<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
----------------------
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended May 3, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
------------ -----------
Commission File Number 0-6544
------------------------------
BRUNO'S, INC.
(Exact name of registrant as specified in its charter)
STATE OF INCORPORATION: ALABAMA I.R.S. EMPLOYER I.D. NO. 63-0411801
ADDRESS OF PRINCIPAL EXECUTIVE OFFICE (INCLUDING ZIP CODE)
800 Lakeshore Parkway, Birmingham, Alabama 35211
REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE
(205) 940-9400
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No ( )
OUTSTANDING COMMON STOCK AS OF June 10, 1997 is 25,337,982
<PAGE> 2
Commission File No. 0-6544
BRUNO'S, INC.
Index
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets at
May 3, 1997 and February 1,1997 2
Condensed Consolidated Statements of Operations for the
Thirteen (13) Week Periods Ended May 3, 1997 and
April 27, 1996 3
Condensed Consolidated Statements of Cash Flows for the
Thirteen (13) Week Periods Ended May 3, 1997 and
April 27, 1996 4
Notes to Condensed Consolidated Financial Statements 5-7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Change in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signature Page 13
Index of Exhibits 14
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Commission File No. 0-6544
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BRUNO'S, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MAY 3, 1997 AND FEBRUARY 1,1997
(In Thousands Except Share and Per Share Amounts)
- -------------------------------------------------------------------------------------
May 3, February 1,
1997 1997
(unaudited)
----------------------------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents $ 3,456 $ 4,908
Receivables 20,886 20,480
Inventories, net of LIFO reserve of $9,300
and $8,940, respectively 184,449 181,786
Prepaid expenses 9,551 10,468
Refundable income taxes 1,381 1,373
Deferred income taxes 17,669 14,534
--------- ---------
Total current assets 237,392 233,549
--------- ---------
Property and equipment, net of accumulated 462,450 466,997
depreciation of $326,384 and $313,369 at --------- ---------
May 3,1997 and February 1,1997,respectively
Goodwill, net 50,097 50,824
Intangibles and other assets, net 37,826 40,061
--------- ---------
Total non-current assets 87,923 90,885
--------- ---------
Total $ 787,765 $ 791,431
========= =========
LIABILITIES AND DEFICIENCY IN NET ASSETS:
Current liabilities:
Current maturities of long-term debt and $ 2,449 $ 2,491
capitalized lease obligations
Accounts payable 171,587 149,614
Accrued payroll and related expenses 14,032 20,360
Accrued interest 16,757 22,630
Other accrued expenses 37,192 39,270
--------- ---------
Total current liabilities 242,017 234,365
--------- ---------
Noncurrent liabilities:
Long-term debt 817,185 813,722
Capitalized lease obligations 12,225 12,415
Deferred income taxes 6,742 6,742
Other noncurrent liabilities 44,914 54,336
--------- ---------
Total noncurrent liabilities 881,066 887,215
--------- ---------
Deficiency in net assets:
Common Stock, $.01 par value, 60,000,000 253 253
shares authorized; 25,337,982 and 25,333,607
issued and outstanding, respectively
Paid-in capital (587,580) (587,624)
Retained earnings 254,199 259,314
Shareholder's notes receivable (2,190) (2,092)
--------- ---------
Total deficiency in net assets (335,318) (330,149)
--------- ---------
Total $ 787,765 $ 791,431
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 4
Commission File No. 0-6544
BRUNO'S, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEK PERIODS ENDED MAY 3, 1997 AND
APRIL 27, 1996
(In Thousands Except Share and Per Share Amounts)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
May 3, April 27,
1997 1996
(13 Weeks) (13 Weeks)
(unaudited) (unaudited)
----------- ------------
<S> <C> <C>
NET SALES $ 685,260 $ 732,721
----------- -----------
COST AND EXPENSES:
Cost of products sold 529,362 554,124
Store operating, selling and administrative expenses 128,771 136,993
Depreciation and amortization 14,257 13,706
Interest expense, net 21,120 21,140
----------- -----------
Total cost and expenses 693,510 725,963
----------- -----------
Income (loss) before provision for income taxes (8,250) 6,758
INCOME TAXES (BENEFIT) (3,135) 2,568
----------- -----------
Net income (loss) $ (5,115) $ 4,190
=========== ===========
NET INCOME (LOSS) PER COMMON SHARE $ (0.20) $ 0.17
=========== ===========
CASH DIVIDENDS PER COMMON SHARE $ -- $ --
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON 25,321,219 25,110,952
=========== ===========
SHARES OUTSTANDING
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 5
BRUNO'S, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEK PERIODS ENDED MAY 3, 1997 AND
APRIL 27, 1996
(Amounts In Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
May 3, April 27,
1997 1996
(13 Weeks) (13 Weeks)
(unaudited) (unaudited)
------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (5,115) $ 4,190
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 14,257 13,706
LIFO provision 360 750
Change in assets and liabilities (5,249) 3,571
--------- ---------
Total adjustments 9,368 18,027
--------- ---------
Net cash provided by operating activities 4,253 22,217
--------- ---------
INVESTING ACTIVITIES:
Proceeds from sale of property 8,259 --
Capital expenditures (17,239) (15,292)
--------- ---------
Net cash used in investing activities (8,980) (15,292)
--------- ---------
FINANCING ACTIVITIES:
Reductions of long-term debt and capitalized lease
obligations (269) (482)
Net borrowings under long-term credit facilities 3,500 --
Sale of common stock, net 44 1,687
--------- ---------
Net cash provided by financing activities 3,275 1,205
--------- ---------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1,452) 8,130
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,908 57,387
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,456 $ 65,517
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 6
Commission File No. 0-6544
BRUNO'S, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTEEN WEEK
PERIODS ENDED MAY 3, 1997, AND APRIL 27, 1996 (IN THOUSANDS EXCEPT SHARE AND PER
SHARE AMOUNTS)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of Bruno's, Inc. and its wholly owned subsidiaries. Significant
inter-company balances and transactions have been eliminated in consolidation.
Operating results for the thirteen weeks ended May 3, 1997, are not necessarily
indicative of the results that may be expected for the entire fiscal year. The
unaudited condensed financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended February 1, 1997.
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments necessary for a fair statement of the
consolidated financial position and results of operations of the Company for the
interim periods.
2. NET INCOME (LOSS) PER SHARE
Net income (loss) per share was computed based on the weighted average number of
common shares outstanding during the respective periods. Stock options and
warrants outstanding are common stock equivalents but were excluded from net
income (loss) per common share computations because their effect either was not
material or would be antidilutive to the calculation of net income (loss) per
share.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standard No. 128, Earnings per Share, which supersedes APB Opinion
No. 15, Earnings per Share, for periods ending after December 15, 1997 including
interim periods. Because of the antidilutive effect of common stock equivalents,
"basic" and "diluted" earnings per share under FAS No. 128 would be identical to
net income (loss) per share presented in the financial statements.
3. CONTINGENCIES
The Company is a party to various legal and taxing authority proceedings
incidental to its business. In the opinion of management, the ultimate liability
with respect to these actions will not materially affect the financial position
or results of operations of the Company.
5
<PAGE> 7
4. SHORT-TERM BORROWINGS AND LONG-TERM DEBT
On August 18, 1995, the Company entered into a Credit Agreement with several
lending institutions (the "Credit Agreement"). The Credit Agreement provided for
a revolving credit facility and a term loan facility. As of May 3, 1997, the
Company had $48 million outstanding under its revolving credit facility and $369
million outstanding under its term loan facility.
The Company's long-term debt as of May 3, 1997 is summarized as follows:
<TABLE>
<CAPTION>
(000's omitted)
---------------
<S> <C>
Term Loan $369,000
Senior Subordinated Notes 400,000
Revolving Credit Facility 48,000
Other Borrowings 414
--------
817,414
Less current maturities 229
--------
$817,185
========
</TABLE>
On June 2, 1997, the Company and its lending institutions entered into an
agreement amending and restating the Credit Agreement (the "Amended and Restated
Credit Agreement"). The Amended and Restated Credit Agreement provides for a
revolving credit facility of $225 million (the "Revolving Credit Facility") and
a term loan facility of $350 million (the "Term Loan Facility"). The Amended and
Restated Credit Agreement increases the Company's borrowing limits, revises
certain financial covenants and reduces the Company's interest rates.
The Revolving Credit Facility and Tranche A of the Term Loan Facility bear
interest at either the prime rate plus 0.00% to 1.25%, or the eurodollar rate
plus 1.00% to 2.25%. Tranche B of the Term Loan Facility bears interest at
either the prime rate plus 0.50% to 1.75%, or the eurodollar rate plus 1.50% to
2.75%. The Company elects the applicable rate at the beginning of an interest
rate period (as defined in the Amended and Restated Credit Agreement). The
interest rates may vary based on the Company's financial performance as defined
in the Amended and Restated Credit Agreement. Scheduled debt reductions occur on
various dates beginning in June 1998 and continuing through April 2005.
