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EXHIBIT 4.1
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$875,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF APRIL 17, 1997
AMONG
FOOD 4 LESS HOLDINGS, INC.,
AS GUARANTOR,
RALPHS GROCERY COMPANY,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
AND
BANKERS TRUST COMPANY,
AS AGENT
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FOOD 4 LESS HOLDINGS, INC.
AND
RALPHS GROCERY COMPANY
AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 2
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement . . . . . .. . . . 43
1.3 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 43
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 44
2.1 Term Loans and Commitments; Making of Loans; the Register; Notes . . . . . . . . . . . . . . .. . . . 44
2.2 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 51
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 55
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General
Provisions Regarding Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 56
2.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 68
2.6 Special Provisions Governing Eurodollar Rate Loans . . . . . . . . . . . . . . . . . . . . . .. . . . 69
2.7 Increased Costs; Taxes; Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 71
2.8 Obligation of Lenders and Issuing Lenders to Mitigate; Replacement of Lender . . . . . . . . .. . . . 76
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 77
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein . . . . . . . . .. . . . 77
3.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 81
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters of Credit . . . . . . . . . . . . . .. . . . 81
3.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 84
3.5 Indemnification; Nature of Issuing Lenders' Duties . . . . . . . . . . . . . . . . . . . . . .. . . . 85
3.6 Increased Costs and Taxes Relating to Letters of Credit . . . . . . . . . . . . . . . . . . . .. . . . 86
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 88
4.1 Conditions to Initial Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 88
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 93
4.3 Conditions to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 94
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SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries . . . . . . . . . . . . . 95
5.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
5.3 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
5.4 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.5 Title to Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.6 Litigation; Adverse Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.7 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.8 Performance of Agreements; Materially Adverse Agreements . . . . . . . . . . . . . . . . . . . . . . . 100
5.9 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.10 Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.11 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.12 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5.13 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
5.14 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
5.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
5.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
5.17 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.18 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
6.1 Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
6.2 Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
6.3 Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
6.4 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
6.5 Inspection; Lender Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
6.6 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
6.7 Environmental Disclosure and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
6.8 Loan Parties' Remedial Action Regarding Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . 114
6.9 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
6.10 Execution of Guaranty and Collateral Documents by Future Subsidiaries . . . . . . . . . . . . . . . . . 115
6.11 Additional Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
6.12 Redemption of Certain Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
7.2 Liens and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
7.3 Investments; Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
7.4 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
7.5 Restricted Junior Payments; Other Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . 128
7.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions . . . . . . . . . . . . . . . . . . . 133
7.8 Consolidated Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
7.9 Restriction on Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
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7.10 Sales and Lease-Backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
7.11 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
7.12 Transactions with Shareholders and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
7.13 Disposal of Subsidiary Stock; Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 138
7.14 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
7.15 Amendments of Certain Documents; No Prepayments of Certain Indebtedness . . . . . . . . . . . . . . . . 140
7.16 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
8.1 Failure to Make Payments When Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
8.2 Default in Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
8.3 Breach of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
8.4 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
8.5 Other Defaults Under Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 142
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 142
8.8 Judgments and Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
8.9 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
8.10 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
8.11 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
8.12 Invalidity of Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
8.13 Failure of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
8.14 Action Under Related Financing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
SECTION 9. HOLDINGS GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
9.1 Guarantied Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
9.2 Terms of Holdings Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
SECTION 10. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
10.2 Powers; General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
10.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness . . . . . . . . . . 152
10.4 Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
10.5 Successor Agent and Swing Line Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
10.6 Guaranties and Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
11.1 Assignments and Participations in Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . 153
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
11.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
11.4 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
11.5 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
11.6 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
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11.7 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
11.9 Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . . 161
11.10 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . 161
11.11 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
11.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
11.13 Obligations Several; Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . . . . . . 162
11.14 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
11.15 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
11.16 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
11.17 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
11.18 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
11.19 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
11.20 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
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 REQUEST FOR LETTER OF CREDIT
IV FORM OF TRANCHE A TERM NOTE
V FORM OF TRANCHE B TERM NOTE
VI FORM OF REVOLVING NOTE
VII FORM OF SWING LINE NOTE
VIII FORM OF COMPLIANCE CERTIFICATE
IX FORM OF GUARANTY
X FORM OF PLEDGE AGREEMENT
XI FORM OF SECURITY AGREEMENT
XII FORM OF TRADEMARK SECURITY AGREEMENT
XIII FORM OF DEED OF TRUST
XIV FORM OF DEPOSIT ACCOUNTS SECURITY AGREEMENT
XV-A FORM OF OPINION OF LATHAM & WATKINS
XV-B FORM OF OPINION OF WAYNE BELL, ESQ.
XV-C FORM OF OPINION OF KANSAS COUNSEL
XVI FORM OF OPINION OF O'MELVENY & MYERS LLP
XVII FORM OF ASSIGNMENT AGREEMENT
XVIII FORM OF AUDITOR'S LETTER
XIX FORM OF FINANCIAL CONDITION CERTIFICATE
XX FORM OF MASTER ASSIGNMENT AGREEMENT
XXI FORM OF ACKNOWLEDGEMENT AND CONSENT
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SCHEDULES
1.1A EXISTING LETTERS OF CREDIT
1.1B PLANNED DISPOSITIONS
1.1C SELECTED ASSETS
1.1D PLANNED IMPROVEMENT PROPERTIES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1F REAL PROPERTY ASSETS
5.1 HOLDINGS AND SUBSIDIARIES OF HOLDINGS
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
5.18 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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DEFINITIONS
A. CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ADAMS/VERMONT PARTNERSHIP" means Adams/Vermont Renaissance
Plaza, Ltd., a California limited partnership in which Company holds a 75%
partnership interest, as a general partner, which partnership was formed to
develop a shopping center located at Adams and Vermont Streets in Los Angeles,
California, including a store to be leased to or operated by Company or one of
its Subsidiaries.
"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 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.
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"AGREEMENT" means this Amended and Restated Credit Agreement
dated as of April 17, 1997, 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(1)(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 TRANCHE A BASE RATE MARGIN" means, as of any date
of determination, a percentage per annum set forth below opposite the
applicable Leverage Ratio; provided that for the period from the Effective Date
until the first delivery after the Effective Date of a Margin Determination
Certificate pursuant to subsection 6.1(xviii), the Applicable Tranche A Base
Rate Margin shall be 0.75% per annum; provided further that, if Company has
failed to provide a Margin Determination Certificate at the time required
pursuant to subsection 6.1, the Applicable Tranche A Base Rate Margin shall be
1.25% per annum for the period from the date such Margin Determination
Certificate was required to be delivered until such Margin Determination
Certificate is actually delivered:
LEVERAGE RATIO APPLICABLE TRANCHE A BASE RATE MARGIN
greater than 6.5:1.0 1.25%
less than or equal to 6.5:1.0 1.00%
but greater than 6.0:1.0
less than or equal to 6.0:1.0 0.75%
but greater than 5.5:1.0
less than or equal to 5.5:1.0 0.625%
but greater than 5.0:1.0
less than or equal to 5.0:1.0 0.50%
but greater than 4.75:1.0
less than or equal to 4.75:1.0 0.375%
but greater than 4.5:1.0
less than or equal to 4.5:1.0 0.25%
"APPLICABLE TRANCHE A EURODOLLAR MARGIN" means, as of any date
of determination, a percentage per annum set forth below opposite the
applicable Leverage Ratio; provided that for the period from the Effective Date
until the first delivery after the Effective Date of a Margin Determination
Certificate pursuant to subsection 6.1(xviii), the Applicable Tranche A
Eurodollar Margin shall be 1.75% per annum; provided further that, if
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Company has failed to provide a Margin Determination Certificate at the time
required pursuant to subsection 6.1, the Applicable Tranche A Eurodollar Margin
shall be 2.25% per annum for the period from the date such Margin Determination
Certificate was required to be delivered until such Margin Determination
Certificate is actually delivered:
LEVERAGE RATIO APPLICABLE TRANCHE A EURODOLLAR RATE
MARGIN
greater than 6.5:1.0 2.25%
less than or equal to 6.5:1.0 2.00%
but greater than 6.0:1.0
less than or equal to 6.0:1.0 1.75%
but greater than 5.5:1.0
less than or equal to 5.5:1.0 1.625%
but greater than 5.0:1.0
less than or equal to 5.0:1.0 1.50%
but greater than 4.75:1.0
less than or equal to 4.75:1.0 1.375%
but greater than 4.5:1.0
less than or equal to 4.5:1.0 1.25%
"APPLICABLE TRANCHE B BASE RATE MARGIN" means, as of any date
of determination, a percentage per annum set forth below opposite the
applicable Leverage Ratio; provided that for the period from the Effective Date
until the first delivery after the Effective Date of a Margin Determination
Certificate pursuant to subsection 6.1(xviii), the Applicable Tranche B Base
Rate Margin shall be 1.25% per annum; provided further that if Company has
failed to provide a Margin Determination Certificate at the time required
pursuant to subsection 6.1, the Applicable Tranche B Base Rate Margin shall be
1.75% per annum for the period from the date such Margin Determination
Certificate was required to be delivered until such Margin Determination
Certificate is actually delivered:
11
LEVERAGE RATIO APPLICABLE TRANCHE B BASE RATE MARGIN
greater than 6.5:1.0 1.75%
less than or equal to 6.5:1.0 1.50%
but greater than 6.0:1.0
less than or equal to 6.0:1.0 1.25%
but greater than 5.5:1.0
less than or equal to 5.5:1.0 1.125%
but greater than 5.0:1.0
less than or equal to 5.0:1.0 1.00%
but greater than 4.75:1.0
less than or equal to 4.75:1.0 0.875%
but greater than 4.5:1.0
less than or equal to 4.5:1.0 0.75%
"APPLICABLE TRANCHE B EURODOLLAR MARGIN" means, as of any date
of determination, a percentage per annum set forth below opposite the
applicable Leverage Ratio; provided that for the period from the Effective Date
until the first delivery after the Effective Date of a Margin Determination
Certificate pursuant to subsection 6.1(xviii), the Applicable Tranche B
Eurodollar Margin shall be 2.25% per annum; provided further that if Company
has failed to provide a Margin Determination Certificate at the time required
pursuant to subsection 6.1, the Applicable Tranche B Eurodollar Margin shall be
2.75% per annum for the period from the date such Margin Determination
Certificate was required to be delivered until such Margin Determination
Certificate is actually delivered:
12
LEVERAGE RATIO APPLICABLE TRANCHE B EURODOLLAR RATE
MARGIN
greater than 6.5:1.0 2.75%
less than or equal to 6.5:1.0 2.50%
but greater than 6.0:1.0
less than or equal to 6.0:1.0 2.25%
but greater than 5.5:1.0
less than or equal to 5.5:1.0 2.125%
but greater than 5.0:1.0
less than or equal to 5.0:1.0 2.00%
but greater than 4.75:1.0
less than or equal to 4.75:1.0 1.875%
but greater than 4.5:1.0
less than or equal to 4.5:1.0 1.75%
"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 $100,000 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 $100,000 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 XVII annexed hereto.
"AUDITOR'S LETTER" means a letter, substantially in the form
of Exhibit XVIII annexed hereto, acknowledged and agreed to by Company and
Arthur Andersen LLP, which shall be delivered to Agent pursuant to subsection
4.1M.
13
"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.
"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.
14
"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.
"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 were
outstanding on the Closing Date; provided, however, that in the event any such
warrant (of which Ronald W. Burkle had 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 were outstanding on the Closing Date; provided, however, that in
the event any such warrant (of which the Yucaipa Investors had 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 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
15
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.
"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 Term Loan Exposure with respect to Tranche A Term Loans
and/or Revolving Loan Exposure (taken together as a single class) and (ii)
Lenders having Term Loan Exposure with respect to Tranche B Term Loans.
"CLOSING DATE" means June 14, 1995, the date on which the
initial Loans were made.
"CO-AGENTS" 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.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Agent on the Closing Date,
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 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 for the benefit of Lenders 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, as of any date of
determination, a percentage per annum set forth below opposite the applicable
Leverage Ratio; provided that for the period from the Effective Date until the
first delivery after the Effective Date of a
16
Margin Determination Certificate pursuant to subsection 6.1(xviii), the
Commitment Fee Percentage shall be 0.500% per annum; provided further that if
Company has failed to provide a Margin Determination Certificate at the time
required pursuant to subsection 6.1, the Commitment Fee Percentage shall be
0.500% per annum for the period from the date such Margin Determination
Certificate was required to be delivered until such Margin Determination
Certificate is actually delivered:
LEVERAGE RATIO COMMITMENT FEE PERCENTAGE
greater than 5.5:1.0 0.500%
less than or equal to 5.5:1.0 0.425%
but greater than 5.0:1.0
less than or equal to 5.0:1.0 0.375%
but greater than 4.5:1.0
less than or equal to 4.5:1.0 0.325%
"COMMITMENTS" means the commitments of Lenders to make Loans
as set forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the
preamble to this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit VIII 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, (vii) Smith's-Related Restructuring
Charges and (viii) 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 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
17
other evidence of beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of Company minus (ii) the sum (without
duplication) of (a) Consolidated Capital Expenditures (as defined in clause (i)
above) constituting Development Investments permitted under subsection
7.3(vii), (b) the principal amounts 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 270 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 permitted pursuant
to subsection 2.4B(iii)(a)(v) and so long as such expenditures are made not
later than 18 months after receipt of such proceeds.
"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 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 Effective Date and
(ii) any interest expenses not payable in Cash (including amortization of
discounts and premiums and amortization of debt issuance costs).
"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
18
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; provided that such Net Asset Sale Proceeds which meet the following
requirements ("Excluded Proceeds") shall not be added pursuant to this clause
(h): (x) they have not been reinvested as permitted pursuant to such clauses
(i), (ii) and (iv) and (y) the period for permitted reinvestment pursuant to
such clauses (i), (ii) and (iv) extends beyond the last date of the Fiscal
Year, (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 and (j) an amount equal to the Excluded Proceeds from the
previous Fiscal Year; 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.
"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 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
19
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, (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 and (v) the after tax impact (if any) of the Smith's-Related
Restructuring Charges; 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 the selling stockholders of Ralphs Supermarkets, Inc. 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 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 such selling stockholders 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 such selling stockholders 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; provided that through and including April 30, 1997, the 1992 13.75%
Senior Subordinated Notes and the 1995 13.75% Senior Subordinated Notes shall
not be included as Indebtedness of Company for purposes of any calculation of
Company's Consolidated Total Debt.
"CONSULTING AGREEMENT" means that certain Consulting Agreement
dated as of the Closing Date among Holdings, Company and Yucaipa, as such
Consulting Agreement
20
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 nonperformance
by any other party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement (contingent or
otherwise) (X) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or any balance
sheet item, level of income or financial condition of another if, in the case
of any agreement described under subclauses (X) or (Y) of this sentence, the
primary purpose or intent thereof is as 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 each Deed of Trust executed and
delivered by any Loan Party on the Closing Date and each other deed of trust,
mortgage, security agreement and fixture filing relating to any fee or
leasehold interest of any Loan Party in real property substantially in the form
of Exhibit XIII 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
21
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.
