accrued fronting fees in respect
of Standby Letters of Credit are otherwise payable as
provided in this sentence); and (b) a letter of credit
fee equal to 1.75% per annum multiplied by the average
---------- --
daily maximum amount available to be drawn under such
Standby Letter of Credit, in each case payable in arrears
on and through each January 15, April 15, July 15 and
October 15 of each year and computed on the basis of a
360-day year for the actual number of days elapsed;
(ii) with respect to each Commercial Letter of
Credit, (a) a fronting fee equal to 0.25% per annum of
the average daily maximum amount available to be drawn
under such Commercial Letter of Credit and (b) a letter
of credit fee equal to 0.25% per annum of the average
daily maximum amount available to be drawn under such
Commercial Letter of Credit, in each case payable in
arrears on and through each January 15, April 15, July 15
and October 15 of each year and computed on the basis of
a 360-day year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or
transfer of each Letter of Credit and each drawing made
thereunder (without duplication of the fees payable under
clauses (i) and (ii) above), documentary and processing
charges in accordance with such Issuing Lender's standard
schedule for such charges in effect at the time of such
issuance, amendment, transfer or drawing, as the case may
be.
Promptly upon receipt by such Issuing Lender of any amount
described in clause (i)(b) or (ii)(b) of this subsection 3.2,
such Issuing Lender shall distribute to each other Lender its
Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters
-------- --- ------------- -- ------- ----- ----- -------
of Credit.
-- ------
A. Responsibility of Issuing Lender With Respect to
Requests For Drawings. In determining whether to honor any
request for drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible
only to determine that the documents and certificates required
to be delivered under such Letter of Credit have been
delivered and that they strictly comply on their face with the
requirements of such Letter of Credit.
B. Reimbursement by Company of Amounts Drawn Under
Letters of Credit. In the event an Issuing Lender has
determined to honor a request for drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately
notify Company and Agent, and Company shall reimburse such
Issuing Lender on or before the Business Day immediately
following the date on which such drawing is honored (the
"Reimbursement Date") in an amount in Dollars in same day
funds equal to the amount of such drawing; provided that,
--------
anything contained in this Agreement to the contrary
notwithstanding, (i) unless Company shall have notified Agent
and such Issuing Lender prior to 12:00 Noon (New York time) on
the date of such drawing that Company intends to reimburse
such Issuing Lender for the amount of such drawing with funds
other than the proceeds of Revolving Loans, Company shall be
deemed to have given a timely Notice of Borrowing to Agent
requesting Lenders to make Revolving Loans that are Base Rate
Loans on the Reimbursement Date in an amount in Dollars equal
to the amount of such drawing and (ii) subject to satisfaction
or waiver of the conditions specified in subsection 4.2B,
Lenders shall, on the Reimbursement Date, make Revolving Loans
that are Base Rate Loans in the amount of such drawing, the
proceeds of which shall be applied directly by Agent to
reimburse such Issuing Lender for the amount of such drawing;
and provided, further that if for any reason proceeds of
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Revolving Loans are not received by such Issuing Lender on the
Reimbursement Date in an amount equal to the amount of such
drawing, Company shall reimburse such Issuing Lender, on
demand, in an amount in same day funds equal to the excess of
the amount of such drawing over the aggregate amount of such
Revolving Loans, if any, which are so received. Nothing in
this subsection 3.3B shall be deemed to relieve any Lender
from its obligation to make Revolving Loans on the terms and
conditions set forth in this Agreement, and Company shall
retain any and all rights it may have against any Lender
resulting from the failure of such Lender to make such
Revolving Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Drawings Under
Letters of Credit.
(i) Payment by Lenders. In the event that Company
------- -- -------
shall fail for any reason to reimburse any Issuing Lender
as provided in subsection 3.3B in an amount equal to the
amount of any drawing honored by such Issuing Lender
under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender of the
unreimbursed amount of such drawing and of such other
Lender's respective participation therein based on such
Lender's Pro Rata Share. Each Lender shall make
available to such Issuing Lender an amount equal to its
respective participation, in Dollars and in same day
funds, at the office of such Issuing Lender specified in
such notice, not later than 12:00 Noon (New York time) on
the first business day (under the laws of the
jurisdiction in which such office of such Issuing Lender
is located) after the date notified by such Issuing
Lender. In the event that any Lender fails to make
available to such Issuing Lender on such business day the
amount of such Lender's participation in such Letter of
Credit as provided in this subsection 3.3C, such Issuing
Lender shall be entitled to recover such amount on demand
from such Lender together with interest thereon at the
rate customarily used by such Issuing Lender for the
correction of errors among banks for three Business Days
and thereafter at the Base Rate. Nothing in this
subsection 3.3C shall be deemed to prejudice the right of
any Lender to recover from any Issuing Lender any amounts
made available by such Lender to such Issuing Lender
pursuant to this subsection 3.3C in the event that it is
determined by the final judgment of a court of competent
jurisdiction that the payment with respect to a Letter of
Credit by such Issuing Lender in respect of which payment
was made by such Lender constituted gross negligence or
willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements
------------ -- ------- -- --------------
Received From Company. In the event any Issuing Lender
-------- ---- -------
shall have been reimbursed by other Lenders pursuant to
subsection 3.3C(i) for all or any portion of any drawing
honored by such Issuing Lender under a Letter of Credit
issued by it, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by
it under subsection 3.3C(i) with respect to such drawing
such other Lender's Pro Rata Share of all payments
subsequently received by such Issuing Lender from Company
in reimbursement of such drawing when such payments are
received. Any such distribution shall be made to a
Lender at its primary address set forth below its name on
the appropriate signature page hereof or at such other
address as such Lender may request.
D. Interest on Amounts Drawn Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees
------- -- -------- -- -------
to pay to each Issuing Lender, with respect to drawings
made under any Letters of Credit issued by it, interest
on the amount paid by such Issuing Lender in respect of
each such drawing from the date of such drawing to but
excluding the date such amount is reimbursed by Company
(including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B) at a rate
equal to (a) for the period from the date of such drawing
to but excluding the Reimbursement Date, the rate then in
effect under this Agreement with respect to Revolving
Loans that are Base Rate Loans and (b) thereafter, a rate
which is 2% per annum in excess of the rate of interest
otherwise payable under this Agreement with respect to
Revolving Loans that are Base Rate Loans. Interest
payable pursuant to this subsection 3.3D(i) shall be
computed on the basis of a 360-day year for the actual
number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand
is made, on the date on which the related drawing under a
Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing
------------ -- -------- -------- -- -------
Lender. Promptly upon receipt by any Issuing Lender of
------
any payment of interest pursuant to subsection 3.3D(i),
(a) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing
Lender in respect of the period from the date of the
applicable drawing under a Letter of Credit issued by
such Issuing Lender to but excluding the date on which
such Issuing Lender is reimbursed for the amount of such
drawing (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B),
the amount that such other Lender would have been
entitled to receive in respect of the letter of credit
fee that would have been payable in respect of such
Letter of Credit for such period pursuant to subsection
3.2 if no drawing had been made under such Letter of
Credit, and (b) in the event such Issuing Lender shall
have been reimbursed by other Lenders pursuant to
subsection 3.3C(i) for all or any portion of such
drawing, such Issuing Lender shall distribute to each
other Lender which has paid all amounts payable by it
under subsection 3.3C(i) with respect to such drawing
such other Lender's Pro Rata Share of any interest
received by such Issuing Lender in respect of that
portion of such drawing so reimbursed by other Lenders
for the period from the date on which such Issuing Lender
was so reimbursed by other Lenders to and including the
date on which such portion of such drawing is reimbursed
by Company. Any such distribution shall be made to a
Lender at its primary address set forth below its name on
the appropriate signature page hereof or at such other
address as such Lender may request.
3.4 Obligations Absolute.
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The obligation of Company to reimburse each Issuing
Lender for drawings made under the Letters of Credit issued by
it and to repay any Revolving Loans made by Lenders pursuant
to subsection 3.3B and the obligations of Lenders under
subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, set-off, defense or
other right which Company or any Lender may have at any
time against a beneficiary or any transferee of any
Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other
Lender or any other Person or, in the case of a Lender,
against Company, whether in connection with this
Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying
transaction between Company or one of its Subsidiaries
and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft, demand, certificate or other
document presented under any Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under
any Letter of Credit against presentation of a demand,
draft or certificate or other document which does not
strictly comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the
foregoing; or
(viii) the fact that an Event of Default or a
Potential Event of Default shall have occurred and be
continuing;
provided, in each case, that payment by the applicable Issuing
--------
Lender under the applicable Letter of Credit shall not have
constituted gross negligence or willful misconduct of such
Issuing Lender under the circumstances in question (as deter-
mined by a final judgment of a court of competent
jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
---------------- ------ -- ------- -------- ------
A. Indemnification. In addition to amounts payable as
provided in subsection 3.6, Company hereby agrees to protect,
indemnify, pay and save harmless each Issuing Lender from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which such Issuing Lender may incur
or be subject to as a consequence, direct or indirect, of
(i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or
willful misconduct of such Issuing Lender as determined by a
final judgment of a court of competent jurisdiction or
(b) subject to the following clause (ii), the wrongful
dishonor by such Issuing Lender of a proper demand for payment
made under any Letter of Credit issued by it; or (ii) the
failure of such Issuing Lender to honor a drawing under any
such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such
acts or omissions herein called "Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between
Company and any Issuing Lender, Company assumes all risks of
the acts and omissions of, or misuse of the Letters of Credit
issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Lender shall not be
responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for
and issuance of any such Letter of Credit, even if it should
in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter
of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) failure of the beneficiary
of any such Letter of Credit to comply fully with any
conditions required in order to draw upon such Letter of
Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher; (v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit
of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control
of such Issuing Lender, including without limitation any
Governmental Acts, and none of the above shall affect or
impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation
of the specific provisions set forth in the first paragraph of
this subsection 3.5B, any action taken or omitted by any
Issuing Lender under or in connection with the Letters of
Credit issued by it or any documents and certificates
delivered thereunder, if taken or omitted in good faith, shall
not put such Issuing Lender under any resulting liability to
Company.
Notwithstanding anything to the contrary contained
in this subsection 3.5 (including without limitation the last
sentence of the second preceding paragraph), Company shall
retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross
negligence or willful misconduct of such Issuing Lender, as
determined by a final judgment of a court of competent
jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
--------- ----- --- ----- -------- -- ------- -- ------
In the event that any Issuing Lender or Lender shall
determine (which determination shall, absent manifest error
(including arithmetical error), be final and conclusive and
binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein
or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination
of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or
directive issued or made after the date hereof by any central
bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its
applicable lending or letter of credit office) to any
additional Tax (other than any Tax on the overall net
income of such Issuing Lender or Lender) with respect to
the issuing or maintaining of any Letters of Credit or
the purchasing or maintaining of any participations
therein or any other obligations under this Section 3,
whether directly or by such being imposed on or suffered
by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any
reserve (including without limitation any marginal,
emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or
similar requirement in respect of any Letters of Credit
issued by any Issuing Lender or participations therein
purchased by any Lender; or
(iii) imposes any other condition (other than
with respect to a Tax matter) on or affecting such
Issuing Lender or Lender (or its applicable lending or
letter of credit office) regarding this Section 3 or any
Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost
to such Issuing Lender or Lender of agreeing to issue, issuing
or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to
reduce any amount received or receivable by such Issuing
Lender or Lender (or its applicable lending or letter of
credit office) with respect thereto; then, in any case,
Company shall promptly pay to such Issuing Lender or Lender,
upon receipt of the statement referred to in the immediately
succeeding sentence, such additional amount or amounts as may
be necessary to compensate such Issuing Lender or Lender for
any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall
deliver to Company a written statement, setting forth in
reasonable detail the basis for calculating the additional
amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and
binding upon all parties hereto absent manifest error
(including arithmetical error).
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the
issuance of Letters of Credit hereunder are subject to the
satisfaction of the following conditions.
4.1 Conditions to Initial Revolving Loans and Swing Line
---------- -- ------- --------- ----- --- ----- ----
Loans.
-----
The obligations of Lenders to make the Revolving
Loans and Swing Line Loans to be made on the Closing Date are,
in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of
the following conditions:
A. Company Documents. On or before the Closing Date,
Company shall deliver or cause to be delivered to Lenders (or
to Agent for Lenders with sufficient originally executed
copies, where appropriate, for each Lender and its counsel)
the following, each, unless otherwise noted, dated the Closing
Date:
(i) Certified copies of its Certificate of
Incorporation, together with a good standing certificate
from the Secretary of State of the State of Delaware and
each other state in which it is qualified as a foreign
corporation to do business, each dated a recent date
prior to the Closing Date;
(ii) Copies of its Bylaws, certified as of the
Closing Date by its corporate secretary or an assistant
secretary;
(iii) Resolutions of its Board of Directors
approving and authorizing the execution, delivery and
performance of this Agreement, the other Loan Documents
and the Spin-Off Agreements and authorizing the
consummation of the transactions contemplated hereby and
thereby, certified as of the Closing Date by its
corporate secretary or an assistant secretary as being in
full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of its
officers executing this Agreement and the other Loan
Documents; and
(v) Executed originals of this Agreement, the Notes
(duly executed in accordance with subsection 2.1D, drawn
to the order of each Lender and the Swing Line Lender and
with appropriate insertions), the Company Security
Agreement, the Company Trademark Security Agreement, the
Company Pledge Agreement, the Collateral Account
Agreement and the other Loan Documents to which it is a
party.
B. Subsidiary Documents. On or before the Closing
Date, Company shall cause each of its Subsidiaries (other than
Stuart) to deliver to Lenders (or to Agent for Lenders with
sufficient originally executed copies, where appropriate, for
each Lender and its counsel) the following, each, unless
otherwise noted, dated the Closing Date:
(i) Certified copies of such Subsidiary's
Certificate of Incorporation, together with a good
standing certificate from the Secretary of State of the
state of such Subsidiary's incorporation and each other
state in which such Subsidiary is qualified as a foreign
corporation to do business, each dated a recent date
prior to the Closing Date;
(ii) Copies of such Subsidiary's Bylaws, certified
as of the Closing Date by such Subsidiary's corporate
secretary or an assistant secretary;
(iii) Resolutions of such Subsidiary's Board of
Directors approving and authorizing the execution,
delivery and performance of the Loan Documents to which
such Subsidiary is a party, certified as of the Closing
Date by such Subsidiary's corporate secretary or an
assistant secretary as being in full force and effect
without modification or amendment;
(iv) Signature and incumbency certificates of such
Subsidiary's officers executing the Loan Documents to
which such Subsidiary is a party; and
(v) Executed originals of the Subsidiary Guaranty,
the Subsidiary Security Agreement, the Subsidiary
Trademark Security Agreement, the Subsidiary Pledge
Agreement and other Loan Documents to which such
Subsidiary is a party.
C. Delivery of Closing Date Mortgages; Closing Date
Mortgage Policies. Agent shall have received from Company and
its Subsidiaries (i) fully executed and notarized Mortgages
(each a "Closing Date Mortgage" and collectively the "Closing
Date Mortgages") encumbering the fee interest and/or leasehold
interest of Company and its Subsidiaries in each Real Property
Asset designated in Part I of Schedule 4.1C annexed hereto
-------- ----
(each a "Closing Date Mortgaged Property" and collectively the
"Closing Date Mortgaged Properties"); (ii) a title report
obtained by Company in respect of any Closing Date Mortgaged
Property consisting of fee interests in Real Property Assets
and a title report obtained by Company in respect of any
Closing Date Mortgaged Property consisting of leasehold
interests in Real Property Assets and designated in Part II of
Schedule 4.1C annexed hereto; (iii) an opinion of counsel
-------- ----
(which counsel shall be reasonably satisfactory to Agent and
CO-AGENT) in the state in which each Closing Date Mortgaged
--------
Property is located with respect to the enforceability of the
form of Closing Date Mortgage to be recorded in such state and
such other matters as Agent or CO-AGENT may reasonably
--------
request, in form and substance reasonably satisfactory to
Agent and CO-AGENT; (iv) in the case of each real property
--------
leasehold interest of Company or any of its Subsidiaries
constituting Closing Date Mortgaged Property, (a) such
estoppel letters, consents and waivers from the landlords on
such real property as may be required by Agent or CO-AGENT,
--------
which estoppel letters shall be in form and substance
reasonably satisfactory to Agent and CO-AGENT and which
--------
consents and waivers shall consent to the Closing Date
Mortgage relating to such leasehold interest and to the
assignment of such leasehold interest to the successful bidder
at a foreclosure or similar sale (and to a subsequent third
party assignee by Agent or any Lender to the extent Agent or
such Lender is the successful bidder at such sale) in the
event of a foreclosure or similar action pursuant to such
Closing Date Mortgage and (b) evidence that the applicable
lease, a memorandum of lease with respect thereto, or other
evidence of such lease in form and substance reasonably
satisfactory to Agent, has been or will be recorded in all
places to the extent necessary or desirable, in the reasonable
judgment of Agent, so as to enable the Closing Date Mortgage
encumbering such leasehold interest to effectively create a
valid and enforceable first priority lien (subject to
Permitted Encumbrances) on such leasehold interest in favor of
Agent (or such other Person as may be required or desired
under local law) for the benefit of Lenders; (v) ALTA
mortgagee title insurance policies issued by First American
Title Insurance Company of New York or other title insurers
reasonably satisfactory to Agent (the "Closing Date Mortgage
Policies"), in amounts not less than the respective amounts
designated in Schedule 4.1C annexed hereto with respect to any
-------- ----
particular Closing Date Mortgaged Properties, assuring Agent
that the applicable Closing Date Mortgages create valid and
enforceable first priority mortgage liens on the respective
Closing Date Mortgaged Properties, free and clear of all
defects and encumbrances except Permitted Encumbrances and
subject to a standard survey exception, which Closing Date
Mortgage Policies shall be in form and substance reasonably
satisfactory to Agent and CO-AGENT and shall include an
--------
endorsement for mechanics' liens, for future advances under
this Agreement, the Notes and the other Loan Documents, and
for any other matters that Agent or CO-AGENT may reasonably
--------
request, and shall provide for affirmative insurance and such
reinsurance as Agent or CO-AGENT may reasonably request, all
--------
of the foregoing in form and substance reasonably satisfactory
to Agent and CO-AGENT; (vi) evidence, which may be in the form
--------
of a letter from an insurance broker, a municipal engineer,
Charles Jones, Inc. or Transamerica Flood Hazard
Certification, as to whether (a) any Closing Date Mortgaged
Property (``Closing Date Flood Hazard Property'') is in an
area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards and (b) the
community in which such Closing Date Flood Hazard Property is
located is participating in the National Flood Insurance
Program; and (vii) if there are any Closing Date Flood Hazard
Properties, Company's written acknowledgement of receipt of
written notification from Agent (a) as to the existence of
each such Closing Date Flood Hazard Property and (b) as to
whether the community in which each such Closing Date Flood
Hazard Property is located is participating in the National
Flood Insurance Program.