The Company incurs commitment fees of 0.5% on the unused portion of the credit
available under the Amended and Restated Credit Agreement.
The Amended and Restated Credit Agreement contains certain restrictive covenants
which, among other things, require the Company to maintain (i) a consolidated
total debt to earnings before interest, taxes, depreciation and amortization
("EBITDA") ratio of 6.95 to 1.00 or less (such ratio decreases over the term of
the Amended and Restated Credit Agreement), (ii) a consolidated EBITDA to
consolidated interest expense ratio of 1.50 to 1.00 or greater (such ratio
increases over the term of the Amended and Restated Credit Agreement), and (iii)
a consolidated fixed charge coverage ratio of 1.15 to 1.00 or greater (such
ratio increases over the term of the Amended and Restated Credit Agreement). In
calculating compliance with these covenants, EBITDA is adjusted by the amount of
certain noncash and nonrecurring gains and charges. The covenants in the Amended
and Restated Credit Agreement also limit capital expenditures, dividends and
certain other debt payments of the Company. At May 3,1997, the Company was in
compliance with all such covenants.
6
<PAGE> 8
Future principal payments for the Company's long-term debt are as follows:
<TABLE>
<CAPTION>
Fiscal Years:
-------------
<S> <C>
1997 $ 229
1998 2,065
1999 18,065
2000 22,055
2001 26,000
thereafter 749,000
--------
$817,414
========
</TABLE>
7
<PAGE> 9
Commission File No. 0-6544
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of significant factors
affecting the Company's earnings during the periods included in the accompanying
condensed consolidated statements of operations.
A table showing the percentage of net sales represented by certain items in the
Company's condensed consolidated statements of operations is as follows:
<TABLE>
<CAPTION>
MAY 3, APRIL 27,
1997 1996
(13 WEEKS) (13 WEEKS)
------------ ------------
<S> <C> <C>
Net sales 100.00 % 100.00%
Cost of products sold 77.25 % 75.63%
Store operating, selling, and administrative expenses 18.79 % 18.70%
--------- ---------
EBITDA 3.96 % 5.67%
Depreciation and amortization 2.08 % 1.86%
Interest expense, net 3.08 % 2.89%
--------- ---------
Income (loss) before provision for income taxes (1.20)% 0.92%
Income taxes (benefit) (0.46)% 0.35%
--------- ---------
Net income (loss) (0.74)% 0.57%
========= =========
</TABLE>
A summary of the changes in certain items included in the condensed statements
of operations for the thirteen week period ended May 3, 1997 as compared to the
thirteen week period ended April 27, 1996 is as follows:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
DOLLARS IN THOUSANDS PERCENTAGE
EXCEPT PER SHARE CHANGE
AMOUNTS
---------------- ------------
<S> <C> <C>
Net sales (47,461) (6.48)%
Cost of products sold (24,762) (4.47)%
Store operating, selling, and administrative expenses (8,222) (6.00)%
---------
EBITDA (14,477) (34.80)%
Depreciation and amortization 551 4.02)%
Interest expense, net (20) (0.09)%
---------
Income (loss) before provision for income taxes (15,008) N/A
Income taxes (benefit) (5,703) N/A
---------
Net income (loss) (9,305) N/A
=========
NET INCOME (LOSS) PER COMMON SHARE (0.37) N/A
=========
</TABLE>
8
<PAGE> 10
1
The following table contains a pro forma income statement for the thirteen week
period ended April 27, 1996 reflecting the acquisition of Seessel Holdings, Inc.
and the sale or closing of 47 stores during the fiscal year ended February 1,
1997 as if such events had occurred at the beginning of such period.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THIRTEEN WEEK PERIOD ENDED APRIL 27, 1996
(Amounts In Thousands)
<TABLE>
<CAPTION>
Thirteen (13) Week Period
Ended April 27,1996 (unaudited)
-------------------------------------
Total
Bruno's Company
(Pro Forma) Seessel's * (Pro Forma)
----------- ----------- -----------
<S> <C> <C> <C>
Net sales $662,193 $ 44,667 $706,860
Cost of products sold 500,378 31,369 531,747
Store operating, selling, and administrative expenses 119,460 10,973 130,433
-------- -------- --------
EBITDA 42,355 2,325 44,680
Depreciation and amortization 11,864 1,588 13,452
-------- -------- --------
Operating Income (loss) $ 30,491 $ 737 $ 31,228
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Thirteen (13) Week Period
Ended April 27,1996 (unaudited)
-------------------------------------
Total
Bruno's Company
(Pro Forma) Seessel's * (Pro Forma)
----------- ----------- -----------
<S> <C> <C> <C>
Net sales 100.00% 100.00% 100.00%
Cost of products sold 75.56% 70.23% 75.23%
Store operating, selling, and administrative expenses 18.04% 24.57% 18.45%
-------- -------- --------
EBITDA 6.40% 5.21% 6.32%
Depreciation and amortization 1.79% 3.56% 1.90%
-------- -------- --------
Operating Income (loss) 4.60% 1.65% 4.42%
======== ======== ========
</TABLE>
* The results of Seessel's represent, in all material respects, its internally
reported results for the thirteen week period ended April 27, 1996 except for
depreciation and amortization which has been adjusted to reflect the post
acquisition annualized expense.
9
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
GENERAL
As of May 3, 1997, the Company operated a chain of 219 supermarkets and
combination food and drug stores. The Company also operated nine retail liquor
stores. As of April 27, 1996, the Company operated 255 supermarkets and
combination food and drug stores as well as nine retail liquor stores.
ACQUISITONS AND DIVESTITURES
The Company, in December 1996, acquired all of the outstanding stock of Seessel
Holdings, Inc. (Seessel's), which owns and operates eight supermarkets in
Memphis, Tennessee and two supermarkets in Northern Mississippi, for $50.4
million in cash including direct acquisition costs. This acquisition was
accounted for using the purchase method.
During the fiscal year ended February 1, 1997, management evaluated the
Company's market strategy, geographic positioning and store level return on
assets. As a result of this evaluation, the Company during the fourth quarter of
such fiscal year developed and completed a divestiture program (the "Divestiture
Program") under which the Company closed its distribution center located in
Vidalia, Georgia and sold or closed 47 stores. The 47 stores included 33 Piggly
Wiggly stores in Georgia, nine FoodMax stores in Georgia and South Carolina, two
Food World stores in Florida, one Food World store in Mississippi, one Food
World store in Alabama, and one Food Fair store in Alabama.
RESULTS OF OPERATIONS
NET SALES
Net sales decreased $47.5 million in the quarter ended May 3, 1997 as compared
to the quarter ended April 27, 1996. The decrease was due primarily to the
reduction in store count associated with the Divestiture Program. Comparable
store sales decreased 2.6% from the prior year due to increased competitive
activity in the Company's trade areas.
GROSS PROFIT
Gross profit (net sales less cost of products sold) as a percentage of net sales
for the first quarter was 22.7% compared to 24.4% in the prior year. The
decrease in gross profit was primarily the result of increased promotional
activity incurred in conjunction with the implementation of the Company's
frequent shopper program. This program, which was initiated during the third
quarter of the prior year, grants special discounts to customers with frequent
shopper cards in an effort to increase customer loyalty and increase the amount
of the Company's average transaction. As of May 3, 1997, there were 88 stores
offering the frequent shopper program. The Company plans to add more stores to
the program during the remainder of the fiscal year.
10
<PAGE> 12
STORE OPERATING, SELLING AND ADMINISTRATIVE EXPENSES
Store operating, selling, and administrative expenses as a percent of net sales
was 18.8% for the period ended May 3, 1997 compared to 18.7% for the comparable
period of the prior year.
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION (EBITDA)
EBITDA decreased by $14.5 million in the quarter ended May 3, 1997 compared to
the quarter ended April 27, 1996. The decrease resulted from the decrease in
comparable store sales and gross profit as discussed above.
INCOME TAXES
The Company's effective income tax rate remained at 38% during both the period
ended May 3, 1997 and the comparable period of the prior year.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has funded working capital requirements, capital
expenditures, and other cash requirements primarily through cash flow from
operations and borrowings under its revolving credit facility. The Company
believes that operating cash flows combined with borrowings under its credit
facility will be sufficient to fund store expansion and working capital needs.
At May 3, 1997, the Company had available $75.0 million under its revolving
credit facility. See "Short-Term Borrowings and Long-Term Debt" in Notes to
Consolidated Financial Statements.
Operating activities generated $4.3 million and $22.2 million, respectively, in
the periods ended May 3, 1997, and April 27, 1996. The item most significantly
influencing this change was the reduction in EBITDA which is discussed above.