"DEPOSIT ACCOUNTS SECURITY AGREEMENT" means each Deposit
Accounts Security Agreement executed and delivered by Company and certain of
Company's Subsidiaries on the Closing Date and each other Deposit Accounts
Security Agreement substantially in the form of Exhibit XIV annexed hereto, to
be executed and delivered by Subsidiaries of Company from time to time in
accordance with subsection 6.10, 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 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,
22
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.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"EFFECTIVE DATE" means the date on or before May 31, 1997
which the conditions precedent to the purchase of the Loans and the making of
the initial Revolving Loans set forth in subsection 4.1 are satisfied.
"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 and, with respect to any
Lender that is a fund that invests in loans, any other fund that invests in
loans and is managed by the same investment advisor of such Lender or by an
Affiliate of such investment advisor; 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 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
23
Hazardous Materials and relating to Company, any of its Subsidiaries, any of
their respective Affiliates or any Facility.
"ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity
executed and delivered by Company on the Closing Date, as such Environmental
Indemnity may be amended, supplemented or otherwise modified from time to time.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to (i)
environmental matters, including, without limitation, those relating to fines,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of
Hazardous Materials, (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
24
Internal Revenue Code with respect to any Pension Plan (whether or not waived
in accordance with Section 412(d) of the Internal Revenue Code) or the failure
to make by its due date a required installment under Section 412(m) of the
Internal Revenue Code with respect to any Pension Plan or the failure to make
any required contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a
notice of intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by 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 in accordance with the terms hereof: (a)
any fee interest in undeveloped land acquired by
25
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 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. There shall
be no limitation on the number of Real Property Assets constituting Excluded
Sites pursuant to the foregoing sentence.
"EXISTING CREDIT AGREEMENT" has the meaning assigned to that
term in the introduction to this Agreement.
"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 on the Closing Date by Food 4 Less GM, Inc., a
California corporation, 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 be amended, supplemented or otherwise
modified from time to time.
"F4L MERCHANDISING" means Food 4 Less Merchandising, Inc., a
California 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.
"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
26
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.
"FLOOD HAZARD PROPERTY" means a Real Property Asset subject to
a Deed of Trust located in an area designated by the Federal Emergency
Management Agency as having special flood or mudslide hazards.
"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.
"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,
27
Inc., a California corporation, and Grocers General Merchandise Company, a
California corporation, as in effect on the Closing Date 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 each other Guaranty
Agreement 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
IX annexed hereto, as each such Guaranty Agreement may 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 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" has the meaning assigned to that term in the
preamble to this Agreement.
"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, as such debentures may be amended from time to time to the extent
permitted under subsection 7.15B.
28
"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 PLEDGE AGREEMENT" means the Pledge Agreement
executed and delivered by Holdings on the Closing Date, as such Pledge
Agreement may 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 Company and Ralphs Holding Company (now
known as Ralphs Grocery Company), as such Indemnification Agreement may be
amended from time to time after the Closing Date to the extent permitted under
subsection 7.15A.
"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 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 June 15,
29
1997, 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 DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"INTEREST RATE EXCHANGERS" has the meaning assigned to that
term in Section 9.
"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 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
30
context of a particular Commitment or a particular Type of Loans, shall mean
Lenders having that Commitment or that Type of Loans.
"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).
"LEVERAGE RATIO" means, as at any date of determination, the
ratio of Consolidated Total Debt as of the last day of the Fiscal Quarter
immediately preceding the Fiscal Quarter in which such date of determination
occurs to Consolidated Adjusted EBITDA for the four Fiscal Quarters ending as
of such last day of such immediately preceding Fiscal Quarter.
"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.
"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, 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 Leverage Ratio which is applicable as of the last day of the fiscal period
for which such financial statements and Officers' Certificate are being
delivered.
"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.
31
"MASTER ASSIGNMENT AGREEMENT" means that certain Master
Assignment Agreement substantially in the form of Exhibit XX annexed hereto,
among Company, the lenders under the Existing Credit Agreement, the lenders
under this Agreement and the Agent pursuant to which all lenders under the
Existing Credit Agreement assign their loans and/or revolving loan commitments
to the Agent, and Agent assigns to each Lender under this Agreement, and each
such lender purchases from Agent, the Loans and/or Revolving Loan Commitments
as set forth on Schedule 2.1 attached to this Agreement.
"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.
"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.
"1992 10-1/4% SENIOR SUBORDINATED NOTE INDENTURE" means the
indenture dated as of July 29, 1992 between Company (as the successor to Ralphs
Grocery Company) and United States Trust Company of New York pursuant to which
the 1992 10-1/4% Senior Subordinated Notes were issued, as amended by the First
Supplemental Indenture dated as of May 30, 1995 and the Second Supplemental
Indenture dated as of June 14, 1995, and as such indenture may be further
amended from time to time to the extent permitted under subsection 7.15B.
"1992 10-1/4% SENIOR SUBORDINATED NOTES" means Company's
$300,000,000 in initial aggregate principal amount of 10-1/4% Senior
Subordinated Notes due July 15, 2002, as such notes may be amended from time to
time to the extent permitted under subsection 7.15B.
"1992 13.75% SENIOR SUBORDINATED NOTE INDENTURE" means the
indenture dated as of June 15, 1991 among Company (as the successor to Food 4
Less Supermarkets,
32
Inc.), the subsidiary guarantors named therein and United States Trust Company
of New York pursuant to which the 1992 13.75% 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 the Fifth Supplemental Indenture dated
as of June 14, 1995, and as such indenture may be further amended from time to
time to the extent permitted under subsection 7.15B.
"1992 13.75% SENIOR SUBORDINATED NOTES" means Company's
$145,000,000 in initial aggregate principal amount of 13.75% Senior
Subordinated Notes due April 15, 2001, as such notes may be amended from time
to time to the extent permitted under subsection 7.15B.
"1992 10.45% SENIOR NOTE INDENTURE" means the indenture dated
as of April 15, 1992 among Company (as the successor to Food 4 Less
Supermarkets, Inc.), the subsidiary guarantors named therein and Norwest Bank
Minnesota, National Association, pursuant to which the 1992 10.45% 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 the Third
Supplemental Indenture dated as of June 14, 1995, and as such indenture may be
further amended from time to time to the extent permitted under subsection
7.15B.
"1992 10.45% SENIOR NOTES" means Company's $175,000,000 in
initial aggregate principal amount of 10.45% Senior Notes due June 15, 2000, as
such notes may be amended from time to time to the extent permitted under
subsection 7.15B.
"1993 9% SENIOR SUBORDINATED NOTE INDENTURE" means the
indenture dated as of March 30, 1993 between Company (as the successor to
Ralphs Grocery Company) and United States Trust Company of New York pursuant to
which the 1993 9% Senior 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 the Third Supplemental Indenture dated
as of June 14, 1995, and as such indenture may be further amended from time to
time to the extent permitted under subsection 7.15B.
"1993 9% SENIOR SUBORDINATED NOTES" means Company's
$150,000,000 in initial aggregate principal amount of 9% Senior Subordinated
Notes due April 1, 2003, as such notes may be amended from time to time to the
extent permitted under subsection 7.15B.
"1995 11% SENIOR SUBORDINATED NOTE INDENTURE" means the
indenture dated as of June 1, 1995 among Company (as the successor to Food 4
Less Supermarkets, Inc.), the subsidiary guarantors named therein and United
States Trust Company of New York pursuant to which the 1995 11% Senior
Subordinated Notes were issued, as amended by a First Supplemental Indenture
dated as of June 14, 1995, and as it may be further amended from time to time
to the extent permitted under subsection 7.15B.
"1995 11% SENIOR SUBORDINATED NOTES" means the $524,055,000 in
initial aggregate principal amount of 11% Senior Subordinated Notes due 2005 of
the Company, as
33
such notes may be amended from time to time to the extent permitted under
subsection 7.15B.
"1995 13.75% SENIOR SUBORDINATED NOTE INDENTURE" means the
indenture dated as of June 1, 1995 among Company (as the successor to Food 4
Less Supermarkets, Inc.), the subsidiary guarantors named therein and United
States Trust Company of New York pursuant to which the 1995 13.75% Senior
Subordinated Notes were issued, as amended by a First Supplemental Indenture
dated as of June 14, 1995, and as it may be further amended from time to time
to the extent permitted under subsection 7.15B.
"1995 13.75% SENIOR SUBORDINATED NOTES" means Company's
$140,184,000 in initial aggregate principal amount of Senior Subordinated Notes
due 2005, as such notes may be amended from time to time to the extent
permitted under subsection 7.15B.
"1995 10.45% SENIOR NOTE INDENTURE" means the indenture dated
as of June 1, 1995 among Company (as the successor to Food 4 Less Supermarkets,
Inc.), the subsidiary guarantors named therein and Norwest Bank Minnesota,
National Association pursuant to which the 1995 10.45% Senior Notes were
issued, as amended by a First Supplemental Indenture dated as of June 14, 1995,
and as it may be further amended from time to time to the extent permitted
under subsection 7.15B.
"1995 10.45% SENIOR NOTES" means Company's $520,326,000 in
initial aggregate principal amount of 10.45% Senior Notes due 2004, as such
notes may be amended from time to time to the extent permitted under subsection
7.15B.
"1996 10.45% SENIOR NOTE INDENTURE" means the indenture dated
as of June 6, 1996 among Company, the subsidiary guarantors named therein and
Norwest Bank Minnesota, National Association, pursuant to which the 1996 10.45%
Senior Notes were issued, as such indenture may be further amended from time to
time to the extent permitted under subsection 7.15B.
"1996 10.45% SENIOR NOTES" means Company's $100,000,000 in
initial aggregate principal amount of 10.45% Senior Notes due 2004, as such
notes may be amended from time to time to the extent permitted under subsection
7.15B.
"1997 11% SENIOR SUBORDINATED NOTE INDENTURE" means the
indenture dated as of March 26, 1997 among Company, the subsidiary guarantors
named therein and United States Trust Company of New York pursuant to which the
1997 11% Senior Subordinated Notes were issued, as amended from time to time to
the extent permitted under subsection 7.15B.
"1997 11% SENIOR SUBORDINATED NOTES" means Company's
$155,000,000 in initial aggregate principal amount of 11% Senior Subordinated
Notes due 2005, as such notes may be 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
34
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 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.
"REQUEST FOR 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.
"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.
"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.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
35
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
a. Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 6.3;
b. 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;
c. 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);
d. any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
e. 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;
f. 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;
g. 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);
h. Liens arising from filing UCC financing statements
for precautionary purposes relating solely to true leases of personal
property permitted by this Agreement under which Company or any of its
Subsidiaries is a lessee;
36
i. 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;
j. 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;
k. 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
l. 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 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.
"PLANNED IMPROVEMENT FINANCED AMOUNT" means with respect to
any NonRecourse Indebtedness incurred by Company or any of its Subsidiaries
with respect to any Planned Improvement Property pursuant to subsection
7.1(xiv), the initial principal amount of such Non-Recourse Indebtedness, and
with respect to any sale and concurrent lease-back by Company or any of its
Subsidiaries of any Planned Improvement Property pursuant to clause (b) of
subsection 7.10, the amount of the sales price for such Planned Improvement
Property.
"PLANNED IMPROVEMENT PROPERTIES" means the Real Property
Assets set forth on Schedule 1.1D annexed hereto.
"PLEDGE AGREEMENT" means each Pledge Agreement executed and
delivered by Company and certain Subsidiaries of Company on the Closing Date
and each other Pledge Agreement 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 X 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.
37
"PRIME RATE" means the rate that Bankers announces from time
to time as its prime lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Bankers or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PRO RATA SHARE" means, on any date of determination, (i) with
respect to all payments, computations and other matters relating to 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.
"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.
"REDEMPTION AMOUNT" means, at any time, $25,000,000; provided
that (i) if the Leverage Ratio (calculated on a pro forma basis giving effect
to any redemption or repurchase of Subordinated Indebtedness and/or Senior
Indebtedness of Holdings or Company and/or repurchase of capital stock of
Holdings and all Indebtedness incurred in connection therewith) (the "ADJUSTED
LEVERAGE RATIO") at such time is less than 4.00:1.00, the Redemption Amount
shall be increased to $50,000,000; and (ii) if the Adjusted Leverage Ratio at
such time is less than 3.50:1.00, the Redemption Amount shall be increased to
$75,000,000; provided, further, that the Redemption Amount shall be reduced by
the aggregate amount of all prior repurchases and/or redemptions made pursuant
to subsection 7.5A(x) and 7.5B(iv).
"REFERENCE LENDERS" means Bankers, The Chase Manhattan Bank
and Bank of America, N.T. & S.A.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that
term in subsection 2.1A(iv).
"REGISTER" has the meaning assigned to that term in subsection
2.1D(i).
38
"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 Company 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.
"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, 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.
"REPLACED LENDER" has the meaning assigned to such term in
subsection 2.8.
"REPLACEMENT LENDER" has the meaning assigned to such term in
subsection 2.8.
"REPORTING DIVISION" means each of (a) Company and its
Subsidiaries on a consolidated basis, (b) until any Asset Sale of Cala, Cala
and its Subsidiaries on a consolidated basis, (c) until any Asset Sale of
Falley's, 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.
"REQUISITE CLASS LENDERS" means, at any time, (i) for the
Class Lenders having Term Loan Exposure with respect to Tranche A Term Loans
and/or Revolving Loan Exposure, Lenders having or holding 66 and 2/3% of the
sum of the aggregate Term Loan Exposure with respect to Tranche A Term Loans of
all Lenders plus the aggregate Revolving Loan Exposure of all Lenders, and,
(ii) for the Class Lenders having Term Loan Exposure with respect to Tranche B
Term Loans, Lenders having or holding 66 and 2/3% of the sum of the aggregate
Term Loan Exposure with respect to Tranche B Term Loans of all Lenders.
"REQUISITE LENDERS" means Lenders having or holding a majority
of the sum of the aggregate Term Loan Exposure of all Term Lenders plus the
aggregate Revolving Loan Exposure of all Revolving 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
39
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, 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 of Company and related transactions on the Closing
Date, 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(iii), 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(iv), and "REVOLVING LOAN COMMITMENTS" means such
commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means February
15, 2003.
"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
40
purchased by other Lenders) plus (e) the 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(iii).
"REVOLVING NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Effective 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 VI annexed hereto,
as they may be amended, supplemented or otherwise modified from time to time.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITY AGREEMENT" means each Security Agreement executed
and delivered by Holdings, Company and certain Subsidiaries of Company on the
Closing Date and each other Security Agreement 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 each such Security
Agreement may be amended, supplemented or otherwise modified from time to time,
and "SECURITY AGREEMENTS" means all such Security Agreements, collectively.
"SELECTED ASSETS" means all or the majority of the Company's
existing Northern California operations, all or the majority of its existing
Midwestern operations, the shares of Associated Wholesalers, Inc. owned by
Falley's, and any or all of its owned warehouse facilities, in each case as set
forth in Schedule 1.1C annexed hereto.
"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 were issued, as such Seller Debenture
Indenture may be amended from time to time to the extent permitted under
subsection 7.15B.
"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 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
41
Indenture, as such debentures may be amended from time to time to the extent
permitted under subsection 7.15B.
"SENIOR DEBT INDENTURES" means any or all of the 1992 10.45%
Senior Note Indenture, the 1995 10.45% Senior Note Indenture, the 1996 10.45%
Senior Note Indenture, the Holdings Discount Debenture Indenture, and any
indenture pursuant to which any senior Indebtedness permitted under subsection
7.1(xiii) is issued.
"SENIOR INDEBTEDNESS" means any or all of the 1992 10.45%
Senior Notes, the 1995 10.45% Senior Notes, the 1996 10.45% Senior Notes, the
Holdings Discount Debentures, and any senior Indebtedness permitted under
subsection 7.1(xiii).
"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 Company, as such Stockholders Agreement may be amended
from time to time after the Closing Date to the extent permitted under
subsection 7.15A.
"SMITH'S-RELATED RESTRUCTURING CHARGES" means the amount of
non-cash and cash restructuring charges and integration costs incurred by
Company and its Subsidiaries in connection with the discontinuance of certain
of Company's warehousing, manufacturing and distribution operations at its
facility in La Habra, California, and the related transfer of such warehousing,
manufacturing and distribution operations to the facility subleased by Company
from Smith's Food & Drug Centers, Inc. ("SMITH'S") in Riverside, California
(the "WAREHOUSE RESTRUCTURING"), and the disposition of up to 9 grocery stores
operated by Company in southern California in connection with Company's
acquisition of up to 9 grocery stores from Smith's in southern California (the
"STORE RESTRUCTURING"), including in each case transition and transaction costs
related thereto; provided that (x) the aggregate amount of all such cash and
non-cash charges and costs and the aggregate amount of all such cash charges
and costs included in Consolidated Adjusted EBITDA and Consolidated Net Worth
as "Smith's-Related Restructuring Charges" for all periods with respect to the
Warehouse Restructuring shall not exceed $43,600,000 and $33,200,000,
respectively, and (y) the aggregate amount of all such cash and non-cash
charges and costs and the aggregate amount of all such cash charges and costs
included in Consolidated Adjusted EBITDA and Consolidated Net Worth as
"Smith's-Related Restructuring Charges" for all periods with respect to the
Store Restructuring shall not exceed $22,500,000 and $12,800,000, respectively,
in each case to the extent that such restructuring charges and integration
costs reduce the net income of Company and its Subsidiaries.
"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
42
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 1992
13.75% Senior Subordinated Note Indenture, the 1995 13.75% Senior Subordinated
Note Indenture, the 1993 9% Senior Subordinated Note Indenture, the 1992
10-1/4% Senior Subordinated Note Indenture, the 1995 11% Senior Subordinated
Note Indenture, the 1997 11% Senior Subordinated Note Indenture, the Seller
Debenture Indenture, and any indenture pursuant to which any subordinated
Indebtedness permitted under subsection 7.1(xiii) is issued.
"SUBORDINATED INDEBTEDNESS" means (i) the 1992 13.75% Senior
Subordinated Notes, the 1995 13.75% Senior Subordinated Notes, the 1995 11%
Senior Subordinated Notes, the Seller Debentures, the 1993 9% Senior
Subordinated Notes, the 1992 10-1/4% Senior Subordinated Notes and the 1997 11%
Senior 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, including without
limitation any subordinated Indebtedness permitted under subsection 7.1(xiii).
"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.
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"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(iv).
"SWING LINE LOANS" means the Loans made by Swing Line Lender
to Company pursuant to subsection 2.1A(iv).
"SWING LINE NOTE" means (i) the promissory note of Company
issued pursuant to subsection 2.1E on the Effective 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 VII 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 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 Company), 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 EXPOSURE" means, with respect to a Lender of a Type
of Term Loan as of any date of determination 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 or
the Tranche B Term Loans.
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"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 Effective 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 Loans of such Type, in each case substantially in the
form of Exhibits IV-V annexed hereto in the case of Tranche A Term Loans and
Tranche B Term Loans, respectively, in each case 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 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 each other
Trademark Security Agreement 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 XII annexed hereto, as each such Trademark Collateral
Security Agreement and Conditional Assignment may 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 outstanding.
"TRANCHE A TERM LOANS" means the Loans of the Tranche A Term
Lenders 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 outstanding.
"TRANCHE B TERM LOANS" means the Loans of the Tranche B Term
Lenders pursuant to subsection 2.1A(ii).
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"TRANSACTION DOCUMENTS" means any or all of the Loan
Documents, the Related Financing Documents, 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 Supermarkets, Inc.) and Holdings (as successor to
Food 4 Less Holdings, Inc.), 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 Swing Line
Loan (each of which is a "TYPE" of Loan) and with respect to a Term Loan, a
Tranche A Term Loan or a Tranche B Term Loan (each of which is a "TYPE" of Term
Loan).
"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.
B. 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
46
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, 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.
C. 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 I. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
A. TERM LOANS AND COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
1. TERM LOANS AND 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 Loans as described in subsections 2.1A(iii) and Swing
Line Lender hereby agrees to make the Loans described in subsection 2.1A(iv).
a. Tranche A Term Loans. The amount of each Tranche A
Term Lender's Tranche A Term Loan is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate amount of the Tranche A
Term Loans is $200,000,000; provided that the Tranche A Term Loans of
Tranche A Term Lenders shall be adjusted to give effect to any
assignments of the Tranche A Term Loans pursuant to subsection 11.1B.
Tranche A Term Loans repaid or prepaid may not be reborrowed.
b. Tranche B Term Loans. The amount of each Tranche B
Term Lender's Tranche B Term Loan is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate amount of the Tranche B
Term Loans is $350,000,000; provided that the Tranche B Term Loans of
Tranche B Term Lenders
47
shall be adjusted to give effect to any assignments of the Tranche B
Term Loans pursuant to subsection 11.1B. Tranche B Term Loans repaid
or prepaid may not be reborrowed.
c. 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 Effective 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 May 31, 1997 if
the Term Loans are not purchased pursuant to the Master Assignment
Agreement on or before that date. Amounts borrowed under this
subsection 2.1A(iii) 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:
(1) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect; and
(2) (i) for 30 consecutive days during each
period of twelve consecutive months through the last day of
Fiscal Year 1997, 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 $110,000,000; and (ii) thereafter for 30 consecutive
days during each period of twelve consecutive months, 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 $100,000,000
or, upon and after any Asset Sale of Cala the Net Cash
Proceeds of which are not less than $25,000,000, $75,000,000.
48
d. 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 Effective 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 May 31, 1997 if the Term Loans are not
purchased pursuant to the Master Assignment Agreement on or before
that date. Amounts borrowed under this subsection 2.1A(iv) 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:
(1) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect; and
(2) (i) for 30 consecutive days during each
period of twelve consecutive months through the last day of
Fiscal Year 1997, 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 $110,000,000; and (ii) thereafter for 30 consecutive
days during each period of twelve consecutive months, 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 $100,000,000
or, upon and after any Asset Sale of Cala the Net Cash
Proceeds of which are not less than $25,000,000, $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,
49
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 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.
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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 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.
2. BORROWING MECHANICS. Revolving Loans made on any Funding Date
(other than Revolving Loans made pursuant to a request by Swing Line Lender
pursuant to subsection 2.1A(iv) 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 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
51
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.
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.
3. DISBURSEMENT OF FUNDS. All Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares of the Revolving Loan Commitments, it being
understood that no Lender shall be responsible for any default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder nor
shall the Revolving Loan Commitment of any Lender be increased or decreased as
a result of a default by any other Lender in that other Lender's obligation to
make a Loan requested hereunder. Promptly after receipt by Agent of a Notice
of Borrowing pursuant to subsection 2.1B (or 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(iv) 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
52
Loans made on the Effective 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 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.
4. THE REGISTER.
a. 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.
b. Agent shall record in the Register 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.
c. 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,
53
shall not affect Company's Obligations in respect of the applicable
Loans; and provided 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.
d. 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.
e. 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 Effective
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, in the principal amount of that Lender's
Tranche A Term Loan 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 Revolving Lender (or to Agent for
that Lender) a Revolving Note substantially in the form of Exhibit VI 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 (iv) to Swing Line Lender a Swing Line Note substantially in the form of
Exhibit VII 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.
B. INTEREST ON THE LOANS.
1. 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
54
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.
a. 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 Tranche A Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus the Applicable Tranche A
Eurodollar Margin.
b. 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 the Applicable Tranche B Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus the Applicable Tranche B
Eurodollar Margin.
c. 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 Tranche A Base Rate Margin
minus the Commitment Fee Percentage.
Upon delivery of the Margin Determination Certificate by
Company to Agent pursuant to subsection 6.1(xviii), the Applicable Tranche A
Base Rate Margin, the Applicable Tranche A Eurodollar Margin, the Applicable
Tranche B Base Rate Margin and the Applicable Tranche A 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 erroneously
indicates an applicable margin more favorable to Company than should be
afforded by the actual calculation of the Leverage Ratio, Company shall
promptly pay additional interest and letter of credit fees to correct for such
error.
2. 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:
55
a. 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;
b. 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;
c. 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;
d. 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;
e. no Interest Period with respect to any portion of the
Tranche A Term Loans shall extend beyond February 15, 2003, no
Interest Period with respect to any portion of the Tranche B 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;
f. 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;
g. there shall be no more than 12 Interest Periods
outstanding at any time (it being understood that Interest Periods for
different Types of Loans, whether or not such Interest Periods are for
the same period and end on the same day, constitute separate Interest
Periods); and
h. 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.
3. 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)
56
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).
4. 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; and provided further that no Loan may be made as or converted into a
Base Rate Loan during the period from December 24 of any year to and including
January 7 of the immediately succeeding year for the purpose of investing in
securities bearing interest at a rate determined by reference to any other
basis for the purpose of arbitrage or speculation.
Company shall deliver a Notice of Conversion/Continuation to
Agent no later than 1:00 P.M. (New York City time) at least one Business Day in
advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation shall specify
(i) the proposed conversion/continuation date (which shall be a Business Day),
(ii) the amount 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
57
Determination Date, and Company shall be bound to effect a conversion or
continuation in accordance therewith.
5. 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. 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.
6. 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.
C. FEES.
1. 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 Effective
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 then applicable 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 June 15, 1997, and on the Revolving Loan Commitment Termination
Date.
Upon delivery of the Margin Determination Certificate by
Company to Agent pursuant to subsection 6.1(xviii), the Commitment Fee
Percentage shall automatically be
58
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 erroneously indicates an applicable margin
more favorable to Company than should be afforded by the actual calculation of
the Leverage Ratio, Company shall promptly pay additional commitment fees to
correct for such error.
2. OTHER FEES. Company agrees to pay to Agent and Bankers, as
Arranger, such other fees in the amounts and at the times as have been
separately agreed upon by letter agreement between Company, Agent and such
Arranger. After receipt of such other fees from Company, Agent agrees to pay,
or to cause to be paid by such Arranger, 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/or Arranger and such Lender.
D. REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS.
1. SCHEDULED PAYMENTS OF TERM LOANS.
a. Scheduled Payments of Tranche A Term Loans. Company
shall make principal payments on the Tranche A Term Loans in
installments on the dates and in the amounts set forth below:
Scheduled Repayment
Date of Tranche A Term Loans
---- -----------------------
September 15, 1999 $ 11,000,000
December 15, 1999 11,000,000
March 15, 2000 11,000,000
June 15, 2000 11,000,000
September 15, 2000 13,500,000
December 15, 2000 13,500,000
March 15, 2001 13,500,000
June 15, 2001 13,500,000
September 15, 2001 13,500,000
December 15, 2001 13,500,000
March 15, 2002 13,500,000
June 15, 2002 13,500,000
September 15, 2002 16,000,000
December 15, 2002 16,000,000
February 15, 2003 16,000,000
-----------
$200,000,000
; 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 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 February 15,
59
2003, 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.
b. Scheduled Payments of Tranche B Term Loans. Company
shall make principal payments on the Tranche B Term Loans in equal
quarterly installments of $875,000 on each March 15, June 15,
September 15 and December 15, commencing on June 15, 1997, through and
including March 15, 2000, and thereafter on the dates and in the
amounts set forth below:
Scheduled Repayment
Date of Tranche B Term Loans
---- -----------------------
June 15, 2000 $ 5,000,000
September 15, 2000 3,875,000
December 15, 2000 3,875,000
March 15, 2001 5,875,000
June 15, 2001 5,875,000
September 15, 2001 10,875,000
December 15, 2001 10,875,000
March 15, 2002 11,875,000
June 15, 2002 11,875,000
September 15, 2002 15,000,000
December 15, 2002 15,000,000
March 15, 2003 15,000,000
June 15, 2003 15,000,000
September 15, 2003 35,000,000
December 15, 2003 37,250,000
February 15, 2004 137,250,000
------------
$350,000,000
; 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 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 February 15, 2004,
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.
60
2. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
a. Voluntary Prepayments.
(1) 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
unless Company compensates each Lender for any breakage costs
associated with such prepayment in accordance with subsection
2.6D, 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).
(2) In the event Company is entitled to replace a
non-consenting Lender pursuant to subsection 11.6B, Company
shall have the right, upon five Business Days' written notice
to Agent (which notice Agent shall promptly transmit to each
of the Lenders), to prepay all Loans, together with accrued
and unpaid interest, fees and other amounts owing to such
Lender (including without limitation amounts owing to such
Lender pursuant to subsection 2.6D) in accordance with
subsection 11.6B so long as (1) in the case of the prepayment
of the Revolving Loans of any Lender pursuant to this
subsection 2.4B(i)(b), the Revolving Loan Commitment of such
Lender is terminated concurrently with such prepayment
pursuant to subsection 2.4B(ii)(b) (at which time Schedule 2.1
shall be deemed modified to reflect the changed Revolving Loan
Commitments), and (2) in the case of the prepayment of the
Loans of any Lender, the consents required by subsection 11.6B
in connection with the prepayment pursuant to this subsection
2.4B(i)(b) shall have been obtained, and at such time, such
Lender shall no longer constitute a "Lender" for purposes of
this Agreement, except with respect to indemnifications under
this Agreement (including, without limitation, subsections
2.6D, 2.7, 3.6, 11.2 and 11.3), which shall survive as to such
Lender.
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b. Voluntary Reductions of Revolving Loan Commitments.
(1) 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.
(2) In the event Company is entitled to replace a
non-consenting Lender pursuant to subsection 11.6B, Company
shall have the right, upon five Business Days' written notice
to Agent (which notice Agent shall promptly transmit to each
of the Lenders), to terminate the entire Revolving Loan
Commitment of such Lender so long as (1) all Loans, together
with accrued and unpaid interest, fees and other amounts owing
to such Lender are repaid, including without limitation
amounts owing to such Lender pursuant to subsection 2.6D,
pursuant to subsection 2.4B(i)(b) concurrently with the
effectiveness of such termination (at which time Schedule 2.1
shall be deemed modified to reflect such changed amounts), and
(2) the consents required by subsection 11.6B in connection
with the prepayment pursuant to subsection 2.4B(i)(b) shall
have been obtained, and at such time, such Lender shall no
longer constitute a "Lender" for purposes of this Agreement,
except with respect to indemnifications under this Agreement
(including, without limitation, subsections 2.6D, 2.7, 3.6,
11.2 and 11.3), which shall survive as to such Lender.
c. Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments. The Loans shall be prepaid and/or the
Revolving Loan Commitments shall be permanently reduced in the amounts
and under the circumstances set forth below, all such prepayments
and/or reductions to be applied as set forth below or as more
specifically provided in subsection 2.4B(iv):
(1) Prepayments and Reductions from Asset Sales.
No later than the earlier to occur of (y) the third Business
Day following the date of receipt (or if Company would incur
breakage costs as a result of a prepayment on such date, on
the earlier to occur of the first such date thereafter on
which no such breakage costs are incurred and 30 days after
such date of receipt) by Company or any of its Subsidiaries of
Cash Proceeds of any Asset Sale in an
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aggregate cumulative amount equal to or exceeding $5,000,000 and (z)
the date of the occurrence of any Event of Default or Potential Event
of Default, (A) in the case of the first $75,000,000 in Net Cash
Proceeds from an Asset Sale of Cala and its Subsidiaries, Falley's and
its Subsidiaries or the business of Cala and its Subsidiaries or
Falley's and its Subsidiaries (collectively, the "Selected Asset
Sales"), Company may apply such Net Cash Proceeds to prepay first
Swing Line Loans to the full extent thereof and thereafter Revolving
Loans to the remaining extent thereof and the Revolving Loan
Commitments shall not be reduced by such prepayment of Swing Line
Loans or Revolving Loans, (B) in the case of the first $50,000,000 in
Net Cash Proceeds from Selected Asset Sales thereafter, Company shall
(i) prepay the Term Loans in an amount equal to 50% of such Net Cash
Proceeds and (ii) prepay the Swing Line Loans to the full extent
thereof and thereafter the Revolving Loans in an amount equal to the
remaining 50% of such Net Cash Proceeds, but the Revolving Loan
Commitments shall not be reduced by any such prepayment of the Swing
Line Loans or Revolving Loans, and (C) in the case of Net Cash
Proceeds from Asset Sales which are not covered by the foregoing
clauses (A) or (B), Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an amount
equal to such Net Cash Proceeds as specified in subsection 2.4B(iv);
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 Sales 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) other than Net Cash Proceeds from
Planned Dispositions, from Asset Sales covered by the
foregoing clause (B) or constituting Planned
Improvement Financed Amounts, Net Cash Proceeds from
the sale of any store 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) other than Net Cash Proceeds from
Planned Dispositions, from Asset Sales covered by the
foregoing clause (B) or constituting Planned
Improvement Financed Amounts, Net Cash Proceeds from
the sale of a store 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 clause (i) above and this
clause (ii), 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 such
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clauses (i) and (ii), within three Business Days of
receipt of proceeds thereof;
(iii) other than Net Cash Proceeds
constituting Planned Improvement Financed Amounts,
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 270 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 same or
similar equipment within 90 days of such sale;
(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 or reinvested in new stores or the
construction or remodeling of stores 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 or to
acquire new stores or to construct or remodel stores;
and
(vi) an amount equal to 75% of Net Cash
Proceeds constituting Planned Improvement Financed
Amounts to the extent that such Net Cash Proceeds are
used to remodel, expand, renovate or otherwise
improve the store located on the related Planned
Improvement Property within two years of the sale of
such Planned Improvement Property.
In addition to the prepayments and reductions
required pursuant to the preceding paragraph, in the event
that Company or any of its Subsidiaries accepts non-cash
consideration or defers a portion of the sales price for Cala
and/or Falley's in excess of 15% of the aggregate sales prices
for Cala and Falley's, the Revolving Loan Commitments shall be
automatically and permanently reduced upon consummation of
such sale in an amount equal to such non-cash consideration
and such deferred portion of such sales prices in excess of
15% of such aggregate sales prices. Immediately upon
consummation of any sale of Cala or Falley's which requires a
reduction in the
64
Revolving Loan Commitments under this paragraph, the Company
shall deliver an Officers' Certificate to Agent notifying
Agent of such sale and of the amount of such reduction in the
Revolving Loan Commitments.
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.
(2) Prepayments and Reductions Due to Issuance of
Debt. 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
(other than the issuance of Indebtedness pursuant to
subsections 7.1(i)-(xii) and (xv) as in effect on the
Effective Date) of Holdings or any such Subsidiary (the "NET
DEBT PROCEEDS"), (i) in the case of Net Debt Proceeds which do
not constitute Planned Improvement Financed Amounts, Company
shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an amount equal to such Net
Debt Proceeds; provided that to the extent that after giving
effect to any such issuances of debt Securities and any
permanent prepayment of the Loans from the proceeds thereof,
Company's Leverage Ratio is less than 2.50:1.00, Company shall
prepay the Loans and/or the Revolving Loan Commitments shall
be permanently reduced in an amount equal to 50% of such Net
Debt Proceeds; and (ii) in the case of Net Debt Proceeds
constituting Planned Improvement Financed Amounts, Company
shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an amount equal to 25% of such
Net Debt Proceeds; provided that to the extent that any such
Planned Improvement Financed Amounts have not been used to
remodel, expand, renovate or otherwise improve the store
located on the related Planned Improvement Property within two
years of the issuance of such debt Securities, such Net Debt
Proceeds shall be applied by the Company no later than the
first Business Day following the expiration of such two-year
period to prepay the Loans and/or to permanently reduce the
Revolving Loan Commitments in accordance with this clause
(ii).
(3) 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
65
permitted under subsection 7.12) (without duplication) (the
"Net Equity Proceeds"), Company shall prepay the Loans and/or
the Revolving Loan Commitments shall be permanently reduced in
an amount equal to 50% of such Net Equity Proceeds (such amount
being the "EQUITY REPAYMENT AMOUNT"); provided, however, that,
commencing with Fiscal Year 1998 and for any Fiscal Year
thereafter, 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 since the Closing
Date 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 Net Equity Proceeds.
(4) 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,
Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an amount (the
"NET REVERSION AMOUNT") equal to 100% of such returned surplus
assets, net of transaction costs and expenses incurred in
obtaining such return, including incremental taxes payable as
a result thereof.
(5) 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 Company shall prepay the Loans and/or
the Revolving Loan Commitments shall be permanently reduced in
an amount equal to (i) for Fiscal Year 1997, 100%, and (ii)
commencing with Fiscal Year 1998 and thereafter, 75%, of such
Consolidated Excess Cash Flow (such amount being the "CASH
FLOW REPAYMENT AMOUNT"); provided, however, that, commencing
with Fiscal Year 1998 and for any Fiscal Year thereafter, 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 since the Closing Date 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.
(6) Prepayments Due to Reductions or Restrictions
of Revolving Loan Commitments. Company shall immediately
prepay first the Swing 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(iii) and clause (b)
of the second paragraph of subsection 2.1A(iv). Any
66
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.
(7) Calculations of Net Proceeds Amounts;
Additional Prepayments and Reductions Based on Subsequent
Calculations. Concurrently with any prepayment of the Loans
and/or reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(e) or within three Business Days of
the receipt of any Net Cash Proceeds of Asset Sales under
subsection 2.4B(iii)(a), Company shall deliver to Agent an
Officers' Certificate demonstrating (1) the calculation of the
amount (the "NET PROCEEDS AMOUNT") of the applicable Net Cash
Proceeds of Asset Sales, Net Debt Proceeds, Net Equity
Proceeds, Net Reversion Amount (as such latter three terms are
defined in subsections 2.4B(iii)(b), (c) and (d),
respectively) or the applicable Consolidated Excess Cash Flow,
as the case may be, that gave rise to such prepayment and/or
reduction; (2) with respect to the receipt of Net Cash
Proceeds referred to in clauses (i), (iv), (v) and (vi) of
subsection 2.4B(iii)(a), in reasonable detail, the intended
application of such Net Cash Proceeds and the estimated costs
of the reinvestment or improvement referred to in such clauses
and in the case of Net Debt Proceeds referred to in clause
(ii) of subsection 2.4B(iii)(b), the intended application of
such Net Debt Proceeds; and (3) with respect to the receipt of
Net Cash Proceeds referred to in clauses (ii), (iii) and (v)
of subsection 2.4B(iii)(a), in reasonable detail the
Consolidated Capital Expenditures made by Company which
account for the exclusion of any such Net Cash Proceeds from
the mandatory prepayment requirements of subsection
2.4B(iii)(a). Such Officers' Certificate, in the case of
clauses (i), (iv) and (vi) of subsection 2.4B(iii)(a) and
clause (ii) of subsection 2.4B(iii)(b), may be amended at any
time and from time to time by Company during the 270-day,
90-day or two-year period following receipt of such Net Cash
Proceeds or Net Debt Proceeds, as the case may be. In the
event that Company shall subsequently determine that the
actual Net Proceeds Amount was greater than the amount set
forth in such Officers' Certificate or that, with respect to
clauses (i), (iv), (v) and (vi) of subsection 2.4B(iii)(a),
clause (ii) of subsection 2.4B(iii)(b) or the provisos in
subsections 2.4B(iii)(c) and (e), such Net Proceeds Amount was
not expended for the purposes specified in such Officers'
Certificate, as amended, within the time periods specified in
such clauses, Company shall promptly make an additional
prepayment of the Loans (and/or, if applicable, the Revolving
Loan Commitments shall be permanently reduced) in an amount
equal to the amount of such excess or unexpended portion, but
only to the extent such amount has not been previously applied
as a mandatory prepayment under subsection 2.4B(iii)(e), and
Company shall concurrently therewith deliver to Agent an
Officers' Certificate demonstrating the derivation of the
additional Net Proceeds Amount resulting in such excess or
unexpended portion.
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d. Application of Prepayments.
(1) 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)(a) 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)(a) shall be applied (x) to each Type of Term Loan on a
pro rata basis and (y) to reduce the unpaid scheduled
installments of the principal of the Term Loans set forth in
subsections 2.4A(i)-(ii) on a pro rata basis.
(2) Application of Mandatory Prepayments by Type
of Loans. Any amount (the "APPLIED AMOUNT") required to be
applied as a mandatory prepayment of the Loans and/or a
reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(e) shall be applied first to prepay
the Term Loans to the full extent thereof, second, to the
extent of any remaining portion of the Applied Amount, to
prepay the Swing Line Loans to the full extent thereof and to
permanently reduce the Revolving Loan Commitments by the
amount of such prepayment, third, to the extent of any
remaining portion of the Applied Amount, to prepay the
Revolving Loans to the full extent thereof and to further
permanently reduce the Revolving Loan Commitments by the
amount of such prepayment, and fourth, in an amount equal to
any remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full
extent thereof.
(3) 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 each Type of Term Loan on a pro rata basis, (y) in the
case of any mandatory prepayments to be applied to the Tranche
A Term Loans, to reduce unpaid scheduled installments of
principal of the Tranche A Term Loans set forth in subsection
2.4A(i) in forward order of maturity for up to the immediately
succeeding twelve-month period, and (z) to reduce the unpaid
scheduled installments of principal of the Tranche B Term
Loans and the unpaid scheduled installments of principal of
the Tranche A Term Loans (after giving effect to clause (y)
above) set forth in subsections 2.4A(i) and 2.4A(ii) on a pro
rata basis; provided that in the case of Tranche B 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 such Tranche B Term Lenders the right to
waive such Lenders' right to receive such prepayment (the
"WAIVABLE MANDATORY PREPAYMENT"), Agent shall notify such
Tranche B Term Lenders of such receipt and the amount of the
prepayment to be applied to each such Lender's Term Loans;
provided still
68
further that Company shall use its reasonable efforts to notify
such Tranche B 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 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.
(4) Application of Prepayments to Base Rate Loans
and Eurodollar Rate Loans. Considering each Type of Loan
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.
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, 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
69
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 or Letter of Credit 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 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.
E. USE OF PROCEEDS.
1. EFFECTIVE DATE. The proceeds of the Revolving Loans made on
the Effective Date shall be applied by Company to pay accrued interest, fees
and expenses under the Existing Credit Agreement and expenses incurred in
connection with the transactions contemplated by this Agreement and to working
capital and general corporate purposes.
2. REVOLVING LOANS; SWING LINE LOANS. The proceeds of any other
Revolving Loans and any Swing Line Loans shall be applied by Company for
working capital and general corporate purposes.
3. 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.
70
F. 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:
1. 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.
2. 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.
3. 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 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
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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.
4. 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.
5. 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.
6. 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,
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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.
7. 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.
G. INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
1. 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):
a. subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall
income of such Lender) with 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;
b. 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
c. 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;
73
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 six months 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 six
month period so long as such Lender has given such notice to Company no later
than six months 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.
2. WITHHOLDING OF TAXES.
a. 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 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.
b. 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:
(1) Company shall notify Agent of any such
requirement or any change in any such requirement as soon as
Company becomes aware of it;
(2) 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;
(3) the sum payable by Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent
74
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
(4) 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 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.
c. Evidence of Exemption from U.S. Withholding Tax.
(1) 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
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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.
(2) 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 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.
(3) 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).
3. 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
76
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 reduction in return was incurred
more than six months 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 six month period so long as such Lender has given such
notice to Company no later than six months 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.
H. 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 or in the event a Lender has not consented to a proposed change, waiver,
discharge or termination with respect to this Agreement which has been approved
by the Requisite Lenders as provided in subsection 11.6, Company shall have the
right, if no Potential Event of Default or Event of Default then exists, to
replace such Lender (a "REPLACED LENDER") with one or more Eligible Assignees
(collectively, the "REPLACEMENT LENDER") acceptable to Agent, provided that (i)
at the time of any replacement pursuant to this subsection 2.8, the Replacement
Lender shall enter into one or more Assignment Agreements pursuant to
subsection 11.1B (and with all fees payable pursuant to such subsection 11.1B
to be paid by the Replacement Lender) pursuant to which the Replacement Lender
shall acquire all of the outstanding Loans and Commitments of, and in each case
participations in Letters of Credit and Swing Line Loans by, the Replaced
Lender and, in connection therewith, shall pay to (x) the Replaced Lender in
respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Replaced Lender, (B) an amount equal to all unpaid drawings with respect to
Letters of Credit that have been funded by (and not reimbursed to) such
Replaced Lender, together with all then unpaid interest with respect thereto at
such time and (C) an amount equal to all accrued, but theretofore unpaid, fees
owing to the Replaced Lender with respect thereto, (y) the appropriate Issuing
Lender an amount equal to such Replaced Lender's Pro Rata Share of any unpaid
drawings with respect to Letters of Credit (which at such time remains an
unpaid drawing) issued by it to the extent such amount was not theretofore
funded by such Replaced Lender, and (z) Swing Line Lender an amount equal to
such Replaced Lender's Pro Rata Share of any Refunded Swing Line Loans to the
extent such amount was not theretofore funded by such Replaced Lender, and (ii)
all obligations (including without limitation all such amounts, if any, owing
under subsection 2.6D) of Company owing to the Replaced Lender (other than
those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid), shall be
paid in full to such Replaced Lender concurrently with such replacement. Upon
the execution of the respective Assignment Agreements, recordation of such
assignment in the Register by Agent pursuant to subsection 2.1D, the payment of
amounts referred to in clauses (i) and (ii) above and delivery to the
Replacement Lender of the appropriate Note or Notes executed by Company, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to constitute a Lender hereunder except with respect to
indemnification provisions under this Agreement which by the terms of this
Agreement survive the termination of this Agreement, which indemnification
provisions shall survive as to such Replaced Lender. Notwithstanding anything
to the contrary contained above, no Issuing Lender may be replaced hereunder at
any time while it has Letters of Credit outstanding hereunder unless
arrangements satisfactory to such Issuing Lender (including the furnishing of a
Standby Letter of Credit in form and substance, and issued by an issuer,
satisfactory to such Issuing Lender or the furnishing of cash collateral in
amounts and pursuant to arrangements satisfactory to such Issuing Lender) have
been made with respect to such outstanding Letters of Credit.
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SECTION II. LETTERS OF CREDIT
A. ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
1. LETTERS OF CREDIT. In addition to Company requesting that
Revolving Lenders make Revolving Loans pursuant to subsection 2.1A(iii) and
that Swing Line Lender make Swing Line Loans pursuant to subsection 2.1A(iv),
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 payable on a sight basis 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 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):
a. 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;
b. any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $150,000,000;
c. 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 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 at the time at which such Issuing
Lender may give notice that it will not extend such Standby Letter of
Credit, unless such Event of Default has been waived in accordance
with the provisions of subsection 11.6;
d. 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
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e. any Letter of Credit denominated in a currency other
than Dollars and payable on a sight basis.
2. MECHANICS OF ISSUANCE.
a. Request for Letter of Credit. 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 Request for 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 Request for 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, (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 in substantial compliance with the terms and
conditions and on or before 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.
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 Request for 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 Request for Letter of Credit.
b. Determination of Issuing Lender. Upon receipt by a
proposed Issuing Lender of a Request for 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-Agent to issue such Letter of Credit by delivering to
such Co-Agent a copy of the applicable Request for Letter of Credit
and any Co-Agent 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-Agent which so elects to issue such Letter of Credit shall be
the Issuing Lender with respect thereto; provided that in the event
that five Co-Agents which in the ordinary course of their business
customarily issue letters of credit shall have declined to issue such
Letter of Credit,
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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 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.
c. 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.
d. Notification to Revolving Lenders. Upon the issuance
of any Standby 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 Standby
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 Standby Letter of Credit, determined
in accordance with subsection 3.1C.
e. Reports to Revolving Lenders. Within 15 days after
the end of each calendar quarter ending after the Closing Date, so
long as any Standby Letter of Credit shall have been outstanding
during such calendar quarter, each Issuing Lender shall deliver to
each other Revolving Lender and Agent a report setting forth the daily
maximum amount available to be drawn under the Standby Letters of
Credit issued by such Issuing Lender that were outstanding during such
calendar quarter. In the case of Commercial Letters of Credit, in the
event that the Issuing Lender is other than the Agent, such Issuing
Lender will send by facsimile transmission to the Agent, promptly on
the first Business Day of each week, its daily aggregate maximum
amount available for drawing under Commercial Letters of Credit for
the previous week. The Agent shall deliver to each Revolving Lender,
upon each calendar month end, a report setting forth for such period
the daily aggregate maximum amount available for drawing under the
Commercial Letters of Credit issued by all the Issuing Lenders during
such period.
3. 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
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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 Effective 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 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 Effective Date to the same extent as if initially
issued hereunder on such date.
B. LETTER OF CREDIT FEES.
Company agrees to pay the following amounts with respect to Letters of
Credit:
a. 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 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 Tranche A Eurodollar Margin minus the Commitment Fee
Percentage multiplied by (y) the daily 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;
b. 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 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 Tranche A Eurodollar Margin minus the sum
of (A) 1.0% per annum and (B) the Commitment Fee Percentage multiplied
by (y) the daily 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
c. 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.
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 Effective Date.
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C. DRAWINGS AND REIMBURSEMENT OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
1. 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 substantially comply on their face
with the requirements of such Letter of Credit.
2. 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 any Revolving Lender resulting from the failure
of such Revolving Lender to make such Revolving Loans under this subsection
3.3B.
3. PAYMENT BY REVOLVING LENDERS OF UNREIMBURSED DRAWINGS UNDER
LETTERS OF CREDIT.
a. 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
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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.
b. 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 the appropriate signature page
hereof or at such other address as such Revolving Lender may request.
4. INTEREST ON AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
a. 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.
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b. 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 appropriate signature page
hereof or at such other address as such Revolving Lender may request.
D. 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, any of the following
circumstances:
a. any lack of validity or enforceability of any Letter
of Credit;
b. 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;
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c. 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;
d. 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;
e. any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Holdings or any of its Subsidiaries;
f. 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);
g. any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
h. 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).
E. INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
1. 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").
2. 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
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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 substantially comply
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 of any document required in order to
make a drawing or amendment 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.
F. 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):
a. 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
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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;
b. 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
c. 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 six months 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 six
month period so long as such Lender has given such notice to Company no later
than six months 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 III. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to purchase or make Loans and the
issuance of Letters of Credit hereunder are subject to the satisfaction of the
following conditions.
A. CONDITIONS TO INITIAL EFFECTIVENESS.
The obligations of Lenders to purchase the Term Loans and to purchase
and/or make any Revolving Loans and Swing Line Loans on the Effective 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:
1. LOAN PARTY DOCUMENTS. On or before the Effective 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 Effective Date:
a. Certified copies of its Certificate or 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 Effective
Date;
b. Copies of its Bylaws, certified as of the Effective
Date by its corporate secretary or an assistant secretary;
c. Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of each of the
Loan Documents to which it is a party to be executed on the Effective
Date, and all transactions related thereto, certified as of the
Effective Date by its corporate secretary or an assistant secretary as
being in full force and effect without modification or amendment;
d. Signature and incumbency certificates of its officers
executing each of the Loan Documents to which it is a party;
e. Executed originals of this Agreement, the Notes (duly
executed in accordance with subsection 2.1E, drawn to the order of
each Lender and Swing Line Lender and with appropriate insertions) and
the other Loan Documents to be executed on the Effective Date,
including without limitation the Master Assignment Agreement executed
by the Company and the Acknowledgement and Consent, substantially in
the form of Exhibit XXI annexed hereto, executed by the Company and
each of the other Loan Parties; and
f. Such other documents as Agent may reasonably request.
2. YUCAIPA INVESTMENT. 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 the Effective 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 and the Effective Date.
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3. OTHER EXISTING INDEBTEDNESS. Agent shall have received an
Officers' Certificate of Company certifying that as of the Effective Date,
after giving effect to the transactions contemplated by this Agreement, the
Indebtedness of the Loan Parties (other than the Indebtedness under the Loan
Documents) consists of (i) the outstanding principal amount of existing Funded
Debt described in Schedule 7.1 annexed hereto, (ii) obligations under existing
Capital Leases of all Loan Parties as of the Effective 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, and (iii) the Indebtedness under the Related Financing
Documents which shall not exceed the amounts permitted pursuant to subsections
7.1(v) and 7.1(vi).
4. EXISTING CREDIT AGREEMENT PAYMENTS AND ASSIGNMENTS.
(1) With respect to the Existing Credit Agreement,
Company shall have paid to Bankers, as agent under the Existing Credit
Agreement, for distribution to lenders and issuing lenders, as applicable,
under the Existing Credit Agreement all unpaid accrued interest on all loans,
all unpaid accrued commitment fees and all unpaid accrued fees on all Letters
of Credit, in each case through but excluding the Effective Date.
(2) On or before the Effective Date, Company, each lender
under the Existing Credit Agreement, Bankers, as agent under the Existing
Credit Agreement, each Lender and Agent under this Agreement shall have
executed and delivered the Master Assignment Agreement, substantially in the
form of Exhibit XX annexed hereto, and on the Effective Date, each such lender,
Bankers, Lender and Agent shall have sold, purchased and/or assigned such loans
and/or revolving loan commitments pursuant to the Master Assignment Agreement
such that each Lender's Pro Rata Share of the Loans and/or Revolving Loan
Commitments upon consummation of the closing shall be as set forth on Schedule
2.1 annexed hereto.
5. SECURITY INTERESTS. To the extent not otherwise satisfied
pursuant to subsection 4.1F, each Loan Party shall have taken or caused to be
taken (and Agent shall have received satisfactory evidence thereof) all such
actions, executed and delivered or caused to be executed and delivered all such
agreements, documents and instruments and made or caused to be made all such
filings and recordings (other than the filing or recording of items described
in clauses (ii), (iii) and (iv) below) that may be necessary or, in the opinion
of Agent, desirable in order to make or to continue in favor of Agent for the
benefit of Lenders a valid and perfected first priority security interest 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 or
continue the perfection of the security interests granted to Agent in the
Collateral, (iii) delivery to Agent of all cover
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sheets, documents or other instruments required to perfect or continue the
perfection of the Liens 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 or continue the
perfection of the first priority Liens granted to Agent on behalf of Lenders
under the Collateral Documents.
6. REAL PROPERTY ASSETS. Schedule 4.1F annexed hereto sets forth
all Real Property Assets of Company or any of its Subsidiaries as of the
Effective Date and identifies each such Real Property Asset which is subject to
a Deed of Trust as of the Effective Date. Subject to subsection 6.11, Agent
shall have received from Company and each of its Subsidiaries having Real
Property Assets required to be subject to a Deed of Trust pursuant to this
Agreement and which were not made subject to a Deed of Trust on the Closing
Date, fully executed counterparts of such amendments to Deeds of Trust, or
Deeds of Trust, in either case in form and substance satisfactory to Agent and
in recordable form, together with evidence that such counterparts of such
amendments to Deeds of Trust or Deeds of Trust have been recorded, or as soon
as practicable following the Effective Date will be recorded, in all places to
the extent necessary or desirable, in the judgment of Agent, so as to
effectively amend the Deeds of Trust to the extent necessary or appropriate to
encumber any Real Property Assets required to be subject to a Deed of Trust
pursuant to this Agreement which were not made subject to a Deed of Trust on
the Closing Date, subject only to Permitted Encumbrances. In addition, Agent
shall have received such endorsements to the Title Insurance Policies as are
reasonably required by Agent to insure that execution of this Agreement does
not impair the validity of the Deeds of Trust with respect to the Real Property
Assets insured thereunder recorded on the Closing Date.
7. 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 Effective Date and setting forth substantially the matters
in the opinions designated in Exhibit XV-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 Wayne
Bell, Esq., Senior Counsel of Company, in form and substance satisfactory to
Agent and its counsel, dated the Effective Date and setting forth substantially
the matters in the opinions designated in Exhibit XV-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 Effective Date and
setting forth substantially the matters in the opinions designated in Exhibit
XV-C annexed hereto and as to such other matters as Agent acting on behalf of
Lenders may reasonably request.
8. OPINIONS OF AGENT'S COUNSEL. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, counsel to Agent, dated as of the Effective Date,
substantially in the form of Exhibit XVI annexed hereto and as to such other
matters as Agent acting on behalf of Lenders may reasonably request.
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9. NO MATERIAL ADVERSE CHANGE. Since October 6, 1996 there shall
have occurred no material adverse change in the condition (financial or
otherwise), business, assets, liabilities, properties, results of operations or
prospects of Company and its Subsidiaries, taken as a whole.
10. NO DISRUPTION OF FINANCIAL AND CAPITAL MARKETS. There shall
have been no material adverse change after March 19, 1997, to the syndication
markets for credit 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.
11. FINANCIAL STATEMENTS. Agent shall have received on behalf of
Lenders (a) the unaudited financial statements for Company and its Subsidiaries
referred to in clauses (ii) and (iii) of subsection 5.3, all in reasonable
detail and certified by the chief financial officer of Company that they fairly
present the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments, (b) a pro forma balance sheet as of the Effective Date for Company
and its Subsidiaries, prepared in accordance with GAAP (except as otherwise
noted therein) and giving effect to the transactions contemplated by this
Agreement, and (c) projected financial statements (including balance sheets and
statements of operations and cash flows) of Company and its Subsidiaries for
the eight-year period after the Effective Date, all of the foregoing to be (x)
substantially consistent with any financial statements for the same periods
delivered to the Agent prior to March 19, 1997, and in the case of any such
financial statements for subsequent periods, substantially consistent with any
projected financial results for such periods delivered to the Agent prior to
such date and (y) otherwise in form and substance satisfactory to the Agent and
the Lenders.
12. SOLVENCY ASSURANCES. Agent and Lenders shall have received a
certificate from the chief financial officer of Company substantially in the
form of Exhibit XIX annexed hereto, supporting the conclusions that, after
giving effect to the transactions contemplated by this Agreement, Company will
not be insolvent or will not be rendered insolvent by the indebtedness incurred
in connection with the transactions contemplated by this Agreement, 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.
13. AUDITOR'S LETTER. Agent shall have received executed copies
of the Auditor's Letter.
14. FEES. Company shall have paid to Agent, for distribution (as
appropriate) to Agent and Lenders, the fees payable on the Effective Date
referred to in subsection 2.3.
15. 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 Effective Date to the same
extent as though made on and as of that date and that each Loan
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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 Effective Date except as otherwise disclosed
to and agreed to in writing by Agent and Requisite Lenders.
16. CONSENTS. Company shall have delivered to Agent such
consents, waivers, amendments or approvals as may be required to be obtained in
connection with any material agreement in order to enter into and carry out its
obligations under this Agreement, including, without limitation, a consent from
each lender to any of the Loan Parties as may be required, in each case in form
and substance satisfactory to Agent.
17. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby 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.
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
Effective 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 Effective Date.
B. 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:
1. 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.
2. As of that Funding Date:
a. 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 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;
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b. 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;
c. 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;
d. 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;
e. 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
f. 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; 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.
C. 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:
1. On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have been made.
2. 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 Request for 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
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such other documents or information as the applicable Issuing Lender may
reasonably require in connection with the issuance of such Letter of Credit.
3. 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 IV. 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
the following statements are true, correct and complete:
A. ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
1. 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 to which it is a party and to carry out the transactions contemplated
thereby.
2. 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.
3. CONDUCT OF BUSINESS. Each Loan Party is engaged only in the
businesses permitted to be engaged in pursuant to subsection 7.14.
4. SUBSIDIARIES. All of the Subsidiaries of Holdings 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
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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 Effective
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 and 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.
B. AUTHORIZATION OF BORROWING, ETC.
1. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of each Loan Document have been duly authorized by all necessary
corporate action on the part of each Loan Party which is a party to such Loan
Document.
2. NO CONFLICT. The execution, delivery and performance by each
Loan Party of the Loan Documents to which such Loan Party is a party and the
consummation of the transactions contemplated by the Loan 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 Effective Date (or, in the case of any Loan Document
executed and delivered after the Effective 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.
3. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsection 4.1, 6.10
and 6.11 and (ii) the delivery to Agent of any pledged Collateral not delivered
to Agent at the time of execution and delivery of the applicable Collateral
Document (all of which pledged Collateral has been so delivered) are effective
to create in favor of Agent for the benefit of Lenders, as security for the
respective Secured Obligations (as defined in the applicable Collateral
Document in respect of any
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Collateral), a valid and perfected first priority Lien on all of the Collateral
(subject to Permitted Encumbrances and Liens set forth on 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), and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and such first priority status of such Liens have been duly made or
taken and remain in full force and effect, other than the filing of any UCC
financing statements delivered to Agent for filing (but not yet filed) and the
periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Agent.
4. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by each Loan Party of the Loan Documents to which such Loan Party
is a party and the consummation of the transactions contemplated by the Loan
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
Effective Date, and (iii) notices or other actions required to be taken after
the Effective 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 executed and delivered after the Effective Date, on or before
such date of execution and delivery).
5. BINDING OBLIGATION. Each of the Loan 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, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
6. VALID ISSUANCE OF HOLDINGS COMMON STOCK, HOLDINGS PREFERRED
STOCK AND NEW INDEBTEDNESS OF HOLDINGS AND COMPANY.
a. (a) Holdings Common Stock. As of the Effective
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
Effective 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
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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 5.1, no stockholder of Holdings has or will have any
preemptive rights to subscribe for any additional equity
Securities of Holdings.
b. Certain Other Indebtedness of Holdings and Company.
The Senior Debt Indentures, the Senior Indebtedness, the Subordinated
Debt Indentures and the Subordinated Indebtedness, are 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 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 1992 13.75% Senior
Subordinated Note Indenture and (ii) a refinancing or replacement of
the "1992 Credit Agreement", as defined in the 1993 9% Senior
Subordinated Note Indenture and the 1992 10-1/4% Senior Subordinated
Note Indenture. The subordination provisions of each of the
Subordinated Notes and each of the Subordinated Debt Indentures are
enforceable against the holders thereof and the Loans and all other
monetary Obligations hereunder are within the definition of "SENIOR
INDEBTEDNESS" included in such provisions.
C. FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: (i) the audited
consolidated balance sheets of Company and its Subsidiaries as at January 28,
1996 and the related consolidated statements of operations, stockholders'
equity and cash flows of Company and its Subsidiaries for the fiscal year then
ended, (ii) the unaudited consolidated balance sheets of Company and its
Subsidiaries as at April 21, 1996, July 14, 1996 and October 6, 1996, and the
related consolidated statements of operations, stockholders' equity and cash
flows of Company and its Subsidiaries for the fiscal quarters then ended, and
(iii) the unaudited consolidated balance sheets of Company and its Subsidiaries
as at November 3, 1996, December 1, 1996, December 29, 1996, and March 2, 1997
and the related consolidated statements of operations, stockholders' equity and
cash flows of Company and its Subsidiaries for the fiscal month then ended and
for the fiscal year-to-date fiscal periods 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.
None of the Loan Parties has 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
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otherwise) or prospects of the Loan Parties, taken as a whole, other than (i)
the incurrence of the Obligations and (ii) contingent obligations or
liabilities for taxes, long-term leases or forward or long-term commitments
disclosed on Schedule 5.3 annexed hereto.
D. NO MATERIAL ADVERSE CHANGE.
Since January 28, 1996, no event or change has occurred that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect.
E. 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 Effective 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 Effective 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.
F. 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 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.
G. 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
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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.
H. PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
1. 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.
2. 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.
I. 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.
J. SECURITIES ACTIVITIES.
1. 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.
2. 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.
K. EMPLOYEE BENEFIT PLANS.
1. 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.
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2. 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.
3. 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.
4. 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.
L. 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 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.
M. ENVIRONMENTAL PROTECTION.
1. Except as set forth in Schedule 5.13 annexed hereto:
a. 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;
b. 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;
c. 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
101
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;
d. 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;
e. 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;
f. 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;
g. 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;
h. no unpermitted underground storage tanks or surface
impoundments are on or at any Facility; and
i. 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.
2. 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.
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3. 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.
4. 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.
N. 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.
O. 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.
P. 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.
Q. INTELLECTUAL PROPERTY.
1. All Intellectual Property as of the Effective 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
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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.
2. 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 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.
R. PERMITS.
Except as disclosed in Schedule 5.18 annexed hereto, each of
the Loan Parties 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 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 all such Permits are
valid and in full force and effect. Each of the Loan Parties is in 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.
SECTION V. 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.
A. 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:
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a. 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 Effective 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 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;
b. 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, all as set forth in 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;
c. 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, all as set forth in Holdings' or
105
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 Andersen LLP or other independent certified public
accountants, substantially in the form of Exhibit XVIII 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;
d. 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 provided that with respect to the delivery
of financial statements for Company's Fiscal Year ended February 2,
1997, such Compliance Certificate shall be completed with reference to
the Company's compliance with the covenants contained in the Existing
Credit Agreement; and (b) within 100 days after the beginning of each
Fiscal Year and in
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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;
e. 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 preparation of the
financial statements delivered immediately prior to such change;
f. 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;
g. 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;
h. 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
107
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;
i. 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 default or event or condition of the type
referred to in subsection 8.2 or (c) 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;
j. Litigation or Other Proceedings: promptly upon any
Specified Officer of any Loan Party obtaining knowledge of (X) the
institution of, or nonfrivolous 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 Loan 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;
k. 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
108
threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto;
l. 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 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;
m. 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;
n. 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;
o. 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;
p. Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Holdings or
Company;
q. 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
109
and Company and its Subsidiaries pursuant to subdivision (ii) above, a
written notice setting forth with respect to 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;
r. 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;
s. 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
t. 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.
B. 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.
C. PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
1. 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.
2. 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).
110
D. MAINTENANCE OF PROPERTIES; INSURANCE.
1. 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 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.
2. 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 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.
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E. 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.
F. 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.
G. ENVIRONMENTAL DISCLOSURE AND INSPECTION.
1. 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.
2. 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
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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.
3. 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 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.
4. 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.
5. 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.
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H. 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.
I. 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 amount of not less than $300,000,000, each such
Interest Rate Agreement to be in form and substance satisfactory to Agent.
J. EXECUTION OF GUARANTY AND COLLATERAL DOCUMENTS BY FUTURE SUBSIDIARIES.
In the event that any Person becomes a Subsidiary of Company
after the date hereof, 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
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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
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.
K. ADDITIONAL REAL PROPERTY.
After the Effective Date, each of Holdings and Company shall,
and shall cause its Subsidiaries to, with respect to each Real Property Asset
listed in Schedule 4.1F annexed hereto (to the extent the items listed below
have not been obtained or delivered to Agent on the Closing Date or the
Effective Date and can, using reasonable commercial efforts, be obtained) and
each Real Property Asset in which Company or such Subsidiary acquires fee title
or a leasehold interest after the Effective 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 three months after the applicable Real Property Asset becomes
Covered Real Property (or within one month after the Effective Date, with
respect to the Real Property Assets identified with a "PC" in the "Mortgage"
column listed on Schedule 4.1F), deliver:
(1) 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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(2) 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,
(3) 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,
(4) 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, recorded memoranda and
agreements from the lessor on such real property as are
reasonably required by Agent,
(5) environmental audits prepared by professional
consultants mutually acceptable to Company and Agent, in form,
scope and substance satisfactory to Agent in its reasonable
discretion,
(6) 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,
(7) 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,
(8) 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
(9) 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.
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.
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L. REDEMPTION OF CERTAIN INDEBTEDNESS.
On or prior to April 28, 1997, the Company shall have called
for redemption, and shall have redeemed, all of its outstanding 1992 13.75%
Senior Subordinated Notes and 1995 13.75% Senior Subordinated Notes at a
redemption price which does not exceed 106.111% of the principal amount thereof
plus accrued interest to the date of redemption.
SECTION VI. 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.
A. 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:
a. the Loan Parties may become and remain liable with
respect to Indebtedness which is included among the Obligations;
b. 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;
c. 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;
d. Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any
wholly-owned Subsidiary of Company may become and remain liable with
respect to Indebtedness to Company or any other wholly-owned
Subsidiary of Company; provided that (a) all such intercompany
Indebtedness shall be evidenced by promissory notes that are pledged
to Agent pursuant to the terms of the 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;
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e. Holdings may become and remain liable with respect to
Indebtedness evidenced by the Seller Debentures in an aggregate
principal amount not to exceed $131,500,000 and the Holdings Discount
Debentures in an aggregate principal amount not to exceed (at
maturity) $193,363,750, minus the aggregate principal amount thereof
from time to time repurchased, redeemed or prepaid;
f. Company may become and remain liable with respect to
Indebtedness evidenced by its 1995 11% Senior Subordinated Notes in an
aggregate principal amount not to exceed $524,005,000, its 1997 11%
Senior Subordinated Notes in an aggregate principal amount not to
exceed $155,000,000, its 1993 9% Senior Subordinated Notes in an
aggregate principal amount not to exceed $145,000, its 1992 10-1/4%
Senior Subordinated Notes in an aggregate principal amount not to
exceed $2,100,000, its 1992 13.75% Senior Subordinated Notes in an
aggregate principal amount not to exceed $4,816,000, its 1995 13.75%
Senior Subordinated Notes in an aggregate principal amount not to
exceed $140,200,000, its 1992 10.45% Senior Notes in an aggregate
principal amount not to exceed $4,700,000, its 1995 10.45% Senior
Notes in an aggregate principal amount not to exceed $520,326,000 and
its 1996 10.45% Senior Notes in an aggregate principal amount not to
exceed $100,000,000, minus in each case the aggregate principal amount
thereof from time to time repurchased, redeemed or prepaid;
g. 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;
h. 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
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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;
i. 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;
j. Company and its Subsidiaries may become and remain
liable with respect to Indebtedness represented by Deferred Trade
Payables in an aggregate amount for all such Indebtedness not to
exceed $5,000,000 at any time outstanding;
k. 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;
l. 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;
m. Holdings and Company may become during Fiscal Year
1997 and remain liable with respect to unsecured senior Indebtedness
and/or unsecured senior subordinated Indebtedness in an aggregate
principal amount which shall not exceed $150,000,000, the terms of
which Indebtedness shall be in form and substance satisfactory to
Agent and Requisite Lenders; provided, that Holdings shall contribute
the proceeds from the issuance of such Indebtedness to Company in the
form of an equity contribution; provided further, that in either case,
the Company shall apply such proceeds in accordance with subsection
2.4B(iii)(b);
n. Company and its Subsidiaries may become and remain
liable with respect to Non-Recourse Indebtedness incurred principally
to finance the remodeling, expansion, renovation or other improvement
of a store located on any Planned Improvement Property; provided that
(a) the initial principal amount of such Non-Recourse Indebtedness
shall not be less than 70% of the fair market value of such Planned
Improvement Property, (b) the proceeds of such Non-Recourse
Indebtedness are applied to prepay Loans and/or permanently reduce
Revolving Loan Commitments to the extent required by subsection
2.4B(iii)(b) or to remodel, expand, renovate or improve such store
within two years of the incurrence of such Non-Recourse Indebtedness
and (c) after giving effect to the incurrence of such Non-Recourse
Indebtedness, the aggregate amount of all Planned Improvement
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Financed Amounts received by Company and its Subsidiaries pursuant to
this subsection 7.1(xiv) or clause (b) of subsection 7.10 shall not
exceed $80,000,000; and
o. 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.
B. LIENS AND RELATED MATTERS.
1. 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:
a. Permitted Encumbrances;
b. 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);
c. existing Liens described in Schedule 7.2 annexed
hereto;
d. 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, 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;
e. 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;
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f. 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;
g. Liens on Planned Improvement Properties securing
Planned Improvement Financed Amounts permitted pursuant to subsection
7.1(xiv) and clause (b) of subsection 7.10; provided that such Liens
shall extend only to the Planned Improvement Properties which are
encumbered under subsection 7.1(xiv) or clause (b) of subsection 7.10,
as the case may be, including the stores located thereon and the
equipment and fixtures located in such stores, and the proceeds
thereof;
h. Liens not otherwise permitted by clauses (i) through
(vii) 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 (viii) 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
i. 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.
2. 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 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.
3. 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
121
and its Subsidiaries in accordance with subsection 6.11, the lessor will not
agree to permit such hypothecation.
C. 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:
a. Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
b. Holdings and its Subsidiaries may continue to own the
Investments owned by them as of the Effective Date in any Subsidiaries
of Holdings and described on Schedule 5.1 annexed hereto as in effect
on the Effective Date and Holdings may make additional capital
contributions to Company;
c. Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1(iv);
d. Company and its Subsidiaries may continue to own the
existing Investments owned by them and described in Schedule 7.3
annexed hereto;
e. 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 Consolidated Capital
Expenditure, such Consolidated Capital Expenditure is permitted under
subsection 7.8;
f. 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;
g. 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 or make loans or incur other liabilities with
respect to the Adams/Vermont Partnership; 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
122
its Subsidiaries) and (c) the aggregate Development Investments,
together with the aggregate outstanding loans and other liabilities to
the Adams/Vermont Partnership and 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;
h. Company and its Subsidiaries may accept promissory
notes or capital stock received in consideration of, or the deferral
of a portion of the sales price accepted with respect to, Asset Sales;
provided that (a) 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 on a cumulative basis after the Effective Date first
exceeds $10,000,000 (the "SPECIFIED FISCAL YEAR") and any 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 promissory notes or a deferred
portion of such sales price, (b) Company and its Subsidiaries may
accept promissory notes, capital stock or defer a portion of the sales
price for sales of Cala and Falley's up to 100% of such sales prices
provided that the amount of such non-cash consideration or such
deferred portion of such sales prices in excess of 15% of the
aggregate sales prices for Cala and Falley's shall immediately effect
a permanent reduction in the Revolving Loan Commitments pursuant to
subsection 2.4B(iii)(a) in an amount equal to such non-cash
consideration and such deferred portion of such sales prices in excess
of 15% of such aggregate sales prices, (c) the aggregate principal
amount of such promissory notes and the deferred portion of such sales
prices related to all other Asset Sales shall not at any time exceed
$10,000,000 and (d) any such promissory notes or capital stock so
accepted shall be pledged as security for the Obligations pursuant to
the applicable Collateral Document;
i. 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;
j. 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;
k. 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;
l. 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
123
guarantees permitted under subsection 7.4(v), shall not exceed
$5,000,000 at any time outstanding;
m. Company may make and maintain loans to Holdings for
the purposes described in subsection 7.5A(iv) 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(iv) at the time any such loan is made;
n. 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
o. Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
$5,000,000.
D. 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:
a. 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);
b. 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;
c. 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);
124
d. 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;
e. 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;
f. 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) or subsection 7.1(xiii)
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 either shall be in the form of such
guarantee as in effect and delivered to Agent on the Closing Date, as
such form may be amended from time to time to the extent permitted
under subsection 7.15B, or shall be in form and substance satisfactory
to Agent and Requisite Lenders;
g. Company and its Subsidiaries, as applicable, may
remain liable with respect to existing Contingent Obligations
described in Schedule 7.4 annexed hereto;
h. Holdings 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;
i. 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
125
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 and the aggregate outstanding loans and other liabilities
to the Adams/Vermont Partnership under subsection 7.3(vii), shall not
exceed $35,000,000 at any time outstanding; and
j. 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.
E. RESTRICTED JUNIOR PAYMENTS; OTHER RESTRICTED PAYMENTS.
1. 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) 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 and to the holders of Indebtedness permitted under
subsection 7.1(xiii) to the extent required by the terms of, and subject to any
subordination provisions contained in, the indenture pursuant to which such
Indebtedness is issued; (ii) 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 Seller Debentures and any Indebtedness permitted under
subsection 7.1(xiii); (iii) Company may make payments of regularly scheduled
interest and regularly scheduled payments of principal in respect of the 1993
9% Senior Subordinated Notes, the 1992 10-1/4% Senior Subordinated Notes and
the 1992 13.75% Senior Subordinated Notes, and Company may make payments of
regularly scheduled interest in respect of the 1995 11% Senior Subordinated
Notes, the 1997 11% Senior Subordinated Notes and the 1995 13.75% 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; (iv) Company may make cash
dividends to 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; (v) 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); (vi) 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;
(vii) Company may make cash dividends to Holdings to enable Holdings to make
payments permitted pursuant to subsection 7.12(iv);
126
(viii) 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);
(ix) Company may make payments of regularly scheduled interest in respect of
subordinated Indebtedness permitted pursuant to subsection 7.1(xiii), 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; (x) so long as no default exists under the
Subordinated Debt Indentures, or would occur as a result therefrom, Holdings
and Company may at any time repurchase or redeem Subordinated Indebtedness and
shares of Holdings' capital stock in an aggregate amount since the Effective
Date, together with the aggregate amount of all repurchases or redemptions of
Senior Indebtedness made pursuant to subsection 7.5B(iv) on or after the
Effective Date, not to exceed the Redemption Amount; and (xi) Company may make
the payments required to redeem the 1992 13.75% Senior Subordinated Notes and
the 1995 13.75% Senior Subordinated Notes as required pursuant to subsection
6.12. 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.
2. 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) 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, (ii) Company may redeem, repurchase or retire
Senior Indebtedness (other than the 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), (iii) Holdings may make cash interest payments to the holders of
senior Indebtedness permitted under subsection 7.1(xiii) in accordance with the
terms of and to the extent required by the terms of the indenture pursuant to
which such Indebtedness is issued, and (iv) so long as no default exists under
the Senior Debt Indentures, or would result therefrom, Holdings and Company may
at any time repurchase or redeem its Senior Indebtedness in an aggregate amount
since the Effective Date, together with the aggregate amount of all repurchases
or redemption of Subordinated Indebtedness and shares of Holdings' capital
stock made pursuant to subsection 7.5A(x) on or after the Effective Date, not
to exceed the Redemption Amount.
F. FINANCIAL COVENANTS.
Immediately upon the sale by Company or any of its
Subsidiaries of all or a majority of its existing Northern California
operations (the "NORTHERN CALIFORNIA SALE") or all or a majority of its
existing Midwestern operations (the "MIDWESTERN SALE"), Company and Agent, on
behalf of Lenders, shall enter into negotiations on adjustments to be made to
127
the Consolidated Adjusted EBITDA numbers set forth in this subsection 7.6 to
take into account the effect of such disposition. Agent shall provide Lenders
notice of the adjustments agreed upon between Company and Agent with respect to
the Northern California Sale or the Midwestern Sale, as the case may be, such
notice to be given immediately upon such agreement. From and after the date of
such notice, this subsection 7.6 will be amended as set forth in such notice.
1. 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 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
------ ---------------------
1st Fiscal Quarter, 1997 1.15:1.00
2nd Fiscal Quarter, 1997 1.15:1.00
3rd Fiscal Quarter, 1997 1.15:1.00
4th Fiscal Quarter, 1997 1.20:1.00
1st Fiscal Quarter, 1998 1.20:1.00
2nd Fiscal Quarter, 1998 1.25:1.00
3rd Fiscal Quarter, 1998 1.25:1.00
4th Fiscal Quarter, 1998 1.30:1.00
1st Fiscal Quarter, 1999 1.30:1.00
2nd Fiscal Quarter, 1999 1.35:1.00
3rd Fiscal Quarter, 1999 1.35:1.00
4th Fiscal Quarter, 1999
through 4th Fiscal Quarter, 2002 1.40:1.00
1st Fiscal Quarter, 2003
and each Fiscal Quarter thereafter 1.50:1.00
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2. MAXIMUM LEVERAGE RATIO. Company shall not at any time permit
the ratio of (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
------ ----------------------
1st Fiscal Quarter, 1997 6.50:1.00
2nd Fiscal Quarter, 1997 6.50:1.00
3rd Fiscal Quarter, 1997 6.50:1.00
4th Fiscal Quarter, 1997 6.25:1.00
1st Fiscal Quarter, 1998 6.25:1.00
2nd Fiscal Quarter, 1998 6.00:1.00
3rd Fiscal Quarter, 1998 5.75:1.00
4th Fiscal Quarter, 1998 5.75:1.00
1st Fiscal Quarter, 1999 5.50:1.00
2nd Fiscal Quarter, 1999 5.25:1.00
3rd Fiscal Quarter, 1999 5.00:1.00
4th Fiscal Quarter, 1999 4.75:1.00
1st Fiscal Quarter, 2000 4.50:1.00
2nd Fiscal Quarter, 2000 4.50:1.00
3rd Fiscal Quarter, 2000 4.25:1.00
4th Fiscal Quarter, 2000 4.25:1.00
1st Fiscal Quarter, 2001 4.25:1.00
2nd Fiscal Quarter, 2001 4.00:1.00
3rd Fiscal Quarter, 2001 3.75:1.00
4th Fiscal Quarter, 2001 3.75:1.00
1st Fiscal Quarter, 2002 3.50:1.00
2nd Fiscal Quarter, 2002 3.50:1.00
3rd Fiscal Quarter, 2002 3.50:1.00
4th Fiscal Quarter, 2002 3.50:1.00
1st Fiscal Quarter, 2003 3.25:1.00
2nd Fiscal Quarter, 2003 3.25:1.00
3rd Fiscal Quarter, 2003 3.25:1.00
4th Fiscal Quarter, 2003 3.25:1.00
1st Fiscal Quarter, 2004 3.00:1.00
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3. MINIMUM CONSOLIDATED ADJUSTED EBITDA. Company shall not
permit Consolidated Adjusted EBITDA 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 amount indicated:
MINIMUM CONSOLIDATED
PERIOD ADJUSTED EBITDA
------ ---------------
1st Fiscal Quarter, 1997 $315,000,000
2nd Fiscal Quarter, 1997 $320,000,000
3rd Fiscal Quarter, 1997 $330,000,000
4th Fiscal Quarter, 1997 $340,000,000
1st Fiscal Quarter, 1998 $345,000,000
2nd Fiscal Quarter, 1998 $350,000,000
3rd Fiscal Quarter, 1998 $365,000,000
4th Fiscal Quarter, 1998 $380,000,000
1st Fiscal Quarter, 1999 $400,000,000
2nd Fiscal Quarter, 1999 $412,000,000
3rd Fiscal Quarter, 1999 $425,000,000
4th Fiscal Quarter, 1999 $445,000,000
1st Fiscal Quarter, 2000 $455,000,000
2nd Fiscal Quarter, 2000 $460,000,000
3rd Fiscal Quarter, 2000 $470,000,000
4th Fiscal Quarter, 2000 $480,000,000
1st Fiscal Quarter, 2001 $490,000,000
2nd Fiscal Quarter, 2001 $495,000,000
3rd Fiscal Quarter, 2001 $505,000,000
4th Fiscal Quarter, 2001 $520,000,000
1st Fiscal Quarter, 2002 $530,000,000
2nd Fiscal Quarter, 2002 $540,000,000
3rd Fiscal Quarter, 2002 $550,000,000
4th Fiscal Quarter, 2002 $560,000,000
1st Fiscal Quarter, 2003 $570,000,000
2nd Fiscal Quarter, 2003 $580,000,000
3rd Fiscal Quarter, 2003 $590,000,000
4th Fiscal Quarter, 2003 $600,000,000
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4. 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 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 Effective Date through
4th Fiscal Quarter, 1997 ($75,000,000)
1st Fiscal Quarter, 1998 through
4th Fiscal Quarter, 1998 ($95,000,000)
1st Fiscal Quarter, 1999 through
4th Fiscal Quarter, 1999 ($75,000,000)
1st Fiscal Quarter, 2000 through
4th Fiscal Quarter, 2001 ($50,000,000)
1st Fiscal Quarter, 2002 through
4th Fiscal Quarter, 2002 -0-
1st Fiscal Quarter, 2003 and thereafter $25,000,000
G. 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:
a. Alpha Beta may merge into Company with Company being
the surviving corporation;
b. 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);
c. Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration
131
received for such assets shall be in an amount at least equal to the
fair market value thereof;
d. 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;
e. Company and its Subsidiaries may sell (a) furniture,
fixtures and/or equipment acquired after December 14, 1994 and (b)
grocery stores (including furniture, fixtures and equipment located
therein and acquired after December 14, 1994) opened or acquired after
December 14, 1994, in each case in connection with a concurrent
lease-back of such furniture, fixtures and/or equipment and/or of such
grocery stores to the extent such transactions are permitted under
subsection 7.10 and Agent shall release any security interests in
favor of Agent for the benefit of Lenders in such furniture, fixtures
and/or equipment and/or such grocery stores;
f. (a) Company and its Subsidiaries may sell up to eight
grocery stores in any Fiscal Year, plus a number of stores equal to
the difference between eight and the number of stores sold under this
clause (vi) in the immediately preceding Fiscal Year, which stores are
no longer useful to the businesses of Company and its Subsidiaries;
and (B) with the approval of Agent, Company and its Subsidiaries may
terminate the leases on up to six (6) grocery stores or other
facilities in any Fiscal Year, which grocery stores or other
facilities are no longer useful to the businesses of Company and its
Subsidiaries and Agent shall release any security interests in favor
of Agent for the benefit of Lenders in Company's or its Subsidiaries'
leasehold interests in such stores or other facilities and any
personal property remaining on any such premises;
g. Company and its Subsidiaries may make any of the
Planned 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;
h. 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;
i. Company and its Subsidiaries may lease or sublease
any of their respective real or personal property in the ordinary
course of business;
j. (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
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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;
k. Company and its Subsidiaries may make Asset Sales of
the Selected Assets pursuant to this subsection 7.7(xi) through the
end of Fiscal Year 1998; provided that the consideration received for
such assets shall be in an amount at least equal to the fair market
value thereof, provided that for any individual transaction or series
of related transactions for which the aggregate consideration equals
or exceeds $25,000,000, Company shall provide to Agent a fairness
opinion from an investment bank acceptable to Agent that the amount of
the consideration is not less than the fair market value of such
assets;
l. 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;
and
m. so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing at the time of such
incurrence or sale, Company and its Subsidiaries may incur
Non-Recourse Indebtedness with respect to Planned Improvement
Properties to the extent permitted under subsection 7.1(xiv) and may
sell and concurrently lease-back Planned Improvement Properties to the
extent permitted under clause (b) of subsection 7.10 and Agent shall
release any Liens in favor of Agent for the benefit of Lenders on such
Planned Improvement Properties, including any stores located thereon
and any equipment or fixtures located in such stores.
H. 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 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 shall be increased (i) by an amount equal to the excess, if any (but in
no event more than 20% 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 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,
15% 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; (iii) by an amount equal to
(but in no event greater than $15,000,000 for any Fiscal
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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 (other than Asset Sales
covered by clause (B) of subsection 2.4B(iii)(a)) 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; and (iv) by an
amount equal to the Planned Improvement Financed Amount which has been applied
by Company and its Subsidiaries during such Fiscal Year to remodel, expand,
renovate or otherwise improve the stores located on the Planned Improvement
Properties and which was not required to be used to prepay the Loans and/or
permanently reduce Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a) or (b); 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 for any Fiscal
Year 20% of the Maximum Consolidated Capital Expenditures Amount for such
Fiscal Year as set forth in the table below:
MAXIMUM CONSOLIDATED
FISCAL YEAR CAPITAL EXPENDITURES AMOUNT
----------- ---------------------------
Fiscal Year 1996 $ 95,000,000
Fiscal Year 1997 $150,000,000
Fiscal Year 1998 $135,000,000
Fiscal Year 1999 $135,000,000
Fiscal Year 2000
and each Fiscal Year thereafter $100,000,000
I. 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 shall not exceed the
corresponding amount set forth below opposite such Fiscal Year:
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PERIOD MAXIMUM LEASE
------ PAYMENTS
Fiscal Year 1997 $234,800,000
Fiscal Year 1998 $261,600,000
Fiscal Year 1999 $289,100,000
Fiscal Year 2000 $315,500,000
Fiscal Year 2001 $342,500,000
Fiscal Year 2002 $369,800,000
Fiscal Year 2003
and each Fiscal Year thereafter $389,900,000
J. 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) in connection with such lease; provided that (a) 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 and (b)
additionally, with respect to any such lease with respect to a Planned
Improvement Property, the proceeds of which are to be principally used to
remodel, expand, renovate or otherwise improve a store located on such Planned
Improvement Property, (i) the amount of the sales price for such Planned
Improvement Property shall not be less than 70% of the fair market value of
such Planned Improvement Property, (ii) the proceeds of such sales price shall
be applied to prepay Loans and/or permanently reduce Revolving Loan Commitments
to the extent required by subsection 2.4B(iii)(a) or to remodel, expand,
renovate or improve such store within two years of such sale and (iii) after
giving effect to such sale, the aggregate amount of all Planned Improvement
Financed Amounts received by Company and its Subsidiaries pursuant to this
clause (b) or subsection 7.1(xiv) shall not exceed $80,000,000.
K. 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.
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L. 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) transactions between
Company and/or any of its Subsidiaries and Golden Alliance that are otherwise
permitted under this Agreement; (vi) 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;
(vii) payments by Holdings and its Subsidiaries pursuant to tax sharing
agreements in effect from time to time among Holdings and its Subsidiaries;
(viii) 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 of Company; (ix) transactions between
Company and Holdings entered into pursuant to and in accordance with the
Transfer and Assumption Agreement, and (x) 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.
M. DISPOSAL OF SUBSIDIARY STOCK; RESTRICTIONS ON SUBSIDIARIES.
1. 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.).
2. 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
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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.
3. The Adams/Vermont Partnership shall not engage in any
business, own or hold any assets or incur any Indebtedness, Contingent
Obligations or other liabilities other than those reasonably related to the
development of a shopping center located at Adams and Vermont Streets in Los
Angeles, California. Neither Holdings, Company nor any other Loan Party shall
incur any Indebtedness, Contingent Obligations or other liabilities on behalf
of, or with respect to, the Adams/Vermont Partnership other than Company's
liabilities as a general partner under the partnership agreement governing the
Adams/Vermont Partnership substantially as in effect on the Effective Date to
the extent permitted pursuant to subsections 7.3(vii) and 7.4(ix).
Notwithstanding anything to the contrary contained herein or in the other Loan
Documents, the Adams/Vermont Partnership shall not be required to execute a
Guaranty or other Collateral Documents.
N. 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), (iv) and (vii) 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.
O. AMENDMENTS OF CERTAIN DOCUMENTS; NO PREPAYMENTS OF CERTAIN
INDEBTEDNESS.
1. 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 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.
2. Other than the redemption of the 1995 13.75% Senior
Subordinated Notes and the 1992 13.75% Senior Subordinated Notes from the
proceeds of the 1997 11% Senior
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Subordinated Notes, 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.
P. FISCAL YEAR.
Company shall not change its Fiscal Year-end from the Sunday
closest to January 31 of the following calendar year.
SECTION VII. EVENTS OF DEFAULT
IF any of the following conditions or events ("Events of
Default") shall occur:
A. 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
B. DEFAULT IN OTHER AGREEMENTS.
a. 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
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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
C. 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
D. 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
E. 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
F. INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
a. 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
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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
G. VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
a. 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
H. 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
I. 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
J. 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
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neither Company nor any other Loan Party would have liability if the Pension
Plan then terminated), which exceeds $10,000,000; or
K. CHANGE IN CONTROL.
A Change of Control shall have occurred; or
L. 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
M. 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
N. 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 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
141
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(iv).
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 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 VIII. 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:
A. 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
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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".
B. 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:
(1) 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,
(2) any extension or renewal of any provision thereof,
(3) 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,
(4) the release of any of the security held by Agent for
any of the Guarantied Obligations,
(5) the failure of Agent or any Guarantied Party to
exercise any right or remedy against any other guarantor of any of the
Guarantied Obligations,
(6) 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,
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(7) 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
(8) 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 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
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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:
a. 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 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);
b. 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
c. 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
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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 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.
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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.
SECTION IX. AGENT
A. 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 the Co-Agents listed
as such on the signature pages hereto as Co-Agents 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 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 hereunder shall have no duties or
responsibilities under this Agreement or any other Loan Document to any Person,
other than as a Lender hereunder or thereunder.
B. POWERS; GENERAL IMMUNITY.
1. 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.
2. 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
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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.
3. 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.
4. 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 "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.
C. 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
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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.
D. 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, reasonable 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. If
indemnification payments made by Lenders pursuant to this subsection 10.4 are
subsequently recovered by Agent from any Loan Party, Agent shall promptly
refund such previously paid indemnification payments to Lenders.
E. SUCCESSOR AGENT AND SWING LINE LENDER.
1. 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 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.
2. 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
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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 VII
annexed hereto, in the principal amount of the Swing Line Loan Commitment then
in effect and with other appropriate insertions.
F. 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.
SECTION X. MISCELLANEOUS
A. ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
1. GENERAL. Subject to subsection 11.1B, 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
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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.
2. ASSIGNMENTS.
a. 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 and provided that Company hereby consents to any assignment to
any Eligible Assignee which immediately prior to the effectiveness of
the Master Assignment Agreement was a Lender under the Existing Credit
Agreement). 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 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
or Exhibit VI annexed hereto, as the case may be, with appropriate
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insertions, to reflect the new Commitments and/or outstanding Term
Loans, as the case may be, of the assignee and/or the assigning
Lender.
b. 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 XVII 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 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).
3. 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".
4. 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 and with the consent of Company and Agent, any Lender
which is a fund may pledge all or any portion of its Notes or Loans to its
trustee in support of its obligations to its trustee; 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.
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5. 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.
B. 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 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 or environmental reports provided for
under subsection 4.1F 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.
C. 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,
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statutes, rules or regulations (including without limitation securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of this Agreement or the other Loan Documents or any
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.
D. 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.
E. 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
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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.
F. AMENDMENTS AND WAIVERS.
1. 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 no such amendment,
modification, termination, waiver or consent shall, without the consent of each
Lender (with Obligations directly affected in the case of the following clause
(i)): (i) extend the scheduled final maturity of any Loan or Note, or extend
the stated expiration date of any Letter of Credit beyond the Revolving Loan
Commitment Termination Date, or reduce the rate of interest (other than any
waiver of any increase in the interest rate applicable to any of the Loans
pursuant to subsection 2.2E) or fees thereon, or extend the time of payment of
interest or fees thereon, or reduce the principal amount thereof, (ii) release
all or substantially all of the Collateral, release all or substantially all of
the Loan Parties that are party to the Subsidiary Guaranty from the Subsidiary
Guaranty or release Holdings from the Holdings Guaranty, in each case except as
expressly provided in the Loan Documents, (iii) amend, modify, terminate or
waive any provision of this subsection 11.6, (iv) reduce the percentage
specified in the definition of Requisite Lenders (it being understood that,
with the consent of the Requisite Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the
Requisite Lenders on substantially the same basis as the extensions of Term
Loans and Revolving Loan Commitments are included on the Effective Date) or (v)
consent to the assignment or transfer by Holdings or Company of any of their
respective rights and obligations under this Agreement; provided further that
no such amendment, modification, termination or waiver shall (1) increase the
Commitments of any Lender over the amount thereof then in effect
155
without the consent of such Lender (it being understood that amendments,
modifications or waivers of conditions precedent, covenants, Potential Events
of Default or Events of Default or of a mandatory reduction in the Commitments
shall not constitute an increase of the Commitment of any Lender, and that an
increase in the available portion of any Commitment of any Lender shall not
constitute an increase in the Commitment of such Lender); (2) without the
consent of the Swing Line Lender, amend, modify, terminate or waive any
provision of subsection 2.1A(iv) or any other provision of this Agreement
relating to the Swing Line Loan Commitment or the Swing Line Loans; (3) without
the consent of the Requisite Class Lenders of each Class which is being
allocated a lesser prepayment, repayment or commitment reduction as a result of
the actions described below (or without the consent of the Requisite Class
Lenders of each Class in the case of an amendment to the definition of
Requisite Class Lenders), amend the definition of Requisite Class Lenders or
alter the required application of any prepayments or repayments (or commitment
reduction), as between the Classes pursuant to subsection 2.4B(iv) (although
the Requisite Lenders may waive, in whole or in part, any such prepayment,
repayment or commitment reduction so long as the application, as between the
Classes, of any such prepayment, repayment or commitment reduction which is
still required to be made is not altered); (4) without the consent of Requisite
Class Lenders of the respective Class, waive or reduce any scheduled repayment
set forth in subsections 2.4A(i) and (ii) of such affected Class; (5) amend,
modify, terminate or waive any obligations of Revolving Lenders relating to the
purchase of participations 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; or (6) without the consent of Agent or any
applicable Co-Agent, amend, modify, terminate or waive any provision of Section
10 as the same applies to Agent or any Co-Agent or of any other provision of
this Agreement as the same applies to the rights or obligations of Agent or any
Co-Agent.
2. If, in connection with any proposed amendment, modification,
termination or waiver to any of the provisions of this Agreement or the Notes
which requires the consent of all Lenders, the consent of the Requisite Lenders
is obtained but the consent of one or more of such other Lenders whose consent
is required is not obtained, then Company shall have the right, so long as all
non-consenting Lenders whose individual consent is required are treated as
described in either clause (i) or (ii) below, to either (i) replace each such
non-consenting Lender or Lenders with one or more Replacement Lenders pursuant
to subsection 2.8 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed amendment, modification,
termination or waiver, or (ii) terminate such non-consenting Lender's
Commitments and repay in full its outstanding Loans in accordance with
subsections 2.4B(i)(b) and 2.4B(ii)(b); provided that unless the Commitments
that are terminated and the Loans that are repaid pursuant to the preceding
clause (ii) are immediately replaced in full at such time through the addition
of new Lenders or the increase of the Commitments and/or outstanding Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to the preceding clause (ii), the Requisite
Lenders (determined before giving effect to the proposed action) shall
specifically consent thereto; provided further that Company shall not have the
right to terminate such non-consenting Lender's Commitment and repay in full
its outstanding Loans pursuant to clause (ii) of this subsection 11.6B if,
immediately after the termination of such Lender's Revolving Loan Commitment in
accordance with subsection 2.4B(ii)(b), the Revolving Loan Exposure of all
Lenders would exceed the Revolving Loan Commitments of
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all Lenders; provided still further that Company shall not have the right to
replace a Lender solely as a result of the exercise of such Lender's rights
(and the withholding of any required consent by such Lender) pursuant to the
second proviso to subsection 11.6A.
3. Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Company in any case shall entitle Company to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, 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 Company, on Company.
G. 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.
H. 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.
I. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
1. 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.
2. 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.
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J. 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 Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
K. 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.
L. 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.
M. 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.
N. 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.
158
O. 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.
P. 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.
Q. 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.
R. 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
159
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.
S. 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 to any direct or indirect contractual
counterparties in swap agreements or such contractual counterparties'
professional advisors provided that such contractual counterparties or their
professional advisors agree to handle the above-described confidential
information in accordance with safe and sound practices which are substantially
the same as those followed by banking institutions or as required or requested
by any governmental agency (including, without limitation, any regulatory body
having jurisdiction over such Lender) 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; provided still further that
expressly excluded from such non-public information referred to in this
subsection 11.19 is information that, prior to such information being disclosed
by a Lender, is made available by any Loan Party to the public.
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T. 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.
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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.
S-1
162
COMPANY: RALPHS GROCERY COMPANY
By:
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Title:
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HOLDINGS: FOOD 4 LESS HOLDINGS, INC.
By:
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Title:
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CREDIT AGREEMENT
163
BANKERS TRUST COMPANY, INDIVIDUALLY
AND AS AGENT
By:
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Title:
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CREDIT AGREEMENT
164
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By:
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Title:
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CREDIT AGREEMENT
165
BANK OF AMERICA ILLINOIS
By:
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Title:
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CREDIT AGREEMENT
166
BANQUE PARIBAS, LOS ANGELES AGENCY
By:
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Title:
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By:
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Title:
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CREDIT AGREEMENT
167
THE CHASE MANHATTAN BANK
By:
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Title:
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CREDIT AGREEMENT
168
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE
By:
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Title:
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By:
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Title:
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CREDIT AGREEMENT
169
CREDIT LYONNAIS, LOS ANGELES BRANCH
By:
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Title:
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CREDIT AGREEMENT
170
CREDIT SUISSE FIRST BOSTON
By:
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Title:
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By:
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Title:
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CREDIT AGREEMENT
171
DLJ CAPITAL FUNDING, INC.
By:
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Title:
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CREDIT AGREEMENT
172
THE FIRST NATIONAL BANK OF CHICAGO
By:
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Title:
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CREDIT AGREEMENT
173
FLEET NATIONAL BANK
By:
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Title:
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CREDIT AGREEMENT
174
GOLDMAN SACHS CREDIT PARTNERS L.P.
By:
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Title:
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CREDIT AGREEMENT
175
THE INDUSTRIAL BANK OF JAPAN, LIMITED, LOS
ANGELES AGENCY
By:
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Title:
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CREDIT AGREEMENT
176
THE MITSUBISHI TRUST AND BANKING CORPORATION
By:
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Title:
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CREDIT AGREEMENT
177
MORGAN STANLEY SENIOR FUNDING, INC.
By:
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Title:
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CREDIT AGREEMENT
178
NATIONAL WESTMINSTER BANK PLC
By:
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Title:
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CREDIT AGREEMENT
179
UNION BANK OF CALIFORNIA, N.A.
By:
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Title:
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CREDIT AGREEMENT
180
UNITED STATES NATIONAL BANK OF OREGON
By:
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Title:
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CREDIT AGREEMENT
181
THE TRAVELERS INSURANCE COMPANY
By:
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Title:
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CREDIT AGREEMENT
182
CIBC INC.
By:
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Title:
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CREDIT AGREEMENT
183
GENERAL ELECTRIC CAPITAL CORPORATION
By:
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Title:
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CREDIT AGREEMENT
184
MARINE MIDLAND BANK
By:
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Title:
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CREDIT AGREEMENT
185
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:
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Title:
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CREDIT AGREEMENT
186
KZH HOLDING CORPORATION II
By:
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Title:
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CREDIT AGREEMENT
187
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By:
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Title:
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CREDIT AGREEMENT
188
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By:
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Title:
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CREDIT AGREEMENT
189
SENIOR HIGH INCOME PORTFOLIO, INC.
By:
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Title:
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CREDIT AGREEMENT
190
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By:
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Title:
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CREDIT AGREEMENT
191
DAI-ICHI KANGYO BANK, LTD., LOS ANGELES
AGENCY
By:
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Title:
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CREDIT AGREEMENT
192
IMPERIAL BANK
By:
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Title:
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CREDIT AGREEMENT
193
NATIONAL CITY BANK
By:
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Title:
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CREDIT AGREEMENT
194
SOCIETE GENERALE
By:
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Title:
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CREDIT AGREEMENT
195
THE SUMITOMO BANK, LIMITED,
LOS ANGELES BRANCH
By:
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Title:
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CREDIT AGREEMENT
196
THE SUMITOMO TRUST & BANKING CO., LTD.,
LOS ANGELES AGENCY
By:
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Title:
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CREDIT AGREEMENT
197
THE FIRST NATIONAL BANK OF BOSTON
By:
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Title:
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CREDIT AGREEMENT
198
CITIBANK, N.A.
By:
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Title:
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CREDIT AGREEMENT
199
PRIME INCOME TRUST
By:
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Title:
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CREDIT AGREEMENT
200
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By:
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Title:
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CREDIT AGREEMENT
201
CONTINENTAL CASUALTY COMPANY
By:
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Title:
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CREDIT AGREEMENT
202
UNITED COMPANIES LIFE INSURANCE COMPANY
By: TCW Asset Management Company,
as Attorney-in-Fact
By:
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Title:
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CREDIT AGREEMENT
203
INTEGON LIFE INSURANCE CORPORATION
By: TCW Asset Management Company,
as Attorney-in-Fact
By:
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Title:
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CREDIT AGREEMENT
204
LEHMAN COMMERCIAL PAPER INC.
By:
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Title:
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CREDIT AGREEMENT
205
PILGRIM AMERICA PRIME RATE TRUST
By:
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Title:
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CREDIT AGREEMENT
206
ML CBO IV (CAYMAN) LTD.
By: Protective Asset Management, L.L.C.,
as Collateral Manager
By:
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Title:
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CREDIT AGREEMENT
207
PROTECTIVE LIFE INSURANCE COMPANY
By:
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Title:
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CREDIT AGREEMENT
208
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities GenPar, L.P.,
its General Partner
By: Oak Hill Securities MGP,
Inc., its General Partner
By:
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Title:
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CREDIT AGREEMENT
209
PARIBAS CAPITAL FUNDING LLC
By:
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Title:
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CREDIT AGREEMENT
210
FIRSTRUST BANK
By:
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Title:
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CREDIT AGREEMENT
211
CITY NATIONAL BANK
By:
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Title:
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CREDIT AGREEMENT
212
CO-AGENTS
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION
THE CHASE MANHATTAN BANK
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION EUROPEENNE
CREDIT SUISSE FIRST BOSTON
THE MITSUBISHI TRUST AND BANKING CORPORATION
UNION BANK OF CALIFORNIA, N.A.
UNITED STATES NATIONAL BANK OF OREGON
BANQUE PARIBAS, LOS ANGELES AGENCY
CREDIT LYONNAIS, LOS ANGELES BRANCH
FLEET NATIONAL BANK
THE INDUSTRIAL BANK OF JAPAN, LIMITED, LOS ANGELES AGENCY
MORGAN STANLEY SENIOR FUNDING, INC.
DLJ CAPITAL FUNDING, INC.
THE FIRST NATIONAL BANK OF CHICAGO
GOLDMAN SACHS CREDIT PARTNERS L.P.
NATIONAL WESTMINSTER BANK PLC
CREDIT AGREEMENT