EXECUTION COPY
EXHIBIT 10.2
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$375,000,000
CREDIT AGREEMENT
among
ROUNDY'S ACQUISITION CORP.,
ROUNDY'S, INC.,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
BEAR STEARNS CORPORATE LENDING INC.,
as Administrative Agent,
CANADIAN IMPERIAL BANK OF COMMERCE,
as Syndication Agent
BANK ONE, WISCONSIN,
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
LASALLE BANK NATIONAL ASSOCIATION,
ASSOCIATED BANK, N.A.,
HARRIS TRUST AND SAVINGS BANK,
M&I MARSHALL & ILSLEY BANK,
U.S. BANK, NATIONAL ASSOCIATION,
as Documentation Agents
Dated as of June 6, 2002
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BEAR, STEARNS & CO. INC., as Sole Lead Arranger and Sole Bookrunner
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................................................. 1
1.1. Defined Terms.............................................................................. 1
1.2. Other Definitional Provisions.............................................................. 25
SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS........................................................ 25
2.1. Term Commitments........................................................................... 25
2.2. Procedure for Term Loan Borrowing.......................................................... 25
2.3. Repayment of Term Loans.................................................................... 26
SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS................................................... 26
3.1. Revolving Commitments...................................................................... 26
3.2. Procedure for Revolving Loan Borrowing..................................................... 26
3.3. Swingline Commitment....................................................................... 27
3.4. Procedure for Swingline Borrowing; Refunding of Swingline Loans............................ 27
3.5. Commitment Fees, etc....................................................................... 29
3.6. Termination or Reduction of Revolving Commitments.......................................... 29
3.7. L/C Commitment............................................................................. 29
3.8. Procedure for Issuance of Letter of Credit................................................. 30
3.9. Fees and Other Charges..................................................................... 30
3.10. L/C Participations......................................................................... 30
3.11. Reimbursement Obligation of the Borrower................................................... 31
3.12. Obligations Absolute....................................................................... 32
3.13. Letter of Credit Payments.................................................................. 32
3.14. Applications............................................................................... 32
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS
AND LETTERS OF CREDIT....................................................................... 33
4.1. Optional Prepayments....................................................................... 33
4.2. Mandatory Prepayments and Commitment Reductions............................................ 33
4.3. Conversion and Continuation Options........................................................ 34
4.4. Limitations on Eurodollar Tranches......................................................... 35
4.5. Interest Rates and Payment Dates........................................................... 35
4.6. Computation of Interest and Fees........................................................... 36
4.7. Inability to Determine Interest Rate....................................................... 36
4.8. Pro Rata Treatment and Payments............................................................ 37
4.9. Requirements of Law........................................................................ 38
4.10. Taxes...................................................................................... 39
4.11. Indemnity.................................................................................. 41
4.12. Change of Lending Office................................................................... 41
4.13. Replacement of Lenders..................................................................... 41
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4.14. Evidence of Debt........................................................................... 42
4.15. Illegality................................................................................. 43
SECTION 5. REPRESENTATIONS AND WARRANTIES.............................................................. 43
5.1. Financial Condition........................................................................ 43
5.2. No Change.................................................................................. 44
5.3. Corporate Existence; Compliance with Law................................................... 44
5.4. Corporate Power; Authorization; Enforceable Obligations.................................... 44
5.5. No Legal Bar............................................................................... 45
5.6. Litigation................................................................................. 45
5.7. No Default................................................................................. 45
5.8. Ownership of Property; Liens............................................................... 45
5.9. Intellectual Property...................................................................... 45
5.10. Taxes...................................................................................... 45
5.11. Federal Regulations........................................................................ 46
5.12. Labor Matters.............................................................................. 46
5.13. ERISA...................................................................................... 46
5.14. Investment Company Act; Other Regulations.................................................. 46
5.15. Subsidiaries............................................................................... 46
5.16. Use of Proceeds............................................................................ 47
5.17. Environmental Matters...................................................................... 47
5.18. Accuracy of Information, etc............................................................... 48
5.19. Security Documents......................................................................... 48
5.20. Solvency................................................................................... 49
5.21. Senior Indebtedness........................................................................ 49
5.22. Regulation H............................................................................... 49
5.23. Certain Documents.......................................................................... 49
SECTION 6. CONDITIONS PRECEDENT........................................................................ 49
6.1. Conditions to Initial Extension of Credit.................................................. 49
6.2. Conditions to Each Extension of Credit..................................................... 54
SECTION 7. AFFIRMATIVE COVENANTS....................................................................... 54
7.1. Financial Statements....................................................................... 54
7.2. Certificates; Other Information............................................................ 55
7.3. Payment of Obligations..................................................................... 56
7.4. Maintenance of Existence; Compliance....................................................... 56
7.5. Maintenance of Property; Insurance......................................................... 57
7.6. Inspection of Property; Books and Records; Discussions..................................... 57
7.7. Notices.................................................................................... 57
7.8. Environmental Laws......................................................................... 58
7.9. Additional Collateral, etc................................................................. 58
7.10. Further Assurances......................................................................... 60
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SECTION 8. NEGATIVE COVENANTS.......................................................................... 60
8.1. Financial Condition Covenants.............................................................. 60
8.2. Indebtedness............................................................................... 62
8.3. Liens...................................................................................... 64
8.4. Fundamental Changes........................................................................ 66
8.5. Disposition of Property.................................................................... 67
8.6. Restricted Payments........................................................................ 67
8.7. Capital Expenditures....................................................................... 69
8.8. Investments................................................................................ 69
8.9. Optional Payments and Modifications of Certain Debt Instruments............................ 72
8.10. Transactions with Affiliates............................................................... 73
8.11. Sales and Leasebacks....................................................................... 73
8.12. Changes in Fiscal Periods.................................................................. 74
8.13. Negative Pledge Clauses.................................................................... 74
8.14. Clauses Restricting Subsidiary Distributions............................................... 74
8.15. Lines of Business.......................................................................... 75
8.16. Amendments to Share Exchange Documents..................................................... 75
SECTION 9. EVENTS OF DEFAULT........................................................................... 75
SECTION 10. THE AGENTS................................................................................. 79
10.1. Appointment................................................................................ 79
10.2. Delegation of Duties....................................................................... 80
10.3. Exculpatory Provisions..................................................................... 80
10.4. Reliance by Agents......................................................................... 80
10.5. Notice of Default.......................................................................... 81
10.6. Non-Reliance on Agents and Other Lenders................................................... 81
10.7. Indemnification............................................................................ 81
10.8. Agent in Its Individual Capacity........................................................... 82
10.9. Successor Administrative Agent............................................................. 82
10.10. Agents Generally........................................................................... 83
10.11. The Lead Arranger.......................................................................... 83
SECTION 11. MISCELLANEOUS.............................................................................. 83
11.1. Amendments and Waivers..................................................................... 83
11.2. Notices.................................................................................... 84
11.3. No Waiver; Cumulative Remedies............................................................. 85
11.4. Survival of Representations and Warranties................................................. 86
11.5. Payment of Expenses and Taxes.............................................................. 86
11.6. Successors and Assigns; Participations and Assignments..................................... 87
11.7. Adjustments; Set-off....................................................................... 89
11.8. Counterparts............................................................................... 90
11.9. Severability............................................................................... 90
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11.10. Integration................................................................................ 90
11.11. GOVERNING LAW.............................................................................. 90
11.12. Submission To Jurisdiction; Waivers........................................................ 90
11.13. Acknowledgments............................................................................ 91
11.14. Releases of Guarantees and Liens........................................................... 91
11.15. Confidentiality............................................................................ 92
11.16. WAIVERS OF JURY TRIAL...................................................................... 92
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ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Commitments
1.1B Mortgaged Property
3.7 Existing Letters of Credit
5.6 Litigation
5.15 Subsidiaries
5.19(a) UCC Filing Jurisdictions
5.19(b) Mortgage Filing Jurisdictions
8.2(d) Existing Indebtedness
8.3(f) Existing Liens
8.8 Investments
8.10 Affiliate Contracts
8.13 Negative Pledge Agreements
8.14 Restrictions on Subsidiary Distributions
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Kirkland & Ellis
F-2 Form of Legal Opinion of Whyte Hirshboeck Dudek S.C. and
Vorys, Sater, Seymour & Pease LLP
G Form of Exemption Certificate
H-1 Form of Term Note
H-2 Form of Revolving Note
H-3 Form Swing Line Note
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CREDIT AGREEMENT, dated as of June 6, 2002, among ROUNDY'S
ACQUISITION CORP., a Delaware corporation ("Holdings"), ROUNDY'S, INC., a
Wisconsin corporation (the "Borrower"), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the
"Lenders"), BEAR, STEARNS & CO. INC., as sole lead arranger and sole bookrunner
(in such capacity, the "Lead Arranger"), BEAR STEARNS CORPORATE LENDING INC., as
administrative agent (in such capacity, the "Administrative Agent"), CANADIAN
IMPERIAL BANK OF COMMERCE, as syndication agent (in such capacity, the
"Syndication Agent"), and the institutions listed on the cover page, as
documentation agents (in such capacity, the "Documentation Agents").
W I T N E S S E T H:
WHEREAS, Willis Stein & Partners III, L.P. ("WSP"), together
with certain of its affiliates and related partners and investors (WSP and such
affiliates, partners and investors, the "Sponsor") and certain other investors
and management (together with the Sponsor, the "Equity Investors"), have,
through Holdings, agreed to acquire (the "Share Exchange") all of the capital
stock of the Borrower for total consideration of approximately $759,500,000
pursuant to the Share Exchange Agreement dated as of April 8, 2002 between
Holdings and the Borrower (as amended from time to time, the "Share Exchange
Agreement"). The Borrower will become a wholly-owned subsidiary of Holdings, and
substantially all the existing indebtedness of the Borrower and its subsidiaries
will be terminated and repaid (other than up to $13,900,000 of certain assumed
indebtedness for borrowed money) (the foregoing transactions described in this
paragraph, the "Transaction").
WHEREAS, Holdings intends to finance the Transaction and the
related premiums, costs, fees and expenses from the following sources: (a) not
less than $314,500,000 in common and preferred equity issued by Holdings to the
Equity Investors (the "Equity"), (b) approximately $250,000,000 in borrowings
under the $375,000,000 senior secured credit facilities to be made available to
the Borrower pursuant to this Agreement, which are comprised of a $250,000,000
term loan facility and a $125,000,000 revolving credit facility, (c)
$225,000,000 in cash proceeds from the issuance by the Borrower of the Senior
Subordinated Notes in a public offering or Rule 144A private placement and (d)
the assumption of up to $13,900,000 of certain existing Indebtedness of the
Borrower.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"Acquired Person": as to any Person, any other Person (i) all
of the Capital Stock of which is owned by such Person and (ii) which is
consolidated with such Person in accordance with GAAP.
"Acquisition": as to any Person, the acquisition by such
Person of (a) Capital Stock of any other Person in related, complementary or
ancillary line of business as such Person if, after giving effect to the
acquisition of such Capital Stock, such other Person would be (i) an
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Acquired Person of such Person and (ii) a Subsidiary Guarantor, (b) all or
substantially all of the assets of any other Person in related, complementary or
ancillary line of business as such Person or (c) assets constituting one or more
business units of any other Person used in related, complementary or ancillary
line of business as such Person.
"Additional Acquisition Extension of Credit": any Additional
Extension of Credit the proceeds of which are used to finance an Acquisition
permitted under Section 8.8(i).
"Additional Extension of Credit": as defined in Section 11.1.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble to this
Agreement.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Administrative
Agent, the Lead Arranger, the Syndication Agent and the Documentation Agents,
which term shall include, for purposes of Section 10 only, the Issuing Lender.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
Base Rate Loans Eurodollar Loans
Revolving Loans and Swingline Loans 2.00% 3.00%
Term Loans 1.50% 2.50%
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; provided, that, on and after the first Adjustment Date (as defined in the
Pricing Grid) occurring after the date which is six months after the Closing
Date, the Applicable Margin with respect to Revolving Loans and Swingline Loans
will be determined pursuant to the Pricing Grid.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.
"Approved Fund": with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d), (e), (g), (h), (i), or (j) of Section 8.5) that yields gross
proceeds to Holdings, the Borrower or any of its Subsidiaries (valued at the
initial principal amount thereof in the case of non-cash proceeds consisting of
notes or other debt securities and valued at fair market value in the case of
other non-cash proceeds) in excess of $1,000,000.
"Assignee": as defined in Section 11.6(c).
"Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit E.
"Assignor": as defined in Section 11.6(c).
"Available Revolving Commitment": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment then in effect over (b) such Lender's Revolving Extensions
of Credit then outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 3.5, the aggregate principal amount of
Swingline Loans then outstanding shall be deemed to be zero.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 0.50%. For purposes hereof: "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the Reference Lender
as its prime rate in effect at its principal office in New York City (the Prime
Rate not being intended to be the lowest rate of interest charged by the
Reference Lender in connection with extensions of credit to debtors). Any change
in the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Base Rate Loans": Loans the rate of interest applicable to
which is based upon the Base Rate.
"Benefited Lender": as defined in Section 11.7(a).
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"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble to this Agreement.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Business": as defined in Section 5.17(b).
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close, provided, that with respect to notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
such day is also a day for trading by and between banks in Dollar deposits in
the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its Subsidiaries
for the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries but excluding any
such expenditure: (i) which is financed with the Net Cash Proceeds of a Recovery
Event as permitted by Section 4.2(b); (ii) relating to the purchase price of an
Acquisition or an Investment permitted under Section 8.8; (iii) made by
Holdings, the Borrower or any Subsidiary Guarantor as a tenant to finance
leasehold improvements, to the extent such expenditures are reimbursed by the
landlord; (iv) to effect any Sale and Leaseback Transactions permitted under
Section 8.11; (v) that is financed with the proceeds of a Disposition permitted
by Section 8.5(a) and 8.5(f); and (vi) which is financed with the Net Cash
Proceeds of Excluded Sponsor Capital Stock; provided, that any Capital
Expenditures incurred in reliance on this clause (vi), together with aggregate
consideration of any Investments made in reliance on Section 8.8(r) and any
purchases made in reliance on the final proviso of Section 8.6(b), shall not
exceed in the aggregate $25,000,000.
"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) U.S. Dollars; (b) securities issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within twelve months from the date of acquisition; (c)
certificates of deposit, time or demand deposits, eurodollar time deposits
5
or overnight bank deposits having maturities of twelve months or less from the
date of acquisition issued by any Lender or by any commercial bank organized
under the laws of the United States or any state thereof having combined capital
and surplus of not less than $500,000,000 and a Thomson Bank Watch Rating of at
least B; (d) commercial paper of an issuer rated no lower than P-2 by Standard &
Poor's Rating Services ("S&P") or A-2 by Moody's Investors Service, Inc.
("Moody's"), or carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally, and maturing within twelve months from the
date of acquisition; (e) repurchase obligations of any Lender, any commercial
bank satisfying the requirements of clause (c) of this definition or recognized
securities dealer having combined capital and surplus of not less than
$500,000,000, having a term of not more than seven days, with respect to
securities satisfying the criteria in clauses (b) or (c) above; (f) securities
with maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) having one of the two highest rating categories
obtainable from either Moody's or S&P; (g) securities with maturities of six
months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (c) of this definition; or (h) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (g) of this definition.
"Closing Date": the date on which the conditions precedent set
forth in Section 6.1 shall have been satisfied or waived (in accordance with
Section 11.1), which date is June 6, 2002.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": as to any Lender, the sum of the Term Commitment
and the Revolving Commitment of such Lender.
"Commitment Allocation Notice": as to any Lender, the notice
to such Lender from the Administrative Agent countersigned by such Lender and
acknowledged by the Borrower, setting forth such Lender's Commitment on the
Closing Date.
"Commitment Fee Rate": (a) with respect to each day during the
Revolving Commitment Period on which the Utilization Percentage is at any time
less than or equal to 50%, 0.75% per annum or (b) with respect to all other days
during the Revolving Commitment Period, 0.50% per annum; provided, that (i) on
and after the first Adjustment Date occurring after the date which is six months
after the Closing Date, the Commitment Fee Rate will be determined pursuant to
the Pricing Grid and (ii) on and after the date the Commitment Fee Rate is
determined pursuant to the Pricing Grid, if, on any such day, the Utilization
Percentage is less
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than or equal to 50%, the Commitment Fee Rate shall be 0.25% higher than the
Commitment Fee Rate otherwise applicable pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Conduit Lender": any special purpose entity organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument,
subject to the consent of the Administrative Agent and the Borrower; provided,
that the designation by any Lender of a Conduit Lender shall not relieve the
designating Lender of any of its obligations to fund a Loan under this Agreement
if, for any reason, its Conduit Lender fails to fund any such Loan, and the
designating Lender (and not the Conduit Lender) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Lender, and provided, further, that
no Conduit Lender shall (a) be entitled to receive any greater amount pursuant
to Section 4.9, 4.10, 4.11 or 11.5 than the designating Lender would have been
entitled to receive in respect of the extensions of credit made by such Conduit
Lender or (b) be deemed to have any Commitment.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated May, 2002 and furnished to the Lenders.
"Consolidated Current Assets": at any date, all amounts (other
than cash and Cash Equivalents) that would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date, but excluding (a) any
Indebtedness of the Borrower and its Subsidiaries and (b) without duplication of
clause (a) above, all Indebtedness consisting of Revolving Loans or Swingline
Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period (except
in the case of clause (j) below), the sum of (a) income tax expense (including,
without duplication, franchise and foreign withholding taxes and any state
single business unitary or similar tax), (b) interest expense, amortization or
writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including the Loans), (c)
depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs
7
and any goodwill impairment loss recognized by FAS No. 142, (e) any
extraordinary charges, expenses or losses determined in accordance with GAAP,
(f) non-cash compensation expenses arising from the issuance of stock, options
to purchase stock and stock appreciation rights to the management of Holdings or
any of its Subsidiaries, (g) any other non-cash charges, non-cash expenses or
non-cash losses of Holdings or any of its Subsidiaries (excluding any such
charge, expense or loss incurred in the ordinary course of business that
constitutes an accrual of or a reserve for cash charges for any future period,
but including non-cash charges arising out of the restructuring, consolidation,
severance or discontinuance of any portion of the operations, employees and/or
management of Holdings and its Subsidiaries); provided, however, that cash
payments made in such period or in any future period in respect of such non-cash
charges, expenses or losses (excluding any such charge, expense or loss incurred
in the ordinary course of business that constitutes an accrual of or a reserve
for cash charges for any future period) shall be subtracted from Consolidated
Net Income in calculating Consolidated EBITDA in the period when such payments
are made, (h) costs, fees and expenses incurred in connection with the
Transaction to the extent paid within three months after the Closing Date, (i)
reasonable costs, fees and expenses incurred in connection with Dispositions
made in reliance on Section 8.5(a) (but only to the extent it is a Disposition
of "surplus" property) and Section 8.5(f), in each case, as permitted herein and
(j) the cash proceeds of any business interruption insurance to the extent such
proceeds are not included in determining Consolidated Net Income for such
period, and minus, to the extent included in the statement of such Consolidated
Net Income for such period, the sum of (a) interest income, (b) any
extraordinary income or gains determined in accordance with GAAP and (c) any
other non-cash income (excluding any items that represent the reversal of any
accrual of, or cash reserve for, anticipated cash charges in any prior period
that are described in the parenthetical to clause (g) above), all as determined
on a consolidated basis. For the purposes of calculating Consolidated EBITDA for
any period of four consecutive fiscal quarters (each, a "Reference Period")
pursuant to any determination of the Consolidated Leverage Ratio, (i) if at any
time during such Reference Period the Borrower or any Subsidiary shall have made
any Material Disposition, the Consolidated EBITDA for such Reference Period
shall be reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the property that is the subject of such Material Disposition
for such Reference Period or increased by an amount equal to the Consolidated
EBITDA (if negative) attributable thereto for such Reference Period, as
determined in accordance with Regulation S-X (except as determined reasonably
and in good faith by the chief financial officer of the Borrower and set forth
in an officer's certificate delivered to the Administrative Agent setting forth
in reasonable detail the basis for any adjustments which are not in compliance
with Regulation S-X, which adjustments are acceptable to the Administrative
Agent in its reasonable judgment) and (ii) if during such Reference Period the
Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated
EBITDA for such Reference Period shall be calculated after giving pro forma
effect thereto as if such Material Acquisition occurred on the first day of such
Reference Period, as determined in accordance with Regulation S-X (except as
determined reasonably and in good faith by the chief financial officer of the
Borrower and set forth in an officer's certificate delivered to the
Administrative Agent setting forth in reasonable detail the basis for any
adjustments which are not in compliance with Regulation S-X, which adjustments
are acceptable to the Administrative Agent in its reasonable judgment). As used
in this definition, "Material Acquisition" means any acquisition of property or
series of related acquisitions of property that (a) constitutes assets
comprising all or substantially all of an operating unit of a business or
8
constitutes all or substantially all of the common stock of a Person and (b)
involves the payment of consideration by the Borrower and its Subsidiaries in
excess of $1,000,000; and "Material Disposition" means any Disposition of
property or series of related Dispositions of property that yields gross
proceeds to the Borrower or any of its Subsidiaries in excess of $1,000,000.
"Consolidated EBITDAR": for any period, the sum of (a)
Consolidated EBITDA for such period, plus (b) Consolidated Lease Expense for
such period.
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) Consolidated EBITDAR for such period to (b) Consolidated Fixed
Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Lease Expense for such period and (c) scheduled payments made
during such period on account of principal of Indebtedness of the Borrower or
any of its Subsidiaries (including scheduled principal payments in respect of
the Term Loans).
"Consolidated Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease Obligations) of
the Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Hedge Agreements
in respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP, but excluding non-cash amortization of deferred
financing costs incurred in connection with the Transaction and any future
issuance of Indebtedness).
"Consolidated Lease Expense": for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries for such period with respect to leases of real and personal
property, determined on a consolidated basis in accordance with GAAP minus the
aggregate amount of rental income of the Borrower and its Subsidiaries for such
period with respect to leases of real and personal property, determined on a
consolidated basis in accordance with GAAP, provided that payments in respect of
Capital Lease Obligations shall not constitute Consolidated Lease Expense.
"Consolidated Leverage Ratio": as at the last day of any
period, the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated
EBITDA for such period.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided, that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any
9
Contractual Obligation (other than under any Loan Document) or Requirement of
Law applicable to such Subsidiary, provided, further, that to the extent any
earnings of any Subsidiary are excluded from Consolidated Net Income for any
period as a result of clause (c) and the applicable prohibition ceases to exist
in any future period, such earnings shall be included in Consolidated Net Income
for any such future period.
"Consolidated Senior Debt": all Consolidated Total Debt other
than the Senior Subordinated Notes.
"Consolidated Senior Leverage Ratio": as of the last day of
any period of four consecutive fiscal quarters, the ratio of (a) Consolidated
Senior Debt on such day to (b) Consolidated EBITDA for such period.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its Subsidiaries at
such date, to the extent the same should appear on a consolidated balance sheet
of the Borrower as determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Continuing Directors": the directors of Holdings on the
Closing Date, after giving effect to the Share Exchange and the other
transactions contemplated hereby, and each other director, if, in each case,
such other director's nomination for election to the board of directors of
Holdings is recommended by at least a majority of the then Continuing Directors
who were members of such board of directors at the time of such nomination.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Derivatives Counterparty": as defined in Section 8.6.
"Designated Lenders": as defined in Section 6.1(a).
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose" and "Disposed of" shall have correlative meanings.
10
"Documentation Agents": as defined in the preamble to this Agreement.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"ECF Percentage": (a) 75% with respect to each fiscal year of the
Borrower to the extent that the Consolidated Leverage Ratio as of the last day
of such fiscal year is greater than or equal to 3.0 to 1.0, (b) 50% with respect
to each fiscal year of the Borrower to the extent that the Consolidated Leverage
Ratio as of the last day of such fiscal year is less than 3.0 to 1.0 but greater
than or equal to 2.0 to 1.0 or (c) 0% with respect to each fiscal year of the
Borrower to the extent that the Consolidated Leverage Ratio as of the last day
of such fiscal year is less than 2.0 to 1.0.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Equity": as defined in the recitals to this Agreement.
"Equity Investors": as defined in the recitals to this Agreement.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 (or any successor page) of the Dow Jones Markets screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest Period.
In the event that such rate does not appear on Page 3750 of the Dow Jones
Markets screen (or otherwise on such screen), the "Eurodollar Base Rate" for the
purposes of this definition shall be determined by the Administrative Agent as
the average of the rate of interest at which deposits in Dollars for delivery on
the first day of such Interest Period in same day funds in the approximate
amount of the Eurodollar Loan by the Syndication Agent and up to two other
Lenders selected by the Administrative Agent and the Borrower (each a "Reference
Lender") and with a term equivalent period would be offered by the Reference
Lenders to first-
11
tier major banks in the interbank market at their request at approximately 11:00
A.M., London time, two Business Days prior to the beginning of such Interest
Period.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
under a particular Facility with current Interest Periods which begin on the
same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default": any of the events specified in Section 9;
provided, that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess,
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) an amount equal to the amount of all non-cash charges
(including depreciation and amortization) deducted in arriving at such
Consolidated Net Income, (iii) decreases in Consolidated Working Capital for
such fiscal year, (iv) the net increase during such fiscal year (if any) in
long-term deferred tax accounts of the Borrower, (v) any cash received as a
result of a net decrease in the outstanding amount of Investments in Investee
Stores (as permitted pursuant to Section 8.8(j)) during such fiscal year and
(vi) an amount equal to the aggregate net non-cash loss on the Disposition of
Property by the Borrower and its Subsidiaries during such fiscal year (other
than sales of inventory in the ordinary course of business), to the extent
deducted in arriving at such Consolidated Net Income over (b) the sum, without
duplication, of (i) an amount equal to the amount of all non-cash credits
included in arriving at such Consolidated Net Income, (ii) the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such fiscal
year on account of Capital Expenditures (excluding any such expenditures
financed with the principal amount of term Indebtedness incurred to finance such
expenditures (but including repayments of any such Indebtedness incurred during
such period or any prior period) and any such expenditures financed with the
proceeds of any Reinvestment Deferred Amount), (iii) all optional prepayments of
Funded Debt (other than the Loans and Funded Debt described in clause (b)(ii)
above) during such fiscal year, (iv) the aggregate amount of all regularly
scheduled principal payments of Funded Debt (including the Term Loans) of the
Borrower and its Subsidiaries made during such fiscal year (other than in
respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (v) increases in
Consolidated Working Capital for such fiscal year, (vi) the net decrease during
such fiscal year (if any) in long-term deferred tax accounts of the Borrower,
(vii) an amount equal to the aggregate net non-cash (and, to the extent any cash
gain results in a mandatory prepayment under Section 4.2(b) or to the extent
such cash gain arises out of a Disposition permitted under Section 8.5(f) or
8.5(h), cash) gain on the Disposition of Property (which shall include any
12
Recovery Event) by the Borrower and its Subsidiaries during such fiscal year
(other than sales of inventory in the ordinary course of business), to the
extent included in arriving at such Consolidated Net Income, (viii) the amount
of non-cash charges added back in prior fiscal years for which Excess Cash Flow
is calculated pursuant to this Agreement pursuant to clause (a)(ii) above to the
extent any such charge results in a cash payment during such fiscal year, (ix)
an amount equal to cash payments made by the Borrower and the Subsidiary
Guarantors in respect of (A) Pick 'n Save Acquisitions and (B) Acquisitions in
reliance on Section 8.8(i)(A)(x) (in each instance, excluding payments financed
with the principal amount of term Indebtedness incurred, and the proceeds from
the issuance of Capital Stock issued, to finance such Pick 'n Save Acquisitions
and Acquisitions (but including repayments of any such Indebtedness incurred
during such period or any prior period)), (x) payments to fund the underfunding
liability as of the Closing Date of the defined pension plan, (xi) any cash
payments made during such period pursuant to Restricted Payments permitted under
Section 8.6(b) (excluding amounts expended in reliance on the final proviso
thereof), Section 8.6(c), (e) and (f), (xii) any cash payments of reasonable
costs, fees and expenses incurred in connection with any Acquisition or Pick 'n
Save Acquisition, (xiii) any cash payments of reasonable costs, fees and
expenses incurred in connection with Dispositions made in reliance on Section
8.5(a) (but only to the extent it is a Disposition of "surplus" property) and
Section 8.5(f), in each case, as permitted herein, (xiv) any extraordinary cash
charges, expenses and losses in accordance with GAAP and (xv) any cash payments
in respect of a net increase in the outstanding amount of Investments in
Investee Stores (as permitted pursuant to Section 8.8(j)) during such fiscal
year.
"Excess Cash Flow Application Date": as defined in Section 4.2(c).
"Excluded Acquisition Capital Stock": as defined in Section 8.8(i).
"Excluded Capital Stock": the collective reference to (i) Excluded
Acquisition Capital Stock; (ii) Capital Stock of Holdings issued or sold to
Holdings, any of its Subsidiaries, any directors, managers, consultants,
officers or employees of Holdings or any of its Subsidiaries; (iii) Director's
qualifying shares; (iv) Capital Stock of Holdings issued to directors, managers,
consultants, officers or employees of Holdings or its Subsidiaries in connection
with a substantially contemporaneous stock repurchase of Capital Stock from
directors, managers, consultants, officers or employees of Holdings or its
Subsidiaries; (v) Capital Stock issued to the holders of Indebtedness in
satisfaction of such Indebtedness (other than the Loans); and (vi) Capital Stock
of Holdings issued to the Sponsor (excluding Excluded Acquisition Capital Stock)
resulting in Net Cash Proceeds to Holdings in the aggregate amount not to exceed
$25,000,000 ("Excluded Sponsor Capital Stock").
"Excluded Indebtedness": all Indebtedness permitted by clauses (a),
(b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m) and (n) of Section
8.2.
"Excluded Sponsor Capital Stock": as defined in the definition of
"Excluded Capital Stock".
"Facility": each of (a) the Term Commitments and the Term Loans made
thereunder (the "Term Facility"), and (b) the Revolving Commitments and the
extensions of credit made thereunder (the "Revolving Facility").
13
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": Badger Assurance Ltd.
"Funded Debt": as to any Person, all Indebtedness of such Person that
matures more than one year from the date of its creation or matures within one
year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrower, Indebtedness in respect of the
Loans.
"Funding Office": the office of the Administrative Agent specified in
Section 11.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time. In the event that any Accounting Change (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, Administrative
Agent and the Required Lenders, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if such
Accounting Changes had not occurred. "Accounting Changes" refers to changes in
accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or, if applicable, the SEC.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by Holdings, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
14
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Guarantors": the collective reference to Holdings and the Subsidiary
Guarantors.
"Hedge Agreements": all interest rate swaps, caps or collar agreements
or similar arrangements dealing with interest rates or currency exchange rates
or the exchange of nominal interest obligations, either generally or under
specific contingencies.
"Holdings": as defined in the preamble to this Agreement.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) the liquidation value of all
redeemable preferred Capital Stock of such Person (excluding preferred Capital
Stock the redemption of which is prohibited until prior repayment in full of the
Obligations), (h) all Guarantee Obligations of such Person in respect of
15
obligations of the kind referred to in clauses (a) through (g) above, (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation, and (j) for the purposes of
Sections 8.2 and 9(e) only, all obligations of such Person in respect of Hedge
Agreements; provided, that the amount of Indebtedness for which recourse is
limited to an identified asset or assets shall be equal to the lesser of (1) the
limited amount of such obligation and (2) the fair market value of such asset or
assets. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in such entity, except to the extent the terms of
such Indebtedness expressly provide that such Person is not liable therefor.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day that is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest Period
and (d) as to any Loan (other than any Revolving Loan that is a Base Rate Loan
and any Swingline Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six or (with the
consent of all Lenders under the relevant Facility) nine or twelve months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six or (with
the consent of all Lenders under the relevant Facility) nine or twelve months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided, that all of the
foregoing provisions relating to Interest Periods are subject to the following:
16
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) the Borrower may not select an Interest Period under a
particular Facility that would extend beyond the Revolving Termination Date
or beyond the date final payment is due on the Term Loans; and
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
"Investee Store": a Person in which the Borrower or any of its
Subsidiaries has invested equity capital, to which it has made loans or for
which it has guaranteed loans, in any such case in accordance with the business
practice of the Borrower and its Subsidiaries of making equity investments in,
making loans to or guaranteeing loans made to Persons in acquiring, remodeling,
refurbishing, expanding or operating one or more retail grocery stores.
"Investments": as defined in Section 8.8.
"Issuing Lender": Bank One, N.A. and any other Lender designated as
the "Issuing Lender" by the Administrative Agent and the Borrower, in its
capacity as issuer of any Letter of Credit. In the event there is more than one
Issuing Lender, the relevant provisions herein and in the other Loan Documents
shall be construed accordingly.
"L/C Commitment": $20,000,000.
"L/C Fee Payment Date": the last day of each March, June, September
and December and the last day of the Revolving Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum, without
duplication, of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings under
Letters of Credit that have not then been reimbursed pursuant to Section 3.11.
"L/C Participants": the collective reference to all the Revolving
Lenders other than the Issuing Lender.
"Lead Agents": the collective reference to the Administrative Agent,
the Lead Arranger and the Syndication Agent.
"Lead Arranger": as defined in the preamble to this Agreement.
17
"Lenders": as defined in the preamble hereto; provided, that unless
the context otherwise requires, each reference herein to the Lenders shall be
deemed to include any Conduit Lender.
"Letters of Credit": as defined in Section 3.7(a).
"Lien": any mortgage, pledge, hypothecation, collateral assignment,
security deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security agreement
of any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having substantially the same economic
effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents and the
Notes.
"Loan Parties": Holdings, the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the holders
of more than 50% of the aggregate unpaid principal amount of the Term Loans or
the Total Revolving Extensions of Credit, as the case may be, outstanding under
such Facility (or, in the case of the Revolving Facility, prior to any
termination of the Revolving Commitments, the holders of more than 50% of the
Total Revolving Commitments).
"Material Acquisition": as defined in the definition of "Consolidated
EBITDA".
"Material Adverse Effect": a material adverse effect on (a) the
Transaction as of the Closing Date, (b) the business, assets, property,
condition (financial or otherwise) or results of operations of the Borrower and
its Subsidiaries taken as a whole or (c) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights or remedies of the
Agents or the Lenders hereunder or thereunder.
"Material Disposition": as defined in the definition of "Consolidated
EBITDA".
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Mortgaged Properties": the real properties listed on Schedule 1.1B,
as to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, substantially in the form of Exhibit D (with such
changes thereto as shall be advisable under the
18
law of the jurisdiction in which such mortgage or deed of trust is to be
recorded), as the same may be amended, supplemented or otherwise modified from
time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or by the Disposition of any non-cash consideration received in
connection therewith or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of (i) attorneys' fees, accountants' fees,
investment banking fees, (ii) amounts required to be applied to the repayment of
Indebtedness (together with any interest thereon, premium or penalty and any
other amount payable with respect thereto) secured by a Lien expressly permitted
hereunder on any asset that is the subject of such Asset Sale or Recovery Event
(other than any Lien pursuant to a Security Document), (iii) amounts provided as
a reasonable reserve against any liabilities under any indemnification
obligations or purchase price adjustments associated with any Asset Sale (such
amounts to be included as Net Cash Proceeds when such reserves are no longer
required) and (iv) other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash
proceeds received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in Section 4.10(a).
"Non-Executing Persons": as defined in Section 6.1(a).
"Non-U.S. Lender": as defined in Section 4.10(d).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to any Agent or to any Lender (or, in the case of
Specified Hedge Agreements, any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Specified Hedge
Agreement or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to any Agent or to any Lender that are
19
required to be paid by the Borrower pursuant hereto) or otherwise; provided,
that (i) obligations of the Borrower or any Subsidiary under any Specified Hedge
Agreement shall be secured and guaranteed pursuant to the Security Documents
only to the extent that, and for so long as, the other Obligations are so
secured and guaranteed and (ii) any release of Collateral or Guarantors effected
in the manner permitted by this Agreement shall not require the consent of
holders of obligations under Specified Hedge Agreements.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Investors": the collective reference to the Sponsor and its
Control Investment Affiliates.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Pick 'n Save Acquisition": an acquisition by the Borrower or any
Subsidiary Guarantor of an existing or future licensed Pick 'n Save retail store
and related assets.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prepayment Account": as defined in Section 4.2(d).
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 5.1(a).
"Projections": as defined in Section 7.2(c).
"Properties": as defined in Section 5.17(a).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
20
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of Holdings, the Borrower or any of its Subsidiaries.
"Reference Lender": as defined in the definition of
"Eurodollar Base Rate".
"Reference Period": as defined in the definition of
"Consolidated EBITDA".
"Refunded Swingline Loans": as defined in Section 3.4(b).
"Refunding Date": as defined in Section 3.4(c).
"Register": as defined in Section 11.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.11 for amounts drawn under
Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by Holdings, the
Borrower or any of its Subsidiaries in connection therewith that are not applied
to prepay the Term Loans pursuant to Section 4.2(b) as a result of the delivery
of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale or Recovery Event to acquire or repair fixed or capital assets
useful in its or one of its Subsidiary's business or to finance an Acquisition.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire or
repair fixed or capital assets useful in the Borrower's or one of its
Subsidiary's business or to finance an Acquisition.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring twelve months after
receipt of a Reinvestment Deferred Amount with respect to such Reinvestment
Event and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire or repair fixed or capital assets useful
in the Borrower's or one of its Subsidiary's business or to finance an
Acquisition with all or any portion of the relevant Reinvestment Deferred
Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
21
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. (S) 4043.
"Required Lenders": at any time, (a) until the Closing Date,
(i) the holders of more than 50% of the Term Commitments then in effect and (ii)
the holders of more than 50% of the Total Revolving Commitments then in effect
and (b) thereafter, (i) the holders of more than 50% of the aggregate unpaid
principal amount of the Term Loans then outstanding and (ii) the holders of more
than 50% of the Total Revolving Commitments then in effect or, if the Revolving
Commitments have been terminated, the Total Revolving Extensions of Credit then
outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": as to any Person, the chief executive
officer, president, chief financial officer or treasurer of such Person, but in
any event, with respect to financial matters, the chief financial officer or
treasurer of such Person provided that, for purposes of Section 1.2, Responsible
Officer shall include any officer of such person with knowledge of or
responsibility for compliance with the applicable provisions of the Loan
Documents.
"Restricted Payments": as defined in Section 8.6.
"Revolving Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Loans and participate in Swingline Loans
and Letters of Credit in an aggregate principal and/or face amount not to exceed
the amount set forth in such Lender's Commitment Allocation Notice or in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof. The
original amount of the Total Revolving Commitments is $125,000,000.
"Revolving Commitment Period": the period from and including
the Closing Date to the Revolving Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding and (c) such
Lender's Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.
"Revolving Lender": each Lender that has a Revolving
Commitment or that holds Revolving Loans.
"Revolving Loans": as defined in Section 3.1(a).
22
"Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then constitutes
of the Total Revolving Commitments (or, at any time after the Revolving
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Loans then outstanding constitutes
of the aggregate principal amount of the Revolving Loans then outstanding).
"Revolving Termination Date": June 6, 2007.
"Sale and Leaseback Transactions": as defined in Section 8.11.
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other security
documents hereafter delivered to the Administrative Agent granting a Lien on any
property of any Person to secure the obligations and liabilities of any Loan
Party under any Loan Document.
"Senior Subordinated Note Indenture": the Indenture entered
into by the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Subordinated Notes, together with all instruments and
other agreements entered into by the Borrower or such Subsidiaries in connection
therewith (other than the Share Exchange Documentation and the Loan Documents),
as the same may be amended, supplemented or otherwise modified from time to time
in accordance with Section 8.9.
"Senior Subordinated Notes": the subordinated notes of the
Borrower issued on the Closing Date pursuant to the Senior Subordinated Note
Indenture in an aggregate principal amount not to exceed $225,000,000.
"Share Exchange": as defined in the recitals to this
Agreement.
"Share Exchange Agreement": as defined in the recitals to this
Agreement.
"Share Exchange Documentation": collectively, the Share
Exchange Agreement and all schedules, exhibits and annexes thereto and all side
letters and agreements affecting the terms thereof or entered into in connection
therewith, in each case as amended, supplemented or otherwise modified from time
to time in accordance with Section 8.16.
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets (as such term is defined in clause (a) above) of
such Person will, as of
23
such date, be greater than the amount that will be required to pay the liability
of such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person is, as of such date,
able to pay its debts as they mature. For purposes of this definition, (i)
"debt" means liability on a "claim", and (ii) "claim" means any (x) right to
payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured;
provided, that in computing the amount of any contingent, unliquidated,
unmatured or disputed claim at any time, it is intended that such claims will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual, liquidated or matured claim.
"Specified Change of Control": a "Change of Control" as
defined in the Senior Subordinated Note Indenture.
"Specified Hedge Agreement": any Hedge Agreement (a) entered
into by (i) the Borrower or any of its Subsidiaries and (ii) any Agent or Lender
or any affiliate thereof, as counterparty and (b) that has been designated by
such Agent or Lender, as the case may be, and the Borrower, by notice to the
Administrative Agent, as a Specified Hedge Agreement. The designation of any
Hedge Agreement as a Specified Hedge Agreement shall not create in favor of the
Agent, Lender or affiliate thereof that is a party thereto any rights in
connection with the management or release of any Collateral or of the
obligations of any Guarantor under the Guarantee and Collateral Agreement.
"Sponsor": as defined in the recitals to this Agreement.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Domestic Subsidiary of the
Borrower.
"Swingline Commitment": the obligation of the Swingline Lender
to make Swingline Loans pursuant to Section 3.3 in an aggregate principal amount
at any one time outstanding not to exceed $20,000,000.
"Swingline Lender": Bear Stearns Corporate Lending Inc., in
its capacity as the lender of Swingline Loans.
24
"Swingline Loans": as defined in Section 3.3(a).
"Swingline Participation Amount": as defined in Section
3.4(c).
"Syndication Agent": as defined in the preamble to this
Agreement.
"Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make a Term Loan to the Borrower hereunder in a principal
amount not to exceed the amount set forth in such Lender's Commitment Allocation
Notice or in the Assignment and Acceptance pursuant to which such Lender became
a party hereto, as the same may be changed from time to time pursuant to the
terms hereof. The original aggregate amount of the Term Commitments is
$250,000,000.
"Term Lender": each Lender that has a Term Commitment or is
the holder of a Term Loan.
"Term Loan": as defined in Section 2.1.
"Term Percentage": as to any Term Lender at any time, the
percentage which such Lender's Term Commitment then constitutes of the aggregate
Term Commitments (or, at any time after the Closing Date, the percentage which
the aggregate principal amount of such Lender's Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then
outstanding).
"Total Revolving Commitments": at any time, the aggregate
amount of the Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Transaction": as defined in the recitals to this Agreement.
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"United States": the United States of America.
"Utilization Percentage": at any time, the percentage which
the then outstanding Revolving Extension of Credit constitutes of the Total
Revolving Commitments then in effect.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
"WSP": as defined in the recitals to this Agreement.
25
1.2. Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP, (ii) the words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation", (iii) the word "incur" shall be
construed to mean incur, create, issue, assume, become liable in respect of or
suffer to exist (and the words "incurred" and "incurrence" shall have
correlative meanings), and (iv) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) The word "knowledge" when used with respect to Holdings,
the Borrower or any of its Subsidiaries shall be deemed to be a reference to the
knowledge of any Responsible Officer of Holdings, the Borrower or any such
Subsidiary, as the case may be.
SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS
2.1. Term Commitments. Subject to the terms and conditions
hereof, each Term Lender severally agrees to make a term loan (a "Term Loan") to
the Borrower on the Closing Date in an amount not to exceed the amount of the
Term Commitment of such Lender. The Term Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.2 and 4.3.
2.2. Procedure for Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 10:30 A.M., New York City time, on the
anticipated Closing Date) requesting that the Term Lenders make the Term Loans
on the Closing Date and specifying the amount to be borrowed. The Term Loans
made on the Closing Date shall initially be Base Rate Loans. Upon receipt of
such notice the Administrative Agent shall promptly notify each Term Lender
thereof. Not later than 1:00 P.M., New York City time, on the Closing Date each
Term Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the Term Loan or Term
Loans to be made by such Lender. The Administrative Agent shall credit the
account of the Borrower on the books of such office of the
26
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Term Lenders in immediately available funds.
2.3. Repayment of Term Loans. The Term Loan of each Lender
shall mature in 28 consecutive quarterly installments payable on the last day of
March, June, September and December of each year, commencing on September 30,
2002, each of which shall be in an amount equal to such Lender's Term Percentage
multiplied by the amount set forth below opposite such installment (after giving
effect to any optional and mandatory prepayments):
Installment Principal Amount
----------- ----------------
1 to 24 $ 625,000 each
25 to 28 $ 58,750,000 each
SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS
3.1. Revolving Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans ("Revolving Loans") to the Borrower from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender's Revolving Percentage of the sum
of (i) the L/C Obligations then outstanding and (ii) the aggregate principal
amount of the Swingline Loans then outstanding, does not exceed the amount of
such Lender's Revolving Commitment. During the Revolving Commitment Period the
Borrower may use the Revolving Commitments by borrowing, prepaying and
reborrowing the Revolving Loans in whole or in part, all in accordance with the
terms and conditions hereof. The Revolving Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 3.2 and 4.3.
(b) The Borrower shall repay all outstanding Revolving Loans
on the Revolving Termination Date.
3.2. Procedure for Revolving Loan Borrowing. The Borrower may
borrow under the Revolving Commitments during the Revolving Commitment Period on
any Business Day, provided, that the Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to (a) 12:00 Noon, New York City time, three Business Days prior to
the requested Borrowing Date, in the case of Eurodollar Loans, or (b) 10:30
A.M., New York City time, on the proposed Borrowing Date, in the case of Base
Rate Loans), specifying (i) the amount and Type of Revolving Loans to be
borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar
Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Period therefor. Any Revolving Loans made on the
Closing Date shall initially be Base Rate Loans. Each borrowing under the
Revolving Commitments shall be in an amount equal to (x) in the case of Base
Rate Loans, $1,000,000 or a whole multiple of $250,000 in excess thereof (or, if
the then aggregate Available Revolving Commitments are less than $1,000,000,
such lesser amount) and (y) in the case of Eurodollar Loans, $2,500,000 or a
whole multiple of $250,000 in excess thereof; provided, that the Swingline
Lender may request, on behalf of the Borrower, borrowings under the Revolving
Commitments that are Base Rate Loans in other amounts pursuant to Section 3.4.
27
Upon receipt of any such notice from the Borrower, the Administrative Agent
shall promptly notify each Revolving Lender thereof. Each Revolving Lender will
make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 1:00 P.M., New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Lenders and in like funds as received by the Administrative Agent.
3.3. Swingline Commitment. (a) Subject to the terms and
conditions hereof, the Swingline Lender agrees to make a portion of the credit
otherwise available to the Borrower under the Revolving Commitments from time to
time during the Revolving Commitment Period by making swing line loans
("Swingline Loans") to the Borrower; provided, that (i) the aggregate principal
amount of Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans hereunder, may exceed the Swingline Commitment then in effect)
and (ii) the Borrower shall not request, and the Swingline Lender shall not
make, any Swingline Loan if, after giving effect to the making of such Swingline
Loan, the aggregate amount of the Available Revolving Commitments would be less
than zero. During the Revolving Commitment Period, the Borrower may use the
Swingline Commitment by borrowing, repaying and reborrowing Swingline Loans, all
in accordance with the terms and conditions hereof. Swingline Loans shall be
Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swingline Loans
on the Revolving Termination Date.
3.4. Procedure for Swingline Borrowing; Refunding of Swingline
Loans. (a) When the Borrower desires that the Swingline Lender make Swingline
Loans, it shall give the Swingline Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swingline Lender not later than 12:00 Noon, New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date (which shall be a Business Day during the Revolving Commitment
Period). Each borrowing under the Swingline Commitment shall be in an amount
equal to $250,000 or a whole multiple of $100,000 in excess thereof. Not later
than 3:00 P.M., New York City time, on the Borrowing Date specified in a notice
in respect of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender. The Administrative Agent shall make the proceeds of such Swingline Loan
available to the Borrower on such Borrowing Date by depositing such proceeds in
the account of the Borrower with the Administrative Agent on such Borrowing Date
in immediately available funds.
(b) The Swingline Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), on one Business
Day's notice given by the Swingline
28
Lender no later than 12:00 Noon, New York City time, request each Revolving
Lender to make, and each Revolving Lender hereby agrees to make, a Revolving
Loan, in an amount equal to such Revolving Lender's Revolving Percentage of the
aggregate amount of the Swingline Loans (the "Refunded Swingline Loans")
outstanding on the date of such notice, to repay the Swingline Lender. Each
Revolving Lender shall make the amount of such Revolving Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business Day after the date of
such notice. The proceeds of such Revolving Loans shall be immediately made
available by the Administrative Agent to the Swingline Lender for application by
the Swingline Lender to the repayment of the Refunded Swingline Loans. The
Borrower irrevocably authorizes the Swingline Lender to charge the Borrower's
accounts with the Administrative Agent (up to the amount available in each such
account) in order to immediately pay the amount of such Refunded Swingline Loans
to the extent amounts received from the Revolving Lenders are not sufficient to
repay in full such Refunded Swingline Loans.
(c) If prior to the time a Revolving Loan would have
otherwise been made pursuant to Section 3.4(b), one of the events described in
Section 9(f) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swingline Lender in its sole
discretion, Revolving Loans may not be made as contemplated by Section 3.4(b),
each Revolving Lender shall, on the date such Revolving Loan was to have been
made pursuant to the notice referred to in Section 3.4(b) (the "Refunding
Date"), purchase for cash an undivided participating interest in the then
outstanding Swingline Loans by paying to the Swingline Lender an amount (the
"Swingline Participation Amount") equal to (i) such Revolving Lender's Revolving
Percentage times (ii) the sum of the aggregate principal amount of Swingline
Loans then outstanding that were to have been repaid with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has
received from any Revolving Lender such Lender's Swingline Participation Amount,
the Swingline Lender receives any payment on account of the Swingline Loans, the
Swingline Lender will distribute to such Lender its Swingline Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was outstanding
and funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.
(e) Each Revolving Lender's obligation to make the Loans
referred to in Section 3.4(b) and to purchase participating interests pursuant
to Section 3.4(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including (i) any setoff, counterclaim, recoupment, defense
or other right that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 6; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower; (iv)
any breach of this Agreement or any other Loan Document by the Borrower, any
other Loan Party or any other Revolving Lender; or
29
(v) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
3.5. Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Lender a commitment
fee for the period from and including the Closing Date to but excluding the last
day of the Revolving Commitment Period, computed at the Commitment Fee Rate on
the average daily amount of the Available Revolving Commitment of such Lender
during the period for which payment is made, payable quarterly in arrears on the
last day of each March, June, September and December and on the Revolving
Termination Date, commencing on the first of such dates to occur after the date
hereof.
(b) The Borrower agrees to pay to the Administrative Agent
the fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Administrative Agent.
(c) The Borrower agrees to pay to the Administrative Agent
and the Lead Arranger the fees in the amounts and on the dates previously agreed
to in writing by the Borrower and the Administrative Agent and the Lead
Arranger.
3.6. Termination or Reduction of Revolving Commitments. The
Borrower shall have the right, upon not less than two Business Days' notice to
the Administrative Agent, to terminate the Revolving Commitments or, from time
to time, to reduce the amount of the Revolving Commitments; provided, that no
such termination or reduction of Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
reduction shall be in an amount equal to $1,000,000, or a whole multiple of
$250,000 in excess thereof, and shall reduce permanently the Revolving
Commitments then in effect.
3.7. L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Revolving
Lenders set forth in Section 3.10(a), agrees to issue letters of credit
("Letters of Credit") for the account of the Borrower on any Business Day during
the Revolving Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided, that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
aggregate amount of the Available Revolving Commitments would be less than zero.
Each Letter of Credit shall (i) be denominated in Dollars, (ii) have a minimum
face amount agreed by the Borrower and the Issuing Lender and (iii) expire no
later than the earlier of (x) the first anniversary of its date of issuance and
(y) the date that is five Business Days prior to the Revolving Termination Date,
provided, that any Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the date referred to in clause (y) above). The letters of credit
described in Schedule 3.7 which are outstanding as of the date hereof shall be
deemed to be issued by the Issuing Lender under this Agreement as of the Closing
Date and shall be a Letter of Credit for all purposes hereof (other than Section
3.8) and the other Loan Documents, including, without limitation, for purposes
of Sections 3.9 through 3.14.
30
(b) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.8. Procedure for Issuance of Letter of Credit. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will notify the Administrative Agent of the amount, the beneficiary and the
requested expiration of the requested Letter of Credit, and upon receipt of
confirmation from the Administrative Agent that after giving effect to the
requested issuance, the Available Revolving Commitments would not be less than
zero, the Issuing Lender will process such Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall promptly issue
the Letter of Credit requested thereby (but in no event shall the Issuing Lender
be required to issue any Letter of Credit earlier than three Business Days after
its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may
be agreed to by the Issuing Lender and the Borrower. The Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower (with a copy to the
Administrative Agent) promptly following the issuance thereof. The Issuing
Lender shall promptly furnish to the Administrative Agent, which shall in turn
promptly furnish to the Lenders, notice of the issuance of each Letter of Credit
(including the amount thereof).
3.9. Fees and Other Charges. (a) The Borrower will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar Loans under the Revolving Facility,
shared ratably among the Revolving Lenders and payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date of such Letter of Credit. In
addition, the Borrower shall pay to the Issuing Lender for its own account a
fronting fee on the undrawn and unexpired amount of each Letter of Credit as
agreed by the Borrower and the Issuing Lender, payable quarterly in arrears on
each L/C Fee Payment Date after the date of issuance.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.10. L/C Participations. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions set forth below, for such L/C Participant's
own account and risk an undivided interest equal to such L/C Participant's
Revolving Percentage in the Issuing Lender's obligations and rights under and in
respect of each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender
31
that, if a draft is paid under any Letter of Credit for which the Issuing Lender
is not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative Agent upon
demand of the Issuing Lender an amount equal to such L/C Participant's Revolving
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed. The Administrative Agent shall promptly forward such amounts to the
Issuing Lender.
(b) If any amount required to be paid by any L/C Participant to the
Administrative Agent for the account of the Issuing Lender pursuant to Section
3.10(a) in respect of any unreimbursed portion of any payment made by the
Issuing Lender under any Letter of Credit is paid to the Administrative Agent
for the account of the Issuing Lender within three Business Days after the date
such payment is due, such L/C Participant shall pay to the Administrative Agent
for the account of the Issuing Lender on demand an amount equal to the product
of (i) such amount, times (ii) the daily average Federal Funds Effective Rate
during the period from and including the date such payment is required to the
date on which such payment is immediately available to the Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount required to
be paid by any L/C Participant pursuant to Section 3.10(a) is not made available
to the Administrative Agent for the account of the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans under the Revolving Facility. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.10(a), the
Administrative Agent or the Issuing Lender receives any payment related to such
Letter of Credit (whether directly from the Borrower or otherwise, including
proceeds of collateral applied thereto by the Issuing Lender), or any payment of
interest on account thereof, the Administrative Agent or the Issuing Lender, as
the case may be, will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
Administrative Agent or the Issuing Lender, as the case may be, shall be
required to be returned by the Administrative Agent or the Issuing Lender, such
L/C Participant shall return to the Administrative Agent for the account of the
Issuing Lender the portion thereof previously distributed by the Administrative
Agent or the Issuing Lender, as the case may be, to it.
3.11. Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse the Issuing Lender no later than three Business Days after the date on
which the Issuing Lender notifies the Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender for the
amount of (a) such draft so paid and (b) any taxes, fees, charges or other costs
or expenses incurred by the Issuing Lender in connection with such payment. Each
such payment shall be made to the Issuing Lender at its address for notices
specified herein in lawful money of the United States and in immediately
available funds. Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this
32
Section from the date of the applicable drawing until payment in full at the
rate set forth in (i) until the third Business Day following notice to the
Borrower, Section 4.5(b) and (ii) thereafter, Section 4.5(c). Unless the
Borrower shall otherwise notify the Issuing Lender and the Administrative Agent,
each drawing under any Letter of Credit shall (unless an event of the type
described in clause (i) or (ii) of Section 9(f) shall have occurred and be
continuing with respect to the Borrower, in which case the procedures specified
in Section 3.10 for funding by L/C Participants shall apply) constitute a
request by the Borrower to the Administrative Agent for a borrowing pursuant to
Section 3.2 of Base Rate Loans (or, at the option of the Administrative Agent
and the Swing Line Lender in their sole discretion, a borrowing pursuant to
Section 3.4 of Swing Line Loans) in the amount of such drawing. The Borrowing
Date with respect to such borrowing shall be the first date on which a borrowing
of Revolving Credit Loans (or, if applicable, Swing Line Loans) could be made,
pursuant to Section 3.2 or, if applicable, Section 3.4), if the Administrative
Agent had received a notice of such borrowing at the time the Administrative
Agent receives notice from the relevant Issuing Lender of such drawing under
such Letter of Credit.
3.12. Obligations Absolute. The Borrower's obligations under Section
3.11 shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that the Borrower
may have or have had against the Issuing Lender, any beneficiary of a Letter of
Credit or any other Person. The Borrower also agrees with the Issuing Lender
that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.11 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions resulting from the gross negligence or willful misconduct of the
Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.13. Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.14. Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
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SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS
AND LETTERS OF CREDIT
4.1. Optional Prepayments. The Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent at least three Business
Days prior thereto in the case of Eurodollar Loans and same day in the case of
Base Rate Loans so long as such notice is received prior to 11:30 A.M., New York
City time, which notice shall specify the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans or Base Rate Loans; provided, that
if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 4.11. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Loans that are Base Rate Loans and Swingline Loans) accrued interest to such
date on the amount prepaid. Partial prepayments of Term Loans and Revolving
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple of $250,000 in excess thereof. Partial prepayments of Swingline Loans
shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof.
4.2. Mandatory Prepayments and Commitment Reductions. (a) If, after
the Closing Date, any Capital Stock or Indebtedness shall be issued or incurred
by Holdings, the Borrower or any of its Subsidiaries (other than Excluded
Capital Stock and Excluded Indebtedness), an amount equal to 100% of the Net
Cash Proceeds thereof shall be applied on the date of such issuance or
incurrence toward the prepayment of the Term Loans as set forth in Section
4.8(b).
(b) If on any date Holdings, the Borrower or any of its Subsidiaries
shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then,
unless a Reinvestment Notice shall be delivered in respect thereof, such Net
Cash Proceeds shall be applied within three Business Days after receipt of such
Net Cash Proceeds toward the prepayment of the Term Loans as set forth in
Section 4.8(b); provided, that, notwithstanding the foregoing, (i) the aggregate
Net Cash Proceeds of Asset Sales that may be excluded from the foregoing
requirement pursuant to a Reinvestment Notice shall not exceed $20,000,000 in
any fiscal year of the Borrower and (ii) on each Reinvestment Prepayment Date,
an amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the Term
Loans as set forth in Section 4.8(b).
(c) If, for any fiscal year of the Borrower commencing with the
fiscal year ending on or about December 31, 2002 (which for such fiscal year
ending on or about December 31, 2002 shall include only the period beginning on
or about September 30, 2002 and ending on or about December 31, 2002), there
shall be more than $2,500,000 of Excess Cash Flow, the Borrower shall, on the
relevant Excess Cash Flow Application Date, apply toward the prepayment of the
Term Loans as set forth in Section 4.8(b) an amount equal to: (1) the ECF
Percentage of such Excess Cash Flow minus (2) the aggregate amount of all
prepayments of Revolving Loans and Swingline Loans during such fiscal year to
the extent accompanying permanent optional reductions of the Revolving
Commitments minus (3) the aggregate amount of all optional prepayments of Term
Loans during such fiscal year. Each such prepayment shall
34
be made on a date (an "Excess Cash Flow Application Date") no later than five
Business Days after the earlier of (i) the date on which the financial
statements of the Borrower referred to in Section 7.1(a), for the fiscal year
with respect to which such prepayment is made, are required to be delivered to
the Lenders and (ii) the date such financial statements are actually delivered.
(d) The application of any prepayment pursuant to Section 4.2 shall
be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each
prepayment of the Loans under Section 4.2 shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid. Any amounts to be
applied to Eurodollar Loans shall, at the option of the Borrower, be applied to
prepay Eurodollar Loans immediately and/or shall be deposited in the Prepayment
Account (as defined below). The Administrative Agent shall apply any cash
deposited in the Prepayment Account to Eurodollar Loans on the last day of the
Interest Periods therefore (or, at the direction of the Borrower, on any earlier
date) until all outstanding Eurodollar Loans have been prepaid or until all cash
on deposit in the Prepayment Account with respect to such Loans has been
exhausted. So long as no Event of Default shall have occurred and be continuing,
the Administrative Agent shall pay to the Borrower any interest or earnings on
investments (calculated on an aggregate basis and net of any amount deposited in
the Prepayment Account) in the Prepayment Account upon the Borrower's reasonable
request. For purposes of this Agreement, the term "Prepayment Account" shall
mean an account established by the Borrower with the Administrative Agent and
over which the Administrative Agent shall have exclusive dominion and control,
including the right of withdrawal for application in accordance with this
subsection 4.2(d). The Administrative Agent will, at the request of the
Borrower, invest amounts on deposit in the Prepayment Account in Cash
Equivalents that mature prior to the last day of the applicable Interest Periods
of the Eurodollar Loans to be prepaid; provided, that (i) the Administrative
Agent shall not be required to make any investment that, in its sole judgment,
would require or cause the Administrative Agent to be in, or would result in any
violation of any, Requirement of Law and (ii) the Administrative Agent shall
have no obligation to invest amounts on deposit in the Prepayment Account if an
Event of Default shall have occurred and be continuing. The Borrower shall
indemnify the Administrative Agent for any losses relating to the investments so
that the amount available to prepay Eurodollar Loans on the last day of the
applicable Interest Periods therefor is not less than the amount that would have
been available had no investments been made. Other than any interest earned on
such investments, the Prepayment Account shall not bear interest. Interest or
profits, if any, on such investments shall be deposited and reinvested and
disbursed as described above. If the maturity of the Loans has been accelerated
pursuant to Section 9, the Administrative Agent shall first apply all amounts on
deposit in the Prepayment Account to prepay the outstanding Term Loans pro rata
and, then, to prepay any outstanding Revolving Loans. The Borrower hereby grants
to the Administrative Agent, for its benefit and the benefit of the Lenders, a
security interest in the Prepayment Account to secure the Obligations.
4.3. Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least one Business Days' prior irrevocable notice of
such election, provided, that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest
35
Period therefor), provided, that no Base Rate Loan under a particular Facility
may be converted into a Eurodollar Loan when any Event of Default has occurred
and is continuing and the Administrative Agent or the Majority Facility Lenders
in respect of such Facility have determined in its or their sole discretion not
to permit such conversions. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided,
that no Eurodollar Loan under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations, and
provided, further, that if the Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted to
Base Rate Loans on the last day of such then expiring Interest Period. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
4.4. Limitations on Eurodollar Tranches. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $2,500,000 or a whole
multiple of $250,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
4.5. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise and after all applicable grace periods
have elapsed), such overdue amount shall bear interest at a rate per annum equal
to (x) in the case of the Loans, the rate that would otherwise be applicable
thereto pursuant to the foregoing provisions of this Section plus 2% or (y) in
the case of Reimbursement Obligations, the rate applicable to Base Rate Loans
under the Revolving Facility plus 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise and after all applicable grace
periods have elapsed), such overdue amount shall bear interest at a rate per
annum equal to the rate then applicable to Base Rate Loans under the relevant
Facility plus 2% (or, in the case of any such other amounts that do not relate
to a particular Facility, the rate then applicable to Base Rate Loans under the
Revolving Facility plus 2%), in each case, with respect
36
to clauses (i) and (ii) above, from the date of such non-payment until but
excluding the date such overdue amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided, that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
4.6. Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to Base Rate Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 4.5(a).
4.7. Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then-current
Interest Period, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans under the
37
relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurodollar Loans.
4.8. Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Percentages, or Revolving
Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders. Amounts repaid or prepaid on account of the Term Loans
may not be reborrowed. The amount of each principal prepayment of the Term Loans
shall be applied to reduce the then remaining installments of the Term Loans pro
rata based upon the then remaining principal amount thereof.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Loans shall be made pro
rata according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of
38
manifest error. If such Lender's share of such borrowing is not made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate Loans
under the relevant Facility, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
4.9. Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of payments
to such Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 4.10 and taxes imposed on or measured by the overall net income of
such Lender by the jurisdiction in which such Lender has its principal
office or the applicable lending office);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable by such Lender hereunder
in respect thereof, then, in any such case, the Borrower shall within thirty
days after receipt of written notice from such Lender (which shall include the
certificate described in clause (c) below) pay such Lender, any additional
amounts necessary to compensate such Lender for such increased cost or reduced
amount receivable. If any Lender becomes entitled to claim any additional
amounts pursuant to this paragraph, it shall promptly
39
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof has the effect of reducing the rate
of return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder or under or in respect of any Letter of Credit to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's or
such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, after submission
by such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor (which shall include the certificate described in
clause (c) below), the Borrower shall pay to such Lender within thirty days
after receipt of such notice such additional amount or amounts as will
compensate such Lender for such reduction; provided, that the Borrower shall not
be required to compensate a Lender pursuant to this paragraph for any amounts
incurred more than four months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; and
provided, further, that if the circumstances giving rise to such claim have a
retroactive effect, then such four-month period shall be extended to include the
period of such retroactive effect.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower with appropriate detail
demonstrating how such amounts were derived (with a copy to the Administrative
Agent) shall be conclusive in the absence of manifest error. The obligations of
the Borrower pursuant to this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
4.10. Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on any Agent or any Lender as a result of a present or
former connection between such Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
such Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") or Other Taxes
are required to be withheld from any amounts payable to any Agent or any Lender
hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable
40
to any Lender with respect to any Non-Excluded Taxes (i) that are attributable
to such Lender's failure to comply with the requirements of paragraph (d) or (e)
of this Section or (ii) that are United States withholding taxes imposed on
amounts payable to such Lender at the time the Lender becomes a party to this
Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Agent or Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the Agents and
the Lenders for any incremental taxes, interest or penalties that may become
payable by any Agent or any Lender as a result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without
41
withholding or at a reduced rate, provided, that such Lender is legally entitled
to complete, execute and deliver such documentation and in such Lender's
reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
4.11. Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss (other than loss of profits) or expense
that such Lender may sustain or incur as a consequence of (a) default by the
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making by the Borrower of a prepayment of Eurodollar Loans on a day that is not
the last day of an Interest Period with respect thereto, provided that any
Lender seeking indemnity pursuant to this Section 4.11 shall have provided
notice to the Borrower of such loss or expense within four months of the
conclusion of the events giving rise to such loss or expense. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) that
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. A certificate as to any amounts payable pursuant to this Section with
appropriate detail demonstrating how such amounts were derived submitted to the
Borrower by any Lender shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
4.12. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 4.9, 4.10(a) or
4.15 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
or, if reasonably requested by the Borrower, to file any certificate or document
to, designate another lending office for any Loans affected by such event, in
each case with the object of avoiding the consequences of such event; provided,
that such designation is made on terms that, in the reasonable judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic, legal
or regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of any Borrower or the rights of
any Lender pursuant to Section 4.9 or 4.10(a).
4.13. Replacement of Lenders. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 4.9 or 4.10(a), (b) defaults in its obligation to make Loans hereunder,
with a replacement financial institution or (c)
42
in connection with any proposed amendment, modification, supplement or waiver
with respect to any of the provisions of the Loan Documents as contemplated in
Section 11.1 where such amendment, modification, supplement or waiver has been
approved by the Required Lenders in accordance with such Section, fails to
consent to any such proposed action; provided, that (i) such replacement does
not conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) prior to any
such replacement, such Lender shall have taken no action under Section 4.12 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 4.9 or 4.10(a), (iv) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced Lender on
or prior to the date of replacement, (v) the Borrower shall be liable to such
replaced Lender under Section 4.11 if any Eurodollar Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (vii) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 11.6 (provided that the Borrower shall be obligated to
pay the registration and processing fee referred to therein), (viii) until such
time as such replacement shall be consummated, the Borrower shall pay all
additional amounts (if any) required pursuant to Section 4.9 or 4.10(a), as the
case may be, and (ix) any such replacement shall not be deemed to be a waiver of
any rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.
4.14. Evidence of Debt. (a) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(b) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 11.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(c) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 4.14(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(d) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing any Term Loans, Revolving Loans or
Swing Line Loans, as the case may be, of such Lender, substantially in the forms
of Exhibit H-1, H-2 or H-3, respectively, with appropriate insertions as to date
and principal amount.
43
4.15. Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be suspended until
such time as it shall no longer be unlawful for such Lender to make or maintain
Eurodollar Loans and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 4.11.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, Holdings
and the Borrower hereby jointly and severally represent and warrant to each
Agent and each Lender that:
5.1. Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at March 30,
2002, (including the notes thereto) (the "Pro Forma Balance Sheet"), copies of
which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the consummation of
the Share Exchange, (ii) the Loans to be made and the Senior Subordinated Notes
to be issued on the Closing Date and the use of proceeds thereof and (iii) the
payment of costs, fees and expenses in connection with the foregoing. The Pro
Forma Balance Sheet has been prepared in good faith by the Borrower based on the
assumptions used to prepare the pro forma financial information in the
Confidential Information Memorandum (which assumptions are believed by the
Borrower on the delivery date to be reasonable), and presents fairly in all
material respects on a pro forma basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at March 30, 2002, assuming that
the events specified in the preceding sentence had actually occurred at such
date.
(b) The audited consolidated balance sheets of the Borrower as at
December 29, 2001, December 30, 2000 and January 1, 2000, and the related
consolidated statements of earnings and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
Deloitte & Touche LLP, present fairly in all material respects the consolidated
financial condition of the Borrower as at such date, and the consolidated
results of its operations and its consolidated cash flows for the respective
fiscal years then ended. The unaudited consolidated balance sheet of the
Borrower as at March 30, 2002, and the related unaudited consolidated statements
of earnings and cash flows for the three-month period ended on such date,
present fairly in all material respects the consolidated financial condition of
the Borrower as at such date, and the consolidated results of its operations and
its consolidated cash flows for the three-month period then ended (subject to
normal year-end audit adjustments and the absence of footnotes). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
44
and disclosed therein). Holdings, the Borrower and its Subsidiaries do not have
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the most
recent audited financial statements referred to in this paragraph or delivered
pursuant to Section 7.1 or reflected in the Borrower's most recent quarterly
financial statements delivered pursuant to Section 7.1. During the period from
December 29, 2001 to and including the date hereof there has been no Disposition
by the Borrower of any material part of its business or property.
5.2. No Change. Since December 29, 2001, there has been no development
or event that has had or could reasonably be expected to have a Material Adverse
Effect.
5.3. Corporate Existence; Compliance with Law. Each of Holdings, the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
material property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified as a
foreign corporation (or other entity) and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except where the failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect and (d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
5.4. Corporate Power; Authorization; Enforceable Obligations. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has
taken all necessary corporate (or other) action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party and, in
the case of the Borrower, to authorize the extensions of credit on the terms and
conditions of this Agreement. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required to be obtained by a Loan Party in connection with the
Transaction, the continuing operations of Holdings, the Borrower and its
Subsidiaries and the extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the Loan Documents, except (i) consents, authorizations, filings and notices,
which have been obtained or made and are in full force and effect, (ii) the
filings referred to in Section 5.19 and (iii) those consents, authorizations,
filings and notices, the failure of which to make or obtain would not reasonably
be expected to have a Material Adverse Effect. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
45
5.5. No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof (i) will not violate
any Requirement of Law or any Contractual Obligation of Holdings, the Borrower
or any of its Subsidiaries and (ii) will not result in, or require, the creation
or imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
5.6. Litigation. Except as set forth on Schedule 5.6, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of Holdings or the Borrower,
threatened by or against Holdings, the Borrower or any of its Subsidiaries or
against any of their respective properties or revenues (a) with respect to any
of the Loan Documents or any of the transactions contemplated hereby or thereby,
or (b) if reasonably likely to be adversely determined or settled, and is
adversely determined or settled, could reasonably be expected to have a Material
Adverse Effect.
5.7. No Default. Neither Holdings, the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect.
5.8. Ownership of Property; Liens. Each of Holdings, the Borrower and
its Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in, all
its other material property used in its business as currently conducted, and
none of such property is subject to any Lien except as permitted by Section 8.3.
5.9. Intellectual Property. Except as could not reasonably be
expected to have a Material Adverse Effect, (a) Holdings, the Borrower and each
of its Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as and where the same is currently
conducted; (b) no material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property with respect to the conduct of its
business as and where the same is currently conducted, nor does Holdings or the
Borrower know of any valid basis for any such claim and (c) the use of
Intellectual Property by Holdings, the Borrower and its Subsidiaries does not
infringe on the rights of any Person in any material respect.
5.10. Taxes. Each of Holdings, the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any the amount or
validity of that are (i) currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of Holdings, the Borrower or its Subsidiaries, as the case
may be or (ii) could not reasonably be expected to have a Material Adverse
Effect).
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5.11. Federal Regulations. No part of the proceeds of any Loans, and
no other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect. If
requested by the Administrative Agent, the Borrower will furnish to the
Administrative Agent a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
5.12. Labor Matters. Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against Holdings, the Borrower or any of its Subsidiaries pending
or, to the knowledge of Holdings or the Borrower, threatened; (b) hours worked
by and payment made to employees of Holdings, the Borrower and its Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Requirement of Law dealing with such matters; and (c) all payments
due from Holdings, the Borrower or any of its Subsidiaries on account of
employee health and welfare insurance have been paid or accrued as a liability
on the books of Holdings, the Borrower or the relevant Subsidiary.
5.13. ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred for which
all liabilities thereunder have not been satisfied, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period. The present value of
all accrued benefits under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made, exceed the value
of the assets of such Plan allocable to such accrued benefits by an amount
which, when aggregated with such amount for all such underfunded Plans, could be
reasonably expected to have a Material Adverse Effect. Neither the Borrower nor
any Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and, to the knowledge of the Borrower,
neither the Borrower nor any Commonly Controlled Entity would become subject to
any liability under ERISA that would reasonably be expected to have a Material
Adverse Effect if the Borrower or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made.
No such Multiemployer Plan is in Reorganization or Insolvent.
5.14. Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
5.15. Subsidiaries. Except as disclosed to the Administrative Agent by
the Borrower in writing from time to time after the Closing Date, as of the
Closing Date (a) Schedule 5.15 sets forth the name and jurisdiction of
incorporation of each Subsidiary of Holdings and, as
47
to each such Subsidiary, the percentage of each class of Capital Stock owned by
any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors' qualifying shares) of
any nature relating to any Capital Stock of the Borrower or any Subsidiary,
except as created by the Loan Documents.
5.16. Use of Proceeds. The proceeds of the Term Loans shall be used to
finance a portion of the Transaction and to pay related costs, fees and
expenses. The proceeds of the Revolving Loans shall be used to finance a portion
of the Transaction and to pay related costs, fees and expenses and, following
the consummation of the Transaction, shall be used, together with the proceeds
of the Swingline Loans, and the Letters of Credit, for general corporate and
working capital purposes (including, but not limited to, Capital Expenditures).
5.17. Environmental Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by
Holdings, the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under circumstances that constitute
or constituted a violation of, or could give rise to liability under, any
Environmental Law;
(b) neither Holdings, the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the business operated by Holdings, the Borrower or any of its
Subsidiaries (the "Business"), nor does Holdings or the Borrower have
knowledge or reason to believe that any such notice will be received or is
being threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location that could give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation
of, or in a manner that could give rise to liability under, any applicable
Environmental Law;
(d) no judicial proceeding or governmental or administrative action
is pending or, to the knowledge of Holdings and the Borrower, threatened,
under any Environmental Law to which Holdings, the Borrower or any
Subsidiary is or will be named as a party with respect to the Properties or
the Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect
to the Properties or the Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the
48
operations of Holdings, the Borrower or any Subsidiary in connection with
the Properties or otherwise in connection with the Business, in violation
of or in amounts or in a manner that could give rise to liability under
Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with respect to
the Properties or the Business; and
(g) neither Holdings, the Borrower nor any of its Subsidiaries has
assumed any liability of any other Person under Environmental Laws.
5.18. Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document or certificate (excluding any
projections, pro forma financial information or estimates) furnished by or on
behalf of any Loan Party to the Administrative Agent or the Lenders, or any of
them, for use in connection with the transactions contemplated by this Agreement
or the other Loan Documents (as modified or supplemented by other information
furnished, including information contained in the prospectus for the Senior
Subordinated Notes), when taken as a whole, contained as of the date such
information, document or certificate was so furnished (or, in the case of
information relating to the Share Exchange, the Senior Subordinated Notes or the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein not materially
misleading. The projections, pro forma financial information and estimates
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Administrative Agent and the Lenders that
such financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein by
a material amount.
5.19. Security Documents. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor's rights generally and by general
equitable principles (whether such enforcement is sought in a proceeding at law
or in equity). In the case of the Pledged Stock described in the Guarantee and
Collateral Agreement, when certificates representing such Pledged Stock are
delivered to the Administrative Agent together with the necessary endorsements,
and in the case of the other Collateral described in the Guarantee and
Collateral Agreement (to the extent that a security interest in such other
Collateral can be perfected by filing), when financing statements and other
filings specified on Schedule 5.19(a) in appropriate form are filed in the
offices specified on Schedule 5.19(a) and all applicable fees have been paid,
the Guarantee and Collateral Agreement shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement) (to the extent that a
security interest in such other Collateral can be
49
perfected by filing), in each case prior and superior in right to any other
Person (except, in the case of Collateral other than Pledged Stock, Liens
permitted by Section 8.3).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditor's rights generally and by general equitable principals (whether such
enforcement is sought in a proceeding at law or in equity), and when the
Mortgages are filed in the offices specified on Schedule 5.19(b) and all
applicable fees have been paid, each such Mortgage shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in the Mortgaged Properties and the proceeds thereof, as
security for the Obligations (as defined in the relevant Mortgage), in each case
prior and superior in right to any other Person (except Liens permitted by
Section 8.3). Schedule 1.1B lists each parcel of real property in the United
States owned in fee simple by the Borrower or any of its Subsidiaries as of the
Closing Date.
5.20. Solvency. The Borrower and its Subsidiaries, taken as a whole,
immediately after giving effect to the Share Exchange and the incurrence of all
Indebtedness and obligations being incurred in connection herewith and therewith
will be and will continue to be, Solvent.
5.21. Senior Indebtedness. The Obligations constitute "Senior Debt"
and the Indebtedness hereunder constitutes "Designated Senior Debt" of the
Borrower under and as defined in the Senior Subordinated Note Indenture.
5.22. Regulation H. No Mortgage encumbers improved real property that
is located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has not been made available under the National Flood Insurance Act of
1968, except as identified on Schedule 1.1B.
5.23. Certain Documents. The Borrower has delivered to the
Administrative Agent a complete and correct copy of the material Share Exchange
Documentation and the Senior Subordinated Note Indenture, including any
amendments, supplements or modifications with respect to any of the foregoing.
SECTION 6. CONDITIONS PRECEDENT
6.1. Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction or waiver (in accordance with Section 11.1), prior
to or concurrently with the making of such extension of credit on the Closing
Date, of the following conditions precedent:
(a) Credit Agreement; Guarantee and Collateral Agreement. The
Administrative Agent shall have received (i) this Agreement, executed and
delivered by each Agent, Holdings, the Borrower and each Person listed on
Schedule 1.1A, (ii) the Guarantee and Collateral Agreement, executed and
delivered by Holdings, the Borrower and each Subsidiary Guarantor and (iii)
an Acknowledgment and Consent in the form
50
attached to the Guarantee and Collateral Agreement, executed and delivered
by each Issuer (as defined therein), if any, that is not a Loan Party.
In the event that this Agreement has not been duly executed and
delivered by each Person listed on Schedule 1.1A on the date scheduled to
be the Closing Date, the condition referred to in clause (i) above shall
nevertheless be deemed satisfied if on such date the Borrower and the
Administrative Agent shall have designated one or more Persons (the
"Designated Lenders") to assume, in the aggregate, all of the Commitments
that would have been held by the Persons listed on Schedule 1.1A (the
"Non-Executing Persons") which have not so executed and delivered this
Agreement (subject to each such Designated Lender's consent and its
execution and delivery of this Agreement). Schedule 1.1A shall
automatically be deemed to be amended to reflect the respective Commitments
of the Designated Lenders and the omission of the Non-Executing Persons as
Lenders hereunder.
(b) Share Exchange, etc. The following conditions shall have been
satisfied:
(i) the Share Exchange shall have been consummated in all material
respects in accordance with (A) the terms of the Share Exchange
Documentation and (B) all Requirements of Law for aggregate consideration
(including the refinancing of debt of the Borrower and the payment of
costs, fees and expenses) not exceeding $783,500,000 and no material
provision of the Share Exchange Documentation shall have been amended,
waived or otherwise modified without the prior written consent of the Lead
Agents and the Required Lenders in any material respect;
(ii) Holdings shall have received at least $314,500,000 from the
proceeds of Equity issued by Holdings to the Equity Investors on terms and
conditions reasonably satisfactory to the Lead Agents; provided, that WSP
shall hold at least 60% of such Equity, and such proceeds shall have been
used as consideration for the Share Exchange;
(iii) the Borrower shall have received at least $200,000,000 in gross
cash proceeds from the issuance by the Borrower of the Senior Subordinated
Notes in a public offering or Rule 144A private placement on terms and
conditions reasonably satisfactory to the Lead Agents;
(iv) the Lead Agents shall have received reasonably satisfactory
evidence that the costs, fees and expenses to be incurred in connection
with the Transaction and the financing thereof shall not exceed $24,000,000
without the prior written consent of the Lead Agents; and
(v) (A) the Lead Agents shall have received reasonably satisfactory
evidence that substantially all of the existing Indebtedness of the
Borrower (including outstanding Hedge Agreements) and its Subsidiaries
shall have been terminated and all amounts thereunder shall have been paid
in full in connection with the Transaction, other than the Indebtedness
permitted by Section 8.2(d) and (B) reasonably satisfactory arrangements
shall have been made for the termination of all Liens granted in connection
therewith.
51
(c) Pro Forma Balance Sheet and Income Statements; Financial
Statements. The Lenders shall have received and the Lead Agents shall be
reasonably satisfied with each of the financial statements described in
Section 5.1.
(d) Financial Condition. (i) Consolidated EBITDA (calculated in
accordance with Regulation S-X and giving effect to certain other
non-recurring adjustments acceptable to the Lead Agents) for the twelve
month period ended March 30, 2002, as determined on a pro forma basis shall
be at least $110,000,000 and the Borrower shall provide support for such
calculation of a nature that is reasonably satisfactory to the Lead Agents
(and, in any event, in conformity with Regulation S-X), (ii) the
Consolidated Leverage Ratio (calculated in accordance with Regulation S-X
and giving effect to certain other non-recurring adjustments acceptable to
the Lead Agents) as determined from the Pro Forma Balance Sheet shall not
exceed 4.0 to 1.0 and (iii) the Lead Agents shall have received and shall
be reasonably satisfied with a certificate of a Responsible Officer which
shall certify the foregoing calculations.
(e) Approvals. The Lead Agents shall have received a certificate,
certified by a Responsible Officer, to the effect that no consent or
authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person is required to be obtained
by a Loan Party in connection with the Transaction, the continuing
operations of Holdings, the Borrower and its Subsidiaries and the
extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the
Loan Documents, except (i) consents, authorizations, filings and notices,
which have been obtained or made and are in full force and effect and are
attached to such certificate of such Responsible Officer as an exhibit,
(ii) the filings referred to in Section 5.19 and (iii) those consents,
authorizations, filings and notices, the failure of which to make or obtain
would not reasonably be expected to have a Material Adverse Effect.
(f) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Loan Parties except for liens permitted by Section
8.3 or discharged on or prior to the Closing Date pursuant to documentation
reasonably satisfactory to the Administrative Agent.
(g) Fees. The Lenders and the Agents shall have received all fees
required to be paid, and all expenses payable hereunder for which invoices
have been presented (including the reasonable fees and expenses of legal
counsel), on or before the Closing Date. All such amounts will be paid with
proceeds of Loans made on the Closing Date and will be reflected in the
funding instructions given by the Borrower to the Administrative Agent on
or before the Closing Date.
(h) Closing Certificate. The Administrative Agent shall have received
a certificate of each Loan Party, dated the Closing Date, substantially in
the form of Exhibit C, with appropriate insertions and attachments.
52
(i) Legal Opinions. Each of the Lenders shall have received the
following executed legal opinions:
(i) the legal opinion of Kirkland & Ellis, counsel to the
Borrower and its Subsidiaries, substantially in the form of Exhibit F-1;
(ii) the legal opinion of Whyte Hirschboeck Dudek S.C. and
Vorys, Sater, Seymour & Pease LLP local counsel of the Borrower and certain
of its Subsidiaries, substantially in the form of Exhibit F-2;
(iii) to the extent consented to by the relevant counsel, each
legal opinion, if any, delivered in connection with the Share Exchange
Agreement, accompanied by a reliance letter in favor of the Lenders; and
(iv) the legal opinion of local counsel in Indiana and of such
other special and local counsel as may be required by the Administrative
Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(j) Pledged Stock; Stock Powers; Pledged Notes. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each
promissory note (if any) pledged to the Administrative Agent pursuant to
the Guarantee and Collateral Agreement endorsed (without recourse) in blank
(or accompanied by an executed transfer form in blank) by the pledgor
thereof.
(k) Filings, Registrations and Recordings. Each document (including
any Uniform Commercial Code financing statement) required by the Security
Documents or under law to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 8.3), shall be in proper form for filing,
registration or recordation.
(l) Mortgages, etc. (i) The Administrative Agent shall have received
a Mortgage with respect to each Mortgaged Property, executed and delivered
by a duly authorized officer of each party thereto.
(ii) The Administrative Agent shall have received, and the title
insurance company issuing the policy referred to in clause (iii) below (the
"Title Insurance Company") shall have received, maps or plats of an
as-built survey of the sites of the Mortgaged Properties certified to the
Administrative Agent and the Title Insurance Company in a manner
satisfactory to them, dated a date satisfactory to the Administrative Agent
and the Title Insurance Company by an independent professional licensed
land surveyor satisfactory to the Administrative Agent and the Title
Insurance Company, which maps or plats and the surveys on which they are
based shall be made in accordance
53
with the Minimum Standard Detail Requirements for Urban Land Title Surveys
jointly established and adopted by the American Land Title Association and
the American Congress on Surveying and Mapping in 1999, and, without
limiting the generality of the foregoing, there shall be surveyed and shown
on such maps, plats or surveys the following: (A) the locations on such
sites of all the buildings, structures and other improvements and the
established building setback lines; (B) the lines of streets abutting the
sites and width thereof; (C) all access and other easements appurtenant to
the sites; (D) all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any adjoining
property by the building structures and improvements on the sites; and (F)
if the site is described as being on a filed map, a legend relating the
survey to said map.
(iii) The Administrative Agent shall have received in respect of each
Mortgaged Property a mortgagee's title insurance policy (or policies) or
marked up unconditional binder for such insurance. Each such policy shall
(A) be in an amount satisfactory to the Administrative Agent; (B) be issued
at ordinary rates; (C) insure that the Mortgage insured thereby creates a
valid first Lien on such Mortgaged Property free and clear of all defects
and encumbrances, except as disclosed therein and acceptable to the
Administrative Agent; (D) name the Administrative Agent for the benefit of
the Lenders as the insured thereunder; (E) be in the form of ALTA Loan
Policy - 1970 (Amended 10/17/70 and 10/17/84) (or equivalent policies); (F)
contain such endorsements and affirmative coverage as the Administrative
Agent may reasonably request and (G) be issued by title companies
satisfactory to the Administrative Agent (including any such title
companies acting as co-insurers or reinsurers, at the option of the
Administrative Agent). The Administrative Agent shall have received
evidence satisfactory to it that all premiums in respect of each such
policy, all charges for mortgage recording tax, and all related expenses,
if any, have been paid.
(iv) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance that (1) covers
any parcel of improved real property that is encumbered by any Mortgage,
(2) is written in an amount not less than the outstanding principal amount
of the indebtedness secured by such Mortgage that is reasonably allocable
to such real property or the maximum limit of coverage made available with
respect to the particular type of property under the National Flood
Insurance Act of 1968, whichever is less, and (3) has a term ending not
later than the maturity of the Indebtedness secured by such Mortgage and
(B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(v) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in clause (iii) above and a copy of
all other material documents affecting the Mortgaged Properties.
54
(m) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.3(b) of the Guarantee
and Collateral Agreement.
(n) Employment Agreement. The Lead Agents shall have received the
employment agreement of Robert Mariano.
(o) Perfection Certificate. The Administrative Agent shall have
received a perfection certificate from the Borrower satisfactory to the
Administrative Agent.
6.2. Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction or
waiver (in accordance with Section 11.1) of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date, except for representations and
warranties expressly stated to relate to a specific earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 6.2 have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding (unless collateralized on terms and conditions satisfactory to the
Issuing Lender following the termination of the Commitments and the repayment of
all amounts due and payable under the Loan Documents) or any Loan or other
amount (excluding contingent indemnification obligations or obligations with
respect to Specified Hedge Agreements) is owing to any Lender or Agent
hereunder, each of Holdings and the Borrower shall and shall cause each of its
Subsidiaries to:
7.1. Financial Statements. Furnish to the Administrative Agent for
further delivery to each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated statements of
earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a
55
"going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by Deloitte & Touche LLP or other
independent certified public accountants of nationally recognized standing;
and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of earnings and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments and the absence of footnotes).
All such financial statements shall be prepared in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein).
7.2. Certificates; Other Information. Furnish to the Administrative
Agent for further delivery to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making their audit examination no Default or Event of Default has occurred
with respect to the covenants contained in Section 8.1 and other accounting
matters, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Sections 7.1(a) and (b), (i) a certificate of a Responsible
Officer stating that such Responsible Officer has obtained no knowledge
that any Default or Event of Default has occurred and is continuing except
as specified in such certificate and (ii) in the case of quarterly or
annual financial statements, (x) a Compliance Certificate containing (A)
all information and calculations necessary for determining compliance by
Holdings, the Borrower and its Subsidiaries with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or
fiscal year of the Borrower, as the case may be, and, if applicable, for
determining the Applicable Margins and Commitment Fee Rate and (B) if
applicable, an update to Schedule 5.15 setting forth the name and
jurisdiction of incorporation of each newly formed or acquired Subsidiary
of Holdings and, as to each such Subsidiary, the percentage of each class
of Capital Stock owned by any Loan Party, and (y) to the extent not
previously disclosed to the Administrative Agent, a listing of any
Intellectual Property acquired by any Loan Party since the date of the most
recent list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of the
following fiscal year, the related consolidated statements
of projected cash flow, projected changes in financial position and
projected income and a description of the material underlying assumptions
applicable thereto), and, as soon as available, significant revisions, if
any, of such budget and projections with respect to such fiscal year
presented to the board of directors of the Borrower (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions, believed by the
Borrower to be reasonable at the time of delivery, it being recognized that
such Projections are not to be viewed as fact and that actual results
during the periods covered by such Projections may differ from the
projected results set forth therein by a material amount;
(d) concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) and (b), a narrative discussion and analysis
(in a management discussion analysis format) of the financial condition and
results of operations of the Borrower and its Subsidiaries for such period
and for the period from the beginning of the then current fiscal year to
the end of such period, as compared to the comparable periods of the
previous year; provided, that no such delivery shall be required so long as
the Borrower delivers to the Administrative Agent and each Lender its
periodic filing on Form 10-Q or Form 10-K, as the case may be, of the
Securities Act of 1934 as filed with the Securities and Exchange Commission
to satisfy its requirement under Sections 7.1(a) and (b);
(e) no later than 5 Business Days prior to the effectiveness thereof,
copies of substantially final drafts of any proposed amendment, supplement,
waiver or other modification with respect to the Senior Subordinated Note
Indenture or the Share Exchange Agreement;
(f) within five days after the same are sent, copies of all financial
statements and reports that Holdings or the Borrower sends to the holders
of any class of its debt securities or public equity securities and, within
five days after the same are filed, copies of all financial statements and
reports that Holdings or the Borrower may make to, or file with, the SEC;
and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request (through the Administrative
Agent).
7.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except (i) where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Holdings, the Borrower or its Subsidiaries, as the case may be or
(ii) the failure to so pay, discharge or otherwise satisfy could not reasonably
be expected to have a Material Adverse Effect.
7.4. Maintenance of Existence; Compliance. (a)(i) Preserve, renew and
keep in full force and effect its corporate existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted herein and except, in the case of clause (ii) above, to
57
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
7.5. Maintenance of Property; Insurance. (a) Keep all material
property useful and necessary, in such Person's reasonable judgment, in such
Person's business in good working order and condition, ordinary wear and tear
and damage caused by casualty excepted and (b) maintain with financially sound
and reputable insurance companies (i) insurance on all its property in at least
such amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business and (ii) key-man insurance on Robert Mariano in the amount of
$2,000,000 and for a period of no less than two years from the date hereof (it
being understood that such key-man insurance shall be obtained within 30 days of
the date hereof).
7.6. Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender (coordinated through the Administrative Agent) to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records (other than materials protected by attorney-client
privilege) during regular business hours and upon reasonable prior notice by the
Administrative Agent and to discuss the business, operations, properties and
financial and other condition of Holdings, the Borrower and its Subsidiaries
with officers and employees of Holdings, the Borrower and its Subsidiaries and
with its independent certified public accountants, so long as the Borrower is
afforded an opportunity to be present at any such discussion with such
accountants. It is understood that, so long as no Event of Default has occurred
and is continuing, such visits, inspections and examinations by the Lenders
shall be at the expense of the Borrower no more than one time annually.
7.7. Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any litigation, investigation or proceeding that may exist at any
time between Holdings, the Borrower or any of its Subsidiaries and any
Governmental Authority which could reasonably be expected to be adversely
determined or settled and, if adversely determined or settled, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting Holdings, the Borrower or
any of its Subsidiaries which could reasonably be expected to be adversely
determined or settled (i) in which the amount involved is $5,000,000 or
more and not covered by insurance or (ii) in which injunctive or similar
relief is sought;
58
(d) any litigation or proceeding affecting Holdings, the Borrower or
any of its Subsidiaries which relates to any Loan Document;
(e) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Single Employer
Plan, a failure to make any required contribution to a Single Employer Plan
or a Multiemployer Plan, the creation of any Lien in favor of the PBGC or a
Single Employer Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Single Employer Plan or Multiemployer Plan; and
(f) any development or event that has had a Material Adverse Effect.
Each notice pursuant to this Section 7.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Holdings, the Borrower or the relevant
Subsidiary proposes to take with respect thereto.
7.8. Environmental Laws. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
7.9. Additional Collateral, etc. (a) With respect to any property
acquired after the Closing Date by Holdings, the Borrower or any of its
Subsidiaries (other than (x) any property described in paragraph (b), (c) or (d)
below, (y) any property subject to a Lien expressly permitted by Section 8.3(g),
(z) property acquired by any Foreign Subsidiary and (aa) any property of the
type excluded from the Security Documents) as to which the Administrative Agent,
for the benefit of the Lenders, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or such other documents as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a security interest in such property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in such
property (other than Liens permitted under Section 8.3), including the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law.
59
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $2,000,000 acquired after
the Closing Date by Holdings, the Borrower or any of its Subsidiaries (other
than (x) any such real property subject to a Lien expressly permitted by Section
8.3(g) and (z) real property acquired by any Foreign Subsidiary), promptly (i)
execute and deliver a first priority Mortgage, in favor of the Administrative
Agent, for the benefit of the Lenders, covering such real property, (ii) if
requested by the Administrative Agent, provide the Lenders with (x) title and
extended coverage insurance covering such real property in an amount at least
equal to the purchase price of such real property (or such other amount as shall
be reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor's certificate and (y) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such mortgage or deed of trust, each of the foregoing in form
and substance reasonably satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Subsidiary (other than a Foreign
Subsidiary) created or acquired after the Closing Date by Holdings (which, for
the purposes of this paragraph (c), shall include any existing Subsidiary that
ceases to be a Foreign Subsidiary), the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest (subject to Liens
permitted under Section 8.3) in the Capital Stock of such new Subsidiary that is
owned by Holdings, the Borrower or any of its Subsidiaries, (ii) deliver to the
Administrative Agent the certificates, if any, representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of Holdings, the Borrower or such Subsidiary, as the case may
be, (iii) cause such new Subsidiary (A) to become a party to the Guarantee and
Collateral Agreement, (B) to take such actions necessary or advisable to grant
to the Administrative Agent for the benefit of the Lenders a perfected first
priority security interest (subject to Liens permitted under Section 8.3) in the
Collateral described in the Guarantee and Collateral Agreement with respect to
such new Subsidiary, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be reasonably requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the form of Exhibit C, with
appropriate insertions and attachments, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Foreign Subsidiary created or acquired
after the Closing Date by Holdings, the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest (subject to Liens
permitted under Section 8.3) in the Capital Stock of such new Subsidiary that is
60
owned by Holdings, the Borrower or any of its Subsidiaries (provided that in no
event shall more than 65% of the total outstanding Capital Stock of any such new
Subsidiary be required to be so pledged), (ii) deliver to the Administrative
Agent the certificates, if any, representing such Capital Stock, together with
undated stock powers, in blank, executed and delivered by a duly authorized
officer of Holdings, the Borrower or such Subsidiary, as the case may be, and
take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Administrative Agent's security
interest therein, and (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
7.10. Further Assurances. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of the
Security Documents, or of more fully perfecting or renewing the rights of the
Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by any Loan Party
which may be deemed to be part of the Collateral) pursuant hereto or thereto.
Upon the exercise by the Administrative Agent or any Lender of any power, right,
privilege or remedy pursuant to this Agreement or the other Loan Documents which
requires any consent, approval, recording qualification or authorization of any
Governmental Authority, the Borrower will execute and deliver, or will cause the
execution and delivery of, all applications, certifications, instruments and
other documents and papers that the Administrative Agent or such Lenders may be
required to obtain from any Loan Party for such governmental consent, approval,
recording, qualification or authorization.
SECTION 8. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding (unless collateralized on terms and conditions satisfactory to the
Issuing Lender following the termination of the Commitments and the repayment of
all amounts due and payable under the Loan Documents) or any Loan or other
amount is owing (excluding contingent indemnification obligations or obligations
with respect to Specific Hedge Agreements) to any Lender or Agent hereunder,
each of Holdings and the Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
8.1. Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Fiscal Quarter Consolidated
Ending On or About Leverage Ratio
------------------ --------------
September 30, 2002 4.50 to 1.00
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December 31, 2002 4.50 to 1.00
March 31, 2003 4.50 to 1.00
June 30, 2003 4.50 to 1.00
September 30, 2003 4.25 to 1.00
December 31, 2003 4.25 to 1.00
March 31, 2004 4.00 to 1.00
June 30, 2004 4.00 to 1.00
September 30, 2004 3.75 to 1.00
December 31, 2004 3.75 to 1.00
March 31, 2005 3.50 to 1.00
June 30, 2005 3.50 to 1.00
September 30, 2005 3.25 to 1.00
December 31, 2005 3.25 to 1.00
March 31, 2006 3.00 to 1.00
June 30, 2006 3.00 to 1.00
September 30, 2006 3.00 to 1.00
December 31, 2006 and 3.00 to 1.00
thereafter
(b) Consolidated Senior Leverage Ratio. Permit the Consolidated
Senior Leverage Ratio as at the last day of any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth below
to exceed the ratio set forth below opposite such fiscal quarters:
Fiscal Quarter Consolidated Senior
Ending On or About Leverage Ratio
------------------ --------------
September 30, 2002 3.00 to 1.00
December 31, 2002 3.00 to 1.00
March 31, 2003 2.75 to 1.00
June 30, 2003 2.75 to 1.00
September 30, 2003 2.75 to 1.00
December 31, 2003 2.50 to 1.00
March 31, 2004 2.50 to 1.00
June 30, 2004 2.25 to 1.00
September 30, 2004 2.25 to 1.00
December 31, 2004 2.25 to 1.00
March 31, 2005 2.25 to 1.00
June 30, 2005 2.25 to 1.00
September 30, 2005 2.00 to 1.00
December 31, 2005 2.00 to 1.00
March 31, 2006 2.00 to 1.00
June 30, 2006 2.00 to 1.00
September 30, 2006 2.00 to 1.00
December 31, 2006 and 2.00 to 1.00
thereafter
62
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower (or, if less, the number of full fiscal quarters
subsequent to the Closing Date) ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such fiscal quarter:
Fiscal Quarter Consolidated Fixed Charge
Ending On or About Coverage Ratio
------------------ --------------
September 30, 2002 2.00 to 1.00
December 31, 2002 2.00 to 1.00
March 31, 2003 2.00 to 1.00
June 30, 2003 2.00 to 1.00
September 30, 2003 2.10 to 1.00
December 31, 2003 2.10 to 1.00
March 31, 2004 2.10 to 1.00
June 30, 2004 2.10 to 1.00
September 30, 2004 2.15 to 1.00
December 31, 2004 2.25 to 1.00
March 31, 2005 2.25 to 1.00
June 30, 2005 2.35 to 1.00
September 30, 2005 2.50 to 1.00
December 31, 2005 2.50 to 1.00
March 31, 2006 2.50 to 1.00
June 30, 2006 2.50 to 1.00
September 30, 2006 2.50 to 1.00
December 31, 2006 and 2.50 to 1.00
thereafter
; provided, that for the purposes of determining the ratio described above for
the fiscal quarters of the Borrower ending on or about September 30, 2002,
December 31, 2002 and March 31, 2003, the expenses set forth in items (a) and
(c) of the definition of Consolidated Fixed Charges for the relevant period
shall be deemed to equal the expenses set forth in items (a) and (c) of the
definition of Consolidated Fixed Charges for such fiscal quarter (and, in the
case of the latter two such determinations, each previous fiscal quarter
commencing after the Closing Date) multiplied by 4, 2 and 4/3, respectively.
8.2. Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document
(other than Additional Acquisition Extensions of Credit);
(b) Indebtedness (i) of the Borrower to any Subsidiary, (ii) of any
Subsidiary Guarantor to the Borrower or any other Subsidiary, (iii) of any
Foreign Subsidiary to any Foreign Subsidiary and (iv) subject to Section
8.8(h), of any Foreign Subsidiary to the Borrower or any Subsidiary
Guarantor;
63
(c) Guarantee Obligations incurred in the ordinary course of business
by the Borrower or any of its Subsidiaries of (i) obligations of the
Borrower, any Subsidiary Guarantor and, subject to Section 8.8(h), of any
Foreign Subsidiary or (ii) Indebtedness of any Investee Store permitted by
clause (j) of Section 8.8;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 8.2(d) and any refinancings, refundings, renewals or extensions
thereof (without increasing, or shortening the maturity of, the principal
amount thereof);
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 8.3(g) in an aggregate
principal amount not to exceed $15,000,000 at any one time outstanding;
(f) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes (or any subordinated notes issued to refinance the
Senior Subordinated Notes having substantially the same terms and
conditions as the Senior Subordinated Notes (except that the final maturity
thereof shall be the same as or longer than the final maturity of the
Senior Subordinated Notes)) and (ii) Guarantee Obligations of any
Subsidiary Guarantor in respect of such Indebtedness, provided, that such
Guarantee Obligations are subordinated to the same extent as the
obligations of the Borrower in respect of the Senior Subordinated Notes;
(g) Hedge Agreements in respect of Indebtedness otherwise permitted
hereby that bears interest at a floating rate, so long as such agreements
are not entered into for speculative purposes;
(h) Indebtedness incurred by the Borrower to finance any Acquisition
permitted under Section 8.8(i) in an aggregate principal amount not to
exceed $75,000,000 at any time outstanding; provided, that such
Indebtedness is either (A) an Additional Acquisition Extension of Credit or
(B) is subordinated to the same extent as the obligations of the Borrower
in respect of the Senior Subordinated Notes;
(i) (x) Indebtedness of a Person which becomes a Subsidiary after the
Closing Date pursuant to an Acquisition or a Pick 'n Save Acquisition, as
the case may be, permitted under Section 8.8(i) and (y) Indebtedness of a
Person otherwise assumed in connection with an Acquisition or a Pick 'n
Save Acquisition, as the case may be, or an asset acquired after the
Closing Date, provided that, (A) any such Indebtedness was not incurred or
created in connection with or in anticipation of the relevant Acquisition
or a Pick 'n Save Acquisition, as the case may be, and (B) no Default or
Event of Default would result therefrom; provided, further that the
aggregate principal amount of any such Indebtedness shall not exceed
$15,000,000 at any one time outstanding;
(j) Indebtedness resulting from the issuance of performance, surety,
statutory or appeal bonds in the ordinary course of business; provided,
that no such bond or similar obligation is provided to secure the repayment
of other Indebtedness;
(k) Indebtedness of Holdings or the Borrower consisting of (x)
repurchase obligations with respect to Capital Stock of Holdings issued to
directors, consultants,
64
managers, officers and employees of Holdings and its Subsidiaries arising
upon the death, disability or termination of employment of such director,
consultant, manager, officer or employee to the extent such repurchase is
permitted under Section 8.6 and (y) promissory notes issued by Holdings or
the Borrower to directors, consultants, managers, officers and employees
(or their spouses or estates) of Holdings and its Subsidiaries to purchase
or redeem Capital Stock of Holdings issued to such director, consultant,
manager, officer or employee to the extent such purchase or redemption is
permitted under Section 8.6;
(l) Indebtedness of Holdings or any of its Subsidiaries resulting
from agreements providing for indemnification, adjustment of purchase price
or similar obligations in connection with dispositions of any business,
assets or Subsidiary of the Borrower or any of its Subsidiaries permitted
under Section 8.5;
(m) Indebtedness in the form of obligations of Holdings or any of its
Subsidiaries under indemnification, incentive, non-compete, deferred
compensation, or other similar arrangements in connection with an
Acquisition or an Investment permitted under Section 8.8;
(n) Indebtedness of Holdings to the Borrower incurred in lieu of the
Borrower making a Restricted Payment pursuant to Section 8.6(b) or (c), in
an aggregate amount not to exceed the amount of cash dividends that the
Borrower would be permitted to make pursuant to Sections 8.6(b) and (c) if
no such Indebtedness was incurred;
(o) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount not to exceed $20,000,000 at
any one time outstanding; and
(p) Indebtedness of the Borrower that is incurred to finance an
Acquisition or a Pick 'n Save Acquisition and that is owed to the seller
pursuant to such Acquisition or Pick 'n Save Acquisition, as the case may
be; provided, that (A) such Indebtedness is subordinated to the Loans on
terms and conditions satisfactory to the Administrative Agent, (B) no
portion of the principal of such Indebtedness shall be due and payable
prior to six months after the maturity of Term Loans, (C) the interest rate
of such Indebtedness shall not exceed prevailing market interest rates as
reasonably determined by the chief financial officer and (D) the aggregate
amount of Indebtedness incurred pursuant to this Section 8.2(p) shall not
exceed $15,000,000 at any one time outstanding.
8.3. Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes assessments, charges or other governmental levies
not yet due or that are being contested in good faith by appropriate
proceedings, provided, that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;
(b) landlord's, carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
that are not overdue for a period of more than 30 days or that are being
contested in good faith by appropriate proceedings;
65
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and pledges
securing liability to insurance carriers under insurance or self-insurance
arrangements in respect of deductibles; provided, that the aggregate amount
of any such pledges or deposits shall not exceed $3,000,000;
(d) deposits to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) (i) easements, rights-of-way, restrictions and other similar
encumbrances (which, for the avoidance of doubt, includes covenants running
with the land), that, in the aggregate, are not substantial in amount and
that do not in any case materially detract from the value of the Property
subject thereto or materially interfere with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries and (ii) any other Lien
or exception to coverage described in mortgage policies of title insurance
or surveys issued in favor of and accepted by the Administrative Agent with
respect to any Property with a Mortgage;
(f) Liens in existence on the date hereof listed on Schedule 8.3(f),
securing Indebtedness permitted by Section 8.2(d), provided, that no such
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 8.2(e) to finance the acquisition,
construction, repair or improvement of real property, fixed or capital
assets, provided, that (i) such Liens shall be created within 180 days of
the acquisition of such fixed or capital assets, (ii) such Liens do not at
any time encumber any Property other than the Property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is not
increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor, sublessor, licensor or licensee
under any lease or license entered into by the Borrower or any other
Subsidiary in the ordinary course of its business and covering only the
assets so leased;
(j) Liens not otherwise permitted by this Section so long as neither
(i) the aggregate outstanding principal amount of the obligations secured
thereby nor (ii) the aggregate fair market value (determined as of the date
such Lien is incurred) of the assets subject thereto exceeds (as to the
Borrower and all Subsidiaries) $10,000,000 at any one time;
(k) Liens on any assets acquired after the Closing Date securing
Indebtedness permitted under Section 8.2(h)(A) and (i), provided that (x)
such Liens were not incurred or created in connection with or in
anticipation of the acquisition thereof, (y) such Liens do not cover or
encumber any assets of the Borrower or its Subsidiaries (other than the
66
assets being acquired) and are not amended to cover any such assets or (z)
the amount of Indebtedness or other obligations secured thereby are not
increased;
(l) Liens arising out of judgments or awards in respect of Holdings or
any of its Subsidiaries not constituting an Event of Default under Section
9(h) so long as (i) such Lien is released within 60 days after entry
thereof or (ii) the relevant judgment creditor has not commenced action to
attach or foreclosure on property of the Borrower or any of its
Subsidiaries;
(m) contractual or statutory Liens of suppliers on goods provided by
the relevant suppliers imposed by law or pursuant to customary reservations
or retentions of title arising in the ordinary course of business;
(n) rights of setoff of a customary nature or bankers' liens upon
deposits of cash in favor of banks or other depository institutions
incurred in the ordinary course of business;
(o) Liens arising from precautionary Uniform Commercial Code
financing statements regarding operating leases or consignments entered
into in the ordinary course of business by the Borrower and its
Subsidiaries;
(p) Liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto;
(q) Liens securing reimbursement obligations in respect of commercial
letters of credit or bankers' acceptances related to drawings thereunder;
provided that such Liens attach only to the documents, the goods covered
thereby and the proceeds thereof.
8.4. Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Subsidiary Guarantor (provided
that the Subsidiary Guarantor shall be the continuing or surviving
corporation) or, subject to Section 8.8(h), with or into any Foreign
Subsidiary;
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor or, subject to Section 8.8(h), any Foreign Subsidiary;
and
(c) (i) any Disposition of or by a Subsidiary permitted under Section
8.5(f) or (ii) any merger, consolidation or amalgamation to effect any
Investment permitted under Section 8.8(i).
67
8.5. Disposition of Property. Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of damaged, obsolete, worn out or surplus
property in the ordinary course of business;
(b) the Disposition of inventory and equipment held for sale in the
ordinary course of business;
(c) Dispositions permitted by Section 8.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to any
Loan Party;
(e) leases, subleases and licenses of customer-operated stores in the
ordinary course of business consistent with past practice;
(f) the Disposition of other property having a fair market value not
to exceed $20,000,000 in the aggregate for any fiscal year of the Borrower,
provided that at least 75% of the consideration therefor shall consist of
cash or cash equivalents;
(g) the sale of Investments permitted pursuant to Section 8.8(b) and
Dispositions to effect Investments permitted pursuant to Section 8.8(g);
(h) any Recovery Event; provided, that the requirements of Section
4.2(b) are complied with in connection therewith;
(i) sales or discounts of receivables in the ordinary course of
business in connection with the compromise or collection thereof; and
(j) cancellation of any Indebtedness constituting an Investment in a
Loan Party permitted pursuant to Section 8.8 if Capital Stock of such Loan
Party is issued in substitution therefor or repayment thereof.
8.6. Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of Holdings, the Borrower or any Subsidiary,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of Holdings, the Borrower or any Subsidiary, or enter into any
derivatives or other transaction with any financial institution, commodities or
stock exchange or clearinghouse (a "Derivatives Counterparty") obligating
Holdings, the Borrower or any Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of any such Capital Stock
(collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the Borrower or
any Subsidiary Guarantor;
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(b) so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, the Borrower may pay
dividends to Holdings to permit Holdings to purchase Holdings' Capital
Stock or Capital Stock options from present or former officers,
directors, consultants, managers or employees or their respective
estates, spouses or family members of Holdings, the Borrower or any
Subsidiary upon the death, disability or termination of employment of
such officer, directors, consultants, managers or employee, or to make
payments with respect to Indebtedness issued to repurchase such
Capital Stock or Capital Stock options; provided, that the aggregate
amount of payments (including, without limitation, payments in respect
of Indebtedness permitted under Section 8.2(k)) under this subsection
shall not exceed $2,000,000 in any twelve-month period; provided
further, that (i) Holdings and the Borrower, without duplication, may
carry forward and make in a subsequent calendar year, in addition to
the amounts permitted for such calendar year, the amount of such
purchases, redemptions or other acquisitions or retirements for value
permitted to have been made but not made in any preceding calendar
year up to a maximum of $6,000,000 in any calendar year pursuant to
this clause (b) and (ii) that such amount in any calendar year may be
increased by the cash proceeds of key man life insurance policies
received by the Borrower and its Subsidiaries after the Closing Date
less any amount previously applied to the payment of Restricted
Payments pursuant to this clause (b); provided further, that
regardless of whether a Default or an Event of Default shall have
occurred and be continuing, (x) Holdings and the Borrower, without
duplication, may use the Net Cash Proceeds received from the issuance
of Excluded Sponsor Capital Stock to finance such purchases so long as
(i) the aggregate amount of any such purchases made in reliance on
this proviso of this Section 8.6(b), together with any Investments
made in reliance on Section 8.8(r) and any Capital Expenditures
incurred in reliance on clause (vi) of the definition of "Capital
Expenditures" do not exceed in the aggregate $25,000,000 and (ii) such
proceeds are immediately utilized for such purchases and (y) Holdings
may cancel any notes outstanding pursuant to Section 8.8(d) so long as
such notes were initially issued in a non-cash transaction in exchange
for the issuance of Capital Stock of Holdings to the holders of such
notes and such notes are cancelled solely in exchange for the return
of such Capital Stock and so long as the aggregate principal amount of
any such notes so cancelled shall not exceed $3,000,000 during the
term of this Agreement (and any such repurchase of Capital Stock in
connection with any such cancellation shall be permitted hereunder and
shall not be included for purposes of determining compliance with the
monetary thresholds in the first and second proviso hereof);
(c) the Borrower may pay dividends to Holdings to permit Holdings
to (i) pay corporate overhead expenses incurred in the ordinary course
of business (including without limitation, directors' and
shareholders' fees and expenses) not to exceed $500,000 in any fiscal
year plus any bona fide indemnification claims made by directors or
officers of Holdings that are not covered by insurance and (ii) pay
any taxes that are due and payable by Holdings and the Borrower as
part of a consolidated group, provided that the amount of Restricted
Payments permitted hereunder shall be reduced by any Indebtedness
incurred pursuant to Section 8.2(k);
(d) repurchases of Capital Stock of Holdings deemed to occur upon
the cashless exercise of stock options and warrants;
69
(e) the Borrower may pay dividends to Holdings to permit
Holdings to repurchase Capital Stock of Holdings pursuant to equity
agreements with customers of the Borrower; provided, that the
aggregate amount of all such repurchases under this Section 8.6(e)
shall not exceed $2,000,000;
(f) Holdings may make payments pursuant to Section 8.10(a); and
(g) the Borrower may pay a dividend to Holdings on the Closing
Date to finance the Share Exchange in accordance with the Share
Exchange Documentation; provided, that such payment must be
contemporaneously utilized by Holdings to consummate the Share
Exchange.
8.7. Capital Expenditures. Make any Capital Expenditure, except
(a) Capital Expenditures of the Borrower and its Subsidiaries not exceeding
during any of the fiscal years of the Borrower set forth below, the amount set
forth opposite such fiscal year below:
Fiscal Year Amount
--------------- ------------
2002 $60,000,000
2003 $70,000,000
2004 $65,000,000
2005 $60,000,000
2006 and thereafter $55,000,000
provided, that (i) up to $10,000,000 of any such amount referred to above, if
not so expended in the period for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (ii) Capital Expenditures
made pursuant to this clause (a) during any fiscal year shall be deemed made,
first, in respect of amounts carried over from the prior period pursuant to
subclause (i) above and, second, in respect of amounts permitted for such fiscal
year as provided above, (b) Capital Expenditures made with the proceeds of any
Reinvestment Deferred Amount, (c) Capital Expenditures attributable to all or a
portion of the cost of Acquisitions permitted under Section 8.8 and (d) Capital
Expenditures attributable to any portion of the Excess Cash Flow of the Borrower
for fiscal years completed since the Closing Date which was not required to be
applied toward the prepayment of the Term Loan and not used to finance
Acquisitions as set forth in Section 8.8(i).
8.8. Investments. Make any advance, loan, extension of credit (by
way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, any Person (all of the foregoing,
"Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 8.2;
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(d) loans and advances to employees of Holdings, the Borrower or any
Subsidiary of the Borrower in the ordinary course of business (including
for travel, entertainment and relocation expenses and for purchases of
Capital Stock of Holdings) in an aggregate amount for Holdings, the
Borrower or any Subsidiary of the Borrower not to exceed $3,000,000 at any
one time outstanding;
(e) the Share Exchange;
(f) Investments in fixed or capital assets useful in the business of
the Borrower and its Subsidiaries made by the Borrower or any of its
Subsidiaries with the proceeds of any Reinvestment Deferred Amount;
(g) intercompany Investments by Holdings, the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such Investment,
is a Subsidiary Guarantor;
(h) intercompany Investments by the Borrower or any of its
Subsidiaries made in the ordinary course of business and consistent with
past practice in a Foreign Subsidiary which are made for the purpose of
funding the insurance requirements of Holdings, the Borrower and its
Subsidiaries having an aggregate fair market value (measured on the date
each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made
pursuant to this clause (h) that are at that time outstanding not to exceed
0.65% of the Borrower's net sales and service fees for the Borrower's most
recently ended four full quarters for which financial statements are
available immediately preceding the date on which such Investment is made;
(i) Acquisitions or Pick 'n Save Acquisitions by the Borrower and the
Subsidiary Guarantors, provided that (A) in connection with any
Acquisition, the aggregate consideration in any given fiscal year
(excluding consideration in the form of Capital Stock of Holdings but
including Indebtedness permitted under Section 8.2(i) and 8.2(p) incurred
in connection with Acquisitions) for all such Acquisitions after the
Closing Date shall not exceed the sum of (x) $20,000,000, (y) any portion
of the Excess Cash Flow of the Borrower for fiscal years completed since
the Closing Date which was not required to be applied toward the prepayment
of the Term Loan and not used to finance Capital Expenditures as set forth
in Section 8.7, (z) Net Cash Proceeds received by Holdings from the
issuance of Capital Stock of Holdings to the Sponsor; provided, that such
proceeds are immediately utilized for such Acquisition ("Excluded
Acquisition Capital Stock") and (aa) any Reinvestment Deferred Amount, (B)
in connection with any Acquisition or Pick 'n Save Acquisition, after
giving effect to the consummation of such Acquisition or Pick 'n Save
Acquisition, including the incurrence of any Indebtedness associated
therewith, the Consolidated Leverage Ratio of the Borrower for a period of
four consecutive fiscal quarters ending on the last day of the fiscal
quarter immediately preceding the fiscal quarter in which such Acquisition
or Pick 'n Save Acquisition is consummated (and calculated giving pro forma
effect to such Acquisition or Pick 'n Save Acquisition and such incurrence
of Indebtedness as if they had occurred on the first day of the four
quarter period in respect of which such Consolidated Leverage Ratio is
71
calculated) shall not exceed the applicable ratio required for such
period pursuant to Section 8.1 (with such required ratio, for purposes
of this Section being decreased by 0.25 to 1.00 for each period ending
on, about or prior to December 31, 2003) and the Borrower would have
been in compliance with the covenants set forth in Section 8.1 on such
date, (C) in connection with any Acquisition or Pick 'n Save
Acquisition after giving effect to the consummation of such
Acquisition or Pick 'n Save Acquisition, including the incurrence of
any Consolidated Senior Debt associated therewith, the Consolidated
Senior Debt Leverage Ratio of the Borrower for a period of four
consecutive fiscal quarters ending on the last day of the fiscal
quarter immediately preceding the fiscal quarter in which such
Acquisition or Pick 'n Save Acquisition is consummated (and calculated
giving pro forma effect to such Acquisition or Pick 'n Save
Acquisition and such incurrence of Indebtedness as if they had
occurred on the first day of the four quarter period in respect of
which such Consolidated Senior Debt Leverage Ratio is calculated)
shall not exceed the applicable ratio required for such period
pursuant to Section 8.1 and the Borrower would have been in compliance
with the covenants set forth in Section 8.1 on such date, (D) the
average Available Revolving Commitments during the 30 day period
preceding the date of such Acquisition or Pick 'n Save Acquisition
shall not be less than $50,000,000 after giving effect on a pro forma
basis to such Acquisition or Pick 'n Save Acquisition, (E) not later
than five Business Days prior to the consummation of any such
Acquisition or Pick 'n Save Acquisition, the Administrative Agent
shall have received and be satisfied with (i) a certificate of a
Responsible Officer setting forth the calculations required to
determine compliance with clauses (A), (B), (C) and (D) above and
certifying that the conditions set forth in this Section 8.8(i) have
been satisfied, (ii) financial statements (which financial statements
must be audited or reviewed, in the case of a Pick 'n Save
Acquisition, and audited, in the case of an Acquisition, in each such
case, by independent accountants if the aggregate consideration for
such Pick 'n Save Acquisition or Acquisition, as the case may be, is
equal to or greater than $15,000,000) relating to such Person or
Persons that is the subject of such Acquisition or Pick 'n Save
Acquisition for the most recently ended fiscal year and (iii) such
other financial information relating to the Acquisition or Pick 'n
Save Acquisition as the Administrative Agent may reasonably request,
(F) the Acquisition or Pick 'n Save Acquisition is consummated on a
friendly basis and (G) after giving effect to such Acquisition or Pick
'n Save Acquisition, no Event of Default shall have then occurred and
be continuing;
(j) Investments by the Borrower or the Subsidiary Guarantors in
Investee Stores either in the form of equity, loans or other
extensions of credit having an aggregate fair market value (measured
on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (j) and the aggregate amount
of Indebtedness outstanding under Section 8.2(c)(ii) that are at that
time outstanding not to exceed $20,000,000;
(k) Investments by Holdings and any of its Subsidiaries existing
on the Closing Date and listed on Schedule 8.8;
72
(l) Investments by any Foreign Subsidiary in Holdings or any of
its Subsidiaries;
(m) Investments received by the Borrower or any Subsidiary in
connection with the bankruptcy or reorganization of, or in good faith
settlement of delinquent accounts and disputes with, customers and
suppliers;
(n) Investments by the Borrower or any of its Subsidiaries in the
form of Hedge Agreements that are permitted herein or not speculative
in nature and in the ordinary course of business and consistent with
past practice;
(o) the Borrower and its Subsidiaries may receive and own
securities and other investments acquired pursuant to transactions
permitted by Sections 8.5(f);
(p) the Borrower may make a loan to Holdings that could otherwise
be made as a distribution permitted under Section 8.6;
(q) Investments consisting of endorsements for collection or
deposit in the ordinary course of business; and
(r) Acquisitions by the Borrower or any Subsidiary Guarantor or
Investments by the Borrower or any Subsidiary Guarantor in joint
ventures, in each case financed with the proceeds of Excluded Sponsor
Capital Stock; provided, that any Investments made in reliance on this
clause (r), together with any Capital Expenditures incurred in
reliance on clause (vi) in the definition of "Capital Expenditures"
and any purchases made in reliance on the final proviso of Section
8.6(b), shall not exceed in the aggregate $25,000,000.
8.9. Optional Payments and Modifications of Certain Debt Instruments.
(a) Make or offer to make any optional or voluntary payment, prepayment,
repurchase or redemption of or otherwise optionally or voluntarily defease or
segregate funds with respect to the Senior Subordinated Notes (other than an
exchange of Capital Stock of Holdings to the holders of the Senior Subordinated
Notes for the cancellation of all or any portion of the Senior Subordinated
Notes), or enter into any derivative or other transaction with any Derivatives
Counterparty obligating Holdings, the Borrower or any Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in market
value of the Senior Subordinated Notes, (b) amend, modify, waive or otherwise
change, or consent or agree to any amendment, modification, waiver or other
change to, any of the terms of the Senior Subordinated Notes (other than any
such amendment, modification, waiver or other change that (i) would extend the
maturity or reduce the amount of any payment of principal thereof or reduce the
rate or extend any date for payment of interest thereon, (ii) does not involve
the payment of a consent fee and (iii) would not reasonably be expected to
materially increase the obligations of the obligor or confer additional material
rights on the holder of such Senior Subordinated Notes in a manner reasonably
expected to be materially adverse to the interests of the Administrative Agent
or the Lenders), (c) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, the terms of
the preferred Equity in a manner that would (i) set the scheduled redemption
date prior to the date that is six months after the date of final maturity of
the Term Loans or (ii) allow the holders of such preferred Equity to redeem, at
their
73
option, prior to the date that is six months after the date of final maturity of
the Term Loans or (d) designate any Indebtedness (other than obligations of the
Loan Parties pursuant to the Loan Documents) as "Designated Senior Debt" for the
purposes of the Senior Subordinated Note Indenture.
8.10. Transactions with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than Holdings or any of its Subsidiaries) unless such
transaction is (a) otherwise permitted under this Agreement, or (b) upon fair
and reasonable terms not materially less favorable to Holdings, the Borrower or
such Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person that is not an Affiliate. Notwithstanding the
foregoing, Holdings and its Subsidiaries may:
(a) make payments of reasonable professional fees to WSP or any
of its Affiliates in connection with work performed on the Borrower's
behalf and that are approved by the board of directors of the Borrower
in good faith not to exceed $1,000,000 in the aggregate in any fiscal
year;
(b) make payments in connection with the Share Exchange
Documentation, the Senior Subordinated Note Indenture, this Agreement
and the other Loan Documents (including the payment of costs, fees and
expenses in connection therewith);
(c) pay customary fees to, and the out-of-pocket expenses of,
the board of directors of Holdings and its Subsidiaries, and customary
indemnities for the benefit of the members of such board of directors
and the officers of Holdings and its Subsidiaries;
(d) make payments permitted pursuant to Section 8.6;
(e) enter into (i) transactions with customers in the ordinary
course of business and consistent with past practice as of the date
hereof and (ii) transactions pursuant to any other contract or
agreement in effect on the date hereof and listed on Schedule 8.10;
(f) pay customary compensation to officers, directors,
consultants, managers and employees of Holdings or any of its
Subsidiaries; and
(g) issue Capital Stock and/or Capital Stock rights of Holdings
to (1) Equity Investors and other investors satisfactory to WSP, (2)
employees, directors, consultants, officers and managers of Holdings
and its Subsidiaries and (3) Investee Stores.
8.11. Sales and Leasebacks. Enter into any arrangement with any
Person providing for the leasing by Holdings, the Borrower or any Subsidiary of
real or personal property that has been or is to be sold or transferred by
Holdings, the Borrower or such Subsidiary to such Person or to any other Person
to whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of Holdings, the Borrower or such Subsidiary
("Sale and Leaseback Transactions") unless (i) the sale of such property is
74
permitted by Section 8.5(f) and (ii) any Capital Lease Obligations and Liens
arising in connection therewith are permitted by Section 8.2 and 8.3.
8.12. Changes in Fiscal Periods. Change the fiscal year of the
Borrower from the 52 or 53 week period ending on the Saturday nearest December
31 or change the Borrower's method of determining fiscal quarters.
8.13. Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of Holdings, the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, other than:
(a) this Agreement and the other Loan Documents;
(b) any agreements governing any purchase money Liens, Capital Lease
Obligations or Sale and Leaseback Transactions otherwise permitted hereby
(in which case, any prohibition or limitation shall only be effective
against the assets financed thereby);
(c) the Senior Subordinated Note Indenture;
(d) imposed by law;
(e) contained in agreements relating to the sale of a Subsidiary
permitted hereunder pending such sale (in which case any such prohibition
or limitation shall apply only to the assets of such Subsidiary);
(f) contained in licenses or leases entered into in the ordinary
course of business (in which case any such prohibition or limitation shall
only apply to rights under such license or lease);
(g) contained in agreements for or instruments evidencing
Indebtedness existing on the Closing Date and listed on Schedule 8.13;
(h) contained in agreements or instruments assumed or acquired in
connection with an Acquisition (in which case any such prohibition or
limitation shall only apply to the assets acquired in such Acquisition);
and
(i) contained in agreements for or instruments evidencing
Indebtedness permitted to be secured under Section 8.3(j) (in which case
any such prohibition or limitation shall only apply to the assets subject
to the applicable permitted Lien).
8.14. Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
75
Subsidiary of the Borrower, except for such encumbrances or restrictions set
forth on Schedule 8.14 or existing under or by reason of (i) any restrictions
existing under the Loan Documents, (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital Stock
or assets of such Subsidiary, (iii) applicable law, (iv) the Senior Subordinated
Note Indenture (or any other agreement governing Indebtedness permitted under
Section 8.2(f)), (v) customary provisions restricting the assignment of rights
under contracts, (vi) customary non-assignment provisions in leases entered into
in the ordinary course of business and consistent with past practices, (vii)
purchase money obligations for Property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (c) above on
the Property so acquired, (viii) any agreement for the sale of a Subsidiary that
restricts distributions by that Subsidiary pending its sale, (ix) restrictions
on cash or other deposits or net worth imposed by customers under contracts
entered in the ordinary course of business and (x) restrictions on rights to
dispose of assets subject to Liens permitted under Section 8.3(e), 8.3(f),
8.3(g), 8.3(h), 8.3(i), 8.3(j), 8.3(k), 8.3(p) or 8.3(q).
8.15. Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or that are
reasonably related, ancillary or complementary thereto.
8.16. Amendments to Share Exchange Documents. (a) Amend, supplement or
otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of
the indemnities and licenses furnished to the Borrower or any of its
Subsidiaries pursuant to the Share Exchange Documentation such that after giving
effect thereto such indemnities or licenses shall be materially less favorable
to the interests of the Loan Parties or the Lenders with respect thereto or (b)
otherwise amend, supplement or otherwise modify the terms and conditions of the
Share Exchange Documentation or any such other documents except for any such
amendment, supplement or modification that (i) becomes effective after the
Closing Date and (ii) could not reasonably be expected to have a Material
Adverse Effect.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
76
(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of
Section 7.4(a) (with respect to Holdings and the Borrower only),
Section 7.7(a) or Section 8 of this Agreement or Sections 5.5 and
5.7(b) of the Guarantee and Collateral Agreement or (ii) a "Designated
Event of Default" under and as defined in any Mortgage shall have
occurred and be continuing; or
(d) any Loan Party shall default in the observance or performance
of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of
30 days after notice to the Borrower from the Administrative Agent or
the Required Lenders; or
(e) Holdings, the Borrower or any of its Subsidiaries shall (i)
default in making any payment of any principal of any Indebtedness
(including any Guarantee Obligation, but excluding the Loans) on the
scheduled or original due date with respect thereto, after all
applicable grace periods; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness
was created; or (iii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause,
or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause,
with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or to become subject to a mandatory offer
to purchase by the obligor thereunder or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable;
provided, that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults, events
or conditions of the type described in clauses (i), (ii) and (iii) of
this paragraph (e) shall have occurred and be continuing with respect
to Indebtedness the outstanding principal amount of which exceeds in
the aggregate $12,500,000; or
(f) (i) Holdings, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of
its assets, or Holdings, the Borrower or any of its Subsidiaries shall
make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against Holdings, the Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against Holdings, the Borrower or any
of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of
77
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order
for any such relief that shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) Holdings, the Borrower or any of its Subsidiaries shall take
any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) Holdings, the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due;
or
(g) (i) any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(h) one or more judgments or decrees shall be entered against
Holdings, the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance as to
which the relevant insurance company has acknowledged coverage) of
$15,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 45
days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to
be in full force and effect, or any Loan Party or any Affiliate of any
Loan Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force
and effect or any Loan Party or any Affiliate of any Loan Party shall
so assert; or
(k) (i) the Permitted Investors shall cease to have the power to
vote or direct the voting of securities having a majority of the
ordinary voting power for the election of directors of Holdings
(determined on a fully diluted basis); (ii) prior to the effectiveness
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of an initial registered public offering of the Capital Stock of
Holdings, WSP and its Control Investment Affiliates will collectively
cease to own and control, of record and beneficially, (and have the
exclusive power to vote with respect thereto) directly or indirectly
at least 51% of the aggregate voting power of the outstanding Capital
Stock of Holdings free and clear of all Liens (except Liens created by
the Guarantee and Collateral Agreement) and in any event sufficient to
direct or cause the direction of the management and policies of
Holdings; (iii) after the effectiveness of an initial registered
public offering of the Capital Stock of Holdings, any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
excluding the Permitted Investors, shall become, or obtain rights
(whether by means or warrants, options or otherwise) to become, the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act), directly or indirectly, of more than (x) 30% of the
outstanding Capital Stock of Holdings or (y) a greater percentage of
the outstanding Capital Stock of Holdings than the percentage of such
Capital Stock then owned collectively by WSP and its Control
Investment Affiliates, in each case measured by voting power rather
than number of shares; (iv) the board of directors of Holdings shall
cease to consist of a majority of Continuing Directors; (v) Holdings
shall cease to own and control, of record and beneficially, directly,
100% of each class of outstanding Capital Stock of the Borrower free
and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement); or (vi) a Specified Change of Control shall
occur; or
(l) Holdings shall (i) conduct, transact or otherwise engage in,
or commit to conduct, transact or otherwise engage in, any business or
operations other than (A) those incidental to its ownership of the
Capital Stock of the Borrower, (B) incurring fees, costs and expenses
relating to corporate existence, overhead and general operating
including, without limitation, professional fees for legal, tax and
accounting issues, (C) the issuance of its Capital Stock and the
costs, fees and expenses related thereto, (D) providing
indemnification to officers and directors and as otherwise permitted
in Article VIII and (E) engaging in activities, incurring obligations
and making investments to the extent permitted under Sections 8.6,
8.8(d), 8.8(g) and 8.8(k), (ii) incur, create, assume or suffer to
exist any Indebtedness or other liabilities or financial obligations,
except (x) to the extent permitted under Section 8.2(k), 8.2(l),
8.2(m) or 8.2(n), (y) nonconsensual obligations imposed by operation
of law, (z) pursuant to the Loan Documents to which it is a party and
(aa) obligations with respect to its Capital Stock, (iii) own, lease,
manage or otherwise operate any properties or assets (including cash
(other than cash received in connection with dividends made by the
Borrower in accordance with Section 8.6 pending application in the
manner contemplated by said Section) and cash equivalents other than
$1,000,000 in U.S. Government Securities) other than the ownership of
shares of Capital Stock of the Borrower and (iv) not immediately
contribute to the Borrower the Net Cash Proceeds received from the
issuance of any Capital Stock (including, without limitation, Excluded
Sponsor Capital Stock and Excluded Acquisition Capital Stock); or
(m) the Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations
or the obligations of the Subsidiary Guarantors under the Guarantee
and Collateral Agreement, as the case may be, as provided in the
Senior Subordinated Note Indenture, or any Loan Party, any
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Affiliate of any Loan Party, the trustee in respect of the Senior
Subordinated Notes or the holders of at least 25% in aggregate
principal amount of the Senior Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account (which shall permit Investments in Cash Equivalents
until applied to the Obligations) opened by the Administrative Agent an amount
equal to the aggregate then undrawn and unexpired amount of such Letters of
Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full (excluding contingent indemnification obligations or obligations with
respect to Specific Hedge Agreements), the balance, if any, in such cash
collateral account shall be returned to the Borrower (or such other Person as
may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrower.
SECTION 10. THE AGENTS
10.1. Appointment. Each Lender hereby irrevocably designates and
appoints each Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes such Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this
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Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against any Agent.
10.2. Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
10.3. Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
10.4. Reliance by Agents. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including counsel to
Holdings or the Borrower), independent accountants and other experts selected by
such Agent. The Administrative Agent may deem and treat the payee of any Note as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. Each Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Agents shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
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10.5. Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender, Holdings or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall promptly give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders (or, if so specified by this Agreement, all Lenders or any
other instructing group of Lenders specified by this Agreement); provided, that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
10.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.7. Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by Holdings or the Borrower and
without limiting the obligation of Holdings or the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or
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arising out of, the Commitments, this Agreement, any of the other Loan Documents
or any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
such Agent under or in connection with any of the foregoing; provided, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder.
10.8. Agent in Its Individual Capacity. Each Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Loan Party as though such Agent were not an Agent. With respect to its
Loans made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms "Lender" and "Lenders" shall
include each Agent in its individual capacity.
10.9. Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 9(a) or Section 9(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders and, if applicable,
the Borrower appoint a successor agent as provided for above. The Syndication
Agent and each of the Documentation Agents may, at any time, by notice to the
Lenders and the Administrative Agent, resign as Syndication Agent or
Documentation Agent, as the case may be, hereunder, whereupon the duties,
rights, obligations and responsibilities of the Syndication Agent or
Documentation Agent, as the case may be, hereunder shall automatically be
assumed by, and inure to the benefit of, the Administrative Agent, without any
further act by the Syndication Agent or Documentation Agent, as the case may be,
the Administrative Agent or any Lender. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
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10.10. Agents Generally. Except as expressly set forth herein, no Agent
shall have any duties or responsibilities hereunder in its capacity as such.
10.11. The Lead Arranger. The Lead Arranger, in its capacity as such,
shall have no duties or responsibilities, and shall incur no liability, under
this Agreement and other Loan Documents.
SECTION 11. MISCELLANEOUS
11.1. Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder (except that any amendment or modification of
defined terms used in the financial covenants in this Agreement shall not
constitute a reduction in the rate of interest or fees for purposes of this
clause (i)) or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of any Lender's Revolving Commitment (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of mandatory reduction of
Commitments shall not constitute an increase of Commitment of any Lender and
that an increase in the available portion of any Commitment of any Lender shall
not constitute an increase in the Commitment of any Lender), or amend, modify or
waive Section 4.8 (a), (b) or (c), in each case without the written consent of
each Lender directly affected thereby; (ii) eliminate or reduce the voting
rights of any Lender under this Section 11.1 without the written consent of such
Lender; (iii) reduce any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release all or
substantially all of the Guarantors from their obligations under the Guarantee
and Collateral Agreement, in each case without the written consent of all
Lenders unless otherwise permitted herein or in any other Loan Document; (iv)
amend, modify or waive any provision of Section 10 without the written consent
of each Agent adversely affected thereby; (v) amend, modify or waive any
provision of Section 3.3 or 3.4 without the written consent of the Swingline
Lender; or (vi) amend, modify or waive any provision of Sections 3.7 to 3.14
without the written consent of the Issuing Lender. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the Lenders
and shall be binding upon the Loan Parties, the Lenders, the Agents and all
future holders of the Loans. In the case of any waiver, the Loan Parties, the
Lenders and the Agents shall be restored to their
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former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
For the avoidance of doubt, this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent and the Borrower (or, in the case of Additional Acquisition Extensions of
Credit, with the consent of the Administrative Agent and the Borrower) (a) to
add one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time outstanding thereunder and the accrued
interest and fees in respect thereof (collectively, the "Additional Extensions
of Credit") to share ratably in the benefits of this Agreement and the other
Loan Documents with the Term Loans and Revolving Extensions of Credit (to the
extent applicable) and the accrued interest and fees in respect thereof and (b)
to include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders.
11.2. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of Holdings, the Borrower and the
Lead Agents, and as set forth in an administrative questionnaire delivered to
the Administrative Agent in the case of the Lenders, or to such other address as
may be hereafter notified by the respective parties hereto:
Holdings: 23000 Roundy's Drive
Pewaukee, WI 53072
Attention: Edward G. Kitz
Telecopy: (262) 953-7979
Telephone: (262) 953-7999
The Borrower: 23000 Roundy's Drive
Pewaukee, WI 53072
Attention: Edward G. Kitz
Telecopy: (262) 953-7979
Telephone: (262) 953-7999
With a copy to:
WSP One North Wacker Drive
Suite 4800
Chicago, IL 60606
Attention: Mark Michaels
Telecopy: (312) 422-2424
Telephone: (312) 422-2400
85
Kirkland & Ellis 200 East Randolph Drive
Chicago, IL 60601
Attention: John A. Weissenbach
Telecopy: (312) 861-2200
Telephone: (312) 861-2000
The Administrative Agent: Bear Stearns Corporate Lending Inc.
383 Madison Avenue
New York, NY 10179
Attention: Victor Bulzacchelli
Portfolio Management Group
Telecopy: (212) 272-5466
Telephone: (212) 272-2000
with a copy to: Deutsche Bank
60 Wall Street
Mail Code: NYC 1701
New York, NY 10005
Attention: Donna Liparulo
Telecopy: (212) 797-0407
Telephone: (212) 602-1116
The Syndication Agent: Canadian Imperial Bank of Commerce
425 Lexington Ave.
New York, NY 10017
Attention: Brian O'Callahan
Telecopy: (212) 856-6066
Telephone: (212) 856-4177
with a copy to: Canadian Imperial Bank of Commerce
425 Lexington Ave.
New York, NY 10017
Attention: Vincent Spencer
Telecopy: (212) 856-3761
Telephone: (212) 885-4579
provided, that any notice, request or demand to or upon any Agent, the Issuing
Lender or the Lenders shall not be effective until received.
11.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
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11.4. Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
11.5. Payment of Expenses and Taxes. The Borrower agrees (a) to pay
or reimburse each Lead Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and disbursements
of one counsel to the Lead Agents and filing and recording fees and expenses,
with statements with respect to the foregoing to be submitted to the Borrower
prior to the Closing Date (in the case of amounts to be paid on the Closing
Date) and from time to time thereafter on a quarterly basis or such other
periodic basis as such Lead Agent shall deem appropriate, (b) to pay or
reimburse each Lender and Lead Agent for all its reasonable, out-of-pocket costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including the fees and disbursements of one counsel to the Lead
Agents (unless there is an actual or perceived conflict of interest in which
case each Lead Agent affected thereby may retain its own counsel), and one
counsel for the Lenders (unless there is an actual or perceived conflict of
interest in which case each Lender affected thereby may retain its own counsel)
(c) to pay, indemnify, and hold each Lender and Lead Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
that may be payable or determined to be payable in connection with the execution
and delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender and
Lead Agent and their respective officers, directors, employees, affiliates,
agents, controlling persons and trustees (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations, actual losses, damages,
penalties, actions, judgments, suits, reasonable costs, reasonable expenses or
reasonable disbursements of any kind or nature whatsoever with respect to any
claims or proceedings brought by a third party in connection with the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents, including any of the
foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of Holdings, the Borrower any of its Subsidiaries or any of the
Properties and the reasonable fees and expenses of one counsel to the Lead
Agents (unless there is an actual or perceived conflict of interest in which
case each Lead Agent affected thereby may retain its own counsel) and one
counsel for the Lenders (unless there is an actual or perceived conflict of
interest in which case each Lender affected thereby may retain its own counsel)
in connection with claims, actions or proceedings by any Indemnitee against any
Loan Party under any Loan Document (all the foregoing in this clause (d),
collectively, the "Indemnified Liabilities"), provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities to result from the gross
negligence or willful misconduct of such Indemnitee or disputes among the Lead
Agents and/or any Lenders. Without limiting the
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foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee. All amounts due under this Section
11.5 shall be payable not later than 30 days after written demand is submitted
to the Borrower therefor. Statements payable by the Borrower pursuant to this
Section 11.5, at the address of the Borrower set forth in Section 11.2, or to
such other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section 11.5
shall survive repayment of the Loans and all other amounts payable hereunder.
11.6. Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of Holdings, the
Borrower, the Lenders, the Administrative Agent, all future holders of the Loans
and their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Lender.
(b) Any Lender other than any Conduit Lender may, without the
consent of the Borrower, in accordance with applicable law, at any time sell to
one or more banks, financial institutions or other entities (each, a
"Participant") participating interests in any Loan owing to such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Loans or any fees payable hereunder, or postpone the date of
the final maturity of the Loans, in each case to the extent subject to such
participation. The Borrower agrees that if amounts outstanding under this
Agreement and the Loans are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law (except as
limited by this Agreement), be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, provided, that in purchasing such
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 11.7(a) as fully as
if it were a Lender hereunder. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 4.9, 4.10 and 4.11 with respect to
its participation in the Commitments and the Loans outstanding from time to time
as if it was a Lender; provided, that in the case of Section 4.10, such
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to
88
any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(c) Any Lender other than any Conduit Lender (an "Assignor") may,
in accordance with applicable law, at any time and from time to time assign, to
(i) any Lender, any Affiliate of any Lender or any Approved Fund thereof or (ii)
with the consent of the Borrower and the Administrative Agent (which, in each
case, shall not be unreasonably withheld or delayed), to an additional bank,
financial institution or other entity (an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance, executed by such Assignee, such
Assignor and any other Person whose consent is required pursuant to this
paragraph, and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided, that (A) no such assignment to an Assignee
(other than any Lender, any affiliate of any Lender or any Approved Fund) shall
be in an aggregate principal amount of less than $500,000 (other than in the
case of an assignment of all of a Lender's interests under this Agreement),
unless otherwise agreed by the Borrower and the Administrative Agent, (B) in the
case of any assignment of Revolving Commitments (other than to a Lender or an
Affiliate of a Lender), the consent of Borrower the Issuing Lender and the Swing
Line Lender shall be required, (C) no consent shall be required for any
assignment by the Administrative Agent or any of its Affiliates and (D) no
consent of the Borrower shall be required for any assignment of Term Loans.
Notwithstanding the foregoing, the Borrower's consent (which shall not be
unreasonably withheld or delayed) shall be required for any assignment to any
company which is engaged in a business that is substantially similar to the
Borrower or is a competitor of the Borrower. For purposes of the proviso
contained in the preceding sentence, the amount described therein shall be
aggregated in respect of each Lender and its related Approved Funds, if any. Any
such assignment need not be ratable as among the Facilities. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto).
Notwithstanding any provision of this Section 11.6, the consent of the Borrower
shall not be required for any assignment that occurs when an Event of Default
shall have occurred and be continuing. Notwithstanding the foregoing, any
Conduit Lender may assign at any time to its designating Lender hereunder
without the consent of the Borrower or the Administrative Agent any or all of
the Loans it may have funded hereunder and pursuant to its designation agreement
and without regard to the limitations set forth in the first sentence of this
Section 11.6(c).
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 11.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each other Loan Party, the Administrative Agent and the
Lenders shall treat each
89
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing the Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance,
and thereupon one or more new Notes shall be issued to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed by
an Assignor, an Assignee and any other Person whose consent is required by
Section 11.6(c), together with any tax forms required herein, the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii) record
the information contained therein in the Register on the effective date
determined pursuant thereto.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 11.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.
(h) Each of Holdings, the Borrower, each Lender and the
Administrative Agent hereby confirms that it will not institute against a
Conduit Lender or join any other Person in instituting against a Conduit Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued by
such Conduit Lender; provided, however, that each Lender designating any Conduit
Lender hereby agrees to indemnify, save and hold harmless each other party
hereto for any loss, cost, damage or expense arising out of its inability to
institute such a proceeding against such Conduit Lender during such period of
forbearance.
11.7. Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "Benefited
Lender") shall at any time receive any payment of all or part of the Obligations
owing to it, or receive any collateral in respect thereof (whether voluntarily
or involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 9(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefited Lender to share the excess payment or benefits
of such collateral ratably with each of the Lenders; provided, however, that if
all or any portion of such excess payment or benefits is
90
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) Upon the occurrence and during the continuance of an Event
of Default under Section 9(a), in addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without prior notice
to Holdings or the Borrower, any such notice being expressly waived by Holdings
and the Borrower to the extent permitted by applicable law, upon any amount to
the extent due and payable by Holdings or the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise), to set off and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final, other than payroll or trust accounts), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured, at any
time held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of Holdings or the Borrower, as the case may be. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such setoff and application made by such Lender, provided, that the failure
to give such notice shall not affect the validity of such setoff and
application.
11.8. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.
11.9. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10. Integration. This Agreement and the other Loan Documents
represent the entire agreement of Holdings, the Borrower, the Agents and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by any Agent or any Lender
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Loan Documents.
11.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.12. Submission To Jurisdiction; Waivers. Each of Holdings and
the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition
91
and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New
York, the courts of the United States for the Southern District of New
York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to Holdings or the Borrower, as the case may be at its address
set forth in Section 11.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
11.13. Acknowledgments. Each of Holdings and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) no Agent or Lender has any fiduciary relationship with or
duty to Holdings or the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship
between the Agents and Lenders, on one hand, and Holdings and the
Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among Holdings, the Borrower
and the Lenders.
11.14. Releases of Guarantees and Liens. (a) Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 11.1) to take any action requested by the Borrower having the effect
of releasing any Collateral or guarantee obligations (i) to the extent necessary
to permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 11.1 or (ii) under the
circumstances described in paragraph (b) below.
92
(b) At such time as the Loans, the Reimbursement Obligations
and the other obligations under the Loan Documents (other than contingent
indemnification obligations and obligations under or in respect of Hedge
Agreements) shall have been paid in full, the Commitments have been terminated
and no Letters of Credit shall be outstanding (unless collateralized on terms
and conditions satisfactory to the Issuing Lender following the termination of
the Commitments and the repayment of all amounts due and payable under the Loan
Documents), the Collateral shall be released from the Liens created by the
Security Documents, and the Security Documents and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Loan Party under the Security Documents shall promptly terminate, all
without delivery of any instrument or performance of any act by any Person.
11.15. Confidentiality. Each Agent and each Lender agrees to keep
confidential all non-public information provided to it by or on behalf of the
Sponsor or Equity Investor or any Loan Party or any of their Subsidiaries or any
of such Person's attorneys, agents or accountants pursuant to this Agreement;
provided, that nothing herein shall prevent any Agent or any Lender from
disclosing any such information (a) to any Agent, any other Lender, any
affiliate of any Agent or Lender or any Approved Fund that are made aware of the
provisions of this Section prior to disclosure, (b) to any actual or prospective
Transferee or Hedge Agreement counterparty or any "Other Professional Advisor"
referred to in clause (c) below, in each case, that agrees to comply with the
provisions of this Section prior to disclosure, (c) to its employees, directors,
agents, attorneys, accountants and other professional advisors or those of any
of its affiliates that are made aware of provisions of this Section prior to
disclosure (with such Agent or Lender to be responsible for any breach of this
Section by such Persons), (d) upon the request or demand of any Governmental
Authority, (e) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(f) if requested or required to do so in connection with any litigation or
similar proceeding, (g) that has been publicly disclosed, (h) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender, or (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document.
11.16. WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE AGENTS
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
93
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
ROUNDY'S ACQUISITION CORP.
By: /s/ Robert A. Mariano
----------------------------------
Name:
Title:
ROUNDY'S, INC.
By: /s/ Edward G. Kitz
----------------------------------
Name:
Title:
BEAR, STEARNS & CO. INC., as Sole Lead
Arranger and Sole Bookrunner
By: /s/ Keith C. Barnish
----------------------------------
Name: Keith C. Barnish
Title: Senior Managing Director
BEAR STEARNS CORPORATE LENDING INC.,
as Administrative Agent and as a Lender
By: /s/ Keith C. Barnish
----------------------------------
Name: Keith C. Barnish
Title: Executive Vice President
CANADIAN IMPERIAL BANK OF COMMERCE,
as Syndication Agent
By: /s/ Brian O'Callahan
----------------------------------
Name: Brian O'Callahan
Title: Executive Director
CIBC INC., as Lender
By: /s/ Brian O'Callahan
----------------------------------
Name: Brian O'Callahan
Title: Executive Director
BANK ONE, WISCONSIN
By: /s/ James R. Popp
-----------------------
Name: James R. Popp
Title: Sr. Vice President
[Signature Page to the Roundy's Inc. Credit Agreement, dated as of June 6, 2002]
COOPERATIVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK
INTERNATIONAL"
NEW YORK BRANCH
By: /s/ David W. Nelson
-----------------------
Name: David W. Nelson
Title: Managing Director
/s/ Edward J. Peyser
------------------------
Edward J. Peyser
Managing Director
[Signature Page to the Roundy's Inc. Credit Agreement, dated as of June 6, 2002]
LASALLE BANK
NATIONAL ASSOCIATION
By: /s/ Bernardo Lacayo
-----------------------
Name: Bernardo Lacayo
Title: Vice President
[Signature Page to the Roundy's Inc. Credit Agreement, dated as of June 6, 2002]
ASSOCIATED BANK, N.A.
By: /s/ Mark Matthiesen
-----------------------
Name: Mark Matthiesen
Title: Vice President
[Signature Page to the Roundy's Inc. Credit Agreement, dated as of June 6, 2002]
HARRIS TRUST AND SAVINGS
BANK
By: /s/ Scott Place
----------------------
Name: Scott Place
Title: Vice President
[Signature Page to the Roundy's Inc. Credit Agreement, dated as of June 6, 2002]
M&I MARSHALL & ILSLEY BANK
By: /s/ Eric L. Thomas
-----------------------
Name: Eric L. Thomas
Title: Vice President
By: /s/ Leo D. Freeman
-----------------------
Name: Leo D. Freeman
Title: Vice President
U.S. BANK
NATIONAL ASSOCIATION
By: /s/ Jeff Janza
-----------------------
Name: Jeff Janza
Title: Vice President
[Signature Page to the Roundy's Inc. Credit Agreement, dated as of June 6, 2002]
Annex A
PRICING GRID FOR REVOLVING LOANS, SWINGLINE LOANS
AND COMMITMENT FEES
================================================================================
Applicable Margin for Applicable Margin for Commitment Fee
Pricing Level Eurodollar Loans Base Rate Loans Rate
- --------------------------------------------------------------------------------
Revolving Revolving
Loans Loans
- --------------------------------------------------------------------------------
I 3.25% 2.25% 0.50%
- --------------------------------------------------------------------------------
II 3.00% 2.00% 0.50%
- --------------------------------------------------------------------------------
III 2.75% 1.75% 0.50%
- --------------------------------------------------------------------------------
IV 2.25% 1.25% 0.40%
- --------------------------------------------------------------------------------
V 1.75% 0.75% 0.375%
================================================================================
The Applicable Margin for Revolving Loans and Swingline Loans and the Commitment
Fee Rate shall be adjusted, on and after the first Adjustment Date (as defined
below) occurring after the date which is six months after the Closing Date,
based on changes in the Consolidated Leverage Ratio, with such adjustments to
become effective on the date (the "Adjustment Date") that is three Business Days
after the date on which the relevant financial statements are delivered to the
Lenders pursuant to Section 7.1 and to remain in effect until the next
adjustment to be effected pursuant to this paragraph. If any financial
statements referred to above are not delivered within the time periods specified
in Section 7.1, then, until the date that is three Business Days after the date
on which such financial statements are delivered, the highest rate set forth in
each column of the Pricing Grid shall apply. On each Adjustment Date, the
Applicable Margin for Revolving Loans and Swingline Loans and the Commitment Fee
Rate shall be adjusted to be equal to the Applicable Margins and Commitment Fee
Rate opposite the Pricing Level determined to exist on such Adjustment Date from
the financial statements relating to such Adjustment Date.
As used herein, the following rules shall govern the
determination of Pricing Levels on each Adjustment Date:
"Pricing Level I" shall exist on an Adjustment Date if the
Consolidated Leverage Ratio for the relevant period is greater than or equal to
4.00 to 1.00.
"Pricing Level II" shall exist on an Adjustment Date if the
Consolidated Leverage Ratio for the relevant period is less than 4.00 to 1.00
but greater than or equal to 3.50 to 1.00.
"Pricing Level III" shall exist on an Adjustment Date if the
Consolidated Leverage Ratio for the relevant period is less than 3.50 to 1.00
but greater than or equal to 3.00 to 1.00.
"Pricing Level IV" shall exist on an Adjustment Date if the
Consolidated Leverage Ratio for the relevant period is less than 3.00 to 1.00
but greater than or equal to 2.50 to 1.00.
"Pricing Level V" shall exist on an Adjustment Date if the
Consolidated Leverage Ratio for the relevant period is less than 2.50 to 1.00.
Schedule 1.1B - Mortgaged Property
----------------------------------
- -----------------------------------------------------------------------------------------------------------
STORE # LOCATION COUNTY RECORD OWNER
- -----------------------------------------------------------------------------------------------------------
74 315 S. Main Street, Clark The Copps Corporation,
Greenwood, WI 54437 a Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
103 3256 Church Street, Stevens Portage The Copps Corporation,
Point, WI 54481 a Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
104 2551 Jackson Street, Oshkosh, WI Winnebago The Copps Corporation, a
54907 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
105 1200 S. Koeller Road, Oshkosh, Winnebago The Copps Corporation, a
WI 54901 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
340 S. 8th Street, Medford, WI Taylor The Copps Corporation, a
106 54451 Wisconsin corporation
(as to Parcels C&E)
- -----------------------------------------------------------------------------------------------------------
108 1919 E. Calumet Street, Appleton, Calumet The Copps Corporation, a
WI 54915 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
112 330 N. Peters Ave., Fond du Lac, Fond du Lac The Copps Corporation, a
WI 54935 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
117 1009 Holiday Lane, Hurley, WI Iron The Copps Corporation, a
54534 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
STORE # LOCATION COUNTY RECORD OWNER
- -----------------------------------------------------------------------------------------------------------
118 2400 Wisconsin Avenue, Appleton, Outagamie The Copps Corporation, a
WI 54914 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
119 3310 E. Hamilton Avenue, Eau Eau Claire The Copps Corporation, a
Claire, WI 54701 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
124 1530 S. Commercial, Neenah, WI Winnebago The Copps Corporation, a
54956 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
127 256 S. Lake Street, Phillips, WI Price The Copps Corporation, a
Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
150 1105 N. Central Avenue, Wood The Copps Corporation, a
Marshfield, WI Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
904 2220 Minnesota Avenue, Stevens Portage The Copps Corporation, a
Point, WI 54481 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
912 2828 Wayne Street, Stevens Point, Portage The Copps Corporation, a
WI 54481 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
916 3308 Wayne Street, Stevens Point, Portage The Copps Corporation, a
WI 54481 Wisconsin corporation
(Parcel 2 only)
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
STORE # LOCATION COUNTY RECORD OWNER
- -----------------------------------------------------------------------------------------------------------
1097337 23000 Roundy Drive, Pewaukee, WI Waukesha Jondex Corp., a
53072 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
1097336 23050 Roundy Drive, Pewaukee, WI Waukesha Jondex Corp., a
53072 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
1603 112 W. 8th Street, Monroe, WI Green Jondex Corp., a
Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
1097339 11300/11500 W. Burleigh, Milwaukee Jondex Corp., a
Wauwatosa, WI 53222 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
1097335 16655 West Glendale, New Berlin, Waukesha Jondex Corp., a
WI 53151 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
1097338 12735 W. Capitol Drive, Waukesha Mega Marts Inc., a
Brookfield, WI 53045 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
3446 6500 South US 421, Westville, IN LaPorte The Midland Grocery Company, an
46391 Ohio corporation
- -----------------------------------------------------------------------------------------------------------
63406 1764 Creston Street, Muskegon, Muskegon Midland Grocery of Michigan,
MI 49442 Inc., a Michigan corporation
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
STORE # LOCATION COUNTY RECORD OWNER
- -----------------------------------------------------------------------------------------------------------
62383 111 E. Exchange Street, Ottawa Midland Grocery of Michigan,
Spring Lake, MI 49456 Inc., a Michigan corporation
- -----------------------------------------------------------------------------------------------------------
106495 1317 N. 25th Street, Sheboygan Rindt Enterprises, Inc., a
Sheboygan, WI 53081 Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
106426 Route 45 South, Eldorado, IL Saline Scot Lad Foods, Inc., a Wisconsin
62930 corporation
- -----------------------------------------------------------------------------------------------------------
2008 4501 Peters Road, Evansville, IN Vanderburgh Scot Lad Foods, Inc., a Wisconsin
47711 corporation
- -----------------------------------------------------------------------------------------------------------
3413 6916 Nelson Road, Fort Wayne, IN Allen Scot Lad Foods, Inc., a Wisconsin
46803 corporation
- -----------------------------------------------------------------------------------------------------------
20160121 1100 Prosperity Road, Lima, OH Allen Scot Lad-Lima, Inc., an
45801 Ohio corporation
- -----------------------------------------------------------------------------------------------------------
1350 Wolohan Drive, Ashland, KY Boyd Cardinal Foods, Inc., a Delaware
corporation
- -----------------------------------------------------------------------------------------------------------
12 acre vacant parcel, Oshkosh, WI Winnebago Jondex Corp., a
Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
STORE # LOCATION COUNTY RECORD OWNER
- -----------------------------------------------------------------------------------------------------------
17 acre vacant parcel, Kenosha, WI Kenosha Jondex Corp., a
Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
Lake County parcels, Delafield, WI Waukesha Jondex Corp., a
Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
1350/1390 Royale Mile Rd., Waukesha Jondex Corp., a
Oconomowoc, WI Wisconsin corporation
- -----------------------------------------------------------------------------------------------------------
7 acre vacant parcel, Wellston, OH Jackson Jondex Corp., a Wisconsin
corporation
- -----------------------------------------------------------------------------------------------------------
Schedule 3.7 - Existing Letters of Credit
-----------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Issuing Bank Beneficiary Expiration Date Amount Purpose
- -------------------------------------------------------------------------------------------------------------------------
Bank One, Bank One, 5/31/03 $630,000 Secured obligations to vendor - Direct
Wisconsin Cincinnati, NA (renewable) Source International, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Bank One, Wisconsin Old Republic 12/19/02 $7,014,000 Secured workers' compensation
Insurance Company (renewable) liabilities of Roundy's, Inc.
wholly-owned subsidiary, Badger
Assurance, Ltd.
- -------------------------------------------------------------------------------------------------------------------------
Bank One, Wisconsin Fireman's Fund 12/01/02 $1,940,000 Security to support deductible portion
Insurance Company of liability insurance
- -------------------------------------------------------------------------------------------------------------------------
Schedule 5.15 - Subsidiaries
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NAME JURISDICTION OF PERCENTAGE OF CAPITAL STOCK OWNED
INCORPORATION (and who it is owned by)
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Roundy's, Inc. Wisconsin 100% (Roundy's Acquisition Corp.)
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Badger Assurance Ltd. Bermuda 100% (Roundy's, Inc.)
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Cardinal Food, Inc. Delaware 100% (Scot Lad Foods, Inc.)
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The Copps Corporation Wisconsin 100% (Roundy's, Inc.)
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Holt Public Storage, Inc. Wisconsin 100% (Roundy's, Inc.)
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Insurance Planners, Inc. Wisconsin 100% (Ropak Inc.)
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I.T.A., Inc. Wisconsin 100% (Roundy's, Inc.)
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Jondex Corp. Wisconsin 100% (Roundy's, Inc.)
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Kee Trans, Inc. Wisconsin 100% (Roundy's, Inc.)
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Mega Marts, Inc. Wisconsin 100% (Roundy's, Inc.)
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The Midland Grocery Company Ohio 100% common stock (Shop-Rite, Inc.); 100%
preferred stock (Cardinal Foods, Inc.)
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Midland Grocery of Michigan, Inc. Michigan 100% (Roundy's, Inc.)
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Pick `n Save Warehouse Foods, Inc. Wisconsin 100% (Ropak Inc.)
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Rindt Enterprises, Inc. Wisconsin 100% (Ropak Inc.)
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Ropak Inc. Wisconsin 100% (Roundy's, Inc.)
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Scot Lad Foods, Inc. Wisconsin 100% (Roundy's, Inc.)
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Scot Lad-Lima, Inc. Ohio 100% (Scot Lad Foods, Inc.)
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Shop-Rite, Inc. Wisconsin 100% (Ropak Inc.)
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Spring Lake Merchandise, Inc. Ohio 100% (Scot Lad Foods, Inc.)
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Ultra Mart Foods, Inc. Wisconsin 100% (Roundy's, Inc.)
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Village Market, LLC Indiana 1 Unit (Shop-Rite, Inc.), 99 Units (Scot Lad
Foods, Inc.)
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Schedule 5.19(a) - UCC Filing Jurisdictions
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Debtor Jurisdiction Filing Office
- ------ ------------ -------------
Roundy's Acquisition Corp. Delaware Secretary of State of the State of Delaware
Roundy's, Inc. Wisconsin Wisconsin Department of Financial Institutions
Cardinal Foods, Inc. Delaware Secretary of State of the State of Delaware
The Copps Corporation Wisconsin Wisconsin Department of Financial Institutions
Holt Public Storage, Inc. Wisconsin Wisconsin Department of Financial Institutions
Insurance Planners, Inc. Wisconsin Wisconsin Department of Financial Institutions
I.T.A., Inc. Wisconsin Wisconsin Department of Financial Institutions
Jondex Corp. Wisconsin Wisconsin Department of Financial Institutions
Kee Trans, Inc. Wisconsin Wisconsin Department of Financial Institutions
Mega Marts, Inc. Wisconsin Wisconsin Department of Financial Institutions
The Midland Grocery Co. Ohio Secretary of State of the State of Ohio
Midland Grocery of Michigan, Inc. Michigan Michigan Department of State, U.C.C. Unit
Pick `N Save Warehouse Foods, Inc. Wisconsin Wisconsin Department of Financial Institutions
Rindt Enterprises, Inc. Wisconsin Wisconsin Department of Financial Institutions
Ropak Inc. Wisconsin Wisconsin Department of Financial Institutions
Scot Lad Foods, Inc. Wisconsin Wisconsin Department of Financial Institutions
Scot Lad Lima, Inc. Ohio Secretary of State of the State of Ohio
Shop-Rite, Inc. Wisconsin Wisconsin Department of Financial Institutions
Spring Lake Merchandise, Inc. Ohio Secretary of State of the State of Ohio
Ultra Mart Foods, Inc. Wisconsin Wisconsin Department of Financial Institutions
Village Market, LLC Indiana Secretary of State of the State of Indiana
Schedule 5.19(b) - Mortgage Filing Jurisdictions
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FILING OFFICE
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Clark County Register of Deeds
517 Court Street, Room 303
P.O. Box 384
Neillsville, WI 54456
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Portage County Register of Deeds
1516 Church Street
Stevens Point, WI 54481
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Winnebago County Register of Deeds
Courthouse, Room 30
415 Jackson Street
P.O. Box 2808
Oshkosh, WI 54901
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Taylor County Register of Deeds
224 S. 2nd Street
P.O. Box 403
Medford, WI 54451
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Calumet County Register of Deeds
206 Court Street
Chilton, WI 53014-1198
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Fond du Lac County Register of Deeds
160 S. Macy Street
Fond du Lac, WI 54935
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Iron County Register of Deeds
300 Taconite Street
Hurley, WI 54534
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Outagamie County Register of Deeds
410 S. Walnut Street,
CAB 205
Appleton, WI 54911
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FILING OFFICE
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Eau Claire County Register of Deeds
721 Oxford Avenue, Room 1310
P.O. Box 718
Eau Claire, WI 54703
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Price County Register of Deeds
126 Cherry
Phillips, WI 54555
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Wood County Register of Deeds
400 Market Street
P.O. Box 8095
Wisconsin Rapids, WI 54494
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Waukesha County Register of Deeds
1320 Pewaukee Road
Room 110
Waukesha, WI 53188
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Green County Register of Deeds
1016 16th Avenue
Courthouse
Monroe, WI 53566
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Milwaukee County Register of Deeds
901 N. 9th Street, Room 103
Milwaukee, WI 53233
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La Porte County Recorder
813 Lincolnway, Suite 206
La Porte, IN 46350
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Muskegon County Register of Deeds
County Building
Muskegon, MI 49442
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FILING OFFICE
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Ottawa County Register of Deeds
414 Washington Avenue, Room 305
Grand Haven, MI 49417
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Sheboygan County Register of Deeds
508 New York Avenue, 2nd Floor
P.O. Box 416
Sheboygan, WI 53081-0416
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Saline County Recorder
10 E. Poplar Street
Harrisburg, IL 62946
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Vanderburgh County Recorder
231 City-County Building
1 NW Martin Luther King Jr. Boulevard
Evansville, IN 47708
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Allen County Recorder
1 E. Main Street
City County Building, Room 206
Fort Wayne, IN 46802
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Boyd County Clerk
Courthouse
2800 Louisa Street
Catlettsburg, KY 41129
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Kenosha County Register of Deeds
1010 56 Street
Kenosha, WI 53140
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Jackson County Recorder
Courthouse
226 E. Main Street
Jackson, OH 45640
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Schedule 8.2(d) - Existing Indebtedness
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Capital Leases
- --------------
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Store Location Landlord Term Rent Years Rent Years Rent Years Rent Years
1-5 6-10 11-17.5 17.5-20
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Plover Rice 1/7/00- $331,500 $331,500 $338,300 $338,300
Enterprises 1/6/20
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Stevens Point RBR Joint 8/6/98- $363,240 $375,092 $394,854 $405,907
Venture 8/6/18
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Appleton-West WAC, LLC 12/16/97- $480,000 $480,000 $500,000 $500,000
12/15/17
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Madison-Shopko Koeller Road 5/18/99- $458,250 $458,250 $471,500 $471,500
Partners, LLP 5/17/19
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Long Term Debt
- --------------
Note Payable to Jack Bonser 10% due 2006 $143,222
Note Payable to Jack Bonser 10% due 2006 51,152
Schedule 8.3(f) - Existing Liens
The following described UCC financing statements:
1. Filing No. 207847 filed on February 21, 1972 with the Wisconsin Secretary
of State, naming Midwest General Merchandise Inc., Debtor and General
Electric Company, Secured Party;
2. Filing No. 01946483 filed on April 14, 2000 with the Wisconsin Secretary of
State, naming Roundy's Inc., Debtor and Noritsu America Corporation,
Secured Party;
3. Filing No. 01946483 filed on April 14, 2000 with the Wisconsin Secretary of
State, naming Ultra Mart Foods, Inc., Debtor and Noritsu America
Corporation, Secured Party;
4. Filing No. 612699 filed on June 14, 1982 with the Wisconsin Secretary of
State, naming The Copps Corporation, Debtor and General Electric Company,
Secured Party;
5. Filing No. 02039961 filed on February 28, 2001 with the Wisconsin Secretary
of State, naming The Copps Corporation, Debtor and Wells Fargo Financial,
Secured Party;
6. Filing No. 02039977 filed on February 28, 2001 with the Wisconsin Secretary
of State, naming The Copps Corporation, Debtor and Wells Fargo Financial,
Secured Party;
7. Filing No. 1535794 filed on September 25, 1995 with the Wisconsin Secretary
of State, naming Rindt Enterprises, Inc., Debtor and Norwest Bank, N.A.,
Secured Party (payment of the underlying Indebtedness anticipated on or
about June 28, 2002);
8. Filing No. 01940537 filed on March 28, 2000 with the Wisconsin Secretary of
State, naming Rindt Enterprises, Inc., Debtor and Norwest Bank, N.A.,
Secured Party (payment of the underlying Indebtedness anticipated on or
about June 28, 2002);
9. Filing No. E40152 filed on May 22, 1973 with the Ohio Secretary of State,
naming American Merchandising Associates, Inc. (n/k/a Spring Lake
Merchandise, Inc.), Debtor and General Electric Company, Secured Party;
10. Filing No. G22177 filed on February 18, 1975 with the Ohio Secretary of
State, naming American Merchandising Associates, Inc. (n/k/a Spring Lake
Merchandise, Inc.), Debtor and General Electric Company, Secured Party; and
11. Filing No. 11947 filed on May 22, 1973 with the Ohio Secretary of State,
naming American Merchandising Associates, Inc. (n/k/a Spring Lake
Merchandise, Inc.), Debtor and General Electric Company, Secured Party.
Schedule 8.8 - Investments
--------------------------
Partnership and LLC Investments:
- -------------------------------
State Street Limited Partnership - Agreement of Limited Partnership of State
Street Limited Partnership dated 11/18/82, as amended 12/14/82. Jondex Corp. is
a limited partner holding 34.4% of the partnership (original capital
contribution of $275,000)
Clintonville Land Co. LLC - Limited liability company organized under Wisconsin
law 9/11/98. Jondex Corp. is Managing Member holding a 50% undivided interest.
Stock Investments:
- -----------------
Valley Baker stock - Roundy's Inc. (5 shares) plus Certificates of Indebtedness
Valley Baker stock - Shop Rite, Inc. (5 shares) plus Certificates of
Indebtedness
Valley Baker stock - Copps' Retail (500 shares)
SuperValu stock - Copps' Retail (20 shares)
Fleming Co. - Copps' Retail (1 share)
Schutz Sav-O - Copps' Retail (1 share)
Wal-Mart-Copps' Retail (2 shares)
K-Tel - Copps' Retail (235 shares)
Shurfine Stock - Roundy's (1 share of Class A and 1,783 shares of Class B)
Greater Muskegon Industrial Fund (100 shares)
Grocers Fixtures Co-op (5 shares)
Schedule 8.10 - Affiliate Contracts
State Street Limited Partnership entered into a lease with Shop-Rite, Inc. (now
assigned to Jondex Corp.) dated 12/6/82 for 240 months. This property has been
sublet to an independent operator.
Schedule 8.13 - Negative Pledge Agreements
1. See Capital Leases on Schedule 8.2 Indebtedness
Schedule 8.14 - Restrictions on Subsidiary Distributions
Restrictions contained in the Securities Purchase Agreement, dated June 6, 2002,
by and among Holdings and Willis Stein & Partners III, L.P., Willis Stein &
Partners III-C, L.P., Willis Stein & Partners Dutch III-A, L.P., Willis Stein &
Partners Dutch III-B, L.P., each a Delaware limited partnership, as amended,
restated, supplemented or otherwise modified from time to time in a manner not
materially adverse to the Agent and the Lenders.