Cash flows used in investing activities were $9.0 million in the period ended
May 3, 1997 compared to $15.3 million in the comparable period of the prior
year. Capital expenditures were $17.2 million for the current year's quarter
compared to $15.3 million in the prior year's quarter. The Company's capital
expenditures are primarily related to the opening of new stores and investments
in systems technology. The Company believes that capital expenditures for the
remainder of the current fiscal year will be financed through cash flows from
operations, existing cash balances and, if necessary, borrowings under its
revolving credit facility. Cash flows from investing activities for the period
ended May 3, 1997 include $8.3 million in proceeds related to the sale of
certain properties.
Cash flows from financing activities were $3.3 million for the period ended May
3, 1997 compared to $1.2 million for the comparable period of the prior year.
Current year financing activities include $3.5 million in net borrowings under
the Company's revolving credit facility. Prior year investing activities
primarily consisted of $1.7 million of management equity contributions.
On June 2, 1997, the Company entered into the Amended and Restated Credit
Agreement, which contains provisions increasing the Company's borrowing limits,
revising certain financial covenants and reducing the Company's interest rates.
See "Short-Term Borrowings and Long-Term Debt" in Notes to Consolidated
Financial Statements.
11
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to various legal and taxing authority proceedings
incidental to its business. In the opinion of management, the ultimate liability
with respect to these actions will not materially affect the financial position
or results of operations of the Company.
ITEM 2. CHANGE IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
4.6 Credit Agreement, dated as of August 18, 1995, as amended and
restated as of June 2, 1997, among the Company, the several
lenders from time to time parties thereto, and The Chase
Manhattan Bank, as Administrative Agent.
27 Financial Data Schedule (for SEC use only)
</TABLE>
(b) Forms on 8-K
None
12
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BRUNO'S, INC.
/s/ James J. Hagan
-----------------------
James J. Hagan,
Executive Vice President and
Chief Financial Officer
Dated: June 13, 1997
13
<PAGE> 15
BRUNO'S, INC.
FORM 10-Q REPORT
(For Quarter ended May 3, 1997)
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
4.6 Credit Agreement, dated as of August 18, 1995, as amended and
restated as of June 2, 1997, among the Company, the several
lenders from time to time parties thereto, and The Chase
Manhattan Bank, as Administrative Agent.
27 Financial Data Schedule (for SEC use only)
</TABLE>
14
<PAGE> 1
EXHIBIT 4.6
CONFORMED COPY
===============================================================================
CREDIT AGREEMENT
DATED AS OF AUGUST 18, 1995,
AS AMENDED AND RESTATED AS OF
JUNE 2, 1997,
AMONG
BRUNO'S, INC.,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1. Definitions.........................................................................1
SECTION 2. Amount and Terms of Credit.........................................................25
2.1 Commitments......................................................................25
2.2 Minimum Amount of Each Borrowing; Maximum Number of Borrowings...................27
2.3 Notice of Borrowing..............................................................27
2.4 Disbursement of Funds............................................................28
2.5 Repayment of Loans; Evidence of Debt.............................................29
2.6 Conversions and Continuations....................................................30
2.7 Pro Rata Borrowings..............................................................31
2.8 Interest.........................................................................31
2.9 Interest Periods.................................................................32
2.10 Increased Costs, Illegality, etc.................................................33
2.11 Compensation.....................................................................34
2.12 Change of Lending Office.........................................................35
2.13 Notice of Certain Costs..........................................................35
SECTION 3. Letters of Credit..................................................................35
3.1 Letters of Credit................................................................35
3.2 Letter of Credit Requests........................................................36
3.3 Letter of Credit Participations..................................................36
3.4 Agreement to Repay Letter of Credit Drawings.....................................38
3.5 Increased Costs..................................................................38
3.6 Successor Letter of Credit Issuer................................................39
SECTION 4. Fees; Commitments..................................................................39
4.1 Fees.............................................................................39
4.2 Voluntary Reduction of Revolving Credit Commitments..............................40
4.3 Mandatory Reduction of Revolving Credit Commitments..............................41
4.4 Mandatory Termination of Commitments.............................................41
SECTION 5. Payments...........................................................................41
5.1 Voluntary Prepayments............................................................41
5.2 Mandatory Prepayments and Revolving Credit Commitment Reductions.................42
5.3 Method and Place of Payment......................................................45
5.4 Net Payments.....................................................................45
5.5 Computations of Interest and Fees................................................47
SECTION 6. Conditions Precedent to Initial Borrowing..........................................47
6.1 Credit Documents.................................................................47
6.2 Closing Certificate..............................................................47
6.3 Corporate Proceedings of Each Credit Party.......................................47
6.4 Corporate Documents..............................................................48
6.5 No Material Adverse Change.......................................................48
6.6 Fees.............................................................................48
6.7 Other Indebtedness...............................................................48
6.8 Required Approvals...............................................................48
6.9 Legal Opinions...................................................................48
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
6.10 Audited Financial Statements.....................................................48
6.11 Environmental and Safety Conditions..............................................48
SECTION 7. Conditions Precedent to All Credit Events..........................................48
7.1 No Default; Representations and Warranties.......................................49
7.2 Notice of Borrowing; Letter of Credit Request....................................49
SECTION 8. Representations, Warranties and Agreements.........................................49
8.1 Corporate Status.................................................................49
8.2 Corporate Power and Authority....................................................49
8.3 No Violation.....................................................................49
8.4 Litigation.......................................................................50
8.5 Margin Regulations...............................................................50
8.6 Governmental Approvals...........................................................50
8.7 Investment Company Act...........................................................50
8.8 True and Complete Disclosure.....................................................50
8.9 Financial Condition; Financial Statements........................................50
8.10 Tax Returns and Payments.........................................................51
8.11 Compliance with ERISA............................................................51
8.12 Subsidiaries.....................................................................51
8.13 Patents, etc.....................................................................51
8.14 Environmental Laws...............................................................51
8.15 Properties.......................................................................52
SECTION 9. Affirmative Covenants..............................................................52
9.1 Information Covenants............................................................52
9.2 Books, Records and Inspections...................................................54
9.3 Maintenance of Insurance.........................................................54
9.4 Payment of Taxes.................................................................54
9.5 Consolidated Corporate Franchises................................................54
9.6 Compliance with Statutes, Obligations, etc.......................................54
9.7 ERISA............................................................................55
9.8 Good Repair......................................................................55
9.9 Transactions with Affiliates.....................................................55
9.10 End of Fiscal Years; Fiscal Quarters.............................................55
9.11 Additional Guarantors............................................................56
9.12 Pledges of Additional Stock and Evidence of Indebtedness.........................56
9.13 Use of Proceeds..................................................................56
SECTION 10. Negative Covenants................................................................56
10.1 Changes in Business.............................................................56
10.2 Limitation on Indebtedness......................................................56
10.3 Limitation on Liens.............................................................57
10.4 Limitation on Fundamental Changes...............................................58
10.5 Limitation on Sale of Assets....................................................58
10.6 Limitation on Investments.......................................................59
10.7 Limitation on Dividends.........................................................60
10.8 Limitation on Debt Payments.....................................................60
10.9 Consolidated Total Debt to Consolidated EBITDA Ratio............................60
10.10 Consolidated EBITDA to Consolidated Interest Expense Ratio......................61
10.11 Consolidated Fixed Charge Coverage Ratio........................................61
10.12 Capital Expenditures............................................................61
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
SECTION 11. Events of Default.................................................................62
11.1 Payments........................................................................62
11.2 Representations, etc............................................................62
11.3 Covenants.......................................................................62
11.4 Default Under Other Agreements..................................................63
11.5 Bankruptcy, etc.................................................................63
11.6 ERISA...........................................................................63
11.7 Guarantee.......................................................................63
11.8 Pledge Agreement................................................................64
11.9 Judgments.......................................................................64
11.10 Change of Control..............................................................64
SECTION 12. The Administrative Agent..........................................................64
12.1 Appointment.....................................................................64
12.2 Delegation of Duties............................................................65
12.3 Exculpatory Provisions..........................................................65
12.4 Reliance by Administrative Agent................................................65
12.5 Notice of Default...............................................................65
12.6 Non-Reliance on Administrative Agent and Other Lenders..........................65
12.7 Indemnification.................................................................66
12.8 Administrative Agent in Its Individual Capacity.................................66
12.9 Successor Agent.................................................................66
SECTION 13. Miscellaneous.....................................................................67
13.1 Amendments and Waivers..........................................................67
13.2 Notices.........................................................................68
13.3 No Waiver; Cumulative Remedies..................................................69
13.4 Survival of Representations and Warranties......................................69
13.5 Payment of Expenses and Taxes...................................................69
13.6 Successors and Assigns; Participations and Assignments..........................69
13.7 Replacements of Lenders under Certain Circumstances.............................71
13.8 Adjustments; Set-off............................................................72
13.9 Counterparts....................................................................72
13.10 Severability....................................................................72
13.11 Integration.....................................................................72
13.12 GOVERNING LAW...................................................................72
13.13 Submission To Jurisdiction; Waivers.............................................73
13.14 Acknowledgments.................................................................73
13.15 WAIVERS OF JURY TRIAL...........................................................73
13.16 Confidentiality.................................................................73
</TABLE>
<PAGE> 5
<TABLE>
SCHEDULES
<S> <C>
Schedule 1.1 Commitments and Addresses of Lenders
Schedule 3.1 Outstanding Letters of Credit
Schedule 8.12 Subsidiaries
Schedule 10.2 Other Indebtedness
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 Form of Tranche B Prepayment Option Notice
Exhibit I Form of Confidentiality Agreement
</TABLE>
<PAGE> 6
CREDIT AGREEMENT dated as of August 18, 1995, as amended and
restated as of June 2, 1997, 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 THE CHASE MANHATTAN 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 requested the Lenders to extend credit in the
form of (a) Tranche A Term Loans, in an aggregate principal amount not in excess
of $150,000,000, (b) Tranche B Term Loans, in an aggregate principal amount not
in excess of $200,000,000 and (c) Revolving Credit Loans at any time and from
time to time prior to the Revolving Credit Maturity Date, in an aggregate
principal amount at any time outstanding not in excess of $225,000,000 (or as
reduced as set forth herein) less 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. The Borrower has requested the Letter of
Credit Issuer to issue Letters of Credit at any time and from time to time prior
to the L/C Maturity Date, in an aggregate face amount at any time outstanding
not in excess of $50,000,000. The Borrower has requested Chase to extend credit
in the form of Swingline Loans at any time and from time to time prior to the
Swingline Maturity Date, in an aggregate principal amount at any time
outstanding not in excess of $25,000,000.
