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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported: April 20, 1995)
BRUNO'S, INC.
(Exact name of registrant as specified in its charter)
Alabama
(State or other jurisdiction of incorporation)
0-6544 63-0411801
(Commission File Number) (I.R.S. Employer Identification No.)
800 Lakeshore Parkway
Birmingham, Alabama 35211
(Address of principal executive offices/Zip Code)
(205) 940-9400
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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<PAGE>
Item 5. Other Events.
------------
As previously reported in the Company's Current Report on Form 8-K, dated April
27, 1995, as amended by the Current Report on Form 8-K/A, dated May 30, 1995,
the Company entered into an Agreement and Plan of Merger, dated as of
April 20, 1995, and amended as of May 18, 1995, pursuant to which Crimson
Acquisition Corp. ("Crimson"), a subsidiary of Crimson Associates, L.P., a
partnership organized by Kohlberg Kravis Roberts & Co., will be merged with and
into the Company, with the Company continuing as the surviving corporation (the
"Merger"). Set forth on the following pages are certain revised unaudited pro
forma financial and other data of the Company, as adjusted to give effect to
the Merger and the transactions contemplated thereby, including the incurrence
of certain borrowings anticipated in connection therewith.
2
<PAGE>
PRO FORMA CAPITALIZATION
The following table sets forth the (i) unaudited consolidated historical
cash and cash equivalents and historical capitalization of the Company
and (ii) unaudited consolidated pro forma cash and cash equivalents and the
pro forma capitalization of the Company as of April 8, 1995, as adjusted to
give effect to the Merger and the transactions contemplated thereby,
including the raising of capital and application of such proceeds therefrom.
This table should be read in conjunction with the Company's historical
financial statements contained in reports and other documents filed
by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934.
<TABLE><CAPTION>
As of
April 8, 1995
-----------------------------
Historical Pro Forma
-------------- --------------
(dollars in millions)
<S> <C> <C>
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20.8 $ 0.8
======== ========
Long-term debt:
Term Loan Facility (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -- $ 475.0
Revolving Credit Facility (b) . . . . . . . . . . . . . . . . . . . . . . . . . -- 10.1
Capitalized lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . 19.3 19.3
6.62% Series A Senior Notes due 2003 . . . . . . . . . . . . . . . . . . . . . 100.0 --
7.09% Series B Senior Notes due 2008 . . . . . . . . . . . . . . . . . . . . . 100.0 --
10 1/2% Senior Subordinated Notes due 2005 . . . . . . . . . . . . . . . . . . -- 400.0
Other long term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 0.8
-------- --------
Total long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 220.1 $ 905.2
-------- --------
Shareholders' investment:
Common stock (200.0 million shares authorized, $.01 par value,
78.1 million shares outstanding, historical basis; 60.0
million share authorized, $.01 par value, 25.0 million shares
outstanding, pro forma basis) . . . . . . . . . . . . . . . . . . . . . . . 0.8 0.3
Paid-in capital (deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.0 (592.3)
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384.4 309.4
Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.7) --
-------- --------
Total shareholders' investment . . . . . . . . . . . . . . . . . . . . . . . $ 422.5 $ (282.6)
-------- --------
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 642.6 $ 622.6
======== ========
</TABLE>
-----------------
(a) The Company will incur $475 million of indebtedness under the term
loan facility in connection with the Merger. The term loan tranches
under the term loan facility will consist of the $275 million
78-month amortizing Tranche A Loans, the $75 million 90-month
amortizing Tranche B Loans, the $75 million 102-month amortizing
Tranche C Loans and the $50 million 114-month amortizing Tranche D
Loans.
(b) The revolving credit facility will provide a $125 million revolving
credit facility which will be available for working capital purposes
and general corporate purposes. Approximately $10.1 million of the
funds available under the revolving credit facility will be drawn on
the date of the Merger.
3
<PAGE>
PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated condensed financial
statements (the "Pro Forma Financial Statements") have been derived by the
application of pro forma adjustments to the Company's historical financial
statements. The pro forma income statements for the periods presented give
effect to the Merger and related transactions as if such transactions were
consummated as of July 4, 1993 for the year ended July 2, 1994 and as of July
3, 1994 for the forty-week period ended April 8, 1995. The pro forma balance
sheet gives effect to the Merger and related transactions as if such
transactions had occurred as of April 8, 1995. The adjustments are described
in the accompanying notes. The Pro Forma Financial Statements should not be
considered indicative of actual results that would have been achieved had the
Merger and related transactions been consummated on the date or for the
periods indicated and do not purport to indicate balance sheet data or
results of operations as of any future date or for any future period. The Pro
Forma Financial Statements should be read in conjunction with the Company's
historical financial statements contained in reports and other documents
filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934.
The pro forma adjustments were applied to the respective historical
financial statements to reflect and account for the Merger as a
recapitalization. Accordingly, the historical basis of the Company's assets and
liabilities has not been impacted by the transaction.
4
<PAGE>
PRO FORMA CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in millions)
<TABLE><CAPTION>
As of April 8, 1995
-------------------------------------------------------
Pro Forma
Historical Adjustments Pro Forma
------------------ ------------------- ----------------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . $20.8 $(20.0)(a) $ 0.8
Receivables . . . . . . . . . . . . . . . . . . . . . 40.3 40.3
Inventories . . . . . . . . . . . . . . . . . . . . . 250.3 250.3
Prepaid expenses . . . . . . . . . . . . . . . . . . 14.5 14.5
Deferred income taxes . . . . . . . . . . . . . . . . 1.4 1.4
------ ------ ------
327.3 (20.0) 307.3
Property and equipment, net . . . . . . . . . . . . . . 515.4 515.4
Intangibles and other, net . . . . . . . . . . . . . . 55.7 55.7
------ ------ ------
Total Assets . . . . . . . . . . . . . . . . . . . . $898.4 $(20.0) $878.4
====== ====== ======
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Current maturities of debt and short-term borrowings. $26.9(b) $0.0 $ 26.9(b)
Accounts payable . . . . . . . . . . . . . . . . . . 107.0 107.0
Accrued income taxes . . . . . . . . . . . . . . . . 0.9 0.9
Other accrued expenses . . . . . . . . . . . . . . . 61.2 61.2
------ ------ ------
196.0 0.0 196.0
------ ------ ------
Noncurrent Liabilities:
Long-term debt . . . . . . . . . . . . . . . . . . . 200.8 675.0(c) 875.8
Revolving credit facility . . . . . . . . . . . . . . 0.0 10.1(d) 10.1(d)
Capitalized lease obligations . . . . . . . . . . . . 19.3 19.3
Deferred income taxes . . . . . . . . . . . . . . . . 47.1 47.1
Other noncurrent liabilities . . . . . . . . . . . . 12.7 12.7
------ ------ ------
279.9 685.1 965.0
------ ------ ------
Shareholders' Investment (Deficit):
Common stock (78.1 million shares outstanding,
$.01 par value, historical basis; 25.0 million
shares outstanding, $.01 par value, pro forma
basis) . . . . . . . . . . . . . . . . . . . . . . 0.8 (0.5)(e) 0.3
Paid-in capital (deficit) . . . . . . . . . . . . . . 42.0 (634.3)(f) (592.3)
Retained earnings . . . . . . . . . . . . . . . . . . 384.4 (75.0)(g) 309.4
Treasury stock . . . . . . . . . . . . . . . . . . . (4.7) 4.7 (h) 0.0
------ ------ ------
422.5 (705.1) (282.6)
------ ------ ------
Total Liabilities and Shareholders' Investment . . . $898.4 $(20.0) $878.4
====== ====== ======
</TABLE>
-----------------
NOTES TO PRO FORMA
CONSOLIDATED BALANCE SHEET
The pro forma financial data have been derived by the application of
pro forma adjustments to the Company's historical financial statements for
the period noted. The Merger has been accounted for as a recapitalization
which will have no impact on the historical basis of assets and liabilities.
The pro forma financial data assumes that there are no dissenting
shareholders to the Merger.
(a) The net effect of $(20.0) reflects the following:
(Millions)
--------
Total Sources:
Term loan proceeds ............................ $ 475.0
Debt securities proceeds ...................... 400.0
Revolving credit facility proceeds ............ 10.1
Crimson equity contribution ................... 250.0
--------
$1,135.1
--------
Total Uses:
Cash merger consideration ..................... $ 880.1
Historical debt repayment ..................... 200.0
Fees and expenses ............................. 75.0
--------
$1,155.1
--------
Net ........................................... $ (20.0)
========
(b) This amount consists primarily of a $25.0 million note payable
which was repaid by the Company on April 14, 1995.
<PAGE>
(c) The pro forma adjustment to long term debt reflects the following:
(Millions)
--------
Repayment of historical debt outstanding ........ $(200.0)
New Term Loan Facility .......................... 475.0
Debt Securities ................................. 400.0
-------
Total adjustment ................................ $ 675.0
=======
(d) The Company expects that a $125 million Revolving Credit Facility will
be available for working capital and general corporate purposes. It
is anticipated that $10.1 million will be drawn in connection with
the Merger.
(e) The adjustment reflects the effect of the Merger on the 78.1 million
shares outstanding at $.01 par value per share. There will be
25.0 million shares outstanding subsequent to the Merger.
(f) The adjustment reflects amounts distributed to convert to cash 73.3
million shares of Bruno's Common Stock for total consideration of
$880.1 million, plus the $4.7 million impact of cancelled treasury
stock, net of the receipt of 20.8 million shares by Crimson
Associates, L.P. for total consideration of $250.0 million, and net
of the $0.5 million allocated to par value of the Bruno's Common
Stock as a result of the Merger. It is anticipated that all 73.3
million shares will be cancelled.
(g) The adjustment reflects the fees anticipated to be paid to effect the
Merger. Such estimated fees and expenses are anticipated to consist of
(i) fees and expenses related to certain financings in connection with
the Merger (the "Merger Financings"), including bank syndication and
commitment fees and underwriting discounts and commissions, (ii)
fees and expenses in connection with the prepayment of historical debt
and an interest rate swap, (iii) professional, advisory and investment
banking fees and expenses and (iv) miscellaneous fees and expenses,
such as printing and filing fees. Included in the $75.0 million of
estimates fees and expenses is the $15 million fee payable by the
Company to KKR in the event the Merger closes in accordance with the
Merger Agreement. It is expected that the most substantial portion of
the remaining estimated fees and expenses will relate to the Merger
Financings.
(h) The adjustment reflects the cancellation of the 0.6 million shares of
treasury stock.
5
<PAGE>
PRO FORMA CONSOLIDATED
INCOME STATEMENT
(Unaudited)
(Dollars in millions, except per share data)
<TABLE><CAPTION>
For the Forty Weeks Ended April 8, 1995
-------------------------------------------------------
Pro Forma Pro Forma
Historical Adjustments
------------------ ------------------- ----------------
<S> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . $2,201.0 $2,201.0
Cost of products sold . . . . . . . . . . . . . . . . . 1,684.8 1,684.8
-------- --------
Gross profit . . . . . . . . . . . . . . . . . . . . . 516.2 516.2
Store operating, selling and administrative expenses . 424.8 424.8
Depreciation and amortization . . . . . . . . . . . . . 41.5 41.5
Interest expense . . . . . . . . . . . . . . . . . . . 20.7 $ 46.2(a) 66.9
Interest income . . . . . . . . . . . . . . . . . . . . (4.7) 3.7(b) (1.0)
-------- ------ --------
Income (loss) before income taxes . . . . . . . . . . . 33.9 (49.9) (16.0)
Income taxes . . . . . . . . . . . . . . . . . . . . . 12.9 (19.0)(c) (6.1)
-------- ------ --------
Net income (loss) . . . . . . . . . . . . . . . . . . . $ 21.0 $(30.9) $ (9.9)
======== ====== ========
Weighted average shares outstanding . . . . . . . . . 77.6 25.0
======== ========
Primary earnings (loss) per share . . . . . . . . . . . $ 0.27 $ (0.40)
======== ========
</TABLE>
-----------------
The pro forma financial data have been derived by the application of
pro forma adjustments to the historical financial statements for the period
noted. The Merger has been accounted for as a recapitalization which will
have no impact on the historical basis of assets and liabilities. The pro
forma financial data assume that there are no dissenting shareholders to
the Merger.
(a) The pro forma adjustment to interest expense reflects the following:
(Millions)
--------
Interest expense on historical debt ............ $(18.9)
Interest expense on the term loan facility and
revolving credit facility
(assumed 8.80% average rate) ................. 32.8
Interest expense on the debt securities
(assumed 10.50% average rate) ................ 32.3
------
Total adjustment ............................... $ 46.2
======
A 0.125% increase or decrease in the assumed average interest
rate on the term loan facility and revolving credit facility would
change the pro forma interest expense by $0.5 million. The pro forma
net income (loss) would change by $0.3 million and the pro forma
primary earnings (loss) per share would change by $0.01.
A 0.125% increase or decrease in the assumed average interest
rate on the debt securities would change the pro forma interest
expense by $0.4 million. The pro forma net income (loss) would
change by $0.2 million and the pro forma primary earnings (loss)
per share would change by $0.01.
(b) The adjustment reverses historical income recognized on the Company's
interest rate swap (assumed to be settled upon consummation of the
Merger).
(c) The adjustment reflects the tax effect of the pro forma adjustments at
a 38% effective rate.
6
<PAGE>
<TABLE><CAPTION>
PRO FORMA CONSOLIDATED
INCOME STATEMENT
(Unaudited)
(Dollars in millions, except per share data)
For the Fiscal Year Ended July 2, 1994
-------------------------------------------------------
Pro Forma
Historical Adjustments Pro Forma
------------------ ------------------- ----------------
<S> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . $2,834.7 $2,834.7
Cost of products sold . . . . . . . . . . . . . . . . . 2,185.6 2,185.6
-------- --------
Gross profit . . . . . . . . . . . . . . . . . . . . . 649.1 649.1
Store operating, selling and administrative . . . . . . 512.1 512.1
Depreciation and amortization . . . . . . . . . . . . . 52.3 52.3
Interest expense . . . . . . . . . . . . . . . . . . . 20.5 $ 66.2(a) 86.7
Interest income . . . . . . . . . . . . . . . . . . . . (4.6) 4.0(b) (0.6)
-------- ------ --------
Income (loss) before income taxes . . . . . . . . . . . 68.8 (70.2) (1.4)
Income taxes . . . . . . . . . . . . . . . . . . . . . 28.2 (26.7)(c) 1.5
-------- ------ --------
Net income (loss) $ 40.6 $(43.5) $ (2.9)
======== ====== ========
Weighted average shares outstanding . . . . . . . 78.1 25.0
======== ========
Primary earnings (loss) per share . . . . . . . . $ 0.52 $ (0.12)
======== ========
</TABLE>
-----------------
The pro forma financial data have been derived by the application of
pro forma adjustments to the Company's historical financial statements for
the period noted. The Merger has been accounted for as a recapitalization
which will have no impact on the historical basis of assets and
liabilities. The pro forma financial data assume that there are no
dissenting shareholders to the Merger.
(a) The pro forma adjustment to interest expense reflects the following:
(Millions)
--------
Interest expense on historical debt ............ $(18.5)
Interest expense on the term loan facility
and revolving credit facility
(assumed 8.80% average rate) ................ 42.7
Interest expense on the debt securities
(assumed 10.50% average rate) ............... 42.0
------
Total adjustment ................................ $ 66.2
======
A 0.125% increase or decrease in the assumed average interest
rate on the term loan facility and revolving credit facility would
change the pro forma interest expense by $0.6 million. The pro forma
net income (loss) would change by $0.4 million and the pro forma
primary earnings (loss) per share would change by $0.02.
A 0.125% increase or decrease in the assumed average interest
rate on the debt securities would change the pro forma interest
expense by $0.5 million. The pro forma net income (loss) would
change by $0.3 million and the pro forma primary earnings (loss)
per share would change by $0.01.
(b) The adjustment reverses historical income recognized on the Company's
interest rate swap (assumed to be settled upon consummation of the
Merger).
(c) The adjustment reflects the tax effect of the pro forma adjustments at
a 38% effective rate. The historical effective tax rate of 41%
includes the impact of a $2.2 million retroactive adjustment due
to a change in federal tax rates.
7
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
-----------------------------------------------------
The following documents are filed as Exhibits to the Registrant's
Registration Statement of Form S-3 (File No. 33-60161):
Exhibit
Number Description
------- -----------
1 Underwriting Agreement, dated August 10, 1995, between
the Company and BT Securities Corporation, Chemical
Securities Inc. and Salamon Brothers Inc.
10.1 Form of Credit Agreement, to be dated as of August 18, 1995,
among the Company, the several lenders from time to time
parties thereto and Chemical Bank, as administrative agent.
8
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 14, 1995
BRUNO'S, INC.
By: /s/ Ronald G. Bruno
Ronald G. Bruno, Chief
Executive Officer and
Chairman of the Board
9
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
------- -----------
1 Underwriting Agreement, dated August 10, 1995, between
the Company and BT Securities Corporation, Chemical
Securities Inc. and Salamon Brothers Inc.
10.1 Form of Credit Agreement, to be dated as of August 18, 1995,
among the Company, the several lenders from time to time
parties thereto and Chemical Bank, as administrative agent.
10
EXHIBIT 1
BRUNO'S, INC.
$400,000,000 10 1/2% SENIOR SUBORDINATED NOTES due 2005
UNDERWRITING AGREEMENT
----------------------
August 10, 1995
BT Securities Corporation
Chemical Securities Inc.
Salomon Brothers Inc
c/o BT Securities Corporation
130 Liberty Street
New York, New York 10006
Ladies and Gentlemen:
Bruno's, Inc., an Alabama corporation (the "Company"), hereby confirms
its agreement with BT Securities Corporation, Chemical Securities Inc. and
Salomon Brothers Inc (collectively, the "Underwriters"), as set forth
below.
1. The Securities. Subject to the terms and conditions herein
--------------
contained, the Company proposes to issue and sell to the Underwriters
$400,000,000 aggregate principal amount of its 10 1/2% Senior Subordinated
Notes due 2005 (the "Securities"). The Securities are to be issued under an
indenture as supplemented by an indenture supplement dated as of August 18,
1995, (collectively, the "Indenture") by and between the Company and Marine
Midland Bank, as trustee (the "Trustee").
2. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to and agrees with the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-60161) with
respect to the Securities and certain of the Company's equity securities
and warrants to purchase debt and equity securities of the Company,
including a related preliminary prospectus, has been filed by the Company
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act") and such registration
statement has become effective under the Act. The Company has filed one or
more amendments thereto, including a prospectus relating to the Securities,
each of which has previously been furnished to the Underwriters. As used
in this Agreement, the term "Registration Statement" means such
registration statement on Form S-3, as amended at the time when it was
declared effective or, if later, at the time the last post-effective
amendment thereto becomes effective, including all financial schedules and
exhibits thereto and documents incorporated therein by reference and
including any information deemed included in the Registration Statement;
the term "Preliminary Prospectus" means each prospectus, subject to
completion, used in connection with the offer of any Securities prior to
the date hereof; and the term "Prospectus" means the prospectus included in
the Registration Statement, together with each prospectus supplement filed
on or after the date hereof by the Company pursuant to Rule 424(b) of the
Rules and Regulations, but excluding any prospectus supplement that does
not relate to the offering of
<PAGE>
the Securities. Any reference herein to any Prospectus shall be deemed to
refer to and include the documents incorporated therein by reference, as of
the date of such Prospectus, and include any documents filed with the
Commission after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder (collectively, the "Exchange Act"), and so incorporated by
reference therein (all such incorporated documents being herein called the
"Incorporated Documents").
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or Prospectus. When the Registration
Statement or any amendment thereto was declared effective, it (i) complied
in all material respects with the requirements of, the Act and the Rules
and Regulations and (ii) did not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading. When the Prospectus or any amendment or supplement
thereto was filed with the Commission pursuant to Rule 424(b) and when any
of the Incorporated Documents, if any, were filed after the date of the
Prospectus and on or before the Closing Date, and on the Closing Date (as
hereinafter defined), the Prospectus (i) complied or will comply in all
material respects with the requirements of, the Act and the Rules and
Regulations and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make-the statements therein, in the light of the circumstances under which
they were made, not misleading. The foregoing provisions of this paragraph
(b) do not apply to statements or omissions made in the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company by the Underwriters specifically for
use therein, or to the Statement of Eligibility and Qualification (Form T-
1) under the Trust Indenture Act of 1939, as amended and the rules and
regulations of the Commission thereunder (the "Trust Indenture Act"), of
the Trustee filed as an exhibit to the Registration Statement.
(c) The Company and each of its Significant Subsidiaries (as defined
in Regulation S-X of the Commission) has been duly incorporated and is
validly existing in good standing as a corporation under the laws of its
jurisdiction of incorporation, with all requisite corporate power and
authority to own, lease and operate its properties and conduct its
businesses as now conducted as described in the Prospectus and is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions where the ownership, leasing or operation of its
properties or the conduct of its businesses requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the business, results of operations or condition
(financial or other) of the Company and its subsidiaries, taken as a whole
(any such event a "Material Adverse Effect"); the Company has the
authorized, issued and outstanding capitalization set forth in the
Prospectus; the outstanding shares of capital stock of the Company are
owned as described in the Prospectus; all of the outstanding shares of
capital stock of each of its subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable and were not issued in
violation of any preemptive or similar rights; and except as disclosed in
the Prospectus, all of the outstanding shares of capital stock of each of
the Company's subsidiaries are owned by the Company or another subsidiary,
free and clear of all liens, encumbrances, equities and claims or
restrictions on transferability (other than those imposed by the Act and
the securities or "Blue Sky" laws of certain jurisdictions) or voting.
Except as described in the Prospectus, no holders of securities of the
Company are entitled to have such securities registered under the
Registration Statement.
(d) The Securities have each been duly authorized by the Company and,
when the Securities are executed by the Company and authenticated by the
Trustee in accordance with the provisions of the Indenture and delivered to
and paid for by the Underwriters in accordance with the terms of this
Agreement, the Securities will be entitled to the benefits of the Indenture
and will constitute valid and
2
<PAGE>
legally binding obligations of the Company enforceable in accordance with
their terms, subject to the effects of (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought. Upon approval by the shareholders
of the increase in the Company's authorized bonded indebtedness as
described in the Prospectus (the "Bonded Indebtedness Shareholder
Approval"; together with shareholder approval of the Merger (as defined in
the Prospectus), the "Shareholders Approval"), the Company will have all
requisite corporate power and authority to execute, deliver and perform its
obligations under the Indenture; subject to Bonded Indebtedness Shareholder
Approval, the Indenture has been duly authorized by the Company and
qualified under the Trust Indenture Act and, when executed and delivered by
the Company (assuming the due authorization, execution and delivery by the
Trustee), will constitute the valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms,
subject to the effects of (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(e) Subject to Bonded Indebtedness Shareholder Approval, the Company
has all requisite corporate power and authority to enter into this
Agreement, to issue and deliver the Securities and to consummate the
transaction contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company. No consent, approval, authorization
or order of any court or governmental agency or body is required for the
performance of this Agreement by the Company or the consummation by the
Company of the transactions contemplated hereby, except such as may be
required under state securities or "Blue Sky" laws in connection with the
purchase and distribution of the Securities by the Underwriters. Except as
disclosed in the Prospectus, neither the Company nor any of its
subsidiaries is (i) in violation of its certificate of incorporation or
bylaws, (ii) in violation of any statute, judgment, decree, order, rule or
regulation applicable to the Company or any of its subsidiaries, which
violation would have a Material Adverse Effect, or (iii) in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, note, or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be
bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, which default would have a Material Adverse
Effect.
(f) The execution, delivery and performance by the Company of this
Agreement and the Indenture and the consummation by the Company of the
transactions contemplated hereby and thereby and in the Registration
Statement will not conflict with or constitute or result in a breach or
violation by the Company or any of its subsidiaries of any of (i) the terms
or provisions of, or constitute a default by the Company or any of its
subsidiaries under, any indenture, mortgage, deed of trust, loan agreement,
note, or other agreement or instrument to which the Company or any of its
subsidiaries is a party or to which any of them or their respective
properties is subject, which conflict, breach, violation or default would
have a Material Adverse Effect, (ii) the certificate of incorporation or
bylaws of the Company or any of its subsidiaries, or (iii) (assuming
compliance with all applicable state securities and "Blue Sky" laws) any
statute, judgment, decree, order, rule or regulation of any court or
governmental agency or other body applicable to the Company or any of its
subsidiaries or any of their properties, which conflict, breach, violation
or default would have a Material Adverse Effect.
(g) The audited consolidated financial statements of the Company and
its consolidated subsidiaries incorporated by reference in the Registration
Statement or the Prospectus present fairly the consolidated financial
position, results of operations and cash flows of the Company and its
consolidated
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subsidiaries at the dates and for the periods to which they relate and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein. The
unaudited consolidated financial statements and the related notes
incorporated by reference in the Registration Statement or the Prospectus
present fairly the consolidated financial position, results of operations
and cash flows of the Company and its consolidated subsidiaries at the
dates and for the periods to which they relate, subject to year-end audit
adjustments, and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, except as otherwise
stated therein. Arthur Andersen LLP, which has examined certain of such
consolidated financial statements as set forth in its reports incorporated
by reference in the Registration Statement and the Prospectus is an
independent public accounting firm as required by the Act and the Rules and
Regulations.
(h) The pro forma consolidated condensed financial statements and
other pro forma financial information (including the notes thereto)
included in the Registration Statement or the Prospectus (A) present fairly
in all material respects the information shown therein, and (B) have been
prepared in accordance with applicable requirements of Regulation S-X
promulgated under the Exchange Act. Based on discussions with Deloitte &
Touche LLP and Arthur Andersen LLP, the assumptions used in the preparation
of the pro forma financial statements and other pro forma condensed
consolidated financial information included in the Registration Statement
and the Prospectus are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(i) Except as described in the Prospectus, there is not pending or,
to the knowledge of the Company, threatened, any action, suit, proceeding,
inquiry or investigation to which the Company or any of its subsidiaries is
a party, or to which the property of the Company or any of its subsidiaries
is subject, before or brought by any court or governmental agency or body,
which would be reasonably likely to have a Material Adverse Effect, or
which seeks to restrain, enjoin, prevent the consummation of or otherwise
challenge the issuance or sale of the Securities to be sold hereunder or
the consummation of the transactions described in the Prospectus under the
caption "Use of Proceeds."
(j) The Company and each of its subsidiaries owns or possesses
adequate licenses or other rights to use all patents, trademarks, service
marks, trade names, copyrights and know-how necessary to conduct the
business described in the Prospectus, except where the failure to own or
possess or have the ability to acquire any of the foregoing would not have
a Material Adverse Effect, and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, could have a Material Adverse
Effect.
(k) The Company and its subsidiaries have obtained licenses, permits,
certificates and other authorizations from appropriate state, federal or
local regulatory agencies or bodies necessary to conduct the business now
operated by them as described in the Prospectus, the lack of which would
have a Material Adverse Effect ("Permits"); and neither the Company nor any
of its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authorization
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling, or finding, would have a Material Adverse
Effect.
(l) Subsequent to the respective dates as of which information is
given in the Registration Statement or Prospectus, and except as described
therein or contemplated thereby, (i) neither the Company nor any of its
subsidiaries has incurred any material liabilities or obligations, direct
or contingent, or entered into any material transactions, not in the
ordinary course of business and (ii) the
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Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock.
(m) There are no contracts or other documents required to be filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations that have not been described or filed as required.
(n) Neither the Company nor any agent acting on its behalf has taken
or will take any action that might cause this Agreement or the sale of the
Securities to violate Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System, in each case as in effect, or as the same may
hereafter be in effect, on the Closing Date.
(o) The Company and each of its subsidiaries have good title to all
real property and good title to all personal property described in the
Prospectus as being owned by it and good title to a leasehold estate in the
real and personal property described in the Prospectus as being leased by
it, free and clear of all liens, charges, encumbrances or restrictions,
except, in each case, as (i) described in the Prospectus, (ii) as do not
materially interfere with the use made and proposed to be made of such
properties (including, without limitation, purchase money mortgages) or
(iii) to the extent the failure to have such title or the existence of such
liens, charges, encumbrances or restrictions would not have a Material
Adverse Effect.
(p) The Company is not an "investment company or an affiliated person
of, or "promoter" or "principal underwriter" for, an "investment company,"
as such terms are defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
(q) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action designed,
or which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities.
(r) The Securities, the Indenture, and this Agreement will conform in
all material respects to the descriptions thereof in the Prospectus.
(s) The statistical and market-related data included in the
Prospectus are based on or derived from sources which the Company believes
to be reliable and accurate in all material respects.
(t) Except as stated in the Prospectus, the Company does not know of
any claims for services, either in the nature of a finder's fee or
origination fee, with respect to the transactions contemplated thereby.
(u) Except as described in the Prospectus and except as would not
individually or in the aggregate have a Material Adverse Effect, to the
best knowledge of the Company, each of the Company and its subsidiaries is
in material compliance with all applicable laws, rules or regulations
relating to pollution or protection of public or employee health or the
environment ("Environmental Laws"). The term "Hazardous Material" means
(a) any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (b) any
"hazardous waste" as defined by the Resource Conservation and Recovery Act,
as amended, (c) any petroleum or petroleum product, (d) any polychlorinated
biphenyl and (e) any pollutant or contaminant or hazardous,
5
<PAGE>
dangerous or toxic chemical, material waste or substance regulated under or
within the meaning of any other Environmental Law.
(v) There is no alleged liability, or to the best knowledge of the
Company, potential liability, (including, without limitation, alleged or
potential liability or investigatory costs, cleanup costs, governmental
response costs, natural resource damages, property damages, personal
injuries or penalties) of the Company or any of its subsidiaries arising
out of, based on or resulting from (a) the presence or release into the
environment of any Hazardous Material at any location, whether or not owned
by the Company or any of its subsidiaries or (b) any violation or alleged
violation of any Environmental Law, (x) which alleged or potential
liability is required to be disclosed in the Registration Statement, other
than as disclosed therein, or (y) which alleged or potential liability,
singly or in the aggregate, is reasonably expected to have a Material
Adverse Effect.
(w) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of its subsidiaries which is pending
or, to the knowledge of the Company, threatened, except as would not,
individually or in the aggregate, be expected to have a Material Adverse
Effect.
(x) Except as described in the Prospectus or which would not have a
Material Adverse Effect, none of the Company or its subsidiaries has any
liability for any prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to any pension,
profit sharing or other plan which is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), to which the Company or
any subsidiary makes or ever has made a contribution and in which any
employee of the Company or any subsidiary is or has ever been a
participant. With respect to such plans, the Company and each of its
subsidiaries is in compliance in all material respects with all applicable
provisions of ERISA.
(y) The Company has all requisite corporate power and authority to
enter into the Agreement and Plan of Merger, dated as of April 20, 1995,
and amended as of May 18, 1995 (as amended, the "Merger Agreement"),
between the Company and Crimson Acquisition Corp. and to consummate the
transactions contemplated thereby. Subject to Shareholder Approval, the
Merger Agreement has been duly authorized, executed and delivered by the
Company. Subject to Shareholder Approval, no consent, approval,
authorization or order of any court or governmental agency or body is
required for the performance of the Merger Agreement by the Company or the
consummation by the Company of the transactions contemplated thereby,
except such as have been obtained.
(z) The execution, delivery and performance by the Company of the
Merger Agreement and the consummation by the Company of the transactions
contemplated thereby will not conflict with or constitute or result in a
breach or violation by the Company or any of its subsidiaries of any of (i)
the terms or provisions of, or constitute a default by the Company or any
of its subsidiaries under, any indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, or other agreement or
instrument to which the Company or any of its subsidiaries is a party or to
which any of them or their respective properties is subject other than with
respect to any indebtedness that will be retired in connection with the
Merger, which conflict, breach, violation or default would have a Material
Adverse Effect, (ii) the certificate of incorporation or bylaws of the
Company or any of its subsidiaries, or (iii) (assuming compliance with all
applicable state securities and "Blue Sky" laws) any statute, judgment,
decree, order, rule or regulation of any court or governmental agency or
other body applicable to the Company or any of its subsidiaries or any of
their properties, which conflict, breach, violation or default would have a
Material Adverse Effect.