D. Security Interests. To the extent not otherwise
satisfied pursuant to subsection 4.1C, Company and its
Subsidiaries shall have taken or caused to be taken (and Agent
shall have received satisfactory evidence thereof) such
actions (other than the filing or recording of items described
in clauses (ii), (iii) and (iv) below) in such a manner so
that Agent has a valid and perfected first priority security
interest as of such date in the entire Collateral (except to
the extent any such security interest cannot be granted under
applicable laws). Such actions shall include, without
limitation, (i) delivery to Agent of certificates (which
certificates shall be registered in the name of Agent or
properly endorsed in blank for transfer or accompanied by
irrevocable undated stock powers duly endorsed in blank, all
in form and substance satisfactory to Agent and CO-AGENT)
--------
representing the capital stock pledged pursuant to the Company
Pledge Agreement and the Subsidiary Pledge Agreements and
delivery to Agent of all other instruments (duly endorsed
where appropriate) evidencing the Collateral, (ii) delivery to
Agent of Uniform Commercial Code financing statements as to
the Collateral for all jurisdictions as may be necessary or
desirable to perfect the security interests in the Collateral,
(iii) delivery to Agent of the Company Trademark Security
Agreement and the Subsidiary Trademark Security Agreements
together with the cover sheets required for filing with the
United States Patent and Trademark Office and (iv) delivery to
Agent of such other documents and instruments that Agent or
CO-AGENT reasonably deems necessary or advisable to establish,
--------
preserve and perfect the first priority Liens granted to Agent
on behalf of Lenders under the Collateral Documents.
E. Arrangements with SMG-II, Holdings, PTKH and
Pathmark. On or prior to the Closing Date, (i) each of
Company, SMG-II, Holdings, PTKH, Pathmark and Chefmark shall
have entered into each of the Spin-Off Agreements to which
such Person is a party, in each case in form and substance
satisfactory to Agent and Lenders, (ii) Agent shall have
received evidence satisfactory to Agent and CO-AGENT that the
--------
transfer of assets contemplated by the agreement described in
clause (i) of the definition of the term "Spin-Off Agreements"
has been consummated, and (iii) all other arrangements among
Company, SMG-II, Holdings, PTKH and Pathmark shall be
satisfactory in form and substance to Agent, CO-AGENT and
--------
Requisite Lenders.
F. Appraisals. Agent shall have received appraisals,
in form, scope and substance satisfactory to Agent and
satisfying the requirements of any applicable laws and
regulations, concerning any real property fee interests of
Company or any of its Subsidiaries constituting Closing Date
Mortgaged Properties (in each case to the extent required
under such laws and regulations as determined by Agent in its
discretion).
G. Environmental Matters. Agent shall have received
reports and other information, in form, scope and substance
satisfactory to Agent, concerning environmental liabilities of
Company and its Subsidiaries with respect to the Facilities
listed on Schedule 4.1G annexed hereto.
-------- ----
H. Pathmark Credit Agreement. On or prior to the
Closing Date, Pathmark shall have entered into the Pathmark
Credit Agreement with the other parties thereto and all
conditions precedent to the funding of the initial loans
thereunder shall have been satisfied or waived with the
consent of Agent, CO-AGENT and Requisite Lenders.
--------
I. Opinions of Company's Counsel. Lenders and their
respective counsel shall have received (i) originally executed
copies of one or more favorable written opinions of Shearman &
Sterling, counsel for Company and its Subsidiaries, in form
and substance reasonably satisfactory to Agent and its counsel
and CO-AGENT, dated as of the Closing Date and setting forth
--------
substantially the matters in the opinions designated in
Exhibit IX annexed hereto and as to such other matters as
------- --
Agent acting on behalf of Lenders may reasonably request,
together with evidence satisfactory to Agent that Company and
such Subsidiaries requested such counsel to deliver such
opinions to Lenders, (ii) originally executed copies of one or
more favorable written opinions of Marc A. Strassler, vice
president and general counsel of Company and its Subsidiaries,
in form and substance reasonably satisfactory to Agent and its
counsel and CO-AGENT, dated as of the Closing Date and setting
--------
forth substantially the matters in the opinions designated in
Exhibit X annexed hereto and as to such other matters as Agent
------- -
acting on behalf of Lenders may reasonably request, and (iii)
copies of all opinions (other than the opinions described in
the immediately preceding clauses (i) and (ii)) required to be
delivered by Shearman & Sterling, counsel for SMG-II,
Holdings, PTKH, Pathmark, Company, Company's Subsidiaries and
Chefmark, and Marc A. Strassler, vice president and general
counsel of SMG-II, Holdings, PTKH, Pathmark, Company,
Company's Subsidiaries and Chefmark, to the lenders party to
the Pathmark Credit Agreement pursuant to clauses (i), (ii)
and (iii) of subsection 4.1M of the Pathmark Credit Agreement.
J. Opinions of Agent's Counsel. Lenders shall have
received originally executed copies of one or more favorable
written opinions of O'Melveny & Myers, counsel to Agent, dated
as of the Closing Date, substantially in the form of
Exhibit XI annexed hereto and as to such other matters as
------- --
Agent acting on behalf of Lenders may reasonably request.
K. Audit of Inventory and Accounts Receivable. On or
prior to the Closing Date, Agent and Lenders shall have
received reports and other information, in form, scope and
substance satisfactory to Agent and Lenders, resulting from an
audit of all Inventory and all accounts receivable of Company.
L. Estimate of Stand-Alone Expenses. On or prior to
the Closing Date, Agent and Lenders shall have received a
certificate from Pathmark executed by its chief financial
officer, in form and substance satisfactory to Agent and
Lenders, setting forth an estimate of stand-alone expenses
that would be incurred by Company and its Subsidiaries with
respect to certain items designated by Agent and Lenders,
including without limitation legal, tax, accounting and cash
management services and the information systems supporting
such items, if such items were provided by a third party other
than Pathmark (on an arms-length basis), and an explanation of
the assumptions on which such estimate is based.
M. Borrowing Base Certificate. Company shall have
delivered to Agent and Lenders a Borrowing Base Certificate
substantially in the form of Exhibit VII annexed hereto,
------- ---
prepared as of a recent date prior to the Closing Date.
N. Fees. Company shall have paid to Agent, for
distribution (as appropriate) to Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.
O. No Material Adverse Effect. Since January 30, 1993,
no material adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries, taken as a whole,
or in the Transferred Businesses, Transferred Assets or
Assumed Liabilities (as each such term is defined in the Spin-
Off Agreement described in clause (i) of the definition of
Spin-Off Agreements), shall have occurred.
P. Certain Related Documents. On the Closing Date,
(i) Agent shall have received executed or conformed copies of
the Spin-Off Agreements (in each case as amended through and
including the Closing Date), the terms and conditions of which
shall be in all respects satisfactory to Agent, CO-AGENT and
--------
Requisite Lenders, (ii) except as otherwise disclosed to and
agreed to in writing by Agent, CO-AGENT and Requisite Lenders,
--------
(a) the Spin-Off Agreements shall be in full force and effect
and no term or condition thereof shall have been amended,
modified or waived after the execution thereof, (b) Company
shall not have failed in any material respect to perform any
material obligation or covenant required by the Spin-Off
Agreements to be performed or complied with by it on or before
the Closing Date, and (c) all conditions to the Spin-Off
(including, without limitation, any necessary third party
consents and approvals) shall have been satisfied or waived
pursuant to all applicable terms and proceedings and by Agent
and CO-AGENT, and (iii) Agent shall have received an Officers'
--------
Certificate from Company, in form and substance satisfactory
to Agent and CO-AGENT, to the effect set forth in clause (ii)
--------
above.
Q. Representations and Warranties; Performance of
Agreements. Company shall have delivered to Agent an
Officers' Certificate, in form and substance satisfactory to
Agent and CO-AGENT, to the effect that the representations and
--------
warranties in Section 5 hereof are true, correct and complete
in all material respects on and as of the Closing Date to the
same extent as though made on and as of that date, except to
the extent such representations and warranties specifically
relate to an earlier date, in which case such representations
and warranties shall have been true, correct and complete in
all material respects on and as of such earlier date, and that
Company shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before
the Closing Date except as otherwise disclosed to and agreed
to in writing by Agent and Requisite Lenders.
R. Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the
transactions contemplated hereby, by the other Loan Documents
and by the Spin-Off Agreements and all documents incidental
thereto not previously found acceptable by Agent, acting on
behalf of Lenders, and its counsel or CO-AGENT shall be
--------
satisfactory in form and substance to Agent and such counsel
and CO-AGENT, and Agent and such counsel shall have received
--------
all such counterpart originals or certified copies of such
documents as Agent or CO-AGENT may reasonably request.
--------
S. Pro Forma Unaudited Consolidated Balance Sheet.
Company shall have delivered to Agent, CO-AGENT and Lenders a
--------
pro forma unaudited consolidated balance sheet of Company and
its Subsidiaries as at the Closing Date prepared on the basis
that the Spin-Off had been consummated.
4.2 Conditions to All Loans.
---------- -- --- -----
The obligations of Lenders to make Loans on each
Funding Date are subject to the following further conditions
precedent:
A. Agent shall have received before that Funding Date,
in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed
by the chief executive officer, the chief financial officer,
the treasurer or the controller of Company or by any other
officer or cash management personnel of Company designated by
any of the above-described officers on behalf of Company in a
writing delivered to Agent.
B. As of that Funding Date the following statements
shall be true (and each of the giving of the applicable Notice
of Borrowing and the acceptance by Company of the proceeds of
such Loan shall constitute a representation and warranty by
Company that such statements (other than statements as to
matters of opinion of Agent or of Requisite Lenders) are true
as of that Funding Date):
(i) The representations and warranties contained
herein and in the other Loan Documents are true, correct
and complete in all material respects on and as of that
Funding Date to the same extent as though made on and as
of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in
which case such representations and warranties were true,
correct and complete in all material respects on and as
of such earlier date;
(ii) No event has occurred and is continuing or
would result from the consummation of the borrowing
contemplated by such Notice of Borrowing that would
constitute an Event of Default or a Potential Event of
Default;
(iii) Each Loan Party has performed in all
material respects all agreements and satisfied all
conditions which this Agreement provides shall be
performed or satisfied by it on or before that Funding
Date;
(iv) The amount of the proposed borrowing of Loans
contemplated by such Notice of Borrowing does not cause
the Total Utilization of Revolving Loan Commitments to
exceed the Borrowing Base in effect on that Funding Date;
(v) No order, judgment or decree of any court,
arbitrator or governmental authority has purported to
enjoin or restrain any Lender from making the Loans to be
made by it on that Funding Date;
(vi) The making of the Loans requested on such
Funding Date does not violate any law including, without
limitation, Regulation G, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal
Reserve System; and
(vii) There is not pending or, to the knowledge
of Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that has
not been disclosed by Company in writing pursuant to
subsection 5.6 or 6.1(xi) prior to the making of the last
preceding Loans (or, in the case of the initial Loans,
prior to the execution of this Agreement), and there has
occurred no development not so disclosed in any such
action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the
opinion of Agent, of CO-AGENT or of Requisite Lenders,
--------
could reasonably be expected to have a Material Adverse
Effect; and no injunction or other restraining order has
been issued and no hearing to cause an injunction or
other restraining order to be issued is pending or
noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a
result of, the Spin-Off, the transactions contemplated by
this Agreement or any of the other Loan Documents or the
making of Loans hereunder.
4.3 Conditions to Letters of Credit.
---------- -- ------- -- ------
The issuance of any Letter of Credit hereunder
(whether or not the applicable Issuing Bank is obligated to
issue such Letter of Credit) is subject to the following
conditions precedent:
A. On or before the date of issuance of the initial
Letter of Credit pursuant to this Agreement, the initial Loans
shall have been made.
B. On or before the date of issuance of such Letter of
Credit, Agent shall have received, in accordance with the
provisions of subsection 3.1B(i), an originally executed
Notice of Issuance of Letter of Credit, in each case signed by
the chief executive officer, the chief financial officer, the
treasurer or the controller of Company or by any other officer
or cash management personnel of Company designated by any of
the above-described officers on behalf of Company in a writing
delivered to Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or
information as the applicable Issuing Lender may reasonably
require in connection with the issuance of such Letter of
Credit.
C. On the date of issuance of such Letter of Credit,
all conditions precedent described in subsection 4.2B shall be
satisfied to the same extent as if the issuance of such Letter
of Credit were the making of a Loan and the date of issuance
of such Letter of Credit were a Funding Date.
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agree-
ment and to make the Loans, to induce Issuing Lenders to issue
Letters of Credit and to induce other Lenders to purchase
participations therein, Company represents and warrants to
each Lender, on the date of this Agreement, on each Funding
Date and on the date of issuance of each Letter of Credit,
that the following statements are true, correct and complete
(it being agreed that each such statement which expressly
refers to a particular date shall be understood to continue to
refer to such particular date each time that the
representation and warranty of Company set forth in this
paragraph is made):
5.1 Organization, Powers, Qualification, Good Standing,
------------- ------- -------------- ---- ---------
Business and Subsidiaries.
-------- --- ------------
A. Organization and Powers. Each Loan Party is a
corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation.
Each Loan Party has all requisite corporate power and
authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to
enter into the Loan Documents and the Spin-Off Agreements, to
carry out the transactions contemplated thereby and to issue
and pay the Notes, in each case to the extent it is a party
thereto.
B. Qualification and Good Standing. Each Loan Party is
qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good
standing has not had and could not reasonably be expected to
have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries
are engaged only in the businesses permitted to be engaged in
pursuant to subsection 7.14.
D. Subsidiaries. All of the Subsidiaries of Company as
of the Closing Date are identified in Schedule 5.1 annexed
-------- ---
hereto. The capital stock of each of the Subsidiaries of
Company identified in Schedule 5.1 annexed hereto is duly
-------- ---
authorized, validly issued, fully paid and nonassessable and
none of such capital stock constitutes Margin Stock. Each of
the Subsidiaries of Company identified in Schedule 5.1 annexed
-------- ---
hereto is validly existing and in good standing under the laws
of its respective jurisdiction of incorporation set forth
therein, has full corporate power and authority to own its
assets and properties and to operate its business as presently
owned and conducted, and is qualified to do business and in
good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and
operations, in each case except where failure to be so
qualified or in good standing or a lack of such corporate
power and authority has not had and could not reasonably be
expected to have a Material Adverse Effect. Schedule 5.1
-------- ---
annexed hereto correctly sets forth, as of the Closing Date,
the ownership interest of Company in each of its Subsidiaries
identified therein.
5.2 Authorization of Borrowing, etc.
------------- -- ---------- ----
A. Authorization of Borrowing. The execution, delivery
and performance of the Loan Documents and the Spin-Off
Agreements and the issuance, delivery and payment of the Notes
have been duly authorized by all necessary corporate action on
the part of each Loan Party that is a party thereto.
B. No Conflict. The execution, delivery and perfor-
mance by Company and its Subsidiaries of the Loan Documents
and the Spin-Off Agreements, the issuance, delivery and
payment of the Notes and the consummation of the Spin-Off and
the other transactions contemplated by the Loan Documents and
the Spin-Off Agreements do not and will not (i) violate any
provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of Company
or any of its Subsidiaries or any order, judgment or decree of
any court or other agency of government binding on Company or
any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of Company or
any of its Subsidiaries, (iii) result in or require the
creation or imposition of any Lien upon any of the properties
or assets of Company or any of its Subsidiaries (other than
any Liens created under any of the Loan Documents in favor of
Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under
any Contractual Obligation of Company or any of its
Subsidiaries, except for such approvals or consents which will
be obtained on or before the Closing Date and those set forth
on Schedule 5.2B annexed hereto.
-------- ----
C. Governmental Consents. The execution, delivery and
performance by Company and its Subsidiaries of the Loan
Documents and the Spin-Off Agreements, the issuance, delivery
and payment of the Notes and the consummation of the Spin-Off
and the transactions contemplated by the Loan Documents and
the Spin-Off Agreements do not and will not require any
registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other
governmental authority or regulatory body, except for
------
(i) filings and recordings required in connection with the
perfection of the security interests granted pursuant to the
Loan Documents, (ii) registrations, consents, approvals,
notices or other actions set forth on Schedule 5.2C annexed
-------- ----
hereto, and (iii) registrations, consents, approvals, notices
or other actions the absence of which could not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
D. Binding Obligation. Each of the Loan Documents and
the Spin-Off Agreements has been duly executed and delivered
by each Loan Party that is a party thereto and is the legal,
valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors'
rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding at law or in equity).
5.3 Financial Condition.
--------- ---------
Company has heretofore (or, in the case of the
balance sheet described in clause (ii) below, Company has as
of the Closing Date) delivered to Lenders, at Lenders'
request, the following financial statements and information:
(i) the pro forma unaudited consolidated balance sheet of
Company and its Subsidiaries as at January 30, 1993 and the
related pro forma unaudited consolidated statements of income,
stockholders' equity and cash flows of Company and its
Subsidiaries for the Fiscal Year then ended and (ii) the pro
forma unaudited consolidated balance sheet of Company and its
Subsidiaries described in subsection 4.1S, each prepared on
the basis that the Spin-Off had been consummated at the
beginning of such Fiscal Year. All such statements were
prepared on a pro forma basis in conformity with GAAP and
fairly present, on a pro forma basis as described above, the
financial position (on a consolidated basis) of the entities
described in such financial statements as at the respective
dates thereof and the results of operations and cash flows (on
a consolidated basis) of the entities described therein for
the Fiscal Year then ended, subject to changes resulting from
audit and year-end adjustments. Company does not (and will
not following the funding of the initial Loans) have any
Contingent Obligation, contingent liability or liability for
taxes, long-term lease or unusual forward or long-term
commitment that is not (but should in conformity with GAAP be)
reflected in the foregoing financial statements or the notes
thereto and which in any such case is material in relation to
the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its
Subsidiaries.
5.4 No Material Adverse Change; No Restricted Junior Payments.
-- -------- ------- ------- -- ---------- ------ --------
As of the Closing Date, no material adverse change
in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company and its
Subsidiaries, taken as a whole, or in the Transferred
Businesses, Transferred Assets or Assumed Liabilities (as each
such term is defined in the Spin-Off Agreement described in
clause (i) of the definition of Spin-Off Agreements), has
occurred since January 30, 1993. As of any time after the
Closing Date, no event or change has occurred since the
Closing Date that has caused or evidences, either in any case
or in the aggregate, a Material Adverse Effect. Neither
Company nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Junior Payment or agreed to do so
except as permitted by subsection 7.5.