The proceeds of the Term Loans made under this Agreement will
be used by the Borrower, together with the amount of Revolving Credit Loans made
on the Effectiveness Date under this Agreement, solely to refinance all Term
Loans and Revolving Credit Loans outstanding on the Effectiveness Date prior to
giving effect to this Agreement and to pay related fees, expenses and
transaction costs (collectively, the "Refinancing"). 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 for general corporate purposes. Letters of Credit issued under this
Agreement will be used by the Borrower (i) in the case of stand-by letters of
credit, for general corporate purposes and (ii) in the case of commercial
letters of credit, to make payments with respect to purchases of certain goods
and services in the ordinary course of business.
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.
<PAGE> 7
2
"Acquired EBITDA" shall mean, with respect to any Acquired
Entity or Business for any period, the sum of the amounts for such
period of (a) income from continuing operations before income taxes and
extraordinary items, (b) interest expense (including that attributable
to Capital Leases in accordance with GAAP), net of interest income,
including, without limitation, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under interest rate swap, cap or
collar agreements or interest rate future or option contracts but
excluding, however amortization of deferred financing costs and any
other amounts of non-cash interest, (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 and (h) restructuring charges or reserves less the sum of
the amounts for such period of (i) non-recurring gains, (j) non-cash
gains and (k) gains on asset sales, all as determined on a consolidated
basis for such Acquired Entity or Business in accordance with GAAP.
"Acquired Entity or Business" shall have the meaning provided
in the definition of the term "Consolidated EBITDA".
"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.
"Adjusted Total Tranche A Commitment" shall mean at any time
the Total Tranche A Commitment less the Tranche A Commitments of all
Defaulting Lenders.
"Administrative Agent" shall mean Chase, 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.
"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 Amended and Restated 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
<PAGE> 8
3
Loan, a Swingline Loan, a Tranche A Term Loan or a Tranche B Term Loan
and (b) the Status in effect on such date:
<TABLE>
<CAPTION>
Applicable ABR
Loan Status Margin
---- ------ --------------
<S> <C> <C>
Revolving Credit Loans, Swingline Loans Level I Status 0.000%
and Tranche A Term Loans Level II Status 0.250%
Level III Status 0.375%
Level IV Status 0.500%
Level V Status 0.625%
Level VI Status 0.750%
Level VII Status 1.000%
Level VIII Status 1.250%
Tranche B Term Loans Level I Status 0.500%
Level II Status 0.750%
Level III Status 0.875%
Level IV Status 1.000%
Level V Status 1.125%
Level VI Status 1.250%
Level VII Status 1.500%
Level VIII Status 1.750%
</TABLE>
"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
<PAGE> 9
4
set forth below based upon (a) whether such loan is a Revolving Credit
Loan, a Tranche A Term Loan or a Tranche B Term Loan and (b) the Status
in effect on such date:
<TABLE>
<CAPTION>
Applicable Eurodollar
Loan Status Margin
---- ------ ---------------------
<S> <C> <C>
Revolving Credit Loans and Level I Status 1.000%
Tranche A Term Loans Level II Status 1.250%
Level III Status 1.375%
Level IV Status 1.500%
Level V Status 1.625%
Level VI Status 1.750%
Level VII Status 2.000%
Level VIII Status 2.250%
Tranche B Term Loans Level I Status 1.500%
Level II Status 1.750%
Level III Status 1.875%
Level IV Status 2.000%
Level V Status 2.125%
Level VI Status 2.250%
Level VII Status 2.500%
Level VIII Status 2.750%
</TABLE>
"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 an amount equal to the
excess, if any, of (a) the amount of the Total Revolving Credit
Commitment over (b) the sum of (i) the aggregate principal amount of
all Revolving Credit Loans (but not Swingline Loans) then outstanding
and (ii) 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
<PAGE> 10
5
Section 5.2(a)(ii), (d) the amount of any capital contributions made to
the Borrower from and including the Business Day immediately following
the Effectiveness Date through and including 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.
"Borrower Common Stock" shall mean any class of outstanding
common stock of the Borrower.
"Borrowing" shall mean and include (a) the incurrence of
Swingline Loans from Chase on a given date, (b) the incurrence of one
Type of Term Loan on the Effectiveness Date (or resulting from
conversions on a given date after the Effectiveness 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 Capital 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
<PAGE> 11
6
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 to the extent purchased
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 Bank 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. ss. 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, a majority 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.
"Chase" shall mean The Chase Manhattan Bank, a New York
banking corporation (formerly named Chemical Bank), and any successor
thereto by merger, consolidation or otherwise.
"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
<PAGE> 12
7
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, 0.5000% 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:
<TABLE>
<CAPTION>
Commitment
Status Fee Rate
------ --------
<S> <C>
Level I Status .3000%
Level II Status .3250%
Level III Status .3750%
Level IV Status .3750%
Level V Status .4250%
Level VI Status .5000%
Level VII Status .5000%
Level VIII Status .5000%
</TABLE>
"Confidential Information" shall have the meaning provided in
Section 13.16.
"Confidential Information Memorandum" shall mean the
Confidential Information Memorandum of the Borrower dated May 1997,
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 and (h) in the case of any period ending during the fiscal
year ended January 31, 1998, expenses related to the Refinancing and
the transactions in connection therewith, less the sum of the amounts
for such period of (i) non-recurring gains, (j) non-cash gains and (k)
gains on asset sales, all as determined on a consolidated basis for the
Borrower and its Subsidiaries in accordance with GAAP, provided that
for purposes of the definition of the term "Consolidated Total Debt to
Consolidated EBITDA Ratio", there shall be included in determining
Consolidated EBITDA for such period, the Acquired EBITDA of any Person,
property, business or asset, in each case, in the Borrower's line of
business acquired pursuant to a Permitted Acquisition and not
subsequently sold, transferred or otherwise disposed of (but not
including the Acquired
<PAGE> 13
8
EBITDA of any related Person, property, business or assets to the
extent not so acquired) by the Borrower or any of its Subsidiaries
during such period (each such Person, property, business or asset, in
each case, in the Borrower's line of business acquired and not
subsequently so disposed of, an "Acquired Entity or Business"), based
on the actual Acquired EBITDA of such Acquired Entity or Business for
such period (including the portion thereof occurring prior to such
acquisition).
"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.
"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 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, provided that
the principal amount of any bonds issued by the Borrower and held by
the Borrower on such date shall not be included as Indebtedness for the
purposes of this clause (a) 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.
<PAGE> 14
9
"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 constituting
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 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 promissory notes issued by the Borrower
hereunder .
"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.
"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.
<PAGE> 15
10
"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).
"Effectiveness Agreement" shall mean the Effectiveness
Agreement dated as of June 2, 1997, among Bruno's, Inc., the Lenders
(as defined therein), the Letter of Credit Issuer, the Administrative
Agent and the Collateral Agent (as defined therein).
"Effectiveness Date" shall have the meaning assigned to such
term in the Effectiveness Agreement.
"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
thereof, including any binding judicial or administrative order,
consent decree or judgment, relating to the environment, human health
or safety or Hazardous Materials.
"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.
<PAGE> 16
11
"Eurodollar Loan" shall mean any Eurodollar Term Loan or
Eurodollar Revolving Credit Loan.
"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 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 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 of 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
<PAGE> 17
12
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) to the extent included in arriving at
such Consolidated Net Income, (vi) increases in Consolidated Working
Capital for such period, (vii) 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 Permitted Acquisitions made during such period to the extent
that such Permitted Acquisitions were financed (A) with internally
generated cash flow of the Borrower and its Subsidiaries or (B) with
the proceeds of Revolving Credit Loans 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 Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the
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 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.
<PAGE> 18
13
"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.
"KKR" shall mean each of Kohlberg Kravis Roberts & Co. and
KKR Associates, L.P.
<PAGE> 19
14
"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 preamble to
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 (i) standby letter of
credit and (ii) commercial letter of credit issued pursuant to Section
3.1.
"Letter of Credit Commitment" shall mean $50,000,000, as the
same may be reduced from time to time 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 Chase or one or more of
its Affiliates or one or more other letter of credit issuers
satisfactory to the Borrower and Chase or any successor to any of the
foregoing 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
Total Debt to Consolidated EBITDA Ratio is less than or equal to
3.75:1.00 as of such date.
"Level II Status" shall mean, on any date, the Consolidated
Total Debt to Consolidated EBITDA Ratio is less than or equal to
4.50:1.00 as of such date.
"Level III Status" shall mean, on any date, the Consolidated
Total Debt to Consolidated EBITDA Ratio is less than or equal to
4.75:1.00 as of such date.
<PAGE> 20
15
"Level IV Status" shall mean, on any date, the Consolidated
Total Debt to Consolidated EBITDA Ratio is less than or equal to
5.00:1.00 as of such date.
"Level V Status" shall mean, on any date, the Consolidated
Total Debt to Consolidated EBITDA Ratio is less than or equal to
5.50:1.00 as of such date.
"Level VI Status" shall mean, on any date, the Consolidated
Total Debt to Consolidated EBITDA Ratio is less than or equal to
6.00:1.00 as of such date.
"Level VII Status" shall mean, on any date, the Consolidated
Total Debt to Consolidated EBITDA Ratio is less than or equal to
6.50:1.00 as of such date.
"Level VIII Status" shall mean, on any date, the circumstance
that none of Level I, Level II, Level III, Level IV, Level V, Level VI
or Level VII 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.
"Material Subsidiary" shall mean, at any date of
determination, any Subsidiary of the Borrower (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 20% of the consolidated total
assets of the Borrower and its Subsidiaries at such date and (b) whose
gross revenues for such Test Period were equal to or greater than 20%
of the consolidated gross revenues of the Borrower and its Subsidiaries
for such period, in each case determined in accordance with GAAP.
<PAGE> 21
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"Maturity Date" shall mean the Tranche A Maturity Date, the
Tranche B Maturity Date or the Revolving Credit Maturity Date.
"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
or issuance, as the case may be, 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,
(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
be deemed to be Net Cash Proceeds of an Asset Sale Prepayment
Event occurring on the last day of such one-year period and be
applied 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 or
issuance, as the case may be (other than those payable to the
Borrower or any Subsidiary of the Borrower), in each case only
to
<PAGE> 22
17
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.
"Original Closing Date" shall mean August 18, 1995.
"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;
(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
<PAGE> 23
18
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 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 incurred after the Original Closing Date and that is secured
by a mortgage on any Real Estate owned by
<PAGE> 24
19
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 final scheduled maturity of all the Loans and (e) the
proceeds of such Indebtedness are applied as provided in Section 5.2.
"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 multi employer 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 Chase 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 Lender" shall mean Chase.
"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.
<PAGE> 25
20
"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 any Tranche A Repayment Amount
or any Tranche B Repayment Amount.
"Repayment Date" shall mean Tranche A Repayment Date or
Tranche B 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, (a) Non-Defaulting
Lenders having or holding 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 Revolving Credit Lenders" shall mean, at any date,
(a) Non-Defaulting Lenders having or holding a majority of the Adjusted
Total Revolving Credit Commitment 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
Revolving Credit 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 majority of the outstanding
principal amount of the Tranche A Term Loans (excluding the Tranche A
Term Loans held by Defaulting Lenders) at such date.
"Required Tranche B Lenders" shall mean, at any date,
Non-Defaulting Lenders having or holding a majority of the outstanding
principal amount of the Tranche B Term Loans (excluding the Tranche B
Term Loans held by Defaulting Lenders) 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 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.
<PAGE> 26
21
"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 Commitment Reduction Amount" shall mean,
with respect to any date set forth below (each, a "Revolving Credit
Commitment Reduction Date"), the dollar amount set forth opposite such
date:
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
June 2, 2000 $15,000,000
June 2, 2001 20,000,000
June 2, 2002 25,000,000
June 2, 2003 40,000,000
</TABLE>
provided, that any Revolving Credit Commitment Reduction Amount set forth above
shall be reduced pursuant to and in accordance with Sections 4.2 and 5.2(a).
"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 Effectiveness Date, or, if such date
is not a Business Day, the next preceding Business Day.
"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(e).
"Specified Subsidiary" shall mean, at any date of
determination, a 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
<PAGE> 27
22
(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 Ratings 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, Level VII Status or Level
VIII Status, as the case may be, on such date. Changes in Status
resulting from changes in the Consolidated Total 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
delivered for the Test Period ending on or about October 31, l997, the
Status of the Borrower for the purposes of this Agreement shall be
deemed to be Level VI and (ii) each determination of the Consolidated
Total 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 Original Closing Date pursuant to the Indenture
dated as of August 18, 1995, between the Borrower and Marine Midland
Bank, as trustee, as supplemented by the First Supplemental Indenture
dated as of August 18, 1995, between the Borrower and such 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.
"Supermajority Revolving Credit Lenders" shall mean, at any
date, (a) Non-Defaulting Lenders having or holding at least 66-2/3% of
the Adjusted Total Revolving Credit Commitment 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
<PAGE> 28
23
Lenders) of at least 66-2/3% of the outstanding principal amount of the
Revolving Credit Loans and Letter of Credit Exposures (excluding the
Loans and Letter of Credit Exposures of Defaulting Lenders) at such
date.
"Supermajority Tranche A Lenders" shall mean, at any date,
Non-Defaulting Lenders having or holding at least 66-2/3% of the
outstanding principal amount of the Tranche A Term Loans (excluding the
Tranche A Term Loans held by Defaulting Lenders) at such date.
"Supermajority Tranche B Lenders" shall mean, at any date,
Non-Defaulting Lenders having or holding at least 66-2/3% of the
outstanding principal amount of the Tranche B Term Loans (excluding the
Tranche B Term Loans held by Defaulting Lenders) at such date.
"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 or Tranche B
Term Loan.
"Term Loan Commitment" shall mean, with respect to each
Lender, the sum of such Lender's Tranche A Commitment and Tranche B
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 Bank 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 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 Credit Exposure" shall mean, at any date, the sum of
(a) the Total Revolving Credit Commitment at such date and (b) the
outstanding principal amount of all Term Loans at such date.
<PAGE> 29
24
"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.
"Total Tranche A Commitment" shall mean the Tranche A
Commitments of all the Lenders.
"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 Effectiveness 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 April 15, 2005, 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.
"Transferee" shall have the meaning provided in Section
13.6(e).
<PAGE> 30
25
"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.
"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.
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; and
(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.
Such Term Loans (x) shall be made on the Effectiveness Date, (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 or prepaid, Term
Loans may not be reborrowed.
(b) Subject to and upon the terms and conditions herein set
forth, each Lender having a Revolving Credit Commitment 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 Effectiveness
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
<PAGE> 31
26
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 outstanding, equals the Total
Revolving Credit Commitment then in effect. On the Revolving Credit Maturity
Date, all Revolving Credit Loans shall be repaid in full.
(c) Subject to and upon the terms and conditions herein set
forth, Chase in its individual capacity agrees, at any time and from time to
time on and after the Effectiveness 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. Chase 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 Chase
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 in accordance with the provisions of Section
13.1.
(d) On any Business Day, Chase 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 Chase to repay Chase 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 Chase 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 Chase, 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 Chase (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 principal and
interest
<PAGE> 32
27
payable on such Swingline Loans shall be for the account of Chase 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 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
Effectiveness Date, (ii) in the case of the initial Borrowing, the Effectiveness
Date (which shall be a Business Day) and (iii) whether the Term Loans shall
consist of ABR Loans and/or Eurodollar Term Loans and, if the Term Loans 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 any Borrowing of the
Term Loans, 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 2.10,
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
<PAGE> 33
28
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 Chase 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.
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 Chase 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.