6
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3. Purchase, Sale and Delivery of the Securities. On the basis of
---------------------------------------------
the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the Underwriters, and each of the Underwriters
severally agrees to purchase from the Company, $400,000,000 aggregate
principal amount of the Securities at 97.5% of their principal amount. The
obligations of the Underwriters under this Agreement are several and not
joint. Certificates in definitive form for the Securities that the
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Underwriters
request upon notice to the Company at least 48 hours prior to the Closing
Date, shall be delivered by or on behalf of the Company to the
Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor by wire transfer of same day funds, net of the
intraday/overnight cost of such funds, to the Company's account or at the
Company's direction. Such delivery of and payment for the Securities shall
be made at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue,
New York, New York 10017, at 10:00 A.M., New York time, on August 18, 1995,
or at such other place, time or date as the Underwriters and the Company
may agree upon or as the Underwriters may determine pursuant to Section
7(a) hereof, such time and date of delivery against payment being herein
referred to as the "Closing Date." The Company will make such certificate
or certificates for the Securities available for checking and packaging by
the Underwriters at the offices in New York, New York of BT Securities
Corporation at least 24 hours prior to the Closing Date.
4. Offering by the Underwriters. The Underwriters propose to offer
----------------------------
for sale to the public the Securities at the price and upon the terms set
forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with
------------------------
the Underwriters that:
(a) If required, the Company will file the Prospectus and any
amendment or supplement thereto with the Commission in the manner and
within the time period required by Rule 424(b) under the Act. During any
time when a prospectus relating to the Securities is required to be
delivered under the Act, the Company will comply with all requirements
imposed upon it by the Act, the Rules and Regulations and the Trust
Indenture Act to the extent necessary to permit the continuance of sales of
or dealings in the Securities in accordance with the provisions hereof and
of the Prospectus and the Company will give each Underwriter notice of its
intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to
the Prospectus (whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the Rules and Regulations), will furnish
the Underwriters with copies of any such amendment or supplement for a
reasonable period of time prior to the proposed filing or use, as the case
may be, and will not file any such amendment or supplement or use any such
prospectus to which the Underwriters or counsel for the Underwriters shall
reasonably object in writing or which is not in compliance with the Act or
the Rules and Regulations. The Company will advise the Underwriters,
promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or declared effective or any
Prospectus has been filed and will provide evidence satisfactory to the
Underwriters of each such filing or effectiveness.
(b) The Company will advise the Underwriters, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any amendment thereto or any order preventing or
suspending the use of any Prospectus, (ii) the suspension of the qualifi-
cation of the Securities for offering or sale in any jurisdiction, (iii)
the institution, threatening or contemplation of any proceeding for any
such purpose or (iv) any request made by the Commission for amending the
Registration Statement, for amending or
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<PAGE>
supplementing the Prospectus or for additional information. The Company
will make every reasonable effort to prevent the issuance of any such stop
order and, if any such stop order is issued, to obtain the withdrawal
thereof as promptly as possible.
(c) The Company will endeavor, in cooperation with the Underwriters,
to qualify the Securities for offering and sale under the securities or
"Blue Sky" laws of such jurisdictions as the Underwriters may designate and
will continue such qualifications in effect for as long as may be necessary
to complete the distribution of the Securities; provided, however, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to execute a general consent to service of process
in any jurisdiction.
(d) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which, in the opinion of counsel for the Underwriters, the Prospectus as
then amended or supplemented would include any untrue statement of a
material fact, or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any
time to amend or supplement the Prospectus to comply with the Act, the
Rules and Regulations or the Exchange Act, the Company will promptly notify
the Underwriters thereof and, subject to Section 5(a) hereof, will prepare
and file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to each of the
Underwriters and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and
each amendment thereto (in each case including exhibits thereto) and (ii)
so long as a prospectus relating to the Securities is required to be
delivered under the Act, as many copies of each Prospectus or any amendment
or supplement thereto as the Underwriters may reasonably request.
(f) The Company, as soon as practicable, will make generally
available to holders of the Securities and to the Underwriters consolidated
earnings statements of the Company and its subsidiaries (which need not be
certified by an independent public accountant) that satisfy the provisions
of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) For and during the period ending on the date no Securities are
outstanding, the Company will furnish to the Underwriters copies of all
reports and other communications (financial or otherwise) furnished by the
Company to the Trustee or the holders of the Securities and, as soon as
available, copies of any reports or financial statements furnished to or
filed by the Company with the Commission or any national securities
exchange on which any class of securities of the Company may be listed.
(i) Prior to the Closing Date, the Company will furnish to the
Underwriters, as soon as they have been prepared, a copy of any unaudited
interim consolidated financial statements of the Company for any period
subsequent to the period covered by its most recent financial statements
appearing in the Registration Statement and Prospectus.
(j) If, prior to the completion of the distribution of the
Securities, the Company commences engaging in business with the government
of Cuba or with any person or affiliate located in Cuba after
8
<PAGE>
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in
the Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
6. Expenses. The Company agrees to pay all costs and expenses
--------
incident to the performance of its obligations under this Agreement,
whether or not the transactions contemplated herein are consummated or this
Agreement is terminated pursuant to Section 11 hereof, including all costs
and expenses incident to (i) the printing, word processing or other produc-
tion of the registration statement originally filed with respect to the
Securities and any amendment thereto and the Prospectus and any amendment
or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants
and any other experts or advisors retained by the Company, (iv) preparation
(including printing), issuance and delivery to the Underwriters of the
Securities, including trustee's fees, (v) the qualification of the
Securities under state securities and "Blue Sky" laws, including filing
fees and fees and disbursements of counsel for the Underwriters relating
thereto, (vi) the filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the Securities, (vii)
fees and expenses of the Trustee, including fees and expenses of counsel to
the Trustee and (viii) any fees charged by investment rating agencies for
the rating of the Securities. If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 11(a)(i) hereof or because of
any failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by the Underwriters,
the Company will reimburse the Underwriters upon demand (accompanied by
documentation) for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by the Underwriters in con-
nection with the proposed purchase and sale of the Securities.
7. Conditions of the Underwriters' Obligations. The obligation of
-------------------------------------------
the Underwriters to purchase and pay for the Securities shall be subject to
accuracy of the representations and warranties of the Company herein
contained on the date hereof and as of the Closing Date, to the performance
by the Company of its obligations hereunder and to the following
conditions:
(a) If required, the Prospectus and any amendment or supplement
thereto shall have been filed in accordance with Rule 424(b) under the Act;
no stop order suspending the effectiveness of the Registration Statement or
any amendment thereto or the qualification of the Indenture under the Trust
Indenture Act shall have been issued and no proceedings for those purposes
shall have been instituted or, to the knowledge of the Company or the
Underwriters, threatened or are contemplated by the Commission; and the
Company shall have complied with or satisfactorily responded to any request
of the Commission for additional information.
(b) The Underwriters shall have received an opinion in form and
substance satisfactory to the Underwriters, dated the Closing Date and
addressed to the Underwriters, of Sirote & Permutt, counsel for the
Company, to the effect that:
(i) Each of the Company and its subsidiaries is duly
incorporated, validly existing and in good standing under the laws of
its respective jurisdiction of incorporation and has all requisite
corporate power and authority to own, lease and operate its properties
and to conduct
9
<PAGE>
its business as described in the Prospectus. Each of the Company and
its subsidiaries is duly qualified as a foreign corporation and in
good standing in each jurisdiction in which it is doing business.
(ii) The Company has the authorized, issued and outstanding
equity capitalization set forth in the Prospectus; and the outstanding
shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and, to such
counsel's knowledge, were not issued in violation of any preemptive or
similar rights.
(iii) Except as set forth or contemplated in the Prospectus,
to the knowledge of such counsel (a) no options, warrants or other
rights to purchase from the Company, shares of capital stock or
ownership interests in the Company are outstanding and (b) no
agreements or other obligations of the Company to issue, or other
rights to cause the Company to convert, any obligation into, or
exchange any securities for, shares of capital stock or ownership
interests in the Company are outstanding.
(iv) The Securities have been duly authorized, executed and
delivered by the Company and (assuming the due authorization,
execution and delivery of the Indenture by the Trustee and the
execution, delivery and authentication of the Securities by the
Trustee in accordance with the Indenture) when issued and paid for by
the Underwriters in accordance with the terms of this Agreement, will
constitute the legally valid and binding obligations of the Company
enforceable against the Company in accordance with their terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject to general principles of
equity (regardless of whether a proceeding is sought in equity or at
law).
(v) The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Indenture
and the Securities; the Indenture has been qualified under and
complies in all material respects with the requirements of the Trust
Indenture Act, as amended; the Indenture has been duly authorized,
executed and delivered by the Company and (assuming the due
authorization, execution and delivery thereof by the Trustee), will
constitute the legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject to general principles of equity (regardless of whether a
proceeding is sought in equity or at law).
(vi) The Company has all requisite corporate power and authority
to execute, deliver and perform its respective obligations under this
Agreement and the Merger Agreement (as defined in the Registration
Statement); the execution, delivery and performance of this Agreement
and the Merger Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of the
Company. This Agreement and the Merger Agreement have been duly exe-
cuted and delivered by the Company.
(vii) The statements set forth in the Prospectus under the
caption "Description of Securities," insofar as they purport to
summarize certain provisions of the Securities and the Indenture,
provide fair summaries thereof and are accurate in all material
respects. The statements set forth in the Prospectus under the
caption "Description of Certain Federal Income
10
<PAGE>
Tax Consequences," insofar as they purport to summarize certain
provisions of the United States federal income tax laws, provide fair
summaries thereof and are accurate in all material respects.
(viii) To the knowledge of such counsel, no legal or
governmental proceedings are pending to which any of the Company or
its subsidiaries will be a party which seek to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or
sale of the Securities to the Underwriters or the consummation of the
transactions described in the Prospectus under the captions "Use of
Proceeds."
(ix) The execution and delivery of this Agreement, the Merger
Agreement and the Indenture, and the consummation by the Company of
the transactions contemplated hereby and thereby and in the
Registration Statement, will not conflict with, constitute a default
under or violate, or with respect to clause (y), impose or create any
lien upon any material property or assets of the Company or any of its
subsidiaries under any of the terms, conditions or provisions of (x)
their respective certificates of incorporation or by-laws, (y) any of
the terms, conditions or provisions of any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or
instrument, which are identified to such counsel by the Company or any
of its subsidiaries as being material, to which the Company or its
subsidiaries are a party or by which the Company or its subsidiaries
are bound, or to which any of the property or assets of the Company or
its subsidiaries are subject, except with respect to such conflicts,
defaults or violations which would not, individually or in the
aggregate, have a Material Adverse Effect, whether or not arising in
the ordinary course of business (except as set forth in such opinion
as previously disclosed to the Underwriters), or (z) any decree of any
court or governmental authority binding on the Company or its
subsidiaries, of which such counsel is aware, except those which would
not have a Material Adverse Effect.
(x) To the knowledge of such counsel, no consent, approval or
authorization of any governmental authority is required for the
issuance and sale by the Company of the Securities to the
Underwriters, except such as may be required under the Act, the Trust
Indenture Act, state or foreign securities or Blue Sky laws, as to
which such counsel need express no opinion, and those which have
previously been obtained.
(xi) The execution and delivery of this Agreement, the Merger
Agreement, the Indenture and the Securities and the consummation of
the transactions contemplated hereby and thereby will not conflict
with, constitute a default under or violate any Alabama, New York
corporate or federal law or regulation (other than state securities or
Blue Sky laws, as to which such counsel need express no opinion) of
which such counsel is aware and which, in such counsel's experience,
are normally applicable to transactions of this type (provided that
such opinion need not cover any laws or regulations to which the
Company or its subsidiaries may be subject solely as a result of the
Underwriters' legal or regulatory status or the Underwriters'
involvement in such transactions).
(xii) None of the Company or its subsidiaries is, or
immediately after the sale of Securities to be sold hereunder and the
application of the proceeds from such sale (as described in the
Prospectus under the caption "Use of Proceeds") will be, an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(xiii) The Registration Statement, the Prospectus and the
other documents filed under the Act and the Exchange Act and
incorporated by reference in the Registration Statement and
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the Prospectus or any amendment thereof or supplement thereto or from
which information is so incorporated by reference (other than the
Trustee Statement of Eligibility and the financial statements, notes
and schedules thereto and other financial, statistical and accounting
information included or incorporated by reference therein, as to which
no opinion need be expressed) comply as to form in all material
respects with the Act, the Trust Indenture Act, or the Exchange Act,
as the case may be, and the Rules and Regulations.
(xiv) The Registration Statement was declared effective under
the Act on July 17, 1995. To the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened by the
Commission.
(xv) To the best of such counsel's knowledge, there are no
contracts or documents of the Company or any of its subsidiaries that
are required to be filed (A) by the Act, as exhibits to the
Registration Statement (B) by the Exchange Act, as exhibits to any of
the documents incorporated by reference, (C) by the Trust Indenture
Act or (D) by the Rules and Regulations that have not been so filed.
In addition, such counsel shall state that it has participated in
conferences with representatives of the Company, representatives of the
Company's accountants, the Underwriters' representatives and counsel for
the Underwriters, at which conferences the contents of the Registration
Statement and the Prospectus were discussed and, although such counsel has
not independently verified and is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (other than those
that such counsel must opine on pursuant to Section 7(b)(vii)), no facts
have come to such counsel's attention that led such counsel to believe that
the Registration Statement, on the effective date thereof (or any amendment
thereof made prior to the Closing Date, as of the date of such amendment),
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading or that the Prospectus, on the
date thereof (or with respect to any amendment thereof or supplement
thereto made prior the Closing Date, as of the date of such amendment or
supplement),or on the date of such opinion contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to (i) the
second paragraph of "Prospectus Supplement Summary-The Merger," "Prospectus
Supplement Summary-Post Merger Business Strategy," the third paragraphs of
"Business" and "Business-Post Merger Business Strategy (collectively, the
"KKR Information") and (ii) the financial statements and related notes, the
financial statement schedules and other financial, statistical and
accounting data included in the Registration Statement or Prospectus). The
opinion of Sirote & Permutt described in this Section shall be rendered to
the Underwriters at the request of the Company and shall so state therein.
Sirote & Permutt may rely on the opinion of Simpson Thacher &
Bartlett as to certain matters of New York law and with respect to the
opinions required by Section 7(b)(vii) and with respect to compliance with
the Trust Indenture Act and on certificates of authorized officers of the
Company as to certain matters of fact and intention. The Underwriters
shall receive the opinion of Simpson Thacher & Bartlett as to the matters
set forth in the preceding paragraph including with respect to the KKR
Information.
12
<PAGE>
(c) The Underwriters shall have received an opinion, dated the
Closing Date, of Latham & Watkins, counsel for the Underwriters, with
respect to certain legal matters relating to this Agreement, and such other
related matters as the Underwriters may require. In rendering such
opinion, Latham & Watkins shall have received and may rely upon such
certificates and other documents and information as they may reasonably
request to pass upon such matters. In addition, in rendering their
opinion, Latham & Watkins may state that their opinion is limited to
matters of New York and federal law.
(d) The Underwriters shall have received from Arthur Andersen LLP a
comfort letter or letters dated, respectively, the date hereof and the
Closing Date, in form and substance satisfactory to the Underwriters.
(e) Subsequent to the date of the most recent financial statements in
the Prospectus, there shall have been no material adverse change in the
business, results of operations or condition (financial or other) of the
Company and its subsidiaries, taken as a whole, except as set forth in, or
contemplated by, the Registration Statement and the Prospectus.
(f) The sale of the Securities by the Company hereunder shall not be
enjoined (temporarily or permanently) on the Closing Date.
(g) The Underwriters shall have received a certificate, dated the
Closing Date, signed on behalf of the Company by its Chairman of the Board
of Directors, President or any Vice President and the Chief or Principal
Financial Officer of the Company to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects as of the date
hereof and as if made on and as of the Closing Date (except to the
extent such representations or warranties specifically relate to an
earlier date and time), and the Company has performed in all material
respects all covenants and agreements and satisfied hereunder all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date;
(ii) To the best of their knowledge, no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto
or the qualification of the Indenture under the Trust Indenture Act
has been issued, and no proceedings for those purposes have been
instituted, threatened or are contemplated by the Commission; and
(iii) Subsequent to the effective date of the Registration
Statement, there has not occurred any event or events that,
individually or in the aggregate, would have a Material Adverse
Effect.
On or before the Closing Date, the Underwriters and counsel for the
Underwriters shall have received such further documents, opinions,
certificates and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company as they shall have
heretofore reasonably requested from the Company.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Underwriters and counsel for the Underwriters. The Company
shall furnish to the Underwriters such conformed copies of such opinions,
certificates, letters, schedules, documents and instruments in such
quantities as the Underwriters shall reasonably request.
13
<PAGE>
8. Conditions of the Company's Obligations. Except as provided in
---------------------------------------
Section 10 hereof, the obligation of the Company to issue, sell and deliver
the Securities to the Underwriters shall be subject to the filing of the
certificate of merger relating to the Merger (as defined in the Prospectus)
in the office of the Secretary of State of the State of Alabama.
9. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each of the Underwriters, and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) the registration statement originally
filed with respect to the Securities or any amendment thereto or the
Prospectus or any amendment or supplement thereto or any related
Preliminary Prospectus or (B) any application or other document, or
any amendment or supplement thereto, executed by the Company or based
upon written information furnished by or on behalf of the Company
filed in any jurisdiction in order to qualify the Securities under the
securities or "Blue Sky" laws thereof or filed with the Commission or
any securities association or securities exchange (each an
"Application"); or
(ii) the omission or alleged omission to state, in such
registration statement or any amendment thereto, any Prospectus or any
amendment or supplement thereto, or any Application, a material fact
required to be stated therein or necessary to make the statements
therein not misleading,
and will reimburse (promptly following the receipt of invoices therefor),
as incurred, the Underwriters and each such controlling person for any
legal or other expenses reasonably incurred by the Underwriters or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, the Company will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement or any amendment thereto, any Prospectus or any amendment or
supplement thereto, or any Application in reliance upon and in conformity
with written information furnished to the Company by the Underwriters
specifically for use therein; and provided, further, that the Company will
not be liable to the Underwriters or any person controlling the Under-
writers with respect to any such untrue statement or omission made in any
Preliminary Prospectus that is corrected in the Prospectus (or any
amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from any Underwriter in
reliance upon a Preliminary Prospectus but was not sent or given a copy of
the Prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person in any case
where such delivery of the Prospectus (as so amended or supplemented) is
required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 5(e)(ii) of this Agreement. This indemnity agreement will be in
addition to any liability that the Company may otherwise have to the
indemnified parties. The Company shall not be liable under this Section 9
for any settlement of any claim or action effected without its consent,
which shall not be unreasonably withheld.
14
<PAGE>
(b) The Underwriters will indemnify and hold harmless each of the
Company, its directors, its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which the Company or any such director,
officer or controlling person may become subject under the Act, the
Exchange Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Prospectus or any amendment or supplement thereto, or any related
Preliminary Prospectus or any Application or (ii) the omission or the
alleged omission to state therein a material fact required to be stated in
the Registration Statement or any amendment thereto, any Prospectus or any
amendment or supplement thereto, or any related Preliminary Prospectus or
any Application, or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written informa-
tion furnished to the Company by the Underwriters specifically for use
therein; and, subject to the limitation set forth immediately preceding
this clause, will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action in respect thereof. This indemnity agreement
will be in addition to any liability that the Underwriters may otherwise
have to the indemnified parties. The Underwriters shall not be liable
under this Section 9 for any settlement of any claim or action effected
without its consent, which shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party (i) will not relieve it from any liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses or material prejudice and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraphs (a) and (b) above. In case any such action,is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be one or more legal
defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party
then, the indemnifying party shall not have the right to direct the defense
of such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or par-
ties. After notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the
immediately preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for
the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in
the same
15
<PAGE>
jurisdiction arising out of the same, general allegations or circumstances,
designated by the Underwriters in the case of paragraph (a) of this Section
9 or the Company in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph
(b), as the case may be, who are parties to such action or actions) or (ii)
the indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party. After
such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party, unless such indemnified party waived in
writing its rights under this Section 9, in which case the indemnified
party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable or insufficient
to hold harmless an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof), each indemnifying
party, in order to provide for just and equitable contribution, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the offering of the
Securities or (ii) if the allocation provided by the foregoing clause (i)
is not permitted by applicable law, not only such relative benefits but
also the relative fault of the indemnifying party or parties on the one
hand and the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect
thereof). The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault of the
parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
supplied by the Company on the one hand, or the Underwriters on the other,
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and
the Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), the Underwriters
shall not be obligated to make contributions hereunder that in the
aggregate exceed the total underwriting discounts and commissions received
by the Underwriters under this Agreement, less the aggregate amount of any
damages that the Underwriters have otherwise been required to pay by reason
of the untrue or alleged untrue statements or the omissions or alleged
omissions to state a material fact, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each
person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act shall have the same rights
to contribution as the Underwriters, and each director of the Company, each
officer of the Company who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
10. Survival Clause. The respective representations, warranties,
---------------
agreements, covenants, indemnities and other statements of the Company, its
officers and the Underwriters set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement shall remain in
16
<PAGE>
full force and effect, regardless of (i) any investigation made by or on
behalf of the Company, any of its officers or directors, the Underwriters
or any controlling person referred to in Section 9 hereof and (ii) delivery
of and payment for the Securities. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 9 hereof shall
remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
-----------
discretion of the Underwriters by notice to the Company given prior to the
Closing Date in the event that the Company shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder at or prior thereto or, if at
or prior to the Closing Date:
(i) the Company shall have sustained any loss or interference
with respect to its businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, which loss or interference has had or has a Material
Adverse Effect, or there shall have been any material adverse change,
or any development involving a prospective material adverse change
(including without limitation a change in management or control of the
Company, except as a result of the Merger), in the business, results
of operations or condition (financial or other) of the Company and its
subsidiaries, taken as a whole, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or supple-
ment thereto);
(ii) trading in securities generally on the New York Stock
Exchange or Nasdaq National Market shall have been suspended or
minimum or maximum prices shall have been established on any such
exchange (or trading in securities of the Company shall have been
suspended, except any suspension occurring as a result of the Merger);
(iii) a banking moratorium shall have been declared by New
York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States, or (C) any material adverse change in the
financial markets of the United States which, in the sole judgment of
the Underwriters, makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities as con-
templated by the Prospectus, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Underwriters. The statements set
----------------------------------------
forth in the last full paragraph on the front cover page and in the third
paragraph, second sentence of the fourth paragraph, the fifth paragraph and
the seventh paragraph under the heading "Underwriting" (the table not
counting as a paragraph) in the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by
the Underwriters to the Company for the purposes of Sections 2(b) and 9
hereof. The Underwriters confirm that such statements (to the extent such
statements relate to the Underwriters) are correct.
13. Notices. All communications hereunder shall be in writing and,
-------
if sent to the Underwriters, shall be mailed or delivered or telecopied and
confirmed in writing to BT Securities
17
<PAGE>
Corporation, 130 Liberty Street, New York, New York 10006, Attention:
Corporate Finance Department, with a copy to Raymond Y. Lin, Latham &
Watkins, 885 Third Avenue, New York, New York 10022; if sent to the Com-
pany, shall be mailed or delivered or telecopied and confirmed in writing
to the Company at Bruno's, Inc., 800 Lakeshore Parkway, Birmingham, Alabama
35211, Attention: Secretary, with a copy to Richard Cohn, Sirote & Permutt,
2222 Arlington Avenue South, Birmingham, Alabama 35205.
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the Underwriters, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person except that (i) the indemnities of the Company contained in Section
9 of this Agreement shall also be for the benefit of any person or persons
who control the Underwriters within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters
contained in Section 9 of this Agreement shall also be for the benefit of
the directors of the Company, its officers who have signed the Registration
Statement and any person or persons who control the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Securities from the Underwriters will be deemed a successor
because of such purchase.
15. Applicable Law. The validity and interpretation of this
--------------
agreement, and the terms and conditions set forth herein shall be governed
by and construed in accordance with the laws of the state of New York,
without giving effect to any provisions relating to conflicts of law.
16. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18
<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between
the Company and the Underwriters.
Very truly yours,
BRUNO'S, INC.
By: /s/ Ronald G. Bruno
-------------------------------------
Name: Ronald G. Bruno
Title: Chairman of the Board of
Directors and Chief Executive
Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BT SECURITIES CORPORATION
By: /s/ J. Edward Virtue
-----------------------------------------------------
Name: J. Edward Virtue
Title:
CHEMICAL SECURITIES INC.
By: /s/ Gerard J. Murray
-----------------------------------------------------
Name: Gerard J. Murray
Title: Vice President
SALOMON BROTHERS INC
By: /s/ Jeffrey McDermott
-----------------------------------------------------
Name: Jeffrey McDermott
Title: Vice President
19
EXHIBIT 10.1
[CS&M Draft--8/11/95]
=================================================================
CREDIT AGREEMENT
among
BRUNO'S, INC.
The Several Lenders
from Time to Time Parties Hereto
and
CHEMICAL BANK,
as Administrative Agent
Dated as of August 18, 1995
=================================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Amount and Terms of Credit . . . . . . . . . . . . . . . . . 22
2.1 Commitments . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2 Minimum Amount of Each Borrowing; Maximum Number of Borrowings 24
2.3 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . 24
2.4 Disbursement of Funds . . . . . . . . . . . . . . . . . . . 25
2.5 Repayment of Loans; Evidence of Debt . . . . . . . . . . . . 26
2.6 Conversions and Continuations . . . . . . . . . . . . . . . 28
2.7 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . 29
2.8 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.9 Interest Periods . . . . . . . . . . . . . . . . . . . . . . 30
2.10 Increased Costs, Illegality, etc. . . . . . . . . . . . . . 30
2.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . 32
2.12 Change of Lending Office . . . . . . . . . . . . . . . . . . 32
2.13 Notice of Certain Costs . . . . . . . . . . . . . . . . . . 32
SECTION 3. Letters of Credit . . . . . . . . . . . . . . . . . . . . . 32
3.1 Letters of Credit . . . . . . . . . . . . . . . . . . . . . 32
3.2 Letter of Credit Requests . . . . . . . . . . . . . . . . . 33
3.3 Letter of Credit Participations . . . . . . . . . . . . . . 33
3.4 Agreement to Repay Letter of Credit Drawings . . . . . . . . 35
3.5 Increased Costs . . . . . . . . . . . . . . . . . . . . . . 36
3.6 Successor Letter of Credit Issuer . . . . . . . . . . . . . 36
SECTION 4. Fees; Commitments . . . . . . . . . . . . . . . . . . . . . 37
4.1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.2 Voluntary Reduction of Revolving Credit Commitments . . . . 37
4.3 Mandatory Termination of Commitments . . . . . . . . . . . . 38
SECTION 5. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.1 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . 38
5.2 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . 38
5.3 Method and Place of Payment . . . . . . . . . . . . . . . . 41
5.4 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . 41
5.5 Computations of Interest and Fees . . . . . . . . . . . . . 43
SECTION 6. Conditions Precedent to Initial Borrowing . . . . . . . . . 43
6.1 Credit Documents . . . . . . . . . . . . . . . . . . . . . . 43
6.2 Closing Certificate . . . . . . . . . . . . . . . . . . . . 43
6.3 Corporate Proceedings of Each Credit Party . . . . . . . . . 43
6.4 Corporate Documents . . . . . . . . . . . . . . . . . . . . 44
6.5 No Material Adverse Change . . . . . . . . . . . . . . . . . 44
6.6 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.7 Equity Contributions . . . . . . . . . . . . . . . . . . . . 44
6.8 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.9 Other Indebtedness . . . . . . . . . . . . . . . . . . . . . 44
6.10 Closing Date Balance Sheet . . . . . . . . . . . . . . . . . 44
6.11 Solvency Letter . . . . . . . . . . . . . . . . . . . . . . 44
<PAGE>
6.12 Required Approvals . . . . . . . . . . . . . . . . . . . . . 44
6.13 Existing Indebtedness of the Borrower . . . . . . . . . . . 45
6.14 Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . 45
6.15 Audited Financial Statements . . . . . . . . . . . . . . . . 45
6.16 Environmental and Safety Conditions . . . . . . . . . . . . 45
6.17 Subordinated Notes . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7. Conditions Precedent to All Credit Events . . . . . . . . . 45
7.1 No Default; Representations and Warranties . . . . . . . . . 45
7.2 Notice of Borrowing; Letter of Credit Request . . . . . . . 45
SECTION 8. Representations, Warranties and Agreements . . . . . . . . . 46
8.1 Corporate Status . . . . . . . . . . . . . . . . . . . . . . 46
8.2 Corporate Power and Authority . . . . . . . . . . . . . . . 46
8.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . 46
8.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.5 Margin Regulations . . . . . . . . . . . . . . . . . . . . . 46
8.6 Governmental Approvals . . . . . . . . . . . . . . . . . . . 46
8.7 Investment Company Act . . . . . . . . . . . . . . . . . . . 47
8.8 True and Complete Disclosure . . . . . . . . . . . . . . . . 47
8.9 Financial Condition; Financial Statements . . . . . . . . . 47
8.10 Tax Returns and Payments . . . . . . . . . . . . . . . . . 47
8.11 Compliance with ERISA . . . . . . . . . . . . . . . . . . 47
8.12 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 48
8.13 Patents, etc. . . . . . . . . . . . . . . . . . . . . . . 48
8.14 Environmental Laws . . . . . . . . . . . . . . . . . . . . 48
8.15 Properties . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9. Affirmative Covenants . . . . . . . . . . . . . . . . . . . 48
9.1 Information Covenants . . . . . . . . . . . . . . . . . . . 48
9.2 Books, Records and Inspections . . . . . . . . . . . . . . . 50
9.3 Maintenance of Insurance . . . . . . . . . . . . . . . . . . 50
9.4 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . 50
9.5 Consolidated Corporate Franchises . . . . . . . . . . . . . 51
9.6 Compliance with Statutes, Obligations, etc. . . . . . . . . 51
9.7 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.8 Good Repair . . . . . . . . . . . . . . . . . . . . . . . . 51
9.9 Transactions with Affiliates . . . . . . . . . . . . . . . . 51
9.10 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . 52
9.11 Additional Guarantors . . . . . . . . . . . . . . . . . . 52
9.12 Pledges of Additional Stock and Evidence of Indebtedness . 52
9.13 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 52
SECTION 10. Negative Covenants . . . . . . . . . . . . . . . . . . . . . 52
10.1 Changes in Business . . . . . . . . . . . . . . . . . . 52
10.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . 52
10.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . 53
10.4 Limitation on Fundamental Changes . . . . . . . . . . . . 54
10.5 Limitation on Sale of Assets . . . . . . . . . . . . . . . 54
10.6 Limitation on Investments . . . . . . . . . . . . . . . . 55
10.7 Limitation on Dividends . . . . . . . . . . . . . . . . . 55
10.8 Limitation on Debt Payments . . . . . . . . . . . . . . . 56
10.9 Consolidated Total Debt to Consolidated EBITDA Ratio . . . 56
10.10 Consolidated EBITDA to Consolidated Interest Expense Ratio 56
10.11 Consolidated Fixed Charge Coverage Ratio . . . . . . . . . 57
-ii-
<PAGE>
10.12 Capital Expenditures . . .. . . . . . . . . . . . . . . . 57
SECTION 11. Events of Default . . . . . . . . . . . . . . . . . . . . . 58
11.1 Payments . . . . . . . . . . . . . . . . . . . . . . . . . 58
11.2 Representations, etc. . . . . . . . . . . . . . . . . . . 58
11.3 Covenants . . . . . . . . . . . . . . . . . . . . . . . . 58
11.4 Default Under Other Agreements . . . . . . . . . . . . . . 58
11.5 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . 59
11.6 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 59
11.7 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . 59
11.8 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . 59
11.9 Judgments . . . . . . . . . . . . . . . . . . . . . . . 59
11.10 Change of Control . . . . . . . . . . . . . . . . . . . 60
SECTION 12. The Administrative Agent . . . . . . . . . . . . . . . . . . 60
12.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . 60
12.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . 60
12.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . 60
12.4 Reliance by Administrative Agent . . . . . . . . . . . . . 61
12.5 Notice of Default . . . . . . . . . . . . . . . . . . . . 61
12.6 Non-Reliance on Administrative Agent and Other Lenders . . 61
12.7 Indemnification . . . . . . . . . . . . . . . . . . . . . 61
12.8 Administrative Agent in Its Individual Capacity . . . . . 62
12.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . 62
SECTION 13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 62
13.1 Amendments and Waivers . . . . . . . . . . . . . . . . . 62
13.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . 63
13.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . 64
13.4 Survival of Representations and Warranties . . . . . . . 64
13.5 Payment of Expenses and Taxes . . . . . . . . . . . . . 64
13.6 Successors and Assigns; Participations and Assignments . 65
13.7 Replacements of Lenders under Certain Circumstances . . 66
13.8 Adjustments; Set-off . . . . . . . . . . . . . . . . . . 67
13.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . 67
13.10 Severability . . . . . . . . . . . . . . . . . . . . . . 67
13.11 Integration . . . . . . . . . . . . . . . . . . . . . . 67
13.12 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 68
13.13 Submission To Jurisdiction; Waivers . . . . . . . . . . 68
13.14 Acknowledgements . . . . . . . . . . . . . . . . . . . . 68
13.15 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . 68
13.16 Confidentiality . . . . . . . . . . . . . . . . . . . . 68
-iii-
<PAGE>
SCHEDULES
Schedule 1.1 Commitments and Addresses of Lenders
Schedule 8.12 Subsidiaries
Schedule 8.14 Environmental Matters
Schedule 10.2 Other Indebtedness
Schedule 10.3 Existing Liens
EXHIBITS
Exhibit A Form of Guarantee
Exhibit B Form of Pledge Agreement
Exhibit C-1 Form of Promissory Note (Term Loans)
Exhibit C-2 Form of Promissory Note (Revolving Credit and Swingline
Loans)
Exhibit D Form of Letter of Credit Request
Exhibit E-1 Form of Legal Opinion of Simpson Thacher & Bartlett
Exhibit E-2 Form of Legal Opinion of Sirote & Permutt
Exhibit F Form of Assignment and Acceptance
Exhibit G Form of Closing Certificate
Exhibit H-1 Form of Tranche B Prepayment Option Notice
Exhibit H-2 Form of Tranche C Prepayment Option Notice
Exhibit H-3 Form of Tranche D Prepayment Option Notice
Exhibit I Form of Confidentiality Agreement
<PAGE>
[CS&M Draft--8/11/95]
CREDIT AGREEMENT dated as of August 18, 1995, among BRUNO'S,
INC., an Alabama corporation (the "Borrower"), the lending institutions
--------
from time to time parties hereto (each a "Lender" and, collectively, the
------
"Lenders"), and CHEMICAL BANK, as Administrative Agent (such term and each
-------
other capitalized term used but not defined in this introductory statement
having the meaning provided in Section 1).
The Borrower has entered into an Agreement and Plan of Merger
dated as of April 20, 1995, and amended as of May 18, 1995 (such Agreement
and Plan of Merger, as so amended and as the same may be amended,
supplemented or otherwise modified from time to time after the date hereof,
being referred to herein as the "Merger Agreement"), with Crimson
----------------
Acquisition Corp., an Alabama corporation ("Crimson") and a wholly owned
-------
subsidiary of the Partnership, pursuant to which Crimson will merge with
and into the Borrower in a transaction (the "Merger") in which (a) the pre-
------
Merger shareholders of the Borrower will receive cash in an aggregate
amount of $880,000,000 and approximately 17% of the post-Merger common
stock of the Borrower, (b) the Partnership will receive approximately 83%
of the post-Merger common stock of the Borrower and (c) the Borrower will
be the surviving corporation in the Merger.
The proceeds of (a) Tranche A Term Loans in an aggregate
principal amount of $275,000,000, (b) Tranche B Term Loans in an aggregate
principal amount of $75,000,000, (c) Tranche C Term Loans in an aggregate
principal amount of $75,000,000 and (d) Tranche D Term Loans in an
aggregate principal amount of $50,000,000 made under this Agreement will be
used by the Borrower, together with Revolving Credit Loans made under this
Agreement on the Closing Date and the entire amount of the Equity
Contributions made to Crimson, (i) to finance the amounts payable by the
Borrower in the Merger and (ii) to refinance certain existing debt of the
Borrower. The proceeds of Revolving Credit Loans made under this Agreement
(other than the Revolving Credit Loans used for the purpose specified in
the immediately preceding sentence) and the proceeds of the Swingline Loans
made under this Agreement will be used by the Borrower (a) to refinance
certain existing debt of the Borrower, (b) to pay fees and expenses in
connection with the Merger and the other transactions contemplated hereby
and (c) for general corporate purposes. Letters of Credit issued under
this Agreement will be used by the Borrower for general corporate purposes.
The parties hereto hereby agree as follows:
SECTION 1. Definitions. As used herein, the following terms
-----------
shall have the meanings specified in this Section 1 unless the context
otherwise requires (it being understood that defined terms in this
Agreement shall include in the singular number the plural and in the plural
the singular):
"ABR" shall mean, for any day, a rate per annum (rounded upwards,
---
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the ABR due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"ABR Loan" shall mean each Loan bearing interest at the rate
--------
provided in Section 2.8(a) and, in any event, shall include all
Swingline Loans.
"ABR Revolving Credit Loan" shall mean any Revolving Credit Loan
-------------------------
bearing interest at a rate determined by reference to the ABR.
"Adjusted Total Revolving Credit Commitment" shall mean at any
------------------------------------------
time the Total Revolving Credit Commitment less the aggregate
Revolving Credit Commitments of all Defaulting Lenders.
"Administrative Agent" shall mean Chemical, together with its
--------------------
affiliates, as the arranger of the Commitments and as the agent for
the Lenders under this Agreement and the other Credit Documents.
<PAGE>
2
"Administrative Agent's Office" shall mean the office of the
-----------------------------
Administrative Agent located at 270 Park Avenue, New York, New York
10017, or such other office in New York City as the Administrative
Agent may hereafter designate in writing as such to the other parties
hereto.
"Affiliate" shall mean, with respect to any Person, any other
---------
Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with such Person. A Person shall be
deemed to control a corporation if such Person possesses, directly or
indirectly, the power (a) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such
corporation or (b) to direct or cause the direction of the management
and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Aggregate Revolving Credit Outstandings" shall have the meaning
---------------------------------------
provided in Section 5.2(b).
"Agreement" shall mean this Credit Agreement, as the same may be
---------
from time to time modified, amended and/or supplemented.
"Applicable ABR Margin" shall mean, with respect to each ABR Loan
---------------------
at any date, the applicable percentage per annum set forth below based
upon (a) whether such loan is a Revolving Credit Loan, a Tranche A
Term Loan, a Tranche B Term Loan, a Tranche C Term Loan or a Tranche D
Term Loan and (b) in the case of Revolving Credit Loans and Tranche A
Term Loans, the Status in effect on such date:
Applicable ABR
Loan Status Margin
---- ------ -------------
Revolving Credit Loans, Level I Status 0.000%
Swingline Loans and Level II Status 0.250%
Tranche A Term Loans Level III Status 0.500%
Level IV Status 0.750%
Level V Status 1.000%
Level VI Status 1.250%
Level VII Status 1.500%
Tranche B Term Loans 2.000%
Tranche C Term Loans 2.500%
Tranche D Term Loans 3.000%
"Applicable Eurodollar Margin" shall mean, with respect to each
----------------------------
Eurodollar Term Loan and Eurodollar Revolving Credit Loan at any date,
the applicable percentage per annum set forth below based upon
(a) whether such loan is a Revolving Credit Loan, a Tranche A Term
Loan, a Tranche B Term Loan, a Tranche C Term Loan or a Tranche D Term
Loan and (b) in the case of Revolving Credit Loans and Tranche A Term
Loans, the Status in effect on such date:
Applicable
Eurodollar
Loan Status Margin
---- ------ ------------
Revolving Credit Loans Level I Status 1.000%
and Tranche A Term Loans Level II Status 1.250%
Level III Status 1.500%
Level IV Status 1.750%
Level V Status 2.000%
<PAGE>
3
Applicable
Eurodollar
Loan Status Margin
---- ------ -------------
Level VI Status 2.250%
Level VII Status 2.500%
Tranche B Term Loan 3.000%
Tranche C Term Loan 3.500%
Tranche D Term Loan 4.000%
"Asset Sale Prepayment Event" shall mean any sale, transfer or
---------------------------
other disposition of any business units, assets or other properties of
the Borrower or any of its Subsidiaries not in the ordinary course of
business. Notwithstanding the foregoing, the term "Asset Sale
Prepayment Event" shall not include any transaction permitted by
Section 10.5 (other than Section 10.5(b)).
"Authorized Officer" shall mean the Chairman of the Board, the
------------------
President, the Chief Financial Officer, the Treasurer or any other
senior officer of the Borrower designated as such in writing to the
Administrative Agent by the Borrower.
"Available Commitment" shall mean (a) at any time to but
--------------------
excluding the Closing Date, an amount equal to the amount of the Total
Commitment and (b) at any time from and including the Closing Date, an
amount equal to the excess, if any, of (i) the amount of the Total
Revolving Credit Commitment over (ii) the sum of (x) the aggregate
principal amount of all Revolving Credit Loans (but not Swingline
Loans) then outstanding and (y) the aggregate Letter of Credit
Outstandings at such time.
"Available Investment Amount" shall mean, on any date (the
---------------------------
"Reference Date"), an amount equal to the sum of (a) $100,000,000, (b)
--------------
the Net Cash Proceeds of any Prepayment Events to the extent that such
Net Cash Proceeds have not on or prior to the Reference Date been (i)
applied to the repayment of Loans in accordance with Section 5.2(a)(i)
or (ii) reinvested in the business of the Borrower or any of its
Subsidiaries, (c) an amount equal to (i) the cumulative amount of
Excess Cash Flow for all fiscal years completed prior to the Reference
Date minus (ii) the portion of such Excess Cash Flow that has been on
-----
or prior to the Reference Date (or will be) applied to the prepayment
of Loans in accordance with Section 5.2(a)(ii), (d) the amount of any
capital contributions made to the Borrower on or prior to the
Reference Date and (e) an amount equal to (i) 50% of the Net Cash
Proceeds received by the Borrower on or prior to the Reference Date
from any issuance of equity securities by the Borrower minus (ii) the
-----
portion of such Net Cash Proceeds that has been applied to the
purchase of Subordinated Notes or other subordinated Indebtedness of
the Borrower or any of its Subsidiaries in accordance with Section
10.8.
"Bankruptcy Code" shall have the meaning provided in Section
---------------
11.5.
"Base CD Rate" shall mean the sum of (a) the product of (i) the
------------
Three-Month Secondary CD Rate and (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate.
"Board" shall mean the Board of Governors of the Federal Reserve
-----
System of the United States (or any successor).
"Borrower" shall have the meaning provided in the first paragraph
--------
of this Agreement.
<PAGE>
4
"Borrower Common Stock" shall mean any class of outstanding
---------------------
common stock of the Borrower after the Merger.
"Borrowing" shall mean and include (a) the incurrence of
---------
Swingline Loans from Chemical on a given date, (b) the incurrence of
one Type of Term Loan on the Closing Date (or resulting from
conversions on a given date after the Closing Date) having, in the
case of Eurodollar Term Loans, the same Interest Period (provided that
--------
ABR Loans incurred pursuant to Section 2.10(b) shall be considered
part of any related Borrowing of Eurodollar Term Loans) and (c) the
incurrence of one Type of Revolving Credit Loan on a given date (or
resulting from conversions on a given date) having, in the case of
Eurodollar Revolving Credit Loans, the same Interest Period (provided
--------
that ABR Loans incurred pursuant to Section 2.10(b) shall be
considered part of any related Borrowing of Eurodollar Revolving
Credit Loans).
"Business Day" shall mean (a) for all purposes other than as
------------
covered by clause (b) below, any day excluding Saturday, Sunday and
any day that shall be in the City of New York a legal holiday or a day
on which banking. institutions are authorized by law or other
governmental actions to close and (b) with respect to all notices and
determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, any day that is a Business Day
described in clause (a) and which is also a day for trading by and
between banks in Dollar deposits in the relevant interbank Eurodollar
market.
"Capital Expenditures" shall mean, for any period, the aggregate
--------------------
of all expenditures (whether paid in cash or accrued as liabilities
and including in all events all amounts expended or capitalized under
Capitalized Leases, but excluding any amount representing capitalized
interest) by the Borrower and its Subsidiaries during such period
that, in conformity with GAAP, are or are required to be included as
additions during such period to property, plant or equipment reflected
in the consolidated balance sheet of the Borrower and its
Subsidiaries, provided that the term "Capital Expenditures" shall not
--------
include (a) expenditures made in connection with the replacement,
substitution or restoration of assets (i) to the extent financed from
insurance proceeds paid on account of the loss of or damage to the
assets being replaced or restored or (ii) with awards of compensation
arising from the taking by eminent domain or condemnation of the
assets being replaced, (b) the purchase price of equipment that is
purchased simultaneously with the trade-in of existing equipment to
the extent that the gross amount of such purchase price is reduced by
the credit granted by the seller of such equipment for the equipment
being traded in at such time and (c) the purchase of plant, property
or equipment made within one year of the sale of any asset with the
proceeds of such sale.
"Capital Lease", as applied to any Person, shall mean any lease
-------------
of any property (whether real, personal or mixed) by that Person as
lessee that, in conformity with GAAP, is, or is required to be,
accounted for as a capital lease on the balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
-----------------------------
Capital Leases of the Borrower or any of its Subsidiaries, in each
case taken at the amount thereof accounted for as liabilities in
accordance with GAAP.
"C/D Assessment Rate" shall mean for any day as applied to any
-------------------
ABR Loan, the annual assessment rate in effect on such day that is
payable by a member of the Lender Insurance Fund maintained by the
Federal Deposit Insurance Corporation or any successor thereto (the
"FDIC") classified as well-capitalized and within supervisory subgroup
----
"B" (or a comparable successor assessment risk classification) within
the meaning of 12 C.F.R.
<PAGE>
5
Sec. 327.3(d) (or any successor provision) to the FDIC for the FDIC's
insuring time deposits at offices of such institution in the United
States.
"C/D Reserve Percentage" shall mean for any day as applied to any
----------------------
ABR Loan, the percentage (expressed as a decimal) that is in effect on
such day, as prescribed by the Board, for determining the reserve
requirement for a Depositary Institution (as defined in Regulation D
of the Board) in respect of new non-personal time deposits in Dollars
having a maturity that is 30 days or more.
"Change of Control" shall mean and be deemed to have occurred if
-----------------
(a) at any time Continuing Directors shall not constitute a majority
of the Board of Directors of the Borrower; (b) KKR and its Affiliates
shall at any time not own directly or indirectly, beneficially and of
record, an aggregate of at least 50% of the outstanding Voting Stock
of the Borrower (other than as the result of one or more public
offerings of Borrower Common Stock, whether by the Borrower or by KKR
or any of its Affiliates); and/or (c) any person, entity or "group"
(within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended) shall at any time have acquired
direct or indirect beneficial ownership of a percentage of the
outstanding Voting Stock of the Borrower that exceeds the percentage
of such Voting Stock then beneficially owned by KKR and its
Affiliates.
"Chemical" shall mean Chemical Bank, a New York banking
--------
corporation, and any successor thereto by merger, consolidation or
otherwise.
"Closing Date" shall mean the date of the initial Borrowing
------------
hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended
----
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in
effect at the date of this Agreement and any subsequent provisions of
the Code, amendatory thereof, supplemental thereto or substituted
therefor.
"Commitments" shall mean, with respect to each Lender, such
-----------
Lender's Term Loan Commitments and Revolving Credit Commitment.
"Commitment Fee Rate" shall mean, for any Lender for any day, the
-------------------
rate per annum equal to (a) in the case of such Lender's Tranche B
Commitment, Tranche C Commitment and Tranche D Commitment, .5000% and
(b) in the case of such Lender's Revolving Credit Commitment and
Tranche A Commitment, the rate per annum set forth below opposite the
Status in effect on such day:
Commitment
Status Fee Rate
------ --------------
Level I Status .3750%
Level II Status .3750%
Level III Status .3750%
Level IV Status .3750%
Level V Status .5000%
Level VI Status .5000%
Level VII Status .5000%
"Confidential Information" shall have the meaning provided in
------------------------
Section 13.16.
<PAGE>
6
"Confidential Information Memorandum" shall mean the Confidential
-----------------------------------
Information Memorandum of the Borrower dated June 1995, delivered to
the Lenders in connection with this Agreement.
"Consolidated Earnings" shall mean, for any period, "income from
---------------------
continuing operations before income taxes and extraordinary items" of
the Borrower and its Subsidiaries for such period, determined in a
manner consistent with the manner in which such amount was determined
in accordance with the audited financial statements referred to in
Section 9.1(a).
"Consolidated EBITDA" shall mean, for any period, the sum,
-------------------
without duplication, of the amounts for such period of (a)
Consolidated Earnings, (b) Consolidated Interest Expense, (c)
depreciation expense, (d) amortization expense, including amortization
of deferred financing fees, (e) non-recurring charges, (f) non-cash
charges, (g) losses on asset sales, (h) in the case of any period
ending during the fiscal year ended June 29, 1996, expenses related to
the Merger and the transactions in connection therewith and (i) in the
case of any Test Period ending on or prior to December 31, 1995,
income in an aggregate amount not in excess of $5,000,000 in respect
of a contract between the Borrower and a supplier less the sum of the
----
amounts for such period of (j) non-recurring gains, (k) non-cash gains
and (l) gains on asset sales, all as determined on a consolidated
basis for the Borrower and its Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, cash
-----------------------------
interest expense (including that attributable to Capital Leases in
accordance with GAAP), net of interest income, of the Borrower and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of the Borrower 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 Hedge Agreements (other than currency swap
agreements, currency future or option contracts and other similar
agreements), but excluding, however, amortization of deferred
financing costs and any other amounts of non-cash interest, all as
calculated on a consolidated basis in accordance with GAAP; provided,
--------
however, that Consolidated Interest Expense for the Test Periods
-------
ending on December 31, 1995, March 31, 1996, and June 30, 1996, shall
be determined by (a) in the case of the Test Period ending on
December 31, 1995, multiplying Consolidated Interest Expense for the
period commencing on September 30, 1995, and ending on December 31,
1995, by 4, (b) in the case of the Test Period ending on March 31,
1996, multiplying Consolidated Interest Expense for the period
commencing on September 30, 1995, and ending on March 31, 1996, by 2
and (c) in the case of the Test Period ending on June 30, 1996,
multiplying Consolidated Interest Expense for the period commencing on
September 30, 1995, and ending on June 30, 1996, by 4/3.
"Consolidated Net Income" shall mean, for any period, the
-----------------------
consolidated net income (or loss) of the Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"Consolidated Rental Expense" shall mean, for any period, the
---------------------------
aggregate rental expense of the Borrower and its Subsidiaries for such
period, excluding real estate taxes and common area maintenance
charges, calculated on a consolidated basis in accordance with GAAP,
in respect of all rent obligations under operating leases for real or
personal property.
"Consolidated Senior Debt" shall mean, as of any date of
------------------------
determination, Consolidated Total Debt as of such date minus
-----
Consolidated Subordinated Debt as of such date.
<PAGE>
7
"Consolidated Senior Debt to Consolidated EBITDA Ratio" shall
-----------------------------------------------------
mean, as of any date of determination, the ratio of (a) Consolidated
Senior Debt as of the last day of the Test Period ending with the
fiscal period covered by this Section 9.1 Financials last delivered or
required to be delivered pursuant to Section 9.1 to (b) Consolidated
EBITDA for such Test Period.
"Consolidated Subordinated Debt" shall mean, as of any date of
------------------------------
determination, all Indebtedness of the Borrower and its Subsidiaries
for borrowed money that is (a) outstanding on such date and
(b) subordinated in right of payment to the Obligations, all
calculated on a consolidated basis in accordance with GAAP.
"Consolidated Total Debt" shall mean, as of any date of
-----------------------
determination, the sum of (a) all Indebtedness of the Borrower and its
Subsidiaries for borrowed money outstanding on such date and (b) all
Capitalized Lease Obligations of the Borrower and its Subsidiaries
outstanding on such date, all calculated on a consolidated basis in
accordance with GAAP.
"Consolidated Total Debt to Consolidated EBITDA Ratio" shall
----------------------------------------------------
mean, as of any date of determination, the ratio of (a) Consolidated
Total Debt as of the last day of the Test Period ending with the
fiscal period covered by the Section 9.1 Financials last delivered or
required to be delivered pursuant to Section 9.1 to (b) Consolidated
EBITDA for such Test Period.
"Consolidated Working Capital" shall mean, at any date, the
----------------------------
excess of (a) the sum of all amounts (other than cash and cash
equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at
such date over (b) the sum of all amounts that would, in conformity
with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries on such date, but excluding (i) the
current portion of any Funded Debt and (ii) without duplication of
clause (i) above, all Indebtedness consisting of Loans and Letter of
Credit Exposure to the extent otherwise included therein.
"Contingent Obligations" shall mean, as to any Person, any
----------------------
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other monetary obligations
("primary obligations") of any other Person (the "primary obligor") in
------------------- ---------------
any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property con-
stituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency
of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent Obligations"
-------- -------
shall not include (x) endorsements of instruments for deposit or
collection in the ordinary course of business, (y) guarantees made by
a Person of the obligations of a Subsidiary or Affiliate of such
Person that do not constitute Indebtedness of such Subsidiary or
Affiliate and are incurred in the ordinary course of business of such
Subsidiary or Affiliate or (z) obligations arising from agreements
providing for indemnification or adjustment of purchase price (or from
guarantees securing any obligations pursuant to any such agreements),
incurred or assumed in connection with the acquisition or disposition
of any business or assets or Subsidiary (other than Guarantee
Obligations). The amount of any Contingent Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is
made or, if not stated or determinable, the maximum reasonably
anticipated liability in
<PAGE>
8
respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Continuing Director" shall mean, at any date, an individual (a)
-------------------
who is a member of the Board of Directors of the Borrower on the date
hereof, (b) who, as at such date, has been a member of such Board of
Directors for at least the 12 preceding months, (c) who has been
nominated to be a member of such Board of Directors, directly or
indirectly, by KKR or Persons nominated by KKR or (d) who has been
nominated to be a member of such Board of Directors by a majority of
the other Continuing Directors then in office.
"Credit Documents" shall mean this Agreement, the Guarantee, the
----------------
Pledge Agreement and any Notes.
"Credit Event" shall mean and include the making (but not the
------------
conversion or continuation) of a Loan and the issuance of a Letter of
Credit.
"Credit Party" shall mean each of the Borrower and the
------------
Guarantors.
"Crimson" shall have the meaning provided in the first paragraph
-------
of this Agreement.
"Debt Incurrence Prepayment Event" shall mean any issuance or
--------------------------------
incurrence by the Borrower or any of its Subsidiaries of any
Indebtedness (including any Indebtedness incurred in connection with
any Permitted Mortgage Financing but excluding any other Indebtedness
permitted to be issued or incurred under Section 10.2).
"Default" shall mean any event, act or condition that with notice
-------
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
-----------------
Lender Default is in effect.
"Dividends" shall have the meaning provided in Section 10.7.
---------
"Dollars" and "$" shall mean dollars in lawful currency of the
------- -
United States of America.
"Drawing" shall have the meaning provided in Section 3.4(b).
-------
"Environmental Claims" shall mean any and all administrative,
--------------------
regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigations
(other than internal reports prepared by the Borrower or any of its
Subsidiaries (a) in the ordinary course of such Person's business or
(b) as required in connection with a financing transaction or an
acquisition or disposition of real estate) or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval
given, under any such Environmental Law (hereafter, "Claims"),
------
including, without limitation, (i) any and all Claims by governmental
or regulatory authorities for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable
Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials
or arising from alleged injury or threat of injury to health, safety
or the environment.
"Environmental Law" shall mean any applicable Federal, state,
-----------------
foreign or local statute, law, rule, regulation, ordinance, code and
rule of common law now or hereafter in effect and in each case as
amended, and any binding judicial or administrative interpretation
<PAGE>
9
thereof, including any binding judicial or administrative order,
consent decree or judgment, relating to the environment, human health
or safety or Hazardous Materials.
"Equity Contribution" shall mean the equity contribution to the
-------------------
Borrower by the Partnership of an aggregate cash amount of not less
than $250,000,000.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time. Section references to ERISA are
to ERISA as in effect at the date of this Agreement and any subsequent
provisions of ERISA amendatory thereof, supplemental thereto or
substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
---------------
3(9) of ERISA) that together with the Borrower or a Subsidiary would
be deemed to be a "single employer" within the meaning of Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer
under Section 414 of the Code.
"Eurodollar Rate" shall mean, in the case of any Eurodollar Term
---------------
Loan or Eurodollar Revolving Credit Loan, with respect to each day
during each Interest Period pertaining to such Eurodollar Loan, the
rate of interest determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the
Telerate screen as of 11:00 A.M., London time, two Business Days prior
to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Telerate Service (or otherwise on
such service), the "Eurodollar Rate" for the purposes of this
paragraph shall be determined by reference to such other publicly
available service for displaying eurodollar rates as may be agreed
upon by the Administrative Agent and the Borrower or, in the absence
of such agreement, the "Eurodollar Rate" for the purposes of this
paragraph shall instead be the rate per annum equal to the average of
the respective rates notified to the Administrative Agent by each of
the Reference Lenders as the rate at which such Reference Lender is
offered Dollar deposits at or about 10:00 A.M., New York time, two
Business Days prior to the beginning of such Interest Period, in the
interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans are then
being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Term Loan or Eurodollar Revolving
Credit Loan, as the case may be, to be outstanding during such
Interest Period.
"Eurodollar Loan" shall mean any Eurodollar Term Loan or
---------------
Eurodollar Revolving Credit Loan.
"Eurodollar Revolving Credit Loan" shall mean any Revolving
--------------------------------
Credit Loan bearing interest at a rate determined by reference to the
Eurodollar Rate.
"Eurodollar Term Loan" shall mean any Term Loan bearing interest
--------------------
at a rate determined by reference to the Eurodollar Rate.
"Event of Default" shall have the meaning provided in Section 11.
----------------
"Excess Cash Flow" shall mean, for any period, an amount equal to
----------------
the excess of (a) the sum, without duplication, of (i) Consolidated
Net Income for such period, (ii) an amount equal to the amount of all
non-cash charges to the extent deducted in arriving at such
Consolidated Net Income, (iii) decreases in Consolidated Working
Capital for such period and (iv) an amount equal to the aggregate net
non-cash loss on the sale, lease, transfer or other disposition of
assets by the Borrower and its Subsidiaries during such period (other
than sales
<PAGE>
10
in the ordinary course of business) to the extent deducted in arriving
at such Consolidated Net Income over (b) the sum, without duplication,
----
of (i) an amount equal to the amount of all non-cash credits included
in arriving at such Consolidated Net Income, (ii) the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such
period on account of Capital Expenditures (excluding the principal
amount of Indebtedness incurred in connection with such Capital
Expenditures, whether incurred in such period or in a subsequent
period), (iii) the aggregate amount of all prepayments of Revolving
Credit Loans and Swingline Loans made during such period to the extent
accompanying reductions of the Total Revolving Credit Commitments,
(iv) the aggregate amount of all principal payments of Indebtedness of
the Borrower or its Subsidiaries (including, without limitation, any
Term Loans and the principal component of payments in respect of
Capitalized Lease Obligations but excluding Revolving Credit Loans and
Swingline Loans) made during such period (other than in respect of any
revolving credit facility to the extent there is not an equivalent
permanent reduction in commitments thereunder), (v) an amount equal to
the aggregate net non-cash gain on the sale, lease, transfer or other
disposition of assets by the Borrower and its Subsidiaries during such
period (other than sales in the ordinary course of business) the
extent included in arriving at such Consolidated Net Income,
(vi) increases in Consolidated Working Capital for such period,
payments by the Borrower and its Subsidiaries during such period in
respect of long-term liabilities of the Borrower and its Subsidiaries
other than Indebtedness, (viii) the amount of Investments made during
such period pursuant to Section 10.06 to the extent that such
Investments were financed with internally generated cash flow of the
Borrower and its Subsidiaries and (ix) the aggregate amount of
expenditures actually made by the Borrower and its Subsidiaries in
cash during such period (including, without limitation, expenditures
for the payment of financing fees) to the extent that such
expenditures are not expensed during such period.
"Federal Funds Effective Rate" shall mean, for any day, the
----------------------------
weighted average of the per annum rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Lender of New York, or, if such rate is not
so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"Fees" shall mean all amounts payable pursuant to, or referred to
----
in, Section 4.1.
"Final Date" shall mean the date on which the Commitments shall
----------
have terminated, no Loans shall be outstanding and the Letter of
Credit Outstandings shall have been reduced to zero.
"Fronting Fee" shall have the meaning provided in Section 4.1(c).
------------
"Funded Debt" shall mean all Indebtedness of the Borrower and its
-----------
Subsidiaries that matures more than one year from the date of its
creation or matures within one year from such date that is renewable
or extendable, at the option of the Borrower or one of its
Subsidiaries, to a date more than one year from such date or arises
under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one
year from such date, including, without limitation, all amounts of
Funded Debt required to be paid or prepaid within one year from the
date of its creation and, in the case of the Borrower, Indebtedness in
respect of the Loans.
"GAAP" shall mean generally accepted accounting principles in the
----
United States of America as in effect from time to time; provided,
--------
however, that if there occurs after the date hereof any change in GAAP
-------
that affects in any respect the calculation of any covenant
<PAGE>
11
contained in Section 10, the Lenders and the Borrower shall negotiate
in good faith amendments to the provisions of this Agreement that
relate to the calculation of such covenant with the intent of having
the respective positions of the Lenders and the Borrower after such
change in GAAP conform as nearly as possible to their respective
positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Section 10 shall be
calculated as if no such change in GAAP has occurred.
"Governmental Authority" shall mean any nation or government, any
----------------------
state or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantee Obligation" shall mean, as to any Person, any
--------------------
Contingent Obligation of such Person in respect of any Indebtedness of
any other Person (other than Indebtedness of the kind described in
clause (g) of the definition thereof that is not itself a Contingent
Obligation in respect of Indebtedness).
"Guarantor" shall mean each Subsidiary of the Borrower that
---------
becomes a party to the Guarantee.
"Guarantee" shall mean and include the Guarantee, made by each
---------
Guarantor in favor of the Administrative Agent for the benefit of the
Lenders, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
-------------------
products, radioactive materials, friable asbestos, urea formaldehyde
foam insulation, transformers or other equipment that contain
dielectric fluid containing regulated levels of polychlorinated
biphenyls, and radon gas; (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances",
"hazardous waste", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", "toxic substances", "toxic pollutants",
"contaminants", or "pollutants", or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by
any Governmental Authority.
"Hedge Agreements" shall mean interest rate swap, cap or collar
----------------
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements entered into by the Borrower in order to protect the
Borrower or the Subsidiaries against fluctuations in interest rates or
currency rates.
"Indebtedness" of any Person shall mean (a) all indebtedness of
------------
such Person for borrowed money, (b) the deferred purchase price of
assets or services that in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (c) the face
amount of all letters of credit issued for the account of such Person
and, without duplication, all drafts drawn thereunder, (d) all
Indebtedness of a second Person secured by any Lien on any property
owned by such first Person, whether or not such Indebtedness has been
assumed, (e) all Capitalized Lease Obligations of such Person, (f) all
obligations of such Person under interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements and (g) without duplication, all Contingent Obligations of
such Person, provided that Indebtedness shall not include trade
--------
payables and accrued expenses, in each case arising in the ordinary
course of business.
"Interest Period" shall mean, with respect to any Term Loan or
---------------
Revolving Credit Loan, the interest period applicable thereto, as
determined pursuant to Section 2.9.
<PAGE>
12
"KKR" shall mean each of Kohlberg Kravis Roberts & Co. and KKR
---
Associates, L.P.
"L/C Maturity Date" shall mean the date that is five Business
-----------------
Days prior to the Revolving Credit Maturity Date.
"L/C Participant" shall have the meaning provided in Section
---------------
3.3(a).
"L/C Participation" shall have the meaning provided in Section
-----------------
3.3(a).
"Lender" shall have the meaning provided in the first paragraph
------
of this Agreement.
"Lender Default" shall mean (a) the refusal (which has not been
--------------
retracted) of a Lender to make available its portion of any Borrowing
or to fund its portion of any unreimbursed payment under Section 3.3
or (b) a Lender having notified the Administrative Agent and/or the
Borrower that it does not intend to comply with the obligations under
Section 2.1(b) or 2.1(d) or under Section 3.3, in the case of either
clause (a) or clause (b) above, as a result of the appointment of a
receiver or conservator with respect to such Lender at the direction
or request of any regulatory agency or authority.
"Letter of Credit" shall mean each standby letter of credit
----------------
issued pursuant to Section 3.1.
"Letter of Credit Exposure" shall mean, with respect to any
-------------------------
Lender, such Lender's Revolving Credit Commitment Percentage of the
Letter of Credit Outstandings.
"Letter of Credit Fee" shall have the meaning provided in Section
--------------------
4.1(b).
"Letter of Credit Issuer" shall mean Chemical or any successor to
-----------------------
Chemical pursuant to Section 3.6.
"Letter of Credit Outstandings" shall mean, at any time, the sum
-----------------------------
of, without duplication, (a) the aggregate Stated Amount of all
outstanding Letters of Credit and (b) the aggregate amount of all
Unpaid Drawings in respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
------------------------
Section 3.2.
"Level I Status" shall mean, on any date, the Consolidated Senior
--------------
Debt to Consolidated EBITDA Ratio is less than or equal to 1.10:1.00
as of such date.
"Level II Status" shall mean, on any date, the Consolidated
---------------
Senior Debt to Consolidated EBITDA Ratio is less than or equal to
1.50:1.00 as of such date.
"Level III Status" shall mean, on any date, the Consolidated
----------------
Senior Debt to Consolidated EBITDA Ratio is less than or equal to
1.75:1.00 as of such date.
"Level IV Status" shall mean, on any date, the Consolidated
---------------
Senior Debt to Consolidated EBITDA Ratio is less than or equal to
2.15:1.00 as of such date.
"Level V Status" shall mean, on any date, the Consolidated Senior
--------------
Debt to Consolidated EBITDA Ratio is less than or equal to 2.50:1.00
as of such date.
"Level VI Status" shall mean, on any date, the Consolidated
---------------
Senior Debt to Consolidated EBITDA Ratio is less than or equal to
2.85:1.00 as of such date.
<PAGE>
13
"Level VII Status" shall mean, on any date, the circumstance
----------------
that none of Level I Status, Level II Status, Level III, Level IV,
Level V or Level VI Status exists as of such date.
"Lien" shall mean any mortgage, pledge, security interest,
----
hypothecation, assignment, lien (statutory or other), or similar
encumbrance (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement or any lease in
the nature thereof).
"Loan" shall mean any Revolving Credit Loan, Swingline Loan or
----
Term Loan made by any Lender hereunder.
"Mandatory Borrowing" shall have the meaning provided in Section
-------------------
2.1(d).
"Margin Stock" shall have the meaning provided in Regulation U.
------------
"Material Adverse Change" shall mean any change in the business,
-----------------------
assets, operations, properties or financial condition of the Borrower
and its Subsidiaries taken as a whole that would materially adversely
affect the ability of the Borrower and the other Credit Parties taken
as a whole to perform their obligations under this Agreement and the
other Credit Documents taken as a whole.
"Material Adverse Effect" shall mean a circumstance or condition
-----------------------
affecting the business, assets, operations, properties or financial
condition of the Borrower and its Subsidiaries taken as a whole that
would materially adversely affect (a) the ability of the Borrower and
the other Credit Parties taken as a whole to perform their obligations
under this Agreement and the other Credit Documents taken as a whole
or (b) the rights and remedies of the Administrative Agent and the
Lenders under this Agreement and the other Credit Documents taken as a
whole.
"Maturity Date" shall mean the Tranche A Maturity Date, the
-------------
Tranche B Maturity Date, the Tranche C Maturity Date, the Tranche D
Maturity Date or the Revolving Credit Maturity Date.
"Merger Agreement" shall have the meaning provided in the first
----------------
paragraph of this Agreement.
"Minimum Borrowing Amount" shall mean (a) with respect to a
------------------------
Borrowing of Term Loans or Revolving Credit Loans, $5,000,000 and (b)
with respect to a Borrowing of Swingline Loans, $500,000.
"Moody's" shall mean Moody's Investors Service, Inc. or any
-------
successor by merger or consolidation to its business.
"Net Cash Proceeds" shall mean, with respect to any Prepayment
-----------------
Event or any issuance by the Borrower of equity securities, (a) the
gross cash proceeds (including payments from time to time in respect
of installment obligations, if applicable) received by or on behalf of
the Borrower or any of its Subsidiaries in respect of such Prepayment
Event less (b) the sum of:
(i) in the case of any Asset Sale Prepayment Event, the
amount, if any, of all taxes paid or estimated to be payable by
the Borrower or any of its Subsidiaries in connection with such
Asset Sale Prepayment Event,
<PAGE>
14
(ii) in the case of any Asset Sale Prepayment Event, the
amount of any reasonable reserve established in accordance with
GAAP against any liabilities (other than any taxes deducted
pursuant to clause (i) above) associated with the assets sold or
disposed of and retained by the Borrower or any of its
Subsidiaries, provided that the amount of any subsequent
--------
reduction of such reserve (other than in connection with a
payment in respect of any such liability) shall be deemed to be
Net Cash Proceeds of an Asset Sale Prepayment Event occurring on
the date of such reduction,
(iii) in the case of any Asset Sale Prepayment Event, the
amount of any Indebtedness secured by a Lien on such asset to the
extent that the instrument creating or evidencing such
Indebtedness requires that such Indebtedness be repaid upon
consummation of such Asset Sale Prepayment Event,
(iv) in the case of any Asset Sale Prepayment Event, the
amount of any proceeds of such Asset Sale Prepayment Event that
the Borrower has reinvested (or intends to reinvest within one
year of the date of such Asset Sale Prepayment Event) in the
business of the Borrower or any of its Subsidiaries, provided
--------
that any portion of such proceeds that has not been so reinvested
within such one-year period shall (x) be deemed to be Net Cash
Proceeds of an Asset Sale Prepayment Event occurring on the last
day of such one-year period and (y) be applied to the repayment
of Term Loans in accordance with Section 5.2(a)(i) and
(v) in the case of any Prepayment Event or any issuance by
the Borrower of equity securities, reasonable and customary fees,
commissions, expenses, issuance costs, discounts and other costs
paid by the Borrower or any of its Subsidiaries in connection
with such Prepayment Event (other than those payable to the
Borrower or any Subsidiary of the Borrower), in each case only to
the extent not already deducted in arriving at the amount
referred to in clause (a) above.
"Non-Defaulting Lender" shall mean and include each Lender other
---------------------
than a Defaulting Lender.
"Non-Excluded Taxes" shall have the meaning provided in Section
------------------
5.4(a).
"Notice of Borrowing" shall have the meaning provided in Section
-------------------
2.3.
"Notice of Conversion or Continuation" shall have the meaning
------------------------------------
provided in Section 2.6.
"Obligations" shall mean all monetary amounts of every type or
-----------
description at any time owing to the Administrative Agent or any
Lender pursuant to the terms of this Agreement or any other Credit
Document.
"Participant" shall have the meaning provided in Section
-----------
13.6(a)(ii).
"Partnership" shall mean Crimson Associates, L.P., a Delaware
-----------
limited partnership.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
----
established pursuant to Section 4002 of ERISA, or any successor
thereto.
"Permitted Acquisition" shall mean the acquisition by the
---------------------
Borrower or any of the Subsidiaries of assets or capital stock or
other equity interests, so long as (a) such acquisition and all
transactions related thereto shall be consummated in accordance with
applicable law;
<PAGE>
15
(b) such acquisition shall, in the case of a Permitted Acquisition of
capital stock or other equity interest of a domestic corporation or
other domestic entity by the Borrower or any of its direct domestic
Subsidiaries, result in such domestic corporation or other domestic
entity becoming a Subsidiary and a direct Subsidiary in the case of
such an Acquisition by the Borrower; (c) no capital stock or other
equity interest or assets acquired in connection with such acquisition
shall be subject to any Lien (other than Liens permitted by Section
10.3); (d) neither the Borrower nor any of its Subsidiaries shall
assume or incur, directly or indirectly, any Indebtedness or other
liability in connection with such acquisition (other than Indebtedness
permitted by Section 10.2); and (e) after giving effect to such
acquisition, no Default or Event of Default shall have occurred and be
continuing.
"Permitted Business" shall mean the owning, leasing and operating
------------------
of supermarkets and the food retailing business, any activities
heretofore conducted by the Borrower and other related businesses
approved from time to time by the Board of Directors of the Borrower.
"Permitted Investments" shall mean (a) securities issued or
---------------------
unconditionally guaranteed by the United States government or any
agency or instrumentality thereof, in each case having maturities of
not more than 24 months from the date of acquisition thereof, (b)
securities issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality
thereof or any political subdivision of any such state or any public
instrumentality thereof having maturities of not more than 24 months
from the date of acquisition thereof and, at the time of acquisition,
having an investment grade rating generally obtainable from either S&P
or Moody's (or, if at any time neither S&P nor Moody's shall be rating
such obligations, then from another nationally recognized rating
service); (c) commercial paper issued by any Lender or any bank
holding company owning any Lender; (d) commercial paper maturing no
more than 12 months after the date of creation thereof and, at the
time of acquisition, having a rating of at least A-2 or P-2 from
either S&P or Moody's (or, if at any time neither S&P nor Moody's
shall be rating such obligations, an equivalent rating from another
nationally recognized rating service); (e) domestic and eurodollar
certificates of deposit or bankers' acceptances maturing no more than
two years after the date of acquisition thereof issued by any Lender
or any other bank having combined capital and surplus of not less than
$250,000,000 in the case of domestic banks and $100,000,000 (or the
dollar equivalent thereof) in the case of foreign banks; (f)
repurchase agreements with a term of not more than 30 days for
underlying securities of the type described in clauses (a), (b) and
(e) above entered into with any bank meeting the qualifications
specified in clause (e) above or securities dealers of recognized
national standing; and (g) shares of investment companies that are
registered under the Investment Company Act of 1940 and invest solely
in one or more of the types of securities described in clauses (a)
through (f) above.
"Permitted Liens" shall mean (a) Liens for taxes, assessments or
---------------
governmental charges or claims not yet due or which are being
contested in good faith and by appropriate proceedings for which
appropriate reserves have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary
course of business, in each case so long as such Liens arise in the
ordinary course of business and do not individually or in the
aggregate have a Material Adverse Effect; (c) Liens arising from
judgments or decrees in circumstances not constituting an Event of
Default under Section 11.9; (d) Liens incurred or deposits made 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, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business; (e)
ground leases in respect of real property on which facilities owned or
leased by the Borrower or any of its Subsidiaries are
<PAGE>
16
located; (f) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the business of the Borrower
and its Subsidiaries taken as a whole; (g) any interest or title of a
lessor or secured by a lessor's interest under any lease permitted by
this Agreement; (h) 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; (i) Liens on goods the
purchase price of which is financed by a documentary letter of credit
issued for the account of the Borrower or any of its Subsidiaries,
provided that such Lien secures only the obligations of the Borrower
--------
or such Subsidiaries in respect of such letter of credit to the extent
permitted under Section 10.2; and (j) leases or subleases granted to
others not interfering in any material respect with the business of
the Borrower and its Subsidiaries, taken as a whole.
"Permitted Mortgage Financing" shall mean Indebtedness of the
----------------------------
Borrower that is incurred after the Closing Date and is secured by a
mortgage on any Real Estate owned by the Borrower or its Subsidiaries,
provided that (a) the recourse of the lenders with respect to such
Indebtedness is limited solely to the mortgaged Real Estate, (b) no
agreement in connection with such Indebtedness shall restrict the
ability of the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the
mortgaged Real Estate, (c) the aggregate of the initial principal
amount of the Indebtedness incurred in connection with such Permitted
Mortgage Financing is equal to at least 70% of the aggregate of the
fair market value of the Real Estate securing such Indebtedness
determined at the time of the issuance thereof in good faith by the
Borrower, (d) the final maturity of such Indebtedness is later than
the scheduled maturity of all the Loans and (e) the proceeds of such
Indebtedness are applied as provided in Section 5.2(a).
"Person" shall mean any individual, partnership, joint venture,
------
firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan, as
----
defined in Section 4001 of ERISA and subject to Title IV of ERISA,
that is or was within any of the preceding five plan years maintained
or contributed to by (or to which there is or was an obligation to
contribute or to make payments of) the Borrower, a Subsidiary or an
ERISA Affiliate.
"Pledge Agreement" shall mean and include the Pledge Agreement
----------------
entered into by the Borrower, the other pledgors party thereto and the
Administrative Agent for the benefit of the Lenders, substantially in
the form of Exhibit B, as the same may be amended, supplemented or
otherwise modified from time to time.
"Prepayment Event" shall mean any Asset Sale Prepayment Event and
----------------
any Debt Incurrence Prepayment Event.
"Prime Rate" shall mean the rate of interest per annum publicly
----------
announced from time to time by the Administrative Agent as its
reference rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest
charged by Chemical in connection with extensions of credit to
debtors).
"Real Estate" shall mean land, buildings and improvements owned
-----------
or leased by the Borrower or any of its Subsidiaries, but excluding
all operating fixtures and equipment, whether or not incorporated into
improvements.
"Reference Lenders" shall mean Chemical and [ ].
-----------------
<PAGE>
17
"Register" shall have the meaning provided in Section 13.6(c).
--------
"Regulation D" shall mean Regulation D of the Board as from time
------------
to time in effect and any successor to all or a portion thereof
establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board as from time
------------
to time in effect and any successor to all or a portion thereof
establishing margin requirements.
"Regulation T" shall mean Regulation T of the Board as from time
------------
to time in effect and any successor to all or a portion thereof
establishing margin requirements.
"Regulation U" shall mean Regulation U of the Board as from time
------------
to time in effect and any successor to all or a portion thereof
establishing margin requirements.
"Regulation X" shall mean Regulation X of the Board as from time
------------
to time in effect and any successor to all or a portion thereof
establishing margin requirements.
"Repayment Amount" shall mean Tranche A Repayment Amount,
----------------
Tranche B Repayment Amount, Tranche C Repayment Amount or Tranche D
Repayment Amount.
"Repayment Date" shall mean Tranche A Repayment Date, Tranche B
--------------
Repayment Date, Tranche C Repayment Date or Tranche D Repayment Date.
"Reportable Event" shall mean an event described in Section 4043
----------------
of ERISA and the regulations thereunder.
"Required Lenders" shall mean, at any date, Non-Defaulting
----------------
Lenders having or holding (a) a majority of the sum of (i) the
Adjusted Total Revolving Credit Commitment at such date and (ii) the
outstanding principal amount of the Term Loans (excluding the Term
Loans held by Defaulting Lenders) at such date or (b) if the Total
Revolving Credit Commitment has been terminated or for the purposes of
acceleration pursuant to Section 11, the holders (excluding Defaulting
Lenders) of a majority of the outstanding principal amount of the
Loans and Letter of Credit Exposures (excluding the Loans and Letter
of Credit Exposures of Defaulting Lenders) at such date.
"Required Tranche A Lenders" shall mean, at any date, Non-
--------------------------
Defaulting Lenders having or holding (a) a majority of the sum of
(i) the Adjusted Total Revolving Credit Commitment at such date and
(ii) the outstanding principal amount of the Tranche A Term Loans
(excluding the Tranche A Term Loans held by Defaulting Lenders) at
such date or (b) if the Total Revolving Credit Commitment has been
terminated or for the purposes of acceleration pursuant to Section 11,
the holders (excluding Defaulting Lenders) of a majority of the
outstanding principal amount of the Loans and Letter of Credit
Exposures (excluding the Loans and Letter of Credit Exposures of
Defaulting Lenders) at such date.
"Required Tranche B, C and D Lenders" shall mean, at any date,
-----------------------------------
Non-Defaulting Lenders having or holding a majority of the sum of the
outstanding principal amount of the Tranche B Term Loans, Tranche C
Term Loans and Tranche D Term Loans (excluding the Tranche B Term
Loans, Tranche C Term Loans and Tranche D Term Loans held by
Defaulting Lenders) in the aggregate at such date.
"Requirement of Law" shall mean, as to any Person, the
------------------
Certificate of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a Court or other
Governmental
<PAGE>
18
Authority, in each case applicable to or binding upon such Person or
any of its property or assets or to which such Person or any of its
property or assets is subject.
"Revolving Credit Commitment" shall mean, (a) with respect to
---------------------------
each Lender that is a Lender on the date hereof, the amount set forth
opposite such Lender's name on Schedule 1.1 as such Lender's
"Revolving Credit Commitment" and (b) in the case of any Lender that
becomes a Lender after the date hereof, the amount specified as such
Lender's "Revolving Credit Commitment" in the Assignment and
Acceptance pursuant to which such Lender assumed a portion of the
Total Revolving Credit Commitment, in each case as the same may be
changed from time to time pursuant to the terms hereof.
"Revolving Credit Commitment Percentage" shall mean at any time,
--------------------------------------
for each Lender, the percentage obtained by dividing such Lender's
Revolving Credit Commitment by the Total Revolving Credit Commitment,
provided that at any time when the Total Revolving Credit Commitment
--------
shall have been terminated, each Lender's Revolving Credit Commitment
Percentage shall be its Revolving Credit Commitment Percentage as in
effect immediately prior to such termination.
"Revolving Credit Loan" shall have the meaning provided in
---------------------
Section 2.1.
"Revolving Credit Maturity Date" shall mean the date that is six
------------------------------
years and six months after the Closing Date.
"SEC" shall have the meaning provided in Section 8.4.
---
"Section 9.1 Financials" shall mean the financial statements
----------------------
delivered, or required to be delivered, pursuant to Section 9.1(a) or
(b) together with the accompanying officer's certificate delivered, or
required to be delivered, pursuant to Section 9.1(d).
"Senior Notes" shall mean (a) the $100,000,000 aggregate
------------
principal amount of 6.62% Series A Senior Notes of the Borrower due
September 15, 2003 and (b) the $100,000,000 aggregate principal amount
of 7.09% Series B Senior Notes due September 15, 2008.
"Specified Subsidiary" shall mean, at any date of determination,
--------------------
Subsidiary (a) whose total assets at the last day of the Test Period
ending on the last day of the most recent fiscal period for which
Section 9.1 Financials have been delivered were equal to or greater
than 5% of the consolidated total assets of the Borrower and its
Subsidiaries at such date or (b) whose gross revenues for such Test
Period were equal to or greater than 5% of the consolidated gross
revenues of the Borrower and its Subsidiaries for such period, in each
case determined in accordance with GAAP.
"S&P" shall mean Standard & Poor's Rating Group or any successor
---
by merger or consolidation to its business.
"SEC" shall mean the Securities and Exchange Commission or any
---
successor thereto.
"Stated Amount" of any Letter of Credit shall mean the maximum
-------------
amount from time to time available to be drawn thereunder, determined
without regard to whether any conditions to drawing could then be met.
"Status" shall mean, as to the Borrower as of any date, the
------
existence of Level I Status, Level II Status, Level III Status,
Level IV Status, Level V Status, Level VI Status or Level VII Status
as the case may be, on such date. Changes in Status resulting from
changes
<PAGE>
19
in the Consolidated Senior Debt to Consolidated EBITDA Ratio shall
become effective on each date (the "Adjustment Date") on which
---------------
(a) Section 9.1 Financials are delivered to the Lenders under Section
9.1 and (b) an officer's certificate is delivered by the Borrower to
the Lenders setting forth, with respect to the most recently delivered
Section 9.1 Financials, the then-applicable Status, and shall remain
in effect until the next change to be effected pursuant to this
definition, provided that (i) until the effectiveness of the initial
--------
change in Status based upon the Section 9.1 Financials, the Status of
the Borrower for the purposes of this Agreement shall be deemed to be
Level VII and (ii) each determination of the Consolidated Senior Debt
to Consolidated EBITDA Ratio pursuant to this definition shall be
made with respect to the Test Period ending at the end of the period
covered by the relevant financial statements.
"Subordinated Notes" shall mean the $400,000,000 aggregate
------------------
principal amount of Senior Subordinated Notes of the Borrower due 2005
issued on or about the Closing Date pursuant to the indenture dated as
of August [ ], 1995, between the Borrower and Marine Midland Bank, as
trustee.
"Subsidiary" of any Person shall mean and include (a) any
----------
corporation more than 50% of whose stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority
of the directors of such corporation (irrespective of whether or not
at the time stock of any class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (b) any partnership, association,
joint venture or other entity in which such Person directly or
indirectly through Subsidiaries has more than a 50% equity interest at
the time. Unless otherwise expressly provided, all references herein
to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"Swingline Commitment" shall mean $25,000,000.
--------------------
"Swingline Loans" shall have the meaning provided in Section 2.1.
---------------
"Swingline Maturity Date" shall mean, with respect to any
-----------------------
Swingline Loan, the date that is five Business Days prior to the
Revolving Credit Maturity Date.
"Term Loan" shall mean any Tranche A Term Loan, Tranche B Term
---------
Loan, Tranche C Term Loan or Tranche D Term Loan.
"Term Loan Commitment" shall mean, with respect to each Lender,
--------------------
the sum of such Lender's Tranche A Commitment, Tranche B Commitment,
Tranche C Commitment and Tranche D Commitment.
"Test Period" shall mean, for any determination under this
-----------
Agreement, the four consecutive fiscal quarters of the Borrower then
last ended.
"Three-Month Secondary CD Rate" shall mean, for any day, the
-----------------------------
secondary market rate, expressed as a per annum rate, for three-month
certificates of deposit reported as being in effect on such day (or,
if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the
Federal Reserve Lender of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such
rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New
York City received at approximately 10:00 A.M., New York time, on such
day (or, if such day shall not be a Business Day, on the next
preceding
<PAGE>
20
Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by it.
"Total Commitment" shall mean the sum of the Total Term Loan
----------------
Commitment and the Total Revolving Credit Commitment.
"Total Revolving Credit Commitment" shall mean the sum of the
---------------------------------
Revolving Credit Commitments of all the Lenders.
"Total Term Loan Commitment" shall mean the sum of the Term Loan
--------------------------
Commitments of all the Lenders.
"Tranche A Availability Period" shall mean the period from and
-----------------------------
including the Closing Date to but excluding the day that is 180 days
following the Closing Date.
"Tranche A Commitment" shall mean, (a) in the case of each Lender
--------------------
that is a Lender on the date hereof, the amount set forth opposite
such Lender's name on Schedule 1.1 as such Lender's "Tranche A
Commitment" and (b) in the case of any Lender that becomes a Lender
after the date hereof, the amount specified as such Lender's "Tranche
A Commitment" in the Assignment and Acceptance pursuant to which such
Lender assumed a portion of the Total Term Loan Commitment, in each
case as the same may be changed from time to time pursuant to the
terms hereof.
"Tranche A Maturity Date" shall mean the date that is six years
-----------------------
and six months after the Closing Date, or, if such Date is not a
Business Day, the next preceding Business Day.
"Tranche A Repayment Amount" shall have the meaning provided in
--------------------------
Section 2.5(b).
"Tranche A Repayment Date" shall have the meaning provided in
------------------------
Section 2.5(b).
"Tranche A Term Loan" shall have the meaning provided in
-------------------
Section 2.1.
"Tranche B Commitment" shall mean, (a) in the case of each Lender
--------------------
that is a Lender on the date hereof, the amount set forth opposite
such Lender's name on Schedule 1.1 as such Lender's "Tranche B
Commitment" and (b) in the case of any Lender that becomes a Lender
after the date hereof, the amount specified as such Lender's "Tranche
B Commitment" in the Assignment and Acceptance pursuant to which such
Lender assumed a portion of the Total Term Loan Commitment, in each
case as the same may be changed from time to time pursuant to the
terms hereof.
"Tranche B Maturity Date" shall mean the date that is seven years
-----------------------
and six months after the Closing Date, or, if such date is not a
Business Day, the next preceding Business Day.
"Tranche B Repayment Amount" shall have the meaning provided in
--------------------------
Section 2.5(c).
"Tranche B Repayment Date" shall have the meaning provided in
------------------------
Section 2.5(c).
"Tranche B Term Loan" shall have the meaning provided in
-------------------
Section 2.1.
"Tranche C Commitment" shall mean, (a) in the case of each Lender
--------------------
that is a Lender on the date hereof, the amount set forth opposite
such Lender's name on Schedule 1.1 as such Lender's "Tranche C
Commitment" and (b) in the case of any Lender that becomes a Lender
after the date hereof, the amount specified as such Lender's "Tranche
C Commitment" in the
<PAGE>
21
Assignment and Acceptance pursuant to which such Lender assumed a
portion of the Total Term Loan Commitment, in each case as the same
may be changed from time to time pursuant to the terms hereof.
"Tranche C Maturity Date" shall mean the date that is eight years
-----------------------
and six months after the Closing Date, or, if such date is not a
Business Day, the next preceding Business Day.
"Tranche C Repayment Amount" shall have the meaning provided in
--------------------------
Section 2.5(d).
"Tranche C Repayment Date" shall have the meaning provided in
------------------------
Section 2.5(d).
"Tranche C Term Loan" shall have the meaning provided in
-------------------
Section 2.1.
"Tranche D Commitment" shall mean, (a) in the case of each Lender
--------------------
that is a Lender on the date hereof, the amount set forth opposite
such Lender's name on Schedule 1.1 as such Lender's "Tranche D
Commitment" and (b) in the case of any Lender that becomes a Lender
after the date hereof, the amount specified as such Lender's "Tranche
D Commitment" in the Assignment and Acceptance pursuant to which such
Lender assumed a portion of the Total Term Loan Commitment, in each
case as the same may be changed from time to time pursuant to the
terms hereof.
"Tranche D Maturity Date" shall mean the date that is nine years
-----------------------
and six months after the Closing Date, or, if such date is not a
Business Day, the next preceding Business Day.
"Tranche D Repayment Amount" shall have the meaning provided in
--------------------------
Section 2.5(e).
"Tranche D Repayment Date" shall have the meaning provided in
------------------------
Section 2.5(e).
"Tranche D Term Loan" shall have the meaning provided in
-------------------
Section 2.1.
"Transferee" shall have the meaning provided in Section 13.6(e).
----------
"Type" shall mean (a) as to any Term Loan, its nature as an
----
ABR Loan or a Eurodollar Term Loan and (b) as to any Revolving Credit
Loan, its nature as an ABR Loan or a Eurodollar Revolving Credit Loan.
"UCC" shall mean the Uniform Commercial Code.
---
"Unfunded Current Liability" of any Plan shall mean the amount,
--------------------------
if any, by which the present value of the accrued benefits under the
Plan as of the close of its most recent plan year, determined in
accordance with Statement of Financial Accounting Standards No. 87 as
in effect on the date hereof, based upon the actuarial assumptions
that would be used by the Plan's actuary in a termination of the Plan,
exceeds the fair market value of the assets allocable thereto.
"Unpaid Drawing" shall have the meaning provided in Section
--------------
3.4(a).
"Voting Stock" shall mean, with respect to any Person, shares of
------------
such Person's capital stock having the right to vote for the election
of directors of such Person under ordinary circumstances.
<PAGE>
22
SECTION 2. Amount and Terms of Credit.
--------------------------
2.1 Commitments. (a) Subject to and upon the terms and
-----------
conditions herein set forth:
(i) each Lender having a Tranche A Commitment severally agrees to
make a loan or loans (each a "Tranche A Term Loan" and, collectively,
-------------------
the "Tranche A Term Loans") to the Borrower, which Tranche A Term
--------------------
Loans (x) shall not exceed for any such Lender the Tranche A
Commitment of such Lender and (y) shall be repaid in full on the
Tranche A Maturity Date;
(ii) each Lender having a Tranche B Commitment severally agrees
to make a loan or loans (each a "Tranche B Term Loan" and,
-------------------
collectively, the "Tranche B Term Loans") to the Borrower, which
--------------------
Tranche B Term Loans (x) shall not exceed for any such Lender the
Tranche B Commitment of such Lender and (y) shall be repaid in full on
the Tranche B Maturity Date;
(iii) each Lender having a Tranche C Commitment severally agrees
to make a loan or loans (each a "Tranche C Term Loan" and,
-------------------
collectively, the "Tranche C Term Loans") to the Borrower, which
--------------------
Tranche C Term Loans (x) shall not exceed for any such Lender the
Tranche C Commitment of such Lender and (y) shall be repaid in full on
the Tranche C Maturity Date; and
(iv) each Lender having a Tranche D Commitment severally agrees
to make a loan or loans (each a "Tranche D Term Loan" and,
-------------------
collectively, the "Tranche D Term Loans") to the Borrower, which
--------------------
Tranche D Term Loans (x) shall not exceed for any such Lender the
Tranche D Commitment of such Lender and (y) shall be repaid in full on
the Tranche D Maturity Date.
Such Term Loans (x) shall be made (A) in the case of any Term Loan other
than a Tranche A Term Loan, on the Closing Date and (B) in the case of any
Tranche A Term Loan, from time to time during the Tranche A Availability
Period, (y) may, at the option of the Borrower, be incurred and maintained
as, and/or converted into, ABR Loans or Eurodollar Term Loans, provided
--------
that all Term Loans made by each of the Lenders pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Term Loans of the same Type, and (z) may be repaid in
accordance with the provisions hereof. Once repaid, Term Loans may not be
reborrowed.
(b) Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees to make a loan or loans (each a
"Revolving Credit Loan" and, collectively, the "Revolving Credit Loans") to
--------------------- ----------------------
the Borrower, which Revolving Credit Loans (i) shall be made at any time
and from time to time on and after the Closing Date and prior to the
Revolving Credit Maturity Date, (ii) may, at the option of the Borrower, be
incurred and maintained as, and/or converted into, ABR Loans or Eurodollar
Revolving Credit Loans, provided that all Revolving Credit Loans made by
--------
each of the Lenders pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, consist entirely of Revolving Credit Loans of
the same Type, (iii) may be repaid and reborrowed in accordance with the
provisions hereof, (iv) shall not exceed for any Lender at any time
outstanding that aggregate principal amount which, when added to the
product of (x) such Lender's Revolving Credit Commitment Percentage and (y)
the sum of (I) the aggregate Letter of Credit Outstandings at such time and
---
(II) the aggregate principal amount of all Swingline Loans then
outstanding, equals the Revolving Credit Commitment of such Lender at such
time and (v) shall not, after giving effect thereto and to the application
of the proceeds thereof, exceed for all Lenders at any time outstanding the
aggregate principal amount that, when added to the sum of (x) the Letter of
Credit Outstandings at such time and (y) the aggregate principal amount of
all Swingline Loans then
<PAGE>
23
outstanding, equals the Total Revolving Credit Commitment then in effect.
On the Maturity Date, all Revolving Credit Loans shall be repaid in full.
(c) Subject to and upon the terms and conditions herein set
forth, Chemical in its individual capacity agrees, at any time and from
time to time on and after the Closing Date and prior to the date that is
five Business Days prior to the Revolving Credit Maturity Date, to make a
loan or loans (each a "Swingline Loan" and, collectively, the "Swingline
-------------- ---------
Loans") to the Borrower, which Swingline Loans (i) shall be ABR Loans,
-----
(ii) shall have the benefit of the provisions of Section 2.1(d), (iii)
shall not exceed at any time outstanding the Swingline Commitment, (iv)
shall not, after giving effect thereto and to the application of the
proceeds thereof, exceed in the aggregate at any time outstanding the
principal amount that, when added to the aggregate principal amount of all
Revolving Credit Loans then outstanding and all Letter of Credit
Outstandings at such time, equals the Total Revolving Credit Commitment
then in effect and (v) may be repaid and reborrowed in accordance with the
provisions hereof. On the Swingline Maturity Date, each outstanding
Swingline Loan shall be repaid in full. Chemical shall not make any
Swingline Loan after receiving a written notice from the Borrower or any
Lender stating that a Default or Event of Default exists and is continuing
until such time as Chemical shall have received written notice of
(i) rescission of all such notices from the party or parties originally
delivering such notice or (ii) the waiver of such Default or Event of
Default by the Required Lenders.
(d) On any Business Day, Chemical may, in its sole discretion,
give notice to the Lenders that all then-outstanding Swingline Loans shall
be funded with a Borrowing of Revolving Credit Loans, in which case a
Borrowing of Revolving Credit Loans constituting ABR Loans (each such
Borrowing, a "Mandatory Borrowing") shall be made on the immediately
-------------------
succeeding Business Day by all Lenders pro rata based on each Lender's
--- ----
Revolving Credit Commitment Percentage, and the proceeds thereof shall be
applied directly to Chemical to repay Chemical for such outstanding
Swingline Loans. Each Lender hereby irrevocably agrees to make such
Revolving Credit Loans upon one Business Day's notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified to it in writing by Chemical
notwithstanding (i) that the amount of the Mandatory Borrowing may not
comply with the minimum amount for each Borrowing specified in Section 2.2,
(ii) whether any conditions specified in Section 7 are then satisfied,
(iii) whether a Default or an Event of Default has occurred and is
continuing, (iv) the date of such Mandatory Borrowing and (v) any reduction
in the Total Commitment after any such Swingline Loans were made. In the
event that, in the sole judgment of Chemical, any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code in respect of the Borrower), each
Lender hereby agrees that it shall forthwith purchase from Chemical
(without recourse or warranty) such participation of the outstanding
Swingline Loans as shall be necessary to cause the Lenders to share in such
Swingline Loans ratably based upon their respective Revolving Credit
Commitment Percentages, provided that all interest payable on such
--------
Swingline Loans shall be for the account of Chemical until the date the
respective participation is purchased and, to the extent attributable to
the purchased participation, shall be payable to the Lender purchasing same
from and after such date of purchase.
2.2 Minimum Amount of Each Borrowing; Maximum Number of
---------------------------------------------------
Borrowings. The aggregate principal amount of each Borrowing of Term
----------
Loans, Revolving Credit Loans or Swingline Loans shall be in a multiple of
$100,000 and shall not be less than the Minimum Borrowing Amount with
respect thereto (except that Mandatory Borrowings shall be made in the
amounts required by Section 2.1(d)). More than one Borrowing may be
incurred on any date, provided that at no time shall there be outstanding
--------
more than 20 Borrowings of Eurodollar Loans under this Agreement.
2.3 Notice of Borrowing. (a) The Borrower shall give the
-------------------
Administrative Agent at the Administrative Agent's Office (i) prior to
12:00 Noon (New York time) at least three Business
<PAGE>
24
Days' prior written notice (or telephonic notice promptly confirmed in
writing) of the Borrowing of the Term Loans if all or any of the Term Loans
are to be initially Eurodollar Loans and (ii) prior written notice (or
telephonic notice promptly confirmed in writing) prior to 10:00 A.M. (New
York time) on the date of the Borrowing of the Term Loans if all the Term
Loans are to be ABR Loans. Each such notice (each, together with each
notice of a Borrowing of Revolving Credit Loans pursuant to Section 2.3(b)
and each notice of a Borrowing of Swingline Loans pursuant to
Section 2.3(c), a "Notice of Borrowing") shall be irrevocable and shall
-------------------
specify (i) the aggregate principal amount of the Term Loans to be made on
the Closing Date, (ii) the Closing Date (which shall be a Business Day) and
(iii) whether the Term Loans on the Closing Date shall consist of ABR Loans
and/or Eurodollar Term Loans and, if the Term Loans on the Closing Date are
to include Eurodollar Term Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall promptly give each
Lender written notice (or telephonic notice promptly confirmed in writing)
of the Borrowing of the Term Loans on the Closing Date, of such Lender's
proportionate share thereof and of other matters covered by the Notice of
Borrowing.
(b) Whenever the Borrower desires to incur Revolving Credit
Loans hereunder (other than Mandatory Borrowings or borrowings to repay
Unpaid Drawings), it shall give the Administrative Agent at the
Administrative Agent's Office (i) prior to 12:00 Noon (New York time) at
least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Eurodollar Revolving
Credit Loans and (ii) prior to 12:00 Noon (New York time) at least one
Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of ABR Loans. Each such Notice of
Borrowing, except as otherwise expressly provided in Section 2.12, shall be
irrevocable and shall specify (i) the aggregate principal amount of the
Revolving Credit Loans to be made pursuant to such Borrowing, (ii) the date
of Borrowing (which shall be a Business Day) and (iii) whether the
respective Borrowing shall consist of ABR Loans or Eurodollar Revolving
Credit Loans and, if Eurodollar Revolving Credit Loans, the Interest Period
to be initially applicable thereto. The Administrative Agent shall
promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing of Revolving Credit Loans,
of such Lender's proportionate share thereof and of the other matters
covered by the Notice of Borrowing.
(c) Whenever the Borrower desires to incur Swingline Loans
hereunder, it shall give the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of
Swingline Loans prior to 1:00 P.M. (New York time) on the date of such
Borrowing. Each such notice shall be irrevocable and shall specify (i) the
aggregate principal amount of the Swingline Loans to be made pursuant to
such Borrowing and (ii) the date of Borrowing (which shall be a Business
Day). The Administrative Agent shall promptly give Chemical written notice
(or telephonic notice promptly confirmed in writing) of each proposed
Borrowing of Swingline Loans and of the other matters covered by the Notice
of Borrowing.
(d) Mandatory Borrowings shall be made upon the notice specified
in Section 2.1(d), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of Mandatory Borrowings as
set forth in such Section.
(e) Borrowings to reimburse Unpaid Drawings shall be made upon
the notice specified in Section 3.4(c).
(f) Without in any way limiting the obligation of the Borrower
to confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent may act prior to receipt of written confirmation
without liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from an Authorized Officer of the
Borrower. In each such case the Borrower hereby waives the right to
dispute the Administrative Agent's record of the terms of any such
telephonic notice.
<PAGE>
25
2.4 Disbursement of Funds. (a) No later than 12:00 Noon (New
---------------------
York time) on the date specified in each Notice of Borrowing (including
Mandatory Borrowings), each Lender will make available its pro rata
--- ----
portion, if any, of each Borrowing requested to be made on such date in the
manner provided below, provided that all Swingline Loans shall be made
--------
available in the full amount thereof by Chemical no later than 2:00 P.M.
(New York time) on the date requested.
(b) Each Lender shall make available all amounts it is to fund
under any Borrowing in Dollars and immediately available funds to the
Administrative Agent at the Administrative Agent's Office and the
Administrative Agent will (except in the case of Mandatory Borrowings and
Borrowings to repay Unpaid Drawings) make available to the Borrower by
depositing to the Borrower's account at the Administrative Agent's Office
the aggregate of the amounts so made available in Dollars and the type of
funds received. Unless the Administrative Agent shall have been notified
by any Lender prior to the date of any such Borrowing that such Lender does
not intend to make available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the Administrative Agent
may assume that such Lender has made such amount available to the
Administrative Agent on such date of Borrowing, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion and
without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to the Borrower, the Administrative Agent
shall be entitled to recover such corresponding amount from such Lender.
If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from such Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount
is recovered by the Administrative Agent, at a rate per annum equal to (i)
if paid by such Lender, the Federal Funds Effective Rate or (ii) if paid by
the Borrower, the then-applicable rate of interest, calculated in
accordance with Section 2.8, for the respective Loans.
(c) Nothing in this Section 2.4 shall be deemed to relieve any
Lender from its obligation to fulfill its commitments hereunder or to
prejudice any rights that the Borrower may have against any Lender as a
result of any default by such Lender hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other
Lender to fulfill its commitments hereunder).
2.5 Repayment of Loans; Evidence of Debt. (a) The Borrower
------------------------------------
shall repay to the Administrative Agent, for the benefit of the Lenders,
(i) on the Tranche A Maturity Date, the then-unpaid Tranche A Term Loans
and Revolving Credit Loans; (ii) on the Tranche B Maturity Date, the then-
unpaid Tranche B Term Loans; (iii) on the Tranche C Maturity Date, the
then-unpaid Tranche C Term Loans; and (iv) on the Tranche D Maturity Date,
the then-unpaid Tranche D Term Loans. The Borrower shall repay to the
Administrative Agent, for the account of Chemical, on the Swingline
Maturity Date, the then-unpaid Swingline Loans.
(b) The Borrower shall repay to the Administrative Agent, for
the benefit of the Lenders of Tranche A Term Loans, on each date set forth
below (each a "Tranche A Repayment Date"), the principal amount of the
------------------------
Tranche A Term Loans set forth below opposite such Tranche A Repayment Date
(each a "Tranche A Repayment Amount"):
--------------------------
Tranche A Tranche A
--------- ---------
Repayment Date Repayment Amount
-------------- ----------------
August [ ], 1996 17,500,000
August [ ], 1997 17,500,000
<PAGE>
26
Tranche A Tranche A
--------- ---------
Repayment Date Repayment Amount
-------------- ----------------
February [ ], 1998 15,000,000
August [ ], 1998 15,000,000
February [ ], 1999 20,000,000
August [ ], 1999 20,000,000
February [ ], 2000 30,000,000
August [ ], 2000 30,000,000
February [ ], 2001 37,500,000
August [ ], 2001 37,500,000
Tranche A MaturityDate 35,000,000
To the extent that the aggregate principal amount of Tranche A
Term Loans outstanding on the last day of the Tranche A Availability Period
is less than $275,000,000, the Tranche A Repayment Amounts shall
automatically be decreased, in the inverse order of maturity, by the amount
of such difference.
(c) The Borrower shall repay to the Administrative Agent, for
the benefit of the Lenders of Tranche B Loans, on each date set forth below
(each a "Tranche B Repayment Date"), the principal amount of the Tranche B
------------------------
Term Loans set forth below opposite such Tranche B Repayment Date (each a
"Tranche B Repayment Amount"):
--------------------------
Tranche B
Tranche B Repayment
---------
Repayment Date Amount
-------------- ------
February [ ], 1996 $500,000
August [ ], 1996 500,000
February [ ], 1997 500,000
August [ ], 1997 500,000
February [ ], 1998 500,000
August [ ], 1998 500,000
February [ ], 1999 500,000
August [ ], 1999 500,000
February [ ], 2000 500,000
August [ ], 2000 500,000
February [ ], 2001 500,000
August [ ], 2001 500,000
February [ ], 2002 23,000,000
August [ ], 2002 23,000,000
Tranche B Maturity Date 23,000,000
(d) The Borrower shall repay to the Administrative Agent, for
the benefit of the Lenders of Tranche C Loans, on each date set forth below
(each a "Tranche C Repayment Date"), the principal amount of the Tranche C
------------------------
Term Loans set forth below opposite such Tranche C Repayment Date (each a
"Tranche C Repayment Amount"):
--------------------------
Tranche C
Tranche C Repayment
---------
Repayment Date Amount
-------------- ------
February [ ], 1996 $500,000
August [ ], 1996 500,000
February [ ], 1997 500,000
August [ ], 1997 500,000
<PAGE>
27
Tranche C
Tranche C Repayment
---------
Repayment Date Amount
-------------- ------
February [ ], 1998 500,000
August [ ], 1998 500,000
February [ ], 1999 500,000
August [ ], 1999 500,000
February [ ], 2000 500,000
August [ ], 2000 500,000
February [ ], 2001 500,000
August [ ], 2001 500,000
February [ ], 2002 500,000
August [ ], 2002 500,000
February [ ], 2003 22,666,666
August [ ], 2003 22,666,667
Tranche C Maturity Date 22,666,667
(e) The Borrower shall repay to the Administrative Agent, for
the benefit of the Lenders of Tranche D Loans, on each date set forth below
(each a "Tranche D Repayment Date"), the principal amount of the Tranche D
------------------------
Term Loans set forth below opposite such Tranche D Repayment Date (each a
"Tranche D Repayment Amount"):
--------------------------
Tranche D Tranche D
Repayment Date Repayment Amount
-------------- ----------------
February [ ], 1996 $ 500,000
August [ ], 1996 500,000
February [ ], 1997 500,000
August [ ], 1997 500,000
February [ ], 1998 500,000
August [ ], 1998 500,000
February [ ], 1999 500,000
August [ ], 1999 500,000
February [ ], 2000 500,000
August [ ], 2000 500,000
February [ ], 2001 500,000
August [ ], 2001 500,000
February [ ], 2002 500,000
August [ ], 2002 500,000
February [ ], 2003 500,000
August [ ], 2003 500,000
February [ ], 2004 14,000,000
August [ ], 2004 14,000,000
Tranche D Maturity Date 14,000,000
(f) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower
to the appropriate lending office of such Lender resulting from each Loan
made by such lending office of such Lender from time to time, including the
amounts of principal and interest payable and paid to such lending office
of such Lender from time to time under this Agreement.
<PAGE>
28
(g) The Administrative Agent shall maintain the Register
pursuant to Section 13.6, and a subaccount for each Lender, in which
Register and subaccounts (taken together) shall be recorded (i) the amount
of each Loan made hereunder, whether such Loan is a Term Loan, a Revolving
Credit Loan or a Swingline Loan, the Type of each Loan made and the
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender or Chemical hereunder and (iii) the amount of any sum received
by the Agent hereunder from the Borrower and each Lender's share thereof.
(h) The entries made in the Register and accounts and
subaccounts maintained pursuant to paragraphs (f) and (g) of this
Section 2.5 shall, to the extent permitted by applicable law, be prima
facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of any
-------- -------
Lender or the Administrative Agent to maintain such account, such Register
or such subaccount, as applicable, or any error therein, shall not in any
manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance with
the terms of this Agreement.
2.6 Conversions and Continuations. (a) The Borrower shall have
-----------------------------
the option on any Business Day to convert all or a portion equal to at
least the Minimum Borrowing Amount of the outstanding principal amount of
Term Loans or Revolving Credit Loans of one Type into a Borrowing or
Borrowings of another Type or to continue the outstanding principal amount
of any Eurodollar Term Loans or Eurodollar Revolving Credit Loans as
Eurodollar Term Loans or Eurodollar Revolving Credit Loans, as the case may
be, for an additional Interest Period, provided that (i) no partial
--------
conversion of Eurodollar Term Loans or Eurodollar Revolving Credit Loans
shall reduce the outstanding principal amount of Eurodollar Term Loans or
Eurodollar Revolving Credit Loans made pursuant to a single Borrowing to
less than the Minimum Borrowing Amount, (ii) ABR Loans may not be converted
into Eurodollar Term Loans or Eurodollar Revolving Credit Loans if a
Default or Event of Default is in existence on the date of the conversion
and the Administrative Agent has or the Required Lenders have determined in
its or their sole discretion not to permit such conversion,
(iii) Eurodollar Loans may not be continued as Eurodollar Term Loans or
Eurodollar Revolving Credit Loans for an additional Interest Period if a
Default or Event of Default is in existence on the date of the proposed
continuation and the Administrative Agent has or the Required Lenders have
determined in its or their sole discretion not to permit such continuation
and (iv) Borrowings resulting from conversions pursuant to this Section 2.6
shall be limited in number as provided in Section 2.2. Each such
conversion or continuation shall be effected by the Borrower by giving the
Administrative Agent at the Administrative Agent's Office prior to 12:00
Noon (New York time) at least three Business Days' (or one Business Day's
notice in the case of a conversion into ABR Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each a "Notice of
---------
Conversion or Continuation") specifying the Term Loans or Revolving Credit
--------------------------
Loans to be so converted or continued, the Type of Term Loans or Revolving
Credit Loans to be converted or continued into and, if such Term Loans or
Revolving Credit Loans are to be converted into or continued as Eurodollar
Term Loans or Eurodollar Revolving Credit Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each
Lender notice as promptly as practicable of any such proposed conversion or
continuation affecting any of its Term Loans or Revolving Credit Loans.
(b) If any Default or Event of Default is in existence at the
time of any proposed continuation of any Eurodollar Term Loans or
Eurodollar Revolving Credit Loans and the Administrative Agent has or the
Required Lenders have determined in its or their sole discretion not to
permit such continuation, such Eurodollar Term Loans or Eurodollar
Revolving Credit Loans shall be automatically converted on the last day of
the current Interest Period into ABR Loans. If upon the expiration of any
Interest Period in respect of Eurodollar Term Loans or Eurodollar Revolving
Credit Loans, the Borrower has failed to elect a new Interest Period to be
applicable thereto as provided in clause (a) above, the Borrower shall be
deemed to have elected to convert such Borrowing of Eurodollar Term Loans
or Eurodollar Revolving Credit Loans, as the case may be, into a Borrowing
of ABR Loans effective as of the expiration date of such current Interest
Period.
2.7 Pro Rata Borrowings. Each Borrowing of Term Loans or
-------------------
Revolving Credit Loans under this Agreement shall be loaned by the Lenders
pro rata on the basis of their then-applicable Commitments. It is
--- ----
<PAGE>
29
understood that no Lender shall be responsible for any default by any other
Lender in its obligation to make Loans hereunder and that each Lender shall
be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to fulfill its commitments
hereunder.
2.8 Interest. (a) The unpaid principal amount of each ABR Loan
--------
shall bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum that shall at
all times be the Applicable ABR Margin plus the ABR in effect from time to
time.
(b) The unpaid principal amount of each Eurodollar Term Loan or
Eurodollar Revolving Credit Loan shall bear interest from the date of the
Borrowing thereof until maturity thereof (whether by acceleration or
otherwise) at a rate per annum that shall at all times be the Applicable
Eurodollar Margin in effect from time to time plus the relevant Eurodollar
Rate.
(c) If all or a portion of (i) the principal amount of any Loan
or (ii) to the extent permitted by applicable law, any interest payable
thereon shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a
rate per annum that is (x) in the case of overdue principal, the rate that
would otherwise be applicable thereto plus 2% or (y) in the case of any
----
overdue interest, the rate described in Section 2.8(a) plus 2% from and
----
including the date of such non-payment to but excluding the date on which
such amount is paid in full (after as well as before judgment).
(d) Interest on each Loan shall accrue from and including the
date of any Borrowing to but excluding the date of any repayment thereof
and shall be payable (i) in respect of each ABR Loan, quarterly in arrears
on the last day of each March, June, September and December, (ii) in
respect of each Eurodollar Term Loan or Eurodollar Revolving Credit Loan,
on the last day of each Interest Period applicable thereto and, in the case
of an Interest Period in excess of three months, on each date occurring at
three-month intervals after the first day of such Interest Period, (iii) in
respect of each Loan (except, in the case of prepayments, any ABR Loan), on
any prepayment (on the amount prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 5.5.
(f) The Administrative Agent, upon determining the interest rate
for any Borrowing of Eurodollar Loans, shall promptly notify the Borrower
and the relevant Lenders thereof. Each such determination shall, absent
clearly demonstrable error, be final and conclusive and binding on all
parties hereto.
2.9 Interest Periods. At the time the Borrower gives a Notice
----------------
of Borrowing or Notice of Conversion or Continuation in respect of the
making of, or conversion into or continuation as, a Borrowing of Eurodollar
Term Loans or Eurodollar Revolving Credit Loans (in the case of the initial
Interest Period applicable thereto) or prior to 10:00 A.M. (New York time)
on the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of Eurodollar Term Loans or Eurodollar Revolving
Credit Loans, the Borrower shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) the Interest Period applicable to such Borrowing,
which Interest Period shall, at the option of the Borrower, be a one, two,
three, six or (in the case of Tranche A Term Loans and Revolving Credit
Loans, if available to all the Lenders making such loans as determined by
such Lenders in good faith based on prevailing market conditions) a nine or
twelve month period. Notwithstanding anything to the contrary contained
above:
(a) the initial Interest Period for any Borrowing of Eurodollar
Term Loans or Eurodollar Revolving Credit Loans shall commence on the
date of such Borrowing (including the date of any conversion from a
Borrowing of ABR Loans) and each Interest Period occurring thereafter
in respect of such Borrowing shall commence on the day on which the
next preceding Interest Period expires;
(b) if any Interest Period relating to a Borrowing of Eurodollar
Term Loans or Eurodollar Revolving Credit Loans begins on the last
Business Day of a calendar month or begins on a day for
<PAGE>
30
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period, such Interest Period shall end on
the last Business Day of the calendar month at the end of such
Interest Period;
(c) if any 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 in
--------
respect of a Eurodollar Term Loan or Eurodollar Revolving Credit Loan
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; and
(d) the Borrower shall not be entitled to elect any Interest
Period in respect of any Eurodollar Term Loan or Eurodollar Revolving
Credit Loan if such Interest Period would extend beyond the applicable
Maturity Date of such Loan.
2.10 Increased Costs, Illegality, etc. (a) In the event that
---------------------------------
(x) in the case of clause (i) below, the Administrative Agent or (y) in the
case of clauses (ii) and (iii) below, any Lender shall have reasonably
determined (which determination shall, absent clearly demonstrable error,
be final and conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising on or after the
Closing Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loans (other than any such increase or
reduction attributable to taxes) because of (x) any change since the
date hereof in any applicable law, governmental rule, regulation,
guideline or order (or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule,
regulation, guideline or order), such as, for example, but not limited
to, a change in official reserve requirements, and/or (y) other
circumstances affecting the interbank Eurodollar market or the
position of such Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any law, governmental rule, regulation, guideline or
order (or would conflict with any such governmental rule, regulation,
guideline or order not having the force of law even though the failure
to comply therewith would not be unlawful), or has become
impracticable as a result of a contingency occurring after the date
hereof that materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Lender (or the Administrative Agent, in
the case of clause (i) above) shall within a reasonable time thereafter
give notice (if by telephone confirmed in writing) to the Borrower and to
the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Term Loans and
Eurodollar Revolving Credit Loans shall no longer be available until such
time as the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist (which notice the Administrative Agent agrees to give at such
time when such circumstances no longer exist), and any Notice of Borrowing
or Notice of Conversion given by the Borrower with respect to Eurodollar
Term Loans or Eurodollar Revolving Credit Loans that have not yet been
incurred shall be deemed rescinded by the Borrower, (y) in the case of
clause (ii) above, the Borrower shall pay to such Lender, promptly after
receipt of written demand therefor, such additional amounts (in the form of
an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its reasonable discretion shall determine) as
shall be required to compensate such Lender for such increased costs or
reductions in amounts receivable hereunder (it being agreed that a written
notice as to the additional amounts owed to such
<PAGE>
31
Lender, showing in reasonable detail the basis for the calculation thereof,
submitted to the Borrower by such Lender shall, absent clearly demonstrable
error, be final and conclusive and binding upon all parties hereto) and
(z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 2.10(b) as promptly as possible and, in any
event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 2.10(a)(ii) or (iii), the Borrower may
(and in the case of a Eurodollar Loan affected pursuant to Section
2.10(a)(iii) shall) either (i) if the affected Eurodollar Loan is then
being made pursuant to a Borrowing, cancel said Borrowing by giving the
Administrative Agent telephonic notice (confirmed promptly in writing)
thereof on the same date that the Borrower was notified by a Lender
pursuant to Section 2.10(a)(ii) or (iii) or (ii) if the affected Eurodollar
Loan is then outstanding, upon at least three Business Days notice to the
Administrative Agent, require the affected Lender to convert each such
Eurodollar Revolving Credit Loan and Eurodollar Term Loan into an ABR Loan,
provided that if more than one Lender is affected at any time, then all
--------
affected Lenders must be treated in the same manner pursuant to this
Section 2.10(b).
(c) If, after the date hereof, the adoption of any applicable
law, rule or regulation regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, the National Association of Insurance
Commissioners, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by a Lender or its
parent with any request or directive made or adopted after the date hereof
regarding capital adequacy (whether or not having the force of law) of any
such authority, association, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Lender's or
its parent's capital or assets as a consequence of such Lender's
commitments or obligations hereunder to a level below that which such
Lender or its parent could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such
Lender's or its parent's policies with respect to capital adequacy), then
from time to time, promptly after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or its parent
for such reduction, it being understood and agreed, however, that a Lender
shall not be entitled to such compensation as a result of such Lender's
compliance with, or pursuant to any request or directive to comply with,
any such law, rule or regulation as in effect on the date hereof. Each
Lender, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 2.10(c), will give prompt written notice
thereof to the Borrower, which notice shall set forth in reasonable detail
the basis of the calculation of such additional amounts, although the
failure to give any such notice shall not, subject to Section 2.13, release
or diminish any of the Borrower's obligations to pay additional amounts
pursuant to this Section 2.10(c) upon receipt of such notice.
2.11 Compensation. If (a) any payment of principal of any
------------
Eurodollar Term Loan or Eurodollar Revolving Credit Loan is made by the
Borrower to or for the account of a Lender other than on the last day of
the Interest Period for such Eurodollar Loan as a result of a payment or
conversion pursuant to Section 2.6, 2.10, 5.1 or 5.2, as a result of
acceleration of the maturity of the Loans pursuant to Section 11 or for any
other reason, (b) if any ABR Loan is not converted into a Eurodollar Term
Loan or Eurodollar Revolving Credit Loan as a result of a withdrawn Notice
of Conversion or Continuation or (c) if any Eurodollar Loan is not
continued as a Eurodollar Term Loan or Eurodollar Revolving Credit Loan as
a result of a withdrawn Notice of Conversion or Continuation, the Borrower
shall, after receipt of a written request by such Lender (which request
shall set forth in reasonable detail the basis for requesting such amount),
pay to the Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or
expenses that such Lender may reasonably incur as a result of such payment,
failure to convert or failure to continue, including, without limitation,
any loss, cost or expense (excluding loss of anticipated profits) actually
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by any Lender to fund or maintain such Eurodollar Loan.
2.12 Change of Lending Office. Each Lender agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section
2.10(a)(ii), 2.10(a)(iii), 2.10(b), 3.5 or 5.4 with respect to such Lender,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such
<PAGE>
32
Lender) to designate another lending office for any Loans affected by such
event, provided that such designation is made on such terms that such
--------
Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giv-
ing rise to the operation of any such Section. Nothing in this Section
2.12 shall affect or postpone any of the obligations of the Borrower or the
right of any Lender provided in Section 2.10, 3.5 or 5.4.
2.13 Notice of Certain Costs. Notwithstanding anything in this
-----------------------
Agreement to the contrary, to the extent any notice required by
Section 2.10, 2.11, 3.5 or 5.4 is given by any Lender more than 180 days
after such Lender has knowledge (or should have had knowledge) of the
occurrence of the event giving rise to the additional cost, reduction in
amounts, loss, tax or other additional amounts described in such Sections,
such Lender shall not be entitled to compensation under Section 2.10, 2.11,
3.5 or 5.4, as the case may be, for any such amounts incurred or accruing
prior to the giving of such notice to the Borrower.
SECTION 3. Letters of Credit.
-----------------
3.1 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower, at any time and from time to
time on or after the Closing Date and prior to the L/C Maturity Date, may
request that the Letter of Credit Issuer issue, for the account of the
Borrower, a standby letter of credit or letters of credit in such form as
may be approved by the Letter of Credit Issuer in its reasonable
discretion.
(b) Notwithstanding the foregoing (i) no Letter of Credit shall
be issued the Stated Amount of which, when added to the sum of (x) the
Letter of Credit Outstandings at such time and (y) the aggregate principal
of all Revolving Credit Loans and Swingline Loans then outstanding, would
exceed the Total Revolving Credit Commitment then in effect; (ii) each
Letter of Credit shall, unless otherwise agreed upon by the Administrative
Agent and the Letter of Credit Issuer, have an expiry date occurring no
later than one year after the date of issuance thereof, and in no event
occurring later than the L/C Maturity Date; (iii) each Letter of Credit
shall be denominated in Dollars; and (iv) no Letter of Credit shall be
issued by the Letter of Credit Issuer after it has received a written
notice from the Borrower or any Lender stating that a Default or Event of
Default has occurred and is continuing until such time as the Letter of
Credit Issuer shall have received a written notice of (x) rescission of
such notice from the party or parties originally delivering such notice or
(y) the waiver of such Default or Event of Default by the Required Lenders.
3.2 Letter of Credit Requests. (a) Whenever the Borrower
-------------------------
desires that a Letter of Credit be issued for its account, it shall give
the Administrative Agent and the Letter of Credit Issuer at least five (or
such lesser number as may be agreed upon by the Administrative Agent and
the Letter of Credit Issuer) Business Days' written notice thereof. Each
notice shall be executed by the Borrower and shall be in the form of
Exhibit D (each a "Letter of Credit Request"). The Administrative Agent
------------------------
shall promptly transmit copies of each Letter of Credit Request to each
Lender.
(b) The making of each Letter of Credit Request shall be deemed
to be a representation and warranty by the Borrower that the Letter of
Credit may be issued in accordance with, and will not violate the
requirements of, Section 3.1(b).
3.3 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter
of Credit Issuer shall be deemed to have sold and transferred to each other
Lender (each such other Lender, in its capacity under this Section 3.3, an
"L/C Participant"), and each such L/C Participant shall be deemed
---------------
irrevocably and unconditionally to have purchased and received from the
Letter of Credit Issuer, without recourse or warranty, an undivided
interest and participation (each an "L/C Participation"), to the extent of
-----------------
such L/C Participant's Revolving Credit Commitment Percentage, in such
Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with
respect thereto, and any security therefor or guaranty pertaining thereto
(although Letter of Credit Fees will be paid directly to the Administrative
Agent for the ratable account of the L/C
<PAGE>
33
Participants as provided in Section 4.1(b) and the L/C Participants shall
have no right to receive any portion of any Fronting Fees).
(b) In determining whether to pay under any Letter of Credit,
the Letter of Credit Issuer shall have no obligation relative to the L/C
Participants other than to confirm that any documents required to be
delivered under such Letter of Credit have been delivered and that they
appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Letter of Credit
Issuer under or in connection with any Letter of Credit issued by it, if
taken or omitted in the absence of gross negligence or willful misconduct,
shall not create for the Letter of Credit Issuer any resulting liability.
(c) In the event that the Letter of Credit Issuer makes any
payment under any Letter of Credit issued by it and the Borrower shall not
have repaid such amount in full to the Letter of Credit Issuer pursuant to
Section 3.4(a), the Letter of Credit Issuer shall promptly notify the
Administrative Agent and each L/C Participant of such failure, and each L/C
Participant shall promptly and unconditionally pay to the Administrative
Agent, for the account of the Letter of Credit Issuer, the amount of such
L/C Participant's Revolving Credit Commitment Percentage of such
unreimbursed payment in Dollars and in same day funds; provided, however,
-------- -------
that no L/C Participant shall be obligated to pay to the Administrative
Agent for the account of the Letter of Credit Issuer its Revolving Credit
Commitment Percentage of such unreimbursed amount arising from any wrongful
payment made by the Letter of Credit Issuer under a Letter of Credit as a
result of acts or omissions constituting willful misconduct or gross
negligence on the part of the Letter of Credit Issuer. If the Letter of
Credit Issuer so notifies, prior to 11:00 A.M. (New York time) on any
Business Day, any L/C Participant required to fund a payment under a Letter
of Credit, such L/C Participant shall make available to the Administrative
Agent for the account of the Letter of Credit Issuer such L/C Participant's
Revolving Credit Commitment Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such L/C
Participant shall not have so made its Revolving Credit Commitment
Percentage of the amount of such payment available to the Administrative
Agent for the account of the Letter of Credit Issuer, such L/C Participant
agrees to pay to the Administrative Agent for the account of the Letter of
Credit Issuer, forthwith on demand, such amount, together with interest
thereon for each day from such date until the date such amount is paid to
the Administrative Agent for the account of the Letter of Credit Issuer at
the Federal Funds Effective Rate. The failure of any L/C Participant to
make available to the Administrative Agent for the account of the Letter of
Credit Issuer its Revolving Credit Commitment Percentage of any payment
under any Letter of Credit shall not relieve any other L/C Participant of
its obligation hereunder to make available to the Administrative Agent for
the account of the Letter of Credit Issuer its Revolving Credit Commitment
Percentage of any payment under such Letter of Credit on the date required,
as specified above, but no L/C Participant shall be responsible for the
failure of any other L/C Participant to make available to the
Administrative Agent such other L/C Participant's Revolving Credit
Commitment Percentage of any such payment.
(d) Whenever the Letter of Credit Issuer receives a payment in
respect of an unpaid reimbursement obligation as to which the
Administrative Agent has received for the account of the Letter of Credit
Issuer any payments from the L/C Participants pursuant to the preceding
clause (c) above, the Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to
each L/C Participant that has paid its Revolving Credit Commitment
Percentage of such reimbursement obligation, in Dollars and in same day
funds, an amount equal to such L/C Participant's share (based upon the
proportionate aggregate amount originally funded by such L/C Participant to
the aggregate amount funded by all L/C Participants) of the principal
amount of such reimbursement obligation and interest thereon accruing after
the purchase of the respective L/C Participations.
(e) The obligations of the L/C Participants to make payments to
the Administrative Agent for the account of the Letter of Credit Issuer
with respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
<PAGE>
34
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the
Administrative Agent, the Letter of Credit Issuer, any Lender or other
Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default;
provided, however, that no L/C Participant shall be obligated to pay to the
-------- -------
Administrative Agent for the account of the Letter of Credit Issuer its
Revolving Credit Commitment Percentage of any unreimbursed amount arising
from any wrongful payment made by the Letter of Credit Issuer under a
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Letter of Credit Issuer.
3.4 Agreement to Repay Letter of Credit Drawings. (a) The
--------------------------------------------
Borrower hereby agrees to reimburse the Letter of Credit Issuer, by making
payment to the Administrative Agent in Dollars in immediately available
funds at the Administrative Agent's Office, for any payment or disbursement
made by the Letter of Credit Issuer under any Letter of Credit (each such
amount so paid until reimbursed, an "Unpaid Drawing") immediately after,
--------------
and in any event on the date of, such payment, with interest on the amount
so paid or disbursed by the Letter of Credit Issuer, to the extent not
reimbursed prior to 5:00 P.M. (New York time) on the date of such payment
or disbursement, from and including the date paid or disbursed to but
excluding the date the Letter of Credit Issuer is reimbursed therefor, at a
rate per annum that shall at all times be the Applicable ABR Margin plus
the ABR as in effect from time to time, provided that, notwithstanding
--------
anything contained in this Agreement to the contrary, (i) unless the
Borrower shall have notified the Administrative Agent and the Letter of
Credit Issuer prior to 10:00 A.M. on the date of such drawing that the
Borrower intends to reimburse the Letter of Credit Issuer for the amount of
such drawing with funds other than the proceeds of Loans, the Borrower
shall be deemed to have given a Notice of Borrowing to the Administrative
Agent requesting that the Lenders make Revolving Credit Loans (which shall
initially be ABR Loans) on the date on which such drawing is honored in an
amount equal to the amount of such drawing and (ii) each Lender shall, on
such date, make Revolving Credit Loans in an amount equal to such Lender's
pro rate portion of such Borrowing in accordance with the provisions of
Section 2.4.
(b) The Borrower's obligations under this Section 3.4 to
reimburse the Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment that the Borrower or any other
Person may have or have had against the Letter of Credit Issuer, the
Administrative Agent or any Lender (including in its capacity as an L/C
Participant), including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit (each a "Drawing") to
-------
conform to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such Drawing, provided
--------
that the Borrower shall not be obligated to reimburse the Letter of Credit
Issuer for any wrongful payment made by the Letter of Credit Issuer under
the Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the
Letter of Credit Issuer.
<PAGE>
35
(c) Each payment by the Letter of Credit Issuer under any Letter
of Credit shall constitute a request by the Borrower for an ABR Revolving
Credit Loan in the amount of the Unpaid Drawing in respect of such Letter
of Credit. The Letter of Credit Issuer shall notify the Borrower and the
Administrative Agent, by 10:00 A.M. (New York time) on any Business Day on
which the Letter of Credit Issuer intends to honor a drawing under a Letter
of Credit, of (i) the Letter of Credit Issuer's intention to honor such
drawing and (ii) the amount of such drawing. Unless otherwise instructed
by the Borrower by 10:30 A.M. (New York time) on such Business Day, the
Administrative Agent shall notify each Lender of such drawing and the
amount of its Revolving Credit Loan to be made in respect thereof, and each
Lender shall be irrevocably obligated to make an ABR Revolving Credit Loan
to the Borrower in the amount of its Revolving Credit Commitment Percentage
of the applicable Unpaid Drawing by 12:00 noon (New York time) on such
Business Day by making the amount of such Revolving Credit Loan available
to the Administrative Agent at the Administrative Agent's Office. Such
Revolving Credit Loans shall be made without regard to the Minimum
Borrowing Amount. The Administrative Agent shall use the proceeds of such
Revolving Credit Loans solely for purpose of reimbursing the Letter of
Credit Issuer for the related Unpaid Drawing.
3.5 Increased Costs. If after the date hereof, the adoption of
---------------
any applicable law, rule or regulation, or any change therein, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or actual compliance by the
Letter of Credit Issuer or any L/C Participant with any request or
directive made or adopted after the date hereof (whether or not having the
force of law), by any such authority, central bank or comparable agency
shall either (a) impose, modify or make applicable any reserve, deposit,
capital adequacy or similar requirement against letters of credit issued by
the Letter of Credit Issuer, or any L/C Participant's L/C Participation
therein, or (b) impose on the Letter of Credit Issuer or any L/C
Participant any other conditions affecting its obligations under this
Agreement in respect of Letters of Credit or L/C Participations therein or
any Letter of Credit or such L/C Participant's L/C Participation therein;
and the result of any of the foregoing is to increase the cost to the
Letter of Credit Issuer or such L/C Participant of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by the Letter of Credit Issuer or such L/C
Participant hereunder (other than any such increase or reduction
attributable to taxes) in respect of Letters of Credit or L/C
Participations therein, then, promptly after receipt of written demand to
the Borrower by the Letter of Credit Issuer or such L/C Participant, as the
case may be (a copy of which notice shall be sent by the Letter of Credit
Issuer or such L/C Participant to the Administrative Agent), the Borrower
shall pay to the Letter of Credit Issuer or such L/C Participant such
additional amount or amounts as will compensate the Letter of Credit Issuer
or such L/C Participant for such increased cost or reduction, it being
understood and agreed, however, that the Letter of Credit Issuer or a L/C
Participant shall not be entitled to such compensation as a result of such
Person's compliance with, or pursuant to any request or directive to comply
with, any such law, rule or regulation as in effect on the date hereof. A
certificate submitted to the Borrower by the Letter of Credit Issuer or a
L/C Participant, as the case may be (a copy of which certificate shall be
sent by the Letter of Credit Issuer or such L/C Participant to the
Administrative Agent), setting forth in reasonable detail the basis for the
determination of such additional amount or amounts necessary to compensate
the Letter of Credit Issuer or such L/C Participant as aforesaid shall be
conclusive and binding on the Borrower absent clearly demonstrable error.
3.6 Successor Letter of Credit Issuer. The Letter of Credit
---------------------------------
Issuer may resign as Letter of Credit Issuer upon 60 days' prior written
notice to the Administrative Agent, the Lenders and the Borrower. If the
Letter of Credit Issuer shall resign as Letter of Credit Issuer under this
Agreement, then the Borrower shall appoint from among the Lenders a
successor issuer of Letters of Credit, whereupon such successor issuer
shall succeed to the rights, powers and duties of the Letter of Credit
Issuer, and the term "Letter of Credit Issuer" shall mean such successor
issuer effective upon such appointment. At the time such resignation shall
become effective, the Borrower shall pay to the resigning Letter of Credit
Issuer all accrued and unpaid fees pursuant to Section 4.1(c). The
acceptance of any appointment as the Letter of Credit Issuer hereunder by a
successor Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Borrower and the Administrative
Agent and, from and after the effective date of such agreement, such
successor Lender shall have all the rights and obligations of the previous
Letter of Credit Issuer under this Agreement and the other Credit
Documents. After the resignation of the Letter of Credit Issuer hereunder,
the resigning Letter
<PAGE>
36
of Credit Issuer shall remain a party hereto and shall continue to have all
the rights and obligations of a Letter of Credit Issuer under this
Agreement and the other Loan Documents with respect to Letters of Credit
issued by it prior to such resignation, but shall not be required to issue
additional Letters of Credit. After any retiring Letter of Credit Issuer's
resignation as Letter of Credit Issuer, the provisions of this Agreement
relating to the Letter of Credit Issuer shall inure to its benefit as to
any actions taken or omitted to be taken by it (a) while it was Letter of
Credit Issuer under this Agreement or (b) at any time with respect to
Letters of Credit issued by such Letter of Credit Issuer.
SECTION 4. Fees; Commitments.
-----------------
4.1 Fees. (a) The Borrower agrees to pay to the Administrative
----
Agent, for the account of the Lenders (pro rata according to their
--- ----
respective Commitments), a commitment fee for each day from and including
the Closing Date to the Final Date. Such fee shall be payable (i) in the
case of all Commitments other than the Tranche A Commitments and the
Revolving Credit Commitments, on the Closing Date, (ii) in the case of the
Tranche A Commitments, on the Closing Date and on the last day of the
Tranche A Availability Period and (iii) in the case of the Revolving Credit
Commitments, on the Closing Date and in arrears on (A) the last day of each
March, June, September and December (for the three-month period (or portion
thereof) ended on the such day) and (B) on the Final Date (for the period
ended on such date for which no payment has been received pursuant to
clause (A) above) and shall be computed for each day during such period at
a rate per annum equal to the Commitment Fee Rates in effect on such day on
the Available Commitments in effect on such day. Notwithstanding the
foregoing, the Borrower shall not be obligated to pay any amounts to any
Defaulting Lender pursuant to this Section 4.1.
(b) The Borrower agrees to pay to the Administrative Agent for
the account of the Lenders pro rata on the basis of their respective Letter
--- ----
of Credit Exposure, a fee in respect of each Letter of Credit (the "Letter
------
of Credit Fee"), for the period from and including the date of issuance of
-------------
such Letter of Credit to but not including the termination date of such
Letter of Credit computed at the per annum rate for each day equal to the
Applicable Eurodollar Margin for Revolving Credit Loans minus 1/8 of 1% per
annum on the average daily Stated Amount of such Letter of Credit. Such
Letter of Credit Fees shall be due and payable quarterly in arrears on the
last day of each March, June, September and December and on the date upon
which the Total Revolving Credit Commitment terminates and the Letter of
Credit Outstandings shall have been reduced to zero.
(c) The Borrower agrees to pay to the Administrative Agent for
the account of the Letter of Credit Issuer a fee in respect of each Letter
of Credit issued by it (the "Fronting Fee"), for the period from and
------------
including the date of issuance of such Letter of Credit to but not
including the termination date of such Letter of Credit, computed at the
rate for each day equal to 1/8 of 1% per annum on the average daily Stated
Amount of such Letter of Credit. Such Fronting Fees shall be due and
payable quarterly in arrears on the last day of each March, June, September
and December and on the date upon which the Total Revolving Credit
Commitment terminates and the Letter of Credit Outstandings shall have been
reduced to zero.
(d) The Borrower agrees to pay directly to the Letter of Credit
Issuer upon each issuance of, drawing under, and/or amendment of, a Letter
of Credit issued by it such amount as the Letter of Credit Issuer and the
Borrower shall have agreed upon for issuances of, drawings under or
amendments of, letters of credit issued by it.
(e) The Borrower agrees to pay to the Administrative Agent, on
the Closing Date, the fees in the amounts and on the dates previously
agreed to in writing by the Borrower and the Administrative Agent. The
Administrative Agent agrees to pay to each Lender, for its own account on
the Closing Date, the fees in the amounts and on the dates previously
agreed to in writing by the Administrative Agent and such Lender.
4.2 Voluntary Reduction of Revolving Credit Commitments. Upon
---------------------------------------------------
at least one Business Day's prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent at the
Administrative Agent's Office (which notice the Administrative Agent shall
promptly transmit to each of the
<PAGE>
37
Lenders), the Borrower shall have the right, without premium or penalty, on
any day, permanently to terminate or reduce the Revolving Credit
Commitments in whole or in part, provided that (a) any such reduction shall
--------
apply proportionately and permanently to reduce the Revolving Credit
Commitment of each of the Lenders, (b) any partial reduction pursuant to
this Section 4.2 shall be in the amount of at least $1,000,000 and
(c) after giving effect to such termination or reduction and to any
prepayments of the Loans made on the date thereof in accordance with this
Agreement, the sum of the aggregate outstanding principal amount of the
Revolving Credit Loans and the Letter of Credit Outstandings shall not
exceed the Total Revolving Credit Commitment.
4.3 Mandatory Termination of Commitments. (a) The Total Term
------------------------------------
Loan Commitment (other than the Tranche A Commitments) shall terminate at
5:00 P.M. (New York time) on the Closing Date. The Tranche A Commitments
shall be reduced at 5:00 P.M. (New York time) on the Closing Date in an
amount equal to the greater of (i) $275,000,000 and (ii) the aggregate
principal amount of Tranche A Term Loans borrowed on the Closing Date.
Upon any borrowing of Tranche A Term Loans following the Closing Date, the
Tranche A Commitments shall be reduced by the amount of such Tranche A Term
Loans. The Tranche A Commitments shall terminate at 5:00 P.M. (New York
time) on the date that is ninety days following the Closing Date.
(b) The Total Revolving Credit Commitment shall terminate at
5:00 P.M. (New York time) on the Revolving Credit Maturity Date.
(c) The Swingline Commitment shall terminate at 5:00 P.M. (New
York time) on the Swingline Maturity Date.
SECTION 5. Payments.
--------
5.1 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay Term Loans, Revolving Credit Loans and Swingline Loans, without
premium or penalty, in whole or in part from time to time on the following
terms and conditions: (a) the Borrower shall give the Administrative Agent
at the Administrative Agent's Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to make such prepayment, the
amount of such prepayment and (in the case of Eurodollar Term Loans and
Eurodollar Revolving Credit Loans) the specific Borrowing(s) pursuant to
which made, which notice shall be given by the Borrower no later than (i)
in the case of Term Loans or Revolving Credit Loans, 10:00 A.M. (New York
time) one Business Day prior to, or (ii) in the case of Swingline Loans,
10:00 A.M. (New York time) on, the date of such prepayment and shall
promptly be transmitted by the Administrative Agent to each of the Lenders
or Chemical, as the case may be; (b) each partial prepayment of any
Borrowing of Term Loans or Revolving Credit Loans shall be in a multiple of
$100,000 and in an aggregate principal amount of at least $2,000,000 and
each partial prepayment of Swingline Loans shall be in a multiple of
$100,000 and in an aggregate principal amount of at least $500,000,
provided that no partial prepayment of Eurodollar Term Loans or Eurodollar
--------
Revolving Credit Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Term Loans or Eurodollar Revolving Credit Loans made
pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount for Eurodollar Term Loans or Eurodollar Revolving Credit Loans; (c)
any prepayment of Eurodollar Term Loans or Eurodollar Revolving Credit
Loans pursuant to this Section 5.1 on any day other than the last day of an
Interest Period applicable thereto shall be subject to compliance by the
Borrower with the applicable provisions of Section 2.11; and (d) each
prepayment in respect of any one or more tranches of Term Loans or
Revolving Credit Loans made pursuant to a Borrowing shall be applied pro
---
rata among such tranches of Term Loans or Revolving Credit Loans, provided
---- --------
that at the Borrower's election in connection with any prepayment pursuant
to this Section 5.1, such prepayment shall not be applied to any Term Loan
or Revolving Credit Loan of a Defaulting Lender. Each prepayment of Term
Loans pursuant to this Section 5.1 shall be (a) applied to Tranche A Term
Loans, Tranche B Term Loans, Tranche C Loans, Tranche D Loans or Revolving
Credit Loans in such manner as the Borrower may determine and (b) applied
to reduce the Repayment Amounts with respect to any such Term Loans in such
order as the Borrower may determine.
<PAGE>
38
5.2 Mandatory Prepayments. (a) Term Loan Prepayments. (i) On
--------------------- ---------------------
each occasion that a Prepayment Event occurs, the Borrower shall, within
five Business Days after the occurrence of such Prepayment Event, repay the
principal amount of Term Loans in an amount equal to 100% of the Net Cash
Proceeds from such Prepayment Event, in each case in accordance with
paragraph (c) below.
(ii) Not later than the date on which the financial statements
with respect to any fiscal year (commencing with the fiscal year ending
June 29, 1996) are delivered pursuant to Section 9.1, the Borrower shall,
in each case in accordance with paragraph (c) below, repay the principal of
Term Loans in an amount equal to (A) 50% of Excess Cash Flow for such
fiscal year (or, in the case of the fiscal year ending June 29, 1996, for
the period from and including the Closing Date to and including June 29,
1996) minus (B) any mandatory prepayments declined and retained by the
-----
Borrower pursuant to Section 5.2(c)(ii) during such fiscal year to the
extent that such prepayments would otherwise constitute Excess Cash Flow
for such fiscal year.
(b) Aggregate Revolving Credit Outstandings. If on any date the
---------------------------------------
sum of the outstanding principal amount of the Revolving Credit Loans and
Swingline Loans and the aggregate amount of Letter of Credit Outstandings
(all the foregoing, collectively, the "Aggregate Revolving Credit
--------------------------
Outstandings") exceeds the Total Revolving Credit Commitment as then in
------------
effect, the Borrower shall forthwith repay on such date the principal
amount of Swingline Loans and, after all Swingline Loans have been paid in
full, Revolving Credit Loans, in an amount equal to such excess. If, after
giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Credit Loans, the Aggregate Revolving Credit Outstandings exceed
the Total Revolving Credit Commitment then in effect, the Borrower shall
pay to the Administrative Agent an amount in cash equal to such excess and
the Administrative Agent shall hold such payment for the benefit of the
Lenders as security for the obligations of the Borrower hereunder
(including, without limitation, obligations in respect of Letter of Credit
Outstandings) pursuant to a cash collateral agreement to be entered into in
form and substance satisfactory to the Administrative Agent (which shall
permit certain investments in Permitted Investments satisfactory to the
Administrative Agent, until the proceeds are applied to the secured
obligations).
(c) Application to Repayment Amounts. (i) An amount equal each
--------------------------------
prepayment of Term Loans required by this Section 5.2 shall be
(i) allocated pro rata among the Tranche A Term Loans, the Tranche B Term
--- ----
Loans, the Tranche C Term Loans and the Tranche D Term Loans and
(ii) applied (A) in the case of the Tranche A Loans, to reduce the Tranche
A Repayment Amounts, in the manner described in paragraph (iii) below and
(B) in the case of each of the Tranche B Term Loans. the Tranche C Term
Loans and the Tranche D Term Loans, to reduce the Repayment Amounts with
respect to such Loans in the manner described in paragraph (ii) below.
(ii) Notwithstanding paragraph (i) above, with respect to the
amount of any mandatory prepayment described in Section 5.2(a) that is
allocated to the then-outstanding Tranche B Term Loans, Tranche C Term
Loans or Tranche D Term Loans (such amounts, the "Tranche B Prepayment
--------------------
Amount", the "Tranche C Prepayment Amount" and the "Tranche D Prepayment
------ --------------------------- --------------------
Amount", respectively), the Borrower will, in lieu of applying such amount
------
to the prepayment of Tranche B Term Loans, Tranche C Term Loans and
Tranche D Term Loans, respectively, as provided in paragraph (i) above, on
the date specified in Section 5.2(a) for such prepayment, give the
Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each
Tranche B Lender, Tranche C Lender and Tranche D Lender a notice (each, a
"Prepayment Option Notice") as described below. As promptly as practicable
------------------------
after such notice, the Administrative Agent will send to each Tranche B
Lender, Tranche C Lender and Tranche D Lender a Prepayment Option Notice,
which shall be in the form of Exhibit H-1, H-2 or H-3, as applicable, and
shall include an offer by the Borrower to prepay on a specified date (each
a "Mandatory Prepayment Date"), which shall not be less than 20 days or
-------------------------
more than 25 days after the date of the Prepayment Option Notice, the Term
Loans of such Lender by an amount equal to the portion of the Prepayment
Amount indicated in such Lender's Prepayment Option Notice as being
applicable to such Lender and such Lender's Tranche B Term Loans, Tranche C
Term Loans and Tranche D Term Loans, respectively. On the Mandatory
Prepayment Date, (A) the Borrower shall pay to the Administrative Agent the
aggregate amount necessary to prepay that portion of the outstanding Term
Loans in respect of which Tranche B Lenders, Tranche C Lenders and
Tranche D Lenders have accepted prepayment as described above (such
Lenders, the "Accepting Lenders"),
-----------------
<PAGE>
39
and such amount shall be applied pro rata to reduce the Tranche B Repayment
--- ----
Amounts, Tranche C Repayment Amounts or Tranche D Repayment Amounts, as
applicable, with respect to each Accepting Lender, (B) the Borrower shall
pay to the Administrative Agent an amount equal to 50% of the portion of
the Tranche B Prepayment Amount, Tranche C Prepayment Amount and Tranche D
Prepayment Amount not accepted by the Accepting Lenders, and such amount
shall be applied to reduce the Tranche A Repayment Amounts in the manner
described in paragraph (iii) below, and (C) the Borrower shall be entitled
to retain the remaining 50% of the portion of the Tranche B Prepayment
Amount, Tranche C Prepayment Amount and Tranche D Prepayment Amount not
accepted by the Accepting Lenders; provided, however, that in the event of
-------- -------
any Prepayment Event that is a Permitted Mortgage Financing, (x) the
Borrower shall, in lieu of complying with the provisions of clause (B)
above, pay to the Administrative Agent an amount equal to 75% of the
portion of the Tranche B Repayment Amount, Tranche C Repayment Amount and
Tranche D Repayment Amount not accepted by the Accepting Lenders in respect
of such Permitted Mortgage Financing, and such amount shall be applied to
reduce the Tranche A Repayment Amounts in the manner described in paragraph
(iii) below, and (y) the Borrower shall be entitled to retain the remaining
25% of the portion of the Tranche B Prepayment Amount, Tranche C Prepayment
Amount and Tranche D Prepayment Amount not accepted by the Accepting
Lenders.
(iii) An amount equal to each prepayment of Tranche A Term Loans
required by this Section 5.2 (including any such prepayment required by the
provisions of paragraph (ii) above) shall be applied (A) first, to the
-----
reduce the Tranche A Repayment Amounts due on any Tranche A Repayment Date
occurring within the two-year period commencing on the date of such
prepayment and (B) second, pro rata to reduce the remaining Tranche A
------ --- ----
Repayment Amounts.
(d) Application to Term Loans. With respect to each prepayment
-------------------------
of Term Loans required by Section 5.2(a), the Borrower may designate the
Types of Loans that are to be prepaid and the specific Borrowing(s)
pursuant to which made, provided that: (i) Eurodollar Term Loans may be
--------
designated for prepayment pursuant to this Section 5.2 only on the last day
of an Interest Period applicable thereto unless all Eurodollar Term Loans
with Interest Periods ending on such date of required prepayment and all
ABR Term Loans have been paid in full; and (ii) if any prepayment of
Eurodollar Term Loans made pursuant to a single Borrowing shall reduce the
outstanding Term Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount for Eurodollar Term Loans, such Borrowing
shall immediately be converted into ABR Loans. In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in
its reasonable discretion with a view, but no obligation, to minimize
breakage costs owing under Section 2.11.
(e) Application to Revolving Credit Loans. With respect to each
-------------------------------------
prepayment of Revolving Credit Loans required by Section 5.2(b), the
Borrower may designate the Types of Loans that are to be prepaid and the
specific Borrowing(s) pursuant to which made, provided that (i) Eurodollar
--------
Revolving Credit Loans may be designated for prepayment pursuant to this
Section 5.2 unless all Eurodollar Revolving Credit Loans with Interest
Periods ending on such date of required prepayment and all ABR Loans have
been paid in full; (ii) if any prepayment of Eurodollar Revolving Credit
Loans made pursuant to a single Borrowing shall reduce the outstanding
Revolving Credit Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount for Eurodollar Revolving Credit Loans,
such Borrowing shall immediately be converted into ABR Loans; (iii) each
prepayment of any Loans made pursuant to a Borrowing shall be applied pro
---
rata among such Loans; and (iv) notwithstanding the provisions of the
----
preceding clause (iii), no prepayment made pursuant to Section 5.2(b) of
Revolving Credit Loans shall be applied to the Revolving Credit Loans of
any Defaulting Lender. In the absence of a designation by the Borrower as
described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its reasonable discretion
with a view, but no obligation, to minimize breakage costs owing under
Section 2.11.
(f) Eurodollar Interest Periods. In lieu of making any payment
---------------------------
pursuant to this Section 5.2 in respect of any Eurodollar Loan other than
on the last day of the Interest Period therefor, so long as no Default or
Event of Default shall have occurred and be continuing, the Borrower at its
option may deposit with the Administrative Agent an amount equal to the
amount of the Eurodollar Loan to be prepaid and such Eurodollar Loan shall
be repaid on the last day of the Interest period therefor in the required
amount. Such deposit shall
<PAGE>
40
be held by the Administrative Agent in a corporate time deposit account
established on terms reasonably satisfactory to the Administrative Agent,
earning interest at the then-customary rate for accounts of such type.
Such deposit shall constitute cash collateral for the Obligations, provided
--------
that the Borrower may at any time direct that such deposit be applied to
make the applicable payment required pursuant to this Section 5.2.
(g) Minimum Amount. No prepayment shall be required pursuant to
--------------
Section 5.2(a) during any year unless and until the amount of all Net Cash
Proceeds from all Prepayment Events during such year not prepaid pursuant
to this Section 5.2 exceeds $15,000,000 in the aggregate.
5.3 Method and Place of Payment. (a) Except as otherwise
---------------------------
specifically provided herein, all payments under this Agreement shall be
made to the Administrative Agent for the ratable account of the Lenders
entitled thereto, the Letter of Credit Issuer or Chemical, as the case may
be, not later than 12:00 Noon (New York time) on the date when due and
shall be made in immediately available funds and in lawful money of the
United States of America at the Administrative Agent's Office, it being
understood that written or facsimile notice by the Borrower to the
Administrative Agent to make a payment from the funds in the Borrower's
account at the Administrative Agent's Office shall constitute the making of
such payment to the extent of such funds held in such account. The
Administrative Agent will thereafter cause to be distributed on the same
day (if payment was actually received by the Administrative Agent prior to
2:00 P.M. (New York time) on such day) like funds relating to the payment
of principal or interest or Fees ratably to the Lenders entitled thereto.
(b) Any payments under this Agreement that are made later than
2:00 P.M. (New York time) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such
extension.
5.4 Net Payments. (a) All payments made by the Borrower under
------------
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any current or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding (i) net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender and (ii) any taxes imposed on the
Administrative Agent or any Lender as a result of a current or former
connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable
------------------
to the Administrative Agent or any Lender hereunder, the amounts so payable
to the Administrative Agent or such Lender shall be increased to the extent
necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this
Agreement; provided, however, that the Borrower shall not be required to
-------- -------
increase any such amounts payable to any Lender that is not organized under
the laws of the United States of America or a state thereof if such Lender
fails to comply with the requirements of paragraph (b) of this Section 5.4.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for
its own account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the
Lenders for any incremental taxes, interest, costs or penalties that may
become payable by the Administrative Agent or any Lender as a result of any
such failure. The agreements in this Section 5.4(a) shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
<PAGE>
41
(b) Each Lender that is not incorporated or organized under the
laws of the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative Agent two
copies of either United States Internal Revenue Service Form 1001 or
Form 4224 or, in the case of Non-U.S. Lender claiming exemption from
U.S. Federal withholding tax under Section 871(h) or 881(c) of the
Code with respect to payments of "portfolio interest", a Form W-8, or
any subsequent versions thereof or successors thereto (and, if such
Non-U.S. Lender delivers a Form W-8, a certificate representing that
such Non-U.S. Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption
from, or reduced rate of, U.S. Federal withholding tax on payments by
the Borrower under this Agreement;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent;
unless in any such case any change in treaty, law or regulation has
occurred prior to the date on which any such delivery would otherwise be
required that renders any such form inapplicable or would prevent such
Lender from duly completing and delivering any such form with respect to it
and such Lender so advises the Borrower and the Administrative Agent. Each
Person that shall become a Participant pursuant to Section 13.6 or a Lender
pursuant to Section 13.6 shall, upon the effectiveness of the related
transfer, be required to provide all the forms and statements required
pursuant to this Section 5.4(b), provided that in the case of a Participant
such Participant shall furnish all such required forms and statements to
the Lender from which the related participation shall have been purchased.
(c) The Borrower shall not be required to indemnify any Non-U.S.
Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect
of U.S. Federal withholding tax pursuant to paragraph (a) above to the
extent that (i) the obligation to withhold amounts with respect to U.S.
Federal withholding tax existed on the date such Non-U.S. Lender became a
party to this Agreement (or, in the case of a Non-U.S. Participant, on the
date such Participant became a Participant hereunder); provided, however,
-------- -------
that this clause (i) shall not apply to the extent that (x) the indemnity
payments or additional amounts any Lender (or Participant) would be
entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the person making the
assignment, participation or transfer to such Lender (or Participant) would
have been entitled to receive in the absence of such assignment,
participation or transfer, or (y) such assignment, participation or
transfer had been requested by the Borrower, (ii) the obligation to pay
such additional amounts would not have arisen but for a failure by such
Non-U.S. Lender or Non-U.S. Participant to comply with the provisions of
paragraph (b) above or (iii) any of the representations or certifications
made by a Non-U.S. Lender or Non-U.S. Participant pursuant to paragraph (b)
above are incorrect at the time a payment hereunder is made, other than by
reason of any change in treaty, law or regulation having effect after the
date such representations or certifications were made.
(d) If the Borrower determines in good faith that a reasonable
basis exists for contesting any taxes for which indemnification has been
demanded hereunder, the relevant Lender or the Administrative Agent, as
applicable, shall cooperate with the Borrower in challenging such taxes at
the Borrower's expense if so requested by the Borrower. If any Lender or
the Administrative Agent, as applicable, receives a refund of a tax for
which a payment has been made by the Borrower pursuant to this Agreement,
which refund in the good faith judgment of such Lender or Administrative
Agent, as the case may be, is attributable to such payment made by the
Borrower, then the Lender or the Administrative Agent, as the case may be,
shall reimburse the
<PAGE>
42
Borrower for such amount as the Lender or Administrative Agent, as the case
may be, determines to be the proportion of the refund as will leave it,
after such reimbursement, in no better or worse position than it would have
been in if the payment had not been required. A Lender or Administrative
Agent shall claim any refund that it determines is available to it, unless
it concludes in its reasonable discretion that it would be adversely
affected by making such a claim. Neither the Lender nor the Administrative
Agent shall be obliged to disclose any information regarding its tax
affairs or computations to the Borrower in connection with this
paragraph (d) or any other provision of this Section 5.4.
(e) Each Lender represents and agrees that, on the date hereof
and at all times during the term of this Agreement, it is not and will not
be a conduit entity participating in a conduit financing arrangement (as
defined in Section 7701(1) of the Code and the regulations thereunder) with
respect to the Borrowings hereunder unless the Borrower has consented to
such arrangement prior thereto.
5.5 Computations of Interest and Fees. (a) Interest on
---------------------------------
Eurodollar Loans and, except as provided in the next succeeding sentence,
ABR Loans shall be calculated on the basis of a 360-day year for the actual
days elapsed. Interest on ABR Loans in respect of which the rate of
interest is calculated on the basis of the Prime Rate and interest on
overdue interest shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed.
(b) Fees and Letter of Credit Outstandings shall be calculated
on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed.
SECTION 6. Conditions Precedent to Initial Borrowing.
-----------------------------------------
The initial Borrowing under this Agreement is subject to the
satisfaction of the following conditions precedent:
6.1 Credit Documents. The Administrative Agent shall have
----------------
received (a) this Agreement, executed and delivered by a duly
authorized officer of the Borrower and each Lender, (b) the Guarantee,
executed and delivered by a duly authorized officer of each Guarantor,
(c) the Pledge Agreement, executed and delivered by each pledgor party
thereto and (d) all certificates representing securities pledged under
the Pledge Agreement, accompanied by instruments of transfer and stock
powers endorsed in blank.
6.2 Closing Certificate. The Administrative Agent shall
-------------------
have received a certificate of each Credit Party, dated the Closing
Date, substantially in the form of Exhibit G, with appropriate
insertions, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Credit Party, and
attaching the documents referred to in Sections 6.3 and 6.4.
6.3 Corporate Proceedings of Each Credit Party. The
------------------------------------------
Administrative Agent shall have received a copy of the resolutions, in
form and substance satisfactory to the Administrative Agent, of the
Board of Directors of each Credit Party (or a duly authorized
committee thereof) authorizing (a) the execution, delivery and
performance of the Credit Documents to which it is a party Agreement
and (b) in the case of the Borrower, the extensions of credit
contemplated hereunder.
6.4 Corporate Documents. The Administrative Agent shall
-------------------
have received true and complete copies of the certificate of
incorporation and by-laws of each Credit Party.
6.5 No Material Adverse Change. There shall have been no
--------------------------
material adverse change in the business, assets, operations,
properties, financial condition or prospects of the Borrower and its
Subsidiaries taken as a whole since July 2, 1994.
<PAGE>
43
6.6 Fees. The Administrative Agent shall have received the
----
fees referred to in Section 4.1(e) to be received on the Closing Date.
6.7 Equity Contributions. The Equity Contribution shall
--------------------
have been made or shall be made simultaneously with the making of the
initial Loans.
6.8 Merger. (i) The Merger shall have been consummated, or
------
shall be consummated simultaneously with the making of the initial
Loans, in accordance with applicable law and the Merger Agreement,
(ii) approximately 94.70% of the shares of Borrower Common Stock
outstanding immediately prior to the Merger shall have been converted
into approximately $880,000,000 in cash in the aggregate,
(iii) approximately 5.30% of the shares of Borrower Common Stock
outstanding immediately prior to the Merger, representing
approximately 16.67% of the shares of Borrower Common Stock expected
to be outstanding immediately after the Merger, (iv) the Partnership
shall have received shares representing approximately 83.33% of the
Borrower Common Stock expected to be outstanding immediately after the
Merger and (v) the Lenders shall (a) be reasonably satisfied with the
capitalization, structure and equity ownership of the Borrower and its
subsidiaries (it being agreed that such capitalization, structure and
ownership on the date hereof are satisfactory) and (b) be reasonably
satisfied that the aggregate level of fees and expenses to be paid in
connection with the Merger, the financing therefor and the other
transactions contemplated hereby shall not exceed $75,000,000. The
Merger Agreement shall not have been amended in any material respect
that is, in the reasonable judgment of the Administrative Agent,
adverse to the interests of the Lenders, since June 22, 1995.
6.9 Other Indebtedness. After giving effect to the Merger
------------------
and the other transactions contemplated hereby, the Borrower and its
Subsidiaries shall have outstanding no Indebtedness or preferred stock
other than (a) the extensions of credit under this Agreement, (b) the
Subordinated Notes and (c) the Indebtedness listed on Schedule 10.2.
6.10 Closing Date Balance Sheet. The Lenders shall have
--------------------------
received a pro forma consolidated closing balance sheet of the
--- -----
Borrower, dated the Closing Date and reasonably satisfactory to the
Lenders.
6.11 Solvency Letter. The Lenders shall have received a
---------------
solvency letter from Murray, Devine & Co., in form and substance
reasonably satisfactory to the Lenders, as to the solvency of the
Borrower and its Subsidiaries on a consolidated basis after giving
effect to the Merger, the making of the initial Loans and the
consummation of the other transactions contemplated hereby, together
with such other evidence of solvency reasonably requested by the
Lenders.
6.12 Required Approvals. All requisite material
------------------
governmental authorities and third parties shall have approved or
consented to the Merger and the other transactions contemplated hereby
to the extent required, all applicable appeal periods shall have
expired and there shall be no governmental or judicial action, actual
or threatened, that has or could have a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the
Merger or the other transactions contemplated hereby.
6.13 Existing Indebtedness of the Borrower. The
-------------------------------------
Administrative Agent shall have received satisfactory evidence that
the Senior Notes shall have been prepaid pursuant to the note purchase
agreement for such Senior Notes, that any amounts owing in respect of
such Senior Notes by the Borrower shall have been (or shall upon the
occurrence of the Closing Date be) paid in full.
6.14 Legal Opinions. The Administrative Agent shall have
--------------
received, with a counterpart for each Lender, the executed legal
opinions of (a) Simpson Thacher & Bartlett, special New York counsel
to the Borrower, substantially in the form of Exhibit E-1, and (b)
Sirote & Permutt,
<PAGE>
44
Alabama counsel to the Borrower, substantially in the form of Exhibit
E-2, and the Borrower hereby instructs such counsel to deliver such
legal opinions.
6.15 Audited Financial Statements. The Administrative Agent
----------------------------
shall have received the consolidated balance sheets of the Borrower
and its Subsidiaries for the fiscal period ended July 2, 1994, and the
related consolidated statements of income and retained earnings and of
cash flows for such fiscal period and certified by Arthur Anderson
& Co. whose opinion shall not be qualified as to the scope of the
audit or as to the status of the Borrower or any of the Specified
Subsidiaries as a going concern.
6.16 Environmental and Safety Conditions. The Lenders shall
-----------------------------------
be reasonably satisfied as to the amount and nature of any
environmental and employee health and safety exposures to which the
Borrower and the Subsidiaries may be subject and the plans of the
Borrower with respect thereto.
6.17 Subordinated Notes. The Borrower shall have received
------------------
gross proceeds of not less than $400,000,000 from the sale at par of
the Subordinated Notes.
SECTION 7. Conditions Precedent to All Credit Events. The
-----------------------------------------
agreement of each Lender to make any Loan requested to be made by it on any
date (including, without limitation, its initial Loan, but excluding
Mandatory Borrowings) and the obligation of the Letter of Credit Issuer to
issue Letters of Credit on any date is subject to the satisfaction of the
following conditions precedent:
7.1 No Default; Representations and Warranties. At the time of
------------------------------------------
each Credit Event and also after giving effect thereto (a) there shall
exist no Default or Event of Default and (b) all representations and
warranties made by any Credit Party contained herein or in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and
as of the date of such Credit Event (except where such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all
material respects as of such earlier date).
7.2 Notice of Borrowing; Letter of Credit Request. (a) Prior
---------------------------------------------
to the making of each Term Loan, each Revolving Credit Loan (other than any
Revolving Credit Loan made pursuant to Section 3.4(a)) and each Swingline
Loan, the Administrative Agent shall have received a Notice of Borrowing
(whether in writing or by telephone) meeting the requirements of Section
2.3.
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the Letter of Credit Issuer shall have received a
Letter of Credit Request meeting the requirements of Section 3.2(a).
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by each Credit Party to each of
the Lenders that all the applicable conditions specified above exist as of
that time.
SECTION 8. Representations, Warranties and Agreements. In
------------------------------------------
order to induce the Lenders to enter into this Agreement, to make the Loans
and issue or participate in Letters of Credit as provided for herein, the
Borrower makes the following representations and warranties to, and
agreements with, the Lenders, all of which shall survive the execution and
delivery of this Agreement and the making of the Loans and the issuance of
the Letters of Credit:
8.1 Corporate Status. Each Credit Party (a) is a duly organized
----------------
and validly existing corporation or other entity in good standing under the
laws of the jurisdiction of its organization and has the corporate or other
organizational power and authority to own its property and assets and to
transact the business
<PAGE>
45
in which it is engaged and (b) has duly qualified and is authorized to do
business and is in good standing in all jurisdictions where it is required
to be so qualified, except where the failure to be so qualified could not
reasonably be expected to result in a Material Adverse Effect.
8.2 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents to which it is a party and has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. Each Credit
Party has duly executed and delivered each Credit Document to which it is a
party and each such Credit Document constitutes the legal, valid and
binding obligation of such Credit Party enforceable in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
subject to general principles of equity.
8.3 No Violation. Neither the execution, delivery and
------------
performance by any Credit Party of the Credit Documents to which it is a
party nor compliance with the terms and provisions thereof nor the
consummation of the Merger and the other transactions contemplated therein
will (a) contravene any applicable provision of any material law, statute,
rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality, (b) result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of the
Borrower or any of its Subsidiaries pursuant to the terms of any material
indenture, loan agreement, lease agreement, mortgage, deed of trust,
agreement or other material instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets is
bound or (c) violate any provision of the charter or By-Laws of the
Borrower or any of its Subsidiaries.
8.4 Litigation. Except as set forth in the Recent SEC Documents
----------
(as such term is defined in the Merger Agreement), in the Borrower's
Form 10-K for the fiscal year ended July 2, 1994, or in the Borrower's
Form 10-Q for the fiscal quarter ended April 8, 1995, in each case as filed
with the Securities and Exchange Commission (the "SEC"), there are no
---
actions, suits or proceedings (including, without limitation, Environmental
Claims) pending or, to the knowledge of the Borrower, threatened with
respect to the Borrower or any of its Subsidiaries that could reasonably be
expected to result in a Material Adverse Effect.
8.5 Margin Regulations. Neither the making of any Loan
------------------
hereunder nor the use of the proceeds thereof will violate the provisions
of Regulation G, T, U or X of the Board.
8.6 Governmental Approvals. No order, consent, approval,
----------------------
license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any foreign or domestic governmental or
public body or authority, or any subdivision thereof, is required to
authorize or is required in connection with (a) the execution, delivery and
performance of any Credit Document or (b) the legality, validity, binding
effect or enforceability of any Credit Document, except any of the
foregoing the failure to obtain or make could not reasonably be expected to
have a Material Adverse Effect.
8.7 Investment Company Act. The Borrower is not an "investment
----------------------
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
8.8 True and Complete Disclosure. (a) All factual information
----------------------------
(taken as a whole) heretofore or contemporaneously furnished by the
Borrower or any of its Subsidiaries in writing to the Administrative Agent
and/or any Lender on or before the Closing Date (including, without
limitation, (i) the Confidential Information Memorandum and (ii) all
information contained in the Credit Documents) for purposes of or in
connection with this Agreement or any transaction contemplated herein is
true and complete in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided, it being understood and agreed that for
<PAGE>
46
purposes of this Section 8.8(a), such factual information shall not include
projections and pro forma financial information.
(b) The projections and pro forma financial information
contained in the factual information referred to in paragraph (a) above
were based on good faith estimates and assumptions believed by such Persons
to be reasonable at the time made, it being recognized by the 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.
8.9 Financial Condition; Financial Statements. The consolidated
-----------------------------------------
balance sheets of the Borrower and its Subsidiaries at July 2, 1994, and
the related consolidated statements of income and cash flows for the
twelve-month period ended as of such date, which statements have been
audited by Arthur Andersen & Co., independent certified public accountants,
who delivered an unqualified opinion with respect thereto, present fairly
in all material respects the consolidated financial position of the
Borrower and its Subsidiaries at the date of said statements and the
results of operations for the period covered thereby. All such financial
statements have been prepared in accordance with GAAP consistently applied
except to the extent provided in the notes to said financial statements.
There has been no Material Adverse Change since July 2, 1994.
8.10 Tax Returns and Payments. Each of the Borrower and its
------------------------
Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and
has paid all material taxes and assessments payable by it that have become
due, other than those not yet delinquent or contested in good faith. The
Borrower and each of its Subsidiaries have paid, or have provided adequate
reserves (in the good faith judgment of the management of the Borrower) in
accordance with GAAP for the payment of, all material federal, state and
foreign income taxes applicable for all prior fiscal years and for the
current fiscal year to the Closing Date.
8.11 Compliance with ERISA. Each plan is in compliance with
---------------------
ERISA, the Code and any applicable Requirement of Law; no Reportable Event
has occurred (or is reasonably likely to occur) with respect to any Plan;
no Plan is insolvent or in reorganization (or is reasonably likely to be
insolvent or in reorganization), and no written notice of any such
insolvency or reorganization has been given to the Borrower, any Subsidiary
or any ERISA Affiliate; no Plan (other than a multiemployer plan) has an
accumulated or waived funding deficiency (or is reasonably likely to have
such a deficiency); neither the Borrower nor any Subsidiary nor any ERISA
Affiliate has incurred (or is reasonably likely expected to incur) any
liability to or on account of a Plan pursuant to Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971
or 4975 of the Code or has been notified in writing that it will incur any
liability under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted (or are reasonably likely to be
instituted) to terminate or to reorganize any Plan or to appoint a trustee
to administer any Plan, and no written notice of any such proceedings has
been given to the Borrower, any Subsidiary or any ERISA Affiliate; and no
lien imposed under the Code or ERISA on the assets of the Borrower or any
Subsidiary or any ERISA Affiliate exists (or is reasonably likely to exist)
nor has the Borrower, any Subsidiary or any ERISA Affiliate been notified
in writing that such a lien will be imposed on the assets of the Borrower,
any Subsidiary or any ERISA Affiliate on account of any Plan, except to the
------
extent that a breach of any of the foregoing representations, warranties or
agreements in this Section 8.11 would not result, individually or in the
aggregate, in an amount of liability that would be reasonably likely to
have a Material Adverse Effect. No Plan (other than a multiemployer plan)
has an Unfunded Current Liability that would, individually or when taken
together with any other liabilities referenced in this Section 8.11, be
reasonably likely to have a Material Adverse Effect. With respect to Plans
that are multiemployer plans (as defined in Section 3(37) of ERISA), the
representations and warranties in this Section 8.11, other than any made
with respect to (a) liability under Section 4201 or 4204 of ERISA or (b)
liability for termination or reorganization of such Plans under ERISA, are
made to the best knowledge of the Borrower.
8.12 Subsidiaries. Schedule 8.12 lists each Subsidiary of the
------------
Borrower (and the direct and indirect ownership interest of the Borrower
therein), in each case existing on the Closing Date. Each Specified
Subsidiary as of the Closing Date has been so designated on Schedule 8.12.
<PAGE>
47
8.13 Patents, etc. The Borrower and each of its Subsidiaries
-------------
have obtained all patents, trademarks, servicemarks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions,
that are necessary for the operation of their respective businesses as
currently conducted and as proposed to be conducted, except where the
failure to obtain any such rights could not reasonably be expected to have
a Material Adverse Effect.
8.14 Environmental Laws. (a) Except as set forth on
------------------
Schedule 8.14, the Borrower and each of its Subsidiaries are in compliance
with all Environmental Laws in all jurisdictions in which the Borrower and
each of its Subsidiaries are currently doing business (including, without
limitation, having obtained all material permits required under
Environmental Laws), and the Borrower will comply and cause each of its
Subsidiaries to comply with all such Environmental Laws (including, without
limitation, all permits required under Environmental Laws), other than in
each case instances of noncompliance that could not be reasonably be
expected to have a Material Adverse Effect.
(b) Except as set forth on Schedule 8.14, neither the Borrower
nor any of its Subsidiaries has treated, stored, transported or disposed of
Hazardous Materials at or from any currently or formerly owned Real Estate
or facility relating to its business in a manner that could reasonably be
expected to have a Material Adverse Effect.
8.15 Properties. The Borrower and each of its Subsidiaries have
----------
good title to or leasehold interest in all properties that are necessary
for the operation of their respective businesses as currently conducted and
as proposed to be conducted, free and clear of all Liens (other than any
Liens permitted by this Agreement) and except where the failure to have
such good title could not reasonably be expected to have a Material Adverse
Effect.
SECTION 9. Affirmative Covenants. The Borrower hereby
---------------------
covenants and agrees that on the Closing Date and thereafter, for so long
as this Agreement is in effect and until the Commitments, the Swingline
Commitment and each Letter of Credit have terminated and the Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations
incurred hereunder, are paid in full:
9.1 Information Covenants. The Borrower will furnish to each
---------------------
Lender and the Administrative Agent:
(a) Annual Financial Statements. On or before the date on which
---------------------------
such financial statements are required to be filed with the SEC, the
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal year and the related consolidated statement of
income and retained earnings and of cash flows for such fiscal year,
setting forth comparative consolidated figures for the preceding
fiscal year, and certified by independent certified public accountants
of recognized national standing whose opinion shall not be qualified
as to the scope of audit or as to the status of the Borrower or any of
the Specified Subsidiaries as a going concern, together in any event
with a certificate of such accounting firm stating that in the course
of its regular audit of the business of the Borrower, which audit was
conducted in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of any Default or Event
of Default relating to accounting matters that has occurred and is
continuing or, if in the opinion of such accounting firm such a
Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof.
(b) Quarterly Financial Statements. As soon as available and in
------------------------------
any event on or before the date on which such financial statements
are required to be filed with the SEC with respect to each of the
first three quarterly accounting periods in each fiscal year of the
Borrower, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly period and the related
consolidated statement of income for such quarterly accounting period
and for the elapsed portion of the fiscal year ended with the last day
of such quarterly period, and the related consolidated statement of
cash flows for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, and setting forth comparative
consolidated figures for the related periods in the prior fiscal year
or, in
<PAGE>
48
the case of such consolidated balance sheet, for the last day of the
prior fiscal year, all of which shall be certified by an Authorized
Officer of the Borrower, subject to changes resulting from audit and
normal year-end audit adjustments.
(c) Monthly Financial Statements. As soon as available and in
----------------------------
any event within 30 days after the close of each fiscal month of the
Borrower, commencing with February 1996, the consolidated statement of
income for such fiscal month and for the elapsed portion of the fiscal
year ended with the last day of such fiscal month, and the related
consolidated statement of cash flows for the elapsed portion of the
fiscal year ended with the last day of such fiscal month, and setting
forth comparative consolidated figures for the related fiscal month or
months in the prior fiscal year, all of which shall be in the format
prepared by management of the Borrower for its internal use.
(d) Budgets. Within 60 days after the commencement of each
-------
fiscal year of the Borrower, budgets of the Borrower in reasonable
detail for the fiscal year as customarily prepared by management of
the Borrower for its internal use, setting forth the principal
assumptions upon which such budgets are based.
(e) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Section 9.1(a) and (b), a
certificate of an Authorized Officer of the Borrower to the effect
that no Default or Event of Default exists or, if any Default or Event
of Default does exist, specifying the nature and extent thereof, which
certificate shall set forth (i) the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the
provisions of Sections 10.10, 10.11 and 10.12 as at the end of such
fiscal year or period, as the case may be, (ii) a specification of any
change in the identity of the Subsidiaries and the Specified
Subsidiaries as at the end of such fiscal year or period, as the case
may be, from the Subsidiaries and the Specified Subsidiaries,
respectively, provided to the Lenders on the Closing Date or the most
recent fiscal year or period, as the case may be and (iii) the Status
that is effective on the date of such delivery.
(f) Notice of Default or Litigation. Promptly after an
-------------------------------
Authorized Officer of the Borrower or any of its Subsidiaries obtains
knowledge thereof, notice of (i) the occurrence of any event that
constitutes a Default or Event of Default, which notice shall specify
the nature thereof, the period of existence thereof and what action
the Borrower proposes to take with respect thereto and (ii) any
litigation or governmental proceeding pending against the Borrower or
any of its Subsidiaries that could reasonably be expected to result in
a Material Adverse Effect.
(g) Environmental Matters. The Borrower will promptly advise
---------------------
the Lenders in writing after obtaining knowledge of any one or more of
the following environmental matters, unless such environmental matters
would not, individually or when aggregated with all other such
matters, be reasonably expected to result in a Material Adverse
Effect:
(i) Any pending or threatened Environmental Claim against
the Borrower or any of its Subsidiaries or any Real Estate;
(ii) Any condition or occurrence on any Real Estate that
(x) results in noncompliance by the Borrower or any of its
Subsidiaries with any applicable Environmental Law or (y) could
reasonably be anticipated to form the basis of an Environmental
Claim against the Borrower or any of its subsidiaries or any Real
Estate;
(iii) Any condition or occurrence on any Real Estate that
could reasonably be anticipated to cause such Real Estate to be
subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Estate under any Environmental Law;
and
(iv) The taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Estate.
<PAGE>
49
All such notices shall describe in reasonable detail the nature
of the claim, investigation, condition, occurrence or removal or
remedial action and the Borrower's response thereto.
(h) Other Information. Promptly upon filing thereof, copies of
-----------------
any filings on Form 10-K, 10-Q or 8-K or registrations with, and
reports to, the SEC by the Borrower or any of its Subsidiaries (other
than amendments to any registration statement (to the extent such
registration statement, in the form it becomes effective, is delivered
to the Lenders), exhibits to any registration statement and any
registration statements on Form S-8) and copies of all financial
statements, proxy statements, notices and reports that the Borrower or
any of its Subsidiaries shall send to the holders of any publicly
issued debt of the Borrower and/or any of its Subsidiaries in their
capacity as such holders (in each case to the extent not theretofore
delivered to the Lenders pursuant to this Agreement) and, with
reasonable promptness, such other information (financial or otherwise)
as the Administrative Agent on its own behalf or on behalf of any
Lender may reasonably request in writing from time to time.
9.2 Books, Records and Inspections. The Borrower will, and will
------------------------------
cause each of the Specified Subsidiaries to, permit officers and designated
representatives of the Administrative Agent or the Required Lenders to
visit and inspect any of the properties or assets of the Borrower and any
of its Subsidiaries in whomsoever's possession to the extent that it is
within the Borrower's or such Subsidiary's control to permit such
inspection, and to examine the books of account of the Borrower and any of
its Subsidiaries and discuss the affairs, finances and accounts of the
Borrower and of any of its Subsidiaries with, and be advised as to the same
by, its and their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent or the Required Lenders may desire.
9.3 Maintenance of Insurance. The Borrower will, and will cause
------------------------
each of the Specified Subsidiaries to, at all times maintain in full force
and effect insurance in such amounts, covering such risks and liabilities
and with such deductibles or self-insured retentions as are in accordance
with normal industry practice.
9.4 Payment of Taxes. The Borrower will pay and discharge, and
----------------
will cause each of its Subsidiaries to pay and discharge, all material
taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits, or upon any properties belonging to it, prior
to the date on which material penalties attach thereto, and all lawful
material claims that, if unpaid, could reasonably be expected to become a
material Lien upon any properties of the Borrower or any of the Specified
Subsidiaries, provided that neither the Borrower nor any of its
--------
Subsidiaries shall be required to pay any such tax, assessment, charge,
levy or claim that is being contested in good faith and by proper
proceedings if it has maintained adequate reserves (in the good faith
judgment of the management of the Borrower) with respect thereto in
accordance with GAAP.
9.5 Consolidated Corporate Franchises. The Borrower will do,
---------------------------------
and will cause each Specified Subsidiary to do, or cause to be done, all
things necessary to preserve and keep in full force and effect its
existence, corporate rights and authority, except to the extent that the
failure to do so could reasonably be expected to have a Material Adverse
Effect; provided, however, that the Borrower and its Subsidiaries may
-------- -------
consummate any transaction permitted under Section 10.4 or 10.5.
9.6 Compliance with Statutes, Obligations, etc. The Borrower
-------------------------------------------
will, and will cause each Subsidiary to, comply with all applicable laws,
rules, regulations and orders, except to the extent the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
9.7 ERISA. Promptly after the Borrower or any Subsidiary or any
-----
ERISA Affiliate knows or has reason to know of the occurrence of any of the
following events that, individually or in the aggregate (including in the
aggregate such events previously disclosed or exempt from disclosure
hereunder, to the extent the liability therefor remains outstanding), would
be reasonably likely to have a Material Adverse Effect, the Borrower will
deliver to each of the Lenders a certificate of an Authorized Officer or
any other senior officer of the Borrower setting forth details as to such
occurrence and the action, if any, that the Borrower, such Subsidiary or
such ERISA Affiliate is required or proposes to take, together with any
notices (required,
<PAGE>
50
proposed or otherwise) given to or filed with or by the Borrower, such
Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant (other than
notices relating to an individual participant's benefits) or the Plan
administrator with respect thereto: that a Reportable Event has occurred;
that an accumulated funding deficiency has been incurred or an application
is to be made to the Secretary of the Treasury for a waiver or modification
of the minimum funding standard (including any required installment
payments) or an extension of any amortization period under Section 412 of
the Code with respect to a Plan; that a Plan having an Unfunded Current
Liability has been or is to be terminated, reorganized, partitioned or
declared insolvent under Title IV of ERISA (including the giving of written
notice thereof); that a Plan has an Unfunded Current Liability that has or
will result in a lien under ERISA or the Code; that proceedings will be or
have been instituted to terminate a Plan having an Unfunded Current
Liability (including the giving of written notice thereof); that a
proceeding has been instituted against the Borrower, a Subsidiary or an
ERISA Affiliate pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that the PBGC has notified the Borrower, any
Subsidiary or any ERISA Affiliate of its intention to appoint a trustee to
administer any Plan; that the Borrower, any Subsidiary or any ERISA
Affiliate has failed to make a required installment or other payment
pursuant to Section 412 of the Code with respect to a Plan; or that the
Borrower, any Subsidiary or any ERISA Affiliate has incurred or will incur
(or has been notified in writing that it will incur) any liability
(including any contingent or secondary liability) to or on account of a
Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201 or 4204 of ERISA or Section 4971 or 4975 of the Code.
9.8 Good Repair. The Borrower will, and will cause each of its
-----------
Subsidiaries to, ensure that its properties and equipment used or useful in
its business in whomsoever's possession they may be to the extent that it
is within the Borrower's or such Subsidiary's control to cause same, are
kept in good repair, working order and condition, normal wear and tear
excepted, and that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto, to the extent
and in the manner customary for companies in similar businesses and
consistent with third party leases, except in each case to the extent the
failure to do so could be reasonably be expected to have a Material Adverse
Effect.
9.9 Transactions with Affiliates. The Borrower will conduct,
----------------------------
and cause each of its Subsidiaries to conduct, all transactions with any of
its Affiliates on terms that are substantially as favorable to the Borrower
or such Subsidiary as it would obtain in a comparable arm's-length
transaction with a Person that is not an Affiliate, provided that the
--------
foregoing restrictions shall not apply to (a) the payment of customary
annual fees to KKR and its Affiliates for management, consulting and
financial services rendered to the Borrower and its Subsidiaries, and
investment banking fees paid to KKR and its Affiliates for services
rendered to the Borrower and its Subsidiaries in connection with
divestitures, acquisitions, financings and other transactions,
(b) customary fees paid to members of the Board of Directors of the
Borrower and its Subsidiaries and (c) transactions permitted by
Section 10.7.
9.10 End of Fiscal Years; Fiscal Quarters. The Borrower will,
------------------------------------
for financial reporting purposes, cause (a) each of its, and each of its
Subsidiaries', fiscal years to end on the Saturday nearest June 30 of each
year and (b) each of its, and each of its Subsidiaries', fiscal quarters to
end on (i) the Saturday 12 weeks after, (ii) the Saturday 26 weeks after
and (iii) the Saturday 40 weeks after, the Saturday nearest June 30 of each
year; provided, however, that the Borrower may, upon written notice to the
-------- -------
Administrative Agent, change its financial reporting so as to cause
(i) each of its, and each of its Subsidiaries', fiscal years to end on
[ ] of each year and (ii) each of its, and each of its
Subsidiaries', financial quarters to end on [ ], [ ]
and [ ] of each year, in which case the Borrower and the
Administrative Agent will, and are hereby authorized by the Lenders to,
make any adjustments to this Agreement that are necessary in order to
reflect such change in financial reporting.
9.11 Additional Guarantors. The Borrower will cause any direct
---------------------
or indirect domestic Subsidiary formed or otherwise purchased or acquired
after the date hereof to execute a supplement to the Guarantee, in form and
substance reasonably satisfactory to the Administrative Agent, in order to
become a Guarantor.
<PAGE>
51
9.12 Pledges of Additional Stock and Evidence of Indebtedness.
--------------------------------------------------------
The Borrower will pledge to the Administrative Agent, for the benefit of
the Lenders, (a) all the capital stock of each direct domestic Subsidiary
(or 65% of the capital stock of each direct foreign Subsidiary) formed or
otherwise purchased or acquired after the date hereof, in each case
pursuant to a supplement to the Pledge Agreement in form and substance
reasonably satisfactory to the Administrative Agent, (b) all the capital
stock of any direct domestic Subsidiary (or 65% of the capital of each
direct foreign Subsidiary) that is not a direct Subsidiary on the date
hereof but subsequently becomes a direct Subsidiary, in each case pursuant
to a supplement to the Pledge Agreement in form and substance reasonably
satisfactory to the Administrative Agent, and (c) all evidences of
Indebtedness in excess of $5,000,000 received by the Borrower or any of the
direct Subsidiaries in connection with any disposition of assets pursuant
to Section 10.5(b), in each case pursuant to a supplement to the Pledge
Agreement in form and substance reasonably satisfactory to the
Administrative Agent.
9.13 Use of Proceeds. The Borrower will use the Letters of
---------------
Credit and the proceeds of all Loans for the purposes set forth in the
introductory statement to this Agreement.
SECTION 10. Negative Covenants. The Borrower hereby
------------------
covenants and agrees that on the Closing Date and thereafter, for so long
as this Agreement is in effect and until the Commitments, the Swingline
Commitment and each Letter of Credit have terminated and the Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations
incurred hereunder, are paid in full:
10.1 Changes in Business. The Borrower and its Subsidiaries
-------------------
taken as a whole will not fundamentally and substantively alter the
character of their business taken as a whole from the business conducted by
the Borrower and its Subsidiaries taken as a whole on the date hereof and
other business activities incidental or related thereto, except that the
Borrower and its Subsidiaries may engage in the Permitted Business and
other business activities reasonably incidental thereto.
10.2 Limitation on Indebtedness. The Borrower will not, and will
--------------------------
not permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness of (i) the Borrower to any Subsidiary of the
Borrower and (ii) Indebtedness of any Subsidiary to the Borrower or
any other Subsidiary;
(c) Indebtedness in respect of bankers' acceptance, letter of
credit, warehouse receipt or similar facilities entered into in the
ordinary course of business;
(d) Guarantee Obligations in respect of obligations that are
permitted to be incurred under this Agreement;
(e) Contingent Obligations incurred in the ordinary course of
business in respect of obligations of suppliers, customers,
franchisees and licensees;
(f) (i) Indebtedness arising under Capital Leases in an aggregate
amount not exceeding $40,000,000 at any time outstanding,
(ii) additional Indebtedness incurred within 270 days of the
acquisition, construction or improvement of fixed or capital assets to
finance the acquisition, construction or improvement of such fixed or
capital assets or otherwise incurred in respect of Capital
Expenditures permitted by Section 10.11, provided that, at any time
--------
at which the Consolidated Total Debt to Consolidated EBITDA Ratio for
the most recently ended Test Period is greater than 4.00:1.00, the
aggregate principal amount of any such additional Indebtedness
incurred and remaining outstanding pursuant to this clause (ii) shall
not exceed $100,000,000, and (iii) any refinancing, refunding, renewal
or extension of any Indebtedness specified in clause (ii) above,
provided that the principal amount
--------
<PAGE>
52
thereof is not increased above the principal amount thereof
outstanding immediately prior to such refinancing refunding, renewal
or extension;
(g) Indebtedness outstanding on the date hereof and listed on
Schedule 10.2 and any refinancing, refunding, renewal or extension
thereof, provided that (i) the principal amount thereof is not
--------
increased above the principal amount thereof outstanding immediately
prior to such refinancing, refunding, renewal or extension and
(ii) the direct and contingent obligors with respect to such
Indebtedness are not changed;
(h) Indebtedness in respect of Hedge Agreements;
(i) Indebtedness in respect of the Subordinated Notes;
(j) Indebtedness incurred in connection with any Permitted
Mortgage Financing;
(k) (i) additional Indebtedness of the Borrower not contemplated
by clauses (a) through (j) above and (ii) any refinancing, refunding,
renewal or extension of any Indebtedness specified in clause (i)
above, provided that (A) the Borrower shall remain the sole direct
--------
obligor with respect to such Indebtedness and (B) the amount of
Indebtedness incurred and remaining outstanding pursuant to this
clause (k) shall not at any time exceed $50,000,000; and
(n) Indebtedness that is incurred in the ordinary course of
business for working capital purposes and matures within one year from
the date incurred, provided that the aggregate principal amount of
--------
Indebtedness of the Borrower and its Subsidiaries incurred pursuant to
this clause (n) shall not exceed $5,000,000 at any time outstanding.
10.3 Limitation on Liens. The Borrower will not, and will not
-------------------
permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon any property or assets of any kind (real or personal,
tangible or intangible) of the Borrower or any Subsidiary, whether now
owned or hereafter acquired, except:
(a) Liens arising under the Credit Documents;
(b) Permitted Liens;
(c) Liens securing Indebtedness permitted pursuant to
Section 10.2(f), provided that such Liens attach only to the assets so
--------
financed;
(d) Liens on assets of the Borrower or any of its Subsidiaries
existing on the date hereof;
(e) Liens securing Indebtedness incurred in connection with any
Permitted Mortgage Financing;
(f) the replacement, extension or renewal of any Lien permitted
by clauses (a) through (e) above upon or in the same assets
theretofore subject to such Lien or the replacement, extension or
renewal (without increase in the amount or change in any direct or
contingent obligor) of the Indebtedness secured thereby; and
(g) additional Liens securing Indebtedness of the Borrower or any
Subsidiary so long as the aggregate principal amount of the
Indebtedness so secured does not exceed $10,000,000 at any time
outstanding.
10.4 Limitation on Fundamental Changes. The Borrower will not,
---------------------------------
and will not permit any of its Subsidiaries to, enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself
<PAGE>
53
(or suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all its business
units, assets or other properties, except that:
(a) the Borrower may effect the Merger;
(b) so long as no Default or Event of Default would result from
the consummation of any merger or consolidation described in this
clause (b), (i) any Subsidiary of the Borrower or any other Person may
be merged or consolidated with or into the Borrower, provided that the
--------
Borrower shall be the continuing or surviving corporation, and
(ii) any Subsidiary of the Borrower or any other Person may be merged
or consolidated with any one or more other Subsidiaries of the
Borrower, provided that, in the case of any merger or consolidation
--------
involving one or more Guarantors, a Guarantor shall be the continuing
or surviving corporation;
(c) any Subsidiary that is not a Guarantor may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower, a Guarantor or
any other Subsidiary of the Borrower; and
(d) any Guarantor may sell, lease, transfer or otherwise dispose
of any or all of its assets (upon voluntary liquidation or otherwise)
to the Borrower or any other Guarantor.
10.5 Limitation on Sale of Assets. The Borrower will not, and
----------------------------
will not permit any of its Subsidiaries to, (i) convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired (other than any such
sale, transfer, assignment or other disposition resulting from any casualty
or condemnation, of any assets of the Borrower or its Subsidiaries) or
(ii) issue or sell any shares of a Subsidiary's capital stock to any Person
other than the Borrower or a Guarantor, except that:
(a) the Borrower and its Subsidiaries may sell, transfer or
otherwise dispose of used or surplus equipment, vehicles, inventory
and other assets in the ordinary course of business;
(b) the Borrower and its Subsidiaries may sell, transfer or
otherwise dispose of other assets for fair value, provided that
--------
(i) the aggregate amount of such sales, transfers and disposals by the
Borrower and its Subsidiaries taken as a whole pursuant to this
clause (b) shall not exceed the aggregate $225,000,000 during the term
of this Agreement and (ii) any consideration in excess of $5,000,000
received by the Borrower or any direct Subsidiary in connection with
such sales, transfers and other dispositions of assets pursuant to
this clause (b) that is in the form of Indebtedness shall be pledged
to the Administrative Agent pursuant to Section 9.12;
(c) the Borrower and its Subsidiaries may make sales of assets
for fair value to any Subsidiary of the Borrower;
(d) any Subsidiary may effect any transaction permitted by
Section 10.4; and
(e) the Borrower and its Subsidiaries may sell or discount
without recourse accounts receivable arising in the ordinary course of
business in connection with the compromise or collection thereof.
10.6 Limitation on Investments. The Borrower will not, and will
-------------------------
not permit any of its Subsidiaries to, make any advance, loan, extensions
of credit or capital contribution to, or purchase any stock, bonds, notes,
debentures or other securities of or any assets of, or make any other
investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Permitted Investments;
<PAGE>
54
(c) loans and advances to officers, directors and employees of
the Borrower or any of its Subsidiaries (i) to finance the purchase of
capital stock of the Borrower and (ii) for additional purposes not
contemplated by clause (i) above in an aggregate principal amount at
any time outstanding with respect to this clause (ii) not exceeding
$2,500,000;
(d) investments existing on the date hereof (including the
investment on the date hereof in PM Associates) and any extensions,
renewals or reinvestments thereof, so long as the aggregate amount of
all investments pursuant to this clause (d) is not increased at any
time above the amount of such investments existing on the date hereof;
(e) investments in Hedge Agreements permitted by Section 10.2(h);
(f) investments received in connection with the bankruptcy or
reorganization of suppliers or customers and in settlement of
delinquent obligations of, and other disputes with, customers arising
in the ordinary course of business;
(g) investments payment for which is made solely with capital
stock of the Borrower;
(h) investments constituting non-cash proceeds of sales of assets
to the extent permitted by Section 10.5;
(i) investments by the Borrower or any of its Subsidiaries to the
extent that such investments constitute the proceeds from capital
contributions to the Borrower or issuances of equity securities of the
Borrower;
(j) investments by the Borrower and its Subsidiaries in any
domestic Subsidiary; and
(k) additional investments (including investments in connection
with any Permitted Acquisition) not contemplated by clauses (a)
through (j) above in an aggregate amount at the time of such
investment not in excess of (i) the Available Investment Amount at
such time minus (ii) the aggregate amount of all investments that have
-----
been made pursuant to this clause (k) and remain outstanding at such
time (it being understood that each investment made pursuant to this
clause (k) shall be deemed not to be outstanding to the extent of any
return or repayment of such investment).
10.7 Limitation on Dividends. The Borrower will not declare or
-----------------------
pay any dividends (other than dividends payable solely in its capital stock
or rights, warrants or options to purchase its capital stock) or return any
capital to its stockholders or make any other distribution, payment or
delivery of property or cash to its stockholders as such, or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for
consideration, any shares of any class of its capital stock now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any of such shares), or set aside any funds for any of
the foregoing purposes, or permit any of its Subsidiaries to purchase or
otherwise acquire for consideration (other than in connection with an
investment permitted by Section 10.6) any shares of any class of the
capital stock of the Borrower or any other Subsidiary of the Borrower, as
the case may be, now or hereafter outstanding (or any options or warrants
or stock appreciation rights issued by such Person with respect to its
capital stock) (all of the foregoing "Dividends"), provided that, so long
--------- --------
as no Event of Default exists or would exist after giving effect thereto,
(a) the Borrower may redeem in whole or in part any capital stock of the
Borrower for another class of capital stock or rights to acquire capital
stock of the Borrower, provided that such other class of capital stock
--------
contains terms and provisions at least as advantageous to the Lenders as
those contained in the capital stock redeemed thereby, and (b) the Borrower
may repurchase shares of its capital stock (and/or options or warrants in
respect thereof) held by its officers, directors and employees so long as
such repurchase is pursuant to, and in accordance with the terms of,
management and/or employee stock plans, stock subscription agreements or
shareholder agreements.
<PAGE>
55
10.8 Limitation on Debt Payments. The Borrower will not
---------------------------
optionally prepay, repurchase or redeem or otherwise defease any
subordinated Indebtedness for borrowed money of the Borrower or any
Subsidiary (including the Subordinated Notes); provided, however, that so
-------- -------
long as no Default or Event of Default has occurred and is continuing, the
Borrower may optionally prepay, repurchase or redeem any Subordinated Notes
or other subordinated Indebtedness of the Borrower or any of its
Subsidiaries with a portion of the Net Cash Proceeds of any issuance by the
Borrower of equity securities (provided, however, that the aggregate price
-------- -------
of such prepayment, repurchase or redemption shall not exceed 50% of the
Net Cash Proceeds received by the Borrower from the issuance of equity
securities by the Borrower).
10.9 Consolidated Total Debt to Consolidated EBITDA Ratio. The
----------------------------------------------------
Borrower will not permit the ratio of (a) Consolidated Total Debt as of the
last day of any Test Period ending during any period set forth below to
(b) Consolidated EBITDA for such Test Period to be greater than the ratio
set forth below opposite such period:
Period Ratio
------ -----
Closing Date through October 31, 1996 6.70:1.00
December 31, 1996 through March 31, 1997 6.30:1.00
June 30, 1997 through March 31, 1998 5.60:1.00
June 30, 1998 through March 31, 1999 4.80:1.00
June 30, 1999 through March 31, 2000 4.20:1.00
June 30, 2000 through March 31, 2001 3.50:1.00
June 30, 2001 through March 31, 2002 3.25:1.00
June 30, 2002 through March 31, 2003 3.25:1.00
June 30, 2003 through March 31, 2004 3.25:1.00
June 30, 2004 through the Maturity Date 3.25:1.00
10.10 Consolidated EBITDA to Consolidated Interest Expense
----------------------------------------------------
Ratio. The Borrower will not permit the ratio of (a) Consolidated EBITDA
-----
for any Test Period ending during any period set forth below to
(b) Consolidated Interest Expense for such Test Period to be less than the
ratio set forth below opposite such period:
Period Ratio
------ -----
Closing Date through March 31, 1996 1.35:1.00
June 30, 1996 through October 31, 1996 1.45:1.00
December 31, 1996 through March 31, 1997 1.65:1.00
June 30, 1997 through March 31, 1998 1.85:1.00
June 30, 1998 through March 31, 1999 2.15:1.00
June 30, 1999 through March 31, 2000 2.55:1.00
June 30, 2000 through March 31, 2001 2.95:1.00
June 30, 2001 through March 31, 2002 3.35:1.00
June 30, 2002 through March 31, 2003 3.50:1.00
June 30, 2003 through March 31, 2004 3.50:1.00
June 30, 2004 through the Maturity Date 3.50:1.00
<PAGE>
56
10.11 Consolidated Fixed Charge Coverage Ratio. The Borrower
----------------------------------------
will not permit the ratio of (a) the sum of (i) Consolidated EBITDA for any
Test Period ending during any period set forth below and (ii) Rental
Expense for such Test Period to (b) the sum of (i) Consolidated Interest
Expense for such Test Period and (ii) Consolidated Rental Expense for such
Test Period to be less than the ratio set forth below opposite such period:
Period Amount
------ ------
Closing Date through March 31, 1996 1.25:1.00
June 30, 1996 through October 31, 1996 1.30:1.00
December 31, 1996 though March 31, 1997 1.40:1.00
June 30, 1997 through March 31, 1998 1.50:1.00
June 30, 1998 through March 31, 1999 1.65:1.00
June 30, 1999 through March 31, 2000 1.80:1.00
June 30, 2000 through March 31, 2001 1.95:1.00
June 30, 2001 through March 31, 2002 2.05:1.00
June 30, 2002 through March 31, 2003 2.20:1.00
June 30, 2003 through March 31, 2004 2.20:1.00
June 30, 2004 through the Maturity Date 2.20:1.00
10.12 Capital Expenditures. The Borrower will not, and will
--------------------
not permit any of its Subsidiaries, to make any Capital Expenditures (other
than Permitted Acquisitions that constitute Capital Expenditures) that
would cause the aggregate amount of all Capital Expenditures made by the
Borrower and its Subsidiaries in any fiscal year of the Borrower set forth
below to exceed the amount set forth below opposite such fiscal year:
Fiscal Year Ending on
---------------------
the Saturday Nearest Amount
-------------------- ------
June 30, 1996 $80,000,000
June 30, 1997 80,000,000
June 30, 1998 90,000,000
June 30, 1999 95,000,000
June 30, 2000 105,000,000
June 30, 2001 105,000,000
June 30, 2002 105,000,000
June 30, 2003 105,000,000
June 30, 2004 105,000,000
Any Capital Expenditure permitted to be made but not made in any fiscal
year set forth above may be carried forward to the next succeeding fiscal
year and added to the amounts set forth above for such next succeeding
fiscal year; provided, however, that the aggregate amount of all Capital
-------- -------
Expenditures made by the Borrower and its Subsidiaries shall not exceed (a)
$120,000,000 in the case of the fiscal year of the Borrower ending on the
Saturday nearest June 30, 1997; (b) $120,000,000 in the case of the fiscal
year of the Borrower ending on the Saturday nearest June 30, 1998; (c)
$130,000,000 in the case of the fiscal year of the Borrower ending on the
Saturday nearest June 30, 1999; (d) $140,000,000 in the case of the fiscal
year of the Borrower ending on the Saturday nearest June 30, 2000; and (e)
$150,000,000 in the case of any fiscal year of the Borrower thereafter.
<PAGE>
57
SECTION 11. Events of Default. Upon the occurrence of any of
-----------------
the following specified events (each an "Event of Default"):
----------------
11.1 Payments. The Borrower shall (a) default in the payment
--------
when due of any principal of the Loans or (b) default, and such default
shall continue for five or more days, in the payment when due of any
interest on the Loans or any Fees or any Unpaid Drawings or of any other
amounts owing hereunder or under any other Credit Document; or
11.2 Representations, etc. Any representation, warranty or
---------------------
statement made or deemed made by any Credit Party herein or in any
certificate delivered or required to be delivered pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as of
which made or deemed made; or
11.3 Covenants. Any Credit Party shall (a) default in the due
---------
performance or observance by it of any term, covenant or agreement
contained in Section 9.1(f) and Section 10 or (b) default in the due
performance or observance by it of any term, covenant or agreement (other
than those referred to in Section 11.1, 11.2 or clause (a) of this Section
11.3) contained in this Agreement and such default shall continue
unremedied for a period of at least 30 days after receipt of written notice
by the Borrower from the Administrative Agent or the Required Lenders; or
11.4 Default Under Other Agreements. (a) The Borrower or any of
------------------------------
its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) in excess of $20,000,000 in the
aggregate, for the Borrower and such Subsidiaries, beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created or (ii) default in the observance or performance
of any agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or (except in the case of Indebtedness consisting of any Hedge
Agreement) any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, any such Indebtedness to become due prior
to its stated maturity; or (b) without limiting the provisions of
clause (a) above, any such Indebtedness (other than Indebtedness consisting
of any Hedge Agreement) shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required
prepayment or as a mandatory prepayment, prior to the stated maturity
thereof; or
11.5 Bankruptcy, etc. The Borrower or any Specified Subsidiary
----------------
shall commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
---------------
commenced against the Borrower or any Specified Subsidiary and the petition
is not controverted within 10 days after commencement of the case; or an
involuntary case is commenced against the Borrower or any Specified
Subsidiary and the petition is not dismissed within 60 days after
commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Borrower or any Specified Subsidiary; or the Borrower or
any Specified Subsidiary commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrower or any
Specified Subsidiary; or there is commenced against the Borrower or any
Specified Subsidiary any such proceeding that remains undismissed for a
period of 60 days; or the Borrower or any Specified Subsidiary is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrower or any
Specified Subsidiary suffers any appointment of any custodian or the like
for it or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or the Borrower or any Specified
Subsidiary makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Borrower or any Specified Subsidiary for
the purpose of effecting any of the foregoing; or
11.6 ERISA. (a) Any Plan shall fail to satisfy the minimum
-----
funding standard required for any plan year or part thereof or a waiver of
such standard or extension of any amortization period is sought or granted
under Section 412 of the Code; any Plan is or shall have been terminated or
is the subject of termination proceedings under ERISA (including the giving
of written notice thereof); an event shall have
<PAGE>
58
occurred or a condition shall exist in either case entitling the PBGC to
terminate any Plan or to appoint a trustee to administer any Plan
(including the giving of written notice thereof); any Plan shall have an
accumulated funding deficiency (whether or not waived); the Borrower or any
Subsidiary or any ERISA Affiliate has incurred or is likely to incur a
liability to or on account of a Plan under Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975
of the Code (including the giving of written notice thereof); (b) there
could result from any event or events set forth in clause (a) of this
Section 11.6 the imposition of a lien, the granting of a security interest,
or a liability, or the reasonable likelihood of incurring a lien, security
interest or liability; and (c) such lien, security interest or liability
will or would be reasonably likely to have a Material Adverse Effect; or
11.7 Guarantee. The Guarantee or any material provision thereof
---------
shall cease to be in full force or effect or any Guarantor thereunder or
any Credit Party shall deny or disaffirm in writing such Guarantor's
obligations under the Guarantee; or
11.8 Pledge Agreement. The Pledge Agreement or any material
----------------
provision thereof shall cease to be in full force or effect (other than
pursuant to the terms hereof or thereof or as a result of acts or omissions
of the Administrative Agent or any Lender) or any Pledgor thereunder or any
Credit Party shall deny or disaffirm in writing such Pledgor's obligations
under the Pledge Agreement; or
11.9 Judgments. One or more judgments or decrees shall be
---------
entered against the Borrower or any of its Subsidiaries involving a
liability of $20,000,000 or more in the aggregate for all such judgments
and decrees for the Borrower and its Subsidiaries (to the extent not paid
or fully covered by insurance provided by a carrier that has acknowledged
coverage in writing) and any such judgments or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 60 days from
the entry thereof; or
11.10 Change of Control. A Change of Control shall occur;
-----------------
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall, upon the
written request of the Required Lenders, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights
of the Administrative Agent or any Lender to enforce its claims against the
Borrower, except as otherwise specifically provided for in this Agreement
(provided that, if an Event of Default specified in Section 11.5 shall
--------
occur with respect to the Borrower, the result that would occur upon the
giving of written notice by the Administrative Agent as specified in
clauses (i), (ii) and (iv) below shall occur automatically without the
giving of any such notice): (i) declare the Total Term Loan Commitment and
the Total Revolving Commitment terminated, whereupon the Commitments and
Swingline Commitment, if any, of each Lender or Chemical, as the case may
be, shall forthwith terminate immediately and any Fees theretofore accrued
shall forthwith become due and payable without any other notice of any
kind; (ii) declare the principal of and any accrued interest in respect of
all Loans and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; (iii) terminate any Letter of Credit that
may be terminated in accordance with its terms; and/or (iv) direct the
Borrower to pay (and the Borrower agrees that upon receipt of such notice,
or upon the occurrence of an Event of Default specified in Section 11.5
with respect to the Borrower, it will pay) to the Administrative Agent at
the Administrative Agent's Office such additional amounts of cash, to be
held as security for the Borrower's reimbursement obligations for Drawings
that may subsequently occur thereunder, equal to the aggregate Stated
Amount of all Letters of Credit issued and then outstanding.
SECTION 12. The Administrative Agent.
------------------------
12.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Credit Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action
on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and
<PAGE>
59
perform such duties as are expressly delegated to the Administrative Agent
by the terms of this Agreement and the other Credit Documents, together
with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement,
the Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Credit Document or otherwise exist against the Administrative Agent.
12.2 Delegation of Duties. The Administrative Agent may execute
--------------------
any of its duties under this Agreement and the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
12.3 Exculpatory Provisions. Neither the Administrative Agent
----------------------
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with this Agreement or
any other Credit Document (except for its or such Person's own gross
negligence or willful misconduct) or (b) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties
made by the Borrower or any Guarantor or any officer thereof contained in
this Agreement or any other Credit Document or in any certificate, report,
statement or other document referred to or provided for in, or received by
the Administrative Agent under or in connection with, this Agreement or any
other Credit Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Credit Document or for any failure of the Borrower or any Guarantor to
perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in,
or conditions of, this Agreement or any other Credit Document, or to
inspect the properties, books or records of the Borrower.
12.4 Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the
Lender specified in the Register with respect to any amount owing hereunder
as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Credit Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Credit Documents in accordance with a request
of the Required Lenders, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
12.5 Notice of Default. The Administrative Agent shall not be
-----------------
deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative Agent has received
notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is
a "notice of default". In the event that the Administrative Agent receives
such a notice, the Administrative Agent shall give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the
Required Lenders, provided that unless and until the Administrative Agent
--------
shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
<PAGE>
60
12.6 Non-Reliance on Administrative Agent and Other Lenders.
------------------------------------------------------
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereinafter taken, including any review of the
affairs of the Borrower or any Guarantor, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently
and without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the
Borrower and any Guarantor and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that
it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Credit Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
the Borrower and any Guarantor. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, assets, operations, properties,
financial condition, prospects or creditworthiness of the Borrower or any
Guarantor that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
12.7 Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent in its capacity as such (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do
so), ratably according to their respective Revolving Credit Commitment
Percentages in effect on the date on which indemnification is sought (or,
if indemnification is sought after the date upon which the Commitments
shall have terminated and the Loans shall have been paid in full, ratably
in accordance with their Revolving Credit Commitment Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time
(including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of, the Commitments, this
Agreement, any of the other Credit Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby
or thereby or any action taken or omitted by the Administrative Agent under
or in connection with any of the foregoing, provided that no Lender shall
--------
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's gross negligence or
willful misconduct. The agreements in this Section 12.7 shall survive the
payment of the Loans and all other amounts payable hereunder.
12.8 Administrative Agent in Its Individual Capacity. The
-----------------------------------------------
Administrative Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower and any
Guarantor as though the Administrative Agent were not the Administrative
Agent hereunder and under the other Credit Documents. With respect to the
Loans made by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Credit Documents as any Lender
and may exercise the same as though it were not the Administrative Agent,
and the terms "Lender" and "Lenders" shall include the Administrative Agent
in its individual capacity.
12.9 Successor Agent. The Administrative Agent may resign as
---------------
Administrative Agent upon 20 days' prior written notice to the Lenders and
the Borrower. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Credit Documents, then the
Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall be approved by the Borrower (which
approval shall not be unreasonably withheld), whereupon such successor
agent shall succeed to the rights, powers and duties of the Administrative
Agent, and the term "Administrative Agent" shall mean such successor agent
effective upon such appointment and approval, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be
terminated, without any other or further act
<PAGE>
61
or deed on the part of such former Administrative Agent or any of the
parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions
of this Section 12 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Credit Documents.
SECTION 13. Miscellaneous.
-------------
13.1 Amendments and Waivers. Neither this Agreement nor any
----------------------
other Credit Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 13.1. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (a)
enter into with the relevant Credit Party or Credit Parties written
amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Agreement or the
other Credit Documents or changing in any manner the rights of the Lenders
or of the Borrower hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Credit Documents or any Default or Event of Default
and its consequences; provided, however, that no such waiver and no such
-------- -------
amendment, supplement or modification shall directly (i) forgive any
portion of any Loan or extend the final scheduled maturity date of any
Loan, or reduce the stated rate of any interest or fee payable hereunder
(other than as a result of waiving the applicability of any post-default
increase in interest rates) or extend the final expiration date of any
Lender's Commitment or increase the aggregate amount of the Commitments of
any Lender, in each case without the written consent of each Lender
directly and adversely affected thereby, or (ii) amend, modify or waive any
provision of this Section 13.1 or reduce the percentages specified in the
definitions of the terms "Required Lenders", "Required Tranche A Lenders"
and "Required Tranche B, C and D Lenders", or consent to the assignment or
transfer by any Credit Party of any of its rights and obligations under any
Credit Document to which it is a party, in each case without the written
consent of each Lender directly and adversely affected thereby, or (iii)
amend, modify or waive any provision of Section 12 without the written
consent of the then-current Administrative Agent, or (iv) amend, modify or
waive any provision of Section 3 without the written consent of the Letter
of Credit Issuer, or (v) amend, modify or waive any provisions hereof
relating to Swingline Loans without the written consent of Chemical, or
(vi) change any Revolving Credit Commitment to any other Commitment (other
than a Tranche A Commitment), change any Tranche A Commitment to any other
Commitment (other than a Revolving Credit Commitment) or change any Tranche
B Commitment, Tranche C Commitment or Tranche D Commitment to any other
Commitment, in each case without the prior written consent of each Lender
directly or adversely affected thereby, or (vii) decrease any Tranche A
Repayment Amount, extend any scheduled Tranche A Repayment Date or decrease
the amount of any mandatory prepayment to be received by any Lender holding
any Tranche A Loans, in each case without the written consent of the
Required Tranche A Lenders, or (viii) decrease any scheduled Tranche B
Repayment Amount, Tranche C Repayment Amount or Tranche D Repayment Amount,
extend any Tranche B Repayment Date, Tranche C Repayment Date or Tranche D
Repayment Date or decrease the amount of any mandatory prepayment to be
received by any Lender holding any Tranche B Loans, Tranche C Loans or
Tranche D Loans, in each case without the written consent of the Required
Tranche B, C, and D Lenders, or (ix) release all or substantially all the
Collateral without the written consent of (A) the Required Tranche A
Lenders and (B) the Required Tranche B, C and D Lenders. Any such waiver
and any such amendment, supplement or modification shall apply equally to
each of the affected Lenders and shall be binding upon the Borrower, such
Lenders, the Administrative Agent and all future holders of the affected
Loans. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former positions and rights
hereunder and under the other Credit Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing, it being
understood that no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.
13.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered, or three
days after being deposited in
<PAGE>
62
the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth on Schedule 1.1 in the case of the
other parties hereto, or to such other address as may be hereafter notified
by the respective parties hereto:
The Borrower: Bruno's Inc.
800 Lakeshore Parkway
Birmingham, AL 35211
Attention: Chief Financial Officer
Fax: 205-940-9400
with a copy to:
Bruno's, Inc.
In care of Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, NY 10019
Attention: Nils Brous
Fax: 212-750-0003
The Administrative Agent: Chemical Bank Agency
Services Corporation
Grand Central Tower
140 East 45th Street
New York, NY 10017
Attention: Janet Belden
Fax: 212-622-0002
with a copy to:
Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Robert Gaynor
Fax: 212-972-0009
provided that any notice, request or demand to or upon the Administrative
--------
Agent or the Lenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and 5.1 shall
not be effective until received.
13.3 No Waiver; Cumulative Remedies. No failure to exercise and
------------------------------
no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other
Credit Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
13.4 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made hereunder, in the other Credit
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery
of this Agreement and the making of the Loans hereunder.
13.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
-----------------------------
pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement
<PAGE>
63
and the other Credit Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration
of the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees, disbursements and other charges of counsel
to the Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all its reasonable and documented costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Credit Documents and any such other
documents, including, without limitation, the reasonable fees,
disbursements and other charges of counsel to each Lender and of counsel to
the Administrative Agent, (c) to pay, indemnify, and hold harmless each
Lender and the Administrative Agent from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any
delay in, paying, stamp, excise and other similar taxes, if any, that may
be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, this Agreement, the other Credit
Documents and any such other documents, and (d) to pay, indemnify, and hold
harmless each Lender and the Administrative Agent and their respective
directors, officers, employees and agents from and against any and all
other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever including reasonable and documented fees, disbursements and
other charges of counsel with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other
Credit Documents and any such other documents, including, without
limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to
the operations of the Borrower, any of its Subsidiaries or any of the
Properties (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), provided that the Borrower shall have no
--------
obligation hereunder to the Administrative Agent or any Lender nor any of
their respective directors, officers, employees and agents with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the party to be indemnified or (ii) disputes among the
Administrative Agent, the Lenders and/or their transferees. The agreements
in this Section 13.5 shall survive repayment of the Loans and all other
amounts payable hereunder.
13.6 Successors and Assigns; Participations and Assignments. (a)
------------------------------------------------------
(i) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent and their respective
successors and assigns, except that the Borrower may not assign or transfer
any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(ii) Any Lender may, in the ordinary course of its business
and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any
------------
Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Credit Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain
the holder of any such Loan for all purposes under this Agreement and the
other Credit Documents, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other
Credit Documents. In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of any
provision of any Credit Document, or any consent to any departure by any
Credit Party therefrom, except to the extent that such amendment, waiver or
consent would directly forgive any principal of, or interest on (other than
as a result of waiving the applicability of any post-default increase in
interest rates), the Loans or any Fees payable hereunder, or postpone the
date of the final scheduled maturity of any Loan, in each case to the
extent subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted
by applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly
to it as a Lender under this Agreement, provided that, in purchasing such
--------
participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 13.7 as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of
<PAGE>
64
Sections 2.10 and 2.11 with respect to its participation in the Commitments
and the Loans outstanding from time to time as if it were a Lender,
provided that no Participant shall be entitled to receive any greater
--------
amount pursuant to any such Section than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such
transfer occurred.
(iii) Any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time and from time to time assign
to any Lender or any Affiliate (with the consent of the Borrower if any
increased costs would result therefrom) thereof or, with the consent of the
Borrower and the Administrative Agent (which in each case shall not be
unreasonably withheld, it being understood that, without limitation, the
Borrower shall have the right to withhold its consent to any assignment if,
in order for such assignment to comply with applicable law, the Borrower
would be required to obtain the consent of, or make any filing or
registration with, any Governmental Authority), to an additional bank or
financial institution (an "Assignee") all or any part of its rights and
--------
obligations under this Agreement and the other Credit Documents pursuant to
an Assignment and Acceptance, substantially in the form of Exhibit F,
executed by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an Affiliate thereof, by the Borrower
and the Administrative Agent) and delivered to the Administrative Agent for
its acceptance and recording in the Register, provided that, except in the
--------
case of an assignment of all of a Lender's interests under this Agreement,
unless otherwise agreed by the Borrower and the Administrative Agent, no
such assignment to an Assignee (other than any Lender or any Affiliate
thereof) shall be in an aggregate principal amount of less than
(A) $10,000,000 in the case of Revolving Credit Loans, Revolving Credit
Commitments and Tranche A Term Loans and (B) $5,000,000 in the case of
Tranche B Term Loans, Tranche C Term Loans and Tranche D Term Loans. Upon
such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder with a Commitment as set forth therein and (y) the
assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this Agreement to the contrary, the
consent of the Borrower shall not be required for any assignment that
occurs at any time when any of the events described in Section 11.5 shall
have occurred and be continuing with respect to the Borrower.
(b) Nothing herein shall prohibit any Lender from pledging or
assigning all or any portion of its Loans to any Federal Reserve Bank
in accordance with applicable law. In order to facilitate such pledge
or assignment, the Borrower hereby agrees that, upon request of any
Lender at any time and from time to time after the Borrower has made
its initial borrowing hereunder, the Borrower shall provide to such
Lender, at the Borrower's own expense, a promissory note,
substantially in the form of Exhibit C-1 or C-2, as the case may be,
evidencing the Term Loans and Revolving Credit Loans, respectively,
owing to such Lender.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in
Section 13.2 a copy of each Assignment and Acceptance delivered to it
and a register (the "Register") for the recordation of the names and
--------
addresses of the Lenders and the Commitment of, and principal amount
of the Loans owing to, each Lender from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat
each Person whose name is recorded in the Register as the owner of a
Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Credit Documents,
notwithstanding any notice to the contrary. Any assignment of any
Loan or other obligation hereunder shall be effective only upon
appropriate entries with respect thereto being made in the Register.
The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
<PAGE>
65
(d) (i) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case of
an Assignee that is not then a Lender or an Affiliate thereof, by the
Borrower and the Administrative Agent) together with payment to the
Administrative Agent of a registration and processing fee of $3,500,
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give
notice of such acceptance and recordation to the Lenders and the
Borrower.
(e) Subject to Section 13.16, the Borrower authorizes each
Lender to disclose to any Participant or Assignee (each, a
"Transferee") and any prospective Transferee any and all financial
----------
information in such Lender's possession concerning the Borrower and
its Affiliates that has been delivered to such Lender by or on behalf
of the Borrower pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of the Borrower in connection with such
Lender's credit evaluation of the Borrower and its Affiliates prior to
becoming a party to this Agreement, provided that neither the
--------
Administrative Agent nor any Lender shall provide to any Transferee or
prospective Transferee any of the Confidential Information unless such
person shall have previously executed a Confidentiality Agreement in
the form of Exhibit I.
13.7 Replacements of Lenders under Certain Circumstances. The
---------------------------------------------------
Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.10, 2.11, 3.5 or 5.4,
(b) is affected in the manner described in Section 2.10(a)(iii) and as a
result thereof any of the actions described in such Section is required to
be taken or (c) becomes a Defaulting Lender, with a replacement bank or
other financial institution, provided that (i) such replacement does not
--------
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) the
Borrower shall repay (or the replacement bank or institution shall
purchase, at par) all Loans and other amounts (other than any disputed
amounts), pursuant to Section 2.10, 2.11, 3.5 or 5.4, as the case may be)
owing to such replaced Lender prior to the date of replacement, (iv) the
replacement bank or institution, if not already a Lender, and the terms and
conditions of such replacement, shall be reasonably satisfactory to the
Administrative Agent, (v) the replaced Lender shall be obligated to make
such replacement in accordance with the provisions of Section 13.6
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), and (vi) any such replacement shall
not be deemed to be a waiver of any rights that the Borrower, the
Administrative Agent or any other Lender shall have against the replaced
Lender.
13.8 Adjustments; Set-off. (a) If any Lender (a "benefitted
-------------------- ----------
Lender") shall at any time receive any payment of all or part of its Loans,
------
or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings
of the nature referred to in Section 11.5, or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loan, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however,
-------- -------
that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefitted Lender, such purchase shall be rescinded,
and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) After the occurrence and during the continuance of an Event
of Default, in addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon any amount becoming due and
payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against
such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness
or claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing by
such Lender or any branch or agency thereof to or for the credit or the
account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any
<PAGE>
66
such set-off and application made by such Lender, provided that the failure
--------
to give such notice shall not affect the validity of such set-off and
application.
13.9 Counterparts. This Agreement may be executed by one or more
------------
of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.
13.10 Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
13.11 Integration. This Agreement and the other Credit
-----------
Documents represent the agreement of the Borrower, the Administrative Agent
and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set
forth or referred to herein or in the other Credit Documents.
13.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
13.13 Submission To Jurisdiction; Waivers. The Borrower
-----------------------------------
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Credit Documents
to which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 13.2 or
at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section 13.13 any special, exemplary,
punitive or consequential damages.
13.14 Acknowledgements. The Borrower hereby acknowledges
----------------
that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Credit Documents;
<PAGE>
67
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Credit
Documents, and the relationship between Administrative Agent and
Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
13.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE
---------------------
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
13.16 Confidentiality. The Administrative Agent and each
---------------
Lender shall hold all non-public information furnished by or on behalf of
the Borrower in connection with such Lender's evaluation of whether to
become a Lender hereunder or obtained by such Lender or the Administrative
Agent pursuant to the requirements of this Agreement ("Confidential
------------
Information"), in accordance with its customary procedure for handling
-----------
confidential information of this nature and in accordance with safe and
sound banking practices and in any event may make disclosure as required or
requested by any governmental agency or representative thereof or pursuant
to legal process or to such Lender's or the Administrative Agent's
attorneys or independent auditors, provided that unless specifically
--------
prohibited by applicable law or court order, each Lender and the
Administrative Agent shall notify the Borrower of any request by any
governmental agency or representative thereof (other than any such request
in connection with an 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 or the Administrative Agent be obligated
or required to return any materials furnished by the Borrower or any
Subsidiary of the Borrower. Each Lender and the Administrative Agent
agrees that it will not provide to prospective Transferees any of the
Confidential Information unless such Person shall have previously executed
a Confidentiality Agreement in the form of Exhibit I.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the
date first above written.
BRUNO'S, INC.,
By:
------------------------------------
Name:
Title:
CHEMICAL BANK, as Administrative
Agent and as a Lender,
By:
------------------------------------
Name:
Title:
[OTHER LENDERS],
By:
------------------------------------
Name:
Title:
