1
FILED PURSUANT TO RULE 424(b)(3)
FILE NOS. 333-38337-01,
333-38337-02, 333-38337-04,
333-38337-05, 333-38337-06,
333-38337-07, 333-38337-08,
333-38337-09, 333-38337-10
PROSPECTUS SUPPLEMENT NO. 7
TO PROSPECTUS DATED MAY 4, 1999 [AMERISERVE LOGO]
AMERISERVE FOOD DISTRIBUTION, INC.
8 7/8% NEW SENIOR NOTES DUE 2006
10 1/8% NEW SENIOR SUBORDINATED NOTES DUE 2007
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This seventh Prospectus Supplement supplements the information contained
in, and should be read in conjunction with, the Prospectus dated May 4, 1999 and
the Prospectus Supplements filed on May 17, 1999, August 10, 1999, September 16,
1999, September 24, 1999, October 1, 1999 and November 2, 1999.
This Prospectus Supplement and the Prospectus are to be used by Donaldson,
Lufkin & Jenrette Securities Corporation, in connection with the offers and
sales in market-making transactions at negotiated prices related to prevailing
market prices at the time of sale. The Notes are not listed on any securities
exchange or admitted to trading in the National Association of Securities
Dealers Automated Quotation System and the Company does not intend to make any
such listing or seek such admission to trading. DLJ currently makes a market in
the Notes; however, they are not obligated to continue to do so and any
market-making may be discontinued at any time. The Company receives no portion
of the proceeds of sales of the Notes and has paid certain expenses incident to
the registration of the Notes.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
-------------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS NOVEMBER 9, 1999.
2
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 25, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934,
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 19367
---------------------
AMERISERVE FOOD DISTRIBUTION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2296149
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
15305 DALLAS PARKWAY
ADDISON, TX 75001
(Address of principal executive offices)
(972) 364-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
---------------------
Former name, address and fiscal year, if changed since last report:
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
All shares of the registrant's common stock are held by one affiliate. As
of November 9, 1999, there were 600 shares of common stock of the registrant
outstanding.
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3
AMERISERVE FOOD DISTRIBUTION, INC.
FORM 10-Q INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets as of September 25,
1999 and December 26, 1998............................. 3
Condensed Consolidated Statements of Operations for the
third quarter and year-to-date periods ended September
25, 1999 and September 26, 1998........................ 4
Condensed Consolidated Statements of Cash Flows for the
year-to-date periods ended September 25, 1999 and
September 26, 1998..................................... 5
Notes to Condensed Consolidated Financial Statements...... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 11
Item 3. Quantitative and Qualitative Disclosures About
Market Risk............................................... 21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................... 22
Item 2. Changes in Securities............................... 22
Item 3. Defaults upon Senior Securities..................... 22
Item 4. Submission of Matters to a Vote of Security
Holders................................................... 22
Item 5. Other Information................................... 22
Item 6. Exhibits and Reports on Form 8-K.................... 22
Signatures.................................................. 27
Index to Exhibits
2
4
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERISERVE FOOD DISTRIBUTION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
ASSETS
SEPTEMBER 25, DECEMBER 26,
1999 1998
------------- ------------
(UNAUDITED) (NOTE)
Current assets:
Cash and cash equivalents................................. $ 1,610 $ 4,667
Accounts receivable....................................... 47,786 55,402
Undivided interest in accounts receivable trust........... 181,343 208,451
Allowance for doubtful accounts........................... (23,982) (23,852)
Inventories............................................... 318,724 292,255
Other current assets...................................... 28,001 13,835
---------- ----------
Total current assets.............................. 553,482 550,758
Property and equipment, net................................. 286,760 224,516
Intangible assets, net...................................... 1,119,639 1,087,079
Other noncurrent assets..................................... 22,373 24,970
---------- ----------
$1,982,254 $1,887,323
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt......................... $ 18,121 $ 8,649
Accounts payable.......................................... 694,565 699,788
Accrued and other current liabilities..................... 162,358 183,671
---------- ----------
Total current liabilities......................... 875,044 892,108
Long-term debt.............................................. 1,121,632 902,600
Other noncurrent liabilities................................ 137,437 91,533
Stockholder's equity (deficit):
Common stock, $.01 par value per share; 10,000 shares
authorized, 600 shares outstanding..................... -- --
Paid-in capital........................................... 249,609 224,609
Accumulated deficit....................................... (401,468) (223,527)
---------- ----------
Total stockholder's equity (deficit).............. (151,859) 1,082
---------- ----------
$1,982,254 $1,887,323
========== ==========
See accompanying notes.
Note: The balance sheet at December 26, 1998 has been derived from the audited
financial statement at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
3
5
AMERISERVE FOOD DISTRIBUTION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, UNAUDITED)
THIRD QUARTER ENDED YEAR-TO-DATE ENDED
------------------------------ ------------------------------
SEPTEMBER 25, SEPTEMBER 26, SEPTEMBER 25, SEPTEMBER 26,
1999 1998 1999 1998
------------- ------------- ------------- -------------
Net sales.............................. $2,150,340 $2,217,416 $6,310,571 $4,987,365
Cost of goods sold..................... 1,957,143 2,014,761 5,749,515 4,517,507
---------- ---------- ---------- ----------
Gross profit........................... 193,197 202,655 561,056 469,858
Distribution, selling and
administrative expenses.............. 151,063 165,645 461,378 377,689
Depreciation of property and
equipment............................ 11,881 7,483 33,991 20,030
Amortization of intangible assets...... 13,083 8,259 38,432 22,318
Restructuring and other unusual
costs................................ 49,854 14,649 116,814 61,953
---------- ---------- ---------- ----------
Operating income (loss)................ (32,684) 6,619 (89,559) (12,132)
---------- ---------- ---------- ----------
Other income (expense):
Interest expense, net................ (23,452) (20,914) (67,094) (57,764)
Loss on sale of accounts
receivable........................ (7,636) (7,135) (20,668) (16,150)
Interest income-affiliates........... 200 439 667 757
---------- ---------- ---------- ----------
(30,888) (27,610) (87,095) (73,157)
---------- ---------- ---------- ----------
Loss before income taxes............... (63,572) (20,991) (176,654) (85,289)
Provision for income taxes............. 415 297 1,287 821
---------- ---------- ---------- ----------
Net loss............................... $ (63,987) $ (21,288) $ (177,941) $ (86,110)
========== ========== ========== ==========
See accompanying notes.
4
6
AMERISERVE FOOD DISTRIBUTION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS, UNAUDITED)
YEAR-TO-DATE ENDED
-----------------------------
SEPTEMBER 25, SEPTEMBER 26,
1999 1998
------------- -------------
Operating Activities:
Net loss.................................................. $(177,941) $ (86,110)
Adjustments to reconcile net loss to net cash used for
operating activities:
Depreciation and amortization.......................... 72,423 42,348
Impairment of property and equipment................... -- 16,462
Changes in assets and liabilities...................... (97,217) (90,270)
--------- ---------
Net cash used for operating activities.................... (202,735) (117,570)
--------- ---------
Investing Activities:
Business acquired, net of cash acquired................... -- (313,501)
Proceeds from sale of property............................ 22,195 --
Capital expenditures...................................... (49,865) (39,347)
Net cash transfers from (to) affiliates................... 12,737 (5,207)
--------- ---------
Net cash used for investing activities.................... (14,933) (358,055)
--------- ---------
Financing Activities:
Net increase in borrowings under revolving line of
credit................................................. 171,500 15,300
Proceeds from sale of accounts receivable................. 30,000 190,000
Proceeds from capital contribution........................ 25,000 50,000
Repayments of long-term debt.............................. (11,889) (7,831)
--------- ---------
Net cash provided by financing activities................. 214,611 247,469
--------- ---------
Net decrease in cash........................................ (3,057) (228,156)
Cash at beginning of period................................. 4,667 231,131
--------- ---------
Cash at end of period....................................... $ 1,610 $ 2,975
========= =========
Supplemental disclosures:
Cash paid during the period for:
Interest............................................... $ 77,668 $ 68,747
Income taxes, net of refunds........................... $ 740 $ 821
Business acquired:
Fair value of assets acquired............................. $ -- $ 744,405
Cash paid................................................. -- (313,501)
--------- ---------
Liabilities assumed....................................... $ -- $ 430,904
========= =========
Noncash investing and financing activities:
Capital expenditures through capital leases (included in
long-term debt)........................................ $ 68,780 $ 14,718
See accompanying notes.
5
7
AMERISERVE FOOD DISTRIBUTION, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 25, 1999 (UNAUDITED)
1. INTERIM FINANCIAL DATA
The accompanying unaudited Condensed Consolidated Financial Statements of
AmeriServe Food Distribution, Inc. (AmeriServe) have been prepared in accordance
with generally accepted accounting principles for interim financial information
and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and notes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting only of
adjustments of a normal and recurring nature) considered necessary for a fair
presentation of the financial position and results of operations have been
included. Operating results for the year-to-date period ended September 25, 1999
are not necessarily indicative of the results that might be expected for the
entire fiscal year ended December 25, 1999. This report should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in AmeriServe's Annual Report on Form 10-K for the fiscal year ended
December 26, 1998.
AmeriServe is a direct subsidiary of Nebco Evans Holding Company (NEHC) and
comprises substantially all of NEHC's operations. NEHC is an indirect subsidiary
of Holberg Industries, Inc., (Holberg) a privately held diversified service
company that also has subsidiaries operating within the parking services
industry in North America. NEHC has outstanding debt and preferred stock
securities registered with the Securities and Exchange Commission.
2. ACQUISITION
On May 21, 1998, AmeriServe acquired ProSource, Inc. (ProSource) for $313.5
million in cash, which included repayment of ProSource's existing indebtedness.
ProSource, which reported net sales of $3.9 billion for its fiscal year ended
December 27, 1997, was in the foodservice distribution business, specializing in
quick service and casual dining chain restaurants. ProSource serviced
approximately 12,700 restaurants, principally in the United States, in such
chains as Burger King, Chick-fil-A, Chili's, Long John Silver's, Olive Garden,
Red Lobster, Sonic, TCBY and TGI Friday's. The acquisition has been accounted
for under the purchase method; accordingly, reported operating results for 1998
include the ProSource operations only for periods subsequent to its acquisition
date.
The final ProSource purchase price allocation below is based on the
estimated fair values of identifiable intangible and tangible assets acquired
and liabilities assumed at the acquisition date, as follows (in millions):
Accounts receivable........................................ $ 224.0
Inventories................................................ 153.6
Property and equipment..................................... 29.0
Goodwill................................................... 314.3
Identifiable intangible assets............................. 82.0
Other assets............................................... 15.3
Accounts payable........................................... (310.0)
Accrued and other liabilities.............................. (98.2)
Restructuring reserves..................................... (96.5)
-------
$ 313.5
=======
The restructuring reserves of $96.5 million were included in the purchase
price allocation above in connection with a business restructuring plan to
consolidate and integrate the operations of ProSource and the former PFS
Division of PepsiCo, Inc. (PFS), acquired effective June 1997, with AmeriServe's
existing operations. The reserves consist of accruals for severance and other
employee-related costs ($45.9 million),
6
8
AMERISERVE FOOD DISTRIBUTION, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
costs associated with the closures of duplicative warehouse and other facilities
($47.0 million), and other exit cost accruals ($3.6 million). Through September
25, 1999, payments charged against the ProSource restructuring reserves totaled
$17.7 million, including $11.7 million in 1999. See Note 3 for additional
discussion.
The following unaudited pro forma results of operations for the
year-to-date period ended September 26, 1998 assume the acquisition of ProSource
occurred at the beginning of that period (in millions):
Net sales.................................................. $6,647.4
Net loss................................................... (87.2)
This information does not purport to be indicative of the results that
would have been obtained if ProSource had actually been acquired at the
beginning of fiscal 1998.
3. RESTRUCTURING AND OTHER UNUSUAL COSTS
In 1997, AmeriServe developed a restructuring plan identifying a number of
actions to consolidate and integrate the operations of PFS. The plan was revised
in the second quarter of 1998 for the consolidation and integration of the
acquired ProSource operations (see Note 2). The restructuring plan is designed
to reduce operating costs by eliminating cost redundancies arising from the
acquisitions, leveraging warehouse economies of scale, increasing delivery fleet
utilization and centralizing and streamlining support processes.
The first phase of the restructuring plan, which represents a substantial
majority of the plan, is the consolidation of the business serving quick service
restaurant customers. This effort is largely complete, with 85% of quick service
net sales flowing through consolidated warehouse facilities as of the end of the
third quarter of 1999. The actions under the plan include construction of new,
strategically located, state-of-the-art distribution centers, closures of a
number of distribution centers and expansions/reconfigurations of others,
dispositions of property and equipment, conversions of computer systems,
reductions in workforce, relocation of employees and centralization of support
functions largely at the headquarters in Addison, Texas, a suburb of Dallas.
AmeriServe had previously disclosed the second and concluding phase of the
restructuring plan to be the integration of the separate casual dining network
of twelve distribution centers into the consolidated quick service network. In
the fourth quarter of 1999, AmeriServe completed a review of its overall
strategy with respect to business outside its core quick service food and supply
operations. As a result, AmeriServe has decided to explore opportunities to exit
a portion of its casual dining business. This decision was based on an extensive
review of warehouse processes and computer systems requirements and related
complexities to effectively service all these customers, along with the
learnings from the quick service consolidation. AmeriServe concluded that the
efficiencies contemplated in its business model would be maximized by limiting
the number of customers with a wide variety of menu items. The casual dining
business generates about 20% of AmeriServe's sales, but represents approximately
12% of case volumes and its operating profit is currently not significant to
AmeriServe's results. The integration of business retained from the casual
dining operations into the consolidated quick service network represents the
amended second phase of the restructuring plan. Certain smaller customers
serviced in the casual dining distribution network are quick service in nature.
Although early in the process, AmeriServe may incur a significant charge as a
result of the decision to exit the business, principally a write-off of a
portion of goodwill and other intangibles recorded upon the allocation of the
ProSource purchase price.
A total of $131.6 million in cash exit cost liabilities associated with the
restructuring plan have been recorded since 1997, consisting of both purchase
accounting and restructuring charge reserves and including adjustments recorded
in 1999 described below. Of this total, $31.2 million in payments, including
$14.9 million in 1999, have been charged to the reserves through September 25,
1999. Because of the decision regarding the casual dining business discussed
above, it is probable that AmeriServe will reduce exit cost reserves of
7
9
AMERISERVE FOOD DISTRIBUTION, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
approximately $35 million related to the integration of the casual dining
business, with an offsetting reduction of goodwill associated with the ProSource
acquisition.
In the second quarter of 1999, AmeriServe finalized decisions regarding
closures of additional distribution centers in 2000 previously under
consideration. As a result, an additional $4.0 million restructuring charge and
$15.7 million in increased restructuring reserves in the final ProSource
purchase price allocation (see Note 2) were recorded to primarily recognize
lease termination and employee severance exit cost liabilities. In the third
quarter of 1999, AmeriServe completed a review of previously established exit
cost liabilities for facilities that have closed. Because of lower than expected
costs, certain restructuring reserves were reduced, resulting in a credit to
"Restructuring and other unusual costs" of $5.2 million and a reduction in
goodwill of $12.0 million.
In the second quarter of 1998, AmeriServe recorded $16.5 million in exit
cost restructuring charges and $11.0 million in asset impairment writedowns.
Both of these charges, totaling $27.5 million, were associated with then
existing distribution centers to be closed as part of the planned actions to
consolidate and integrate the newly acquired ProSource operations.
Other incremental integration costs associated with the restructuring plan
that do not qualify as exit costs are expensed as incurred and also classified
as "Restructuring and other unusual costs". These costs relate primarily to
start-up of new or expanded distribution centers and other actions to facilitate
the distribution network consolidation, and include both specifically
identifiable and estimated distribution network inefficiencies, as well as
activities to realign and centralize administrative and other support functions.
In conjunction with the restructuring plan, AmeriServe has been
implementing a major new computer software and hardware platform, which is
intended to enhance productivity in distribution operations, streamline and
facilitate centralization of support processes and reduce AmeriServe's exposure
to the Year 2000 computer code problem. The implementation of the new computer
platform in the quick service business was completed in the third quarter of
1999. The non-capitalized costs to develop and implement the new system, as well
as costs to remediate computer code of existing systems for the Year 2000 issue,
are expensed as incurred and classified as "Restructuring and other unusual
costs".
Included in "Restructuring and other unusual costs" in the Condensed
Consolidated Statements of Operations are the following (in millions):
THIRD QUARTER ENDED YEAR-TO-DATE ENDED
----------------------------- -----------------------------
SEPTEMBER 25, SEPTEMBER 26, SEPTEMBER 25, SEPTEMBER 26,
1999 1998 1999 1998
------------- ------------- ------------- -------------
Restructuring and impairment charges
(credit)............................... $(5.2) $ -- $ (1.2) $33.9
Distribution network start-up costs and
integration inefficiencies........... 33.9 6.7 62.3 12.3
Administrative integration-related
costs................................ 1.6 3.0 12.4 4.2
New computer system implementation
costs................................ 18.6 1.8 36.9 2.7
Y2K remediation costs.................. .9 2.3 5.7 3.5
Other unusual costs, including one-time
acquisition related expenses......... .1 .8 .7 5.4
----- ----- ------ -----
$49.9 $14.6 $116.8 $62.0
===== ===== ====== =====
8
10
AMERISERVE FOOD DISTRIBUTION, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. LONG-TERM DEBT
On October 1, 1999, AmeriServe entered into an amended credit agreement
providing for a $205 million 12% term loan due 2006 and a revolving credit line
of up to $125 million. The term loan is payable to AmeriServe Finance Trust
(Finco), a limited purpose business trust. Finco financed the loan to AmeriServe
(the Finco Loan) through a joint issuance with its wholly owned subsidiary,
AmeriServe Capital Corporation (Capital), of $205 million 12% Senior Secured
Notes due 2006 (the Notes) in a private placement not requiring registration
under the Securities Act of 1933, as amended. Finco was established by Nebco
Evans Distributors, Inc. (NEDI), a direct subsidiary of Holberg and a holding
company with substantially all of its assets consisting of the capital stock of
NEHC. NEDI unconditionally guarantees the Notes issued by Finco and Capital.
The Notes were issued at a discount, resulting in proceeds before debt
issuance costs of $200.3 million. The proceeds from the Finco loan were
partially used by AmeriServe to repay indebtedness under its previous credit
facility, with the balance to be used for general corporate purposes. The Notes
are secured by the Finco Loan, which, in turn, is secured by a second lien on
AmeriServe's assets (with certain exceptions) that is subordinate to a first
lien securing the revolving credit line under the amended facility.
Interest on the Notes and the Finco Loan is payable semi-annually. The
Finco Loan agreement includes covenants that limit AmeriServe's ability to incur
additional debt, pay dividends on or repurchase its stock and use assets as
security in other transactions. Finco and Capital have agreed to file an
exchange offer registration statement for the Notes within 120 days of the
issuance for a new issue of identical securities registered under The Securities
Act of 1933, as amended.
The bank-funded revolving credit line of up to $125 million replaces, with
terms similar in nature, the previous $220 million revolving credit facility.
Availability under the amended revolver, which expires June 2003, is linked to
levels of AmeriServe's inventories of food and paper products. Borrowing
capacity is reduced by letters of credit outstanding. As of October 1, 1999,
there were no borrowings against the revolver. Letters of credit at the date
totaled $40.7 million. Borrowings under the previous revolving line of credit
totaled $175.5 million at September 25, 1999. Borrowings repaid on October 1,
1999 with proceeds from the Finco Loan totaled $168.0 million. The credit line
is expected to increase by $100 million under a proposal submitted by the
lender, and an agreement is anticipated to be finalized by mid-December 1999.
5. ACCOUNTS RECEIVABLE PROGRAM
Under AmeriServe's ongoing Accounts Receivable Program (the Program) that
expires in December 2001, a substantial majority of the trade accounts
receivable generated by AmeriServe are sold on a daily basis to AmeriServe
Funding Corporation (Funding), a wholly owned, special purpose,
bankruptcy-remote, consolidated subsidiary. The purchases by Funding are
financed through the sale of the receivables by Funding to AmeriServe Master
Trust (the Trust) in exchange for cash and an undivided interest in the Trust.
The initial purchases of accounts receivable by the Trust were funded through
the issuances of a series of interest-bearing investor certificates by the
Trust. Subsequent purchases are funded daily by collections on previously
acquired accounts receivable. As liquidity available under the Program changes
with seasonal or other fluctuations in accounts receivable levels, the amount of
investor certificates outstanding is adjusted. The ongoing cost of the Program,
substantially all of which represents the return to investors in the
certificates, is reported as "Loss on sale of accounts receivable" in the
Condensed Consolidated Statements of Operations.
The Program provides up to $485 million in capacity, with the actual
availability linked to eligible accounts receivable levels. The availability at
September 25, 1999 was the full $485 million, all of which AmeriServe had
received in proceeds as of that date. The proceeds reflected $666.3 million of
accounts receivable sold less Funding's undivided interest in the assets of the
Trust of $181.3 million.
9
11
AMERISERVE FOOD DISTRIBUTION, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. GUARANTOR SUBSIDIARIES
AmeriServe's principal operating subsidiaries fully, unconditionally,
jointly and severally guarantee AmeriServe's $205 million 12% Finco Term Loan,
$350 million 8 7/8% Senior Notes and $500 million 10 1/8% Senior Subordinated
Notes.
The AmeriServe parent company and the guarantor subsidiaries, which are
direct, wholly owned U.S. subsidiaries, conduct the substantial majority of
consolidated operations. Separate financial statements of the guarantor
subsidiaries are not presented because, in the opinion of management, such
financial statements are not material to investors.
The only material subsidiary of AmeriServe that is not a guarantor
subsidiary is Funding, which is a wholly owned, special purpose,
bankruptcy-remote subsidiary. Funding has no operating revenues or expenses, and
its only asset is an undivided interest in an accounts receivable trust (see
Note 5). Funding's interest in the Trust is junior to the claims of the holders
of certificates issued by the Trust. Accordingly, as creditors of AmeriServe,
the claims of the holders of the Senior Notes, Senior Subordinated Notes and the
Finco Loan against the accounts receivable held in the Trust are similarly
junior to the claims of holders of the certificates issued by the Trust.
Following is summarized combined financial information (in accordance with
Rule 1-02(bb) of Regulation S-X) at September 25, 1999 and for the year-to-date
period then ended for the guarantor subsidiaries (in thousands):
Current assets........................................... $ 20,587
Current liabilities...................................... 14,994
Noncurrent assets........................................ 72,670
Noncurrent liabilities................................... 42,598
Net sales................................................ $436,699
Operating income......................................... 7,536
Net income............................................... 7,153
7. CAPITAL TRANSACTIONS
On March 24, 1999, NEHC provided a $25 million cash capital contribution to
AmeriServe. These funds represented a portion of the proceeds remaining from
NEHC's issuance of 11 1/4% Senior Redeemable Exchangeable Preferred Stock in
March 1998.
Under transactions anticipated to be completed by mid-December 1999,
AmeriServe expects to receive $50 million in cash proceeds from equity and
equity-like investments by AmeriServe's indirect shareholders.
10
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This report contains certain forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933 concerning, among other things, AmeriServe's financial
results, future plans, objectives, expected performance and potential
efficiencies and improvements, as well as customer, supplier and other
relationships. Specifically, statements in this report that are not historical
facts, including statements accompanied by words such as "will," "believe,"
"expect," "anticipate," "estimate," "intend" or "plan" are intended to identify
forward-looking statements and convey the uncertainty of future events or
outcomes. AmeriServe cautions readers that any such forward-looking statements
are based on assumptions that it believes are reasonable, but are subject to a
wide range of risk, and there is no assurance that actual results may not differ
materially from those projected in such forward-looking statements. Readers are
cautioned not to place undue reliance on the forward-looking statements, which
speak only as of the date hereof. AmeriServe undertakes no obligation to update
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence or nonoccurrence of anticipated events.
Certain factors that could cause actual results to differ materially from
projected results include but are not limited to: the ability to realize
anticipated cost efficiencies, the effect of market conditions, the impact of
competitive actions and the integration of acquisitions, among other things.
Additional information as to these and other relevant matters can be found in
AmeriServe's Registration Statement on Form S-4 filed on April 30, 1999, as well
as AmeriServe's annual, periodic and other filings with the Securities and
Exchange Commission, and this report should be read in conjunction with
cautionary statements contained therein.
NATURE OF OPERATIONS
AmeriServe is a foodservice distributor specializing in chain restaurants
and distributing a wide variety of food items as well as paper goods, cleaning
and other supplies and equipment. AmeriServe operates within a single type of
business activity, with no operating segments as defined by Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information."
AmeriServe services approximately 36,000 restaurants, the vast majority of
which are in the United States. AmeriServe's largest customers are system owners
and/or franchisees operating restaurants in the Arby's, Burger King,
Chick-fil-A, Chili's, Dairy Queen, KFC, Lone Star Steakhouse, Long John
Silver's, Olive Garden, Pizza Hut, Red Lobster, Sonic, Taco Bell, TCBY and TGI
Friday's systems. For most of these concepts, AmeriServe services all or a
substantial majority of the U.S. restaurants in the systems. AmeriServe also
operates foodservice distribution businesses in Canada and Mexico, which are not
material to the consolidated financial statements.
AmeriServe is a direct subsidiary of Nebco Evans Holding Company (NEHC) and
comprises substantially all of NEHC's operations. NEHC is an indirect subsidiary
of Holberg Industries, Inc. (Holberg), a privately held diversified service
company that also has subsidiaries operating within the parking services
industry in North America. NEHC has outstanding debt and preferred stock
securities registered with the Securities and Exchange Commission.
ACQUISITION
On May 21, 1998, AmeriServe acquired ProSource for $313.5 million in cash,
which included $15.00 per share for all of the outstanding common stock,
repayment of existing indebtedness of ProSource of $159.5 million and direct
costs of the acquisition. ProSource, which reported net sales of $3.9 billion
for its fiscal year ended December 27, 1997 was in the foodservice distribution
business, specializing in quick service and casual dining chain restaurants.
ProSource serviced approximately 12,700 restaurants, principally in the United
States, in such chains as Burger King, Chick-fil-A, Chili's, Long John Silver's,
Olive Garden, Red Lobster, Sonic, TCBY and TGI Friday's. Funding of the
acquisition and related transactions included $125 million in proceeds from the
sale of ProSource accounts receivable (see Note 5 to the Condensed Consolidated
Financial Statements), a $50 million capital contribution to AmeriServe from
NEHC and cash and cash equivalents on hand. The acquisition has been accounted
for under the purchase method;
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accordingly, reported operating results for the year-to-date period ended
September 26, 1998 included 18 weeks of results for the former ProSource
operations. Reported operating results for the year-to-date period ended
September 25, 1999 include 39 weeks of results for a portion of the former
ProSource operations. Certain former ProSource operations have been converted to
an accounting calendar with 36 weeks in the year-to-date period -- see
discussion below under "Accounting Calendar." The comparisons of reported
operating results for the year-to-date 1999 to the same period of 1998 presented
below under "Results of Operations" are significantly impacted by the
acquisition of ProSource.
BUSINESS RESTRUCTURING
AmeriServe has experienced rapid growth as a result of the acquisitions of
ProSource and, effective June 1997, the former PFS Division of PepsiCo,
Inc.(PFS), both large foodservice distribution companies with national scope
specializing in the chain restaurant segment of the U.S. foodservice industry.
These acquisitions have resulted in redundancies in AmeriServe's warehouse
facilities, truck delivery routes and administrative and other support
functions. AmeriServe has been implementing a business restructuring plan to
consolidate and integrate the acquired businesses. Actions identified in the
plan include construction of new, strategically located, state-of-the-art
distribution centers, closures of a number of distribution centers and
expansions/reconfigurations of others, dispositions of property and equipment,
conversions of computer systems, reductions in workforce, relocation of
employees and centralization of support functions largely at the headquarters in
Addison, Texas, a suburb of Dallas.
Completion of the plan is expected to significantly increase operating
efficiencies through warehouse economies of scale, increased delivery fleet
utilization and centralized, streamlined support processes. A major new computer
software and hardware platform has been implemented (discussed below under
"Computer Systems and Year 2000 Issue") and is expected to facilitate actions to
enhance productivity and centralize support processes.
The first phase of the restructuring plan, which represents a substantial
majority of the plan, is the consolidation of the business serving quick service
restaurant customers. This phase of the plan has been proceeding on schedule and
is nearly complete. As of November 9, 1999, AmeriServe has closed 36 quick
service distribution centers and transferred the business to new or existing
centers. One quick service center closure is planned for the balance of 1999,
and four are planned for 2000. Eight distribution centers have been expanded
and/or significantly reconfigured, and the remaining facility planned for
completion in early 2000 is in process. Operations have commenced at seven newly
constructed distribution centers in Orlando, FL; Denver, CO; Memphis, TN;
Charlotte, NC; Atlanta, GA; Houston, TX, and Kansas City, KS. New distribution
centers in Boston, MA and Cleveland, OH are planned for completion in late 2000.
As a result of these actions, 18 distribution centers are substantially complete
with respect to warehouse consolidation of the quick service business,
representing approximately 85% of quick service net sales. In the fourth quarter
of 1999, the Kansas City market will be consolidated, bringing the total to
approximately 90% completion of the quick service warehouse facility
consolidation.
AmeriServe had previously disclosed the second and concluding phase of the
restructuring plan to be the integration of the separate casual dining network
of twelve distribution centers into the consolidated quick service network. In
the fourth quarter of 1999, AmeriServe completed a review of its overall
strategy with respect to business outside its core quick service food and supply
operations. As a result, AmeriServe has decided to explore opportunities to exit
a portion of its casual dining business. This decision was based on an extensive
review of warehouse processes and computer systems requirements and related
complexities to effectively service these customers, along with the learnings
from the quick service consolidation. AmeriServe concluded that the efficiencies
contemplated in its business model would be maximized by limiting the number of
customers with a wide variety of menu items. The casual dining business
generates about 20% of AmeriServe's sales, but represents approximately 12% of
case volumes and its operating profit is currently not significant to
AmeriServe's results. The integration of business retained from the casual
dining operations into the consolidated quick service network represents the
amended second phase of the restructuring plan. Certain smaller customers
serviced in the casual dining distribution network are quick service in nature.
Although
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early in the process, AmeriServe may incur a significant charge as a result of
the decision to exit the business, principally a write-off of a portion of
goodwill and other intangibles recorded upon the allocation of the ProSource
purchase price.
Further, AmeriServe has decided to sell its Equipment Division, which has
annual revenues of approximately $180 million. This business supplies restaurant
customers with major equipment needs such as ovens, fryers and mixers as well as
cooking utensils and other smallwares. AmeriServe has retained an investment
banking firm to assist in the sale and is currently in negotiations with
potential buyers of the division. AmeriServe does not expect a significant
impact on results of operations upon disposition of the business.
AmeriServe will incur significant cash costs to implement the restructuring
plan. A total of $131.6 million in cash exit cost liabilities, primarily for
employee severance and lease payments related to closed facilities, have been
recorded since 1997, including adjustments recorded in 1999 as described in Note
3 to the Condensed Consolidated Financial Statements. Of the total in reserves
established, $31.2 million has been spent through September 25, 1999, including
$14.9 million in 1999, and approximately $7 million is expected to be spent over
the balance of 1999. Because of the decision regarding the casual dining
business discussed above, it is probable that AmeriServe will reduce exit cost
reserves of approximately $35 million related to the integration of the casual
dining business, with an offsetting reduction of goodwill associated with the
ProSource acquisition.
In addition, cash integration costs associated with the plan, which are
expensed as incurred, totaled $116.9 million through September 25, 1999,
including $75.6 million in 1999, and about $30 million is expected to be spent
over the balance of 1999. These costs relate primarily to start-up of new or
expanded distribution centers and other actions to facilitate the distribution
network consolidation, and include both specifically identifiable and estimated
distribution network inefficiencies, as well as activities to realign and
centralize administrative and other support functions.
With the completion of much of the quick service physical consolidation,
the new computer system platform implementation and the realignment of
administrative functions, AmeriServe will realize, beginning in the fourth
quarter of 1999, cash operating cost reductions associated with a decline in
headcount of about 1,500, or approximately 15% of AmeriServe's current
workforce. This decrease, which represented approximately $25 million in costs
during the third quarter of 1999, largely consists of individuals who have
completed contract and other temporary labor services supporting the
restructuring actions. The majority of the headcount actions are expected to be
completed by year-end.
CUSTOMER ACTIVITIES
AmeriServe has reached a decision to explore opportunities to exit a
portion of its casual dining business. See discussion above under "Business
Restructuring."
AmeriServe has been very active in solidifying relationships with existing
quick service customers, including TRICON Global Restaurants, Inc. (Tricon),
AmeriServe's largest customer, and franchisees in the Tricon and Burger King
systems, through long-term distribution agreements. As a result, approximately
80% of AmeriServe's total business is covered by long-term agreements, with
close to 75% of the business under contracts with three or more years of
remaining term.
As part of the Tricon and other new or revised distribution agreements,
AmeriServe has moved a substantial portion of its business from pricing based on
a percentage mark-up (over cost) to a fee per case mark-up. This change results
in pricing that more closely correlates with AmeriServe's cost structure and
insulates its gross profit from product cost and mix variability. Approximately
70% of AmeriServe's business is under fee per case pricing.
In the course of revising or entering into new contracts, AmeriServe, in
cooperation with customers, has identified supply chain efficiency and cost
reduction opportunities benefiting both parties. These include reduced
deliveries per week, after-hours delivery, electronic ordering and scheduled
order-to-delivery windows, which also enhance order fulfillment accuracy.
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AmeriServe provides value-added services to customers such as consolidating
purchases of low volume items to reduce the cost of these products, and
management of freight costs in transporting products from vendors to
AmeriServe's distribution centers, which reduces the freight component of
product costs. AmeriServe has recently introduced a private label program under
which nonproprietary supplies and food items are offered to customers. The
ongoing expansion of these services and programs is expected to improve gross
profit margins from current levels.
During the second half of 1998, AmeriServe discontinued service to Wendy's
company-owned and franchised restaurants as a result of a decision by Wendy's
International, Inc. to transfer its business to a competitor. Net sales to the
Wendy's concept were approximately $600 million annually.
COMPUTER SYSTEMS AND YEAR 2000 ISSUE
AmeriServe's business activity requires the processing of thousands of
transactions on a daily basis in the purchasing, transportation and warehousing
of food and supply items and sale of these items to restaurant customers.
AmeriServe's operational and financial stability is reliant upon the orderly
flow of goods through the entire supply chain; i.e., from providers of food
commodities to food processors to AmeriServe to customers' restaurants and
finally to consumers. This flow of goods depends on the use of computerized
systems throughout the supply chain.
AmeriServe has taken a number of steps to assess and remediate its exposure
to the Year 2000 (Y2K) computer program code problem. Findings to date include:
- As measured by lines of program code, approximately 20% of AmeriServe's
software required remediation for the Y2K code problem. Remediation and
testing of these legacy applications is complete, and all have been
placed back into production.
- The remaining 80% of software includes applications that are currently
being replaced by a new software package platform (see discussion below)
and several previously existing software application packages that will
continue to be utilized. The providers of the software packages have
certified that their products are Y2K compliant. AmeriServe has initiated
testing procedures to verify compliance, and testing of human resource,
purchasing, financial and transportation management applications are
complete. Upgrades and testing of PC-based applications are also in
process. All remaining applications are expected to be completed in
November, rather than the third quarter as previously projected.
- AmeriServe has completed an assessment of its computer hardware and
determined that approximately 30% of these devices were not Y2K
compliant. Upgrades and replacements of critical assets, including
mid-range systems and operating system software, are complete.
Remediation of other assets, including desktops and laptops, is in
process and expected to be completed in November 1999, rather than the
third quarter as previously projected.
- AmeriServe has completed its assessment of other mechanical equipment and
devices with electronic components possibly susceptible to the Y2K issue.
Risk identified has been minimal. Upgrades and replacements of
mission-critical systems are complete.
- AmeriServe has requested information regarding Y2K readiness from 2,800
product vendors and service providers and over 7,400 customers. A
systematic, objective evaluation process was used to assess responses.
Follow-up activities with critical trading partners has been completed
and contingency plans are being developed where applicable.
- AmeriServe is using the services of outside experts to assist internal
resources in the identification and remediation of Y2K issues in the
various areas of exposure discussed above.
Given the environment AmeriServe operates in, with rapid movement of high
volumes of products in cooperation with a large number of trading partners, the
risk of the Y2K issue is high and could result in a significant adverse effect
on AmeriServe's operations. AmeriServe believes that software and equipment
within its control are or will be timely compliant. The risk lies principally
with AmeriServe's large base of
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suppliers and customers. Within these groups there is a wide range of exposure
and resources focusing on potential Y2K issues. AmeriServe is limited in its
ability to determine with a high degree of reliability the state of readiness of
trading partners and to influence these partners to achieve timely compliance.
AmeriServe has developed a comprehensive contingency plan in the event of a
disruption to the business. The plan focuses on AmeriServe's critical business
activities and has been reviewed with customers. Contingency preparedness
activities, including introduction of the plan throughout the organization, have
been initiated.
As referred to above, AmeriServe has been in the process of replacing
critical applications and processes within its management information system
with a new software and hardware platform. The software package platform
includes integrated distribution operations and financial management
applications. The new system complements the restructuring plan as it is
intended to enhance productivity in distribution operations, streamline and
facilitate centralization of support processes and have the flexibility to meet
customer-unique requirements. The on-schedule implementation of the system in
the quick service business was completed in the third quarter of 1999.
AmeriServe intends to continue to utilize the computer applications currently
supporting the casual dining business, which have been remediated for the Y2K
issue, tested and placed back into production.
The cash costs (excluding leased computer hardware) to fully implement the
new system in the quick service business and complete remediation of the Y2K
issue will approximate $122 million. Of this amount, $117.1 million has been
spent through September 25, 1999, including $66.8 million in 1999, and the
remainder of approximately $5 million is expected to be spent over the balance
of 1999. The costs to purchase and develop the software for the new system are
being capitalized. The costs to re-engineer processes, roll-out the developed
software (largely data conversion and training) and perform the assessment and
remediation of the Y2K issue have been expensed as incurred and included in
"Restructuring and other unusual costs" in the Condensed Consolidated Statements
of Operations.
ACCOUNTING CALENDAR
As previously disclosed, AmeriServe has been in the process of conforming
the reporting of certain operations in order to adopt a 13-period accounting
calendar for all the business. Under this calendar, the fiscal year consists of
13 four-week periods, with each of the first three quarters consisting of 12
weeks and the fourth quarter consisting of 16 weeks. As of September 25, 1999,
all of the quick service operations, representing approximately 75% of the
business, were on the new calendar. The balance was on a calendar with each
quarter consisting of 13 weeks. Because of the phased nature of the conversion,
which began in the fourth quarter of 1998, year-over-year comparisons of
quarterly results have not been materially impacted, but disclosures of the
impact will be made as necessary to help identify underlying trends.
RESULTS OF OPERATIONS
The following table presents certain financial information of AmeriServe
derived from the Condensed Consolidated Statements of Operations (in millions):
THIRD QUARTER ENDED YEAR-TO-DATE ENDED
--------------------------------------------- ---------------------------------------------
SEPTEMBER 25, SEPTEMBER 26, SEPTEMBER 25, SEPTEMBER 26,
1999 % 1998 % 1999 % 1998 %
------------- ----- ------------- ----- ------------- ----- ------------- -----
Net sales................... $2,150.3 100.0 $2,217.4 100.0 $6,310.6 100.0 $4,987.4 100.0
Cost of goods sold.......... 1,957.1 91.0 2,014.8 90.9 5,749.5 91.1 4,517.5 90.6
-------- ----- -------- ----- -------- ----- -------- -----
Gross profit................ 193.2 9.0 202.6 9.1 561.1 8.9 469.9 9.4
Distribution, selling and
administrative expenses... 151.1 7.0 165.6 7.5 461.4 7.3 377.7 7.6
-------- ----- -------- ----- -------- ----- -------- -----
Operating income before
depreciation, amortization
and restructuring and
other unusual costs....... $ 42.1 2.0 $ 37.0 1.7 $ 99.7 1.6 $ 92.2 1.8
======== ===== ======== ===== ======== ===== ======== =====
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Third Quarter and Year-to-Date 1999 Compared to the Same Periods of 1998:
Net sales in the third quarter of 1999 decreased $67.1 million, or 3.0%, to
$2.1 billion. Net sales increased $109 million, or 5.4%, after adjusting 1998
sales for Wendy's business ($115 million), which was largely phased out by the
end of the third quarter of 1998, and the estimated effect of conforming certain
operations to an accounting calendar with 12 weeks in this year's quarter from
13 weeks last year ($61 million). The adjusted net sales growth of 5.4%
reflected advances in both the quick service and casual dining businesses.
Higher sales in the quick service business reflected growth in stores served,
partially offset by lower case volumes per store, in certain key concepts. Sales
performance in the casual dining business was driven by growth in case volumes
per store. Year-to-date net sales in 1999 increased $1.3 billion, or 26.5%, to
$6.3 billion, driven by the acquisition of ProSource.
Gross profit in the third quarter of 1999 decreased $9.5 million, or 4.7%,
to $193.2 million, and the gross margin declined .1 of a point to 9.0%. This
performance reflected the discontinued Wendy's business, the accounting calendar
change and a shift in gross profit components to value-added services provided
for in certain recent customer contracts, such as private label sales and
inbound freight management. Gross margins are expected to improve as these
services are fully implemented. The gross margin decline also reflected the
relatively faster growth of the lower gross margin casual dining business.
Year-to-date gross profit in 1999 increased $91.2 million, or 19.4%, to $561.1
million, and the gross margin declined .5 of a point to 8.9%. This performance
was driven by the acquisition of ProSource. The casual dining business of
ProSource has a lower gross margin because of higher product case costs as
compared to the quick service business. AmeriServe's profitability is largely
determined by the relationship of the negotiated mark-up, or distribution fee
that is added to product cost to determine sales prices, to AmeriServe's
operating costs. Therefore, a decline in the gross profit margin does not
necessarily indicate a decline in profitability in dollars.
Distribution, selling and administrative expenses in the third quarter of
1999 decreased $14.6 million, or 8.8%, to $151.1 million, and as a percent of
net sales decreased .5 of a point to 7.0%. This performance reflected the
discontinued Wendy's business, the accounting calendar change and lower
administrative expenses from the integration of the former ProSource
headquarters into AmeriServe's Dallas area headquarters. The expense margin
decline also reflected the relatively faster growth of the lower expense margin
casual dining business. Year-to-date distribution, selling and administrative
expenses in 1999 increased $83.7 million, or 22.2%, to $461.4 million, and as a
percent of net sales decreased .3 of a point to 7.3%, driven by the acquisition
of ProSource. The lower expense margin primarily reflected the higher case sales
prices in ProSource's casual dining business as compared to the quick service
business (see gross profit discussion above).
Operating income in 1999 before depreciation of property and equipment,
amortization of intangible assets and restructuring and other unusual costs
increased $5.1 million, or 13.8%, to $42.1 million in the quarter and $7.5
million, or 8.1%, to $99.7 million year-to-date. As a percent of net sales, this
income measure increased .3 of a point to 2.0% in the quarter and declined .2 of
a point to 1.6% year-to-date. The margin change for the quarter was driven by
lower operating expenses and for the year-to-date by the acquisition of
Prosource as described above.
Depreciation of property and equipment in 1999 increased $4.4 million to
$11.9 million in the quarter and $14.0 million to $34.0 million year-to-date,
reflecting capital expenditures for the new computer system platform and
warehouse and fleet equipment, as well as, for the year-to-date, the impact of
the ProSource acquisition.
Amortization of intangible assets in 1999 increased $4.8 million to $13.1
million in the quarter and $16.1 million to $38.4 million year-to-date primarily
reflecting the impact of the final estimate of intangible assets arising from
the allocation of the ProSource purchase price.
Restructuring and other unusual costs in 1999 of $49.9 million in the
quarter and $116.8 million year-to-date consisted primarily of incremental costs
associated with the distribution network consolidation and integration, the new
computer system implementation and Y2K remediation. The level of these expenses
is expected to decline beginning in the fourth quarter of 1999. Costs in 1999
also include a restructuring credit of
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$5.2 million in the third quarter to reflect lower than expected lease
termination and employee severance exit costs for certain facilities that have
closed and a $4.0 million restructuring charge in the second quarter primarily
for exit cost liabilities arising from distribution center closure decisions to
finalize the restructuring plan. Charges in 1998 consisted of $33.9 million in
exit cost accruals and impairment charges in the second quarter primarily for
distribution centers to be closed in connection with the then approved
restructuring plan to consolidate and integrate the newly acquired ProSource
operations.
Interest expense net of interest income in 1999 increased $2.5 million to
$23.5 million in the quarter and $9.3 million to $67.1 million year-to-date
reflecting increased borrowings on the revolving credit facility to largely fund
restructuring activities and computer systems initiatives, as well as, for the
year-to-date, reduced interest income as cash equivalents on hand in 1998 were
used to partially fund the acquisition of ProSource.
Loss on sale of accounts receivable relates to an ongoing Accounts
Receivable Program that provides financing capacity. (See Note 5 to the
Condensed Consolidated Financial Statements.) Under the program, trade accounts
receivable are sold to a wholly owned, special purpose, bankruptcy-remote,
consolidated subsidiary, which in turn transfers the receivables to a master
trust. The loss on sale of accounts receivable of $7.6 million in the quarter
and $20.7 million year-to-date largely represents the return to investors in
certificates issued by the master trust. The increase over 1998 of $.5 million
in the quarter and $4.5 million year-to-date reflects the addition of ProSource
accounts receivable as well as amendments to the program in the second half of
1998 that resulted in additional capacity.
Provision for income taxes in 1999 primarily represents estimated current
state and foreign income taxes payable. AmeriServe's net deferred tax assets are
offset entirely by a valuation allowance, largely reflecting a net operating
loss carryforward position for federal income tax purposes.
Net loss in 1999 increased $42.7 million to $64.0 million in the quarter
and $91.8 million to $177.9 million year-to-date driven by increased
restructuring expenses, higher amortization of intangibles and additional net
financing costs.
Comparison of Results of Operations on a Combined Basis:
This supplementary information is provided to enhance comparisons of
year-to-date results of operations by taking into account the acquisition of
ProSource. The combined results for the year-to-date ended September 26, 1998
presented below include the historical results of ProSource for the periods
prior to its May 1998 acquisition date. The following combined results do not
purport to represent what the 1998 reported results would have been had the
acquisition of ProSource actually occurred at the beginning of fiscal 1998 (in
millions):
YEAR-TO-DATE ENDED
---------------------------------------------
COMBINED
SEPTEMBER 25, SEPTEMBER 26,
1999 % 1998 %
------------- ----- ------------- -----
Net sales................................... $6,310.6 100.0 $6,647.4 100.0
Cost of goods sold.......................... 5,749.5 91.1 6,046.2 91.0
-------- ----- -------- -----
Gross profit................................ 561.1 8.9 601.2 9.0
Distribution, selling and administrative
expenses.................................. 461.4 7.3 500.6 7.5
-------- ----- -------- -----
Operating income before depreciation,
amortization and restructuring and other
unusual costs............................. $ 99.7 1.6 $ 100.6 1.5
======== ===== ======== =====
Net sales in 1999 decreased $336.8 million, or 5.1%. Net sales increased
$262 million, or 4.3% after adjusting 1998 combined net sales for the estimated
impact of the discontinued Wendy's business of $428 million and the change in
accounting calendar from 39 weeks in 1998 to 36 weeks this year of $171 million
(see discussion under "Accounting Calendar" above). The adjusted net sales
growth of 4.3% reflected advances in both the quick service and casual dining
businesses. Higher sales in the quick service
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business reflected growth in stores served, partially offset by lower case
volumes per store, in certain key concepts. Sales performance in the casual
dining business was driven by growth in case volumes per store.
At September 25, 1999, the approximate number of stores served by
AmeriServe was 36,100 compared to 37,400 at the same time last year, including
over 700 stores in Canada and Mexico in both years. The decrease reflected the
discontinuance of certain smaller accounts, store closures and some remaining
Wendy's stores not yet phased out as of the end of last year's quarter.
Gross profit in 1999 decreased $40.1 million, or 6.7%, and the gross margin
declined .1 of a point to 8.9%. This performance reflected the discontinuance of
the Wendy's business, the accounting calendar change and a shift in gross profit
components to value-added services such as private label sales and inbound
freight management. Gross margins are expected to improve as these services are
fully implemented. The gross margin decline also reflected the relatively faster
growth of the casual dining business, which has a lower gross margin as
described above.
Operating expenses in 1999 declined $39.2 million, or 7.8%, and as a
percent of net sales, declined .2 of a point to 7.3% year-to-date. This
performance reflected the discontinued Wendy's business, the accounting calendar
change and the lower administrative expenses at the former ProSource
headquarters. The lower expense margin also reflected the relatively faster
growth of the casual dining business as described above.
Management fees to Holberg included in distribution, selling and
administrative expenses in both 1999 and 1998 were $2.8 million.
LIQUIDITY AND CAPITAL RESOURCES
On October 1, 1999, under an amended credit facility, AmeriServe issued a
$205 million 12% term note due 2006 to AmeriServe Finance Trust (Finco), a
direct subsidiary of Nebco Evans Distributors, Inc., the parent company of NEHC.
Finco financed the term loan to AmeriServe through the issuance of $205 million
12% Senior Secured Notes (the Notes) due 2006 in a private placement not
requiring registration under the Securities Act of 1933, as amended. Proceeds
from the Notes, issued at a discount, totaled $200.3 before debt issuance costs.
The proceeds were partially used by AmeriServe to repay borrowings under its
previous revolving credit line, with the balance to be used for general
corporate purposes. (See Note 4 to the Condensed Consolidated Statements of
Operations.)
AmeriServe's current and expected sources of liquidity include the
following:
- Cash provided by ongoing operating activities.
- A bank-funded revolving credit line under the amended credit facility of
up to $125 million, all of which was available before $40.7 million in
letters of credit at October 1, 1999. (See Note 4 to the Condensed
Consolidated Statements of Operations.) The credit line is expected to
increase by $100 million under a proposal submitted by the lender, and an
agreement is anticipated to be finalized by mid-December 1999.
- Proceeds from the Accounts Receivable Program of up to $485 million, all
of which was available and fully used at September 25, 1999. (See Note 5
to the Condensed Consolidated Statements of Operations.)
- $50 million in cash proceeds from equity and equity-like investments by
AmeriServe's indirect shareholders, under transactions expected to be
completed by mid-December 1999.
- Future proceeds and cash flow benefits estimated to be $80-110 million
over the next 60-90 days from the anticipated sale of the Equipment
Division and reductions in inventories and accounts receivable from the
higher than normal levels experienced during the distribution center
consolidations and new computer system roll-out activities.
- Proceeds from sales of warehouse facilities and excess transportation
equipment of approximately $30 million, under transactions expected to
close during the fourth quarter of 1999.
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- Lease financing of warehouse facility construction and purchases of
delivery fleet, material handling equipment and computer hardware.
During the third quarter of 1999, AmeriServe reduced its accounts payable
balance by $133 million, and expects to further reduce the balance during the
fourth quarter. The accounts payable balances began to build earlier in the year
as AmeriServe encountered disruptions in processing supplier invoices during
conversions of computer systems and consolidation of the accounts payable
function into the Dallas-area headquarters. AmeriServe believes that as a result
of the invoice processing issues, which are being resolved, and concerns
regarding AmeriServe's levels of restructuring spending and the additional
indebtedness incurred under the $205 million Finco Loan, certain suppliers have
been seeking shorter payment terms, either explicitly or implicitly (through
reduction in normal cash "float"). As indicated in AmeriServe's report on Form
8-K filed with the Securities and Exchange Commission on November 2, 1999,
AmeriServe has assured suppliers that it expects to have adequate liquidity (as
described above) to meet its ongoing obligations.
The adequacy of AmeriServe's liquidity sources is largely dependant upon
its ability to reduce restructuring costs from current levels and retain
historical payment terms in meeting supplier obligations. As discussed under
"Business Restructuring" above, AmeriServe has taken actions to reduce its
headcount by about 1,500, or approximately 15% of its current workforce. This
decrease, which represented approximately $25 million in costs during the third
quarter of 1999, largely consists of individuals who have completed contract and
other temporary labor services supporting the restructuring activities.
AmeriServe currently estimates approximately $42 million in cash spending
requirements for the balance of 1999 relating to the consolidation and
integration actions and computer systems initiatives (discussed above under
"Business Restructuring" and "Computer Systems and Year 2000 Issue",
respectively). Cash capital expenditures for 1999, in addition to amounts
included in the computer systems initiatives, are estimated to be about $30
million, of which $25 million has been spent year-to-date. The following table
indicates the nature and timing of cash expenditures associated with the
restructuring and computer systems initiatives (in millions):
1998 THIRD YEAR TOTAL BALANCE
AND QUARTER TO DATE SPENDING OF 1999
1997 1999 1999 TO DATE (ESTIMATED)
------ ------- ------- -------- -----------
Cash expenditures for:
Lease liabilities, severance and other
exit costs(a)........................ $ 16.3 $ 4.1 $ 14.9 $ 31.2 $ 7
Integration costs(b)................... 41.3 35.4 75.6 116.9 30
New computer system implementation and
Y2K remediation(c)................... 50.3 29.8 66.8 117.1 5
------ ----- ------ ------ ---
$107.9 $69.3 $157.3 $265.2 $42
====== ===== ====== ====== ===
- ---------------
(a) Spending is charged against exit cost reserves, totaling $131.6 million,
recorded since 1997 and consisting of both purchase accounting ($106.7
million) and restructuring charge ($24.9 million) reserves.
(b) Spending is expensed as incurred.
(c) The portion of the spending representing costs to purchase and develop
software is capitalized. All other spending is expensed as incurred.
Amounts included above that were capitalized were $10.3 million in the
third quarter and $24.2 million year-to-date.
Year-to-Date 1999 Compared to Year-to-Date 1998:
Net cash used for operating activities increased $85.2 million to $202.7
million in 1999. This performance primarily reflected the increased net loss of
$78.2 million after adjustment for noncash depreciation, amortization and
impairment charges.
19
21
Net cash used for investing activities decreased $343.1 million to $14.9
million in 1999 primarily reflecting the ProSource acquisition in 1998. Higher
capital expenditures of $10.5 million, driven by capitalized computer software
development costs and spending associated with warehouse facility development,
were more than offset by an increase in net cash transfers from affiliates of
$17.9 million. Proceeds of $22.2 million from property sales resulted from
sale-leaseback transactions related primarily to new/expanded warehouse
facilities.
Net cash provided by financing activities decreased $32.9 million to $214.6
million in 1999. This change was largely due to a decrease in proceeds from sale
of accounts receivable of $160 million and capital contributions from NEHC of
$25 million, reflecting the 1998 funding of the ProSource acquisition, partially
offset by increased borrowings on the revolving credit facility of $156.2
million.
SEASONALITY AND GENERAL PRICE LEVELS
Historically, AmeriServe's operating results have reflected seasonal
variations. AmeriServe experiences lower net sales and operating profits in the
first and fourth calendar quarters, with the effects being more pronounced in
the first quarter. Additionally, the effect of these seasonal variations is more
pronounced in regions where winter weather is generally more inclement.
AmeriServe has been in the process of adopting a 13-period fiscal year calendar
(see discussion under "Accounting Calendar" above). Under this calendar, the
first three quarters consist of 12 weeks and the fourth quarter consists of 16
weeks. As a result, reported net sales and operating profits for the fourth
quarter will not necessarily decline from the second and third quarters.
Inflation has not had a significant impact on AmeriServe operations. Food
price deflation could adversely affect profitability as approximately 30% of
AmeriServe's sales are at prices based on product cost plus a percentage markup.
CAUTIONARY STATEMENTS
Restructuring Risk
As discussed above under "Business Restructuring," AmeriServe is in the
process of implementing a comprehensive restructuring involving consolidation
and transfer of business among warehouse facilities, re-routing of truck
deliveries, consolidation and streamlining of support functions and relocation
and training of employees. AmeriServe is investing significant cash expenditures
to effect the restructuring plan, with the expectation of substantial cost
savings upon its completion.
While AmeriServe has made significant progress, there can be no assurance
that the remaining restructuring activities will be completed on time, that
business operations will not be disrupted during the remaining restructuring
period, that spending will be within projected levels, that liquidity will be
adequate to complete the actions and that the expected cost savings will be
achieved. While AmeriServe believes it has the resources to meet the objectives,
the ultimate level and timing of efficiencies to be realized are subject to its
ability to manage through the complexities of the restructuring plan and respond
to unanticipated events.
Computer Systems Risk
As discussed above under "Computer Systems and Year 2000 Issue," AmeriServe
has implemented a new computer software and hardware platform that is expected
to enhance productivity in quick service distribution operations, streamline
support processes and significantly reduce AmeriServe's exposure to the Y2K code
problem. AmeriServe has also completed remediation of Y2K code problems in
applications that will not be replaced by the new system.
While AmeriServe has made substantial progress, there can be no assurance
that the system implementation and Y2K remediation actions will be fully
effective, that business operations will not be disrupted and that significant
additional spending will not be required to achieve desired results.
20
22
Industry and Customer Risk
AmeriServe's future results are subject to economic and competitive risks
and uncertainties in the chain restaurant and foodservice distribution
industries and in the economy, generally. The trend of consolidation in the
foodservice distribution industry, as evidenced by AmeriServe's acquisition
activity, may further intensify competitive pressures. While AmeriServe will
take appropriate actions to retain desired business, some loss of customers
during this transition period has occurred and is a continuing risk. In
addition, the activities associated with the restructuring plan and computer
systems initiatives increase the risk of business disruption; therefore, there
can be no assurance of AmeriServe's consistent achievement of service level
requirements set forth in customer contracts. Management believes that
completion of the restructuring plan will enhance AmeriServe's position as one
of the most efficient distributors in its industry and, therefore, highly
competitive in pricing and customer service.
With respect to risk of customer concentration, approximately 21% of
AmeriServe's net sales are to Tricon and 10% are to Darden Restaurants, Inc.,
which owns all the Red Lobster and Olive Garden restaurants. AmeriServe provides
service to Tricon's U.S. company-owned restaurants under a long-term exclusive
distribution agreement that, including a two and one-half year extension option,
expires July 2007. Tricon is actively engaged in the sale to franchisees of
company-owned restaurants covered by the distribution agreement. While the
distribution agreement provides that prior to sales of Pizza Hut and Taco Bell
restaurants, such franchisees will enter into distribution agreements with
AmeriServe on substantially similar terms, there can be no assurance that the
transition from company-owned to franchised status will not affect AmeriServe's
results. AmeriServe provides service to Red Lobster and Olive Garden restaurants
under exclusive distribution agreements effective June 1997 and expiring in May
2002.
Risk of Leverage
AmeriServe is and will continue to be highly leveraged as a result of
indebtedness incurred in connection with the acquisitions and restructuring
plan. AmeriServe's ability to meet interest payments, refinance the debt or
ultimately repay the debt is subject to, among others, the risks and
uncertainties discussed above.
For additional factors that could cause AmeriServe's actual results to
differ materially from expected and historical results, see the "Risk Factors"
set forth in AmeriServe's amended Registration Statement on Form S-4 filed with
the Securities and Exchange Commission on April 30, 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
AmeriServe's $205 million Term Loan (payable to AmeriServe Finance
Trust -- see Note 4 to the Condensed Consolidated Statements of Operations),
$350 million Senior Notes and $500 million Senior Subordinated Notes carry fixed
interest rates and, therefore, do not expose AmeriServe to the risk of earnings
or cash flow loss due to changes in market interest rates.
AmeriServe is exposed to market interest rates in connection with its
accounts receivable program and credit facility. As discussed in Management
Discussion and Analysis of Financial Condition and Results of Operations under
"Results of Operations," substantially all of the loss on sale of accounts
receivable as reported in the Condensed Consolidated Statements of Operations
represents the return to investors in variable interest rate certificates issued
by a master trust to which the rights of ownership of a substantial majority of
AmeriServe's accounts receivable have been transferred. At September 25, 1999,
the master trust had certificates outstanding of $485 million. Borrowings
against AmeriServe's amended revolving credit line also carry variable interest
rates. (See Notes 4 and 5 to the Condensed Consolidated Financial Statements).
At September 25, 1999, AmeriServe is not engaged in other contracts which
would cause exposure to the risk of material earnings or cash flow loss due to
changes in market commodity prices, foreign currency exchange rates or interest
rates.
21
23
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
EXHIBIT
NUMBER EXHIBIT
------- -------
2.1 -- Asset Purchase Agreement between PepsiCo, Inc. and Nebco
Evans Holding Company (incorporated by reference to
Exhibit 2.2 to the Registrant's Registration Statement
Form S-4 No. 333-33225 filed August 8, 1997).
2.2 -- Agreement and Plan of Merger, dated as of January 29,
1998, by and among AmeriServe Food Distribution, Inc.,
Steamboat Acquisition Corp. and ProSource, Inc.
(incorporated by reference to Exhibit 2.1 to the
Registrant's Current Report on Form 8-K, dated January
29, 1998).
2.3 -- Voting Agreement, dated as of January 29, 1998, by and
among AmeriServe Food Distribution, Inc., Steamboat
Acquisition Corp. and Onex DHC LLC and certain of its
affiliates (incorporated by reference to Exhibit 2.2 to
the Registrant's Current Report on Form 8-K, dated
January 29, 1998).
3.1 -- Amended and Restated Certificate of Incorporation of
AmeriServe Food Distribution, Inc. (formerly AmeriServ
Food Company, successor to AmeriServe Food Distribution,
Inc.) (incorporated by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K filed March 27,
1998).
3.2 -- Amended and Restated Bylaws of AmeriServe Food
Distribution, Inc. (formerly AmeriServ Food Company,
successor to AmeriServe Food Distribution, Inc.)
(incorporated by reference to Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K filed March 27,
1998).
3.3 -- Articles of Incorporation of AmeriServe Transportation,
Inc. (incorporated by reference to Exhibit 3.5 to the
Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
3.4 -- By-Laws of AmeriServe Transportation, Inc. (incorporated
by reference to Exhibit 3.6 to the Registrant's
Registration Statement on Form S-4 No 333-33225 filed
August 8, 1997).
22
24
EXHIBIT
NUMBER EXHIBIT
------- -------
3.5 -- Articles of Incorporation of Chicago Consolidated
Corporation (incorporated by reference to Exhibit 3.7 to
the Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
3.6 -- By-Laws of Chicago Consolidated Corporation (incorporated
by reference to Exhibit 3.8 to the Registrant's
Registration Statement on Form S-4 No. 333-33225 filed
August 8, 1997).
3.7 -- Articles of Incorporation of Northland Transportation
Services, Inc. (incorporated by reference to Exhibit 3.9
to the Registrant's Registration Statement on Form S-4
No. 333-33225 filed August 8, 1997).
3.8 -- By-Laws of Northland Transportation Services, Inc.
(incorporated by reference to Exhibit 3.10 to the
Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
3.9 -- Articles of Incorporation of Delta Transportation, Ltd.
(incorporated by reference to Exhibit 3.13 to the
Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
3.10 -- By-Laws of Delta Transportation, Ltd. (incorporated by
reference to Exhibit 3.14 to the Registrant's
Registration Statement on Form S-4 No. 333-33225 filed
August 8, 1997).
3.11 -- Articles of Incorporation of PSD Transportation Service,
Inc. (incorporated by reference to Exhibit 3.11 to the
Registrant's Registration Statement on Form S-4 No.
33-33225 filed August 8, 1997).
3.12 -- By-Laws of PSD Transportation Services, Inc.
(incorporated by reference to Exhibit 3.12 to the
Registrant's Registration Statement on Form S-4 No.
33-33225 filed August 8, 1997).
3.13 -- Certificate of Incorporation of PSC Services of Florida,
Inc. (incorporated by reference to Exhibit 3.13 to the
Registrant's Registration Statement on Form S-4 No.
33-33225 filed August 8, 1997).
3.14 -- By-Laws of PSC Services of Florida, Inc. (incorporated by
reference to Exhibit 3.14 to the Registrant's
Registration Statement on Form S-4 No. 33-33225 filed
August 8, 1997).
3.15 -- Certificate of Incorporation of BroMar Services, Inc.
(incorporated by reference to Exhibit 3.15 to the
Registrant's Registration Statement on Form S-4 No.
33-33225 filed August 8, 1997).
3.16 -- By-Laws of BroMar Services, Inc. (incorporated by
reference to Exhibit 3.16 to the Registrant's
Registration Statement on Form S-4 No. 33-33225 filed
August 8, 1997).
3.17 -- Certificate of Amendment to the Certificate of
Incorporation of BroMar Services, Inc. (incorporated by
reference to Exhibit 3.17 to the Registrant's
Registration Statement on Form S-4 No. 33-33225 filed
August 8, 1997).
3.18 -- Certificate of Incorporation of ProSource Mexico
Holdings, Inc. (incorporated by reference to Exhibit 3.18
to the Registrant's Registration Statement on Form S-4
No. 33-33225 filed August 8, 1997).
3.19 -- By-Laws of ProSource Mexico Holdings, Inc. (incorporated
by reference to Exhibit 3.19 to the Registrant's
Registration Statement on Form S-4 No. 33-33225 filed
August 8, 1997).
23
25
EXHIBIT
NUMBER EXHIBIT
------- -------
4.1 -- Indenture, dated as of October 15, 1997, by and among
AmeriServe Food Distribution, Inc., the Subsidiary
Guarantors and State Street Bank and Trust Company, with
respect to the Senior Notes (incorporated by reference to
Exhibit 4.1 to the Registrant's Registration Statement on
Form S-4 No. 333-38337 filed October 21, 1997).
4.2 -- Supplemental 8 7/8% New Senior Notes Indenture, dated as
of December 23, 1997, by and among AmeriServe Food
Distribution, Inc., AmeriServ Food Company, and State
Street Bank and Trust Company, as Trustee (incorporated
by reference to Exhibit 4.2 to the Registrant's Current
Report on Form 8-K, dated December 28, 1997).
4.3 -- Indenture, dated as of July 11, 1997, by and among
AmeriServe Food Distribution, Inc., the Subsidiary
Guarantors and State Street Bank and Trust Company, with
respect to the new Senior Subordinated Notes
(incorporated by reference to Exhibit 4.1 of the
Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
4.4 -- Supplemental 10 1/8% New Senior Subordinated Notes
Indenture, dated as of December 23, 1997, by and among
AmeriServe Food Distribution, Inc., AmeriServ Food
Company, and State Street Bank and Trust Company, as
Trustee (incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K, dated December
28, 1997).
4.7 -- Second Supplemental 8 7/8% New Senior Notes Indenture,
dated as of May 21, 1998, by and among AmeriServe Food
Distribution, Inc. and State Street Bank and Trust
Company (incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated May 21,
1998).
4.8 -- Second Supplemental 10 1/8% New Senior Subordinated Notes
Indenture, dated as of December 23, 1997, by and among
AmeriServe Food Distribution, Inc., AmeriServ Food
Company, and State Street Bank and Trust Company
(incorporated by reference to Exhibit 4.3 to the
Registrant's Current Report on Form 8-K dated May 21,
1998).
10.1 -- Registration Rights Agreement, dated as of July 11, 1997,
by and among AmeriServe Food Distribution, Inc., the
Subsidiary Guarantors and Donaldson, Lufkin & Jenrette
Securities Corporation (incorporated by reference to
Exhibit 10.1 to the Registrant's Registration Statement
on Form S-4 No. 333-33225 filed August 8, 1997).
10.2 -- Registration Rights Agreement, dated as of October 15,
1997, by and among AmeriServe Food Distribution, Inc.,
the Subsidiary Guarantors and Donaldson, Lufkin &
Jenrette Securities Corporation (incorporated by
reference to Exhibit 10.1 to the Registrant's
Registration Statement on Form S-4 No. 333-38337 filed
October 21, 1997).
10.3 -- Employment Agreement, dated as of December 23, 1986
between AmeriServe Food Distribution, Inc. and Raymond E.
Marshall, as amended by Amendment to Employment
Agreement, dated as of January 1, 1995 (incorporated by
reference to Exhibit 10.4 to the Registrant's
Registration Statement on Form S-4 No. 333-33225 filed
August 8, 1997).
10.4 -- Employment Agreement, dated as of July 1, 1998 between
AmeriServe Food Distribution, Inc. and Thomas C.
Highland. (incorporated by reference to Exhibit 10.4 to
the Registrant's Annual Report on Form 10-K filed March
25, 1999).
24
26
EXHIBIT
NUMBER EXHIBIT
------- -------
10.5 -- Employment Agreement, dated as of November 26, 1997
between AmeriServe Food Distribution, Inc. and Kenneth R.
Lane. (incorporated by reference to Exhibit 10.5 to the
Registrant's Annual Report on Form 10-K filed March 25,
1999).
10.6 -- Employment Agreement, dated as of August 15, 1997 between
AmeriServe Food Distribution, Inc. and Diana M. Moog.
(incorporated by reference to Exhibit 10.6 to the
Registrant's Annual Report on Form 10-K filed March 25,
1999).
10.7 -- Amended and Restated Sales and Distribution Agreement
dated as of November 1, 1998, by and among PFS, Pizza
Hut, Taco Bell, Kentucky Fried Chicken Corporation and
Kentucky Fried Chicken of California, Inc. (incorporated
by reference to Exhibit 10.7 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.8 -- Third Amended and Restated Credit Agreement, dated as of
May 21, 1998 among AmeriServe Food Distribution, Inc.,
Bank of America National Trust and Savings Association,
as Administrative Agent, Donaldson, Lufkin and Jenrette
Securities Corporation, as Documentation Agent, Bank of
America National Trust and Savings Association, as Letter
of Credit Issuing Lender and the Other Financial
Institutions Party Thereto, Arranged by BancAmerica
Robertson Stephens (incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q
filed November 10, 1998).
10.9 -- First Amendment to Third Amended and Restated Credit
Agreement, dated as of July 24, 1998. (incorporated by
reference to Exhibit 10.9 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.10 -- Amended and Restated Pooling and Servicing Agreement,
dated as of July 28, 1998 among AmeriServe Funding
Corporation, AmeriServe Food Distribution, Inc. and
Norwest Bank Minnesota, N.A. (incorporated by reference
to Exhibit 10.10 to the Registrant's Annual Report on
Form 10-K filed March 25, 1999).
10.11 -- Series 1998-1 Supplement to Pooling and Servicing
Agreement, dated as of July 28, 1998 among AmeriServe
Funding Corporation, AmeriServe Food Distribution, Inc.
and Norwest Bank Minnesota, N.A. (incorporated by
reference to Exhibit 10.11 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.12 -- Series 1998-3 Supplement to Pooling and Servicing
Agreement, dated as of December 18, 1998 among AmeriServe
Funding Corporation, AmeriServe Food Distribution, Inc.
and Norwest Bank Minnesota, N.A. (incorporated by
reference to Exhibit 10.12 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.13 -- Series 1998-4 Supplement to Pooling and Servicing
Agreement, dated as of December 18, 1998 among AmeriServe
Funding Corporation, AmeriServe Food Distribution, Inc.
and Norwest Bank Minnesota, N.A. (incorporated by
reference to Exhibit 10.13 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.14 -- Nebco Evans Holding Company 1998 Management Stock Option
Plan (incorporated by reference to Exhibit 4.2 to Nebco
Evans Holding Company's Registration Statement on Form
S-8 No. 333-53095 filed on May 20, 1998).
25
27
EXHIBIT
NUMBER EXHIBIT
------- -------
10.15 -- Omnibus Amendment No. 1 to Series 1998-1 Supplement to
Pooling and Services Agreement, dated as of June 1, 1999
among AmeriServe Funding Corporation, AmeriServe Food
Distribution, Inc. and Norwest Bank Minnesota, N.A.
(incorporated by reference to Exhibit 10.15 to the
Registrant's Quarterly Report on Form 10-Q filed August
10, 1999).
10.16 -- Omnibus Amendment No. 1 to Series 1998-4 Supplement to
Pooling and Services Agreement, dated as of June 1, 1999
among AmeriServe Funding Corporation, AmeriServe Food
Distribution, Inc. and Norwest Bank Minnesota, N.A.
(incorporated by reference to Exhibit 10.16 to the
Registrant's Quarterly Report on Form 10-Q filed August
10, 1999).
10.17 -- Fourth Amended and Restated Credit Agreement, dated as of
September 30, 1999 among AmeriServe Food Distribution,
Inc., Bank of America, N.A., as Administrative Agent, and
Bank of America, N.A., as Letter of Credit Issuing
Lender, and Other Financial Institutions and Other
Lenders Party thereto, arranged by Banc of America
Securities, L.L.C., as Sole Lead Book Manager.*
10.18 -- Indenture, dated as of October 1, 1999 by and among
AmeriServe Finance Trust, AmeriServe Capital Corporation,
acting as Agent of AmeriServe Finance Trust, Nebco Evans
Distributors, Inc., as Guarantor, and United States Trust
Company of New York, as Trustee, with respect to
$205,000,000, 12% Senior Secured Notes due 2006.*
27.1 -- Financial Data Schedule.*
- ---------------
* Filed herewith.
(b) Reports on Form 8-K
8-K filed September 17, 1999.
8-K filed September 27, 1999.
8-K filed October 6, 1999.
8-K filed November 2, 1999.
26
28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
AMERISERVE FOOD DISTRIBUTION, INC.
------------------------------------
(Registrant)
By: /s/ DIANA M. MOOG
----------------------------------
Diana M. Moog,
Executive Vice President
and Chief Financial Officer
Date: November 9, 1999
By: /s/ STAN SZLAUDERBACH
----------------------------------
Stan Szlauderbach,
Vice President and
Chief Accounting Officer
Date: November 9, 1999
27
29
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
------- -------
2.1 -- Asset Purchase Agreement between PepsiCo, Inc. and Nebco
Evans Holding Company (incorporated by reference to
Exhibit 2.2 to the Registrant's Registration Statement
Form S-4 No. 333-33225 filed August 8, 1997).
2.2 -- Agreement and Plan of Merger, dated as of January 29,
1998, by and among AmeriServe Food Distribution, Inc.,
Steamboat Acquisition Corp. and ProSource, Inc.
(incorporated by reference to Exhibit 2.1 to the
Registrant's Current Report on Form 8-K, dated January
29, 1998).
2.3 -- Voting Agreement, dated as of January 29, 1998, by and
among AmeriServe Food Distribution, Inc., Steamboat
Acquisition Corp. and Onex DHC LLC and certain of its
affiliates (incorporated by reference to Exhibit 2.2 to
the Registrant's Current Report on Form 8-K, dated
January 29, 1998).
3.1 -- Amended and Restated Certificate of Incorporation of
AmeriServe Food Distribution, Inc. (formerly AmeriServ
Food Company, successor to AmeriServe Food Distribution,
Inc.) (incorporated by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K filed March 27,
1998).
3.2 -- Amended and Restated Bylaws of AmeriServe Food
Distribution, Inc. (formerly AmeriServ Food Company,
successor to AmeriServe Food Distribution, Inc.)
(incorporated by reference to Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K filed March 27,
1998).
3.3 -- Articles of Incorporation of AmeriServe Transportation,
Inc. (incorporated by reference to Exhibit 3.5 to the
Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
3.4 -- By-Laws of AmeriServe Transportation, Inc. (incorporated
by reference to Exhibit 3.6 to the Registrant's
Registration Statement on Form S-4 No 333-33225 filed
August 8, 1997).
3.5 -- Articles of Incorporation of Chicago Consolidated
Corporation (incorporated by reference to Exhibit 3.7 to
the Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
3.6 -- By-Laws of Chicago Consolidated Corporation (incorporated
by reference to Exhibit 3.8 to the Registrant's
Registration Statement on Form S-4 No. 333-33225 filed
August 8, 1997).
3.7 -- Articles of Incorporation of Northland Transportation
Services, Inc. (incorporated by reference to Exhibit 3.9
to the Registrant's Registration Statement on Form S-4
No. 333-33225 filed August 8, 1997).
3.8 -- By-Laws of Northland Transportation Services, Inc.
(incorporated by reference to Exhibit 3.10 to the
Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
3.9 -- Articles of Incorporation of Delta Transportation, Ltd.
(incorporated by reference to Exhibit 3.13 to the
Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
3.10 -- By-Laws of Delta Transportation, Ltd. (incorporated by
reference to Exhibit 3.14 to the Registrant's
Registration Statement on Form S-4 No. 333-33225 filed
August 8, 1997).
30
EXHIBIT
NUMBER EXHIBIT
------- -------
3.11 -- Articles of Incorporation of PSD Transportation Service,
Inc. (incorporated by reference to Exhibit 3.11 to the
Registrant's Registration Statement on Form S-4 No.
33-33225 filed August 8, 1997).
3.12 -- By-Laws of PSD Transportation Services, Inc.
(incorporated by reference to Exhibit 3.12 to the
Registrant's Registration Statement on Form S-4 No.
33-33225 filed August 8, 1997).
3.13 -- Certificate of Incorporation of PSC Services of Florida,
Inc. (incorporated by reference to Exhibit 3.13 to the
Registrant's Registration Statement on Form S-4 No.
33-33225 filed August 8, 1997).
3.14 -- By-Laws of PSC Services of Florida, Inc. (incorporated by
reference to Exhibit 3.14 to the Registrant's
Registration Statement on Form S-4 No. 33-33225 filed
August 8, 1997).
3.15 -- Certificate of Incorporation of BroMar Services, Inc.
(incorporated by reference to Exhibit 3.15 to the
Registrant's Registration Statement on Form S-4 No.
33-33225 filed August 8, 1997).
3.16 -- By-Laws of BroMar Services, Inc. (incorporated by
reference to Exhibit 3.16 to the Registrant's
Registration Statement on Form S-4 No. 33-33225 filed
August 8, 1997).
3.17 -- Certificate of Amendment to the Certificate of
Incorporation of BroMar Services, Inc. (incorporated by
reference to Exhibit 3.17 to the Registrant's
Registration Statement on Form S-4 No. 33-33225 filed
August 8, 1997).
3.18 -- Certificate of Incorporation of ProSource Mexico
Holdings, Inc. (incorporated by reference to Exhibit 3.18
to the Registrant's Registration Statement on Form S-4
No. 33-33225 filed August 8, 1997).
3.19 -- By-Laws of ProSource Mexico Holdings, Inc. (incorporated
by reference to Exhibit 3.19 to the Registrant's
Registration Statement on Form S-4 No. 33-33225 filed
August 8, 1997).
4.1 -- Indenture, dated as of October 15, 1997, by and among
AmeriServe Food Distribution, Inc., the Subsidiary
Guarantors and State Street Bank and Trust Company, with
respect to the Senior Notes (incorporated by reference to
Exhibit 4.1 to the Registrant's Registration Statement on
Form S-4 No. 333-38337 filed October 21, 1997).
4.2 -- Supplemental 8 7/8% New Senior Notes Indenture, dated as
of December 23, 1997, by and among AmeriServe Food
Distribution, Inc., AmeriServ Food Company, and State
Street Bank and Trust Company, as Trustee (incorporated
by reference to Exhibit 4.2 to the Registrant's Current
Report on Form 8-K, dated December 28, 1997).
4.3 -- Indenture, dated as of July 11, 1997, by and among
AmeriServe Food Distribution, Inc., the Subsidiary
Guarantors and State Street Bank and Trust Company, with
respect to the new Senior Subordinated Notes
(incorporated by reference to Exhibit 4.1 of the
Registrant's Registration Statement on Form S-4 No.
333-33225 filed August 8, 1997).
4.4 -- Supplemental 10 1/8% New Senior Subordinated Notes
Indenture, dated as of December 23, 1997, by and among
AmeriServe Food Distribution, Inc., AmeriServ Food
Company, and State Street Bank and Trust Company, as
Trustee (incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K, dated December
28, 1997).
31
EXHIBIT
NUMBER EXHIBIT
------- -------
4.7 -- Second Supplemental 8 7/8% New Senior Notes Indenture,
dated as of May 21, 1998, by and among AmeriServe Food
Distribution, Inc. and State Street Bank and Trust
Company (incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated May 21,
1998).
4.8 -- Second Supplemental 10 1/8% New Senior Subordinated Notes
Indenture, dated as of December 23, 1997, by and among
AmeriServe Food Distribution, Inc., AmeriServ Food
Company, and State Street Bank and Trust Company
(incorporated by reference to Exhibit 4.3 to the
Registrant's Current Report on Form 8-K dated May 21,
1998).
10.1 -- Registration Rights Agreement, dated as of July 11, 1997,
by and among AmeriServe Food Distribution, Inc., the
Subsidiary Guarantors and Donaldson, Lufkin & Jenrette
Securities Corporation (incorporated by reference to
Exhibit 10.1 to the Registrant's Registration Statement
on Form S-4 No. 333-33225 filed August 8, 1997).
10.2 -- Registration Rights Agreement, dated as of October 15,
1997, by and among AmeriServe Food Distribution, Inc.,
the Subsidiary Guarantors and Donaldson, Lufkin &
Jenrette Securities Corporation (incorporated by
reference to Exhibit 10.1 to the Registrant's
Registration Statement on Form S-4 No. 333-38337 filed
October 21, 1997).
10.3 -- Employment Agreement, dated as of December 23, 1986
between AmeriServe Food Distribution, Inc. and Raymond E.
Marshall, as amended by Amendment to Employment
Agreement, dated as of January 1, 1995 (incorporated by
reference to Exhibit 10.4 to the Registrant's
Registration Statement on Form S-4 No. 333-33225 filed
August 8, 1997).
10.4 -- Employment Agreement, dated as of July 1, 1998 between
AmeriServe Food Distribution, Inc. and Thomas C.
Highland. (incorporated by reference to Exhibit 10.4 to
the Registrant's Annual Report on Form 10-K filed March
25, 1999).
10.5 -- Employment Agreement, dated as of November 26, 1997
between AmeriServe Food Distribution, Inc. and Kenneth R.
Lane. (incorporated by reference to Exhibit 10.5 to the
Registrant's Annual Report on Form 10-K filed March 25,
1999).
10.6 -- Employment Agreement, dated as of August 15, 1997 between
AmeriServe Food Distribution, Inc. and Diana M. Moog.
(incorporated by reference to Exhibit 10.6 to the
Registrant's Annual Report on Form 10-K filed March 25,
1999).
10.7 -- Amended and Restated Sales and Distribution Agreement
dated as of November 1, 1998, by and among PFS, Pizza
Hut, Taco Bell, Kentucky Fried Chicken Corporation and
Kentucky Fried Chicken of California, Inc. (incorporated
by reference to Exhibit 10.7 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.8 -- Third Amended and Restated Credit Agreement, dated as of
May 21, 1998 among AmeriServe Food Distribution, Inc.,
Bank of America National Trust and Savings Association,
as Administrative Agent, Donaldson, Lufkin and Jenrette
Securities Corporation, as Documentation Agent, Bank of
America National Trust and Savings Association, as Letter
of Credit Issuing Lender and the Other Financial
Institutions Party Thereto, Arranged by BancAmerica
Robertson Stephens (incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q
filed November 10, 1998).
32
EXHIBIT
NUMBER EXHIBIT
------- -------
10.9 -- First Amendment to Third Amended and Restated Credit
Agreement, dated as of July 24, 1998. (incorporated by
reference to Exhibit 10.9 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.10 -- Amended and Restated Pooling and Servicing Agreement,
dated as of July 28, 1998 among AmeriServe Funding
Corporation, AmeriServe Food Distribution, Inc. and
Norwest Bank Minnesota, N.A. (incorporated by reference
to Exhibit 10.10 to the Registrant's Annual Report on
Form 10-K filed March 25, 1999).
10.11 -- Series 1998-1 Supplement to Pooling and Servicing
Agreement, dated as of July 28, 1998 among AmeriServe
Funding Corporation, AmeriServe Food Distribution, Inc.
and Norwest Bank Minnesota, N.A. (incorporated by
reference to Exhibit 10.11 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.12 -- Series 1998-3 Supplement to Pooling and Servicing
Agreement, dated as of December 18, 1998 among AmeriServe
Funding Corporation, AmeriServe Food Distribution, Inc.
and Norwest Bank Minnesota, N.A. (incorporated by
reference to Exhibit 10.12 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.13 -- Series 1998-4 Supplement to Pooling and Servicing
Agreement, dated as of December 18, 1998 among AmeriServe
Funding Corporation, AmeriServe Food Distribution, Inc.
and Norwest Bank Minnesota, N.A. (incorporated by
reference to Exhibit 10.13 to the Registrant's Annual
Report on Form 10-K filed March 25, 1999).
10.14 -- Nebco Evans Holding Company 1998 Management Stock Option
Plan (incorporated by reference to Exhibit 4.2 to Nebco
Evans Holding Company's Registration Statement on Form
S-8 No. 333-53095 filed on May 20, 1998).
10.15 -- Omnibus Amendment No. 1 to Series 1998-1 Supplement to
Pooling and Services Agreement, dated as of June 1, 1999
among AmeriServe Funding Corporation, AmeriServe Food
Distribution, Inc. and Norwest Bank Minnesota, N.A.
(incorporated by reference to Exhibit 10.15 to the
Registrant's Quarterly Report on Form 10-Q filed August
10, 1999).
10.16 -- Omnibus Amendment No. 1 to Series 1998-4 Supplement to
Pooling and Services Agreement, dated as of June 1, 1999
among AmeriServe Funding Corporation, AmeriServe Food
Distribution, Inc. and Norwest Bank Minnesota, N.A.
(incorporated by reference to Exhibit 10.16 to the
Registrant's Quarterly Report on Form 10-Q filed August
10, 1999).
10.17 -- Fourth Amended and Restated Credit Agreement, dated as of
September 30, 1999 among AmeriServe Food Distribution,
Inc., Bank of America, N.A., as Administrative Agent, and
Bank of America, N.A., as Letter of Credit Issuing
Lender, and Other Financial Institutions and Other
Lenders Party thereto, arranged by Banc of America
Securities, L.L.C., as Sole Lead Book Manager.*
10.18 -- Indenture, dated as of October 1, 1999 by and among
AmeriServe Finance Trust, AmeriServe Capital Corporation,
acting as Agent of AmeriServe Finance Trust, Nebco Evans
Distributors, Inc., as Guarantor, and United States Trust
Company of New York, as Trustee, with respect to
$205,000,000 12% Senior Secured Notes due 2006.*
27.1 -- Financial Data Schedule.*
- ---------------
* Filed herewith.
33
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 30, 1999
AMONG
AMERISERVE FOOD DISTRIBUTION, INC.,
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT,
AND
BANK OF AMERICA, N.A.
AS LETTER OF CREDIT ISSUING LENDER
AND
THE OTHER FINANCIAL INSTITUTIONS AND OTHER LENDERS PARTY HERETO
ARRANGED BY
BANC OF AMERICA SECURITIES L.L.C.,
AS SOLE LEAD ARRANGER AND SOLE BOOK MANAGER
34
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
1.1 Certain Defined Terms 1
1.2 Other Interpretive Provisions 46
1.3 Accounting Principles 47
ARTICLE II THE CREDIT 47
2.1 Amounts and Terms of Commitments 47
2.2 Loan Accounts 48
2.3 Procedure for Borrowing 48
2.4 Conversion and Continuation Elections 49
2.5 Voluntary Termination or Reduction of Revolving
Commitments 51
2.6 Optional Prepayments of Revolving Loans 51
2.7 Optional Prepayments of Term Loan 51
2.8 Mandatory Prepayments of Revolving Loans 52
2.9 Mandatory Prepayments of Term Loan 52
2.10 Repayment 53
2.11 Interest 53
2.12 Fees 54
(a) Arrangement, Agency Fees 54
(b) Commitment Fees 55
2.13 Computation of Fees and Interest 55
2.14 Payments by the Company 55
2.15 Payments by the Lenders to the Administrative Agent 56
2.16 Sharing of Payments, etc. 57
2.17 Legal Defeasance and Covenant Defeasance 57
ARTICLE III THE LETTERS OF CREDIT 59
3.1 The Letter of Credit Subfacility 59
3.2 Issuance, Amendment and Renewal of Letters of Credit 61
3.3 Existing Letters of Credit; Risk Participations,
Drawings and Reimbursements 63
3.4 Repayment of Participations 65
3.5 Role of the Issuing Lender 65
3.6 Obligations Absolute 66
3.7 Cash Collateral Pledge 67
3.8 Letter of Credit Fees 67
3.9 Uniform Customs and Practice 68
35
Page
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY 68
4.1 Taxes 68
4.2 Illegality 69
4.3 Increased Costs and Reduction of Return 70
4.4 Funding Losses 71
4.5 Inability to Determine Rates 71
4.6 Substitution of Affected Lender 72
4.7 Certificates of Lenders 72
4.8 Survival 72
ARTICLE V COLLATERAL AND GUARANTY 72
5.1 Collateral--Personal Property 72
5.2 Mortgages 73
5.3 Guaranty 73
5.4 Company Stock 73
5.5 Intercreditor Agreement 73
5.6 Revolving/Term Loan Intercreditor Agreement 73
ARTICLE VI CONDITIONS PRECEDENT 74
6.1 Conditions of Restatement 74
(a) Credit Agreement and Notes 74
(b) Resolutions; Incumbency 74
(c) Organization Documents 74
(d) Legal Opinions 74
(e) Certificate 74
(f) Collateral Documents 75
(g) Insurance Policies 75
(h) Revolving/Term Loan Intercreditor Agreement 76
(i) Consent 76
(j) Other Documents 76
6.2 Other Conditions to Effectiveness of Restatement 76
(a) Issuance of Term Lender Notes 76
(b) Governmental Approvals 76
(c) Certificate 76
(d) Borrowing Base Certificate 76
(e) Purchase by Revolving Lenders 76
(f) Fees 76
6.3 Conditions to All Credit Extensions 77
(a) Notice, Application 77
(b) Continuation of Representations and
Warranties 77
(c) No Existing Revolving Loan Default 77
36
Page
ARTICLE VII REPRESENTATIONS AND WARRANTIES TO REVOLVING
LENDERS 77
7.1 Corporate Existence and Power 77
7.2 Corporate Authorization; No Contravention 78
7.3 Governmental Authorization 78
7.4 Binding Effect 78
7.5 Litigation 78
7.6 No Default 79
7.7 ERISA Compliance 79
7.8 Use of Proceeds; Margin Regulations 80
7.9 Title to Properties 80
7.10 Taxes 80
7.11 Financial Condition 80
7.12 Environmental Matters 81
7.13 Regulated Entities 81
7.14 No Burdensome Restrictions 81
7.15 Copyrights, Patents, Trademarks and Licenses, etc 81
7.16 Subsidiaries 81
7.17 Insurance 81
7.18 Full Disclosure 82
7.19 Year 2000 82
ARTICLE VIII [INTENTIONALLY LEFT BLANK] 82
ARTICLE IX AFFIRMATIVE COVENANTS RELATING TO REVOLVING
LENDERS 82
9.1 Financial Statements 82
9.2 Certificates; Other Information 84
9.3 Notices 85
9.4 Preservation of Corporate Existence, etc 86
9.5 Maintenance of Property 87
9.6 Insurance 87
9.7 Payment of Obligations 87
9.8 Compliance with Laws 88
9.9 Compliance with ERISA 88
9.10 Inspection of Property and Books and Records 88
9.11 Environmental Laws 89
9.12 Use of Proceeds 89
9.13 Further Assurances 89
ARTICLE X NEGATIVE COVENANTS RELATING TO REVOLVING LENDERS 90
10.1 Limitation on Liens 90
10.2 Asset Dispositions, etc 92
10.3 Consolidations and Mergers 92
10.4 Loans and Investments 93
10.5 Limitation on Indebtedness 94
37
Page
10.6 Transactions with Affiliates 95
10.7 Use of Proceeds 96
10.8 Contingent Obligations 96
10.9 Joint Ventures 96
10.10 Rental Obligations 97
10.11 Restricted Payments 97
10.12 Minimum Interest Coverage 98
10.13 Maximum Leverage 98
10.14 ERISA 99
10.15 Modification of Certain Agreements 99
10.16 Negative Pledges, Restrictive Agreements, etc. 99
10.17 Maximum Capital Expenditures 99
10.18 Change in Business 100
10.19 Accounting Changes 100
10.20 Restructuring Costs 100
10.21 Receivables Facility 100
ARTICLE XI COVENANTS RELATING TO TERM LOAN 101
11.1 [INTENTIONALLY LEFT BLANK] 101
11.2 Asset Sales 101
11.3 Impairment of Liens 102
11.4 Restricted Payments 102
11.5 Incurrence of Debt and Issuance of Preferred Stock 106
11.6 Liens 109
11.7 Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries 109
11.8 Merger, Consolidation, or Sale of Assets 111
11.9 Transactions with Affiliates 111
11.10 Sale and Leaseback Transactions 113
11.11 Limitation on Issuances and Sales of Capital Stock of
Wholly-Owned Restricted Subsidiaries 114
11.12 Limitations on Issuances of Guarantees of Debt 114
11.13 Business Activities 114
11.14 Additional Guarantees 115
11.15 Reports 115
11.16 Mortgage Amendments 116
ARTICLE XII REVOLVING LOAN EVENTS OF DEFAULT 116
12.1 Revolving Loan Event of Default 116
(a) Non-Payment 116
(b) Representation or Warranty 116
(c) Specific Defaults 117
(d) Other Defaults 117
(e) Cross-Default 117
(f) Insolvency; Voluntary Proceedings 117
38
Page
(g) Involuntary Proceedings 117
(h) ERISA 118
(i) Monetary Judgments 118
(j) Non-Monetary Judgments 118
(k) Change of Control 118
(l) Impairment of Security, etc. 119
(m) NEHC 119
12.2 Remedies 119
12.3 Rights Not Exclusive 120
12.4 Article XII for the Exclusive Benefit of Revolving
Lenders and Issuing Lender 120
ARTICLE XIII TERM LOAN EVENTS OF DEFAULT 120
13.1 Term Loan Events of Default 120
13.2 Acceleration 122
13.3 Other Remedies 122
13.4 Waiver of Past Defaults 123
13.5 Control by the Term Lender 123
13.6 Limitation on Suits 123
13.7 Rights of Term Lender to Receive Payment 124
13.8 Collection Suit by Administrative Agent 124
13.9 Article XIII for the Exclusive Benefit of Term Lender 124
ARTICLE XIV THE ADMINISTRATIVE AGENT 125
14.1 Appointment and Authorization 125
14.2 Delegation of Duties 125
14.3 Liability of Administrative Agent 125
14.4 Reliance by Administrative Agent 126
14.5 Notice of Default 126
14.6 Credit Decision 127
14.7 Indemnification of Administrative Agent 127
14.8 Administrative Agent in Individual Capacity 127
14.9 Successor Agent 128
14.10 Withholding Tax 129
14.11 Collateral Matters 130
14.12 [INTENTIONALLY LEFT BLANK] 131
14.13 Senior Debt 131
ARTICLE XV MISCELLANEOUS 131
15.1 Amendments and Waivers 131
15.2 Notices 133
15.3 No Waiver; Cumulative Remedies 134
15.4 Costs and Expenses 134
15.5 Company Indemnification 134
15.6 Payments Set Aside 135
39
Page
15.7 Successors and Assigns 135
15.8 Assignments, Participations, etc. 135
15.9 Confidentiality 138
15.10 Set-off 138
15.11 Automatic Debits of Fees 139
15.12 Notification of Addresses, Lending Offices, etc. 139
15.13 Counterparts 139
15.14 Severability 139
15.15 No Third Parties Benefited 139
15.16 Governing Law and Jurisdiction 139
15.17 Waiver of Jury Trial 140
15.18 Entire Agreement 140
15.19 No Personal Liability of Directors, Officers,
Employees and Stockholders 141
40
SCHEDULES
Schedule 2.1(a) Revolving Commitments
Schedule 2.1(b) Term Loan Commitments
Schedule 3.3 Existing Letters of Credit
Schedule 7.5 Litigation
Schedule 7.7 ERISA
Schedule 7.11 Permitted Obligations
Schedule 7.12 Environmental Matters
Schedule 7.15 Copyrights, Patents, Trademarks, Licenses and Related
Matters
Schedule 7.16 Subsidiaries and Minority Interests
Schedule 7.17 Insurance Matters
Schedule 10.1 Permitted Liens
Schedule 10.4 Existing Investments
Schedule 10.5 Existing Indebtedness
Schedule 10.8 Contingent Obligations
Schedule 15.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D-1 Form of Revolving Loan Note
Exhibit D-2 Form of Term Loan Note
Exhibit E Form of Legal Opinion of Wachtell, Lipton, Rosen & Katz
Exhibit F Form of Legal Opinion of Kevin Rogan
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Guaranty
Exhibit I Form of NEHC Guaranty
Exhibit J Form of Borrowing Base Certificate
41
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT is entered into as
of September 30, 1999, among AmeriServe Food Distribution, Inc., a Delaware
corporation (the "Company"), the several financial institutions from time to
time party to this Agreement (collectively the "Lenders"; individually each a
"Lender"), Bank of America, N.A., as letter of credit issuing bank, and Bank of
America, N.A., as administrative agent for the Lenders.
WHEREAS, the Company, certain financial institutions, Bank of America
National Trust and Savings Association, as letter of credit issuing bank, and
Bank of America National Trust and Savings Association, as agent, are parties
to a Third Amended and Restated Credit Agreement dated as of May 21, 1998, as
heretofore amended (as so amended the "Existing Credit Agreement"); and
WHEREAS, the parties hereto have agreed to amend and restate the
Existing Credit Agreement so as to, among other things, (a) amend the pricing,
certain covenants and certain other provisions of the Existing Credit
Agreement, (b) make available a term loan facility to the Company and (c)
revise in certain respects the composition of the lender group; and
WHEREAS, the parties hereto intend that this Agreement and the Loan
Documents executed in connection herewith not effect a novation of the
obligations of the Company under the Existing Credit Agreement and the "Loan
Documents" (as defined in the Existing Credit Agreement), but merely a
restatement, and where applicable, an amendment to such obligations and the
terms governing such obligations;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the Existing Credit Agreement shall be amended
and restated to read in its entirety as follows:
I. ARTICLE
DEFINITIONS
A. Certain Defined Terms. The following terms have the following meanings:
Accreted Value means, as of any date of determination prior
to maturity, the sum of (a) the aggregate amount lent to the Company
under the Term Loan and (b) the portion of the excess of the principal
amount of such Term Loan Note evidencing the Term Loan over the
aggregate amount lent to the Company under
42
the Term Loan that shall have been accreted thereon through such date,
such amount to be so accreted on a daily basis such that, when
calculated together with the fixed interest component of the Term
Loan, results in an aggregate yield to maturity of 12.5% on the Term
Loan, compounded semi-annually on each March 15 and September 15 from
the date of the making of the Term Loan through the date of
determination.
Acquired Debt means, with respect to any specified Person (a)
Debt of any other Person existing at the time such other Person is
merged with or into or became a Term Loan Subsidiary of such specified
Person, including, without limitation, Debt incurred in connection
with, or in contemplation of, such other Person merging with or into
or becoming a Term Loan Subsidiary of such specified Person, and (b)
Debt secured by a Term Loan Lien encumbering any asset acquired by
such specified Person.
Acquisition means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the
acquisition of in excess of 50% of the capital stock, partnership
interests, membership interests or equity of any Person, or otherwise
causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than
a Person that is a Subsidiary) provided that the Company or the
Subsidiary is the surviving entity.
Acquisition EBITDA means for any four fiscal quarter period,
if the Company makes an Acquisition during such period, the EBITDA of
such acquired entity as if the Acquisition had taken place on the
first day of such period.
Adjusted EBITDA means as at the end of any fiscal quarter for
the Computation Period then ending (a) the Company's consolidated
EBITDA plus (b) Receivables Financing Costs to the extent deducted in
the calculation of EBITDA plus (c) any cash restructuring charges
which are reflected in the operating expenses of the Company's income
statement (but not in excess of $25,000,000 in fiscal year 1999 and
$25,000,000 in fiscal year 2000) plus (d) costs reflected in operating
expenses associated with the J.D. Edwards computer system conversion
so long as those expenses represent integration costs and there is a
corresponding reduction in the amount of Capital Expenditures
permitted for such fiscal year pursuant to Section 10.17; provided
that for the purpose of the calculation of the Leverage Ratio only,
Acquisition EBITDA will be added in the calculation of Adjusted
EBITDA; and provided, further, that no amounts added back to
Consolidated Net Income pursuant to the definition of EBITDA shall be
added back a second time pursuant to this definition.
Adjusted Interest Expense means Interest Expense plus,
without duplication, Receivables Financing Costs.
43
Administrative Agent means Bank of America in its capacity as
agent for the Lenders hereunder, and any successor agent arising under
Section 14.9.
Administrative Agent's Payment Office means the address for
payments set forth on Schedule 15.2 hereto in relation to the
Administrative Agent, or such other address as the Administrative
Agent may from time to time specify.
Affected Lender means any Revolving Lender that has given
notice to the Company (which has not been rescinded) of (i) any
obligation by the Company to pay any amount pursuant to Section 4.1 or
4.3 or (ii) the occurrence of any circumstances of the nature
described in Section 4.2.
Affiliate means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly
or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise, or in the case of any Lender which is an investment fund,
any other fund which is advised by the same investment advisor or an
Affiliate thereof.
Agent-Related Persons means Bank of America and any successor
Administrative Agent arising under Section 14.9 and any successor
letter of credit issuing bank hereunder, together with their
respective Affiliates (including, in the case of Bank of America, the
Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
Agreement means this Fourth Amended and Restated Credit
Agreement.
Applicable Base Rate Margin means (a) initially, 1.50% and
(b) on and after any date specified below on which the Applicable Base
Rate Margin is to be adjusted the rate per annum set forth in the
table below opposite the applicable Leverage Ratio:
- ----------------------------------------------- -------------------------------
Leverage Ratio Applicable Base Rate Margin
- ----------------------------------------------- -------------------------------
Less than 2.0 to 1.0 0.50%
- ----------------------------------------------- -------------------------------
Less than 2.5 to 1.0 0.75%
but greater than or equal to 2.0 to 1.0
- ----------------------------------------------- -------------------------------
Less than 3.0 to 1.0 1.00%
but greater than or equal to 2.5 to 1.0
- ----------------------------------------------- -------------------------------
Less than 3.5 to 1.0 1.25%
but greater than or equal to 3.0 to 1.0
- ----------------------------------------------- -------------------------------
Equal to or greater than 3.5 to 1.0 1.50%
- ----------------------------------------------- -------------------------------
44
The Applicable Base Rate Margin shall be adjusted, to the extent
applicable, 45 days (or, in the case of the last calendar quarter of
any year, 90 days) after the end of each calendar quarter, based on
the Leverage Ratio as of the last day of such calendar quarter
commencing with the calendar quarter ending December 25, 1999; it
being understood that if the Company fails to deliver the financial
statements as required by subsection 9.1(b) or 9.1(c), as applicable,
and the related Compliance Certificate required by subsection 9.2(c)
by the 45th day (or, if applicable, the 90th day) after any calendar
quarter the Applicable Base Rate Margin shall be 1.50% for any
Revolving Loan bearing interest based on the Base Rate until such
financial statements and Compliance Certificate are delivered.
Applicable Offshore Rate Margin means (a) initially 2.75% and
(b) on and after any date specified below on which the Applicable
Offshore Rate Margin is to be adjusted the rate per annum set forth in
the table below opposite the applicable Leverage Ratio:
- ---------------------------------------------- ----------------------------------
Leverage Ratio Applicable Offshore Rate Margin
- ---------------------------------------------- ----------------------------------
Less than 2.0 to 1.0 1.75%
- ---------------------------------------------- ----------------------------------
Less than 2.5 to 1.0 2.00%
but greater than or equal to 2.0 to 1.0
- ---------------------------------------------- ----------------------------------
Less than 3.0 to 1.0 2.25%
but greater than or equal to 2.5 to 1.0
- ---------------------------------------------- ----------------------------------
Less than 3.5 to 1.0 2.50%
but greater than or equal to 3.0 to 1.0
- ---------------------------------------------- ----------------------------------
Equal to or greater than 3.5 to 1.0 2.75%
- ---------------------------------------------- ----------------------------------
The Applicable Offshore Rate Margin shall be adjusted, to the extent
applicable, 45 days (or, in the case of the last calendar quarter of
any year, 90 days) after the end of each calendar quarter, based on
the Leverage Ratio as of the last day of such quarter commencing with
the calendar quarter ending December 25, 1999; it being understood
that if the Company fails to deliver the financial statements required
by subsection 9.1(b) or 9.1(c), as applicable, and the related
Compliance Certificate required by subsection 9.2(c) by the 45th day
(or, if applicable, the 90th day) after any calendar quarter, the
Applicable Offshore Rate Margin shall be 2.75% for Revolving Loans
bearing interest based on the Offshore Rate until such financial
statements and Compliance Certificate are delivered.
Approved Bank has the meaning specified in the definition of
"Cash Equivalent Investments".
Arranger means Banc of America Securities L.L.C., a Delaware
limited liability company, as sole lead arranger and sole book
manager.
45
Asset Sale means: (a) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by
way of a sale and leaseback) other than sales of inventory in the
ordinary course of business consistent with past practices and other
than a Receivables Transaction (provided that the sale, lease,
conveyance or other disposition of all or substantially all of the
Company's assets and those of the Company's Restricted Subsidiaries
taken as a whole will be governed by Sections 2.9 and 11.8 (and not by
the provisions of Section 11.2) of this Agreement), and (b) the issue
or sale by the Company or any of its Restricted Subsidiaries of Equity
Interests of any of the Company's Restricted Subsidiaries, in the case
of either clause (a) or (b), whether in a single transaction or a
series of related transactions (i) that have a fair market value in
excess of $3,000,000 or (ii) for net proceeds in excess of $3,000,000.
Notwithstanding the foregoing: (A) a transfer of assets by the Company
to a Term Loan Wholly-Owned Subsidiary that is a Restricted Subsidiary
or by a Term Loan Wholly-Owned Subsidiary that is a Restricted
Subsidiary to the Company or to another Term Loan Wholly-Owned
Subsidiary that is a Restricted Subsidiary, (B) an issuance of Equity
Interests by a Term Loan Wholly-Owned Subsidiary that is a Restricted
Subsidiary to the Company or to another Term Loan Wholly-Owned
Subsidiary that is a Restricted Subsidiary, and (C) a restricted
payment that is permitted by Section 11.4 will not be deemed to be
Asset Sales.
Assignee has the meaning specified in subsection 15.8(a).
Attorney Costs means and includes all fees and disbursements
of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
Attributable Debt in respect of a sale and leaseback
transaction means, at the time of determination, the present value
(discounted at the rate of interest implicit in such transaction,
determined in accordance with Term Loan GAAP) of the obligation of the
lessee for net rental payments during the remaining term of the lease
included in such sale and leaseback transaction (including any period
for which such lease has been extended or may, at the option of the
lessor, be extended).
Bank of America means Bank of America, N.A., a national
banking association (formerly known as Bank of America National Trust
and Savings Association).
Bankruptcy Code means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. Section 101, et seq.).
Bankruptcy Law means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
46
Base Rate means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of
interest in effect for such day as publicly announced from time to
time by Bank of America in Charlotte, North Carolina, as its
"reference rate." (The "reference rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs
and desired return, general economic conditions and other factors, and
is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.)
Any change in the reference rate announced by Bank of America
shall take effect at the opening of business on the day specified in
the public announcement of such change.
Base Rate Loan means a Revolving Loan that bears interest
based on the Base Rate or an L/C Advance.
Borrowing means (a) with respect to the Revolving Lenders, a
borrowing hereunder consisting of Revolving Loans of the same Type
made to the Company on the same day by the Revolving Lenders under
Article II, and, other than in the case of Base Rate Loans, having the
same Interest Period, and (b) with respect to the Term Lender, the
borrowing hereunder of the Term Loan under Article II.
Borrowing Base means an amount equal to 50% of the net amount
(after deduction of such reserves and allowances as the Administrative
Agent or the Required Lenders reasonably deem proper and necessary
based on customary credit and collection criteria utilized by asset
based lenders) of the Eligible Inventory, as set forth in the most
recent Borrowing Base Certificate.
Borrowing Base Certificate means a certificate in
substantially the form attached hereto as Exhibit J.
Borrowing Date means any date on which a Borrowing occurs
under Section 2.3.
Business Day means any day other than a Saturday, Sunday or
other day on which commercial banks in San Francisco are authorized or
required by law to close and, if the applicable Business Day relates
to any Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
Capital Adequacy Regulation means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
47
Capital Expenditures means all expenditures which, in
accordance with GAAP, would be required to be capitalized and shown on
the consolidated balance sheet of the Company, but (i) excluding
expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed (A) from insurance
proceeds (or other similar recoveries) paid on account of the loss of
or damage to the assets being replaced or restored or (B) with awards
of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced and (ii) excluding
expenditures incurred by the creation of Capitalized Lease Obligations
and financed thereby.
Capital Stock means: (a) in the case of a corporation,
corporate stock, (b) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (c) in the case
of a partnership or limited liability company, partnership or
membership interests (whether general or limited), and (d) any other
interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
Capitalized Lease Obligations means all monetary obligations
of the Company or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as
capitalized leases, and, for purposes of this Agreement and each other
Loan Document, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a
penalty.
Cash Collateralize means to pledge and deposit with or
deliver to the Administrative Agent, for the benefit of the
Administrative Agent, the Issuing Lender and the Revolving Lenders, as
additional collateral for the L/C Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory
to the Administrative Agent and the Issuing Lender (which documents
are hereby consented to by the Revolving Lenders). Derivatives of such
term shall have a corresponding meaning. The Company hereby grants the
Administrative Agent, for the benefit of the Administrative Agent, the
Issuing Lender and the Revolving Lenders, a security interest in all
such cash and deposit account balances. Cash collateral shall be
maintained in blocked, interest bearing deposit accounts at Bank of
America.
Cash Equivalent Investments shall mean (i) securities issued
or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in
support thereof) having maturities of not more than one year from the
date of acquisition, (ii) marketable direct obligations issued by any
State of the United States of America or any local government or other
political
48
subdivision thereof rated (at the time of acquisition of such
security) at least BBB by Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. ("S&P") or Baa2 the
equivalent thereof by Moody's Investors Service, Inc. ("Moody's")
having maturities of not more than one year from the date of
acquisition, (iii) U.S. dollar denominated time deposits, certificates
of deposit and bankers' acceptances of (x) any Revolving Lender, (y)
any domestic commercial bank of recognized standing having capital and
surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating (at the time of acquisition of such security)
by S&P of at least A-2 or the equivalent thereof (any such bank, an
"Approved Bank"), in each case with maturities of not more than six
months from the date of acquisition, (iv) commercial paper and
variable or fixed rate notes issued by any Revolving Lender or
Approved Bank or by the parent company of any Revolving Lender or
Approved Bank and commercial paper and variable rate notes issued by,
or guaranteed by, any industrial or financial company with a
short-term commercial paper rating (at the time of acquisition of such
security) of at least A-2 or the equivalent thereof by S&P or at least
P-2 or the equivalent thereof by Moody's, or guaranteed by any
industrial company with a long-term unsecured debt rating (at the time
of acquisition of such security) of at least BBB or the equivalent
thereof by S&P or at least Baa2 or the equivalent thereof by Moody's
and in each case maturing within one year after the date of
acquisition, (v) repurchase agreements with any Revolving Lender or
any primary dealer maturing within one year from the date of
acquisition that are fully collateralized by investment instruments
that would otherwise be Cash Equivalent Investments; provided that the
terms of such repurchase agreements comply with the guidelines set
forth in the Federal Financial Institutions Examination Council
Supervisory Policy -- Repurchase Agreements of Depository Institutions
With Securities Dealers and Others, as adopted by the Comptroller of
the Currency on October 31, 1985 and (vi) loan participations in
aggregate of no more than $10,000,000 having maturities of not more
than 30 days from the date of the acquisition.
Cash Equivalents means: (a) United States dollars, (b)
securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof
having maturities of not more than six months from the date of
acquisition, (c) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any lender party to this
Agreement or with any domestic commercial bank having capital and
surplus in excess of $500,000,000 and a Thompson Bank Watch Rating of
"B" or better, (d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses
(b) and (c) above entered into with any financial institution meeting
the qualifications specified in clause (c) above, (e) commercial paper
having the highest rating obtainable from Moody's Investors Service,
Inc. or Standard & Poor's Corporation and in each case maturing within
six months after the date of
49
acquisition, and (f) securities quoted by the Nasdaq National Market
or listed on a United States, Canadian or Western European national
securities exchange.
Change of Control means the failure of (a) Holberg or its
shareholders, or any thereof, to own directly or indirectly, in excess
of 50% of the voting power of all issued and outstanding shares of
stock of the Company; (b) NEHC to own directly 100% of the outstanding
shares of voting stock of the Company (other than shares under stock
options held by, or issued under stock options to, directors,
officers, employees and former directors not in excess of 10% of the
shares of voting stock of the Company); or (c) Holberg Inc. or its
shareholders as of the date hereof, or any thereof, to own at least
50% of the outstanding shares of voting stock of Holberg. For purposes
of this definition, voting stock of a corporation shall not include
capital stock of such corporation if such stock has only the minimal
voting rights required by such corporation's jurisdiction of
organization with respect to any capital stock issued by such
corporation.
Change of Control Offer has the meaning specified in Section
2.9(a).
Change of Control Payment has the meaning specified in
Section 2.9(a).
Change of Control Payment Date has the meaning specified in
Section 2.9(a).
Closing Date means the date on which all conditions precedent
set forth in Sections 6.1 and 6.2 are satisfied or waived by all
Revolving Lenders.
Code means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
Collateral means any collateral granted to the Administrative
Agent for the benefit of the Administrative Agent, or the Lenders, to
secure the Obligations of the Company, or any Guarantor, under any
Loan Document.
Collateral Documents means the Security Agreement, the Pledge
Agreement, the Subsidiary Pledge Agreement, the Trademark Security
Agreement, the NEHC Pledge Agreement, the ProSource Trademark Security
Agreement and the Mortgages.
Commitment Fee Rate means 5/8 of 1.00%.
Compliance Certificate means a certificate substantially in
the form of Exhibit C.
Computation Period means as at any fiscal quarter end, the
period of four consecutive quarters then ending.
50
Consent means that certain Agreement and Consent, dated as of
the date hereof, by the Guarantors.
Consolidated Cash Flow means, with respect to any Person for
any period, the Term Loan Consolidated Net Income of such Person for
such period plus: (1) an amount equal to any extraordinary loss plus
any net loss realized in connection with an Asset Sale (to the extent
such losses were deducted in computing such Term Loan Consolidated Net
Income), plus (2) provision for taxes based on income or profits of
such Person and its Term Loan Subsidiaries for such period, to the
extent that such provision for taxes was included in computing such
Term Loan Consolidated Net Income, plus (3) consolidated interest
expense of such Person and its Term Loan Subsidiaries for such period,
whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all
payments associated with Term Loan Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect
of letter of credit or bankers' acceptance financings, and net
payments (if any) pursuant to Hedging Obligations), to the extent that
any such expense was deducted in computing such Term Loan Consolidated
Net Income, plus (4) depreciation, amortization (including
amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of such Person and its Term
Loan Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted
in computing such Term Loan Consolidated Net Income, plus (5) in
connection with any acquisition by the Company, projected quantifiable
improvements in operating results (on an annualized basis) due to cost
reductions calculated in accordance with Article 11 of Regulation S-X
of the Securities Act and evidenced by (a) in the case of cost
reductions of less than $10,000,000, an Officers' Certificate
delivered to the Term Lender and (b) in the case of cost reductions of
$10,000,000 or more, a resolution of the Board of Directors of the
Company set forth in an Officers' Certificate delivered to the Term
Lender, minus (6) non-cash items increasing such Term Loan
Consolidated Net Income for such period. Notwithstanding the
foregoing, the provision for taxes on the income or profits of, and
the depreciation and amortization and other non-cash charges of, a
Term Loan Subsidiary of the referent Person shall be added to Term
Loan Consolidated Net Income to compute Consolidated Cash Flow only to
the extent that a corresponding amount would be permitted at the date
of determination to be dividended to the Company by its Term Loan
Subsidiary without prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant to the
terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules
51
and governmental regulations applicable to that Term Loan Subsidiary
or its stockholders.
Consolidated Net Income means, with respect to the Company
and its Subsidiaries for any period, the net income (or loss) of the
Company and its Subsidiaries for such period.
Consolidated Net Worth means, with respect to any Person as
of any date, the sum of: (1) the consolidated equity of the common
stockholders of such Person and its consolidated Term Loan
Subsidiaries as of such date, plus (2) the respective amounts reported
on such Person's balance sheet as of such date with respect to any
series of preferred stock (other than Disqualified Stock) that by its
terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect
of the year of such declaration and payment, but only to the extent of
any cash received by such Person upon issuance of such preferred
stock, less (x) all write-ups (other than write-ups resulting from
foreign currency translations and write-ups of tangible assets of a
going concern business made within 12 months after the acquisition of
such business) subsequent to the date hereof in the book value of any
asset owned by such Person or a consolidated Term Loan Subsidiary of
such Person, (y) all investments as of such date in unconsolidated
Term Loan Subsidiaries and in Persons that are not Term Loan
Subsidiaries (except, in each case, Permitted Investments), and (z)
all unamortized debt discount and expense and unamortized deferred
charges as of such date, all of the foregoing determined in accordance
with Term Loan GAAP.
Contingent Obligation means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease,
dividend (declared and not paid), letter of credit or other obligation
(the "primary obligations") of another Person (the "primary obligor"),
including any obligation of that Person (i) to purchase, repurchase or
otherwise acquire such primary obligations or any security therefor,
(ii) to advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial
condition 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 holder of any such primary obligation
against loss in respect thereof (each, a "Guaranty Obligation"); (b)
with respect to any Surety Instrument (other than any Letter of
Credit) issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings or payments;
(c) to purchase any materials, supplies or other property from, or to
obtain the services of, another Person if the relevant contract or
other related document or obligation requires
52
that payment for such materials, supplies or other property, or for
such services, shall be made regardless of whether delivery of such
materials, supplies or other property is ever made or tendered, or
such services are ever performed or tendered; or (d) with respect to
any Hedging Agreement. The amount of any Contingent Obligation shall,
in the case of Guaranty Obligations, be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable,
the maximum reasonably anticipated liability in respect thereof, and
in the case of other Contingent Obligations, shall be equal to the
maximum reasonably anticipated liability in respect thereof.
Contractual Obligation means, as to any Person, any provision
of any security issued by such Person or of any agreement,
undertaking, contract, lease, indenture, mortgage, deed of trust, deed
to secure debt or other instrument, document or agreement to which
such Person is a party or by which it or any of its property is bound.
Continuing Directors means, as of any date of determination,
any member of the Company's Board of Directors who: (1) was a member
of such Board of Directors on the date hereof or (2) was nominated for
election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board at
the time of such nomination or election.
Conversion/Continuation Date means any date on which, under
Section 2.4, the Company (a) converts Revolving Loans of one Type to
another Type, or (b) continues as Revolving Loans of the same Type,
but with a new Interest Period, Revolving Loans having Interest
Periods expiring on such date.
Corporate Allocations means the amount paid by the Company to
Holberg for managerial and administration services performed by
Holberg for the Company.
Credit Extension means and includes (a) the making of any
Loans hereunder, and (b) the Issuance of any Letters of Credit
hereunder (including the Existing Letters of Credit).
Credit Facilities means, one or more credit or debt
facilities (including, without limitation, the facility created by
this Agreement) or commercial paper facilities, providing for
revolving credit loans, term loans, receivables financing not
otherwise permitted hereunder (including through the sale of
receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to
time.
Debt means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money
or evidenced by bonds,
53
notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers' acceptances
or representing Term Loan Capital Lease Obligations or the balance
deferred and unpaid of the purchase price of any property or
representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent
any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with Term Loan GAAP, as well as
all indebtedness of others secured by a Term Loan Lien on any asset of
such Person (whether or not such indebtedness is assumed by such
Person) and, to the extent not otherwise included, the Guarantee by
such Person of any indebtedness of any other Person. The amount of any
Debt outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any
Debt that does not require current payments of interest, and
(2) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the
case of any other Debt.
Default means any Revolving Loan Default or Term Loan Default.
Disqualified Stock means any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder thereof, in whole
or in part, on or prior to the date that is 91 days after the date on
which the Term Loan portion of this Agreement matures; provided,
however, that any Capital Stock that would not qualify as Disqualified
Stock but for change of control provisions shall not constitute
Disqualified Stock if the provisions are not more favorable to the
holders of such Capital Stock than the provisions of Section 2.9.
DLJ means Donaldson, Lufkin & Jenrette Securities Corporation.
Dollars, dollars and $ each mean lawful money of the United
States.
Domestic Subsidiary means any Term Loan Subsidiary that was
formed under the laws of the United States or any state thereof or the
District of Columbia.
EBITDA means, for any Computation Period, the sum of
(a) Consolidated Net Income of the Company for such
period excluding, to the extent reflected in determining such
Consolidated Net Income, extraordinary gains and losses for
such period and non-recurring gains and charges,
54
plus
(b) to the extent deducted in determining
Consolidated Net Income, Interest Expense, income tax
expense, depreciation, depletion and amortization for such
period.
Effective Amount means (i) with respect to any Revolving
Loans on any date, the aggregate outstanding principal amount thereof
after giving effect to any Borrowings and prepayments or repayments of
Revolving Loans occurring on such date; and (ii) with respect to any
outstanding L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any Issuances of
Letters of Credit occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as
a result of any reimbursements of outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such
date.
Eligible Assignee means (i) a commercial bank organized under
the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (ii) a
commercial bank organized under the laws of any other country which is
a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located
in the country in which it is organized or another country which is
also a member of the OECD; (iii) a Person that is primarily engaged in
the business of commercial banking and that is (A) a Subsidiary of a
Revolving Lender, (B) a Subsidiary of a Person of which a Revolving
Lender is a Subsidiary, or (C) a Person of which a Revolving Lender is
a Subsidiary; and (iv) any other Person as the Administrative Agent
and the Company shall mutually agree.
Eligible Inventory means, at the time of any determination
thereof, all Inventory of the Company or any of its Subsidiaries
arising in the ordinary course of business of such Company or
Subsidiary, calculated on a FIFO basis (except the inventory of
ProSource may be calculated on a weighted moving average basis until
the J.D. Edwards software conversion is completed), as to which the
following requirements have been fulfilled to the reasonable
satisfaction of the Administrative Agent:
1. the Company or such Subsidiary has lawful and absolute title to
such Inventory;
55
1. the Company or such Subsidiary has the full and unqualified
right to assign and grant a Lien in such Inventory to the Administrative Agent
as security for the Obligations and any obligations arising under Hedging
Agreements;
1. pursuant to the Security Agreement, all of such Inventory is
subject to a Lien in favor of the Administrative Agent for the benefit of the
Lenders, which Lien would be prior to the rights of, and enforceable as such
against, any other Person other than any rights under contract or law of any
lessor of premises on which the Inventory is located provided that the value of
Eligible Inventory shall be calculated net of any such rights, which rights
shall be assumed to be equal to two months rent unless otherwise determined by
the Company or the Administrative Agent;
1. none of the Inventory is subject to any Lien in favor of any
Person other than the Lien of the Administrative Agent pursuant to the Security
Agreement, other than any rights under contract or law of any lessor of
premises on which the Inventory is located provided that the value of Eligible
Inventory shall be calculated net of any such rights, which rights shall be
assumed to be equal to two months rent unless otherwise demonstrated by the
Company or the Administrative Agent;
1. none of such Inventory is obsolete, unsalable, damaged, or
otherwise unfit for sale or further processing;
1. the use of all of such Inventory complies with the rules and
regulations of the Federal Fair Labor Standards Act of 1932 (including Sections
206 and 207 thereof), and any rules or regulations promulgated thereunder;
1. none of such Inventory includes an earned rebate or, to the
extent it does, such portion that represents an earned rebate shall not be
included in the calculation of the amount of the Eligible Inventory;
1. such Inventory is recorded net of cash discounts taken from
vendors; and
1. such Inventory includes a freight adjustment only to the extent
it is actually incurred.
Any Inventory which is at any time Eligible Inventory, but which
subsequently fails to meet any of the foregoing requirements, shall
forthwith cease to be Eligible Inventory.
Environmental Claims means all claims, however asserted, by
any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
56
Environmental Laws means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
Equity Interests means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for, Capital
Stock).
ERISA means the Employee Retirement Income Security Act of
1974, as amended, and regulations promulgated thereunder.
ERISA Affiliate means any trade or business (whether or not
incorporated) under common control with the Company within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
the Code for purposes of provisions relating to Section 412 of the
Code).
ERISA Event means (a) a Reportable Event with respect to a
Pension Plan; (b) the failure to make a required contribution to a
Pension Plan if such failure is sufficient to give rise to a Lien
under Section 302(f) of ERISA; (c) a withdrawal by the Company or any
ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined
in Section 4001(a)(2) of ERISA) or a cessation of operations which is
treated as such a withdrawal under Section 4062(e) of ERISA; (d) a
complete or partial withdrawal by the Company or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (e) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (f) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or
(g) the imposition of any liability under Title IV of ERISA, other
than PBGC premiums due but not delinquent under Section 4007 of ERISA,
upon the Company or any ERISA Affiliate.
Event of Default means any Revolving Loan Event of Default or
Term Loan Event of Default.
Exchange Act means the Securities and Exchange Act of 1934,
and regulations promulgated thereunder.
Existing Credit Agreement has the meaning specified in the
recitals.
57
Existing Debt means the Company's Debt and that of its Term
Loan Subsidiaries (other than Debt under this Agreement and any
permitted refinancings thereof) in existence on the date hereof, until
such amounts are repaid.
Existing Letters of Credit means the letters of credit
described in Schedule 3.3.
Existing Fee Letter means the letter agreement between the
Company, the Administrative Agent and BancAmerica Robertson Stephens
dated May 15, 1998.
Federal Funds Rate means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00
a.m. (New York City time) on that day by each of three leading brokers
of Federal funds transactions in New York City selected by the
Administrative Agent.
Fee Letter has the meaning specified in subsection 2.12(a).
Fixed Charges means, with respect to any Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person
and its Restricted Subsidiaries for such period, whether paid
or accrued (including, without limitation, original issue
discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component
of all payments associated with Term Loan Capital Lease
Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to
Hedging Obligations),
(2) the consolidated interest expense of such Person
and its Restricted Subsidiaries that was capitalized during
such period,
(3) any interest expense on Debt of another Person
that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Term Loan Lien on assets of such
Person or one of its Restricted Subsidiaries (whether or not
such Guarantee or Term Loan Lien is called upon), and
58
(4) the product of (a) all dividend payments,
whether or not in cash, on any series of preferred stock of
such Person or any of its Restricted Subsidiaries, other than
dividend payments on Equity Interests payable solely in the
Company's Equity Interests, times (b) a fraction, the
numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with
Term Loan GAAP.
Fixed Charge Coverage Ratio means with respect to any Person
for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges
of such Person and its Restricted Subsidiaries for such period. In the
event that the Company or any of its Restricted Subsidiaries incurs,
assumes, Guarantees or redeems any Debt (other than revolving credit
borrowings) or issues preferred stock subsequent to the commencement
of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption,
Guarantee or redemption of Debt, or such issuance or redemption of
preferred stock, as if the same had occurred at the beginning of the
applicable four-quarter reference period. In addition, for purposes of
making the computation referred to above
(1) acquisitions that have been made by the Company
or any of its Restricted Subsidiaries, including through
mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the
Calculation Date shall be deemed to have occurred on the
first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period shall be
calculated without giving effect to clause (3) of the proviso
set forth in the definition of Term Loan Consolidated Net
Income,
(2) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with
Term Loan GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, and
(3) the Fixed Charges attributable to discontinued
operations, as determined in accordance with Term Loan GAAP,
and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will
not be Term Loan obligations of the referent Person or any of
its Restricted Subsidiaries following the Calculation Date.
59
Foreign Subsidiary means any Term Loan Subsidiary of the
Company that is not a Domestic Subsidiary.
FRB means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
GAAP means generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession); provided that for the purpose of calculating any
financial covenant or financial ratio, GAAP shall mean such generally
accepted accounting principles which are applicable to the
circumstances as of the date hereof and provided further that upon a
change in GAAP which would, if applicable, affect the calculation of
financial covenants or financial ratios, the parties shall discuss the
amendment of such covenants and ratios and the definition of GAAP.
Governmental Authority means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
Government Securities means direct obligations of, or
obligations guaranteed by, the United States of America for the
payment of which guarantee or obligations the full faith and credit of
the United States is pledged.
Guarantee means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of
business), direct or indirect, in any manner (including, without
limitation, letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Debt.
Guarantor means (a) NEHC; (b) as of the date hereof, each
Subsidiary listed on Schedule 7.16; and (c) thereafter, the Persons
referred to in clauses (a) and (b) and each other Person which from
time to time executes and delivers a counterpart of the Guaranty.
Guaranty means the guaranty of the Guarantors (other than
NEHC) in substantially the form of Exhibit H.
Guaranty Obligation has the meaning specified in the
definition of Contingent Obligation.
60
Hedging Agreement means any agreement (including any master
agreement and any agreement, whether or not in writing, relating to
any single transaction) that is an interest rate swap agreement, basis
swap, forward rate agreement, commodity swap, commodity option, equity
or equity index swap or option, bond option, interest rate option,
forward foreign exchange agreement, rate cap, collar or floor
agreement, currency swap agreement, cross-currency rate swap
agreement, swap option, currency option or any other, similar
agreement (including any option to enter into any of the foregoing).
Hedging Obligations means, with respect to any Person, the
obligations of such Person under: (1) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates or currency rates.
Holberg means Holberg Industries, Inc., a Delaware
corporation.
Honor Date has the meaning specified in subsection 3.3(c).
Impermissible Qualification means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of any Obligor, any qualification or exception to such
opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of
examination of matters relevant to such financial statement;
or
(c) which relates to the treatment or classification
of any item in such financial statement and which, as a
condition to its removal, would require an adjustment to such
item the effect of which would be to cause such Obligor to be
in default of any of its obligations under Sections 10.12 or
10.13.
Indebtedness of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary
course of business on ordinary terms); (c) all non-contingent
reimbursement or payment obligations with respect to Surety
Instruments (it being understood that undrawn letters of credit are
contingent reimbursement obligations); (d) all obligations evidenced
by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses; (e) all indebtedness created or
arising under any conditional sale or other title retention agreement,
or incurred as financing, in either case with respect to property
acquired by the Person (even
61
though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale
of such property); (f) all Capital Lease Obligations; (g) all net
obligations with respect to Hedging Agreements; (h) all indebtedness
referred to in clauses (a) through (g) above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including
accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness; and (i) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in
clauses (a) through (g) above.
Indemnified Obligations has the meaning specified in Section
15.5.
Indemnified Person has the meaning specified in Section 15.5.
Independent Auditor has the meaning specified in Section
9.1(c).
Initial Financial Projections means the projections provided
to the Revolving Lenders prior to the date hereof included in the
letter from Bank of America dated September 17, 1999.
Insolvency Proceeding means (a) any case, action or
proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of its
creditors generally or any substantial portion of its creditors;
undertaken under U.S. federal, state or foreign law, including the
Bankruptcy Code.
Intercreditor Agreement means the Intercreditor Agreement
dated as of July 11, 1997 between the Administrative Agent and Norwest
Bank Minnesota, National Association as Trustee under the Pooling and
Servicing Agreement.
Interest Coverage Ratio means, for the Computation Period
most recently ended on or before such date, the ratio of (a) Adjusted
EBITDA for such Computation Period to (b) Adjusted Interest Expense
for such Computation Period.
Interest Expense means, for any period, the consolidated
interest expense (calculated without offset for interest income) of
the Company and its Subsidiaries for such period including interest
expense related to Capitalized Lease Obligations.
Interest Payment Date means, as to any Revolving Loan other
than a Base Rate Loan, the last day of each Interest Period applicable
to such Revolving Loan and, as to any Base Rate Loan, the last
Business Day of each calendar quarter;
62
provided, however, that if any Interest Period for an Offshore Rate
Loan exceeds three months, the date that falls three months after the
beginning of such Interest Period is also an Interest Payment Date.
Interest Period means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Revolving Loan or on
the Conversion/Continuation Date on which the Revolving Loan is
converted into or continued as an Offshore Rate Loan, and ending on
the date one, two, three or six months thereafter as selected by the
Company in its Notice of Borrowing or Notice of
Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following 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 preceding Business Day;
(ii) 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 the calendar month at the end of such
Interest Period; and
(iii) no Interest Period shall extend beyond the
Revolving Termination Date.
Inventory means all goods now or hereafter (a) held by the
Company or any of its Subsidiaries for sale or lease, (b) furnished or
to be furnished by the Company or any of its Subsidiaries to a third
party under any contract of service, (c) held by the Company or any of
its Subsidiaries as raw materials or work in process or (d) used or
consumed by the Company or any of its Subsidiaries in the ordinary
course of business.
Invested Amount means, at any time, the outstanding principal
amount that is owed to holders (other than Subsidiaries of the
Company) of securities issued by, or loans to, the trust established
under the Pooling and Servicing Agreement or any other trust
established with respect to a Qualified Receivables Transaction.
Investments means, with respect to any Person, all
investments by such Person in other Persons (including Term Loan
Affiliates) in the forms of direct or indirect loans (including
guarantees of Debt or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business),
purchases or other
63
acquisitions for consideration of Debt, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with Term Loan
GAAP. If the Company or any of its Restricted Subsidiaries sells or
otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary such that, after giving effect to any such sale
or disposition, such Person is no longer a Restricted Subsidiary, the
Company shall be deemed to have made an Investment on the date of any
such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of Section 11.4.
IRS means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
Issuance Date has the meaning specified in subsection 3.1(a).
Issue means, with respect to any Letter of Credit, to
incorporate the Existing Letters of Credit into this Agreement, or to
issue or to extend the expiry of, or to renew or increase the amount
of, such Letter of Credit; and the terms "Issued," "Issuing" and
"Issuance" have corresponding meanings.
Issuing Lender means Bank of America in its capacity as
issuer of one or more Letters of Credit hereunder, together with any
replacement letter of credit issuer arising under subsection 14.1(b)
or Section 14.9.
Joint Venture means a single-purpose corporation,
partnership, limited liability company, joint venture or other similar
legal arrangement (whether created by contract or conducted through a
separate legal entity) now or hereafter formed by the Company or any
of its Subsidiaries with another Person in order to conduct a common
venture or enterprise with such Person. No Receivables Subsidiary or
Special Purpose Vehicle shall be considered a Joint Venture.
L/C Advance means each Revolving Lender's participation in
any L/C Borrowing in accordance with its Revolving Percentage.
L/C Amendment Application means an application form for
amendment of outstanding standby or commercial documentary letters of
credit as shall at any time be in use at the Issuing Lender, as the
Issuing Lender shall request.
L/C Application means an application form for issuances of
standby or commercial documentary letters of credit as shall at any
time be in use at the Issuing Lender, as the Issuing Lender shall
request.
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L/C Borrowing means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been
reimbursed on the date when made nor converted into a Borrowing of
Revolving Loans under subsection 3.3(c).
L/C Commitment means the commitment of the Issuing Lender to
Issue, and the commitment of the Revolving Lenders severally to
participate in Letters of Credit (including the Existing Letters of
Credit) from time to time Issued or outstanding under Article III, in
an aggregate amount not to exceed on any date the amount of
$50,000,000, as the same shall be reduced as a result of a reduction
in the L/C Commitment pursuant to Section 2.5; provided that the L/C
Commitment is a part of the combined Revolving Commitments, rather
than a separate, independent commitment.
L/C Fee Rate means, at any time, the Applicable Offshore Rate
Margin; provided that each of the foregoing rates shall be increased
by 2% at any time a Revolving Loan Event of Default exists.
L/C Obligations means, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding,
plus (b) the amount of all unreimbursed drawings under all Letters of
Credit, including all outstanding L/C Borrowings.
L/C-Related Documents means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing
Lender's standard form documents for letter of credit issuances.
Lender has the meaning specified in the introductory clause
hereto. References to the "Lenders" shall include the Revolving
Lenders, the Term Lender and Bank of America, including in its
capacity as Issuing Lender; for purposes of clarification only, to the
extent that Bank of America may have any rights or obligations in
addition to those of the Revolving Lenders due to its status as
Issuing Lender, its status as such will be specifically referenced.
Lending Office means, as to any Lender, the office or offices
of such Lender specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on Schedule
15.2, or such other office or offices as such Lender may from time to
time notify the Company and the Administrative Agent.
Letters of Credit means the Existing Letters of Credit and
any letters of credit (whether standby letters of credit or commercial
documentary letters of credit) Issued by the Issuing Lender pursuant
to Article III.
65
Leverage Ratio means, as at any fiscal quarter end for the
Company and its Subsidiaries on a consolidated basis, the ratio of
(i) Senior Secured Debt (other than Obligations in
respect of the Term Loan) as of such fiscal quarter end
to
(ii) Adjusted EBITDA.
Lien means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale
or other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any
financing statement naming the owner of the asset to which such lien
relates as debtor, under the Uniform Commercial Code or any comparable
law) and any contingent or other agreement to provide any of the
foregoing, but not including the interest of a lessor under an
operating lease.
Liquidated Damages has the meaning specified in Section 2.11.
Loan means each of the Revolving Loans and the Term Loans.
Loan Documents means this Agreement, any Notes, the Fee
Letter, the Revolving/Term Loan Intercreditor Agreement, the
L/C-Related Documents, the Pledge Agreement, the Subsidiary Pledge
Agreements, the Guaranty, the NEHC Guaranty, the Security Agreement,
the Trademark Security Agreement, the ProSource Trademark Security
Agreement, the Mortgages, and all other documents delivered to the
Administrative Agent or any Lender in connection herewith.
Margin Stock means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
Material Adverse Effect means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of the
Company or the Company and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of the Company, NEHC or any
Subsidiary to perform under any Loan Document and to avoid any
Revolving Loan Event of Default; or (c) a material adverse effect upon
the legality, validity, binding effect or enforceability against the
Company or any Subsidiary of any Loan Document.
66
Moody's has been specified in the definition of "Cash
Equivalent Investments".
Mortgage means a mortgage, leasehold mortgage, deed of trust
or similar document granting a Lien on real property in appropriate
form for filing or recording in the applicable jurisdiction and
otherwise reasonably satisfactory to the Administrative Agent as
amended by the Mortgage Amendments.
Mortgage Amendments means amendments of each of the
Mortgages, being delivered to the Term Lender on the Closing Date, to
increase the secured principal amount under each such Mortgage to an
amount equal to one point five (1.5) times the amount secured by such
Mortgage immediately prior to the Closing Date and give notice of the
execution and delivery of this Agreement, each in form and substance
satisfactory to the Term Lender.
Mortgaged Property means the real property subject to a
Mortgage.
Multiemployer Plan means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
ERISA Affiliate may have any liability.
NEHC means Nebco Evans Holding Company, a Delaware
corporation.
NEHC Guaranty means the guaranty of NEHC in substantially the
form of Exhibit I.
NEHC Pledge Agreement means the Amended and Restated Pledge
Agreement dated as of May 21, 1998 (as amended, supplemented, amended
and restated or otherwise modified from time to time) between NEHC and
the Administrative Agent.
Net Income means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with Term Loan GAAP
and before any reduction in respect of preferred stock dividends,
excluding, however,
(1) any gain (but not loss), together with any
related provision for taxes on such gain (but not loss),
realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and
leaseback transactions) or (b) the disposition of any
securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Debt of such Person
or any of its Restricted Subsidiaries and
67
(2) any extraordinary or nonrecurring gain (but not
loss), together with any related provision for taxes on such
extraordinary or nonrecurring gain (but not loss).
Net Proceeds means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the
sale or other disposition of any non-cash consideration received in
any Asset Sale), net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment
banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), and any reserve for
adjustment in respect of the sale price of such asset or assets
established in accordance with Term Loan GAAP.
New Subordinated Debt means all unsecured Indebtedness of the
Company for money borrowed which is subordinated with covenants and
upon terms relating to tenor and subordination substantially the same
as those contained in the Senior Subordinated Notes.
Non-Recourse Debt means Debt
(1) as to which neither the Company nor any of its
Restricted Subsidiaries (a) provides credit support of any
kind (including any undertaking, agreement or instrument that
would constitute Debt), (b) is directly or indirectly liable
(as a guarantor or otherwise), or (c) constitutes the lender;
(2) no default with respect to which (including any
rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Debt
of the Company or any of its Restricted Subsidiaries to
declare a default on such other Debt or cause the payment
thereof to be accelerated or payable prior to its stated
maturity; and
(3) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or
assets of the Company or any of its Restricted Subsidiaries.
Note means, with respect to a Revolving Lender, the Revolving
Loan Note, and with respect to the Term Lender, the Term Loan Note.
Notice of Borrowing means a notice in substantially the form
of Exhibit A.
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Notice of Conversion/Continuation means a notice in
substantially the form of Exhibit B.
Obligations means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document
owing by the Company or any Subsidiary to any Lender, the
Administrative Agent, or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising.
OECD has the meaning specified in the definition of "Eligible
Assignee".
Officer means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person.
Officers' Certificate means a certificate signed on behalf of
the Company by two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the
treasurer or the principal accounting officer of the Company. Each
certificate with respect to compliance with a condition or covenant
provided for in this Agreement shall include: (a) a statement that the
Person making such certificate or opinion has read such covenant or
condition; (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (c) a statement
that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition
has been satisfied; and (d) a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been satisfied.
Offshore Rate means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/100th of 1%)
determined by the Administrative Agent as follows:
Offshore Rate = IBOR
-----------
1.00 - Eurodollar Reserve Percentage
where,
Eurodollar Reserve Percentage means for any day for any
Interest Period the maximum reserve percentage (expressed as
a decimal, rounded upward to the next 1/100th of 1%) in
effect on such day (whether or not applicable to any
Revolving Lender) under regulations issued from time to time
by the FRB for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) with
69
respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
IBOR means the rate of interest per annum determined by the
Administrative Agent as the rate at which dollar deposits in
the approximate amount of Bank of America's Offshore Rate
Loan for such Interest Period would be offered by Bank of
America's Grand Cayman Branch, Grand Cayman B.W.I. (or such
other office as may be designated for such purpose by Bank of
America), to major banks in the offshore dollar interbank
market at their request at approximately 12:00 noon (New York
City time) two Business Days prior to the commencement of
such Interest Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
Offshore Rate Loan means a Revolving Loan that bears interest
based on the Offshore Rate.
Organization Documents means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement,
and all applicable resolutions of the board of directors (or any
committee thereof) of such corporation.
Other Taxes means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents.
Participant has the meaning specified in subsection 15.8(d).
PBGC means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
Pension Plan means a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA, other than a Multiemployer
Plan, with respect to which a Company or any ERISA Affiliate may have
any liability.
Permitted Business means any of the businesses and any other
businesses related to the businesses engaged in by the Company and its
respective Restricted Subsidiaries on the date hereof.
Permitted Indebtedness has the meaning specified in Section
10.5.
70
Permitted Investments means:
(1) any Investment in the Company or in a Term Loan
Wholly Owned Subsidiary of the Company that is a Restricted
Subsidiary and that is engaged in a Permitted Business;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such
Investment (a) such Person becomes a Term Loan Wholly-Owned
Subsidiary that is a Restricted Subsidiary and that is
engaged in a Permitted Business or (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated
into, the Company or a Term Loan Wholly Owned Subsidiary that
is a Restricted Subsidiary and is engaged in a Permitted
Business;
(4) any Restricted Investment made as a result of
the receipt of non-cash consideration from an Asset Sale that
was made pursuant to and in compliance with Section 11.2;
(5) any acquisition of assets solely in exchange for
the issuance of the Company's Equity Interests (other than
Disqualified Stock);
(6) loans and advances made after the date hereof to
Holberg Industries, Inc. not to exceed $10,000,000 at any
time outstanding;
(7) loans and advances made after the date hereof to
NEHC not to exceed $10,000,000 at any time outstanding; and
(8) other Investments made after the date hereof in
any Person 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 (8)
that are at the time outstanding, not to exceed $10,000,000.
Permitted Liens has the meaning specified in Section 10.1.
Permitted Refinancing Debt means any Debt of the Company or
any of the Company's Restricted Subsidiaries issued in exchange for,
or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund other Debt of the Company or any of the
Company's Restricted Subsidiaries; provided that:
(1) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Debt does not
exceed the principal amount of
71
(or accreted value, if applicable), plus accrued interest on,
the Debt so extended, refinanced, renewed, replaced, defeased
or refunded (plus the amount of reasonable expenses incurred
in connection therewith);
(2) such Permitted Refinancing Debt has a final
maturity date later than the final maturity date of, and has
a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Debt being
extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Debt being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of
payment to the Term Loan, such Permitted Refinancing Debt has
a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Term Loan on
terms at least as favorable to the Term Lender as those
contained in the documentation governing the Debt being
extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Debt is incurred either by the Company or
by its Restricted Subsidiary who is the obligor on the Debt
being extended, refinanced, renewed, replaced, defeased or
refunded.
Person means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
PFS means PFS, a division of the PepsiCo, Inc.
PFS Acquisition means the acquisition of PFS by the Company
pursuant to the PFS Acquisition Agreement.
PFS Acquisition Agreement means the Asset Purchase Agreement
between PepsiCo, Inc. and NEHC dated May 23, 1997.
Plan means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan.
Pledge Agreement means the Amended and Restated Pledge
Agreement dated as of May 21, 1998 (as amended, supplemented, amended
and restated or otherwise modified from time to time) between the
Company and the Administrative Agent.
Pooling and Servicing Agreement means the Pooling and
Servicing Agreement dated as of July 1, 1997 among AmeriServe Funding
Corporation,
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AmeriServe Food Distribution, Inc., and Norwest Bank Minnesota,
National Association, as Trustee, as amended, amended and restated,
supplemented or otherwise modified from time to time.
Preferred Stock means preferred stock of the Company issued
on terms acceptable to the Required Lenders.
Principals means Holberg, John V. Holten, Orkla, ASA, Nebco
Evans Distributors, Inc., NEHC, DLJ Merchant Banking Partners, L.P.,
DLJ International Partners, C.V., DLJ Offshore Partners, C.V., DLJ
Merchant Banking Funding, Inc., DLJ Merchant Banking Partners II,
L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ Offshore Partners
II, C.V., DLJ Diversified Partners, L.P., DLJ Diversified Partners-A,
L.P., DLJ Millennium Partners, L.P., DLJ Millennium Partners-A, L.P.,
DLJMB Funding II, Inc., DLJ First ESC L.P., DLJ EAB Partners, L.P. and
UK Investment Plan 1997 Partners.
ProSource means ProSource, Inc., a Delaware corporation.
ProSource Acquisition means the acquisition of ProSource by
the Company pursuant to the ProSource Acquisition Agreement.
ProSource Acquisition Agreement means the Agreement and Plan
of Merger by and among the Company, Steamboat Acquisition Corp. and
ProSource dated as of January 29, 1998.
ProSource Trademark Security Agreement means the Trademark
Security Agreement dated May 21, 1998 (as amended, supplemented or
otherwise modified from time to time), between ProSource and the
Administrative Agent.
Public Equity Offering means a public offering of Equity
Interests (other than Disqualified Stock) of:
(1) the Company; or
(2) NEHC to the extent the net proceeds thereof are
contributed to the Company as a capital contribution, that,
in each case, results in net proceeds to the Company of at
least $25,000,000.
Purchase Money Note means a promissory note evidencing the
obligation of a Receivables Subsidiary to pay all or any portion of
the purchase price for Receivables and other Receivables Program
Assets to the Company or any other Receivables Seller in connection
with a Qualified Receivables Transaction, which note shall be repaid
from cash available to the maker of such note, other than (i) cash
required to be held as reserves pursuant to Receivables Documents,
(ii) amounts paid in respect of interest, principal and (iii) other
amounts owing
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under Receivables Documents and amounts paid in connection with the
purchase of newly generated Receivables.
Qualified Receivables Transaction means any transaction or
series of transactions that may be entered into by the Company and/or
any Subsidiary pursuant to which the Company and/or any Subsidiary may
sell, convey or otherwise transfer to a Receivables Subsidiary (in the
case of a transfer by the Company and/or any other Receivables Seller)
and any other Person (in the case of a transfer by a Receivables
Subsidiary), or may grant a security interest in, any Receivables
Program Assets (whether now existing or arising in the future);
provided that:
(a) no portion of the indebtedness or any other
obligations (contingent or otherwise) of a Receivables
Subsidiary or Special Purpose Vehicle (i) is guaranteed by
the Company or any other Receivables Seller (excluding
guarantees of obligations pursuant to Standard Securitization
Undertakings), (ii) is recourse to or obligates the Company
or any other Receivables Seller in any way other than
pursuant to Standard Securitization Undertakings or (iii)
subjects any property or asset of the Company or any other
Receivables Seller, directly or indirectly, contingently or
otherwise, to the satisfaction of obligations incurred in
such transactions, other than pursuant to Standard
Securitization Undertakings;
(b) neither the Company nor any other Receivables
Seller has any material contract, agreement, arrangement or
understanding with a Receivables Subsidiary or a Special
Purpose Vehicle (except in connection with a Purchase Money
Note or Qualified Receivables Transaction) other than on
terms no less favorable to the Company or such Receivables
Seller than those that might be obtained at the time from
Persons that are not affiliates of the Company, other than
fees payable in the ordinary course of business in connection
with servicing accounts receivable; and
(c) the Company and the other Receivables Sellers do
not have any obligation to maintain or preserve the financial
condition of a Receivables Subsidiary or a Special Purpose
Vehicle or cause such entity to achieve certain levels of
operating results.
Receivable Stated Amount means, with respect to a Receivables
Investor Instrument, the maximum amount of the funding commitment with
respect thereto.
Receivables means all rights of the Company or any other
Receivables Seller to payments (whether constituting accounts, chattel
paper, instruments, general intangibles or otherwise) arising from the
sale of goods, services or future services by the Company and/or a
Receivables Seller, and includes the right to payment of any interest
or finance charge and other obligations with respect thereto and any
other rights to payment recorded as a receivable.
74
Receivables Documents means (x) each and every receivables
purchase agreement, pooling and servicing agreement, series supplement
thereto, certificate purchase agreement, guaranty, Purchase Money
Note, license agreement, sublicense agreement, credit agreement,
agreement to acquire undivided interests or other agreement to
transfer, or create a security interest in, Receivables Program
Assets, in each case as amended, modified, supplemented or amended and
restated and in effect from time to time entered into by the Company,
another Receivables Seller and/or a Receivables Subsidiary, and (y)
each other instrument, agreement and other document entered into by
the Company, any other Receivables Seller and/or a Receivables
Subsidiary relating to the transactions contemplated by the items
referred to in clause (x) above, in each case as amended, modified,
supplemented or amended and restated and in effect from time to time.
Receivables Financing Costs means any loss attributable to
the sale of Receivables Program Assets.
Receivables Investor Instruments means trust certificates,
purchased interests or any other securities, instruments or agreements
evidencing an interest in the Receivables Program Assets held by a
Person other than the Company and its Subsidiaries (excluding
Receivables Subsidiaries).
Receivables Program Assets means (a) all Receivables which
are described as being transferred by the Company, another Receivables
Seller and/or a Receivables Subsidiary pursuant to the Receivables
Documents, (b) all Receivables Related Assets, and (c) all collections
(including recoveries) and other proceeds of the assets described in
the foregoing clauses.
Receivables Program Obligations means (a) notes, trust
certificates, undivided interests, partnership interests or other
interests representing the right to be paid a specified principal
amount from the Receivables Program Assets, and (b) related
obligations of the Company, a Subsidiary and/or a Special Purpose
Vehicle (including, without limitation, rights in respect of interest
or yield, breach of warranty claims and expense reimbursement and
indemnity provisions). The Receivables Program Obligations shall also
include Purchase Money Notes and guarantees by the Company of
obligations pursuant to Standard Securitization Undertakings.
Receivables Related Assets means (i) any rights arising under
the documentation governing or relating to Receivables (including
rights in respect of liens securing such Receivables and other credit
support in respect of such Receivables), (ii) any collections and
other proceeds of such Receivables, (iii) any lockboxes or bank
accounts, all documents, instruments and agreements relating to such
lockboxes or bank accounts, and any amounts from time to time
deposited therein, (iv) spread accounts, trust accounts and other
similar accounts (and any
75
amounts on deposit therein) established in connection with a Qualified
Receivables Transaction, (v) any warranty, indemnity, dilution and
other intercompany claim arising out of Receivables Documents and (vi)
other assets (including those contemplated by Receivables Documents)
which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset
securitization transactions involving accounts receivable.
Receivables Seller means the Company and any Subsidiary of
the Company (other than a Receivables Subsidiary) which is a party to
a Receivables Document.
Receivables Subsidiary means a special purpose wholly-owned
subsidiary of the Company created in connection with the transactions
contemplated by a Qualified Receivables Transaction, which subsidiary
engages in no activities other than those incidental to such Qualified
Receivables Transaction and which is designated as a Receivables
Subsidiary by the Company's Board of Directors. Any such designation
by the Board of Directors shall be evidenced by filing with the
Administrative Agent a certified copy of the resolution of the Board
of Directors of the Company giving effect to such designation and an
officers' certificate certifying, to the best of such officer's
knowledge and belief after consulting with counsel, that such
designation, and the transactions in which the Receivables Subsidiary
will engage, comply with the requirements of the definition of
Qualified Receivables Transaction.
Receivables Transaction means:
(1) the sale or other disposition to a third party of Term
Loan Receivables or an interest therein, or
(2) the sale or other disposition of Term Loan Receivables or
an interest therein to a Term Loan Receivables Subsidiary followed by
a financing transaction in connection with such sale or disposition of
such Term Loan Receivables (whether such financing transaction is
effected by such Term Loan Receivables Subsidiary or by a third party
to whom such Term Loan Receivables Subsidiary sells such Term Loan
Receivables or interests therein); provided that in each of the
foregoing, the Company or its Term Loan Subsidiaries receive at least
80% of the aggregate principal amount of any Term Loan Receivables
financed in such transaction.
Register has the meaning specified in Section 15.8.
Registration Rights Agreement means the Registration Rights
Agreement, dated as of October 1, 1999, by and among the Company,
Nebco Evans Distributors, Inc., a Delaware corporation, Donaldson,
Lufkin & Jenrette Securities Corporation, Banc of America Securities
LLC and Salomon Smith Barney Inc.
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Related Party with respect to any Principal means:
(1) any controlling stockholder, 80% (or more) owned Term
Loan Subsidiary, or spouse or immediate family member (in the case of
an individual) of such Principal or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of such
Principal and/or such other Persons referred to in the immediately
preceding clause (1).
Reportable Event means, any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has
been waived in regulations issued by the PBGC.
Required Lenders means, at any time, Revolving Lenders having
an aggregate Revolving Percentage of 51% or more.
Requirement of Law means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable
to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
Responsible Officer means the chief executive officer or the
president of the Company, or any other officer having substantially
the same authority and responsibility; or, with respect to financial
reporting or compliance with financial covenants, the chief financial
officer or the treasurer of the Company, or any other officer having
substantially the same authority and responsibility.
Restricted Investment means an Investment other than a
Permitted Investment.
Restricted Subsidiary of a Person means any Term Loan
Subsidiary of the referent Person that is not an Unrestricted
Subsidiary.
Restructuring Costs means any cash integration expenditures
related to the PFS Acquisition or the ProSource Acquisition incurred
by the Company reflected as (i) a non-operating expense in the
Company's income statement, (ii) a reduction of the restructuring
reserve on the Company's balance sheet, or (iii) restructuring charges
taken in the years 1998, 1999, and 2000 to the extent added to
Adjusted EBITDA pursuant to clause (c) of the definition of "Adjusted
EBITDA;" provided that "Restructuring Costs" shall not include any
expenditures related to the J.D. Edwards software installation.
77
Revolving Commitment means, as to each Revolving Lender, the
commitment of such Revolving Lender to make Revolving Loans pursuant
to Section 2.1(a). The initial amount of each Revolving Lender's
Revolving Commitment is set forth in Schedule 2.1(a).
Revolving Lender means, at any time, any Lender which then
has a Revolving Commitment or is owed a Revolving Loan or has a
participation in any Letter of Credit.
Revolving Loan has the meaning specified in Section 2.1(a),
and may be a Base Rate Loan or an Offshore Rate Loan (each a "Type" of
Revolving Loan).
Revolving Loan Default means any event or circumstance which,
with the giving of notice, the lapse of time, or both, would (if not
cured or otherwise remedied during such time) constitute a Revolving
Loan Event of Default.
Revolving Loan Event of Default means any of the events or
circumstances specified in Section 12.1.
Revolving Loan Note means a promissory note executed by the
Company in favor of a Revolving Lender pursuant to subsection 2.2(b),
in substantially the form of Exhibit D-1.
Revolving Percentage means, as to any Revolving Lender, the
percentage which (a) the amount of such Revolving Lender's Revolving
Commitment is of (b) the aggregate amount of all of the Revolving
Lenders' Revolving Commitments.
Revolving Refinancing Debt means any Indebtedness which
replaces or refinances the Revolving Loan in whole or in part.
Revolving/Term Loan Intercreditor Agreement means the
Intercreditor Agreement dated as of the date hereof (as amended,
supplemented, amended and restated or otherwise modified from time to
time), among the Administrative Agent as agent for the Revolving
Lenders, the Administrative Agent as agent for the Term Lender, the
Company and the Guarantors.
Revolving Termination Date means the earlier to occur of:
(a) June 30, 2003; and
(b) the date on which the Revolving Commitments terminate in
accordance with the provisions of this Agreement.
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S&P has the meaning specified in the definition of "Cash
Equivalent Investments."
SEC means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
Securities Act means the Securities Act of 1933, as amended.
Security Agreement means the Second Amended and Restated
Security Agreement dated as of May 21, 1998 (as amended, supplemented,
amended and restated or otherwise modified from time to time) between
the Company, its Subsidiaries and the Administrative Agent.
Senior Secured Debt means, as to the Company and its
Subsidiaries, (i) the Obligations, (ii) Capitalized Lease Obligations,
(iii) obligations with respect to drawn Surety Instruments, (iv)
Invested Amounts and (v) other senior secured obligations.
Senior Subordinated Notes means the Company's $500,000,000 10%
senior subordinated notes due July 15, 2007.
Senior Unsecured Notes means the Company's $350,000,000 8%
senior unsecured notes due October 15, 2007.
Significant Subsidiary means any Term Loan Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02
of Regulation S-X, promulgated pursuant to the Securities Act, as such
regulation is in effect on the date hereof.
Special Purpose Vehicle means a trust, partnership or other
special purpose Person established by the Company and/or its
Subsidiaries to implement a Qualified Receivables Transaction.
Standard Securitization Undertakings means representations,
warranties, covenants and indemnities entered into by the Company
and/or any Subsidiary which are reasonably customary in an accounts
receivable transaction.
Stated Maturity means, with respect to any installment of
interest or principal on any series of Debt, the date on which such
payment of interest or principal was scheduled to be paid in the
original documentation governing such Debt, and shall not include any
contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the
payment thereof.
Subordinated Debt means all unsecured Indebtedness of the
Company for money borrowed which is subordinated, upon terms
reasonably satisfactory to the
79
Required Lenders, in right of payment to the payment in full in cash
of all Obligations, which is payable to NEHC and on which interest is
payable in kind, not in cash, until after June 30, 2003.
Subsidiary of a Person means any corporation, association,
partnership, limited liability company, limited liability partnership,
joint venture or other business entity of which more than 50% of the
voting stock, membership interests or other equity interests (in the
case of Persons other than corporations), is owned or controlled
directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the
context otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of the Company. No Special Purpose
Vehicle will be considered a "Subsidiary".
Subsidiary Guarantors means all the Company's direct and
indirect Restricted Subsidiaries other than the Foreign Subsidiaries.
Subsidiary Pledge Agreement means the Pledge Agreement dated
as of May 21, 1998 (as amended, supplemented, amended and restated or
otherwise modified from time to time) between ProSource, ProSource
Services Corporation and the Administrative Agent.
Surety Instruments means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
Tax Sharing Agreement means that certain Tax Sharing
Agreement effective as of the first day of the 1989 consolidated
return year between Holberg and the Company as successor by merger to
certain former subsidiaries of the Company.
Taxes means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the
Administrative Agent, such taxes (including income taxes or franchise
taxes) as are imposed on or measured by each Lender's net income by
the jurisdiction (or any political subdivision thereof) under the laws
of which such Lender or the Administrative Agent, as the case may be,
is organized or maintains a lending office.
Term Commitment means, as to the Term Lender, the commitment
of the Term Lender to make a Term Loan pursuant to Section 2.1(b). The
initial amount of the Term Lender's Commitment is set forth in
Schedule 2.1(b).
Term Lender means, at any time, any Lender which then has a
Term Commitment or is owed a Term Loan.
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Term Lender Notes means the Term Lender's 12% senior secured
notes due September 15, 2006.
Term Lender Notes Trustee means United States Trust Company
of New York, as trustee.
Term Loan has the meaning specified in Section 2.1(b).
Term Loan Affiliate of any specified Person means any other
Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For
purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
Term Loan Borrowing Base means, as of any date, an amount
equal to the sum of:
(1) 85% of the excess of (A) the sum of (a) the face amount
of the Company's Term Loan Receivables and the Company's Restricted
Subsidiaries' Receivables and (b) the book value of its undivided
interest in the assets of the AmeriServe Master Trust, or any
successor or replacement trust, over (B) the sum of the amounts in
clauses A(a) and A(b) above as set forth on the Company's unaudited
consolidated balance sheet dated as of June 26, 1999 plus
(2) 50% of the excess of (A) the book value of all inventory
of the Company and its Restricted Subsidiaries calculated as of the
end of the most recently completed month over (B) the book value of
all inventory of the Company and its Restricted Subsidiaries as set
forth on the Company's unaudited consolidated balance sheet dated as
of June 26, 1999, all calculated on a consolidated basis and in
accordance with Term Loan GAAP. For purposes of the foregoing, any
Receivables held by the AmeriServe Master Trust as a result of a
Receivables Transaction that are subsequently held by the Company or
any of its Restricted Subsidiaries shall be included in the
calculation of clause (A) above.
Term Loan Capital Lease Obligation means, at the time any
determination thereof is to be made, the amount of the liability in
respect of a capital lease that would at such time be required to be
capitalized on a balance sheet in accordance with Term Loan GAAP.
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Term Loan Change of Control means the occurrence of any of
the following:
(1) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or
a series of related transactions, of all or substantially all of the
assets of the Company and its Term Loan Subsidiaries taken as a whole
to any "person" (as such term is used in Section 13(d)(3) of the
Exchange Act) other than the Principals or their Related Parties,
(2) the adoption of a plan relating to the Company's
liquidation or dissolution,
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above), other than the Principals and their
Related Parties, becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except
that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such
right is currently exercisable or is exercisable only upon the
occurrence of a subsequent condition), directly or indirectly, of more
than 50% of the Company's Voting Stock (measured by voting power
rather than number of shares),
(4) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors, or
(5) the Company consolidates with, or merges with or into,
any Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of the Company's assets to any
Person, or any Person consolidates with, or merges with or into, the
Company in any such event pursuant to a transaction in which any of
the Company's outstanding Voting Stock is converted into or exchanged
for cash, securities or other property, other than any such
transaction where the Company's Voting Stock outstanding immediately
prior to such transaction is converted into or exchanged for Voting
Stock (other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately after
giving effect to such issuance).
Term Loan Consolidated Net Income means, with respect to any
Person for any period, the aggregate of the Net Income of such Person
and its Restricted Subsidiaries for such period, on a consolidated
basis, determined in accordance with Term Loan GAAP; provided that:
(1) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by
the equity method of
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accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent
Person or a Term Loan Wholly-Owned Subsidiary that is a
Restricted Subsidiary thereof,
(2) the Net Income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Term Loan
Subsidiary or its stockholders,
(3) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded,
(4) the cumulative effect of a change in accounting
principles shall be excluded, and
(5) the Net Income of any Unrestricted Subsidiary
shall be excluded, whether or not distributed to the Company
or one of its Restricted Subsidiaries for purposes of Section
11.5 and shall be included for purposes of Section 11.4 only
to the extent of the amount of dividends or distributions
paid in cash to the Company or one of its Restricted
Subsidiaries.
Term Loan Default means any event or circumstance which, with
the giving of notice, the lapse of time, or both, would (if not cured
or otherwise remedied during such time) constitute a Term Loan Event
of Default.
Term Loan Event of Default means any of the events or
circumstances described in Section 13.1.
Term Loan GAAP means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as have been approved by a significant segment of the
accounting profession, which are in effect on the date of this
Agreement.
Term Loan Interest Payment Date means the 15th day of each
March and September, commencing as of March 15, 2000.
Term Loan Interest Rate means a rate per annum equal to 12%.
83
Term Loan Lien means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).
Term Loan Maturity Date means September 15, 2006.
Term Loan Note means a promissory note executed by the
Company in favor of the Term Lender pursuant to subsection 2.2(b), in
substantially the form of Exhibit D-2.
Term Loan Permitted Liens means
(1) Term Loan Liens securing Debt under this Agreement that
was permitted by the terms of the Term Loan portion of this Agreement
to be incurred or other Debt allowed to be incurred under clause (2)
of Section 11.5;
(2) Term Loan Liens securing Debt allowed to be incurred
under clause (5) of Section 11.5;
(3) Term Loan Liens in favor of the Company;
(4) Term Loan Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or
any Restricted Subsidiary of the Company, provided that such Term Loan
Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with the Company;
(5) Term Loan Liens on property existing at the time of
acquisition thereof by the Company or any Restricted Subsidiary of the
Company, provided that such Term Loan Liens were in existence prior to
the contemplation of such acquisition;
(6) Term Loan Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of
business;
(7) Term Loan Liens existing on the date hereof;
(8) Term Loan Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being
contested in good faith by
84
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be
required in conformity with Term Loan GAAP shall have been made
therefor;
(9) Term Loan Liens incurred in the ordinary course of
business of the Company or any Restricted Subsidiary of the Company
with respect to obligations that do not exceed $5,000,000 at any one
time outstanding and that (a) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in the
aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of business by the
Company or such Restricted Subsidiary, and
(10) Term Loan Liens on assets of Unrestricted Subsidiaries
that (a) secure Non-Recourse Debt of Unrestricted Subsidiaries or (b)
are incurred in connection with a Receivables Transaction.
Term Loan Prior Liens means liens on the Collateral that
existed immediately before the liens securing the Term Loan were
created.
Term Loan Receivables means, with respect to any Person or
entity, all of the following property and interests in property of
such Person or entity, whether now existing or existing in the future
or hereafter acquired or arising:
(1) accounts;
(2) accounts receivable incurred in the ordinary
course of business, including, without limitation, all rights
to payment created by or arising from sales of goods, leases
of goods or the rendition of services, no matter how
evidenced, whether or not earned by performance;
(3) all rights to any goods or merchandise
represented by any of the foregoing after creation of the
foregoing, including, without limitation, returned or
repossessed goods;
(4) all reserves and credit balances with respect to
any such accounts receivable or account debtors;
(5) all letters of credit, security or guarantees
for any of the foregoing;
(6) all insurance policies or reports relating to
any of the foregoing;
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(7) all collection or deposit accounts relating to
any of the foregoing;
(8) all proceeds of the foregoing; and
(9) all books and records relating to any of the
foregoing.
Term Loan Receivables Subsidiary means an Unrestricted
Subsidiary exclusively engaged in Receivables Transactions and
activities related thereto; provided, however, that
(1) at no time shall the Company and its Term Loan
Subsidiaries have more than one Term Loan Receivables
Subsidiary and
(2) all Debt or other borrowings of such
Unrestricted Subsidiary shall be Non-Recourse Debt.
Term Loan Subsidiary means, with respect to any Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is
at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Term Loan Subsidiaries of that
Person (or a combination thereof) and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Term Loan
Subsidiary of such Person or (b) the only general partners of which
are such Person or one or more Term Loan Subsidiaries of such Person
(or any combination thereof).
Term Loan Wholly Owned Subsidiary of any Person means a Term
Loan Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more
Term Loan Wholly Owned Subsidiaries of such Person and one or more
Term Loan Wholly Owned Subsidiaries of such Person.
Trademark Security Agreement means the Amended and Restated
Trademark Security Agreement dated July 11, 1997 (as amended,
supplemented, amended and restated or otherwise modified from time to
time) between AmeriServ Food Company and the Administrative Agent.
Type has the meaning specified in the definition of
"Revolving Loan."
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UCP has the meaning specified in Section 3.9.
Unfunded Pension Liability means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.
United States and U.S. each means the United States of
America.
Unrestricted Subsidiary means any Term Loan Subsidiary that
is designated by the Board of Directors of the Company as an
Unrestricted Subsidiary pursuant to a resolution of the Board of
Directors of the Company; but only to the extent that such Term Loan
Subsidiary:
(1) has no Debt other than Non-Recourse Debt;
(2) is not party to any agreement, contract,
arrangement or understanding with the Company or any of its
Restricted Subsidiaries unless the terms of any such
agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than
those that might be obtained at the time from Persons who are
not Term Loan Affiliates of the Company;
(3) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any
specified levels of operating results;
(4) has not guaranteed or otherwise directly or
indirectly provided credit support for any Debt of the
Company or any of its Restricted Subsidiaries; and
(5) has at least one director on its board of
directors that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries and has at
least one executive officer that is not a director or
executive officer of the Company or any of its Restricted
Subsidiaries.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Administrative Agent by filing with the
Administrative Agent a certified copy of the Board Resolution giving
effect to such designation and an Officers' Certificate certifying
that such designation complied with the foregoing conditions and was
permitted by Section 11.4. If, at any time, any Unrestricted
Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of the Term
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Loan portion of this Agreement and any Debt of such Term Loan
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary
of the Company as of such date (and, if such Debt is not permitted to
be incurred as of such date under Section 11.5, the Company shall be
in default of such covenant). The Company's Board of Directors may at
any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an
incurrence of Debt by a Restricted Subsidiary of any outstanding Debt
of such Unrestricted Subsidiary and such designation shall be
permitted only if
(a) such Debt is permitted under Section 11.5, and
(b) no Term Loan Default or Term Loan Event of
Default would be in existence following such designation.
Voting Stock of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the
election of the Board of Directors of such Person.
Weighted Average Life to Maturity means, when applied to any
Debt at any date, the number of years obtained by dividing
(1) the sum of the products obtained by multiplying
(a) the amount of each then remaining
installment, sinking fund, serial maturity or other
required payments of principal, including payment at
final maturity, in respect thereof, by
(b) the number of years (calculated to the
nearest one-twelfth) that will elapse between such
date and the making of such payment, by
(2) the then outstanding principal amount of such
Debt.
Wholly-Owned Subsidiary means any corporation in which (other
than directors' qualifying shares required by law) 100% of the capital
stock of each class having ordinary voting power, and 100% of the
capital stock of every other class, in each case, at the time as of
which any determination is being made, is owned, beneficially and of
record, by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1. Other Interpretive Provisions. The meanings of
defined terms are equally applicable to the singular and plural forms of the
defined terms.
1. The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and
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clause, subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
a) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
a) The term "including" is not limiting and means "including
without limitation."
a) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including"; the words
"to" and "until" each mean "to but excluding", and the word "through" means "to
and including."
1. Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
1. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
1. This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
1. This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Administrative
Agent, the Company and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the
Administrative Agent merely because of the Administrative Agent's or Lenders'
involvement in their preparation.
1. Accounting Principles. Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied; provided that capital leases of up
to $45,000,000 in the aggregate arising out of the sale-leaseback of
distribution centers shall be treated as operating leases for the purposes
hereof (including for the purposes of all financial computations required
hereunder).
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1. References herein to "fiscal year" and "fiscal quarter" refer
to such fiscal periods of the Company.
I. ARTICLE
THE CREDIT
1. Amounts and Terms of Commitments. Revolving Loans. Each
Revolving Lender severally agrees, on the terms and conditions set forth herein,
to make loans to the Company (each such loan, a "Revolving Loan"), from time to
time on any Business Day during the period from the Closing Date to the
Revolving Termination Date, in an aggregate amount not to exceed at any time
outstanding such Revolving Lender's Revolving Percentage of $125,000,000;
provided that, after giving effect to any Borrowing of Revolving Loans, the
aggregate amount of all Revolving Loans plus the Effective Amount of all L/C
Obligations shall not exceed the lesser of (i) the Revolving Commitments or (ii)
the Borrowing Base. Within the foregoing limits, and subject to the other terms
and conditions hereof, the Company may borrow under this subsection 2.1(a),
prepay under Section 2.6 and reborrow under this subsection 2.1(a).
1. Term Loans. The Term Lender agrees, on the terms and
conditions set forth herein, to make a loan to the Company (such loan, the "Term
Loan"). The Term Loan may be made in up to two disbursements; the first
disbursement shall be made on the Closing Date in an amount of $205,000,000
principal amount at maturity (before original issue discount) and the second
disbursement shall be made within six months after the date hereof but in an
amount no greater than $25,000,000. Amounts borrowed as a Term Loan which are
repaid or prepaid by the Company may not be reborrowed. The Term Commitment
shall expire concurrently with the making of the Term Loan on the Closing Date.
1. Loan Accounts. The Loans made by each Lender and the Letters
of Credit Issued by the Issuing Lender shall be evidenced by one or more
accounts or records maintained by such Lender or Issuing Lender, as the case may
be, in the ordinary course of business. The accounts or records maintained by
the Administrative Agent, the Issuing Lender and each Lender shall be rebuttable
presumptive evidence of the amount of the Loans made by the Lenders to the
Company and the Letters of Credit Issued for the account of the Company, and the
interest and payments thereon. Any failure so to record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the Company
hereunder to pay any amount owing with respect to the Loans or any Letter of
Credit.
1. Upon the request of any Lender made through the Administrative
Agent, the Loans made by such Lender may be evidenced by one or more Notes,
instead of loan accounts. Each such Lender shall endorse on the schedules
annexed to its Note(s) the date, amount and maturity of each Loan made by it and
the amount of each payment of
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principal made by the Company with respect thereto. Each such Lender is
irrevocably authorized by the Company to endorse its Note(s) and each Lender's
record shall be conclusive absent manifest error; provided, however, that the
failure of a Lender to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of the
Company hereunder or under any such Note to such Lender.
1. Each disbursement of the Term Loan shall be evidenced by a
Term Loan Note.
1. Procedure for Borrowing. Revolving Loans. Each Borrowing of
Revolving Loans shall be made upon the Company's irrevocable written notice
delivered to the Administrative Agent in the form of a Notice of Borrowing,
which notice must be received by the Administrative Agent (i) prior to 8:30 a.m.
(San Francisco time) two Business Days prior to the requested Borrowing Date, in
the case of Offshore Rate Loans; and (ii) prior to 8:30 a.m. (San Francisco
time) on the requested Borrowing Date, in the case of Base Rate Loans,
specifying:
(i) the amount of the Borrowing of Revolving Loans, which shall be
in an aggregate minimum amount of $500,000 and a multiple of $100,000 provided
that, if the amount of (x) the unused Revolving Commitments or (y) the
availability under the Borrowing Base is less than $500,000, the Company may
borrow such amount in Base Rate Loans;
(i) the requested Borrowing Date, which shall be a Business Day;
(i) the Type of Loans comprising the Borrowing; and
(i) the duration of the Interest Period applicable to such
Revolving Loans included in such notice. If the Notice of Borrowing fails to
specify the duration of the Interest Period for any Borrowing comprised of
Offshore Rate Loans, such Interest Period shall be one month.
1. Term Loan. The Borrowing of the Term Loan shall be made upon
the Company's irrevocable written notice delivered to the Administrative Agent,
which notice must be received by the Administrative Agent prior to 8:30 a.m.
(San Francisco time) on the Closing Date.
1. The Administrative Agent will promptly notify each Revolving
Lender of its receipt of any Notice of Borrowing for a Revolving Loan and of the
amount of such Revolving Lender's share of that Borrowing based upon such
Revolving Lender's Revolving Percentage. The Administrative Agent will promptly
notify the Term Lender of the receipt of any notice requesting the Term Loan.
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1. Each Lender will make the amount of its share of each
Borrowing available to the Administrative Agent for the account of the Company
at the Administrative Agent's Payment Office by 11:00 a.m. (San Francisco time)
on the Borrowing Date requested by the Company in funds immediately available to
the Administrative Agent. The proceeds of all such Loans will then be made
available to the Company by the Administrative Agent at such office by crediting
the account of the Company on the books of Bank of America with the aggregate of
the amounts made available to the Administrative Agent by the Lenders and in
like funds as received by the Administrative Agent or as otherwise set forth in
the Notice of Borrowing.
1. After giving effect to any Borrowing of Revolving Loans, there
may not be more than six different Interest Periods in effect.
1. Conversion and Continuation Elections. With respect to
Revolving Loans only, the Company may, upon irrevocable written notice to the
Administrative Agent in accordance with subsection 2.4(b):
a) elect, as of any Business Day, in the case of Base Rate Loans,
or as of the last day of the applicable Interest Period, in the case of any
other Type of Revolving Loans, to convert any such Revolving Loans (or any part
thereof in an amount not less than $500,000, or that is in an integral multiple
of $100,000 in excess thereof) into Revolving Loans of any other Type; or
a) elect as of the last day of the applicable Interest Period, to
continue any Revolving Loans having Interest Periods expiring on such day (or
any part thereof in an amount not less than $500,000 or that is in an integral
multiple of $100,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $500,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the
right of the Company to continue such Revolving Loans as, and convert such
Revolving Loans into, Offshore Rate Loans shall terminate.
1. The Company shall deliver a Notice of Conversion/Continuation
to be received by the Administrative Agent (i) not later than 8:30 a.m. (San
Francisco time) at least two Business Days in advance of the
Conversion/Continuation Date, if the Revolving Loans are to be converted into or
continued as Offshore Rate Loans; and (ii) not later than 8:30 a.m. (San
Francisco time) on the Conversion/Continuation Date, if the Revolving Loans are
to be converted into Base Rate Loans, specifying:
(i) the proposed Conversion/Continuation Date;
(i) the aggregate amount of Revolving Loans to be converted or
renewed;
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(i) the Type of Revolving Loans resulting from the proposed
conversion or continuation; and
(i) other than in the case of conversions into Base Rate Loans,
the duration of the requested Interest Period.
1. If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, the Company has failed to timely select a new Interest
Period to be applicable to such Offshore Rate Loans, or if any Revolving Loan
Default or Revolving Loan Event of Default then exists, the Company shall be
deemed to have elected to convert such Offshore Rate Loans into Base Rate Loans
effective as of the expiration date of such Interest Period.
1. The Administrative Agent will promptly notify each Revolving
Lender of its receipt of a Notice of Conversion/Continuation, or, if no timely
notice is provided by the Company, the Administrative Agent will promptly notify
each Revolving Lender of the details of any automatic conversion. All
conversions and continuations shall be made ratably according to the respective
outstanding principal amounts of the Revolving Loans with respect to which the
notice was given held by each Revolving Lender.
1. Unless the Required Lenders otherwise agree, during the
existence of a Revolving Loan Default or Revolving Loan Event of Default, the
Company may not elect to have a Revolving Loan converted into or continued as an
Offshore Rate Loan.
1. After giving effect to any conversion or continuation of
Revolving Loans, there may not be more than six different Interest Periods in
effect.
A. Voluntary Termination or Reduction of Revolving Commitments.
The Company may, upon not less than five Business Days' prior notice to the
Administrative Agent, terminate the Revolving Commitments, or permanently reduce
the Revolving Commitments by an aggregate minimum amount of $5,000,000 or any
multiple of $100,000 in excess thereof; unless, after giving effect thereto and
to any prepayments of Revolving Loans made on the effective date thereof, (a)
the Effective Amount of all Revolving Loans, and L/C Obligations together would
exceed the amount of the Revolving Commitments then in effect, or (b) the
Effective Amount of all L/C Obligations then outstanding would exceed the L/C
Commitment. Once reduced in accordance with this Section, the Revolving
Commitments may not be increased. Any reduction of the Revolving Commitments
shall be applied to each Revolving Lender according to its Revolving Percentage.
If and to the extent specified by the Company in the notice to the
Administrative Agent, some or all of the reduction in the combined Revolving
Commitments shall be applied to reduce the L/C Commitment. All accrued revolving
commitment and letter of credit fees to, but not including, the effective date
of any
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reduction or termination of Revolving Commitments, shall be paid on the
effective date of such reduction or termination.
1. Optional Prepayments of Revolving Loans. Subject to Section
4.4, the Company may, from time to time, upon irrevocable written notice to the
Administrative Agent (which notice must be received by 8:30 a.m. (San Francisco
time) on the day of prepayment in the case of Base Rate Loans and 8:30 a.m. (San
Francisco time) two Business Days prior to the date of prepayment in the case of
Offshore Rate Loans), ratably prepay any Borrowing of Revolving Loans in whole
or in part, in an aggregate amount of $500,000 or a higher integral multiple of
$100,000.
1. Each notice of prepayment pursuant to this Section shall
specify the date and amount of such prepayment and the Revolving Loans to be
prepaid. The Administrative Agent will promptly notify each Revolving Lender of
its receipt of any such notice and of such Revolving Lender's share of such
prepayment based upon such Revolving Lender's Revolving Percentage. If any such
notice is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to such date on the amount
prepaid and any amounts required pursuant to Section 4.4. Each prepayment of
Revolving Loans shall be applied to each Revolving Lender's Revolving Loans
according to such Revolving Lender's Revolving Percentage.
1. Optional Prepayments of Term Loan. The Term Loan shall not be
prepayable prior to September 15, 2003. On or after September 15, 2003, the
Company may, from time to time, upon not less than thirty nor more than sixty
days' irrevocable written notice, prepay the Term Loan in whole or in part at
the prepayment prices (expressed as percentages of Accreted Value) set forth
below plus accrued interest and Liquidated Damages thereon, if any, to the
applicable date of prepayment, if prepaid during the twelve-month period
beginning on September 15 of the years indicated below:
Year Percentage
---- ----------
2003 106.000%
2004 103.000%
2005 and thereafter 100.000%
Notwithstanding the foregoing, at any time prior to September 15, 2001,
the Company may prepay up to 33% of the original aggregate principal amount of
the Term Loan at a prepayment price of 112% of the Accreted Value thereof, plus
accrued interest and Liquidated Damages thereon, if any, to the applicable date
of prepayment, with the net cash proceeds of a Public Equity Offering; provided
that: (i) at least 67% of the original aggregate principal amount of the Term
Loan remains outstanding immediately after the
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occurrence of such prepayment and (ii) such prepayment shall occur within
forty-five days of the date of closing of such Public Equity Offering.
1. Each notice of prepayment pursuant to this Section shall
specify the date and amount of such prepayment. The Administrative Agent will
promptly notify the Term Lender of its receipt of any such notice. If any such
notice is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice (plus, accrued interest and Liquidated
Damages, if any, thereon) shall be due and payable on the date specified
therein.
1. Mandatory Prepayments of Revolving Loans. If on any date the
Effective Amount of L/C Obligations exceeds the L/C Commitment, the Company
shall Cash Collateralize on such date the outstanding Letters of Credit in an
amount equal to the excess of the maximum amount then available to be drawn
under the Letters of Credit over the aggregate L/C Commitment.
1. If on any day the outstanding Revolving Loans plus the
Effective Amount of the L/C Obligations exceeds the Borrowing Base, the Company
shall on such date make a prepayment of the Revolving Loans equal to the excess
and, if the Revolving Loans shall be prepaid in full, Cash Collateralize the L/C
Obligations by the remainder of such excess. Any prepayment shall be applied to
each Revolving Lender's Revolving Loans according to its Revolving Percentage.
1. Mandatory Prepayments of Term Loan. If a Term Loan Change of
Control occurs, the Term Lender shall have the right to require the Company to
repay all or any part (equal to $1,000 or an integral multiple thereof) of the
Term Loan pursuant to a Change of Control Offer at an offer price in cash equal
to 101% of the Accreted Value thereof plus accrued interest and Liquidated
Damages thereon, if any, to the date of prepayment ("Change of Control
Payment"). Within thirty days following any Term Loan Change of Control, the
Company will mail a notice to the Term Lender describing the transaction or
transactions that constitute the Term Loan Change of Control and offering to
repay the Term Loan (or any portion thereof specified by the Term Lender) on the
date specified in such notice (the "Change of Control Offer"), which date shall
be no earlier than thirty days and no later than sixty days from the date such
notice is mailed (the "Change of Control Payment Date"), pursuant to the
procedures required herein.
1. On the Change of Control Payment Date, the Company shall, to
the extent lawful:
a) prepay the Term Loan or such portions thereof as may have been
specified by the Term Lender pursuant to the Change of Control Offer; and
a) deposit with the Term Lender an amount equal to the Change of
Control Payment in respect of the entire Term Loan or portions thereof to be so
prepaid.
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1. The Company will not be required to make a Change of Control
Offer upon a Term Loan Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section and makes the Change of Control Payment
required by this Section.
1. Repayment. The Company shall pay to the Administrative Agent,
for the account of the Revolving Lenders, on the Revolving Termination Date the
aggregate principal amount of all Revolving Loans outstanding on such date.
1. The Company shall pay to the Administrative Agent, for the
account of the Term Lender, on the Term Loan Maturity Date, the aggregate
principal amount of the Term Loan outstanding on such date.
1. Interest. (i) Each Revolving Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the Offshore Rate or the Base Rate, as the case may be
(and subject to the Company's right to convert to other Types of Revolving Loans
under Section 2.4), plus the Applicable Offshore Rate Margin or Applicable Base
Rate Margin, as the case may be.
(ii) The Term Loan shall bear interest on the outstanding principal
amount thereof from the applicable Closing Date at a rate equal to the Term Loan
Interest Rate.
a) Interest on each Revolving Loan shall be paid in arrears
on each Interest Payment Date. Interest shall also be paid upon payment
(including prepayment) in full thereof and, during the existence of any
Revolving Loan Event of Default, interest shall be paid on demand of the
Administrative Agent at the request or with the consent of the Required Lenders.
a) Interest on the Term Loan shall be paid in arrears on
each Term Loan Interest Payment Date. Interest shall also be paid on the date of
any prepayment of the Term Loan as provided in Sections 2.7, 2.9 or 11.2.
a) Notwithstanding subsection (a)(i) of this Section, while
any Revolving Loan Event of Default exists or after acceleration (as a result of
a Revolving Loan Event of Default), the Company shall pay interest (after as
well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Revolving Loans, at a rate per annum which
is determined by adding 2% per annum to the Applicable Base Rate Margin or
Applicable Offshore Rate Margin then in effect for such Revolving Loans;
provided, however, that, on and after the expiration of any Interest Period
applicable to any Offshore Rate Loan outstanding on the date of occurrence of
such Revolving Loan Event of Default or acceleration (as a result of a Revolving
Loan Event of Default), the principal amount of such Revolving Loan shall,
during the continuation of such Revolving Loan Event of Default or after
acceleration (as
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a result of a Revolving Loan Event of Default), bear interest at a rate per
annum equal to the Base Rate plus the Applicable Base Rate Margin then in effect
plus 2%.
a) Notwithstanding subsection (a)(ii) of this Section, the
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal of the Term Loan at the rate
equal to 1% per annum in excess of the then applicable interest rate on the Term
Loan to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.
a) In the event that the Term Lender is required to pay any
liquidated damages to the holders of the Term Lender Notes, as set forth in the
Registration Rights Agreement, the Company agrees, as partial consideration for
the Term Loan to pay to the Term Lender immediately, as additional interest on
the Term Loan, an amount (the "Liquidated Damages") equal to the amount the Term
Lender is required to pay to such holders.
1. Anything herein to the contrary notwithstanding, the
obligations of the Company to any Lender hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Lender would be contrary
to the provisions of any law applicable to such Lender limiting the highest rate
of interest that may be lawfully contracted for, charged or received by such
Lender, and in such event the Company shall pay such Lender interest at the
highest rate permitted by applicable law.
A. Fees. In addition to certain fees described in Section 3.8:
1. Arrangement, Agency Fees. The Company shall pay to the
Administrative Agent for its own account and the Arranger's own account, the
fees as required by the letter agreement ("Fee Letter") between the Company and
the Arranger and the Administrative Agent dated September 30, 1999, as amended.
1. Commitment Fees. The Company shall pay to the Administrative
Agent for the account of each Revolving Lender a commitment fee equal to the
Commitment Fee Rate times the daily unused portion of such Revolving Lender's
Revolving Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter. For purposes of calculating utilization
under this subsection, the Revolving Commitments shall be deemed used to the
extent of the Effective Amount of Revolving Loans then outstanding, plus the
Effective Amount of L/C Obligations then outstanding. Such commitment fee shall
accrue from the Closing Date to the Revolving Termination Date and shall be due
and payable quarterly in arrears on the last Business Day of each fiscal quarter
commencing on the first such date after the date hereof through the Revolving
Termination Date, with the final payment to be made on the Revolving
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Termination Date; provided that, in connection with any reduction or
termination of Revolving Commitments under Section 2.5, the accrued commitment
fee calculated for the period ending on such date shall also be paid on the date
of such reduction or termination, with the following quarterly payment being
calculated on the basis of the period from such reduction or termination date to
such quarterly payment date. The commitment fees provided in this subsection
shall accrue at all times after the above-mentioned commencement date, including
at any time during which one or more conditions in Article VI are not met.
1. Computation of Fees and Interest. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank of America's
"reference rate" shall be made on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed. All computations of interest on the Term
Loan shall be made on the basis of a 360 day year, comprised of twelve
thirty-day months. All other computations of fees and interest shall be made on
the basis of a 360 day year and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365 day year). Interest
and fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
1. Each determination of an interest rate by the Administrative
Agent shall be conclusive and binding on the Company and the Lenders in the
absence of manifest error.
1. Payments by the Company. All payments to be made by the
Company shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Company shall be made
to the Administrative Agent for the account of the Lenders at the Administrative
Agent's Payment Office, and shall be made in dollars and in immediately
available funds, no later than 11:00 a.m. (San Francisco time) on the date
specified herein. In the case of any payment corresponding to the Revolving
Loans, the Administrative Agent will promptly distribute to each Revolving
Lender its Revolving Percentage of any such payment; and in the case of any
payment corresponding to the Term Loan, the Administrative Agent shall promptly
distribute such payment to the Term Lender. Any payment received by the
Administrative Agent later than 2:00 p.m. (San Francisco time) shall be deemed
to have been received on the following Business Day and any applicable interest
or fee shall continue to accrue.
1. Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
1. Unless the Administrative Agent receives notice from the
Company prior to the date on which any payment is due to the Lenders that the
Company will not make such payment in full as and when required, the
Administrative Agent may assume
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that the Company has made such payment in full to the Administrative Agent on
such date in immediately available funds and the Administrative Agent may (but
shall not be so required), in reliance upon such assumption, distribute to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Company has not made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
1. Payments by the Lenders to the Administrative Agent. Unless
the Administrative Agent receives notice from a Revolving Lender on or prior to
the Closing Date or, with respect to any Borrowing after the Closing Date, at
least one Business Day prior to the date of such Borrowing, that such Revolving
Lender will not make available as and when required hereunder to the
Administrative Agent for the account of the Company the amount of that Revolving
Lender's share of the applicable Loan(s), the Administrative Agent may assume
that each Revolving Lender has made such amount available to the Administrative
Agent in immediately available funds on the Borrowing Date and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Company on such date a corresponding amount.
If and to the extent any Revolving Lender shall not have made its full amount
available to the Administrative Agent in immediately available funds and the
Administrative Agent in such circumstances has made available to the Company
such amount, that Revolving Lender shall on the Business Day following such
Borrowing Date make such amount available to the Administrative Agent, together
with interest at the Federal Funds Rate for each day during such period. A
notice of the Administrative Agent submitted to any Revolving Lender with
respect to amounts owing under this subsection (a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the
Administrative Agent shall constitute such Revolving Lender's Loan on the date
of Borrowing for all purposes of this Agreement. If such amount is not made
available to the Administrative Agent on the Business Day following the
Borrowing Date, the Administrative Agent will notify the Company of such failure
to fund and, upon demand by the Administrative Agent, the Company shall pay such
amount to the Administrative Agent for the Administrative Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Loans comprising such Borrowing.
1. The failure of any Revolving Lender to make any Revolving Loan
on any Borrowing Date shall not relieve any other Revolving Lender of any
obligation hereunder to make a Revolving Loan on such Borrowing Date, but no
Lender shall be responsible for the failure of any other Revolving Lender to
make the Revolving Loan to be made by such other Revolving Lender on any
Borrowing Date.
A. Sharing of Payments, etc. If, other than as expressly provided
elsewhere herein, any Revolving Lender shall obtain on account of the Revolving
Loans made by it any payment (whether voluntary, involuntary, through the
exercise of any right
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of set-off, or otherwise) in excess of its ratable share of such payment
(determined in accordance with the provisions of this Agreement), such Revolving
Lender shall immediately (a) notify the Administrative Agent of such fact, and
(b) purchase from the other Revolving Lenders such participations in the
Revolving Loans made by them as shall be necessary to cause such purchasing
Revolving Lender to share the excess payment pro rata with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Revolving Lender, such purchase shall
to that extent be rescinded and each other Revolving Lender shall repay to the
purchasing Revolving Lender the purchase price paid therefor, together with an
amount equal to such paying Revolving Lender's ratable share (according to the
proportion of (i) the amount of such paying Revolving Lender's required
repayment to (ii) the total amount so recovered from the purchasing Revolving
Lender) of any interest or other amount paid or payable by the purchasing
Revolving Lender in respect of the total amount so recovered. The Company agrees
that any Revolving Lender so purchasing a participation from another Revolving
Lender may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off, but subject to Section 15.10 hereof)
with respect to such participation as fully as if such Revolving Lender were the
direct creditor of the Company in the amount of such participation. The
Administrative Agent will keep records (which shall be conclusive and binding in
the absence of manifest error) of participations purchased under this Section
and will in each case notify the Revolving Lenders following any such purchases
or repayments.
A. Legal Defeasance and Covenant Defeasance. The Company may, at
its option and at any time, elect to have all of its obligations discharged with
respect to the Term Loan and all obligations of the Guarantors that are Term
Loan Subsidiaries with respect thereto discharged ("Legal Defeasance") except
for:
(1) rights of the Term Lender to receive payments in respect of
the principal of, premium and Liquidated Damages, if any, and interest on the
Term Loan when such payments are due from the trust referred to below,
(1) the rights, powers, trusts, duties and immunities of the
Administrative Agent, and the Company's obligations in connection therewith and
(2) the Legal Defeasance provisions of this Section.
In addition, the Company may, at its option and at any time, elect to
have its obligations and those of Term Loan Subsidiary Guarantor released under
the covenants contained in Sections 2.9, 11.2, 11.3, 11.4, 11.5, 11.6, 11.7,
11.8, 11.9, 11.10, 11.11, 11.12, 11.13, 11.14 and 11.16 ("Covenant Defeasance")
and thereafter any omission to comply with such obligations shall not constitute
a Term Loan Default or Term Loan Event of Default. In the event Covenant
Defeasance occurs, the events described in Sections 13.1(c), 13.1(d), 13.1(e),
13.1(f), 13.1(g) and 13.1(j) will no longer constitute a Term Loan Event of
Default.
In order to exercise either Legal Defeasance or Covenant Defeasance,
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(a) the Company must irrevocably deposit with the Administrative
Agent, in trust, for the benefit of the Term Loan Lenders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on the Term Loan on the stated maturity or on the
applicable redemption date, as the case may be, and the Company must specify
whether Term Loan is being defeased to maturity or to a particular redemption
date;
(a) in the case of Legal Defeasance, the Company shall have
delivered to the Administrative Agent an opinion of counsel in the United States
reasonably acceptable to the Administrative Agent confirming that:
(a) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or
(b) since the date hereof, there has been a change in the
applicable federal income tax law, in either case to the effect that,
and based thereon such opinion of counsel shall confirm that, the Term
Lender and the holders of the Term Lender Notes will not recognize
income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred;
(a) in the case of Covenant Defeasance, the Company shall have
delivered to the Administrative Agent an opinion of counsel in the United States
reasonably acceptable to the Administrative Agent confirming that the Term
Lender will not recognize income, gain or loss for federal income tax purposes
as a result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(a) no Term Loan Default or Term Loan Event of Default shall have
occurred and be continuing on the date of such deposit (other than a Term Loan
Default or Term Loan Event of Default resulting from the borrowing of funds to
be applied to such deposit) or insofar as Term Loan Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period ending
on the 91st day after the date of deposit;
(a) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under any material
agreement or instrument (other than the Term Loan portion of this Agreement) to
which the Company or any of its
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Term Loan Subsidiaries are a party or by which the Company or any of its Term
Loan Subsidiaries are bound;
(a) the Company must have delivered to the Administrative Agent an
opinion of counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(a) the Company must deliver to the Administrative Agent an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Term Lender over its other creditors with the
intent of defeating, hindering, delaying or defrauding its creditors or those of
others; and
(a) the Company must deliver to the Administrative Agent an
Officers' Certificate and an opinion of counsel, each stating that all
conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Provided, however, that no defeasance pursuant to this Section shall be made if
prohibited by the terms applicable hereunder to the Revolving Loans.
I. ARTICLE
THE LETTERS OF CREDIT
1. The Letter of Credit Subfacility. On the terms and conditions
set forth herein (i) the Issuing Lender agrees, (A) from time to time on any
Business Day during the period from the Closing Date to the Revolving
Termination Date to issue Letters of Credit for the account of the Company, and
to amend or renew Letters of Credit previously issued by it, in accordance with
subsections 3.2(c) and 3.2(d), and (B) to honor drafts under the Letters of
Credit; and (ii) the Revolving Lenders severally agree to participate in Letters
of Credit Issued for the account of the Company; provided, that the Issuing
Lender shall not be obligated to Issue, and no Revolving Lender shall be
obligated to participate in, any Letter of Credit if as of the date of Issuance
of such Letter of Credit (the "Issuance Date") (1) the Effective Amount of all
L/C Obligations plus the Effective Amount of all Revolving Loans exceeds the
lesser of (i) the Commitments or (ii) the Borrowing Base, (2) the participation
of any Revolving Lender in the Effective Amount of all L/C Obligations plus the
Effective Amount of the Revolving Loans of such Revolving Lender exceeds such
Revolving Lender's Revolving Commitment, or (3) the Effective Amount of L/C
Obligations exceeds the L/C Commitment. Within the foregoing limits, and subject
to the other terms and conditions hereof, the Company's ability to obtain
Letters of Credit shall be fully revolving, and, accordingly, the Company may,
during the foregoing period, obtain Letters of Credit to replace Letters of
Credit which have expired or which have been drawn upon and reimbursed.
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1. The Issuing Lender is under no obligation to Issue any Letter
of Credit if:
a) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender
from Issuing such Letter of Credit, or any Requirement of Law applicable to the
Issuing Lender or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over the Issuing Lender
shall prohibit, or request that the Issuing Lender refrain from, the Issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the Issuing Lender is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the Issuing Lender any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which the Issuing Lender in good faith
deems material to it;
a) the Issuing Lender has received written notice from any
Revolving Lender, the Administrative Agent or the Company, on or prior to the
Business Day prior to the requested date of Issuance of such Letter of Credit,
that one or more of the applicable conditions contained in Article VI is not
then satisfied;
a) the expiry date of any requested Letter of Credit is (A) more
than 365 days after the date of Issuance, unless the Required Lenders have
approved such expiry date in writing, or (B) after the Revolving Termination
Date, unless all of the Revolving Lenders have approved such expiry date in
writing;
a) the expiry date of any requested Letter of Credit is prior to
the maturity date of any financial obligation to be supported by the requested
Letter of Credit;
a) any requested Letter of Credit does not provide for drafts, or
is not otherwise in form and substance acceptable to the Issuing Lender, or the
Issuance of a Letter of Credit shall violate any applicable policies of the
Issuing Lender;
a) any standby Letter of Credit is for the purpose of supporting
the issuance of any letter of credit by any other Person;
b) such Letter of Credit is in a face amount less than $25,000 or
denominated in a currency other than Dollars; or
a) it is not a standby letter of credit.
1. Issuance, Amendment and Renewal of Letters of Credit. Each
Letter of Credit shall be issued upon the irrevocable written request of the
Company received by the Issuing Lender (with a copy sent by the Company to the
Administrative Agent) at least four days (or such shorter time as the Issuing
Lender may agree in a particular instance in its sole discretion) prior to the
proposed date of issuance. Each such request for issuance of a Letter of Credit
shall be by facsimile, confirmed immediately in
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an original writing, in the form of an L/C Application, and shall specify in
form and detail satisfactory to the Issuing Lender: (i) the proposed date of
issuance of the Letter of Credit (which shall be a Business Day); (ii) the face
amount of the Letter of Credit; (iii) the expiry date of the Letter of Credit;
(iv) the name and address of the beneficiary thereof; (v) the documents to be
presented by the beneficiary of the Letter of Credit in case of any drawing
thereunder; (vi) the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder; and (vii) such other matters as
the Issuing Lender may require.
1. At least two Business Days prior to the Issuance of any Letter
of Credit, the Issuing Lender will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy of
the L/C Application or L/C Amendment Application from the Company and, if not,
the Issuing Lender will provide the Administrative Agent with a copy thereof.
Unless the Issuing Lender has received notice on or before the Business Day
immediately preceding the date the Issuing Lender is to issue a requested Letter
of Credit from the Administrative Agent (A) directing the Issuing Lender not to
issue such Letter of Credit because such issuance is not then permitted under
subsection 3.1(a) as a result of the limitations set forth in clauses (1)
through (3) thereof or subsection 3.1(b)(ii); or (B) that one or more conditions
specified in Article VI are not then satisfied; then, subject to the terms and
conditions hereof, the Issuing Lender shall, on the requested date, issue a
Letter of Credit for the account of the Company in accordance with the Issuing
Lender's usual and customary business practices.
1. From time to time while a Letter of Credit is outstanding and
prior to the Revolving Termination Date, the Issuing Lender will, upon the
written request of the Company received by the Issuing Lender (with a copy sent
by the Company to the Administrative Agent) at least five days (or such shorter
time as the Issuing Lender may agree in a particular instance in its sole
discretion) prior to the proposed date of amendment, amend any Letter of Credit
issued by it. Each such request for amendment of a Letter of Credit shall be
made by facsimile, confirmed immediately in an original writing, made in the
form of an L/C Amendment Application and shall specify in form and detail
satisfactory to the Issuing Lender: (i) the Letter of Credit to be amended; (ii)
the proposed date of amendment of the Letter of Credit (which shall be a
Business Day); (iii) the nature of the proposed amendment; and (iv) such other
matters as the Issuing Lender may require. The Issuing Lender shall be under no
obligation to amend any Letter of Credit if: (A) the Issuing Lender would have
no obligation at such time to issue such Letter of Credit in its amended form
under the terms of this Agreement; or (B) the beneficiary of any such Letter of
Credit does not accept the proposed amendment to the Letter of Credit. No
Revolving Lender shall be obligated to participate in any amended Letter of
Credit if such Revolving Lender would have no obligation at such time to
participate in such Letter of Credit in its amended form under the terms of this
Agreement if such Letter of Credit were newly issued pursuant to Section 3.1.
The Administrative Agent will promptly notify the Revolving Lenders of the
receipt by it of any L/C Application or L/C Amendment Application.
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1. The Issuing Lender and the Revolving Lenders agree that, while
a Letter of Credit is outstanding and prior to the Revolving Termination Date,
at the option of the Company and upon the written request of the Company
received by the Issuing Lender (with a copy sent by the Company to the
Administrative Agent) at least five days (or such shorter time as the Issuing
Lender may agree in a particular instance in its sole discretion) prior to the
proposed date of notification of renewal, the Issuing Lender shall be entitled
to authorize the automatic renewal of any Letter of Credit issued by it. Each
such request for renewal of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, in the form of an L/C Amendment
Application, and shall specify in form and detail satisfactory to the Issuing
Lender: (i) the Letter of Credit to be renewed; (ii) the proposed date of
notification of renewal of the Letter of Credit (which shall be a Business Day);
(iii) the revised expiry date of the Letter of Credit; and (iv) such other
matters as the Issuing Lender may require. The Issuing Lender shall be under no
obligation so to renew any Letter of Credit if: (A) the Issuing Lender would
have no obligation at such time to issue or amend such Letter of Credit in its
renewed form under the terms of this Agreement; or (B) the beneficiary of any
such Letter of Credit does not accept the proposed renewal of the Letter of
Credit. No Revolving Lender shall be obligated to participate in any renewal of
any Letter of Credit if such Revolving Lender would have no obligation at such
time to participate in such Letter of Credit in its renewed form under the terms
of this Agreement if such Letter of Credit were newly issued pursuant to Section
3.1. If any outstanding Letter of Credit shall provide that it shall be
automatically renewed unless the beneficiary thereof receives notice from the
Issuing Lender that such Letter of Credit shall not be renewed, and if at the
time of renewal the Issuing Lender would be entitled to authorize the automatic
renewal of such Letter of Credit in accordance with this subsection 3.2(d) upon
the request of the Company but the Issuing Lender shall not have received any
L/C Amendment Application from the Company with respect to such renewal or other
written direction by the Company with respect thereto, the Issuing Lender shall
nonetheless be permitted to allow such Letter of Credit to renew, and the
Company and the Revolving Lenders hereby authorize such renewal, and,
accordingly, the Issuing Lender shall be deemed to have received an L/C
Amendment Application from the Company requesting such renewal.
1. The Issuing Lender may, at its election (or as required by the
Administrative Agent at the direction of the Required Lenders), deliver any
notices of termination or other communications to any Letter of Credit
beneficiary or transferee, and take any other action as necessary or
appropriate, at any time and from time to time, in order to cause the expiry
date of such Letter of Credit to be a date not later than the Revolving
Termination Date.
2. This Agreement shall control in the event of any conflict with
any L/C-Related Document (other than any Letter of Credit).
1. The Issuing Lender will also deliver to the Administrative
Agent, concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or amendment
to or renewal of a Letter of Credit.
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1. Existing Letters of Credit; Risk Participations, Drawings and
Reimbursements. On and after the Closing Date, the Existing Letters of Credit
shall be deemed for all purposes, including for purposes of the fees to be
collected pursuant to subsections 3.8(a) and 3.8(c), and reimbursement of costs
and expenses to the extent provided herein, Letters of Credit outstanding under
this Agreement and entitled to the benefits of this Agreement and the other Loan
Documents, and shall be governed by the applications and agreements pertaining
thereto and by this Agreement. Each Revolving Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Issuing
Lender on the Closing Date a participation in each such Existing Letter of
Credit and each drawing thereunder in an amount equal to the product of (i) such
Revolving Lender's Revolving Percentage times (ii) the maximum amount available
to be drawn under such Letter of Credit and the amount of such drawing,
respectively. For purposes of subsection 2.1(e) and subsection 2.12(b), the
Existing Letters of Credit shall be deemed to utilize pro rata the Revolving
Commitment of each Revolving Lender.
1. Immediately upon the Issuance of each Letter of Credit in
addition to those described in subsection 3.3(a), each Revolving Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Issuing Lender a participation in such Letter of Credit and each drawing
thereunder in an amount equal to the product of (i) the Revolving Percentage of
such Revolving Lender, times (ii) the maximum amount available to be drawn under
such Letter of Credit and the amount of such drawing, respectively. For purposes
of subsection 2.1(a), each Issuance of a Letter of Credit shall be deemed to
utilize the Revolving Commitment of each Revolving Lender by an amount equal to
the amount of such participation.
1. In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Lender will
promptly notify the Company. The Company shall reimburse the Issuing Lender
prior to 10:00 a.m. (San Francisco time), on each date that any amount is paid
by the Issuing Lender under any Letter of Credit (each such date, an "Honor
Date"), in an amount equal to the amount so paid by the Issuing Lender. In the
event the Company fails to reimburse the Issuing Lender for the full amount of
any drawing under any Letter of Credit by 10:00 a.m. (San Francisco time) on the
Honor Date, the Issuing Lender will promptly notify the Administrative Agent and
the Administrative Agent will promptly notify each Revolving Lender thereof, and
the Company shall be deemed to have requested that Revolving Loans consisting of
Base Rate Loans be made by the Revolving Lenders to be disbursed on the Honor
Date under such Letter of Credit, subject to the amount of the unutilized
portion of the Revolving Commitment and subject to the conditions set forth in
Section 6.3. Any notice given by the Issuing Lender or the Administrative Agent
pursuant to this subsection 3.3(c) may be oral if immediately confirmed in
writing (including by facsimile); provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.
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1. Each Revolving Lender shall upon any notice pursuant to
subsection 3.3(c) make available to the Administrative Agent for the account of
the Issuing Lender an amount in Dollars and in immediately available funds equal
to its Revolving Percentage of the amount of the drawing, whereupon the
participating Revolving Lenders shall (subject to subsection 3.3(c)) each be
deemed to have made a Revolving Loan consisting of a Base Rate Loan to the
Company in that amount. If any Revolving Lender so notified fails to make
available to the Administrative Agent for the account of the Issuing Lender the
amount of such Revolving Lender's Revolving Percentage of the amount of the
drawing by no later than 12:00 noon (San Francisco time) on the Honor Date, then
interest shall accrue on such Revolving Lender's obligation to make such
payment, from the Honor Date to the date such Revolving Lender makes such
payment, at a rate per annum equal to the Federal Funds Rate in effect from time
to time during such period. The Administrative Agent will promptly give notice
of the occurrence of the Honor Date, but failure of the Administrative Agent to
give any such notice on the Honor Date or in sufficient time to enable any
Revolving Lender to effect such payment on such date shall not relieve such
Revolving Lender from its obligations under this Section 3.3.
1. With respect to any unreimbursed drawing that is not converted
into Revolving Loans consisting of Base Rate Loans to the Company in whole or in
part, because of the Company's failure to satisfy the conditions set forth in
Section 6.3 or for any other reason, the Company shall be deemed to have
incurred from the Issuing Lender an L/C Borrowing in the amount of such drawing,
which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at a rate per annum equal to the Base Rate plus the
Applicable Base Rate Margin plus 2% per annum, and each Revolving Lender's
payment to the Issuing Lender pursuant to subsection 3.3(d) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Revolving Lender in satisfaction of its
participation obligation under this Section 3.3.
1. Each Revolving Lender's obligation in accordance with this
Agreement to make the Revolving Loans or L/C Advances, as contemplated by this
Section 3.3, as a result of a drawing under a Letter of Credit, shall be
absolute and unconditional and without recourse to the Issuing Lender and shall
not be affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Revolving Lender may have against
the Issuing Lender, the Company or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Revolving Loan Default, a Revolving Loan
Event of Default or a Material Adverse Effect; or (iii) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing;
provided, however, that each Revolving Lender's obligation to make Revolving
Loans under this Section 3.3 is subject to the conditions set forth in Section
6.3.
1. Repayment of Participations. Upon (and only upon) receipt by
the Administrative Agent for the account of the Issuing Lender of immediately
available funds from the Company (i) in reimbursement of any payment made by the
Issuing Lender under
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the Letter of Credit with respect to which any Revolving Lender has paid the
Administrative Agent for the account of the Issuing Lender for such Revolving
Lender's participation in the Letter of Credit pursuant to Section 3.3 or (ii)
in payment of interest thereon, the Administrative Agent will pay to each
Revolving Lender, in the same funds as those received by the Administrative
Agent for the account of the Issuing Lender, the amount of such Revolving
Lender's Revolving Percentage of such funds, and the Issuing Lender shall
receive the amount of the Revolving Percentage of such funds of any Revolving
Lender that did not so pay the Administrative Agent for the account of the
Issuing Lender.
1. If the Administrative Agent or the Issuing Lender is required
at any time to return to the Company, or to a trustee, receiver, liquidator,
custodian, or any official in any Insolvency Proceeding, any portion of the
payments made by the Company to the Administrative Agent for the account of the
Issuing Lender pursuant to subsection 3.4(a) in reimbursement of a payment made
under the Letter of Credit or interest or fee thereon, each Revolving Lender
shall, on demand of the Administrative Agent, forthwith return to the
Administrative Agent or the Issuing Lender the amount of its Revolving
Percentage of any amounts so returned by the Administrative Agent or the Issuing
Lender plus interest thereon from the date such demand is made to the date such
amounts are returned by such Revolving Lender to the Administrative Agent or the
Issuing Lender, at a rate per annum equal to the Federal Funds Rate in effect
from time to time.
1. Role of the Issuing Lender. Each Revolving Lender and the
Company agree that, in paying any drawing under a Letter of Credit, the Issuing
Lender shall not have any responsibility to obtain any document (other than any
sight draft and certificates expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.
1. No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Lender shall be liable
to any Revolving Lender for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Revolving Lenders (including
the Required Lenders, as applicable); (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any L/C-Related Document.
1. The Company hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude the Company's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Lender, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section 3.6; provided,
however, anything in such clauses to the contrary notwithstanding, that the
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Company may have a claim against the Issuing Lender, and the Issuing Lender may
be liable to the Company, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by the Company which
the Company proves were caused by the Issuing Lender's willful misconduct or
gross negligence or the Issuing Lender's willful failure to pay under any Letter
of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Lender may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Lender shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
A. Obligations Absolute. The obligations of the Company under
this Agreement and any L/C-Related Document to reimburse the Issuing Lender for
a drawing under a Letter of Credit, and to repay any L/C Borrowing and any
drawing under a Letter of Credit converted into Revolving Loans, shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement and each such other L/C-Related Document under all
circumstances, including the following:
a) any lack of validity or enforceability of this Agreement or
any L/C-Related Document;
a) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Company in respect of
any Letter of Credit or any other amendment or waiver of or any consent to
departure from all or any of the L/C-Related Documents;
a) the existence of any claim, set-off, defense or other right
that the Company may have at any time against any beneficiary or any transferee
of any Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Issuing Lender or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by the
L/C-Related Documents or any unrelated transaction;
a) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; or any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit;
a) any payment by the Issuing Lender under any Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of any Letter of Credit; or any payment made by the Issuing
Lender under any Letter of
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Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of any Letter of Credit, including any arising in connection with any
Insolvency Proceeding;
a) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the obligations of the Company in respect of any
Letter of Credit; or
a) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Company or a
guarantor.
A. Cash Collateral Pledge. Upon (i) the request of the
Administrative Agent, (A) if the Issuing Lender has honored any full or partial
drawing request on any Letter of Credit and such drawing has resulted in an L/C
Borrowing hereunder, or (B) if, as of the Revolving Termination Date, any
Letters of Credit may for any reason remain outstanding and partially or wholly
undrawn, or (ii) the occurrence of the circumstances described in subsection
2.8(a) requiring the Company to Cash Collateralize Letters of Credit, then, the
Company shall immediately Cash Collateralize the Obligations in an amount equal
to the L/C Obligations.
1. Letter of Credit Fees. The Company shall pay to the
Administrative Agent for the account of each of the Revolving Lenders a letter
of credit fee with respect to the Letters of Credit equal to L/C Fee Rate of the
daily maximum amount available to be drawn of the outstanding Letters of Credit,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon Letters of Credit outstanding for that quarter as
calculated by the Administrative Agent. Such letter of credit fees shall be due
and payable quarterly in arrears on the last Business Day of each calendar
quarter during which Letters of Credit are outstanding, commencing on the first
such quarterly date to occur after the Closing Date, through the Revolving
Termination Date (or such later date upon which the outstanding Letters of
Credit shall expire), with the final payment to be made on the Revolving
Termination Date (or such later expiration date).
1. The Company shall pay to the Issuing Lender a letter of credit
fronting fee for each Letter of Credit Issued after the Closing Date by the
Issuing Lender equal to the rate set forth in the Existing Fee Letter on the
face amount (or increased face amount, as the case may be) of such Letter of
Credit. Such Letter of Credit fronting fee shall be due and payable on each date
of Issuance of a Letter of Credit.
1. The Company shall pay to the Issuing Lender from time to time
on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Lender relating to
letters of credit as from time to time in effect.
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A. Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as published by the International Chamber of Commerce
("UCP") most recently at the time of issuance of any Letter of Credit shall
(unless otherwise expressly provided in the Letters of Credit) apply to the
Letters of Credit.
I. ARTICLE
TAXES, YIELD PROTECTION AND ILLEGALITY
1. Taxes. Any and all payments by the Company to each Revolving
Lender or the Administrative Agent under this Agreement and any other Loan
Document shall be made free and clear of, and without deduction or withholding
for, any Taxes. In addition, the Company shall pay all Other Taxes.
1. The Company agrees to indemnify and hold harmless each
Revolving Lender and the Administrative Agent for the full amount of Taxes or
Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section) paid by the Revolving Lender or the
Administrative Agent and any liability (including penalties, interest, additions
to tax and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the Revolving Lender
or the Administrative Agent makes written demand therefor.
1. If the Company shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Revolving Lender or the Administrative Agent, then:
a) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Revolving Lender or the Administrative Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made;
a) the Company shall make such deductions and withholdings;
a) the Company shall pay the full amount deducted or withheld to
the relevant taxing authority or other authority in accordance with applicable
law; and
a) the Company shall also pay to each Revolving Lender or the
Administrative Agent for the account of such Revolving Lender, at the time
interest is paid, all additional amounts which the respective Revolving Lender
specifies as necessary to preserve the after-tax yield the Revolving Lender
would have received if such Taxes or Other Taxes had not been imposed.
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The Company shall not, however, be required to pay any amounts pursuant to
clause (i) of the preceding sentence to any Revolving Lender or the Issuing
Lender, as the case may be, organized under the laws of a jurisdiction outside
of the United States, unless such Revolving Lender or the Issuing Lender, as the
case may be, has provided to the Company, within sixty (60) days after the
receipt by such Revolving Lender or the Issuing Lender of a written request
therefor, either (x) a facially complete Internal Revenue Service Form 4224,
Form 1001 or Form W-8 or other applicable form, certificate or document
prescribed by the Internal Revenue Service of the United States certifying as to
such Revolving Lender's or the Issuing Lender's entitlement to an exemption
from, or reduction of, United States withholding tax on payments to be made
hereunder or under any other Loan Document or in respect of any Letter of Credit
or tax on payments to made hereunder or thereunder or (y) a letter stating that
such Revolving Lender or the Issuing Lender is unable lawfully to provide a
properly completed and executed Form 4224 or Form 1001.
1. Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Administrative Agent.
1. If the Company is required to pay additional amounts to any
Revolving Lender or the Administrative Agent pursuant to subsection (c) of this
Section, then such Revolving Lender shall use reasonable efforts (consistent
with legal and regulatory restrictions) to change the jurisdiction of its
Lending Office so as to eliminate any such additional payment by the Company
which may thereafter accrue, if such change in the judgment of such Revolving
Lender is not otherwise disadvantageous to such Revolving Lender.
1. Illegality. If any Revolving Lender determines that the
introduction of any Requirement of Law, or any change in any Requirement of Law,
or in the interpretation or administration of any Requirement of Law, has made
it unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Revolving Lender or its applicable Lending
Office to make Offshore Rate Loans, then, on notice thereof by the Revolving
Lender to the Company through the Administrative Agent, any obligation of that
Revolving Lender to make Offshore Rate Loans shall be suspended until such
Revolving Lender notifies the Administrative Agent and the Company that the
circumstances giving rise to such determination no longer exist.
1. If a Revolving Lender determines that it is unlawful to
maintain any Offshore Rate Loan, the Company shall, upon its receipt of notice
of such fact and demand from such Revolving Lender (with a copy to the
Administrative Agent), prepay in full such Offshore Rate Loans of that Revolving
Lender then outstanding, together with interest accrued thereon and amounts
required under Section 4.4, either on the last day of the Interest Period
thereof, if the Revolving Lender may lawfully continue to maintain such Offshore
Rate Loans to such day, or immediately, if the Revolving Lender may not
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lawfully continue to maintain such Offshore Rate Loan. If the Company is
required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Revolving Lender, in the
amount of such repayment, a Base Rate Loan.
1. If the obligation of any Revolving Lender to make or maintain
Offshore Rate Loans has been so terminated or suspended, the Company may elect,
by giving notice to the Revolving Lender through the Administrative Agent that
all Revolving Loans which would otherwise be made by the Revolving Lender as
Offshore Rate Loans shall be instead Base Rate Loans.
1. Before giving any notice to the Administrative Agent under
this Section, the affected Revolving Lender shall designate a different Lending
Office with respect to its Offshore Rate Loans if such designation will avoid
the need for giving such notice or making such demand and will not, in the
judgment of the Revolving Lender, be illegal or otherwise disadvantageous to
such Revolving Lender.
1. Increased Costs and Reduction of Return. If any Revolving
Lender determines that, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the compliance by that
Revolving Lender with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Revolving Lender of agreeing to make or making,
funding or maintaining any Offshore Rate Loan or participating in Letters of
Credit, or, in the case of the Issuing Lender, any increase in the cost to the
Issuing Lender of agreeing to issue, issuing or maintaining any Letter of Credit
or of agreeing to make or making, funding or maintaining any unpaid drawing
under any Letter of Credit, then the Company shall be liable for, and shall from
time to time, upon demand (with a copy of such demand to be sent to the
Administrative Agent), pay to the Administrative Agent for the account of such
Revolving Lender, additional amounts as are sufficient to compensate such
Revolving Lender for such increased costs.
1. If any Revolving Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Revolving Lender (or its Lending Office) or any corporation
controlling such Revolving Lender with any Capital Adequacy Regulation, affects
or would affect the amount of capital required or expected to be maintained by
such Revolving Lender or any corporation controlling such Revolving Lender and
(taking into consideration such Revolving Lender's or such corporation's
policies with respect to capital adequacy and such Revolving Lender's desired
return on capital) that the amount of such capital is increased as a consequence
of its Revolving Commitments, loans, credits or obligations under this
Agreement, then, upon demand of such Revolving Lender to the Company through the
Administrative
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Agent, the Company shall pay to such Revolving Lender, from time to time as
specified by such Revolving Lender, additional amounts sufficient to compensate
such Revolving Lender (or such corporation) for such increase.
B. Funding Losses. The Company shall reimburse each Revolving
Lender and hold each Revolving Lender harmless from any loss or expense which
the Revolving Lender may sustain or incur as a consequence of:
1. the failure of the Company to make on a timely basis any
payment of principal of any Offshore Rate Loan;
1. the failure of the Company to borrow, continue or convert a
Revolving Loan after the Company has given (or is deemed to have given) a Notice
of Borrowing or a Notice of Conversion/Continuation;
1. the failure of the Company to make any prepayment in
accordance with any notice delivered under Section 2.6;
1. the prepayment (including pursuant to Section 2.8) or other
payment (including after acceleration thereof) of an Offshore Rate Loan on a day
that is not the last day of the relevant Interest Period; or
1. the automatic conversion under Section 2.4 of any Offshore
Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained. For
purposes of calculating amounts payable by the Company to the Revolving Lenders
under this Section and under subsection 4.3(a), each Offshore Rate Loan made by
a Revolving Lender (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the IBOR used
in determining the Offshore Rate for such Offshore Rate Loan by a matching
deposit or other borrowing in the interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Offshore Rate Loan is
in fact so funded.
A. Inability to Determine Rates. If the Administrative Agent
determines that for any reason adequate and reasonable means do not exist for
determining the Offshore Rate for any requested Interest Period with respect to
a proposed Offshore Rate Loan, or that the Offshore Rate applicable pursuant to
subsection 2.11(a)(i) for any requested Interest Period with respect to a
proposed Offshore Rate Loan does not adequately and fairly reflect the cost to
the Revolving Lenders of funding such Revolving Loan the Administrative Agent
will promptly so notify the Company and each Revolving Lender. Thereafter, the
obligation of the Revolving Lenders to make or maintain Offshore Rate Loans,
hereunder shall be suspended until the Administrative Agent revokes such notice
in writing. Upon receipt of such notice, the
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Company may revoke any Notice of Borrowing or Notice of Conversion/Continuation
then submitted by it. If the Company does not revoke such notice, the Revolving
Lenders shall make, convert or continue the Revolving Loans, as proposed by the
Company, in the amount specified in the applicable notice submitted by the
Company, but such Revolving Loans shall be made, converted or continued as Base
Rate Loans instead of Offshore Rate Loans.
A. Substitution of Affected Lender. At any time any Revolving
Lender is an Affected Lender, the Company may replace such Affected Lender as a
party to this Agreement with one or more other bank(s) or financial
institution(s) satisfactory to the Administrative Agent (and upon notice from
the Company such Affected Lender shall assign pursuant to an Assignment and
Acceptance Agreement, and without recourse or warranty, its Revolving
Commitments, if any, its Revolving Loans, its Note, its participation in Letters
of Credit, if any, and all of its other rights and obligations hereunder to such
replacement bank(s) or other financial institution(s) for a purchase price equal
to the sum of the principal amount of the Revolving Loans so assigned, all
accrued and unpaid interest thereon, its ratable share of all accrued and unpaid
non-use fees and Letter of Credit fees, any amounts payable under Section 4.4 as
a result of such Revolving Lender receiving payment of any Offshore Rate Loan
prior to the end of an Interest Period therefor and all other obligations owed
to such Affected Lender hereunder).
A. Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article IV shall deliver to the Company (with a copy to
the Administrative Agent) a certificate setting forth in reasonable detail the
amount payable to such Lender hereunder and such certificate shall be conclusive
and binding on the Company in the absence of manifest error.
A. Survival. The agreements and obligations of the Company in
this Article IV shall survive the payment of all other Obligations.
I. ARTICLE
COLLATERAL AND GUARANTY
A. Collateral--Personal Property. The Obligations (other than the
Obligations in respect of the Term Loan which shall be secured by a second
priority lien and security interest, subject to Term Loan Permitted Liens and
Term Loan Prior Liens) shall be secured by a first lien and security interest,
subject only to Permitted Liens, in all personal property of the Company and the
Guarantors (other than NEHC) pursuant to the Security Agreement, covering the
Company's and such Guarantor's presently existing and after-acquired Inventory,
Accounts Receivable, General Intangibles, Equipment, and the other collateral
more particularly described therein and in all stock owned by the Company and
its Subsidiaries pursuant to the Pledge Agreement and the Subsidiary Pledge
Agreement; provided, however, that (i) the Company will pledge not more than 65%
of
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the stock owned in foreign Subsidiaries and (ii) the Obligations shall not be
secured by Receivables Program Assets transferred to a Receivables Subsidiary
with respect to a Qualified Receivables Transaction.
A. Mortgages. The Obligations (other than the Obligations in
respect of the Term Loan which shall be secured by a second priority lien and
security interest, subject to Term Loan Permitted Liens and Term Loan Prior
Liens) shall be secured by a first lien and security interest, subject to
Permitted Liens, in all owned real property of the Company and its Subsidiaries
(except foreign Subsidiaries) pursuant to the Mortgages. The Obligations (other
than the Obligations in respect of the Term Loan which shall be secured by a
second priority lien and security interest, subject to Term Loan Permitted Liens
and Term Loan Prior Liens) shall also be secured by a first lien and security
interest, subject to Permitted Liens, in (a) all leases of distribution centers
entered into after the date hereof, (b) all leases of distribution centers
subject to leasehold mortgages in favor of the Administrative Agent on the date
hereof, provided, in the case of the second priority lien and security interest
in respect of the Term Loan, that any necessary consent thereto has been
obtained, and (c) all leases related to the Orlando, Florida and Denver,
Colorado distribution centers, provided, in the case of the second priority lien
and security interest in respect of the Term Loan, that any necessary consent
thereto has been obtained. The Company agrees to request the lessors under
distribution center leases subject to leasehold mortgages in favor of the
Administrative Agent on the date hereof and the lessors under the Orlando,
Florida and Denver, Colorado distribution center leases to consent to the grant
of a second priority lien and security interest in respect of the Term Loan, if
such consent is required. The fee and leasehold mortgages described above are
collectively called the "Mortgages". To the extent not previously provided, the
Company agrees to provide leasehold mortgages, lenders title insurance, and
landlord's consents satisfactory to the Administrative Agent for the
distribution facilities leased by the Company from Affiliates of Opus in
Colorado, Florida, Texas and Kentucky within 120 days after the date hereof.
A. Guaranty. The Obligations shall be guaranteed by the
Guarantors pursuant to the Guaranty and the NEHC Guaranty. The Company shall
cause each Subsidiary hereafter acquired (other than a foreign Subsidiary) to
become a Guarantor and to become a party to the Security Agreement and, if it
owns stock, the Subsidiary Pledge Agreement.
A. Company Stock. The Obligations (other than the Obligations in
respect of the Term Loan which shall be secured by a second priority lien and
security interest, subject to Term Loan Permitted Liens and Term Loan Prior
Liens) shall be secured by a first lien and security interest in the stock of
the Company pursuant to the NEHC Pledge Agreement.
A. Intercreditor Agreement. All of the parties to this Agreement
hereby agree to be bound by the Intercreditor Agreement as if they were parties
thereto. No Lender or other party hereto shall assign any of its rights or
obligations under this
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Agreement to any other Person unless such other Person shall have agreed in
writing to be bound by the terms of the Intercreditor Agreement as if such
Person were a party thereto.
A. Revolving/Term Loan Intercreditor Agreement. The Revolving
Lenders and the Term Lender hereby authorize the Administrative Agent to execute
the Revolving/Term Loan Intercreditor Agreement. No Lender or other party hereto
shall assign any of its rights or obligations under this Agreement to any other
Person unless such other Person shall have agreed in writing to be bound by the
terms of the Revolving/Term Loan Intercreditor Agreement as if such Person were
a party thereto.
I. ARTICLE
CONDITIONS PRECEDENT
A. Conditions of Restatement. The amendment and restatement of
the Existing Credit Agreement and the obligation of each Lender to make its
initial Credit Extension hereunder is subject to the condition that the
Administrative Agent shall have received on or before the date of the initial
Credit Extension all of the following, in form and substance satisfactory to the
Administrative Agent and each Lender, and in sufficient copies for each Lender:
1. Credit Agreement and Notes. This Agreement and the Notes
executed by each party thereto;
1. Resolutions; Incumbency.
a) Copies of the resolutions of the board of directors of the
Company and each Subsidiary that may become party to a Loan Document or the
Consent authorizing the transactions contemplated hereby and thereby, certified
as of the Closing Date by the Secretary or an Assistant Secretary of such
Person; and
a) A certificate of the Secretary or Assistant Secretary of the
Company, and each Subsidiary that may become party to a Loan Document or the
Consent certifying the names and true signatures of the officers of the Company
or such Subsidiary authorized to execute, deliver and perform, as applicable,
this Agreement, all other Loan Documents or the Consent to be delivered by it
hereunder;
1. Organization Documents. Each of the articles or certificate of
incorporation and the bylaws of the Company and each Subsidiary party to any
Loan Document as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of the Company or such Subsidiary as of the Closing Date.
1. Legal Opinions. Opinions of Wachtell, Lipton, Rosen & Katz and
Kevin Rogan, counsel to the Company and its Subsidiaries and addressed to the
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Administrative Agent, DLJ, the Term Lender Notes Trustee and the Lenders,
substantially in the form of Exhibits E and F;
1. Certificate. A certificate signed by a Responsible Officer,
dated as of the Closing Date, stating that:
a) the representations and warranties contained in Article VII
are true and correct on and as of such date, as though made on and as of such
date;
a) no Revolving Loan Default or Revolving Loan Event of Default
exists or would result from the Credit Extension; and
a) there has occurred since the date of the applicable fiscal
year end financial statement referred to in Section 7.11 no event or
circumstance that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
1. Collateral Documents. The Collateral Documents (excluding
Mortgages of leased property), executed by the Company or the applicable
Guarantor, in appropriate form for recording, where necessary, together with:
a) copies of all UCC-1 and UCC-3 statements filed, registered or
recorded to perfect the security interests of the Administrative Agent for the
benefit of the Lenders, together with other evidence satisfactory to the
Administrative Agent that there has been filed, registered or recorded all
financing statements and other filings, registrations and recordings necessary
and advisable to perfect the Liens of the Administrative Agent for the benefit
of the Lenders in accordance with applicable law;
a) all certificates and instruments representing the pledged
Collateral, together with stock transfer powers executed in blank with
signatures guaranteed as the Administrative Agent or the Lenders may specify;
a) evidence that all other actions necessary or, in the opinion
of the Administrative Agent or the Lenders, desirable to perfect and protect the
first (or, in the case of the Term Lender only, second) priority security
interest created by the Collateral Documents have been taken;
a) funds sufficient to pay any filing or recording tax or fee in
connection with any and all UCC-1 and UCC-3 financing statements and the
Mortgages;
a) evidence that all other actions necessary or, in the opinion
of the Administrative Agent or the Lenders, desirable to perfect and protect the
first (or, in the case of the Term Lender only, second) priority Lien created by
the Collateral Documents, and to enhance the Administrative Agent's ability to
preserve and protect its interests in and access to the Collateral, have been
taken;
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1. Insurance Policies. Standard lenders' payable endorsements
with respect to the insurance policies or other instruments or documents
evidencing insurance coverage on the properties of the Company in accordance
with Section 9.6; and
2. Revolving/Term Loan Intercreditor Agreement. The
Revolving/Term Loan Intercreditor Agreement executed by each party thereto.
1. Consent. The Consent executed by each Guarantor.
1. Other Documents. Such other approvals, opinions, documents or
materials as the Administrative Agent or any Lender may reasonably request.
A. Other Conditions to Effectiveness of Restatement. The
amendment and restatement of the Existing Credit Agreement shall be subject, in
addition to the conditions set forth in Section 6.1, to the following
conditions:
1. Issuance of Term Lender Notes. At least $150,000,000 in gross
cash proceeds shall be concurrently received by the Term Lender prior to or on
the Closing Date from the issuance of the Term Lender Notes and the Term Lender
shall have concurrently made the Term Loan to the Company.
1. Governmental Approvals. All governmental, shareholder and
third party consents, and approvals necessary in connection with the financings
and equity issuances contemplated hereby and the continued operations of the
business of the Company and its Subsidiaries shall have been obtained and be in
full force and effect, in each case except for such governmental and third party
approvals which the failure to obtain would not, individually or in the
aggregate, have a Material Adverse Effect.
1. Certificate. The Company shall have delivered a Certificate of
its Chief Financial Officer to the effect that all the conditions set forth in
Sections 6.2(a) - (b) above shall have been accomplished.
1. Borrowing Base Certificate. The Company shall have delivered a
Borrowing Base Certificate as of September 4, 1999.
1. Purchase by Revolving Lenders. The Revolving Lenders shall
have purchased and sold appropriate amounts of the outstanding Revolving Loans
under the Existing Credit Agreement, to cause each Revolving Lender to hold its
Revolving Percentage of the Revolving Loans, after giving effect to this
amendment and restatement. Each Revolving Lender, which shall have its Revolving
Percentage reduced to zero, shall have no further obligations under the Existing
Credit Agreement or this Agreement. If any Revolving Lender shall suffer a loss
as a result of the effectiveness of such purchase or sale being during an
Interest Period, the Company shall reimburse such Revolving Lender the amount of
such loss. Each such Revolving Lender shall furnish the Company with a
certificate setting forth the basis for determining the amount to be paid to it
under this clause (e).
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1. Fees. The Company shall have paid all fees required by the Fee
Letter.
B. Conditions to All Credit Extensions. The obligation of each
Revolving Lender to make any Revolving Loan to be made by it (including its
initial Loan) or to continue or convert any Revolving Loan under Section 2.4 and
the obligation of the Issuing Lender to Issue any Letter of Credit (including
the initial Letter of Credit) is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date, Conversion/Continuation
Date or Issuance Date:
1. Notice, Application. The Administrative Agent shall have
received (with, in the case of the initial Revolving Loan only, a copy for each
Revolving Lender) a Notice of Borrowing or a Notice of Conversion/Continuation,
as applicable, or in the case of any Issuance of any Letter of Credit, the
Issuing Lender and the Administrative Agent shall have received an L/C
Application or L/C Amendment Application, as required under Section 3.2;
1. Continuation of Representations and Warranties. The
representations and warranties in Article VII shall be true and correct on and
as of such Borrowing Date or Conversion/Continuation Date with the same effect
as if made on and as of such Borrowing Date or Conversion/Continuation Date
(except to the extent such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct as of such earlier
date); and
1. No Existing Revolving Loan Default. No Revolving Loan Default
or Revolving Loan Event of Default shall exist or shall result from such
Borrowing or continuation or conversion.
Each Notice of Borrowing, L/C Application or L/C Amendment Application
submitted by the Company hereunder shall constitute a representation and
warranty by the Company hereunder, as of the date of each such notice and as of
each Borrowing Date, or Issuance Date, as applicable, that the conditions in
this Section 6.3 are satisfied.
I. ARTICLE
REPRESENTATIONS AND WARRANTIES TO REVOLVING LENDERS
The Company represents and warrants to the Administrative Agent and
each Revolving Lender that:
A. Corporate Existence and Power. The Company and each of its
Subsidiaries:
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1. is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
1. has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
1. is duly qualified as a foreign corporation and is licensed 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 or license; and
1. is in compliance with all Requirements of Law; except, in each
case referred to in clause (c) or clause (d), to the extent that the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
A. Corporate Authorization; No Contravention. The execution,
delivery and performance by the Company and its Subsidiaries of this Agreement
and each other Loan Document to which such Person is party, have been duly
authorized by all necessary corporate action, and do not and will not:
1. contravene the terms of any of that Person's Organization
Documents;
1. conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or
1. violate any Requirement of Law.
A. Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of this Agreement or any other Loan Document.
A. Binding Effect. This Agreement and each other Loan Document to
which the Company or any of its Subsidiaries is a party constitute the legal,
valid and binding obligations of the Company and any of its Subsidiaries to the
extent it is a party thereto, enforceable against such Person in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
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A. Litigation. Except as specifically disclosed in Schedule 7.5,
there are no actions, suits, proceedings, claims or disputes pending, or to the
best knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties which:
1. purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby or thereby; or
1. would reasonably be expected to have a Material Adverse
Effect. No injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery or performance of this Agreement
or any other Loan Document, or directing that the transactions provided for
herein or therein not be consummated as herein or therein provided.
A. No Default. No Revolving Loan Default or Revolving Loan Event
of Default exists or would result from the incurring of any Obligations by the
Company. As of the Closing Date, neither the Company nor any Subsidiary is in
default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect, or that would, if such default had
occurred after the Closing Date, create an Revolving Loan Event of Default under
subsection 12.1(e).
A. ERISA Compliance. Except as specifically disclosed in Schedule
7.7:
1. Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause the loss of such qualification.
The Company and each ERISA Affiliate has made all required contributions to any
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.
1. There are no pending or, to the best knowledge of the Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
1. (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company
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nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the
Company nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Company
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) or ERISA.
A. Use of Proceeds; Margin Regulations. The proceeds of the Loans
are to be used solely for the purposes set forth in and permitted by Section
9.12 and Section 10.7. Neither the Company nor any Subsidiary is generally
engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.
A. Title to Properties. The Company and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
A. Taxes. The Company and its Subsidiaries have filed all federal
and other material tax returns and reports required to be filed, and have paid
all federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
1. Financial Condition. (i) The audited consolidated financial
statements of the Company and its Subsidiaries dated December 26, 1998, and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for the fiscal year ended on that date and (ii) the unaudited
consolidated financial statements of the Company and its Subsidiaries dated June
26, 1999, and the related consolidated statements of income or operations, and
cash flows for the fiscal quarter ended on that date:
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, subject in the case of the June 26, 1999, statements to ordinary, good
faith year end audit adjustments;
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(i) fairly present the financial condition of the Company and its
Subsidiaries as of the date thereof and results of operations for the period
covered thereby; and
(i) except as specifically disclosed in Schedule 7.11, show all
material indebtedness and other liabilities, direct or contingent, of the
Company and its consolidated Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Contingent Obligations.
1. The Initial Financial Projections delivered to the
Administrative Agent and the Revolving Lenders prior to the execution of this
Agreement were prepared by the Company in good faith and based upon historical
financial information and assumptions the Company deems reasonable and
appropriate in light of current circumstances.
1. Since December 26, 1998, there has been no Material Adverse
Effect.
A. Environmental Matters. The Company conducts in the ordinary
course of business a review of the effect of existing Environmental Laws and
existing Environmental Claims on its business, operations and properties, and as
a result thereof the Company has reasonably concluded that, except as
specifically disclosed in Schedule 7.12, such Environmental Laws and
Environmental Claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
A. Regulated Entities. None of the Company, any Person
controlling the Company, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment Company Act of 1940. The Company is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other federal or state statute or regulation limiting its ability to incur
Indebtedness.
A. No Burdensome Restrictions. Neither the Company nor any
Subsidiary is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any Requirement of Law, which,
in the absence of a default thereunder, could reasonably be expected to have a
Material Adverse Effect.
A. Copyrights, Patents, Trademarks and Licenses, etc. The Company
or its Subsidiaries own or are licensed or otherwise have the right to use all
of the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the
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Company or any Subsidiary infringes upon any rights held by any other Person.
Except as specifically disclosed in Schedule 7.15, no claim or litigation
regarding any of the foregoing is pending or threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Company, proposed,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.
A. Subsidiaries. As of the Closing Date, the Company has no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
7.16 hereto and has no equity investments in any other corporation or entity
other than those specifically disclosed in part (b) of Schedule 7.16.
A. Insurance. Except as specifically disclosed in Schedule 7.17,
the properties of the Company and its Subsidiaries are insured with insurance
companies not Affiliates of the Company rated at least "A" by A.M. Best Company,
in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or such Subsidiary operates.
A. Full Disclosure. None of the representations or warranties
made by the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Revolving Lenders prior to the Closing Date),
contains any untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading as of
the time when made or delivered.
A. Year 2000. (a) The Company and its Subsidiaries reasonably
believe that they are taking all commercially reasonable steps to ascertain the
extent of, and to quantify and successfully address, business and financial
risks facing the Company and its Subsidiaries as a result of what is commonly
referred to as the "Year 2000 problem" (i.e., the inability of certain computer
applications to recognize correctly and perform date-sensitive functions
involving certain dates prior to and after December 31, 1999) and (b) the
Company and its Subsidiaries reasonably believe that the Year 2000 problem will
not have a Material Adverse Effect.
I. ARTICLE
[INTENTIONALLY LEFT BLANK]
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I. ARTICLE
AFFIRMATIVE COVENANTS RELATING TO REVOLVING LENDERS
So long as any Revolving Lender shall have any Revolving Commitment
hereunder, or any Revolving Loan or other Obligation (other than Obligations in
respect of the Term Loan) shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, unless the Required Lenders waive compliance in
writing:
A. Financial Statements. The Company shall deliver to the
Administrative Agent, in form and detail satisfactory to the Administrative
Agent and the Required Lenders, with sufficient copies for each Revolving
Lender:
(a) as soon as available and in any event within 30 days after the
end of each four-week fiscal period of the Company, (i) consolidated balance
sheet of the Company and its Subsidiaries as of the end of such four-week fiscal
period, (ii) consolidated statement of earnings and (commencing June, 2000) cash
flow of the Company and its Subsidiaries for such four-week fiscal period and
for the period commencing at the end of the previous four-week fiscal period and
ending with the end of such four-week fiscal period setting forth in each case a
comparison of the results with the corresponding four-week fiscal period of the
previous year and for the period from the beginning of such fiscal year,
certified by a Responsible Officer of the Company; provided that after June
2000, such reports set forth in this subsection (a) shall be delivered to the
Administrative Agent within 15 days after the end of each four-week fiscal
period; and
(a) as soon as available and in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Company, (i) consolidated balance sheet of the Company and its Subsidiaries as
of the end of such fiscal quarter, and (ii) consolidated statement of earnings
and cash flow of the Company and its Subsidiaries for such fiscal quarter and
for the period commencing at the end of the previous fiscal year and ending with
the end of such fiscal quarter setting forth in each case a comparison of the
results with the corresponding fiscal quarter of the previous year, certified by
a Responsible Officer of the Company; (iii) a letter from a Responsible Officer
of the Company explaining (A) the factors (both positive and negative) that
impacted the Company's consolidated financial performance (including as
reflected in the consolidated balance sheet, statement of earnings and cash
flow) for such fiscal quarter and (B) the variances from the most recent
financial projections provided by the Company pursuant to subsection (d) below
for such time period; and
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, a copy of the annual audit report for
such fiscal year for the Company and its Subsidiaries, including therein
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and consolidated statement of earnings and cash flow of the
Company and its Subsidiaries for such fiscal year,
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together with, in comparative form, the figures for the previous fiscal year,
certified (without any Impermissible Qualification) in a manner reasonably
acceptable to the Administrative Agent and the Required Lenders by independent
public accountants reasonably acceptable to the Administrative Agent and the
Required Lenders (the "Independent Auditor"); and
(a) as soon as available and in any event by January 31 of each
year, for the three year period commencing on the first day of that Fiscal Year,
the following pro forma projected financial information, each certified as true
and correct by a Responsible Officer of the Company to the best of such
officer's knowledge: (i) the Company's pro forma balance sheets prepared in
accordance with GAAP for the next three fiscal years and for the first thirteen
periods of the first fiscal year, and (ii) projected pro forma statements of
earnings and cash flows and other operating information for the Company for the
next three fiscal years and for the thirteen fiscal periods of the first fiscal
year, which information presents fairly, on a pro forma basis, the balance
sheets of the Company and the Company's best good faith estimate and projections
of the Company's financial position and results of operations as of the dates
and for the periods indicated.
A. Certificates; Other Information. The Company shall furnish to
the Administrative Agent, with sufficient copies for each Lender:
1. concurrently with the delivery of the financial statements
referred to in subsection 9.1(a), (i) supplier status report for such four-week
fiscal period in form reasonably satisfactory to the Administrative Agent which
shall include a list of the twenty top suppliers, with an estimate of volume (as
a percentage of consolidated cost of goods sold) per such supplier, whether any
notice of discontinuance has been given by any such supplier and, if so, for
what reason, and (ii) customer status report for such four-week fiscal period in
form reasonably satisfactory to the Administrative Agent which shall include a
list of the top ten customers, with an estimate of percentage volume (as of the
previous year) per customer, whether any notice of discontinuance has been given
and, if so for what reason, and a list of chains including the number of units
served in the current four-week fiscal period and the previous four-week fiscal
period and the percentage change;
1. concurrently with the delivery of the financial statements
referred to in subsection 9.1(c), a certificate of the Independent Auditor
stating that in making the examination necessary therefor no knowledge was
obtained of any Revolving Loan Default or Revolving Loan Event of Default,
except as specified in such certificate or that the computation of compliance
with the financial ratios and restrictions contained in Sections 10.10 through
10.13, 10.17, 10.20 and 10.22 provided to the Revolving Lenders and the
Administrative Agent does not fairly present the information set forth therein;
1. concurrently with the delivery of the financial statements
referred to in subsections 9.1(b) and (c), a Compliance Certificate executed by
a Responsible Officer (including a full calculation of status of all "baskets"
of the financial covenants);
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1. monthly within 20 days after each month a Borrowing Base
Certificate; provided that if the Effective Amount of all L/C Obligations plus
the Effective Amount of all Revolving Loans equals or exceeds 50% of the lesser
of (i) the Revolving Commitment or (ii) the Borrowing Base, the Company shall be
required to deliver to the Administrative Agent, with sufficient copies for each
Revolving Lender, a Borrowing Base Certificate (which may contain certain
estimated amounts where the actual amounts are not yet reasonably available) the
Wednesday of each week (as of the Saturday of the previous week);
1. annually, a schedule of insurance carried by the Company and
its Subsidiaries including the amounts of such insurance, deductibles and risks
covered;
1. promptly, (i) if the Company has capital stock that is
publicly traded, copies of all financial statements and reports that the Company
sends to its shareholders, and (ii) copies of all financial statements and
regular, periodical or special reports (including Forms 10K, 10Q and 8K) that
the Company or any Subsidiary may file with the SEC;
1. promptly upon receipt, copies of its accountants' management
letters;
1. concurrently with the delivery of the financial statements
referred to in subsection 9.1(b) and (c), a schedule reconciling the calculation
of adjusted EBITDA as calculated in the financial statements filed with the SEC
with the calculation of Adjusted EBITDA pursuant to this Agreement;
1. at any time (and, if the following condition is met at any
time, such information shall then be provided for one year after the time that
the following condition no longer exists) that the Effective Amount of all L/C
Obligations plus the Effective Amount of all Revolving Loans equals or exceeds
50% of the lesser of (i) the Revolving Commitment or (ii) the Borrowing Base,
such information relating to distribution center performance for the
distribution centers that the Company expects to have at the completion of its
quickservice restaurant and specialty division integration plan as the
Administrative Agent deems reasonably satisfactory, including for each
distribution center the quarterly fill rate, on-time deliveries, cubes per route
mile and cases per man hour and, for review at the Company offices but not to be
distributed, revenues, expenses and operating profit for all centers as well as
operating expense to revenue and operating expense to case ratios for each
distribution center (in each case subject to each Revolving Lender signing
reasonably acceptable confidentiality agreements); and
1. promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary as the
Administrative Agent, at the request of any Lender, may from time to time
reasonably request.
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A. Notices. The Company shall promptly notify the Administrative
Agent and each Revolving Lender:
1. of the occurrence of any Revolving Loan Default or Revolving
Loan Event of Default, and of the occurrence or existence of any event or
circumstance that the Company reasonably expects will become a Revolving Loan
Default or Revolving Loan Event of Default;
1. of any matter that has resulted or may result in a Material
Adverse Effect, including (i) breach or non-performance of, or any default
under, a Contractual Obligation of the Company or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between the Company
or any Subsidiary and any Governmental Authority; or (iii) the commencement of,
or any material development in, any litigation or proceeding affecting the
Company or any Subsidiary, including pursuant to any applicable Environmental
Laws;
1. of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Administrative Agent and each Revolving Lender a copy
of any notice with respect to such event that is filed with a Governmental
Authority and any notice delivered by a Governmental Authority to the Company or
any ERISA Affiliate with respect to such event:
a) an ERISA Event;
a) a material increase in the Unfunded Pension Liability of any
Pension Plan;
a) the adoption of, or the commencement of contributions to, any
Plan subject to Section 412 of the Code by the Company or any ERISA Affiliate;
a) the adoption of any amendment to a Plan subject to Section 412
of the Code, if such amendment results in a material increase in contributions
or Unfunded Pension Liability;
1. of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated Subsidiaries;
1. of the occurrence of any material labor dispute;
1. of the occurrence of an "Early Amortization Event," as defined
in the Pooling and Servicing Agreement; or
1. any event which will give rise to a prepayment pursuant to
Section 2.8(b).
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Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under subsection 9.3(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
A. Preservation of Corporate Existence, etc. The Company shall,
and shall cause each Subsidiary to:
1. preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation except in connection with transactions permitted by Section 10.3
and sales of assets permitted by Section 10.2;
1. preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business except
in connection with transactions permitted by Section 10.3 and sales of assets
permitted by Section 10.2;
1. use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and
1. preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation or non-renewal of which
could reasonably be expected to have a Material Adverse Effect.
A. Maintenance of Property. The Company shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in good working order and condition, ordinary wear and
tear excepted, and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
A. Insurance. The Company shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.
A. Payment of Obligations. The Company shall, and shall cause
each Subsidiary to, pay and discharge as the same shall become due and payable,
all its respective obligations and liabilities, including:
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1. all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary;
1. all lawful claims which, if unpaid, would by law become a Lien
upon its property; and
1. all indebtedness, as and when due and payable, but subject to
any subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
A. Compliance with Laws. The Company shall comply, and shall
cause each Subsidiary to comply, in all material respects with all Requirements
of Law of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
A. Compliance with ERISA. The Company shall, and shall cause each
of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
A. Inspection of Property and Books and Records. The Company
shall maintain and shall cause each Subsidiary to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Company and such Subsidiary.
The Company will (a) permit, and cause each of its Subsidiaries to permit,
access by the Administrative Agent or any Revolving Lender and its agents or
employees to the Company's and its Subsidiaries' books and records and its
respective place or places of business at intervals to be determined by the
Administrative Agent and without hindrance or delay and (b) permit, and cause
each of its Subsidiaries to permit, the Administrative Agent or any Revolving
Lender or its agents and employees to (1) inspect and perform appraisals of its
respective inventory, equipment, fixtures and real property and (2) inspect,
audit, check and make copies and/or extracts from any books, records, computer
data and records, computer programs, journals, orders, receipts, correspondence
and other data relating to its inventory, accounts receivable, contract rights,
general intangibles, equipment, fixtures and real property and any other
Collateral, or relating to any other transactions between the parties hereto and
(c) permit, and cause each of its Subsidiaries to permit, the Administrative
Agent or any Revolving Lender to discuss the Company's or such Subsidiary's
financial matters with its officers and independent public accountant (and the
Company, for itself and each of its Subsidiaries, hereby authorizes such
independent public accountant to
131
discuss such financial matters with the Administrative Agent or any Revolving
Lender or its representatives whether or not any representative of the Company
or such Subsidiary is present). As long as no Revolving Loan Event of Default or
Revolving Loan Default has occurred and is continuing, the Administrative Agent
shall give advance notice of any intent to visit a premises, and all such visits
shall be during normal business hours and made in such a way as to interfere as
little as possible with the conduct of the Company's or its Subsidiaries'
businesses. In addition to, and not by way of limitation of, the Administrative
Agent's and the Revolving Lenders' other rights under this Section, the Company
acknowledges that the Administrative Agent may obtain a new appraisal of any
Collateral (or an update of an existing appraisal) at any time that any
Obligations are outstanding if the Administrative Agent or the Required Lenders,
in its (or their) reasonable judgment, (a) determines that a new appraisal or
update of an existing appraisal is warranted as a result of a Revolving Lender's
internal credit review and evaluation of the Obligations or (b) determines that
such new appraisal or update of existing appraisal is necessary for the
Administrative Agent or the Revolving Lenders to comply with any applicable law,
regulation, guideline, decision or request (whether or not having the force of
law) of any court, regulator, or other governmental authority. Notwithstanding
anything otherwise provided in this Section, all inspections related to
Subsidiaries will be coordinated with the Company, all inspections by any
Revolving Lender will be coordinated with the Administrative Agent and all
Collateral reviews will be done by the Administrative Agent and not by a
Revolving Lender. The Company agrees that all such inspections and/or audits and
appraisals shall be at the Company's expense. Notwithstanding anything otherwise
provided in this Section, as long as no Revolving Loan Event of Default or
Revolving Loan Default has occurred or is continuing, the Company shall not be
required to reimburse the Administrative Agent or any Revolving Lender for
appraisals or Collateral reviews relating to the Company or any of its
Subsidiaries, more frequently than once each fiscal year.
A. Environmental Laws. The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.
A. Use of Proceeds. The Company shall use the proceeds of the
Revolving Loans to provide for working capital, capital expenditures and other
general corporate purposes not in contravention of any Requirement of Law or of
any Loan Document.
A. Further Assurances. Promptly upon the written request of the
Administrative Agent, or the Required Lenders, the Company shall, and shall
cause each Subsidiary to, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel certificates,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, assurances and other instruments the
Administrative Agent or the Required Lenders as the case may be, may reasonably
request from time to time in order (a) to ensure that (i) the Obligations
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with respect to the Revolving Loans are secured by substantially all assets of
the Company and (ii) the Obligations with respect to the Revolving Loans are
secured by substantially all of the assets of each Subsidiary (including,
promptly upon the acquisition or creation thereof, any Subsidiary created or
acquired after the date hereof), (b) to perfect and maintain the validity,
effectiveness and priority of any of the Loan Documents and the Liens intended
to be created thereby, and (c) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Administrative Agent and the
Revolving Lenders the rights granted or now or hereafter intended to be granted
to the Administrative Agent and the Revolving Lenders under any Loan Documents
or under any other document executed in connection therewith. Contemporaneously
with the execution and delivery of any document referred to above, the Company
shall, and shall cause each Subsidiary to, deliver all resolutions, opinions and
corporate documents as the Administrative Agent or the Required Lenders may
reasonably request to confirm the enforceability of such document and the
perfection of the security interest created thereby, if applicable.
I. ARTICLE
NEGATIVE COVENANTS RELATING TO REVOLVING LENDERS
So long as any Revolving Lender shall have any Revolving Commitment
hereunder, or any Revolving Loan or other Obligation (other than Obligations in
respect of the Term Loan) shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, unless the Required Lenders waive compliance in
writing:
A. Limitation on Liens. The Company shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
1. any Lien existing on property of the Company or any Subsidiary
on the Closing Date and set forth in Schedule 10.1 securing Indebtedness
outstanding on such date;
1. any Lien created under any Loan Document and any Lien in favor
of a Revolving Lender or its Affiliates and securing the Hedging Agreements;
1. any second priority Lien created under any Loan Document in
favor of the Term Lender;
1. Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by Section 9.7; provided that no
notice of lien has been filed or recorded under the Code;
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1. carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;
1. Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
1. Liens on the property of the Company or its Subsidiary
securing (i) the non-delinquent performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, (ii) contingent obligations
on surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business; 2. Liens
consisting of judgment or judicial attachment liens, provided that the
enforcement of such Liens is effectively stayed;
1. easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
1. Liens on assets of corporations which become Subsidiaries
after the date of this Agreement; provided, however, (i) that such Liens existed
at the time the respective corporations became Subsidiaries and were not created
in anticipation thereof and (ii) the principal amount of the Indebtedness
secured by any and all such Liens shall not at any time exceed $4,000,000;
1. purchase money security interests on any property acquired or
held by the Company or its Subsidiaries in the ordinary course of business,
securing Indebtedness incurred or assumed for the purpose of financing all or
any part of the cost of acquiring such property; provided that (i) any such Lien
attaches to such property concurrently with or within 20 days after the
acquisition thereof, (ii) such Lien attaches solely to the property so acquired
in such transaction, (iii) the principal amount of the debt secured thereby does
not exceed 100% of the cost of such property and (iv) the principal amount of
the Indebtedness secured by any and all such purchase money security interests
shall not at any time exceed $5,000,000;
1. Liens securing obligations in respect of capital leases on
assets subject to such leases, provided that such capital leases are otherwise
permitted hereunder;
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1. Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution;
1. other Liens to secure obligations, so long as the aggregate
amount secured by such Liens does not exceed $5,000,000 at any time;
1. Liens on Receivables Program Assets; and
1. Liens on assets of foreign Subsidiaries securing Indebtedness
not in excess of $10,000,000 at any time outstanding.
A. Asset Dispositions, etc. The Company will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including accounts receivable and
capital stock of Subsidiaries) to any Person, unless
1. such sale, transfer, lease, contribution or conveyance is in
the ordinary course of its business or is permitted by Section 10.3;
1. such sale, transfer, lease, contribution or conveyance is a
disposition of real estate or warehouses owned or leased on the date hereof made
within two years after the date hereof in connection with the Company's
warehouse consolidation plan;
1. with respect to any real estate or warehouses purchased after
the date hereof, such sale is pursuant to a sale-leaseback arrangement so long
as a leasehold mortgage is granted with respect thereto in form satisfactory to
the Administrative Agent;
1. with respect to any sale, transfer, lease, contribution or
conveyance which is not made in connection with the acquisition of assets by the
Company, the net book value of such assets, together with the net book value of
all other assets sold, transferred, leased, contributed or conveyed otherwise
than in the ordinary course of business by the Company or any of its
Subsidiaries pursuant to this clause since the Closing Date, does not exceed
$10,000,000;
1. with respect to any sale, transfer, lease, contribution or
conveyance (other than any sale, transfer, lease, contribution or conveyance of
assets of the ProSource national accounts division) which is made in connection
with the acquisition of assets by the Company, the net book value of such assets
does not exceed the net book value of the assets acquired by the Company in
connection with any such acquisition;
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1. such sale, transfer, lease, contribution or conveyance is of
obsolete or unuseful Equipment and the aggregate proceeds of all such sales,
transfers, leases, contributions or conveyance of such Equipment is $5,000,000
or less in any fiscal year;
1. such sale, transfer, lease, contribution or conveyance shall
be of Receivables Program Assets pursuant to a Qualified Receivables Transaction
to a Receivables Subsidiary; or
1. such sale, transfer, lease, contribution or conveyance shall
be of Receivables Program Assets pursuant to a Qualified Receivables Transaction
by a Receivables Subsidiary to a Special Purpose Vehicle.
A. Consolidations and Mergers. The Company shall not, and shall
not suffer or permit any Subsidiary to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
1. any Subsidiary may merge with the Company, provided that the
Company shall be the continuing or surviving corporation, or with any one or
more Subsidiaries; provided that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation and if any transaction shall be between
a Guarantor and a Subsidiary which is not a Guarantor, the Guarantor shall be
the continuing or surviving corporation;
1. any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise) to the Company or another Wholly-Owned
Subsidiary, which wholly-owned Subsidiary is a Guarantor if the selling
Subsidiary is a Guarantor;
1. so long as no Revolving Loan Default has occurred and is
continuing, or would occur after giving effect thereto, the Company or any of
its Subsidiaries may purchase all or substantially all of the assets of any
Person, or acquire such Person by merger, if such acquisition is approved by the
Administrative Agent and Required Lenders;
1. as permitted by Section 10.2; or
1. as permitted by Section 10.4(g).
A. Loans and Investments. The Company shall not purchase or
acquire, or suffer or permit any Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisitions, or make or commit to make any advance, loan, extension of
credit or capital contribution
136
to or any other investment in, any Person including any Affiliate of the
Company, except for:
1. investments in Cash Equivalents Investments;
1. extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
ordinary course of business;
1. in the ordinary course of business extensions of credit by the
Company to any of its Subsidiaries or by any of its Subsidiaries to another of
its Subsidiaries;
1. until such time as a Revolving Loan Default shall have
occurred and be continuing, loans and advances to Holberg made on or after the
Closing Date not to exceed $10,000,000 at any time outstanding; provided that
upon the occurrence of such a Revolving Loan Default, any outstanding loans and
advances permitted by this clause (d) must be immediately repaid in full;
1. investments in a Receivables Subsidiary, consisting of
Receivables Program Assets and Purchase Money Notes in payment for Receivables
Program Assets;
1. investments by a Receivables Subsidiary in a Special Purpose
Vehicle;
1. (i) Acquisitions (other than those permitted under Section
10.3(c)) and investments in amounts (including cash paid and Indebtedness
assumed or refinanced) not in excess of $15,000,000 per year, so long as, in the
case of an Acquisition, (A) the entity acquired had a positive operating income
for the 12 months prior to the Acquisition, (B) the entity acquired engaged only
in lines of business in which the Company is engaged, (C) in the case of a stock
Acquisition, the Acquisition is approved by the Board of Directors of the
acquired entity, and (D) giving effect to the Acquisition (x) the Company would
have been in compliance with all covenants hereof as if such Acquisition took
place on the first day of the fiscal quarter period ending at the end of the
last fiscal quarter as demonstrated by a certificate of a Responsible Officer
delivered prior to such Acquisition and (y) at least $50,000,000 of the
Revolving Commitments remain unused (it being understood that the principal
amount of Revolving Loans and the outstanding L/C Obligations shall be deemed
usage), and (ii) existing investments listed on Schedule 10.4; and
1. loans and advances to employees not to exceed $5,000,000 at
any time outstanding.
A. Limitation on Indebtedness. The Company shall not, and shall
not suffer or permit any Subsidiary to, create, incur, assume, suffer to exist,
or otherwise
137
become or remain directly or indirectly liable with respect to, any
Indebtedness, other than the following ("Permitted Indebtedness"):
1. Indebtedness incurred pursuant to this Agreement (including
the Term Loan);
1. Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 10.8;
1. Indebtedness existing on the Closing Date and set forth in
Schedule 10.5;
1. Indebtedness secured by Liens permitted by subsection 10.1(j)
in an aggregate amount outstanding not to exceed $5,000,000.
1. Subordinated Debt;
1. Indebtedness with respect to any assets acquired by the
Company or any of its Subsidiaries (or assets owned by Subsidiaries the stock of
which is acquired by the Company or any of its Subsidiaries) in existence at the
time of the acquisition of such assets or stock, which Indebtedness was not
incurred in contemplation of the acquisition; provided that such Indebtedness
does not in an aggregate amount outstanding exceed $5,000,000;
1. Capitalized Lease Obligations not in excess of $50,000,000
created in any one fiscal year and not in excess of $100,000,000 at any time
outstanding (it being understood that pursuant to Section 1.3(a) capital leases
of up to $45,000,000 in the aggregate arising out of the sale-leaseback of
distribution centers shall be treated as operating leases);
1. Other notes payable to vendors not in excess of $5,000,000 at
any time outstanding;
1. the Senior Subordinated Notes;
1. Indebtedness of foreign Subsidiaries not in excess of
$10,000,000 at any time outstanding;
1. Other Indebtedness not in excess of $5,000,000 at any time
outstanding;
1. Receivables Program Obligations, pursuant to a Qualified
Receivables Transaction;
1. the Senior Unsecured Notes; and
138
1. New Subordinated Debt in an amount not to exceed $25,000,000
in the aggregate.
A. Transactions with Affiliates. The Company will not, and will
not permit any of its Subsidiaries to, enter into, or cause, suffer or permit to
exist any arrangement or contract with any of its other Affiliates (a) unless
such arrangement or contract is fair and equitable to the Company or such
Subsidiary and is an arrangement or contract of the kind which would be entered
into by a prudent Person in the position of the Company or such Subsidiary with
a Person which is not one of its Affiliates, it being understood that any
Qualified Receivables Transaction shall be deemed to satisfy this clause (a);
(b) except (i) the arrangement between Holberg and the Company under the Tax
Sharing Agreement, and (ii) the insurance arrangement between NEHC and its
Subsidiaries and an affiliate of Holberg, the fees with respect to which shall
not exceed the usual and customary fees for such services; (c) except
arrangements or contracts which provide for investments in Affiliates of the
Company or any of its Subsidiaries to the extent such investments are permitted
pursuant to Section 10.4 provided, however, that unless a Revolving Loan Event
of Default shall have occurred and be continuing, Corporate Allocations
permitted under Section 10.11 can be paid; (d) except transactions between the
Company or its Subsidiaries on the one hand and DLJ or its Affiliates on the
other hand involving the provision of financial, investment banking, lending,
management, consulting or underwriting services by DLJ or its Affiliates;
provided that the fees payable to DLJ or its Affiliates do not exceed the usual
and customary fees of DLJ or its Affiliates, as the case may be, for such
services or the usual and customary fees of other New York investment banking
firms for such services; (e) except transactions between the Company and Holberg
involving the provision of financial, management or consulting services provided
that (i) the fees payable by the Company for such services do not exceed the
usual and customary fees for such services and (ii) the payment of any such fees
shall be subject to the consent of the Administrative Agent or, if in excess of
$2,000,000 in any fiscal year, the Required Lenders; or (f) except (i) payments
required under this Agreement to the Term Lender and (ii) payments by the
Company in respect of fees and expenses (including any underwriting discount)
relating to the Term Loan and the Term Lender Notes.
A. Use of Proceeds. The Company shall not, and shall not suffer
or permit any Subsidiary to, use any portion of the Revolving Loan proceeds or
any Letter of Credit, directly or indirectly, (i) to purchase or carry Margin
Stock, (ii) to repay or otherwise refinance indebtedness of the Company or
others incurred to purchase or carry Margin Stock, (iii) to extend credit for
the purpose of purchasing or carrying any Margin Stock or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the Exchange
Act.
A. Contingent Obligations. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
139
1. endorsements for collection or deposit in the ordinary course
of business;
1. Hedging Agreements entered into in the ordinary course of
business as bona fide hedging transactions;
1. Contingent Obligations of the Company and its Subsidiaries
existing as of the Closing Date and listed in Schedule 10.8;
1. other Contingent Obligations so long as the aggregate amount
of such Contingent Obligations outstanding at any one time does not exceed
$3,000,000;
1. Receivables Program Obligations; and
1. guarantees of the Obligations, the Senior Subordinated Notes
and the Senior Unsecured Notes.
A. Joint Ventures. The Company shall not, and shall not suffer or
permit any Subsidiary to enter into any Joint Venture, other than in the
ordinary course of business and other than as permitted by Section 10.4(g).
B. Rental Obligations. The Company will not, and will not permit
any of its Subsidiaries to, enter into at any time any arrangement which does
not create a Capitalized Lease Liability and which involves the leasing by the
Company or any of its Subsidiaries from any lessor of any real or personal
property (or any interest therein), except arrangements which, together with all
other such arrangements which shall then be in effect, will not require the
payment of an aggregate amount of rentals by the Company and its Subsidiaries in
excess of (excluding escalations resulting from a rise in the consumer price or
similar index) $67,500,000 for any fiscal year; provided, however, that any
calculation made for purposes of this Section shall exclude any amounts required
to be expended for maintenance and repairs, insurance, taxes, assessments, and
other similar charges.
A. Restricted Payments. On and at all times after the Closing
Date:
1. the Company will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any class of
capital stock (now or hereafter outstanding) of the Company or on any warrants,
options or other rights with respect to any shares of any class of capital stock
(now or hereafter outstanding) of the Company (other than dividends or
distributions payable in its common stock or warrants to purchase its common
stock or splitups or reclassifications of its stock into additional or other
shares of its common stock) or apply, or permit any of its Subsidiaries to
apply, any of its funds, property or assets to the purchase, redemption, sinking
fund or other retirement of, or agree or permit any of its Subsidiaries to
purchase or redeem, any shares of any class of capital stock (now or hereafter
outstanding) of the Company, or
140
warrants, options or other rights with respect to any shares of any class of
capital stock (now or hereafter outstanding) of the Company;
1. the Company will not, and will not permit any of its
Subsidiaries to
a) make any payment or prepayment of principal of, or make any
payment of interest on, any Subordinated Debt, the Senior Subordinated Notes,
the Senior Unsecured Notes or the Term Loan on any day other than the stated,
scheduled date for such payment or prepayment set forth in the documents and
instruments memorializing such Subordinated Debt, the Senior Subordinated Notes,
or the Senior Unsecured Notes, or which would violate the subordination
provisions of such Subordinated Debt or the Senior Subordinated Notes; or
a) redeem, purchase or defease any Subordinated Debt, Senior
Unsecured Notes, the Senior Subordinated Notes or the Term Loan;
1. except as otherwise permitted under this Section, the Company
will not make any payment to NEHC or Holberg, including without limitation, in
respect of Corporate Allocations and will not make any payment with respect to
annual management fees; and
1. the Company will not, and will not permit any Subsidiary to,
make any deposit for any of the foregoing purposes;
provided, however, that, unless immediately before or after giving effect
thereto, any Revolving Loan Event of Default shall have occurred and be
continuing, the Company may declare, pay or make payments in respect of
a) Corporate Allocations during any fiscal year of the Company in
an aggregate amount not to exceed $5,000,000 in any fiscal year;
a) Payments with respect to the insurance arrangements permitted
pursuant to Section 10.6(b)(ii);
a) Payments permitted pursuant to Section 10.6(e);
a) Payments under the Tax Sharing Agreement; and
a) commencing after January 11, 2003, payments of dividends in
amounts not greater than interest payable by NEHC on its $100,387,000 12 %
Senior Discount Notes so long as (A) the Company would be in pro forma
compliance with all covenants hereunder, as if such dividends were paid on the
last day of the last fiscal quarter ended before such proposed payment and (B)
the proceeds of the dividends shall be applied to such interest on such Senior
Discount Notes.
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A. Minimum Interest Coverage. The Company will not permit the
Interest Coverage Ratio for any Computation Period to be less than the ratio set
forth below opposite the period in which such Computation Period ends:
Period Ratio
------ -----
The Closing Date through the next to last day of the fourth fiscal 1.25 to 1.0
quarter of 2000
The last day of the fourth fiscal quarter of 2000 through the next 1.30 to 1.0
to last day of the first fiscal quarter of 2001
The last day of the first fiscal quarter of 2001 through the next to 1.35 to 1.0
last day of the second fiscal quarter of 2001
The last day of the second fiscal quarter of 2001 through the next 1.50 to 1.0
to last day of the second fiscal quarter of 2002
The last day of the second fiscal quarter of 2002 and thereafter 1.75 to 1.0
A. Maximum Leverage. The Company will not permit the Leverage
Ratio at any fiscal quarter end to exceed the following ratios during the
following periods:
Period Ratio
------ -----
The last day of the fourth fiscal quarter of 1999 through the next 3.50 to 1.0
to last day of the fourth fiscal quarter of 2000
The last day of the fourth fiscal quarter of 2000 through the next 3.25 to 1.0
to last day of the second fiscal quarter of 2001
The last day of the second fiscal quarter of 2001 and thereafter 3.00 to 1.0
A. ERISA. The Company shall not, and shall not suffer or permit
any of its ERISA Affiliates to: (a) engage in a prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably expected to result in liability of the Company
in an aggregate amount in excess of $5,000,000 or (b) engage in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
A. Modification of Certain Agreements. The Company will not
consent to any amendment, supplement or other modification of any of the terms
or provisions contained in, or applicable to, the Tax Sharing Agreement, this
Agreement in respect of any provisions applicable to the Term Loan or any
document or instrument evidencing or applicable to any Subordinated Debt, the
Senior Subordinated Notes or the Senior Unsecured Notes other than any
amendment, supplement or other modification which extends the date or reduces
the amount of any required repayment or redemption.
142
A. Negative Pledges, Restrictive Agreements, etc. The Company
will not, and will not permit any of its Subsidiaries to, enter into any
agreement (excluding this Agreement, any other Loan Document and any agreement
governing any Indebtedness permitted either by clause (c), clause (i) or clause
(m) or clause (n) of Section 10.5 as in effect on the Closing Date or by either
of clause (d) or clause (f) or clause (o) of Section 10.5 as to the assets
financed with the proceeds of such Indebtedness) prohibiting
1. the creation or assumption of any Lien upon its properties,
revenues or assets (other than Receivables Program Assets), whether now owned or
hereafter acquired, or the ability of the Company or any Subsidiary to amend or
otherwise modify this Agreement or any other Loan Document; or
1. the ability of any Subsidiary (other than a Receivables
Subsidiary) to make any payments, directly or indirectly, to the Company by way
of dividends, advances, repayments of loans or advances, reimbursements of
management and other intercompany charges, expenses and accruals or other
returns on investments, or any other agreement or arrangement which restricts
the ability of any Subsidiary (other than a Receivables Subsidiary) to make any
payment, directly or indirectly, to the Company.
A. Maximum Capital Expenditures. The Company will not permit the
aggregate amount of all Capital Expenditures made by the Company and its
Subsidiaries to exceed $75,000,000 in the period from May 21, 1998, through
December 31, 1998, $50,000,000 in fiscal year 1999 and $40,000,000 in any fiscal
year thereafter; provided; that the amounts so permitted in any year shall be
reduced by expenses associated with the J.D. Edwards computer conversion added
to Adjusted EBITDA pursuant to clause (g) of the definition of "Adjusted
EBITDA"; provided, further that in addition to the foregoing Capital
Expenditures, the Company and its Subsidiaries may make Capital Expenditures
aggregating from the date hereof not in excess of $25,000,000 in connection with
real estate and warehouse construction projects (net of proceeds of sales of
such projects with respect to which all Capital Expenditures were made after May
21, 1998); and provided, further, that if the Company and its Subsidiaries do
not expend the full amount scheduled to be permitted in any period, the amount
not so expended may be carried over for expenditures in the next fiscal year but
not after such next fiscal year.
A. Change in Business. The Company shall not, and shall not
suffer or permit any Subsidiary to, engage in any material line of business
substantially different from those lines of business carried on by the Company
and its Subsidiaries on the date hereof.
A. Accounting Changes. The Company shall not, and shall not
suffer or permit any Subsidiary to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Company or of any Subsidiary.
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A. Restructuring Costs. The Company shall not, and shall not
suffer or permit any Subsidiary to, incur Restructuring Costs in excess of the
following amounts in the following periods:
Period Amount
------ ------
Fiscal year 1999 $175,000,000
Fiscal year 2000 $ 25,000,000
Fiscal Year 2001 $ 10,000,000
Each fiscal year thereafter $ 5,000,000
provided, however, that if the Company and its Subsidiaries do not incur the
full amount of restructuring costs scheduled to be permitted in any such
period, the amount not so incurred may be carried over for incurrence in the
next period but not after such next period.
A. Receivables Facility. The Company and its Subsidiaries shall
not amend or modify, or permit the amendment or modification of, any provision
of a Receivables Document if, as a result of such amendment or modification:
1. a Receivables Subsidiary would not be required to apply all
funds available to it (after giving effect to the allocation of funds to
reserves required under the terms of the Receivables Documents and to the
payment of interest, principal and other amounts owed under the Receivables
Documents) to pay the purchase price for Receivables (including any deferred
portion of the purchase price); or
1. the degree of recourse to the Company or its Subsidiaries
under or in the respect of the Receivables Documents is increased in any
material respect.
Notwithstanding anything to the contrary contained in this Section, any
changes to the Receivables Documents which relate to the Company's and/or any
other Receivables Seller's servicing or origination of Receivables Program
Assets shall be permitted.
I. ARTICLE
COVENANTS RELATING TO TERM LOAN
So long as the Term Loan shall remain outstanding:
A. [INTENTIONALLY LEFT BLANK]
A. Asset Sales. The Company shall not, and shall not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale other than transfers
of Term Loan
144
Receivables to a Term Loan Receivables Subsidiary in connection with a
Receivables Transaction unless:
(1) the Company (or its Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the fair
market value (evidenced by a resolution of the Board of Directors of the Company
set forth in an Officers' Certificate delivered to the Trustee) of the assets or
Equity Interests issued or sold or otherwise disposed of; and
(1) at least 80% of the consideration therefor received by the
Company or its Restricted Subsidiary is in the form of cash. For purposes of
this provision each of the following shall be deemed to be cash:
(a) any liabilities (as shown on the Company's or the Company's
Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Term Loan or any guarantee thereof) that
are assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Company or such Restricted Subsidiary from
further liability, and
(a) any securities, notes or other obligations received by the
Company or such Restricted Subsidiary from such transferee that are converted by
the Company or such Restricted Subsidiary into cash within 180 days (to the
extent of the cash received).
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option:
(a) to permanently repay obligations in respect of the Revolving
Loans or to pay other first priority secured Debt (and, in either case, to
correspondingly permanently reduce commitments with respect thereto in the case
of revolving borrowings); or
(a) to the acquisition of a controlling interest in another
business, the making of a capital expenditure or the acquisition of other
long-term assets, in each case, in a Permitted Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce the obligations in respect of the Revolving Loans or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Agreement.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the first sentence of this paragraph will be deemed to constitute
"Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $15,000,000 the
Company shall make an offer to the Term Lender (an "Asset Sale Offer") to repay
the
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maximum Accreted Value of the Term Loan that may be funded with of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the Accreted
Value thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of repayment. To the extent that the aggregate amount of the
Term Loan offered to be repaid pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. Upon completion of such offer to repay, the amount of Excess
Proceeds shall be reset at zero.
A. Impairment of Liens. The Company shall not, and the Company
shall not permit any Restricted Subsidiary to, take or knowingly or negligently
omit to take, any action which action or omission might or would have the result
of materially impairing the Term Loan Liens granted by the Term Lender with
respect to this Agreement, the other Loan Documents, and the Collateral for the
benefit of the Term Lender Notes Trustee and the holders of the Term Lender
Notes and the Term Loan Liens granted by the Company with respect to the
Collateral for the benefit of the Term Lender. Except as permitted by this
Agreement and the Loan Documents, the Company shall not, and shall not permit
any Restricted Subsidiary to, grant to any Person other than the Administrative
Agent, for the benefit of the Administrative Agent and the Lenders, any interest
whatsoever in any of the Collateral.
A. Restricted Payments. From and after the date hereof the
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of its or any of its Restricted Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with any
merger or consolidation involving the Company) or to the direct or indirect
holders of the Company or any of its Restricted Subsidiaries' Equity Interests
in their capacity as such (other than dividends or distributions payable in the
Company's Equity Interests (other than Disqualified Stock));
(1) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any of its Equity Interests or those of any direct or
indirect parent of the Company;
(1) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Debt that is equal with or
subordinated to the Term Loan (other than the Term Loan), except scheduled
payments of interest or principal at Stated Maturity of such Debt; or
(1) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being collectively referred
to as "Restricted Payments"), unless, at the time of and after giving effect to
such Restricted Payment:
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(a) no Term Loan Default or Term Loan Event of Default shall have
occurred and be continuing or would occur as a consequence thereof; and
(a) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Debt pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of Section 11.5; and
(a) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Term Loan Subsidiaries
after the date hereof (excluding Restricted Payments permitted by clause (2) of
the next succeeding paragraph), is less than the sum of
(1) 50% of the Company's Term Loan Consolidated Net
Income for the period (taken as one accounting period) from
the beginning of the first fiscal quarter commencing after the
date hereof to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such
Term Loan Consolidated Net Income for such period is a
deficit, less 100% of such deficit): plus
(2) 100% of the aggregate net cash proceeds received
by the Company from the issue or sale since the date hereof of
Equity Interests (other than our Disqualified Stock) or of
Disqualified Stock or debt securities that have been converted
into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a
Term Loan Subsidiary of the Company and other than
Disqualified Stock or convertible debt securities that have
been converted into Disqualified Stock), plus
(3) to the extent that any Restricted Investment that
was made after the date hereof is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (a) the cash
return of capital with respect to such Restricted Investment
(less the cost of disposition, if any) and (b) the initial
amount of such Restricted Investment, plus
(4) if any Unrestricted Subsidiary (a) is
redesignated as a Restricted Subsidiary, the fair market value
of such redesignated Subsidiary (as determined in good faith
by the Board of Directors of the Company) as of the date of
its redesignation or (b) pays any cash dividends or cash
distributions to the Company or any of its
147
Restricted Subsidiaries, 50% of any such cash dividends or
cash distributions made after the date of the Indenture.
The foregoing provisions shall not prohibit:
(a) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions this Section;
(a) the redemption, repurchase, retirement, defeasance or other
acquisition of any equal or subordinated Debt or Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially concurrent
sale or issuance (other than to a Restricted Subsidiary of the Company) of,
other Equity Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (c)(2) of the preceding paragraph;
(a) the defeasance, redemption, repurchase or other acquisition of
equal or subordinated Debt with the net cash proceeds from an incurrence of
Permitted Refinancing Debt;
(a) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its Equity Interests on a pro rata basis;
(a) the declaration or payment of dividends to NEHC for expenses
incurred by NEHC or Holberg in its capacity as a holding company that are
attributable to the Company's operations and those of its Restricted
Subsidiaries, including, without limitation:
(a) customary salary, bonus and other benefits payable to
officers and employees of NEHC or Holberg,
(b) fees and expenses paid to members of the Board of
Directors of NEHC or Holberg,
(c) general corporate overhead expenses of NEHC or Holberg,
(d) foreign, federal, state or local tax liabilities paid by
NEHC or Holberg,
(e) management, consulting or advisory fees paid to Holberg
not to exceed $4,000,000 in any fiscal year, and
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(f) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of NEHC or Holberg held by
any member of NEHC's or the Company's (or any of the Company's
Restricted Subsidiaries') management pursuant to any management equity
subscription agreement or stock option agreement in effect as of the
date of the Indenture; provided, however, the aggregate amount paid
pursuant to the foregoing clauses (a) through (f) does not exceed
$7,000,000 in any fiscal year;
(a) Investments in any Person (other than in the Company or a Term
Loan Wholly-Owned Subsidiary of the Company that is a Restricted Subsidiary)
engaged in a Permitted Business in an amount not to exceed $5,000,000;
(a) other Investments in Unrestricted Subsidiaries having an
aggregate fair market value, taken together with all other Investments made
pursuant to this clause (7) that are at that time outstanding, not to exceed
$2,000,000;
(a) Permitted Investments;
(a) payments to NEHC or Holberg pursuant to any tax sharing
agreement among Holberg and other members of the affiliated corporations of
which Holberg is the common parent;
(a) optional and mandatory prepayments of any obligations relating
to the Revolving Loans or other senior secured Debt allowed to be incurred
pursuant to Section 11.5; or
(a) other Restricted Payments in an aggregate amount not to exceed
$10,000,000.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Term Loan Default; provided that in no event shall the business currently
operated by any Restricted Subsidiary be transferred to or held by an
Unrestricted Subsidiary. For purposes of making such determination, all
outstanding Investments by the Company and its Restricted Subsidiaries (except
to the extent repaid in cash) in the Term Loan Subsidiary so designated shall be
deemed to be Restricted Payments at the time of such designation and shall
reduce the amount available for Restricted Payments under the first paragraph of
this covenant. All such outstanding Investments shall be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation (as determined in good faith by the Board of
Directors of the Company). Such designation shall only be permitted if such
Restricted Payment would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
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The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or its Term Loan
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined in good
faith by the Board of Directors of the Company whose resolution with respect
thereto shall be delivered to the Term Lender Notes Trustee; such determination
shall be based upon an opinion or appraisal issued by an accounting, appraisal
or investment banking firm of national standing if such fair market value
exceeds $10,000,000. Not later than the date of making any Restricted Payment,
the Company shall deliver to the Term Lender an Officers' Certificate stating
that such Restricted Payment is permitted and setting forth the basis upon
which the calculations required by this Section were computed, together with a
copy of any fairness opinion or appraisal required under this Section.
A. Incurrence of Debt and Issuance of Preferred Stock. The
Company shall not, and shall not permit any of its Term Loan Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Debt (including Acquired Debt) and the Company shall
not issue any Disqualified Stock and shall not permit any of its Term Loan
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company may incur Debt (including Acquired Debt) or issue shares of Disqualified
Stock if the Fixed Charge Coverage Ratio for its most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Debt is incurred or such
Disqualified Stock is issued would have been at least 2.0 to 1.0, determined on
a pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Debt had been incurred, or the Disqualified
Stock had been issued, as the case may be, at the beginning of such four-quarter
period.
The provisions of the first paragraph of this covenant shall not apply
to the incurrence of any of the following items of Debt (collectively,
"Permitted Debt"):
(1) the incurrence by the Company and its Restricted Subsidiaries
of Debt represented by the Senior Subordinated Notes, Senior Notes and the
guarantees thereof, respectively;
(1) the incurrence by the Company and any of its Restricted
Subsidiaries of Debt and letters of credit under Credit Facilities (excluding
Debt permitted by clause (4) below) in an aggregate principal amount at any one
time outstanding under this clause (2) (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the Company
and its Restricted Subsidiaries thereunder) not to exceed $225,000,000 plus the
Term Loan Borrowing Base;
(1) the incurrence by the Company and its Restricted Subsidiaries
of the Existing Debt;
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(1) the incurrence by the Company and the Restricted Subsidiaries
of Debt represented by the Term Loan;
(1) the incurrence by the Company or any of its Restricted
Subsidiaries of Debt represented by Term Loan Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used in our business
or such Restricted Subsidiary (whether through the direct purchase of assets or
the Capital Stock of any Person owning such assets), in an aggregate principal
amount not to exceed $125,000,000;
(1) the incurrence by the Company or any of its Restricted
Subsidiaries of Debt in connection with the acquisition of assets or a new
Restricted Subsidiary; provided that such Debt was incurred by the prior owner
of such assets or such Restricted Subsidiary prior to such acquisition by the
Company or one of its Term Loan Subsidiaries and was not incurred in connection
with, or in contemplation of, such acquisition by the Company or one of its Term
Loan Subsidiaries; provided further that the principal amount (or accreted
value, as applicable) of such Debt, together with any other outstanding Debt
incurred pursuant to this clause (6), does not exceed $5,000,000;
(1) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Debt in exchange for, or the net proceeds
of which are used to refund, refinance or replace Debt that was permitted to be
incurred under the first paragraph of this covenant or clauses (1), (3), (4),
(5), (6), (7), or (17) hereof;
(1) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Debt between or among the Company and any of its
Term Loan Wholly-Owned Subsidiaries that are Restricted Subsidiaries; provided,
however, that:
(a) if the Company is the obligor on such Debt and the payee is
not a Subsidiary Guarantor, such Debt is expressly subordinated to the prior
payment in full in cash of the Term Loan; and
(a) (1) any subsequent issuance or transfer of Equity Interests
that results in any such Debt being held by a Person other than the Company or
its Term Loan Wholly-Owned Subsidiary that is a Restricted Subsidiary and (2)
any sale or other transfer of any such Debt to a Person that is not either the
Company or a Term Loan Wholly-Owned Subsidiary that is a Restricted Subsidiary
of the Company shall be deemed, in each case, to constitute an incurrence of
such Debt by the Company or the Company's Restricted Subsidiary, as the case may
be;
(1) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing
or hedging currency risk
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or interest rate risk with respect to any floating rate Debt that is permitted
by the terms of this Agreement to be outstanding;
(1) the guarantee by the Company or any of its Restricted
Subsidiaries of the Company's Debt or Debt of a Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this covenant;
(1) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Debt ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Debt by a Restricted Subsidiary of the Company;
(1) Asset Sales in the form of Receivables Transactions;
(1) Debt incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including without limitation
to letters of credit in respect to workers' compensation claims or
self-insurance, or other Debt with respect to reimbursement type obligations
regarding workers' compensation claims; provided, however, that upon the drawing
of such letters of credit or the incurrence of such Debt, such obligations are
reimbursed within 30 days following such drawing or incurrence;
(1) Debt arising from the Company's agreements or those of a
Restricted Subsidiary of the Company providing for indemnification, adjustment
of purchase price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, asset or Term Loan Subsidiary,
other than guarantees of Debt incurred by any Person acquiring all or any
portion of such business, assets or Term Loan Subsidiary for the purpose of
financing such acquisition; provided that the maximum aggregate liability of all
such Debt shall at no time exceed 50% of the gross proceeds actually received by
the Company or its Restricted Subsidiary in connection with such disposition;
(1) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any of its Restricted
Subsidiaries in the ordinary course of business;
(1) guarantees incurred in the ordinary course of business in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding; and
(1) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Debt, including Attributable Debt incurred after the
date hereof, in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding, including all Permitted Refinancing Debt incurred to
refund, refinance or replace any other Debt incurred pursuant to this clause
(17), not to exceed $25,000,000.
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For purposes of determining compliance with this covenant, in the event
that an item of Debt meets the criteria of more than one of the categories of
Permitted Debt described in clauses (1) through (17) above or is entitled to be
incurred pursuant to the first paragraph of this covenant, the Company shall, in
its sole discretion, classify such item of Debt in any manner that complies with
this covenant and such item of Debt will be treated as having been incurred
pursuant to only one of such clauses or pursuant to the first paragraph hereof.
Accrual of interest and the accretion of accreted value will not be
deemed to be an incurrence of Debt for purposes of this covenant.
A. Liens. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer
to exist or become effective any Term Loan Lien (other than Term Loan Permitted
Liens) upon any of its property or assets, now owned or hereafter acquired.
A. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of its
Restricted Subsidiary to:
(a) pay dividends or make any other distributions to the Company
or any of the Company's Restricted Subsidiaries on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits,
or
(a) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(1) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(1) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of
(a) Existing Debt as in effect on the date hereof,
(a) this Agreement as in effect as of the date thereof, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive in the aggregate (as
determined by the Administrative Agent in good faith) with respect to such
dividend and other payment restrictions than those contained in this Agreement
as in effect on the date thereof,
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(a) any applicable law, rule, regulation or order,
(a) any instrument governing Debt or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Debt was incurred in
connection with or in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired, provided that, in the case of Debt, such Debt was permitted by the
terms of the Term Loan portion of this Agreement to be incurred,
(a) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices,
(a) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described in
clause (3) above on the property so acquired,
(a) Permitted Refinancing Debt, provided that the material
restrictions contained in the agreements governing such Permitted Refinancing
Debt are no more restrictive than those contained in the agreements governing
the Debt being refinanced,
(a) contracts for the sale of assets, including without limitation
customary restrictions with respect to a Term Loan Subsidiary pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Term Loan Subsidiary,
and
(a) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.
A. Merger, Consolidation, or Sale of Assets. The Company shall
not consolidate or merge with or into (whether or not the Company is the
surviving corporation), or sell, assign, transfer, convey or otherwise dispose
of all or substantially all of its properties or assets in one or more related
transactions, to another corporation, Person or entity unless
(1) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(1) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale,
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assignment, transfer, conveyance or other disposition shall have been made
assumes all of the Company's obligations under this Agreement in a form
acceptable to the Term Lender;
(1) immediately after such transaction no Term Loan Default or
Term Loan Event of Default exists; and
(1) except in the case of a merger of the Company with or into a
Term Loan Wholly-Owned Subsidiary that is a Restricted Subsidiary of the
Company, the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made will,
at the time of such transaction and after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Debt pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
11.5. The Company shall not, directly or indirectly, lease all or substantially
all of its properties or assets, in one or more related transactions, to any
person.
A. Transactions with Affiliates. The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Term Loan Affiliate (each of the foregoing, an
"Affiliate Transaction") involving consideration in excess of $3,000,000 unless
(1) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and
(1) the Company delivers to the Term Lender
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$7,500,000, a resolution of the Board of Directors of the Company set forth in
an Officers' Certificate certifying that such Affiliate Transaction complies
with clause (1) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors of the Company
and
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving either aggregate consideration in excess of
$15,000,000 or an aggregate consideration in excess of $10,000,000 where there
are no disinterested members of the Board of Directors, an opinion as to the
fairness to the Company or such Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
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The following items shall not be deemed to be Affiliate Transactions
and, therefore, shall not be subject to the provisions of the prior paragraph:
(a) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the Company's or the Company's Restricted Subsidiaries' past practice,
(a) transactions between or among the Company and/or the Company's
Restricted Subsidiaries,
(a) Permitted Investments and Restricted Payments that are
permitted by Section 11.4,
(a) customary loans, advances, fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any of its Restricted Subsidiaries,
(a) annual management fees paid to Holberg not to exceed
$5,000,000 in any one year,
(b) transactions pursuant to any contract or agreement in effect
on the date hereof as the same may be amended, modified or replaced from time to
time so long as any such amendment, modification or replacement is no less
favorable to the Company and its Restricted Subsidiaries than the contract or
agreement as in effect on the date hereof or is approved by a majority of the
disinterested directors of the Company,
(a) transactions between the Company or its Restricted
Subsidiaries on the one hand, and Holberg on the other hand, involving the
provision of financial or advisory services by Holberg; provided that fees
payable to Holberg do not exceed the usual and customary fees for similar
services,
(a) transactions between the Company or its Restricted
Subsidiaries on the one hand, and DLJ (including for the purposes of this
section, its Affiliates) on the other hand, involving the provision of
financial, advisory, placement or underwriting services by DLJ; provided that
fees payable to DLJ do not exceed the usual and customary fees of DLJ for
similar services,
(a) the insurance arrangements between NEHC and its Term Loan
Subsidiaries and an Affiliate of Holberg that are not less favorable to the
Company or any of its Term Loan Subsidiaries than those that are in effect on
the date hereof provided such arrangements are conducted in the ordinary course
of business consistent with past practices, and
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(a) payments under any tax sharing agreement in effect among
Holberg and other members of the affiliated group of corporations of which it is
the common parent.
A. Sale and Leaseback Transactions. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, enter into any sale and
leaseback transaction; provided that the Company may enter into a sale and
leaseback transaction if
(1) the Company could have
(a) incurred Debt in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to Section 11.5, and
(a) incurred a Term Loan Lien to secure such Debt pursuant to
Section 11.6,
(1) the gross cash proceeds of such sale and leaseback transaction
are at least equal to the fair market value (as determined in good faith by the
Board of Directors of the Company and set forth in an Officers' Certificate
delivered to the Term Lender Notes Trustee) of the property that is the subject
of such sale and leaseback transaction and
(1) the transfer of assets in such sale and leaseback transaction
is permitted by, and the Company applies the proceeds of such transaction in
compliance with Section 11.2.
A. Limitation on Issuances and Sales of Capital Stock of
Wholly-Owned Restricted Subsidiaries. The Company
(1) shall not, and shall not permit any of its Term Loan
Wholly-Owned Subsidiaries that is a Restricted Subsidiary to, transfer, convey,
sell, lease or otherwise dispose of any Capital Stock of any Term Loan
Wholly-Owned Subsidiary to any Person (other than the Company or a Term Loan
Wholly-Owned Subsidiary that is a Restricted Subsidiary), unless
(a) such transfer, conveyance, sale, lease or other disposition is
of all the Capital Stock of such Term Loan Wholly-Owned Subsidiaries that is a
Restricted Subsidiary, and
(a) the cash Net Proceeds from such transfer, conveyance, sale,
lease or other disposition are applied in accordance with Section 11.2, and
(1) shall not permit any Term Loan Wholly-Owned Subsidiary that is
a Restricted Subsidiary to issue any of its Equity Interests (other than, if
necessary, shares of
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our Capital Stock constituting directors' qualifying shares) to any Person other
than to the Company or a Term Loan Wholly-Owned Subsidiary that is a Restricted
Subsidiary.
A. Limitations on Issuances of Guarantees of Debt. The Company
will not permit any of its Restricted Subsidiaries, directly or indirectly, to
Guarantee or pledge (other than pledges of assets permitted under Section 11.6)
any assets to secure the payment of any other Debt unless either such Restricted
Subsidiary simultaneously executes and delivers an agreement supplemental to
this Agreement providing for the Guarantee of the payment of the Term Loan by
such Restricted Subsidiary, which Guarantee shall be senior to or pari passu
with such Restricted Subsidiary's Guarantee of or pledge to secure such other
Debt.
Notwithstanding the foregoing, any such Guarantee by a Restricted
Subsidiary of the Term Loan shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon any sale,
exchange or transfer, to any Person not a Term Loan Affiliate of the Company's,
of all of the Company's stock in, or all or substantially all the assets of,
such Restricted Subsidiary, which sale, exchange or transfer is made in
compliance with the applicable provisions of the Term Loan portion of this
Agreement. The form of such Guarantee will be attached as an exhibit to this
Agreement.
A. Business Activities. The Company shall not, and shall not
permit any Restricted Subsidiary to, engage in any business other than a
Permitted Business, except to such extent as would not be material to the
Company and its Restricted Subsidiaries taken as a whole.
B. Additional Guarantees.
(1) If the Company or any of its Restricted Subsidiaries shall,
after the date hereof transfer or cause to be transferred, including by way of
any Investment, in one or a series of transactions (whether or not related), any
assets, businesses, divisions, real property or equipment having an aggregate
fair market value (as determined in good faith by the Board of Directors of the
Company) in excess of $1,000,000 to any Restricted Subsidiary that is not a
Foreign Subsidiary,
(1) if the Company or any of its Restricted Subsidiaries shall
acquire another Restricted Subsidiary other than a Foreign Subsidiary having
total assets with a fair market value (as determined in good faith by the Board
of Directors of the Company) in excess of $1,000,000, or
(1) if any Restricted Subsidiary other than a Foreign Subsidiary
shall incur Acquired Debt in excess of $1,000,000, then, in each case, the
Company shall, at the time of such transfer, acquisition or incurrence,
(a) cause such transferee, acquired Restricted Subsidiary or
Restricted Subsidiary incurring Acquired Debt (if not then a Subsidiary
Guarantor) to execute a
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Guarantee of the Company's obligations relating to the Term Loan in the form set
forth herein,
(a) deliver to the Administrative Agent an Opinion of Counsel, in
form reasonably satisfactory to the Administrative Agent, that such Guarantee is
a valid, binding and enforceable obligation of such transferee, acquired
Restricted Subsidiary or Restricted Subsidiary incurring Acquired Debt, subject
to customary exceptions for bankruptcy, fraudulent conveyance and equitable
principles. Notwithstanding the foregoing, the Company or any of its Restricted
Subsidiaries may make a Restricted Investment in any Term Loan Wholly-Owned
Subsidiaries that is a Restricted Subsidiary without compliance with this
covenant provided that such restricted investment is permitted by Section 11.4.
A. Reports. So long as the Term Loan is outstanding, the Company
shall furnish to the Term Lender within the time periods specified in the SEC's
rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company was required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants; and
(1) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company was required to file such reports.
In addition, the Company shall, for so long as the Term Loan remains
outstanding, furnish to the Term Lender, upon its request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
A. Mortgage Amendments. On the Closing Date, the Company is
delivering to the Term Lender the Mortgage Amendments. The Company shall upon
demand pay all recording charges, recording taxes, fees, and title insurance
premiums and charges necessary or appropriate and incurred by the Term Lender or
their counsel to record the Mortgage Amendments and obtain fully paid title
insurance, in favor of the Administrative Agent, insuring the Mortgage
Amendments as modifications to the Mortgages previously recorded and showing no
exceptions to title other than Permitted Liens. Such title insurance shall be
issued by a title insurance company satisfactory to Administrative Agent, shall
be on terms satisfactory to Administrative Agent, and shall provide coverage
insuring each Mortgage (as amended by the relevant Mortgage Amendment) in an
amount equal to twice the amount of such coverage immediately prior to the
Closing Date. The Company shall sign any affidavits, tax returns, and other
forms that may be reasonably requested of it in connection with the recordation
of the Mortgage Amendments. If any Liens exist that are not Permitted Liens,
then the Company shall promptly remove such Liens. Upon request by the Term
Lender or the Administrative Agent, the Company shall promptly amend,
re-execute, modify, supplement, or otherwise make changes to the Mortgage
Amendments (including any descriptive information and
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acknowledgments) as necessary to assure that they can be validly recorded or as
otherwise required by any title insurance company. The parties shall reasonably
cooperate to minimize any recording taxes payable on the recording of the
Mortgage Amendments, but all such arrangements shall be subject to approval by
counsel to the Term Lender.
I. ARTICLE
REVOLVING LOAN EVENTS OF DEFAULT
A. Revolving Loan Event of Default. Any of the following shall
constitute a "Revolving Loan Event of Default":
1. Non-Payment. The Company fails to pay, (i) when and as
required to be paid herein, any amount of principal of any Revolving Loan or of
any L/C Obligation or (ii) within 5 days after the same becomes due, any
interest, fee or any other amount payable hereunder or under any other Loan
Document; or
1. Representation or Warranty. Any representation or warranty by
the Company, NEHC, or any Subsidiary made or deemed made herein (other than the
representations and warranties made in Article VIII), in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, NEHC, any Subsidiary or any Responsible Officer,
furnished at any time under this Agreement (other than certificates, documents
or financial or other statements furnished solely to the Term Lender or to the
Administrative Agent and the Term Lender), or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
1. Specific Defaults. The Company fails to perform or observe any
term, covenant or agreement contained in any of Section 9.1, 9.2, 9.3 or 9.9 or
in Article X; or
1. Other Defaults. The Company, any Subsidiary party thereto or
NEHC fails to perform or observe any other term or covenant contained in this
Agreement (other than those in Article XI) or any other Loan Document, and such
default shall continue unremedied for a period of 20 days after the date upon
which written notice thereof is given to the Company by the Administrative Agent
or any Revolving Lender; or
1. Cross-Default. NEHC, the Company or any Subsidiary (other than
a Receivables Subsidiary) (i) fails to make any payment (including any mandatory
prepayment or redemption) in respect of any Indebtedness (including Indebtedness
under the Term Loan) or Contingent Obligation having an aggregate principal
amount (including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement) of
more than $5,000,000 when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise)
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and such failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure; or (ii) fails to
perform or observe any other condition or covenant, or any other event shall
occur or condition exist, under any agreement or instrument relating to any such
Indebtedness (including Indebtedness under the Term Loan) or Contingent
Obligation, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity, or such Contingent Obligation to
become payable or cash collateral in respect thereof to be demanded or; or
1. Insolvency; Voluntary Proceedings. The Company, NEHC or any
Subsidiary other than a Receivables Subsidiary (i) ceases or fails to be
solvent, or generally fails to pay, or admits in writing its inability to pay,
its debts as they become due, subject to applicable grace periods, if any,
whether at stated maturity or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course; (iii) commences any Insolvency Proceeding with
respect to itself; or (iv) takes any action to effectuate or authorize any of
the foregoing; or
1. Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company, NEHC or any Subsidiary
other than a Receivables Subsidiary, or any writ, judgment, warrant of
attachment, execution or similar process, is issued or levied against a
substantial part of the Company's, NEHC's or any Subsidiary's properties, and
any such proceeding or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be released,
vacated or fully bonded within 60 days after commencement, filing or levy; (ii)
the Company, NEHC or any Subsidiary other than a Receivables Subsidiary admits
the material allegations of a petition against it in any Insolvency Proceeding,
or an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company, NEHC or any Subsidiary other than a
Receivables Subsidiary acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its property or
business; or
1. ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Company under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$5,000,000 unless the ERISA Event is a contribution failure sufficient to give
rise to a Lien under Section 302(f) of ERISA in which case the dollar liability
threshold does not apply; the aggregate amount of Unfunded Pension Liability
among all Pension Plans at any time exceeds $5,000,000; or (iii) the Company or
any ERISA Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
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liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of $5,000,000; or
1. Monetary Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Company, NEHC or any Subsidiary other than a Receivables Subsidiary involving in
the aggregate a liability (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage) as to any single or
related series of transactions, incidents or conditions, of $2,000,000 or more,
and the same shall remain unsatisfied, unvacated and unstayed pending appeal for
a period of 10 days after the entry thereof; or
1. Non-Monetary Judgments. Any non-monetary judgment, order or
decree is entered against the Company, NEHC or any Subsidiary which does or
would reasonably be expected to have a Material Adverse Effect, and there shall
be any period of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
1. Change of Control. There occurs any Change of Control, Term
Loan Change of Control or any "Change of Control" or like event as defined in
any other indenture or other agreement or instrument pursuant to which
Indebtedness or equity is issued or Receivables are sold by NEHC, the Company or
any Subsidiary; or
1. Impairment of Security, etc. Any Loan Document, or any Lien
granted thereunder in favor of the Revolving Lenders, shall (except in
accordance with its terms), in whole or in part, terminate, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
of the Company, NEHC or any Subsidiary party thereto; the Company, NEHC, or any
Subsidiary shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or any Lien granted
in favor of the Revolving Lenders securing any Liability shall, in whole or in
part, cease to be a perfected first priority Lien; provided, however, no
Revolving Loan Event of Default hereunder shall exist to the extent (A) the
failure of such Lien to remain effective is due solely to the negligence of the
Administrative Agent or the Revolving Lenders or (B) the failure to maintain
perfection of such Lien is due solely to the failure of the Administrative Agent
to file appropriate Uniform Commercial Code continuation statements; or
1. NEHC. NEHC shall guarantee any Indebtedness of any Affiliate,
other than the Company and the Subsidiaries of the Company.
A. Remedies. If any Revolving Loan Event of Default occurs, the
Administrative Agent shall, at the request of, or may, with the consent of, the
Required Lenders,
1. declare the commitment of each Revolving Lender to make
Revolving Loans and any obligation of the Issuing Lender to Issue Letters of
Credit to be terminated, whereupon such commitments and obligation shall be
terminated;
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1. declare an amount equal to the maximum aggregate amount that
is or at any time thereafter may become available for drawing under any
outstanding Letters of Credit (whether or not any beneficiary shall have
presented, or shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be immediately due
and payable, and declare the unpaid principal amount of all outstanding
Revolving Loans, all interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under any other Loan Document to be immediately
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Company; and
1. exercise on behalf of itself and the Revolving Lenders all
rights and remedies available to it and the Revolving Lenders under the Loan
Documents or applicable law;
provided, however, that upon the occurrence of any event specified in
subsection (f) or (g) of Section 12.1 (in the case of clause (i) of subsection
(g) upon the expiration of the 60-day period mentioned therein), the obligation
of each Revolving Lender to make Revolving Loans and any obligation of the
Issuing Lender to Issue Letters of Credit shall automatically terminate and the
unpaid principal amount of all outstanding Revolving Loans and all interest
thereon and other amounts as aforesaid shall automatically become due and
payable without further act of the Administrative Agent, the Issuing Lender or
any Revolving Lender.
A. Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
A. Article XII for the Exclusive Benefit of Revolving Lenders and
Issuing Lender. In the interest of clarity, the parties hereby agree and
acknowledge that the provisions of this Article are for the exclusive benefit of
the Revolving Lenders and the Issuing Lender and that the provisions of this
Article do not apply to the Term Lender in any manner whatsoever.
I. ARTICLE
TERM LOAN EVENTS OF DEFAULT
A. Term Loan Events of Default. Any of the following shall
constitute a "Term Loan Event of Default":
1. default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Term Loan;
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1. default in payment when due of principal of or premium, if
any, on the Term Loan;
1. failure by the Company to comply with the provisions described
under Sections 2.9, 11.2 or 11.8 hereof;
1. failure by the Company for 30 days after notice from the
Administrative Agent or the Term Lender to comply with the provisions described
under Sections 11.4 or 11.5 hereof;
1. failure by the Company for 60 days after notice from the
Administrative Agent or the Term Lender to comply with any of its other
agreements relating to the Term Loan portion of this Agreement;
1. default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any Debt
for money borrowed by the Company or any of its Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Subsidiaries) whether such Debt
or Guarantee now exists, or is created after the date hereof, which default (a)
is caused by a failure to pay principal of or premium, if any, or interest on
such Debt prior to the expiration of the grace period provided in such Debt on
the date of such default (a "Payment Default") or (b) results in the
acceleration of such Debt prior to its express maturity and, in each case, the
principal amount of any such Debt, together with the principal amount of any
other such Debt under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $15,000,000 or more;
1. failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $5,000,000, which judgments are not paid,
discharged or stayed for a period of 60 days;
1. The Company or any of its Significant Subsidiaries or any
group of Term Loan Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
a) Commences a voluntary case,
a) Consents to the entry of an order for relief against it in an
involuntary case,
a) Consents to the appointment of a custodian of it or for all or
substantially all of its property,
a) Makes a general assignment for the benefit of its creditors,
or
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a) Generally is not paying its debts as they become due; or
1. A court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
a) Is for relief against the Company or any of its Significant
Subsidiaries or any group of Term Loan Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary case;
a) Appoints a custodian of the Company or any of its Significant
Subsidiaries or any group of Term Loan Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries or any group of
Term Loan Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
a) Orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Term Loan Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days. The term "Custodian" means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
1. the Term Loan Liens securing the Term Loan shall, at any time,
cease to be in full force and effect for any reason (other than by operation of
this Agreement or the Collateral Documents) other than the satisfaction in full
of all Obligations with respect to the Term Loan and discharge of the Term Loan
portion of this Agreement, or any Term Loan Lien securing the Term Loan shall be
declared invalid or unenforceable or the Term Lender, the Company or any Term
Loan Subsidiary Guarantor shall assert, in any pleading in any court of
competent jurisdiction, that any such Term Loan Lien is invalid or
unenforceable.
A. Acceleration. If any Term Loan Event of Default occurs and is
continuing, the Term Lender may declare the Accreted Value of the Term Loan to
be due and payable immediately. Notwithstanding the foregoing, in the case of a
Term Loan Event of Default as described in (h) and (i) of Section 13.1 hereof,
the Term Loan will become due and payable without further action or notice.
In the case of any Term Loan Event of Default occurring by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to prepay the Term Loan
pursuant to the optional prepayment redemption provisions of Section 2.7
hereof, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law upon the acceleration of
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the Term Loan. If a Term Loan Event of Default occurs prior to September 15,
2003 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
prepayment of the Term Loan prior to September 15, 2003 set forth in Section
2.7, then the amount payable in respect of the Term Loan for purposes of this
paragraph for each of the twelve-month periods beginning on September 15 of the
years indicated below shall be set forth below, expressed as percentages of the
Accreted Value that would otherwise be due but for the provisions of this
sentence, plus accrued and unpaid interest and Liquidated Damages, if any, to
the date of payment:
Year Percentage
1999 112.0%
2000 110.5%
2001 109.0%
2002 107.5%
A. Other Remedies. Subject to the provisions of the
Revolving/Term Loan Intercreditor Agreement, if a Term Loan Event of Default
occurs and is continuing, the Term Lender (or the Administrative Agent upon the
direction of the Term Lender) may pursue any available remedy to collect the
payment of principal, premium, if any, interest and Liquidated Damages, if any,
on the Term Loan or to enforce the performance of any provision of this
Agreement.
The Administrative Agent or the Term Lender may maintain a proceeding
even if they do not possess any of the notes evidencing the Term Loan or do not
produce any of them in the proceeding. A delay or omission by the Administrative
Agent or the Term Lender in exercising any right or remedy accruing upon a Term
Loan Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Term Loan Event of Default. All remedies are
cumulative to the extent permitted by law.
The Company shall deliver to the Term Lender annually a statement
regarding compliance with this Agreement, and the Company shall upon becoming
aware of any Term Loan Default or Term Loan Event of Default, deliver to the
Administrative Agent a statement specifying such Term Loan Default or Term Loan
Event of Default.
A. Waiver of Past Defaults. The Term Lender by notice to the
Administrative Agent may waive any existing Term Loan Default or Term Loan Event
of Default and its consequences under this Agreement (including any acceleration
(other than an automatic acceleration resulting from a Term Loan Event of
Default under clause (h) or (i) of Section 13.1 hereof)) except a continuing
Term Loan Default or Term Loan Event of Default in the payment of interest on,
or the principal of, the Term Loan (other than as a result of an acceleration),
which shall require the consent of all of the holders of the Term Lender Notes
then outstanding.
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A. Control by the Term Lender. Subject to the provisions of the
Revolving/Term Loan Intercreditor Agreement, the Term Lender may direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Administrative Agent or exercising any trust power conferred on
it. However, (i) the Administrative Agent may refuse to follow any direction
that conflicts with law or this Agreement and that the Administrative Agent
determines may involve the Administrative Agent in personal liability, and (ii)
the Administrative Agent may take any other action deemed proper by the
Administrative Agent which is not inconsistent with such direction. Subject to
the provisions of Article XIV hereof, in case a Term Loan Event of Default shall
occur (which shall not be cured), the Administrative Agent shall be required, in
the exercise of its power, to use the degree of care of a prudent person in the
conduct of its own affairs. Notwithstanding any provision to the contrary in
this Agreement, the Administrative Agent is under no obligation to exercise any
of its rights or powers under this Agreement at the request of the Term Lender,
unless the Term Lender shall offer to the Administrative Agent security and
indemnity satisfactory to it against any loss, liability or expense.
A. Limitation on Suits. Subject to the provisions of the
Revolving/Term Loan Intercreditor Agreement, the Term Lender may pursue a remedy
with respect to this Agreement only if:
1. The Term Lender gives to the Administrative Agent written
notice of a continuing Term Loan Event of Default or the Administrative Agent
receives such notice from the Company;
1. The Term Lender makes a written request to the Administrative
Agent to pursue the remedy;
1. The Term Lender offers and, if requested, provides to the
Administrative Agent indemnity satisfactory to the Administrative Agent against
any loss, liability or expense;
1. The Administrative Agent does not comply with the request
within 60 days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
1. During such 60-day period the Term Lender does not give the
Administrative Agent a direction inconsistent with the request.
A. Rights of Term Lender to Receive Payment. Notwithstanding any
other provision of this Agreement, the right of the Term Lender to receive
payment of principal, premium, if any, interest, and Liquidated Damages, if any,
on the Term Loan, on or after the respective due dates expressed in this
Agreement (including in connection with an Offer to Purchase), or to bring suit
for the enforcement of any such payment on or after
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such respective dates, shall not be impaired or affected without the consent of
the Term Lender.
A. Collection Suit by Administrative Agent. If a Term Loan Event
of Default specified in Section 13.1(a) or (b) hereof occurs and is continuing,
the Administrative Agent is authorized to recover judgment in its own name and
as Administrative Agent of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Term Loan and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent, its agents and
counsel.
A. Article XIII for the Exclusive Benefit of Term Lender. In the
interest of clarity, the parties hereby agree and acknowledge that the
provisions of this Article are for the exclusive benefit of the Term Lender and
that the provisions of this Article do not apply to the Revolving Lenders or the
Issuing Lender in any manner whatsoever.
I. ARTICLE
THE ADMINISTRATIVE AGENT
1. Appointment and Authorization. Each Lender hereby irrevocably
(subject to Section 14.9) appoints, designates and authorizes the Administrative
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, nor
shall the Administrative Agent have or be deemed to have 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 the
Administrative Agent.
1. The Issuing Lender shall act on behalf of the Revolving
Lenders with respect to any Letters of Credit Issued by it and the documents
associated therewith until such time and except for so long as the
Administrative Agent may agree at the request of the Required Lenders to act for
such Issuing Lender with respect thereto; provided, however, that the Issuing
Lender shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Article with respect to any acts taken or omissions
suffered by the Issuing Lender in connection with Letters of Credit Issued by it
or proposed to be Issued by it and the application and agreements for letters of
credit
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pertaining to the Letters of Credit as fully as if the term "Administrative
Agent," as used in this Article, included the Issuing Lender with respect to
such acts or omissions and (ii) as additionally provided in this Agreement with
respect to the Issuing Lender.
A. Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
A. Liability of Administrative Agent. None of the Agent-Related
Persons shall (i) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct) or (ii) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by the Company or
any Subsidiary or Affiliate of the Company, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall 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 the
Company or any of the Company's Subsidiaries or Affiliates.
1. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement 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 the Company), independent accountants and
other experts selected by the Administrative Agent. The Administrative 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 as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or all Lenders as required herein) and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all of the Lenders.
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1. For purposes of determining compliance with the conditions
specified in Section 6.1, each Revolving Lender that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent by the Administrative Agent to
such Revolving Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Revolving Lender unless such Revolving Lender has provided
written notice to the Administrative Agent of its lack of consent, approval or
satisfaction.
A. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Administrative Agent for the account of the
Lenders, unless the Administrative Agent shall have received written notice from
a Lender or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." The
Administrative Agent will promptly notify the Revolving Lenders or the Term
Lender, as the case may be, of its receipt of any such notice. Subject to
Section 14.13, the Administrative Agent shall take such action with respect to
such Revolving Loan Default or Revolving Loan Event of Default as may be
requested by the Required Lenders in accordance with Article XII (or in the case
of a Term Loan Default or Term Loan Event of Default, such action as may be
requested by the Term Lender in accordance with Article XIII); provided,
however, that unless and until the Administrative Agent has received any such
request, 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 or in the best interest of the
Revolving Lenders or the Term Lender, as the case may be.
A. Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Administrative Agent hereinafter taken, including any review of the
affairs of the Company and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Company and its Subsidiaries, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Company hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person 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 investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and
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other documents expressly herein required to be furnished to the Lenders by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the possession
of any of the Agent-Related Persons.
A. Indemnification of Administrative Agent. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Company and without limiting the obligation of the Company to do
so), pro rata, from and against any and all Indemnified Obligations; provided,
however, that no Lender shall be liable for the payment to the Agent-Related
Persons of any portion of such Indemnified Obligations resulting solely from
such Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse the Administrative Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to the
extent that the Administrative Agent is not reimbursed for such expenses by or
on behalf of the Company. The undertaking in this Section shall survive the
payment of all Obligations hereunder and the resignation or replacement of the
Administrative Agent.
A. Administrative Agent in Individual Capacity. Bank of America
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with the Company and its Subsidiaries and Affiliates as though Bank of America
were not the Administrative Agent or Bank of America were not the Issuing Lender
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Administrative Agent shall
be under no obligation to provide such information to them. With respect to its
Revolving Loans, Bank of America shall have the same rights and powers under
this Agreement as any other Revolving Lender and may exercise the same as though
it were not the Administrative Agent or the Issuing Lender.
A. Successor Agent. The Administrative Agent may, and at the
request of the Required Lenders shall, resign as Administrative Agent upon 30
days' notice to the Lenders. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Revolving Lenders a
successor agent for the Revolving Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after
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consulting with the Revolving Lenders and the Company, a successor agent from
among the Revolving Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Administrative Agent and the term "Administrative
Agent" shall mean such successor agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article and Sections 15.4 and 15.5
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. If no successor agent
has accepted appointment as Administrative Agent by the date which is 30 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 perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, Bank of
America may not be removed as the Administrative Agent at the request of the
Required Lenders unless Bank of America shall also simultaneously be replaced as
"Issuing Lender" hereunder pursuant to documentation in form and substance
reasonably satisfactory to Bank of America. Notwithstanding the foregoing
however, if at any time the Obligations of the Company in respect of the
Revolving Loans and Letters of Credit and the Revolving Commitments shall be
terminated, the Administrative Agent may, and at the request of the Term Lender
Notes Trustee shall, resign as Administrative Agent and the Term Lender Notes
Trustee or such other Person as shall be agreed upon by the Term Lender and the
Company shall become the successor Administrative Agent. Without limiting the
foregoing, the Administrative Agent may at any time resign as administrative
agent for the Term Lender and remain as administrative agent for the Revolving
Lenders; in such event, the Term Lender Notes Trustee or such other Person as
shall be agreed upon by the Term Lender and the Company shall become
administrative agent for the Term Lender and shall exercise the rights,
privileges and duties of the Administrative Agent with respect to the Term
Lender and the Term Loan hereunder and under the other Loan Documents; provided
that, so long as any Obligations in respect of the Revolving Loans are
outstanding, the Administrative Agent for the Revolving Lenders shall continue
to act as the agent for all of the Lenders with respect to the perfection of the
Lenders' security interest in possessory collateral and the two Administrative
Agents will execute such bailment or other agreements as are necessary or
desirable to effectuate the foregoing.
1. Withholding Tax. If any Revolving Lender is a "foreign
corporation, partnership or trust" within the meaning of the Code and such
Revolving Lender claims exemption from, or a reduction of, U.S. withholding tax
under Sections 1441 or 1442 of the Code or if any Revolving Lender claims
exemption from withholding tax pursuant to Section 871(h) or 881(c) of the Code,
such Revolving Lender agrees with and in favor of the Administrative Agent, to
deliver to the Administrative Agent:
a) if such Revolving Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, properly
completed IRS Form 1001
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before the payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during which
interest may be paid under this Agreement;
a) if such Revolving Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Revolving Lender, two
properly completed and executed copies of IRS Form 4224 before the payment of
any interest is due in the first taxable year of such Revolving Lender and in
each succeeding taxable year of such Revolving Lender during which interest may
be paid under this Agreement, and IRS Form W-9;
a) in the case of any Revolving Lender that is exempt from
withholding tax pursuant to Section 881(h) or 881(c) of the Code, properly
completed IRS Form W-8 or any applicable successor form before the payment of
any interest is due; and
a) such other form or forms as may be required under the Code or
other laws of the United States as a condition to exemption from, or reduction
of, United States withholding tax.
Such Revolving Lender agrees to promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
1. If any Revolving Lender claims exemption from, or reduction
of, withholding tax under a United States tax treaty by providing IRS Form 1001
and such Revolving Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of the Company to such
Revolving Lender, such Revolving Lender agrees to notify the Administrative
Agent of the percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Revolving Lender. To the extent of such
percentage amount, the Administrative Agent will treat such Revolving Lender's
IRS Form 1001 as no longer valid.
1. If any Revolving Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Administrative Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of the Company to such Revolving Lender, such Revolving Lender
agrees to undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.
1. If any Revolving Lender is entitled to a reduction in the
applicable withholding tax, the Administrative Agent may withhold from any
interest payment to such Revolving Lender an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other
documentation required by
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subsection (a) of this Section are not delivered to the Administrative Agent,
then the Administrative Agent may withhold from any interest payment to such
Revolving Lender not providing such forms or other documentation an amount
equivalent to the applicable withholding tax.
1. If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for the account of any
Revolving Lender (because the appropriate form was not delivered, was not
properly executed, or because such Revolving Lender failed to notify the
Administrative Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Revolving Lender shall indemnify the Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Administrative Agent under this
Section, together with all costs and expenses (including Attorney Costs). The
obligation of the Revolving Lenders under this subsection shall survive the
payment of all Obligations and the resignation or replacement of the
Administrative Agent.
1. Collateral Matters. The Administrative Agent is authorized on
behalf of all the Lenders; without the necessity of any notice to or further
consent from the Lenders, from time to time to take any action with respect to
any Collateral or the Loan Documents which may be necessary to perfect and
maintain perfected the security interest in and Liens upon the Collateral
granted pursuant to the Loan Documents.
a) The Lenders irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral upon termination of the Revolving
Commitments and payment in full of all Loans and all other obligations known to
the Administrative Agent and payable under this Agreement or any other Loan
Document; constituting property sold or to be sold or disposed of as part of or
in connection with any disposition permitted hereunder; constituting property in
which the Company or any Subsidiary owned no interest at the time the Lien was
granted or at any time thereafter; constituting property leased to the Company
or any Subsidiary under a lease which has expired or been terminated in a
transaction permitted under this Agreement or is about to expire and which has
not been, and is not intended by the Company or such Subsidiary to be, renewed
or extended; consisting of an instrument evidencing Indebtedness or other debt
instrument, if the indebtedness thereby has been paid in full; with the consent
of the Required Lenders, upon the sale of such Collateral; upon the incurrence
of Indebtedness by the Company and its Subsidiaries secured by any Collateral,
which the Company has represented that it is permitted to incur hereunder and,
except in connection with the financing of a purchase or lease of such
Collateral, the proceeds of which the Company has represented it will apply as
set forth in Section 11.2 hereof as if such financing were an Asset Sale; or if
approved, authorized or ratified in writing by the Required Lenders or, if
required by Section 15.1(e), all the Lenders. Upon request by the Administrative
Agent at any time,
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the Lenders will confirm in writing the Administrative Agent's authority to
release particular types or items of Collateral pursuant to this subsection
14.11(b).
A. [INTENTIONALLY LEFT BLANK]
A. Senior Debt. The Administrative Agent shall be permitted,
subject to the provisions of the Revolving/Term Loan Intercreditor Agreement, to
act on the sole instructions of the Required Lenders without the instruction of
the Term Lender.
I. ARTICLE
MISCELLANEOUS
A. Amendments and Waivers. No amendment or waiver of any
provision of this Agreement, any other Loan Document or the Intercreditor
Agreement, and no consent with respect to any departure by the Company, NEHC or
any applicable Subsidiary therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders (or by the Administrative Agent at
the written request of the Required Lenders) and the Company and acknowledged by
the Administrative Agent, and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such waiver, amendment, or consent shall, unless in
writing and signed by all the Revolving Lenders (and with respect to clause (e)
only, the Term Lender) and the Company and acknowledged by the Administrative
Agent, do any of the following:
1. increase or extend the Revolving Commitment of any Revolving
Lender (or reinstate any Revolving Commitment terminated pursuant to Section
12.2);
1. reduce the amount of, postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment or prepayment of principal,
interest, fees or other amounts due to the Revolving Lenders (or any of them)
hereunder or under any other Loan Document or amend the application of payments
with respect thereto;
1. reduce the principal of, or the rate of interest specified
herein on any Revolving Loan, or (subject to clause (ii) below) any fees or
other amounts payable hereunder or under any other Loan Document on any
Revolving Loan or Letter of Credit;
1. change the percentage of the Revolving Commitments or of the
aggregate unpaid principal amount of the Revolving Loans which is required for
the Revolving Lenders or any of them to take any action hereunder;
1. release all or any substantial part of the Collateral in a
manner not permitted by this Agreement or release any Guarantor (unless the
Guarantor is being sold
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or otherwise disposed of in a transaction permitted by this Agreement) or amend
the Revolving/Term Loan Intercreditor Agreement as it relates to the priorities
of different secured creditors in the Collateral;
1. extend any Letter of Credit expiration date to a date beyond
the Revolving Termination Date; or
1. amend this Section, or Section 2.14, or any provision herein
providing for consent or other action by all Revolving Lenders;
and, provided further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Lender in addition to the Required Lenders or
all the Revolving Lenders, as the case may be, affect the rights or duties of
the Issuing Lender under this Agreement or any L/C-Related Document relating to
any Letter of Credit Issued or to be Issued by it, (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Required Lenders or all the Revolving Lenders, as the case may
be, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document, and (iii) the Fee Letters may be amended,
or rights or privileges thereunder waived, in a writing executed by the parties
thereto and; provided, further, that, at the Company's request, the
Administrative Agent shall, without the consent of any Lender, release the
security interest of the Administrative Agent and the Lenders in any property
subject to Capitalized Lease Obligations permitted under Section 10.5(g); and
provided, further, that if at any time the Obligations of the Company in
respect of the Revolving Loans and Letters of Credit shall have been paid in
full and the Revolving Commitments shall have terminated, anything in this
Section referring to "Revolving Lender(s)" or the "Required Lenders" shall be
substituted by the "Term Lender," any references to "Revolving Loan(s)" or
"Letter of Credit" shall be substituted by the "Term Loan," and any reference
to "Required Lenders" shall be substituted by "Term Lender." Notwithstanding
the foregoing provisions of this Section, no provisions of Articles V
(Collateral and Guaranty), XI (Covenants Relating to Term Loan) and XIII(Term
Loan Events of Default) and Sections 1.2, 2.1(b), 2.2 (only to the extent
relating to the Term Loan or the Term Lender), 2.3(b), 2.7, 2.9, 2.10(b),
2.11(a)(ii), 2.11(b)(ii), 2.11(c)(ii), 2.13 (second sentence only), 2.14 (first
sentence, second clause of the third sentence and fourth sentence), 6.1 (only
to the extent relating to the Term Loan or the Term Lender), 6.2 (only to the
extent relating to the Term Loan or the Term Lender), 15.1 (parenthetical clause
on the ninth line thereof, clause (e), this sentence and the next sentence
only), 15.2 (only to the extent relating to the Term Loan or the Term Lender),
15.3 (only to the extent relating to the Term Loan or the Term Lender), 15.4(b)
(only to the extent relating to the Term Loan or the Term Lender), 15.5 (only to
the extent relating to the Term Loan or the Term Lender), 15.6 (only to the
extent relating to the Term Loan or the Term Lender), 15.7 (only to the extent
relating to the Term Loan or the Term Lender), 15.8(g), 15.9 (only to the extent
relating to the Term Loan or the Term Lender), 15.12 (only to the extent
relating to the Term Loan or the Term Lender), 15.13 (only to the extent
relating to the Term Loan or the Term Lender), 15.14 (only to the extent
relating to the Term Loan or the Term Lender), 15.15 (only to the extent
relating to
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the Term Loan or the Term Lender), 15.16 (only to the extent relating to the
Term Loan or the Term Lender), 15.17 (only to the extent relating to the Term
Loan or the Term Lender), 15.18 (only to the extent relating to the Term Loan or
the Term Lender) and 15.19 (only to the extent relating to the Term Loan or the
Term Lender) (and no defined terms used in any of the foregoing articles and
sections, but only to the extent used with respect to the Term Loan or the Term
Lender) may be waived or amended without the prior written consent of the Term
Lender. Nothing in this Section 15.1 shall limit the Revolving Lenders rights
under Section 10.15 hereof.
1. Notices. All notices, requests and other communications shall
be in writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Company by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on Schedule 15.2 and (ii) shall be followed
promptly by delivery of a hard copy original thereof) and mailed, faxed or
delivered to the address or facsimile number specified for notices on Schedule
15.2; or, as directed to the Company or the Administrative Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and as directed to any other party, at such other address as shall be
designated by such party in a written notice to the Company and the
Administrative Agent.
1. All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II, III or XIV shall not be effective until actually
received by the Administrative Agent, and notices to the Issuing Lender pursuant
to Article III shall not be effective until actually received by the Issuing
Lender at the address specified for the Issuing Lender on Schedule 15.2.
1. Any agreement of the Administrative Agent and the Lenders
herein to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Company. The Administrative Agent and the
Lenders shall be entitled to rely on the authority of any Person purporting to
be a Person authorized by the Company to give such notice and the Administrative
Agent and the Lenders shall not have any liability to the Company or other
Person on account of any action taken or not taken by the Administrative Agent
or the Lenders in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans and L/C Obligations shall not be
affected in any way or to any extent by any failure by the Administrative Agent
and the Lenders to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Administrative Agent and the Lenders of a
confirmation which is at variance with the terms understood by the
Administrative Agent and the Lenders to be contained in the telephonic or
facsimile notice.
A. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right,
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remedy, power or privilege hereunder, 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.
A. Costs and Expenses. The Company shall:
1. whether or not the transactions contemplated hereby are
consummated, pay or reimburse Bank of America (including in its capacity as
Administrative Agent and Issuing Lender) within five Business Days after demand
for all costs and expenses incurred by Bank of America (including in its
capacity as Administrative Agent and Issuing Lender) in connection with the
development, preparation, delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
Bank of America (including in its capacity as Administrative Agent and Issuing
Lender) with respect thereto; and
1. pay or reimburse the Administrative Agent, the Arranger and
each Lender within five Business Days after demand for all costs and expenses
(including Attorney Costs) incurred by them in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or any other Loan Document during the existence of an Event of Default
or after acceleration of the Loans (including in connection with any "workout"
or restructuring regarding the Loans, and including in any Insolvency Proceeding
or appellate proceeding).
A. Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Administrative Agent or
replacement of any Lender) be imposed on, incurred by or asserted against any
such Person in any way relating to or arising out of this Agreement or any
document contemplated by or referred to herein, or the transactions contemplated
hereby, or any action taken or omitted by any such Person under or in connection
with any of the foregoing, including with respect to any investigation,
litigation or proceeding (including any Insolvency Proceeding or appellate
proceeding) related to or arising out of this Agreement or the Loans or Letters
of Credit or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
Obligations"); provided, that the Company shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Obligations
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resulting solely from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section shall survive payment of all
other Obligations.
A. Payments Set Aside. To the extent that the Company makes a
payment to the Administrative Agent or the Lenders, or the Administrative Agent
or the Lenders exercise their right of set-off, and such payment or the proceeds
of such set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its pro rata
share of any amount so recovered from or repaid by the Administrative Agent,
which had previously been received by such Lender.
A. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent and each Lender.
1. Assignments, Participations, etc. Any Revolving Lender may,
with the written consent of the Company at all times (other than during the
existence of a Revolving Loan Event of Default) and the Administrative Agent,
which consents shall not be unreasonably withheld, at any time assign and
delegate to one or more Eligible Assignees (provided that no written consent of
the Company, or the Administrative Agent shall be required in connection with an
assignment and delegation by Bank of America or in connection with any
assignment and delegation by a Revolving Lender to an Eligible Assignee that is
an Affiliate of such Revolving Lender) (each an "Assignee") all, or any part of
all, of the Revolving Loans, the Revolving Commitment, the L/C Obligations and
the other rights and obligations of such Revolving Lender hereunder, in a
minimum amount of $5,000,000 (provided that no minimum amount shall be
applicable to any assignment and delegation to an existing Revolving Lender or
an Affiliate of a Revolving Lender or to an assignment of the entire remaining
amount of the Revolving Loans and Revolving Commitment of a Revolving Lender)
provided, however, that the Company and the Administrative Agent may continue to
deal solely and directly with such Revolving Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Company and the
Administrative Agent by such Revolving Lender and the Assignee; (ii) such
Revolving Lender and its Assignee shall have delivered to the Company and the
Administrative Agent an Assignment and Acceptance substantially in the form of
Exhibit G ("Assignment and Acceptance"), together with any Note or Notes subject
to such assignment, (iii) the assignor Revolving Lender or Assignee has paid to
the Administrative Agent a processing
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fee in the amount of $3,000 and (iv) the information in the Assignment and
Acceptance is recorded in the Register pursuant to subsection (d) hereof.
1. From and after the date that the Administrative Agent notifies
the assignor Revolving Lender that it has received (and provided its consent
with respect to) an executed Assignment and Acceptance and payment of the
above-referenced processing fee and it has recorded the information in the
Register, (i) the Assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Revolving
Lender under the Loan Documents and (ii) the assignor Revolving Lender shall, to
the extent that rights and obligations hereunder and under the other Loan
Documents have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Documents.
1. Within five Business Days after its receipt of notice by the
Administrative Agent that it has received an executed Assignment and Acceptance
and payment of the processing fee (and provided that it consents to such
assignment in accordance with subsection 15.8(a)), the Company shall execute and
deliver to the Administrative Agent, new Notes evidencing such Assignee's
assigned Revolving Loans and Revolving Commitment and, if the assignor Revolving
Lender has retained a portion of its Revolving Loans and its Revolving
Commitments, replacement Notes in the principal amount of the Revolving Loans
retained by the assignor Revolving Lender (such Notes to be in exchange for, but
not in payment of, the Notes held by such Revolving Lender). Immediately upon
each Assignee making its processing fee payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Revolving Commitments arising therefrom. The
Revolving Commitment allocated to each Assignee shall reduce such Revolving
Commitments of the assigning Revolving Lender pro tanto.
1. The Company hereby designates the Administrative Agent to
serve as the Company's agent, solely for purposes of this Section 15.8(d), to
maintain a register (the "Register") on which it will record the Revolving
Commitments from time to time of each of the Revolving Lenders, the address and
any U.S. federal taxpayers identification number of each Lender, the Loans made
by each of the Lenders and each repayment in respect of the principal amount of
the Loans of each Lender. Failure to make any such recordation, or any error in
such recordation shall not affect any Lender's obligations in respect of such
Loans. With respect to any Revolving Lender, the transfer of the Revolving
Commitments of such Revolving Lender and the rights to the principal of, and
interest on, any Revolving Loan made pursuant to such Revolving Commitments
shall not be effective until such transfer is recorded on the Register
maintained by the Administrative Agent with respect to ownership of such
Revolving Commitments and loans and prior to such recordation all amounts owing
to the transferor with respect to such Revolving Commitments and Revolving Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Revolving Commitments
180
and Revolving Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Acceptance pursuant to this Section.
Coincident with the delivery of such an Assignment and Acceptance to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Revolving Loan, or as soon thereafter as practicable, the
assigning or transferor Revolving Lender shall surrender the Note evidencing
such Revolving Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Revolving Lender
and/or the new Revolving Lender. The Company agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section
15.8(d).
1. Any Revolving Lender may at any time sell to one or more
commercial banks or other Persons not Affiliates of the Company (a
"Participant") participating interests in any Revolving Loans, the Revolving
Commitment of that Revolving Lender and the other interests of that Revolving
Lender (the "originating Lender") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the originating Lender shall remain
solely responsible for the performance of such obligations, (iii) the Company,
the Issuing Lender and the Administrative Agent shall continue to deal solely
and directly with the originating Lender in connection with the originating
Lender's rights and obligations under this Agreement and the other Loan
Documents and (iv) no Revolving Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would require
unanimous consent of the Revolving Lenders as described in the first proviso to
Section 15.1. In the case of any such participation, the Participant shall be
entitled to the benefit of Sections 4.1, 4.3 and 15.5 as though it were also a
Revolving Lender hereunder, and if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of a Revolving Loan Event of Default, each Participant shall
be deemed to have the right of set-off 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 Revolving Lender under
this Agreement.
1. Notwithstanding any other provision in this Agreement, any
Revolving Lender may at any time create a security interest in, or pledge, all
or any portion of its rights under and interest in this Agreement and the Note
held by it in favor of any Federal Reserve Bank in accordance with Regulation A
of the FRB or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
2. Notwithstanding the foregoing, but subject to the terms of the
Revolving/Term Loan Intercreditor Agreement, the Term Lender may at any time
transfer to, or pledge or create a security interest in favor of, any Person all
or any portion of its
181
rights under and interests in this Agreement and the other Loan Documents
(including, without limitation, the Note held by it). Upon any such transfer
(but not any such pledge or grant of a security interest prior to the pledgee's
or secured party's foreclosure thereon), the transferee shall succeed to all of
the rights of the Term Lender hereunder and under the other Loan Documents with
respect to the rights so assigned or transferred and may enforce such rights as
if it were the original Term Lender hereunder. The beneficiary of any such
pledge or grant of a security interest may enforce such pledge or security
interest in any manner permitted under applicable law.
A. Confidentiality. Each Lender agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company and provided to it by the Company or any Subsidiary, or
by the Administrative Agent on such Company's or Subsidiary's behalf, under this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information other than in connection with or in enforcement
of this Agreement and the other Loan Documents or in connection with other
business now or hereafter existing or contemplated with the Company or any
Subsidiary; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Lender, or
(ii) was or becomes available on a non-confidential basis from a source other
than the Company, provided that such source is not bound by a confidentiality
agreement with the Company known to the Lender; provided, however, that any
Lender may disclose such information (A) at the request or pursuant to any
requirement of the National Association of Insurance Commissioners or any
Governmental Authority to which the Lender is subject or in connection with an
examination of such Lender by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the
Administrative Agent, any Lender or their respective Affiliates may be party;
(E) to the extent reasonably required in connection with the exercise of any
remedy hereunder or under any other Loan Document; (F) to such Lender's
independent auditors and other professional advisors; (G) to any Participant or
Assignee, actual or potential, provided that such Person agrees in writing to
keep such information confidential to the same extent required of the Lenders
hereunder; (H) as to any Lender or its Affiliate, as expressly permitted under
the terms of any other document or agreement regarding confidentiality to which
the Company or any Subsidiary is party or is deemed party with such Lender or
such Affiliate; and (I) to its Affiliates.
A. Set-off. In addition to any rights and remedies of the
Revolving Lenders provided by law, if a Revolving Loan Event of Default exists
or the Revolving Loans have been accelerated, each Revolving Lender is
authorized at any time and from time to time, without prior notice to the
Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Revolving Lender to or for the credit or
the
182
account of the Company against any and all Obligations owing to such Revolving
Lender, now or hereafter existing, irrespective of whether or not the
Administrative Agent or such Revolving Lender shall have made demand under this
Agreement or any Loan Document and although such Obligations may be contingent
or unmatured. Each Revolving Lender agrees promptly to notify the Company and
the Administrative Agent after any such set-off and application made by such
Revolving Lender; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application.
A. Automatic Debits of Fees. With respect to any commitment fee,
arrangement fee, letter of credit fee or other fee, or any other cost or expense
(including Attorney Costs) due and payable to the Administrative Agent, the
Issuing Lender, Bank of America or the Arranger under the Loan Documents, the
Company hereby irrevocably authorizes Bank of America to debit any deposit
account of the Company with Bank of America in an amount such that the aggregate
amount debited from all such deposit accounts does not exceed such fee or other
cost or expense. If there are insufficient funds in such deposit accounts to
cover the amount of the fee or other cost or expense then due, such debits will
be reversed (in whole or in part, in Bank of America's sole discretion) and such
amount not debited shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off.
A. Notification of Addresses, Lending Offices, etc. Each Lender
shall notify the Administrative Agent in writing of any changes in the address
to which notices to the Lender should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.
A. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
A. Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
A. No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Lenders, the
Administrative Agent and the Agent-Related Persons, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents.
1. Governing Law and Jurisdiction. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
183
WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT THE ADMINISTRATIVE AGENT,
THE LENDERS AND THE BORROWER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
1. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS
OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT
AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE COMPANY, THE ADMINISTRATIVE AGENT AND THE LENDERS EACH WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
A. Waiver of Jury Trial. THE COMPANY, THE LENDERS AND THE
ADMINISTRATIVE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. THE COMPANY, THE LENDERS AND THE ADMINISTRATIVE AGENT EACH AGREE
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
184
A. Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
A. No Personal Liability of Directors, Officers, Employees and
Stockholders. No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any Obligations of the Company
under this Agreement, or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Lender waives and releases all such
liability. The waiver and release are part of the consideration for the Loans.
[SIGNATURE PAGES FOLLOW]
185
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.
AMERISERVE FOOD DISTRIBUTION, INC.
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
186
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
187
BANK OF AMERICA, N.A., as
Issuing Lender and Revolving Lender
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
188
LASALLE BANK N.A.
as a Revolving Lender
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
189
TRANSAMERICA BUSINESS CREDIT CORPORATION,
as a Revolving Lender
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
190
AMERISERVE FINANCE TRUST,
as Term Lender
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
191
BAY VIEW FINANCIAL CORPORATION,
as a Revolving Lender
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
192
BHF (USA) CAPITAL CORPORATION,
as a Revolving Lender
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
193
FLEET CAPITAL CORPORATION,
as a Revolving Lender
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
194
FOOTHILL INCOME TRUST LP,
as a Revolving Lender
By: FIT, GP, LLC
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
195
FLEET BUSINESS CREDIT CORPORATION,
as a Revolving Lender
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Fourth Amendment And Restated Credit Agreement
196
EXHIBIT 10.18
EXECUTION COPY
================================================================================
AMERISERVE FINANCE TRUST
AMERISERVE CAPITAL CORPORATION
----------------------------------------
$205,000,000
12% SENIOR SECURED NOTES DUE 2006
----------------------------------------
-------------------
INDENTURE
DATED AS OF OCTOBER 1, 1999
-------------------
UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
================================================================================
197
TABLE OF CONTENTS
Page
EXHIBITS..........................................................................................................i
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
Section 1.01 Definitions............................................................................1
Section 1.02 Other Definitions.....................................................................10
Section 1.03 Incorporation by Reference of Trust Indenture Act.....................................10
Section 1.04 Rules of Construction.................................................................11
ARTICLE 2. THE NOTES.............................................................................................11
Section 2.01 Form and Dating.......................................................................11
Section 2.02 Execution and Authentication..........................................................12
Section 2.03 Registrar and Paying Agent............................................................13
Section 2.04 Paying Agent to Hold Money in Trust...................................................13
Section 2.05 Holder Lists..........................................................................14
Section 2.06 Transfer and Exchange.................................................................14
Section 2.07 Replacement Notes.....................................................................21
Section 2.08 Outstanding Notes.....................................................................22
Section 2.09 Treasury Notes........................................................................22
Section 2.10 Temporary Notes.......................................................................22
Section 2.11 Cancellation..........................................................................23
Section 2.12 Defaulted Interest....................................................................23
Section 2.13 Record Date...........................................................................23
Section 2.14 Computation of Interest...............................................................23
Section 2.15 CUSIP Number..........................................................................23
ARTICLE 3. REDEMPTION AND PREPAYMENT.............................................................................24
Section 3.01 Notices to Trustee....................................................................24
Section 3.02 Selection of Notes to be Redeemed or Purchased........................................24
Section 3.03 Notice of Redemption..................................................................24
Section 3.04 Effect of Notice of Redemption........................................................25
Section 3.05 Deposit of Redemption or Purchase Price...............................................25
Section 3.06 Notes Redeemed in Part................................................................26
Section 3.07 Optional Redemption...................................................................26
Section 3.08 Mandatory Redemption..................................................................26
Section 3.09 Repurchase Offers.....................................................................26
ARTICLE 4. COVENANTS.............................................................................................28
Section 4.01 Payment of Notes......................................................................28
Section 4.02 Maintenance of Office or Agency.......................................................28
Section 4.03 Corporate Existence...................................................................29
Section 4.04 Compliance Certificate................................................................29
i
198
Section 4.05 Taxes.................................................................................30
Section 4.06 Stay, Extension and Usury Laws........................................................30
Section 4.07 Impairment of Liens...................................................................30
Section 4.08 Limitation on Activities of the Issuers...............................................30
Section 4.09 Liens.................................................................................31
Section 4.10 Reports...............................................................................31
Section 4.11 Change of Control.....................................................................31
Section 4.12 Asset Sales...........................................................................32
Section 4.13 Payment for Consents..................................................................33
ARTICLE 5. SUCCESSORS............................................................................................33
Section 5.01 Merger, Consolidation of Sale of Assets...............................................33
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................33
Section 6.01 Events of Default.....................................................................33
Section 6.02 Acceleration..........................................................................34
Section 6.03 Other Remedies........................................................................35
Section 6.04 Waiver of Past Defaults...............................................................35
Section 6.05 Control by Majority...................................................................35
Section 6.06 Limitation on Suits...................................................................36
Section 6.07 Rights of Holders of Notes to Receive Payment.........................................36
Section 6.08 Collection Suit by Trustee............................................................36
Section 6.09 Trustee May File Proofs of Claim......................................................36
Section 6.10 Priorities............................................................................37
Section 6.11 Undertaking for Costs.................................................................37
ARTICLE 7. TRUSTEE...............................................................................................38
Section 7.01 Duties of Trustee.....................................................................38
Section 7.02 Rights of Trustee.....................................................................39
Section 7.03 Individual Rights of Trustee..........................................................39
Section 7.04 Trustee's Disclaimer..................................................................39
Section 7.05 Notice of Defaults....................................................................40
Section 7.06 Reports by Trustee to Holders of the Notes............................................40
Section 7.07 Compensation and Indemnity............................................................40
Section 7.08 Replacement of Trustee................................................................41
Section 7.09 Successor Trustee by Merger, etc......................................................42
Section 7.10 Eligibility; Disqualification.........................................................42
Section 7.11 Preferential Collection of Claims Against The Issuers.................................42
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE..............................................................43
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance..............................43
Section 8.02 Legal Defeasance and Discharge........................................................43
Section 8.03 Covenant Defeasance...................................................................44
Section 8.04 Conditions to Legal or Covenant Defeasance............................................44
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions..............................................................45
Section 8.06 Repayment to The Issuers..............................................................46
ii
199
Section 8.07 Reinstatement.........................................................................46
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER......................................................................47
Section 9.01 Without Consent of Holders of the Notes...............................................47
Section 9.02 With Consent of Holders of Notes......................................................47
Section 9.03 Compliance with Trust Indenture Act...................................................48
Section 9.04 Revocation and Effect of Consents.....................................................49
Section 9.05 Notation on or Exchange of Notes......................................................49
Section 9.06 Trustee to Sign Amendments, etc.......................................................49
Section 9.07 Amendment, Supplement and Waiver - Amended Credit Agreement...........................49
ARTICLE 10. GUARANTEE OF NOTES...................................................................................50
Section 10.01 Note Guarantee........................................................................50
Section 10.02 Execution and Delivery of Note Guarantee..............................................51
Section 10.03 Guarantor May Consolidate, etc., on Certain Terms.....................................52
Section 10.04 Limitation on Guarantor Liability.....................................................52
Section 10.05 "Trustee" to Include Paying Agent.....................................................52
ARTICLE 11. COLLATERAL AND SECURITY..............................................................................53
Section 11.01 Note Security Documents...............................................................53
Section 11.02 Recording and Opinions................................................................53
Section 11.03 Release of Collateral.................................................................54
Section 11.04 Certificates of the Issuers...........................................................54
Section 11.05 Certificates of the Trustee...........................................................55
Section 11.06 Authorization of Actions to Be Taken by the Trustee Under the Note Security
Documents.............................................................................55
Section 11.07 Authorization of Receipt of Funds by the Trustee Under the Note Security
Documents.............................................................................55
Section 11.08 Termination of Security Interest......................................................55
ARTICLE 12. MISCELLANEOUS........................................................................................55
Section 12.01 Trust Indenture Act Controls..........................................................55
Section 12.02 Notices...............................................................................56
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.........................57
Section 12.04 Certificate and Opinion as to Conditions Precedent....................................57
Section 12.05 Statements Required in Certificate or Opinion.........................................57
Section 12.06 Rules by Trustee and Agents...........................................................58
Section 12.07 No Personal Liability of Directors, Officers, Employees and Stockholders..............58
Section 12.08 Governing Law.........................................................................58
Section 12.09 No Adverse Interpretation of Other Agreements.........................................58
Section 12.10 Successors............................................................................58
Section 12.11 Severability..........................................................................58
Section 12.12 Counterpart Originals.................................................................58
Section 12.13 Table of Contents, Headings, etc......................................................58
iii
200
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFEROR
Exhibit C FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
Exhibit D FORM OF NOTE GUARANTEE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE
i
201
CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
310 (a)(1)........................................................................................ 7.10
(a)(2)........................................................................................ 7.10
(a)(3)........................................................................................ N.A.
(a)(4)........................................................................................ N.A.
(a)(5)........................................................................................ 7.10
(b)........................................................................................... 7.10
(c)........................................................................................... N.A.
311 (a)........................................................................................... 7.11
(b)........................................................................................... 7.11
(c)........................................................................................... N.A.
312 (a)........................................................................................... 2.05
(b)........................................................................................... 12.03
(c)........................................................................................... 12.03
313 (a)........................................................................................... 7.06
(b)(1)........................................................................................ 7.06
(b)(2)........................................................................................ 7.06; 7.07
(c)........................................................................................... 7.06;12.02
(d)........................................................................................... 7.06
314 (a)........................................................................................... 4.03;11.05
(b)........................................................................................... 11.02
(c)(1)........................................................................................ N.A.
(c)(2)........................................................................................ N.A.
(c)(3)........................................................................................ N.A.
(d)........................................................................................... 11.04;11.03
(e)........................................................................................... 12.05
(f)........................................................................................... N.A.
315 (a)........................................................................................... N.A.
(b)........................................................................................... N.A.
(c)........................................................................................... N.A.
(d)........................................................................................... N.A.
(e)........................................................................................... 6.11
316 (a)(last sentence)............................................................................ N.A.
(a)(1)(A)..................................................................................... N.A.
(a)(1)(B)..................................................................................... N.A.
(a)(2)........................................................................................ N.A.
(b)........................................................................................... N.A.
(c)........................................................................................... 2.13
317 (a)(1)........................................................................................ N.A.
(a)(2)........................................................................................ N.A.
(b)........................................................................................... N.A.
318 (a)........................................................................................... N.A.
(b)........................................................................................... N.A.
(c)........................................................................................... 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
i
202
Indenture, dated as of October 1, 1999, among AmeriServe Finance Trust,
a limited purpose Delaware business trust ("Finco"), AmeriServe Capital
Corporation, a Delaware corporation and acting as an agent of Finco, pursuant to
an Agency Agreement dated as of September 24, 1999 ("Capital" and together with
Finco, the "Issuers"), Nebco Evans Distributors, Inc., a Delaware corporation
(the "Guarantor"), and United States Trust Company of New York, as trustee (the
"Trustee").
The Issuers, the Guarantor and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the holders of
the Issuers' 12% Senior Secured Notes due 2006 (the "Senior Secured Notes") and
the new 12% Senior Secured Notes due 2006 (the "New Senior Secured Notes" and,
together with the Senior Secured Notes and the Additional Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS.
"Accreted Value" means, as of any date of determination prior to the
Full Accretion Date, the sum of (a) the initial offering price of each Note and
(b) the portion of the excess of the principal amount of each Note over such
initial offering price that have been accreted thereon through such date, such
amount to be so accreted on a daily basis such that, when calculated together
with the fixed interest component of the Note, results in an aggregate yield to
maturity of 12.5% on the Notes, compounded semi-annually on each March 15 and
September 15 from the date of issuance of the Notes through the date of
determination.
"Additional Notes" means up to $45.0 million in aggregate principal
amount of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.08 hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"AmeriServe" means AmeriServe Food Distribution, Inc., a Delaware
Corporation.
"Amended Credit Agreement" means the fourth amended and restated credit
agreement, dated as of September 30, 1999, between AmeriServe, Bank of America,
N.A., as Administrative Agent, Bank of America, N.A., as Letter of Credit
Issuing Lender, and the other financial institutions and other lenders party
thereto, providing for revolving credit borrowings and issuance of letters of
credit, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time.
"Applicable Procedures" means, with respect to any transfer or exchange
of beneficial interests in a Global Note, the rules and procedures of the
Depositary that apply to such transfer and exchange.
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"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets or rights (including, without limitation, by way of a sale and
leaseback) (provided that the sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Issuers and its Restricted
Subsidiaries taken as a whole will be governed by Section 4.11 and/or Article 5
hereof and not by the provisions of Section 4.12 hereof).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the board of directors of Capital or any
authorized committee of such board of directors or the Administrator of Finco.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited), and (iv) any other interest (including an interest in a trust) or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means: (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any lender party to the Credit
Facility or with any domestic commercial bank having capital and surplus in
excess of $500 million and a Thompson Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above, (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition, and (vi)
securities quoted by the Nasdaq National Market or listed on a United States,
Canadian or Western European national securities exchange.
"Cedel" means Cedel Bank, societe anonyme.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of AmeriServe and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) other than the Principals or their Related Parties (as defined below), (ii)
the adoption of a plan relating to the liquidation or dissolution of AmeriServe
or the Issuers, (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right to
acquire, whether such right is
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currently exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 50% of the Voting Stock of
AmeriServe (measured by voting power rather than number of shares), (iv) the
first day on which a majority of the members of the Board of Directors of
AmeriServe are not Continuing Directors, or (v) AmeriServe consolidates with, or
merges with or into, any Person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any Person, or
any Person consolidates with, or merges with or into, AmeriServe in any such
event pursuant to a transaction in which any of the outstanding Voting Stock of
AmeriServe is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Voting Stock of AmeriServe
outstanding immediately prior to such transaction is converted into or exchanged
for Voting Stock (other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of such Voting Stock of
such surviving or transferee Person (immediately after giving effect to such
issuance).
"Collateral" shall have the meaning given to it in the Amended Credit
Agreement.
"Collateral Agent" shall mean United States Trust Company of New York,
as Collateral Agent, until a successor replaces it in accordance with the
applicable provisions of this Indenture, and thereafter means the successor.
"Commission" means the Securities and Exchange Commission.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries or the value of such person's interests
in a trust as of such date, plus (ii) the respective amounts reported on such
Person's balance sheet as of such date with respect to any series of preferred
stock (other than Disqualified Stock) that by its terms is not entitled to the
payment of dividends unless such dividends may be declared and paid only out of
net earnings in respect of the year of such declaration and payment, but only to
the extent of any cash received by such Person upon issuance of such preferred
stock, less (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made within 12 months after the acquisition of such business)
subsequent to the date of this Indenture in the book value of any asset owned by
such Person or a consolidated Subsidiary of such Person, (y) all investments as
of such date in unconsolidated Subsidiaries and in Persons that are not
Subsidiaries (except, in each case, Permitted Investments), and (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of AmeriServe who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Issuers.
"Credit Facility" means the third amended and restated credit
agreement, dated as of May 21, 1998, between AmeriServe and Bank of America,
providing for revolving credit borrowings and issuance of letters of credit,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time.
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"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of EXHIBIT A
attached hereto (but without including the text referred to in footnotes 1 and 3
thereto).
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to Section 2.06 of this Indenture, and,
thereafter, "Depositary" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature; provided, however,
that any Capital Stock that would not qualify as Disqualified Stock but for
change of control provisions shall not constitute Disqualified Stock if the
provisions are not more favorable to the holders of such Capital Stock than the
provisions described under Section 4.11 hereof.
"DLJ" means Donaldson, Lufkin & Jenrette Securities Corporation.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, the
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer by the Issuers to Holders to exchange
Senior Secured Notes for New Senior Secured Notes.
"Full Accretion Date" means September 15, 2006.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Notes" means the Rule 144A Global Notes and the Regulation S
Permanent Global Notes.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without
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limitation, letters of credit and reimbursement agreements in respect thereof),
of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency rates.
"Holberg" means Holberg Industries, Inc., a Delaware corporation.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be: (1) the
accreted value thereof, in the case of any Indebtedness that does not require
current payments of interest, and (2) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds an interest through a
Participant.
"Initial Notes" means $205.0 million in aggregate principal amount of
Notes originally issued under this Indenture on the date hereof.
"Initial Purchasers" means DLJ, Banc of America Securities LLC and
Salomon Smith Barney Inc.
"Institutional Accredited Investor" means an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Issuers or any Restricted Subsidiary of the Issuers sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Issuers such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Issuers, the Issuers
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the
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Equity Interests of such Restricted Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of the covenant described
above under Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal Corporate
Trust Office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment shall be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"NEHC" means Nebco Evans Holding Corporation, a Delaware corporation,
the parent of the Issuers.
"Net Proceeds" means the aggregate cash proceeds received by the
Issuers or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"New Senior Secured Notes" means the Issuers' 12% Senior Secured Notes
due 2006, which will be issued in exchange for the Issuers' Senior Secured
Notes.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Issuers nor any of their Restricted Subsidiaries (a) provide credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise), or (c) constitute the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes being offered hereby) of the Issuers or any of their Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Issuers or any of its Restricted
Subsidiaries.
"Note Collateral" shall include, in each case as pledged and assigned
to the Trustee or the Issuers, as applicable, pursuant to the Note Security
Documents, (i) the Term Loan, (ii) all cash held by the Trustee pursuant to this
Indenture or the Note Security Documents, and (iii) all proceeds of the
foregoing.
"Note Custodian" means the Trustee, when serving as custodian for the
Depositary with respect to the Notes in global form, or any successor entity
thereto.
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"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes, if any are issued, shall
be treated as a single class for all purposes under this Indenture.
"Note Security Documents" means each security agreement between the
Trustee and each of the Issuers and each stock pledge, deed of trust and
mortgage executed by the Issuers creating Liens that secure the Notes, each
collateral assignment of any other document creating a Lien that, after giving
effect to such collateral assignment, secured the Notes, and any other document
creating a Lien that secures the Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, the Administrator, any Assistant
Treasurer, the Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of each
Issuer by two Officers of such Issuer, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of such Issuer, that meets the requirements of
Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Issuers, any
Subsidiary of the Issuers or the Trustee.
"Participant" means, with respect to DTC, Euroclear or Cedel, a Person
who has an account with DTC, Euroclear or Cedel, respectively (and, with respect
to DTC, shall include Euroclear and Cedel).
"Permitted Business" means any of the businesses and any other
businesses related to the businesses engaged in by the Issuers and their
respective Restricted Subsidiaries on the date of this Indenture.
"Permitted Investments" means (a) any Investment in the Issuers or in a
Wholly-Owned Restricted Subsidiary of the Issuers that is engaged in a Permitted
Business; (b) any Investment in Cash Equivalents; (c) any Investment by the
Issuers or any Restricted Subsidiary of the Issuers in a Person, if as a result
of such Investment (i) such Person becomes a Wholly-Owned Restricted Subsidiary
of the Issuers that is engaged in a Permitted Business or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Issuers or a
Wholly-Owned Restricted Subsidiary of the Issuers that is engaged in a Permitted
Business; (d) any Restricted Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 hereof; (e) any acquisition of assets solely in
exchange for the issuance of the Equity Interests (other than Disqualified
Stock) of the Issuers; (f) loans and advances made after the date of this
Indenture to Holberg not to exceed $10.0 million at any time outstanding; (g)
loans and advances made after the date of this Indenture to NEHC not to exceed
$10.0 million at any time outstanding; and (h) other Investments made after the
date of this Indenture in any Person 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 the time outstanding, not to exceed
$10.0 million.
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"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Principals" means Holberg., John V. Holten, Orkla, ASA, Nebco Evans
Distributors, Inc., NEHC, DLJ Merchant Banking Partners, L.P., DLJ International
Partners, C.V., DLJ Offshore Partners, C.V., DLJ Merchant Banking Funding, Inc.,
DLJ Merchant Banking Partners II, L.P., DLJ Merchant Banking Partners II-A,
L.P., DLJ Offshore Partners II, C.V., DLJ Diversified Partners, L.P., DLJ
Diversified Partners-A, L.P., DLJ Millennium Partners, L.P., DLJ Millennium
Partners-A, L.P., DLJMB Funding II, Inc., DLJ First ESC L.P., DLJ EAB Partners,
L.P. and UK Investment Plan 1997 Partners.
"Private Placement Legend" means the legend initially set forth on the
Senior Secured Notes in the form set forth in Section 2.06(g) hereof.
"Public Equity Offering" means a public offering of Equity Interests
(other than Disqualified Stock) of (i) AmeriServe; or (ii) NEHC to the extent
the net proceeds thereof are contributed to AmeriServe as a capital
contribution, that, in each case, results in the net proceeds to AmeriServe of
at least $25.0 million.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, by and among the Issuers, the Guarantor
and the Initial Purchasers, and, with respect to any Additional Notes, one or
more registration rights agreements between the Guarantor, the Issuers and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Guarantor and
the Issuers to the purchasers of Additional Notes to register such Additional
Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Permanent Global Notes" means the permanent global notes
that are deposited with and registered in the name of the Depositary or its
nominee, representing a series of Notes sold in reliance on Regulation S.
"Related Party" with respect to any Principal means (i) any controlling
stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (ii) any trust,
corporation, partnership or other entity, the beneficiaries, stockholder,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Person referred to
in the immediately preceding clause (i).
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Beneficial Interest" means any beneficial interest of a
Participant or Indirect Participant in the Rule 144A Global Note or the
Regulation S Global Note.
"Restricted Global Notes" means the Rule 144A Global Notes and the
Regulation S Global Notes, all of which shall bear the Private Placement Legend.
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"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Notes" means the permanent global notes that contain
the paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 3 to the form of the Note attached hereto as EXHIBIT A, and that is
deposited with and registered in the name of the Depositary or its nominee,
representing a series of Notes sold in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Secured Notes" means the Issuers' 12% Senior Secured Notes due
2006.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Subsidiary" means, with respect to any Person: (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Term Loan" means the loans made pursuant to Section 2.1(b) of the
Amended Credit Agreement.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb), as amended, as in effect on the date hereof.
"Transfer Restricted Securities" means Notes or beneficial interests
therein that bear or are required to bear the Private Placement Legend.
"Trustee" means United States Trust Company of New York until a
successor replaces it in accordance with the applicable provisions of this
Indenture, and thereafter means the successor.
"Unrestricted Global Notes" means one or more Global Notes that do not
and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution; but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Issuers or any Restricted Subsidiary of
the Issuers unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Issuers or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Issuers; (c) is a Person with respect to which neither the
Issuers nor any of its Restricted Subsidiaries
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has any direct or indirect obligation (x) to subscribe for additional Equity
Interests or (y) to maintain or preserve such Person's financial condition or to
cause such Person to achieve any specified levels of operating results; (d) has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Issuers or any of its Restricted Subsidiaries; and (e)
has at least one director on its board of directors that is not a director or
executive officer of the Issuers or any of its Restricted Subsidiaries and has
at least one executive officer that is not a director or executive officer of
the Issuers or any of its Restricted Subsidiaries.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Issuers as of such date. The Board of Directors of the Issuers may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Issuers of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall be permitted only if (i) such
Indebtedness is permitted under Section 4.08 hereof and (ii) no Default or Event
of Default would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
SECTION 1.02 OTHER DEFINITIONS.
Defined in
Term Section
"Asset Sale Offer"............................................................................ 4.12
"Change of Control Offer"..................................................................... 4.11
"Change of Control Payment"................................................................... 4.11
"Change of Control Payment Date".............................................................. 4.11
"Covenant Defeasance"......................................................................... 8.03
"Custodian"................................................................................... 6.01
"DTC"......................................................................................... 2.03
"Event of Default"............................................................................ 6.01
"Excess Proceeds"............................................................................. 4.12
"Legal Defeasance"............................................................................ 8.02
"Offer Amount"................................................................................ 3.09
"Offer Period"................................................................................ 3.09
"Paying Agent"................................................................................ 2.03
"Payment Default"............................................................................. 6.01
"Purchase Date"............................................................................... 3.09
"Registrar"................................................................................... 2.03
"Repurchase Offer"............................................................................ 3.09
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
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"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Notes means the Issuers, the Guarantor and
any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by the Commission rule
under the TIA have the meanings so assigned to them therein.
SECTION 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement or
successor sections or rules adopted by the Commission from
time to time.
ARTICLE 2.
THE NOTES
SECTION 2.01 FORM AND DATING.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of EXHIBIT A attached hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes
initially shall be issued in denominations of $1,000 and integral multiples
thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Issuers, the
Guarantor and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provisions of any Note conflicts with the express provisions
of this Indenture, the provisions of this Indenture shall govern and be
controlling.
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Global Notes. Notes issued in global form shall be substantially in the
form of Exhibit A attached hereto.
Each Global Note shall represent such of the outstanding Notes as shall
be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel Bank.
Except as set forth in Section 2.06 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to
Rule 144A Global Notes and Regulation S Permanent Global Notes deposited with or
on behalf of the Depositary.
The Issuers shall execute and the Trustee shall, in accordance with
this Section 2.01(b), authenticate and deliver the Global Notes that (i) shall
be registered in the name of the Depositary or the nominee of the Depositary and
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Participants shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depositary or by the Note
Custodian as custodian for the Depositary or under such Global Note, and the
Depositary may be treated by the Issuers, the Trustee and any agent of the
Issuers or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants, the
operation of customary practices of such Depositary governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(c) Definitive Notes. Notes issued in certificated form shall be
substantially in the form of EXHIBIT A attached hereto (but without including
the text referred to in footnotes 1 and 3 thereto).
SECTION 2.02 EXECUTION AND AUTHENTICATION.
An Officer shall sign the Notes for each of the Issuers by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture. The
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form of Trustee's certificate of authentication to be borne by the Notes shall
be substantially as set forth in EXHIBIT A hereto.
The Trustee shall, upon a written order of the Issuers signed by an
Officer of each of the Issuer directing the Trustee to authenticate the Notes,
authenticate Notes for original issue up to the aggregate principal amount
stated in paragraph 4 of the Notes. The Trustee shall, upon written order of the
Issuers signed by an Officer, authenticate New Senior Secured Notes for original
issuance in exchange for a like principal amount of Senior Secured Notes
exchanged in the Exchange Offer or otherwise exchanged for New Senior Secured
Notes pursuant to the terms of the Registration Rights Agreement. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.
The Trustee may (at the Issuers' expense) appoint an authenticating
agent acceptable to the Issuers' to authenticate Notes. An authenticating agent
may authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the
Issuers or an Affiliate of the Issuers.
SECTION 2.03 REGISTRAR AND PAYING AGENT.
The Issuers shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and (ii) an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. The Issuers may change any Paying
Agent or Registrar without notice to any Holder. The Issuers shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuers may act as
Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes. The
Issuers initially appoint the Trustee to act as the Registrar and Paying Agent
with respect to the Definitive Notes.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
shall notify the Trustee of any default by the Issuers in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Issuers at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Issuers) shall have no
further liability for the money. If the Issuers act as Paying Agent, they shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon the occurrence of events specified in
Section 6.01(vii) through (viii) hereof, the Trustee shall serve as Paying Agent
for the Notes.
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SECTION 2.05 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Issuers and/or the Guarantor shall furnish to the
Trustee at least seven (7) Business Days before each interest payment date and
at such other times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Issuers and the Guarantor shall
otherwise comply with TIA Section 312(a).
SECTION 2.06 TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Beneficial
interests in a Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Global Note in
accordance with the transfer restrictions set forth in the legend in subsection
(g) of this Section 2.06. Transfers of beneficial interests in the Global Notes
to Persons required to take delivery thereof in the form of an interest in
another Global Note shall be permitted as follows:
(i) Rule 144A Global Note to Regulation S Global Note. If, at any
time, an owner of a beneficial interest in a Rule 144A Global
Note deposited with the Depositary (or the Trustee as
custodian for the Depositary) wishes to transfer its
beneficial interest in such Rule 144A Global Note to a Person
who is required or permitted to take delivery thereof in the
form of an interest in a Regulation S Global Note, such owner
shall, subject to the Applicable Procedures, exchange or cause
the exchange of such interest for an equivalent beneficial
interest in a Regulation S Global Note as provided in this
Section 2.06(a)(i). Upon receipt by the Trustee of (1)
instructions given in accordance with the Applicable
Procedures from a Participant directing the Trustee to credit
or cause to be credited a beneficial interest in the
Regulation S Global Note in an amount equal to the beneficial
interest in the Rule 144A Global Note to be exchanged, (2) a
written order given in accordance with the Applicable
Procedures containing information regarding the Participant
account of the Depositary and the Euroclear or Cedel account
to be credited with such increase, and (3) a certificate in
the form of EXHIBIT B-1 hereto given by the owner of such
beneficial interest stating that the transfer of such interest
has been made in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in
accordance with Rule 903 or Rule 904 of Regulation S, then the
Trustee, as Registrar, shall instruct the Depositary to reduce
or cause to be reduced the aggregate principal amount at
maturity of the applicable Rule 144A Global Note and to
increase or cause to be increased the aggregate principal
amount at maturity of the applicable Regulation S Global Note
by the principal amount at maturity of the beneficial interest
in the Rule 144A Global Note to be exchanged or transferred,
to credit or cause to be credited to the account of the Person
specified in such instructions, a beneficial interest in the
Regulation S Global Note equal to the reduction in the
aggregate principal amount at maturity of the Rule 144A Global
Note, and to debit, or cause to be debited, from the account
of the Person making such exchange or transfer the beneficial
interest in the Rule 144A Global Note that is being exchanged
or transferred.
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(ii) Regulation S Global Note to Rule 144A Global Note. If, at any
time, after the expiration of the 40-day restricted period, an
owner of a beneficial interest in a Regulation S Global Note
deposited with the Depositary or with the Trustee as custodian
for the Depositary wishes to transfer its beneficial interest
in such Regulation S Global Note to a Person who is required
or permitted to take delivery thereof in the form of an
interest in a Rule 144A Global Note, such owner shall, subject
to the Applicable Procedures, exchange or cause the exchange
of such interest for an equivalent beneficial interest in a
Rule 144A Global Note as provided in this Section 2.06(a)(ii).
Upon receipt by the Trustee of (1) instructions from Euroclear
or Cedel, if applicable, and the Depositary, directing the
Trustee, as Registrar, to credit or cause to be credited a
beneficial interest in the Rule 144A Global Note equal to the
beneficial interest in the Regulation S Global Note to be
exchanged, such instructions to contain information regarding
the Participant account with the Depositary to be credited
with such increase, (2) a written order given in accordance
with the Applicable Procedures containing information
regarding the participant account of the Depositary and (3) a
certificate in the form of EXHIBIT B-2 attached hereto given
by the owner of such beneficial interest stating (A) if the
transfer is pursuant to Rule 144A, that the Person
transferring such interest in a Regulation S Global Note
reasonably believes that the Person acquiring such interest in
a Rule 144A Global Note is a QIB and is obtaining such
beneficial interest in a transaction meeting the requirements
of Rule 144A and any applicable blue sky or securities laws of
any state of the United States, (B) that the transfer complies
with the requirements of Rule 144 under the Securities Act,
(C) if the transfer is to an Institutional Accredited Investor
that such transfer is in compliance with the Securities Act
and a certificate in the form of EXHIBIT C attached hereto
and, if such transfer is in respect of an aggregate principal
amount of less than $100,000, an Opinion of Counsel acceptable
to the Issuers that such transfer is in compliance with the
Securities Act or (D) if the transfer is pursuant to any other
exemption from the registration requirements of the Securities
Act, that the transfer of such interest has been made in
compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the
requirements of the exemption claimed, such statement to be
supported by an Opinion of Counsel from the transferee or the
transferor in form reasonably acceptable to the Issuers and to
the Registrar and in each case, in accordance with any
applicable securities laws of any state of the United States
or any other applicable jurisdiction, then the Trustee, as
Registrar, shall instruct the Depositary to reduce or cause to
be reduced the aggregate principal amount at maturity of such
Regulation S Global Note and to increase or cause to be
increased the aggregate principal amount at maturity of the
applicable Rule 144A Global Note by the principal amount at
maturity of the beneficial interest in the Regulation S Global
Note to be exchanged or transferred, and the Trustee, as
Registrar, shall instruct the Depositary, concurrently with
such reduction, to credit or cause to be credited to the
account of the Person specified in such instructions a
beneficial interest in the applicable Rule 144A Global Note
equal to the reduction in the aggregate principal amount at
maturity of such Regulation S Global Note and to debit or
cause to be debited from the account of the Person making such
transfer the beneficial interest in the Regulation S Global
Note that is being exchanged or transferred.
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(b) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented by a Holder to the Registrar with a request to register the
transfer of the Definitive Notes or to exchange such Definitive Notes for an
equal principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested only
if the Definitive Notes are presented or surrendered for registration of
transfer or exchange, are endorsed and contain a signature guarantee or
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his attorney and contains a
signature guarantee, duly authorized in writing and the Registrar received the
following documentation (all of which may be submitted by facsimile):
(i) in the case of Definitive Notes that are Transfer Restricted
Securities, such request shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered
to the Registrar by a Holder for registration in the
name of such Holder, without transfer, or such Transfer
Restricted Security is being transferred to the Issuers
or any of its Subsidiaries, a certification to that
effect from such Holder (in substantially the form of
EXHIBIT B-3 hereto); or
(B) if such Transfer Restricted Security is being
transferred to a QIB in accordance with Rule 144A under
the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 under the
Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to
that effect from such Holder (in substantially the form
of EXHIBIT B-3 hereto); or
(C) if such Transfer Restricted Security is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 904 under the
Securities Act, a certification to that effect from such
Holder (in substantially the form of EXHIBIT B-3
hereto);
(D) if such Transfer Restricted Security is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration
requirements of the Securities Act other than those
listed in subparagraphs (B) and (C) above, a
certification to that effect from such Holder (in
substantially the form of EXHIBIT B-3 hereto), a
certification substantially in the form of EXHIBIT C
hereto, and, if such transfer is in respect of an
aggregate principal amount of Notes of less than
$100,000, an Opinion of Counsel acceptable to the
Issuers that such transfer is in compliance with the
Securities Act; or
(E) if such Transfer Restricted Security is being
transferred in reliance on any other exemption from the
registration requirements of the Securities Act, a
certification to that effect from such Holder (in
substantially the form of EXHIBIT B-3 hereto) and an
Opinion of Counsel from such Holder or the transferee
reasonably acceptable to the Issuers and to the
Registrar to the effect that such transfer is in
compliance with the Securities Act.
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(c) Transfer of a Beneficial Interest in a Rule 144A Global Note or
Regulation S Permanent Global Note for a Definitive Note.
(i) Any Person having a beneficial interest in a Rule 144A Global
Note or Regulation S Permanent Global Note may upon request,
subject to the Applicable Procedures, exchange such beneficial
interest for a Definitive Note. Upon receipt by the Trustee of
written instructions or such other form of instructions as is
customary for the Depositary (or Euroclear or Cedel, if
applicable), from the Depositary or its nominee on behalf of
any Person having a beneficial interest in a Rule 144A Global
Note or Regulation S Permanent Global Note , and, in the case
of a Transfer Restricted Security, the following additional
information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the
beneficial owner, a certification to that effect from
such Person (in substantially the form of EXHIBIT B-4
hereto);
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under
the Securities Act, a certification to that effect from
the transferor (in substantially the form of EXHIBIT B-4
hereto);
(C) if such beneficial interest is being transferred to an
Institutional Accredited Investor, pursuant to a private
placement exemption from the registration requirements
of the Securities Act (and based on an opinion of
counsel if the Issuers so request), a certification to
that effect from such Holder (in substantially the form
of EXHIBIT B-4 hereto) and a certificate from the
applicable transferee (in substantially the form of
EXHIBIT C hereto); or
(D) if such beneficial interest is being transferred in
reliance on any other exemption from the registration
requirements of the Securities Act, a certification to
that effect from the transferor (in substantially the
form of EXHIBIT B-4 hereto) and an Opinion of Counsel
from the transferee or the transferor reasonably
acceptable to the Issuers and to the Registrar to the
effect that such transfer is in compliance with the
Securities Act, in which case the Trustee or the Note
Custodian, at the direction of the Trustee, shall, in
accordance with the standing instructions and procedures
existing between the Depositary and the Note Custodian,
cause the aggregate principal amount of Rule 144A Global
Notes or Regulation S Permanent Global Notes, as
applicable, to be reduced accordingly and, following
such reduction, the Issuers shall execute and, the
Trustee shall authenticate and deliver to the transferee
a Definitive Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial interest
in a Rule 144A Global Note or Regulation S Permanent Global
Note, as applicable, pursuant to this Section 2.06(c) shall be
registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or
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Indirect Participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered.
Following any such issuance of Definitive Notes, the Trustee,
as Registrar, shall instruct the Depositary to reduce or cause
to be reduced the aggregate principal amount at maturity of
the applicable Global Note to reflect the transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(e) Transfer and Exchange of a Definitive Note for a Beneficial
Interest in a Global Note. A definitive Note may not be transferred or exchanged
for a beneficial interest in a Global Note.
(f) Authentication of Definitive Notes in Absence of Depositary. If at
any time:
(i) the Depositary for the Notes notifies the Issuers that the
Depositary is unwilling or unable to continue as Depositary
for the Global Notes and a successor Depositary for the Global
Notes is not appointed by the Issuers within 90 days after
delivery of such notice; or
(ii) the Issuers, at their sole discretion, notify the Trustee in
writing that they elect to cause the issuance of Definitive
Notes under this Indenture,
then the Issuers shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (iii), (iv)
and (v), each Note certificate evidencing Global Notes and
Definitive Notes (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend (the "Private
Placement Legend") in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH
IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER:
(A) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) (A "QIB") OR (B) IT HAS ACQUIRED THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT.
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(B) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION; AND
(C) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATIONS S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS
A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
(ii) Each Note shall bear a legend (the "Original Issue Discount
Legend") in substantially the following form:
"FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS
BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000
PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS $_____,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $_____, THE ISSUE
DATE IS OCTOBER 1, 1999 AND THE YIELD TO MATURITY IS ___% PER
ANNUM."
(iii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Note) pursuant to Rule 144 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted Security that is
a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted
Security for a Definitive Note that does not bear the
legend set forth in (i) above and rescind any
restriction on the transfer of such
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Transfer Restricted Security upon receipt of a
certification from the transferring holder
substantially in the form of EXHIBIT B-4 hereto; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the legend set
forth in (i) above, but shall continue to be subject to
the provisions of Section 2.06(a) and (b) hereof;
provided, however, that with respect to any request for
an exchange of a Transfer Restricted Security that is
represented by a Global Note for a Definitive Note that
does not bear the legend set forth in (i) above, which
request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that
such request is being made pursuant to Rule 144 (such
certification to be substantially in the form of
EXHIBIT B-4 hereto).
(iv) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Note) in reliance on any exemption from the
registration requirements of the Securities Act (other than
exemptions pursuant to Rule 144A or Rule 144 under the
Securities Act) in which the Holder or the transferee
provides an Opinion of Counsel to the Issuers and the
Registrar in form and substance reasonably acceptable to the
Issuers and the Registrar (which Opinion of Counsel shall
also state that the transfer restrictions contained in the
legend are no longer applicable):
(A) In the case of any Transfer Restricted Security that is
a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted
Security for a Definitive Note that does not bear the
legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted
Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the legend set
forth in (i) above, but shall continue to be subject to
the provisions of Section 2.06(a) and (b) hereof.
(v) Notwithstanding the foregoing, upon the consummation of the
Exchange Offer in accordance with the Registration Rights
Agreement, the Issuers shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof,
the Trustee shall authenticate (i) one or more Unrestricted
Global Notes in aggregate principal amount equal to the
principal amount of the Restricted Beneficial Interests
tendered for acceptance by persons that are not (x)
broker-dealers, (y) Persons participating in the distribution
of the Notes or (z) Persons who are affiliates (as defined in
Rule 144) of the Issuers and accepted for exchange in the
Exchange Offer and (ii) Definitive Notes that do not bear the
Private Placement Legend in an aggregate principal amount
equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee
shall cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly and the
Issuers shall execute and the Trustee shall authenticate and
deliver to the Persons designated by the Holders of
Definitive Notes so accepted Definitive Notes in the
appropriate principal amount.
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(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or cancelled, all Global Notes shall be returned to or
retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Issuers shall execute and the Trustee shall authenticate
Global Notes and Definitive Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Issuers may
require payment of a sum sufficient to cover any stamp or
transfer tax or similar governmental charge payable in
connection therewith (other than any such stamp or transfer
taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.10, 4.14 and 9.05
hereto).
(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or
Definitive Notes shall be the valid obligations of the
Issuers, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of
transfer or exchange.
(iv) The Registrar shall not be required:(A) to issue, to register
the transfer of or to exchange Notes during a period
beginning at the opening of fifteen (15) Business Days before
the day of any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being
redeemed in part, or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding
interest payment date.
(v) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Issuers may deem
and treat the Person in whose name any Note is registered as
the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for
all other purposes, and neither the Trustee, any Agent nor
the Issuers shall be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02
hereof.
SECTION 2.07 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Issuers and
the Trustee receives evidence to their satisfaction of the destruction, loss or
theft of any Note, the Issuers shall issue and the Trustee, upon the written
order of the Issuers signed by an Officer of each Issuer, shall authenticate a
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replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Issuers, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Issuers to protect the
Issuers, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Issuers and the Trustee may
charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuers and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Issuers or the Guarantor or an
Affiliate of the Issuers or the Guarantor holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Issuers or an Affiliate thereof)
holds, on a redemption date or maturity date, money sufficient to pay Notes
payable on that date, then on and after that date such Notes shall be deemed to
be no longer outstanding and shall cease to accrue interest.
SECTION 2.09 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Issuers or the Guarantor, or by any Affiliate of the Issuers or the Guarantor
shall be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes shown on the Trustee's register as
being so owned shall be so disregarded. Notwithstanding the foregoing, Notes
that are to be acquired by the Issuers or the Guarantor or an Affiliate of the
Issuers or the Guarantor pursuant to an exchange offer, tender offer or other
agreement shall not be deemed to be owned by such entity until legal title to
such Notes passes to such entity.
SECTION 2.10 TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Issuers may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Issuers signed by an Officer of each Issuer. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Issuers consider appropriate for temporary Notes. Without unreasonable delay,
the Issuers shall prepare and the Trustee shall upon receipt of a written order
of each Issuer signed by an Officer authenticate Definitive Notes in exchange
for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
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SECTION 2.11 CANCELLATION.
The Issuers at any time may deliver to the Trustee for cancellation any
Notes previously authenticated and delivered hereunder or which the Issuers may
have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Trustee. All Notes surrendered for registration of
transfer, exchange or payment, if surrendered to any Person other than the
Trustee, shall be delivered to the Trustee. The Trustee and no one else shall
cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation. Subject to Section 2.07 hereof, the Issuers may not
issue new Notes to replace Notes that it has redeemed or paid or that have been
delivered to the Trustee for cancellation. All cancelled Notes held by the
Trustee shall be destroyed and certification of their destruction delivered to
the Issuers, unless by a written order, signed by an Officer of each of the
Issuers, the Issuers shall direct that cancelled Notes be returned to it.
SECTION 2.12 DEFAULTED INTEREST.
If the Issuers or the Guarantor defaults in a payment of interest on
the Notes, it shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, which date shall be at the
earliest practicable date but in all events at least five (5) Business Days
prior to the payment date, in each case at the rate provided in the Notes and in
Section 4.01 hereof. The Issuers shall fix or cause to be fixed each such
special record date and payment date, and shall promptly thereafter, notify the
Trustee of any such date. At least fifteen (15) days before the special record
date, the Issuers (or the Trustee, in the name and at the expense of the
Issuers) shall mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such interest to
be paid.
SECTION 2.13 RECORD DATE.
The record date for purposes of determining the identity of Holders of
the Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA Section 316(c).
SECTION 2.14 COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
SECTION 2.15 CUSIP NUMBER.
The Issuers in issuing the Notes may use a "CUSIP" number, and if it
does so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Issuers shall
promptly notify the Trustee of any change in the CUSIP number.
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ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01 NOTICES TO TRUSTEE.
If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, they shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date (unless a
shorter period is acceptable to the Trustee) an Officers' Certificate setting
forth (i) the Section of this Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed and (iv) the redemption price.
If the Issuers are required to make an offer to purchase Notes pursuant
to Section 4.11 or 4.12 hereof, they shall furnish to the Trustee, at least 45
days before the scheduled purchase date, an Officers' Certificate setting forth
(i) the section of this Indenture pursuant to which the offer to purchase shall
occur, (ii) the terms of the offer, (iii) the principal amount of Notes to be
purchased, (iv) the purchase price, (v) the purchase date and (vi) and further
setting forth a statement to the effect that (a) the Issuers or AmeriServe or
one its Subsidiaries has affected an Asset Sale and there are Excess Proceeds
aggregating more than $15.0 million or (b) a Change of Control has occurred, as
applicable.
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED OR PURCHASED.
If less than all of the Notes are to be redeemed at any time, selection
of Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate; provided
that no Notes of $1,000 or less shall be redeemed in part. Notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address. Notices of redemption may not be conditional. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Note. Notes called
for redemption become due on the date fixed for redemption. On and after the
redemption date, interest ceases to accrue on Notes or portions of them called
for redemption.
SECTION 3.03 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Issuers shall mail or cause to be mailed by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price for the Notes and accrued interest, and
Liquidated Damages, if any;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Notes to be redeemed and that, after
the redemption date, upon surrender of such Note, a new Note
or Notes in principal amount equal to the unredeemed portion
shall be issued upon surrender of the original Note;
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(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Issuers default in making such redemption
payment, interest and Liquidated Damages, if any, on Notes
called for redemption ceases to accrue on and after the
redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice
or printed on the Notes.
At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at the Issuers' expense; provided, however,
that the Issuers shall have delivered to the Trustee, at least 45 days prior to
the redemption date (or such shorter period as shall be acceptable to the
Trustee), an Officers' Certificate requesting that the Trustee give such notice
and setting forth the information to be stated in the notice as provided in the
preceding paragraph. The notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Note shall not affect the validity of the
proceeding for the redemption of any other Note.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price plus accrued and unpaid interest and
Liquidated Damages, if any, to such date. A notice of redemption may not be
conditional.
SECTION 3.05 DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
On or before 10:00 a.m. (New York City time) on each redemption date or
the date on which Notes must be accepted for purchase pursuant to Section 4.12
or 4.11, the Issuers shall deposit with the Trustee or with the Paying Agent
money sufficient to pay the redemption price of and accrued and unpaid interest
and Liquidated Damages, if any, on all Notes to be redeemed or purchased on that
date. The Trustee or the Paying Agent shall promptly return to the Issuers upon
their written request any money deposited with the Trustee or the Paying Agent
by the Issuers in excess of the amounts necessary to pay the redemption price of
(including any applicable premium), accrued interest and Liquidated Damages, if
any, on all Notes to be redeemed or purchased.
If Notes called for redemption or tendered in an Asset Sale Offer or
Change of Control Offer are paid or if the Issuers have deposited with the
Trustee or Paying Agent money sufficient to pay the redemption or purchase price
of, unpaid and accrued interest and Liquidated Damages, if any, on all Notes to
be redeemed or purchased, on and after the redemption or purchase date interest
and Liquidated Damages, if any, shall cease to accrue on the Notes or the
portions of Notes called for redemption or tendered and not withdrawn in an
Asset Sale Offer or Change of Control Offer (regardless of whether certificates
for such securities are actually surrendered). If a Note is redeemed or
purchased on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest and Liquidated
Damages, if any, shall be paid to the Person in whose name such Note was
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registered at the close of business on such record date. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Issuers to comply with the preceding paragraph, interest shall be
paid on the unpaid principal and Liquidated Damages, if any, from the redemption
or purchase date until such principal and Liquidated Dames, if any, is paid, and
to the extent lawful on any interest not paid on such unpaid principal, in each
case, at the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Issuers shall
issue and, upon the Issuers' written request, the Trustee shall authenticate for
the Holder at the expense of the Issuers a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
SECTION 3.07 OPTIONAL REDEMPTION.
(a) Except as set forth in the next paragraph, the Notes will not be
redeemable at the Issuers' option prior to September 15, 2003. Thereafter, the
Notes will be subject to redemption at any time at the option of the Issuers, in
whole or in part, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of the Accreted Value) set forth
below plus accrued and unpaid interest and Liquidated Damages thereon, if any,
to the applicable redemption date, if redeemed during the twelve-month period
beginning on September 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2003.......................................................... 106.00%
2004.......................................................... 103.00%
2005 and thereafter........................................... 100.000%
(b) Notwithstanding the foregoing, at any time prior to September 15,
2001, the Issuers may redeem up to 33% of the original aggregate principal
amount of Notes at a redemption price of 112.0% of the Accreted Value thereof,
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
redemption date, with the net cash proceeds of a Public Equity Offering that are
used to prepay the Term Loan; provided that at least 67% of the original
aggregate principal amount of Notes remains outstanding immediately after the
occurrence of such redemption; and provided, further, that such redemption shall
occur within 45 days of the date of the closing of such Public Equity Offering.
SECTION 3.08 MANDATORY REDEMPTION.
Except as set forth under Sections 4.11 and 4.12 hereof, the Issuers
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
SECTION 3.09 REPURCHASE OFFERS.
In the event that the Issuers shall be required to commence an offer to
all Holders to repurchase Notes (a "Repurchase Offer") pursuant to Section 4.12
hereof, (an "Asset Sale Offer") or pursuant to Section 4.11 hereof, (a "Change
of Control Offer,") the Issuers shall follow the procedures specified below.
A Repurchase Offer shall commence no earlier than 30 days and no later
than 60 days after a Change of Control (unless the Issuers are not required to
make such offer pursuant to Section 4.11 hereof) or an Excess Proceeds Offer
Triggering Event (as defined below), as the case may be, and remain open for a
period of twenty (20) Business Days following its commencement and no longer,
except to the
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extent that a longer period is required by applicable law (the "Offer Period").
No later than five (5) Business Days after the termination of the Offer Period
(the "Purchase Date"), the Issuers shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.12 hereof, in the case of an
Excess Proceeds Offer, or 4.11 hereof, in the case of a Change of Control Offer
(the "Offer Amount") or, if less than the Offer Amount has been tendered, all
Notes tendered in response to the Repurchase Offer. Payment for any Notes so
purchased shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest or Liquidated Damages, if any, shall be payable to Holders who tender
Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Issuers shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to such Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall describe the transaction
or transactions that constitute the Change of Control or Excess Proceeds Offer
Triggering Event, as the case may be and shall state:
(a) that the Repurchase Offer is being made pursuant to this
Section 3.09 and Section 4.12 or 4.11 hereof, as the case may
be, and the length of time the Repurchase Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Issuers default in making such payment, any
Note accepted for payment pursuant to the Repurchase Offer
shall cease to accrue interest and Liquidated Damages, if any,
after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to a
Repurchase Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note, duly completed, or transfer by book-entry
transfer, to the Issuers, the Depositary, or the Paying Agent
at the address specified in the notice not later than the
close of business on the last day of the Offer Period;
(f) that Holders shall be entitled to withdraw their election if
the Issuers, the Depositary or the Paying Agent, as the case
may be, receives, not later than the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of
the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note
purchased;
(g) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Issuers shall select
the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Issuers so
that only Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased); and
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(h) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before 10:00 a.m. (New York City time) on each Purchase Date, the
Issuers shall irrevocably deposit with the Trustee or Paying Agent in
immediately available funds the aggregate purchase price with respect to a
principal amount of Notes equal to the Offer Amount, together with accrued and
unpaid interest and Liquidated Damages, if any, thereon, to be held for payment
in accordance with the terms of this Section 3.09. On the Purchase Date, the
Issuers shall, to the extent lawful, (i) accept for payment, on a pro rata basis
to the extent necessary, the Offer Amount of Notes or portions thereof tendered
pursuant to the Repurchase Offer, or if less than the Offer Amount has been
tendered, all Notes tendered, (ii) deliver or cause the Paying Agent or
depository, as the case may be, to deliver to the Trustee Notes so accepted and
(iii) deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Issuers in accordance with the
terms of this Section 3.09. The Issuers, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than three (3)
Business Days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Issuers for purchase, plus any accrued and unpaid interest and
Liquidated Damages, if any, thereon, and the Issuers shall promptly issue a new
Note, and the Trustee, shall authenticate and mail or deliver such new Note, to
such Holder, equal in principal amount to any unpurchased portion of such
Holder's Notes surrendered. Any Note not so accepted shall be promptly mailed or
delivered by the Issuers to the Holder thereof. The Issuers shall publicly
announce in a newspaper of general circulation or in a press release provided to
a nationally recognized financial wire service the results of the Repurchase
Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01, 3.02, 3.05 and 3.06 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.01 PAYMENT OF NOTES.
The Issuers shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. The Issuers shall pay all Liquidated Damages, if any, in the same manner
on the dates and in the amounts set forth in the Registration Rights Agreement.
Principal, premium and Liquidated Damages, if any, and interest, shall be
considered paid for all purposes hereunder on the date the Paying Agent, if
other than the Issuers, holds, as of 10:00 a.m. (New York City time) money
deposited by the Issuers in immediately available funds and designated for and
sufficient to pay all such principal, premium and Liquidated Damages, if any,
and interest, then due.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain in the Borough of Manhattan, the City of New
York an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee or Registrar) where Notes
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may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Issuers in respect of the Notes and this
Indenture may be served. The Issuers shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuers shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Issuers may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Issuers of their obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Issuers shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Issuers hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Issuers in accordance with Section 2.03
hereof.
SECTION 4.03 CORPORATE EXISTENCE.
The Issuers shall do or cause to be done all things necessary to
preserve and keep in full force and effect their corporate, partnership, trust
or other existence and the corporate, partnership, trust or other existence of
each of their Subsidiaries in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Issuers and the
rights (charter and statutory), licenses and franchises of the Issuers and their
Subsidiaries.
SECTION 4.04 COMPLIANCE CERTIFICATE.
The Issuers shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Issuers and their Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether each has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that, to the best of his or her knowledge, each entity
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Issuers are
taking or propose to take with respect thereto) and that, to the best of his or
her knowledge, no event has occurred and remains in existence by reason of which
payments on account of the principal of, premium or Liquidated Damages, if any,
or interest on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Issuers are taking or proposes to
take with respect thereto.
So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, in connection with the
year-end financial statements delivered pursuant to Section 4.03 hereof, the
Issuers shall use their best efforts to deliver a written statement of the
Issuers' independent public accountants (who shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that the Issuers have violated any provisions of Article
Four hereof or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation. In the event that such written statement of the
Issuers' independent
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public accountants cannot be obtained, the Issuers shall deliver an Officers'
Certificate certifying that it has used its best efforts to obtain such
statements and was unable to do so.
The Issuers shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Issuers are taking or propose to take with respect
thereto.
SECTION 4.05 TAXES.
The Issuers shall pay, and shall cause each of their Subsidiaries to
pay, prior to delinquency all material taxes, assessments and governmental
levies, except such as are contested in good faith and by appropriate
proceedings and with respect to which appropriate reserves have been taken in
accordance with GAAP.
SECTION 4.06 STAY, EXTENSION AND USURY LAWS.
The Issuers and the Guarantor covenant (to the extent that they may
lawfully do so) that they shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and each of the
Issuers and the Guarantor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
they shall not, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07 IMPAIRMENT OF LIENS.
The Issuers shall not take or knowingly or negligently omit to take,
any action which action or omission might or would have the result of materially
impairing the Liens granted by the Issuers with respect to the Note Collateral
for the benefit of the Trustee and the Holders of the Notes. Except as permitted
by this Indenture and the Note Security Documents, the Issuers shall not grant
to any Person other than the Trustee, for the benefit of the Trustee and the
Holders of the Notes, any interest whatsoever in any of the Note Collateral.
SECTION 4.08 LIMITATION ON ACTIVITIES OF THE ISSUERS.
The Issuers will not engage in any business activity or undertake any
activity, except any activity (i) relating to the offering, sale or issuance of
the Notes or the lending of the proceeds of such sale of Notes to AmeriServe
pursuant to the Amended Credit Agreement, or (ii) undertaken with the purpose
of, and directly related to, exercising its rights under, and fulfilling the
obligations of the Issuers under the Notes, this Indenture, the Amended Credit
Agreement and the Note Security Documents. Finco shall for so long as the Notes
are outstanding be a limited purpose entity with organizational documents that
limit its business activities and ability to commence a voluntary case or
proceeding under any applicable bankruptcy or insolvency laws. The Issuers shall
not (i) incur any Indebtedness other than the Notes or (ii) enter into any
derivative product transactions.
Notwithstanding the foregoing, if AmeriServe may incur additional
indebtedness pursuant to the terms of the Amended Credit Agreement, Finco may
issue and sell Additional Notes in an aggregate principal amount not greater
than the lesser of (x) the amount of additional indebtedness AmeriServe may
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incur pursuant to the terms of the Amended Credit Agreement and (y) $45.0
million, and loan the proceeds of such sale to AmeriServe as additional
indebtedness under the Term Loan.
SECTION 4.09 LIENS
The Issuers shall not create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien upon any of their property or
assets (including the Note Collateral), now owned or hereafter acquired.
SECTION 4.10 REPORTS
Whether or not required by the Commission, so long as any Notes are
outstanding, the Issuers will furnish to the Holders within the time periods
specified in the Commission's rules and regulations: (1) all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms 10-Q and 10-K if the Issuers or AmeriServe were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Issuers' and AmeriServe's
certified independent accountants; and (2) all current reports that would be
required to be filed with the Commission on Form 8-K if the Issuers or
AmeriServe were required to file such reports.
In addition, whether or not required by the Commission, the Issuers
will file a copy of all such information and reports with the Commission for
public availability (unless the Commission will not accept such a filing) and
make such information available to securities analysts and prospective investors
upon request. In addition, the Issuers shall, for so long as any Notes remain
outstanding, furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
SECTION 4.11 CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control, the Issuers shall make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the Accreted Value thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Issuers shall mail a notice to each Holder stating: (1) that the
Change of Control Offer is being made pursuant to this Section 4.11 and that all
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"); (3)
that any Note not tendered will continue to accrue interest; (4) that, unless
the Issuers default in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Issuers
shall
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comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes in
connection with a Change of Control.
(b) On the Change of Control Payment Date, the Issuers will, to the
extent lawful:
(i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Notes or portions
thereof so tendered; and
(iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being
purchased by us.
(c) The Paying Agent will promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Issuers shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. The Change of Control
provisions described above are applicable whether or not any other provisions of
this Indenture are applicable.
(d) The Issuers shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements
applicable to a Change of Control Offer made by the Issuers and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.
SECTION 4.12 ASSET SALES
The Issuers shall not consummate an Asset Sale.
Upon the occurrence of an Asset Sale by AmeriServe or any of its
Restricted Subsidiaries the Net Proceeds of which are applied to repay the Term
Loan, such Net Proceeds paid to either Issuer shall be deemed to constitute
"Excess Proceeds."
The Issuers shall make an offer to all Holders of Notes (an "Asset Sale
Offer") to purchase the maximum principal amount of Notes that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the Accreted Value thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Issuers shall invest any remaining Excess Proceeds in
Government Securities. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
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SECTION 4.13 PAYMENT FOR CONSENTS.
Neither the Issuers nor any of their Affiliates shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions hereof or
the Notes unless such consideration is offered to be paid or is paid to all
Holders of the Notes that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
ARTICLE 5.
SUCCESSORS
SECTION 5.01 MERGER, CONSOLIDATION OF SALE OF ASSETS.
The Issuers shall not consolidate or merge with or into or sell,
assign, transfer, convey or otherwise dispose of all or substantially all of
their properties or assets in one or more related transactions, to another
corporation, Person or entity.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of interest on,
or Liquidated Damages with respect to, the Notes;
(ii) default in payment when due of principal of or premium, if
any, on the Notes;
(iii) failure by either Issuer to comply with the provisions
described under Sections 4.07, 4.08, 4.11, 4.12 or Article 5
hereof;
(iv) failure by either Issuer for 60 days after notice from the
Trustee or at least 25% in principal amount of the Notes then
outstanding to comply with any of its other agreement in this
Indenture or the Notes;
(v) default under the Term Loan;
(vi) failure by either Issuer to pay final judgments aggregating
in excess of $5.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days;
(vii) either Issuer or any of their Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, pursuant to or within
the meaning of Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it
in an involuntary case,
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(c) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become due;
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against either Issuer or any of their
Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant
Subsidiary in an involuntary case;
(b) appoints a Custodian of either Issuer or any of their
Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant
Subsidiary or for all or substantially all of the
property of either Issuer or any of their Significant
Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary;
or
(c) orders the liquidation of either Issuer or any of their
Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
(ix) the Liens under the Note Security Documents shall, at any
time, cease to be in full force and effect for any reason
(other than by operation of the provisions of this Indenture
and the Note Security Documents) other than satisfaction in
full of all Obligations under this Indenture and discharge of
this Indenture, or any Lien created hereunder shall be
declared invalid or unenforceable or either Issuer shall
assert, in any pleading in any court of competent
jurisdiction, that any such Lien is unenforceable.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
SECTION 6.02 ACCELERATION.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Accreted Value of all Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default as described
in (vii) and (viii) of Section 6.01 hereof, the Accreted Value of all
outstanding Notes shall become due and payable without further action or notice.
Holders of the Notes may not enforce this Indenture or the Notes except as
provided in this Indenture.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding payment of the premium that the Issuers would have had
to pay if the Issuers then had elected to redeem the Notes pursuant to the
optional redemption provisions of Section 3.07(a) hereof, an equivalent premium
shall also become and be immediately due and payable to the extent permitted by
law upon the acceleration of the Notes. If an
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Event of Default occurs prior to September 15, 2003 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding the prohibition on redemption of the Notes prior to
September 15, 2003, then the amount payable in respect of such Notes for
purposes of this paragraph for each of the twelve-month periods beginning on
September 15 of the years indicated below shall be set forth below, expressed as
percentages of the Accreted Value that would otherwise be due but for the
provisions of this sentence, plus accrued and unpaid interest and Liquidated
Damages, if any, to the date of payment:
YEAR PERCENTAGE
---- ----------
2000.............................................................. 112.00%
2001.............................................................. 110.00%
2002.............................................................. 108.00%
SECTION 6.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any,
interest and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
The Issuers are required to deliver to the Trustee annually a statement
regarding compliance with this Indenture, and the Issuers are required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
SECTION 6.04 WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under this Indenture (including any acceleration (other than an automatic
acceleration resulting from an Event of Default under clause (vii) or (viii) of
Section 6.01 hereof) except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes (other than as a result
of an acceleration), which shall require the consent of all of the Holders of
the Notes then outstanding.
SECTION 6.05 CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust power
conferred on it. However, (i) the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or that may involve
the Trustee in personal liability, and (ii) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction. In case an Event of Default shall occur (which shall not be cured),
the Trustee will be required, in the exercise of its power, to use the degree of
care of a prudent person in the conduct of its own affairs. Notwithstanding any
provision to the contrary in this Indenture, the Trustee is under no obligation
to exercise any of its rights or powers under this Indenture at the request of
any Holder of Notes, unless such
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Holder shall offer to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
SECTION 6.06 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture,
the Note Guarantee or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default or the Trustee receives such
notice from the Issuers;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, interest, and
Liquidated Damages, if any, on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Issuers for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon the Notes), its creditors or its property, to
participate as a member, voting or otherwise, of any official committee of
creditors appointed in such manner and shall be entitled and empowered to
collect, receive
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and distribute any money or other securities or property payable or deliverable
upon the conversion or exchange of the Notes or on any such claims and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, interest, and Liquidated Damages, if any,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium, if any, interest, and
Liquidated Damages, if any, respectively;
Third: without duplication, to the Holders for any other
Obligations owing to the Holders under this Indenture and the Notes; and
Fourth: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
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ARTICLE 7.
TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing of
which a Responsible Officer of the Trustee has knowledge, the
Trustee shall exercise such of the rights and powers vested
in it by this Indenture and use the same degree of care and
skill in its exercise, as a prudent person would exercise or
use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture or the TIA and
the Trustee need perform only those duties that are
specifically set forth in this Indenture or the TIA and
no others, and no implied covenants or obligations
shall be read into this Indenture against the Trustee;
and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to
determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The
Trustee shall be under no obligation to exercise any of its
rights and powers under this Indenture at the request of any
Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing
with the Issuers. Money held in trust by the Trustee need not
be segregated from other funds except to the extent required
by law. The Trustee may be the Collateral Agent.
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SECTION 7.02 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely on the truth of the
statements and correctness of the opinions contained in, and
shall be protected from acting or refraining from acting
upon, any document believed by it to be genuine and to have
been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or
both. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel. Prior to taking, suffering
or admitting any action, the Trustee may consult with counsel
of the Trustee's own choosing and the written advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of
any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized
or within the rights or powers conferred upon it by this
Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuers or the
Guarantor shall be sufficient if signed by an Officer of the
Issuers or the Guarantor, as applicable.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders unless such
Holders shall have offered to the Trustee reasonable security
or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities that might be incurred by it in
compliance with such request or direction.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner of Notes and may otherwise deal with the Issuers, the Guarantor or any
Affiliate of the Issuers or the Guarantor with the same rights it would have if
it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the Commission for permission to continue as Trustee or resign. Any Agent may do
the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof. The Trustee shall not be responsible for the validity,
effectiveness or sufficiency of the Note Collateral or the Note Security
Documents.
SECTION 7.04 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture, the Note Guarantee or the Notes,
it shall not be accountable for the Issuers' use of the proceeds from the Notes
or any money paid to the Issuers or upon the Issuers' direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or
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recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
SECTION 7.05 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment on any
Note pursuant to Section 6.01(i) or (ii) hereof, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA ss. 313(a) (but if no event described in
TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b). The Trustee shall also transmit by mail all reports as required by TIA
ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Issuers and filed with the Commission and each
stock exchange on which the Issuers have informed the Trustee in writing the
Notes are listed in accordance with TIA ss. 313(d). The Issuers shall promptly
notify the Trustee when the Notes are listed on any stock exchange and of any
delisting thereof.
SECTION 7.07 COMPENSATION AND INDEMNITY.
The Issuers and the Guarantor, jointly and severally, shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder. To the extent permitted by law, the Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuers and the Guarantor, jointly and severally, shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Issuers and the Guarantor, jointly and severally, shall indemnify
the Trustee against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Issuers and the Guarantor (including this Section 7.07)
and defending itself against any claim (whether asserted by the Issuers, the
Guarantor or any Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder except to the
extent any such loss, liability or expense may be attributable to its negligence
or bad faith. The Trustee shall notify the Issuers and the Guarantor promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Issuers and the Guarantor shall not relieve the Issuers and the Guarantor of
their obligations hereunder. The Issuers and the Guarantor shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Issuers and the Guarantor shall pay the reasonable fees
and expenses of such counsel. The Issuers and the Guarantor need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld, conditioned or delayed.
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The obligations of the Issuers and the Guarantor under this Section
7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Issuers' and the Guarantor's payment obligations in this
Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal, interest and Liquidated Damages, if any, on particular Notes. Such
Lien shall survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(vii) or (viii) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
SECTION 7.08 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Issuers. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers in writing. The Issuers may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under
any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and the duties of the
Trustee under this
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Indenture. The successor Trustee shall mail a notice of its succession to the
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided that all sums owing to
the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Issuers' obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee. The replacement of the Trustee pursuant
to this Section 7.08 shall operate as a replacement of the Collateral Agent as
well. The Issuers shall take such actions as are necessary or desirable, in the
opinion of counsel to the successor Collateral Agent to maintain the perfection
of the Liens created by the Note Security Documents, all at the expense of the
Issuers.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee or any Agent consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee or any Agent, as applicable.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities. The Trustee and its direct parent shall at all times have a
combined capital surplus of at least $50.0 million as set forth in its most
recent annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUERS.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
SECTION 7.12 CO-COLLATERAL AGENT.
At any time or times, for the purpose of meeting the legal requirements
of any jurisdiction in which any of the Note Collateral may at the time be
located, the Issuers and the Collateral Agent shall have power to appoint, and,
upon the written request of the Collateral Agent or of the Holders of at least
25% in principal amount of the Notes outstanding the Issues shall for such
purpose join the Collateral Agent in the execution, delivery and performance of
all instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Collateral Agent either to act as co-collateral agent,
jointly with the Collateral Agent, of all or any part of the Note Collateral, or
to act as separate collateral agent of any such property, in either case with
such powers as may be provided in the instrument of appointment, and to vest in
such Person or Persons in the capacity aforesaid, any property, title, right or
power deemed necessary or desirable, subject to the other provisions of this
Section. If the Issuers do not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case an Event of Default has occurred
and is continuing, the Collateral Agent alone shall have power to make such
appointment.
Should any written instrument from the Issuers be required by any
co-collateral agent or separate collateral agent so appointed for more fully
confirming to such co-collateral agent or separate collateral
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agent such property, title, right or power, any and all such instruments shall,
on request, be executed, acknowledged and delivered by the Issuers.
Every co-collateral agent or separate collateral agent shall, to the
extent permitted by law, but to such extent only, be appointed subject to the
following terms, namely:
A. The rights, powers, duties and obligations hereby conferred or
imposed upon the Collateral Agent in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Collateral Agent or by the Collateral Agent and such co-collateral agent or
separate collateral agent jointly, as shall be provided in the instrument
appointing such co-collateral agent or separate collateral agent, except to the
extent that under any law of any jurisdiction in which any particular act is to
be performed, the Collateral Agent shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and obligations
shall be exercised and performed by such co-collateral agent or separate
collateral agent.
B. The Collateral Agent at any time, by an instrument in writing
executed by it, with the concurrence of the Issuers evidenced by an Officers'
Certificate, may accept the resignation of or remove any co-collateral agent or
separate collateral agent appointed under this Section, and, in case an Event of
Default has occurred and is continuing, the Collateral Agent shall have power to
accept the resignation of, or remove, any such co-collateral agent or separate
collateral agent without the concurrence of the Issuers. Upon the written
request of the Collateral Agent, the Issuers shall join with the Collateral
Agent in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or removal. A
successor to any co-collateral agent or separate collateral agent so resigned or
removed may be appointed in the manner provided in this Section.
C. No co-collateral agent or separate collateral agent hereunder shall
be personally liable by reason of any act or omission of the Collateral Agent,
or any other such collateral agent hereunder.
D. Any act of Holders of Notes delivered to the Collateral Agent shall
be deemed to have been delivered to each such co-collateral agent and separate
collateral agent.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Issuers and the Guarantor may, at the option of their respective
Boards of Directors or other governing body evidenced by a resolution set forth
in an Officers' Certificate, at any time, elect to have either Section 8.02 or
8.03 hereof be applied to all outstanding Notes and Note Guarantee upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers and the Guarantor shall, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed
to have been discharged from their respective obligations with respect to all
outstanding Notes and Note Guarantee on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Issuers and the Guarantor shall be deemed to have paid
and discharged the entire Indebtedness represented by the outstanding Notes and
Note Guarantee, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section
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8.05 hereof and the other Sections of this Indenture referred to in (a)
and (b) below, and to have satisfied all their respective other obligations
under such Notes and Note Guarantee and this Indenture (and the Trustee, on
demand of and at the expense of the Issuers, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of, premium,
if any, and interest and Liquidated Damages, if any, on such Notes when such
payments are due from the trust referred to in Section 8.04(a); (b) the Issuers'
obligations with respect to such Notes under Sections 2.02, 2.03, 2.04, 2.05,
2.06, 2.07, 2.10 and 4.02 hereof; (c) the rights, powers, trusts, duties and
immunities of the Trustee including without limitation thereunder Section 7.07,
8.05 and 8.07 hereof and the Issuers' obligations in connection therewith and
(d) the provisions of this Article 8. Subject to compliance with this Article 8,
the Issuers may exercise their option under this Section 8.02 notwithstanding
the prior exercise of its option under Section 8.03 hereof.
SECTION 8.03 COVENANT DEFEASANCE.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers and the Guarantor shall, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their respective obligations under the covenants contained in Sections
3.09, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 5.01 and 10.01
hereof with respect to the outstanding Notes and Note Guarantee on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes and Note Guarantee shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes and Note Guarantee shall not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes and Note Guarantee,
the Issuers may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes and
Note Guarantee shall be unaffected thereby. In addition, upon the Issuers'
exercise under Section 8.01 hereof of the option applicable to this Section
8.03, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(iii) through 6.01(v) hereof shall not constitute Events of
Default.
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes and Note Guarantee:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Notes, cash in
U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as shall be sufficient,
in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium and
Liquidated Damages, if any, and interest on the outstanding
Notes on the stated maturity or on the applicable redemption
date, as the case may be, and the Issuers must specify
whether the Notes are being defeased to maturity or to a
particular redemption date;
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(b) in the case of an election under Section 8.02 hereof, the
Issuers shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the
Trustee confirming that (A) the Issuers have received from,
or there has been published by, the Internal Revenue Service
a ruling or (B) since the date hereof, there has been a
change in the applicable federal income tax law, in either
case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Holders of the outstanding
Notes shall not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and
shall be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Issuers shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the
Trustee confirming that the Holders of the outstanding Notes
shall not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and
shall be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default
or Event of Default resulting from the borrowing of funds to
be applied to such deposit) or insofar as Events of Default
set forth in Section 6.01 (vii) and (viii) are concerned, at
any time in the period ending on the 91st day after the date
of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under
any material agreement or instrument (other than this
Indenture) to which the Issuers are a party or by which the
Issuers are bound;
(f) the Issuers shall have delivered to the Trustee an opinion of
counsel to the effect that after the 91st day following the
deposit, the trust funds shall not be subject to the effect
of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally;
(g) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the
Issuers with the intent of preferring the Holders of Notes
over the other creditors of the Issuers with the intent of
defeating, hindering, delaying or defrauding creditors of the
Issuers or others; and
(h) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all
conditions precedent provided for relating to the Legal
Defeasance or the Covenant Defeasance have been complied
with.
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuers acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become
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due thereon in respect of principal, premium, if any, interest and Liquidated
Damages, if any, but such money need not be segregated from other funds except
to the extent required by law.
The Issuers shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuers from time to time upon the written request
of the Issuers and be relieved of all liability with respect to any money or
non-callable Government Securities held by it as provided in Section 8.04 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are
in excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06 REPAYMENT TO THE ISSUERS.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuers, in trust for the payment of the principal of, premium, if any,
interest or Liquidated Damages, if any, on any Note and remaining unclaimed for
one year after such principal, and premium, if any, or interest or Liquidated
Damages, if any, has become due and payable shall be paid to the Issuers on
their written request or (if then held by the Issuers) shall be discharged from
such trust; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Issuers for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Issuers as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Issuers cause to be
published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
shall be repaid to the Issuers.
SECTION 8.07 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Issuers and the Guarantor under this
Indenture, the Notes and the Note Guarantee shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Issuers makes any payment of principal of, premium, if
any, interest or Liquidated Damages, if any, on any Note following the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
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ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF THE NOTES.
Notwithstanding Section 9.02 of this Indenture, without the consent of
any Holder of Notes the Issuers and the Trustee may amend or supplement this
Indenture, the Notes or the Note Guarantee:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(d) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of
the Notes;
(e) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the
date hereof;
(f) to provide for the assumption of the Guarantor's obligations
to the Holders of the Notes pursuant Article 10 hereof, as
applicable; or
(g) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under
the TIA.
Upon the written request of the Issuers accompanied by resolutions of
the Board of Directors or other governing body of the Issuers authorizing the
execution of any such amended or supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.06 hereof, the Trustee shall
join with the Issuers and the Guarantor in the execution of any amended or
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, this Indenture, the
Notes or the Note Guarantee may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer, for Notes), and, any existing
default or compliance with any provision of this Indenture, the Notes or the
Note Guarantee may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with or a tender offer or exchange offer for the Notes).
Upon the request of the Issuers accompanied by resolutions of the Board
of Directors or other governing body of the Issuers authorizing the execution of
any such amended or supplemental indenture, and upon the filing with the Trustee
of evidence satisfactory to the Trustee of the consent of the Holders of Notes
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06 hereof, the Trustee shall join with the Issuers and the Guarantor
in the execution of such amended or
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supplemental indenture unless such amended or supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may, but shall not be obligated to, enter into such
amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof. After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuers shall mail to the Holders of each Note affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Issuers to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver.
Subject to Sections 6.02, 6.04 and 6.07, hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may amend
or waive compliance in a particular instance by the Issuers or the Guarantor
with any provision of this Indenture, the Notes or the Note Guarantee. However,
without the consent of each Holder affected, an amendment, or waiver may not
(with respect to any Note held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Note or alter the provisions with respect to the redemption
of the Notes (other than provisions relating to Sections
3.09, 4.11 and 4.12 hereof);
(c) reduce the rate of or change the time for payment of interest
on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes
(except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount
of the Notes and a waiver of the payment default that
resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in Section 6.04 or 6.07 hereof;
(g) waive a redemption or repurchase payment with respect to any
Note (other than a payment required by Section 4.11 or 4.12
hereof);
(h) make any change in the amendment and waiver provisions of
this Article 9; or
(i) release Note Collateral from the Lien of the Indenture or the
Note Security Documents (except in accordance with the
provisions hereof).
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Note Guarantee or
the Notes shall be set forth in an amended or supplemental indenture that
complies with the TIA as then in effect.
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SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder of a Note may revoke the
consent as to its Note if the Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. When an
amendment, supplement or waiver becomes effective in accordance with its terms,
it thereafter binds every Holder.
The Issuers may, but shall not be obligated to, fix a record date for
determining which Holders of the Notes must consent to such amendment,
supplement or waiver. If the Issuers fix a record date, the record date shall be
fixed at (i) the later of 30 days prior to the first solicitation of such
consent or the date of the most recent list of Holders of Notes furnished for
the Trustee prior to such solicitation pursuant to Section 2.05 hereof or (ii)
such other date as the Issuers shall designate.
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Issuers in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Issuers
and the Guarantor may not sign an amendment or supplemental indenture until
their respective Boards of Directors or other governing body approves it. In
signing or refusing to sign any amended or supplemental indenture the Trustee
shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
10.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that it
will be valid and binding upon the Issuers and the Guarantor in accordance with
its terms.
SECTION 9.07 AMENDMENT, SUPPLEMENT AND WAIVER - AMENDED CREDIT AGREEMENT
Except as provided in the next two succeeding paragraphs, the Issuers
agree that they will amend or supplement the Amended Credit Agreement in a
manner that effects the Term Loan only with the consent of the holders of at
least a majority in principal amount of the Notes then outstanding, and any
existing default or compliance with any provision of the Amended Credit
Agreement may be waived by the Issuers only with the consent of the Holders of a
majority in principal amount of the then outstanding Notes.
Without the consent of each Holder of Notes, the Issuers may not amend
or waive only portions of the Amended Credit Agreement the effect of which will:
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(1) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver by the Issuers of the Amended Credit
Agreement;
(2) reduce the principal of or change the maturity of, or alter the
provisions with respect to the redemption of the Term Loan portion of
Amended Credit Agreement;
(3) reduce the rate of or change the time for payment of interest on the
Term Loan portion of the Amended Credit Agreement;
(4) waive a Term Loan Default (as defined in the Amended Credit Agreement)
or Term Loan Event of Default (as defined in the Amended Credit
Agreement) in the payment of principal of or premium, if any, or
interest on the Term Loan portion of the Amended Credit Agreement;
(5) make the Term Loan payable in money other than that stated in the Term
Loan portion of the Amended Credit Agreement;
(6) make any change in the provisions of the Amended Credit Agreement
relating to waivers of past Term Loan Defaults or the rights of the
Issuers to receive payments of principal of or premium, if any, or
interest on the Term Loan;
(7) waive a redemption payment with respect to the Term Loan portion of the
Amended Credit Agreement;
(8) release any portion of the Lien in the Collateral (except in accordance
with the provisions of the agreement creating such Lien); or
(9) make any change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder of
Notes, the Issuers may amend or supplement the Term Loan portion of the Amended
Credit Agreement to cure any ambiguity, defect or inconsistency in the Term Loan
portion of the Amended Credit Agreement or to make any change that would provide
any additional rights or benefits to the Issuers or that does not adversely
affect the legal rights under the Term Loan portion of the Amended Credit
Agreement of the Issuers or to provide for the insurance of additional
indebtedness in accordance with the limitations set forth in Amended Credit
Agreement as of the date hereof.
ARTICLE 10.
GUARANTEE OF NOTES
SECTION 10.01 NOTE GUARANTEE.
The Guarantor hereby, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes and the Obligations of the Issuers hereunder and
thereunder, that: (a) the principal of, premium, if any, interest and Liquidated
Damages, if any, on the Notes will be promptly paid in full when due, subject to
any applicable grace period, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal, premium, if any, (to the
extent permitted by law) interest on any interest, if any, and Liquidated
Damages, if any, on the Notes, and all other payment Obligations of the Issuers
to the Holders or the Trustee hereunder or thereunder will be promptly paid in
full and performed, all in accordance with the terms hereof and thereof; and (b)
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in case of any extension of time of payment or renewal of any Notes or any of
such other Obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration,
redemption or otherwise. Failing payment when so due of any amount so guaranteed
for whatever reason the Guarantor will be obligated to pay the same immediately.
An Event of Default under this Indenture or the Notes shall constitute an event
of default under the Note Guarantee, and shall entitle the Holders to accelerate
the Obligations of the Guarantor hereunder in the same manner and to the same
extent as the Obligations of the Issuers. The Guarantor hereby agrees that its
Obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder with respect to
any provisions hereof or thereof, the recovery of any judgment against the
Issuer, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Issuers, any
right to require a proceeding first against the Issuers, protest, notice and all
demands whatsoever and covenants that this Note Guarantee will not be discharged
except by complete performance of the Obligations contained in the Notes and
this Indenture. If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, the Guarantor, or any Note Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Issuer or the Guarantor, any amount paid by either to the Trustee or such
Holder, this Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. The Guarantor agrees that it shall not be
entitled to, and hereby waives, any right of subrogation in relation to the
Holders in respect of any Obligations guaranteed hereby. The Guarantor further
agrees that, as between the Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in Article 6 for the purposes of this Note
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such Obligations as provided in
Article 6 hereof, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purpose of this Note
Guarantee.
SECTION 10.02 EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To evidence its Note Guarantee set forth in Section 10.01, the
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form of EXHIBIT D shall be endorsed by an Officer of the Guarantor on each
Note authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of the Guarantor, by manual or facsimile signature, by an
Officer of the Guarantor.
The Guarantor hereby agrees that its Note Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantor.
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SECTION 10.03 GUARANTOR MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained
in this Indenture shall prohibit a merger between the Guarantor and the Issuers.
(b) Subject to Section 10.04 hereof, the Guarantor may not consolidate
with or merge with or into (whether or not the Guarantor is the surviving
Person), another corporation, Person or entity whether or not affiliated with
the Guarantor unless, subject to the provisions of the following paragraph, (i)
the Person formed by or surviving any such consolidation or merger (if other
than the Guarantor) assumes all the obligations of the Guarantor pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes and this Indenture; (ii) immediately after giving
effect to such transaction, no Default or Event of Default exists; and (iii) the
Guarantor, or any Person formed by or surviving any such consolidation or
merger, would have Consolidated Net Worth (immediately after giving effect to
such transaction), equal to or greater than the Consolidated Net Worth of the
Guarantor immediately preceding the transaction.
(c) In the case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and substantially in the form of EXHIBIT E
hereto, of the Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
the Note Guarantee to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Issuers and delivered to the
Trustee. The Note Guarantee so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Note Guarantee theretofore and
thereafter issued in accordance with the terms of this Indenture as though all
of such Note Guarantee had been issued at the date of the execution hereof.
SECTION 10.04 LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, the Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Issuers under the
Notes and this Indenture and (ii) the amount, if any, which would not have (A)
rendered the Guarantor "insolvent" (as such term is defined in the United States
Bankruptcy Code and in the Debtor and Creditor Law of the State of New York) or
(B) left the Guarantor with unreasonably small capital at the time its Note
Guarantee of the Notes was entered into; provided that, it will be a presumption
in any lawsuit or other proceeding in which the Guarantor is a party that the
amount guaranteed pursuant to the Note Guarantee is the amount set forth in
clause (i) above unless any creditor, or representative of creditors of the
Guarantor, or debtor in possession or trustee in bankruptcy of the Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is the amount set forth in clause (ii) above
SECTION 10.05 "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Issuers and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in each case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
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ARTICLE 11. COLLATERAL AND SECURITY
SECTION 11.01 NOTE SECURITY DOCUMENTS.
The due and punctual payment of the principal of and interest and
Liquidated Damages, if any, on the Notes when and as the same shall be due and
payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest and Liquidated Damages (to the extent permitted by law), if any, on
the Notes and performance of all other obligations of the Issuers to the Holders
of Notes or the Trustee under this Indenture and the Notes, according to the
terms hereunder or thereunder, shall be secured as provided in the Note Security
Documents which the Issuers have entered into simultaneously with the execution
of this Indenture. Each Holder of Notes, by its acceptance thereof, consents and
agrees to the terms of the Note Security Documents (including, without
limitation, the provisions providing for foreclosure and release of Note
Collateral) as the same may be in effect or may be amended from time to time in
accordance with its terms, appoints the Trustee to act as the "Collateral Agent"
thereunder and authorizes and directs the Trustee, as the Collateral Agent to
enter into the Note Security Documents and to perform its obligations and
exercise its rights thereunder in accordance therewith. The Issuers shall
provide for a true and complete copy of Amended Credit Agreement to be provided
to Trustee and Collateral Agent and shall do or cause to be done all such acts
and things as may be necessary or proper, or as may be required by the
provisions of the Note Security Documents, to assure and confirm to the Trustee
and the Collateral Agent the security interest in the Note Collateral
contemplated hereby, by the Note Security Documents or any part thereof, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture and of the Notes secured hereby, according to the
intent and purposes herein expressed. The Issuers shall take, or shall cause
their Subsidiaries to take, upon request of the Trustee, any and all actions
reasonably required to cause the Note Security Agreement to create and maintain,
as security for the Obligations of the Issuers hereunder, a valid and
enforceable perfected first priority Lien in and on all the Note Collateral, in
favor of the Collateral Agent for the benefit of the Holders of Notes, superior
to and prior to the rights of all third Persons and subject to no other Liens
than Permitted Liens.
SECTION 11.02 RECORDING AND OPINIONS.
(a) The Issuers shall furnish to the Trustee simultaneously with the
execution and delivery of this Indenture an Opinion of Counsel either (i)
stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, financing
statements or other instruments necessary to make effective the Lien intended to
be created by the Note Security Documents, and reciting with respect to the
security interests in the Note Collateral, the details of such action, or (ii)
stating that, in the opinion of such counsel, no such action is necessary to
make such Lien effective.
(b) The Issuers shall furnish to the Collateral Agent and the Trustee
on March 15 in each year beginning with March 15, 2000, an Opinion of Counsel,
dated as of such date, either (i) (A) stating that, in the opinion of such
counsel, action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of all supplemental
indentures, financing statements, continuation statements or other instruments
of further assurance as is necessary to maintain the Lien of the Note Security
Documents and reciting with respect to the security interests in the Note
Collateral the details of such action or referring to prior Opinions of Counsel
in which such details are given, (B) stating that, based on relevant laws as in
effect on the date of such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are necessary as of
such date and during the succeeding 12 months fully to preserve and protect, to
the extent such protection and preservation are possible by filing, the rights
of the Holders of Notes and the Collateral Agent and the Trustee hereunder
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and under the Note Security Documents with respect to the security interests in
the Note Collateral, or (ii) stating that, in the opinion of such counsel, no
such action is necessary to maintain such Lien and assignment.
(c) The Issuers shall otherwise comply with the provisions of TIA
Section 314(b).
SECTION 11.03 RELEASE OF COLLATERAL.
(a) Subject to subsections (b), (c) and (d) of this Section 11.03, Note
Collateral may be released from the Lien and security interest created by the
Note Security Documents at any time or from time to time in accordance with the
provisions of the Note Security Documents and as provided hereby. In addition,
upon the request of the Issuers pursuant to an Officers' Certificate certifying
that all conditions precedent hereunder and under the Note Security Documents
have been met and (at the sole cost and expense of the Issuers) the Collateral
Agent shall release Note Collateral. Upon receipt of such Officers' Certificate
the Collateral Agent shall execute, deliver or acknowledge any necessary or
proper instruments of termination, satisfaction or release to evidence the
release of any Note Collateral permitted to be released pursuant to this
Indenture or the Note Security Documents.
(b) No Note Collateral shall be released from the Lien and security
interest created by the Note Security Documents pursuant to the provisions of
the Note Security Documents unless there shall have been delivered to the
Collateral Agent the certificate required by this Section 11.03.
(c) At any time when a Default or Event of Default shall have occurred
and be continuing and the maturity of the Notes shall have been accelerated
(whether by declaration or otherwise) and the Trustee shall have delivered a
notice of acceleration to the Collateral Agent, no release of Note Collateral
pursuant to the provisions of the Note Security Documents shall be effective as
against the Holders of Notes.
(d) The release of any Note Collateral from the terms of this Indenture
and the Note Security Documents shall not be deemed to impair the security under
this Indenture in contravention of the provisions hereof if and to the extent
the Note Collateral is released pursuant to the terms of the Note Security
Documents. To the extent applicable, the Issuers shall cause TIA Section 313(b),
relating to reports, and TIA Section 314(d), relating to the release of property
or securities from the Lien and security interest of the Note Security Documents
and relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Note Security Documents, to
be complied with. Any certificate or opinion required by TIA Section 314(d) may
be made by an Officer of each of the Issuers except in cases where TIA Section
314(d) requires that such certificate or opinion be made by an independent
Person, which Person shall be an independent engineer, appraiser or other expert
selected or approved by the Trustee and the Collateral Agent in the exercise of
reasonable care.
SECTION 11.04 CERTIFICATES OF THE ISSUERS.
The Issuers shall furnish to the Trustee and the Collateral Agent,
prior to each proposed release of Note Collateral pursuant to the Note Security
Documents, (i) all documents required by TIA Section 314(d) and (ii) an Opinion
of Counsel, which may be rendered by internal counsel to the Issuers, to the
effect that such accompanying documents constitute all documents required by TIA
Section 314(d). The Trustee may, to the extent permitted by Sections 7.01 and
7.02 hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and such
Opinion of Counsel.
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SECTION 11.05 CERTIFICATES OF THE TRUSTEE.
In the event that the Issuers wish to release Note Collateral in
accordance with the Note Security Documents and have delivered the certificates
and documents required by the Note Security Documents and Sections 11.03 and
11.04 hereof, the Trustee shall determine whether it has received all
documentation required by TIA Section 314(d) in connection with such release
and, based on such determination and the Opinion of Counsel delivered pursuant
to Section 11.02, shall deliver a certificate to the Collateral Agent setting
forth such determination.
SECTION 11.06 AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE NOTE
SECURITY DOCUMENTS.
Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee
may, in its sole discretion and without the consent of the Holders of Notes,
direct, on behalf of the Holders of Notes, the Collateral Agent to, take all
actions it deems necessary or appropriate in order to (a) enforce any of the
terms of the Note Security Documents and (b) collect and receive any and all
amounts payable in respect of the Obligations of the Issuers hereunder. The
Trustee shall have power to institute and maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Note Collateral by any
acts that may be unlawful or in violation of the Note Security Documents or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Holders of Notes in
the Note Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial to
the interests of the Holders of Notes or of the Trustee).
SECTION 11.07 AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE NOTE
SECURITY DOCUMENTS.
The Trustee is authorized to receive any funds for the benefit of the
Holders of Notes distributed under the Note Security Documents, and to make
further distributions of such funds to the Holders of Notes according to the
provisions of this Indenture.
SECTION 11.08 TERMINATION OF SECURITY INTEREST.
Upon the payment in full of all Obligations of the Issuers under this
Indenture and the Notes, or upon Legal Defeasance, the Trustee shall, at the
request of the Issuers, deliver a certificate to the Collateral Agent stating
that such Obligations have been paid in full, and instruct the Collateral Agent
to release the Liens pursuant to this Indenture and the Note Security Documents.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
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SECTION 12.02 NOTICES.
Any notice or communication by the Issuers, the Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Issuers or the Guarantor:
AmeriServe Finance Trust
AmeriServe Capital Corporation
c/o AmeriServe Food Distribution, Inc.,
15305 Dallas Parkway
Addison, Texas 75001
Attention: President
With a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019-6188
Telecopier No.: (212) 403-2000
Attention: Adam O. Emmerich
If to the Trustee/Collateral Agent:
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, NY 10036-1532
Telecopier No.: (212) 852-1626/1627
Attention: Corporate Business Unit
except that with respect to presentation of Notes for payment or
registration of transfer or exchange:
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
The Issuers, the Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier promising next Business Day delivery, except that notices and
communications to the Trustee or the Collateral Agent shall be deemed duly given
and effective only upon receipt.
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Any notice or communication to a Holder shall be mailed by first class
mail or by overnight air courier promising next Business Day delivery to its
address shown on the register kept by the Registrar. Any notice or communication
shall also be so mailed to any Person described in TIA Section 313(c), to the
extent required by the TIA. Failure to mail a notice or communication to a
Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuers mail a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
SECTION 12.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Issuers, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuers or the Guarantor to the
Trustee to take any action under this Indenture (other than the initial issuance
of the Senior Secured Notes), the Issuers or the Guarantor shall furnish to the
Trustee upon request:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
SECTION 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
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SECTION 12.06 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Issuers or the Guarantor, as such, shall have any liability for any obligations
of the Issuers or the Guarantor under the Notes, this Indenture, the Note
Guarantee or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 12.08 GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEE.
SECTION 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Issuers or their Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.10 SUCCESSORS.
All agreements of the Issuers and the Guarantor in this Indenture, the
Notes and the Note Guarantee shall bind their respective successors and assigns.
All agreements of the Trustee in this Indenture shall bind its successors and
assigns.
SECTION 12.11 SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.12 COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
Dated as of October 1, 1999 AMERISERVE FINANCE TRUST
By:
-----------------------------------
Name:
Title:
AMERISERVE CAPITAL CORPORATION
By:
-----------------------------------
Name:
Title:
NEBCO EVANS DISTRIBUTORS, INC.
By:
-----------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:
------------------------------------
Name:
Title
261
EXHIBIT A
Face of 12% Senior Secured Notes due 2006
No. ___ $205,000,000
CUSIP NO. 03073MAA5
[AMERISERVE FINANCE TRUST]
[AMERISERVE CAPITAL CORPORATION, as agent of AmeriServe Finance Trust]
promises to pay to _________________ or registered assigns, the principal sum of
_________________ on September 15, 2006.
Interest Payment Dates: September 15 and March 15
Record Dates: September 1 and March 1
AMERISERVE FINANCE TRUST
By:
-----------------------------------
Name:
Title:
AMERISERVE CAPITAL CORPORATION,
as agent of AmeriServe Finance Trust
By:
-----------------------------------
Name:
Title:
This is one of the
Senior Secured Notes referred to in the
within-mentioned Indenture:
Dated: OCTOBER 1, 1999
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:
-----------------------------------------
A-1-1
262
(Back of Senior Secured Note)
12% Senior Secured Note due 2006
Unless and until it is exchanged in whole or in part for Senior Secured
Notes in definitive form, this Senior Secured Note may not be transferred except
as a whole by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Issuers (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the
registered owner hereof, Cede & Co., has an interest herein.
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(a) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B)
IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT.
(b) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION; AND
(c) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR
AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATIONS S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
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FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL
ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE
PRICE IS $977.06, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $22.94, THE ISSUE
DATE IS OCTOBER 1, 1999 AND THE YIELD TO MATURITY IS 12.5% PER ANNUM.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Each of AmeriServe Finance Trust, a limited purpose
Delaware Business Trust ("Finco") and AmeriServe Capital Trust, a
Delaware corporation and an agent of Finco ("Capital" and
together with Finco, the "Issuers"), and either Issuers'
successor, promises to pay interest on the principal amount of
this Senior Secured Note at the rate of 12% per annum and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5
of the Registration Rights Agreement referred to below. The
Issuers will pay interest and Liquidated Damages, if any, in
United States dollars (except as otherwise provided herein)
semi-annually in arrears on September 15 and March 15, commencing
on March 15, 2000, or if any such day is not a Business Day, on
the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Senior Secured Notes shall accrue from
the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that
if there is no existing Default or Event of Default in the
payment of interest, and if this Senior Secured Note is
authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date,
except in the case of the original issuance of Senior Secured
Notes, in which case interest shall accrue from the date of
authentication. The Issuers shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy
Law) on overdue principal at the rate equal to 1% per annum in
excess of the then applicable interest rate on the Senior Secured
Notes to the extent lawful; The Issuers shall pay interest
(including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace
period) at the same rate to the extent lawful. Interest shall be
computed on the basis of a 360-day year comprised of twelve
30-day months.
2. METHOD OF PAYMENT. The Issuers shall pay interest on the Senior
Secured Notes (except defaulted interest) and Liquidated Damages,
if any, on the applicable Interest Payment Date to the Persons
who are registered Holders of Senior Secured Notes at the close
of business on the September 1 or March 1 next preceding the
Interest Payment Date, even if such Senior Secured Notes are
cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. The Senior Secured Notes
shall be payable as to principal, premium and Liquidated Damages,
if any, and interest at the office or agency of the Issuers
maintained for such purpose within or without the City and State
of New York, or, at the option of The Issuers, payment of
interest and Liquidated Damages, if any, may be made by check
mailed to the Holders at their addresses set forth in the
register of Holders; provided that payment by wire transfer of
immediately available funds shall be required with respect to
principal of, premium and Liquidated Damages, if any, and
interest on, all Global Notes and all other Senior Secured Notes
the Holders of which shall have provided written wire transfer
instructions to the Issuers and the Paying Agent. Such payment
shall be in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public
and private debts.
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3. PAYING AGENT AND REGISTRAR. Initially, United States Trust
Company of New York, the Trustee under the Indenture, shall act
as Paying Agent and Registrar. The Issuers may change any Paying
Agent or Registrar without notice to any Holder. The Issuers or
any of their Subsidiaries may act in any such capacity.
4. INDENTURE. The Issuers issued the Senior Secured Notes under an
Indenture dated as of October 1, 1999 ("Indenture") among the
Issuers, the Guarantor and the Trustee. The terms of the Senior
Secured Notes include those stated in the Indenture and those
made a part of the Indenture by reference to the Trust Indenture
Act of 1939, as amended (15 U.S. Codess.ss.77aaa-77bbbb) (the
"TIA"). The Senior Secured Notes are subject to all such terms,
and Holders are referred to the Indenture and such Act for a
statement of such terms. The Senior Secured Notes are secured
Obligations of the Issuers limited to $205,000,000 in aggregate
principal amount, plus amounts, if any, sufficient to pay premium
or Liquidated Damages, if any, and interest on outstanding Senior
Secured Notes as set forth in Paragraph 2 hereof. The Indenture
pursuant to which the Senior Secured Note is issued provides that
up to $45.0 million of Additional Notes may be issued thereunder.
5. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Senior Secured
Notes shall not be redeemable at the Issuers' option prior to
September 15, 2003. Thereafter, the Senior Secured Notes shall be
subject to redemption at the option of the Issuers, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at
the redemption prices (expressed as percentages of Accreted
Value) set forth below together with accrued and unpaid interest
and any Liquidated Damages, if any, thereon to the applicable
redemption date, if redeemed during the twelve-month period
beginning on April 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2003..................................................... 106.000%
2004..................................................... 103.000%
2005 and thereafter...................................... 100.000%
Notwithstanding the foregoing, at any time prior to September
15, 2001 the Issuers may redeem up to 33% of the original
aggregate principal amount of Senior Secured Notes at a
redemption price of 112.0% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, to
the redemption date, with the net proceeds of a Public Equity
Offering; provided that at least 67% of the original aggregate
principal amount of Senior Secured Notes remains outstanding
immediately after the occurrence of such redemption; and
provided, further, that such redemption shall occur within 45
days of the date of the closing of such Public Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Issuers shall
not be required to make mandatory redemption or sinking fund
payments with respect to the Senior Secured Notes.
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7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder of
Senior Secured Notes will have the right to require the Issuers
to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Secured Notes pursuant
to the offer described below (the "Change of Control Offer") at
an offer price in cash equal to 101% of the Accreted Value
thereof plus accrued and unpaid interest and Liquidated Damages,
if any, thereon, to the date of purchase. Within 30 days
following any Change of Control, the Issuers shall mail a notice
to each Holder describing the transaction or transactions that
constitute the Change of Control setting forth the procedures
governing the Change of Control Offer required by the Indenture.
(b) When the aggregate amount of Excess Proceeds exceeds $15.0
million, the Issuers shall offer to all Holders of Senior Secured
Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Senior Secured Notes that may be purchased out of the
Excess Proceeds at an offer price in cash equal to 100% of
Accreted Value thereof, plus accrued and unpaid interest, and
Liquidated Damages thereon, if any, to the date of purchase in
accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Senior Secured Notes
(including any Additional Notes) tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Issuers may use
any remaining Excess Proceeds for any general corporate purposes.
If the aggregate principal amount of Senior Secured Notes
surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Senior Secured Notes to be
purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
(c) Holders of the Senior Secured Notes that are the subject of
an Offer to Purchase will receive a Change of Control Offer or
Asset Sale Offer from the Issuers prior to any related purchase
date and may elect to have such Senior Secured Notes purchased by
completing the form titled "Option of Holder to Elect Purchase"
appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption
date to each Holder whose Senior Secured Notes are to be redeemed
at its registered address. Senior Secured Notes in denominations
larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Senior Secured Notes held
by a Holder are to be redeemed. On and after the redemption date,
interest and Liquidated Damages, if any, ceases to accrue on the
Senior Secured Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Secured Notes are
in registered form without coupons in initial denominations of
$1,000 and integral multiples of $1,000. The transfer of the
Senior Secured Notes may be registered and the Senior Secured
Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer
documents and the Issuers may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The
Issuers need not exchange or register the transfer of any Senior
Secured Note or portion of a Senior Secured Note selected for
redemption, except for the unredeemed portion of any Senior
Secured Note being redeemed in part. Also, it need not exchange
or register the transfer of any Senior Secured Notes for a period
of 15 days before a selection of Senior Secured Notes to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date.
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10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Secured
Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following
paragraphs, the Indenture, the Senior Secured Notes and the Note
Guarantee may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Senior
Secured Notes and Additional Notes then outstanding (including,
without limitation, consents obtained in connection with a
purchase of or, tender offer or exchange offer for Senior Secured
Notes), and any existing Default or Event of Default or
compliance with any provision of the Indenture, the Senior
Secured Notes or the Note Guarantee may be waived with the
consent of the Holders of a majority in principal amount of the
then outstanding Senior Secured Notes and Additional Notes
(including consents obtained in connection with a tender offer or
exchange offer for Senior Secured Notes).
Without the consent of any Holder of Senior Secured Notes, the
Issuers and the Trustee may amend or supplement the Indenture,
the Note Guarantees or the Senior Secured Notes to cure any
ambiguity, defect or inconsistency, to provide for uncertificated
Senior Secured Notes in addition to or in place of certificated
Senior Secured Notes, to make any change that would provide any
additional rights or benefits to the Holders of Senior Secured
Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, to provide for the issuance of
Additional Notes in accordance with the limitations set forth in
the Indenture, or to comply with the requirements of the
Commission in order to effect or maintain the qualification of
the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on or Liquidated
Damages, if any, with respect to the Senior Secured Notes or the
Term Loan; (ii) default in payment when due of the principal of
or premium, if any, on the Senior Secured Notes or the Term Loan;
(iii) failure by the Issuers to comply with the provisions
described in Sections 4.07, 4.08, 4.11, 4.12 or 5.01 of the
Indenture; (iv) failure by either Issuer for 60 days after notice
from the Trustee or the Holders of at least 25% in principal
amount of the Senior Secured Notes then outstanding to comply
with its other agreements in the Indenture or the Senior Secured
Notes; (v) default under the Term Loan portion of the Amended
Credit Agreement (vi) failure by the Issuers to pay final
judgments aggregating in excess of $5.0 million, which judgments
are not paid discharged or stayed within 60 days after their
entry; and (vii) certain events of bankruptcy or Issuers.
If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then
outstanding Senior Secured Notes may declare all the Senior
Secured Notes to be due and payable immediately. Notwithstanding
the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the
Issuers all outstanding Senior Secured Notes will become due and
payable without further action or notice. Holders of the Senior
Secured Notes may not enforce the Indenture or the Senior Secured
Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the
then outstanding Senior Secured Notes may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from
Holders of the Senior Secured Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default
relating
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to the payment of principal or interest) if it determines that
withholding notice is in their interest.
13. TRUSTEE DEALINGS WITH ISSUERS. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and
perform services for the Issuers, the Guarantor or their
respective Affiliates, and may otherwise deal with the Issuers,
the Guarantor or their respective Affiliates, as if it were not
the Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder, of the Issuers or Guarantor, as
such, shall have any liability for any obligations of the Issuers
or Guarantor under the Senior Secured Notes, the Indenture or the
Note Guarantee or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of
Senior Secured Notes by accepting a Senior Secured Note waives
and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Senior Secured Notes
and the Note Guarantee.
15. AUTHENTICATION. This Senior Secured Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.
In addition to the rights provided to Holders of the Senior
Secured Notes under the Indenture, Holders of Transferred
Restricted Securities (as defined in the Registration Rights
Agreement) shall have all the rights set forth in the
Registration Rights Agreement, dated as of the date hereof, among
the Issuers, the Guarantor and the Initial Purchasers or, in the
case of Additional Notes, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have the rights set forth in
one or more registration rights agreements, if any, between the
Issuers and the other parties thereto, relating to rights given
by the Issuers to the purchasers of Additional Notes
(collectively, the "Registration Rights Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the
Issuers have caused CUSIP numbers to be printed on the Senior
Secured Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to the Holders. No representation is
made as to the accuracy of such numbers either as printed on the
Senior Secured Notes or as contained in any notice of redemption
and reliance may be placed only on the other identification
numbers placed thereon.
The Issuers shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
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AmeriServe Finance Trust
AmeriServe Capital Corporation
c/o AmeriServe Food Distribution, Inc.
15305 Dallas Parkway
Addison, Texas 75001
Telecopy: (972) 364-2022
Chief Financial Officer
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ASSIGNMENT FORM
To assign this Senior Secured Note, fill in the form below: (I) or (we)
assign and transfer this Senior Secured Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Senior Secured Note on the books of the Issuers. The agent may
substitute another to act for him.
Date: __________
Your Signature:
-----------------------------------
(Sign exactly as your name appears on the face of
this Senior Secured Note)
Signature Guarantee:
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Secured Note purchased by the
Issuers pursuant to Section 4.11 or 4.12 of the Indenture, check the box below:
[ ] Section 4.11 [ ] Section 4.12
If you want to elect to have only part of the Senior Secured Note
purchased by the Issuers pursuant to Section 4.11 or Section 4.12 of the
Indenture, state the amount you elect to have purchased: $___________
Date: __________
Your Signature:
-----------------------------------
(Sign exactly as your name appears on the face of
this Senior Secured Note)
Tax Identification No.:
---------------------------
Signature Guarantee:
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SCHEDULE OF EXCHANGES OF SENIOR SECURED NOTES(1)
The following exchanges of a part of this Global Note for other Senior
Secured Notes have been made:
Principal Amount of Signature of
this Global Note authorized officer
Amount of decrease Amount of increase in following such of Trustee or Senior
in Principal Amount Principal Amount of decrease (or Secured Note
Date of Exchange of this Global Note this Global Note increase) Custodian
- ------------------------- ------------------- --------------------- ------------------- --------------------
- ----------------
(1) This should be included only if the Secured Senior Note is issued in global
form.
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EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(1) of the Indenture)
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
Re: 12% Senior Secured Notes due 2006 of AmeriServe Finance Trust and AmeriServe
Capital Corporation
Reference is hereby made to the Indenture, dated as of October 1, 1999
(the "Indenture"), among AmeriServe Finance Trust, a limited purpose Delaware
Corporation ("Finco"), AmeriServe Capital Corporation, a Delaware corporation
acting as an agent of Finco pursuant to the Agency Agreement dated as of
September 24, 1999 ("Capital" and together with Finco, the "Issuers"), Nebco
Evans Distributors, Inc. (the "Guarantor"), and United States Trust Company of
New York, as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
This letter relates to $ __________ principal amount of Senior Secured
Notes which are evidenced by one or more Rule 144A Global Notes and held with
the Depositary in the name of ______________________ (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the Senior
Secured Notes to a Person who will take delivery thereof in the form of an equal
principal amount of Senior Secured Notes evidenced by one or more Regulation S
Global Notes, which amount, immediately after such transfer, is to be held with
the Depositary through Euroclear or Cedel or both.
In connection with such request and in respect of such Senior Secured
Notes, the Transferor hereby certifies that such transfer has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with Rule 903 or Rule 904 under the United States
Securities Act of 1933, as amended (the "Securities Act"), and accordingly the
Transferor hereby further certifies that:
(1) The offer of the Senior Secured Notes was not made to a
person in the United States;
(2) either:
(a) at the time the buy order was originated, the
transferee was outside the United States or the
Transferor and any person acting on its behalf
reasonably believed and believes that the transferee
was outside the United States; or
(b) the transaction was executed in, on or through the
facilities of a designated offshore securities market
and neither the Transferor nor any person acting on its
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behalf knows that the transaction was prearranged with
a buyer in the United States;
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 904(b) of
Regulation S;
(4) the transaction is not part of a plan or scheme to
evade the registration provisions of the Securities
Act; and
(5) upon completion of the transaction, the beneficial
interest being transferred as described above is to be
held with the Depositary through Euroclear or Cedel or
both.
Upon giving effect to this request to exchange a beneficial interest in
a Rule 144A Global Note for a beneficial interest in a Regulation S Global Note,
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Regulation S Global Notes pursuant to the Indenture and
the Securities Act and, if such transfer occurs prior to the end of the 40-day
restricted period associated with the initial offering of Senior Secured Notes,
the additional restrictions applicable to transfers of interest in the
Regulation S Temporary Global Note.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers, the Guarantor and Donaldson, Lufkin &
Jenrette Securities Corporation, Banc of America Securities LLC, and Salomon
Smith Barney Inc., the initial purchasers of such Senior Secured Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
Dated:
cc: AmeriServe Finance Trust
AmeriServe Capital Corporation
AmeriServe Food Distribution, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Banc of America Securities LLC
Salomon Smith Barney Inc.
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EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
Re: 12% Senior Secured Notes due 2006 of AmeriServe Finance Trust and
AmeriServe Capital Corporation
Reference is hereby made to the Indenture, dated as of October 1, 1999
(the "Indenture"), among AmeriServe Finance Trust, a limited purpose Delaware
Trust ("Finco"), AmeriServe Capital Corporation, a Delaware corporation acting
as an agent of Finco pursuant to the Agency Agreement dated as of September 24,
1999 ("Capital" and together with Finco, the "Issuers"), Nebco Evans
Distributors, Inc. (the "Guarantor"), and United States Trust Company of New
York, as trustee (the "Trustee"). Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to $_____________ principal amount of Senior
Secured Notes which are evidenced by one or more Regulation S Global Notes and
held with the Depositary through Euroclear or Cedel in the name of
__________________________________ (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Senior Secured Notes to
a Person who will take delivery thereof in the form of an equal principal amount
of Senior Secured Notes evidenced by one or more Rule 144A Global Notes, to be
held with the Depositary.
In connection with such request and in respect of such Senior Secured
Notes, the Transferor hereby certifies that:
[CHECK ONE]
[ ] such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Senior Secured Notes are being transferred to a
Person that the Transferor reasonably believes is purchasing the Senior
Secured Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the
requirements of Rule 144A;
or
[ ] such transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;
or
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[ ] such transfer is being effected pursuant to an exemption under the
Securities Act other than Rule 144A, Rule 144 or Rule 904 and the
Transferor further certifies that the Transfer complies with the
transfer restrictions applicable to beneficial interests in Global
Notes and Definitive Senior Secured Notes bearing the Private Placement
Legend and the requirements of the exemption claimed, which
certification is supported by (x) if such transfer is in respect of a
principal amount of Senior Secured Notes at the time of Transfer of
$100,000 or more, a certificate executed by the Transferee in the form
of EXHIBIT C to the Indenture, or (y) if such Transfer is in respect of
a principal amount of Senior Secured Notes at the time of transfer of
less than $100,000, (1) a certificate executed in the form of EXHIBIT C
to the Indenture and (2) an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that (1) such Transfer
is in compliance with the Securities Act and (2) such Transfer complies
with any applicable blue sky securities laws of any state of the United
States;
or
[ ] such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Senior
Secured Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Issuers and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and such Senior Secured Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Notes for a beneficial interest in 144A Global Senior
Secured Notes, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Rule 144A Global Notes pursuant to the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers, the Guarantor and Donaldson, Lufkin &
Jenrette Securities Corporation, Banc of America Securities LLC, and Salomon
Smith Barney Inc., the initial purchasers of such Senior Secured Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
B-2-2
276
Dated:
cc: AmeriServe Finance Trust
AmeriServe Capital Corporation
AmeriServe Food Distribution, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Banc of America Securities LLC
Salomon Smith Barney Inc.
B-2-3
277
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE SENIOR SECURED NOTES
(Pursuant to Section 2.06(b) of the Indenture)
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
Re: 12% Senior Secured Notes due 2006 of AmeriServe Finance Trust and
AmeriServe Capital Corporation
Reference is hereby made to the Indenture, dated as of October 1, 1999
(the "Indenture"), among AmeriServe Finance Trust, a limited purpose Delaware
Trust ("Finco"), AmeriServe Capital Corporation, a Delaware corporation acting
as an agent of Finco pursuant to the Agency Agreement dated as of September 24,
1999 ("Capital" and together with Finco, the "Issuers"), Nebco Evans
Distributors, Inc. (the "Guarantor"), and United States Trust Company of New
York, as trustee (the "Trustee"). Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This relates to $____________ principal amount of Senior Secured Notes
which are evidenced by one or more Definitive Senior Secured Notes in the name
of ____________ (the "Transferor"). The Transferor has requested an exchange or
transfer of such Definitive Senior Secured Note(s) in the form of an equal
principal amount of Senior Secured Notes evidenced by one or more Definitive
Senior Secured Notes, to be delivered to the Transferor or, in the case of a
transfer of such Senior Secured Notes, to such Person as the Transferor
instructs the Trustee.
In connection with such request and in respect of the Senior Secured
Notes surrendered to the Trustee herewith for exchange (the "Surrendered Senior
Secured Notes"), the Holder of such Surrendered Senior Secured Notes hereby
certifies that:
[CHECK ONE]
[ ] the Surrendered Senior Secured Notes are being acquired for the
Transferor's own account, without transfer;
or
[ ] the Surrendered Senior Secured Notes are being transferred to the
Issuers;
or
[ ] the Surrendered Senior Secured Notes are being transferred pursuant to
and in accordance with Rule 144A under the United States Securities Act
of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Senior Secured
Notes are being transferred to a Person that the Transferor reasonably
believes is purchasing the Surrendered Senior Secured Notes for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such
B-3-1
278
account is a "qualified institutional buyer" within the meaning of Rule
144A, in each case in a transaction meeting the requirements of Rule
144A;
or
[ ] the Surrendered Senior Secured Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
[ ] the Surrendered Senior Secured Notes are being transferred pursuant to
an exemption under the Securities Act other than Rule 144A, Rule 144 or
Rule 904 and the Transferor further certifies that the Transfer
complies with the transfer restrictions applicable to beneficial
interests in Global Notes and Definitive Senior Secured Notes bearing
the Private Placement Legend and the requirements of the exemption
claimed, which certification is supported by (x) if such transfer is in
respect of a principal amount of Senior Secured Notes at the time of
Transfer of $100,000 or more, a certificate executed by the Transferee
in the form of EXHIBIT C to the Indenture, or (y) if such Transfer is
in respect of a principal amount of Senior Secured Notes at the time of
transfer of less than $100,000, (1) a certificate executed in the form
of EXHIBIT C to the Indenture and (2) an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that (1) such Transfer
is in compliance with the Securities Act and (2) such Transfer complies
with any applicable blue sky securities laws of any state of the United
States;
or
[ ] the Surrendered Senior Secured Notes are being transferred pursuant to
an effective registration statement under the Securities Act;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Senior
Secured Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Issuers and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and the Surrendered Senior Secured Notes are being transferred in compliance
with any applicable blue sky securities laws of any state of the United States.
B-3-2
279
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers, the Guarantor and Donaldson, Lufkin &
Jenrette Securities Corporation, Banc of America Securities LLC, and Salomon
Smith Barney Inc., the initial purchasers of such Senior Secured Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
Dated:
cc: AmeriServe Finance Trust
AmeriServe Capital Corporation
AmeriServe Food Distribution, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Banc of America Securities LLC
Salomon Smith Barney Inc.
B-3-3
280
EXHIBIT B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE
TO DEFINITIVE SENIOR SECURED NOTE
(Pursuant to Section 2.06(c) of the Indenture)
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
Re: 12% Senior Secured Notes due 2006 of AmeriServe Finance Trust and
AmeriServe Capital Corporation
Reference is hereby made to the Indenture, dated as of October 1, 1999
(the "Indenture"), among AmeriServe Finance Trust, a limited purpose Delaware
Trust ("Finco"), AmeriServe Capital Corporation, a Delaware corporation acting
as an agent of Finco pursuant to the Agency Agreement dated as of September 24,
1999 ("Capital" and together with Finco, the "Issuers"), Nebco Evans
Distributors, Inc. (the "Guarantor"), and United States Trust Company of New
York, as trustee (the "Trustee"). Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to $____________ principal amount of Senior Secured
Notes which are evidenced by a beneficial interest in one or more Rule 144A
Global Notes in the name of ________________ (the "Transferor"). The Transferor
has requested an exchange or transfer of such beneficial interest in the form of
an equal principal amount of Senior Secured Notes evidenced by one or more
Definitive Senior Secured Notes, to be delivered to the Transferor or, in the
case of a transfer of such Senior Secured Notes, to such Person as the
Transferor instructs the Trustee.
In connection with such request and in respect of the Senior Secured
Notes surrendered to the Trustee herewith for exchange (the "Surrendered Senior
Secured Notes"), the Holder of such Surrendered Senior Secured Notes hereby
certifies that:
[CHECK ONE]
[ ] the Surrendered Senior Secured Notes are being transferred to the
beneficial owner of such Senior Secured Notes;
or
[ ] the Surrendered Senior Secured Notes are being transferred pursuant to
and in accordance with Rule 144A under the United States Securities Act
of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Senior Secured
Notes are being transferred to a Person that the Transferor reasonably
believes is purchasing the Surrendered Senior Secured Notes for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule
144A, in each case in a transaction meeting they requirements of Rule
144A;
B-4-1
281
or
[ ] the Surrendered Senior Secured Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
[ ] the Surrendered Senior Secured Notes are being transferred pursuant to
an effective registration statement under the Securities Act;
or
[ ] the Surrendered Senior Secured Notes are being transferred pursuant to
an exemption under the Securities Act other than Rule 144A, Rule 144 or
Rule 904 and the Transferor further certifies that the Transfer
complies with the transfer restrictions applicable to beneficial
interests in Global Notes and Definitive Senior Secured Notes bearing
the Private Placement Legend and the requirements of the exemption
claimed, which certification is supported by (x) if such transfer is in
respect of a principal amount of Senior Secured Notes at the time of
Transfer of $100,000 or more, a certificate executed by the Transferee
in the form of EXHIBIT C to the Indenture, or (y) if such Transfer is
in respect of a principal amount of Senior Secured Notes at the time of
transfer of less than $100,000, (1) a certificate executed in the form
of EXHIBIT C to the Indenture and (2) an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that (1) such Transfer
is in compliance with the Securities Act and (2) such Transfer complies
with any applicable blue sky securities laws of any state of the United
States;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Senior
Secured Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Issuers and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and the Surrendered Senior Secured Notes are being transferred in compliance
with any applicable blue sky securities laws of any state of the United States.
B-4-2
282
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers, the Guarantor and Donaldson, Lufkin &
Jenrette Securities Corporation, Banc of America Securities LLC, and Salomon
Smith Barney Inc., the initial purchaser of such Senior Secured Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
Dated:
cc: AmeriServe Finance Trust
AmeriServe Capital Corporation
AmeriServe Food Distribution, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Banc of America Securities LLC
Salomon Smith Barney Inc.
B-4-3
283
EXHIBIT C
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
Re: 12% Senior Secured Notes due 2006 of AmeriServe Finance Trust and
AmeriServe Capital Corporation
Reference is hereby made to the Indenture, dated as of October 1, 1999
(the "Indenture"), among AmeriServe Finance Trust, a limited purpose Delaware
Trust ("Finco"), AmeriServe Capital Corporation, a Delaware corporation acting
as an agent of Finco pursuant to the Agency Agreement dated as of September 24,
1999 ("Capital" and together with Finco, the "Issuers"), Nebco Evans
Distributors, Inc. (the "Guarantor"), and United States Trust Company of New
York, as trustee (the "Trustee"). Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $______________ aggregate
principal amount of:
(a) [ ] Beneficial interests, or
(b) [ ] Definitive Senior Secured Notes,
we confirm that:
1. We understand that any subsequent transfer of the Senior Secured
Notes of any interest therein is subject to certain restrictions
and conditions set forth in the Indenture and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise
transfer the Senior Secured Notes or any interest therein except
in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Senior Secured Notes
have not been registered under the Securities Act, and that the
Senior Secured Notes and any interest therein may not be offered
or sold except as permitted in the following sentence. We agree,
on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell the Senior
Secured Notes or any interest therein, (A) we will do so only
(1)(a) to a person who the Seller reasonably believes is a
qualified institutional buyer (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of
144A, (b) in a transaction meeting the requirements of Rule 144
under the Securities Act, (c) outside the United States to a
foreign person in a transaction meeting the requirements of Rule
904 of the Securities Act, or (d) in accordance with another
exemption from the registration requirements of the Securities
Act (and based upon an opinion of counsel), (2) to the Issuers or
(3) pursuant to an effective registration statement and, in each
case, in accordance with any applicable securities laws of any
State of the United States or any other applicable jurisdiction
and
C-1
284
(B) we will, and each subsequent holder will be required to,
notify any purchaser from it of the security evidenced hereby of
the resale restrictions set forth in (A) above."
3. We understand that, on any proposed resale of the Senior Secured
Notes or beneficial interests, we will be required to furnish to
you and the Issuers such certifications, legal opinions and other
information as you and the Issuers may reasonably require to
confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Senior Secured Notes
purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of our investment in the Senior Secured Notes, and we and
any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Senior Secured Notes or beneficial interests
therein purchased by us for our own account or for one or more
accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment
discretion.
6. We are not acquiring the Senior Secured Notes with a view to any
distribution thereof that would violate the Securities Act or the
securities laws of any State of the United States.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
--------------------------------------------
[Insert Name of Accredited Investor]
By:
-----------------------------------------
Name:
Title:
Dated: ,
---------------- ------
C-2
285
EXHIBIT D
NOTE GUARANTEE
Subject to Article of the Indenture, the Guarantor hereby
unconditionally guarantees to each Holder of a Senior Secured Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Senior
Secured Notes and the Obligations of the Issuers under the Senior Secured Notes
or under the Indenture, that: (a) the principal of, premium, if any, interest
and Liquidated Damages, if any, on the Senior Secured Notes will be promptly
paid in full when due, subject to any applicable grace period, whether at
maturity, by acceleration, redemption or otherwise, and interest on overdue
principal, premium, if any, (to the extent permitted by law) interest on any
interest, if any, and Liquidated Damages, if any, on the Senior Secured Notes
and all other payment Obligations of the Issuers to the Holders or the Trustee
under the Indenture or under the Senior Secured Notes will be promptly paid in
full and performed, all in accordance with the terms thereof; and (b) in case of
any extension of time of payment or renewal of any Senior Secured Notes or any
of such other payment Obligations, the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when so due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantor will be obligated to pay the same immediately.
The obligations of the Guarantor to the Holders and to the Trustee
pursuant to this Note Guarantee and the Indenture are expressly set forth in
Article 10 of the Indenture, and reference is hereby made to such Indenture for
the precise terms of this Note Guarantee. The terms of Article 10 of the
Indenture are incorporated herein by reference.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon the Guarantor and its respective successors and
assigns to the extent set forth in the Indenture until full and final payment of
all of the Issuers' Obligations under the Senior Secured Notes and the Indenture
and shall inure to the benefit of the successors and assigns of the Trustee and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. This is a Note
Guarantee of payment and not a guarantee of collection.
This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Senior Secured Note upon which
this Note Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
For purposes hereof, the Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Issuers under the
Senior Secured Notes and the Indenture and (ii) the amount, if any, which would
not have (A) rendered such the Guarantor "insolvent" (as such term is defined in
the Bankruptcy Law and in the Debtor and Creditor Law of the State of New York)
or (B) left the Guarantor with unreasonably small capital at the time its Note
Guarantee of the Senior Secured Notes was entered into; provided that, it will
be a presumption in any lawsuit or other proceeding in which the Guarantor is a
party that the amount guaranteed pursuant to the Note Guarantee is the amount
set forth in clause (i) above unless any creditor, or representative of
creditors of the Guarantor, or debtor in possession or trustee in bankruptcy of
the Guarantor, otherwise proves in such a lawsuit that the aggregate liability
of the Guarantor is limited to the amount set forth in clause (ii) above.
E-1
286
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Dated as of [_________], 1999 NEBCO EVANS DISTRIBUTORS, INC.
By:
------------------------------------
Name:
Title:
E-2
287
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
___________, between [ ] (the "New Guarantor"), and [ ], as trustee
under the indenture referred to below (the "Trustee"). Capitalized terms used
herein and not defined herein shall have the meaning ascribed to them in the
Indenture (as defined below).
W I T N E S S E T H
WHEREAS, the Issuers have heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of October 1, 1999, providing
for the issuance of an aggregate principal amount of up to $230,000,000 of 12%
Senior Secured Notes due 2006 (the "Senior Notes");
WHEREAS, Section 10.03 of the Indenture provides that under certain
circumstances a supplemental indenture must be executed pursuant to which such
all of the Issuers' Obligations under the Senior Notes will be guaranteed
pursuant to a Note Guarantee on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Senior Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO NOTE GUARANTEE. The New Guarantor hereby agrees to
guarantee the Issuers' Obligations under the Senior Notes and the Indenture on
the terms and subject to the conditions set forth in Article 10 of the Indenture
and to be bound by all other applicable provisions of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of the Guarantor, as such,
shall have any liability for any obligations of the Issuers under the Senior
Notes, any Note Guarantee, the Indenture or this Supplemental Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Senior Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Senior Notes.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
5. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
E-3
288
7. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Guarantor.
E-4
289
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: [NAME OF NEW GUARANTOR]
---------------
By:
-----------------------------------------
Name:
Title:
Dated: AS TRUSTEE
---------------
By:
-----------------------------------------
Name:
Title:
E-5
290
[ARTICLE] 5
[MULTIPLIER] 1,000
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-25-1999
[PERIOD-START] DEC-26-1998
[PERIOD-END] SEP-25-1999
[CASH] 1,610
[SECURITIES] 0
[RECEIVABLES] 229,129
[ALLOWANCES] (23,982)
[INVENTORY] 318,724
[CURRENT-ASSETS] 553,482
[PP&E] 357,379
[DEPRECIATION] (70,619)
[TOTAL-ASSETS] 1,982,254
[CURRENT-LIABILITIES] 875,044
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 0
[OTHER-SE] (151,859)
[TOTAL-LIABILITY-AND-EQUITY] 1,982,254
[SALES] 6,310,571
[TOTAL-REVENUES] 6,310,571
[CGS] 5,749,515
[TOTAL-COSTS] 5,749,515
[OTHER-EXPENSES] 648,854
[LOSS-PROVISION] 1,761
[INTEREST-EXPENSE] 67,094
[INCOME-PRETAX] (176,654)
[INCOME-TAX] 1,287
[INCOME-CONTINUING] (177,941)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (177,941)
[EPS-BASIC] 0
[EPS-DILUTED] 0