<PAGE> 34
29
(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, (ii) on the
Tranche B Maturity Date, the then-unpaid Tranche B Term Loans and (iii) on the
Revolving Credit Maturity Date, the then-unpaid Revolving Credit Loans. The
Borrower shall repay to the Administrative Agent, for the account of Chase, 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"):
<TABLE>
<CAPTION>
Tranche A Tranche A
--------- ---------
Repayment Date Repayment Amount
-------------- ----------------
<S> <C>
June 2, 1998 $ 500,000
December 2, 1998 500,000
June 2, 1999 8,500,000
December 2, 1999 8,500,000
June 2, 2000 10,500,000
December 2, 2000 10,500,000
June 2, 2001 12,500,000
December 2, 2001 12,500,000
June 2, 2002 18,000,000
December 2, 2002 18,000,000
June 2, 2003 25,000,000
Tranche A Maturity Date 25,000,000
</TABLE>
<PAGE> 35
30
(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"):
<TABLE>
<CAPTION>
Tranche B Tranche B
Repayment Date Repayment Amount
-------------- ----------------
<S> <C>
June 2, 1998 $ 500,000
December 2, 1998 500,000
June 2, 1999 500,000
December 2, 1999 500,000
June 2, 2000 500,000
December 2, 2000 500,000
June 2, 2001 500,000
December 2, 2001 500,000
June 2, 2002 500,000
December 2, 2002 500,000
June 2, 2003 500,000
December 2, 2003 500,000
June 2, 2004 64,500,000
December 2, 2004 64,500,000
Tranche B Maturity Date 65,000,000
</TABLE>
(d) 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.
(e) 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 Chase hereunder and
(iii) the amount of any sum received by the Agent hereunder from the Borrower
and each Lender's share thereof.
(f) The entries made in the Register and accounts and
subaccounts maintained pursuant to paragraphs (d) and (e) 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
<PAGE> 36
31
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 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.
<PAGE> 37
32
(c) If all or a portion of (i) the principal amount of any
Loan or (ii) 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, to the extent permitted by applicable law, 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 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
<PAGE> 38
33
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
Effectiveness 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 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
<PAGE> 39
34
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 2.5, 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
Borrowing of Eurodollar Term Loans or Eurodollar Revolving Credit Loans is not
made as a result of a withdrawn Notice of Borrowing, (c) 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 (d) 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.
<PAGE> 40
35
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 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 giving
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 Effectiveness Date and prior to the L/C Maturity Date, may request
that the Letter of Credit Issuer issue or, in the case of any Letter of Credit
set forth on Schedule 3.1 hereto, permit to remain outstanding, for the account
of the Borrower, (i) a standby letter of credit or standby letters of credit or
(ii) a commercial letter of credit or commercial letters of credit, in each case
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 Letter of Credit
Outstandings at such time, would exceed the Letter of Credit Commitment then in
effect; (ii) 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; (iii) 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 (A) in the case of any standby letter of credit, one
year after the date of issuance thereof and (B) in the case of any commercial
letter of credit, 270 days after the date of issuance thereof, and in no event
occurring later than the L/C Maturity Date; (iv) each Letter of Credit shall be
denominated in Dollars; and (v) 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 in accordance with the provisions of Section 13.1.
(c) Upon at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) to the Administrative Agent and
the Letter of Credit Issuer (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), the Borrower shall have the right, on
any day, permanently to terminate or reduce the Letter of Credit Commitment in
whole or in part, provided that, after giving effect to such termination or
reduction, the Letter of Credit Outstandings shall not exceed the Letter of
Credit Commitment.
<PAGE> 41
36
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 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
<PAGE> 42
37
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:
(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.
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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 rata 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.
(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
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39
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 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 each Lender having a Revolving Credit Commitment (pro
rata according to the respective Commitments of all such Lenders), a commitment
fee for each day from and including the Effectiveness Date to but excluding the
Final
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Date. Such commitment fee shall be payable in arrears on (i) the last day of
each March, June, September and December (for the three-month period (or portion
thereof) ended on such day) and (ii) on the Final Date (for the period ended on
such date for which no payment has been received pursuant to clause (i) 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 Effectiveness 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
Effectiveness 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 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. Each
reduction of the Revolving Credit Commitments pursuant to this Section 4.2 shall
be applied to reduce the Revolving Credit Commitment Reduction Amounts in such
manner as the Borrower may determine.
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4.3 Mandatory Reductions of Revolving Credit Commitments. (a)
The Total Revolving Credit Commitment shall be automatically, permanently
reduced at 5:00 P.M. (New York time) on each Revolving Credit Commitment
Reduction Date by an amount equal to the applicable Revolving Credit Commitment
Reduction Amount, and each such reduction shall be allocated pro rata among the
Revolving Credit Commitments.
(b) The Total Revolving Credit Commitment shall be permanently
reduced by an amount equal to any reduction of the Revolving Credit Commitments
required by Section 5.2(a), and each such reduction shall be (i) allocated pro
rata among the Revolving Credit Commitments and (ii) applied (A) first, to
reduce in such order as the Borrower may determine, the Revolving Credit
Commitment Reduction Amounts with respect to any Revolving Credit Commitment
Reduction Date occurring within the two-year period commencing on the date of
such reduction and (B) second, pro rata to reduce the remaining Revolving Credit
Commitment Reduction Amounts; provided that the Total Revolving Credit
Commitment shall not be reduced to an amount less than $150,000,000 by any
reduction of the Revolving Credit Commitments required by Section 5.2.
4.4 Mandatory Termination of Commitments. (a) The Total Term
Loan Commitment shall terminate at 5:00 P.M. (New York time) on the
Effectiveness 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 Chase, 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 that is greater than zero but 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 either or both
tranches of Term Loans or in respect of Revolving Credit Loans, in each case
made pursuant to a particular Borrowing shall be applied pro rata among the
Lenders holding Loans comprising such Borrowing of Term Loans or Revolving
Credit Loans, provided that at the Borrower's election in connection with any
prepayment pursuant to this Section
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5.1, such prepayment shall not be applied to any Term Loan or Revolving Credit
Loan of a Defaulting Lender. Each prepayment of Loans pursuant to this Section
5.1 shall be (a) applied to Tranche A Term Loans, Tranche B Term 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.
5.2 Mandatory Prepayments and Revolving Credit Commitment
Reductions. (a) Term Loan Prepayments and Revolving Credit Commitment
Reductions. (i) On each occasion that a Prepayment Event occurs, the Borrower
shall, within five Business Days after the occurrence of such Prepayment Event,
(A) repay the principal amount of Term Loans in accordance with paragraph (c)
below or (B) if no Term Loans remain outstanding on such date (or to the extent
the amount required to be applied pursuant to this Section 5.2 exceeds the
aggregate principal amount of outstanding Term Loans on such date), reduce the
Total Revolving Credit Commitment in accordance with Section 4.3(b) and, to the
extent required by Section 5.2(b), repay Swingline Loans or Revolving Credit
Loans or pay cash security to the Administrative Agent, in an amount equal to
(i) in the case of an Asset Sale Prepayment Event, 70% of the Net Cash Proceeds
therefrom (or 50% of such Net Cash Proceeds if, on the date of, and after giving
to, such Asset Sale Prepayment Event, the Consolidated Total Debt to
Consolidated EBITDA Ratio, determined on a pro forma basis as if such Asset Sale
Prepayment Event had occurred on the first day of the last relevant Test Period,
is less than 4.00 to 1.00) and (ii) in the case of a Debt Incurrence Prepayment
Event, 100% of the Net Cash Proceeds therefrom.
(ii) Not later than the date on which the financial statements
with respect to any fiscal year are or are required to be delivered pursuant to
Section 9.1, the Borrower shall, in each case in accordance with paragraph (c)
below, (A) repay the principal of Term Loans or (B) if no Term Loans remain
outstanding on such date (or to the extent the amount required to be applied
pursuant to this Section 5.2 exceeds the aggregate principal amount of
outstanding Term Loans on such date), reduce the Total Revolving Credit
Commitment in accordance with Section 4.3(b) and, to the extent required by
Section 5.2(b), repay Swingline Loans or Revolving Credit Loans or pay cash
security to the Administrative Agent, in an amount equal to (x) 50% of Excess
Cash Flow for such fiscal year minus (y) 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 to
each prepayment of Term Loans required by Section 5.2(a) shall be (A) initially
allocated pro rata among the Tranche A Term Loans and the Tranche B Term Loans
and (B) applied (x) in the case of the Tranche A Loans, to reduce the Tranche A
Repayment Amounts, in the manner described in paragraph (iii) below and (y) in
the case of the Tranche B Term
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Loans, to reduce the Tranche B Repayment Amounts, in the manner described in
paragraph (iv) below; provided, however, that at any time when (1) any Tranche A
Term Loans remain outstanding or (2) the Total Revolving Credit Commitment
exceeds $150,000,000, any amount to be applied pursuant to this paragraph (i) to
reduce the Tranche B Repayment Amounts shall instead be applied in the manner
described in paragraph (ii) below.
(ii) If the terms of this paragraph (ii) are applicable
pursuant to the proviso to 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 (such amount, the "Tranche B Prepayment
Amount"), the Borrower will, in lieu of applying such amount to the prepayment
of Tranche B Term Loans, 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 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 a Prepayment Option Notice, which shall be in the form of
Exhibit H, 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 Tranche
B 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. 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 have accepted prepayment as described
above (such Lenders, the "Accepting Lenders"), and such amount shall be applied
pro rata to reduce the Tranche B Repayment Amounts with respect to each
Accepting Lender in the manner described in paragraph (iv) below, (B) the
Borrower shall pay to the Administrative Agent an amount equal to 50% of the
portion of the Tranche B 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; provided that if,
after giving effect to the prepayment of Tranche A Term Loans pursuant to
Section 5.02(a)(i), no Tranche A Term Loans remain outstanding on the date of
such Prepayment Event (or to the extent the amount required to be applied
pursuant to clause (B) above exceeds the aggregate principal amount of
outstanding Tranche A Term Loans on such date), the Revolving Credit Commitments
shall be reduced by an amount equal to the portion of the Tranche B Prepayment
Amount that otherwise would have been used to prepay Tranche A Term Loans under
this clause (B) in accordance with Section 4.3(b), and such amount shall be
applied, to the extent required by Section 5.2(b), to repay Swingline Loans or
Revolving Credit Loans or to pay cash security to the Administrative Agent with
any excess amount to be retained by the Borrower and (C) the Borrower shall be
entitled to retain the remaining 50% of the portion of the Tranche B 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 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; provided that if, after giving effect to the prepayment of Tranche A Term
Loans pursuant to Section 5.2(a)(i), no Tranche A Term Loans remain outstanding
on the date of such Prepayment Event (or to the extent the amount required to be
applied pursuant to clause (x) above exceeds the aggregate principal amount of
outstanding Tranche A Term Loans on such date), the Revolving Credit Commitments
shall be reduced by an amount equal to the portion of the Tranche B Prepayment
Amount that otherwise would have been used to prepay Tranche A Term Loans under
clause (x) above in accordance with Section 4.3(b), and such amount shall be
applied, to the extent required by Section 5.2(b), to repay Swingline Loans or
Revolving Credit Loans or to pay cash security to the Administrative Agent with
any excess to be retained by the Borrower, and (y) the Borrower shall be
entitled to retain the remaining 25% of the portion of the Tranche B Prepayment
Amount not accepted by the Accepting Lenders.
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(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 reduce,
in such order as the Borrower may determine, 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.
(iv) An amount equal to each prepayment of Tranche B Term
Loans required by this Section 5.2 (including any such prepayment required by
the provisions of paragraph (ii) above) shall be applied pro rata to reduce the
remaining Tranche B 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 only on the last day of an Interest Period applicable thereto 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 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.
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45
(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,
without set-off, counterclaim or deduction of any kind, to the Administrative
Agent for the ratable account of the Lenders entitled thereto, the Letter of
Credit Issuer or Chase, 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.
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(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.
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47
(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 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
Effectiveness 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
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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 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 February 1, 1997.
6.6 Fees. The Administrative Agent shall have received
the fees referred to in Section 4.1(e) to be received on the
Effectiveness Date.
6.7 Other Indebtedness. After giving effect to the
Refinancing 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.
6.8 Required Approvals. All requisite material
governmental authorities and third parties shall have approved or
consented to the Refinancing 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
Refinancing or the other transactions contemplated hereby.
6.9 Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the executed legal
opinion, of (a) Simpson Thacher & Bartlett, special New York counsel to
the Borrower, substantially in the form of Exhibit E-1, and (b) Sirote
& Permutt, Alabama counsel to the Borrower, substantially in the form
of Exhibit E-2, and the Borrower hereby instructs such counsel to
deliver such legal opinion.
6.10 Audited Financial Statements. The Administrative
Agent shall have received the consolidated balance sheets of the
Borrower and its Subsidiaries for the fiscal period ended February 1,
1997, and the related consolidated statements of income and retained
earnings and of cash flows for such fiscal period and certified by
Deloitte & Touche LLP 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.
6.11 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.
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:
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49
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 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
Refinancing 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,
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50
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 on the Borrower's Form
10-K for the fiscal year ended February 1, 1997, 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 Effectiveness 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
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 February 1,
1997, 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
Deloitte & Touche LLP, 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
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51
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 February 1, 1997.
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 Effectiveness
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 multi employer 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 multi employer 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 multi employer 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 Effectiveness Date. To the knowledge of
the Borrower, each Specified Subsidiary as of the Effectiveness Date has been so
designated on Schedule 8.12.
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) Other than instances of
noncompliance that could not reasonably be expected to have a Material Adverse
Effect: (i) the Borrower and each of its Subsidiaries are in
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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 (ii) 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).
(b) 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 Effectiveness 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 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.
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(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 (other than any fiscal month that constitutes the end of a
fiscal quarter or the end of a fiscal year of the Borrower), commencing
with May 1997, 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 95 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 10.9, 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 Effectiveness 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
<PAGE> 59
54
(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.
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.
<PAGE> 60
55
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, 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 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 January 31 of each
year and (b) each of its, and each of its Subsidiaries', fiscal quarters to end
consistent with
<PAGE> 61
56
such fiscal year and the Borrower's past practice; provided, however, that the
Borrower may, upon written notice to the Administrative Agent, change the
financial reporting convention specified above to any other financial reporting
convention reasonably acceptable to the Administrative Agent, 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.
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 Effectiveness 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 any bankers' acceptance, letter
of credit, warehouse receipt or similar facilities entered into in the
ordinary course of business;
<PAGE> 62
57
(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, lessors and licensees;
(f) (i) (A) Indebtedness arising under Capital Leases and (B)
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 10.12, 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 Indebtedness incurred and remaining outstanding
pursuant to clauses (A) and (B) above or pursuant to clause (ii) below,
shall not exceed $140,000,000, and (ii) any refinancing, refunding,
renewal or extension of any Indebtedness specified in clause (i) above,
provided that the principal amount thereof is not increased above the
principal amount thereof outstanding immediately prior to such
refinancing refunding, renewal or extension except to the extent such
increase complies with the limits of clause (i) above;
(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
(l) 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;
<PAGE> 63
58
(c) Liens securing Indebtedness permitted pursuant to Section
10.2(f), provided that such Liens attach only to the assets so
financed;
(d) Liens existing on the date hereof on assets of the
Borrower or any of its Subsidiaries;
(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 (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 Refinancing;
(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;
<PAGE> 64
59
(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 in the aggregate $225,000,000 during the period from and
including the Effectiveness Date to and including the Tranche B
Maturity Date 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;
(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
$4,000,000;
(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;
<PAGE> 65
60
(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) since the Effectiveness Date 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.
10.8 Limitation on Debt Payments. The Borrower will not
optionally prepay, repurchase or redeem or otherwise defease any 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 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 Consolidated Total Debt to Consolidated EBITDA
Ratio as of the last day of any Test Period ending during any period set forth
below to be greater than the ratio set forth below opposite such period,
provided that for any period set forth below, the dates constituting the
beginning and the end of such period shall refer to the last day of the fiscal
period of the Borrower ending on or about such date:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
April 30, 1997 through October 31, 1997 6.95:1.00
January 31, 1998 through October 31, 1998 6.75:1.00
</TABLE>
<PAGE> 66
61
<TABLE>
<S> <C>
February 1, 1999 through October 31, 1999 6.25:1.00
January 31, 2000 through October 31, 2000 5.50:1.00
January 31, 2001 through October 31, 2001 5.00:1.00
January 31, 2002 through the Tranche B Maturity Date 4.50:1.00
</TABLE>
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, provided that for any period set forth below, the dates
constituting the beginning and the end of such period shall refer to the last
day of the fiscal period of the Borrower ending on or about such date:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
April 30, 1997 through October 31, 1998 1.50:1.00
February 1, 1999 through October 31, 1999 1.65:1.00
January 31, 2000 through October 31, 2000 1.85:1.00
January 31, 2001 through October 31, 2001 2.00:1.00
January 31, 2002 through the Tranche B Maturity Date 2.25:1.00
</TABLE>
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) Consolidated 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, provided that
for any period set forth below, the dates constituting the beginning and the end
of such period shall refer to the last day of the fiscal period of the Borrower
ending on or about such date:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
April 30, 1997 through October 31, 1997 1.15:1.00
January 31, 1998 through October 31, 1998 1.20:1.00
February 1, 1999 through October 31, 2000 1.30:1.00
January 31, 2001 through October 31, 2001 1.40:1.00
January 31, 2002 through the Tranche B Maturity Date 1.50:1.00
</TABLE>
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
<PAGE> 67
62
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:
<TABLE>
<CAPTION>
Fiscal Year Ending on
---------------------
the Saturday Nearest Amount
-------------------- ------
<S> <C>
January 31, 1997 $80,000,000
January 31, 1998 85,000,000
January 31, 1999 92,500,000
January 31, 2000 100,000,000
January 31, 2001 105,000,000
Thereafter until the Tranche B Maturity
Date 105,000,000
</TABLE>
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 January 31, 1998;
(b) $125,000,000 in the case of the fiscal year of the Borrower ending on the
Saturday nearest January 31, 1999; (c) $135,000,000 in the case of the fiscal
year of the Borrower ending on the Saturday nearest January 31, 2000; (d)
$145,000,000 in the case of the fiscal year of the Borrower ending on the
Saturday nearest January 31, 2001; and (e) $150,000,000 in the case of any
fiscal year of the Borrower thereafter.
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 the Guarantee,
the Pledge Agreement or 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, the Guarantee or the Pledge 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
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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 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
<PAGE> 69
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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 or any Material Subsidiary, 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 Chase, 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 or any Material Subsidiary, 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 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.
<PAGE> 70
65
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.
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
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66
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 portions of the Total Credit Exposure 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 respective
portions of the Total Credit Exposure in effect 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
<PAGE> 72
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to the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. 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 Revolving Credit Lenders", "Required Tranche A
Lenders", "Required Tranche B Lenders", "Supermajority Revolving Lenders",
"Supermajority Tranche A Lenders" and "Supermajority Tranche B Lenders", or
consent to the assignment or transfer by the Borrower 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 Chase, or (vi) change any
Revolving Credit Commitment to any other Commitment, change any Tranche A
Commitment to any other Commitment or change any Tranche B Commitment to any
other Commitment, in each case without the prior written consent of each Lender
directly and 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,
extend any Tranche B Repayment Date or decrease the amount of any mandatory
prepayment to be received by any Lender holding any Tranche B Loans without the
written consent of the Required Tranche B Lenders, or (ix) decrease any
scheduled Revolving Credit Commitment Reduction Amount, extend any Revolving
Credit Commitment Reduction Date, decrease the amount of any mandatory
prepayment to be received by any Lender holding any Revolving Credit Loan or
decrease the amount of any mandatory reduction of the Revolving Credit
Commitments pursuant to Section 5.2(a) without the written consent of the
Required Revolving Credit Lenders, or (x) release all or substantially all the
Collateral or release all or substantially all the Guarantors under the
Guarantee, in either case without the written consent of (A) the Supermajority
Tranche A Lenders, (B) the
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Supermajority Tranche B Lenders and the Supermajority Revolving Credit 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 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: The Chase Manhattan Bank
One Chase Manhattan Plaza, 8th Floor
New York, NY 10081
Attention: Joseph Brusco or Janet Belden
Fax: (212) 552-7500
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: William Rindfuss
Fax: (212) 270-1474
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.
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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
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
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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 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 to 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 $5,000,000 in the case of (A) Revolving Credit Loans and
Revolving Credit Commitments in the aggregate, (B) Tranche A Term Loans or (C)
Tranche B Term Loans so assigned. 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
<PAGE> 76
71
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.
(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, 2.12, 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, 2.12, 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
<PAGE> 77
72
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 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.
<PAGE> 78
73
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 judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States 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 Acknowledgments. 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;
(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
<PAGE> 79
74
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 or to any other Person
upon (a) the consent of the Borrower and the Administrative Agent after
reasonable disclosure by the Borrower as to the purposes of the Borrower's
disclosure of such Confidential Information to such Person and (b) the execution
by such other Person of a Confidentiality Agreement in the form of Exhibit I,
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
/s/ JAMES J. HAGAN
---------------------------------
Name: James J. Hagan
Title: Executive Vice President and Chief
Financial Officer
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender,
by
/s/ WILLIAM P. RINDFUSS
----------------------------------
Name: William P. Rindfuss
Title: Vice President
<PAGE> 80
AMSOUTH BANK OF ALABAMA,
by
/s/ SAMUEL M. TORTORICI
---------------------------------
Name: Samuel M. Tortorici
Title: Senior Vice President
BANK OF AMERICA ILLINOIS,
by
/s/ LINDA A. CARPER
---------------------------------
Name: Linda A. Carper
Title: Managing Director
THE BANK OF NOVA SCOTIA
by
/s/ W.J. BROWN
---------------------------------
Name: W.J. Brown
Title: Vice President
BANKERS TRUST COMPANY,
by
/s/ MARY JO JOLLY
---------------------------------
Name: Mary Jo Jolly
Title: Assistant Vice President
<PAGE> 81
BANK OF TOKYO - MITSUBISHI TRUST COMPANY
by
/s/ JOSEPH P. DEVOE
---------------------------------
Name: Jospeh P. Devoe
Title: Vice President
CIBC INC,
by
/s/ CHRISTOPHER P. KLECZKOWSKI
---------------------------------
Name: Christopher P. Kleczkowski
Title: Director, CIBC Woody Gundy
Securities Corp.,
as Agent
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
New York Branch,
by
/s/ IAN REECE
---------------------------------
Name: Ian Reece
Title: Senior Credit Officer
by
/s/ DANA W. HEMENWAY
---------------------------------
Name: Dana W. Hemenway
Title: Vice President
<PAGE> 82
THE DAI-ICHI KANGYO BANK, LTD.,
by
/s/ STEPHANIE R. ROGERS
---------------------------------
Name: Stephanie R. Rogers
Title: Vice President
FLEET NATIONAL BANK
by
/s/ MARK CORDES
---------------------------------
Name: Mark Cordes
Title: Vice President
GOLDMAN SACHS CREDIT PARTNERS L.P.,
by
/s/ JOHN E. URBAN
---------------------------------
Name: John E. Urban
Title: Authorized Signer
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
by
/s/ TAKUYA HONJO
---------------------------------
Name: Takuya Honjo
Title: Senior Vice President
<PAGE> 83
KEYPORT LIFE INSURANCE COMPANY,
by
/s/ DANIEL T.H. YIN
---------------------------------
Name: Daniel T.H. Yin
Title: Assistant Vice President
KZH HOLDING CORPORATION,
by
/s/ ROBERT GOODWIN
---------------------------------
Name: Robert Goodwin
Title: Authorized Agent
KZH HOLDING CORPORATION II,
by
/s/ ROBERT GOODWIN
---------------------------------
Name: Robert Goodwin
Title: Authorized Agent
MITSUI LEASING (U.S.A.) INC.,
by
/s/ JERRY PARISI
---------------------------------
Name: Jerry Parisi
Title: Senior Vice President
<PAGE> 84
NATIONSBANK, N.A.,
by
/s/ NANCY S. GOLDMAN
---------------------------------
Name: Nancy S. Goldman
Title: Vice President
OCTAGON CREDIT INVESTORS LOAN PORTFOLIO,
(a unit of The Chase Manhattan Bank)
by
/s/ ANDREW D. GORDON
---------------------------------
Name: Andrew D. Gordon
Title: Managing Director
THE SAKURA BANK, LIMITED,
by
/s/ YOSHIKAZU NAGURA
---------------------------------
Name: Yoshikazu Nagura
Title: Vice President
THE SUMITOMO BANK, LIMITED
by
/s/ JOHN C. KISSINGER
---------------------------------
Name: John C. Kissinger
Title: Joint General Manager
<PAGE> 85
SOUTHTRUST BANK OF ALABAMA, N.A.,
by
/s/ T. Knudsen
---------------------------------
Name: T. Knudsen
Title: Senior Vice President
THE TRAVELERS INSURANCE COMPANY,
by
/s/ ROBERT M. MILLS
---------------------------------
Name: Robert M. Mills
Title: Investment Officer
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST,
by
/s/ JEFFREY W. MAILLET
---------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President - Portfolio
Manager
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF BRUNO'S, INC. FOR THE QUARTER ENDED MAY 3, 1997, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-02-1997
<PERIOD-END> MAY-03-1997
<CASH> 3,456
<SECURITIES> 0
<RECEIVABLES> 20,886
<ALLOWANCES> 0
<INVENTORY> 184,449
<CURRENT-ASSETS> 237,392
<PP&E> 788,834
<DEPRECIATION> 326,384
<TOTAL-ASSETS> 787,765
<CURRENT-LIABILITIES> 242,017
<BONDS> 400,000
0
0
<COMMON> 253
<OTHER-SE> (335,571)
<TOTAL-LIABILITY-AND-EQUITY> 787,765
<SALES> 685,260
<TOTAL-REVENUES> 685,260
<CGS> 529,362
<TOTAL-COSTS> 529,362
<OTHER-EXPENSES> 143,028
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,120
<INCOME-PRETAX> (8,250)
<INCOME-TAX> (3,135)
<INCOME-CONTINUING> (5,115)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,115)
<EPS-PRIMARY> (0.20)
<EPS-DILUTED> (0.20)
</TABLE>