5.5 Title to Properties; Liens.
----- -- ----------- -----
Company and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in
real property), (ii) valid leasehold interests in (in the case
of leasehold interests in real or personal property), or
(iii) good title to (in the case of all other personal
property), all of their respective properties and assets
reflected in the financial statements referred to in
subsection 5.3 or in the most recent financial statements
delivered pursuant to subsection 6.1, in each case except for
assets disposed of since the date of such financial statements
in the ordinary course of business or as otherwise permitted
under subsection 7.7. Except as permitted by this Agreement,
all such properties and assets are free and clear of Liens.
5.6 Litigation; Adverse Facts.
----------- ------- -----
Except as set forth in Schedule 5.6 annexed hereto,
-------- ---
there is no action, suit, proceeding, arbitration or
governmental investigation (whether or not purportedly on
behalf of Company or any of its Subsidiaries) at law or in
equity or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the
knowledge of Company, threatened against or affecting Company
or any of its Subsidiaries or any property of Company or any
of its Subsidiaries that has had, or could reasonably be
expected to result in, a Material Adverse Effect. Neither
Company nor any of its Subsidiaries is (i) in violation of any
applicable law that has had, or could reasonably be expected
to result in, a Material Adverse Effect or (ii) subject to or
in default with respect to any final judgment, writ,
injunction, decree, rule or regulation of any court or any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic
or foreign, that has had, or could reasonably be expected to
result in, a Material Adverse Effect.
5.7 Payment of Taxes.
------- -- -----
Except to the extent permitted by subsection 6.3,
all tax returns and reports of Company and its Subsidiaries
required to be filed by any of them have been timely filed,
and all taxes, assessments, fees and other governmental
charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and fran-
chises which are shown thereon to be due and payable have been
paid when due and payable. Company knows of no proposed tax
assessment against Company or any of its Subsidiaries which is
not being contested by Company or such Subsidiary in good
faith and by appropriate proceedings; provided that such
--------
reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or
provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements.
----------- -- ----------- ---------- ------- ----------
A. Neither Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any
of its Contractual Obligations, and no condition exists that,
with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences,
direct or indirect, of such default or defaults, if any, could
not reasonably be expected to result in a Material Adverse
Effect.
B. Neither Company nor any of its Subsidiaries is a
party to or is otherwise subject to any agreement or
instrument or any charter or other internal restriction which
has had, or could reasonably be expected to result in,
individually or in the aggregate, a Material Adverse Effect.
5.9 Governmental Regulation.
------------ ----------
Neither Company nor any of its Subsidiaries is
subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce
Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render
all or any portion of the Obligations unenforceable, except
that Pauls Trucking Corp. is licensed by the Interstate
Commerce
Commission as a "common carrier."
5.10 Securities Activities.
---------- ----------
Neither Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing
or carrying any Margin Stock.
5.11 Employee Benefit Plans.
-------- ------- -----
A. Company and each of its ERISA Affiliates are in
compliance in all material respects with all applicable
provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their
obligations under each Employee Benefit Plan.
B. No ERISA Event has occurred with respect to which
Company or any of its ERISA Affiliates is subject to any
unsatisfied liability in excess of $1,000,000 or with respect
to which Company or any of its ERISA Affiliates could
reasonably be expected to incur liability in excess of
$1,000,000, and no ERISA Event is reasonably expected to occur
after the date hereof which could reasonably be expected to
result in a liability to Company or any of its ERISA
Affiliates in excess of $500,000.
C. Except as set forth on Schedule 5.11 annexed hereto,
as of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for
all Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit
liabilities), does not exceed $0.
5.12 Certain Fees.
------- ----
No broker's or finder's fee or commission (other
than any such fees or commissions that may be payable to
Persons engaged by Agent or any Lender in connection with such
engagement by Agent or such Lender) will be payable with
respect to this Agreement or the Spin-Off, and Company hereby
indemnifies Lenders against, and agrees that it will hold
Lenders harmless from, any claim, demand or liability for any
such broker's or finder's fees alleged to have been incurred
in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or
liability.
5.13 Environmental Protection.
------------- ----------
Except as set forth in Schedule 5.13 annexed hereto:
-------- ----
(i) the operations of Company and each of its
Subsidiaries (including, without limitation, all
operations and conditions at or in the Facilities that
are presently owned, leased or operated by Company or any
of its Subsidiaries) comply with all Environmental Laws
except where the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect;
(ii) Company and each of its Subsidiaries have
obtained all Governmental Authorizations under
Environmental Laws necessary to their respective
operations, and all such Governmental Authorizations are
in effect, and Company and each of its Subsidiaries are
in compliance with such Governmental Authorizations
except where the failure to obtain or comply with any
such Governmental Authorization individually or in the
aggregate could not reasonably be expected to have a
Material Adverse Effect;
(iii) neither Company nor any of its
Subsidiaries has received (a) any notice or claim to the
effect that it is or may be liable to any Person as a
result of or in connection with any Hazardous Materials
or (b) any letter or request for information under
Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Sec. 9604) or
comparable state laws, and, to the best of Company's
knowledge, none of the operations of Company or any of
its Subsidiaries is the subject of any federal or state
investigation relating to or in connection with any
Hazardous Materials at any Facility or at any other
location;
(iv) none of the operations of Company or any of its
Subsidiaries is subject to any judicial or administrative
proceeding alleging the violation of or liability under
any Environmental Laws which if adversely determined
could reasonably be expected to have a Material Adverse
Effect;
(v) other than provisions in leases entered into by
Company or any of its Subsidiaries in the ordinary course
of business which individually or in the aggregate would
not create a liability that could reasonably be expected
to have a Material Adverse Effect, neither Company nor
any of its Subsidiaries nor any of their respective
Facilities that are presently owned, leased or operated
by Company or any of its Subsidiaries nor any of their
respective operations are subject to any outstanding
written order or agreement with any governmental
authority or private party relating to (a) any Environ-
mental Laws or (b) any Environmental Claims which, in the
case of clause (a) or (b), individually or in the
aggregate could reasonably be expected to have a Material
Adverse Effect;
(vi) neither Company nor any of its Subsidiaries
nor, to the best knowledge of Company, any of their
respective predecessors by merger or consolidation has
filed any notice under any Environmental Law indicating
past or present treatment or Release of Hazardous
Materials at any Facility, and none of Company's or any
of its Subsidiaries' operations involves the generation,
transportation, treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270
or any state equivalent;
(vii) no Hazardous Materials exist on, under or
about any Facility in a manner that could reasonably be
expected to give rise to an Environmental Claim having a
Material Adverse Effect;
(viii) neither Company nor any of its
Subsidiaries nor, to the best knowledge of Company, any
of their respective predecessors by merger or
consolidation has disposed of any Hazardous Materials in
a manner that could reasonably be expected to give rise
to an Environmental Claim having a Material Adverse
Effect;
(ix) to the best knowledge of Company, no
underground storage tanks are on or at any Facility that
is presently owned, leased or operated by Company or any
of its Subsidiaries;
(x) neither Company nor any of its Subsidiaries
bears any liability in connection with underground
storage tanks on or at Facilities heretofore owned,
leased or operated by Company or any of its Subsidiaries
that individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect; and
(xi) to the best knowledge of Company, no Lien in
favor of any Person relating to or in connection with any
Environmental Claim involving in the aggregate at any
time an amount in excess of $500,000 has been filed or
has been attached to one or more Facilities that are
presently owned, leased or operated by Company or any of
its Subsidiaries.
5.14 Employee Matters.
-------- -------
There is no strike or work stoppage in existence or
threatened involving Company or any of its Subsidiaries that
could reasonably be expected to have a Material Adverse
Effect.
5.15 Solvency.
--------
Company and each of its Subsidiaries is and, upon
the incurrence of any Obligations by Company on any date on
which this representation is made, will be, Solvent.
5.16 Disclosure.
----------
No representation or warranty of Company or any of
its Subsidiaries contained in any Loan Document, in any Spin-
Off Agreement or in any other document, certificate or written
statement furnished to Lenders by or on behalf of Company or
any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state a
material fact (known to Company, in the case of any document
not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections
and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it
being recognized by Lenders that such projections as to future
events are not to be viewed as facts and that actual results
during the period or periods covered by any such projections
may differ from the projected results. There is no fact known
(or which should upon the reasonable exercise of diligence be
known) to Company (other than matters of a general economic
nature) that has had, or could reasonably be expected to
result in, a Material Adverse Effect and that has not been
disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the
transactions contemplated hereby.
5.17 Intellectual Property.
------------ --------
A. Company and its Subsidiaries own, or are licensed
(to the extent required to be so licensed) to use, the
Intellectual Property and all such Intellectual Property is
fully protected and duly and properly registered, filed or
issued in the appropriate office and jurisdictions for such
registrations, filing or issuances, and Company owns all of
the right, title and interest in and to the "Rickel" trademark
under the applicable laws of the United States free and clear
of any Lien (other than Permitted Encumbrances and Liens
created in favor of Agent on behalf of Lenders pursuant to the
Loan Documents).
B. Except as disclosed in Schedule 5.17, no material
-------- ----
claim has been asserted by any Person with respect to the use
of any such Intellectual Property, or challenging or
questioning the validity or effectiveness of any such
Intellectual Property. Except as disclosed in Schedule 5.17,
-------- ----
the use of such Intellectual Property by Company or any of its
Subsidiaries does not infringe on the rights of any Person,
subject to such claims and infringements as do not, in the
aggregate, give rise to any liabilities on the part of Company
or any of its Subsidiaries that are material to Company or any
of its Subsidiaries. The consummation of the transactions
contemplated by this Agreement or the Spin-Off will not in any
material manner or to any material extent impair the ownership
of (or the license to use, as the case may be) any of such
Intellectual Property by Company or any of its Subsidiaries.
5.18 Spin-Off Agreements.
-------- ----------
Company has delivered to Lenders complete and
correct copies of the Spin-Off Agreements and of all exhibits
and schedules thereto.
Section 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of
the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations and
the cancellation or expiration of all Letters of Credit,
unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1 Financial Statements and Other Reports.
--------- ---------- --- ----- -------
Company will maintain, and cause each of its
Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices
to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Lenders:
(i) Monthly Reports: as soon as available and in
------- -------
any event within 30 days after the end of each month
ending after the Closing Date, the weekly "EBIT" report
for such month for each of the Blair and Rickel divisions
of Company and the corporate weekly reports for the weeks
ending during such month for each of such divisions, in
each case substantially in the form of the pro forma
"EBIT" report and corporate weekly reports delivered to
Lenders prior to the Closing Date;
(ii) Quarterly Financials: as soon as available and
--------- ----------
in any event within 45 days after the end of each of the
first three fiscal quarters of each Fiscal Year, (a) the
consolidated and consolidating balance sheets of Company
and its Subsidiaries as at the end of such fiscal quarter
and the related consolidated and consolidating statements
of income, stockholders' equity and cash flows of Company
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, setting forth in each
case in comparative form the corresponding figures for
the corresponding periods of the previous Fiscal Year
(but only if such corresponding periods begin after the
Closing Date), and the corresponding figures from the
consolidated plan and financial forecast for the current
Fiscal Year delivered pursuant to subsection 6.1(xiv),
all in reasonable detail and certified by the chairman,
president, chief financial officer or controller of
Company that they fairly present the financial condition
of Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting
from audit and year-end adjustments, and (b) a narrative
report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to
senior management for such fiscal quarter and for the
period from the beginning of the then current Fiscal Year
to the end of such fiscal quarter;
(iii) Year-End Financials: as soon as available
-------- ----------
and in any event within 90 days after the end of each
Fiscal Year, (a) the consolidated and consolidating
balance sheets of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated and
consolidating statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such
Fiscal Year and for the fourth fiscal quarter of such
Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal
Year or the fourth fiscal quarter thereof, as the case
may be (but only if such previous Fiscal Year or the
fourth fiscal quarter thereof, as the case may be, begins
after the Closing Date), and the corresponding figures
from the consolidated plan and financial forecast
delivered pursuant to subsection 6.1(xiv) for the Fiscal
Year covered by such financial statements, all in
reasonable detail and certified by the chairman,
president, chief financial officer or controller of
Company that they fairly present the financial condition
of Company and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows
for the periods indicated, (b) a narrative report
describing the operations of Company and its Subsidiaries
in the form prepared for presentation to senior
management for such Fiscal Year, and (c) in the case of
such consolidated financial statements with respect to
such Fiscal Year, a report thereon of Deloitte & Touche
or other independent certified public accountants of
recognized national standing selected by Company and
satisfactory to Agent and CO-AGENT, which report shall be
--------
unqualified, shall express no doubts about the ability of
Company and its Subsidiaries to continue as a going
concern, and shall state that such consolidated financial
statements fairly present the consolidated financial
position of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their
cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial
statements) and that the examination by such accountants
in connection with such consolidated financial statements
has been made in accordance with generally accepted
auditing standards;
(iv) Officers' and Compliance Certificates:
--------- --- ---------- ------------
together with each delivery of financial statements of
Company and its Subsidiaries pursuant to subdivisions
(ii) and (iii) above, (a) an Officers' Certificate of
Company stating that the signers have reviewed the terms
of this Agreement and have made, or caused to be made
under their supervision, a review in reasonable detail of
the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such
financial statements and that such review has not
disclosed the existence during or at the end of such
accounting period, and that the signers do not have
knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence
thereof and what action Company has taken, is taking and
proposes to take with respect thereto; and (b) a
Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable
accounting periods with the restrictions contained in
Section 7;
(v) Borrowing Base Certificates: as soon as
--------- ---- ------------
available and in any event within 20 days after the end
of each month ending after the Closing Date, a Borrowing
Base Certificate dated as of the last day of such month
together with an Inventory report substantially in the
form of Exhibit XXIII annexed hereto and such other
------- -----
information as Agent or CO-AGENT may reasonably request;
--------
(vi) Reconciliation Statements: if, as a result of
-------------- ----------
any change in accounting principles and policies from
those used in the preparation of the audited financial
statements referred to in subsection 5.3, the
consolidated financial statements of Company and its
Subsidiaries delivered pursuant to subdivisions (ii),
(iii) or (xiv) of this subsection 6.1 will differ in any
material respect from the consolidated financial
statements that would have been delivered pursuant to
such subdivisions had no such change in accounting
principles and policies been made, then (a) together with
the first delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiv) of this subsection
6.1 following such change, consolidated financial
statements of Company and its Subsidiaries for (y) the
current Fiscal Year to the effective date of such change
and (z) the one full Fiscal Year immediately preceding
the Fiscal Year in which such change is made, in each
case prepared on a pro forma basis as if such change had
been in effect during such periods, and (b) together with
each delivery of financial statements pursuant to
subdivision (ii), (iii) or (xiv) of this subsection 6.1
following such change, a written statement of the
chairman, president, chief financial officer or
controller of Company setting forth the differences which
would have resulted if such financial statements had been
prepared without giving effect to such change;
(vii) Accountants' Certification: together with
------------ -------------
each delivery of consolidated financial statements of
Company and its Subsidiaries pursuant to subdivision
(iii) above, a written statement by the independent
certified public accountants giving the report thereon
(a) stating that their audit examination has included a
review of the terms of subsections 7.1, 7.2, 7.3, 7.6,
7.7, 7.8, 7.9 and 7.16 of this Agreement and any
definitions set forth in this Agreement relating thereto,
in each case as they relate to accounting matters, and
(b) stating whether, in connection with their audit
examination, any condition or event (including without
limitation any condition or event relating to the
subsections of this Agreement specified in the
immediately preceding clause (a) or relating to
subsection 7.4 of this Agreement) that constitutes an
Event of Default or Potential Event of Default has come
to their attention and, if such a condition or event has
come to their attention, specifying the nature and period
of existence thereof; provided that such accountants
--------
shall not be liable by reason of any failure to obtain
knowledge of any such Event of Default or Potential Event
of Default that would not be disclosed in the course of
their audit examination;
(viii) Accountants' Reports: promptly upon
------------ -------
receipt thereof (unless restricted by applicable
professional standards), copies of all reports submitted
to Company by independent certified public accountants in
connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries
made by such accountants, including, without limitation,
any comment letter submitted by such accountants to
management in connection with their annual audit;
(ix) SEC Filings and Press Releases: promptly upon
--- ------- --- ----- --------
their becoming available, copies of (a) all financial
statements, reports, notices and proxy statements sent or
made available generally by Company to its security
holders or by any Subsidiary of Company to its security
holders other than Company or another Subsidiary of
Company, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a
similar form) containing initial preliminary and final
(but not, unless otherwise requested by Agent,
intermediate draft) prospectuses, if any, filed by
Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission
or any governmental or private regulatory authority, and
(c) all press releases and other statements made
available generally by Company or any of its Subsidiaries
to the public concerning material developments in the
business of Company or any of its Subsidiaries;
(x) Events of Default, etc.: promptly upon any
------ -- -------- ----
officer of Company obtaining knowledge (a) of any
condition or event that constitutes an Event of Default
or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to Agent) or
taken any other action with respect to a claimed Event of
Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type
referred to in subsection 8.2, (c) of any condition or
event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange
Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such
Form as in effect on the date hereof) if Company were
required to file such reports under the Exchange Act, or
(d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officers'
Certificate specifying the nature and period of existence
of such condition, event or change, or specifying the
notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event
of Default, default, event or condition, and what action
Company has taken, is taking and proposes to take with
respect thereto;
(xi) Litigation or Other Proceedings: promptly upon
---------- -- ----- -----------
any officer of Company obtaining knowledge of (X) the
institution of, or non-frivolous threat of, any action,
suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration
against or affecting Company or any of its Subsidiaries
or any property of Company or any of its Subsidiaries
(collectively, "Proceedings") not previously disclosed in
writing by Company to Lenders or (Y) any material
development in any Proceeding that, in any case:
(1) after giving effect to coverage and policy
limits of insurance policies maintained by Company
and its Subsidiaries issued by unaffiliated
insurers, has a reasonable possibility of giving
rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated
hereby or by the Spin-Off Agreements;
written notice thereof together with such other
information as may be reasonably available to Company to
enable Lenders and their counsel to evaluate such
matters;
(xii) ERISA Events: within 20 days of becoming
----- ------
aware of the occurrence of or forthcoming occurrence of
any ERISA Event, a written notice specifying the nature
thereof, what action Company or any of its ERISA
Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Depart-
ment of Labor or the PBGC with respect thereto;
(xiii) ERISA Notices: with reasonable
----- -------
promptness, copies of (a) if requested by any Lender,
each Schedule B (Actuarial Information) to the annual
-------- -
report (Form 5500 Series) filed by Company or any of its
ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan; (b) all notices received by
Company or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and
(c) such other documents or governmental reports or
filings relating to any Employee Benefit Plan as Agent
shall reasonably request;
(xiv) Financial Plans: as soon as practicable
--------- -----
and in any event no later than February 28 of each Fiscal
Year, a consolidated plan and financial forecast for such
Fiscal Year and the next four succeeding Fiscal Years,
including without limitation (a) forecasted consolidated
balance sheets and forecasted consolidated statements of
income and cash flows of Company and its Subsidiaries for
each of such five Fiscal Years, together with an
explanation of the assumptions on which such forecasts
are based, (b) forecasted consolidated balance sheets and
forecasted consolidated statements of income and cash
flows of Company and its Subsidiaries for each fiscal
quarter of the first such Fiscal Year, together with an
explanation of the assumptions on which such forecasts
are based, and (c) such other information as any Lender
may reasonably request;
(xv) Insurance: as soon as practicable and in any
---------
event by the last day of each Fiscal Year, a report in
form and substance reasonably satisfactory to Agent and
CO-AGENT outlining all material insurance coverage
--------
maintained as of the date of such report by Company and
its Subsidiaries and all material insurance coverage
planned to be maintained by Company and its Subsidiaries
in the immediately succeeding Fiscal Year;
(xvi) Environmental Audits and Reports: as soon
------------- ------ --- -------
as practicable following receipt thereof by Company,
copies of all environmental audits and reports, whether
prepared by personnel of Company or any of its
Subsidiaries or by independent consultants, with respect
to significant environmental matters at any Facility or
which relate to an Environmental Claim which has a
reasonable possibility of giving rise to a Material
Adverse Effect;
(xvii) Board of Directors: with reasonable
----- -- ---------
promptness, written notice of any change in the Board of
Directors of Company;
(xviii) Audited Consolidated Balance Sheet: as
------- ------------ ------- -----
soon as available and in any event within 90 days after
the Closing Date, the consolidated balance sheet of
Company and its Subsidiaries as at the Closing Date,
together with a report thereon of Deloitte & Touche,
which report shall state that such consolidated balance
sheet fairly presents the consolidated financial position
of Company and its Subsidiaries as at the Closing Date in
conformity with GAAP and that the examination by Deloitte
& Touche in connection with such consolidated balance
sheet has been made in accordance with generally accepted
auditing standards; and
(xix) Other Information: with reasonable
----- -----------
promptness, such other information and data with respect
to Company or any of its Subsidiaries as from time to
time may be reasonably requested by any Lender.
6.2 Corporate Existence, etc.
--------- ---------- ----
Except to the extent permitted under subsection 7.7,
Company will, and will cause each of its Subsidiaries to, at
all times preserve and keep in full force and effect its
corporate existence and all rights and franchises material to
its business; provided, however, that neither Company nor any
-------- -------
of its Subsidiaries shall be required to preserve any such
right or franchise if the Board of Directors of Company or
such Subsidiary shall determine that the preservation thereof
is no longer desirable in the conduct of the business of
Company or such Subsidiary, as the case may be, and that the
loss thereof is not disadvantageous in any material respect to
Company, such Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
------- -- ----- --- ------- --- -------------
A. Company will, and will cause each of its Subsidiar-
ies to, pay all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or
in respect of any of its income, businesses or franchises
before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that
by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or
--------
claim need be paid if being contested in good faith by
appropriate proceedings promptly instituted and diligently
conducted and if such reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall
have been made therefor.
B. Company will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person (other than
SMG-II, Holdings or PTKH so long as the filing of such
consolidated income tax return is required by applicable law
and other than Company or any of its Subsidiaries).
6.4 Maintenance of Properties; Insurance.
----------- -- ----------- ---------
Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear
excepted, all material properties used or useful in the
business of Company and its Subsidiaries (including, without
limitation, Intellectual Property) and from time to time will
make or cause to be made all appropriate repairs, renewals and
replacements thereof. Company will maintain or cause to be
maintained, with financially sound and reputable insurers,
insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or
damage of the kinds customarily carried or maintained under
similar circumstances by corporations of established
reputation engaged in similar businesses, in such amounts
(giving effect to self-insurance), with such deductibles and
by such methods as shall be customary for corporations
similarly situated in the industry. Each such policy of
insurance that insures against loss or damage with respect to
any Collateral shall name Agent for the benefit of Lenders as
the loss payee thereunder for amounts in excess of $5,000,000
per occurrence and shall provide for at least 30 days prior
written notice to Agent of any modification or cancellation of
such policy. Upon receipt by Agent of any insurance proceeds
as loss payee, (i) to the extent that Company or any of its
Subsidiaries intends to use any such insurance proceeds that
are Net Cash Proceeds of Asset Sale to repair, restore or
replace assets of Company or any of its Subsidiaries as
provided in subsection 2.4A(iii)(a), Agent shall, subject to
the provisions of subsection 2.4A(iii)(a), deliver such
insurance proceeds to Company and (ii) otherwise, Agent shall,
and Company hereby authorizes Agent to, apply such insurance
proceeds that are Net Cash Proceeds of Asset Sale to prepay
the Loans in accordance with subsection 2.4A(iii)(a).
6.5 Inspection; Lender Meeting.
----------- ------ -------
Company shall, and shall cause each of its
Subsidiaries to, permit (i) any authorized representatives
designated by any Lender to visit and inspect any of the
properties of Company or any of its Subsidiaries, including
its and their financial and accounting records, and to make
copies and take extracts therefrom, and to discuss its and
their affairs, finances and accounts with its and their
officers and independent public accountants (provided that
Company may, if it so chooses, be present at or participate in
any such discussion), and (ii) any authorized representatives
designated by CO-AGENT to conduct (a) during the first twelve
--------
month period following the Closing Date, two audits of all
Inventory and all accounts receivable of Company in scope and
substance substantially similar to the audit of Inventory and
accounts receivable of Company that was conducted by
authorized representatives of Agent in April, 1993 and
(b) during each succeeding twelve month period thereafter, one
such audit of all Inventory and accounts receivable of
Company, all upon reasonable notice and at such reasonable
times during normal business hours and as often as may be
reasonably requested. Without in any way limiting the
foregoing, Company will, upon the request of Agent, CO-AGENT
--------
or Requisite Lenders, participate in a meeting of Agent and
Lenders once during each Fiscal Year to be held at Company's
corporate offices (or such other location as may be agreed to
by Company, CO-AGENT and Agent) at such time as may be agreed
--------
to by Company, CO-AGENT and Agent.
--------
6.6 Compliance with Laws, etc.
---------- ---- ----- ----
Company shall, and shall cause each of its
Subsidiaries to, comply with the requirements of all
applicable laws, rules, regulations and orders of any
governmental authority, noncompliance with which could
reasonably be expected to cause, individually or in the
aggregate at any one time, a Material Adverse Effect, in each
case except to the extent that Company's or such Subsidiary's
requirement to comply therewith is being contested in good
faith by Company or such Subsidiary, as the case may be, and
such reserve or other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor.
6.7 Environmental Disclosure and Inspection.
------------- ---------- --- ----------
A. Company shall, and shall cause each of its
Subsidiaries to, exercise reasonable due diligence in order to
comply and cause (i) all tenants under any leases or occupancy
agreements affecting any portion of the Facilities that are
presently owned, leased or operated by Company or any of its
Subsidiaries and (ii) all other Persons on or occupying such
property, to comply in all material respects with all
Environmental Laws.
B. Company shall, promptly after obtaining knowledge
thereof, advise Lenders in writing and in reasonable detail of
(i) any Release of any Hazardous Materials required to be
reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws,
(ii) any and all written communications with respect to any
Environmental Claims that could reasonably be expected to give
rise to a Material Adverse Effect or with respect to any
Release of Hazardous Materials required to be reported to any
federal, state or local governmental or regulatory agency that
could reasonably be expected to give rise to a Material
Adverse Effect, (iii) any remedial action taken by Company or
any other Person in response to (x) any Hazardous Materials
on, under or about any Facility, the existence of which could
reasonably be expected to result in an Environmental Claim
which could reasonably be expected to have a Material Adverse
Effect, or (y) any Environmental Claim that could reasonably
be expected to have a Material Adverse Effect, (iv) Company's
discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Facility that is presently
owned, leased or operated by Company or any of its
Subsidiaries that could reasonably be expected to cause such
Facility or any part thereof to be subject to any material
restrictions on the ownership, occupancy, transferability or
use thereof under any Environmental Laws, and (v) any request
for information from any governmental agency that suggests
such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for a material
Release of Hazardous Materials.
C. Company shall promptly notify Lenders of any
proposed acquisition of stock, assets, or property by Company
or any of its Subsidiaries that could reasonably be expected
to expose Company or any of its Subsidiaries to, or result in,
Environmental Claims that could have a reasonable possibility
of giving rise to a Material Adverse Effect.
D. Company shall, at its own expense, provide copies of
such documents or written information as Agent may reasonably
request in relation to any matters disclosed pursuant to this
subsection 6.7.
6.8 Execution of Subsidiary Guaranty and Collateral Documents
--------- -- ---------- -------- --- ---------- ---------
by Certain Subsidiaries and Future Subsidiaries.
-- ------- ------------ --- ------ ------------
In the event that any Subsidiary of Company existing
as of the date hereof (other than any such Subsidiary that has
executed and delivered the Subsidiary Guaranty and, so long as
Stuart remains liable with respect to Indebtedness which
prohibits Stuart from entering into the Subsidiary Guaranty
and the Collateral Documents, other than Stuart) hereafter
owns or acquires assets with an aggregate fair market value
(without netting such fair market value against any liability
of such Subsidiary) exceeding $25,000 or in the event that any
Person becomes a Subsidiary of Company after the date hereof,
Company will promptly notify Agent and CO-AGENT of that fact
--------
and cause such Subsidiary to execute and deliver to Agent a
counterpart of the Subsidiary Guaranty and a Subsidiary
Security Agreement, a Subsidiary Pledge Agreement, a
Subsidiary Trademark Security Agreement and Additional
Mortgages and to take all such further action and execute all
such further documents and instruments as may be reasonably
required to grant and perfect in favor of Agent, for the
benefit of Lenders, a first-priority security interest in all
of the Covered Real Property and all of the personal property
assets of such Subsidiary described in the applicable
Collateral Documents. Company shall deliver to Agent,
together with such Collateral Documents, (i) certified copies
of such Subsidiary's Articles or Certificate of Incorporation,
together with a good standing certificate from the Secretary
of State of the jurisdiction of its incorporation, each to be
dated a recent date prior to their delivery to Agent, (ii) a
copy of such Subsidiary's Bylaws, certified by its corporate
secretary or an assistant corporate secretary as of a recent
date prior to their delivery to Agent, (iii) a certificate
executed by the secretary or an assistant secretary of such
Subsidiary as to (a) the incumbency and signatures of the
officers of such Subsidiary executing the Subsidiary Guaranty
and the Collateral Documents to which such Subsidiary is a
party and (b) the fact that the attached resolutions of the
Board of Directors of such Subsidiary authorizing the
execution, delivery and performance of the Subsidiary Guaranty
and such Collateral Documents are in full force and effect and
have not been modified or rescinded, and (iv) a favorable
opinion of counsel to such Subsidiary, in form and substance
satisfactory to Agent and its counsel and CO-AGENT, as to
--------
(a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such
Subsidiary of the Subsidiary Guaranty and such Collateral
Documents, (c) the enforceability of the Subsidiary Guaranty
and such Collateral Documents against such Subsidiary, and
(d) such other matters as Agent may reasonably request, all of
the foregoing to be satisfactory in form and substance to
Agent and its counsel and CO-AGENT.
--------
6.9 Additional Mortgages; Release of Mortgages.
---------- ---------- ------- -- ---------
A. On and after the Closing Date, Company shall,
and shall cause its Subsidiaries to, (i) with respect to each
leasehold interest in Real Property Assets listed in Part I of
Schedule 6.9 annexed hereto or hereafter acquired by Company
-------- ---
or any of its Subsidiaries, use its best efforts (which shall
not be deemed to include, in the good faith judgment of
Company, the material modification of any rights or
obligations, or the incurrence of any material obligations,
under the applicable lease or the expenditure of money in
excess of nominal amounts or the payment of monetary
consideration other than nominal monetary consideration) until
the end of the applicable three month period described below
to obtain the consent of the lessor under each related lease
to the encumbrancing of Company's or such Subsidiary's
leasehold interest under such lease pursuant to an Additional
Mortgage (as defined below) and to the assignment of such
leasehold interest to the successful bidder at a foreclosure
or similar sale (and to a subsequent third party assignee by
Agent or any Lender to the extent Agent or such Lender is the
successful bidder at such sale) in the event of a foreclosure
or similar action pursuant to such Additional Mortgage as soon
as practicable but in any event within three months after the
commencement of the lease term under the applicable lease (or,
in the case of Company's leasehold interests in Real Property
Assets listed in Part I of Schedule 6.9 annexed hereto, as
-------- ---
soon as practicable but in any event within three months after
the Closing Date) (ii) with respect to each leasehold interest
in Real Property Assets listed in Part II of Schedule 6.9
-------- ---
annexed hereto, use its best efforts (which shall not be
deemed to include, in the good faith judgment of Company, the
material modification of any rights or obligations, or the
incurrence of any material obligations, under the applicable
lease or the expenditure of money in excess of nominal amounts
or the payment of monetary consideration other than nominal
monetary consideration) until the end of the three month
period after the Closing Date to record the applicable lease,
or a memorandum of lease with respect thereto, or other
evidence of such lease in form and substance reasonably
satisfactory to Agent in all places to the extent necessary or
desirable, in the reasonable judgment of Agent, so as to
enable the Additional Mortgage encumbering such leasehold
interest to effectively create a valid and enforceable first
priority lien (subject to Permitted Encumbrances) on such
leasehold interest in favor of Agent (or such other Person as
may be required or desired under local law) for the benefit of
Lenders), and (iii) with respect to each Covered Real Property
(other than any leasehold interest for which Company or any of
its Subsidiaries was unable to obtain the applicable lessor's
consent pursuant to clause (i) above or to record the
applicable instrument pursuant to clause (ii) above), as soon
as practicable and in any event within three months after the
applicable Real Property Asset becomes Covered Real Property
(or, in the case of Company's leasehold interest in Real
Property Assets listed in Schedule 6.9 annexed hereto for
-------- ---
which Company was able to obtain the applicable lessor's
consent pursuant to clause (i) above or was able to record the
applicable instrument pursuant to clause (ii) above, as the
case may be, as soon as practicable but in any event within
three months after the Closing Date), deliver (a) fully
executed counterparts of Mortgages (each an "Additional
Mortgage" and collectively the "Additional Mortgages")
encumbering such Covered Real Property, together with evidence
that counterparts of such Additional Mortgages have been
recorded in all places to the extent necessary or desirable,
in the reasonable judgment of Agent and CO-AGENT, so as to
--------
effectively create a valid and enforceable first priority lien
(or such other priority lien as may be specified in the
applicable Additional Mortgage), subject to Permitted
Encumbrances, on such Covered Real Property in favor of Agent
(or such other trustee as may be required or desired under
local law) for the benefit of Lenders; (b) a title report
obtained by Company in respect of any such Covered Real
Property consisting of fee interests in Real Property Assets
and, if reasonably required by Agent or CO-AGENT, a title
--------
report obtained by Company in respect of any such Covered Real
Property consisting of material leasehold interests in Real
Property Assets; (c) if required by Agent or CO-AGENT, an
--------
opinion of counsel (which counsel shall be reasonably
satisfactory to Agent and CO-AGENT) in the state in which such
--------
Covered Real Property is located with respect to the
enforceability of the form of Additional Mortgage recorded in
such state and such other matters as Agent may reasonably
request, in form and substance reasonably satisfactory to
Agent and CO-AGENT; (d) in the case of each such Covered Real
--------
Property consisting of leasehold interests in Real Property
Assets, such estoppel letters from the landlords on such real
property as may be reasonably requested by Agent or CO-AGENT,
--------
in form and substance reasonably satisfactory to Agent and CO-
---
AGENT; (e) if required by Agent or CO-AGENT, in the case of
----- --------
each such Covered Real Property consisting of fee interests in
Real Property Assets, environmental audits prepared by
professional consultants mutually acceptable to Company, CO-
---
AGENT and Agent, in form, scope and substance satisfactory to
-----
Agent in its reasonable discretion; (f) if required by Agent
or CO-AGENT, in the case of each such Covered Real Property
--------
consisting of fee interests in Real Property Assets, ALTA
mortgagee title insurance policies issued by title insurers
reasonably satisfactory to Agent and CO-AGENT (the "Additional
--------
Mortgage Policies"), in amounts reasonably satisfactory to
Agent and CO-AGENT, assuring Agent that the applicable
--------
Additional Mortgages create valid and enforceable first
priority mortgage liens (or such other priority liens as may
be specified in the applicable Additional Mortgage) on such
Covered Real Property, free and clear of all defects and
encumbrances except Permitted Encumbrances and subject to a
standard survey exception, which Additional Mortgage Policies
shall be in form and substance reasonably satisfactory to
Agent and CO-AGENT and shall include an endorsement for
--------
mechanics' liens, for future advances under this Agreement,
the Notes and the other Loan Documents, and for any other
matters that Agent or CO-AGENT may reasonably request, and
--------
shall provide for affirmative insurance and such reinsurance
as Agent or CO-AGENT may reasonably request, all of the
--------
foregoing in form and substance reasonably satisfactory to
Agent and CO-AGENT; (g) evidence, which may be in the form of
--------
a letter from an insurance broker, a municipal engineer,
Charles Jones, Inc. or Transamerica Flood Hazard
Certification, as to whether (1) any such Covered Real
Property ("Additional Flood Hazard Property") is in an area
designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards and (2) the
community in which each Additional Flood Hazard Property is
located is participating in the National Flood Insurance
Program; and (h) if there are any Additional Flood Hazard
Properties, Company's written acknowledgement of receipt of
written notification from Agent (1) as to the existence of
each such Additional Flood Hazard Property and (2) as to
whether the community in which each such Flood Hazard Property
is located is participating in the National Flood Insurance
Program.
Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives
designated by Agent and CO-AGENT, upon reasonable notice, to
--------
visit and inspect any fee interests in Real Property Assets
and, if reasonably required by Agent and CO-AGENT, any
--------
material leasehold interests in Real Property Assets, in each
case to be subject to the Lien of an Additional Mortgage, for
the purpose of obtaining an appraisal of value, conducted by
consultants retained by Agent and CO-AGENT in compliance with
--------
all applicable banking regulations, with respect to such real
property fee or leasehold interest.
B. At least 30 days prior to the making by Company
or any of its Subsidiaries of any sale or disposition of
assets permitted under clause (iv), (v), (vii), (viii) or (ix)
of subsection 7.7 of any assets of Company or any of its
Subsidiaries encumbered by any Collateral Document, Company
shall, to the extent necessary to make such sale or
disposition of assets, request that Agent execute and deliver
to Company reconveyance documents and/or releases (including
without limitation amendments to the UCC-1 financing
statements that have been filed or recorded in connection with
such Collateral Document) releasing any Liens on the assets
being sold pursuant to such sale or disposition of assets that
were granted in favor of Agent pursuant to such Collateral
Document. Upon receiving any such request, Agent shall, at
Company's expense, execute and deliver to Company such
reconveyance documents and/or releases, in recordable form, on
the date of such sale or disposition of assets; provided that,
--------
at the time of Agent's execution and delivery to Company of
such reconveyance documents and/or releases, (i) no Event of
Default or Potential Event of Default shall have occurred and
be continuing or shall be caused thereby, (ii) Agent shall
have received evidence satisfactory to it that such sale or
disposition of assets shall be permitted under clause (iv),
(v), (vii), (viii) or (ix) of subsection 7.7, and (iii)
Company shall have (a) paid Agent, for application to the
prepayment of the Loans or to the cash collateralization of
the Letters of Credit pursuant to subsection 2.4A(iii)(a), an
amount (the "Required Prepayment Amount") equal to the Net
Cash Proceeds of Asset Sale of such sale or disposition of
assets that are required to be applied to the prepayment of
the Loans or to the cash collateralization of the Letters of
Credit pursuant to subsection 2.4A(iii)(a), or (b) provided
Agent with evidence satisfactory to it that irrevocable
arrangements, in form and substance satisfactory to Agent,
have been made to transfer the Required Prepayment Amount to
Agent.
6.10 Assignability of Lease Agreements.
------------- -- ----- ----------
Company shall, and shall cause each of its
Subsidiaries to, use its best efforts (which shall not be
deemed to include, in the good faith judgement of Company, the
material modification of any rights or obligations, or the
incurrence of any material obligations, under the applicable
lease or the expenditure of money in excess of nominal amounts
or the payment of monetary consideration other than nominal
monetary consideration) in entering into any lease as a
lessee, whether such lease is an Operating Lease or a Capital
Lease, to obtain lease terms permitting (or not expressly
prohibiting) the encumbrancing of the leasehold interest of
Company or such Subsidiary, as the case may be, in the
property that is the subject of such lease pursuant to an
Additional Mortgage and the assignment of such leasehold
interest to the successful bidder at a foreclosure or similar
sale (and to a subsequent third party assignee by Agent or any
Lender to the extent Agent or such Lender is the successful
bidder at such sale) in the event of a foreclosure or similar
action pursuant to such Additional Mortgage.
Section 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of
the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations and
the cancellation or expiration of all Letters of Credit,
unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 7.
7.1 Indebtedness.
------------
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume
or guaranty, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness, except:
(i) Company may become and remain liable with
respect to the Obligations;
(ii) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations
permitted by subsection 7.4 and, upon any matured
obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations
so extinguished;
(iii) Company and its Subsidiaries may become
and remain liable with respect to Indebtedness in respect
of Capital Leases; provided that such Capital Leases are
--------
permitted under the terms of subsection 7.9;
(iv) Company may become and remain liable with
respect to Indebtedness to any of its wholly-owned
Subsidiaries, and any wholly-owned Subsidiary of Company
may become and remain liable with respect to Indebtedness
to Company or any other wholly-owned Subsidiary of
Company; provided that (a) all such intercompany
--------
Indebtedness shall be evidenced by promissory notes that
are pledged to Agent pursuant to the terms of the Company
Pledge Agreement or the applicable Subsidiary Pledge
Agreement, as the case may be, (b) all such intercompany
Indebtedness owed by Company to any of its Subsidiaries
shall be subordinated in right of payment to the payment
in full of the Obligations pursuant to the terms of the
applicable promissory notes or an intercompany
subordination agreement, and (c) any payment by any
Subsidiary of Company under the Subsidiary Guaranty shall
result in a pro tanto reduction of the amount of any
--- -----
intercompany Indebtedness owed by such Subsidiary to
Company or to any of its Subsidiaries for whose benefit
such payment is made;
(v) Company and its Subsidiaries, as applicable,
may remain liable with respect to Indebtedness described
in Schedule 7.1 annexed hereto;
-------- ---
(vi) Company and its Subsidiaries may become and
remain liable with respect to Indebtedness incurred to
refinance, in whole or in part, any outstanding
Indebtedness of Company or any of its Subsidiaries
permitted under subdivision (v) of this subsection 7.1;
provided, however, that in each case (a) the principal
-------- -------
amount of such refinancing Indebtedness does not exceed
the principal amount of the Indebtedness so refinanced
and (b) the interest rates, maturities, amortization
schedules, covenants, defaults, remedies, and other terms
of such refinancing Indebtedness are in each case (1) the
same as those in the Indebtedness being refinanced or
(2) otherwise satisfactory to Agent, CO-AGENT and
--------
Requisite Lenders; provided that interest rates that are
--------
less than, maturities that are longer than, and
amortization schedules that result in a longer average
life to maturity than, the comparable provisions of the
Indebtedness being refinanced shall be deemed
satisfactory to Agent and Requisite Lenders for purposes
of this clause (2); and
(vii) Company and its Subsidiaries may become
and remain liable with respect to other Indebtedness in
an aggregate principal amount not to exceed $5,000,000 at
any time outstanding.
7.2 Liens and Related Matters.
----- --- ------- -------
A. Prohibition on Liens. Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or permit to exist any Lien on or with
respect to any property or asset of any kind (including any
document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now
owned or hereafter acquired, or any income or profits
therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar
notice of any Lien with respect to any such property, asset,
income or profits under the Uniform Commercial Code of any
State or under any similar recording or notice statute,
except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral
Documents;
(iii) Liens described in Schedule 7.2 annexed
-------- ---
hereto;
(iv) Liens securing Indebtedness of Company or any
of its Subsidiaries incurred to refinance any outstanding
Indebtedness of Company or such Subsidiary that is
secured by Liens on Real Property Assets permitted under
subdivision (iii) of this subsection 7.2; provided,
however, that in each case (a) such refinancing
Indebtedness is permitted under subsection 7.1(vi),
(b) the Liens securing such refinancing Indebtedness are
limited to the Real Property Assets that were subject to
the Liens securing the Indebtedness so refinanced,
(c) the Indebtedness secured by such Lien is Non-Recourse
Indebtedness to the extent that the Indebtedness so
refinanced was Non-Recourse Indebtedness, and (d) the
principal amount of such refinancing Indebtedness shall
not be (1) less than 60% of the fair market value of such
Real Property Assets as of the date of such refinancing
or (2) if such refinancing Indebtedness is not Non-
Recourse Indebtedness, greater than 80% of the fair
market value of such Real Property Assets as of the date
of such refinancing; and
(v) Other Liens (other than consensual Liens
encumbering any of the Collateral) securing Indebtedness
or other obligations in an aggregate amount not exceeding
$2,000,000 at any time outstanding.
B. Equitable Lien in Favor of Lenders. If Company or
any of its Subsidiaries shall create or assume any Lien upon
any of its properties or assets, whether now owned or here-
after acquired, other than Liens excepted by the provisions of
subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness
secured thereby as long as any such Indebtedness shall be so
secured; provided that, notwithstanding the foregoing, this
--------
covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not
permitted by the provisions of subsection 7.2A.
C. No Further Negative Pledges. Except with respect to
specific property encumbered to secure payment of particular
Indebtedness or to be sold pursuant to an executed agreement
with respect to an Asset Sale, neither Company nor any of its
Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties
or assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to
Company or Other Subsidiaries. Except as provided herein,
Company will not, and will not permit any of its Subsidiaries
to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to (i) pay
dividends or make any other distributions on any of such
Subsidiary's capital stock owned by Company or any other
Subsidiary of Company, (ii) repay or prepay any Indebtedness
owed by such Subsidiary to Company or any other Subsidiary of
Company, (iii) make loans or advances to Company or any other
Subsidiary of Company, or (iv) transfer any of its property or
assets to Company or any other Subsidiary of Company.
7.3 Investments; Joint Ventures.
------------ ----- --------
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any
Investment in any Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Subsidiaries may make inter-
company loans to the extent permitted under subsection
7.1(iv);
(iii) Company may continue to own its existing
Investments in its Subsidiaries as of the Closing Date;
(iv) Company and its Subsidiaries may continue to
own the Investments owned by them and described in
Schedule 7.3 annexed hereto;
-------- ---
(v) Company and its Subsidiaries may make loans and
advances to employees in the ordinary course of business
in an aggregate amount not to exceed at any time
outstanding $500,000;
(vi) Company and its Subsidiaries may make and own
Investments in an aggregate amount not to exceed at any
time outstanding $3,000,000 consisting of any deferred
portion of the sales price received by Company or any of
its Subsidiaries in connection with any Asset Sale
permitted under subsection 7.7(iv);
(vii) Company may make and own Investments in an
aggregate amount not to exceed $5,000,000 in a community
organization established for the purpose of developing a
single store in an urban area which is to be managed or
operated by Company and which engages exclusively in
businesses permitted under subsection 7.14; and
(viii) Company or any of its Subsidiaries may
make and own Investments in respect of Securities of
another Person received by Company or such Subsidiary in
connection with a plan of reorganization of such Person
or a readjustment of its debts.
7.4 Contingent Obligations.
---------- -----------
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or
remain liable with respect to any Contingent Obligation,
except:
(i) Company may become and remain liable with
respect to Contingent Obligations in respect of Letters
of Credit;
(ii) Subsidiaries of Company may become and remain
liable with respect to Contingent Obligations under the
Subsidiary Guaranty;
(iii) Company and its Subsidiaries may become
and remain liable with respect to Contingent Obligations
in respect of indemnification and purchase price
adjustment obligations incurred in connection with Asset
Sales or other sales of assets so long as such
indemnification and purchase price adjustment obligations
are customary in light of the type of Asset Sales or
other sales of assets in connection with which they were
incurred;
(iv) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations in
respect of any Indebtedness or other obligation (other
than any Non-Recourse Indebtedness) of Company or any of
its Subsidiaries not prohibited by the Loan Documents;
(v) Company and its Subsidiaries may become and
remain liable with respect to Contingent Obligations
under guarantees in the ordinary course of business of
the obligations of suppliers, customers, franchisees and
licensees of Company and its Subsidiaries in an aggregate
amount not to exceed at any time $1,500,000;
(vi) Company or any of its Subsidiaries may become
and remain liable with respect to Contingent Obligations
in respect of leasehold interests assigned by Company or
such Subsidiary after the Closing Date to any Person
other than Company or any of its Subsidiaries;
(vii) Company and its Subsidiaries, as
applicable, may remain liable with respect to Contingent
Obligations described in Schedule 7.4 annexed hereto; and
-------- ---
(viii) Company and its Subsidiaries may become
and remain liable with respect to other Contingent
Obligations; provided that the maximum aggregate
--------
liability, contingent or otherwise, of Company and its
Subsidiaries in respect of all such other Contingent
Obligations permitted by this clause (viii) shall at no
time exceed $2,000,000.
7.5 Restricted Junior Payments.
---------- ------ --------
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Junior Payment.
7.6 Financial Covenants.
--------- ---------
A. Minimum Interest Coverage Ratio. Company shall not
permit the ratio of (i) Consolidated Adjusted EBITDA to
(ii) Consolidated Interest Expense for any four-fiscal quarter
period ending as of the last day of any fiscal quarter of
Company ending as of the dates set forth below (or, in the
case of the fiscal quarter of Company ending on April 30, 1994
or July 30, 1994, for the two- or three-fiscal quarter period,
respectively, ending as of such date) to be less than the cor-
relative ratio indicated:
Minimum
Fiscal Quarter Ending Interest Coverage Ratio
------ ------- ------ -------- -------- -----
April 30, 1994 1.10:1.00
July 30, 1994 1.30:1.00
October 29, 1994 2.00:1.00
January 28, 1995 2.00:1.00
Minimum
Fiscal Quarter Ending Interest Coverage Ratio
------ ------- ------ -------- -------- -----
April 29, 1995 2.00:1.00
July 29, 1995 2.25:1.00
October 28, 1995 2.25:1.00
February 3, 1996 2.25:1.00
May 4, 1996 2.25:1.00
August 3, 1996 2.25:1.00
November 2, 1996 2.50:1.00
February 1, 1997 2.50:1.00
May 3, 1997 2.50:1.00
August 2, 1997 2.50:1.00
November 4, 1997 2.50:1.00
January 31, 1998 2.50:1.00
May 2, 1998 2.50:1.00
August 1, 1998
and thereafter 2.50:1.00
B. Maximum Leverage Ratio. Company shall not permit
the ratio of (i) Consolidated Total Debt to (ii) Consolidated
Net Worth as of the last day of any fiscal quarter of Company
to exceed 0.50:1.00.
C. Minimum Consolidated Tangible Net Worth. Company
shall not permit Consolidated Tangible Net Worth at any time
during any of the periods set forth below to be less than the
correlative amount indicated:
Minimum Consolidated
Period Tangible Net Worth
------ -------- --- -----
Closing Date to the last day
of Fiscal Year 1993 $168,150,000
Fiscal Year 1994 $168,150,000
Fiscal Year 1995 $168,150,000
Fiscal Year 1996 $169,250,000
Fiscal Year 1997 $171,500,000
Fiscal Year 1998
and thereafter $175,000,000
7.7 Restriction on Fundamental Changes; Asset Sales.
----------- -- ----------- -------- ----- -----
Company shall not, and shall not permit any of its
Subsidiaries to, enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell,
lease, sub-lease, transfer or otherwise dispose of all or any
part of its business, property or fixed assets, whether now
owned or hereafter acquired, except:
(i) any Subsidiary of Company may be merged with or
into Company or any wholly-owned Subsidiary of Company,
or be liquidated, wound up or dissolved, or all or any
substantial part of its business, property or assets may
be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of
transactions, to Company or any wholly-owned Subsidiary
of Company; provided that, in the case of such a merger,
--------
Company or such wholly-owned Subsidiary shall be the
continuing or surviving corporation;
(ii) Company and its Subsidiaries may make Con-
solidated Capital Expenditures permitted under subsection
7.8;
(iii) Company and its Subsidiaries may sell
inventory in the ordinary course of business;
(iv) Company and its Subsidiaries may make Asset
Sales; provided that the aggregate assets sold pursuant
--------
to Asset Sales in any Fiscal Year shall not have
accounted for more than 20% of the consolidated revenues
of Company and its Subsidiaries for the immediately
preceding Fiscal Year as shown on the consolidated
financial statements of Company and its Subsidiaries for
such immediately preceding Fiscal Year; provided further
-------- -------
that (a) the consideration received for the related
assets (other than the related assets taken pursuant to
any taking of assets described in clause (iii) of the
definition of the term "Asset Sale") shall be in an
amount at least equal to (1) the fair market value
thereof or (2) a lower amount if the Board of Directors
of Company or the applicable Subsidiary, as the case may
be, shall determine that the sale of such related assets
for such lower amount is desirable in order to minimize
losses being incurred by Company or such Subsidiary, as
the case may be, with respect to such related assets and
that such sale for such lower amount is in the best
interest of Company or such Subsidiary, as the case may
be; (b) at least 50% of the consideration received
(excluding any consideration received in the form of the
assumption of liability under any lease pertaining to
such related assets by the purchaser thereof) for the
related assets (other than the related assets taken
pursuant to any taking of assets described in clause
(iii) of the definition of the term "Asset Sale") shall
be cash; and (c) the Net Cash Proceeds of Asset Sale of
such Asset Sales shall be applied in the manner and to
the extent required by subsection 2.4A(iii)(a);
(v) Company and its Subsidiaries may dispose of
obsolete, worn out or surplus property disposed of in the
ordinary course of business;
(vi) Company and its Subsidiaries may, as lessor or
sub-lessor, lease or sub-lease any Real Property Assets
in the ordinary course of business;
(vii) Company and its Subsidiaries may make
asset sales described in clause (i)(b)(2) of the
definition of the term "Asset Sale";
(viii) Company and its Subsidiaries may transfer
their respective assets pursuant to any taking of assets
described in clause (iii) of the definition of the term
"Asset Sale" to the extent that the aggregate net cash
proceeds received by Company and its Subsidiaries in
connection with such taking and all other takings related
to such taking are equal to or less than $100,000; and
(ix) Company or any Subsidiary of Company may, in
the ordinary course of business, terminate any lease to
which it is a party as lessee.
7.8 Consolidated Capital Expenditures.
------------ ------- ------------
Company shall not, and shall not permit its
Subsidiaries to, make or incur Consolidated Capital
Expenditures, in any Fiscal Year indicated below, in an
aggregate amount in excess of the corresponding amount (the
"Maximum Consolidated Capital Expenditures Amount") set forth
below opposite such Fiscal Year; provided that the Maximum
--------
Consolidated Capital Expenditures Amount for any Fiscal Year
shall be increased by an amount equal to the excess, if any
(but in no event more than $5,000,000), of the Maximum
Consolidated Capital Expenditures Amount for the previous
Fiscal Year (as adjusted in accordance with this proviso) over
the actual amount of Consolidated Capital Expenditures for
such previous Fiscal Year:
Maximum Consolidated
Fiscal Year Capital Expenditures
------ ---- ------- ------------
Amount
------
1993 $25,000,000
1994 $30,000,000
1995 $25,000,000
1996 $21,000,000
1997 $22,000,000
1998 and thereafter $22,000,000
7.9 Restriction on Leases.
----------- -- ------
Company shall not, and shall not permit any of its
Subsidiaries to, become liable in any way, whether directly or
by assignment or as a guarantor or other surety, for the
obligations of the lessee under any lease, whether an
Operating Lease or a Capital Lease (other than intercompany
leases between Company and its wholly-owned Subsidiaries),
unless, immediately after giving effect to the incurrence of
liability with respect to such lease, the Consolidated Rental
Payments at the time in effect during the then current Fiscal
Year shall not exceed the corresponding amount set forth below
opposite such Fiscal Year:
Maximum Consolidated
Fiscal Year Rental Payments
------ ---- ------ --------
1993 $17,296,000
1994 $18,833,000
1995 $23,478,000
1996 $28,364,000
1997 $32,082,000
1998 and thereafter $34,220,000
7.10 Sales and Lease-backs.
----- --- -----------
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, become or remain
liable as lessee or as guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease,
of any property (whether real, personal or mixed), whether now
owned or hereafter acquired, (i) which Company or any of its
Subsidiaries has sold or transferred or is to sell or transfer
to any other Person (other than Company or any of its
Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by
Company or any of its Subsidiaries to any Person (other than
Company or any of its Subsidiaries) in connection with such
lease; provided that Company and its Subsidiaries may enter
--------
into Sale and Lease-backs of Equipment so long as (a) the sale
or transfer by Company or any of its Subsidiaries of any
property in connection with such Sale and Lease-backs are
permitted under subsection 7.7 and (b) the leases entered into
in connection with such Sale and Lease-backs are permitted
under subsection 7.9.
7.11 Sale or Discount of Receivables.
---- -- -------- -- -----------
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, sell with recourse,
or discount or otherwise sell for less than the face value
thereof, any of its notes or accounts receivable.
7.12 Transactions with Shareholders and Affiliates.
------------ ---- ------------ --- ----------
Company shall not, and shall not permit any of its Sub-
sidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the
rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with any Affiliate of
Company or of any such holder, on terms that are less
favorable to Company or that Subsidiary, as the case may be,
than those that might be obtained at the time from Persons who
are not such a holder or Affiliate; provided that the
--------
foregoing restriction shall not apply to (i) any transaction
between Company and any of its wholly-owned Subsidiaries or
between any of its wholly-owned Subsidiaries,
(ii) transactions entered into or existing pursuant to and in
accordance with the Spin-Off Agreements, or (iii) reasonable
and customary fees paid to members of the Boards of Directors
of Company and its Subsidiaries.
7.13 Disposal of Subsidiary Stock.
-------- -- ---------- -----
Except for any sale of 100% of the capital stock or other
equity Securities of any of its Subsidiaries in compliance
with the provisions of subsection 7.7(iv) and except pursuant
to the Collateral Documents, Company shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital
stock or other equity Securities of any of its Subsidi-
aries, except to qualify directors if required by
applicable law; or
(ii) permit any of its Subsidiaries directly or
indirectly to sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries (including such
Subsidiary), except to Company, another Subsidiary of
Company, or to qualify directors if required by applica-
ble law.
7.14 Conduct of Business.
------- -- --------
From and after the Closing Date, Company shall not, and
shall not permit any of its Subsidiaries to, engage in any
business other than (i) the businesses engaged in by Company
and its Subsidiaries on the Closing Date and similar or
related businesses and (ii) such other lines of business as
may be consented to by Requisite Lenders.
7.15 Amendments of Certain Documents.
---------- -- ------- ---------
A. Company shall not, and shall not permit any of its
Subsidiaries to, amend or otherwise change the terms of any of
the Spin-Off Agreements in any material respect or waive any
of its material rights thereunder without the prior written
consent of the Requisite Lenders.
B. Company shall not, and shall not permit any of its
Subsidiaries to, amend or otherwise change the terms of any
Indebtedness of Company or any of its Subsidiaries permitted
to be incurred under subsection 7.1(vi) ("Specified
Refinancing Indebtedness"), or make any payment consistent
with an amendment thereof or change thereto, if the effect of
such amendment or change is to increase the interest rate on
such Specified Refinancing Indebtedness, change (to earlier
dates) any dates upon which payments of principal or interest
are due thereon, change any event of default or condition to
an event of default with respect thereto (other than to
eliminate any such event of default or to increase any grace
period with respect thereto), change the redemption,
prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof),
or change any collateral therefor (other than to release such
collateral), or if the effect of such amendment or change,
together with all other amendments or changes made, is to
increase materially the obligations of the obligor thereunder
or to confer any additional rights on the holders of such
Specified Refinancing Indebtedness which would be adverse to
Company or Lenders.
7.16 Fiscal Year.
------ ----
Company shall not change its Fiscal Year-end from
the Saturday closest to January 31.
Section 8. EVENTS OF DEFAULT
If any of the following conditions or events
("Events of Default") shall occur:
8.1 Failure to Make Payments When Due.
------- -- ---- -------- ---- ---
Failure to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by
notice of prepayment or otherwise; failure to pay when due any
amount payable to an Issuing Lender in reimbursement of any
drawing under a Letter of Credit; or failure to pay any
interest on any Loan or any fee or any other amount due under
this Agreement within five days after the date due; or
8.2 Default in Other Agreements.
------- -- ----- ----------
(i) Failure of Company or any of its Subsidiaries
to pay when due (a) any principal of or interest on any
Indebtedness (other than Indebtedness referred to in
subsection 8.1) in an individual principal amount of
$1,000,000 or more or any items of Indebtedness with an aggre-
gate principal amount of $5,000,000 or more or (b) any
Contingent Obligation in an individual principal amount of
$1,000,000 or more or any Contingent Obligations with an
aggregate principal amount of $5,000,000 or more, in each case
beyond the end of any grace period provided therefor; or
(ii) breach or default by Company or any of its Subsidiaries
with respect to any other material term of (a) any evidence of
any Indebtedness in an individual principal amount of
$1,000,000 or more or any items of Indebtedness with an aggre-
gate principal amount of $5,000,000 or more or any Contingent
Obligation in an individual principal amount of $1,000,000 or
more or any Contingent Obligations with an aggregate principal
amount of $5,000,000 or more or (b) any loan agreement,
mortgage, indenture or other agreement relating to such
Indebtedness or Contingent Obligation(s), if the effect of
such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation(s) (or a
trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be
declared due and payable prior to its stated maturity or the
stated maturity of any underlying obligation, as the case may
be, in each case after the end of any grace period provided
therefor; or
8.3 Breach of Certain Covenants.
------ -- ------- ---------
Failure of Company to perform or comply with any
term or condition contained in subsection 2.5 or 6.2 or
Section 7 of this Agreement or any other material term of any
Loan Document (other than this Agreement); or
8.4 Breach of Warranty.
------ -- --------
Any representation, warranty, certification or other
statement made by Company or any of its Subsidiaries in any
Loan Document or in any statement or certificate at any time
given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date
as of which made; or
8.5 Other Defaults Under Loan Documents.
----- -------- ----- ---- ---------
Company or any of its Subsidiaries shall default in
the performance of or compliance with any term contained in
this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or
waived within 30 days after receipt by Company of notice from
Agent or any Lender of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
----------- ----------- ----------- -- --------- ----
(i) A court having jurisdiction in the premises
shall enter a decree or order for relief in respect of Company
or any of its Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, which
decree or order is not stayed; or any other similar relief
shall be granted under any applicable federal or state law; or
(ii) an involuntary case shall be commenced against Company or
any of its Subsidiaries under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its
Subsidiaries, or over all or a substantial part of its
property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its
Subsidiaries for all or a substantial part of its property; or
a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property
of Company or any of its Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days
unless dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
--------- ----------- ----------- -- --------- ----
(i) Company or any of its Subsidiaries shall have
an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order
for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial
part of its property; or Company or any of its Subsidiaries
shall make any general assignment for the benefit of
creditors; or (ii) Company or any of its Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the
Board of Directors of Company or any of its Subsidiaries (or
any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to
in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
--------- --- -----------
Any money judgment, writ or warrant of attachment or
similar process involving in the aggregate at any time an
amount in excess of $2,000,000 (to the extent not adequately
covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered
or filed against Company or any of its Subsidiaries or any of
their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in
any event later than five days prior to the date of any
proposed sale thereunder); or
8.9 Dissolution.
-----------
Any order, judgment or decree shall be entered
against Company or any of its Subsidiaries decreeing the
dissolution or split up of Company or that Subsidiary and such
order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 Employee Benefit Plans.
-------- ------- -----
There shall occur one or more ERISA Events which
individually or in the aggregate results in or might
reasonably be expected to result in liability of Company or
any of its ERISA Affiliates in excess of $2,000,000 during the
term of this Agreement; or there shall exist an amount of
unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for
all Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit
liabilities), which exceeds $2,000,000; or
8.11 Change in Control.
------ -- -------
Merrill Lynch Capital Partners, Inc. ("MLCP") or its
Affiliates shall cease to beneficially own and control,
directly or indirectly, at least 51% of the issued and
outstanding shares of capital stock of Company entitled
(without regard to the occurrence of any contingency) to vote
for the election of members of the Board of Directors of
Company; or
8.12 Invalidity of Subsidiary Guaranty.
---------- -- ---------- --------
Upon execution and delivery thereof, the Subsidiary
Guaranty for any reason, other than the satisfaction in full
of all Obligations, ceases to be in full force and effect
(other than in accordance with its terms) or is declared to be
null and void, or any Loan Party denies in writing that it has
any further liability, including without limitation with
respect to future advances by Lenders, under any Loan Document
to which it is a party; or
8.13 Failure of Security.
------- -- --------
Upon execution and delivery thereof, any Collateral
Document shall, at any time, cease to be in full force and
effect (other than by reason of a release of Collateral
thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other
termination of such Collateral Document in accordance with the
terms hereof or thereof) or shall be declared null and void,
or the validity or enforceability thereof shall be contested
in writing by any Loan Party, or the Agent shall not have or
shall cease to have a valid and perfected first priority
security interest (subject to Permitted Encumbrances) in any
Collateral purported to be covered thereby having a fair
market value individually or in the aggregate exceeding
$1,000,000, in each case for any reason other than the failure
of Agent or any Lender to take any action within its control;
or
8.14 Failure to Consummate Spin-Off.
------- -- ---------- --------
The Spin-Off shall not be consummated in accordance
with this Agreement concurrently with the making of the
initial Loans or the Spin-Off shall be unwound, reversed or
otherwise rescinded in whole or in part for any reason; or
8.15 Termination of Logistical Services Agreement.
----------- -- ---------- -------- ---------
The Spin-Off Agreement described in clause (iv) of
the definition thereof shall terminate as a result of any
reason whatsoever; or
8.16 Incurrence of Liability Relating to Spin-Off.
---------- -- --------- -------- -- --------
Company shall incur any liability as a result of the
incurrence by Pathmark of any liability for any Tax for which
Company has agreed to indemnify Pathmark pursuant to the Spin-
Off Agreement described in clause (ii) of the definition of
the term "Spin-Off Agreements" and the incurrence of such
liability by Company would reasonably be expected to result in
a Material Adverse Effect; or
8.17 Material Difference in Closing Date Balance Sheets.
-------- ---------- -- ------- ---- ------- ------
The inventory line item set forth in the pro forma
unaudited consolidated balance sheet of Company and its
Subsidiaries as at the Closing Date delivered pursuant to
subsection 4.1S shall exceed the corresponding inventory line
item set forth in the consolidated balance sheet of Company
and its Subsidiaries as at the Closing Date delivered pursuant
to subsection 6.1(xviii) by more than $30,000,000:
THEN (i) upon the occurrence of any Event of Default described
in subsection 8.6 or 8.7, each of (a) the unpaid principal
amount of and accrued interest on the Loans, (b) an amount
equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not
any beneficiary under any such Letter of Credit shall have
presented, or shall be entitled at such time to present, the
drafts or other documents or certificates required to draw
under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable,
without presentment, demand, protest or other requirements of
any kind, all of which are hereby expressly waived by Company,
and the obligation of each Lender to make any Loan, the
obligation of Agent to issue any Letter of Credit and the
right of any Lender to issue any Letter of Credit hereunder
shall thereupon terminate, and (ii) upon the occurrence and
during the continuation of any other Event of Default, Agent
shall, upon the written request of Requisite Lenders, by
written notice to Company, declare all or any portion of the
amounts described in clauses (a) through (c) above to be, and
the same shall forthwith become, immediately due and payable,
and the obligation of each Lender to make any Loan, the
obligation of Agent to issue any Letter of Credit and the
right of any Lender to issue any Letter of Credit hereunder
shall thereupon terminate; provided that the foregoing shall
--------
not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to repay
Swing Line Loans or purchase participations therein as
provided in subsection 2.1A(ii).
Any amounts described in clause (b) above, when
received by Agent, shall be held by Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied
as therein provided.
Notwithstanding anything contained in the second
preceding paragraph, if at any time within 60 days after an
acceleration of the Loans pursuant to such paragraph Company
shall pay all arrears of interest and all payments on account
of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the
rates specified in this Agreement) and all Events of Default
and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to subsection 10.6, then
Requisite Lenders, by written notice to Company, may at their
option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent
Event of Default or Potential Event of Default or impair any
right consequent thereon. The provisions of this paragraph
are intended merely to bind Lenders to a decision which may be
made at the election of Requisite Lenders and are not intended
to benefit Company and do not grant Company the right to
require Lenders to rescind or annul any acceleration
hereunder, even if the conditions set forth herein are met.
Section 9. AGENT, CO-AGENT, COLLATERAL AGENT AND
--------
SUPPLEMENTAL COLLATERAL AGENTS
9.1 Appointment.
-----------
A. Agent. Bankers is hereby appointed Agent hereunder
and under the other Loan Documents and each Lender hereby
authorizes Agent to act as its agent in accordance with the
terms of this Agreement and the other Loan Documents. Agent
agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable.
B. CO-AGENT. Heller is hereby appointed as CO-AGENT
-------- --------
hereunder and under the other Loan Documents (in such
capacity, "CO-AGENT") and each Lender hereby authorizes CO-
-------- ---
AGENT to act as CO-AGENT in accordance with the terms of this
----- --------
Agreement and the other Loan Documents. CO-AGENT agrees to
--------
act upon the express conditions contained in this Agreement
and the other Loan Documents, as applicable.
C. Collateral Agent. Heller is hereby appointed as
collateral agent hereunder and under the other Loan Documents
(in such capacity, "Collateral Agent") and Agent and each
Lender hereby authorize Collateral Agent to act as collateral
agent in accordance with the terms of this Agreement and the
other Loan Documents. Collateral Agent agrees to act upon the
express conditions in this Agreement and the other Loan
Documents, as applicable.
Anything contained in any of the Loan Documents to
the contrary notwithstanding, each and every right, power,
privilege or duty expressed or intended by this Agreement or
any of the other Loan Documents to be exercised by or vested
in or conveyed to Agent with respect to any Collateral shall
be exercisable by and vest in Collateral Agent to the extent
necessary to enable Collateral Agent to exercise such rights,
powers and privileges with respect to such Collateral and to
perform such duties with respect to such Collateral, and every
covenant and obligation contained in the Loan Documents and
necessary to the exercise or performance thereof by Collateral
Agent shall run to and be enforceable by either of Collateral
Agent and Agent; provided that Agent and Collateral Agent
--------
shall consult with each other regarding the exercise by either
of such parties of any such right, power or privilege or the
performance by either of such parties of any such duty.
In furtherance of the foregoing, (i) Agent hereby
appoints Collateral Agent as Agent's attorney-in-fact, with
full authority in the place and stead of Agent and in the name
of Agent or Collateral Agent, to exercise such rights, powers
and privileges and to perform such duties, and (ii) should any
instrument in writing from Agent or Company be reasonably
required by Collateral Agent for more fully and certainly
vesting in and confirming to it such rights, powers,
privileges and duties, any and all such instruments in writing
shall, promptly upon request by Collateral Agent, be executed,
acknowledged and delivered by Agent or Company, as the case
may be. The power of attorney granted by Agent in the
immediately preceding sentence shall be irrevocable; provided
--------
that, in the event Collateral Agent shall resign or be removed
in accordance with subsection 9.6A, such power of attorney
shall immediately terminate and all the rights, powers,
privileges and duties of Collateral Agent shall thereafter be
exercisable solely by Agent.
D. Supplemental Collateral Agents. It is the purpose
of this Agreement and the other Loan Documents that there
shall be no violation of any law of any jurisdiction denying
or restricting the right of banking corporations or
associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation
under this Agreement or any of the other Loan Documents, and
in particular in case of the enforcement of any of the Loan
Documents, or in case Agent or Collateral Agent deems that by
reason of any present or future law of any jurisdiction it may
not exercise any of the rights, powers or remedies granted
herein or in any of the other Loan Documents, or take any
other action which may be desirable or necessary in connection
therewith, it may be necessary that Agent or Collateral Agent
appoint an additional individual or institution (including
without limitation Bankers Trust Company New Jersey Limited)
as a separate trustee, co-trustee, separate collateral agent
or collateral CO-AGENT (any such additional individual or
--------
institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as
"Supplemental Collateral Agents").
In the event that Agent or Collateral Agent appoints
a Supplemental Collateral Agent with respect to any
Collateral, each and every right, power, privilege or duty
expressed or intended by this Agreement or any of the other
Loan Documents to be exercised by or vested in or conveyed to
Agent with respect to such Collateral shall be exercisable by
and vest in such Supplemental Collateral Agent to the extent,
and only to the extent, necessary to enable such Supplemental
Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such
duties with respect to such Collateral, and every covenant and
obligation contained in the Loan Documents and necessary to
the exercise or performance thereof by such Supplemental
Collateral Agent shall run to and be enforceable by either
such Supplemental Collateral Agent or Agent or Collateral
Agent.
Should any instrument in writing from Company be
required by any Supplemental Collateral Agent so appointed by
Agent or Collateral Agent for more fully and certainly vesting
in and confirming to him or it such rights, powers, privileges
and duties, any and all such instruments in writing shall,
promptly upon request by Agent or Collateral Agent, be
executed, acknowledged and delivered by Company. In case any
Supplemental Collateral Agent, or a successor thereto, shall
die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest
in and be exercised by Agent and Collateral Agent until the
appointment of a new Supplemental Collateral Agent.
E. Generally. The provisions of this Section 9 are
solely for the benefit of Agent, CO-AGENT, Collateral Agent,
--------
Supplemental Collateral Agents and Lenders, and Company shall
have no rights as a third party beneficiary of any of the
provisions thereof. In performing their functions and duties
under this Agreement or any of the other Loan Documents,
Agent, CO-AGENT, Collateral Agent and Supplemental Collateral
--------
Agents shall act solely as agents of Lenders (and, in the case
of Collateral Agent and Supplemental Collateral Agents, as
agents of Agent) and do not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency
or trust with or for Company or any of its Subsidiaries.
9.2 Powers; General Immunity.
------- ------- --------
A. Duties Specified. Each Lender irrevocably author-
izes Agent, CO-AGENT, Collateral Agent and each Supplemental
--------
Collateral Agent to take such action on such Lender's behalf
and to exercise such powers hereunder and under the other Loan
Documents as are specifically delegated to Agent, CO-AGENT,
--------
Collateral Agent or such Supplemental Collateral Agent by the
terms hereof and thereof, together with such powers as are
reasonably incidental thereto. Agent, CO-AGENT, Collateral
--------
Agent and each Supplemental Collateral Agent shall have only
those duties and responsibilities that are expressly specified
in this Agreement and the other Loan Documents and they may
perform such duties by or through their respective agents or
employees. Neither Agent nor CO-AGENT nor Collateral Agent
--------
nor any Supplemental Collateral Agent shall have, by reason of
this Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this
Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose
upon Agent, CO-AGENT, Collateral Agent or any Supplemental
--------
Collateral Agent any obligations in respect of this Agreement
or any of the other Loan Documents except as expressly set
forth herein or therein.
B. No Responsibility for Certain Matters. Neither
Agent nor CO-AGENT nor Collateral Agent nor any Supplemental
--------
Collateral Agent shall be responsible to any Lender for the
execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this
Agreement or any other Loan Document or for any
representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or
in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by
Agent, CO-AGENT, Collateral Agent or any Supplemental
--------
Collateral Agent to Lenders or by or on behalf of Company to
Agent, CO-AGENT, Collateral Agent or any Supplemental
--------
Collateral Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any
other Person liable for the payment of any Obligations, nor
shall Agent nor CO-AGENT nor Collateral Agent nor any
--------
Supplemental Collateral Agent be required to ascertain or
inquire as to the performance or observance of any of the
terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of
Default or Potential Event of Default. Anything contained in
this Agreement to the contrary notwithstanding, Agent shall
not have any liability arising from confirmations of the
amount of outstanding Loans or the Letter of Credit Usage or
the component amounts thereof.
C. Exculpatory Provisions. Neither Agent nor CO-AGENT
--------
nor Collateral Agent nor any Supplemental Collateral Agent nor
any of their respective officers, directors, employees or
agents shall be liable to Lenders for any action taken or
omitted by Agent, CO-AGENT, Collateral Agent or such
--------
Supplemental Collateral Agent hereunder or under any of the
other Loan Documents or in connection herewith or therewith
except to the extent caused by Agent's or CO-AGENT's or
--------
Collateral Agent's or such Supplemental Collateral Agent's
gross negligence or willful misconduct. If Agent or CO-AGENT
--------
or Collateral Agent or any Supplemental Collateral Agent shall
request instructions from Lenders with respect to any act or
action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents, Agent
or CO-AGENT or Collateral Agent or such Supplemental
--------
Collateral Agent shall be entitled to refrain from such act or
taking such action unless and until Agent or CO-AGENT or
--------
Collateral Agent or such Supplemental Collateral Agent shall
have received instructions from Requisite Lenders. Without
prejudice to the generality of the foregoing, (i) each of
Agent, CO-AGENT, Collateral Agent and Supplemental Collateral
--------
Agents shall be entitled to rely, and shall be fully protected
in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions
and judgments of attorneys (who may be attorneys for Company
and its Subsidiaries), accountants, experts and other profes-
sional advisors selected by it; and (ii) no Lender shall have
any right of action whatsoever against Agent or CO-AGENT or
--------
Collateral Agent or any Supplemental Collateral Agent as a
result of Agent or CO-AGENT or Collateral Agent or such
--------
Supplemental Collateral Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the
other Loan Documents in accordance with the instructions of
Requisite Lenders. Each of Agent, CO-AGENT, Collateral Agent
--------
and Supplemental Collateral Agents shall be entitled to
refrain from exercising any power, discretion or authority
vested in it under this Agreement or any of the other Loan
Documents unless and until it has obtained the instructions of
Requisite Lenders.
D. Agent, CO-AGENT, Collateral Agent and Supplemental
--------
Collateral Agents Entitled to Act as Lenders. The agency
hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations
upon, Agent or CO-AGENT or Collateral Agent or, if any
--------
Supplemental Collateral Agent is or becomes a Lender, such
Supplemental Collateral Agent, in its individual capacity as a
Lender hereunder. With respect to its participation in the
Loans and the Letters of Credit, Agent, CO-AGENT, Collateral
--------
Agent and, if any Supplemental Collateral Agent is or becomes
a Lender, such Supplemental Collateral Agent, shall have the
same rights and powers hereunder as any other Lender and may
exercise the same as though it were not performing the duties
and functions delegated to it hereunder, and the term "Lender"
or "Lenders" or any similar term shall, unless the context
clearly otherwise indicates, include Agent, CO-AGENT,
--------
Collateral Agent and, if any Supplemental Collateral Agent is
or becomes a Lender, such Supplemental Collateral Agent, in
its individual capacity. Agent, CO-AGENT, Collateral Agent
--------
and, if any Supplemental Collateral Agent is or becomes a
Lender, such Supplemental Collateral Agent, and their
respective Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial
advisory or other business with Company or any of its
Affiliates as if it were not performing the duties specified
herein, and may accept fees and other consideration from
Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For
--------------- --- ----------- -- -------------- ---
Appraisal of Creditworthiness.
--------- -- ----------------
Each Lender represents and warrants that it has made
its own independent investigation of the financial condition
and affairs of Company and its Subsidiaries in connection with
the making of the Loans and the issuance of Letters of Credit
hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company. Neither
Agent nor CO-AGENT nor Collateral Agent nor any Supplemental
--------
Collateral Agent shall have any duty or responsibility, either
initially or on a continuing basis, to make any such investi-
gation or any such appraisal on behalf of Lenders or to
provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and
neither Agent nor CO-AGENT nor Collateral Agent nor any
--------
Supplemental Collateral Agent shall have any responsibility
with respect to the accuracy of or the completeness of any
information provided to Lenders.
9.4 Right to Indemnity.
----- -- ---------
Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify Agent, CO-AGENT, Collateral
--------
Agent and each Supplemental Collateral Agent, to the extent
that Agent, CO-AGENT, Collateral Agent and such Supplemental
--------
Collateral Agent shall not have been reimbursed by Company,
for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and
disbursements) or disbursements of any kind or nature what-
soever which may be imposed on, incurred by or asserted
against Agent, CO-AGENT, Collateral Agent or such Supplemental
--------
Collateral Agent in performing its duties hereunder or under
the other Loan Documents or otherwise in their respective
capacities as Agent, CO-AGENT, Collateral Agent and
--------
Supplemental Collateral Agent in any way relating to or
arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of
--------
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's or CO-AGENT's or Collateral Agent's or
--------
such Supplemental Collateral Agent's gross negligence or
willful misconduct. If any indemnity furnished to Agent, CO-
---
AGENT, Collateral Agent or any Supplemental Collateral Agent
-----
for any purpose shall, in the opinion of Agent, CO-AGENT,
--------
Collateral Agent or such Supplemental Collateral Agent, be
insufficient or become impaired, Agent, CO-AGENT, Collateral
--------
Agent or such Supplemental Collateral Agent may call for addi-
tional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is
furnished.
9.5 Payee of Note Treated as Owner.
----- -- ---- ------- -- -----
Agent, CO-AGENT, Collateral Agent and Supplemental
--------
Collateral Agents may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof shall
have been filed with Agent. Any request, authority or consent
of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of
any Note shall be conclusive and binding on any subsequent
holder, transferee or assignee of that Note or of any Note or
Notes issued in exchange therefor.
9.6 Successor Agent and Swing Line Lender.
--------- ----- --- ----- ---- ------
A. Successor Agent, etc. Agent, CO-AGENT,
--------
Collateral Agent or any Supplemental Collateral Agent may
resign at any time by giving 30 days' prior written notice
thereof to Lenders and Company, and Agent, CO-AGENT,
--------
Collateral Agent or any Supplemental Collateral Agent may be
removed at any time with or without cause by an instrument or
concurrent instruments in writing delivered to Company and
Agent, CO-AGENT, Collateral Agent or such Supplemental
--------
Collateral Agent, as the case may be, and signed by Requisite
Lenders. Upon any such notice of resignation or any such
removal (i) in the case of a resignation or removal of CO-
---
AGENT or Collateral Agent, there shall be no successor CO-
----- ---
AGENT or Collateral Agent, (ii) in the case of a resignation
-----
or removal of any Supplemental Collateral Agent, Agent or
Collateral Agent may appoint a successor Supplemental
Collateral Agent as contemplated by subsection 9.1D, and (iii)
in the case of a resignation or removal of Agent, Requisite
Lenders shall have the right, upon five Business Days' notice
to Company, to appoint a successor Agent. Upon the acceptance
of any appointment as Agent or Supplemental Collateral Agent
hereunder by a successor Agent or Supplemental Collateral
Agent, that successor Agent or Supplemental Collateral Agent
shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or
removed Agent or Supplemental Collateral Agent and the
retiring or removed Agent or Supplemental Collateral Agent
shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Agent's, CO-AGENT's,
--------
Collateral Agent's or Supplemental Collateral Agent's
resignation or removal hereunder as Agent, CO-AGENT,
--------
Collateral Agent or Supplemental Collateral 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, CO-AGENT, Collateral Agent or Supplemental Collateral
--------
Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation
or removal of Agent pursuant to subsection 9.6A shall also
constitute the resignation or removal of Bankers or its
successor as Swing Line Lender, and any successor Agent
appointed pursuant to subsection 9.6A shall, upon its
acceptance of such appointment, become the successor Swing
Line Lender for all purposes hereunder. In such event
(i) Company shall prepay any outstanding Swing Line Loans made
by the retiring or removed Agent in its capacity as Swing Line
Lender, (ii) upon such prepayment, the retiring or removed
Agent and Swing Line Lender shall surrender the Swing Line
Note held by it to Company for cancellation, and (iii) Company
shall issue a new Swing Line Note to the successor Agent and
Swing Line Lender substantially in the form of Exhibit VI
------- --
annexed hereto, in the principal amount of the Swing Line Loan
Commitment then in effect and with other appropriate
insertions.
9.7 Collateral Documents.
---------- ---------
Each Lender hereby further authorizes Agent and, to
the extent directed to do so by Agent or Collateral Agent,
each Supplemental Collateral Agent to enter into the
Collateral Documents as secured party on behalf of and for the
benefit of Lenders and agrees to be bound by the terms of the
Collateral Documents; provided that neither Agent nor
--------
Collateral Agent nor any Supplemental Collateral Agent shall
enter into or consent to any amendment, modification,
termination or waiver of any provision contained in the
Collateral Documents without the prior consent of Requisite
Lenders. Each Lender agrees that no Lender shall have any
right individually to realize upon the Subsidiary Guaranty or
any of the Collateral under the Collateral Documents, it being
understood and agreed that all rights and remedies under the
Collateral Documents may be exercised solely by Agent,
Collateral Agent and Supplemental Collateral Agents for the
benefit of Lenders and the other beneficially interested
parties under the Collateral Documents and the other Loan
Documents in accordance with the terms thereof.
Section 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of
----------- --- -------------- -- ----- --- ------- --
Credit.
------
A. General. Each Lender shall have the right at any
time to (i) sell, assign, transfer or negotiate to any
Eligible Assignee, or (ii) sell participations to any Person
in, all or any part of any Loan or Loans made by it or its
Commitments or its Letters of Credit or participations therein
or any other interest herein or in any other Obligations owed
to it; provided that no such assignment or participation
--------
shall, without the consent of Company, require Company to file
a registration statement with the Securities and Exchange
Commission or apply to qualify such assignment or
participation of the Loans, the Letters of Credit or
participations therein or the other Obligations under the
securities laws of any state. Except as otherwise provided in
this subsection 10.1, no Lender shall, as between Company and
such Lender, be relieved of any of its obligations hereunder
as a result of any sale, assignment, transfer or negotiation
of, or any granting of participations in, all or any part of
the Loans, the Commitments, the Letters of Credit or
participations therein or the other Obligations owed to such
Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Loan,
------- --- ----- -- -----------
Commitment, Letter of Credit or participation therein or
other Obligation may (a) be assigned in any amount (of a
constant and not a varying percentage) to another Lender,
or to an Affiliate of the assigning Lender or another
Lender, with the giving of notice to Company and Agent
and, in the case of an assignment to an Affiliate of the
assigning Lender where the assigning Lender can
reasonably foresee that such assignment would result in a
requirement on the part of Company to pay any greater
amount pursuant to subsection 2.6D or 2.7 than Company
would have been required to pay to the assigning Lender
in respect of the amount of the assignment effected by
such assigning Lender to such Affiliate had no such
assignment occurred, with the consent of Company to such
assignment (which consent shall not be unreasonably
withheld), (b) be assigned in an amount (of a constant
and not a varying percentage) of not less than $5,000,000
(or such lesser amount as shall constitute the aggregate
amount of all Loans, Commitments, Letters of Credit and
participations therein and other Obligations of the
assigning Lender) to any other Eligible Assignee with the
consent of Company and Agent (which consent of Company
and Agent shall not be unreasonably withheld), or (c) be
assigned in accordance with the provisions of subsection
2.1E. To the extent of any such assignment in accordance
with clause (a), (b) or (c) above, the assigning Lender
shall be relieved of its obligations with respect to its
Loans, Commitments, Letters of Credit or participations
therein or other Obligations or the portion thereof so
assigned. The parties to each such assignment described
in clause (a) or (b) above shall execute and deliver to
Agent, for its acceptance, an Assignment and Acceptance
in substantially the form of Exhibit XII annexed hereto,
------- ---
together with (1) a processing fee of $1,500 in the case
of an assignment to another Lender or (2) a processing
fee of $2,500 in the case of an assignment to any other
Eligible Assignee and such certificates, documents or
other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee
under such Assignment and Acceptance may be required to
deliver to Agent pursuant to subsection 2.7B(iii). The
parties to each such assignment described in clause (c)
above shall execute and deliver to Agent, and Agent shall
accept, an Extension Assignment and Acceptance in
substantially the form of Exhibit XIII annexed hereto in
------- ----
accordance with the provisions of subsection 2.1E. Upon
such execution, delivery and acceptance, from and after
the effective date of the assignments and assumptions
contemplated by such Assignment and Acceptance or such
Extension Assignment and Acceptance, as the case may be,
(y) each assignee thereunder shall be a party hereto and,
to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and
Acceptance or such Extension Assignment and Acceptance,
as the case may be, shall have the rights and obligations
of a Lender hereunder and (z) each assigning Lender
thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance or such Extension
Assignment and Acceptance, as the case may be, relinquish
its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and
Acceptance or an Extension Assignment and Acceptance
covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto). The
Commitments hereunder shall be modified to reflect the
Commitment of such assignee and any remaining Commitment
of such assigning Lender and, if any such assignment
pursuant to an Assignment and Acceptance occurs after the
issuance of the Notes hereunder, new Notes shall, upon
surrender of such assigning Lender's Notes, be issued to
such assignee and to such assigning Lender as necessary
to reflect the new Commitments of such assignee and such
assigning Lender.
(ii) Acceptance by Agent. Upon its receipt of an
---------- -- -----
Assignment and Acceptance executed by an assigning Lender
and an assignee representing that it is an Eligible
Assignee, together with the processing fee referred to in
subsection 10.1B(i) and any certificates, documents or
other evidence with respect to United States federal
income tax withholding matters that such assignee may be
required to deliver to Agent pursuant to subsection
2.7B(iii), Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of
Exhibit XII annexed hereto and if Company and Agent have
------- ---
consented to the assignment evidenced thereby (in each
case to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such Assignment and
Acceptance by executing a counterpart thereof as provided
therein (which acceptance shall evidence any required
consent of Agent to such assignment), and (b) give prompt
notice thereof to Company. Agent shall maintain a copy
of each Assignment and Acceptance delivered to and
accepted by it as provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation,
other than an Affiliate of the Lender granting such
participation, shall not be entitled to require such Lender to
take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final
maturity date of any Loan allocated to such participation or
(ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation,
and all amounts payable by Company hereunder (including
without limitation amounts payable to such Lender pursuant to
subsections 2.6D, 2.7 and 3.6) shall be determined as if such
Lender had not sold such participation. Company and each
Lender hereby acknowledge and agree that, solely for purposes
of subsections 10.4 and 10.5, (a) any participation will give
rise to a direct obligation of Company to the participant and
(b) the participant shall be considered to be a "Lender".
D. Assignments to Federal Reserve Bank. In addition to
the assignments and participations permitted under the
foregoing provisions of this subsection 10.1, any Lender may
assign and pledge all or any portion of its Loans, the other
Obligations owed to such Lender and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A
of the Board of Governors of the Federal Reserve System and
any operating circular issued by such Federal Reserve Bank.
No Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of
any such assignment and pledge.
E. Information. Each Lender may furnish any informa-
tion concerning Company and its Subsidiaries in the possession
of that Lender from time to time to assignees and participants
(including prospective assignees and participants); provided,
--------
however, that prior to being furnished with any such
-------
information which is non-public information obtained pursuant
to the requirements of this Agreement which has been
identified as confidential by Company, the assignee or
participant or prospective assignee or participant shall agree
to preserve the confidentiality of such information in
accordance with subsection 10.19.
10.2 Expenses.
--------
Whether or not the transactions contemplated hereby
shall be consummated, Company agrees to pay promptly (i) all
the actual and reasonable costs and expenses of preparation of
the Loan Documents; (ii) all the costs of furnishing all
opinions by counsel for Company (including without limitation
any opinions requested by Lenders as to any legal matters
arising hereunder) and of Company's performance of and
compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the
other Loan Documents including, without limitation, with
respect to confirming compliance with environmental and
insurance requirements; (iii) the reasonable fees, expenses
and disbursements of counsel to Agent (including allocated
costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Docu-
ments and the Loans and any consents, amendments, waivers or
other modifications hereto or thereto and any other documents
or matters requested by Company or any of its Subsidiaries;
(iv) all the actual costs and reasonable expenses of creating
and perfecting Liens in favor of Agent on behalf of Lenders
pursuant to any Loan Document, including filing and recording
fees and expenses, title insurance, fees and expenses of
counsel for providing such opinions as Agent or Requisite
Lenders may reasonably request and fees and expenses of legal
counsel to Agent; (v) all the actual costs and reasonable
expenses of obtaining and reviewing any appraisals provided
for under subsection 4.1F or 6.9, any environmental audits or
reports provided for under subsection 4.1G or 6.9 and any
audits or reports provided for under subsection 4.1K or 6.5
with respect to Inventory and accounts receivable of Company;
(vi) the reasonable fees, expenses and disbursements of any
accountants retained by Agent in connection with the review
and analysis prior to the Closing Date of any financial
statements of Company and its Subsidiaries or any other
reports furnished to Agent by or on behalf of Company or any
of its Subsidiaries pursuant to or for use in connection with
this Agreement; (vii) all other actual and reasonable costs
and expenses incurred by Agent in connection with the negotia-
tion, preparation and execution of the Loan Documents and the
transactions contemplated hereby and thereby; and (viii) after
the occurrence of an Event of Default, all costs and expenses,
including reasonable attorneys' fees (including allocated
costs of internal counsel) and costs of settlement, incurred
by Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from Company or any of its
Subsidiaries hereunder or under the other Loan Documents by
reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 Indemnity.
---------
In addition to the payment of expenses pursuant to
subsection 10.2, whether or not the transactions contemplated
hereby shall be consummated, Company agrees to defend,
indemnify, pay and hold harmless Agent, CO-AGENT, Collateral
--------
Agent, Supplemental Collateral Agents and Lenders, and the
officers, directors, employees, agents and affiliates of
Agent, CO-AGENT, Collateral Agent, Supplemental Collateral
--------
Agents and Lenders (collectively called the "Indemnitees")
from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature
whatsoever (including without limitation the reasonable fees
and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or
not any such Indemnitee shall be designated as a party or a
potential party thereto), whether direct, indirect or
consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including
without limitation securities and commercial laws, statutes,
rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this
Agreement or the other Loan Documents or any Spin-Off
Agreements or the transactions contemplated hereby or thereby
(including without limitation Lenders' agreement to make the
Loans hereunder or the use or intended use of the proceeds of
any of the Loans or the issuance of Letters of Credit
hereunder or the use or intended use of any of the Letters of
Credit) or the statements contained in the commitment letter
delivered by any Lender to Company with respect thereto
(collectively called the "Indemnified Liabilities"); provided
--------
that Company shall not have any obligation to any Indemnitee
hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the
gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent
jurisdiction; and provided, further that in connection with
investigating, preparing to defend, or defending against any
Indemnified Liability of, to or against more than one
Indemnitee, such investigation, preparation or defense shall
be conducted by the same legal counsel on behalf of all such
Indemnitees except to the extent that one or more of such
Indemnitees determines in good faith that there is a conflict
of interests between such Indemnitee or Indemnitees and some
or all of the remaining Indemnitees. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction
of all Indemnified Liabilities incurred by the Indemnitees or
any of them.
10.4 Set Off; Security Interest in Deposit Accounts.
--- ---- -------- -------- -- ------- --------
In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such
rights, upon the occurrence of any Event of Default each
Lender is hereby authorized by Company at any time or from
time to time, without notice to Company or to any other
Person, any such notice being hereby expressly waived, to set
off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, Indebt-
edness evidenced by certificates of deposit, whether matured
or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender to or
for the credit or the account of Company against and on
account of the obligations and liabilities of Company to that
Lender under this Agreement, the Notes, the Letters of Credit
and participations therein, including, but not limited to, all
claims of any nature or description arising out of or
connected with this Agreement, the Notes, the Letters of
Credit and participations therein or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made
any demand hereunder or (ii) the principal of or the interest
on the Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become
due and payable pursuant to Section 8 and although said
obligations and liabilities, or any of them, may be contingent
or unmatured. Company hereby further grants to Agent and each
Lender a security interest in all deposits and accounts
maintained with Agent or such Lender as security for the
Obligations.
10.5 Ratable Sharing.
------- -------
Lenders hereby agree among themselves that if any of
them shall, whether by voluntary payment, by realization upon
security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the
enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as
cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of
principal, interest, amounts payable in respect of Letters of
Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collec-
tively, the "Aggregate Amounts Due" to such Lender) which is
greater than the proportion received by any other Lender in
respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment
shall (i) notify Agent and each other Lender of the receipt of
such payment and (ii) apply a portion of such payment to
purchase participations (which it shall be deemed to have
purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such
payment) in the Aggregate Amounts Due to the other Lenders so
that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts
Due to them; provided that if all or part of such
--------
proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing
Lender ratably to the extent of such recovery, but without
interest. Company expressly consents to the foregoing
arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies
owing by Company to that holder with respect thereto as fully
as if that holder were owed the amount of the participation
held by that holder.
10.6 Amendments and Waivers.
---------- --- -------
No amendment, modification, termination or waiver of
any provision of this Agreement or of the Notes, or consent to
any departure by Company therefrom, shall in any event be
effective without the written concurrence of Requisite
Lenders; provided that any amendment, modification, termina-
--------
tion or waiver which: increases the amount of the Commitments
or reduces the principal amount of the Loans; changes each
Lender's Pro Rata Share; changes the definition of "Requisite
Lenders"; changes in any manner any provision of the Agreement
which, by its terms, expressly requires the approval or
concurrence of all Lenders; postpones the scheduled final
maturity dates of the Loans or the dates on which interest or
any fees are payable (other than any waiver of the requirement
that any Eurodollar Rate Loan may not be voluntarily prepaid
prior to the expiration of the Interest Period applicable
thereto); decreases the interest rates borne by the Loans or
the amount of any fees payable hereunder; increases the
maximum duration of Interest Periods; reduces the amount or
postpones the due date of any amount payable in respect of, or
postpones the required expiration date of, any Letters of
Credit; changes in any manner the obligations of Lenders
relating to the purchase of participations in Letters of
Credit; increases the percentage set forth in the definition
of the term "Borrowing Base"; releases any Lien granted in
favor of Agent with respect to any Collateral consisting of
Inventory other than in accordance with the terms of the Loan
Documents; or changes in any manner the provisions contained
in subsection 8.1 or this subsection 10.6 shall be effective
only if evidenced by a writing signed by or on behalf of all
Lenders. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in
Section 4 shall be effective only if evidenced by a writing
signed by or on behalf of Agent and CO-AGENT and Requisite
--------
Lenders, (ii) no amendment, modification, termination or
waiver of any provision of any Note shall be effective without
the written concurrence of the Lender which is the holder of
that Note, (iii) no amendment, modification, termination or
waiver of any provision of Section 9 or of any other provision
of this Agreement which, by its terms, expressly requires the
approval or concurrence of Agent and/or CO-AGENT shall be
--------
effective without the written concurrence of Agent and/or CO-
---
AGENT, as the case may be, and (iv) no amendment,
-----
modification, termination or waiver of any provision of
subsection 2.1A(ii) or any other provision of this Agreement
relating to the Swing Line Loan Commitment or the Swing Line
Loans shall be effective without the written concurrence of
Swing Line Lender. Agent may, but shall have no obligation
to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
No notice to or demand on Company in any case shall entitle
Company to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termi-
nation, waiver or consent effected in accordance with this
subsection 10.6 shall be binding upon each holder of the Notes
at the time outstanding, each future holder of the Notes and,
if signed by Company, on Company.
10.7 Independence of Covenants.
------------ -- ---------
All covenants hereunder shall be given independent
effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occur-
rence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.
10.8 Notices.
-------
Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to
be given shall be in writing and may be personally served,
telecopied or sent by United States mail or courier service
and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telecopy, or
four Business Days after depositing it in the United States
mail, registered or certified, with postage prepaid and
properly addressed; provided that notices to Agent and CO-
-------- ---
AGENT shall not be effective until received. For the purposes
-----
hereof, the address of each party hereto shall be as set forth
under such party's name on the signature pages hereof or
(i) as to Company and Agent, such other address as shall be
designated by such Person in a written notice delivered to the
other parties hereto and (ii) as to each other party, such
other address as shall be designated by such party in a
written notice delivered to Agent.
10.9 Survival of Representations, Warranties and Agreements.
-------- -- ---------------- ---------- --- ----------
A. All representations, warranties and agreements made
herein shall survive the execution and delivery of this
Agreement and the making of the Loans and the issuance of the
Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of Company set
forth in subsections 2.6D, 2.7, 3.5A, 3.6, 10.2 and 10.3 and
the agreements of Lenders set forth in subsections 9.2C, 9.4,
10.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the
termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies
------- -- ---------- --- ------- --------
Cumulative.
----------
No failure or delay on the part of Agent or any
Lender in the exercise of any power, right or privilege
hereunder or under any Note or Letter of Credit shall impair
such power, right or privilege or be construed to be a waiver
of any default or acquiescence therein, nor shall any single
or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other
power, right or privilege. All rights and remedies existing
under this Agreement, the Notes, the Letters of Credit and the
other Loan Documents are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
------------ -------- --- -----
None of Agent, CO-AGENT, Collateral Agent, any
--------
Supplemental Collateral Agent or any Lender shall be under any
obligation to marshal any assets in favor of Company or any
other party or against or in payment of any or all of the
Obligations. To the extent that Company makes a payment or
payments to Agent, CO-AGENT, Collateral Agent, Supplemental
--------
Collateral Agents or Lenders (or to Agent, CO-AGENT,
--------
Collateral Agent or Supplemental Collateral Agents for the
benefit of Lenders), or Agent, CO-AGENT, Collateral Agent,
--------
Supplemental Collateral Agents or Lenders enforce any security
interests or exercise their rights of setoff, and such payment
or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or
any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor or
related thereto, shall be revived and continued in full force
and effect as if such payment or payments had not been made or
such enforcement or setoff had not occurred.
10.12 Severability.
------------
In case any provision in or obligation under this
Agreement or the Notes shall be invalid, illegal or un-
enforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or
of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders'
----------- -------- ----------- ------ -- --------
Rights.
------
The obligations of Lenders hereunder are several and
no Lender shall be responsible for the obligations or Commit-
ments of any other Lender hereunder. Nothing contained herein
or in any other Loan Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time
hereunder to each Lender shall be a separate and independent
debt, and each Lender shall be entitled to protect and enforce
its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
10.14 Headings.
--------
Section and subsection headings in this Agreement
are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
10.15 Applicable Law.
---------- ---
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
10.16 Successors and Assigns.
---------- --- -------
This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall
inure to the benefit of the parties hereto and the successors
and permitted assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1).
Neither Company's rights or obligations hereunder nor any
interest therein may be assigned or delegated by Company
without the prior written consent of all Lenders.
10.17 Consent to Jurisdiction and Service of Process.
------- -- ------------ --- ------- -- -------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE CITY AND STATE
OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT
COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPER-
TIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURIS-
DICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT,
SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION. Company hereby
agrees that service of all process in any such proceedings in
any such court may be made by registered or certified mail,
return receipt requested, to Company at its address provided
in subsection 10.8, such service being hereby acknowledged by
Company to be sufficient for personal jurisdiction in any
action against Company in the State of New York and to be
otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of any
Lender to bring proceedings against Company in the courts of
any other jurisdiction.
10.18 Waiver of Jury Trial.
------ -- ---- -----
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES
TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The
scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of
duty claims and all other common law and statutory claims.
Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each
has already relied on this waiver in entering into this
Agreement, and that each will continue to rely on this waiver
in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with
its legal counsel and that it knowingly and voluntarily waives
its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THE LOANS MADE HEREUNDER. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the
court.
10.19 Confidentiality.
---------------
Each Lender shall hold all non-public information
obtained pursuant to the requirements of this Agreement which
has been identified as confidential by Company in accordance
with such Lender's customary procedures for handling
confidential information of this nature and in accordance with
safe and sound banking practices, it being understood and
agreed by Company that in any event a Lender may make
disclosures reasonably required by any bona fide assignee or
participant in connection with the contemplated assignment by
such Lender of any Loans or any participation therein or as
required or requested by any governmental agency or repre-
sentative thereof or pursuant to legal process; provided that,
--------
unless specifically prohibited by applicable law or court
order, each Lender shall notify Company of any request by any
governmental agency or representative thereof (other than any
such request in connection with any examination of the
financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information
prior to disclosure of such information; and provided, further
-------- -------
that in no event shall any Lender be obligated or required to
return any materials furnished by Company or any of its
Subsidiaries.
10.20 Counterparts; Effectiveness.
------------- -------------
This Agreement and any amendments, waivers, consents
or supplements hereto or in connection herewith may be
executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties
hereto and receipt by Company and Agent of written or tele-
phonic notification of such execution and authorization of
delivery thereof.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date
first written above.
COMPANY:
PLAINBRIDGE, INC.
By:
Title:
Notice Address:
Plainbridge, Inc.
301 Blair Road
P.O. Box 5021
Woodbridge, New Jersey 07095-5021
Attention: Chief Executive Officer
with a copy to:
Plainbridge, Inc.
301 Blair Road
P.O. Box 5021
Woodbridge, New Jersey 07095-5021
Attention: Corporate Secretary
LENDERS:
BANKERS TRUST COMPANY,
individually and as Agent
By:
Title:
Notice Address:
Bankers Trust Company
280 Park Avenue
New York, New York 10017
Attention: Mary Jo Jolly
with a copy to:
Bankers Trust Company
300 South Grand Avenue, 41st Floor
Los Angeles, California 90071
Attention: Michael R. Duckworth
HELLER FINANCIAL, INC.
By:
Title:
Notice Address:
101 Park Avenue
10th Floor
New York, New York 10178
Attention: HBC Portfolio Manager
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:
Title:
Notice Address:
520 Madison Avenue
39th Floor
New York, New York 10022
Attention: Patricia Loret de Mola
NATIONAL CANADA FINANCE CORPORATION
By:
Title:
Notice Address:
85 Livingston Avenue
Roseland, New Jersey 07068
Attention: John Leifer
John Richter
CREDIT AGREEMENT
DATED AS OF OCTOBER 26, 1993
AMONG
PLAINBRIDGE, INC.,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
and
BANKERS TRUST COMPANY,
as Agent
PLAINBRIDGE, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
----- -- --------
Page
----
Section 1. DEFINITIONS1
1.1 Certain Defined Terms1
1.2 Accounting Terms; Utilization of GAAP for
Purposes of Calculations Under Agreement26
1.3 Other Definitional Provisions26
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS26
2.1 Commitments; Loans26
2.2 Interest on the Loans36
2.3 Fees39
2.4 Prepayments and Reductions in Commitments;
General Provisions Regarding Payments40
2.5 Use of Proceeds46
2.6 Special Provisions Governing
Eurodollar Rate Loans46
2.7 Increased Costs; Taxes;
Capital Adequacy49
2.8 Obligation of Lenders and Issuing
Lenders to Mitigate53
2.9 Removal of a Lender53
2.10 Defaulting Lenders54
Section 3. LETTERS OF CREDIT56
3.1 Issuance of Letters of Credit and Lenders'
Purchase of Participations Therein56
3.2 Letter of Credit Fees59
3.3 Drawings and Reimbursement of Amounts Drawn
Under Letters of Credit.60
3.4 Obligations Absolute62
3.5 Indemnification; Nature of Issuing Lenders'
Duties63
3.6 Increased Costs and Taxes Relating
to Letters of Credit65
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT66
4.1 Conditions to Initial Revolving Loans
and Swing Line Loans66
4.2 Conditions to All Loans72
4.3 Conditions to Letters of Credit74
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES74
5.1 Organization, Powers, Qualification, Good
Standing, Business and Subsidiaries75
5.2 Authorization of Borrowing, etc.75
5.3 Financial Condition77
5.4 No Material Adverse Change;
No Restricted Junior Payments77
5.5 Title to Properties; Liens77
5.6 Litigation; Adverse Facts78
5.7 Payment of Taxes78
5.8 Performance of Agreements; Materially
Adverse Agreements78
5.9 Governmental Regulation79
5.10 Securities Activities79
5.11 Employee Benefit Plans79
5.12 Certain Fees80
5.13 Environmental Protection80
5.14 Employee Matters82
5.15 Solvency82
5.16 Disclosure82
5.17 Intellectual Property82
5.18 Spin-Off Agreements83
Section 6. COMPANY'S AFFIRMATIVE COVENANTS83
6.1 Financial Statements and Other Reports83
6.2 Corporate Existence, etc.89
6.3 Payment of Taxes and Claims;
Tax Consolidation89
6.4 Maintenance of Properties; Insurance90
6.5 Inspection; Lender Meeting90
6.6 Compliance with Laws, etc91
6.7 Environmental Disclosure and Inspection91
6.8 Execution of Subsidiary Guaranty and
Collateral Documents by Certain
Subsidiaries and Future Subsidiaries92
6.9 Additional Mortgages; Release of
Mortgages93
6.10 Assignability of Lease Agreements96
Section 7. COMPANY'S NEGATIVE COVENANTS96
7.1 Indebtedness96
7.2 Liens and Related Matters98
7.3 Investments; Joint Ventures99
7.4 Contingent Obligations100
7.5 Restricted Junior Payments101
7.6 Financial Covenants101
7.7 Restriction on Fundamental Changes;
Asset Sales103
7.8 Consolidated Capital Expenditures104
7.9 Restriction on Leases105
7.10 Sales and Lease-backs105
7.11 Sale or Discount of Receivables106
7.12 Transactions with Shareholders
and Affiliates106
7.13 Disposal of Subsidiary Stock106
7.14 Conduct of Business107
7.15 Amendments of Certain Documents107
7.16 Fiscal Year107
Section 8. EVENTS OF DEFAULT108
8.1 Failure to Make Payments When Due108
8.2 Default in Other Agreements108
8.3 Breach of Certain Covenants108
8.4 Breach of Warranty109
8.5 Other Defaults Under Loan Documents109
8.6 Involuntary Bankruptcy; Appointment
of Receiver, etc.109
8.7 Voluntary Bankruptcy; Appointment of
Receiver, etc.109
8.8 Judgments and Attachments110
8.9 Dissolution110
8.10 Employee Benefit Plans110
8.11 Change in Control110
8.12 Invalidity of Subsidiary Guaranty111
8.13 Failure of Security111
8.14 Failure to Consummate Spin-Off111
8.15 Termination of Logistical
Services Agreement111
8.16 Incurrence of Liability Relating to
Spin-Off111
8.17 Material Difference in Closing Date
Balance Sheets112
Section 9. AGENT, CO-AGENT, COLLATERAL AGENT
--------
AND SUPPLEMENTAL COLLATERAL AGENTS113
9.1 Appointment113
9.2 Powers; General Immunity115
9.3 Representations and Warranties;
No Responsibility For Appraisal
of Creditworthiness117
9.4 Right to Indemnity118
9.5 Payee of Note Treated as Owner118
9.6 Successor Agent and Swing Line Lender118
9.7 Collateral Documents119
Section 10. MISCELLANEOUS120
10.1 Assignments and Participations in
Loans and Letters of Credit120
10.2 Expenses123
10.3 Indemnity123
10.4 Set Off; Security Interest in
Deposit Accounts124
10.5 Ratable Sharing125
10.6 Amendments and Waivers126
10.7 Independence of Covenants127
10.8 Notices127
10.9 Survival of Representations,
Warranties and Agreements127
10.10 Failure or Indulgence Not Waiver;
Remedies Cumulative127
10.11 Marshalling; Payments Set Aside128
10.12 Severability128
10.13 Obligations Several; Independent
Nature of Lenders' Rights128
10.14 Headings129
10.15 Applicable Law129
10.16 Successors and Assigns129
10.17 Consent to Jurisdiction and Service
of Process129
10.18 Waiver of Jury Trial130
10.19 Confidentiality130
10.20 Counterparts; Effectiveness131
Signature pages S-1
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF EXTENSION REQUEST
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF BORROWING BASE CERTIFICATE
VIII FORM OF COMPLIANCE CERTIFICATE
IX FORM OF OPINION OF SHEARMAN & STERLING
X FORM OF OPINION OF GENERAL COUNSEL OF COMPANY
XI FORM OF OPINION OF O'MELVENY & MYERS
XII FORM OF ASSIGNMENT AND ACCEPTANCE
XIII FORM OF EXTENSION ASSIGNMENT AND ACCEPTANCE
XIV FORM OF COLLATERAL ACCOUNT AGREEMENT
XV FORM OF COMPANY PLEDGE AGREEMENT
XVI FORM OF COMPANY SECURITY AGREEMENT
XVII FORM OF COMPANY TRADEMARK SECURITY AGREEMENT
XVIII FORM OF SUBSIDIARY GUARANTY
XIX FORM OF SUBSIDIARY PLEDGE AGREEMENT
XX FORM OF SUBSIDIARY SECURITY AGREEMENT
XXI FORM OF SUBSIDIARY TRADEMARK SECURITY AGREEMENT
XXII FORM OF MORTGAGE
XXIII FORM OF INVENTORY REPORT
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C REAL PROPERTY COVERED BY CLOSING DATE
MORTGAGES
4.1G REAL PROPERTY COVERED BY ENVIRONMENTAL
REPORTS
5.1 SUBSIDIARIES OF COMPANY
5.2B CERTAIN APPROVALS AND CONSENTS
5.2C CERTAIN GOVERNMENTAL CONSENTS
5.6 LITIGATION
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
5.17 INTELLECTUAL PROPERTY MATTERS
6.9 REAL PROPERTY REQUIRING LANDLORD CONSENT
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS