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Exhibit 4.1
FOOD 4 LESS HOLDINGS, INC.
AND
FOOD 4 LESS SUPERMARKETS, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of June 14, 1995 and entered
into by and among FOOD 4 LESS HOLDINGS, INC., a Delaware corporation ("NEW
HOLDINGS"), FOOD 4 LESS SUPERMARKETS, INC., a Delaware corporation ("FOOD 4
LESS"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually referred to herein as a "LENDER" and collectively as "LENDERS"),
BANQUE INDOSUEZ, BANQUE PARIBAS, BARCLAYS BANK PLC, and CREDIT LYONNAIS CAYMAN
ISLAND BRANCH, as co-agents for Lenders (each individually referred to herein
as a "CO-AGENT" and collectively as "CO-AGENTS"), BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION, THE CHASE MANHATTAN BANK, N.A., CAMPAGNIE
FINANCIERE DE CIC ET DE L'UNION EUROPEENNE, CREDIT SUISSE, THE MITSUBISHI TRUST
AND BANKING CORPORATION, NATWEST BANK N.A., UNION BANK, UNITED STATES NATIONAL
BANK OF OREGON and WELLS FARGO BANK, N.A., as co-arrangers for Lenders (each
individually referred to herein as a "CO-ARRANGER" and collectively as
"CO-ARRANGERS"), and BANKERS TRUST COMPANY ("BANKERS"), as administrative agent
for Lenders (in such capacity, "AGENT").
R E C I T A L S
WHEREAS, prior to the consummation of the transactions
referred to herein, F4L Parent (capitalized terms used herein without
definition shall have the meanings set forth in Section 1 below) has merged
with and into Old Holdings with Old Holdings being the surviving corporation;
WHEREAS, in order to effect the reincorporation of Old
Holdings as a Delaware corporation, Old Holdings has merged with and into New
Holdings with New Holdings being the surviving corporation and, as a result of
the Reincorporation Merger, New Holdings has succeeded to all of the rights and
obligations of Old Holdings;
WHEREAS, pursuant to the Merger Agreement, Holdings and Food 4
Less will acquire all of the outstanding capital stock of Ralphs Supermarkets;
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WHEREAS, Holdings and Food 4 Less will effect the acquisition
of all of the outstanding capital stock of Ralphs Supermarkets (a) by Holdings
making a cash payment to the Sellers of approximately $100,000,000 and issuing
the Seller Debentures and $18,500,000 initial accreted value of Holdings
Discount Debentures to the Sellers in consideration for approximately 48% of
the issued and outstanding capital stock of Ralphs Supermarkets, which capital
stock will thereupon be contributed by Holdings to Food 4 Less, and (b) upon
receipt of such capital stock, by merging Food 4 Less with and into Ralphs
Supermarkets with Ralphs Supermarkets being the surviving corporation and the
Sellers receiving a cash payment of approximately $275,900,000 in consideration
for the remaining approximately 52% of the issued and outstanding capital stock
of Ralphs Supermarkets;
WHEREAS, immediately upon consummation of the RSI Merger,
Ralphs Grocery will be merged with and into Ralphs Supermarkets, with Ralphs
Supermarkets being the surviving corporation, and immediately upon consummation
of the RGC Merger, Ralphs Supermarkets' name will be changed to "Ralphs Grocery
Company";
WHEREAS, to effect the Acquisition as herein described, (a)
Holdings (i) is offering to purchase for cash all of the Holdings Discount
Notes for an aggregate amount not to exceed $85,500,000 and (ii) is soliciting
consents from holders of the Holdings Discount Notes to certain amendments to
the Holdings Discount Note Indenture, (b) Food 4 Less (i) is offering to
holders of the Old F4L Senior Notes and the Old F4L Senior Subordinated Notes
to exchange such notes for New F4L Senior Notes and the New F4L Senior
Subordinated Notes, respectively, and a cash payment, and (ii) is soliciting
consents from holders of the Old F4L Senior Notes and the Old F4L Senior
Subordinated Notes to certain amendments to the Old F4L Senior Note Indenture
and the Old F4L Senior Subordinated Note Indenture, and (c) Food 4 Less (i) is
offering to holders of the Old RGC 9% Subordinated Notes and the Old RGC
10-1/4% Subordinated Notes to exchange not less than a majority in aggregate
principal amount of such notes for an equivalent aggregate principal amount of
the New RGC Senior Subordinated Notes and a cash payment, (ii) is offering to
purchase for cash at 101% of the principal amount thereof the Old RGC 9%
Subordinated Notes and the Old RGC 10-1/4% Subordinated Notes in excess of the
minimum required exchange amount and (iii) is soliciting consents from holders
of the Old RGC 9% Subordinated Notes and the Old RGC 10-1/4% Subordinated Notes
to certain amendments to the Old RGC 9% Subordinated Note Indenture and the Old
RGC 10-1/4% Subordinated Note Indenture;
WHEREAS, as a result of the change of control of Ralphs
Supermarkets effected by the Acquisition, Company will thereafter offer to
purchase any then outstanding Old RGC 9% Subordinated Notes and Old RGC 10-1/4%
Subordinated Notes for a purchase price of 101% of the principal amount thereof
plus accrued interest;
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WHEREAS, in order to finance (a) the payment of the
approximately $375,900,000 cash purchase consideration to the Sellers and
management stockholders and option holders in connection with the Acquisition,
(b) the refinancing of approximately $615,500,000 of existing indebtedness of
Food 4 Less and Ralphs Grocery, (c) the payment of up to $22,800,000 pursuant
to the provisions of the equity appreciation rights of Ralphs Supermarkets, (d)
the purchase of not less than $19,000,000 and up to $30,000,000 in Old RGC 9%
Subordinated Notes and Old RGC 10-1/4% Subordinated Notes in the Ralphs Grocery
Offers described herein, (e) the repayment in full of the principal amount of
the Holdings Discount Notes plus accrued interest and premiums thereon in an
aggregate amount not to exceed $85,500,000, and (f) the payment of up to
$173,000,000 in fees, expenses, premiums and other costs in connection with the
Acquisition, (i) Holdings will receive not less than $140,000,000 in proceeds
from the issuance of preferred stock in a private placement, (ii) Holdings will
issue the Seller Debentures in an aggregate principal amount of $131,500,000 to
the Sellers, (iii) Holdings will issue the Holdings Discount Debentures in an
initial accreted value of not less than $100,000,000, (iv) the management of
Ralphs Grocery will invest not less than $10,000,000 in cash contributions in
Food 4 Less (in the form of a cancellation of their rights to receive certain
cash payments upon consummation of the RSI Merger), (v) Lenders have agreed to
make the Term Loans to Food 4 Less in an aggregate amount of up to $600,000,000
and Revolving Lenders have agreed to make up to $13,500,000 (less an amount
equal to the aggregate accreted value of the Holdings Discount Notes
outstanding as of the Closing Date) of Revolving Loans to Food 4 Less and (vi)
Food 4 Less will receive not less than $450,000,000 in aggregate proceeds from
the issuance of New F4L Senior Notes and New RGC Senior Subordinated Notes in
the Public Offering;
WHEREAS, in addition to the Revolving Loans made to Food 4
Less on the Closing Date, Company has requested that Revolving Lenders provide
a revolving credit facility which shall allow for the making of Revolving Loans
and the issuance of Letters of Credit to meet the working capital requirements
and general corporate purposes of Company and its Subsidiaries;
WHEREAS, Holdings has agreed to guaranty the Obligations of
Company and to secure such guaranty by pledging to Agent on behalf of Lenders
all of the capital stock of Company; and
WHEREAS, each of Company's Subsidiaries has agreed to guaranty
the Obligations of Company, and Company has agreed to secure its Obligations as
the borrower hereunder and each of Company's Subsidiaries has agreed to secure
its guaranty by pledging (a) all of the capital stock of the Subsidiaries owned
by it, (b) certain of its personal property and (c) certain of its interests in
real property.
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NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Holdings, Company,
Lenders, Co-Agents, Co-Arrangers and Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACQUISITION" means the consummation of the RSI Merger in
accordance with the terms of the Merger Agreement, which shall result in
Holdings owning all of the outstanding capital stock of Ralphs Supermarkets.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) the arithmetic average
(rounded upward to the nearest 1/16 of one percent) of the offered quotation,
if any, to first class banks in the interbank Eurodollar market by each of the
Reference Lenders for U.S. Dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of that
Reference Lender for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York City time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable on such Interest
Rate Determination Date to any member bank of the Federal Reserve System in
respect of "Eurocurrency liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D); provided that if any
Reference Lender fails to provide Agent with its aforementioned quotation then
the Adjusted Eurodollar Rate shall be determined based on the quotation(s)
provided to Agent by the other Reference Lender(s).
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means (i) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise, or (ii) the ownership of more
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than 10% of the voting securities of that Person; provided that Bankers Trust
New York Corporation and each of its Affiliates (as defined above) shall not be
considered to be an "Affiliate" of Holdings or any of its Subsidiaries.
"AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
administrative agent appointed pursuant to subsection 10.5A.
"AGREEMENT" means this Credit Agreement dated as of June 14,
1995, as it may be amended, supplemented or otherwise modified from time to
time.
"ALPHA BETA" means Alpha Beta Company, a California
corporation.
"AMOUNT OF UNFUNDED BENEFIT LIABILITY" means, with respect to
any Pension Plan, (i) if set forth on the most recent actuarial valuation
report with respect to such Pension Plan, the amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA) and (ii) otherwise,
the excess of (a) the greater of the current liability (as defined in Section
412(l)(7) of the Internal Revenue Code) or the actuarial present value of the
accrued benefits with respect to such Pension Plan over (b) the market value of
the assets of such Pension Plan.
"APPLICABLE BASE RATE MARGIN" means, as of any date of
determination, (i) 1.25% per annum in the event that (a) the Interest Coverage
Ratio is equal to or greater than 2.00:1.00 and (b) the aggregate outstanding
principal amount of Term Loans is less than $600,000,000; (ii) notwithstanding
clause (i), 1.00% per annum in the event that (a) the Interest Coverage Ratio
is equal to or greater than 2.50:1.00 and (b) the aggregate outstanding
principal amount of Term Loans is less than $525,000,000; and (iii) 1.50% per
annum in the event that neither of the foregoing clauses (i) or (ii) is
applicable, including for the period from the Closing Date until a Margin
Determination Certificate is delivered pursuant to subsection 6.1(xviii)
establishing that either of clause (i) or clause (ii) is applicable.
"APPLICABLE EURODOLLAR MARGIN" means, as of any date of
determination, (i) 2.50% per annum in the event that (a) the Interest Coverage
Ratio is equal to or greater than 2.00:1.00 and (b) the aggregate outstanding
principal amount of Term Loans is less than $600,000,000; (ii) notwithstanding
clause (i), 2.25% per annum in the event that (a) the Interest Coverage Ratio
is equal to or greater than 2.50:1.00 and (b) the aggregate outstanding
principal amount of Term Loans is less than $525,000,000; and (iii) 2.75% per
annum in the event that neither of the foregoing clauses (i) or (ii) is
applicable, including for the period from the Closing Date until a Margin
Determination Certificate is delivered pursuant to subsection 6.1(xviii)
establishing that either of clause (i) or clause (ii) is applicable.
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"ASSET SALE" means (i) the sale, lease, assignment or other
transfer (whether voluntary or involuntary) for value (collectively, a
"transfer") by Company or any of its Subsidiaries to any Person other than
Company or any of its wholly-owned Subsidiaries of (a) any of the stock of any
of Company's Subsidiaries, (b) substantially all of the assets of any division
or line of business of Company or any of its Subsidiaries, or (c) any other
assets (whether tangible or intangible) of Company or any of its Subsidiaries,
excluding (1) any Cash Equivalents or inventory sold in the ordinary course of
business, (2) any such transfer to the extent that the aggregate value of the
stock or assets transferred in any single transaction or related series of
transactions is equal to $50,000 or less, or $1,000,000 or less in the
aggregate in any Fiscal Year for all such excluded transfers and all excluded
occurrences described in clause (ii) below, and (3) any transfer in an
arm's-length transaction by Company or a Subsidiary of Company to a Developer
of a Development Site constituting a Development Investment permitted under
subsection 7.3(vii), or (ii) the occurrence of any complete or partial loss,
damage or destruction of any assets of Company or any of its Subsidiaries
giving rise to insurance proceeds, excluding any such occurrence to the extent
that the aggregate value of the assets lost, destroyed or damaged in any single
occurrence or related series of occurrences is equal to $50,000 or less, or
$1,000,000 or less in the aggregate in any Fiscal Year for all such excluded
occurrences and all excluded transfers described in clause (i)(2) above.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit XXII annexed hereto.
"AUDITOR'S LETTER" means each of (i) a letter, substantially
in the form of Exhibit XXIII-A annexed hereto, acknowledged and agreed to by
Company and Arthur Andersen LLP and (ii) a letter, substantially in the form of
Exhibit XXIII-B annexed hereto, acknowledged and agreed to by Company and KPMG
Peat Marwick LLP, each of which shall be delivered to Agent pursuant to
subsection 4.1W, and "AUDITOR'S LETTERS" shall mean both of such letters,
collectively.
"BANKERS" has the meaning assigned to that term in the
introduction to this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is .50% per annum in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
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"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or the
State of California or is a day on which banking institutions located in the
State of New York or in the State of California are authorized or required by
law or other governmental action to close.
"CALA" means Cala Co., a Delaware corporation.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is required to be accounted for as a capital lease on
the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either Standard & Poor's Ratings Group ("S&P") or
Moody's Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; (v) shares of any money market mutual fund that (a) has
at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's; and (vi) repurchase agreements with respect to, and which are fully
secured by a security interest in, obligations of the type described in clause
(i) or clause (ii) above and are with any commercial bank described in clause
(iv) above.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to,
or monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
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"CERTIFICATE RE NON-BANK STATUS" means a certificate in form
and substance satisfactory to Agent delivered by a Lender to Agent pursuant to
subsection 2.7B(iii) pursuant to which such Lender certifies that it is not (i)
a "bank" as such term is defined in subsection 881(c)(3) of the Internal
Revenue Code; (ii) a 10 percent shareholder of Company within the meaning of
Section 871(h)(3)(B) or Section 881(c)(3)(B) of the Internal Revenue Code; or
(iii) a "controlled" foreign corporation related to Company within the meaning
of Section 864(d)(4) of the Internal Revenue Code.
"CHANGE OF CONTROL" means any of (a) the failure at any time
of Ronald W. Burkle (other than as a result of death or incapacity) to have
economic ownership of, directly or indirectly (including through his ownership
interest in the Yucaipa Investors), a percentage (calculated without regard to
any dilution resulting from (i) the accretion on the Holdings Preferred Stock,
(ii) the exercise of warrants to purchase Holdings Voting Stock which are
outstanding on the Closing Date; provided, however, that in the event any such
warrant (of which Ronald W. Burkle has direct or indirect economic ownership on
the Closing Date) is exercised, in addition to the percentage of Holdings
Voting Stock otherwise required to be maintained under this clause (a), Ronald
W. Burkle shall continue to have economic ownership of, directly or indirectly
(including through his ownership interest in the Yucaipa Investors), at least
50% of the number of shares of Holdings Voting Stock in which he had such
economic interest under such warrant on the Closing Date, or (iii) the exercise
of employee stock options) of issued and outstanding shares of Holdings Voting
Stock, which percentage shall be at least 50% of the percentage of the issued
and outstanding Holdings Voting Stock economically owned, directly or
indirectly (including through his ownership interest in the Yucaipa Investors),
by Ronald W. Burkle on the Closing Date, (b) the failure at any time of Yucaipa
and the Yucaipa Investors collectively to beneficially own and control and to
have economic ownership of, directly or indirectly, a percentage (calculated
without regard to any dilution resulting from (i) the accretion on the Holdings
Preferred Stock, (ii) the exercise of warrants to purchase Holdings Voting
Stock which are outstanding on the Closing Date; provided, however, that in the
event any such warrant (of which the Yucaipa Investors have direct or indirect
economic ownership on the Closing Date) is exercised, in addition to the
percentage of Holdings Voting Stock otherwise required to be maintained under
this clause (b), Yucaipa and The Yucaipa Investors collectively shall continue
to have economic ownership of, directly or indirectly, at least 50% of the
number of shares of Holdings Voting Stock in which they had such economic
interest under such warrant on the Closing Date, or (iii) the exercise of
employee stock options) of issued and outstanding Holdings Voting Stock, which
percentage shall be at least 50% of the percentage of the issued and
outstanding Holdings Voting Stock beneficially owned and controlled or
economically owned, directly or indirectly, by Yucaipa and the Yucaipa
Investors collectively on the Closing Date, (c) the failure at any time of
Ronald W. Burkle, directly or indirectly, to have the ability to elect a
majority of the members of the Board of Directors of Holdings and of Company;
provided that no Change in Control shall be deemed to have occurred under this
clause (c) as a result of the death or
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incapacity of Ronald W. Burkle for a period of 60 days after such death or
incapacity, (d) the failure at any time of Holdings to beneficially own and
control 100% of the issued and outstanding shares of capital stock of Company
or the failure at any time of Holdings to have the ability to elect all of the
Board of Directors of Company, or (e) the occurrence of any "Change of Control"
as defined in any of the Subordinated Debt Indentures or the Senior Debt
Indentures. As used herein, the term "beneficially own" or "beneficial
ownership" shall have the meaning set forth in the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"CHANGE OF CONTROL OFFER" means an offer by Company, following
the Mergers, to holders of Old RGC 9% Subordinated Notes and Old RGC 10-1/4%
Subordinated Notes who did not exchange or sell such notes pursuant to the
Ralphs Grocery Offers to purchase such holders' Old RGC 9% Subordinated Notes
and Old RGC 10-1/4% Subordinated Notes at 101% of the principal amount thereof,
together with accrued interest thereon to the date of purchase.
"CHANGE OF CONTROL PURCHASE DATE" means the date, which shall
be not later than 91 days after the Closing Date, on which Company purchases
any or all of the then outstanding Old RGC 9% Subordinated Notes and the Old
RGC 10-1/4% Subordinated Notes pursuant to the Change of Control Offer.
"CLASS" means, with respect to Lenders, each class of Lenders
under this Agreement, with there being two separate classes of Lenders, i.e.,
(i) Lenders having Tranche A Term Loan Exposure and/or Revolving Loan Exposure
(taken together as a single class) and (ii) Lenders having Tranche B Term Loan
Exposure, Lenders having Tranche C Term Loan Exposure and/or Lenders having
Tranche D Term Loan Exposure (taken together as a single class).
"CLOSING DATE" means the date on or before June 30, 1995, on
which the initial Loans are made.
"CO-AGENTS" has the meaning assigned to that term in the
introduction to this Agreement.
"CO-ARRANGERS" has the meaning assigned to that term in the
introduction to this Agreement.
"COLLATERAL" means all the real, personal and mixed property
made subject to a Lien pursuant to the Collateral Documents.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.
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"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Agent on the Closing Date,
substantially in the form of Exhibit XXV annexed hereto, pursuant to which
Company may pledge cash to Agent to secure the obligations of Company to
reimburse Issuing Lenders for payments made under one or more Letters of Credit
as provided in Section 8, as such Collateral Account Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"COLLATERAL DOCUMENTS" means the Holdings Pledge Agreement,
the Pledge Agreements, the Security Agreement, the Trademark Security
Agreement, the Deposit Accounts Security Agreement, the Deeds of Trust, the F4L
GM Security Agreement, the Collateral Account Agreement and all other
instruments or documents delivered by Holdings, Company or any of Company's
Subsidiaries in order to grant to Agent Liens on any of their respective
property.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or services
by Company or any of its Subsidiaries in the ordinary course of business of
Company or such Subsidiary.
"COMMITMENT FEE PERCENTAGE" means .50% per annum.
"COMMITMENTS" means the commitments of Lenders to make Loans
as set forth in subsection 2.1A.
"COMPANY" means, prior to the RSI Merger, Food 4 Less; upon
consummation of the RSI Merger and prior to consummation of the RGC Merger,
Ralphs Supermarkets; and, upon the consummation of the RGC Merger, Ralphs
Grocery.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit X annexed hereto delivered to Agent and Lenders by Company
pursuant to subsection 6.1(iv).
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, without
duplication, the sum of the amounts for such period of (i) Consolidated Net
Income, (ii) Consolidated Cash Interest Expense, (iii) provisions for taxes
based on income, (iv) total depreciation expense, (v) total amortization
expense, (vi) Restructuring Charges and (vii) other non-cash items reducing
Consolidated Net Income less other non-cash items increasing Consolidated Net
Income, all of the foregoing as determined on a consolidated basis for Company
and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, an
amount equal to (i) the sum of (a) the aggregate of all expenditures (whether
paid in cash or other consideration or accrued as a liability and including
that portion of Capital Leases
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which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "property, plant or equipment" or
comparable items reflected in the consolidated balance sheets of Company and
its Subsidiaries plus (b) to the extent not covered by clause (i)(a) of this
definition, the aggregate of all expenditures by Company and its Subsidiaries
during that period to acquire (by purchase or otherwise) the business, property
or fixed assets (other than current assets consisting of inventory or accounts
receivable) of any Person, or the stock or other evidence of beneficial
ownership of any Person that, as a result of such acquisition, becomes a
Subsidiary of Company minus (ii) the sum of (a) Consolidated Capital
Expenditures (as defined in clause (i) above) constituting Development
Investments permitted under subsection 7.3(vii), (b) the proceeds of
Indebtedness permitted under subsections 7.1(iii) and 7.1(viii), (c) an amount
equal to the proceeds received by Company or any of its Subsidiaries from a
sale-leaseback transaction of a store or equipment permitted under subsection
7.10 so long as such transaction occurs within 180 days of the completion of
such store or acquisition of such equipment and to the extent prior
expenditures, up to an equivalent amount for the asset so sold and leased back,
constituted Consolidated Capital Expenditures (as defined above) in such period
or in any prior period, and (d) expenditures in an amount not to exceed the
proceeds of insurance, condemnation awards (or payments in lieu thereof) or
indemnity payments received from third parties, so long as such expenditures
were made for purposes of replacing or repairing the assets in respect of which
such proceeds, awards or payments were received and so long as such
expenditures are made not later than 18 months of the occurrence of the damage
to or loss of the assets being replaced or repaired; provided that, solely for
purposes of the calculations made under subsection 7.8 for the period
commencing on the Closing Date and ending on January 28, 1996, the exclusions
set forth in clauses (b) and (c) of clause (ii) above shall not be applicable
in determining "Consolidated Capital Expenditures."
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
total interest expense net of any interest income received in Cash by Company
or any of its Subsidiaries (including that portion attributable to Capital
Leases in accordance with GAAP and capitalized interest) of Company and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Company and its Subsidiaries, including, without limitation,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under
Interest Rate Agreements, plus all dividends on capital stock of Company paid
or payable in Cash and used by Holdings to pay interest on Indebtedness of
Holdings, including without limitation the Holdings Discount Debentures, the
Holdings Discount Notes and the Seller Debentures, but excluding, however, (i)
any amounts referred to in subsection 2.3 payable to Agent and Lenders on or
before the Closing Date, (ii) any interest expenses not payable in Cash
(including amortization of discounts and amortization of debt issuance costs),
and (iii) the fees, costs and expenses payable by Company relating to the
issuance of or consent to modifications of Subordinated Indebtedness and/or
Senior Indebtedness in connection with the Acquisition.
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"CONSOLIDATED EXCESS CASH FLOW" means, for any Fiscal Year, an
amount equal to (i) the sum (without duplication) of the amounts for such
Fiscal Year of (a) Consolidated Net Income, (b) any after-tax gains
attributable to returned surplus assets of any Pension Plan, (c) the amount of
Net Cash Proceeds of Asset Sales received in such Fiscal Year that are not
otherwise included in Consolidated Net Income and that are required to be used
to prepay the Term Loans and/or permanently reduce the Revolving Loan
Commitments pursuant to subsection 2.4B(iii)(a), but excluding amounts returned
to Company pursuant to the last sentence of subsection 2.4B(iv)(b) which are
not used by Company to prepay the Term Loans and/or permanently reduce the
Revolving Loan Commitments, (d) the aggregate amount of Cash proceeds (net of
underwriting discounts, similar placement fees and commissions and other
reasonable costs and expenses associated therewith) from the issuance after the
Closing Date of any debt or equity Securities of Holdings or any of its
Subsidiaries that are required to be used to prepay the Loans pursuant to
subsections 2.4B(iii)(b) or 2.4B(iii)(c), as the case may be, but excluding
amounts returned to Company pursuant to the last sentence of subsection
2.4B(iv)(b) which are not used by Company to prepay the Terms Loans and/or
permanently reduce the Revolving Loan Commitments, (e) consolidated
depreciation and amortization expense for such Fiscal Year, (f) other non-cash
charges reducing Consolidated Net Income, including the net decrease (if any)
in deferred tax assets and the net increase (if any) in deferred tax
liabilities of Company and its Subsidiaries, (g) (to the extent not included in
Consolidated Net Income) any cash extraordinary gains, (h) an amount equal to
the Net Cash Proceeds of Asset Sales excluded from mandatory prepayments
required to be made under subsection 2.4B(iii)(a) pursuant to clauses (i), (ii)
and (iv) of the first proviso thereof, and (i) all Cash proceeds received by
Company or any of its Subsidiaries in payment or repayment of any Development
Investment previously made by Company or such Subsidiary minus (ii) the sum
(without duplication) of the amounts for such Fiscal Year of (a) Consolidated
Capital Expenditures permitted under subsection 7.8 made during such Fiscal
Year, (b) payments of principal made in respect of any outstanding Indebtedness
of Company or any of its Subsidiaries to the extent such payments are permanent
reductions in Funded Debt and not prohibited under subsection 7.5, (c) the net
increase (if any) in deferred tax assets and the net decrease (if any) in
deferred tax liabilities, (d) the amount of all Development Investments paid or
payable in cash permitted under subsection 7.3(vii) made during such Fiscal
Year and (e) other non-cash charges increasing Consolidated Net Income, all of
the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"CONSOLIDATED FIXED CHARGES" means, without duplication, for
any period, the sum of the amounts for such period of (i) Consolidated Cash
Interest Expense, (ii) Consolidated Rental Payments, and (iii) scheduled
principal payments attributable to Capital Leases of Company and its
Subsidiaries, all of the foregoing as determined on a consolidated basis for
Company and its Subsidiaries in conformity with GAAP.
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"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP after deductions for (a) the aggregate dividends paid by Company to
Holdings with respect to capital stock of Company during such period or during
any prior period to the extent that such dividends are or were used by Holdings
to pay amounts recognized as expenses by Holdings during such period in
conformity with GAAP and (b) to the extent not included in the immediately
preceding clause (a), the aggregate dividends paid by Company to Holdings with
respect to capital stock of Company during such period to the extent that such
dividends are used by Holdings to pay interest on Indebtedness of Holdings,
including without limitation the Holdings Discount Debentures, the Holdings
Discount Notes and the Seller Debentures; provided that there shall be excluded
(i) the income (or loss) of any Person (other than a Subsidiary of Company) in
which any other Person (other than Company or any of its Subsidiaries) has a
joint interest, except to the extent of the amount of dividends or other
distributions actually paid to Company or any of its Subsidiaries by such
Person during such period, (ii) the income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary of Company or is merged into or
consolidated with Company or any of its Subsidiaries or that Person's assets
are acquired by Company or any of its Subsidiaries, (iii) the income of any
Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary losses.
"CONSOLIDATED NET WORTH" means, as at any date of
determination, without duplication, the sum of (i) the capital stock and
additional paid-in capital plus retained earnings (or minus accumulated
deficits) of Company and its Subsidiaries on a consolidated basis determined in
conformity with GAAP, (ii) the after tax impact (if any) of the cumulative
amount of Restructuring Charges incurred or reflected subsequent to the Closing
Date, (iii) the amount, not to exceed $50,000,000, for the write-off of
goodwill taken by Company and its Subsidiaries on a consolidated basis
determined in conformity with GAAP and (iv) to the extent that the net value of
the capital stock of Holdings held by any employee stock ownership plan of
Company or any of its Subsidiaries as shown on the consolidated balance sheet
of Company and its Subsidiaries is not included in clause (i) above, such net
value; provided that for purposes of this definition, notwithstanding any
adjustment made or required to be made after the Closing Date as a result of
the receipt on the Closing Date of debt Securities of Holdings by Sellers and
the other Persons receiving such debt Securities on such date, (a) the value
assigned to the Seller Debentures, and to any capital contribution made by
Holdings to Company on the Closing Date the amount of which is calculated with
reference to the value of the Seller Debentures, will be $131,500,000 (as
adjusted from
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time to time pursuant to any adjustments required to be made after the Closing
Date other than as a result of the receipt on the Closing Date of debt
Securities of Holdings by Sellers and the other Persons receiving such debt
Securities on the such date) and (b) the value assigned to the Holdings
Discount Debentures, and to any capital contribution made to Company by
Holdings on the Closing Date the amount of which is calculated with reference
to the value of the Holdings Discount Debentures, will be $100,000,000 (as
adjusted from time to time pursuant to any adjustments required to be made
after the Closing Date other than as a result of the receipt on the Closing
Date of debt Securities of Holdings by Sellers and the other Persons receiving
such debt Securities on such date).
"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the
aggregate amount of all rents paid or payable by Company and its Subsidiaries
on a consolidated basis during that period under all Operating Leases to which
Company or any of its Subsidiaries is a party as lessee (net of sublease
income).
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONSULTING AGREEMENT" means that certain Consulting Agreement
dated as of the Closing Date among Holdings, Company and Yucaipa, as such
Consulting Agreement may be amended from time to time after the Closing Date to
the extent permitted under subsection 7.15A.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements and Currency Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to
make take-or-pay or similar payments if required regardless of non-performance
by any other party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement (contingent or
otherwise) (X) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or
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(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof
is as described in the preceding sentence. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if less, the amount to which such Contingent Obligation
is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"COVERED REAL PROPERTY" has the meaning assigned to that term
in subsection 6.11.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement designed to protect Company or any of
its Subsidiaries against fluctuations in currency values.
"DEED OF TRUST" means any deed of trust, mortgage, security
agreement and fixture filing relating to any fee or leasehold interest of any
Loan Party in real property, which shall be substantially in the form of
Exhibit XVI annexed hereto, in each case (i) with appropriate insertions and
deletions based upon the nature of the real property interest (i.e., fee or
leasehold) to be encumbered thereby and (ii) containing such schedules and
including such additional provisions and other deviations from such Exhibit as
are satisfactory to Agent and not inconsistent with the provisions of
subsection 6.11 or as are necessary to conform such Exhibit to applicable local
law, and which shall be dated the date of delivery thereof and made by such
Loan Party as trustor or mortgagor, as the case may be, in favor of Agent, as
beneficiary or mortgagee, delivered for the purpose of securing all Obligations
hereunder, as the same may be amended, supplemented or otherwise modified from
time to time.
"DEFERRED TRADE PAYABLES" means promissory notes (whether
interest bearing or non-interest bearing) executed by Company or any of its
Subsidiaries in favor of such entity's suppliers to finance the purchase price
and delivery costs of inventory in connection with such entity's opening or
acquisition of new stores or remodeling of existing stores.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
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"DEPOSIT ACCOUNTS SECURITY AGREEMENT" means each Deposit
Accounts Security Agreement to be executed and delivered by Company and certain
of Company's Subsidiaries on the Closing Date and to be executed and delivered
by Subsidiaries of Company from time to time in accordance with subsection
6.10, each substantially in the form of Exhibit XVIII annexed hereto, pursuant
to which Company and such Subsidiaries shall grant to Agent a security interest
in all of its Deposit Accounts maintained with commercial banks or other
depository institutions located in California or in any other jurisdiction
which permits the perfection of a security interest in Deposit Accounts by
notifying the institution that maintains the Deposit Accounts of such security
interest, as each such Deposit Accounts Security Agreement may hereafter be
amended, supplemented or otherwise modified from time to time, and "DEPOSIT
ACCOUNTS SECURITY AGREEMENTS" means all such Deposit Account Security
Agreements, collectively.
"DEVELOPER" means any Person which owns, leases or otherwise
controls or intends to acquire an interest in a Development Site.
"DEVELOPMENT INVESTMENT" means (a) a loan by Company or a
Subsidiary of Company to a Developer, the proceeds of which are to be used to
finance a Development Project of such Developer, (b) a cash contribution by
Company or a Subsidiary of Company to the capital of a Developer, the proceeds
of which are to be used to finance a Development Project of such Developer, or
(c) a contribution by Company or a Subsidiary of Company to the capital of a
Developer of an interest of Company or such Subsidiary in a Development Site.
The amount of any Development Investment shall be the amount of cash loaned or
contributed to a Developer for the purpose specified above or the fair market
value of the interest of a Development Site contributed to the capital of a
Developer, which fair market value shall be determined, without regard to the
proposed investment, at the time of such contribution in good faith by
resolution of the Board of Directors of Company, in each case minus the amount
of cash received by Company or any of its Subsidiaries in repayment of such
Development Investment.
"DEVELOPMENT PROJECT" means a project for the development by
or at the direction of a Developer of a Development Site, including the
construction, remodeling, expansion or renovation of a store thereon, which
store is to be leased to and operated by Company or one of its Subsidiaries.
"DEVELOPMENT SITE" means real property which is identified by
Company or one of its Subsidiaries as the intended location for a store or a
shopping center and related improvements to be constructed, remodeled, expanded
or renovated by or at the direction of the Developer thereof, which in each
case shall include a store intended to be leased to and operated by Company or
one of its Subsidiaries.
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"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that (x) such bank
is acting through a branch or agency located in the United States or (y) such
bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses including, but not limited to,
insurance companies, mutual funds and lease financing companies, in each case
(under clauses (i) through (iv) above) that is reasonably acceptable to Agent;
and (B) any Lender and any Affiliate of any Lender; provided that no Affiliate
of Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA (i) which is, or, at any time within the five
calendar years immediately preceding the date hereof, was at any time,
maintained or contributed to by the Loan Parties or any of their respective
ERISA Affiliates or (ii) with respect to which any Loan Party retains any
liability, including any potential joint and several liability as a result of
an affiliation with an ERISA Affiliate or a party that would be an ERISA
Affiliate except for the fact the affiliation ceased more than five calendar
years prior to the date hereof.
"ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity
executed and delivered by Company on the Closing Date substantially in the form
of Exhibit XVII annexed hereto, as such Environmental Indemnity may hereafter
be amended, supplemented or otherwise modified from time to time.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company, any of
its Subsidiaries, any of their respective Affiliates or any Facility.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to (i)
environmental matters, including, without limitation, those relating to fines,
injunctions, penalties, damages,
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contribution, cost recovery compensation, losses or injuries resulting from the
Release or threatened Release of Hazardous Materials, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the protection
of human, plant or animal health or welfare, in any manner applicable to
Company or any of its Subsidiaries or any of their respective properties,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. Section 136 et seq.), the Occupational Safety and
Health Act (29 U.S.C. Section 651 et seq.) and the Emergency Planning and
Community Right-to-Know Act (42 U.S.C. Section 11001 et seq.), each as amended
or supplemented, and any analogous future or present local, state and federal
statutes and regulations promulgated pursuant thereto, each as in effect as of
the date of determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means (i) any
corporation which is, or was at any time within the five calendar years
immediately preceding the date hereof, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is, or was at any time within the five calendar years
immediately preceding the date hereof, a member; (ii) any trade or business
(whether or not incorporated) which is, or was at any time within the five
calendar years immediately preceding the date hereof, a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which that Person is, or was at any time within
the five calendar years immediately preceding the date hereof, a member; and
(iii) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is, or was at any time within the five calendar years
immediately preceding the date hereof, a member.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of
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any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent
to terminate such plan in a distress termination described in Section 4041(c)
of ERISA; (iv) the withdrawal by any of the Loan Parties or any of their
respective ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in liability
pursuant to Sections 4063 or 4064 of ERISA; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which might reasonably be expected to constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on any of the Loan Parties or
any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal by any of the Loan Parties or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by any of the Loan Parties or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could reasonably be expected
to give rise to the imposition on any of the Loan Parties or any of their
respective ERISA Affiliates of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409 or 502(c), (i) or
(l) or 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets
thereof, or against any of the Loan Parties or any of their respective ERISA
Affiliates in connection with any such Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan (or
any other Employee Benefit Plan intended to be qualified under Section 401(a)
of the Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan to
qualify for exemption from taxation under Section 501(a) of the Internal
Revenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any
Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCLUDED SITE" means, as of any date, provided that there
shall not then exist a Potential Event of Default or an Event of Default, all
of the following, excluding any fee interest in Real Property Assets on which
Agent shall have been granted a Lien
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in accordance with the terms hereof: (a) any fee interest in undeveloped land
acquired by Company or any of its Subsidiaries for the development of a grocery
store, so long as less than a year has elapsed since the date such fee interest
was first acquired by Company or any of its Subsidiaries (the "Acquisition
Date"), (b) any fee interest in Real Property Assets owned by Company or any of
its Subsidiaries consisting of a grocery store under construction, so long as
less than a year has elapsed since the date such construction commenced, and
(c) any fee interest in a grocery store, the construction of which is complete,
which fee interest was not previously a Covered Real Property, so long as not
more than 180 days has elapsed since the date of completion of such
construction; provided that the maximum length of time that a property may be
characterized as an Excluded Site is two years from its Acquisition Date;
provided further that if on any date there are more than five (5) properties
that meet the foregoing definition of "Excluded Site", only the five (5) such
properties with the earliest Acquisition Dates (and on which Agent shall not
have been granted a Lien in accordance with the terms hereof) shall constitute
"Excluded Sites". "EXCLUDED SITE" shall also include (I) any Real Property
Asset located outside of California, so long as Agent has been notified by
Company in writing of the nature and address of such Real Property Asset and of
the amount of expenditures made or to be made to acquire or develop such Real
Property Asset and Agent has not requested a Deed of Trust with respect
thereto, and (II) until the date that is eighteen (18) months after the Closing
Date, any store identified in Schedule 1.1B annexed hereto as a Planned
Disposition and any store identified in Schedule 1.1C annexed hereto as a
Required Disposition. There shall be no limitation on the number of Real
Property Assets constituting Excluded Sites pursuant to the foregoing sentence.
"EXISTING LETTERS OF CREDIT" means the Letters of Credit
listed on Schedule 1.1A annexed hereto.
"F4L GM SECURITY AGREEMENT" means the Security Agreement
executed and delivered by Food 4 Less GM, Inc., a California corporation,
substantially in the form of Exhibit XIX annexed hereto, pursuant to which Food
4 Less GM, Inc. grants a security interest in its general partnership interest
in Golden Alliance to Agent, as such Security Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"F4L MERCHANDISING" means Food 4 Less Merchandising, Inc., a
California corporation.
"F4L PARENT" means Food 4 Less, Inc., a Delaware corporation.
"FACILITIES" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated or used by any of
the Loan Parties or any of their respective predecessors or Affiliates.
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"FALLEY'S" means Falley's, Inc., a Kansas corporation.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by Agent from three Federal funds
brokers of recognized standing selected by Agent.
"FISCAL PERIOD" means a fiscal period of Company and its
Subsidiaries, consisting of a four-week period or five-week period, as the case
may be.
"FISCAL QUARTER" means a fiscal quarter of Company and its
Subsidiaries, consisting of, in the case of each of the first three Fiscal
Quarters of each Fiscal Year, a 12-week period and, in the case of the fourth
Fiscal Quarter of each Fiscal Year, a 16- or 17-week period.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries, consisting of a 52- or 53-week period, ending on the date which
is the Sunday closest to January 31 of the following calendar year. For
purposes of this Agreement, any particular Fiscal Year shall be designated by
reference to the calendar year in which such Fiscal Year commences.
"FOOD 4 LESS" has the meaning assigned to that term in the
introduction to this Agreement.
"FOOD 4 LESS OFFERS" means the offers to exchange the Old F4L
Senior Notes and the Old F4L Senior Subordinated Notes for an equivalent
principal amount of the New F4L Senior Notes and the New F4L Senior
Subordinated Notes, respectively, plus a cash payment, and the solicitation of
consents with respect to the amendment of the Old F4L Senior Note Indenture and
the Old F4L Senior Subordinated Note Indenture, as described in the Amended and
Restated Prospectus and Solicitation Statement dated May 12, 1995 relating
thereto, as supplemented by the Supplement to Prospectus dated May 31, 1995
relating thereto (the "FOOD 4 LESS PROSPECTUS").
"FUNDED DEBT", as applied to any Person, means all
Indebtedness of that Person which by its terms or by the terms of any
instrument or agreement relating thereto matures more than one year from, or is
directly renewable or extendable at the option of the debtor to a date more
than one year from (including an option of the debtor under a revolving credit
or similar agreement obligating the lender or lenders to extend credit over a
period of one year or more from), the date of the creation thereof.
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"FUNDING AND PAYMENT OFFICE" means the office of Agent and
Swing Line Lender located at One Bankers Trust Plaza, New York, New York, or
such other office as shall be designated by Agent in a written notice delivered
to the other parties hereto.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOLDEN ALLIANCE" means Golden Alliance Distribution, a
California general partnership, the general partners of which are Food 4 Less
GM, Inc. and Grocers General Merchandise Company.
"GOLDEN ALLIANCE AGREEMENT" means that certain Joint Venture
Agreement of Golden Alliance Distribution dated as of April 8, 1992 by and
between Food 4 Less GM, Inc., a California corporation, and Grocers General
Merchandise Company, a California corporation, as in effect on the date hereof
and as amended from time to time to the extent permitted pursuant to subsection
7.15B.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"GUARANTY" means the Guaranty Agreement executed and delivered
by certain Subsidiaries of Company on the Closing Date and to be executed and
delivered by Subsidiaries of Company from time to time in accordance with
subsection 6.10, substantially in the form of Exhibit XI annexed hereto, as
such Guaranty Agreement may hereafter be amended, supplemented or otherwise
modified from time to time.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "restricted hazardous waste", "infectious waste", "toxic substances" or
any other formulations intended to define, list or classify substances by
reason of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes
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associated with the exploration, development or production of crude oil,
natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) asbestos in any form; (vii)
urea formaldehyde foam insulation; (viii) electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty parts per million; (ix) pesticides; and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any governmental authority or which may or could pose a hazard to the health
and safety of the owners, occupants or any Persons in the vicinity of the
Facilities.
"HOLDINGS" means, prior to the Reincorporation Merger, Old
Holdings; and upon the consummation of the Reincorporation Merger, New
Holdings.
"HOLDINGS COMMON STOCK" means the Common Stock of Holdings,
par value $0.01 per share, and the Non-Voting Common Stock of Holdings, par
value $0.01 per share.
"HOLDINGS DISCOUNT DEBENTURE INDENTURE" means the indenture
dated as of June 1, 1995 between Holdings and United States Trust Company of
New York pursuant to which the Holdings Discount Debentures were issued, as
such indenture may be amended from time to time to the extent permitted under
subsection 7.15B.
"HOLDINGS DISCOUNT DEBENTURES" means the 13-5/8% Senior
Discount Debentures due 2005 issued by Holdings with an initial accreted value
of not less than $100,000,000 and an aggregate face amount at maturity of
$193,363,570 principal amount, as such debentures may be amended from time to
time to the extent permitted under subsection 7.15B.
"HOLDINGS DISCOUNT NOTE INDENTURE" means the indenture dated
as of December 31, 1992 between Old Holdings and United States Trust Company of
New York pursuant to which the Holdings Discount Notes were issued, as amended
by the First Supplemental Indenture dated May 30, 1995 and on or prior to the
date hereof as described in the Offer to Purchase and Solicitation Statement
dated May 12, 1995, as supplemented by the Supplement to Offer to Purchase and
Solicitation Statement dated May 31, 1995 relating to the Holdings Discount
Notes (the "HOLDINGS OFFER TO PURCHASE"), and as such indenture may be further
amended from time to time to the extent permitted under subsection 7.15B.
"HOLDINGS DISCOUNT NOTES" means the $103,600,000 aggregate
face amount of 15.25% Senior Discount Notes due December 15, 2004, Series A and
Series B, issued by Old Holdings and assumed by New Holdings as described in
the Holdings Offer to Purchase, as such notes may be amended from time to time
to the extent permitted under subsection 7.15B.
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"HOLDINGS GUARANTY" means the Obligations of Holdings set
forth in Section 9 hereof guaranteeing the Obligations of Company under the
Loan Documents and under Interest Rate Agreements relating thereto.
"HOLDINGS OFFER" means the offer to purchase for cash all of
the outstanding Holdings Discount Notes for an aggregate amount not to exceed
$85,500,000 and the solicitation of consents with respect to the amendment of
the Holdings Discount Note Indenture, as described in the Holdings Offer to
Purchase.
"HOLDINGS PLEDGE AGREEMENT" means the Pledge Agreement
executed and delivered by Holdings on the Closing Date, substantially in the
form of Exhibit XV annexed hereto, as such Pledge Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"HOLDINGS PREFERRED STOCK" means the Series A Preferred Stock
of Holdings, par value $0.01 per share, and the Series B Preferred Stock of
Holdings, par value $0.01 per share.
"HOLDINGS VOTING STOCK" means the Holdings Common Stock, the
Holdings Preferred Stock and any additional class of capital stock of Holdings
entitled (without regard to the occurrence of any contingency) to vote for the
election of members of the Board of Directors of Holdings.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred purchase
price of property or services (excluding any such obligations incurred under
ERISA), which purchase price is (a) due more than twelve months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note
or similar written instrument, and (v) all indebtedness secured by any Lien on
any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person. Obligations under Interest Rate
Agreements and Currency Agreements constitute Contingent Obligations and not
Indebtedness.
"INDEMNIFICATION AGREEMENT" means that certain Indemnification
Agreement, effective as of February 3, 1992, by and among Federated Department
Stores, Inc., each of its subsidiaries, Allied Stores Corporation, each of its
subsidiaries, Federated Stores, Inc., each of its holding companies and real
estate subsidiaries, Ralphs Grocery and Ralphs Holding Company (now known as
Ralphs Supermarkets), as such Indemnification Agreement may be amended from
time to time after the Closing Date to the extent permitted under subsection
7.15A.
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"INDEMNITEE" has the meaning assigned to that term in
subsection 11.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of the Loan Parties as currently conducted that
are material to the condition (financial or otherwise), business or operations
of Company or any of its Subsidiaries.
"INTEREST COVERAGE RATIO" means, as at any date of
determination, the ratio of (i) Consolidated Adjusted EBITDA to (ii)
Consolidated Cash Interest Expense for the four Fiscal Quarters ending as of
the last day of the Fiscal Quarter immediately preceding the Fiscal Quarter
during which such date of determination occurs; except that, if the date of
determination is the last day of a Fiscal Quarter, the four Fiscal Quarters
tested shall include the preceding three Fiscal Quarters and the Fiscal Quarter
then ending.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each March 15, June 15, September 15 and December 15 of each year,
commencing on September 15, 1995, and (ii) with respect to any Eurodollar Rate
Loan, the last day of each Interest Period applicable to such Loan; provided
that in the case of each Interest Period of longer than three months "Interest
Payment Date" shall also include the date that is three months after the
commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in interest rates.
"INTEREST RATE EXCHANGERS" has the meaning assigned to that
term in Section 9.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by the Loan Parties of, or of a beneficial interest in, any
Securities of any other Person (other than a Person that, prior to such
purchase or acquisition, was a Subsidiary of Holdings) or (ii) any direct or
indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and
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similar expenditures in the ordinary course of business) or capital
contribution by any of the Loan Parties to any other Person (other than Company
and any wholly-owned Subsidiary of Company that has executed and delivered a
counterpart of the Guaranty), including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be the original cost of such Investment plus the cost
of all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"ISSUING LENDER" means, with respect to any Letter of Credit,
the Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 11.1, and the
term "Lenders" shall include Swing Line Lender unless the context otherwise
requires; provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean Lenders having that Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by
Issuing Lenders for the account of Company or any wholly-owned Subsidiary of
Company pursuant to subsection 3.1 and the Existing Letters of Credit.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters
of Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B).
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
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"LOAN" or "LOANS" means one or more of the Term Loans,
Revolving Loans or Swing Line Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the
Guaranty, the Environmental Indemnity, the Collateral Documents and the Letters
of Credit (and any applications for, or other documents or certificates
executed by any Loan Party in favor of an Issuing Lender relating to, the
Letters of Credit).
"LOAN PARTY" means each of Holdings, Ralphs Grocery, Ralphs
Supermarkets, Crawford Stores, Inc., Company and any of Company's Subsidiaries
from time to time executing a Loan Document, and "LOAN PARTIES" means all such
Persons, collectively.
"MARGIN DETERMINATION CERTIFICATE" means an Officers'
Certificate of Company delivered with the financial statements required
pursuant to subsections 6.1(ii) or 6.1(iii) setting forth in reasonable detail
the Interest Coverage Ratio which is applicable as of the date on which such
Officers' Certificate is delivered and the aggregate principal amount of
outstanding Term Loans as of the date which corresponds to the date of
determination of such Interest Coverage Ratio.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Loan Parties, taken as a whole, or (ii) the
material impairment of the ability of any Loan Party to perform, or the
impairment of the ability of Agent or Lenders to enforce, the Obligations or
any of the Loan Documents.
"MERGERS" means, collectively, the RSI Merger, the RGC Merger,
the Parent Merger and the Reincorporation Merger.
"MERGER AGREEMENT" means that certain Agreement and Plan of
Merger dated as of September 14, 1994, as amended pursuant to the First
Amendment dated as of January 12, 1995, the Second Amendment dated as of
February 24, 1995, the Third Amendment dated as of April 26, 1995 and the
Fourth Amendment dated as of June 14, 1995, by and among F4L Parent, Old
Holdings, Food 4 Less, Ralphs Supermarkets and the Sellers, pursuant to which
the RSI Merger shall occur, as such Agreement and Plan of Merger may be further
amended from time to time after the Closing Date to the extent permitted under
subsection 7.15A.
"METROPOLITAN DEEDS OF TRUST" means three Deeds of Trust and
Security Agreements with Assignment of Rents and Fixture Filings, each dated
May 30, 1989, as amended, made by Ralphs Grocery as trustor to Commonwealth
Land Title Insurance
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Company as trustee, for the benefit of Metropolitan Life Insurance Company as
beneficiary and secured party, which deeds of trust secure payment of the RGC
Mortgage Notes.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
in Section 3(37) of ERISA, (i) to which any of the Loan Parties or any of their
respective ERISA Affiliates is contributing, or, at any time within the five
calendar years immediately preceding the date hereof, has contributed, (ii) to
which any of the Loan Parties or any of their respective ERISA Affiliates has,
or, at any time within the five calendar years immediately preceding the date
hereof, has had, an obligation to contribute or (iii) with respect to which any
of the Loan Parties retains any liability, including any potential joint and
several liability as a result of an affiliation with an ERISA Affiliate or a
party that would be an ERISA Affiliate except for the fact the affiliation
ceased more than five calendar years prior to the date hereof.
"NET CASH PROCEEDS" means, with respect to any Asset Sale,
Cash Proceeds of such Asset Sale net of bona fide direct costs of sale
including (i) income taxes reasonably estimated to be actually payable as a
result of such Asset Sale within two years of the date of such Asset Sale and
(ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on, any Indebtedness (other than the Loans) that is secured
by a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale.
"NEW F4L SENIOR NOTE INDENTURE" means the indenture dated as
of June 1, 1995 among Food 4 Less, the subsidiary guarantors named therein and
Norwest Bank Minnesota, National Association pursuant to which the New F4L
Senior Notes were issued, as such indenture is amended on the date hereof as
described in the Food 4 Less Prospectus and may be further amended from time to
time to the extent permitted under subsection 7.15B.
"NEW F4L SENIOR NOTES" means up to $525,000,000 in aggregate
principal amount of 10.45% Senior Notes due 2004 of the Company, as such notes
may be amended from time to time to the extent permitted under subsection
7.15B.
"NEW F4L SENIOR SUBORDINATED NOTE INDENTURE" means the
indenture dated as of June 1, 1995 among Food 4 Less, the subsidiary guarantors
named therein and United States Trust Company of New York pursuant to which the
New F4L Senior Subordinated Notes were issued, as such indenture is amended on
the date hereof as described in the Food 4 Less Prospectus and may be further
amended from time to time to the extent permitted under subsection 7.15B.
"NEW F4L SENIOR SUBORDINATED NOTES" means up to $145,000,000
in aggregate principal amount of 13.75% Senior Subordinated Notes due 2005 of
the
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Company, as such notes may be amended from time to time to the extent permitted
under subsection 7.15B.
"NEW HOLDINGS" has the meaning assigned to that term in the
introduction to this Agreement.
"NEW RGC SENIOR SUBORDINATED NOTES" means the up to
$530,000,000 in aggregate principal amount of 11% Senior Subordinated Notes due
2005 of the Company, as such notes may be amended from time to time to the
extent permitted under subsection 7.15B.
"NEW RGC SENIOR SUBORDINATED NOTE INDENTURE" means the
indenture dated as of June 1, 1995 among Food 4 Less, the subsidiary guarantors
named therein and United States Trust Company of New York pursuant to which the
New RGC Senior Subordinated Notes are issued, as such indenture is amended on
the date hereof as described in the Ralphs Prospectus and may be further
amended from time to time to the extent permitted under subsection 7.15B.
"NON-RECOURSE INDEBTEDNESS" means, as applied to any Person,
all Indebtedness of that Person secured by Liens on specified assets of that
Person under the terms of which (i) no recourse may be had against that or any
other Person for the payment of the principal of or interest or premium on such
Indebtedness or for any claim based thereon and (ii) the enforcement of all
obligations relating to such Indebtedness is limited to foreclosure or other
actions with respect to such specified assets, in each case other than
customary exceptions for fraud, waste or environmental indemnification.
"NOTES" means one or more of the Tranche A Term Notes, Tranche
B Term Notes, Tranche C Term Notes, Tranche D Term Notes, Revolving Notes or
Swing Line Note or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto delivered by Company to
Agent pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
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"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman or vice
chairman of the board (if an officer) or its president or one of its executive
or senior vice presidents and by its chief financial officer or its treasurer;
provided that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of any Loans hereunder shall include (i) a
statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with; and provided further that any Officers'
Certificate required pursuant to subsection 2.4B(iii) may be executed by any
one of the officers referred to in this definition.
"OLD F4L SENIOR NOTE INDENTURE" means the indenture dated as
of July 24, 1992 among Food 4 Less, the subsidiary guarantors named therein and
Norwest Bank Minnesota, National Association, pursuant to which the Old F4L
Senior Notes were issued, as amended by the First Supplemental Indenture dated
July 24, 1992, the Second Supplemental Indenture dated as of May 30, 1995 and
as amended and described in the Food 4 Less Prospectus and as such indenture
may be further amended from time to time to the extent permitted under
subsection 7.15B.
"OLD F4L SENIOR NOTES" means Company's $175,000,000 in
aggregate principal amount of 10.45% Senior Notes due June 15, 2000.
"OLD F4L SENIOR SUBORDINATED NOTE INDENTURE" means the
indenture dated as of June 15, 1991 among Food 4 Less, the subsidiary
guarantors named therein and United States Trust Company of New York pursuant
to which the Old F4L Senior Subordinated Notes were issued, as amended by the
First Supplemental Indenture dated as of April 18, 1992, the Second
Supplemental Indenture dated as of May 18, 1992, the Third Supplemental
Indenture dated as of July 24, 1992, the Fourth Supplemental Indenture dated as
of May 30, 1995 and as amended as described in the Food 4 Less Prospectus and
as such indenture may be further amended from time to time to the extent
permitted under subsection 7.15B.
"OLD F4L SENIOR SUBORDINATED NOTES" means Company's
$145,000,000 in initial aggregate principal amount of 13.75% Senior
Subordinated Notes due April 15, 2001.
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"OLD HOLDINGS" means Food 4 Less Holdings, Inc., a California
corporation, the rights and obligations of which were succeeded to by New
Holdings as a result of the Reincorporation Merger.
"OLD RGC 9% SUBORDINATED NOTE INDENTURE" means the indenture
dated as of March 30, 1993 between Ralphs Grocery and United States Trust
Company of New York pursuant to which the Old RGC 9% Subordinated Notes were
issued, as amended by the First Supplemental Indenture dated as of June 23,
1993, the Second Supplemental Indenture dated as of May 30, 1995 and as amended
as described in the Ralphs Prospectus and as such indenture may be further
amended from time to time to the extent permitted under subsection 7.15B.
"OLD RGC 9% SUBORDINATED NOTES" means the $150,000,000 in
aggregate principal amount of 9% Senior Subordinated Notes due April 1, 2003
issued by Ralphs Grocery and assumed by Company upon consummation of the RGC
Merger.
"OLD RGC 10-1/4% SUBORDINATED NOTE INDENTURE" means the
indenture dated as of July 29, 1992 between Ralphs Grocery and United States
Trust Company of New York pursuant to which the Old RGC 10-1/4% Subordinated
Notes were issued, as amended by the First Supplemental Indenture dated as of
May 30, 1995 and and as amended as described in the Ralphs Prospectus and as
such indenture may be further amended from time to time to the extent permitted
under subsection 7.15B.
"OLD RGC 10-1/4% SUBORDINATED NOTES" means the $300,000,000 in
aggregate principal amount of 10-1/4% Senior Subordinated Notes due July 15,
2002 issued by Ralphs Grocery and assumed by Company upon consummation of the
RGC Merger.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"PARENT MERGER" means the merger of F4L Parent and Old
Holdings with Old Holdings being the surviving corporation.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
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"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords and banks and rights of
offset, and Liens of carriers, warehousemen, workmen, repairmen,
mechanics and materialmen and of growers on inventory consisting of
agricultural products and other Liens imposed by law incurred in the
ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, trade contracts,
utility payments, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money);
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v) leases or subleases granted to others not interfering
in any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, minor
defects, encroachments or irregularities in title and other similar
charges or encumbrances not interfering in any material respect with
the ordinary conduct of the business of Company or any of its
Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor
(other than any Loan Party) under any lease permitted by subsection
7.9, (b) restriction or encumbrance that the interest or title of such
lessor or sublessor may be subject to (including without limitation
ground leases or other prior leases of the demised premises,
mortgages, mechanics liens, tax liens and easements), or (c)
subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding
clause (b);
(viii) Liens arising from filing UCC financing statements
for precautionary purposes relating solely to true leases of personal
property
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permitted by this Agreement under which Company or any of its
Subsidiaries is a lessee;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or regulate the
use of any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries; and
(xii) any other title exception with respect to Real
Property Assets disclosed by the preliminary title report, title
commitment report or other search of title provided to Agent in
accordance with subsection 4.1N unless disapproved by Agent prior to
the Closing Date.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"PLANNED DISPOSITION" means the sale of any store identified
in Schedule 1.1B annexed hereto or of all or any portion of the real property
or personal property related to any such store.
"PLEDGE AGREEMENT" means each Pledge Agreement executed and
delivered by Company and certain Subsidiaries of Company on the Closing Date
and to be executed and delivered by Subsidiaries of Company from time to time
in accordance with subsection 6.10, each substantially in the form of Exhibit
XII annexed hereto, as each such Pledge Agreement may hereafter be amended,
supplemented or otherwise modified from time to time, and "PLEDGE AGREEMENTS"
means all such Pledge Agreements, collectively.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate that Bankers announces from time
to time as its prime lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any
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customer. Bankers or any other Lender may make commercial loans or other loans
at rates of interest at, above or below the Prime Rate.
"PRO RATA SHARE" means, on any date of determination, (i) with
respect to all payments, computations and other matters relating to a Type of
Term Loan Commitment or a Type of Term Loan of any Lender, the percentage
obtained by dividing (x) the Term Loan Exposure of such Type of that Lender on
such date by (y) the aggregate Term Loan Exposure of such Type of all Lenders
on such date, (ii) with respect to all payments, computations and other matters
relating to the Revolving Loan Commitment or the Revolving Loans of any Lender
or any Letters of Credit issued or participations therein purchased by any
Lender or any participations in any Swing Line Loans purchased by any Lender,
the percentage obtained by dividing (x) the Revolving Loan Exposure of that
Lender on such date by (y) the aggregate Revolving Loan Exposure of all Lenders
on such date, and (iii) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Term Loan Exposure of all
Types of that Lender on such date plus the Revolving Loan Exposure of that
Lender on such date by (y) the sum of the aggregate Term Loan Exposure of all
Types of all Lenders on such date plus the aggregate Revolving Loan Exposure of
all Lenders on such date, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to subsection 11.1. The initial Pro
Rata Share of each Lender for purposes of the preceding sentence is set forth
opposite the name of that Lender in Schedule 2.1 annexed hereto.
"PUBLIC OFFERING" means (i) the issuance of $350,000,000
aggregate principal amount of New F4L Senior Notes in a public offering
registered under the Securities Act, as described in the Prospectus dated May
31, 1995 and (ii) the issuance of $100,000,000 aggregate principal amount of
New RGC Senior Subordinated Notes in a public offering registered under the
Securities Act, as described in the Prospectus dated May 31, 1995.
"RALPHS GROCERY" means, prior to the RGC Merger, Ralphs
Grocery Company, a Delaware corporation, and a wholly-owned Subsidiary of
Ralphs Supermarkets, and following the RGC Merger, Ralphs Supermarkets (which
shall subsequently change its name to "Ralphs Grocery Company").
"RALPHS GROCERY OFFERS" means the offers (i) to exchange not
less than $225,500,000 aggregate principal amount of the Old RGC 9%
Subordinated Notes and the Old RGC 10-1/4% Subordinated Notes for an equivalent
principal amount of the New RGC Senior Subordinated Notes plus a cash payment
and (ii) to purchase for cash up to $224,500,000 aggregate principal amount of
the Old RGC 9% Subordinated Notes and the Old RGC 10-1/4% Subordinated Notes at
the principal amount thereof plus a premium and accrued interest thereon, and
the solicitation of consents with respect to the amendment of the Old RGC 9%
Subordinated Note Indenture and the Old RGC 10-1/4% Subordinated Note
Indenture, as described in the Amended and Restated
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Prospectus and Solicitation Statement dated May 12, 1995 relating thereto, as
supplemented by the Supplement to Prospectus dated May 31, 1995 relating
thereto (the "RALPHS PROSPECTUS").
"RALPHS SUPERMARKETS" means Ralphs Supermarkets, Inc., a
Delaware corporation, which, following the consummation of the RSI Merger,
shall be a wholly-owned Subsidiary of Holdings, and which, subsequent to the
consummation of the RGC Merger, shall change its name to "Ralphs Grocery
Company".
"REAL PROPERTY ASSETS" means interests in land, buildings,
improvements and fixtures attached thereto or used in the operation thereof, in
each case owned or leased (as lessee) by any Loan Party.
"REFERENCE LENDERS" means Bankers, The Mitsubishi Trust and
Banking Corporation and NatWest Bank N.A.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that
term in subsection 2.1A(vi).
"REGISTER" has the meaning assigned to that term in subsection
2.1D(i).
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT AGREEMENT" means that certain Reimbursement
Agreement, dated as of January 31, 1992, between Ralphs Grocery and The Edward
J. DeBartolo Corporation, as such Reimbursement Agreement may be amended from
time to time after the Closing Date to the extent permitted under subsection
7.15A.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"REINCORPORATION MERGER" means the merger of Old Holdings and
New Holdings with New Holdings being the surviving corporation.
"RELATED FINANCING DOCUMENTS" means, collectively, the
Subordinated Debt Indentures, the Subordinated Indebtedness, the Senior Debt
Indentures, the Senior Indebtedness and all other agreements or instruments
delivered pursuant to or in connection with any of the foregoing including any
purchase agreement or registration rights agreement.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including,
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without limitation, the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), or into or out of
any Facility, including the movement of any Hazardous Material through the air,
soil, surface water, groundwater or property.
"REPORTING DIVISION" means each of (a) Company and its
Subsidiaries on a consolidated basis, (b) Cala and its Subsidiaries on a
consolidated basis, (c) Falley's and its Subsidiaries on a consolidated basis
and (d) Company and its Subsidiaries (other than the Subsidiaries included in
the foregoing clauses (b) and (c)) on a consolidated basis.
"REQUIRED DISPOSITION" means any disposition of any store
identified in Schedule 1.1C annexed hereto by Company or any of its
Subsidiaries if such disposition is (i) required or made pursuant to any
agreement with the Federal Trade Commission or the California Attorney General
or (ii) required or made pursuant to any other state or federal antitrust law,
in each case as approved by Agent and Requisite Lenders.
"REQUISITE LENDERS" means Lenders having or holding a majority
of the sum of the aggregate Tranche A Term Loan Exposure of all Tranche A Term
Lenders plus the aggregate Tranche B Term Loan Exposure of all Tranche B Term
Lenders plus the aggregate Tranche C Term Loan Exposure of all Tranche C Term
Lenders plus the aggregate Tranche D Term Loan Exposure of all Tranche D Term
Lenders plus the aggregate Revolving Loan Exposure of all Revolving Lenders.
"REQUISITE CLASS LENDERS" means, at any time, (i) for the
Class Lenders having Tranche A Term Loan Exposure and/or Revolving Loan
Exposure, Lenders having or holding 66 and 2/3% of the sum of the aggregate
Tranche A Term Loan Exposure of all Lenders plus the aggregate Revolving Loan
Exposure of all Lenders, and, (ii) for the Class Lenders having Tranche B Term
Loan Exposure, Tranche C Term Loan Exposure and/or Tranche D Term Loan
Exposure, Lenders having or holding 66 and 2/3% of the sum of the aggregate
Tranche B Term Loan Exposure of all Lenders plus the aggregate Tranche C Term
Loan Exposure of all Lenders plus the aggregate Tranche D Term Loan Exposure of
all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Holdings or Company now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock to the holders of that class,
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock of Holdings or Company now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of Holdings or
Company now or hereafter outstanding, and (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
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retirement, defeasance (including in-substance or legal defeasance), sinking
fund or similar payment with respect to, any Subordinated Indebtedness.
"RESTRUCTURING CHARGES" means, for any period subsequent to
the Closing Date, (i) the amount of cash restructuring charges and integration
costs incurred by Company and its Subsidiaries in connection with the
restructuring and integration of Company's and its Subsidiaries' operations as
a result of the Acquisition and related transactions, the divestitures of
stores by and the consolidation of facilities of Company and its Subsidiaries
and other similar restructurings or integrations; provided that the aggregate
amount of such cash charges and costs included in Consolidated Adjusted EBITDA
and Consolidated Net Worth for all periods shall not exceed $45,000,000, and
(ii) the amount of non-cash restructuring charges and integration costs
reflected on the consolidated financial statements of Company and its
Subsidiaries; provided that the aggregate amount of such non-cash charges and
costs included in Consolidated Adjusted EBITDA and Consolidated Net Worth for
all periods shall not exceed $55,000,000, in each case to the extent such
restructuring charges and integration costs reduce the net income of Company
and its Subsidiaries.
"REVOLVING LENDER" or "REVOLVING LENDERS" means the Lender or
Lenders having a Revolving Loan Commitment or having Revolving Loans
outstanding.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender
to make Revolving Loans to Company pursuant to subsection 2.1A(v), to issue
and/or purchase participations in Letters of Credit pursuant to Section 3 and,
except for Swing Line Lender, to purchase participations in Swing Line Loans
pursuant to subsection 2.1A(vi), and "REVOLVING LOAN COMMITMENTS" means such
commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means June 15,
2001.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination, (i) prior to the termination of the Revolving
Loan Commitments, that Lender's Revolving Loan Commitment, and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit
Usage in respect of all Letters of Credit issued by that Lender (in each case
net of any participations purchased by other Lenders in such Letters of Credit
or any unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit plus (d) in the case of
Swing Line Lender, the aggregate outstanding principal amount of all Swing Line
Loans (net of any participations therein purchased by other Lenders) plus (e)
the
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aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans.
"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(v).
"REVOLVING NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Closing Date to evidence the
Revolving Loans of any Lender and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 11.1B(i) in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of any
Lenders, in each case substantially in the form of Exhibit VIII annexed hereto,
as they may be amended, supplemented or otherwise modified from time to time.
"RGC MERGER" means the merger of Ralphs Supermarkets and
Ralphs Grocery with Ralphs Supermarkets being the surviving corporation.
"RGC MERGER CERTIFICATE" means that certain Certificate of
Merger dated as of June 14, 1995 executed by Ralphs Supermarkets and Ralphs
Grocery and filed with the Secretary of State of the State of Delaware on the
Closing Date in order to consummate the RGC Merger, as in effect on the Closing
Date, as such Certificate of Merger may be amended from time to time after the
Closing Date to the extent permitted under subsection 7.15A.
"RGC MORTGAGE NOTES" means three promissory notes, each dated
May 30, 1989, made by Ralphs Grocery to Metropolitan Life Insurance Company, in
the original principal amounts of $135,000,000, $45,000,000 and $25,000,000, as
such promissory notes have been amended and modified prior to the date hereof.
"RSI MERGER" means the merger of Food 4 Less and Ralphs
Supermarkets with Ralphs Supermarkets being the surviving corporation.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing; provided,
however, that, solely for purposes of subsection 2.4B(iii)(b), notes issued by
Company to evidence any of the Obligations or to evidence Indebtedness incurred
after the Closing Date pursuant to subsection 7.1 shall not be deemed
"Securities".
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"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITY AGREEMENT" means each Security Agreement executed
and delivered by Holdings, Company and certain Subsidiaries of Company on the
Closing Date and to be executed and delivered by Subsidiaries of Company from
time to time in accordance with subsection 6.10, each substantially in the form
of Exhibit XIII annexed hereto, as each such Security Agreement may hereafter
be amended, supplemented or otherwise modified from time to time, and "SECURITY
AGREEMENTS" means all such Security Agreements, collectively.
"SELLER DEBENTURES" means the $131,500,000 principal amount of
13-5/8% Senior Subordinated Pay-In-Kind Debentures due 2007 of Holdings issued
on the Closing Date to the Sellers pursuant to the Seller Debenture Indenture,
together with such 13-5/8% Senior Subordinated Pay-In-Kind Debentures due 2007
issued by Holdings subsequent to the Closing Date as payment in-kind interest
payments in accordance with the Seller Debenture Indenture, as such debentures
may be amended from time to time to the extent permitted under subsection
7.15B.
"SELLER DEBENTURE INDENTURE" means the indenture dated as of
June 1, 1995 between Holdings and Norwest Bank Minnesota, National Association
pursuant to which the Seller Debentures are issued, which is in substantially
the form of Exhibit A attached to the Merger Agreement, as such Seller
Debenture Indenture may be amended from time to time to the extent permitted
under subsection 7.15B.
"SELLERS" means the selling stockholders of Ralphs
Supermarkets, consisting of The Edward J. DeBartolo Corporation, Camdev
Properties Inc., Bank of Montreal, Banque Paribas and Federated Department
Stores, Inc.
"SENIOR DEBT INDENTURES" means any or all of the Old F4L
Senior Note Indenture, the New F4L Senior Note Indenture, the Holdings Discount
Note Indenture and the Holdings Discount Debenture Indenture.
"SENIOR INDEBTEDNESS" means any or all of the Old F4L Senior
Notes, the New F4L Senior Notes, the Holdings Discount Notes and the Holdings
Discount Debentures.
"SHAREHOLDERS AGREEMENT" means that certain Stockholders
Agreement of Holdings dated as of June 14, 1995 by and among each of the
purchasers and investors listed therein, Yucaipa, certain Affiliates of
Yucaipa, Holdings and Ralphs Grocery, as such Stockholders Agreement may be
amended from time to time after the Closing Date to the extent permitted under
subsection 7.15A.
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"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to such Person;
(ii) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due; and
(B) such Person is "solvent" within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"SPECIFIED OFFICERS" means, with respect to any Loan Party,
such Loan Party's chairman of the board, vice chairman of the board, chief
executive officer, president, executive vice presidents, senior vice presidents
and, to the extent not included in any of the foregoing, all officers whose
functional areas include finance, real estate, law, employee benefits or human
resources (including without limitation the general counsel, chief financial
officer, treasurer and controller), and all other officers of such Loan Party
who have functions or duties that are equivalent or similar to those of any of
the foregoing.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
issued for the purpose of supporting (i) Indebtedness of Company or any of its
Subsidiaries in respect of industrial revenue or development bonds or
financings, (ii) workers' compensation liabilities of Company or any of its
Subsidiaries, (iii) the obligations of third party insurers of Company or any
of its Subsidiaries arising by virtue of the laws of any jurisdiction requiring
third party insurers, (iv) obligations with respect to Capital Leases or
Operating Leases of Company or any of its Subsidiaries, and (v) performance,
payment, deposit or surety obligations of Company or any of its Subsidiaries,
in any case if required by law or governmental rule or regulation or in
accordance with custom and practice in the industry; provided that Standby
Letters of Credit may not be issued for the purpose of supporting trade
payables or any Indebtedness constituting "antecedent debt" (as that term is
used in Section 547 of the Bankruptcy Code).
"SUBORDINATED DEBT INDENTURES" means, collectively, the Old
F4L Senior Subordinated Note Indenture, the New F4L Senior Subordinated Note
Indenture, the Old RGC 9% Subordinated Note Indenture, the Old RGC 10-1/4%
Subordinated Note Indenture, the New RGC Senior Subordinated Note Indenture and
the Seller Debenture Indenture.
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"SUBORDINATED INDEBTEDNESS" means (i) the Old F4L Senior
Subordinated Notes, the New F4L Senior Subordinated Notes, the New RGC Senior
Subordinated Notes, the Seller Debentures, the Old RGC 9% Subordinated Notes
and the Old RGC 10-1/4% Subordinated Notes and (ii) any other Indebtedness of
Holdings or Company subordinated in right of payment to the Obligations
pursuant to documentation containing maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other material
terms in form and substance satisfactory to Agent and Requisite Lenders.
"SUBSCRIPTION AGREEMENT" means that certain Subscription
Agreement dated as of June 14, 1995 among RGC Partners, L.P., Holdings, Company
and the partnership investors signatory thereto, as such Subscription Agreement
may be amended from time to time after the Closing Date to the extent permitted
under subsection 7.15A.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"SWING LINE LENDER" means Bankers, or any Person serving as a
successor Agent hereunder, in its capacity as Swing Line Lender hereunder and
under the other Loan Documents.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing
Line Lender to make Swing Line Loans to Company pursuant to subsection
2.1A(vi).
"SWING LINE LOANS" means the Loans made by Swing Line Lender
to Company pursuant to subsection 2.1A(vi).
"SWING LINE NOTE" means (i) the promissory note of Company
issued pursuant to subsection 2.1E on the Closing Date to evidence the Swing
Line Loans of Swing Line Lender and (ii) any promissory note issued by Company
to any successor Agent and Swing Line Lender pursuant to the last sentence of
subsection 10.6B, in each case substantially in the form of Exhibit IX annexed
hereto, as it may be amended, supplemented or otherwise modified from time to
time.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided that "TAX ON THE OVERALL INCOME" of a Person
shall be construed as
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a reference to a tax imposed by the jurisdiction in which that Person's
principal office (and/or, in the case of a Lender, its lending office) is
located or in which that Person is organized or is deemed to be doing business
on all or part of the net income, profits, gains or receipts of that Person
(whether worldwide, or only insofar as such income, profits, gains or receipts
are considered to arise in or to relate to a particular jurisdiction, or
otherwise).
"TAX ELECTION AGREEMENT" means that certain Tax Election
Agreement, effective as of February 3, 1992, by and among The Edward J.
DeBartolo Corporation, Federated Department Stores, Inc., Federated Stores,
Inc., and Ralphs Holding Company (now known as Ralphs Supermarkets, and
following its name change after the RGC Merger, Ralphs Grocery), as such Tax
Election Agreement may be amended from time to time after the Closing Date to
the extent permitted under subsection 7.15A.
"TERM LOAN COMMITMENT" or "TERM LOAN COMMITMENTS" means the
commitments of Lenders to make the Term Loans pursuant to subsection 2.1A in
the aggregate.
"TERM LOAN EXPOSURE" means, with respect to a Lender of a Type
of Term Loan as of any date of determination, (i) prior to the termination of
all of a Lender's Commitment with respect to the Term Loans of such Type, that
Lender's Term Loan Commitment of such Type (or any portion thereof that has not
been terminated) plus the outstanding principal amount of the Term Loan of such
Type of that Lender, and (ii) after the termination of all of a Lender's
Commitment with respect to the Term Loans of such Type, the outstanding
principal amount of the Term Loan of such Type of that Lender.
"TERM LOANS" means one or more of the Tranche A Term Loans,
the Tranche B Term Loans, the Tranche C Term Loans or the Tranche D Term Loans.
"TERM NOTES" means (i) the promissory notes of Company
evidencing the Term Loans of a Type of Term Loan issued pursuant to subsection
2.1E on the Closing Date, and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 11.1B(i) in connection with
assignments of the Term Loan Commitments of such Type or of the Term Loans of
such Type, in each case substantially in the form of Exhibit IV annexed hereto
in the case of Tranche A Term Loans, Exhibit V annexed hereto in the case of
Tranche B Term Loans, Exhibit VI annexed hereto in the case of Tranche C Term
Loans and Exhibit VII annexed hereto in the case of Tranche D Term Loans, as
they may be amended, supplemented or otherwise modified from time to time.
"TITLE INSURANCE POLICIES" means ALTA loan title insurance
policies issued by a title insurance company reasonably satisfactory to Agent,
in the amounts reasonably satisfactory to Agent with respect to any particular
Real Property Assets subject to a Deed of Trust, assuring Agent that the
applicable Deed of Trust creates a
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valid and enforceable first priority lien on the respective Real Property Asset
subject to such Deed of Trust, free and clear of all defects and encumbrances
except Permitted Encumbrances, which Title Insurance Policies shall be in form
and substance reasonably satisfactory to Agent and shall include an endorsement
for any matters that Agent may reasonably request and for future advances under
this Agreement, the Notes and the other Loan Documents, and shall provide for
affirmative insurance and such reinsurance as Agent may request, all of the
foregoing in form and substance reasonably satisfactory to Agent.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans plus (ii) the aggregate principal amount of all
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
"TRADEMARK SECURITY AGREEMENT" means each Trademark Collateral
Security Agreement and Conditional Assignment executed and delivered by Company
and certain Subsidiaries of Company on the Closing Date and to be executed and
delivered by Subsidiaries of Company from time to time in accordance with
subsection 6.10, each substantially in the form of Exhibit XIV annexed hereto,
as each such Trademark Collateral Security Agreement and Conditional Assignment
may hereafter be amended, supplemented or otherwise modified from time to time,
and "TRADEMARK SECURITY AGREEMENTS" means all such Trademark Collateral
Security Agreements and Conditional Assignments, collectively.
"TRANCHE A TERM LENDER" or "TRANCHE A TERM LENDERS" means the
Lender or Lenders having a Tranche A Term Loan Commitment or having a Tranche A
Term Loan outstanding.
"TRANCHE A TERM LOAN COMMITMENT" means the commitment of a
Tranche A Term Lender to make a Tranche A Term Loan to Company pursuant to
subsection 2.1A(i), and "TRANCHE A TERM LOAN COMMITMENTS" means such
commitments of all Tranche A Term Lenders in the aggregate.
"TRANCHE A TERM LOANS" means the Loans made by Tranche A Term
Lenders to Company pursuant to subsection 2.1A(i).
"TRANCHE B TERM LENDER" or "TRANCHE B TERM LENDERS" means the
Lender or Lenders having a Tranche B Term Loan Commitment or having a Tranche B
Term Loan outstanding.
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a
Tranche B Term Lender to make a Tranche B Term Loan to Company pursuant to
subsection 2.1A(ii), and "TRANCHE B TERM LOAN COMMITMENTS" means such
commitments of all Tranche B Term Lenders in the aggregate.
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"TRANCHE B TERM LOANS" means the Loans made by Tranche B Term
Lenders to Company pursuant to subsection 2.1A(ii).
"TRANCHE C TERM LENDER" or "TRANCHE C TERM LENDERS" means the
Lender or Lenders having a Tranche C Term Loan Commitment or having a Tranche C
Term Loan outstanding.
"TRANCHE C TERM LOAN COMMITMENT" means the commitment of a
Tranche C Term Lender to make a Tranche C Term Loan to Company pursuant to
subsection 2.1A(iii), and "TRANCHE C TERM LOAN COMMITMENTS" means such
commitments of all Tranche C Term Lenders in the aggregate.
"TRANCHE C TERM LOANS" means the Loans made by Tranche C Term
Lenders to Company pursuant to subsection 2.1A(iii).
"TRANCHE D TERM LENDER" or "TRANCHE D TERM LENDERS" means the
Lender or Lenders having a Tranche D Term Loan Commitment or having a Tranche D
Term Loan outstanding.
"TRANCHE D TERM LOAN COMMITMENT" means the commitment of a
Tranche D Term Lender to make a Tranche D Term Loan to Company pursuant to
subsection 2.1A(iv), and "TRANCHE D TERM LOAN COMMITMENTS" means such
commitments of all Tranche D Term Lenders in the aggregate.
"TRANCHE D TERM LOANS" means the Loans made by Tranche D Term
Lenders to Company pursuant to subsection 2.1A(iv).
"TRANSACTION DOCUMENTS" means any or all of the Loan
Documents, the Related Financing Documents, the Merger Agreement, the RGC
Merger Certificate, the Tax Election Agreement, the Indemnification Agreement,
the Shareholders Agreement, the Consulting Agreement, the Reimbursement
Agreement and any guaranties relating to any of the foregoing, and all other
agreements or instruments delivered pursuant to or in connection with any of
the foregoing, including any purchase agreement or registration rights
agreement.
"TRANSFER AND ASSUMPTION AGREEMENT" means that certain
Transfer and Assumption Agreement, dated as of June 23, 1989, between Company
(as successor to Food 4 Less) and New Holdings (as successor to Old Holdings),
as it may be amended from time to time after the Closing Date to the extent
permitted under subsection 7.15A.
"TYPE" means a Term Loan, a Revolving Loan or a Swingline Loan
(each of which is a "Type" of Loan) and with respect to a Term Loan, a Tranche
A Term Loan, a Tranche B Term Loan, a Tranche C Term Loan or a Tranche D Term
Loan (each of which is a "Type" of Term Loan).
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"YUCAIPA" means The Yucaipa Companies, a California general
partnership, or any successor thereto (i) which is an Affiliate of Ronald W.
Burkle, (ii) which has been established for the sole purpose of changing the
form of The Yucaipa Companies from that of a partnership to that of a limited
liability company or such other form acceptable to Agent in its sole discretion
and (iii) the form and structure of which has been approved by Agent in its
sole discretion.
"YUCAIPA INVESTORS" means Ronald W. Burkle; F4L Equity
Partners, L.P.; FFL Partners; Yucaipa Capital Fund L.P.; Yucaipa/F4L Partners;
The Yucaipa Companies and any other entity formed after the Closing Date which
is an Affiliate of Ronald W. Burkle; provided, however, that, in the event that
F4L Equity Partners, L.P. is dissolved in accordance with the terms of its
governing partnership documents following the Closing Date, the shares of
Holdings Voting Stock which would have been distributable to Angeles
Development, BV if F4L Equity Partners, L.P. had been dissolved on the Closing
Date (which shares shall not exceed 20% of the total number of shares of
Holdings Voting Stock owned by F4L Equity Partners, L.P. on the Closing Date)
shall be deemed not to have been owned (economically or beneficially) by the
Yucaipa Investors on the Closing Date for purposes of this Agreement.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP. Financial statements and other information required to be delivered
by Company to Lenders pursuant to clauses (i), (ii) and (iii) of subsection 6.1
shall be prepared in accordance with GAAP as in effect at the time of such
preparation (and delivered together with the reconciliation statements provided
for in subsection 6.1(v)). Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall (i) utilize accounting
principles and policies in conformity with those used to prepare the financial
statements referred to in subsection 5.3, or (ii) if any amendments to the
provisions set forth in Sections 1, 6 or 7 are made pursuant to negotiations
conducted by operation of the following sentence, accounting principles and
policies in effect at the time of the effectiveness of such amendments.
Notwithstanding the foregoing, if any changes in accounting principles from
those used in the preparation of the financial statements referred to in
subsection 5.3 hereafter occasioned by the promulgation of rules, regulations,
pronouncements or opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) result in a change in the method of
calculation of financial covenants, standards or terms found in Sections 1, 6
and 7 hereof, the parties hereto agree to enter into negotiations in order to
amend such provisions so as to equitably reflect such changes with the desired
result that the criteria for evaluating Holdings' and Company's financial
condition shall be the same after such changes as if such changes had not been
made. During the period of such negotiations,
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but in no event for a period longer than 60 days, Company shall not be required
to deliver the additional financial statements required pursuant to subsection
6.1(v). After the parties agree on amendments to the provisions of Sections 1,
6 and 7 necessitated by such changes, Company shall not be required to deliver
the additional financial statements required pursuant to subsection 6.1(v) with
respect to such changes.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.1 may, unless
the context otherwise requires, be used in the singular or the plural,
depending on the reference.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Holdings
and Company herein set forth, each Lender hereby severally agrees to make the
Loans described in subsections 2.1A(i), 2.1A(ii), 2.1A(iii), 2.1A(iv) and
2.1A(v), as applicable, and Swing Line Lender hereby agrees to make the Loans
described in subsection 2.1A(vi).
(i) Tranche A Term Loans. Each Tranche A Term Lender
severally agrees to lend to Company on the Closing Date an amount not
exceeding its Pro Rata Share of the aggregate amount of the Tranche A
Term Loan Commitments to be used for the purposes identified in the
first sentence of subsection 2.5A. The amount of each Tranche A Term
Lender's Tranche A Term Loan Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate amount of the Tranche
A Term Loan Commitments is $275,000,000; provided that the Tranche A
Term Loan Commitments of Tranche A Term Lenders shall be adjusted to
give effect to any assignments of the Tranche A Term Loan Commitments
pursuant to subsection 11.1B. Each Tranche A Term Lender's Tranche A
Term Loan Commitment shall expire immediately and without further
action on the earlier of (x) the date on which the Merger Agreement is
terminated in accordance with Article XI thereof and (y) June 30, 1995
if the initial Term Loans are not made on or before that date.
Company may make only one borrowing on the Closing Date under the
Tranche A Term Loan Commitments. Amounts borrowed under this
subsection 2.1A(i) and subsequently repaid or prepaid may not be
reborrowed.
(ii) Tranche B Term Loans. Each Tranche B Term Lender
severally agrees to lend to Company on the Closing Date an amount not
exceeding its Pro
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Rata Share of the aggregate amount of the Tranche B Term Loan
Commitments to be used for the purposes identified in subsection 2.5A.
The amount of each Tranche B Term Lender's Tranche B Term Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate amount of the Tranche B Term Loan Commitments
is $108,333,333; provided that the Tranche B Term Loan Commitments of
Tranche B Term Lenders shall be adjusted to give effect to any
assignments of the Tranche B Term Loan Commitments pursuant to
subsection 11.1B. Each Tranche B Term Lender's Tranche B Term Loan
Commitment shall expire immediately and without further action on the
earlier of (x) the date on which the Merger Agreement is terminated in
accordance with Article XI thereof and (y) June 30, 1995 if the
initial Term Loans are not made on or before that date. Company may
make only one borrowing on the Closing Date under the Tranche B Term
Loan Commitments. Amounts borrowed under this subsection 2.1A(ii) and
subsequently repaid or prepaid may not be reborrowed.
(iii) Tranche C Term Loans. Each Tranche C Term Lender
severally agrees to lend to Company on the Closing Date an amount not
exceeding its Pro Rata Share of the aggregate amount of the Tranche C
Term Loan Commitments to be used for the purposes identified in
subsection 2.5A. The amount of each Tranche C Term Lender's Tranche C
Term Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate amount of the Tranche C Term Loan
Commitments is $108,333,333; provided that the Tranche C Term Loan
Commitments of Tranche C Term Lenders shall be adjusted to give effect
to any assignments of the Tranche C Term Loan Commitments pursuant to
subsection 11.1B. Each Tranche C Term Lender's Tranche C Term Loan
Commitment shall expire immediately and without further action on the
earlier of (x) the date on which the Merger Agreement is terminated in
accordance with Article XI thereof and (y) June 30, 1995 if the
initial Term Loans are not made on or before that date. Company may
make only one borrowing on the Closing Date under the Tranche C Term
Loan Commitments. Amounts borrowed under this subsection 2.1A(iii)
and subsequently repaid or prepaid may not be reborrowed.
(iv) Tranche D Term Loans. Each Tranche D Term Lender
severally agrees to lend to Company on the Closing Date an amount not
exceeding its Pro Rata Share of the aggregate amount of the Tranche D
Term Loan Commitments to be used for the purposes identified in
subsection 2.5A. The amount of each Tranche D Term Lender's Tranche D
Term Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate amount of the Tranche D Term Loan
Commitments is $108,333,334; provided that the Tranche D Term Loan
Commitments of Tranche D Term Lenders shall be adjusted to give effect
to any assignments of the Tranche D Term Loan Commitments pursuant to
subsection 11.1B. Each Tranche D Term Lender's
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Tranche D Term Loan Commitment shall expire immediately and without
further action on the earlier of (x) the date on which the Merger
Agreement is terminated in accordance with Article XI thereof and (y)
June 30, 1995 if the initial Term Loans are not made on or before that
date. Company may make only one borrowing on the Closing Date under
the Tranche D Term Loan Commitments. Amounts borrowed under this
subsection 2.1A(iv) and subsequently repaid or prepaid may not be
reborrowed.
(v) Revolving Loans. Each Revolving Lender severally
agrees, subject to the limitations set forth below with respect to the
maximum amount of Revolving Loans permitted to be outstanding from
time to time, to lend to Company from time to time during the period
from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date an aggregate amount not exceeding its Pro Rata Share
of the aggregate amount of the Revolving Loan Commitments to be used
for the purposes identified in subsection 2.5B. The original amount
of each Revolving Lender's Revolving Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate
original amount of the Revolving Loan Commitments is
$325,000,000; provided that the Revolving Loan Commitments of Revolving
Lenders shall be adjusted to give effect to any assignments of the
Revolving Loan Commitments pursuant to subsection 11.1B; and provided
further that the amount of the Revolving Loan Commitments shall be
reduced from time to time by the amount of any reductions thereto made
pursuant to subsections 2.4B(ii) and 2.4B(iii). Each Revolving
Lender's Revolving Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the
Revolving Loan Commitments shall be paid in full no later than that
date; provided that each Revolving Lender's Revolving Loan Commitment
shall expire immediately and without further action on the earlier of
(x) the date on which the Merger Agreement is terminated in accordance
with Article XI thereof and (y) June 30, 1995 if the initial Term
Loans are not made on or before that date. Amounts borrowed under
this subsection 2.1A(v) may be repaid and reborrowed to but excluding
the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan
Commitments shall be subject to the following limitations in the
amounts and during the periods indicated:
(a) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect; and
(b) for 30 consecutive days during the
twelve-month period immediately following the Closing Date and
thereafter during each twelve-
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month period that immediately follows the Company's most
recent compliance with this subparagraph (b), the sum of (1)
the aggregate outstanding principal amount of all Revolving
Loans plus (2) the aggregate outstanding principal amount of
all Swing Line Loans shall not exceed $75,000,000.
(vi) Swing Line Loans. Swing Line Lender hereby agrees,
subject to the limitations set forth below with respect to the maximum
amount of Swing Line Loans permitted to be outstanding from time to
time, to make a portion of the Revolving Loan Commitments available to
Company from time to time during the period from the Closing Date to
but excluding the Revolving Loan Commitment Termination Date by making
Swing Line Loans to Company in an aggregate amount not exceeding the
amount of the Swing Line Loan Commitment to be used for the purposes
identified in subsection 2.5B, notwithstanding the fact that such
Swing Line Loans, when aggregated with Swing Line Lender's outstanding
Revolving Loans and Swing Line Lender's Pro Rata Share of the Letter
of Credit Usage then in effect, may exceed Swing Line Lender's
Revolving Loan Commitment. The original amount of the Swing Line Loan
Commitment is $30,000,000; provided that any reduction of the
Revolving Loan Commitments made pursuant to subsection 2.4B(ii) or
2.4B(iii) which reduces the aggregate Revolving Loan Commitments to an
amount less than the then current amount of the Swing Line Loan
Commitment shall result in an automatic corresponding reduction of the
Swing Line Loan Commitment to the amount of the Revolving Loan
Commitments, as so reduced, without any further action on the part of
Company, Agent or Swing Line Lender. The Swing Line Loan Commitment
shall expire on the Revolving Loan Commitment Termination Date and all
Swing Line Loans and all other amounts owed hereunder with respect to
the Swing Line Loans shall be paid in full no later than that
date; provided that the Swing Line Loan Commitment shall expire
immediately and without further action on the earlier of (x) the date
on which the Merger Agreement is terminated in accordance with Article
XI thereof and (y) June 30, 1995 if the Term Loans are not made on or
before that date. Amounts borrowed under this subsection 2.1A(vi) may
be repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan
Commitment shall be subject to the following limitations in the
amounts and during the periods indicated:
(a) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect; and
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(b) for 30 consecutive days during the
twelve-month period immediately following the Closing Date and
thereafter during each twelve-month period that immediately
follows the Company's most recent compliance with this
subparagraph (b), the sum of (1) the aggregate outstanding
principal amount of all Revolving Loans plus (2) the aggregate
outstanding principal amount of all Swing Line Loans shall not
exceed $75,000,000.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing
Line Lender (i) may, at any time in its sole and absolute discretion,
and (ii) shall, at least once every seven days, deliver to Agent (with
a copy to Company), no later than 1:00 P.M. (New York City time) on
the first Business Day in advance of the proposed Funding Date, a
notice requesting Revolving Lenders to make Revolving Loans that are
Base Rate Loans on such Funding Date in an amount equal to the amount
of such Swing Line Loans (the "REFUNDED SWING LINE LOANS") outstanding
on the date such notice is given which Swing Line Lender requests
Revolving Lenders to prepay. Anything contained in this Agreement to
the contrary notwithstanding, (i) the proceeds of such Revolving Loans
made by Revolving Lenders other than Swing Line Lender shall be
immediately delivered by Agent to Swing Line Lender (and not to
Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (ii) on the day such Revolving Loans are made,
Swing Line Lender's Pro Rata Share of the Refunded Swing Line Loans
shall be deemed to be paid with the proceeds of a Revolving Loan made
by Swing Line Lender, and such portion of the Swing Line Loans deemed
to be so paid shall no longer be outstanding as Swing Line Loans and
shall no longer be due under the Swing Line Note of Swing Line Lender
but shall instead constitute part of Swing Line Lender's outstanding
Revolving Loans and shall be due under the Revolving Note of Swing
Line Lender. Company hereby authorizes Agent and Swing Line Lender to
charge Company's accounts with Agent and Swing Line Lender (up to the
amount available in each such account) in order to immediately pay
Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Revolving Lenders,
including the Revolving Loan deemed to be made by Swing Line Lender,
are not sufficient to repay in full the Refunded Swing Line Loans. If
any portion of any such amount paid (or deemed to be paid) to Swing
Line Lender should be recovered by or on behalf of Company from Swing
Line Lender in bankruptcy, by assignment for the benefit of creditors
or otherwise, the loss of the amount so recovered shall be ratably
shared among all Revolving Lenders in the manner contemplated by
subsection 11.5.
Immediately upon the funding of each Swing Line Loan by Swing
Line Lender, each Revolving Lender shall be deemed to, and hereby
agrees to, have purchased a participation in such outstanding Swing
Line Loans in an amount
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equal to its Pro Rata Share (calculated without giving effect to
clauses (d) and (e) of the definition of Revolving Loan Exposure) of
the unpaid amount together with accrued interest thereon. Upon one
Business Day's notice from Swing Line Lender, each Revolving Lender
shall deliver to Swing Line Lender an amount equal to its respective
participation in same day funds at the Funding and Payment Office. In
order to evidence such participation each Revolving Lender agrees to
enter into a participation agreement at the request of Swing Line
Lender in form and substance reasonably satisfactory to all parties.
In the event any Revolving Lender fails to make available to Swing
Line Lender the amount of such Revolving Lender's participation as
provided in this paragraph, Swing Line Lender shall be entitled to
recover such amount on demand from such Revolving Lender together with
interest thereon at the rate customarily used by Swing Line Lender for
the correction of errors among banks for three Business Days and
thereafter at the Base Rate. In the event Swing Line Lender receives
a payment of any amount in which other Revolving Lenders have
purchased participations as provided in this paragraph, Swing Line
Lender shall promptly distribute to each such other Revolving Lender
its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, (i)
each Revolving Lender's obligation to make Revolving Loans for the
purpose of repaying any Refunded Swing Line Loans pursuant to the
second preceding paragraph and each Revolving Lender's obligation to
purchase a participation in any unpaid Swing Line Loans pursuant to
the immediately preceding paragraph shall be absolute and
unconditional and shall not be affected by any circumstance, including
without limitation (a) any set-off, counterclaim, recoupment, defense
or other right which such Revolving Lender may have against Swing Line
Lender, Company or any other Person for any reason whatsoever; (b) the
occurrence or continuation of an Event of Default or a Potential Event
of Default; (c) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Holdings or any of its Subsidiaries; (d) any breach of this Agreement
or any other Loan Document by any party thereto; or (e) any other
circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing; provided that such obligations of each Revolving
Lender are subject to the satisfaction of one of the following: (X)
Swing Line Lender believed in good faith that all conditions under
Section 4 to the making of the applicable Swing Line Loans to be
refunded, were satisfied at the time such Swing Line Loans were made,
(Y) such Revolving Lender had actual knowledge, by receipt of any
notices required to be delivered to Revolving Lenders pursuant to
subsection 6.1(ix) or otherwise, that any such condition had not been
satisfied and such Revolving Lender failed to notify Swing Line Lender
and Agent in writing that it had no obligation to make Revolving Loans
until such condition was satisfied (any such notice to be effective as
of the date of receipt thereof by Swing Line Lender and Agent), or (Z)
the satisfaction of any such condition not satisfied had been waived
in accordance with subsection 11.6; and (ii) Swing
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Line Lender shall not be obligated to make any Swing Line Loans if it
has elected not to do so after the occurrence and during the
continuation of a Potential Event of Default or Event of Default.
B. BORROWING MECHANICS. Term Loans or Revolving Loans made on
any Funding Date (other than Revolving Loans made pursuant to a request by
Swing Line Lender pursuant to subsection 2.1A(vi) for the purpose of repaying
any Refunded Swing Line Loans or Revolving Loans made pursuant to subsection
3.3B for the purpose of reimbursing any Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it) that are made as (i) Eurodollar
Rate Loans shall be in an aggregate minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount or (ii) Base Rate Loans shall
be in an aggregate minimum amount of $2,000,000 and integral multiples of
$500,000 in excess of that amount. Swing Line Loans made on any Funding Date
shall be in an aggregate minimum amount of $500,000 and integral multiples of
$250,000 in excess of that amount. Whenever Company desires that Lenders make
Term Loans or whenever Company desires that Revolving Lenders make Revolving
Loans Company shall deliver to Agent a Notice of Borrowing no later than 1:00
P.M. (New York City time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). Whenever Company desires that Swing Line Lender make a Swing Line
Loan, it shall deliver to Agent a Notice of Borrowing no later than 1:00 P.M.
(New York City time) on the proposed Funding Date. The Notice of Borrowing
shall specify (i) the proposed Funding Date (which shall be a Business Day),
(ii) the amount and Type of Loans requested, (iii) in the case of Swing Line
Loans, that such Loans shall be Base Rate Loans, (iv) whether such Loans shall
be Base Rate Loans or Eurodollar Rate Loans, and (v) in the case of any Loans
requested to be made as Eurodollar Rate Loans, the initial Interest Period
requested therefor. Term Loans and Revolving Loans may be continued as or
converted into Base Rate Loans and Eurodollar Rate Loans in the manner provided
in subsection 2.2D. In lieu of delivering the above-described Notice of
Borrowing, Company may give Agent telephonic notice by the required time of any
proposed borrowing under this subsection 2.1B; provided that such notice shall
be promptly confirmed in writing by delivery of a Notice of Borrowing to Agent
on or before the applicable Funding Date.
Notwithstanding anything contained herein to the contrary,
during the period commencing on (and including) the Closing Date and ending on
the earlier of (i) the three-month anniversary of the date on which the first
Eurodollar Rate Loan is made under this Agreement and (ii) the date Agent sends
notice to Company indicating that Lenders' primary syndication has been
concluded, (a) Company may only request Base Rate Loans and Eurodollar Rate
Loans with an Interest Period of one month and (b) the last day of the Interest
Period applicable to any Eurodollar Rate Loan shall be the one-month
anniversary, the two-month anniversary or the three-month anniversary of the
date on which the first Eurodollar Rate Loan is made under this Agreement.
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Neither Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Company or for otherwise acting in
good faith under this subsection 2.1B, and upon funding of Loans by Lenders in
accordance with this Agreement pursuant to any such telephonic notice Company
shall have effected Loans hereunder.
Company shall notify Agent prior to the funding of any Loans
in the event that any of the matters to which Company is required to certify in
the applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing as modified pursuant to the notice provided for
in the first clause of this sentence (it being understood that the making of
such Loans by Lenders shall not in any way be construed as a waiver by Lenders
of any matter set forth in such notice).
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in
lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in
accordance therewith.
C. DISBURSEMENT OF FUNDS. All Term Loans and Revolving Loans
under this Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares of the Commitments for the
particular Type of Loans requested, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Agent of a
Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu
thereof), Agent shall notify each Lender or Swing Line Lender, as the case may
be, of the proposed borrowing. Each Lender shall make the amount of its Loan
available to Agent not later than 12:00 Noon (New York City time) on the
applicable Funding Date, and Swing Line Lender shall make the amount of its
Swing Line Loan available to Agent not later than 2:00 P.M. (New York City
time) on the applicable Funding Date, in each case in same day funds in
Dollars, at the Funding and Payment Office. Except as provided in subsection
2.1A(vi) or subsection 3.3B with respect to Revolving Loans used to repay
Refunded Swing Line Loans or to reimburse any Issuing Lender for the amount of
a drawing under a Letter of Credit issued by it, upon satisfaction or waiver of
the conditions precedent specified in subsections 4.1 (in the case of Loans
made on the Closing Date) and 4.2 (in the case of all Loans), Agent shall make
the proceeds of such Loans available to Company on the applicable Funding Date
by causing an amount of same day funds in Dollars equal to the proceeds of all
such Loans received by Agent
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from Lenders or Swing Line Lender, as the case may be, to be credited to the
account of Company at the Funding and Payment Office.
Unless Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Agent the amount of such Lender's Loan requested on such Funding
Date, Agent may assume that such Lender has made such amount available to Agent
on such Funding Date and Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on such Funding
Date. If such corresponding amount is not in fact made available to Agent by
such Lender, Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Agent, at the customary rate
set by Agent for the correction of errors among banks for three Business Days
and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Agent's demand therefor, Agent shall
promptly notify Company and Company shall immediately pay such corresponding
amount to Agent together with interest thereon, for each day from such Funding
Date until the date such amount is paid to Agent, at the rate payable under
this Agreement for Base Rate Loans of the applicable type of Loans. Nothing in
this subsection 2.1C shall be deemed to relieve any Lender from its obligation
to fulfill its Commitments hereunder or to prejudice any rights that Company
may have against any Lender as a result of any default by such Lender
hereunder.
D. THE REGISTER.
(i) Agent shall maintain, at its address referred to in
subsection 11.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from
time to time (the "REGISTER"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(ii) Agent shall record in the Register the Tranche A Term
Loan Commitment, the Tranche B Term Loan Commitment, the Tranche C
Term Loan Commitment, the Tranche D Term Loan Commitment and the
Revolving Loan Commitment and the Term Loans and Revolving Loans from
time to time of each Lender, the Swing Line Loan Commitment and the
Swing Line Loans from time to time of Swing Line Lender, and each
repayment or prepayment in respect of the principal amount of the Term
Loans or Revolving Loans of each Lender or the Swing Line Loans of
Swing Line Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect Company's Obligations in respect of the
applicable Loans.
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(iii) Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender) the
amount of the Term Loans and each Revolving Loan made by it and each
payment in respect thereof. Any such recordation shall be conclusive
and binding on Company, absent manifest error; provided that failure to
make any such recordation, or any error in such recordation, shall not
affect Company's Obligations in respect of the applicable Loans;
andprovided, further that in the event of any inconsistency between
the Register and any Lender's records, the recordations in the
Register shall govern, absent manifest error.
(iv) Company, Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment
or Loan shall be effective, in each case unless and until an
Assignment Agreement effecting the assignment or transfer thereof
shall have been accepted by Agent and recorded in the Register as
provided in subsection 11.1B(ii). Prior to such recordation, all
amounts owed with respect to the applicable Commitment or Loan shall
be owed to the Lender listed in the Register as the owner thereof, and
any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is listed in
the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding
Commitments or Loans.
(v) Company hereby designates Bankers to serve as
Company's agent solely for purposes of maintaining the Register as
provided in this subsection 2.1D, and Company hereby agrees that, to
the extent Bankers serves in such capacity, Bankers and its officers,
directors, employees, agents and affiliates shall constitute
Indemnitees for all purposes under subsection 11.3.
E. NOTES. Company shall execute and deliver on the Closing Date
(i) to each Tranche A Term Lender (or to Agent for that Lender) a Tranche A
Term Note substantially in the form of Exhibit IV annexed hereto to evidence
that Lender's Tranche A Term Loan Commitment, in the principal amount of that
Lender's Tranche A Term Loan and that Lender's Tranche A Term Loan Commitment
and with other appropriate insertions, (ii) to each Tranche B Term Lender (or
Agent for that Lender) a Tranche B Term Note substantially in the form of
Exhibit V annexed hereto to evidence that Lender's Tranche B Term Loan, in the
principal amount of that Lender's Tranche B Term Loan and with other
appropriate insertions, (iii) to each Tranche C Term Lender (or to Agent for
that Lender) a Tranche C Term Note substantially in the form of Exhibit VI
annexed hereto to evidence that Lender's Tranche C Term Loan, in the principal
amount of that Lender's Tranche C Term Loan and with other appropriate
insertions, (iv) to each Tranche D Term Lender (or to Agent for that Lender) a
Tranche D Term Note substantially in the form of Exhibit VII annexed hereto to
evidence that
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Lender's Tranche D Term Loan, in the principal amount of that Lender's Tranche
D Term Loan and with other appropriate insertions, (v) to each Revolving Lender
(or to Agent for that Lender) a Revolving Note substantially in the form of
Exhibit VIII annexed hereto to evidence that Lender's Revolving Loans, in the
principal amount of that Lender's Revolving Loan Commitment and with other
appropriate insertions, and (vi) to Swing Line Lender a Swing Line Note
substantially in the form of Exhibit IX annexed hereto to evidence Swing Line
Lender's Swing Line Loans, in the principal amount of the Swing Line Loan
Commitment and with other appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, each Term Loan and each Revolving Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate
or the Adjusted Eurodollar Rate, as the case may be. Subject to the provisions
of subsection 2.7, each Swing Line Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate.
The applicable basis for determining the rate of interest with respect to any
Loan shall be selected by Company initially at the time a Notice of Borrowing
is given with respect to such Loan pursuant to subsection 2.1B. The basis for
determining the interest rate with respect to any Term Loan or any Revolving
Loan may be changed from time to time pursuant to subsection 2.2D. If on any
day a Term Loan or Revolving Loan is outstanding with respect to which notice
has not been delivered to Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base
Rate.
(i) Subject to the provisions of subsections 2.2E and
2.7, the Tranche A Term Loans and the Revolving Loans shall bear interest
through maturity as follows:
(A) if a Base Rate Loan, then at the sum of the
Base Rate plus the Applicable Base Rate Margin; or
(B) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus the Applicable Eurodollar Margin.
Upon delivery of the Margin Determination Certificate by
Company to Agent pursuant to subsection 6.1(xviii), the Applicable Base Rate
Margin and the Applicable Eurodollar Margin shall automatically be adjusted in
accordance with such Margin Determination Certificate, such adjustment to
become effective on the next succeeding Business Day following the receipt by
Agent of such Margin Determination Certificate; provided that if a Margin
Determination Certificate is not delivered at the time required pursuant to
subsection 6.1(xviii), clause (iii) of the definitions of
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"Applicable Base Rate Margin" and "Applicable Eurodollar Rate Margin", as the
case may be, shall be applicable from such time until delivery of a succeeding
Margin Determination Certificate; provided further that if a Margin
Determination Certificate erroneously indicates an applicable margin more
favorable to Company than should be afforded by the actual calculation of the
Interest Coverage Ratio, Company shall promptly pay additional interest and
letter of credit fees to correct for such error.
(ii) Subject to the provisions of subsections 2.2E and
2.7, the Tranche B Term Loans shall bear interest through maturity as follows:
(A) if a Base Rate Loan, then at the sum of the
Base Rate plus 2.00% per annum; or
(B) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus 3.25% per annum.
(iii) Subject to the provisions of subsections 2.2E and
2.7, the Tranche C Term Loans shall bear interest through maturity as follows:
(A) if a Base Rate Loan, then at the sum of the
Base Rate plus 2.50% per annum; or
(B) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus 3.75% per annum.
(iv) Subject to the provisions of subsections 2.2E and
2.7, the Tranche D Term Loans shall bear interest through maturity as follows:
(A) if a Base Rate Loan, then at the sum of the
Base Rate plus 2.75% per annum; or
(B) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus 4.00% per annum.
(v) Subject to the provisions of subsections 2.2E and
2.7, the Swing Line Loans shall bear interest through maturity at the sum of
the Base Rate plus the Applicable Base Rate Margin minus the Commitment Fee
Percentage.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
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(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in
the case of a Loan initially made as a Eurodollar Rate Loan, or on the
date specified in the applicable Notice of Conversion/Continuation,
in the case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such
pursuant to a Notice of Conversion/Continuation, each successive
Interest Period shall commence on the day on which the next preceding
Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day;
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Tranche A Term Loans shall extend beyond June 15, 2001, no Interest
Period with respect to any portion of the Tranche B Term Loans shall
extend beyond June 15, 2002, no Interest Period with respect to any
portion of the Tranche C Term Loans shall extend beyond June 15, 2003,
no Interest Period with respect to any portion of the Tranche D Term
Loans shall extend beyond February 15, 2004 and no Interest Period
with respect to any portion of the Revolving Loans shall extend
beyond the Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of any
Type of Term Loan shall extend beyond a date on which Company is
required to make a scheduled payment of principal of Term Loans of
such Type unless the sum of (a) the aggregate principal amount of Term
Loans of such Type that are Base Rate Loans plus (b) the aggregate
principal amount of Term Loans of such Type that are Eurodollar Rate
Loans with Interest Periods expiring on or before such date equals or
exceeds the principal amount required to be paid on Term Loans of such
Type on such date;
(vii) there shall be no more than 20 Interest Periods
outstanding at any time (it being understood that Interest Periods for
different Types of Loans,
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whether or not such Interest Periods are for the same period and end
on the same day, constitute separate Interest Periods); and
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be
deemed to have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date
of such prepayment shall be payable on the next succeeding Interest Payment
Date applicable to Base Rate Loans (or, if earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Term Loans or Revolving Loans equal to $5,000,000
and integral multiples of $1,000,000 in excess of that amount from Loans
bearing interest at a rate determined by reference to one basis to Loans
bearing interest at a rate determined by reference to an alternative basis or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate
Loan, to continue all or any portion of such Loan equal to $5,000,000 and
integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate
Loan; provided, however, that a Eurodollar Rate Loan may only be converted into
a Base Rate Loan on the expiration date of an Interest Period applicable
thereto; provided further that during the period commencing on (and including)
the Closing Date and ending on the earlier of (i) the three-month anniversary
of the date on which the first Eurodollar Rate Loan is made under this
Agreement and (ii) the date Agent sends a notice to Company indicating that
Lenders' primary syndication has been concluded, (a) no Loan may be made or
continued as or converted into a Eurodollar Rate Loan having an Interest Period
of longer than one month and (b) the last day of the Interest Period applicable
to any Eurodollar Rate Loan shall be the one-month anniversary, the two-month
anniversary or the three-month anniversary of the date on which the first
Eurodollar Rate Loan is made under this Agreement; and provided still further
that no Loan may be made as or converted into a Base Rate Loan during the
period from December 24 of any year to and including January 7 of the
immediately succeeding year for the purpose of investing in securities bearing
interest at a rate determined by reference to any other basis for the purpose
of arbitrage or speculation.
Company shall deliver a Notice of Conversion/Continuation to
Agent no later than 1:00 P.M. (New York City time) at least one Business Day in
advance of the
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proposed conversion date (in the case of a conversion to a Base Rate Loan) and
at least three Business Days in advance of the proposed conversion/continuation
date (in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan). A Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
and Type of the Loan to be converted/continued, (iii) the nature of the
proposed conversion/continuation, (iv) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, the requested Interest Period, and (v)
in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan,
that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Agent telephonic notice by the
required time of any proposed conversion/continuation under this subsection
2.2D; provided that such notice shall be promptly confirmed in writing by
delivery of a Notice of Conversion/Continuation to Agent on or before the
proposed conversion/continuation date.
Neither Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to act on behalf of Company or for otherwise acting in good
faith under this subsection 2.2D, and upon conversion or continuation of the
applicable basis for determining the interest rate with respect to any Loans in
accordance with this Agreement pursuant to any such telephonic notice Company
shall have effected a conversion or continuation, as the case may be,
hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation
of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base
Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a
rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for Base Rate Loans.
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Payment or acceptance of the increased rates of interest provided for in this
subsection 2.2E is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan or, with respect to a Base Rate Loan being
converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the Interest Payment Date
with respect to which such interest payment is being made or, with respect to a
Base Rate Loan being converted to a Eurodollar Rate Loan, the date of
conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case may
be, shall be excluded; provided that if a Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Loan.
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay to Agent, for
distribution to each Revolving Lender in proportion to that Revolving Lender's
Pro Rata Share, commitment fees for the period from and including the Closing
Date to and excluding the Revolving Loan Commitment Termination Date equal to
the average of the daily excess of the Revolving Loan Commitments over the
aggregate principal amount of Revolving Loans outstanding (but not any Swing
Line Loans outstanding) multiplied by the Commitment Fee Percentage, such
commitment fees to be calculated on the basis of a 360-day year and the actual
number of days elapsed and to be payable quarterly in arrears on March 15, June
15, September 15 and December 15 of each year, commencing on September 15,
1995, and on the Revolving Loan Commitment Termination Date.
B. OTHER FEES. Company agrees to pay to Agent such other fees in
the amounts and at the times as have been separately agreed upon by letter
agreement between Company and Agent. After receipt of such other fees from
Company, Agent agrees to pay to each Lender such portion of such other fees in
the amounts and at the times as have been separately agreed upon in writing
between Agent and such Lender.
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2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF TERM LOANS.
(i) Scheduled Payments of Tranche A Term Loans. Company
shall make principal payments on the Tranche A Term Loans in equal
quarterly installments on March 15, June 15, September 15 and December
15 of each year commencing on September 15, 1996, such quarterly
installments to comprise the aggregate amounts set forth opposite the
corresponding Payment Period as follows:
Scheduled Repayment
Payment Period of Tranche A Term Loans
-------------- -----------------------
Closing Date - September 14, 1996 $ 0
September 15, 1996 - June 15, 1997 33,000,000
September 15, 1997 - June 15, 1998 55,000,000
September 15, 1998 - June 15, 1999 58,666,667
September 15, 1999 - June 15, 2000 62,333,333
September 15, 2000 - June 15, 2001 66,000,000
------------
$275,000,000
; provided that the scheduled installments of principal of the Tranche
A Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Term Loans in accordance with
subsection 2.4B(iv); and provided still further that the Tranche A Term
Loans and all other amounts owed hereunder with respect to the Tranche
A Term Loans shall be paid in full no later than June 15, 2001, and the
final installment payable by Company in respect of the Tranche A Term
Loans on such date shall be in an amount, if such amount is different
from that specified above, sufficient to repay all amounts owing by
Company under this Agreement with respect to the Tranche A Term Loans.
(ii) Scheduled Payments of Tranche B Term Loans. Company
shall make principal payments on the Tranche B Term Loans in equal
quarterly installments on March 15, June 15, September 15 and December
15 of each year, commencing on September 15, 1995, such quarterly
installments to comprise the aggregate amounts set forth opposite the
corresponding Payment Period as follows:
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Scheduled Repayment
Payment Period of Tranche B Term Loans
-------------- -----------------------
Closing Date - September 14, 1996 $ 1,083,333
September 15, 1996 - June 15, 1997 1,083,333
September 15, 1997 - June 15, 1998 1,083,333
September 15, 1998 - June 15, 1999 1,083,333
September 15, 1999 - June 15, 2000 1,083,333
September 15, 2000 - June 15, 2001 1,083,333
September 15, 2001 - June 15, 2002 101,833,335
------------
$108,333,333
; provided that the scheduled installments of principal of the Tranche
B Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Term Loans in accordance with
subsection 2.4B(iv); and provided still further that the Tranche B Term
Loans and all other amounts owed hereunder with respect to the Tranche
B Term Loans shall be paid in full no later than June 15, 2002, and the
final installment payable by Company in respect of the Tranche B Term
Loans on such date shall be in an amount, if such amount is different
from that specified above, sufficient to repay all amounts owing by
Company under this Agreement with respect to the Tranche B Term Loans.
(iii) Scheduled Payments of Tranche C Term Loans. Company
shall make principal payments on the Tranche C Term Loans in equal
quarterly installments on March 15, June 15, September 15 and December
15 of each year, commencing on September 15, 1995, such quarterly
installments to comprise the aggregate amounts set forth opposite the
corresponding Payment Period as follows:
Scheduled Repayment
Payment Period of Tranche C Term Loans
-------------- -----------------------
Closing Date - September 14, 1996 $ 1,083,333
September 15, 1996 - June 15, 1997 1,083,333
September 15, 1997 - June 15, 1998 1,083,333
September 15, 1998 - June 15, 1999 1,083,333
September 15, 1999 - June 15, 2000 1,083,333
September 15, 2000 - June 15, 2001 1,083,333
September 15, 2001 - June 15, 2002 1,083,333
September 15, 2002 - June 15, 2003 100,750,002
------------
$108,333,333
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; provided that the scheduled installments of principal of the Tranche
C Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Term Loans in accordance with
subsection 2.4B(iv); and provided still further that the Tranche C Term
Loans and all other amounts owed hereunder with respect to the Tranche
C Term Loans shall be paid in full no later than June 15, 2003, and the
final installment payable by Company in respect of the Tranche C Term
Loans on such date shall be in an amount, if such amount is different
from that specified above, sufficient to repay all amounts owing by
Company under this Agreement with respect to the Tranche C Term Loans.
(iv) Scheduled Payments of Tranche D Term Loans. Company
shall make principal payments on the Tranche D Term Loans in equal
quarterly installments on March 15, June 15, September 15 and December
15 of each year, commencing on September 15, 1995, and on February 15,
2004, such quarterly installments to comprise the aggregate amounts set
forth opposite the corresponding Payment Period as follows:
Scheduled Repayment
Payment Period of Tranche D Term Loans
-------------- -----------------------
Closing Date - September 14, 1996 $ 1,083,333
September 15, 1996 - June 15, 1997 1,083,333
September 15, 1997 - June 15, 1998 1,083,333
September 15, 1998 - June 15, 1999 1,083,333
September 15, 1999 - June 15, 2000 1,083,333
September 15, 2000 - June 15, 2001 1,083,333
September 15, 2001 - June 15, 2002 1,083,333
September 15, 2002 - June 15, 2003 1,083,333
September 15, 2003 - February 15, 2004 99,666,670
------------
$108,333,334
; provided that the scheduled installments of principal of the Tranche
D Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Term Loans in accordance with
subsection 2.4B(iv); and provided still further that the Tranche D Term
Loans and all other amounts owed hereunder with respect to the Tranche
D Term Loans shall be paid in full no later than February 15, 2004, and
the final installment payable by Company in respect of the Tranche D
Term Loans on such date shall be in an amount, if such amount is
different from that specified above, sufficient to repay all amounts
owing by Company under this Agreement with respect to the Tranche D
Term Loans.
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B. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon written or
telephonic notice to Agent on or prior to 12:00 Noon (New York City
time) on the date of prepayment, which notice, if telephonic, shall be
promptly confirmed in writing, at any time and from time to time prepay
any Swing Line Loan on any Business Day in whole or in part in an
aggregate minimum amount of $500,000 and integral multiples of $250,000
in excess of that amount. Company may, upon not less than one Business
Day's prior written or telephonic notice, in the case of Base Rate
Loans, and three Business Days' prior written or telephonic notice, in
the case of Eurodollar Rate Loans, in each case given to Agent by 12:00
Noon (New York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Agent (which original
written or telephonic notice Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time
to time prepay any Term Loans or Revolving Loans on any Business Day in
whole or in part in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount for
Eurodollar Rate Loans or an aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that amount for Base Rate
Loans; provided, however, that a Eurodollar Rate Loan may only be
prepaid on the expiration of the Interest Period applicable thereto.
Notice of prepayment having been given as aforesaid, the principal
amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified therein. Any such voluntary
prepayment shall be applied as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments.
Company may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to Agent (which original written
or telephonic notice Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time terminate
in whole or permanently reduce in part, without premium or penalty, the
Revolving Loan Commitments in an amount up to the amount by which the
Revolving Loan Commitments exceed the Total Utilization of Revolving
Loan Commitments at the time of such proposed termination or reduction;
provided that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that amount. Company's
notice to Agent shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial
reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's
notice and shall reduce the Revolving Loan Commitment of each Lender
proportionately by its Pro Rata Share of such reduction.
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(iii) Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments.
(a) Prepayments and Reductions from Asset Sales.
No later than the third Business Day following the date of
receipt by Company or any of its Subsidiaries of Cash Proceeds
of any Asset Sale in an aggregate cumulative amount equal to or
exceeding $500,000 (and as to which no prepayment of the Loans
shall have been made pursuant to this subsection 2.4B(iii)(a)),
(1) Company shall prepay the Term Loans in an amount equal to
the Net Cash Proceeds of such Asset Sale and (2) to the extent
the Net Cash Proceeds of such Asset Sale exceed the aggregate
outstanding principal amount of the Term Loans, Company shall
prepay in an amount equal to such excess first the Swing Line
Loans to the full extent thereof and second the Revolving
Loans, and the Revolving Loan Commitments shall be permanently
reduced in an amount equal to such excess; provided, however,
that, so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, the following
Net Cash Proceeds of Asset Sale received by Company and its
Subsidiaries from and after the date hereof need not be applied
to the mandatory prepayment of the Loans pursuant to this
subsection 2.4B(iii)(a): (i) Net Cash Proceeds from the sale of
any store (other than Net Cash Proceeds from Required
Dispositions or Planned Dispositions) to the extent that such
Net Cash Proceeds are reinvested in new stores or the
construction or remodeling of stores within 270 days of such
sale; (ii) Net Cash Proceeds from the sale of a store (other
than Net Cash Proceeds from Required Dispositions or Planned
Dispositions) to the extent that such Net Cash Proceeds do not
exceed the Consolidated Capital Expenditures made to acquire or
build a replacement store in the general vicinity of the store
sold within 270 days preceding the date of such sale, and, so
long as, in the case of clauses (i) and (ii) above, the
aggregate amount of such Net Cash Proceeds so excluded from the
mandatory prepayment provisions does not exceed in any Fiscal
Year the greater of (x) $15,000,000 and (y) the Net Cash
Proceeds, up to a maximum aggregate amount of $25,000,000,
received by Company or any Subsidiary of Company with respect
to the sale of the first five stores in such Fiscal Year with
respect to which Company has not prepaid the Loans, pursuant to
clause (i) and (ii) above, within three Business Days of
receipt of proceeds thereof; (iii) Net Cash Proceeds from the
sale and concurrent lease-back of any store opened or acquired
after the Closing Date or any equipment acquired after the
Closing Date, in each case within 180 days of the completion of
such store or the acquisition of such equipment, in each case
to the extent and only to the extent of Consolidated Capital
Expenditures made with respect to such store or such equipment;
(iv) Net Cash Proceeds from the sale of worn-out or obsolete
equipment, to the extent that such Net Cash Proceeds are
reinvested in the
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67
same or similar equipment within 90 days of such sale; and (v)
Net Cash Proceeds from the occurrence of any loss, damage or
destruction of any stores or any other facilities of Company or
any of its Subsidiaries (including any assets located therein)
giving rise to insurance proceeds, to the extent that (a) such
Net Cash Proceeds are reinvested to repair or rebuild the
assets so lost, damaged or destroyed within the earlier of (1)
270 days of receipt of such Net Cash Proceeds and (2) 18 months
of the occurrence of such loss, damage or destruction or (b)
such Net Cash Proceeds do not exceed the expenditures made by
Company or any of its Subsidiaries within the earlier of (1)
270 days of receipt of such Net Cash Proceeds and (2) 18 months
of the occurrence of such loss, damage or destruction, to
repair or rebuild the applicable assets so lost, damaged or
destroyed; provided that the Net Cash Proceeds of Asset Sale
which are not being applied to the payment of the Term Loans
pursuant to clauses (i) through (v) above shall be applied
first to the Swing Line Loans then outstanding and second to
the Revolving Loans then outstanding, but the Revolving Loan
Commitments shall not be reduced by the amount of such Net Cash
Proceeds; provided still further that Company shall, within
three Business Days of the receipt by Company or any of its
Subsidiaries of any Net Cash Proceeds of Asset Sale referred to
in clauses (i) through (v) above, deliver to Agent an Officers'
Certificate setting forth (A) the amount of such Net Cash
Proceeds and the amount of the mandatory prepayment to be made,
if any, pursuant to this subsection 2.4B(iii)(a) and setting
forth in reasonable detail the calculations from which such
amounts were derived, (B) with respect to the receipt of Net
Cash Proceeds of Asset Sale referred to in clauses (i), (iv)
and (v) above, in reasonable detail, the intended application
of such Net Cash Proceeds of Asset Sale and the estimated costs
of the reinvestment referred to in such clauses, and (C) with
respect to the receipt of Net Cash Proceeds of Asset Sales
referred to in clauses (ii), (iii) and (v) above, in reasonable
detail the Consolidated Capital Expenditures made by Company
which accounts for the exclusion of any such Net Cash Proceeds
of Asset Sale from the mandatory prepayment requirements of
this subsection 2.4B(iii)(a), which Officers' Certificate, in
the case of clauses (i) and (iv) and with respect to matters
described in clause (B) above, clause (v), may be amended at
any time and from time to time by Company during the 270-day or
90-day period, as applicable, following receipt of such Net
Cash Proceeds of Asset Sale. In the event that any portion of
any Net Cash Proceeds of Asset Sale received by Company or any
of its Subsidiaries which are excluded from the mandatory
prepayment requirement of this subsection 2.4B(iii)(a) by
operation of clauses (i), (iv) and (v) above are not expended
for the purposes specified in the Officers' Certificate, as
amended, delivered by Company in connection therewith within
the time periods specified in such clauses, Company shall,
immediately upon the expiration of the applicable
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time period, make a mandatory prepayment of the Loans as
specified in the first sentence of this subsection 2.4B(iii)(a)
in an amount equal to such unexpended portion, but only to the
extent such amount has not been previously applied as a
mandatory prepayment under subsection 2.4B(iii)(e). In the
event that Company shall, at any time after receipt of Cash
Proceeds of any Asset Sale requiring a prepayment or a
reduction of the Revolving Loan Commitments pursuant to this
subsection 2.4B(iii)(a), determine that the prepayments and/or
reductions of the Revolving Loan Commitments previously made in
respect of such Asset Sale were in an aggregate amount less
than that required by the terms of this subsection
2.4B(iii)(a), Company shall promptly make an additional
prepayment of the Term Loans, Swing Line Loans or Revolving
Loans, as the case may be (and, if applicable, the Revolving
Loan Commitments shall be permanently reduced), in the manner
described above in an amount equal to the amount of any such
deficit, and Company shall concurrently therewith deliver to
Agent an Officers' Certificate demonstrating the derivation of
the additional Net Cash Proceeds resulting in such deficit.
If, following the receipt by Company or any of its Subsidiaries
of Cash Proceeds of any Asset Sale, Company is required to
apply or cause to be applied any portion of such Cash Proceeds
to prepay any Indebtedness evidenced by any of the Related
Financing Documents pursuant to the applicable Related
Financing Document, then, notwithstanding anything contained in
this subsection 2.4B(iii)(a), Company shall prepay the Loans
and/or reduce the Revolving Loan Commitments in the order set
forth in this subsection 2.4B(iii)(a) so as to eliminate any
obligation to prepay such Indebtedness. Any mandatory
prepayments pursuant to this subsection 2.4B(iii)(a) shall be
applied as specified in subsection 2.4B(iv).
(b) Prepayments and Reductions Due to Issuance of
Debt Securities. No later than the first Business Day
following the date of receipt by Holdings or any of its
Subsidiaries of the cash proceeds (net of underwriting
discounts, similar placement fees and commissions and other
reasonable costs and expenses associated therewith) from the
issuance of any debt Securities of Holdings or any such
Subsidiary, (1) Company shall prepay the Term Loans in an
amount equal to such net cash proceeds and (2) to the extent
the amount of such net cash proceeds exceeds the aggregate
outstanding principal amount of the Term Loans, Company shall
prepay in an amount equal to such excess first the Swing Line
Loans to the full extent thereof and second the Revolving
Loans, and the Revolving Loan Commitments shall be permanently
reduced in an amount equal to such excess. Any such mandatory
prepayments shall be applied as specified in subsection
2.4B(iv).
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(c) Prepayments and Reductions Due to Issuance of
Equity Securities. No later than the first Business Day
following the date of receipt by Holdings of the cash proceeds
(net of underwriting discounts, similar placement fees and
commissions and other reasonable costs associated therewith)
from the issuance of any equity Securities of Holdings or the
receipt of any equity contribution by Holdings or Company
(other than issuances of equity to management employees
pursuant to agreements or stock option plans permitted under
subsection 7.12) (without duplication), (1) Company shall
prepay the Term Loans in an amount equal to 50% of such net
cash proceeds (such amount being the "EQUITY REPAYMENT AMOUNT")
and (2) to the extent the Equity Repayment Amount exceeds the
aggregate outstanding principal amount of the Term Loans,
Company shall prepay in an amount equal to such excess first
the Swing Line Loans to the full extent thereof and second the
Revolving Loans to the full extent thereof, and the Revolving
Loan Commitments shall be permanently reduced in an amount
equal to such excess; provided, however, that so long as no
Event of Default or Potential Event of Default shall have
occurred and be continuing, for purposes of this subsection
2.4B(iii)(c), up to 50% of the Equity Repayment Amount (but in
an aggregate amount for the term of this Agreement not to
exceed $25,000,000) may be applied within 60 days of such date
of receipt to redeem, retire or repurchase all or any portion
of any Indebtedness (other than the Loans) of any of Holdings
or Company, as set forth in an Officers' Certificate of Company
delivered to Agent on the date of receipt by Holdings of such
cash proceeds. On the sixtieth day after receipt of such cash
proceeds, (i) Company shall prepay the Term Loans in an amount
equal to the portion of such Equity Repayment Amount that has
not been used to redeem, retire or repurchase such other
Indebtedness as set forth in an Officers' Certificate of
Company delivered to Agent on such sixtieth day and (ii) to the
extent such portion of such Equity Repayment Amount exceeds the
aggregate outstanding principal amount of the Term Loans,
Company shall prepay in an amount equal to such excess first
the Swing Line Loans to the full extent thereof and second the
Revolving Loans, and the Revolving Loan Commitments shall be
permanently reduced in an amount equal to such excess. Any
such mandatory prepayments shall be applied as specified in
subsection 2.4B(iv).
(d) Prepayments and Reductions Due to Reversion of
Surplus Assets of Pension Plans. On the date of return to
Holdings or any of its Subsidiaries of any surplus assets of
any pension plan of Holdings or any of its Subsidiaries, (1)
Company shall prepay the Term Loans in an amount (the "NET
REVERSION AMOUNT") equal to 100% of such returned surplus
assets, net of transaction costs and expenses incurred in
obtaining
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such return, including incremental taxes payable as a result
thereof, and (2) to the extent the Net Reversion Amount exceeds
the aggregate outstanding principal amount of the Term Loans,
Company shall prepay in an amount equal to such excess first
the Swing Line Loans to the full extent thereof and second the
Revolving Loans to the full extent thereof, and the Revolving
Loan Commitments shall be permanently reduced in an amount
equal to such excess. Any such mandatory prepayments shall be
applied as specified in subsection 2.4B(iv).
(e) Prepayments and Reductions Due to Excess Cash
Flow. In the event that there shall be Consolidated Excess
Cash Flow for any Fiscal Year, within 100 days after the last
day of such Fiscal Year (1) Company shall prepay the Term Loans
in an amount equal to 75% of such Consolidated Excess Cash Flow
(such amount being the "CASH FLOW REPAYMENT AMOUNT") and (2) to
the extent the Cash Flow Repayment Amount exceeds the aggregate
outstanding principal amount of the Term Loans, Company shall
prepay in an amount equal to such excess first the Swing Line
Loans to the full extent thereof and second the Revolving Loans
to the full extent thereof, and the Revolving Loan Commitments
shall be permanently reduced in an amount equal to such excess;
provided, however, that so long as no Event of Default or
Potential Event of Default shall have occurred and be
continuing, for purposes of this subsection 2.4B(iii)(e), up to
50% of the Cash Flow Repayment Amount (but in an aggregate
amount for the term of this Agreement not to exceed
$25,000,000) may be applied within 60 days of the date of such
required prepayment to redeem, retire or repurchase all or any
portion of any Indebtedness (other than the Loans) of Company,
as set forth in an Officers' Certificate of Company delivered
to Agent on the date of such required prepayment. On the
sixtieth day after the date the initial prepayment of the Cash
Flow Repayment Amount is required, (i) Company shall prepay the
Term Loans in an amount equal to the portion of such Cash Flow
Repayment Amount that has not been used to redeem, retire or
repurchase such other Indebtedness as set forth in an Officers'
Certificate of Company delivered to Agent on such sixtieth day
and (ii) to the extent such portion of such Cash Flow Repayment
Amount exceeds the aggregate outstanding principal amount of
the Term Loans, Company shall prepay in an amount equal to such
excess first the Swing Line Loans to the full extent thereof
and second the Revolving Loans to the full extent thereof, and
the Revolving Loan Commitments shall be permanently reduced in
an amount equal to such excess. Any such mandatory prepayments
shall be applied as specified in subsection 2.4B(iv).
(f) Prepayments Due to Reductions or Restrictions
of Revolving Loan Commitments. Company shall immediately
prepay first the Swing
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Line Loans and second the Revolving Loans to the extent
necessary (1) so that the Total Utilization of Revolving Loan
Commitments shall not at any time exceed the Revolving Loan
Commitments then in effect and (2) to give effect to the
limitations set forth in clause (b) of the second paragraph of
subsection 2.1A(v) and clause (b) of the second paragraph of
subsection 2.1A(vi). Any such mandatory prepayments shall be
applied as specified in subsection 2.4B(iv) and shall not
reduce the amount of the Revolving Loan Commitments then in
effect.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type
of Loans and Order of Maturity. Subject to the last sentence
of this subsection 2.4B(iv)(a), any voluntary prepayments
pursuant to subsection 2.4B(i) shall be applied to Term Loans,
Revolving Loans or Swing Line Loans as specified by Company in
the applicable notice of prepayment; provided that in the event
Company fails to specify the Loans to which any such prepayment
shall be applied, such prepayment shall be applied first to
repay outstanding Swing Line Loans to the full extent thereof,
second to repay outstanding Revolving Loans to the full extent
thereof, and third to repay outstanding Term Loans to the full
extent thereof. Any voluntary prepayments of the Term Loans
pursuant to subsection 2.4B(i) shall be applied (x) to the
Tranche A Term Loans, the Tranche B Term Loans, the Tranche C
Term Loans and the Tranche D Loans on a pro rata basis and (y)
to reduce the unpaid scheduled installments of principal of the
Term Loans set forth in subsections 2.4A(i), 2.4A(ii),
2.4A(iii) and 2.4A(iv) on a pro rata basis.
(b) Application of Mandatory Prepayments of Term
Loans by Order of Maturity. Any mandatory prepayments of the
Term Loans pursuant to subsection 2.4B(iii) shall be applied
(x) to the Tranche A Term Loans, the Tranche B Term Loans, the
Tranche C Term Loans and the Tranche D Term Loans on a pro rata
basis and (y) to reduce the unpaid scheduled installments of
principal of the Term Loans set forth in subsections 2.4A(i),
2.4A(ii), 2.4A(iii) and 2.4A(iv) on a pro rata basis; provided
that, in the case of Tranche B Term Loans, Tranche C Term Loans
and Tranche D Term Loans, upon receipt of any mandatory
prepayments pursuant to subsection 2.4B(iii) with respect to
which Company has given Agent written notification prior to
such receipt that Company has elected to give the Tranche B
Term Lenders, the Tranche C Term Lenders and the Tranche D Term
Lenders the right to waive such Lenders' right to receive such
prepayment (the "WAIVABLE MANDATORY PREPAYMENT"), Agent shall
notify the Tranche B Term Lenders, the Tranche C Term Lenders
and the Tranche D Term Lenders of such receipt
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and the amount of the prepayment to be applied to each such
Lender's Term Loans; provided, still further that Company shall
use its reasonable efforts to notify the Tranche B Term
Lenders, the Tranche C Term Lenders and the Tranche D Term
Lenders of such Waivable Mandatory Prepayment three (3)
Business Days prior to the payment to Agent of such Waivable
Mandatory Prepayments (it being understood that Company shall
have no liabilities for failing to so notify such Lenders). In
the event any such Tranche B Term Lender, Tranche C Term Lender
or Tranche D Term Lender desires to waive such Lender's right
to receive any such Waivable Mandatory Prepayment, such Lender
shall so advise Agent no later than the close of business on
the date of such notice from Agent. In the event that any such
Lender waives such Lender's right to any such Waivable
Mandatory Prepayment, Agent shall apply 50% of the amount so
waived by such Lender to prepay the Tranche A Term Loans and to
reduce unpaid scheduled installments of principal of the
Tranche A Term Loans set forth in subsection 2.4A(i) on a pro
rata basis. Agent shall return the remainder of the amount so
waived by such Lender to Company.
(c) Application of Prepayments to Base Rate Loans
and Eurodollar Rate Loans. Considering Tranche A Term Loans,
Tranche B Term Loans, Tranche C Term Loans, Tranche D Term
Loans and Revolving Loans being prepaid separately, any
prepayment thereof shall be applied first to Base Rate Loans to
the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of
any payments required to be made by Company pursuant to
subsection 2.6D. To the extent that Company is required to
make a mandatory prepayment of the Loans which is required to
be applied to Eurodollar Rate Loans (following the operation of
the immediately preceding sentence) on a date other than the
last day of an Interest Period applicable to a Eurodollar Rate
Loan, Agent shall hold the amount of such prepayment in an
interest bearing account in the Agent's sole dominion and
control. On the last day of the Interest Period relating to
the next-maturing Eurodollar Rate Loan, Agent shall apply the
amounts held by it in such account to the prepayment of such
maturing Eurodollar Rate Loan and Agent shall notify Company of
the application of such amounts. Upon the direction of
Company, Agent may apply any earnings on amounts held in such
account to the payment of accrued interest on such Eurodollar
Rate Loan or shall release such earnings to Company.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company
of principal, interest, fees and other Obligations hereunder, under the
Notes and under the other Loan Documents shall be made in Dollars in
same day funds,
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without defense, setoff or counterclaim, free of any restriction or
condition, and delivered to Agent not later than 1:00 P.M. (New York
City time) on the date due at the Funding and Payment Office for the
account of Lenders; funds received by Agent after that time on such due
date shall be deemed to have been paid by Company on the next
succeeding Business Day. Company hereby authorizes Agent to charge its
accounts with Agent in order to cause timely payment to be made to
Agent of all principal, interest, fees and expenses due hereunder
(subject to sufficient funds being available in its accounts for that
purpose).
(ii) Application of Payments to Principal and Interest.
Except as otherwise provided in subsection 2.2C, all payments in
respect of the principal amount of any Loan shall include payment of
accrued interest on the principal amount being repaid or prepaid, and
all such payments shall be applied to the payment of interest before
application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of Term Loans and Revolving Loans shall be
apportioned among all outstanding Loans to which such payments relate,
in each case proportionately to Lenders' respective Pro Rata Shares.
Agent shall promptly distribute to each Lender, at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request, its Pro Rata Share of
all such payments received by Agent and the commitment fees of such
Lender when received by Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii),
if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if
any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share
of any Eurodollar Rate Loans, Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be; provided, however, that if the day
on which payment relating to a Eurodollar Rate Loan is due is not a
Business Day but is a day of the month after which no further Business
Day occurs in that month, then the due date thereof shall be the next
preceding Business Day.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which
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interest thereon has been paid; provided that the failure to make (or
any error in the making of) a notation of any Loan made under such Note
shall not limit or otherwise affect the obligations of Company
hereunder or under such Note with respect to any Loan or any payments
of principal or interest on such Note.
2.5 USE OF PROCEEDS.
A. TERM LOANS. The proceeds of the Term Loans made on the Closing
Date, together with other funds available to Company, shall be applied by
Company (i) to pay Company's share of the $375,900,000 cash component of the
purchase price for the stock of Ralphs Supermarkets (including cash payments
for cancellation of management stock options), (ii) to refinance the existing
bank indebtedness of Ralphs Grocery of approximately $243,000,000 and the
existing bank indebtedness of Food 4 Less, Alpha Beta, Cala Foods, Inc.,
Falley's and F4L Merchandising of approximately $178,000,000, (iii) to purchase
not less than $19,000,000 and up to $30,000,000 aggregate principal amount of
the Old RGC 9% Subordinated Notes and the Old RGC 10-1/4% Subordinated Notes,
(iv) to repay in full the amounts outstanding under the RGC Mortgage Notes,
together with accrued interest and fees relating thereto, in an aggregate
amount not exceeding $194,500,000, (v) to pay up to $22,800,000 pursuant to
documents governing the Ralphs Grocery equity appreciation rights, (vi) to pay
the entire principal amount of the Holdings Discount Notes plus accrued
interest and premiums thereon in an aggregate amount not to exceed $85,500,000,
and (vii) to pay up to $152,000,000 of fees, expenses, premiums and other costs
associated with the Acquisition, the making of the Loans hereunder and the
related transactions described herein.
B. REVOLVING LOANS; SWING LINE LOANS. Up to $13,500,000 (less an
amount equal to the aggregate accreted value of the Holdings Discount Notes
outstanding as of the Closing Date) of the proceeds of Revolving Loans made to
Company on the Closing Date may be applied by Company for the purposes
specified in subsection 2.5A. Up to $10,100,000 of the proceeds of the
Revolving Loans made on the Change of Control Purchase Date may be applied by
Company to purchase then outstanding Old RGC 9% Subordinated Notes and Old RGC
10-1/4% Subordinated Notes pursuant to the Change of Control Offer and to pay
premiums and accrued interest on the Securities so purchased. The proceeds of
any other Revolving Loans and any Swing Line Loans shall be applied by Company
for working capital and general corporate purposes.
C. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation G, Regulation U, Regulation T or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board or to violate the Exchange Act, in each case as in
effect on the date or dates of such borrowing and such use of proceeds.
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2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York City time) on each Interest Rate
Determination Date, Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate
is then being determined for the applicable Interest Period and shall promptly
give notice thereof (by telefacsimile or by telephone confirmed in writing) to
Company and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Agent shall have determined (which determination shall be final and
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that, by reason
of circumstances affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the interest rate applicable to such Loans
on the basis provided for in the definition of Adjusted Eurodollar Rate, Agent
shall on such date give notice (by telefacsimile or by telephone confirmed in
writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Agent notifies Company and Lenders that the circumstances giving rise to such
notice no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by
Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful), in each case that becomes effective (other than any change in
such law, treaty or governmental rule, regulation or order which was
promulgated prior to the date hereof and which becomes effective in accordance
with its terms after the date hereof) after the date of this Agreement, or (ii)
has become impracticable, or would cause such Lender material hardship, as a
result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall
be an "AFFECTED LENDER" and it shall on that day give notice (by telefacsimile
or by
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telephone confirmed in writing) to Company and Agent of such determination
(which notice Agent shall promptly transmit to each other Lender). Thereafter
(a) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS") shall be terminated at the earlier to occur of the expiration
of the Interest Period then in effect with respect to the Affected Loans or
when required by law, and (d) the Affected Loans shall automatically convert
into Base Rate Loans on the date of such termination. Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation,
Company shall have the option, subject to the provisions of subsection 2.6D, to
rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of
rescission Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth in reasonable detail the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including, without limitation, any interest paid by that Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss,
expense or liability sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender will sustain or
has sustained: (i) if for any reason (other than a default by that Lender) a
borrowing of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request for borrowing, or a
conversion to or continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Conversion/Continuation or a telephonic
request for conversion or continuation, (ii) if any prepayment or other
principal payment or any conversion of any of its Eurodollar Rate Loans occurs
on a date prior to the last day of an Interest Period applicable to that Loan,
(iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any
date specified in a notice of prepayment given by Company, or (iv) as a
consequence of any other default by Company in the repayment of its Eurodollar
Rate Loans when required by the terms of this Agreement.
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E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of
and during the continuation of a Potential Event of Default or an Event of
Default, unless waived in accordance with the provisions of subsection 11.6,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective (other
than any change in such law, treaty or governmental rule, regulation or order
which was promulgated prior to the date hereof and which becomes effective in
accordance with its terms after the date hereof) after the date hereof, or the
compliance by such Lender with any guideline, request or directive issued or
made after the date hereof by any central bank, the National Association of
Insurance Commissioners ("NAIC") or other governmental or quasi-governmental
authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall income
of such Lender) with
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respect to this Agreement or any of its obligations hereunder or any
payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are reflected
in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the interbank Eurodollar
market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 2.7A to the extent that any such increased cost or
reduction in amounts was incurred more than one year prior to the time it gives
notice to Company (as provided in the next sentence) of the relevant
circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such one
year period so long as such Lender has given such notice to Company no later
than one year from the time such circumstance became applicable to such Lender.
Such Lender shall deliver to Company (with a copy to Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection 2.7A, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. Except as provided
specifically to the contrary in paragraphs (ii) and (iii) below, all
sums payable by Company or any other Loan Party to Agent or any Lender
under this Agreement or the other Loan Documents shall be paid free and
clear of and (except to the extent required by law) without any
deduction or withholding on account of any Tax (other than
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a Tax on the overall income of any Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on behalf
of Company or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of
payment.
(ii) Grossing-up of Payments. If Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Company to
Agent or any Lender under any of the Loan Documents:
(a) Company shall notify Agent of any such
requirement or any change in any such requirement as soon as
Company becomes aware of it;
(b) Company shall pay any such Tax before the date
on which penalties attach thereto, such payment to be made (if
the liability to pay is imposed on Company) for its own account
or (if that liability is imposed on Agent or such Lender, as
the case may be) on behalf of and in the name of Agent or such
Lender;
(c) the sum payable by Company in respect of which
the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment,
Agent or such Lender, as the case may be, receives on the due
date and retains (free from any liability in respect of any
such deduction, withholding or payment) a net sum equal to what
it would have received and so retained had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from which
it is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Company shall
deliver to Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate
of such deduction, withholding or payment from that in effect
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at the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws
of any jurisdiction other than the United States or any state
or other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to Agent
for transmission to Company, on or prior to the Closing Date
(in the case of each Lender listed on the signature pages
hereof) or on the date of the Assignment Agreement pursuant to
which it becomes a Lender (in the case of each other Lender),
and at such other times as may be necessary in the
determination of Company or Agent (each in the reasonable
exercise of its discretion), (1) two original copies of
Internal Revenue Service Form 1001 or 4224 (or any successor
forms), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not subject
to deduction or withholding of United States federal income tax
with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form 1001 or
4224 pursuant to clause (1) above, a Certificate re Non-Bank
Status together with two original copies of Internal Revenue
Service Form W-8 (or any successor form), properly completed
and duly executed by such Lender, together with any other
certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
any payments to such Lender of interest payable under any of
the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the initial
delivery by such Lender of such forms, certificates or other
evidence, whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, such Lender shall (1)
deliver to Agent for transmission to Company two new original
copies of Internal Revenue Service Form 1001 or 4224, or a
Certificate re Non-Bank Status and two original copies of
Internal Revenue Service Form W-8, as the case may be, properly
completed and duly executed by such Lender, together with any
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other certificate or statement of exemption required in order
to confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) immediately notify Agent and Company of its
inability to deliver any such forms, certificates or other
evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to satisfy
the requirements of subsection 2.7B(iii)(a); provided that if
such Lender shall have satisfied such requirements on the
Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.7B(iii)(c)
shall relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any change after the date of such
satisfaction in any applicable law, treaty or governmental
rule, regulation or order, or any change after the date of such
satisfaction in the interpretation, administration or
application thereof, such Lender is no longer properly entitled
to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not
subject to withholding as described in subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or, after the date hereof, any change therein or in
the interpretation or administration thereof by any governmental authority,
central bank, the NAIC or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental authority,
central bank, the NAIC or comparable agency, has or would have the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of, or with reference to, such
Lender's Loans or Commitments or Letters of Credit or participations therein or
other obligations hereunder with respect to the Loans or the Letters of Credit
to a level below that which such Lender or such controlling corporation could
have achieved but for such adoption, effectiveness, phase-in, applicability,
change or compliance (taking into consideration the policies of such Lender or
such controlling corporation with regard to capital adequacy), then from time
to time, within five Business Days after receipt by Company from such Lender of
the statement referred to in the next sentence, Company shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction; provided that
a Lender shall not be entitled to avail itself of the benefit of this
subsection 2.7C to the extent that any such
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reduction in return was incurred more than one year prior to the time it gives
notice to Company (as provided in the next sentence) of the relevant
circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such one
year period so long as such Lender has given such notice to Company no later
than one year from the time such circumstance became applicable to such Lender.
Such Lender shall deliver to Company (with a copy to Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE; REPLACEMENT OF
LENDER.
A. Each Lender and Issuing Lender agrees that, as
promptly as practicable after the officer of such Lender or Issuing Lender
responsible for administering the Loans or Letters of Credit of such Lender or
Issuing Lender, as the case may be, becomes aware of the occurrence of an event
or the existence of a condition that would cause such Lender to become an
Affected Lender or that would entitle such Lender or Issuing Lender to receive
payments under subsection 2.7 or subsection 3.6, it will, to the extent not
inconsistent with the internal policies of such Lender or Issuing Lender and
any applicable legal or regulatory restrictions, use reasonable efforts (i) to
make, issue, fund or maintain the Commitments of such Lender or the affected
Loans or Letters of Credit of such Lender or Issuing Lender through another
lending or letter of credit office of such Lender or Issuing Lender, or (ii)
take such other measures as such Lender or Issuing Lender may deem reasonable,
if as a result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender or Issuing Lender pursuant to
subsection 2.7 or subsection 3.6 would be materially reduced and if, as
determined by such Lender or Issuing Lender in its sole discretion, the making,
issuing, funding or maintaining of such Commitments or Loans or Letters of
Credit through such other lending or letter of credit office or in accordance
with such other measures, as the case may be, would not otherwise materially
adversely affect such Commitments or Loans or Letters of Credit or the
interests of such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or letter of
credit office pursuant to this subsection 2.8 unless Company agrees to pay all
incremental expenses incurred by such Lender or Issuing Lender as a result of
utilizing such other lending or letter of credit office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this subsection 2.8 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender or Issuing Lender to
Company (with a copy to Agent) shall be conclusive absent manifest error.
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B. If Company receives a notice pursuant to subsection
2.7A, 2.7C or 3.6, so long as (i) no Potential Event of Default or Event of
Default shall have occurred and be continuing and Company has obtained a
commitment from another Lender or an Eligible Assignee to purchase at par such
Lender's Loans, Commitments and other Obligations and to assume all obligations
of the Lender to be replaced, (ii) at such time the Lender to be replaced is
not an Issuing Lender with respect to any Letters of Credit outstanding and
(iii) such Lender to be replaced is unwilling to withdraw the notice delivered
to Company, upon 30 days prior written notice to such Lender and Agent, Company
may require the Lender giving such notice to assign all of its Loans,
Commitments and other Obligations to such other Lender or Eligible Assignee
pursuant to the provisions of subsection 11.1B; provided that, prior to or
concurrently with such replacement (i) Company has paid to the Lender giving
such notice all amounts under subsections 2.6D, 2.7A, 2.7C and 3.6 through such
date of replacement, (ii) Company or the applicable assignee has paid to Agent
the processing and recordation fee required to be paid by subsection 11.1B(i)
and (iii) all of the requirements for such assignment contained in subsection
11.1B, including, without limitation, the consent of Agent (if required) and
the receipt by Agent of an executed Assignment Agreement and other supporting
documents, have been fulfilled.
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
A. LETTERS OF CREDIT. In addition to Company requesting that
Revolving Lenders make Revolving Loans pursuant to subsection 2.1A(v) and that
Swing Line Lender make Swing Line Loans pursuant to subsection 2.1A(vi),
Company may request, in accordance with the provisions of this subsection 3.1,
from time to time during the period from the Closing Date to but excluding the
Revolving Loan Commitment Termination Date, that one or more Revolving Lenders
issue Letters of Credit for the account of Company or any wholly-owned
Subsidiary of Company for the purposes specified in the definitions of
Commercial Letters of Credit and Standby Letters of Credit; provided, that if
any such Letter of Credit is issued for the account of any such Subsidiary,
Company shall execute jointly with such Subsidiary all letter of credit
documentation (including, without limitation, letter of credit application) as
may be required by the applicable Issuing Lender. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Holdings and Company herein set forth, any one or more Revolving
Lenders may, but (except as provided in subsection 3.1B(ii)) shall not be
obligated to, issue such Letters of Credit in accordance with the provisions of
this subsection 3.1; provided that Company shall not request that any Revolving
Lender issue (and no Revolving Lender shall issue):
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(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $150,000,000;
(iii) any Standby Letter of Credit having an expiration date
later than the earlier of (a) the date which is 30 days prior to the
Revolving Loan Commitment Termination Date and (b) the date which is
one year from the date of issuance of such Standby Letter of Credit;
provided that the immediately preceding clause (b) shall not prevent
any Issuing Lender from agreeing that a Standby Letter of Credit will
automatically be extended for one or more successive periods not to
exceed one year each unless such Issuing Lender elects not to extend
for any such additional period; provided, further that such Issuing
Lender shall deliver a written notice to Agent setting forth the last
day on which such Issuing Lender may give notice that it will not
extend such Standby Letter of Credit (the "NOTIFICATION DATE" with
respect to such Standby Letter of Credit) at least ten Business Days
prior to such Notification Date; and provided, further that, such
Issuing Lender shall give notice that it will not extend such Standby
Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing on such Notification Date, unless such Event
of Default has been waived in accordance with the provisions of
subsection 11.6;
(iv) any Commercial Letter of Credit having an expiration
date (a) later than the earlier of (X) the date which is 30 days prior
to the Revolving Loan Commitment Termination Date and (Y) the date
which is 180 days from the date of issuance of such Commercial Letter
of Credit or (b) that is otherwise unacceptable to the applicable
Issuing Lender in its reasonable discretion; or
(v) any Letter of Credit denominated in a currency other
than Dollars.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the
issuance of a Letter of Credit, it shall deliver to the proposed
Issuing Lender (with a copy to Agent if Agent is not the proposed
Issuing Lender) a Notice of Issuance of Letter of Credit substantially
in the form of Exhibit III annexed hereto no later than 1:00 P.M. (New
York City time) at least five Business Days (or such shorter period as
may be agreed to by the Issuing Lender in any particular instance) in
advance of the proposed date of issuance. The Notice of Issuance of
Letter of Credit shall specify (a) the Revolving Lender requested to
issue the Letter of Credit, (b) the proposed date of issuance (which
shall be a Business Day), (c) the face amount of the Letter of Credit,
(d) the expiration date of the Letter of Credit,
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(e) the name and address of the beneficiary, (f) if such Letter of
Credit is proposed to be issued for the account of a wholly-owned
Subsidiary of Company, the name of such Subsidiary, and (g) the
verbatim text of the proposed Letter of Credit or the proposed terms
and conditions thereof, including a precise description of any
documents and the verbatim text of any certificates to be presented by
the beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require the Issuing
Lender to make payment under the Letter of Credit; provided that the
Issuing Lender, in its reasonable discretion, may require changes in
the text of the proposed Letter of Credit or any such documents or
certificates; and provided, further that no Letter of Credit shall
require payment against a conforming draft to be made thereunder on the
same business day (under the laws of the jurisdiction in which the
office of the Issuing Lender to which such draft is required to be
presented is located) that such draft is presented if such presentation
is made after 10:00 A.M. (in the time zone of such office of the
Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender
(and Agent, if Agent is not such Issuing Lender) prior to the issuance
of any Letter of Credit in the event that any of the matters to which
Company is required to certify in the applicable Notice of Issuance of
Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any
Letter of Credit Company shall be deemed to have re-certified, as of
the date of such issuance, as to the matters to which Company is
required to certify in the applicable Notice of Issuance of Letter of
Credit.
(ii) Determination of Issuing Lender. Upon receipt by a
proposed Issuing Lender of a Notice of Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a Letter of
Credit, (a) in the event Agent is the proposed Issuing Lender, (1) if
Agent elects to issue such Letter of Credit, Agent shall promptly so
notify Company and Agent shall be the Issuing Lender with respect
thereto and (2) if Agent, in its sole discretion, elects not to issue
such Letter of Credit, Agent shall promptly so notify Company,
whereupon Company may request any Co-Arranger to issue such Letter of
Credit by delivering to such Co-Arranger a copy of the applicable
Notice of Issuance of Letter of Credit and any Co-Arranger so requested
to issue such Letter of Credit shall promptly notify Company and Agent
whether or not, in its sole discretion, it has elected to issue such
Letter of Credit, and any such Co-Arranger which so elects to issue
such Letter of Credit shall be the Issuing Lender with respect thereto;
provided that in the event that all Co- Arrangers shall have declined
to issue such Letter of Credit, notwithstanding the prior election of
Agent not to issue such Letter of Credit, Agent shall be obligated to
issue such Letter of Credit and shall be the Issuing Lender with
respect to such Letter of Credit, notwithstanding the fact that the
Letter of Credit Usage with respect to such Letter of Credit and with
respect to all other Letters of Credit issued by Agent, when aggregated
with Agent's
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outstanding Revolving Loans and Swing Line Loans, may exceed Agent's
Revolving Loan Commitment then in effect; and (b) in the event any
other Revolving Lender is the proposed Issuing Lender, such Revolving
Lender shall promptly notify Company and Agent whether or not, in its
sole discretion, it has elected to issue such Letter of Credit, and (1)
if such Revolving Lender so elects to issue such Letter of Credit, it
shall be the Issuing Lender with respect thereto and (2) if such
Revolving Lender fails to so promptly notify Company and Agent or
declines to issue such Letter of Credit, Company may request Agent or
another Revolving Lender to be the Issuing Lender with respect to such
Letter of Credit in accordance with the provisions of this subsection
3.1B.
(iii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 11.6) of the conditions set forth
in subsection 4.3, the Issuing Lender shall issue the requested Letter
of Credit in accordance with the Issuing Lender's standard operating
procedures.
(iv) Notification to Revolving Lenders. Upon the issuance
of any Letter of Credit the applicable Issuing Lender shall promptly
notify Agent and each other Revolving Lender of such issuance, which
notice shall be accompanied by a copy of such Letter of Credit.
Promptly after receipt of such notice, Agent shall notify each
Revolving Lender of the amount of such Revolving Lender's respective
participation in such Letter of Credit, determined in accordance with
subsection 3.1C.
(v) Reports to Revolving Lenders. Within 15 days after
the end of each month, in the case of Commercial Letters of Credit, and
of each calendar quarter, in the case of Standby Letters of Credit,
ending after the Closing Date, so long as any Letter of Credit shall
have been outstanding during such month or calendar quarter, as the
case may be, each Issuing Lender shall deliver to each other Revolving
Lender and Agent a report setting forth the average for such month or
calendar quarter, as the case may be, of the daily maximum amount
available to be drawn under the Letters of Credit issued by such
Issuing Lender that were outstanding during such month or calendar
quarter, as the case may be.
C. REVOLVING LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF
CREDIT. Immediately upon the issuance of each Letter of Credit, each Revolving
Lender shall be deemed to, and hereby agrees to, have irrevocably purchased
from the Issuing Lender a participation in such Letter of Credit and drawings
thereunder in an amount equal to such Revolving Lender's Pro Rata Share
(calculated without giving effect to clauses (b) and (c) of the definition of
Revolving Loan Exposure) of the maximum amount which is or at any time may
become available to be drawn thereunder. Upon satisfaction of the conditions
set forth in subsection 4.1, the Existing Letters of Credit shall, effective as
of the Closing Date, become Letters of Credit under this Agreement to the same
extent as if initially issued hereunder and each Revolving Lender shall be
deemed to have
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irrevocably purchased from the Issuing Lender(s) of such Existing Letters of
Credit a participation in such Letters of Credit and drawings thereunder in an
amount equal to such Revolving Lender's Pro Rata Share of the maximum amount
which is or at any time may become available to be drawn thereunder. All such
Existing Letters of Credit which become Letters of Credit under this Agreement
shall be fully secured by the Collateral commencing on the Closing Date to the
same extent as if initially issued hereunder on such date.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts with respect to
Letters of Credit:
(i) with respect to each Standby Letter of Credit, (a) to
the applicable Issuing Lender, a fronting fee equal to 0.25% per annum
of the daily maximum amount available to be drawn under such Standby
Letter of Credit, but in any event not less than $500 per year per
Standby Letter of Credit and (b) to Agent, a letter of credit fee equal
to (x) the Applicable Eurodollar Margin minus the Commitment Fee
Percentage multiplied by (y) the daily maximum amount available to be
drawn under such Standby Letter of Credit, in each case payable in
arrears on and to (but excluding) each March 15, June 15, September 15
and December 15 of each year and computed on the basis of a 360-day
year for the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a)
to the applicable Issuing Lender, a fronting fee equal to 0.25% per
annum of the daily maximum amount available to be drawn under such
Commercial Letter of Credit, but in any event not less than $500 per
year per Commercial Letter of Credit and (b) to Agent, a letter of
credit fee equal to (x) the Applicable Eurodollar Margin minus the sum
of (A) 1.0% per annum and (B) the Commitment Fee Percentage multiplied
by (y) the daily maximum amount available to be drawn under such
Commercial Letter of Credit, in each case payable in arrears on and to
(but excluding) each March 15, June 15, September 15 and December 15 of
each year and computed on the basis of a 360-day year for the actual
number of days elapsed; and
(iii) to the applicable Issuing Lender, with respect to the
issuance, amendment, assignment or transfer of each Letter of Credit
and each drawing made thereunder (without duplication of the fees
payable under clauses (i) and (ii) above), documentary and processing
charges in accordance with such Issuing Lender's standard schedule for
such charges in effect at the time of such issuance, amendment,
assignment, transfer or drawing, as the case may be.
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Promptly upon receipt by Agent of any amount described in clause (i)(b) or
(ii)(b) of this subsection 3.2, Agent shall distribute to each Revolving Lender
such Revolving Lender's Pro Rata Share of such amount. With respect to
Existing Letters of Credit, the fees described in clauses (i) and (ii) above
shall accrue from and including the Closing Date.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to determine
that the documents and certificates required to be delivered under such Letter
of Credit have been delivered and that they comply on their face with the
requirements of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS DRAWN UNDER LETTERS OF
CREDIT. In the event an Issuing Lender has determined to honor a drawing under
a Letter of Credit issued by it, such Issuing Lender shall immediately notify
Company and Agent, and Company shall reimburse such Issuing Lender on or before
the Business Day immediately following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in Dollars and in same day
funds equal to the amount of such drawing (whether or not Company is the
account party under such Letter of Credit); provided that, anything contained
in this Agreement to the contrary notwithstanding, (i) unless Company shall
have notified Agent and such Issuing Lender prior to 12:00 Noon (New York City
time) on the date of such drawing that Company intends to reimburse such
Issuing Lender for the amount of such drawing with funds other than the
proceeds of Revolving Loans, Company shall be deemed to have given a timely
Notice of Borrowing (it being understood, however, that such deemed Notice of
Borrowing shall not be deemed to be a representation of Company that the
representations and warranties contained in the Loan Documents are true,
correct and complete in all material respects on and as of the date of such
deemed Notice of Borrowing) to Agent requesting Revolving Lenders to make
Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount
in Dollars equal to the amount of such drawing and (ii) subject to satisfaction
or waiver of the conditions specified in subsection 4.2B, Revolving Lenders
shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of such drawing, the proceeds of which shall be applied directly
by Agent to reimburse such Issuing Lender for the amount of such drawing; and
provided, further that if for any reason proceeds of Revolving Loans are not
received by such Issuing Lender on the Reimbursement Date in an amount equal to
the amount of such drawing, Company shall reimburse such Issuing Lender, on
demand, in an amount in same day funds equal to the excess of the amount of
such drawing over the aggregate amount of such Revolving Loans, if any, which
are so received. Nothing in this subsection 3.3B shall be deemed to relieve
any Revolving Lender from its obligation to make Revolving Loans on the terms
and conditions set forth in this Agreement, and Company shall retain any and
all rights it may have against
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any Revolving Lender resulting from the failure of such Revolving Lender to
make such Revolving Loans under this subsection 3.3B.
C. PAYMENT BY REVOLVING LENDERS OF UNREIMBURSED DRAWINGS UNDER
LETTERS OF CREDIT.
(i) Payment by Revolving Lenders. In the event that
Company shall fail for any reason to reimburse any Issuing Lender as
provided in subsection 3.3B in an amount equal to the amount of any
drawing honored by such Issuing Lender under a Letter of Credit issued
by it, such Issuing Lender shall promptly notify each other Revolving
Lender of the unreimbursed amount of such drawing and of such other
Revolving Lender's respective participation therein based on such
Revolving Lender's Pro Rata Share. Each Revolving Lender shall make
available to such Issuing Lender an amount equal to its respective
participation, in Dollars and in same day funds, at the office of such
Issuing Lender specified in such notice, not later than 1:00 P.M. (New
York City time) on the first business day (under the laws of the
jurisdiction in which such office of such Issuing Lender is located)
after the date notified by such Issuing Lender. In the event that any
Revolving Lender fails to make available to such Issuing Lender on such
business day the amount of such Revolving Lender's participation in
such Letter of Credit as provided in this subsection 3.3C, such Issuing
Lender shall be entitled to recover such amount on demand from such
Revolving Lender together with interest thereon at the rate customarily
used by such Issuing Lender for the correction of errors among banks
for three Business Days and thereafter at the Base Rate. Nothing in
this subsection 3.3C shall be deemed to prejudice the right of any
Revolving Lender to recover from any Issuing Lender any amounts made
available by such Revolving Lender to such Issuing Lender pursuant to
this subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Revolving Lender constituted gross
negligence or willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Revolving Lenders of Reimbursements
Received From Company. In the event any Issuing Lender shall have been
reimbursed by other Revolving Lenders pursuant to subsection 3.3C(i)
for all or any portion of any drawing honored by such Issuing Lender
under a Letter of Credit issued by it, such Issuing Lender shall
distribute to each other Revolving Lender which has paid all amounts
payable by it under subsection 3.3C(i) with respect to such drawing
such other Revolving Lender's Pro Rata Share of all payments
subsequently received by such Issuing Lender from Company in
reimbursement of such drawing when such payments are received. Any
such distribution shall be made to a Revolving Lender at its primary
address set forth below its name on
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the appropriate signature page hereof or at such other address as such
Revolving Lender may request.
D. INTEREST ON AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to pay
to each Issuing Lender, with respect to drawings made under any Letters
of Credit issued by it (whether or not Company is the account party
thereunder), interest on the amount paid by such Issuing Lender in
respect of each such drawing from the date of such drawing to but
excluding the date such amount is reimbursed by Company (including any
such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date of
such drawing to but excluding the Reimbursement Date, the rate then in
effect under this Agreement with respect to Revolving Loans that are
Base Rate Loans and (b) thereafter, a rate which is 2% per annum in
excess of the rate of interest otherwise payable under this Agreement
with respect to Revolving Loans that are Base Rate Loans. Interest
payable pursuant to this subsection 3.3D(i) shall be computed on the
basis of a 360-day year for the actual number of days elapsed in the
period during which it accrues and shall be payable on demand or, if no
demand is made, on the date on which the related drawing under a Letter
of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing under a Letter
of Credit issued by it, (a) such Issuing Lender shall distribute to
each other Revolving Lender, out of the interest received by such
Issuing Lender in respect of the period from the date of such drawing
to but excluding the date on which such Issuing Lender is reimbursed
for the amount of such drawing (including any such reimbursement out of
the proceeds of Revolving Loans pursuant to subsection 3.3B), the
amount that such other Revolving Lender would have been entitled to
receive in respect of the letter of credit fee that would have been
payable in respect of such Letter of Credit for such period pursuant to
subsection 3.2 if no drawing had been made under such Letter of Credit,
and (b) in the event such Issuing Lender shall have been reimbursed by
other Revolving Lenders pursuant to subsection 3.3C(i) for all or any
portion of such drawing, such Issuing Lender shall distribute to each
other Revolving Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such drawing such other Revolving
Lender's Pro Rata Share of any interest received by such Issuing Lender
in respect of that portion of such drawing so reimbursed by other
Revolving Lenders for the period from the date on which such Issuing
Lender was so reimbursed by other Revolving Lenders to and including
the date on which such portion of such drawing is reimbursed by
Company. Any such distribution shall be made to a Revolving Lender at
its primary address set forth below its name on the
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appropriate signature page hereof or at such other address as such
Revolving Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing Lender for
drawings made under the Letters of Credit issued by it (whether or not Company
is the account party thereunder) and to repay any Revolving Loans made by
Revolving Lenders pursuant to subsection 3.3B and the obligations of Revolving
Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company, any Subsidiary that is an account party thereunder
or any Revolving Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any
such transferee may be acting), any Issuing Lender or other Revolving
Lender or any other Person or, in the case of a Revolving Lender,
against Company or any Subsidiary that is an account party under a
Letter of Credit, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction
(including any underlying transaction between Company or one of its
Subsidiaries and the beneficiary for which any Letter of Credit was
procured) other than the defense of payment in accordance with the
terms of this Agreement;
(iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment to the beneficiary of such Letter of Credit by
the applicable Issuing Lender under any Letter of Credit against
presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Holdings or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto (other than a breach by the applicable
Issuing Lender relating to the Letter of Credit in question);
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(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event
of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and of internal counsel) which such
Issuing Lender may incur or be subject to as a consequence, direct or indirect,
of (i) the issuance of any Letter of Credit by such Issuing Lender, other than
as a result of (a) the gross negligence or willful misconduct of such Issuing
Lender as determined by a final judgment of a court of competent jurisdiction
or (b) subject to the following clause (ii), the wrongful dishonor by such
Issuing Lender of a proper demand for payment made under any Letter of Credit
issued by it or (ii) the failure of such Issuing Lender to honor a drawing
under any such Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government
or governmental authority (all such acts or omissions herein called
"GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company and any
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Lender shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (iii) failure of the beneficiary
of any such Letter of Credit to comply fully with any conditions required in
order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they are in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission
or otherwise
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of any document required in order to make a drawing under any such Letter of
Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary
of any such Letter of Credit of the proceeds of any drawing under such Letter
of Credit; or (viii) any consequences arising from causes beyond the control of
such Issuing Lender, including without limitation any Governmental Acts, and
none of the above shall affect or impair, or prevent the vesting of, any of
such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against any
Issuing Lender for any liability directly attributable to the gross negligence
or willful misconduct of such Issuing Lender or to the wrongful dishonor by any
Issuing Lender of a proper demand for payment made under any Letter of Credit
issued by it, in each case, as determined by a final judgment of a court of
competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
In the event that any Issuing Lender or any Revolving Lender
shall determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof (other than any change in such law,
treaty or governmental rule, regulation or order which was promulgated prior to
the date hereof and which becomes effective in accordance with its terms after
the date hereof), or the compliance by any Issuing Lender or any Revolving
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):
(i) subjects such Issuing Lender or such Revolving Lender
(or its applicable lending or letter of credit office) to any
additional Tax (other than any Tax on the overall income of such
Issuing Lender or Revolving Lender) with respect to the issuing or
maintaining of any Letters of Credit or the purchasing or maintaining
of any participations therein or any other obligations under this
Section 3, whether directly or by such being imposed on or suffered by
any particular Issuing Lender;
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(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement in respect of any Letters of Credit
issued by any Issuing Lender or participations therein purchased by any
Revolving Lender; or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Issuing Lender or such Revolving
Lender (or its applicable lending or letter of credit office) regarding
this Section 3 or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or such Revolving Lender of agreeing to issue, issuing or maintaining
any Letter of Credit or agreeing to purchase, purchasing or maintaining any
participation therein or to reduce any amount received or receivable by such
Issuing Lender or such Revolving Lender (or its applicable lending or letter of
credit office) with respect thereto; then, in any case, Company shall promptly
pay to such Issuing Lender or such Revolving Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
as may be necessary to compensate such Issuing Lender or such Revolving Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 3.6 to the extent that any such increased cost or
reduction in amounts was incurred more than one year prior to the time it gives
notice to Company (as provided in the next sentence) of the relevant
circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such one
year period so long as such Lender has given such notice to Company no later
than one year from the time such circumstance became applicable to such Lender.
Such Issuing Lender or such Revolving Lender shall deliver to Company a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Issuing Lender or such Revolving Lender under
this subsection 3.6, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of
Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 CONDITIONS TO TERM LOANS AND INITIAL REVOLVING LOANS AND SWING LINE
LOANS.
The obligations of Lenders to make the Term Loans and any
Revolving Loans and Swing Line Loans to be made on the Closing Date are, in
addition to the
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conditions precedent specified in subsection 4.2, subject to prior or
concurrent satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Company
shall deliver or cause to be delivered to Lenders (or to Agent for Lenders with
sufficient originally executed copies, where appropriate, for each Lender) the
following with respect to each Loan Party, each, unless otherwise noted, dated
the Closing Date:
(i) Certified copies of its Certificate or Articles of
Incorporation (other than the certified copy of Alpha Beta's Articles
of Incorporation), together with a good standing certificate from the
Secretary of State of the jurisdiction of its incorporation and each
other state in which it is qualified as a foreign corporation to do
business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
states, each dated a recent date prior to the Closing Date;
(ii) Copies of its Bylaws, certified as of the Closing Date
by its corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors (a) approving
and authorizing the execution, delivery and performance of each of the
Loan Documents to which it is a party, and (b) approving and
authorizing the execution, delivery and performance of the other
Transaction Documents to which it is a party and, to the extent
applicable, approving and authorizing the Acquisition, the Mergers, the
Public Offering, the exchanges, purchases and consents pursuant to the
Holdings Offer, the Food 4 Less Offers, the Ralphs Grocery Offers and
all transactions related thereto, in each case certified as of the
Closing Date by its corporate secretary or an assistant secretary as
being in full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of its officers
executing each of the Loan Documents to which it is a party;
(v) Executed originals of this Agreement, the Notes (duly
executed in accordance with subsection 2.1E, drawn to the order of each
Lender and Swing
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Line Lender and with appropriate insertions) and the other Loan
Documents, including, without limitation, the Guaranty executed by each
of Company's active Subsidiaries, the Pledge Agreement executed by
Company and each of Company's active Subsidiaries, Deeds of Trust
executed by each of Company, Alpha Beta, Bay Area Warehouse Stores,
Inc., Bell Markets, Inc., Cala Foods, Inc., Falley's and Food 4 Less of
California, Inc., the Environmental Indemnity executed by Company, the
Security Agreement executed by Holdings, Company and each of its active
Subsidiaries, the Trademark Security Agreement executed by Company and
each of its active Subsidiaries, the Holdings Pledge Agreement executed
by Holdings, the Collateral Account Agreement executed by Company, the
F4L GM Security Agreement executed by Food 4 Less GM, Inc. and the
Deposit Accounts Security Agreement executed by Holdings, Company and
each of its active Subsidiaries; and
(vi) Such other documents as Agent may reasonably request.
B. NEW EQUITY. Holdings shall have received contributions of not
less than $10,000,000 from individuals comprising management of Ralphs Grocery
(such contributions to be made in the form of a cancellation of such
individuals' rights to receive certain cash payments upon consummation of the
RSI Merger), plus not less than $140,000,000 in cash proceeds from the issuance
of preferred stock in a private placement. The terms and conditions of such
preferred stock, including the type and amount of dividend payments and any
redemption provisions, shall be satisfactory to Agent; provided that such
preferred stock shall not be subject to any mandatory redemption and no
payments of cash dividends shall be required thereon. Holdings shall have
delivered to Agent an Officers' Certificate in form and substance reasonably
satisfactory to Agent setting forth in reasonable detail (i) the percentage of
issued and outstanding shares of Holdings Voting Stock beneficially owned,
directly or indirectly (including through his ownership interest in the Yucaipa
Investors) by Ronald W. Burkle on the Closing Date and (ii) the percentage of
the issued and outstanding Holdings Voting Stock beneficially owned and
controlled, directly or indirectly, by Yucaipa and the Yucaipa Investors
collectively on the Closing Date.
C. SELLER DEBENTURES AND HOLDINGS DISCOUNT DEBENTURES. Holdings
shall have issued $131,500,000 in aggregate principal amount of the Seller
Debentures to the Sellers pursuant to the requirements contained in the Merger
Agreement. The Seller Debenture Indenture shall be substantially in the form
of Exhibit A to the Merger Agreement with such amendments and modifications
which are required or approved by Agent and Requisite Lenders, and a fully
executed or conformed copy of the Seller Debenture Indenture shall have been
delivered to Agent. Holdings shall have issued the Holdings Discount
Debentures in an initial accreted value of not less than $100,000,000, (i)
$59,000,000 of which shall have been issued in consideration for not less than
$59,000,000 in cash, (ii) $18,500,000 of which shall have been issued to the
Sellers as partial consideration for issued and outstanding capital stock of
Ralphs Supermarkets,
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and (iii) $22,500,000 of which shall have been issued to certain shareholders
of Holdings (or their Affiliates) in satisfaction of fees otherwise payable by
Company and Holdings in connection with the Mergers and the Acquisition. The
terms and conditions of the Holdings Discount Debentures shall be as described
in the documents distributed in connection with the Holdings Offer and shall be
in form and substance satisfactory to Agent and Requisite Lenders. Holdings
shall have delivered to Agent a fully executed or conformed copy of the
Holdings Discount Debenture Indenture.
D. RALPHS GROCERY OFFERS. Pursuant to the Ralphs Grocery Offers,
Food 4 Less shall have (i) issued New RGC Senior Subordinated Notes in an
aggregate principal amount not less than $420,000,000, and shall have exchanged
such New RGC Senior Subordinated Notes and a cash payment in an amount not
exceeding $20 for each $1,000 of principal amount thereof for a like aggregate
principal amount of Old RGC 9% Subordinated Notes and Old RGC 10-1/4%
Subordinated Notes and (ii) purchased for cash not less than $19,000,000 and up
to $30,000,000 of the Old RGC 9% Subordinated Notes and the Old RGC 10-1/4%
Subordinated Notes at the principal amount thereof plus accrued interest
thereon and a premium thereon, the amount of which premium, to the extent it
exceeds 1% of such principal amount, is approved by Agent and Requisite
Lenders. The terms and conditions of the New RGC Senior Subordinated Notes,
including, without limitation, with respect to the interest rates, covenants,
defaults, remedies and subordination provisions shall be as described in the
documents distributed in connection with the Ralphs Grocery Offers and shall be
in form and substance satisfactory to Agent and Requisite Lenders. Company
shall have delivered to Agent a fully executed or conformed copy of the New RGC
Senior Subordinated Note Indenture and resolutions of the Board of Directors of
Ralphs Grocery approving and authorizing the RGC Merger and the exchanges,
purchases and consents pursuant to the Ralphs Grocery Offers and all
transactions related thereto, certified as of the Closing Date by its corporate
secretary or an assistant secretary as being in full force and effect without
modification or amendment.
E. OLD RALPHS GROCERY DEBT SECURITIES. Company shall have
obtained all such consents and amendments to the Old RGC 9% Subordinated Note
Indenture and the Old RGC 10-1/4% Subordinated Note Indenture as may be
required to permit the Mergers, the borrowings of the Loans and the other
transactions described herein. The terms and conditions of such consents and
amendments shall be as described in the Ralphs Grocery Offers and shall be in
form and substance satisfactory to Agent and Requisite Lenders. Company shall
otherwise be in compliance with its obligations under the Old RGC 9%
Subordinated Note Indenture and the Old RGC 10-1/4% Subordinated Note
Indenture. Company shall have delivered to Agent a fully executed or conformed
copy of each of the Old RGC 9% Subordinated Note Indenture and the Old RGC
10-1/4% Subordinated Note Indenture, in each case as so amended.
F. FOOD 4 LESS OFFERS. Pursuant to the Food 4 Less Offers, not
less than 80% of the Old F4L Senior Notes and Old F4L Senior Subordinated Notes
shall have
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been tendered for exchange for an equivalent principal amount of New F4L Senior
Notes and New F4L Senior Subordinated Notes, respectively, and a cash payment
in an amount not exceeding $5 for each $1,000 of principal amount of such New
F4L Senior Notes and $20 for each $1,000 of principal amount of such New F4L
Senior Subordinated Notes. The terms and conditions of the New F4L Senior
Notes and New F4L Senior Subordinated Notes, including, without limitation,
with respect to the interest rates, covenants, defaults, remedies and, with
respect to the New F4L Senior Subordinated Notes, subordination provisions,
shall be as described in the documents distributed in connection with the Food
4 Less Offers and shall be in form and substance satisfactory to Agent and
Requisite Lenders. Company shall have delivered to Agent a fully executed or
conformed copy of each of the New F4L Senior Note Indenture and the New F4L
Senior Subordinated Note Indenture.
G. HOLDINGS OFFER AND COMPANY SOLICITATIONS. Pursuant to the
Holdings Offer, not less than 91% of the Holdings Discount Notes shall have
been purchased for cash. Old Holdings and Company shall have obtained all such
consents and amendments to the Holdings Discount Note Indenture and the Old F4L
Senior Note Indenture and the Old F4L Senior Subordinated Note Indenture as may
be required to permit the RSI Merger, the borrowings of the Loans and the other
transactions described herein. The terms and conditions of such consents and
amendments shall be as described in the Holdings Offer and the Food 4 Less
Offers, respectively, and shall be in form and substance satisfactory to Agent
and Requisite Lenders. Holdings and Company shall otherwise be in compliance
with their respective obligations under the Holdings Discount Note Indenture
and the Old F4L Senior Note Indenture and the Old F4L Senior Subordinated Note
Indenture. Company shall have delivered to Agent a fully executed or conformed
copy of each of the Holdings Discount Note Indenture, the Old F4L Senior Note
Indenture and the Old F4L Senior Subordinated Note Indenture, in each case as
so amended.
H. RGC MORTGAGE NOTES; EVIDENCE OF REMAINING INDEBTEDNESS. Ralphs
Grocery shall have repaid in full the amounts outstanding under the RGC
Mortgage Notes and shall have obtained all required terminations and releases
of the RGC Mortgage Notes and the Metropolitan Deeds of Trust with the result
that Company has no obligations thereunder (other than obligations which are
contingent and unliquidated and not due and owing on the Closing Date and which
pursuant to the provisions of such documents survive the termination of such
documents, the repayment of obligations thereunder, the termination of the
commitments thereunder and the expiration or cancellation of all letters of
credit issued thereunder) and all liens securing the indebtedness evidenced by
the RGC Mortgage Notes have been released, and all such terminations and
releases shall be in form and substance satisfactory to Agent. Company shall
have delivered to Agent a fully executed or conformed copy of each of the RGC
Mortgage Notes and the Metropolitan Deeds of Trust, together with such
terminations and releases. Agent shall have received an Officers' Certificate
of Company certifying that as of the Closing Date, after giving effect to the
transactions
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contemplated by this Agreement, the Indebtedness of the Loan Parties (other
than the Indebtedness under the Loan Documents and the Related Financing
Documents) consists of (i) approximately $21,800,000 of outstanding principal
amount of existing Funded Debt described in Schedule 7.1 annexed hereto and
(ii) obligations under existing Capital Leases of all Loan Parties as of the
Closing Date (which shall be described in Schedule 7.1 annexed hereto) and
reflected as capital lease obligations on the consolidated balance sheets of
Company prepared in accordance with GAAP, which obligations do not exceed
$145,100,000.
I. PUBLIC OFFERING. Company shall have issued (i) $350,000,000 in
aggregate principal amount of New F4L Senior Notes in connection with the
Public Offering and (ii) $100,000,000 in aggregate principal amount of New RGC
Senior Subordinated Notes in connection with the Public Offering. The terms
and conditions of the New F4L Senior Notes issued in connection with the Public
Offering shall be identical in all respects to the New F4L Senior Notes issued
in connection with the Food 4 Less Offers and shall be in form and substance
satisfactory to Agent and Requisite Lenders. The terms and conditions of the
New RGC Senior Subordinated Notes issued in connection with the Public Offering
shall be identical in all respects to the New RGC Senior Subordinated Notes
issued in connection with the Ralphs Grocery Offers and shall be in form and
substance satisfactory to Agent and Requisite Lenders.
J. DISCHARGE OF BANK INDEBTEDNESS; EXISTING LETTERS OF CREDIT.
All existing bank indebtedness of Ralphs Grocery in the approximate aggregate
principal amount of $243,000,000 and of Food 4 Less and certain of its
Subsidiaries in the approximate aggregate principal amount of $178,000,000
shall have been repaid in full, all commitments thereunder shall have been
terminated and all liens securing all such indebtedness shall have been
released. Ralphs Grocery and Food 4 Less, as the case may be, shall have
furnished to Agent copies of all Existing Letters of Credit and all amendments
to such Existing Letters of Credit. Company shall have paid to the lenders
with respect to such Existing Letters of Credit all fees and other amounts
owing with respect thereto to but excluding the Closing Date.
K. MERGERS. The Certificate of Ownership and Merger executed by
F4L Parent and Old Holdings filed with the Secretary of State of the States of
California and Delaware prior to the Closing Date in order to consummate the
Parent Merger (the "PARENT MERGER CERTIFICATE") and the Certificate of
Ownership and Merger executed by Old Holdings and New Holdings filed with the
Secretary of State of the States of California and Delaware on the Closing Date
in order to consummate the Reincorporation Merger (the "REINCORPORATION MERGER
CERTIFICATE") shall be in form and substance satisfactory to Agent and shall be
in full force and effect and shall not have been modified or waived in any
material respect without the consent of Agent. Company shall have delivered to
Agent a fully executed or conformed copy of the Parent Merger Certificate and
the Reincorporation Merger Certificate. Company shall have provided evidence
in form and substance satisfactory to Agent that each of the
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Parent Merger and the Reincorporation Merger has been consummated and has
become effective in all respects in accordance with the Parent Merger
Certificate and the Reincorporation Merger Certificate, respectively. The
Merger Agreement shall be in full force and effect and shall not have been
modified or waived in any material respect without the consent of Agent and
Requisite Lenders. Company shall have delivered to Agent a fully executed or
conformed copy of the Merger Agreement. In consideration for the cash payment
to the Sellers of $100,000,000 and the issuance of the Seller Debentures and
$18,500,000 initial accreted value of Holdings Discount Debentures, Holdings
shall have received approximately 48% of the outstanding capital stock of
Ralphs Supermarkets and Holdings shall have contributed such stock to Food 4
Less. The remaining approximately 52% of the outstanding capital stock of
Ralphs Supermarkets shall have been cancelled in the RSI Merger in exchange for
cash consideration of $275,900,000. The RSI Merger shall have occurred as
contemplated by the Merger Agreement and no conditions to the consummation of
the RSI Merger contained in the Merger Agreement shall have been amended or
waived in any material respect without the prior consent of Agent and Requisite
Lenders. Ralphs Grocery shall have executed and delivered a counterpart of
this Agreement and the other Loan Documents to which it is a party. All shares
of the capital stock of Company shall be owned by Holdings. Company shall have
delivered to Agent resolutions of the Board of Directors of Ralphs Supermarkets
approving and authorizing the Acquisition and the Mergers and all transactions
related thereto, certified as of the Closing Date by its corporate secretary or
an assistant secretary as being in full force and effect without modification
or amendment. The RGC Merger Certificate shall be in form and substance
satisfactory to Agent and shall be in full force and effect and shall not have
been modified or waived in any material respect without the consent of Agent.
Company shall have delivered to Agent a fully executed or conformed copy of the
RGC Merger Certificate. Company shall have provided evidence in form and
substance satisfactory to Agent that (i) each of the RSI Merger and the RGC
Merger has been consummated and has become effective in all respects in
accordance with the Merger Agreement and the RGC Merger Certificate,
respectively, and (ii) the name change of Company to "Ralphs Grocery Company"
has become effective.
L. SHAREHOLDERS AGREEMENT; CERTAIN OTHER DOCUMENTS. Agent shall
have received a fully executed copy of the Shareholders Agreement and such
Shareholders Agreement shall be in full force and effect and shall be in form
and substance satisfactory to Agent and shall not have been modified or waived
in any respect without the consent of Agent. The share ownership of Company
and its Subsidiaries shall be as set forth on Schedule 5.1 annexed hereto.
Agent shall have received (i) a fully executed, complete and correct copy of
(a) the Consulting Agreement, (b) each agreement between Holdings and any
shareholder of Holdings, in its capacity as a shareholder of Holdings, that is
not a party to the Shareholders Agreement, (c) the warrant issued by Holdings
described in subsection 7.12(ix), (d) the Transfer and Assumption Agreement
described in subsection 7.12(x), (e) the certificate of designations with
respect to the Holdings Preferred Stock, (f) the Indemnification Agreement, (g)
the Reimbursement Agreement,
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(h) the Tax Election Agreement, (i) the Golden Alliance Agreement, (j) each
guarantee entered into by any Subsidiary on or prior to the Closing Date
pursuant to subsection 7.4(vi), and (k) the Subscription Agreement, and each
such document shall be in form and substance satisfactory to Agent, and (ii) an
Officers' Certificate from Company, in form and substance satisfactory to
Agent, certifying to the effect that each such document (which shall be
attached thereto) is correct and complete and is in full force and effect and
certifying as to such matters with respect to each of the Related Financing
Documents.
M. SECURITY INTERESTS. To the extent not otherwise satisfied
pursuant to subsection 4.1N, each Loan Party shall have taken or caused to be
taken (and Agent shall have received satisfactory evidence thereof) such
actions (other than the filing or recording of items described in clauses (ii),
(iii) and (iv) below) in such a manner so that Agent has a valid and perfected
first priority security interest as of such date in the entire Collateral
(subject to Permitted Encumbrances and Liens set forth in Schedule 7.2 annexed
hereto on specific property described in such Schedule and except to the extent
any such security interest cannot be granted under applicable laws). Such
actions shall include, without limitation, (i) delivery to Agent of
certificates (which certificates shall be properly endorsed in blank for
transfer or accompanied by irrevocable undated stock powers duly endorsed in
blank, all in form and substance satisfactory to Agent) representing the
capital stock pledged pursuant to the Holdings Pledge Agreement and the Pledge
Agreements, and delivery to Agent of all other instruments (duly endorsed where
appropriate) evidencing the Collateral, (ii) delivery to Agent of Uniform
Commercial Code financing statements as to the Collateral for all jurisdictions
as may be necessary or desirable to perfect the security interests granted to
Agent in the Collateral, (iii) delivery to Agent of the Trademark Security
Agreement together with the cover sheet required for filing with the United
States Patent and Trademark Office and (iv) delivery to Agent of such other
documents and instruments that Agent deems necessary or advisable to establish,
preserve and perfect the first priority Liens granted to Agent on behalf of
Lenders under the Collateral Documents.
N. DELIVERY OF DEEDS OF TRUST; TITLE INSURANCE POLICIES;
APPRAISALS. Schedule 4.1N annexed hereto shall set forth all Real Property
Assets of Company or any of its Subsidiaries as of the Closing Date after
giving effect to the Mergers. Agent shall have received from Company and each
of its Subsidiaries having Real Property Assets (i) fully executed counterparts
of Deeds of Trust, which Deeds of Trust shall cover the fee interest and/or
leasehold interest of Company or such Subsidiary in each Real Property Asset
designated as a "MORTGAGED PROPERTY" on Schedule 4.1N annexed hereto (each a
"MORTGAGED PROPERTY" and collectively the "MORTGAGED PROPERTIES"), together
with evidence (which may be in the form of recording instructions accepted by
title insurers, which instructions may authorize the title insurer to remove
from the counterpart of the Deed of Trust being recorded any exhibit pages
rejected by the county recorder which, if not removed, would prevent the
recordation of such Deed of Trust counterpart) that counterparts of the Deeds
of Trust have been or promptly will be
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recorded in all places to the extent necessary or desirable, in the reasonable
judgment of Agent, so as to effectively create a valid and enforceable first
priority lien (subject only to Permitted Encumbrances, and subject, where
applicable, to the effect, if any, on lien priority of the absence of a
recorded memorandum of lease) on each Mortgaged Property in favor of Agent (or
such other trustee as may be required or desired under local law) for the
benefit of Lenders; (ii) a preliminary title report, title commitment or lot
book guaranty obtained by Company or such Subsidiary in respect of each
Mortgaged Property; (iii) an opinion of counsel (which counsel shall be
reasonably satisfactory to Agent) in the state in which each Mortgaged Property
is located with respect to the enforceability of the Deeds of Trust recorded in
such state and such other matters as Agent may request, in form and substance
satisfactory to Agent; (iv) in the case of each real property leasehold
interest of Company or such Subsidiary constituting Mortgaged Property, such
estoppel letters, consents and waivers from the landlords on such real property
as may be required by Agent, which letters, consents, waivers and agreements
shall be in form and substance reasonably satisfactory to Agent; (v) Title
Insurance Policies with respect to the Mortgaged Properties designated in Part
I of Schedule 4.1N annexed hereto, in amounts not less than the respective
amounts designated on such Schedule 4.1N with respect to any particular
Mortgaged Property; (vi) information sufficient for Agent to determine whether
(1) any Mortgaged Property is in an area designated by the Federal Emergency
Management Agency as having special flood or mud slide hazards (any Real
Property Asset located within such an area being a "FLOOD HAZARD PROPERTY") and
(2) the community in which each Flood Hazard Property is located is
participating in the National Flood Insurance Program; (vii) if any Mortgaged
Properties are Flood Hazard Properties, Company's or such Subsidiary's written
acknowledgment of receipt of written notification from Agent (1) as to the
existence of each such Flood Hazard Property and (2) as to whether the
community in which each such Flood Hazard Property is located is participating
in the National Flood Insurance Program; (viii) appraisals of the Real Property
Assets so designated on Schedule 4.1N annexed hereto performed by certified
real estate appraisers approved by Agent, which appraisals shall be in form,
scope and substance satisfactory to Agent; and (ix) the evidence of insurance
with respect to the Mortgaged Properties required to be provided to Agent
pursuant to the Deeds of Trust, including flood insurance with respect to each
Mortgaged Property that is a Flood Hazard Property located in a community which
is participating in the National Flood Insurance Program.
O. OPINIONS OF LOAN PARTIES' COUNSEL. Lenders and their
respective counsel shall have received (i) originally executed copies of one or
more favorable written opinions of Latham & Watkins, counsel for the Loan
Parties, in form and substance reasonably satisfactory to Agent and its
counsel, dated the Closing Date and setting forth substantially the matters in
the opinions designated in Exhibit XX-A annexed hereto and as to such other
matters as Agent acting on behalf of Lenders may reasonably request, (ii)
originally executed copies of one or more favorable written opinions of Jan
Charles Gray, Esq., General Counsel of Ralphs Supermarkets and Ralphs Grocery,
in form and substance satisfactory to Agent and its counsel, dated the Closing
Date and setting forth
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substantially the matters in the opinions designated in Exhibit XX-B annexed
hereto and as to such other matters as Agent acting on behalf of Lenders may
reasonably request, (iii) originally executed copies of one or more favorable
written opinions of Irwin, Clutter & Severson, counsel for Falley's, in form
and substance reasonably satisfactory to Agent and its counsel, dated the
Closing Date and setting forth substantially the matters in the opinions
designated in Exhibit XX-C annexed hereto and as to such other matters as Agent
acting on behalf of Lenders may reasonably request and (iv) evidence
satisfactory to Agent that Company has requested such counsel to deliver such
opinions to Lenders.
P. OPINIONS FROM RELATED FINANCING TRANSACTIONS. Company shall
have delivered to Agent copies of all legal opinions issued by counsel to any
Loan Party or issued to any Loan Party relating to any transactions occurring
on or about the Closing Date pursuant to any of the Transaction Documents, each
of which opinions shall be accompanied by a written authorization from counsel
issuing such opinion stating that Agent and Lenders may rely on such opinions
as though such opinions were addressed to Agent and Lenders.
Q. OPINIONS OF AGENT'S COUNSEL. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & Myers, counsel to Agent, dated as of the Closing Date,
substantially in the form of Exhibit XXI annexed hereto and as to such other
matters as Agent acting on behalf of Lenders may reasonably request.
R. ENVIRONMENTAL REPORTS. (i) Agent shall have received reports
and other information in form, scope and substance satisfactory to Agent and
(ii) Lenders shall have received summaries of certain of such reports in form,
scope and substance satisfactory to Requisite Lenders, in each case concerning
the Hazardous Materials liabilities of Old Holdings and Ralphs Supermarkets and
their respective Subsidiaries.
S. NO MATERIAL ADVERSE CHANGE. Other than with respect to such
information as is disclosed in filings on Form 10-K for the period ending
January 29, 1995, in the case of Food 4 Less, and on Form 10-K the period
ending January 29, 1995, in the case of Ralphs Grocery, and other than changes
which will occur as a result of the transactions consummated pursuant to the
Transaction Documents, since June 25, 1994, in the case of Food 4 Less and its
Subsidiaries, and January 30, 1994, in the case of Ralphs Grocery and its
Subsidiaries, there shall have occurred no material adverse change in the
condition (financial or otherwise), business, assets, liabilities, properties,
results of operations or prospects of any of (x) Food 4 Less and its
Subsidiaries, taken as a whole, (y) Ralphs Grocery and its Subsidiaries, taken
as a whole, or (z) Food 4 Less and Ralphs Grocery and their respective
Subsidiaries, taken as a whole.
T. NO DISRUPTION OF FINANCIAL AND CAPITAL MARKETS. There shall
have been no material adverse change after April 26, 1995 to the syndication
markets for credit
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facilities similar in nature to the credit facilities provided herein and there
shall not have occurred and be continuing a material disruption of or material
adverse change in financial, banking or capital markets that would have an
adverse effect on such syndication market, in each case as determined by Agent
in its sole discretion.
U. FINANCIAL STATEMENTS. Agent shall have received on behalf of
Lenders (a) the unaudited financial statements for Food 4 Less and its
Subsidiaries and Ralphs Grocery and its Subsidiaries for the most recently
ended Fiscal Period (or the equivalent period, in the case of Ralphs Grocery
and its Subsidiaries) and (b) a pro forma balance sheet as of the Closing Date
for Company and its Subsidiaries after giving effect to the Mergers. Agent and
Lenders shall have had an opportunity to review such unaudited financial
statements with the independent certified public accountants for Food 4 Less
with the cost of such review being for the account of Food 4 Less.
V. SOLVENCY ASSURANCES. Agent and Lenders shall have received a
solvency opinion from Houlihan, Lokey, Howard and Zukin in form and substance
satisfactory to Agent and a certificate from the chief financial officer of
Ralphs Supermarkets substantially in the form of Exhibit XXIV annexed hereto,
in each case supporting the conclusions that, after giving effect to the
Mergers and related transactions, Company will not be insolvent or will not be
rendered insolvent by the indebtedness incurred in connection with such
transactions, or be left with unreasonably small capital with which to engage
in its businesses or have incurred debts beyond its ability to pay such debts
as they mature.
W. AUDITOR'S LETTERS. Agent shall have received executed copies
of each of the Auditor's Letters.
X. FEES. Company shall have paid to Agent, for distribution (as
appropriate) to Agent and Lenders, the fees payable on the Closing Date
referred to in subsection 2.3.
Y. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Each of Holdings and Company shall have delivered to Agent an Officers'
Certificate, in form and substance satisfactory to Agent, to the effect that
the representations and warranties in Section 5 hereof are true, correct and
complete in all material respects on and as of the Closing Date (both
immediately before and immediately after giving effect to the Mergers) to the
same extent as though made on and as of that date and that each Loan Party
shall have performed in all material respects all agreements and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Closing Date except as otherwise disclosed to and agreed to in
writing by Agent and Requisite Lenders.
Z. GOVERNMENTAL AUTHORIZATIONS. Company shall have delivered to
Agent copies of all agreements entered into with the California Attorney
General's office and
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all other Governmental Authorizations required for the consummation of the
Acquisition, in each case in form and substance satisfactory to Agent, and to
the extent any stores of Ralphs Grocery or Food 4 Less or their Subsidiaries
are required to be divested under the terms of any such agreement or
Governmental Authorizations, Agent shall have approved of such divestitures.
All such agreements with the California Attorney General's office shall be
final and binding and shall be in full force and effect without modification or
amendment. Any waiting period applicable to the Acquisition under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired or earlier termination thereof shall have been granted and no action
shall have been instituted by either the United States Department of Justice or
the Federal Trade Commission to prevent the consummation of the Acquisition and
the related transactions or to modify or amend such transactions in any
material manner (including, without limitation, any actions requiring any
material divestiture of assets other than as previously approved by Agent) or,
if any such action shall have been instituted, it shall have been withdrawn or
a final judgment shall have been entered against such Department or Commission,
as the case may be.
AA. CONSENTS. Company shall have delivered to Agent such other
consents, waivers, amendments or approvals as any of Ralphs Supermarkets, Old
Holdings or any of their respective Subsidiaries is required to obtain in
connection with any material agreement in order to enter into and carry out its
obligations under this Agreement and the other Transaction Documents and to
consummate the Acquisition and the Mergers, including, without limitation, a
consent from each lender to any of the foregoing Persons as may be required, in
each case in form and substance satisfactory to Agent.
BB. TRANSACTION COSTS. The transaction costs (including, without
limitation, fees payable to Lenders and Agent, fees, commissions, premiums and
consent fees payable in relation to the Merger Agreement and the Related
Financing Documents) incurred by Holdings and its Subsidiaries in connection
with the Acquisition shall not exceed $173,000,000.
CC. INSURANCE CERTIFICATES. Agent shall have received insurance
certificates (or other satisfactory evidence of endorsements) in form and
substance satisfactory to Agent naming Agent as loss payee or additional
insured under all insurance policies of each Loan Party, in each case in form
and substance satisfactory to Agent.
DD. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby
and by the other Transaction Documents and all documents incidental thereto not
previously found acceptable by Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Agent and such counsel,
and Agent and such counsel shall have received all such counterpart originals
or certified copies of such documents as Agent may reasonably request.
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Each Lender hereby agrees that by its execution and delivery of its
signature page hereto and by the funding of its Loans to be made on the Closing
Date, such Lender approves of and consents to each of the matters set forth in
this subsection 4.1 which must be approved by, or which must be satisfactory
to, Requisite Lenders; provided that, in the case of any agreement or document
which must be approved by, or which must be satisfactory to, Requisite Lenders,
Agent or Company shall have delivered a copy of such agreement or document to
such Lender on or prior to the Closing Date.
Each of the parties hereto acknowledges that (i) certain of the
conditions contained in this subsection 4.1 relating to the execution and
delivery of certain documents by Ralphs Supermarkets, Ralphs Grocery and/or
Crawford Stores, Inc., relating to the RSI Merger and the RGC Merger, and
relating to repayment of certain Indebtedness and payment of certain other
amounts, to the extent that the satisfaction of such conditions is described in
the Amended and Restated Prospectus and Solicitation Statement dated May 12,
1995 relating to the Ralphs Grocery Offers, as supplemented by the Supplement
to Prospectus dated May 31, 1995 relating thereto, as occurring immediately
after the consummation of the Acquisition (such sequence of events being
necessary due to the fact that the satisfaction of such conditions requires the
use of proceeds from the initial Loans or requires the acquisition by Holdings
and Food 4 Less of all of the capital stock of Ralphs Supermarkets), are
conditions which shall be satisfied by Loan Parties immediately after the
Acquisition (and in any event on the Closing Date) and the failure of Loan
Parties to satisfy each such condition immediately after the Acquisition (and
in any event on the Closing Date) shall be an Event of Default and (ii) each
such condition, to the extent so satisfied, shall be deemed to have been
satisfied concurrently with the funding of the initial Loans hereunder.
4.2 CONDITIONS TO ALL LOANS.
The obligations of each Lender to make Loans on each Funding
Date (other than any Funding Date relating to any Refunded Swing Line Loans)
are subject to the following further conditions precedent:
A. Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by the chief executive officer, the
chief financial officer or the treasurer of Company or by any executive officer
of Company designated by any of the above-described officers on behalf of
Company in a writing delivered to Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same extent
as though made on and as of that date, except to the extent such
representations and warranties specifically relate to
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an earlier date, in which case such representations and warranties
shall have been true, correct and complete in all material respects on
and as of such earlier date;
(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date
shall not violate any law including, without limitation, Regulation G,
Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of any
of the Loan Parties, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Loan
Parties or any property of any of the Loan Parties that has not been
disclosed by Company in writing pursuant to subsection 5.6 or 6.1(x)
prior to the making of the last preceding Loans (or, in the case of the
initial Loans, prior to the execution of this Agreement), and there
shall have occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so
disclosed, that, in either event, in the opinion of Agent or of
Requisite Lenders, could reasonably be expected to have a Material
Adverse Effect or, prior to the RSI Merger, a material adverse effect
upon the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Ralphs Supermarkets and its Subsidiaries,
taken as a whole; and no injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief
as a result of, the transactions contemplated by this Agreement or the
making of Loans hereunder.
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4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Agent shall have received, in accordance with the provisions of subsection
3.1B(i), an originally executed Notice of Issuance of Letter of Credit, in each
case signed by the chief executive officer, the chief financial officer or the
treasurer of Company or by any executive officer of Company designated by any
of the above-described officers on behalf of Company in a writing delivered to
Agent, together with all other information specified in subsection 3.1B(i) and
such other documents or information as the applicable Issuing Lender may
reasonably require in connection with the issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied to the
same extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, to induce Issuing Lenders to issue Letters of Credit and to
induce other Lenders to purchase participations therein, each of Holdings and
Company represents and warrants to each Lender, on the date of this Agreement,
on each Funding Date and on the date of issuance of each Letter of Credit,
that, prior to and after giving effect to the Mergers, the following statements
are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Loan Party has all requisite corporate
power and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Loan
Documents and the other Transaction Documents to which it is a party and to
carry out the transactions contemplated thereby.
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B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its present business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had and will not have, either individually or in the
aggregate for all such jurisdictions, a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Each Loan Party is engaged only in the
businesses permitted to be engaged in pursuant to subsection 7.14.
D. SUBSIDIARIES. All of the Subsidiaries of Holdings as of the
Closing Date, both before and after giving effect to the Mergers, are
identified in Schedule 5.1 annexed hereto, as said Schedule 5.1 may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xvii). Notwithstanding anything to the contrary set forth in Schedule 5.1
annexed hereto, Golden Alliance is not and will not become a Subsidiary of
Company and the financial results of the operations of Golden Alliance are not
and will not be included in the consolidated financial reports of Company and
its Subsidiaries. The capital stock of each of the Subsidiaries of Holdings
identified in Schedule 5.1 annexed hereto is duly authorized, validly issued,
fully paid and nonassessable and none of such capital stock constitutes Margin
Stock. Each of the Subsidiaries of Holdings identified in Schedule 5.1 annexed
hereto is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation set forth
therein, has all requisite corporate power and authority to own and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted, and is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or to have such corporate power and authority has
not had and will not have, either individually or in the aggregate for all such
failures, a Material Adverse Effect. Other than listing Subsidiaries of
Company which may have been sold, merged, dissolved, transferred or otherwise
disposed of after the Closing Date in accordance with the terms of this
Agreement, Schedule 5.1 annexed hereto correctly sets forth for Holdings and
each of its Subsidiaries (i) the ownership interest of Holdings and each of its
Subsidiaries in each of the Subsidiaries of Holdings identified therein, (ii)
the jurisdiction of incorporation of Holdings and each such Subsidiary, (iii)
the number of issued and outstanding shares of capital stock of Holdings in
each such Subsidiary, and (iv) whether any such Subsidiary is inactive. The
aggregate assets and the annual revenues of all Subsidiaries identified as
inactive on Schedule 5.1 does not and will not exceed $5,000,000 and
$5,000,000, respectively.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of each Loan Document and each other Transaction Document have been
duly authorized
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by all necessary corporate action on the part of each Loan Party which is a
party to such Loan Document or other Transaction Document.
B. NO CONFLICT. The execution, delivery and performance by each
Loan Party of the Loan Documents and the other Transaction Documents to which
such Loan Party is a party and the consummation of the transactions
contemplated by the Loan Documents and the other Transaction Documents do not
and will not (i) violate any provision of any law or any governmental rule or
regulation applicable to any of the Loan Parties, the Certificate or Articles
of Incorporation or Bylaws of any of the Loan Parties, or any material order,
judgment or decree of any court or other agency of government binding on any of
the Loan Parties, (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any material Contractual
Obligation of any of the Loan Parties which could reasonably be expected to
result in a Material Adverse Effect, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of any of the Loan
Parties (other than any Liens created under any of the Loan Documents in favor
of Agent on behalf of Lenders), or (iv) require any approval of stockholders or
any approval or consent of any Person under any Contractual Obligation of any
of the Loan Parties, except for such approvals or consents which will be
obtained on or before the Closing Date (or, in the case of any Loan Document
executed and delivered after the Closing Date, on or before such date of
execution and delivery) and disclosed in writing to Lenders or such approvals
or consents the failure to obtain could not reasonably be expected individually
or in the aggregate to result in a Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance
by each Loan Party of the Loan Documents and the other Transaction Documents to
which such Loan Party is a party and the consummation of the transactions
contemplated by the Loan Documents and the other Transaction Documents do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body, except for (i) filings and recordings required in
connection with the perfection of the security interests granted pursuant to
the Loan Documents, (ii) such registrations, consents, approvals, notices or
other actions which have been obtained on or before the Closing Date and are
described on Schedule 5.2C annexed hereto and (iii) notices or other actions
required to be taken after the Closing Date relating to operating licenses,
which notices or other actions will be given or taken as required in due course
(or, in the case of any Loan Document or other Transaction Document executed
and delivered after the Closing Date, on or before such date of execution and
delivery).
D. BINDING OBLIGATION. Each of the Loan Documents to which any
Loan Party is a party and each of the other Transaction Documents to which any
Loan Party is a party has been duly executed and delivered by each Loan Party
thereto and is the legally valid and binding obligation of such Loan Party,
enforceable against such Loan Party in accordance with their respective terms,
except as may be limited by bankruptcy,
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insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
E. VALID ISSUANCE OF HOLDINGS COMMON STOCK, HOLDINGS PREFERRED
STOCK AND NEW INDEBTEDNESS OF HOLDINGS AND COMPANY.
(i) (A) Holdings Common Stock. As of the Closing Date,
the number of shares of issued and outstanding Common Stock of Holdings and the
number of shares of issued and outstanding Non-Voting Common Stock of Holdings
are as set forth in Schedule 5.1 annexed hereto. Such shares of Holdings
Common Stock have been duly and validly issued, fully paid and nonassessable.
Any issuance and sale of Holdings Common Stock, upon such issuance and sale,
will either (a) have been registered or qualified under applicable federal and
state securities laws or (b) be exempt therefrom.
(B) Holdings Preferred Stock. As of the Closing
Date the number of shares of issued and outstanding Series A Holdings Preferred
Stock and the number of shares of issued and outstanding Series B Holdings
Preferred Stock are as set forth in Schedule 5.1 annexed hereto. Such shares
of Holdings Preferred Stock have been duly and validly issued, fully paid and
nonassessable. Any issuance and sale of Holdings Preferred Stock, upon such
issuance and sale, will either (a) have been registered and qualified under
applicable federal and state securities laws or (b) be exempt therefrom.
(C) Pre-emptive Rights. Except as set forth in
Schedule 5.2E, no stockholder of Holdings has or will have any preemptive
rights to subscribe for any additional equity Securities of Holdings.
(ii) New Indebtedness of Holdings and Company. Holdings has
the corporate power and authority to issue the Seller Debentures and the
Holdings Discount Debentures and Company has the corporate power and authority
to issue the New RGC Senior Subordinated Notes, the New F4L Senior Notes and
the New F4L Senior Subordinated Notes. The Seller Debentures, the Holdings
Discount Debentures, the New RGC Senior Subordinated Notes, the New F4L Senior
Notes and the New F4L Senior Subordinated Notes, when issued and paid for, will
be the legally valid and binding obligations of Holdings or Company, as the
case may be, enforceable against Holdings or Company, as the case may be, in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights or by equitable principles relating to enforceability. Each
of Holdings and Company represents and warrants and each other party hereto
acknowledges and agrees that the Loans and all other monetary Obligations
hereunder are (i) a refunding or refinancing of the Indebtedness under the
"Credit Agreement", as defined in the Old F4L Senior Subordinated Note
Indenture and (ii) a refinancing or replacement of the "1992 Credit Agreement",
as defined in the Old RGC
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9% Subordinated Note Indenture and the Old RGC 10-1/4% Subordinated Note
Indenture. The subordination provisions of the Seller Debentures, the New RGC
Senior Subordinated Notes, the Old RGC 9% Subordinated Notes, the Old RGC
10-1/4% Subordinated Notes, the Old F4L Senior Subordinated Notes and the New
F4L Senior Subordinated Notes, are and will be enforceable against the holders
thereof and the Loans and all other monetary Obligations hereunder are and will
be within the definition of "SENIOR INDEBTEDNESS" included in such provisions.
The Seller Debentures, the Holdings Discount Debentures, the New RGC Senior
Subordinated Notes, the New F4L Senior Notes and the New F4L Senior
Subordinated Notes, when issued and sold, will either (i) have been registered
or qualified under applicable federal and state securities laws or (ii) be
exempt therefrom.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: (i) the audited
consolidated balance sheets of Food 4 Less and its Subsidiaries as at January
29, 1995 and the related consolidated statements of operations, stockholders'
equity and cash flows of Food 4 Less and its Subsidiaries for the fiscal year
then ended, and (ii) the audited consolidated balance sheets of Ralphs Grocery
and its Subsidiaries as at January 29, 1995 and the related consolidated
statements of operations, cash flows and stockholder's equity of Ralphs Grocery
and its Subsidiaries for the Fiscal Year then ended. All such statements were
prepared in conformity with GAAP and fairly present the financial position (on
a consolidated basis) of the entities described in such financial statements as
at the respective dates thereof and the results of operations and cash flows
(on a consolidated basis) of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
As of the Closing Date, none of the Loan Parties has (and will not following
the funding of the initial Loans) any Contingent Obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of the Loan Parties, taken as a whole, other than
(i) the incurrence of the Obligations and obligations under the other
Transaction Documents and (ii) contingent obligations or liabilities for taxes,
long-term leases or forward or long-term commitments disclosed on Schedule 5.3
annexed hereto. Prior to the RSI Merger, Ralphs Supermarkets engaged in no
business activity other than owning the capital stock of Ralphs Grocery and had
no liabilities for the applicable periods not included on the balance sheets of
Ralphs Grocery and its Subsidiaries referred to above.
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5.4 NO MATERIAL ADVERSE CHANGE.
As of the Closing Date, since January 29, 1995, no event or
change has occurred that has caused or evidences, either in any case or in the
aggregate, a material adverse effect upon the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Ralphs Grocery and
its Subsidiaries, taken as a whole; as of the Closing Date, since January 29,
1995, no event or change has occurred that has caused or evidences, either in
any case or in the aggregate, a material adverse effect upon the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of Food 4 Less and its Subsidiaries, taken as a whole; and since September 17,
1994 (on a pro forma basis after giving effect to the Mergers), no event or
change has occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect.
5.5 TITLE TO PROPERTIES; LIENS.
Each Loan Party has (i) good, sufficient and legal title,
subject only to Permitted Encumbrances and, with respect to Real Property
Assets acquired after the Closing Date by such Loan Party from a Person other
than a Loan Party, such defects in title as existed prior to such acquisition,
to (in the case of fee interests in real property), (ii) valid leasehold
interests, subject only to Permitted Encumbrances and, with respect to Real
Property Assets acquired after the Closing Date by such Loan Party from a
Person other than a Loan Party, such defects in title as existed prior to such
acquisition, in (in the case of leasehold interests in real or personal
property), or (iii) good title to (in the case of all other personal property),
all of its properties and assets reflected in the financial statements referred
to in subsection 5.3 or in the most recent financial statements delivered
pursuant to subsection 6.1, in each case except for assets disposed of since
the date of such financial statements in the ordinary course of business or as
otherwise permitted under subsection 7.7. Except as permitted by this
Agreement, all such properties and assets are free and clear of Liens.
5.6 LITIGATION; ADVERSE FACTS.
There are no actions, suits, proceedings, arbitrations or
governmental investigations (whether or not purportedly on behalf of any of the
Loan Parties) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of any Loan
Party, threatened against or affecting any of the Loan Parties or any property
of any of the Loan Parties that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No Loan Party
is (i) in violation of any applicable laws that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
or (ii) subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other
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governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all material
tax returns and reports of the Loan Parties required to be filed by any of them
have been timely filed, and all material taxes, assessments, fees and other
governmental charges upon the Loan Parties and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. No Loan Party knows of any material
proposed tax assessment against any of the Loan Parties which is not being
actively contested by the relevant Loan Party in good faith and by appropriate
proceedings; provided that such reserves or other appropriate provisions, if
any, as shall be required in conformity with GAAP shall have been made or
provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
A. No Loan Party is in default in the performance,
observance or fulfillment of any of the material obligations, covenants or
conditions contained in any of its material Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
B. No Loan Party is a party to or is otherwise subject to
any agreements or instruments the performance of which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or any charter or other internal restrictions which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
No Loan Party is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act
or the Investment Company Act of 1940 or under any other federal or state
statute or regulation which may limit its ability to incur Indebtedness for
borrowed money or which may otherwise render all or any portion of the
Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. No Loan Party is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
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B. Following application of the proceeds of each Loan,
not more than 25% of the value of the assets (either of Holdings only or of the
Loan Parties on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Holdings or any other Loan Party and any Lender or any
Affiliate of any Lender, relating to Indebtedness and within the scope of
subsection 8.2, will be Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Each of the Loan Parties and each of their respective
ERISA Affiliates are in material compliance with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their material obligations under each Employee Benefit Plan.
B. No ERISA Events have occurred or are reasonably
expected to occur which individually or in the aggregate resulted in or might
reasonably be expected to result in a liability of any of the Loan Parties or
any of their respective ERISA Affiliates (unless no Loan Parties shall be
jointly and severally liable therefor) in excess of $3,000,000 during the term
of this Agreement.
C. Except as disclosed on Schedule 5.11 annexed hereto
and except to the extent required under Section 4980B of the Internal Revenue
Code, no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employees of any
of the Loan Parties or any of their respective ERISA Affiliates (unless no Loan
Parties shall be jointly and severally liable therefor). There are no material
liabilities of any Loan Party under any of the plans listed on Schedule 5.11
annexed hereto that are not reflected in the consolidated financial statements
of Company.
D. As of the most recent valuation date for any Pension
Plan, the Amount of Unfunded Benefit Liabilities, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation (1)
any Pension Plans which have a negative Amount of Unfunded Benefit Liabilities
and (2) any Pension Plan for which neither Company nor any other Loan Party
would have any liability if the Pension Plan then terminated), does not exceed
$6,000,000.
5.12 CERTAIN FEES.
Except as disclosed on Schedule 5.12 annexed hereto, no
material broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby, and each of
Holdings and Company hereby indemnifies Lenders against, and agrees that it
will hold Lenders harmless from, any claim, demand or liability for any such
broker's or finder's fees alleged to have been
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incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
A. Except as set forth in Schedule 5.13 annexed hereto:
(i) the operations of the Loan Parties (including, without
limitation, all operations and conditions at or in the Facilities)
comply in all material respects with all Environmental Laws;
(ii) each of the Loan Parties has obtained all Governmental
Authorizations under Environmental Laws necessary to their respective
operations, and all such Governmental Authorizations are in good
standing, and each of the Loan Parties is in compliance with all
material terms and conditions of such Governmental Authorizations;
(iii) no Loan Party has received (a) any notice or claim to
the effect that it is or may be liable to any Person as a result of or
in connection with any Hazardous Materials except as would not
reasonably be expected to have a Material Adverse Effect or (b) any
letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. Section 9604) or comparable state laws regarding any matter
which could reasonably be expected to result in a Material Adverse
Effect, and, to the best of Holdings' and Company's knowledge, none of
the operations of any of the Loan Parties is the subject of any federal
or state investigation relating to or in connection with any Hazardous
Materials at any Facility or at any other location;
(iv) none of the operations of any of the Loan Parties is
subject to any judicial or administrative proceeding alleging the
violation of or liability under any Environmental Laws which if
adversely determined could reasonably be expected to have a Material
Adverse Effect;
(v) none of the Loan Parties or, to the best knowledge of
Holdings or Company, any predecessor of the Loan Parties has filed any
notice under any Environmental Law indicating past or present treatment
or Release of Hazardous Materials at any Facility except as would not
reasonably be expected to have a Material Adverse Effect, and none of
Loan Parties' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent other than in compliance
in all material respects with all applicable Environmental Laws;
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(vi) no Hazardous Materials exist on, under or about any
Facility in a manner that has a reasonable possibility of giving rise
to an Environmental Claim having a Material Adverse Effect, and no Loan
Party has filed any notice or report of a Release of any Hazardous
Materials that has a reasonable possibility of giving rise to an
Environmental Claim having a Material Adverse Effect;
(vii) none of the Loan Parties or, to the best knowledge of
Holdings or Company, any of their respective predecessors has disposed
of any Hazardous Materials in a manner that has a reasonable
possibility of giving rise to an Environmental Claim having a Material
Adverse Effect;
(viii) no unpermitted underground storage tanks or surface
impoundments are on or at any Facility; and
(ix) no material Lien in favor of any Person relating to or
in connection with any Environmental Claim has been filed or has been
attached to any Facility.
B. None of the Loan Parties or any of their respective
Facilities or operations are subject to any outstanding written order or
agreement with any governmental authority or private party relating to (a) any
Environmental Laws or (b) any Environmental Claims which could reasonably be
expected to result in a liability to Company or any of its Subsidiaries, after
giving effect to indemnification payable to Company or any Subsidiary with
respect to the LaHabra Complex (Alpha Beta Store No. 1900), in excess of
$12,000,000 individually or in the aggregate.
C. None of the Loan Parties has any contingent liability
in connection with any Release of any Hazardous Materials by the Loan Parties
which could reasonably be expected to result in a liability to Company or any
of its Subsidiaries, after giving effect to indemnification payable to Company
or any Subsidiary with respect to the LaHabra Complex (Alpha Beta Store No.
1900), in excess of $12,000,000 individually or in the aggregate.
D. Notwithstanding anything in this subsection 5.13 to
the contrary, no event or condition has occurred with respect to the Loan
Parties relating to any Environmental Laws or any Release of Hazardous
Materials at any Facility or any other location, including, without limitation,
any matter disclosed on Schedule 5.13 annexed hereto, which, individually, or
in the aggregate, has had a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving any of the Loan Parties that could reasonably be expected to have a
Material Adverse Effect.
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5.15 SOLVENCY.
Each of the Loan Parties is and, upon the incurrence of any
Obligations by Company on any date on which this representation is made, will
be, Solvent.
5.16 DISCLOSURE.
No representation or warranty of the Loan Parties contained in
any Loan Document, or in any other document, certificate or written statement
furnished to Lenders by or at the direction of any Loan Party for use in
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state a material fact (known to
Holdings or Company, in the case of any document not furnished by it) necessary
in order to make the statements contained herein or therein not misleading in
light of the circumstances in which the same were made. Any projections and
pro forma financial information contained in such materials are based upon good
faith estimates and assumptions believed by Holdings or Company, as the case
may be, to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Holdings or Company
(other than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents,
certificates and statements furnished to Lenders for use in connection with the
transactions contemplated hereby.
5.17 INTELLECTUAL PROPERTY.
A. All Intellectual Property as of the Closing Date is
identified on Schedule 5.17 annexed hereto. Company and its Subsidiaries own,
or are licensed (to the extent required to be so licensed) to use, the
Intellectual Property and all such Intellectual Property is fully protected and
duly and properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filings or issuances, and the Loan
Parties own all of the right, title and interest in and to such Intellectual
Property under the applicable laws of the United States free and clear of any
Lien (other than Liens permitted under this Agreement), in each case except
where the failure to do or have the foregoing could not reasonably be expected
to result in a Material Adverse Effect.
B. No material claim has been asserted by any Person with
respect to the use of any such Intellectual Property, or challenging or
questioning the validity or effectiveness of any such Intellectual Property.
The use of such Intellectual Property by Company or any of its Subsidiaries
does not infringe on the rights of any Person, subject to such claims and
infringements as do not, individually or in the aggregate, give rise to
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any liabilities on the part of Company or any of its Subsidiaries that are
material to Company and its Subsidiaries, taken as a whole. The consummation
of the transactions contemplated by this Agreement will not in any material
manner or to any material extent impair the ownership of (or the license to
use, as the case may be) any of such Intellectual Property by Company or any of
its Subsidiaries.
5.18 REPRESENTATIONS AND WARRANTIES INCORPORATED FROM MERGER AGREEMENT.
A. Company has delivered to Agent a complete and correct
copy of the Merger Agreement and of all exhibits and schedules delivered in
connection with the Merger Agreement.
B. Each of the representations and warranties contained
in the Merger Agreement (other than those made by the Sellers) is true and
correct in all material respects as of the date hereof, except for those
specifically relating to another time or times which were or will be true and
correct in all material respects at such time or times, subject to the
qualifications set forth in the schedules to the Merger Agreement, and will be
true and correct in all material respects as of the Closing Date, except for
those specifically relating to another time or times which were or will be true
and correct in all material respects at such time or times, and such
representations and warranties are hereby incorporated herein by this reference
with the same effect as though set forth in their entirety herein, subject to
the qualifications set forth in the schedules to the Merger Agreement.
C. Notwithstanding anything in the Merger Agreement to
the contrary, the representations and warranties incorporated in this Agreement
by subsection 5.18B shall, solely for purposes of this Agreement, survive the
execution and delivery of this Agreement, the making of the Loans and the
issuance of Letters of Credit hereunder and the execution and delivery of the
Notes.
5.19 PERMITS.
Except as disclosed in Schedule 5.19 annexed hereto, each of the Loan
Parties, prior to and after giving effect to the Acquisition and the Mergers,
has such certificates, permits, licenses, franchises, consents, approvals,
authorizations and clearances that are material to the condition (financial or
otherwise), business or operations of any Loan Party ("PERMITS") and is (and
will be immediately after the consummation of the Acquisition and the Mergers)
in compliance in all material respects with all applicable laws as are
necessary to own, lease or operate its properties and to conduct its businesses
in the manner as presently conducted and to be conducted immediately after the
consummation of the Acquisition and the Mergers, and all such Permits are valid
and in full force and effect and will be valid and in full force and effect
immediately upon consummation of the Acquisition and the Mergers. Each of the
Loan Parties, prior to and after giving effect to the Acquisition and the
Mergers, is and will be in
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compliance in all material respects with its obligations under such Permits and
no event has occurred that allows, or after notice or lapse of time would
allow, revocation or termination of such Permits, except for any such
revocation or termination which could not reasonably be expected to
individually or in the aggregate have a Material Adverse Effect.
5.20 TRANSACTION DOCUMENTS.
Company has delivered to Lenders complete and correct copies of
the Transaction Documents, in each case as in effect as of the Closing Date,
and of all exhibits and schedules thereto.
5.21 MERGERS.
Upon the filing of the Certificates of the Mergers with the
Secretary of State of the State of Delaware, the Mergers shall become effective
and (i) as a result of the Parent Merger, Old Holdings, as the surviving
corporation of the Parent Merger, by operation of law (with no further action
required), will succeed to all of the rights, assets, properties, obligations
and liabilities of F4L Parent as of the effective date of the Parent Merger,
which date shall be the date of filing of the applicable Certificate of Merger,
(ii) as a result of the Reincorporation Merger, New Holdings, as the surviving
corporation of the Reincorporation Merger, by operation of law (with no further
action required), will succeed to all of the rights, assets, properties,
obligations and liabilities of Old Holdings as of the effective date of the
Reincorporation Merger, which date shall be the date of filing of the
applicable Certificate of Merger, (iii) as a result of the RSI Merger, Ralphs
Supermarkets, as the surviving corporation of the RSI Merger, by operation of
law (with no further action required), will succeed to all of the rights,
assets, properties, obligations and liabilities of Food 4 Less as of the
effective date of the RSI Merger, which date shall be the date of filing of the
applicable Certificate of Merger, and (iv) as a result of the RGC Merger,
Ralphs Supermarkets, as the surviving corporation of the RGC Merger, by
operation of law (with no further action required), will succeed to all of the
rights, assets, properties, obligations and liabilities of Ralphs Grocery as of
the effective date of the RGC Merger, which date shall be the date of filing of
the applicable Certificate of Merger.
SECTION 6. AFFIRMATIVE COVENANTS
Each of Holdings and Company covenants and agrees that, so long
as any of the Commitments hereunder shall remain in effect and until payment in
full of all of the Loans and other Obligations and the cancellation or
expiration of all Letters of Credit, unless Requisite Lenders shall otherwise
give prior written consent, each of Holdings and Company shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section
6.
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6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Agent and Lenders:
(i) Fiscal Period Financials: as soon as practicable and
in any event within 30 days (or, in the case of the last Fiscal Period
in any Fiscal Quarter (other than the last Fiscal Quarter in any Fiscal
Year), 45 days or, in the case of the last Fiscal Period in any Fiscal
Year, 90 days) after the end of each Fiscal Period ending after the
Closing Date, (a) the balance sheets of each Reporting Division as at
the end of such Fiscal Period, (b) the related statements of operations
and cash flows of such Reporting Division and (c) a schedule containing
a summary of comparable store sales growth for such Reporting Division
and for the conventional store businesses of Company and the
Subsidiaries included in clause (d) of the definition of "Reporting
Division" on a consolidated basis and for the warehouse store
businesses of Company and the Subsidiaries included in clause (d) of
the definition of "Reporting Division" on a consolidated basis, in each
case for such Fiscal Period and for the period from the beginning of
the then current Fiscal Year to the end of such Fiscal Period, setting
forth in each case in comparative form the corresponding figures for
(1) the corresponding periods of the previous Fiscal Year (other than,
during the first year following the Closing Date, the entities
identified in clauses (a) and (d) of the definition of "Reporting
Division") and (2) the corresponding figures from the plan and
financial forecast for the current Fiscal Year delivered pursuant to
subsection 6.1(xiii), all in reasonable detail and certified by the
chief financial officer of Company that they fairly present the
financial condition of such Reporting Division as at the dates
indicated and the results of its operations and its cash flows for the
periods indicated, subject to changes resulting from audit and normal
year-end adjustments;
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year and within 90 days after the end of the
fourth Fiscal Quarter of each Fiscal Year, the consolidated balance
sheets of each of Holdings and its Subsidiaries and Company and its
Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of operations, stockholders' equity and cash
flows of each of Holdings and its Subsidiaries and Company and its
Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous
Fiscal Year (other than, during the first year following the Closing
Date, the entities identified in clauses (a) and (d) of the definition
of "Reporting Division"), all as set forth in
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Holdings' or Company's report on Form 10-Q, as the case may be, and the
corresponding figures from the consolidated plan and financial forecast
for the current Fiscal Year delivered pursuant to subsection 6.1(xiii),
all in reasonable detail and certified by the chief financial officer
of Company that they fairly present the financial condition of Holdings
and its Subsidiaries and Company and its Subsidiaries, as the case may
be, as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments;
(iii) Year-End Financials: as soon as available and in any
event (a) within 90 days after the end of each Fiscal Year, the
consolidated balance sheets of each of Holdings and its Subsidiaries
and Company and its Subsidiaries as at the end of such Fiscal Year and
the related consolidated statements of operations, stockholders' equity
and cash flows of each of Holdings and its Subsidiaries and Company and
its Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year
(other than, during the first year following the Closing Date, the
entities identified in clauses (a) and (d) of the definition of
"Reporting Division"), all as set forth in Holdings' or Company's
report on Form 10-K, as the case may be, and the corresponding figures
from the consolidated plan and financial forecast delivered pursuant to
subsection 6.1(xiii) for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present the financial
condition of each of Holdings and its Subsidiaries and Company and its
Subsidiaries, as the case may be, as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, and (b) within 90 days after the end of each Fiscal Year
(or, if an extension has been obtained from the Securities and Exchange
Commission for filing such report after such 90th day, then on the date
of delivery of such report to the Securities and Exchange Commission
and in any event within 105 days after the end of such Fiscal Year) in
the case of such consolidated financial statements, (1) a report
thereon of Arthur Andersen LLP or other independent certified public
accountants of recognized national standing selected by Company and
satisfactory to Agent, which report shall be unqualified as to scope of
audit, shall express no doubts about the ability of each of Holdings
and its Subsidiaries and Company and its Subsidiaries to continue as a
going concern, and shall state that such consolidated financial
statements fairly present the consolidated financial position of each
of Holdings and its Subsidiaries and Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in
such financial statements) and that the examination by such accountants
in connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards and (2) a
letter from Arthur Anderson LLP or other independent certified public
accountants,
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substantially in the form of Exhibit XXIII-A annexed hereto with such
changes as are approved by Agent, acknowledging that Lenders will
receive such consolidated financial statements and such report and will
use such financial statements and report in their credit analyses of
Holdings and its Subsidiaries and Company and its Subsidiaries;
(iv) Officers' and Compliance Certificates: (a) together
with each delivery of financial statements of Holdings and its
Subsidiaries and Company and its Subsidiaries pursuant to subdivisions
(ii) and (iii) above, (1) an Officers' Certificate of Company stating
that the signers have reviewed the terms of this Agreement and have
made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of each of Holdings
and its Subsidiaries and Company and its Subsidiaries during the
accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the
existence as at the date of such Officers' Certificate, of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Company has taken, is taking and proposes to take with respect thereto;
and (2) a Compliance Certificate duly executed and duly completed in
all respects; and (b) within 100 days after the beginning of each
Fiscal Year and in any event on or prior to the date of any mandatory
prepayments made pursuant to subsection 2.4B(iii)(e) during such Fiscal
Year, an Officers' Certificate of Company setting forth the
Consolidated Excess Cash Flow for the Fiscal Year covered by such
financial statements and demonstrating in reasonable detail the
derivation of such Consolidated Excess Cash Flow;
(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the financial statements of Holdings and its
Subsidiaries or any Reporting Division delivered pursuant to
subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1 will
differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions
had no such change in accounting principles and policies been made,
then, subject to subsection 1.2, (a) together with the first delivery
of financial statements pursuant to subdivision (i), (ii), (iii) or
(xiii) of this subsection 6.1 following such change, financial
statements of Holdings and its Subsidiaries or any Reporting Division
for the current Fiscal Year to the effective date of such change, in
each case prepared on a pro forma basis as if such change had been in
effect during such periods, and (b) together with each delivery of
financial statements pursuant to subdivision (i), (ii), (iii) or (xiii)
of this subsection 6.1 following such change, such financial statements
prepared on a basis consistent with the accounting principles and
policies used in the
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preparation of the financial statements delivered immediately prior to
such change;
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of each of Holdings and
its Subsidiaries and Company and its Subsidiaries pursuant to
subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating
whether, in connection with their audit examination, any condition or
event that constitutes an Event of Default or Potential Event of
Default that relates to accounting matters has come to their attention
and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof; provided that
such accountants shall not be liable by reason of any failure to obtain
knowledge of any such Event of Default or Potential Event of Default
that would not be disclosed in the course of their audit examination,
and (b) stating that based on their audit examination nothing has come
to their attention that causes them to believe that the information
contained in the certificates delivered therewith pursuant to
subdivision (iv) above is not correct;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of any
comment letter submitted to the management of Holdings or Company by
independent certified public accountants in connection with each annual
audit of the financial statements of Holdings and its Subsidiaries or
Company and its Subsidiaries, as the case may be, made by such
accountants;
(viii) SEC Filings and Press Releases: promptly upon the
sending or filing thereof, copies of (a) all financial statements,
reports, notices and proxy statements sent or made available generally
by any Loan Party to its public security holders, (b) all regular and
periodic reports and all registration statements (other than on Form
S-8 or a similar form) and prospectuses, if any, filed by Holdings or
any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private
regulatory authority (other than reports of a routine or ministerial
nature which are not material), and (c) all press releases and other
statements made available generally by Holdings or any of its
Subsidiaries to the public concerning material developments in the
business of Holdings or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any Specified
Officer of any Loan Party obtaining knowledge (a) that a condition or
event that constitutes an Event of Default or Potential Event of
Default has occurred and is continuing, or becoming aware that any
Lender or Agent has given any notice (other than to Agent) or taken any
other action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to Holdings
or any of its Subsidiaries or taken any other action with respect to a
claimed
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default or event or condition of the type referred to in subsection
8.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Holdings or Company with the
Securities and Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6
of such Form as in effect on the date hereof), or (d) of the occurrence
of any event or change that has caused or evidences, either in any case
or in the aggregate, a Material Adverse Effect, an Officers'
Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action
taken by any such Person and the nature of such claimed Event of
Default, Potential Event of Default, default, event or condition, and
what action the relevant Loan Party has taken, is taking and proposes
to take with respect thereto;
(x) Litigation or Other Proceedings: promptly upon any
Specified Officer of any Loan Party obtaining knowledge of (X) the
institution of, or non-frivolous threat of, any action, suit,
proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting Holdings
or any of its Subsidiaries or any property of Holdings or any of its
Subsidiaries (collectively, "PROCEEDINGS") not previously disclosed in
writing by Company to Lenders or (Y) any material development in any
Proceeding that, in any case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions to occur or which have occurred
pursuant to the Transaction Documents;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters;
(xi) ERISA Events: promptly upon any Specified Officer of
any Loan Party becoming aware of the occurrence of or forthcoming
occurrence of any ERISA Event, a written notice specifying the nature
thereof, what action Holdings or any of its Subsidiaries or any of
their respective ERISA Affiliates has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by Holdings or any of its Subsidiaries or any of
their respective ERISA Affiliates with the Internal Revenue Service
with respect to each Pension Plan; (b) all
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notices received by Holdings or any of its Subsidiaries or any of their
respective ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (c) such other documents or governmental
reports or filings relating to any Employee Benefit Plan as Agent shall
reasonably request;
(xiii) Financial Plans: as soon as practicable and in any
event no later than 30 days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year as
customarily prepared by Holdings and Company, including without
limitation (a) forecasted balance sheets and forecasted statements of
operations and cash flows of Holdings and its Subsidiaries on a
consolidated basis and each Reporting Division for such Fiscal Year,
together with an explanation of the assumptions on which such forecasts
are based, (b) forecasted statements of operations and cash flows of
each Reporting Division for each Fiscal Period of such Fiscal Year,
together with an explanation of the assumptions on which such forecasts
are based, and (c) such other information and projections as any Lender
may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, an Officers' Certificate or other
report, in each case in form and substance satisfactory to Agent
outlining all material insurance coverage maintained as of the date of
such Officers' Certificate or report by Holdings and its Subsidiaries
and all material insurance coverage planned to be maintained by
Holdings and its Subsidiaries in the immediately succeeding Fiscal
Year;
(xv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports (other than routine follow-up reports to matters
previously disclosed to Lenders), whether prepared by personnel of
Holdings or any of its Subsidiaries or by independent consultants, with
respect to significant environmental matters at any Facility or which
relate to an Environmental Claim which could reasonably be expected to
result in a Material Adverse Effect;
(xvi) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Holdings or
Company;
(xvii) Changes Regarding Subsidiaries: (a) promptly upon any
Person becoming a Subsidiary of Holdings, a written notice setting
forth with respect to such Person (1) the date on which such Person
became a Subsidiary of Holdings and (2) all of the data required to be
set forth in Schedule 5.1 annexed hereto with respect to all
Subsidiaries of Holdings (it being understood that such written notice
shall be deemed to supplement Schedule 5.1 annexed hereto for all
purposes of this Agreement) and (b) together with each delivery of
financial statements of Holdings and its Subsidiaries and Company and
its Subsidiaries pursuant to subdivision (ii) above, a written notice
setting forth with respect to
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each Subsidiary of Holdings which was sold, merged, dissolved,
transferred or otherwise disposed of during the Fiscal Quarter covered
by such financial statements the circumstances of such transaction in
reasonable detail;
(xviii) Margin Determination Certificate: concurrently with
the delivery of the financial statements required under subsections
6.1(ii) and 6.1(iii), Company shall deliver a Margin Determination
Certificate;
(xix) Amendments to Certain Documents: within five Business
Days of entering into any amendment to or modification of any of the
tax sharing agreements referred to in subsection 7.12(viii) or the
warrant referred to in subsection 7.12(ix), a copy of such amendment or
modification; and
(xx) Other Information: with reasonable promptness, such
other information and data with respect to Holdings or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, each of Holdings and
Company will, and will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect its corporate existence and all rights and
franchises material to its business; provided that the corporate existence and
rights and franchises of those Subsidiaries of Holdings identified on Schedule
5.1 annexed hereto as inactive (so long as such Subsidiary owns assets in an
aggregate fair market value (without netting any such fair market value against
any liabilities of such Subsidiary) not exceeding $1,000,000) may be
terminated.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Each of Holdings and Company will, and will cause each
of its Subsidiaries to, pay all material taxes, assessments and other
governmental charges imposed upon it or any of its material properties or
assets or in respect of any of its income, businesses or franchises before any
material penalty accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums that
have become due and payable and that by law have or may become a Lien upon any
of its properties or assets, prior to the time when any material penalty or
fine shall be incurred with respect thereto; provided that no such charge or
claim need be paid if being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
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B. Each of Holdings and Company will not, nor will it
permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person (other than Holdings or any of
its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
A. Each of Holdings and Company will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all of the
Collateral (without limiting any obligations under the Collateral Documents)
and all other material properties used or useful in the business of Holdings
and its Subsidiaries (including, without limitation, Intellectual Property) and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof. Each of Holdings and Company will maintain
or cause to be maintained, with financially sound and reputable insurance
companies or associations or with self-insurance programs, in each case to the
extent consistent with prudent business practices and customary in their
respective industries, insurance with respect to its properties and business
and the properties and businesses of its Subsidiaries against loss or damage of
the kinds (including, in any event, business interruption insurance and, to the
extent commercially reasonable, earthquake insurance) and in the amounts
customarily carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses and owning similar
properties in the same general geographic areas in which Holdings, Company or
any of their respective Subsidiaries, as the case may be, operates. In
addition, each of Holdings and Company will maintain or cause to be maintained
flood insurance with respect to each Flood Hazard Property (as defined in
subsection 4.1N) included in the Collateral and located in a community that
participates in the National Flood Insurance Program. All insurance relating
to the Collateral shall comply with the insurance provisions of the Collateral
Documents.
B. In the event that Company or any of its Subsidiaries,
in connection with any casualty or casualties involving assets of Company or
any of its Subsidiaries, receives (a) proceeds of insurance in excess of
$5,000,000 in connection with any one casualty, or (b) aggregate proceeds of
insurance in excess of $15,000,000 from all such casualties (on a cumulative
basis, net of any proceeds already used to restore the assets affected by such
casualty or casualties or to make prepayments in accordance with subsection
2.4B(iii)(a)), Company shall immediately pay all such insurance proceeds (and
not just such excess) over to Agent, and Agent shall hold such proceeds in an
interest bearing account. Agent shall (i) so long as no Event of Default has
occurred and is continuing, disburse all such insurance proceeds (and any
earnings on amounts held in such interest bearing account) held by it to
Company, in accordance with and subject to such customary terms, conditions and
procedures as Agent shall require, for the sole purpose of restoring (or
reimbursing Company or any of its Subsidiaries for restoration costs previously
expended and for costs expended in obtaining such proceeds with respect to) the
affected assets, or, (ii) at Company's option (or if otherwise required
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by subsection 2.4B(iii)(a)), apply such proceeds and such earnings for the
purpose of making a prepayment in accordance with subsection 2.4. Company
hereby authorizes Agent to make such prepayments with such proceeds and such
earnings. If an Event of Default has occurred and is continuing, Agent may
elect, in its sole and absolute discretion, (i) to apply all or any portion of
such insurance proceeds and such earnings to the restoration of any of the
Collateral, subject to conditions determined by Agent, (ii) to disburse any
such insurance proceeds and such earnings to Company for the purposes set forth
in the immediately preceding sentence, (iii) to hold such insurance proceeds
and such earnings as additional Collateral under the Collateral Documents or
(iv) to apply such insurance proceeds and such earnings as provided for in the
Loan Documents.
6.5 INSPECTION; LENDER MEETING.
Each of Holdings and Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Holdings or any of its
Subsidiaries, including its and their financial and accounting records, and to
make copies and take extracts therefrom, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants (provided that representatives of Holdings or any of its
Subsidiaries may, if it so chooses, be present at or participate in any such
discussion), all upon reasonable notice and at such reasonable times during
normal business hours and as often as may be reasonably requested. Without in
any way limiting the foregoing, each of Holdings and Company will, upon the
request of Agent or Requisite Lenders, participate in a meeting of Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or such other location as may be agreed to by Company and Agent) at such time
as may be agreed to by Company and Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
Each of Holdings and Company shall, and shall cause each of its
Subsidiaries to, comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, noncompliance with which
could reasonably be expected to cause a Material Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
A. Each of Holdings and Company shall, and shall cause
each of its Subsidiaries to, exercise all due diligence in order to comply and
cause (i) all tenants under any leases or occupancy agreements affecting any
portion of the Facilities and (ii) all other Persons on or occupying such
property, to comply with all Environmental Laws.
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B. Each of Holdings and Company agrees that Agent may,
from time to time and in its sole and absolute discretion, retain, at Company's
expense, an independent professional consultant to review any report relating
to Hazardous Materials prepared by or for Holdings or any of its Subsidiaries
and to conduct its own investigation of any Facility currently owned, leased,
operated or used by Holdings or any of its Subsidiaries, and each of Holdings
and Company agrees to use its best efforts to obtain permission for Agent's
professional consultant to conduct its own investigation of any Facility
previously owned, leased, operated or used by Holdings or any of its
Subsidiaries. Each of Holdings and Company hereby grants (to the extent it is
authorized to do so) to Agent and its agents, employees, consultants and
contractors the right to enter into or on to the Facilities currently owned,
leased, operated or used by Holdings or any of its Subsidiaries to perform such
tests on such property as are reasonably necessary to conduct such a review
and/or investigation. Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by such Person and Agent, during normal
business hours and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at any such Facility or to
cause any damage or loss to any property at such Facility. Each of Holdings
and Company and Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Agent pursuant to this subsection
6.7B will be obtained and shall only be used by Agent and Lenders for the
purposes of Lenders' internal credit decisions, to monitor and police the Loans
and to protect Lenders' security interests, if any, created by the Loan
Documents. Agent agrees to deliver a copy of any such report to Company with
the understanding that Company acknowledges and agrees that (i) it will
indemnify and hold harmless Agent and each Lender from any costs, losses or
liabilities relating to Holdings' or any of its Subsidiaries' use of or
reliance on such report, (ii) neither Agent nor any Lender makes any
representation or warranty with respect to such report, and (iii) by delivering
such report to Company, neither Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
C. Company shall promptly advise Lenders in writing and
in reasonable detail of (i) any Release of any Hazardous Materials at any
Facility required to be reported to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws, (ii) any and all
written communications with any governmental authority or any adverse party
with respect to any Environmental Claims that have a reasonable possibility of
giving rise to a Material Adverse Effect or with respect to any Release of
Hazardous Materials at any Facility required to be reported to any federal,
state or local governmental or regulatory agency, (iii) any remedial action
taken by Holdings or any of its Subsidiaries or any other Person in response to
(x) any Hazardous Materials on, under or about any Facility, the existence of
which has a reasonable possibility of resulting in an Environmental Claim
having a Material Adverse Effect, or (y) any Environmental Claim that could
reasonably be expected to result in a Material Adverse Effect, (iv) Holdings'
or any of its Subsidiaries' discovery of any occurrence or condition on any
real property adjoining or in the vicinity of any Facility
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that could cause such Facility or any part thereof to be subject to any
material restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws, and (v) any request for information from
any governmental agency that suggests such agency is investigating whether
Holdings or any of its Subsidiaries may be potentially responsible for a
Release of Hazardous Materials.
D. Company shall promptly notify Lenders of (i) any
proposed acquisition of stock, assets, or property by Holdings or any of its
Subsidiaries that could reasonably be expected to expose Holdings or any of its
Subsidiaries to, or result in, Environmental Claims that could reasonably be
expected to have a Material Adverse Effect or that could reasonably be expected
to have a material adverse effect on any Governmental Authorization then held
by Holdings or any of its Subsidiaries and (ii) any proposed action to be taken
by Holdings or any of its Subsidiaries to commence manufacturing, industrial or
other operations that could reasonably be expected to subject Holdings or any
of its Subsidiaries to additional laws, rules or regulations which could
reasonably be expected to have a Material Adverse Effect, including, without
limitation, laws, rules and regulations requiring additional environmental
permits or licenses.
E. Each of Holdings and Company shall, at its own
expense, provide copies of such documents or information as Agent may
reasonably request in relation to any matters disclosed pursuant to this
subsection 6.7.
6.8 LOAN PARTIES' REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Each of Holdings and Company shall promptly take, and shall
cause each of its Subsidiaries promptly to take, any and all necessary remedial
action in connection with the presence, storage, use, disposal, transportation
or Release of any Hazardous Materials on, under or about any Facility in order
to comply with all applicable Environmental Laws and Governmental
Authorizations. In the event Holdings or any of its Subsidiaries undertakes
any remedial action with respect to any Hazardous Materials on, under or about
any Facility, Holdings or such Subsidiary shall conduct and complete such
remedial action in compliance with all applicable Environmental Laws, and in
accordance with the policies, orders and directives of all federal, state and
local governmental authorities except when, and only to the extent that,
Holdings' or such Subsidiary's liability for such presence, storage, use,
disposal, transportation or discharge of any Hazardous Materials is being
contested in good faith by Holdings or such Subsidiary.
6.9 INTEREST RATE PROTECTION.
Within 120 days of the Closing Date, Company shall obtain, and
shall thereafter cause to be maintained for a period of not less than two
years, one or more Interest Rate Agreements with respect to the Loans, in an
aggregate notional principal
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amount of not less than $300,000,000, each such Interest Rate Agreement to be
in form and substance satisfactory to Agent.
6.10 EXECUTION OF GUARANTY AND COLLATERAL DOCUMENTS BY FUTURE SUBSIDIARIES.
In the event that any Person becomes a Subsidiary of Company
after the date hereof, including, without limitation, Ralphs Supermarkets or
Ralphs Grocery as a result of the non-consummation of the RSI Merger or the RGC
Merger, as the case may be, and Crawford Stores, Inc., a California
corporation, Company will promptly notify Agent of that fact and cause (i) such
Subsidiary to execute and deliver to Agent a counterpart of the Guaranty, the
Security Agreement, the Trademark Security Agreement, Deeds of Trust, the
Deposit Accounts Security Agreement and the Pledge Agreement and to take all
such further action and execute all such further documents and instruments as
may be required to grant and perfect in favor of Agent, for the benefit of
Lenders, a first-priority security interest (subject only to Liens permitted
under this Agreement) in all of the real, personal and mixed property assets of
such Subsidiary (other than with respect to Excluded Sites and other than any
such assets which are subject to Liens permitted under subsection 7.2A(v) and
other Real Property Assets that such Subsidiary would not be obligated to
pledge to Agent pursuant to subsection 6.11 (it being understood and agreed
that all of the requirements of subsection 6.11 are applicable to the Real
Property Assets of such Subsidiary, with the date such Subsidiary became a
Subsidiary of the Company being treated for purposes of subsection 6.11 as the
date on which such Subsidiary acquired all of its Real Property Assets)) and
(ii) the parent of such Subsidiary to execute and deliver to Agent a
counterpart of the Pledge Agreement or a Pledge Amendment to the Pledge
Agreement previously executed by such parent effecting the pledge by such
parent to Agent of all of the capital stock of, or any other equity interest
in, such Subsidiary. Company shall deliver to Agent, together with such
Guaranty and such Collateral Documents, (i) certified copies of such
Subsidiary's Articles or Certificate of Incorporation, together with a good
standing certificate from the Secretary of State of the jurisdiction of its
incorporation, each to be dated a recent date prior to their delivery to Agent,
(ii) a copy of such Subsidiary's Bylaws, certified by its corporate secretary
or an assistant corporate secretary as of a recent date prior to their delivery
to Agent, (iii) a certificate executed by the Secretary or an assistant
secretary of such Subsidiary as to (a) the incumbency and signatures of the
officers of such Subsidiary executing the Guaranty and the Collateral Documents
to which such Subsidiary is a party and (b) the fact that the attached
resolutions of the Board of Directors of such Subsidiary authorizing the
execution, delivery and performance of the Guaranty and such Collateral
Documents are in full force and effect and have not been modified or rescinded,
(iv) the certificate or certificates evidencing all of the capital stock of
(or, if certificated, any other equity interest in) such Subsidiary, and (v) if
requested by Agent, a favorable opinion of counsel to such Subsidiary, in form
and substance satisfactory to Agent and its counsel, as to (a) the due
organization and good standing of such Subsidiary, (b) the due authorization,
execution and delivery by such Subsidiary of the Guaranty and such Collateral
Documents, (c) the
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enforceability of the Guaranty, and such Collateral Documents against such
Subsidiary, and (d) such other matters as Agent may reasonably request, all of
the foregoing to be satisfactory in form and substance to Agent and its
counsel. Upon the repayment of the indebtedness which is secured by the
capital stock of Bell Markets, Inc. as described in Schedule 7.2 annexed
hereto, Company shall cause Cala to pledge all of the capital stock of Bell
Markets, Inc. to Secured Party (as defined in the Pledge Agreement) pursuant to
the Pledge Agreement.
6.11 ADDITIONAL REAL PROPERTY.
After the Closing Date, each of Holdings and Company shall, and
shall cause its Subsidiaries to,
(I) with respect to each leasehold interest in Real Property
Assets listed in Schedule 4.1N annexed hereto (to the extent the items
listed below in this subsection 6.11 have not already been obtained) or
hereafter acquired by Company or any of its Subsidiaries (in either
case, the "LESSEE"), use its best efforts (which shall not be deemed to
include the payment of monetary consideration other than nominal
monetary consideration and out-of-pocket expenses incurred by any
lessor in connection with obtaining the items listed below, but shall
include, with respect to any leasehold interest acquired after the
Closing Date, efforts to include each of the items listed below in the
terms of the lease itself) to obtain and deliver to Agent as soon as
practicable, and if possible within three months after such acquisition
(or within six months after the Closing Date, with respect to the
leasehold interests listed in Schedule 4.1N annexed hereto):
(A) the agreement of the lessor (if required under the
lease) to the encumbrancing of such Lessee's leasehold interest
under the lease pursuant to a Deed of Trust and to the
assignment of such leasehold interest to Agent or its Affiliate
following a default hereunder, and if the lease allows the
lessor to unreasonably withhold consent to an assignment of the
leasehold interest by Agent or its Affiliate to a subsequent
third party assignee, the agreement of the lessor not to
unreasonably withhold such consent,
(B) with respect to Real Property Assets located
outside of California, the lessor's waiver of all right, title
and interest in the Lessee's personal property and fixtures
located on the leased premises,
(C) a license from the lessor for Agent to enter upon
the leased premises to take possession of or sell such personal
property and fixtures or to exercise other remedies, whether or
not the lease has been terminated,
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(D) the lessor's agreement to give Agent written
notice of any default by the Lessee under the lease, and not to
terminate the lease unless Agent fails to cure the default
within 30 days after receiving written notice from such lessor,
or within any longer cure period set forth in the lease, and
(E) excluding those leasehold interests in Kansas and
Missouri real property listed in Schedule 4.1N annexed hereto,
an original memorandum of the lease executed and acknowledged
by the lessor thereunder (or, in the case of an existing
leasehold interest which is of record and which is acquired by
the Lessee by assignment, a memorandum of or a recordable
duplicate original of such assignment, executed and
acknowledged by the assigning Lessee), in form sufficient to
give constructive notice (when recorded) of the Lessee's
leasehold interest under the lease to third-party purchasers
and encumbrancers of the affected real property and otherwise
in form reasonably satisfactory to Agent, together with
evidence of its recordation in all places necessary or
desirable, in the reasonable judgment of Agent, to give
constructive notice of the Lessee's leasehold interest to third
parties, and
(II) with respect to each Real Property Asset listed in
Schedule 4.1N annexed hereto (to the extent the items listed below in
this clause (ii) of this subsection 6.11 have not been obtained or
delivered to Agent on the Closing Date) and each Real Property Asset in
which Company or such Subsidiary acquires fee title or a leasehold
interest after the Closing Date (in each case excluding any Real
Property Asset which is and so long as it remains (A) an Excluded Site,
or (B) a leasehold interest as to which encumbrancing requires the
consent of the lessor, where Company and its Subsidiaries have been
unable to obtain the applicable lessor's consent thereto, or (C) an
asset subject to a Lien permitted under subsection 7.2A(iv) or (v))
(such non-excluded Real Property Assets collectively, "COVERED REAL
PROPERTY"), as soon as practicable and in any event within one month
after the applicable Real Property Asset becomes Covered Real Property,
deliver:
(A) fully executed counterparts of a Deed of Trust, or
an amendment to a Deed of Trust, in form satisfactory to Agent,
which Deed of Trust or amendment shall encumber such Covered
Real Property, together with evidence that counterparts of such
Deed of Trust or amendment have been recorded in all places to
the extent necessary or desirable, in the reasonable judgment
of Agent, so as to effectively create a valid and enforceable
first priority lien (subject only to Permitted Encumbrances) on
such Covered Real Property in favor of Agent (or such other
trustee as may be required or desired under local law) for the
benefit of Lenders,
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(B) if requested by Agent, a title report, title
commitment or other title search satisfactory to Agent obtained
by such Person in respect of such Covered Real Property,
(C) if requested by Agent, an opinion of counsel
(which counsel shall be reasonably satisfactory to Agent) in
the state in which such Covered Real Property is located with
respect to the enforceability of the Deeds of Trust recorded in
such state and such other matters as Agent may request, in form
and substance satisfactory to Agent,
(D) in the case of each such Covered Real Property
consisting of a leasehold interest, a copy of the lease
(including all amendments thereto), together with such estoppel
letters, consents, waivers and agreements from the lessor on
such real property as were obtained pursuant to clause (i)
above,
(E) environmental audits prepared by professional
consultants mutually acceptable to Company and Agent, in form,
scope and substance satisfactory to Agent in its reasonable
discretion,
(F) if Company or any of its Subsidiaries obtains an
owner's or lessee's policy of title insurance with respect to
such Covered Real Property, or if requested by Agent with
respect to any other Covered Real Property having an
acquisition cost or value (as estimated by Agent) in excess of
$2,000,000, a Title Insurance Policy, in an amount reasonably
satisfactory to Agent, with respect to Agent's lien thereon,
(G) information sufficient for Agent to determine
whether (1) any such Real Property Asset is Flood Hazard
Property and (2) the community in which each Flood Hazard
Property is located is participating in the National Flood
Insurance Program,
(H) upon Company's or such Subsidiary's receipt of
written notification from Agent (1) as to the existence of each
such Flood Hazard Property and (2) as to whether the community
in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program, written
acknowledgment of the receipt of such notification; and
(I) the evidence of insurance with respect to such
Real Property Asset required to be provided to Agent pursuant
to the terms of the Deeds of Trust, including flood insurance
with respect to each Flood Hazard Property located in a
community that is participating in the National Flood Insurance
Program.
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Company shall, and shall cause each of its Subsidiaries to,
permit any authorized representatives designated by Agent to visit and inspect
any Real Property Asset for the purpose of obtaining an appraisal of value,
conducted by consultants retained by Agent in compliance with all applicable
banking regulations.
6.12 NOTICE REGARDING CHANGE OF CONTROL OFFER.
Within 30 days after the Closing Date, Company shall deliver to
the trustees under the Old RGC 9% Subordinated Note Indenture and the Old RGC
10-1/4% Subordinated Note Indenture written notice that Company will offer to
purchase all remaining Old RGC 9% Subordinated Notes and Old RGC 10-1/4%
Subordinated Notes pursuant to the Change of Control Offer and as provided in
the applicable indenture, and Company shall at such time deliver to Agent a
copy of such notices.
SECTION 7. NEGATIVE COVENANTS
Each of Holdings and Company covenants and agrees that, so long
as any of the Commitments hereunder shall remain in effect and until payment in
full of all of the Loans and other Obligations and the cancellation or
expiration of all Letters of Credit, unless Requisite Lenders shall otherwise
give prior written consent, each of Holdings and Company shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section
7.
7.1 INDEBTEDNESS.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(i) the Loan Parties may become and remain liable with
respect to Indebtedness which is included among the Obligations;
(ii) Holdings and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases;
provided that such Capital Leases are permitted under the terms of
subsection 7.9;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any
wholly-owned
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Subsidiary of Company may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Subsidiary of
Company; provided that (a) all such intercompany Indebtedness shall be
evidenced by promissory notes that are pledged to Agent pursuant to the
terms of the applicable Collateral Document, (b) all such intercompany
Indebtedness owed by Company to any of its Subsidiaries shall be
subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory notes or
an intercompany subordination agreement, in each case approved by
Agent, and (c) any payment by any Subsidiary of Company under any
guaranty of the Obligations shall result in a pro tanto reduction of
the amount of any intercompany Indebtedness owed by such Subsidiary to
Company or to any of its Subsidiaries for whose benefit such payment is
made;
(v) Holdings may become and remain liable with respect to
Indebtedness evidenced by the Seller Debentures and the Holdings
Discount Debentures and may remain liable with respect to Indebtedness
evidenced by the Holdings Discount Notes; provided that the aggregate
face amount of outstanding Holdings Discount Notes shall not exceed the
lesser of the aggregate face amount of such debt Securities outstanding
as of the Closing Date and $8,500,000 at any time;
(vi) Company may become and remain liable with respect to
Indebtedness evidenced by the Old F4L Senior Notes, the Old F4L Senior
Subordinated Notes, the New F4L Senior Notes, the New F4L Senior
Subordinated Notes, the New RGC Senior Subordinated Notes, the Old RGC
9% Subordinated Notes and the Old RGC 10-1/4% Subordinated Notes;
provided that (a) the aggregate principal amount of outstanding Old F4L
Senior Notes and Old F4L Senior Subordinated Notes shall not exceed the
lesser of the aggregate principal amount of such debt Securities
outstanding as of the Closing Date and $36,800,000 at any time, (b) the
aggregate principal amount of outstanding Old F4L Senior Notes, Old F4L
Senior Subordinated Notes, New F4L Senior Notes and New F4L Senior
Subordinated Notes shall not exceed the lesser of the aggregate
principal amount of such debt Securities outstanding as of the Closing
Date and $670,000,000 at any time, (c) the aggregate principal amount
of outstanding Old RGC 9% Subordinated Notes and Old RGC 10-1/4%
Subordinated Notes shall not exceed the lesser of the aggregate
principal amount of such debt Securities outstanding as of the Closing
Date and $10,000,000 at any time and (d) the outstanding aggregate
principal amount of the New RGC Senior Subordinated Notes, the Old RGC
9% Subordinated Notes and the Old RGC 10-1/4% Subordinated Notes shall
not exceed the lesser of the aggregate principal amount of such debt
Securities outstanding as of the Closing Date and $530,000,000 at any
time;
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(vii) Company and its Subsidiaries, as applicable, may
remain liable with respect to each of the items of existing
Indebtedness described in Schedule 7.1 annexed hereto and any
Indebtedness incurred to refinance such existing Indebtedness; provided
that after giving effect to such refinancing Indebtedness and the
repayment of the corresponding existing Indebtedness with the proceeds
thereof, (a) the aggregate principal amount of the refinancing
Indebtedness and the corresponding existing Indebtedness so refinanced
shall not be greater than the outstanding principal amount of such
existing Indebtedness immediately prior to such refinancing, (b) the
weighted average life to maturity of such refinancing Indebtedness
shall be no shorter than the existing Indebtedness being refinanced and
(c) such refinancing Indebtedness shall not be secured by any
additional property than that which secures the existing Indebtedness
being refinanced;
(viii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness incurred to finance (or may assume
Indebtedness originally incurred to finance) (a) the purchase price of
equipment, fixtures and any other similar property or the remodeling or
other improvement costs of any facility of Company or any of its
Subsidiaries or (b) the purchase price of any Real Property Assets
consisting of fee interests in stores; provided that the aggregate
principal amount of such Indebtedness when incurred (and, in the case
of assumed Indebtedness, when originally incurred) shall not be less
than 80% or more than 100% of the fair market value of (a) the
equipment, fixtures and any other similar property acquired plus the
reasonable installation and delivery charges associated therewith or
the remodeling or other improvement costs relating to such facility or
(b) such Real Property Assets, as applicable; provided further that (1)
the aggregate principal amount of all such Indebtedness incurred or
assumed during any Fiscal Year for purposes described in the first
clause (a) of this subsection 7.1(viii) shall not exceed $20,000,000
and (2) the aggregate principal amount of all Indebtedness incurred to
finance the purchase price of any such Real Property Assets (together
with assumed Indebtedness originally incurred to finance the purchase
price of any such Real Property Assets) shall not exceed $10,000,000 at
any time;
(ix) Subsidiaries of Company acquired after the Closing
Date, the acquisition of which is permitted under subsection 7.3(v) and
subsection 7.7(ii), may remain liable with respect to Indebtedness
existing immediately prior to the time any such entity became a
Subsidiary of Company in an aggregate amount for all such Subsidiaries
not to exceed $4,000,000 at any time outstanding; provided that such
Indebtedness is not incurred in contemplation of such acquisition;
(x) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness represented by Deferred Trade
Payables in an aggregate
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amount for all such Indebtedness not to exceed $5,000,000 at any time
outstanding;
(xi) Food 4 Less GM, Inc. may become and remain liable with
respect to Indebtedness incurred by Golden Alliance in an aggregate
amount not to exceed $2,000,000 at any time outstanding; provided that
such Indebtedness of Food 4 Less GM, Inc. arises solely as a result of
its status as a general partner of Golden Alliance;
(xii) Company may become and remain liable with respect to
Indebtedness evidenced by promissory notes and issued to employees or
former employees of Company and its Subsidiaries in lieu of cash
payments for stock of Holdings required to be repurchased pursuant to
Company's employee stock ownership plan; provided that the aggregate
amount of such Indebtedness does not exceed $4,000,000 at any time
outstanding; and
(xiii) Company and its Subsidiaries may become and remain
liable with respect to other unsecured Indebtedness in an aggregate
principal amount not to exceed $15,000,000 at any time outstanding.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Each of Holdings and Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with
respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Holdings or any of
its Subsidiaries, whether now owned or hereafter acquired, or any income or
profits therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien with
respect to any such property, asset, income or profits under the Uniform
Commercial Code of any State or under any similar recording or notice statute,
except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents,
including Liens securing its obligations to a Lender or an Affiliate of
such Lender which is a counterparty to an Interest Rate Agreement
permitted under subsection 7.4(ii);
(iii) existing Liens described in Schedule 7.2 annexed
hereto;
(iv) Liens on (a) Real Property Assets consisting of fee
interests in stores or (b) equipment, fixtures and other similar
property of Company or any of its Subsidiaries, in each case securing
Indebtedness described in subsections 7.1(iii) and 7.1(viii) and Liens
on inventory of Company and its Subsidiaries,
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securing Indebtedness described in subsection 7.1(x); provided that
such Liens shall extend only to the equipment, fixtures and other
similar property and inventory so financed and the proceeds thereof;
provided, further, that with respect to any such Lien described in
clause (a) above, (1) no Event of Default or Potential Event of Default
shall have occurred and be continuing at the time of incurrence or
assumption of such Lien, (2) such Lien is limited to such Real Property
Assets (and equipment located in or on such Real Property Assets), (3)
the Indebtedness secured by such Lien is Non-Recourse Indebtedness, and
(4) the aggregate principal amount of all Indebtedness secured by all
such Liens shall not at any time exceed $10,000,000;
(v) Liens securing Indebtedness permitted under subsection
7.1(ix), which Liens are existing prior to the time the entity which
incurred such Indebtedness became a Subsidiary of Company; provided
that such Liens were not incurred in connection with, or in
contemplation of, the acquisition of such Subsidiary and such Liens
extend to or cover only the property and assets of such entity which
were covered by such Liens and which were owned by such entity, in each
case at the time such entity became a Subsidiary of Company;
(vi) Liens in favor of third parties as consignors (or as
creditors of such consignors) in goods which are delivered to Company
or any of its Subsidiaries by such third parties on consignment in the
ordinary course of business, the value of which goods so held on
consignment shall at no time exceed $10,000,000 in the aggregate for
Company and its Subsidiaries;
(vii) Liens not otherwise permitted by clauses (i) through
(vi) above securing Indebtedness of Company or any of its Subsidiaries;
provided that (a) the aggregate principal amount of Indebtedness
secured by Liens permitted by this clause (vii) shall not exceed
$6,000,000 at any time outstanding, (b) any such Indebtedness shall be
permitted under subsection 7.1 and (c) such Liens shall not attach to
any Collateral; and
(viii) the replacement, extension or renewal of any Lien
permitted by this subsection 7.2A upon or in the same property subject
to such Lien and as security for the same obligations or any
refinancings thereof; provided that such Lien does not extend to or
cover any property other than the property covered by such Lien
immediately prior to such replacement, extension or renewal of such
Lien and the principal of the obligations secured thereby is not
increased.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If any of Holdings or any
of its Subsidiaries shall create or assume any Lien upon any of its properties
or assets, whether now owned or hereafter acquired, other than Liens excepted
by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien
equally and ratably with any and all other
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Indebtedness secured thereby as long as any such Indebtedness shall be so
secured; provided that, notwithstanding the foregoing, this covenant shall not
be construed as a consent by Requisite Lenders to the creation or assumption of
any such Lien not permitted by the provisions of subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale and except as
provided in the Senior Debt Indentures and the Subordinated Debt Indentures,
neither Holdings nor any of its Subsidiaries shall enter into any agreement
prohibiting the creation or assumption of any Lien upon any of its properties
or assets, whether now owned or hereafter acquired. The foregoing shall not
prohibit the execution or renewal of a store lease which by its term prohibits
the hypothecation of the leasehold interest thereunder (but does not prohibit
the incurrence of liens on any property of Holdings and its Subsidiaries other
than such leasehold interest and equipment related thereto) if, despite the
best efforts of Holdings and its Subsidiaries in accordance with subsection
6.11, the lessor will not agree to permit such hypothecation.
7.3 INVESTMENTS; JOINT VENTURES.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, make or own any Investment
in any Person, including any Joint Venture, except:
(i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Holdings and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date (after giving effect
to the Mergers) in any Subsidiaries of Holdings and described on
Schedule 5.1 annexed hereto as in effect on the Closing Date and
Holdings may make additional capital contributions to Company;
(iii) Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1(iv);
(iv) Company and its Subsidiaries may continue to own the
existing Investments owned by them and described in Schedule 7.3
annexed hereto;
(v) Company and its Subsidiaries may create or acquire new
Subsidiaries to the extent otherwise permitted under this Agreement;
provided that (a) any such new Subsidiary is wholly-owned by Company or
one of its wholly-owned Subsidiaries and the provisions of subsections
6.10 and 6.11 have been complied with and (b) to the extent such
creation or acquisition constitutes a
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Consolidated Capital Expenditure, such Consolidated Capital Expenditure
is permitted under subsection 7.8;
(vi) Food 4 Less GM, Inc. may continue to own the
Investments owned by it as of the Closing Date in Golden Alliance and
may make and own additional Investments in Golden Alliance in an
aggregate amount not to exceed $4,000,000 at any time; provided that
all such Investments are made pursuant to the provisions of the Golden
Alliance Agreement;
(vii) Company or any of its Subsidiaries may, so long as no
Potential Event of Default or Event of Default has occurred and is
continuing or occurs as a result thereof, make Development Investments
in or to any Developer; provided that (a) no such Development
Investment shall be permitted unless, at the time of the making of such
Development Investment, the Development Site and the store located or
to be located at the Development Site have been leased or irrevocably
committed by the Developer to be leased to Company or one of its
Subsidiaries, (b) neither Company nor any of its Subsidiaries may be or
become a general partner of any Developer or otherwise be liable in any
manner for any Indebtedness or any other obligations of any Developer
(other than pursuant to customary provisions contained in any lease
pertaining to a Development Site or a store leased to Company or one of
its Subsidiaries) and (c) the aggregate Development Investments,
together with the maximum aggregate liability, contingent or otherwise,
of Company and its Subsidiaries in respect of all Contingent
Obligations under subsection 7.4(ix), shall not exceed $35,000,000 at
any time outstanding;
(viii) Company and its Subsidiaries may accept promissory
notes received in consideration of, or the deferral of a portion of the
sales price accepted with respect to, any Asset Sale; provided that (a)
not more than 25% of the aggregate sales price for all Required
Dispositions (all of which must be made on or prior to the first
anniversary of the Closing Date) may be in the form of such promissory
notes or a deferred portion of such sales price, (b) not more than 25%
of the aggregate sales price for all Planned Dispositions in any Fiscal
Year (other than the Fiscal Year in which the aggregate cash proceeds
from all Planned Dispositions and Required Dispositions on a cumulative
basis from the Closing Date first exceeds $20,000,000 (the "SPECIFIED
FISCAL YEAR") and each Fiscal Year thereafter), and not more than 50%
of the aggregate sales price for all Planned Dispositions in the
Specified Fiscal Year or any Fiscal Year thereafter, may be in the form
of such promissory notes or a deferred portion of such sales price, (c)
the aggregate principal amount of such promissory notes and the
deferred portion of such sales prices related to all Asset Sales (other
than Required Dispositions and Planned Dispositions) shall not at any
time exceed $10,000,000 and (d) any such promissory notes so accepted
shall be pledged as security for the Obligations pursuant to the
applicable Collateral Document;
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(ix) Company and its Subsidiaries may make and own
Investments received in connection with the bankruptcy of suppliers and
customers or received pursuant to a plan of reorganization of any
supplier or customer, in each case in settlement of delinquent
obligations or disputes with such suppliers or customers;
(x) So long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, Company or any of its
Subsidiaries may make loans to its employees for the purpose of
purchasing common stock of Holdings; provided that the aggregate amount
of such loans shall not exceed $4,000,000 at any time outstanding;
(xi) Company and its Subsidiaries may make loans to
redevelopment agencies for business purposes consistent with past
practices in an aggregate amount not to exceed $10,000,000 at any time
outstanding;
(xii) Company and its Subsidiaries may make and own
Investments (a) in suppliers in anticipation of becoming a customer of
such suppliers and in lieu of deposits, cash discounts or concessions
and (b) in connection with joint ventures with suppliers entered into
in the ordinary course of business; provided that the aggregate amount
of all such Investments under clauses (a) and (b), together with the
amount of guarantees permitted under subsection 7.4(v), shall not
exceed $5,000,000 at any time outstanding;
(xiii) Company may make and maintain loans to Holdings for
the purposes described in subsection 7.5A(viii) in an aggregate amount
at any time outstanding which, together with the amount of Restricted
Junior Payments made for such purposes, shall not exceed the amount of
Restricted Junior Payments Company may make to Holdings under
subsection 7.5A(viii) at the time any such loan is made;
(xiv) Company and its Subsidiaries may purchase common stock
of Holdings from an employee stock ownership plan of any Loan Party or
from participants or former participants in any such plan or from any
employee or former employee of any Loan Party as required pursuant to
the applicable plan or agreement; provided that the cash portion of
such purchases and the cash payments with respect to promissory notes
issued to such participants or holders shall not exceed the sum of (a)
$5,000,000 in any Fiscal Year plus (b) the aggregate amount of cash
proceeds received by Holdings in such Fiscal Year from its sale of
shares of its common stock to an employee stock ownership plan of any
Loan Party or to participants in any such plan or to any employee of
any Loan Party during such Fiscal Year; provided, further, that no such
purchase or cash payment will be permitted if it is prohibited under
any Senior Debt Indenture or any Subordinated Debt Indenture; and
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(xv) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
$5,000,000.
7.4 CONTINGENT OBLIGATIONS.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create or become or remain
liable with respect to any Contingent Obligation, except:
(i) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit; provided that
no Loan Party shall have granted any Lien securing any obligations
(including any reimbursement obligations) relating to any Existing
Letters of Credit (other than pursuant to the Loan Documents);
(ii) Company may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements required under
subsection 6.9 and under other Interest Rate Agreements with respect to
Indebtedness, which Interest Rate Agreements are in form and substance
satisfactory to Agent;
(iii) Holdings may become and remain liable with respect to
Contingent Obligations in respect of the Holdings Guaranty and
Company's Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of the Guaranty, including Contingent
Obligations thereunder for the benefit of a Lender or an Affiliate of
such Lender which is a counterparty to an Interest Rate Agreement
permitted under subsection 7.4(ii);
(iv) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets other than
guaranties of Indebtedness incurred by any Person acquiring all or any
portion of such assets for the purpose of financing such acquisition;
provided that the maximum assumable liability in respect of all such
obligations shall at no time exceed the gross proceeds actually
received by Company and its Subsidiaries in connection with such Asset
Sales and other sales;
(v) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations under guarantees in the
ordinary course of business of the obligations of suppliers, customers,
franchisees and licensees of Company and its Subsidiaries in an
aggregate amount which, together with the amount of Investments
permitted under subsection 7.3(xii), shall not exceed at any time
$5,000,000;
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(vi) Subsidiaries of Company may become and remain liable
with respect to Contingent Obligations in respect of any Indebtedness
of Company permitted by subsection 7.1(vi) pursuant to guarantees
entered into by any Subsidiary of Company; provided that any such
guarantee entered into by any Subsidiary of Company after the Closing
Date shall be in the form of such guarantee as in effect on the Closing
Date and delivered to Agent pursuant to subsection 4.1L, as such form
may be amended from time to time to the extent permitted under
subsection 7.15B;
(vii) Company and its Subsidiaries, as applicable, may
remain liable with respect to existing Contingent Obligations described
in Schedule 7.4 annexed hereto;
(viii) Holding and Company may become and remain liable with
respect to Contingent Obligations under guarantees in respect of
Capital Leases and Operating Leases entered into by Company or any of
Company's Subsidiaries which are permitted under subsection 7.9;
(ix) Company and its Subsidiaries may, so long as no
Potential Event of Default or Event of Default has occurred and is
continuing at the time of becoming liable therefor or occurs as a
result thereof, become and remain liable with respect to Contingent
Obligations that are (x) guaranties of Development Investments
described in clause (a) of the term "Development Investments" or (y)
commitments by Company or any of its Subsidiaries to make a Development
Investment; provided that, with respect to both clause (x) and clause
(y) above, (1) no such Contingent Obligations shall be permitted
unless, at the time of becoming liable with respect to such Contingent
Obligations, the Development Site and the store located or to be
located at the Development Site have been leased or irrevocably
committed by the Developer to be leased to Company or one of its
Subsidiaries, (2) neither Company nor any of its Subsidiaries may be or
become a general partner of any Developer or otherwise be liable in any
manner for any Indebtedness or any other obligations of any Developer
(other than pursuant to customary provisions contained in any lease
pertaining to a Development Site or a store leased to Company or one of
its Subsidiaries) and (3) the maximum aggregate liability, contingent
or otherwise, of Company and its Subsidiaries in respect of all
Contingent Obligations under this subsection 7.4(ix), together with the
aggregate Development Investments under subsection 7.3(vii), shall not
exceed $35,000,000 at any time outstanding; and
(x) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and
its Subsidiaries in respect of all such Contingent Obligations shall at
no time exceed $8,000,000.
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7.5 RESTRICTED JUNIOR PAYMENTS; OTHER RESTRICTED PAYMENTS.
A. Each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Junior Payment; provided that, so
long as no Event of Default or Potential Event of Default shall have occurred
and be continuing or occurs as a result thereof, (i) Company may make cash
dividends to Holdings to enable Holdings to pay (a) up to $100,000,000 in cash
consideration, which, together with the issuance of Seller Debentures and the
Holdings Discount Debentures, will enable Holdings to acquire 48% of the
capital stock of Ralphs Supermarkets, (b) premium, fees and expenses related to
the Acquisition and all other transactions related thereto and all interest
accrued on or prior to the Closing Date with respect to any Indebtedness of any
Loan Party in an aggregate amount of not more than $173,000,000 minus the
amount of premium, fees and expenses related to the Acquisition and all other
transactions related thereto and all interest accrued on or prior to the
Closing Date with respect to any Indebtedness of any Loan Party, in each case
paid or payable, without duplication, by the other Loan Parties, and (c) to RGC
Partners, L.P. costs, expenses and indemnity payments, in each case to the
extent required under the Subscription Agreement, (ii) on the Closing Date,
Company may exchange the New RGC Senior Subordinated Notes for the Old RGC 9%
Subordinated Notes and the Old RGC 10-1/4% Subordinated Notes and make cash
payments to the holders thereof, and purchase for cash the Old RGC 9%
Subordinated Notes and the Old RGC 10-1/4% Subordinated Notes, and may pay
accrued interest on the Old RGC 9% Subordinated Notes and the Old RGC 10-1/4%
Subordinated Notes, in each case pursuant to the Ralphs Grocery Offers, (iii)
on the Closing Date, Company may exchange the New F4L Senior Subordinated Notes
for the Old F4L Senior Subordinated Notes and pay accrued interest thereon and
make cash payments to the holders thereof, in each case pursuant to the Food 4
Less Offers, (iv) Company may purchase, on the Change of Control Purchase Date
using the proceeds of the Revolving Loans, all Old RGC 9% Subordinated Notes
and Old RGC 10-1/4% Subordinated Notes outstanding after the Closing Date
pursuant to the Change of Control Offer, (v) Holdings may make cash interest
payments to the holders of the Seller Debentures to the extent required by the
terms of the Seller Debenture Indenture and to the holders of the Holdings
Discount Debentures to the extent required by the terms of the Holdings
Discount Debenture Indenture, (vi) Company may make cash dividends on the
capital stock of Company to the extent necessary to provide Holdings with funds
to make required cash interest payments with respect to the Holdings Discount
Debentures, the Holdings Discount Notes and the Seller Debentures, (vii)
Company may make payments of regularly scheduled interest and regularly
scheduled payments of principal in respect of the Old RGC 9% Subordinated
Notes, the Old RGC 10-1/4% Subordinated Notes and the Old F4L Senior
Subordinated Notes, and Company may make payments of regularly scheduled
interest in respect of the New RGC Senior Subordinated Notes and the New F4L
Senior Subordinated Notes, in each case in accordance with the terms of, and to
the extent required by, and subject to the subordination provisions contained
in the applicable Subordinated Debt Indenture, (viii) Company may make cash
dividends to
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Holdings for the purpose of paying Holdings' general operating expenses,
franchise tax obligations, accounting, legal, corporate reporting and
administrative expenses incurred in the ordinary course of their respective
businesses in an amount not to exceed $500,000 in the aggregate in any Fiscal
Year, and to pay Holdings' and its Subsidiaries' income taxes and the costs and
expenses of registration of securities and securities related filings under
applicable laws by Holdings, (ix) Company may redeem, repurchase or retire
Subordinated Indebtedness in the amounts and with the proceeds and to the
extent permitted by the provisions of subsections 2.4B(iii)(c) and
2.4B(iii)(e), (x) Company and its Subsidiaries may purchase shares of common
stock of Holdings from an employee stock ownership plan of any Loan Party or
from participants or former participants in such plan and from employees or
former employees of any Loan Party as required pursuant to the provisions of
agreements and plans permitted under subsection 7.12 in an aggregate amount not
to exceed the amount permitted under subsection 7.3(xiv) in any Fiscal Year,
(xi) Company may make cash dividends to Holdings to enable Holdings to make
payments permitted pursuant to subsection 7.12(iv), (xii) Company and its
Subsidiaries may dividend to Holdings any Holdings Common Stock purchased by
Company or any such Subsidiary from any employee stock ownership plan of
Company or such Subsidiary or from participants or former participants in such
plan or employees or former employees of Company or such Subsidiary as required
pursuant to the provisions of agreements and plans permitted under subsection
7.12 in amounts permitted under subsection 7.3(xiv), (xiii) Holdings may
purchase on the Closing Date the Holdings Discount Notes in accordance with the
terms and provisions of the Holdings Offer and (xiv) on or prior to the 30th
day following the Closing Date, Company may make cash dividends to Holdings not
exceeding $3,700,000 to enable Holdings to purchase common stock of Old
Holdings from holders thereof who have exercised statutory dissenters' rights
in connection with the Parent Merger and Holdings may purchase such common
stock from such holders. Neither Holdings nor Company nor any of their
Subsidiaries will directly or indirectly declare, order, pay or make, or set
apart any sum or property for, any Restricted Junior Payment or agree to do so
except as permitted by this subsection 7.5.
B. Each of Holdings and Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, declare, order, pay, make or set
apart any sum for any payment or prepayment of principal of, premium, if any,
or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Senior Indebtedness; provided that, so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing or occurs as a
result thereof, (i) on the Closing Date, Company may exchange the New F4L
Senior Notes for the Old F4L Senior Notes and make cash payments to the holders
thereof, in each case pursuant to the Food 4 Less Offers, (ii) Company may make
payments of regularly scheduled interest and regularly scheduled payments of
principal in respect of any Senior Indebtedness in accordance with the terms of
and to the extent required by the applicable Senior Debt Indenture, (iii)
Company may redeem, repurchase or retire Senior Indebtedness (other than the
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Loans) in the amounts and with the proceeds and to the extent permitted by the
provisions of subsections 2.4B(iii)(c) and 2.4B(iii)(e), (iv) on the Closing
Date, Company may purchase the Holdings Discount Notes and may pay accrued
interest thereon pursuant to the Holdings Offer, and (v) Holdings may make cash
interest payments to the holders of Holdings Discount Notes in accordance with
the terms of and to the extent required by the terms of the Holdings Discount
Note Indenture.
7.6 FINANCIAL COVENANTS.
A. MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall not permit
the ratio of (i) Consolidated Adjusted EBITDA plus Consolidated Rental Payments
to (ii) Consolidated Fixed Charges (a) for the Fiscal Quarter ending October 8,
1995, to be less than 1.21:1.00, (b) for the two-Fiscal Quarter period ending
January 28, 1996, to be less than 1.24:1.00, (c) for the three-Fiscal Quarter
period ending April 21, 1996, to be less than 1.30:1.00, and (d) thereafter,
for any consecutive four-Fiscal Quarter period ending as of the last day of any
Fiscal Quarter occurring during any of the periods set forth below to be less
than the correlative ratio indicated:
MINIMUM FIXED
PERIOD CHARGE COVERAGE RATIO
------------------------ ---------------------
2nd Fiscal Quarter, 1996 1.31:1.00
3rd Fiscal Quarter, 1996 1.32:1.00
4th Fiscal Quarter, 1996 1.37:1.00
1st Fiscal Quarter, 1997 1.39:1.00
2nd Fiscal Quarter, 1997 1.41:1.00
3rd Fiscal Quarter, 1997 1.43:1.00
4th Fiscal Quarter, 1997 1.47:1.00
1st Fiscal Quarter, 1998 1.49:1.00
2nd Fiscal Quarter, 1998 1.51:1.00
3rd Fiscal Quarter, 1998 1.53:1.00
4th Fiscal Quarter, 1998 1.56:1.00
1st Fiscal Quarter, 1999 1.58:1.00
2nd Fiscal Quarter, 1999 1.59:1.00
3rd Fiscal Quarter, 1999 1.60:1.00
4th Fiscal Quarter, 1999 1.60:1.00
1st Fiscal Quarter, 2000 1.60:1.00
2nd Fiscal Quarter, 2000 1.60:1.00
3rd Fiscal Quarter, 2000 1.55:1.00
4th Fiscal Quarter, 2000
and each Fiscal Quarter
thereafter 1.50:1.00
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B. MAXIMUM LEVERAGE RATIO. Company shall not at any time permit
the ratio of (i) (A) Consolidated Total Debt as of October 8, 1995, January 28,
1996, and April 21, 1996, respectively, to (B) Consolidated Adjusted EBITDA
multiplied by (a) for the Fiscal Quarter ending October 8, 1995, 4.33, (b) for
the two-Fiscal Quarters ending January 28, 1996, 1.857 and (c) for the
three-Fiscal Quarters ending April 21, 1996, 1.30, (x) for the Fiscal Quarter
ending October 8, 1995, to exceed 6.60:1.00, (y) for the two-Fiscal Quarter
period ending January 28, 1996 to exceed 6.40:1.00, and (z) for the
three-Fiscal Quarter period ending April 21, 1996 to exceed 6.00:1.00, and (ii)
(A) Consolidated Total Debt as of the last day of any Fiscal Quarter occurring
during any of the periods set forth below to (B) Consolidated Adjusted EBITDA
for the consecutive four-Fiscal Quarter period ending on such last day, to
exceed the correlative ratio indicated:
PERIOD MAXIMUM LEVERAGE RATIO
------------------------ ----------------------
2nd Fiscal Quarter, 1996 5.85:1.00
3rd Fiscal Quarter, 1996 5.65:1.00
4th Fiscal Quarter, 1996 5.40:1.00
1st Fiscal Quarter, 1997 5.20:1.00
2nd Fiscal Quarter, 1997 5.00:1.00
3rd Fiscal Quarter, 1997 4.80:1.00
4th Fiscal Quarter, 1997 4.57:1.00
1st Fiscal Quarter, 1998 4.40:1.00
2nd Fiscal Quarter, 1998 4.23:1.00
3rd Fiscal Quarter, 1998 4.06:1.00
4th Fiscal Quarter, 1998 3.90:1.00
1st Fiscal Quarter, 1999 3.80:1.00
2nd Fiscal Quarter, 1999 3.65:1.00
3rd Fiscal Quarter, 1999 3.55:1.00
4th Fiscal Quarter, 1999 3.45:1.00
1st Fiscal Quarter, 2000 3.35:1.00
2nd Fiscal Quarter, 2000 3.25:1.00
3rd Fiscal Quarter, 2000 3.10:1.00
4th Fiscal Quarter, 2000
and each Fiscal
Quarter thereafter 3.00:1.00
C. MINIMUM CONSOLIDATED ADJUSTED EBITDA. Company shall not permit
Consolidated Adjusted EBITDA (a) for the Fiscal Quarter ending October 8, 1995,
to be less than $70,000,000, (b) for the two-Fiscal Quarter period ending
January 28, 1996, to be less than $168,000,000, (c) for the three-Fiscal
Quarter period ending April 21, 1996, to be less than $254,000,000, and (d)
thereafter, for any consecutive four-Fiscal Quarter
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period ending as of the last day of any Fiscal Quarter occurring during any of
the periods set forth below to be less than the correlative amount indicated:
MINIMUM CONSOLIDATED
PERIOD ADJUSTED EBITDA
------------------------ --------------------
2nd Fiscal Quarter, 1996 $338,000,000
3rd Fiscal Quarter, 1996 $349,000,000
4th Fiscal Quarter, 1996 $370,000,000
1st Fiscal Quarter, 1997 $380,000,000
2nd Fiscal Quarter, 1997 $390,000,000
3rd Fiscal Quarter, 1997 $400,000,000
4th Fiscal Quarter, 1997 $414,000,000
1st Fiscal Quarter, 1998 $423,000,000
2nd Fiscal Quarter, 1998 $431,000,000
3rd Fiscal Quarter, 1998 $440,000,000
4th Fiscal Quarter, 1998 $452,000,000
1st Fiscal Quarter, 1999 $459,000,000
2nd Fiscal Quarter, 1999 $465,000,000
3rd Fiscal Quarter, 1999 $472,000,000
4th Fiscal Quarter, 1999 $481,000,000
1st Fiscal Quarter, 2000 $486,000,000
2nd Fiscal Quarter, 2000 $490,000,000
3rd Fiscal Quarter, 2000 $495,000,000
4th Fiscal Quarter, 2000 $500,000,000
1st Fiscal Quarter, 2001 $505,000,000
2nd Fiscal Quarter, 2001 $510,000,000
3rd Fiscal Quarter, 2001 $515,000,000
4th Fiscal Quarter, 2001 $520,000,000
1st Fiscal Quarter, 2002 $525,000,000
2nd Fiscal Quarter, 2002 $530,000,000
3rd Fiscal Quarter, 2002 $535,000,000
4th Fiscal Quarter, 2002 $540,000,000
1st Fiscal Quarter, 2003 $545,000,000
2nd Fiscal Quarter, 2003 $550,000,000
3rd Fiscal Quarter, 2003 $555,000,000
4th Fiscal Quarter, 2003
and each Fiscal Quarter
thereafter $560,000,000
D. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth at any time during the period commencing on the day
immediately preceding the first day of any of the periods set forth below and
ending on the day
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immediately preceding the last day of such period set forth below to be less
than the correlative amount indicated below for such period set forth below:
MINIMUM
CONSOLIDATED
PERIOD NET WORTH
---------------------------------------- ------------
One day after the Closing Date through
the end of 4th Fiscal Quarter, 1995 $220,000,000
1st Fiscal Quarter, 1996 $200,000,000
2nd Fiscal Quarter, 1996 $194,000,000
3rd Fiscal Quarter, 1996 $189,000,000
4th Fiscal Quarter, 1996 $188,000,000
1st Fiscal Quarter, 1997 $188,000,000
2nd Fiscal Quarter, 1997 $188,000,000
3rd Fiscal Quarter, 1997 $188,000,000
4th Fiscal Quarter, 1997 $192,000,000
1st Fiscal Quarter, 1998 $200,000,000
2nd Fiscal Quarter, 1998 $212,000,000
3rd Fiscal Quarter, 1998 $224,000,000
4th Fiscal Quarter, 1998 $236,000,000
1st Fiscal Quarter, 1999 $254,000,000
2nd Fiscal Quarter, 1999 $272,000,000
3rd Fiscal Quarter, 1999 $289,000,000
4th Fiscal Quarter, 1999 $307,000,000
1st Fiscal Quarter, 2000 $333,000,000
2nd Fiscal Quarter, 2000 $350,000,000
3rd Fiscal Quarter, 2000 $366,000,000
4th Fiscal Quarter, 2000 $383,000,000
1st Fiscal Quarter, 2001 $408,000,000
2nd Fiscal Quarter, 2001 $413,000,000
3rd Fiscal Quarter, 2001 $418,000,000
4th Fiscal Quarter, 2001 $423,000,000
1st Fiscal Quarter, 2002 $428,000,000
2nd Fiscal Quarter, 2002 $433,000,000
3rd Fiscal Quarter, 2002 $438,000,000
4th Fiscal Quarter, 2002 $443,000,000
1st Fiscal Quarter, 2003 $448,000,000
2nd Fiscal Quarter, 2003 $453,000,000
3rd Fiscal Quarter, 2003 $458,000,000
4th Fiscal Quarter, 2003 $463,000,000
First day of 1st Fiscal Quarter, 2004
and thereafter $468,000,000
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7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Holdings shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of Holdings or
any of its Subsidiaries, including the creation or acquisition of any
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any part of its
business, property or assets, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or a substantial portion of the business,
property or assets of, or stock or other evidence of beneficial ownership of,
any Person or any division or line of business of any Person, except:
(i) Food 4 Less and Ralphs Supermarkets may consummate the
Acquisition and the RSI Merger, Ralphs Supermarkets and Ralphs Grocery
may consummate the RGC Merger, Food 4 Less of Southern California, Inc.
may merge into Company with Company being the surviving corporation and
Alpha Beta may merge into Company with Company being the surviving
corporation;
(ii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8 and Development
Investments (to the extent such Development Investments do not
constitute Consolidated Capital Expenditures) permitted under
subsection 7.3(vii);
(iii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof;
(iv) Company and its Subsidiaries may sell or otherwise
dispose of damaged, worn-out or obsolete assets that are no longer
necessary for the proper conduct of their respective business for fair
market value in the ordinary course of business;
(v) Company and its Subsidiaries may sell grocery stores
(including equipment therein acquired after the date which precedes the
Closing Date by six months) opened or acquired after the date which
precedes the Closing Date by six months in connection with a concurrent
lease-back of such grocery stores (including such equipment) to the
extent such transactions are permitted under subsection 7.10;
(vi) Company and its Subsidiaries may sell up to eight
grocery stores in any Fiscal Year, plus, in any Fiscal Year after
Fiscal Year 1995, a number of stores equal to the difference between
eight and the number of stores sold under
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this clause (vi) in the immediately preceding Fiscal Year, which stores
are no longer useful to the businesses of Company and its Subsidiaries;
(vii) Company and its Subsidiaries may make any of the
Planned Dispositions and any of the Required Dispositions; provided
that, in each case, the consideration received for each of such stores
is in an amount at least equal to the fair market value thereof;
provided, further, that all of the Required Dispositions shall be made
on or prior to the first anniversary of the Closing Date;
(viii) Company or any of its Subsidiaries may sell any class
of stock of Certified Grocers of California, Ltd., a California
corporation ("Certified") owned by it pursuant to a redemption of such
stock by Certified;
(ix) Company and its Subsidiaries may lease or sublease any
of their respective real or personal property in the ordinary course of
business;
(x) (A) any wholly-owned Subsidiary of Company (other than
Cala and its Subsidiaries, and Falley's) may be merged or consolidated
with or into Company or any wholly-owned Subsidiary of Company (other
than Bell Markets, Inc.), or all or any part of its business, property
or assets may be conveyed, sold, leased, transferred or otherwise
disposed of, in one transaction or a series of transactions, to Company
or any wholly-owned Subsidiary of Company (other than Bell Markets,
Inc.); provided that, in the case of such a merger or consolidation
involving Company, Company shall be the continuing or surviving
corporation and in the case of such a merger or consolidation involving
two wholly-owned Subsidiaries of Company, the surviving corporation
shall be a party to the Guaranty and its capital stock shall be pledged
to Secured Party (as defined in the Pledge Agreement) pursuant to the
Pledge Agreement; and (B) the corporate existence of those Subsidiaries
of Holdings identified as inactive on Schedule 5.1 annexed hereto may
be terminated to the extent permitted under subsection 6.2; and
(xi) subject to subsection 7.13, Company and its
Subsidiaries may make Asset Sales of assets having an aggregate fair
market value not in excess of $5,000,000 in the aggregate for all such
Asset Sales; provided that the consideration received for such assets
shall be in an amount at least equal to the fair market value thereof.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Holdings shall not make or incur any Consolidated Capital
Expenditures and Company shall not, and shall not permit its Subsidiaries to,
make or incur Consolidated Capital Expenditures, in any Fiscal Year indicated
below, in an aggregate
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amount in excess of the corresponding amount (the "MAXIMUM CONSOLIDATED CAPITAL
EXPENDITURES AMOUNT") set forth below opposite such Fiscal Year; provided that
the Maximum Consolidated Capital Expenditures Amount for any Fiscal Year shall
be increased (i) for any Fiscal Year other than Fiscal Year 1995, by an amount
equal to the excess, if any, (but in no event, for Fiscal Year 1996, more than
$28,000,000 and for each Fiscal Year following Fiscal Year 1996, more than 15%
of the Maximum Consolidated Capital Expenditures Amount for the immediately
preceding Fiscal Year, as set forth in the table below) of the Maximum
Consolidated Capital Expenditures Amount for the previous Fiscal Year (as
adjusted in accordance with this proviso) over the actual amount of
Consolidated Capital Expenditures for such previous Fiscal Year, (ii) by an
amount up to, but in no event greater than, 5% of the Maximum Consolidated
Capital Expenditures Amount for the immediately following Fiscal Year, as set
forth in the table below, which amount described in this clause (ii) shall
reduce the Maximum Consolidated Capital Expenditures Amount for the immediately
following Fiscal Year, and (iii) by an amount equal to (but in no event greater
than $15,000,000 for any Fiscal Year) the aggregate amount of proceeds (other
than insurance proceeds, condemnation awards and indemnity payments) received
by Company and its Subsidiaries from Asset Sales during such Fiscal Year to the
extent such proceeds have been reinvested in new stores or the construction or
remodeling of stores of Company and its Subsidiaries within 270 days of
receipt; provided, however, that the amount which may be added to the Maximum
Consolidated Capital Expenditures Amount pursuant to clauses (i) and (ii) of
the immediately preceding proviso shall not exceed, (a) for Fiscal Year 1995,
5% of the Maximum Consolidated Capital Expenditures Amount for such Fiscal Year
as set forth in the table below, (b) for Fiscal Year 1996, $28,000,000, and (c)
for any Fiscal Year thereafter, 15% of the Maximum Consolidated Capital
Expenditures Amount for such Fiscal Year as set forth in the table below:
MAXIMUM CONSOLIDATED
FISCAL YEAR EXPENDITURE AMOUNT
----------- --------------------
Closing Date through
and including January 28, 1996 $116,000,000
Fiscal Year 1996 $105,000,000
Fiscal Year 1997 $100,000,000
Fiscal Year 1998 $100,000,000
Fiscal Year 1999 $110,000,000
Fiscal Year 2000 $120,000,000
Fiscal Year 2001 $125,000,000
Fiscal Year 2002 $130,000,000
Fiscal Year 2003
and each Fiscal Year thereafter $135,000,000
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7.9 RESTRICTION ON LEASES.
Holdings shall not become liable in any way, whether directly
or by assignment or as a guarantor or other surety, for the obligations of the
lessee under any lease, whether an Operating Lease or a Capital Lease, and
Company shall not, and shall not permit any of its Subsidiaries to, become
liable in any way, whether directly or by assignment or as a guarantor or other
surety, for the obligations of the lessee under any lease, whether an Operating
Lease or a Capital Lease (other than intercompany leases between Company and
its wholly-owned Subsidiaries), unless, immediately after giving effect to the
incurrence of liability with respect to such lease, all amounts paid or payable
under all Capital Leases and Operating Leases (net of sublease income) at the
time in effect during the then current Fiscal Year (or in the case of Fiscal
Year 1995, during the period commencing on the Closing Date and ending on (and
including) January 28, 1996) shall not exceed the corresponding amount set
forth below opposite such Fiscal Year (or in the case of Fiscal Year 1995,
during such period):
MAXIMUM LEASE
PERIOD PAYMENTS
------ -------------
Closing Date through
and including January 28, 1996 $ 90,000,000
Fiscal Year 1996 $195,000,000
Fiscal Year 1997 $215,000,000
Fiscal Year 1998 $240,000,000
Fiscal Year 1999 $265,000,000
Fiscal Year 2000 $285,000,000
Fiscal Year 2001 $300,000,000
Fiscal Year 2002 $320,000,000
Fiscal Year 2003
and each Fiscal Year thereafter $340,000,000
7.10 SALES AND LEASE-BACKS.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease, whether an
Operating Lease or a Capital Lease, of any property (whether real, personal or
mixed), whether now owned or hereafter acquired, (i) which Holdings or any of
its Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Holdings or any of its Subsidiaries) or (ii) which Holdings
or any of its Subsidiaries intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by Holdings
or any of its Subsidiaries to any Person (other than Holdings or any of its
Subsidiaries)
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in connection with such lease; provided that each of Holdings and Company and
its Subsidiaries may become and remain liable as lessee, guarantor or other
surety with respect to any such lease if and to the extent that Holdings,
Company or any of their Subsidiaries would be permitted to enter into, and
remain liable under, such lease under subsection 7.9.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes receivable or accounts receivable.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any Affiliate
of such Person, on terms that are less favorable to such Person or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such an Affiliate; provided that the foregoing
restriction shall not apply to (i) any transaction between Company and any of
its wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries;
(ii) reasonable and customary fees paid to members of the Boards of Directors
of Holdings and its Subsidiaries; (iii) issuances of stock, payments of bonuses
and other transactions pursuant to employment or compensation agreements, stock
option agreements, indemnification agreements and other arrangements, in each
case satisfactory in form and substance to Agent and as in effect as of the
Closing Date and unamended, and substantially similar agreements as may
hereafter become effective, in each case with officers or directors who are
Affiliates of Holdings or any of its Subsidiaries; (iv) payment of consulting
and other fees and expenses and the reimbursement of losses, costs and
expenses under the Consulting Agreement, as amended in accordance with
subsection 7.15A, and in form and substance satisfactory to Agent; (v) the
payment of fees and expenses to Yucaipa and Apollo Advisors, L.P. or its
affiliates and designees and other holders of capital stock of Holdings in
connection with the Acquisition, in each case in amounts that are satisfactory
to Agent; (vi) transactions between Company and/or any of its Subsidiaries and
Golden Alliance that are otherwise permitted under this Agreement; (vii) to the
extent permitted under subsection 7.3(xiv), any repurchase of stock of Holdings
from Company's employee stock ownership plan or participants or former
participants in such plan, in each case to the extent such repurchases are
required by the terms of such plan; (viii) payments by Holdings and its
Subsidiaries pursuant to tax sharing agreements in effect from time to time
among Holdings and its Subsidiaries; (ix) the issuance by Holdings of common
stock to Yucaipa pursuant to Yucaipa's exercise of the warrant issued to it on
the Closing Date by Holdings in connection with the Acquisition; (x)
transactions between Company and
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Holdings entered into pursuant to and in accordance with the Transfer and
Assumption Agreement, (xi) a loan made by Company to RGC Investment Co., on the
Closing Date in the original principal amount of $5,000,000, all of the
proceeds of which loan will immediately be invested by RGC Investment Co. in
RGC Partners, L.P. and (xii) payment of costs, expenses and indemnity payments
by Holdings and Company to RGC Partners, L.P. in accordance with the
Subscription Agreement.
7.13 DISPOSAL ON SUBSIDIARY STOCK; RESTRICTIONS ON SUBSIDIARIES.
A. Except for any sale of 100% of the capital stock or other
equity Securities of any of Company's Subsidiaries in compliance with the
provisions of subsection 7.7(x) and except pursuant to the Collateral
Documents, Holdings shall not and shall not permit any of its Subsidiaries to
directly or indirectly sell, assign, pledge or otherwise encumber or dispose of
any shares of capital stock or other equity Securities of any of its
Subsidiaries, except to qualify directors if required by applicable law, or in
the case of Company's Subsidiaries, to Company or to a wholly-owned Subsidiary
of Company (other than Bell Markets, Inc.).
B. Except as otherwise provided herein or in any other Loan
Document, Holdings will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Company to (i) pay dividends or make any other distributions on any of such
Subsidiary's capital stock owned by Company or any other Subsidiary of Company,
(ii) repay or prepay any Indebtedness owed by such Subsidiary to Company or any
other Subsidiary of Company, (iii) make loans or advances to Company or any
other Subsidiary of Company, or (iv) transfer any of its property or assets to
Company or any other Subsidiary of Company.
7.14 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than (i)
the businesses engaged in by Company and its Subsidiaries on the Closing Date
and similar or related businesses and (ii) such other lines of business as may
be consented to by Requisite Lenders. From and after the Closing Date,
Holdings shall not engage in any business other than owning the capital stock
of Company and entering into and performing its obligations under and in
accordance with the Loan Documents, the Related Financing Documents to which it
is a party and such other documents entered into by Holdings on or prior to the
Closing Date and made available to Agent and shall not own any assets other
than (a) the capital stock of Company and (b) Cash which has been paid to
Holdings for the purpose of allowing Holdings to make the payments described in
clauses (i), (v), (viii) and (xi) of subsection 7.5A; provided that Holdings
shall make such payments immediately upon (and in any event on the date of)
receipt of such Cash.
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7.15 AMENDMENTS OF CERTAIN DOCUMENTS; NO PREPAYMENTS OF CERTAIN
INDEBTEDNESS.
A. Holdings shall not, and shall not permit any of its
Subsidiaries to, amend, waive any of its rights under, or otherwise change the
terms of any of the Shareholders Agreement, the Indemnification Agreement, the
Reimbursement Agreement, the Merger Agreement, the RGC Merger Certificate, the
Consulting Agreement, the Tax Election Agreement, the Transfer and Assumption
Agreement, the Subscription Agreement or the certificate of designations with
respect to the Holdings Preferred Stock, in each case as in effect on the
Closing Date, without the prior written consent of the Requisite Lenders, if
such amendment, waiver or change would increase materially the obligations of
Holdings or any of its Subsidiaries or confer additional rights on any other
party to any such agreement which would be adverse to Holdings or any of its
Subsidiaries.
B. Holdings shall not, and shall not permit any of its
Subsidiaries to, amend or otherwise change the terms of any of the Senior
Indebtedness, the Subordinated Indebtedness, the Senior Debt Indentures, the
Subordinated Debt Indentures, the Golden Alliance Agreement or any of the
guarantees entered into by any Subsidiary of Company permitted under subsection
7.4(vi) (collectively, "RESTRICTED AGREEMENTS"), or make any payment consistent
with an amendment thereof or change thereto, if the effect of such amendment or
change is to increase the interest rate on any such Restricted Agreements,
change any dates upon which payments of principal or interest are due thereon,
change any of the covenants with respect thereto in a manner which is more
restrictive to Holdings or any of its Subsidiaries, change any event of default
or condition to an event of default with respect thereto, change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions (if any) thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase the obligations of the obligor thereunder or to
confer any additional rights on the holders of any such Restricted Agreements
(or a trustee or other representative on their behalf) which would be adverse
to any Loan Party or Lenders.
7.16 FISCAL YEAR
Company shall not change its Fiscal Year-end from the Sunday
closest to January 31 of the following calendar year.
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SECTION 8. EVENTS OF DEFAULT
IF any of the following conditions or events ("Events of
Default") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Company
to pay when due any amount payable to an Issuing Lender in reimbursement of any
drawing under a Letter of Credit; or failure by Company to pay any interest on
any Loan or any fee or any other amount due under this Agreement within five
days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Holdings or any of its Subsidiaries to pay
when due (a) any principal of or interest on any Indebtedness (other than
Indebtedness referred to in subsection 8.1) in an individual principal amount
of $5,000,000 or more or any items of Indebtedness with an aggregate principal
amount of $10,000,000 or more or (b) any Contingent Obligation in an individual
principal amount of $5,000,000 or more or any Contingent Obligations with an
aggregate principal amount of $10,000,000 or more, in each case beyond the end
of any grace period provided therefor; or (ii) breach or default by Holdings or
any of its Subsidiaries with respect to any other material term of (a) any
evidence of any Indebtedness in an individual principal amount of $5,000,000 or
more or any items of Indebtedness with an aggregate principal amount of
$10,000,000 or more or any Contingent Obligation in an individual principal
amount of $5,000,000 or more or any Contingent Obligations with an aggregate
principal amount of $10,000,000 or more or (b) any loan agreement, mortgage,
indenture or other agreement relating to such Indebtedness or Contingent
Obligation(s), if the effect of such breach or default is to cause, or to
permit the holder or holders of that Indebtedness or Contingent Obligation(s)
(or a trustee on behalf of such holder or holders) to cause, that Indebtedness
or Contingent Obligation(s) to become or be declared due and payable prior to
its stated maturity or the stated maturity of any underlying obligation, as the
case may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Holdings or Company to perform or comply with any
term or condition contained in subsection 2.5 or 6.2 or Section 7 of this
Agreement; or
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8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by the Loan Parties in any Loan Document or in any statement or
certificate at any time given by any of the Loan Parties in writing pursuant
hereto or thereto or in connection herewith or therewith shall be false in any
material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 30
days after the receipt by Company of notice from Agent or any Lender of such
default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of Holdings or any of its
Subsidiaries (other than an inactive Subsidiary identified as such in Schedule
5.1 annexed hereto whose aggregate assets and annual revenues do not exceed
$1,000,000 and $1,000,000, respectively, and whose financial condition does not
adversely affect any other Loan Party ("INSIGNIFICANT SUBSIDIARY")) in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Holdings or any of its Subsidiaries (other than an Insignificant
Subsidiary) under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Holdings or any of its Subsidiaries (other than an Insignificant
Subsidiary), or over all or a substantial part of its property, shall have been
entered; or there shall have occurred the involuntary appointment of an interim
receiver, trustee or other custodian of Holdings or any of its Subsidiaries
(other than an Insignificant Subsidiary) for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Holdings or any of
its Subsidiaries (other than an Insignificant Subsidiary), and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
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8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Holdings or any of its Subsidiaries shall have an
order for relief entered with respect to it or commence a voluntary case under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or Holdings or any of its
Subsidiaries shall make any assignment for the benefit of creditors; or (ii)
Holdings or any of its Subsidiaries shall be unable, or shall fail generally,
or shall admit in writing its inability, to pay its debts as such debts become
due; or the Board of Directors of Holdings or any of its Subsidiaries (or any
committee thereof) shall adopt any resolution or otherwise authorize any action
to approve any of the actions referred to in clause (i) above or this clause
(ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $5,000,000
or (ii) in the aggregate at any time an amount in excess of $10,000,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Holdings or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of
any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Holdings
or any of its Subsidiaries decreeing the dissolution or split up of such Person
and such order shall remain undischarged or unstayed for a period in excess of
30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually
or in the aggregate results in or could reasonably be expected to result in
liability of any of the Loan Parties or any of their respective ERISA
Affiliates (unless no Loan Party shall be jointly and severally liable
therefor) in excess of $5,000,000 during the term of this Agreement; or there
shall exist an Amount of Unfunded Benefit Liabilities, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation (1)
any Pension Plans which have a negative Amount of Unfunded Benefit Liabilities
and (2) any Pension Plan for which neither Company nor any other Loan Party
would have liability if the Pension Plan then terminated), which exceeds
$10,000,000; or
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8.11 CHANGE IN CONTROL.
A Change of Control shall have occurred; or
8.12 INVALIDITY OF GUARANTIES.
Either of the Holdings Guaranty or, upon execution and delivery
thereof, the Guaranty for any reason, other than the satisfaction in full of
all Obligations, ceases to be in full force and effect (other than in
accordance with its terms) or is declared to be null and void, or any Loan
Party denies that it has any further liability, including without limitation
with respect to future advances by Lenders, under any Loan Document to which it
is a party, or gives notice to such effect; or
8.13 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in full
force and effect (other than by reason of a release of Collateral in accordance
with the terms thereof) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any Loan Party, or Agent shall not
have or cease to have a valid and perfected first priority security interest in
any significant part of the Collateral (other than as a direct result of a
breach by Agent of any obligation imposed on Agent under the Collateral
Documents); or
8.14 FAILURE TO CONSUMMATE TRANSACTIONS.
Any of the Mergers, the Acquisition and related transactions
contemplated hereby (including without limitation each of the conditions
described in the last paragraph of subsection 4.1 as being required to be
satisfied immediately after the Acquisition) (i) shall not be consummated in
accordance with the Loan Documents and the other Transaction Documents prior to
or concurrently with or immediately after the making of the initial Loans (and
in any event on the Closing Date) or (ii) shall be unwound, reversed or
otherwise rescinded or modified in whole or in part for any reason; or
8.15 ACTION UNDER RELATED FINANCING DOCUMENTS.
Any holder of any Indebtedness evidenced by the Related
Financing Documents shall file an action seeking the rescission thereof or
damages or injunctive relief relating thereto; or any event shall occur which,
under the terms of any Related Financing Documents, shall require Holdings or
any of its Subsidiaries to purchase, redeem or otherwise acquire or offer to
purchase, redeem or otherwise acquire all or any portion of any Indebtedness
evidenced by the Related Financing Documents; or Holdings or any of its
Subsidiaries shall for any other reason purchase, redeem or otherwise acquire
or offer to purchase, redeem or otherwise acquire, or make any other
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payments in respect of, all or any portion of any Indebtedness evidenced by the
Related Financing Documents, except to the extent expressly permitted by
subsection 7.5:
THEN (i) upon the occurrence of any Event of Default described in subsection
8.6 or 8.7, each of (a) the unpaid principal amount of and accrued interest on
the Loans, (b) an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Holdings and Company, and the obligation of each Lender to
make any Loan (including the obligation of Swing Line Lender to make any Swing
Line Loan), the obligation of Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any
other Event of Default, Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan (including the obligation of Swing
Line Lender to make any Swing Line Loan), the obligation of Agent to issue any
Letter of Credit and the right of any Lender to issue any Letter of Credit
hereunder shall thereupon terminate; provided that the foregoing shall not
affect in any way the obligations of Revolving Lenders to purchase
participations in Letters of Credit as provided in subsection 3.3C or the
obligations of Lenders to purchase participations in any unpaid Swing Line
Loans as provided in subsection 2.1A(vi).
Any amounts described in clause (b) above, when received by
Agent, shall be held by Agent pursuant to the terms of the Collateral Account
Agreement and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as
a result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 11.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to
bind Lenders to a decision which may be made at the election of Requisite
Lenders and are
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not intended to benefit Company and do not grant Company the right to require
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are met.
SECTION 9. HOLDINGS GUARANTY
Holdings hereby consents to and confirms its guaranty of all
Obligations of Company and all obligations of Company under Interest Rate
Agreements permitted under subsection 7.4(ii) to which a Lender or an Affiliate
of such Lender is a counterparty. In furtherance of the foregoing, Holdings
hereby agrees as follows:
9.1 GUARANTIED OBLIGATIONS.
As consideration for Lenders agreeing to enter into this
Agreement and extend the Commitments, make the Loans hereunder and issue the
Letters of Credit, Holdings hereby unconditionally and irrevocably guaranties,
as a primary obligor and not merely as a surety, the due and punctual payment
when due (whether at stated maturity, by required prepayment, declaration,
demand or otherwise) (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a)) of all Obligations of Company (including, without
limitation, interest which, but for the filing of a petition in bankruptcy with
respect to Company would accrue on such Obligations, whether or not allowable
as a claim) and all obligations of Company under Interest Rate Agreements
(collectively, the "LENDER INTEREST RATE AGREEMENTS") permitted under
subsection 7.4(ii) to which a Lender or an Affiliate of such Lender (in such
capacity, collectively, "INTEREST RATE EXCHANGERS") is a counterparty (the
"GUARANTIED OBLIGATIONS"). For purposes of this Section 9, Holdings is
referred to as a "GUARANTOR". Lenders and Interest Rate Exchangers are each
referred to herein as a "GUARANTIED PARTY" and collectively as the "GUARANTIED
PARTIES".
9.2 TERMS OF HOLDINGS GUARANTY.
Guarantor agrees that the Guarantied Obligations may be
extended or renewed, and the Loans repaid and reborrowed in whole or in part,
without notice or further assent from it, and that it will remain bound upon
this Holdings Guaranty notwithstanding any extension, renewal or other
alteration of any such Guarantied Obligation or repayment and reborrowing of
the Loans.
Guarantor waives presentation of, demand of, payment from and
protest of any Guarantied Obligation and also waives notice of protest for
nonpayment. The obligations of Guarantor under this Holdings Guaranty shall
not be affected by, and Guarantor hereby waives its rights (to the extent
permitted by law) in connection with:
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(a) the failure of Agent or any Guarantied Party to assert
any claim or demand or to enforce any right or remedy against Company
under the provisions of this Agreement, any Loan Documents or the
Lender Interest Rate Agreements or any other agreement or otherwise,
(b) any extension or renewal of any provision thereof,
(c) any rescission, waiver, amendment or modification of
any of the terms or provisions of this Agreement or any instrument
executed pursuant hereto or the Lender Interest Rate Agreements,
(d) the release of any of the security held by Agent for
any of the Guarantied Obligations,
(e) the failure of Agent or any Guarantied Party to
exercise any right or remedy against any other guarantor of any of the
Guarantied Obligations,
(f) Agent or any Guarantied Party taking and holding
security or collateral for the payment of this Holdings Guaranty, any
other guaranties of the Guarantied Obligations or other liabilities of
Company, and exchanging, enforcing, waiving and releasing any such
security or collateral,
(g) Agent or any Guarantied Party applying any such
security or collateral and directing the order or manner of sale
thereof as Agent in its discretion may determine, or
(h) Agent or any Guarantied Party settling, releasing,
compromising, collecting or otherwise liquidating the Guarantied
Obligations and any security or collateral therefor in any manner
determined by Agent or such Guarantied Party.
Guarantor further agrees that this Holdings Guaranty
constitutes a guaranty of payment when due and not of collection and waives any
right to require that any resort be had by Agent or any other Person to any
security held for payment of the Guarantied Obligations or to any balance of
any deposit account or credit on the books of Agent or any other Person in
favor of Company or any other Person.
The obligations of Guarantor under this Holdings Guaranty shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Guarantied Obligations, discharge of
Company from such Guarantied Obligations in a bankruptcy or similar proceeding
or otherwise. Without limiting the generality of the foregoing, the
obligations of Guarantor under this Holdings Guaranty shall not be discharged
or
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impaired or otherwise affected by the failure of Agent or any Guarantied Party
to assert any claim or demand or to enforce any remedy under this Agreement or
any other agreement, by any waiver or modification of any provision thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
Guarantied Obligations, or by any other act or thing or omission or delay to do
any other act or thing that may or might in any manner or to any extent vary
the risk of Guarantor or would otherwise operate as a discharge of Guarantor as
a matter of law or equity.
Agent may, at its election, foreclose on any security held by
Agent by one or more judicial or nonjudicial sales, or exercise any other right
or remedy Agent may have against Company or any security without affecting or
impairing in any way the liability of Guarantor hereunder except to the extent
the Guarantied Obligations have been paid. Guarantor waives any defense
arising out of such election by Agent, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right
or remedy of Guarantor against Company or any security, so long as Agent has
acted in a commercially reasonable manner.
Guarantor further agrees that this Holdings Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Guarantied
Obligation is rescinded or must otherwise be restored by Agent upon the
bankruptcy or reorganization of Company or otherwise.
Guarantor further agrees, in furtherance of the foregoing and
not in limitation of any other right that Agent may have at law or in equity
against Guarantor by virtue hereof, upon the failure of Company to pay any of
its Guarantied Obligations when and as the same shall become due (whether by
required prepayment, declaration, demand or otherwise), Guarantor will
forthwith pay, or cause to be paid, in cash, to Agent an amount equal to the
sum of the unpaid principal amount of such Guarantied Obligations, accrued and
unpaid interest on such Guarantied Obligations and all other Obligations of
Company to Agent.
Guarantor further agrees as follows:
(i) Guarantor hereby waives (i) any claim, right or
remedy, direct or indirect, that Guarantor now has or may hereafter
have against Company or any of its assets in connection with this
Holdings Guaranty or the performance by Guarantor of its obligations
hereunder, in each case whether such claim, right or remedy arises in
equity, under contract, by statute (including without limitation under
California Civil Code Section 2847, 2848 or 2849), under common law or
otherwise and including without limitation (a) any right of
subrogation, reimbursement or indemnification that Guarantor now has or
may hereafter have against Company, (b) any right to enforce, or to
participate in, any claim, right or remedy that Agent or any Guarantied
Party now has or may hereafter have
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against Company, and (c) any benefit of, and any right to participate
in, any collateral or security now or hereafter held by Agent or any
Guarantied Party, and (ii) any right of contribution Guarantor may have
against any other guarantor of any of the Guarantied Obligations
(including without limitation any such right of contribution under
California Civil Code Section 2848);
(ii) In accordance with Section 2856 of the California
Civil Code, Guarantor waives any and all other rights and defenses
available to Guarantor by reason of Sections 2787 to 2855, inclusive,
2899 and 3433 of the California Civil Code, including without
limitation any and all rights or defenses Guarantor may have by reason
of protection afforded to the principal with respect to any of the
Guarantied Obligations, or to any other guarantor (including any other
guarantor under the Guaranty) of any of the Guarantied Obligations with
respect to any of such guarantor's obligations under its guaranty, in
either case pursuant to the antideficiency or other laws of the State
of California limiting or discharging the principal's indebtedness or
such guarantor's obligations, including without limitation Section
580a, 580b, 580d, or 726 of the California Code of Civil Procedure; and
(iii) In accordance with Section 2856 of the California
Civil Code, Guarantor waives all rights and defenses arising out of an
election of remedies by the creditor, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security
for a Guarantied Obligation, has destroyed Guarantor's rights of
subrogation and reimbursement against the principal by the operation of
Section 580d of the Code of Civil Procedure or otherwise; and even
though that election of remedies by the creditor, such as nonjudicial
foreclosure with respect to security for an obligation of any other
guarantor (including any other guarantor under the Guaranty) of any of
the Guarantied Obligations, has destroyed Guarantor's rights of
contribution against such other guarantor.
The foregoing California waivers are included solely out of an
abundance of caution, and shall not be construed to mean that any of the
above-referenced provisions of California law are in any way applicable to this
Guaranty or to any of the Guarantied Obligations. As used in the foregoing
paragraph, any reference to "the principal" includes Company, and any reference
to "the creditor" includes Agent, each Lender and each Interest Rate Exchanger.
Guarantor hereby waives and relinquishes any duty on the part
of Agent or any Lender to disclose any matter, fact or thing relating to the
business, operations or conditions of Company or any of its Subsidiaries now
known or hereafter known by Agent or any Lender.
Guarantor further agrees that, to the extent the agreement to
waive its rights of subrogation, reimbursement, indemnification and
contribution as set forth
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herein is found by a court of competent jurisdiction to be void or voidable for
any reason, any rights or subrogation, reimbursement or indemnification
Guarantor may have against Company or against any collateral or security, and
any rights of contribution Guarantor may have against any such other guarantor,
shall be junior and subordinate to any rights Agent or Guarantied Parties may
have against Company, to all rights, title and interest Agent or Guarantied
Parties may have in any such collateral or security, and to any right Agent or
Guarantied Parties may have against such other guarantor. Agent, on behalf of
Guarantied Parties, may use, sell or dispose of any item of collateral or
security as it sees fit without regard to any subrogation rights Guarantor may
have, and upon any such disposition or sale any rights of subrogation Guarantor
may have shall terminate. If any amount shall be paid to Guarantor on account
of any such subrogation, reimbursement or indemnification rights at any time
when all Guarantied Obligations (other than Guarantied Obligations which are
contingent and unliquidated and not due and owing on such date and which
pursuant to the provisions of the Credit Agreement survive the termination of
the Credit Agreement, the repayment of the Guarantied Obligations, the
termination of the Commitments and the expiration or cancellation of all
Letters of Credit) shall not have been paid in full, such amount shall be held
in trust for Agent on behalf of Guarantied Parties and shall forthwith be paid
over to Agent for the benefit of Guarantied Parties to be credited and applied
against the Guarantied Obligations, whether matured or unmatured, in accordance
with the terms hereof.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon failure of
Company to pay its Guarantied Obligations when due (whether by required
prepayment, declaration, demand or otherwise) and consequent acceleration of
the Obligations pursuant to Section 8, Agent is hereby authorized by Guarantor
at any time or from time to time, without notice to Guarantor or to any other
Person, any such notice being hereby expressly waived to the extent permitted
by applicable law, to set off and to appropriate and to apply any and all
deposits (general or special, including, not limited to, Indebtedness evidenced
by certificates of deposit, whether matured or unmatured, but not including
trust accounts) and any other Indebtedness at any time owing by Agent to or for
the credit or the account of Guarantor against and on account of the
obligations and liabilities of Guarantor to Agent under this Holdings Guaranty,
including, but not limited to, all such obligations and liabilities with
respect to all claims of any nature or description arising out of or connected
with this Agreement, this Holdings Guaranty or the Letters of Credit or any of
the other Loan Documents, irrespective of whether or not Agent, with respect to
any Obligation owed under the Letters of Credit or this Agreement, shall have
made any demand hereunder. Agent agrees promptly to notify Guarantor after any
such set-off and application is made by Agent.
Notwithstanding anything contained in this Section 9 to the
contrary, this Holdings Guaranty shall not be effective or in full force and
effect until the Closing Date.
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SECTION 10. AGENT
10.1 APPOINTMENT.
Each Lender hereby appoints, and each Interest Rate Exchanger,
by its acceptance of the benefits of this Agreement and the other Loan
Documents, shall be deemed to have appointed, Bankers as Agent hereunder and
under the other Loan Documents and each Lender hereby authorizes, and each
Interest Rate Exchanger, by its acceptance of the benefits of this Agreement
and the other Loan Documents, shall be deemed to have authorized, Agent to act
as its agent in accordance with the terms of this Agreement and the other Loan
Documents, and each Interest Rate Exchanger is considered to be a "Lender" for
purposes of this Section 10. Each Lender hereby appoints Banque Indosuez,
Banque Paribas, Barclays Bank PLC and Credit Lyonnais Cayman Island Branch, as
Co-Agents and Bank of America National Trust & Savings Association, The Chase
Manhattan Bank, N.A., Compagnie Financiere de CIC et de L'Union Europeenne,
Credit Suisse, The Mitsubishi Trust and Banking Corporation, NatWest Bank N.A.,
Union Bank, United States National Bank of Oregon and Wells Fargo Bank, N.A.,
as Co-Arrangers hereunder. Agent agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as applicable. The
provisions of this Section 10 are solely for the benefit of Agent, Co-Agents,
Co-Arrangers and Lenders and no Loan Party shall have any rights as a third
party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement and other than as expressly provided
for in subsection 2.1D(v), Agent shall act solely as an agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for any Loan Party. Each Lender
named as a Co-Agent or as a Co-Arranger hereunder shall have no duties or
responsibilities under this Agreement or any other Loan Document to any Person,
other than as a Lender hereunder and thereunder.
10.2 POWERS; GENERAL IMMUNITY.
A. DUTIES SPECIFIED. Each Lender irrevocably authorizes Agent to
take such action on such Lender's behalf and to exercise such powers hereunder
and under the other Loan Documents as are specifically delegated to Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Agent shall have only those duties and responsibilities
that are expressly specified in this Agreement and the other Loan Documents and
it may perform such duties by or through its agents or employees. Agent shall
not have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
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B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or
any other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Agent to Lenders or by or on behalf of
any Loan Party to Agent or any Lender in connection with the Loan Documents and
the transactions contemplated thereby or for the financial condition or
business affairs of any Loan Party or any other Person liable for the payment
of any Obligations, nor shall Agent be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or as to the
existence or possible existence of any Event of Default or Potential Event of
Default. Agent shall not have any liability arising from confirmations of the
amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.
C. EXCULPATORY PROVISIONS. Neither Agent nor any of its officers,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by Agent under or in connection with any of the Loan Documents
except to the extent caused by Agent's gross negligence or willful misconduct.
If Agent shall request instructions from Lenders with respect to any act or
action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from Requisite Lenders. Without prejudice to the
generality of the foregoing, (i) Agent shall be entitled to rely, and shall be
fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Loan Parties), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against Agent
as a result of Agent acting or (where so instructed) refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of Requisite Lenders. Agent shall be entitled to refrain from
exercising any power, discretion or authority vested in it under this Agreement
or any of the other Loan Documents unless and until it has obtained the
instructions of Requisite Lenders.
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties
and functions delegated to it hereunder, and the term
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"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Agent in its individual capacity. Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with Holdings or
any of its Affiliates as if it were not performing the duties specified herein,
and may accept fees and other consideration from any Loan Party for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
10.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the Loan
Parties in connection with the making of the Loans and the issuance of Letters
of Credit hereunder and that it has made and shall continue to make its own
appraisal of the creditworthiness of the Loan Parties. Agent shall not have
any duty or responsibility, either initially or on a continuing basis, to make
any such investigation or any such appraisal on behalf of Lenders or to provide
any Lender with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter, and Agent shall not have any responsibility with respect to
the accuracy of or the completeness of any information provided to Lenders.
10.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Agent, to the extent that Agent shall not have been
reimbursed by any Loan Party, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Agent in performing its duties hereunder or
under the other Loan Documents or otherwise in its capacity as Agent in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent's gross negligence or willful
misconduct. If any indemnity furnished to Agent for any purpose shall, in the
opinion of Agent, be insufficient or become impaired, Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
10.5 SUCCESSOR AGENT AND SWING LINE LENDER.
A. SUCCESSOR AGENT. Agent may resign at any time by
giving 30 days' prior written notice thereof to Lenders and Company, and Agent
may be removed at any time with or without cause by an instrument or concurrent
instruments in writing
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delivered to Company and Agent and signed by Requisite Lenders. Upon any such
notice of resignation or any such removal, Requisite Lenders shall have the
right, upon five Business Days' notice to Company, to appoint a successor
Agent. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent and the retiring or removed Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Agent, the provisions of this
Section 10 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or
removal of Agent pursuant to subsection 10.5A shall also constitute the
resignation or removal of Bankers or its successor as Swing Line Lender, and
any successor Agent appointed pursuant to subsection 10.5A shall, upon its
acceptance of such appointment, become the successor Swing Line Lender for all
purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Agent in its capacity as Swing
Line Lender, (ii) upon such prepayment, the retiring or removed Agent and Swing
Line Lender shall surrender the Swing Line Note held by it to Company for
cancellation, and (iii) Company shall issue a new Swing Line Note to the
successor Agent and Swing Line Lender substantially in the form of Exhibit IX
annexed hereto, in the principal amount of the Swing Line Loan Commitment then
in effect and with other appropriate insertions.
10.6 GUARANTIES AND COLLATERAL DOCUMENTS.
Each Lender hereby further authorizes Agent to enter into the
Collateral Documents as secured party on behalf of and for the benefit of
Lenders and agrees to be bound by the terms of the Collateral Documents;
provided that, except as otherwise provided in subsection 11.6, Agent shall not
enter into or consent to any amendment, modification, termination or waiver of
any provision contained in the Collateral Documents without the prior consent
of Requisite Lenders. Anything contained in any of the Loan Documents to the
contrary notwithstanding, each Lender agrees that no Lender shall have any
right individually to realize upon any of the Holdings Guaranty, the Guaranty
or any of the Collateral under the Collateral Documents, it being understood
and agreed that all rights and remedies under the Collateral Documents may be
exercised solely by Agent for the benefit of Lenders and the other beneficially
interested parties under the Collateral Documents and the other Loan Documents
in accordance with the terms thereof.
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SECTION 11. MISCELLANEOUS
11.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Each Lender shall have the right at any time to (i)
sell, assign or transfer to any Eligible Assignee, or (ii) sell participations
to any Person in, all or any part of its Commitments or any Loan or Loans made
by it or its Letters of Credit or participations therein or any other interest
herein or in any other Obligations owed to it; provided that no such sale,
assignment, transfer or participation shall, without the consent of Company,
require Company to file a registration statement with the Securities and
Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further that no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Agent and recorded in the
Register as provided in subsection 11.1B(ii); provided, further that no such
sale, assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan Commitment
and the Revolving Loans of the Lender effecting such sale, assignment, transfer
or participation; and provided, further that, anything contained herein to the
contrary notwithstanding, the Swing Line Loan Commitment and the Swing Line
Loans of Swing Line Lender may not be sold, assigned or transferred as
described in clause (i) above to any Person other than a successor Agent and
Swing Line Lender to the extent contemplated by subsection 10.5. Except as
otherwise provided in this subsection 11.1, no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment or transfer of, or any granting of participations in, all
or any part of its Commitments or the Loans, the Letters of Credit or
participations therein, or the other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan, Letter of Credit or participation in any Letter of Credit or in
any Swing Line Loan, or other Obligation may (a) be assigned in any
amount to another Lender, or to an Affiliate of the assigning Lender or
another Lender, with the giving of notice to Company and Agent or (b)
be assigned in an aggregate amount of not less than $5,000,000 (or such
lesser amount as shall constitute the aggregate amount of the
Commitments, Loans, Letters of Credit and participations in any Letter
of Credit or in any Swing Line Loan, and other Obligations of the
assigning Lender) to any other Eligible Assignee with the giving of
notice to Company and with the consent of Company and Agent (which
consent of Company and Agent shall not be unreasonably withheld or
delayed). To the extent of any such assignment in accordance with
either clause (a) or (b) above, the assigning Lender shall be relieved
of its obligations with respect to its
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Commitments, Loans, Letters of Credit or participations therein, or
other Obligations or the portion thereof so assigned. The parties to
each such assignment shall execute and deliver to Agent, for its
acceptance and recording in the Register, an Assignment Agreement,
together with a processing and recordation fee of, in the case of
assignments to a Lender or an Affiliate of a Lender, $1,500 and, in the
case of assignments to any other Eligible Assignee, $3,500 and such
forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under
such Assignment Agreement may be required to deliver to Agent pursuant
to subsection 2.7B(iii)(a). Upon such execution, delivery, acceptance
and recordation, from and after the effective date specified in such
Assignment Agreement, (y) 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 Agreement, shall have
the rights and obligations of a Lender hereunder and (z) the assigning
Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto); provided that the assigning Lender shall retain its
rights (concurrently with assignee) under subsections 2.6D, 2.7, 3.5A,
3.6, 11.2, 11.3 and 11.4. The Commitments hereunder shall be modified
to reflect the Commitment of such assignee and any remaining Commitment
of such assigning Lender and, if any such assignment occurs after the
issuance of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Agent for cancellation,
and thereupon new Notes shall be issued to the assignee and to the
assigning Lender, substantially in the form of Exhibit IV, Exhibit V,
Exhibit VI, Exhibit VII or Exhibit VIII annexed hereto, as the case may
be, with appropriate insertions, to reflect the new Commitments and/or
outstanding Term Loans, as the case may be, of the assignee and/or the
assigning Lender.
(ii) Acceptance by Agent; Recordation in Register. Upon
its receipt of an Assignment Agreement executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in subsection
11.1B(i) and any forms, certificates or other evidence with respect to
United States federal income tax withholding matters that such assignee
may be required to deliver to Agent pursuant to subsection
2.7B(iii)(a), Agent shall, if such Assignment Agreement has been
completed and is in substantially the form of Exhibit XXII hereto and
if Agent and Company have consented to the assignment evidenced thereby
(in each case to the extent such consent is required pursuant to
subsection 11.1B(i)), (a) accept such Assignment Agreement by executing
a counterpart thereof as provided
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therein (which acceptance shall evidence any required consent of Agent
to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company. Agent
shall maintain a copy of each Assignment Agreement delivered to and
accepted by it as provided in this subsection 11.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of
any Loan allocated to such participation, (ii) a reduction of the principal
amount of or the rate of interest payable on any Loan allocated to such
participation, (iii) the release of the Liens held by Agent on behalf of
Lenders with respect to all or substantially all of the Collateral or (iv) a
reduction of the amount of any fees payable hereunder to the extent subject to
such participation, and all amounts payable by Company hereunder (including
without limitation amounts payable to such Lender pursuant to subsections 2.6D,
2.7 and 3.6) shall be determined as if such Lender had not sold such
participation. Holdings, Company and each Lender hereby acknowledge and agree
that, solely for purposes of subsections 11.4 and 11.5, (a) any participation
will give rise to a direct obligation of Holdings or Company, as applicable, to
the participant and (b) the participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 11.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between
Company and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Holdings and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 11.19.
11.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, each of Holdings and Company agrees to pay promptly (i) all the
actual and reasonable costs and expenses of preparation of the Loan Documents;
(ii) all the costs of furnishing all opinions by counsel for Holdings and its
Subsidiaries (including
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without limitation any opinions requested by Lenders as to any legal matters
arising hereunder) and of each Loan Party's performance of and compliance with
all agreements and conditions on its part to be performed or complied with
under this Agreement and the other Loan Documents including, without
limitation, with respect to confirming compliance with environmental and
insurance requirements; (iii) the reasonable fees, expenses and disbursements
of counsel to Agent (including internal counsel) in connection with the
negotiation, preparation, execution and administration of the Loan Documents
and the Loans and any consents, amendments, waivers or other modifications
hereto or thereto and any other documents or matters requested by any Loan
Party; (iv) all the reasonable costs and expenses of creating and perfecting
Liens in favor of Agent on behalf of Lenders pursuant to any Loan Document,
including filing and recording fees and expenses, title insurance, and
reasonable fees and expenses of counsel for providing such opinions as Agent or
Requisite Lenders may reasonably request and reasonable fees and expenses of
legal counsel to Agent; (v) all the reasonable costs and expenses of obtaining
and reviewing any appraisals provided for under subsection 4.1N or 6.11 and any
environmental audits or reports provided for under subsection 4.1R or 6.11;
(vi) all other actual and reasonable costs and expenses incurred by Agent in
connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and the transactions
contemplated hereby and thereby; and (vii) after the occurrence of an Event of
Default, all reasonable costs and expenses, including reasonable attorneys'
fees (including internal counsel) and costs of settlement, incurred by Agent
and Lenders in enforcing any Obligations of or in collecting any payments due
from any Loan Party hereunder or under the other Loan Documents by reason of
such Event of Default or in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy proceedings.
11.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
11.2, whether or not the transactions contemplated hereby shall be consummated,
each of Holdings and Company agrees to defend, indemnify, pay and hold harmless
Agent and Lenders, and the officers, directors, trustees, employees, agents and
affiliates of Agent and Lenders (collectively called the "INDEMNITEES") from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including without limitation the reasonable
fees and disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party
or a potential party thereto), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including without limitation securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise,
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that may be imposed on, incurred by, or asserted against any such Indemnitee,
in any manner relating to or arising out of this Agreement or the other Loan
Documents or any other Transaction Documents or the transactions contemplated
hereby or thereby (including without limitation Lenders' agreement to make the
Loans hereunder or the use or intended use of the proceeds of any of the Loans
or the issuance of Letters of Credit hereunder or the use or intended use of
any of the Letters of Credit) or the statements contained in the commitment
letter delivered by any Lender to any Loan Party with respect thereto
(collectively called the "INDEMNIFIED LIABILITIES"); provided that each of
Holdings and Company shall not have any obligation to any Indemnitee hereunder
with respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities are directly attributable to the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction. To the extent that the undertaking to defend,
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, each of
Holdings and Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.
11.4 SET-OFF.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default and consultation with Agent each Lender is
hereby authorized by each of Holdings and Company at any time or from time to
time, without notice to Holdings or Company or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by that Lender to or for the credit or the account of
Holdings or Company against and on account of the obligations and liabilities
of Holdings or Company to that Lender under this Agreement, the Notes, the
Letters of Credit and participations therein and the other Loan Documents,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Agreement, the Notes, the Letters of Credit and
participations therein or any other Loan Document, irrespective of whether or
not (i) that Lender shall have made any demand hereunder or (ii) the principal
of or the interest on the Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become due and payable
pursuant to Section 8 and although said obligations and liabilities, or any of
them, may be contingent or unmatured. Company hereby further grants to Agent
and each Lender a security interest in all deposits and accounts maintained
with Agent or such Lender as security for the Obligations.
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11.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment, by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts (excluding amounts due and owing pursuant to
subsections 2.6D, 2.7, 3.2(i)(a) and 3.2(ii)(a)) then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the
"AGGREGATE AMOUNTS DUE" to such Lender) which is greater than the proportion
received by any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately greater payment
shall (i) notify Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the
Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is
thereafter recovered from such Lender upon the bankruptcy or reorganization of
Holdings or any of its Subsidiaries or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Each of Holdings and Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by Holdings or any of its
Subsidiaries to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
11.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, or consent to any departure by
Holdings or Company therefrom, shall in any event be effective without the
written concurrence of Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: increases the amount of any
of the Commitments or reduces the principal amount of any of the Loans; changes
any Lender's Pro Rata Share; changes in any manner the definitions of
"Requisite Lenders" or "Requisite Class Lenders"; changes in any manner any
provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of all Lenders; postpones the date of final maturity of
any of the Loans or reduces the amount of principal owing in respect of any of
the Loans; postpones the date on which any interest or any fees are payable;
decreases the interest rate borne by any of the Loans (other than any waiver of
any increase in the interest rate
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applicable to any of the Loans pursuant to subsection 2.2E) or the amount of
any fees payable hereunder; provides for the release of the Liens held by Agent
on behalf of Lenders with respect to all or substantially all of the
Collateral; provides for the release or termination of the Guaranty or the
Holdings Guaranty other than pursuant to the terms thereof; increases the
maximum duration of Interest Periods permitted hereunder; reduces the amount
payable in respect of any Letter of Credit or postpones the due date of any
amount payable in respect of, or extends the date described in subsection
3.1A(iii)(a) which prescribes the required expiration date of, any Letter of
Credit; or changes in any manner the provisions contained in subsection 8.1 or
this subsection 11.6 shall be effective only if evidenced by a writing signed
by or on behalf of all Lenders affected thereby. In addition, (i) no
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the Lender which is the
holder of that Note, (ii) no amendment, modification, termination or waiver of
any provision of subsection 2.1A(vi) or any other provision of this Agreement
relating to the Swing Line Loan Commitment or the Swing Line Loans shall be
effective without the written concurrence of Swing Line Lender, (iii) no
amendment, modification, termination or waiver of any provision of subsection
2.4 which has the effect of changing any interim scheduled payments, voluntary
or mandatory prepayments or Commitment reductions applicable to any Class (an
"AFFECTED CLASS") in a manner that disproportionately disadvantages such Class
relative to the other Class shall be effective without the written concurrence
of the Requisite Class Lenders of the Affected Class (it being understood and
agreed that any amendment, modification, termination or waiver of any provision
which only postpones or reduces any interim scheduled payment, voluntary or
mandatory prepayment or Commitment reduction from those set forth in subsection
2.4 with respect to only one Class shall be deemed to not disproportionately
disadvantage the other Class and, therefore, shall not require the consent of
Requisite Class Lenders of such other Class), (iv) no amendment, modification,
termination or waiver relating to the obligations of Lenders relating to the
purchase of participation in Letters of Credit shall be effective without the
written concurrence of each Issuing Lender having a Letter of Credit then
outstanding or which has not been reimbursed for a drawing under a Letter of
Credit issued by it and of Agent, and (v) no amendment, modification,
termination or waiver of any provision of Section 10 or of any other provision
of this Agreement which, by its terms, expressly requires the approval or
concurrence of Agent shall be effective without the written concurrence of
Agent. Agent may, but shall have no obligation to, with the concurrence of any
Lender, execute amendments, modifications, waivers or consents on behalf of
that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Holdings or Company in any case shall entitle Holdings or Company to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 11.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Holdings and Company, on
Holdings and Company.
179
180
11.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
11.8 NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served, telexed or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile
or telex, or three Business Days after depositing it in the United States mail
with postage prepaid and properly addressed; provided that notices to Agent
shall not be effective until received. For the purposes hereof, the address of
each party hereto shall be as set forth under such party's name on the
signature pages hereof or (i) as to Holdings, Company and Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto and (ii) as to each other party, such other address as
shall be designated by such party in a written notice delivered to Agent.
11.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement and the
making of the Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied
by law to the contrary, the agreements of Holdings and Company set forth in
subsections 2.6D, 2.7, 3.5A, 3.6, 11.2, 11.3 and 11.4 and the agreements of
Lenders set forth in subsections 10.2C, 10.4 and 11.5 shall survive the payment
of the Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.
11.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan
180
181
Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
11.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Holdings, Company or any other party or against
or in payment of any or all of the Obligations. To the extent that any Loan
Party makes a payment or payments to Agent or Lenders (or to Agent for the
benefit of Lenders), or Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
11.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
11.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
11.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
181
182
11.15 APPLICABLE LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
11.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders (it being understood
that Lenders' rights of assignment are subject to subsection 11.1). The terms
and provisions of this Agreement shall enure to the benefit of any assignee or
transferee of any of the Loans, and in the event of any such transfer or
assignment the rights and privileges herein conferred upon Lenders shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. Neither Holdings' or Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Holdings or Company without the prior written consent of all
Lenders.
11.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST HOLDINGS OR COMPANY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT EACH OF HOLDINGS AND COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION.
Each of Holdings and Company hereby agrees that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Holdings or Company, as the case may be, at its
address provided in subsection 11.8, such service being hereby acknowledged by
Holdings or Company, as the case may be, to be sufficient for personal
jurisdiction in any action against Holdings or Company, as the case may be, in
any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of any Lender to bring
proceedings against Holdings or Company in the courts of any other
jurisdiction.
182
183
11.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all- encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in
their related future dealings. Each party hereto further warrants and
represents that it has reviewed this waiver with its legal counsel and that it
knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
11.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of or in connection with this Agreement which has
been identified as confidential by Company in accordance with such Lender's
customary procedures for handling confidential information of this nature and
in accordance with safe and sound banking practices, it being understood and
agreed by Holdings and Company that in any event a Lender may make disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participation therein or as required or requested by any
governmental agency or representative thereof or the NAIC or pursuant to legal
process; provided that, unless specifically prohibited by applicable law or
court order, each Lender shall notify Company of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public information
prior to disclosure of such information; and provided, further that in no event
shall any Lender be obligated or required to return any materials furnished by
Holdings or any of its Subsidiaries.
183
184
11.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
184
185
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
LOAN PARTIES:
FOOD 4 LESS HOLDINGS, INC.
By: /s/ George G. Golleher
-------------------------------------------
George G. Golleher
Title: Vice Chairman of the Board
Notice Address: Food 4 Less Holdings, Inc.
777 South Harbor Boulevard
La Habra, CA 90631
S-1
186
FOOD 4 LESS SUPERMARKETS, INC.
By: /s/ Mark A. Resnik
-------------------------------------------
Mark A. Resnik
Title: Vice President/Secretary
Notice Address: Food 4 Less Supermarkets, Inc.
777 South Harbor Boulevard
La Habra, CA 90631
S-2
187
The undersigned, Ralphs Grocery Company, hereby acknowledges
and confirms that, as a result of the consummation of the RSI Merger and the
RGC Merger (and its subsequent name change from Ralphs Supermarkets, Inc.), it
is the legal successor to Food 4 Less and it has assumed all of the obligations
of Food 4 Less set forth herein, and it is "Company" for all purposes hereunder
and under each of the other Loan Documents.
RALPHS GROCERY COMPANY
By: /s/ Jan Charles Gray
-------------------------------------------
Jan Charles Gray
Title: Senior Vice President, General Counsel
and Secretary
By: /s/ George G. Golleher
-------------------------------------------
George G. Golleher
Title: Vice Chairman of the Board
Notice Address: Ralphs Grocery Company
777 South Harbor Boulevard
La Habra, CA 90631
S-3
188
LENDERS:
BANKERS TRUST COMPANY,
individually and as Agent
By: /s/ Mary Jo Jolly
-------------------------------------------
Mary Jo Jolly
Title: Assistant Vice President
Notice Address: Bankers Trust Company
130 Liberty Street
14th Floor
New York, NY 10006
Attention: Mary Jo Jolly
With a copy to: Bankers Trust Company
300 South Grand Avenue
41st Floor
Los Angeles, CA 90071
Attention: Eric S. Swanson
S-4
189
THE CHASE MANHATTAN BANK, N.S.,
individually and as Co-Arranger
By: /s/ Michael T. McLaughlin
-------------------------------------------
Michael T. McLaughlin
Title: Vice President
Notice Address: The Chase Manhattan Bank, N.A.
One Chase Plaza
8th Floor
New York, NY 10081
Attention: Michael McLaughlin
With a copy to: The Chase Manhattan Bank, N.A.
One Chase Plaza
5th Floor
New York, NY 10081
Attention: Ellen Gertzog
S-5
190
BANK OF AMERICA, NT&SA,
By: /s/ Linda A. Carper
-------------------------------------------
Linda A. Carper
Title: Managing Director
Notice Address: Bank of America NT&SA
231 South La Salle Street
8th Floor
Chicago, IL 60697
Attention: Linda Carper
S-6
191
THE MITSUBISHI TRUST AND BANKING CORPORATION,
individually and as Co-Arranger
By: /s/ Patricia Loret De Mola
-------------------------------------------
Patricia Loret De Mola
Title: Senior Vice President
Notice Address: The Mitsubishi Trust and Banking
Corporation
520 Madison Avenue
25th Floor
New York, NY 10022
Attention: Anthony Rock
S-7
192
NATWEST BANK N.A.,
Individually and as Co-Arranger
By: /s/ George Triebenbacher
-------------------------------------------
George Triebenbacher
Title: Vice President
Notice Address: Natwest Bank N.A.
175 Water Street, 27th Floor
New York, NY 10038
Attention: George Triebenbacher
S-8
193
UNION BANK,
individually and as Co-Arranger
By: /s/ Cecilia M. Valente
-------------------------------------------
Cecilia M. Valente
Title: Vice President
Notice Address: Union Bank
Retailing Industries Department
350 California Street
11th Floor
San Francisco, CA 94104-1408
Attention: Cecilia Valente
S-9
194
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE,
individually and as Co-Arranger
By: /s/ Brian O'Leary
-------------------------------------------
Brian O'Leary
Title: Vice President
By: /s/ Marcus Edward
-------------------------------------------
Marcus Edward
Title: Vice President
Notice Address: Compagnie Financiere de Cic
et de L'Union Europeenne
520 Madison Avenue
37th Floor
New York, NY 10022
Attention: Brian O'Leary
S-10
195
CREDIT SUISSE,
individually and as Co-Arranger
By: /s/ Marilou Palenzuela
-------------------------------------------
Marilou Palenzuela
Title: Member of Senior Management
By: /s/ Maria N. Gaspara
-------------------------------------------
Maria N. Gaspara
Title: Associate
Notice Address: Credit Suisse
633 West 5th Street
64th Floor
Los Angeles, CA 90017
Attention: Rita Asa
S-11
196
WELLS FARGO BANK, N.A.,
individually and as Co-Arranger
By: /s/ Craig T. Ingram
-------------------------------------------
Craig T. Ingram
Title: Vice President
Notice Address:
Fundings:
Attention: Ms. Gail Landers
Vice President _ Wells Fargo Bank
420 Montgomery Street
San Francisco, CA 94163
Corporate Banking Group
MAC # 0101-091
Phone 415-396-4915
Fax 415-989-4319
Relationship Management
Craig T. Ingram
333 South Grand Avenue
Suite 800
MAC #2064-080
Los Angeles, CA 90071
Phone 213-253-6156
Fax 213-617-7620
S-12
197
UNITED STATES NATIONAL BANK OF OREGON
individually and as Co-Arranger
By: /s/ Janet E. Jordan
-----------------------------------------
Janet E. Jordan
Title: Vice President
Notice Address: U.S. National Bank of Oregon
555 S.W. Oak Street
Portland, OR 97204
Attention: Janet Jordan
S-13
198
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
individually and as Co-Arranger
By: /s/ Raymond Whiteman
-----------------------------------------
Raymond Whiteman
Title: Authorized Signature
Notice Address: Credit Lyonnais
Credit Lyonnais Building
18th Floor
Leverage Financial Department
1301 Avenue of the Americas
New York, NY 10019
Attention: Raymond Whiteman
With a copy to: Credit Lyonnais Los Angeles
515 South Flower Street
Suite 2200
Los Angeles, CA 90071
Attention: Francois Coussot
S-14
199
BARCLAYS BANK PLC,
individually and as Co-Arranger
By: /s/ Philip S.A. Capparis
-------------------------------------------
Philip S.A. Capparis
Title: Associate Director
Notice Address: Barclays Bank PLC
222 Broadway, 11th Floor
New York, NY 10038
Attention: Philip Capparis
S-15
200
BANQUE INDOSUEZ
individually and as Co-Arranger
By: /s/ Jim Gryp
-------------------------------------------
Title: First Vice President
By: /s/ J. F. Satre
-------------------------------------------
First Vice President
Title: Vice President
Notice Address: Banque Indosuez
1211 Avenue of the Americas
7th Floor
New York, NY 10036-8701
Attention: Andrew Marshall
S-16
201
BANQUE PARIBAS,
individually and as Co-Arranger
By: /s/ Linda Aleshire
-------------------------------------------
Linda Aleshire
Title: Vice President
By: /s/ John Cate
-------------------------------------------
John Cate
Title: Group Vice President
Notice Address: Banque Paribas
2029 Century Park East
Suite 3900
Los Angeles, CA 90067
Attention: Linda Aleshire
S-17
202
CIBC INC.
By: /s/ Brian E. O'Callahan
-------------------------------------------
Brian E. O'Callahan
Title: Authorized Signature
Notice Address: Canadian Imperial Bank
of Commerce
425 Lexington Avenue
New York, NY 10017
Attention: Brian E. O'Callahan
S-18
203
THE BANK OF NOVA SCOTIA
By: /s/ John A. Quick
-------------------------------------------
John A. Quick
Title: Senior Relationship Officer
Notice Address: The Bank of Nova Scotia
101 California Street
48th Floor
San Francisco, CA 94111
Attention: John Quick
S-19
204
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
LOS ANGELES AGENCY
By: /s/ General Manager
-------------------------------------------
Title: General Manager
Notice Address: The Industrial Bank of Japan, Ltd.
350 South Grand Avenue
Suite 1500
Los Angeles, CA 90071
Attention: Vince Timiraos
Senior Vice President and
Senior Manager
S-20
205
NIPPON CREDIT BANK, LTD.
Los Angeles Agency
By: /s/ Bernardo E. Correa-Hensonke
-------------------------------------------
Bernardo E. Correa-Hensonke
Title: Vice President & Manager
Notice Address: The Nippon Credit Bank
550 South Hope Street, Suite 2500
Los Angeles, CA 90071
Attention: Philip Capparis
S-21
206
THE SUMITOMO TRUST & BANKING CO., LTD.
LOS ANGELES AGENCY
By: /s/ Masayuki Imanaka
-------------------------------------------
Masayuki Imanaka
Title: Senior Manager
Notice Address: The Sumitomo Trust &
Banking Co., Ltd.
Los Angeles Agency
333 South Grand Avenue
Suite 5300
Los Angeles, CA 90071
Attention: Loan Administration Department
With a Copy To: The Sumitomo Trust &
Banking Co., Ltd.
Los Angeles Agency
333 South Grand Avenue
Suite 5300
Los Angeles, CA 90071
Attention: Karen Ryan
S-22
207
DAI-ICHI KANGYO BANK, LIMITED,
Los Angeles Agency
By: /s/ Tomohiro Nozaki
-------------------------------------------
Tomohiro Nozaki
Title: Senior Vice President & Joint General
Manager
Notice Address: Dai-Ichi Kangyo Bank, Limited,
Los Angeles Agency
555 W. Fifth Street
5th Floor
Los Angeles, CA 90013
Attention: David Henry
S-23
208
THE BANK OF CALIFORNIA, N.A.
By: /s/ Vice President
-------------------------------------------
Title: Vice President
Notice Address: The Bank of California, N.A.
550 South Hope Street
3rd Floor
Los Angeles, CA 90071
S-24
209
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Peter K. Merrill
-------------------------------------------
Peter K. Merrill
Title: Director
Notice Address:
S-25
210
FIRSTRUST BANK
By: /s/ Edward A. D'Ancona
-------------------------------------------
Edward A. D'Ancona
Title: Vice President
Notice Address: Firstrust Bank
1931 Cottman Avenue
Philadelphia, PA 19111-3897
Attention: Robert Michaud
S-26
211
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
individually and as Co-Arranger
By: /s/ Joan M. Chiappe
-------------------------------------------
Joan M. Chiappe
Title: Vice President
Notice Address: Internationale Nederlanden (U.S.)
Capital Corporation
135 East 57th Street
New York, NY 10022-2101
Attention: Joan M. Chiappe
S-27
212
VAN KAMPEN MERRITT PRIME RATE INCOME TRUST
By: /s/ Jeffrey W. Maillet
-------------------------------------------
Jeffrey W. Maillet
Title: Sr. Vice President - Portfolio Manager
S-28
213
[Intentionally Omitted]
S-29
214
[Intentionally Omitted]
S-30
215
ACADIA PARTNERS, L.P.
By: Acadia FW Partners, L.P. as General;
Partner of Acadia Partners, L.P.
By: Acadia MGP, Inc., as Managing General
Partner of the General Partner
By: /s/ Glenn R. August
-------------------------------------------
Glenn R. August
Title: Vice President
Notice Address: Acadia Partners, L.P.
c/o Jay M. Goffman, Esq.
O'Sullivan, Graev &
Karabell, LLD
30 Rockefeller Plaza
New York, NY 10112
S-31
216
PILGRIM PRIME RATE TRUST
By: /s/ Michael D. Hatley
-------------------------------------------
Michael D. Hatley
Title: Assistant Portfolio Manager
Notice Address:
S-32
217
[Intentionally Omitted]
S-33
218
CONTINENTAL CASUALTY COMPANY
By: /s/ Vice President
-------------------------------------------
Title: Vice President
Notice Address: Continental Casualty Company
c/o Loews Corporation
667 Madison Avenue
New York, NY 10021-8087
Attention: High Yield
7th Floor
S-34
219
POLAR & CO.
By: /s/ Polar & Company
-------------------------------------------
Title:
Notice Address: Kemper Financial Services
Legal Dept., 22nd Floor
120 South LaSalle
Chicago, IL 60603
Attention: William P. Kovacs, Esq.
S-35
220
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES, FOR THE
ANNUITY HIGH INCOME ACCOUNT
By: /s/ Sheryl Rothman
-------------------------------------------
Sheryl Rothman
Title: Investment Officer
Notice Address: Alliance Capital Management L.P.
1345 Avenue of the Americas
38th Floor
New York, NY 10105
Attention: High Yield Group
S-36
221
PRIME INCOME TRUST
By: /s/ Rafael Scolari
-------------------------------------------
Rafael Scolari
Title: Vice President Portfolio Manager
Notice Address: Prime Income Trust
Two World Trade Center
72nd Floor
New York, NY 10048
Attention: Rafael Scolari
S-37
222
USL CAPITAL CORPORATION
By: /s/ Craig F. Bruzzone
-------------------------------------------
Craig F. Bruzzone
Title: Vice President,
Municipal and Corporate Financing
Notice Address: USL Capital Corporation
733 Front Street, MS 520
San Francisco, CA 94111
Attention: V.P. Capital Markets
S-38
223
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/ Bruce E. Gaudette
-------------------------------------------
Bruce E. Gaudette
Title:
MASSACHUSETTS MUTUAL CORPORATE VALUE PARTNERS
LIMITED
By: /s/ Bruce E. Gaudette
-------------------------------------------
Bruce E. Gaudette
Title: Vice President
Massachusetts Mutual Life
Insurance Company
Its Investment Manager
Notice Address: Massachusetts Mutual Life
Insurance Company
1295 State Street
Springfield, MA 01111
Attention: John Wheeler, Securities
Investment Division
S-39
224
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES, FOR THE
NUTMEG ACCOUNT
By: /s/ Sheryl Rothman
-------------------------------------------
Sheryl Rothman
Title: Investment Officer
Notice Address: Alliance Capital Management L.P.
1345 Avenue of the Americas
38th Floor
New York, NY 10105
Attention: High Yield Group
S-40
225
[Intentionally Omitted]
S-41
226
CRESCENT CAPITAL CORPORATION
By: /s/ Justin L. Driscoll
-------------------------------------------
Justin L. Driscoll
Title: Vice President
Notice Address: Crescent Capital Corporation
1325 Avenue of the Americas,
25th Floor
New York, NY 10019
PENNSYLVANIA LIFE INSURANCE COMPANY
By: Crescent Capital Corporation
its attorney-in-fact
By: /s/ Justin L. Driscoll
-------------------------------------------
Justin L. Driscoll
Title: Vice President
Notice Address: Crescent Capital Corporation
1325 Avenue of the Americas,
25 Floor
New York, NY 10019
S-42
227
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By: /s/ A. Kipp Koester
-------------------------------------------
A. Kipp Koester
Title: Vice President - Securities
Notice Address: The Northwestern Mutual Life
Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Jeff Lueken
S-43
228
JACKSON NATIONAL LIFE INSURANCE COMPANY
By: /s/ Brion Johnson
-------------------------------------------
Brion Johnson
Title: Vice President,
Notice Address: PPM America, Inc.
225 West Wacker, Suite 1200
Chicago, IL 60606-1228
Attention: Michael DiRe
Private Placement
With a Copy To: Jackson National Life Insurance
Company
5901 Executive Drive
Lansing, MI 48909
Attention: Brion Johnson
S-44
229
JACKSON NATIONAL LIFE INSURANCE COMPANY
OF MICHIGAN
By: /s/ Brion Johnson
-------------------------------------------
Brion Johnson
Title: Vice President,
Notice Address: PPM America, Inc.
225 West Wacker, Suite 1200
Chicago, IL 60606-1228
Attention: Michael DiRe
Private Placement
With a Copy To: Jackson National Life Insurance
Company
5901 Executive Drive
Lansing, MI 48909
Attention: Brion Johnson
S-45
230
THE TRAVELERS INSURANCE COMPANY
By: /s/ Robert M. Mills
-------------------------------------------
Robert M. Mills
Title: Assistant Investment Officer
Notice Address: Investment Group - Securities
Travelers Insurance
One Tower Square 9 PB
Hartford, CT 06183
Attention: Robert Mills
S-46
231
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$925,000,000
CREDIT AGREEMENT
DATED AS OF JUNE 14, 1995
AMONG
FOOD 4 LESS HOLDINGS, INC.,
AS GUARANTOR,
FOOD 4 LESS SUPERMARKETS, INC.,
AS BORROWER,
THE LENDERS, CO-AGENTS AND CO-ARRANGERS LISTED HEREIN,
AS LENDERS, CO-AGENTS AND CO-ARRANGERS,
AND
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT
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232
FOOD 4 LESS HOLDINGS, INC.
AND
FOOD 4 LESS SUPERMARKETS, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement . . . . . . 46
1.3 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.1 Commitments; Making of Loans; the Register; Notes . . . . . . . . . . . . . . . . . . . . . . 47
2.2 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General Provisions
Regarding Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
2.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
2.6 Special Provisions Governing Eurodollar Rate Loans . . . . . . . . . . . . . . . . . . . . . . 76
2.7 Increased Costs; Taxes; Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
2.8 Obligation of Lenders and Issuing Lenders to Mitigate; Replacement of Lender . . . . . . . . . 84
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein . . . . . . . . 85
3.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters of Credit. . . . . . . . . . . . . . 90
3.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
3.5 Indemnification; Nature of Issuing Lenders' Duties . . . . . . . . . . . . . . . . . . . . . . 94
3.6 Increased Costs and Taxes Relating to Letters of Credit . . . . . . . . . . . . . . . . . . . 95
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . 97
4.1 Conditions to Term Loans and Initial Revolving Loans and Swing Line Loans . . . . . . . . . . 97
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
4.3 Conditions to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
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5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries . . . . . . . . 111
5.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
5.3 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
5.4 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
5.5 Title to Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
5.6 Litigation; Adverse Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
5.7 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
5.8 Performance of Agreements; Materially Adverse Agreements . . . . . . . . . . . . . . . . . . . 116
5.9 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
5.10 Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
5.11 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
5.12 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
5.13 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
5.14 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
5.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
5.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
5.17 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
5.18 Representations and Warranties Incorporated From Merger Agreement . . . . . . . . . . . . . . 121
5.19 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
5.20 Transaction Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
5.21 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
6.1 Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
6.2 Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
6.3 Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . . . . . . . . . . . . . . . 130
6.4 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
6.5 Inspection; Lender Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
6.6 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
6.7 Environmental Disclosure and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
6.8 Loan Parties' Remedial Action Regarding Hazardous Materials . . . . . . . . . . . . . . . . . 134
6.9 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
6.10 Execution of Guaranty and Collateral Documents by Future Subsidiaries . . . . . . . . . . . . 135
6.11 Additional Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
6.12 Notice Regarding Change of Control Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
7.2 Liens and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
7.3 Investments; Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
7.4 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
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7.5 Restricted Junior Payments; Other Restricted Payments . . . . . . . . . . . . . . . . . . . . 149
7.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions . . . . . . . . . . . . . . . 156
7.8 Consolidated Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
7.9 Restriction on Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
7.10 Sales and Lease-Backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
7.11 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
7.12 Transactions with Shareholders and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 160
7.13 Disposal on Subsidiary Stock; Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . 161
7.14 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
7.15 Amendments of Certain Documents; No Prepayments of Certain Indebtedness . . . . . . . . . . . 162
7.16 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
8.1 Failure to Make Payments When Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
8.2 Default in Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
8.3 Breach of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
8.4 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
8.5 Other Defaults Under Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . 164
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . 165
8.8 Judgments and Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
8.9 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
8.10 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
8.11 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
8.12 Invalidity of Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
8.13 Failure of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
8.14 Failure to Consummate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
8.15 Action Under Related Financing Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . 166
SECTION 9. HOLDINGS GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
9.1 Guarantied Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
9.2 Terms of Holdings Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
SECTION 10. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
10.2 Powers; General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
10.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness . . . . . 175
10.4 Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
10.5 Successor Agent and Swing Line Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
10.6 Guaranties and Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
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SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
11.1 Assignments and Participations in Loans and Letters of Credit . . . . . . . . . . . . . . . . 177
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
11.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
11.4 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
11.5 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
11.6 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
11.7 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
11.9 Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . 185
11.10 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . 185
11.11 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
11.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
11.13 Obligations Several; Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . . 186
11.14 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
11.15 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
11.16 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
11.17 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . 187
11.18 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
11.19 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
11.20 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
Signature pages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TRANCHE A TERM NOTE
V FORM OF TRANCHE B TERM NOTE
VI FORM OF TRANCHE C TERM NOTE
VII FORM OF TRANCHE D TERM NOTE
VIII FORM OF REVOLVING NOTE
IX FORM OF SWING LINE NOTE
X FORM OF COMPLIANCE CERTIFICATE
XI FORM OF GUARANTY
XII FORM OF PLEDGE AGREEMENT
XIII FORM OF SECURITY AGREEMENT
XIV FORM OF TRADEMARK SECURITY AGREEMENT
XV FORM OF HOLDINGS PLEDGE AGREEMENT
XVI FORM OF DEED OF TRUST
XVII FORM OF ENVIRONMENTAL INDEMNITY
XVIII FORM OF DEPOSIT ACCOUNTS SECURITY AGREEMENT
XIX FORM OF F4L GM SECURITY AGREEMENT
XX-A FORM OF OPINION OF LATHAM & WATKINS
XX-B FORM OF OPINION OF JAN CHARLES GRAY, ESQ.
XX-C FORM OF OPINION OF KANSAS COUNSEL
XXI FORM OF OPINION OF O'MELVENY & MYERS
XXII FORM OF ASSIGNMENT AGREEMENT
XXIII-A FORM OF AUDITOR'S LETTER (ARTHUR ANDERSEN LLP)
XXIII-B FORM OF AUDITOR'S LETTER (KPMG PEAT MARWICK)
XXIV FORM OF FINANCIAL CONDITION CERTIFICATE
XXV FORM OF COLLATERAL ACCOUNT AGREEMENT
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SCHEDULES
1.1A EXISTING LETTERS OF CREDIT
1.1B PLANNED DISPOSITIONS
1.1C REQUIRED DISPOSITIONS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1N REAL PROPERTY ASSETS
5.1 HOLDINGS AND SUBSIDIARIES OF HOLDINGS
5.2C GOVERNMENTAL CONSENTS
5.2E HOLDINGS CAPITAL STOCK
5.3 CERTAIN ACCOUNTING MATTERS
5.11 ERISA MATTERS
5.12 BROKER'S OR FINDER'S FEES
5.13 ENVIRONMENTAL MATTERS
5.17 INTELLECTUAL PROPERTY
5.19 CERTAIN MATTERS RELATING TO PERMITS
7.1 EXISTING INDEBTEDNESS
7.2 EXISTING LIENS
7.3 EXISTING INVESTMENTS
7.4 EXISTING CONTINGENT OBLIGATIONS
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