SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - Not applicable
(Date of Earliest Event Reported)
BRUNO'S, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 0-6544
Alabama 63-0411801
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(State of Incorporation) (I.R.S. Employer
Identification No.)
800 Lakeshore Parkway
Birmingham, Alabama 35211
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (205) 940-9400
NYFS10...:\80\56880\0003\1187\FRM2048K.02C
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Item 5. Other Events
Bruno's Inc., an Alabama corporation (the "Registrant"), has entered
into the First Amendment dated as of March 5, 1998 to the Revolving Credit and
Guaranty Agreement with The Chase Manhattan Bank ("Chase"), as agent for itself
and any other lenders party thereto (the "Credit Agreement"), and certain of the
Registrant's subsidiaries set forth therein, as guarantors (collectively, the
"Guarantors"), pursuant to which: (i) all amounts owed by the Registrant and the
Guarantors for certain inventory received by the Registrant and the Guarantors
from certain vendors will be secured on a pari passu basis with the liens
granted to Chase and the other lenders party to the Credit Agreement with
respect to the obligations of the Registrant and the Guarantors under the Credit
Agreement; (ii) the definition of "Borrowing Base" set forth therein has been
amended to set forth such definition with greater specificity; (iii) certain
interest rates on the loans and fees permitted thereunder have been reduced; and
(iv) other amendments relating to the foregoing have been made, including, but
not limited to, the addition of new defined terms relating to reserves, eligible
inventory and the claims of the vendors referred to in clause (i) above.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits.
10.49 Revolving Credit and Guaranty Agreement dated as of
February 2, 1998 among the Registrant, the Guarantors,
the financial institutions party thereto and Chase
(corrected copy refiled).
10.51 First Amendment dated as of March 5, 1998 to the
Revolving Credit and Guaranty Agreement dated as of
February 2, 1998 among the Registrant, the Guarantors,
the financial institutions party thereto and Chase.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BRUNO'S, INC.
By: /s/ Walter M. Grant
-----------------------------------------
Walter M. Grant
Senior Vice President and General Counsel
March 26, 1998
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
10.49 Revolving Credit and Guaranty Agreement dated as of
February 2, 1998 among the Registrant, the Guarantors,
the financial institutions party thereto and Chase
(corrected copy refiled).
10.51 First Amendment dated as of March 5, 1998 to the Revolving
Credit and Guaranty Agreement dated as of February 2, 1998
among the Registrant, the Guarantors, the financial
institutions party thereto and Chase.
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Exhibit 10.49
REVOLVING CREDIT AND GUARANTY AGREEMENT
Among
BRUNO'S, INC.
a Debtor and a Debtor-in-Possession under Chapter 11 of the Bankruptcy Code
as Borrower
THE SUBSIDIARIES OF THE BORROWER NAMED HEREIN,
each a Debtor and a Debtor-in-Possession under Chapter 11 of the Bankruptcy Code
as Guarantors
and
THE BANKS PARTY HERETO,
and
THE CHASE MANHATTAN BANK,
as Agent
Dated as of February 2, 1998
NYFS10...:\80\56880\0003\1187\AGR3258M.200
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REVOLVING CREDIT AND GUARANTY AGREEMENT
TABLE OF CONTENTS
Page No.
SECTION 1. DEFINITIONS..................................................3
SECTION 1.1 Defined Terms................................................3
SECTION 1.2 Terms Generally............................................ 18
SECTION 2. AMOUNT AND TERMS OF CREDIT................................. 18
SECTION 2.1 Commitment of the Banks.................................... 18
SECTION 2.2 Borrowing Base............................................. 19
SECTION 2.3 Letters of Credit.......................................... 19
SECTION 2.4 Issuance................................................... 21
SECTION 2.5 Nature of Letter of Credit Obligations Absolute............ 21
SECTION 2.6 Making of Loans............................................ 22
SECTION 2.7 Repayment of Loans; Evidence of Debt....................... 23
SECTION 2.8 Interest on Loans.......................................... 24
SECTION 2.9 Default Interest........................................... 24
SECTION 2.10 Optional Termination or Reduction of Commitment............ 24
SECTION 2.11 Alternate Rate of Interest................................. 25
SECTION 2.12 Refinancing of Loans....................................... 25
SECTION 2.13 Mandatory Prepayment; Commitment Termination;
Cash Collateral.......................................... 26
SECTION 2.14 Optional Prepayment of Loans; Reimbursement of Banks....... 27
SECTION 2.15 Reserve Requirements; Change in Circumstances.............. 28
SECTION 2.16 Change in Legality......................................... 30
SECTION 2.17 Pro Rata Treatment, etc.................................... 31
SECTION 2.18 Taxes...................................................... 31
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SECTION 2.19 Certain Fees............................................... 34
SECTION 2.20 Commitment Fee............................................. 34
SECTION 2.21 Letter of Credit Fees...................................... 34
SECTION 2.22 Nature of Fees............................................. 34
SECTION 2.23 Priority and Liens......................................... 35
SECTION 2.24 Right of Set-Off........................................... 36
SECTION 2.25 Security Interest in Letter of Credit Account.............. 36
SECTION 2.26 Payment of Obligations..................................... 37
SECTION 2.27 No Discharge; Survival of Claims........................... 37
SECTION 2.28 Use of Cash Collateral..................................... 37
SECTION 3. REPRESENTATIONS AND WARRANTIES............................. 37
SECTION 3.1 Organization and Authority................................. 37
SECTION 3.2 Due Execution.............................................. 38
SECTION 3.3 Statements Made............................................ 38
SECTION 3.4 Financial Statements....................................... 39
SECTION 3.5 Ownership.................................................. 39
SECTION 3.6 Liens...................................................... 39
SECTION 3.7 Compliance with Law........................................ 39
SECTION 3.8 Insurance.................................................. 40
SECTION 3.9 The Orders................................................. 40
SECTION 3.10 Use of Proceeds............................................ 40
SECTION 3.11 Litigation................................................. 40
SECTION 4. CONDITIONS OF LENDING..................................... 41
SECTION 4.1 Conditions Precedent to Initial Loans and Initial
Letters of Credit......................................... 41
SECTION 4.2 Conditions Precedent to Each Loan and Each Letter of
Credit.................................................... 44
SECTION 5. AFFIRMATIVE COVENANTS...................................... 45
SECTION 5.1 Financial Statements, Reports, etc......................... 46
SECTION 5.2 Corporate Existence........................................ 49
SECTION 5.3 Insurance.................................................. 49
SECTION 5.4 Obligations and Taxes...................................... 49
SECTION 5.5 Notice of Event of Default, etc............................ 49
SECTION 5.6 Access to Books and Records................................ 49
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SECTION 5.7 Business Plan.............................................. 50
SECTION 5.8 Maintenance of Concentration Account....................... 50
SECTION 5.9 Borrowing Base Certificate................................. 50
SECTION 5.10 Audits..................................................... 50
SECTION 6. NEGATIVE COVENANTS......................................... 50
SECTION 6.1 Liens...................................................... 51
SECTION 6.2 Merger, etc................................................ 51
SECTION 6.3 Indebtedness............................................... 51
SECTION 6.4 Capital Expenditures....................................... 51
SECTION 6.5 EBITDA..................................................... 51
SECTION 6.6 Guarantees and Other Liabilities........................... 52
SECTION 6.7 Chapter 11 Claims.......................................... 52
SECTION 6.8 Dividends; Capital Stock................................... 52
SECTION 6.9 Transactions with Affiliates............................... 53
SECTION 6.10 Investments, Loans and Advances............................ 53
SECTION 6.11 Disposition of Assets...................................... 53
SECTION 6.12 Nature of Business......................................... 53
SECTION 7. EVENTS OF DEFAULT.......................................... 53
SECTION 7.1 Events of Default.......................................... 53
SECTION 8. THE AGENT.................................................. 57
SECTION 8.1 Administration by Agent.................................... 57
SECTION 8.2 Advances and Payments...................................... 57
SECTION 8.3 Sharing of Setoffs......................................... 58
SECTION 8.4 Agreement of Required Banks................................ 59
SECTION 8.5 Liability of Agent......................................... 59
SECTION 8.6 Reimbursement and Indemnification.......................... 60
SECTION 8.7 Rights of Agent............................................ 60
SECTION 8.8 Independent Banks.......................................... 60
SECTION 8.9 Notice of Transfer......................................... 60
SECTION 8.10 Successor Agent............................................ 60
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SECTION 9. GUARANTY................................................... 61
SECTION 9.1 Guaranty................................................... 61
SECTION 9.2 No Impairment of Guaranty.................................. 62
SECTION 9.3 Subrogation................................................ 62
SECTION 10. MISCELLANEOUS.............................................. 63
SECTION 10.1 Notices.................................................... 63
SECTION 10.2 Survival of Agreement, Representations and Warranties, etc. 63
SECTION 10.3 Successors and Assigns..................................... 64
SECTION 10.4 Confidentiality............................................ 66
SECTION 10.5 Expenses................................................... 67
SECTION 10.6 Indemnity.................................................. 67
SECTION 10.7 CHOICE OF LAW.............................................. 68
SECTION 10.8 No Waiver.................................................. 68
SECTION 10.9 Extension of Maturity...................................... 68
SECTION 10.10 Amendments, etc.......................................... 68
SECTION 10.11 Severability............................................. 69
SECTION 10.12 Headings................................................. 70
SECTION 10.13 Execution in Counterparts................................ 70
SECTION 10.14 Prior Agreements......................................... 70
SECTION 10.15 Further Assurances....................................... 70
SECTION 10.16 WAIVER OF JURY TRIAL..................................... 70
ANNEX A - Commitment Amounts
EXHIBIT A-1 - Form of Interim Order
EXHIBIT A-2 - Form of Final Order
EXHIBIT B - Form of Security and
Pledge Agreement
EXHIBIT C - Form of Opinion of Counsel
EXHIBIT D - Form of Assignment and Acceptance
SCHEDULE 1.01 - Existing Agreements
SCHEDULE 3.05 - Subsidiaries
SCHEDULE 3.06 - Liens
SCHEDULE 3.11 - Litigation
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SCHEDULE 6.04 - Capital Expenditures
SCHEDULE 6.11 - Disposition of Assets
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REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of February 2, 1998
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of February 2,
1998, among BRUNO'S, INC., an Alabama corporation (the "Borrower"), a debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code,
each of the direct or indirect Subsidiaries of the Borrower signatory hereto
(each a "Guarantor" and collectively, the "Guarantors"), each of which
Guarantors referred to in this paragraph is a debtor and debtor-in-possession in
a case pending under Chapter 11 of the Bankruptcy Code (the cases of the
Borrower and the Guarantors, each a "Case" and collectively, the "Cases"), THE
CHASE MANHATTAN BANK, a New York banking corporation ("Chase"), each of the
other financial institutions from time to time party hereto (together with
Chase, the "Banks") and THE CHASE MANHATTAN BANK, as agent (in such capacity,
the "Agent") for the Banks.
INTRODUCTORY STATEMENT
----------------------
On February 2, 1998, the Borrower and the Guarantors filed voluntary
petitions with the Bankruptcy Court initiating the Cases and have continued in
the possession of their assets and in the management of their business pursuant
to Sections 1107 and 1108 of the Bankruptcy Code.
The Borrower has applied to the Banks for a revolving credit and
letter of credit facility in an aggregate principal amount not to exceed
$200,000,000, all of the Borrower's obligations under which are to be guaranteed
by the Guarantors.
The proceeds of the Loans will be used for working capital and other
general corporate purposes of the Borrower and Guarantors.
To provide guarantees and security for the repayment of the Loans,
the reimbursement of any draft drawn under a Letter of Credit and the payment of
the other obligations of the Borrower and the Guarantors hereunder and under the
other Loan Documents (including, without limitation, the Obligations of the
Borrower under Section 6.03(vi)), the Borrower and the Guarantors will provide
to the Agent and the Banks the following (each as more fully described herein):
(a) a guaranty from each of the Guarantors of the due and
punctual payment and performance of the obligations of the Borrower
hereunder;
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(b) with respect to the obligations of the Borrower and the
Guarantors hereunder, an allowed administrative expense claim in
each of the Cases pursuant to Section 364(c)(1) of the Bankruptcy
Code having priority over all administrative expenses of the kind
specified in Sections 503(b) and 507(b) of the Bankruptcy Code;
(c) with respect to the Obligations of the Borrower and the
Guarantors hereunder, a perfected first priority Lien, pursuant to
Section 364(c)(2) of the Bankruptcy Code, upon all cash and cash
equivalents in the Letter of Credit Account, provided that following
the Termination Date, amounts in the Letter of Credit Account shall
not be subject to the Carve-Out hereinafter referred to;
(d) with respect to the Obligations of the Borrower and the
Guarantors hereunder, a perfected Lien, pursuant to Section
364(c)(3) of the Bankruptcy Code, upon all property of the Borrower
and the Guarantors (other than the property referred to in paragraph
(e) below that is subject to the valid and perfected Liens that
presently secure the Borrower's and Guarantors' pre-petition
Indebtedness under the Existing Agreement) that is subject to valid
and perfected Liens in existence on the Filing Date, junior to such
valid and perfected Liens; and with respect to the Obligations of
the Borrower and the Guarantors hereunder, perfected first priority
priming Liens, pursuant to Section 364(d)(1) of the Bankruptcy Code,
upon all property of the Borrower and the Guarantors (including,
without limitation, accounts receivable, inventory, equipment,
property, interests in leaseholds, intellectual property and the
capital stock of the direct and indirect Subsidiaries of the
Borrower) that is subject to (x) the existing Liens that presently
secure the Borrower's and Guarantors' pre-petition Indebtedness
under or in connection with that certain Credit Agreement dated as
of August 18, 1995, among the Borrower, the several lenders from
time to time party thereto and Chase, as administrative agent (as
heretofore amended, amended and restated or otherwise modified, the
"Existing Agreement") and (y) any Liens granted after the Filing
Date to provide adequate protection in respect of the Existing
Agreement, which first priority priming Liens in favor of the Agent
and the Banks shall be senior in all respects to all of such
existing Liens, and to any Liens granted after the Filing Date to
provide adequate protection in respect thereof.
All of the claims and the Liens granted hereunder in the Cases to
the Agent and the Banks shall be subject to the Carve-Out to the extent provided
in Section 2.23.
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Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
SECTION 1.1 DEFINED TERMS.
As used in this Agreement, the following terms shall have the
meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Alternate Base Rate in accordance with the provisions of
Section 2.
"Additional Credit" shall have the meaning given such term in
Section 4.02(d) hereof.
"Adjusted LIBOR Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the quotient of (a) the LIBOR
Rate in effect for such Interest Period divided by (b) a percentage (expressed
as a decimal) equal to 100% minus Statutory Reserves. For purposes hereof, the
term "LIBOR Rate" shall mean the rate (rounded upwards, if necessary, to the
next 1/16 of 1%) at which dollar deposits approximately equal in principal
amount to such Eurodollar Borrowing and for a maturity comparable to such
Interest Period are offered to the principal London office of the Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such Person. For purposes of this definition, a Person (a
"Controlled Person") shall be deemed to be "controlled by" another Person (a
"Controlling Person") if the Controlling Person possesses, directly or
indirectly, power to direct or cause the direction of the management and
policies of the Controlled Person whether by contract or otherwise.
"Agent" shall have the meaning set forth in the Introduction.
"Agreement" shall mean this Revolving Credit and Guaranty Agreement,
as the same may from time to time be further amended, modified or supplemented.
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"Alternate Base Rate" 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%. For purposes hereof, "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by the Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced. "Base CD Rate"
shall mean the sum of (a) the quotient of (i) the Three-Month Secondary CD Rate
divided by (ii) a percentage expressed as a decimal equal to 100% minus
Statutory Reserves and (b) the Assessment Rate. "Three-Month Secondary CD Rate"
shall mean, for any day, the secondary market 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 City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Agent from three New
York City negotiable certificate of deposit dealers of recognized standing
selected by it. "Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published 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 which is a Business Day,
the average of the quotations for the day of such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it. If
for any reason the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate or both for any reason, including the
inability or failure of the Agent to obtain sufficient quotations in accordance
with the terms hereof, the Alternate Base Rate shall be determined without
regard to clause (b) or (c), or both, of the first sentence of this definition,
as appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Agent as the then current
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net annual assessment rate that will be employed in determining amounts payable
by the Agent to the Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or any successor) of time deposits made in
dollars at the Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Bank and an Eligible Assignee, and accepted by the Agent,
substantially in the form of Exhibit D.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
the District of Delaware or any other court having jurisdiction over the Cases
from time to time.
"Banks" shall have the meaning set forth in the Introduction.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrower" shall have the meaning set forth in the Introduction.
"Borrowing" shall mean the incurrence of Loans of a single Type made
from all the Banks on a single date and having, in the case of Eurodollar Loans,
a single Interest Period (with any ABR Loan made pursuant to Section 2.16 being
considered a part of the related Borrowing of Eurodollar Loans).
"Borrowing Base" shall be defined in a manner satisfactory to the
Agent and will include inventory, receivables and real estate, in each case
meeting certain eligibility standards.
"Borrowing Base Certificate" shall mean a certificate satisfactory
in form and substance to the Agent, executed and certified by a Financial
Officer of the Borrower, which shall include appropriate exhibits and schedules
as referred to therein.
"Budget" shall have the meaning set forth in Section 4.01(i).
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in the State of New York are required or permitted to
close (and, for a Letter
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of Credit, other than a day on which the Fronting Bank issuing such Letter of
Credit is closed); provided, however, that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits on the London interbank
market.
"Capital Expenditures" shall mean, for any period, the aggregate of
all expenditures (whether paid in cash and not theretofore accrued subsequent to
the date of this Agreement or accrued as liabilities during such period and
including that portion of Capitalized Leases which is capitalized on the
consolidated balance sheet of the Borrower and the Guarantors) net of cash
amounts received by the Borrower and the Guarantors from other Persons during
such period in reimbursement of Capital Expenditures made by the Borrower and
the Guarantors, excluding interest capitalized during construction, by the
Borrower and the Guarantors during such period that, in conformity with GAAP,
are required to be included in or reflected by the property, plant, equipment or
intangibles or similar fixed asset accounts reflected in the consolidated
balance sheet of the Borrower and the Guarantors (including equipment which is
purchased simultaneously with the trade-in of existing equipment owned by the
Borrower or any of the Guarantors to the extent of the gross amount of such
purchase price less the book value of the equipment being traded in at such
time), but excluding expenditures made in connection with the replacement or
restoration of assets, to the extent reimbursed or financed from insurance
proceeds paid on account of the loss of or the damage to the assets being
replaced or restored, or from awards of compensation arising from the taking by
condemnation or eminent domain of such assets being replaced.
"Capitalized Lease" shall mean, as applied to any Person, any lease
of property by such Person as lessee which would be capitalized on a balance
sheet of such Person prepared in accordance with GAAP.
"Carve-Out" shall have the meaning set forth in Section 2.23.
"Cases" shall mean the Chapter 11 Cases of the Borrower and each of
the Guarantors pending in the Bankruptcy Court.
"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; and/or (b) KKR shall at any time not own directly or
indirectly, beneficially and of record, a majority of the outstanding voting
stock of the Borrower.
"Chase" shall have the meaning set forth in the Introduction.
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"Closing Date" shall mean the date on which this Agreement has been
executed and the conditions precedent to the making of the initial Loans set
forth in Section 4.01 have been satisfied or waived, which date shall occur
promptly, but no later than 10 days after the entry of the Interim Order.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean the Collateral under the Security and Pledge
Agreement.
"Commitment" shall mean, with respect to each Bank, the commitment
of each Bank hereunder in the amount set forth opposite its name on Annex A
hereto or as may subsequently be set forth in the Register from time to time, as
the same may be reduced from time to time pursuant to this Agreement.
"Commitment Fee" shall have the meaning set forth in Section 2.20.
"Commitment Letter" shall mean that certain Commitment Letter dated
January 30, 1998 among the Agent, Chase Securities Inc. and the Borrower.
"Commitment Percentage" shall mean at any time, with respect to each
Bank, the percentage obtained by dividing its Commitment at such time by the
Total Commitment at such time.
"Consummation Date" shall mean the date of the substantial
consummation (as defined in Section 1101 of the Bankruptcy Code and which for
purposes of this Agreement shall be no later than the effective date) of a
Reorganization Plan of the Borrower or any of the Guarantors which is confirmed
pursuant to an order of the Bankruptcy Court.
"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.
"Dollars" and "$" shall mean lawful money of the United States of
America.
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"EBITDA" shall mean, for any period, all as determined in accordance
with GAAP, the consolidated net income (or net loss) of the Borrower and the
Guarantors for such period, plus (a) the sum of (i) depreciation expense, (ii)
amortization expense, (iii) other non-cash charges, (iv) provision for LIFO
adjustment for inventory valuation, (v) net total Federal, state and local
income tax expense, (vi) gross interest expense for such period less gross
interest income for such period, (vii) extraordinary losses, (viii) any
non-recurring charge or restructuring charge which in accordance with GAAP is
excluded from operating income, (ix) the cumulative effect of any change in
accounting principles and (x) "Chapter 11 expenses" (or "administrative costs
reflecting Chapter 11 expenses") as shown on the Borrower's consolidated
statement of income for such period less (b) extraordinary gains plus or minus
(c) the amount of cash received or expended in such period in respect of any
amount which, under clause (viii) above, was taken into account in determining
EBITDA for such or any prior period.
"Eligible Assignee" shall mean (i) a commercial bank having total
assets in excess of $1,000,000,000; (ii) a finance company, insurance company or
other financial institution or fund, in each case acceptable to the Agent, which
in the ordinary course of business extends credit of the type contemplated
herein and has total assets in excess of $200,000,000 and whose becoming an
assignee would not constitute a prohibited transaction under Section 4975 of
ERISA; and (iii) any other financial institution satisfactory to the Borrower
and the Agent.
"Environmental Lien" shall mean a Lien in favor of any Governmental
Authority for (i) any liability under federal or state environmental laws or
regulations, or (ii) damages arising from or costs incurred by such Governmental
Authority in response to a release or threatened release of a hazardous or toxic
waste, substance or constituent, or other substance into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which is a member of a group of which the Borrower is a member and
which is under common control within the meaning of Section 414(b) or (c) of the
Code and the regulations promulgated and rulings issued thereunder.
"Eurocurrency Liabilities" shall have the meaning assigned thereto
in Regulation D issued by the Board, as in effect from time to time.
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"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Section 2.
"Event of Default" shall have the meaning given such term in Section
7.
"Existing Agreement" shall have the meaning set forth in the
Introduction and shall include all of the agreements granting security interests
and Liens in property and assets of the Borrower and the guarantors to the
Existing Lenders, including without limitation, the security agreements,
mortgages and leasehold mortgages listed on Schedule 1.01 hereto, each of which
documents was executed and delivered (to the extent party thereto) by the
Borrower and the Guarantors prior to the Filing Date, as each may have been
amended or modified from time to time.
"Existing Lenders" shall mean, collectively, those certain lenders
to the Borrower and the Guarantors (to the extent party thereto) under the
Existing Agreement, together with any successors or assigns thereof.
"Fees" shall collectively mean the Commitment Fees, Letter of Credit
Fees and other fees referred to in Sections 2.19, 2.20 and 2.21.
"Filing Date" shall mean February 2, 1998.
"Final Order" shall have the meaning given such term in Section
4.02(d).
"Financial Officer" shall mean the Chief Financial Officer, Vice
President Finance, Treasurer or Assistant Treasurer of the Borrower.
"Fronting Bank" shall mean Chase or such other Bank (which other
Bank shall be reasonably satisfactory to the Borrower) as may agree with Chase
to act in such capacity.
"GAAP" shall mean generally accepted accounting principles applied
on a basis consistent with those used in preparing the financial statements
referred to in Section 3.04.
"Governmental Authority" shall mean any Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case whether of the United States or
foreign.
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"Guarantor" shall have the meaning set forth in the Introduction.
"Indebtedness" shall mean, at any time and with respect to any
Person, (i) all indebtedness of such Person for borrowed money, (ii) all
indebtedness of such Person for the deferred purchase price of property or
services (other than property, including inventory, and services purchased, and
expense accruals and deferred compensation items arising, in the ordinary course
of business), (iii) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments (other than performance, surety and
appeal bonds arising in the ordinary course of business), (iv) all indebtedness
of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (v)
all obligations of such Person under leases which have been or should be, in
accordance with GAAP, recorded as capital leases, to the extent required to be
so recorded, (vi) all reimbursement, payment or similar obligations of such
Person, contingent or otherwise, under acceptance, letter of credit or similar
facilities and all obligations of such Person in respect of (x) currency swap
agreements, currency future or option contracts and other similar agreements
designed to hedge against fluctuations in foreign interest rates and (y)
interest rate swap, cap or collar agreements and interest rate future or option
contracts; (vii) all Indebtedness referred to in clauses (i) through (vi) above
guaranteed directly or indirectly by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (A) to pay or
purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (B) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss in respect of such Indebtedness, (C) to supply
funds to or in any other manner invest in the debtor (including any agreement to
pay for property or services irrespective of whether such property is received
or such services are rendered) or (D) otherwise to assure a creditor against
loss in respect of such Indebtedness, and (viii) all Indebtedness referred to in
clauses (i) through (vii) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness.
"Insufficiency" shall mean, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities within the meaning of Section
4001(a)(18) of ERISA.
"Interim Order" shall have the meaning given such term in Section
4.01(b).
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"Interest Expense" shall mean interest expense as determined in
accordance with GAAP.
"Interest Payment Date" shall mean (i) as to any Eurodollar Loan,
the last day of the Interest Period in respect thereof, and (ii) as to all ABR
Loans, the last calendar day of each April, July, October and January and the
date on which any ABR Loans are refinanced with Eurodollar Loans pursuant to
Section 2.12.
"Interest Period" shall mean, as to any Borrowing of Eurodollar
Loans, the period commencing on the date of such Borrowing (including as a
result of a refinancing of ABR Loans) or on the last day of the preceding
Interest Period applicable to such Borrowing and ending on the numerically
corresponding day (or if there is no corresponding day, the last day) in the
calendar month that is one or three months thereafter, as the Borrower may elect
in the related notice delivered pursuant to Sections 2.06(b) or 2.12; provided,
however, that (i) if any Interest Period would end on a day which shall not be a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, and (ii) no Interest Period shall end later than the
Termination Date.
"Investments" shall have the meaning given such term in Section
6.10.
"KKR" shall collectively mean Kohlberg Kravis Roberts & Co. and KKR
Associates, L.P. and their respective Affiliates.
"Letter of Credit" shall mean any irrevocable letter of credit
issued pursuant to Section 2.03, which letter of credit shall be (i) a standby
or documentary letter of credit, (ii) issued for such purposes for which the
Borrower or any Guarantor has historically obtained letters of credit, or for
such other purposes as are reasonably acceptable to the Agent, (iii) denominated
in Dollars and (iv) otherwise in such form as may be reasonably approved from
time to time by the Agent and the applicable Fronting Bank.
"Letter of Credit Account" shall mean the account established by the
Borrower under the sole and exclusive control of the Agent maintained at the
office of the Agent at 270 Park Avenue, New York, New York 10017 designated as
the "Bruno's, Inc. Letter of Credit Account" that shall be used solely for the
purposes set forth in Sections 2.03(b) and 2.13.
"Letter of Credit Fees" shall mean the fees payable in respect of
Letters of Credit pursuant to Section 2.21.
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"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate undrawn stated amount of all Letters of Credit then
outstanding plus (ii) all amounts theretofore drawn under Letters of Credit and
not then reimbursed.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any conditional
sale or other title retention agreement or any lease in the nature thereof).
"Loan" shall have the meaning given such term in Section 2.01.
"Loan Documents" shall mean this Agreement, the Letters of Credit,
the Security and Pledge Agreement, and any other instrument or agreement
executed and delivered in connection herewith.
"Maturity Date" shall mean February 1, 2000.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" shall mean a Single Employer Plan, which
(i) is maintained for employees of the Borrower or an ERISA Affiliate and at
least one Person other than the Borrower and its ERISA Affiliates or (ii) was so
maintained and in respect of which the Borrower or an ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such Plan has been or
were to be terminated.
"Obligations" shall mean (a) the due and punctual payment of
principal of and interest on the Loans and the reimbursement of all amounts
drawn under Letters of Credit, and (b) the due and punctual payment of the Fees
and all other present and future, fixed or contingent, monetary obligations of
the Borrower and the Guarantors to the Banks and the Agent under the Loan
Documents.
"Orders" shall mean the Interim Order and the Final Order of the
Bankruptcy Court referred to in Sections 4.01(b) and 4.02(d).
"Other Taxes" shall have the meaning given such term in Section
2.18.
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"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor agency or entity performing substantially the same functions.
"Pension Plan" shall mean a defined benefit pension or retirement
plan which meets and is subject to the requirements of Section 401(a) of the
Code.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within twelve months from the date of acquisition thereof;
(b) without limiting the provisions of paragraph (d) below,
investments in commercial paper maturing within six months from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least "A-2" or the equivalent thereof from Standard & Poor's Corporation or of
at least "P-2" or the equivalent thereof from Moody's Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits (including Eurodollar time deposits) maturing within six months
from the date of acquisition thereof issued or guaranteed by or placed with (i)
any domestic office of the Agent or the bank with whom the Borrower and the
Guarantors maintain their cash management system, provided, that if such bank is
not a Bank hereunder, such bank shall have entered into an agreement with the
Agent pursuant to which such bank shall have waived all rights of setoff and
confirmed that such bank does not have, nor shall it claim, a security interest
therein or (ii) any domestic office of any other commercial bank of recognized
standing organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $250,000,000 and is the principal banking Subsidiary of a bank holding
company having a long-term unsecured debt rating of at least "A- 2" or the
equivalent thereof from Standard & Poor's Corporation or at least "P-2" or the
equivalent thereof from Moody's Investors Service, Inc.;
(d) investments in commercial paper maturing within six months from
the date of acquisition thereof and issued by (i) the holding company of the
Agent or (ii) the holding company of any other commercial bank of recognized
standing organized under the laws of the United States of America or any State
thereof that has (A) a combined capital and surplus in excess of $250,000,000
and (B) commercial paper rated at least "A-2" or the
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equivalent thereof from Standard & Poor's Corporation or of at least "P-2" or
the equivalent thereof from Moody's Investors Service, Inc.;
(e) investments in repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause (a)
above entered into with any office of a bank or trust company meeting the
qualifications specified in clause (c) above;
(f) investments in money market funds substantially all the assets
of which are comprised of securities of the types described in clauses (a)
through (e) above; and
(g) to the extent owned on the Filing Date, investments in the
capital stock of any direct or indirect Subsidiary of the Borrower.
"Permitted Liens" shall mean (i) Liens imposed by law (other than
Environmental Liens and any Lien imposed under ERISA) for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens (other than Environmental
Liens and any Lien imposed under ERISA) imposed by law created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP; (iii)
Liens (other than any Lien imposed under ERISA) incurred or deposits made in the
ordinary course of business (including, without limitation, surety bonds and
appeal bonds) in connection with workers' compensation, unemployment insurance
and other types of social security benefits or to secure the performance of
tenders, bids, leases, contracts (other than for the repayment of Indebtedness),
statutory obligations and other similar obligations or arising as a result of
progress payments under government contracts; (iv) easements (including, without
limitation, reciprocal easement agreements and utility agreements),
rights-of-way, covenants, consents, reservations, encroachments, variations and
zoning and other restrictions, charges or encumbrances (whether or not recorded)
and interest of ground lessors, which do not interfere materially with the
ordinary conduct of the business of the Borrower or any Guarantor, as the case
may be, and which do not materially detract from the value of the property to
which they attach or materially impair the use thereof to the Borrower or any
Guarantor, as the case may be; (v) purchase money Liens (including Capitalized
Leases) upon or in any property acquired or held in the ordinary course of
business to secure the purchase price of such property or to secure Indebtedness
permitted by Section 6.03(iii) solely for the purpose of financing the
acquisition of such property; and (vi) extensions, renewals or replacements of
any Lien
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referred to in paragraphs (i) through (v) above, provided that the principal
amount of the obligation secured thereby is not increased and that any such
extension, renewal or replacement is limited to the property originally
encumbered thereby.
"Person" shall mean any natural person, corporation, division of a
corporation, partnership, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" shall mean a Single Employer Plan or a Multiemployer Plan.
"Prepayment Date" shall mean thirty (30) days after the entry of the
Interim Order by the Bankruptcy Court if the Final Order has not been entered by
the Bankruptcy Court prior to the expiration of such thirty (30) day period.
"Pre-Petition Agent" shall mean The Chase Manhattan Bank as agent
for the Existing Lenders.
"Pre-Petition Payment" shall mean a payment (by way of adequate
protection or otherwise) of principal or interest or otherwise on account of any
pre-petition Indebtedness or trade payables or other pre-petition claims against
the Borrower or any Guarantor.
"Primed Parties" shall mean the Existing Lenders whose liens are
primed by the Banks pursuant to Section 364(d)(1) of the Bankruptcy Code as
described in clause (e) of the Introduction and Section 2.23.
"Register" shall have the meaning set forth in Section 10.03(d).
"Reorganization Plan" shall mean a plan of reorganization in any of
the Cases.
"Required Banks" shall mean, at any time, Banks holding Loans
representing in excess of 50% of the aggregate principal amount of such Loans
outstanding or, if no such Loans are outstanding, Banks having Commitments
representing in excess of 50% of the Total Commitment.
"Security and Pledge Agreement" shall have the meaning set forth in
Section 4.01(c).
"Single Employer Plan" shall mean a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the
Borrower or an ERISA
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Affiliate or (ii) was so maintained and in respect of which the Borrower could
have liability under Section 4069 of ERISA in the event such Plan has been or
were to be terminated.
"Statutory Reserves" shall mean on any date the percentage
(expressed as a decimal) established by the Board and any other banking
authority which is (i) for purposes of the definition of Base CD Rate, the then
stated maximum rate of all reserves (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York City, for new three month negotiable
nonpersonal time deposits in dollars of $100,000 or more or (ii) for purposes of
the definition of Adjusted LIBOR Rate, the then stated maximum rate for all
reserves (including but not limited to any emergency, supplemental or other
marginal reserve requirements) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency Liabilities (or any successor category
of liabilities under Regulation D issued by the Board, as in effect from time to
time). Such reserve percentages shall include, without limitation, those imposed
pursuant to said Regulation. The Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in such percentage.
"Subsidiary" shall mean, with respect to any Person (herein referred
to as the "parent"), any corporation, association or other business entity
(whether now existing or hereafter organized) of which at least a majority of
the securities or other ownership interests having ordinary voting power for the
election of directors is, at the time as of which any determination is being
made, owned or controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Super-majority Banks" shall have the meaning given such term in
Section 10.10(b).
"Superpriority Claim" shall mean a claim against the Borrower and
any Guarantor in any of the Cases which is an administrative expense claim
having priority over any or all administrative expenses of the kind specified in
Sections 503(b) or 507(b) of the Bankruptcy Code.
"Taxes" shall have the meaning given such term in Section 2.18.
"Termination Date" shall mean the earliest to occur of (i) the
Prepayment Date, (ii) the Maturity Date, (iii) the Consummation Date and (iv)
the acceleration of the Loans and the termination of the Total Commitment in
accordance with the terms hereof.
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"Termination Event" shall mean (i) a "reportable event", as such
term is described in Section 4043 of ERISA and the regulations issued thereunder
(other than a "reportable event" not subject to the provision for 30-day notice
to the PBGC under Section 4043 of ERISA or such regulations) or an event
described in Section 4068 of ERISA excluding events described in Section
4043(c)(9) of ERISA or 29 CFR ss.ss.2615.21 or 2615.23 and excluding events
which would not be reasonably likely (as reasonably determined by the Agent) to
have a material adverse effect on the financial condition, operations, business,
properties or assets of the Borrower and the Guarantors taken as a whole, or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a "substantial employer", as
such term is defined in Section 4001(c) of ERISA, or the incurrence of liability
by the Borrower or any ERISA Affiliate under Section 4064 of ERISA upon the
termination of a Multiple Employer Plan, or (iii) providing notice of intent to
terminate a Plan pursuant to Section 4041(c) of ERISA or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or
(v) any other event or condition (other than the commencement of the Cases and
the failure to have made any contribution accrued as of the Filing Date but not
paid) which would reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the imposition of any liability under Title IV of ERISA
(other than for the payment of premiums to the PBGC).
"Total Commitment" shall mean, at any time, the sum of the
Commitments at such time.
"Transferee" shall have the meaning given such term in Section 2.18.
"Type" when used in respect of any Loan or Borrowing shall refer to
the rate of interest by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall mean
the Adjusted LIBOR Rate and the Alternate Base Rate.
"Unused Total Commitment" shall mean, at any time, (i) the Total
Commitment less (ii) the sum of (x) the aggregate outstanding principal amount
of all Loans and (y) the aggregate Letter of Credit Outstandings.
"Withdrawal Liability" shall have the meaning given such term under
Part I of Subtitle E of Title IV of ERISA.
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SECTION 1.2 TERMS GENERALLY. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. All references herein to Sections,
Exhibits and Schedules shall be deemed references to Sections of, and Exhibits
and Schedules to, this Agreement unless the context shall otherwise require.
Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that for purposes of determining compliance
with any covenant set forth in Section 6, such terms shall be construed in
accordance with GAAP as in effect on the date of this Agreement applied on a
basis consistent with the application used in the Borrower's audited financial
statements referred to in Section 3.04.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
SECTION 2.1 COMMITMENT OF THE BANKS.
(a) Each Bank severally and not jointly with the other Banks agrees,
upon the terms and subject to the conditions herein set forth (including,
without limitation, the provisions of Section 2.28), to make revolving credit
loans (each a "Loan" and collectively, the "Loans") to the Borrower at any time
and from time to time during the period commencing on the date hereof and ending
on the Termination Date (or the earlier date of termination of the Total
Commitment) in an aggregate principal amount not to exceed, when added to such
Bank's Commitment Percentage of the then aggregate Letter of Credit Outstandings
(in excess of the amount of cash then held in the Letter of Credit Account
pursuant to Section 2.03(b)), the Commitment of such Bank, which Loans may be
repaid and reborrowed in accordance with the provisions of this Agreement. At no
time shall the sum of the then outstanding aggregate principal amount of the
Loans plus the then aggregate Letter of Credit Outstandings exceed the lesser of
(i) the Total Commitment of $200,000,000, as the same may be reduced from time
to time pursuant to Section 2.10, and (ii) from and after the entry of the Final
Order, the sum of the Borrowing Base plus cash then held in the Letter of Credit
Account pursuant to Section 2.13(a).
(b) Each Borrowing shall be made by the Banks pro rata in accordance
with their respective Commitments; provided, however, that the failure of any
Bank to make any Loan shall not in itself relieve the other Banks of their
obligations to lend.
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SECTION 2.2 BORROWING BASE.
(a) Notwithstanding any other provision of this Agreement to the
contrary, from and after the entry of the Final Order, the aggregate principal
amount of all outstanding Loans plus the then aggregate Letter of Credit
Outstandings (in excess of the amount of cash then held in the Letter of Credit
Account pursuant to Section 2.13(a)) shall not at any time exceed the Borrowing
Base and no Loan shall be made or Letter of Credit issued in violation of the
foregoing.
(b) Cash held in the Letter of Credit Account shall not be available
for use by the Borrower, whether pursuant to Section 363 of the Bankruptcy Code
or otherwise.
SECTION 2.3 LETTERS OF CREDIT
(a) Upon the terms and subject to the conditions herein set forth,
the Borrower may request a Fronting Bank, at any time and from time to time
after the date hereof and prior to the Termination Date, to issue, and, subject
to the terms and conditions contained herein, such Fronting Bank shall issue,
for the account of the Borrower or a Guarantor one or more Letters of Credit,
provided that no Letter of Credit shall be issued if after giving effect to such
issuance (i) the aggregate Letter of Credit Outstandings shall exceed
$32,000,000 (consisting of a sublimit of (x) $2,000,000 for import documentary
letters of credit and (y) $30,00,000 for standby letters of credit) or (ii) the
aggregate Letter of Credit Outstandings, when added to the aggregate outstanding
principal amount of the Loans, would exceed the Total Commitment and, provided
further that no Letter of Credit shall be issued if the Fronting Bank shall have
received notice from the Agent or the Required Banks that the conditions to such
issuance have not been met.
(b) No Letter of Credit shall expire later than 60 days after the
Maturity Date, provided that if any Letter of Credit shall be outstanding on the
Termination Date, the Borrower shall, at or prior to the Termination Date,
except as the Agent may otherwise agree in writing, (i) cause all Letters of
Credit which expire after the Termination Date to be returned to the Fronting
Bank undrawn and marked "cancelled" or (ii) if the Borrower is unable to do so
in whole or in part, either (x) provide a "back-to-back" letter of credit to one
or more Fronting Banks in a form satisfactory to such Fronting Bank and the
Agent (in their sole discretion), issued by a bank satisfactory to such Fronting
Bank and the Agent (in their sole discretion), in an amount equal to 105% of the
then undrawn stated amount of all outstanding Letters of Credit issued by such
Fronting Banks and/or (y) deposit cash in the Letter of Credit Account in an
amount equal to 105% of the then undrawn stated amount of all outstanding
Letters of Credit as collateral security for the Borrower's reimbursement
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obligations in connection therewith, such cash to be remitted to the Borrower
upon the expiration, cancellation or other termination or satisfaction of such
reimbursement obligations.
(c) The Borrower shall pay to each Fronting Bank, in addition to
such other fees and charges as are specifically provided for in Section 2.21
hereof, such fees and charges in connection with the issuance and processing of
the Letters of Credit issued by such Fronting Bank as are customarily imposed by
such Fronting Bank from time to time in connection with letter of credit
transactions.
(d) Drafts drawn under each Letter of Credit shall be reimbursed by
the Borrower in Dollars not later than the first Business Day following the date
of draw and shall bear interest from the date of draw until the first Business
Day following the date of draw at a rate per annum equal to the Alternate Base
Rate plus 1-1/4% and thereafter until reimbursed in full at a rate per annum
equal to the Alternate Base Rate plus 3-1/4% (computed on the basis of the
actual number of days elapsed over any year of 360 days). The Borrower shall
effect such reimbursement (x) if such draw occurs prior to the Termination Date
(or the earlier date of termination of the Total Commitment), in cash or through
a Borrowing without the satisfaction of the conditions precedent set forth in
Section 4.02 or (y) if such draw occurs on or after the Termination Date (or the
earlier date of termination of the Total Commitment), in cash. Each Bank agrees
to make the Loans described in clause (x) of the preceding sentence
notwithstanding a failure to satisfy the applicable lending conditions thereto
or the provisions of Sections 2.02 or 2.28.
(e) Immediately upon the issuance of any Letter of Credit by any
Fronting Bank, such Fronting Bank shall be deemed to have sold to each Bank
other than such Fronting Bank and each such other Bank shall be deemed
unconditionally and irrevocably to have purchased from such Fronting Bank,
without recourse or warranty, an undivided interest and participation, to the
extent of such Bank's Commitment Percentage, in such Letter of Credit, each
drawing thereunder and the obligations of the Borrower and the Guarantors under
this Agreement with respect thereto. Upon any change in the Commitments pursuant
to Section 10.03, it is hereby agreed that with respect to all Letter of Credit
Outstandings, there shall be an automatic adjustment to the participations
hereby created to reflect the new Commitment Percentages of the assigning and
assignee Banks. Any action taken or omitted by a Fronting Bank under or in
connection with a Letter of Credit, if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Fronting Bank any
resulting liability to any other Bank.
(f) In the event that a Fronting Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to such Fronting Bank
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pursuant to this Section, the Fronting Bank shall promptly notify the Agent,
which shall promptly notify each Bank of such failure, and each Bank shall
promptly and unconditionally pay to the Agent for the account of the Fronting
Bank the amount of such Bank's Commitment Percentage of such unreimbursed
payment in Dollars and in same day funds. If the Fronting Bank so notifies the
Agent, and the Agent so notifies the Banks prior to 11:00 a.m. (New York City
time) on any Business Day, such Banks shall make available to the Fronting Bank
such Bank's Commitment Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Bank shall not have so made its
Commitment Percentage of the amount of such payment available to the Fronting
Bank, such Bank agrees to pay to such Fronting Bank, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Agent for the account of such Fronting Bank at
the Federal Funds Effective Rate. The failure of any Bank to make available to
the Fronting Bank its Commitment Percentage of any payment under any Letter of
Credit shall not relieve any other Bank of its obligation hereunder to make
available to the Fronting Bank its Commitment Percentage of any payment under
any Letter of Credit on the date required, as specified above, but no Bank shall
be responsible for the failure of any other Bank to make available to such
Fronting Bank such other Bank's Commitment Percentage of any such payment.
Whenever a Fronting Bank receives a payment of a reimbursement obligation as to
which it has received any payments from the Banks pursuant to this paragraph,
such Fronting Bank shall pay to each Bank which has paid its Commitment
Percentage thereof, in Dollars and in same day funds, an amount equal to such
Bank's Commitment Percentage thereof.
SECTION 2.4 ISSUANCE. Whenever the Borrower desires a Fronting Bank
to issue a Letter of Credit, it shall give to such Fronting Bank and the Agent
at least two Business Days' prior written (including telegraphic, telex,
facsimile or cable communication) notice (or such shorter period as may be
agreed upon by the Agent, the Borrower and the Fronting Bank) specifying the
date on which the proposed Letter of Credit is to be issued (which shall be a
Business Day), the stated amount of the Letter of Credit so requested, the
expiration date of such Letter of Credit and the name and address of the
beneficiary thereof.
SECTION 2.5 NATURE OF LETTER OF CREDIT OBLIGATIONS ABSOLUTE. The
obligations of the Borrower to reimburse the Banks for drawings made under any
Letter of Credit shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation (it being understood that any such payment by the
Borrower shall be without prejudice to, and shall not constitute a waiver of,
any rights the Borrower might have or might acquire as a result of the payment
by the Fronting Bank of any draft or the reimbursement by the Borrower thereof):
(i) any lack of validity or enforceability of any Letter of Credit; (ii) the
existence of any claim,
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setoff, defense or other right which the Borrower or any Guarantor may have at
any time against a beneficiary of any Letter of Credit or against any of the
Banks, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction; (iii) any draft, demand, certificate or
other document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; (iv) payment by a Fronting Bank of
any Letter of Credit against presentation of a demand, draft or certificate or
other document which does not comply with the terms of such Letter of Credit;
(v) any other circumstance or happening whatsoever, which is similar to any of
the foregoing; or (vi) the fact that any Event of Default shall have occurred
and be continuing.
SECTION 2.6 MAKING OF LOANS. (a)Except as contemplated by Section
2.11, Loans shall be either ABR Loans or Eurodollar Loans as the Borrower may
request subject to and in accordance with this Section, provided that all Loans
made pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, be Loans of the same Type. Each Bank may fulfill its Commitment
with respect to any Eurodollar Loan or ABR Loan by causing any lending office of
such Bank to make such Loan; provided that any such use of a lending office
shall not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement. Each Bank shall, subject to its overall policy
considerations, use reasonable efforts (but shall not be obligated) to select a
lending office which will not result in the payment of increased costs by the
Borrower pursuant to Section 2.15. Subject to the other provisions of this
Section and the provisions of Section 2.12, Borrowings of Loans of more than one
Type may be incurred at the same time, provided that no more than seven (7)
Borrowings of Eurodollar Loans may be outstanding at any time.
(b) The Borrower shall give the Agent prior notice of each Borrowing
hereunder of at least three Business Days for Eurodollar Loans and one Business
Day for ABR Loans; such notice shall be irrevocable and shall specify the amount
of the proposed Borrowing (which shall not be less than $5,000,000 in the case
of Eurodollar Loans and $1,000,000 in the case of ABR Loans) and the date
thereof (which shall be a Business Day) and shall contain disbursement
instructions. Such notice, to be effective, must be received by the Agent not
later than 12:00 noon, New York City time, on the third Business Day in the case
of Eurodollar Loans and the first Business Day in the case of ABR Loans,
preceding the date on which such Borrowing is to be made except as provided in
the last sentence of this Section 2.06(b). Such notice shall specify whether the
Borrowing then being requested is to be a Borrowing of ABR Loans or Eurodollar
Loans. If no election is made as to the Type of Loan, such notice shall be
deemed a request for Borrowing of ABR Loans. The Agent shall promptly notify
each Bank of its proportionate share of such Borrowing, the date of such
Borrowing, the Type of Borrowing or Loans being requested and the Interest
Period or Interest
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Periods applicable thereto, as appropriate. On the borrowing date specified in
such notice, each Bank shall make its share of the Borrowing available at the
office of the Agent at 270 Park Avenue, New York, New York 10017, no later than
12:00 noon, New York City time, in immediately available funds. Upon receipt of
the funds made available by the Banks to fund any borrowing hereunder, the Agent
shall disburse such funds in the manner specified in the notice of borrowing
delivered by the Borrower and shall use reasonable efforts to make the funds so
received from the Banks available to the Borrower no later than 2:00 p.m. New
York City time (other than as provided in the following sentence). With respect
to ABR Loans of $10,000,000 or less, the Banks shall make such Borrowings
available to the Borrower by 4:00 p.m., New York City time, on the same Business
Day that the Borrower gives notice to the Agent of such Borrowing by 12:00 noon,
New York City time.
SECTION 2.7 REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) The Borrower hereby unconditionally promises to pay to the Agent
for the account of each Bank the then unpaid principal amount of each Loan on
the Termination Date.
(b) Each Bank shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such Bank
resulting from each Loan made by such Bank, including the amounts of principal
and interest payable and paid to such Bank from time to time hereunder.
(c) The Agent shall maintain accounts in which it shall record (i)
the amount of each Loan made hereunder, the Type thereof 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 Bank hereunder and (iii)
the amount of any sum received by the Agent hereunder for the account of the
Banks and each Bank's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Bank or the Agent to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the Loans
in accordance with the terms of this Agreement.
(e) Any Bank may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Bank a promissory note payable to the order of such Bank (or, if
requested by such Bank, to such Bank and its registered assigns) and in a form
approved by the Agent. Thereafter, the Loans
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evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.03) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.8 INTEREST ON LOANS.
(a) Subject to the provisions of Section 2.09, each ABR Loan shall
bear interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Alternate Base Rate plus
1-1/4%.
(b) Subject to the provisions of Section 2.09, each Eurodollar Loan
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal, during each Interest Period
applicable thereto, to the Adjusted LIBOR Rate for such Interest Period in
effect for such Borrowing plus 2-1/4%.
(c) Accrued interest on all Loans shall be payable in arrears on
each Interest Payment Date applicable thereto, at maturity (whether by
acceleration or otherwise), after such maturity on demand and (with respect to
Eurodollar Loans) upon any repayment or prepayment thereof (on the amount
prepaid).
SECTION 2.9 DEFAULT INTEREST. If the Borrower or any Guarantor, as
the case may be, shall default in the payment of the principal of or interest on
any Loan or in the payment of any other amount becoming due hereunder
(including, without limitation, the reimbursement pursuant to Section 2.03(d) of
any draft drawn under a Letter of Credit), whether at stated maturity, by
acceleration or otherwise, the Borrower or such Guarantor, as the case may be,
shall on demand from time to time pay interest, to the extent permitted by law,
on such defaulted amount up to (but not including) the date of actual payment
(after as well as before judgment) at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 360 days) equal to (x) in the
case of Borrowings consisting of Eurodollar Loans, the Adjusted LIBOR Rate in
effect for such Borrowing plus 4-1/4% and (y) in the case of all other amounts,
the Alternate Base Rate plus 3-1/4%.
SECTION 2.10 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT. Upon
at least two Business Days' prior written notice to the Agent, the Borrower may
at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Unused Total Commitment. Each such reduction of the
Commitments shall be in the principal amount of $5,000,000 or any integral
multiple thereof. Simultaneously with each reduction or termination of the
Commitment, the Borrower shall pay to the Agent for the account of each
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Bank the Commitment Fee accrued on the amount of the Commitment of such Bank so
terminated or reduced through the date thereof. Any reduction of the Total
Commitment pursuant to this Section shall be applied pro rata to reduce the
Commitment of each Bank.
SECTION 2.11 ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan, the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower absent manifest
error) that reasonable means do not exist for ascertaining the applicable
Adjusted LIBOR Rate, the Agent shall, as soon as practicable thereafter, give
written or telegraphic notice of such determination to the Borrower and the
Banks, and any request by the Borrower for a Borrowing of Eurodollar Loans
(including pursuant to a refinancing with Eurodollar Loans) pursuant to Section
2.06 or 2.12 shall be deemed a request for a Borrowing of ABR Loans. After such
notice shall have been given and until the circumstances giving rise to such
notice no longer exist, each request for a Borrowing of Eurodollar Loans shall
be deemed to be a request for a Borrowing of ABR Loans.
SECTION 2.12 REFINANCING OF LOANS. The Borrower shall have the
right, at any time, on three Business Days' prior irrevocable notice to the
Agent (which notice, to be effective, must be received by the Agent not later
than 12:00 noon, New York City time, on the third Business Day preceding the
date of any refinancing), (x) to refinance (without the satisfaction of the
conditions set forth in Section 4 as a condition to such refinancing) any
outstanding Borrowing or Borrowings of Loans of one Type (or a portion thereof)
with a Borrowing of Loans of the other Type or (y) to continue an outstanding
Borrowing of Eurodollar Loans for an additional Interest Period, subject to the
following:
(a) as a condition to the refinancing of ABR Loans with Eurodollar
Loans and to the continuation of Eurodollar Loans for an additional Interest
Period, no Event of Default shall have occurred and be continuing at the time of
such refinancing;
(b) if less than a full Borrowing of Loans shall be refinanced, such
refinancing shall be made pro rata among the Banks in accordance with the
respective principal amounts of the Loans comprising such Borrowing held by the
Banks immediately prior to such refinancing;
(c) the aggregate principal amount of Loans being refinanced shall
be at least $1,000,000, provided that no partial refinancing of a Borrowing of
Eurodollar Loans shall result in the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $5,000,000 in aggregate principal
amount;
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(d) (i)each Bank shall effect each refinancing by applying the
proceeds of its new Eurodollar Loan or ABR Loan, as the case may be, to its Loan
being refinanced;
(e) the Interest Period with respect to a Borrowing of Eurodollar
Loans effected by a refinancing or in respect to the Borrowing of Eurodollar
Loans being continued as Eurodollar Loans shall commence on the date of
refinancing or the expiration of the current Interest Period applicable to such
continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be refinanced only on the
last day of an Interest Period applicable thereto; and
(g) each request for a refinancing with a Borrowing of Eurodollar
Loans which fails to state an applicable Interest Period shall be deemed to be a
request for an Interest Period of one month.
In the event that the Borrower shall not give notice to refinance any Borrowing
of Eurodollar Loans, or to continue such Borrowing as Eurodollar Loans, or shall
not be entitled to refinance or continue such Borrowing as Eurodollar Loans, in
each case as provided above, such Borrowing shall automatically be refinanced
with a Borrowing of ABR Loans at the expiration of the then-current Interest
Period. The Agent shall, after it receives notice from the Borrower, promptly
give each Bank notice of any refinancing, in whole or part, of any Loan made by
such Bank.
SECTION 2.13 MANDATORY PREPAYMENT; COMMITMENT TERMINATION; CASH
COLLATERAL.
(a) If at any time from and after the entry of the Final Order the
aggregate principal amount of the outstanding Loans plus the aggregate Letter of
Credit Outstandings exceeds the lesser of (x) the Total Commitment and (y) the
sum of the Borrowing Base PLUS cash deposited in the Letter of Credit Account
pursuant to this Section, the Borrower will within three Business days (i)
prepay the Loans in an amount necessary to cause the aggregate principal amount
of the outstanding Loans PLUS the aggregate Letter of Credit Outstandings in
excess of the amount of cash so held in the Letter of Credit Account to be equal
to or less than the Total Commitment and/or the Borrowing Base, as the case may
be, and (ii) if, after giving effect to the prepayment in full of the Loans, the
aggregate Letter of Credit Outstandings in excess of the amount of cash so held
in the Letter of Credit Account exceeds the Total Commitment and/or the
Borrowing Base, as the case may be, deposit into the Letter of Credit Account an
amount equal to 105% of the amount by which the aggregate Letter of Credit
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Outstandings in excess of the amount of cash so held in the Letter of Credit
Account so exceeds the Total Commitment or Borrowing Base, as the case may be;
(b) Upon the Termination Date, the Total Commitment shall be
terminated in full and the Borrower shall pay the Loans in full and, except as
the Agent may otherwise agree in writing, if any Letter of Credit remains
outstanding, deposit into the Letter of Credit Account an amount equal to 105%
of the amount by which the sum of the aggregate Letter of Credit Outstandings
exceeds the amount of cash held in the Letter of Credit Account, such cash to be
remitted to the Borrower upon the expiration, cancellation, satisfaction or
other termination of such reimbursement obligations, or otherwise comply with
Section 2.03(b).
SECTION 2.14 OPTIONAL PREPAYMENT OF LOANS; REIMBURSEMENT OF BANKS.
(a) The Borrower shall have the right at any time and from time to
time to prepay any Loans, in whole or in part, (x) with respect to Eurodollar
Loans, upon at least three Business Days' prior written, telex or facsimile
notice to the Agent and (y) with respect to ABR Loans on the same Business Day
if written, telex or facsimile notice is received by the Agent prior to 12:00
noon, New York City time, and thereafter upon at least one Business Day's prior
written, telex or facsimile notice to the Agent; provided, however, that (i)
each such partial prepayment shall be in multiples of $1,000,000, (ii) no
prepayment of Eurodollar Loans shall be permitted pursuant to this Section
2.14(a) other than on the last day of an Interest Period applicable thereto
unless such prepayment is accompanied by the payment of the amounts described in
clause (i) of the first sentence of Section 2.14(b), and (iii) no partial
prepayment of a Borrowing of Eurodollar Loans shall result in the aggregate
principal amount of the Eurodollar Loans remaining outstanding pursuant to such
Borrowing being less than $5,000,000. Each notice of prepayment shall specify
the prepayment date, the principal amount of the Loans to be prepaid and in the
case of Eurodollar Loans, the Borrowing or Borrowings pursuant to which made,
shall be irrevocable and shall commit the Borrower to prepay such Loan by the
amount and on the date stated therein. The Agent shall, promptly after receiving
notice from the Borrower hereunder, notify each Bank of the principal amount of
the Loans held by such Bank which are to be prepaid, the prepayment date and the
manner of application of the prepayment.
(b) The Borrower shall reimburse each Bank on demand for any loss
incurred or to be incurred by it in the reemployment of the funds released (i)
resulting from any prepayment (for any reason whatsoever, including, without
limitation, refinancing with ABR Loans) of any Eurodollar Loan required or
permitted under this Agreement, if such Loan is prepaid other than on the last
day of the Interest Period for such Loan (including, without limitation, any
such prepayment in connection with the syndication of the credit facility
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evidenced by this Agreement) or (ii) in the event that after the Borrower
delivers a notice of borrowing under Section 2.06 in respect of Eurodollar
Loans, such Loans are not made on the first day of the Interest Period specified
in such notice of borrowing for any reason other than a breach by such Bank of
its obligations hereunder. Such loss shall be the amount as reasonably
determined by such Bank as the excess, if any, of (A) the amount of interest
which would have accrued to such Bank on the amount so paid or not borrowed at a
rate of interest equal to the Adjusted LIBOR Rate for such Loan, for the period
from the date of such payment or failure to borrow to the last day (x) in the
case of a payment or refinancing with ABR Loans other than on the last day of
the Interest Period for such Loan, of the then current Interest Period for such
Loan, or (y) in the case of such failure to borrow, of the Interest Period for
such Loan which would have commenced on the date of such failure to borrow, over
(B) the amount of interest which would have accrued to such Bank on such amount
by placing such amount on deposit for a comparable period with leading banks in
the London interbank market. Each Bank shall deliver to the Borrower from time
to time one or more certificates setting forth the amount of such loss as
determined by such Bank.
(c) In the event the Borrower fails to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.14(a), the
Borrower on demand by any Bank shall pay to the Agent for the account of such
Bank any amounts required to compensate such Bank for any loss incurred by such
Bank as a result of such failure to prepay, including, without limitation, any
loss, cost or expenses incurred by reason of the acquisition of deposits or
other funds by such Bank to fulfill deposit obligations incurred in anticipation
of such prepayment, but without duplication of any amounts paid under Section
2.14(b). Each Bank shall deliver to the Borrower from time to time one or more
certificates setting forth the amount of such loss as determined by such Bank.
(d) Any partial prepayment of the Loans by the Borrower pursuant to
Sections 2.13 or 2.14 shall be applied as specified by the Borrower or, in the
absence of such specification, as determined by the Agent, provided that in each
case no Eurodollar Loans shall be prepaid pursuant to Section 2.13 to the extent
that such Loan has an Interest Period ending after the required date of
prepayment unless and until all outstanding ABR Loans and Eurodollar Loans with
Interest Periods ending on such date have been repaid in full.
SECTION 2.15 RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments
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to any Bank of the principal of or interest on any Eurodollar Loan made by such
Bank or any fees or other amounts payable hereunder (other than changes in
respect of Taxes, Other Taxes and taxes imposed on, or measured by, the net
income or overall gross receipts or franchise taxes of such Bank by the
jurisdiction in which such Bank has its principal office or in which the
applicable lending office for such Eurodollar Loan is located or by any
political subdivision or taxing authority therein, or by any other jurisdiction
or by any political subdivision or taxing authority therein other than a
jurisdiction in which such Bank would not be subject to tax but for the
execution and performance of this Agreement), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by such Bank (except
any such reserve requirement which is reflected in the Adjusted LIBOR Rate) or
shall impose on such Bank or the London interbank market any other condition
affecting this Agreement or the Eurodollar Loans made by such Bank, and the
result of any of the foregoing shall be to increase the cost to such Bank of
making or maintaining any Eurodollar Loan or to reduce the amount of any sum
received or receivable by such Bank hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Bank to be material, then the Borrower
will pay to such Bank in accordance with paragraph (c) below such additional
amount or amounts as will compensate such Bank for such additional costs
incurred or reduction suffered.
(b) If any Bank shall have determined that the adoption or
effectiveness after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any lending office of such
Bank) or any Bank's holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Bank's capital or on the capital of such Bank's holding
company, if any, as a consequence of this Agreement, the Loans made by such Bank
pursuant hereto, such Bank's Commitment hereunder or the issuance of, or
participation in, any Letter of Credit by such Bank to a level below that which
such Bank or such Bank's holding company could have achieved but for such
adoption, change or compliance (taking into account Bank's policies and the
policies of such Bank's holding company with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time the Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank or such Bank's holding company for any such reduction suffered.
(c) A certificate of each Bank setting forth such amount or amounts
as shall be necessary to compensate such Bank or its holding company as
specified in paragraph (a) or
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(b) above, as the case may be, shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay each Bank the amount
shown as due on any such certificate delivered to it within 10 days after its
receipt of the same. Any Bank receiving any such payment shall promptly make a
refund thereof to the Borrower if the law, regulation, guideline or change in
circumstances giving rise to such payment is subsequently deemed or held to be
invalid or inapplicable.
(d) Failure on the part of any Bank to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Bank's right to demand compensation with respect to such period or any
other period. The protection of this Section shall be available to each Bank
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
SECTION 2.16 CHANGE IN LEGALITY.
(a) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, if (x) any change after the date of this Agreement in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration thereof shall make it unlawful for a Bank to
make or maintain a Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to a Eurodollar Loan or (y) at any time any
Bank determines that the making or continuance of any of its Eurodollar Loans
has become impracticable as a result of a contingency occurring after the date
hereof which adversely affects the London interbank market or the position of
such Bank in such market, then, by written notice to the Borrower, such Bank may
(i) declare that Eurodollar Loans will not thereafter be made by such Bank
hereunder, whereupon any request by the Borrower for a Eurodollar Borrowing
shall, as to such Bank only, be deemed a request for an ABR Loan unless such
declaration shall be subsequently withdrawn; and (ii) require that all
outstanding Eurodollar Loans made by it be converted to ABR Loans, in which
event all such Eurodollar Loans shall be automatically converted to ABR Loans as
of the effective date of such notice as provided in paragraph (b) below. In the
event any Bank shall exercise its rights under clause (i) or (ii) of this
paragraph (a), all payments and prepayments of principal which would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Bank or the converted Eurodollar Loans of such Bank shall instead be
applied to repay the ABR Loans made by such Bank in lieu of, or resulting from
the conversion of, such Eurodollar Loans.
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(b) For purposes of this Section 2.16, a notice to the Borrower by
any Bank pursuant to paragraph (a) above shall be effective, if lawful, and if
any Eurodollar Loans shall then be outstanding, on the last day of the
then-current Interest Period, otherwise, such notice shall be effective on the
date of receipt by the Borrower.
SECTION 2.17 PRO RATA TREATMENT, ETC. All payments and repayments of
principal and interest in respect of the Loans (except as provided in Sections
2.15 and 2.16) shall be made pro rata among the Banks in accordance with the
then outstanding principal amount of the Loans and/or participations in Letter
of Credit Outstandings and all outstanding undrawn Letters of Credit (and the
unreimbursed amount of drawn Letters of Credit) hereunder and all payments of
Commitment Fees and Letter of Credit Fees (other than those payable to a
Fronting Bank) shall be made pro rata among the Banks in accordance with their
Commitments. All payments by the Borrower hereunder shall be (i) net of any tax
applicable to the Borrower or Guarantor and (ii) made in Dollars in immediately
available funds at the office of the Agent by 12:00 noon, New York City time, on
the date on which such payment shall be due. Interest in respect of any Loan
hereunder shall accrue from and including the date of such Loan to but excluding
the date on which such Loan is paid in full or converted to a Loan of a
different Type.
SECTION 2.18 TAXES.
(a) Any and all payments by the Borrower or any Guarantor hereunder
shall be made free and clear of and without deduction for any and all current or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding (i) taxes imposed on or measured by
the net income or overall gross receipts of the Agent or any Bank (or any
transferee or assignee thereof, including a participation holder (any such
entity being called a "Transferee")) and franchise taxes imposed on the Agent or
any Bank (or Transferee) by the United States or any jurisdiction under the laws
of which the Agent or any such Bank (or Transferee) is organized or in which the
applicable lending office of any such Bank (or Transferee) is located or any
political subdivision thereof or by any other jurisdiction or by any political
subdivision or taxing authority therein other than a jurisdiction in which the
Agent or such Bank would not be subject to tax but for the execution and
performance of this Agreement and (ii) taxes, levies, imposts, deductions,
charges or withholdings ("Amounts") with respect to payments hereunder to a Bank
(or Transferee) in accordance with laws in effect on the later of the date of
this Agreement and the date such Bank (or Transferee) becomes a Bank (or
Transferee, as the case may be), but not excluding, with respect to such Bank
(or Transferee), any increase in such Amounts solely as a result of any change
in such laws occurring after such later date or any Amounts that would not have
been imposed but for actions (other than actions contemplated by this Agreement)
taken by the Borrower after such
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later date (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrower or any Guarantor shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to the Banks (or any Transferee) or the
Agent, (i) the sum payable shall be increased by the amount necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) such Bank (or Transferee) or the
Agent (as the case may be) shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay any current or future
stamp or documentary taxes or any other excise or property taxes, charges,
assessments or similar levies that arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Bank (or Transferee) and the
Agent for the full amount of Taxes and Other Taxes paid by such Bank (or
Transferee) or the Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date any Bank (or
Transferee) or the Agent, as the case may be, makes written demand therefor. If
a Bank (or Transferee) or the Agent shall become aware that it is entitled to
receive a refund in respect of Taxes or Other Taxes as to which it has been
indemnified by the Borrower pursuant to this Section, it shall promptly notify
the Borrower of the availability of such refund and shall, within 30 days after
receipt of a request by the Borrower, apply for such refund at the Borrower's
expense. If any Bank (or Transferee) or the Agent receives a refund in respect
of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
pursuant to this Section, it shall promptly notify the Borrower of such refund
and shall, within 30 days after receipt of a request by the Borrower (or
promptly upon receipt, if the Borrower has requested application for such refund
pursuant hereto), repay such refund to the Borrower (to the extent of amounts
that have been paid by the Borrower under this Section with respect to such
refund plus interest that is received by the Bank (or Transferee) or the Agent
as part of the refund), net of all out-of-pocket expenses of such Bank (or
Transferee) or the Agent and without additional interest thereon; provided that
the Borrower, upon the request of such Bank (or Transferee) or the Agent, agrees
to return such refund (plus penalties, interest or other charges) to such Bank
(or Transferee) or the Agent in the event such Bank (or Transferee) or the Agent
is required to
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repay such refund. Nothing contained in this subsection (c) shall require any
Bank (or Transferee) or the Agent to make available any of its tax returns (or
any other information relating to its taxes that it deems to be confidential).
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrower in respect of any payment to any Bank (or
Transferee) or the Agent, the Borrower will furnish to the Agent, at its address
referred to on the signature pages hereof, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(f) Each Bank (or Transferee) that is organized under the laws of a
jurisdiction outside the United States shall, if legally able to do so, prior to
the immediately following due date of any payment by the Borrower hereunder,
deliver to the Borrower such certificates, documents or other evidence, as
required by the Code or Treasury Regulations issued pursuant thereto, including
(A) Internal Revenue Service Form W-8 or W-9 and (B) Internal Revenue Service
Form 1001 or Form 4224 and any other certificate or statement of exemption
required by Treasury Regulation Section 1.1441-1, 1.1441-4 or 1.1441-6(c) or any
subsequent version thereof or successors thereto, properly completed and duly
executed by such Bank (or Transferee) establishing that such payment is (i) not
subject to United States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such Bank (or Transferee)
of a trade or business in the United States or (ii) totally exempt from United
States Federal withholding tax or subject to a reduced rate of such tax under a
provision of an applicable tax treaty. Unless the Borrower and the Agent have
received forms or other documents satisfactory to them indicating that such
payments hereunder or are not subject to United States Federal withholding tax
or are subject to such tax at a rate reduced by an applicable tax treaty, the
Borrower or the Agent shall withhold taxes from such payments at the applicable
statutory rate.
(g) The Borrower shall not be required to pay any additional amounts
to any Bank (or Transferee) in respect of United States Federal withholding tax
pursuant to subsection (a) above if the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank (or Transferee) to
comply with the provisions of subsection (f) above.
(h) Any Bank (or Transferee) claiming any additional amounts payable
pursuant to this Section 2.18 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document requested
by the Borrower or to change the
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jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts that may thereafter accrue and would not, in the sole reasonable
determination of such Bank, be otherwise materially disadvantageous to such Bank
(or Transferee).
SECTION 2.19 CERTAIN FEES. The Borrower shall pay to the Agent, for
the respective accounts of the Agent and the Banks, the fees set forth in that
certain letter dated January 30, 1998 among the Agent, Chase Securities Inc. and
the Borrower.
SECTION 2.20 COMMITMENT FEE. The Borrower shall pay to the Banks a
commitment fee (the "Commitment Fee") for the period commencing on the date the
Commitment Letter is executed to the Termination Date or the earlier date of
termination of the Commitment, computed (on the basis of the actual number of
days elapsed over a year of 360 days) at the rate of one-half of one percent
(1/2%) per annum on the average daily Unused Total Commitment. Such Commitment
Fee, to the extent then accrued, shall be payable (x) monthly, in arrears, on
the last calendar day of each month, (y) on the Termination Date and (z) as
provided in Section 2.10 hereof, upon any reduction or termination in whole or
in part of the Total Commitment.
SECTION 2.21 LETTER OF CREDIT FEES. The Borrower shall pay with
respect to each Letter of Credit (i) to the Agent on behalf of the Banks a fee
calculated (on the basis of the actual number of days elapsed over a year of 360
days) at the rate of (x) two and one-quarter (2-1/4%) per annum on the daily
average Letter of Credit Outstandings and (ii) to the Fronting Bank such
Fronting Bank's customary fees for issuance, amendments and processing referred
to in Section 2.03. In addition, the Borrower agrees to pay each Fronting Bank
for its account a fronting fee in respect of each Letter of Credit issued by
such Fronting Bank, for the period from and including the date of issuance of
such Letter of Credit to and including the date of termination of such Letter of
Credit, computed at a rate, and payable at times, to be determined by such
Fronting Bank, the Borrower and the Agent. Accrued fees described in clause (i)
of the first sentence of this paragraph in respect of each Letter of Credit
shall be due and payable monthly in arrears on the last calendar day of each
month and on the Termination Date, or such earlier date as the Total Commitment
is terminated. Accrued fees described in clause (ii) of the first sentence of
this paragraph in respect of each Letter of Credit shall be payable at times to
be determined by the Fronting Bank, the Borrower and the Agent.
SECTION 2.22 NATURE OF FEES. All Fees shall be paid on the dates
due, in immediately available funds, to the Agent for the respective accounts of
the Agent and the Banks, as provided herein and in the letter described in
Section 2.19. Once paid, none of the Fees shall be refundable under any
circumstances.
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SECTION 2.23 PRIORITY AND LIENS.
(a) The Borrower and each of the Guarantors hereby covenants,
represents and warrants that, upon entry of the Interim Order (i) pursuant to
Section 364(c)(1) of the Bankruptcy Code, the Obligations of the Borrower and
the Guarantors hereunder and under the Loan Documents and in respect of
Indebtedness permitted by Section 6.03(vi) shall at all times constitute allowed
administrative expense claims in the Cases having priority over all
administrative expenses of the kind specified in Sections 503(b) or 507(b) of
the Bankruptcy Code, (ii) pursuant to Section 364(c)(2) of the Bankruptcy Code,
the Obligations of the Borrower and the Guarantors hereunder and under the Loan
Documents and in respect of Indebtedness permitted by Section 6.03(vi) shall at
all times be secured by a perfected first priority Lien on all cash maintained
in the Letter of Credit Account and any direct investments of the funds
contained therein, (iii) pursuant to Section 364(c)(3) of the Bankruptcy Code,
the Obligations of the Borrower and the Guarantors hereunder and under the Loan
Documents and in respect of Indebtedness permitted by Section 6.03(vi) shall be
secured by a perfected Lien upon all property of the Borrower and the Guarantors
(other than the property that is subject to existing Liens that presently secure
the obligations of the Borrower and the Guarantors under the Existing Agreement,
as to which the Lien in favor of the Agent and the Banks will be as described in
clause (iv) of this sentence) that is subject to valid and perfected Liens in
existence on the Filing Date, junior to such valid and perfected Liens, and (iv)
pursuant to Section 364(d)(1) of the Bankruptcy Code, the Obligations of the
Borrower and the Guarantors hereunder and under the Loan Documents and in
respect of Indebtedness permitted by Section 6.03(vi) shall be secured by a
perfected first priority, senior priming Lien on all property of the Borrower
and the Guarantors (including without limitation, accounts receivable,
inventory, equipment, property, interests in leaseholds, intellectual property
and the capital stock of all direct or indirect Subsidiaries of the Borrower and
the proceeds thereof) that is subject to existing Liens that presently secure
the Borrower's and the Guarantors' pre-petition Indebtedness under the Existing
Agreement and any Liens granted after the Filing Date to provide adequate
protection in respect of the Existing Agreement, subject only to (x) in the
event of the occurrence and during the continuance of an Event of Default or an
event that would constitute an Event of Default with the giving of notice or
lapse of time or both, the payment of allowed and unpaid professional fees and
disbursements incurred by the Borrower, the Guarantors and any statutory
committees appointed in the Cases in an aggregate amount not in excess of
$2,500,000 and (y) the payment of unpaid fees pursuant to 28 U.S.C. ss. 1930
(collectively, the "Carve-Out"), provided that following the Termination Date
amounts in the Letter of Credit Account shall not be subject to the Carve-Out.
The Banks agree that so long as no Event of Default or event which with the
giving of notice or lapse of time or both would constitute an Event of Default
shall have occurred, the Borrower and the Guarantors shall be permitted to pay
compensation and reimbursement of expenses allowed and payable
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under 11 U.S.C. ss. 330 and 11 U.S.C. ss. 331, as the same may be due and
payable, and the same shall not reduce the Carve-Out.
(b) As to all real property the title to which is held by the
Borrower or any of the Guarantors, or the possession of which is held by the
Borrower or any of the Guarantors pursuant to leasehold interest, and which
secures the obligations under the Existing Agreement, the Borrower and each
Guarantor hereby assigns and conveys as security, grants a security interest in,
hypothecates, mortgages, pledges and sets over unto the Agent on behalf of the
Banks all of the right, title and interest of the Borrower and such Guarantor in
all of such owned real property and in all such leasehold interests, together in
each case with all of the right, title and interest of the Borrower and such
Guarantor in and to all buildings, improvements, and fixtures related thereto,
any lease or sublease thereof, all general intangibles relating thereto and all
proceeds thereof. The Borrower and each Guarantor acknowledges that, pursuant to
the Orders, the Liens in favor of the Agent on behalf of the Banks in all of
such real property and leasehold instruments shall be perfected without the
recordation of any instruments of mortgage or assignment. The Borrower and each
Guarantor further agrees that, upon the request of the Agent, the Borrower and
such Guarantor shall enter into separate fee and leasehold mortgages in
recordable form with respect to such properties on terms reasonably satisfactory
to the Agent.
SECTION 2.24 RIGHT OF SET-OFF. Subject to the provisions of Section
7.01, upon the occurrence and during the continuance of any Event of Default,
the Agent and each Bank is hereby authorized at any time and from time to time,
to the fullest extent permitted by law and without further order of or
application to the Bankruptcy Court, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by the Agent and each such Bank to or for
the credit or the account of the Borrower or any Guarantor against any and all
of the obligations of such Borrower or Guarantor now or hereafter existing under
the Loan Documents, irrespective of whether or not such Bank shall have made any
demand under any Loan Document and although such obligations may be unmatured.
Each Bank and the Agent agrees promptly to notify the Borrower and Guarantors
after any such set-off and application made by such Bank or by the Agent, as the
case may be, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Bank and the Agent
under this Section are in addition to other rights and remedies which such Bank
and the Agent may have upon the occurrence and during the continuance of any
Event of Default.
SECTION 2.25 SECURITY INTEREST IN LETTER OF CREDIT ACCOUNT. Pursuant
to Section 364(c)(2) of the Bankruptcy Code, the Borrower and the Guarantors
hereby assign and pledge to the Agent, for its benefit and for the ratable
benefit of the Banks, and hereby grant
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to the Agent, for its benefit and for the ratable benefit of the Banks, a first
priority security interest, senior to all other Liens, if any, in all of the
Borrower's and the Guarantors' right, title and interest in and to the Letter of
Credit Account and any direct investment of the funds contained therein.
SECTION 2.26 PAYMENT OF OBLIGATIONS. Subject to the provisions of
Section 7.01, upon the maturity (whether by acceleration or otherwise) of any of
the Obligations under this Agreement or any of the other Loan Documents of the
Borrower and the Guarantors, the Banks shall be entitled to immediate payment of
such Obligations without further application to or order of the Bankruptcy
Court.
SECTION 2.27 NO DISCHARGE; SURVIVAL OF CLAIMS. Each of the Borrower
and the Guarantors agrees that (i) its obligations hereunder shall not be
discharged by the entry of an order confirming a Plan of Reorganization (and
each of the Borrower and the Guarantors, pursuant to Section 1141(d)(4) of the
Bankruptcy Code, hereby waives any such discharge) and (ii) the Superpriority
Claim granted to the Agent and the Banks pursuant to the Order and described in
Section 2.23 and the Liens granted to the Agent pursuant to the Order and
described in Sections 2.23 and 2.25 shall not be affected in any manner by the
entry of an order confirming a Plan of Reorganization.
SECTION 2.28 USE OF CASH COLLATERAL. Notwithstanding anything to the
contrary contained herein, the Borrower shall not be permitted (i) to request a
Borrowing under Section 2.06 or request the issuance of a Letter of Credit under
Section 2.04 unless the Bankruptcy Court shall have entered the relevant Order
or (ii) to request a Borrowing under Section 2.06 unless the Borrower and the
Guarantors shall at that time have the use of all cash collateral subject to the
Orders for the purposes described in Section 3.10.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to make Loans and issue and/or
participate in Letters of Credit hereunder, the Borrower and each of the
Guarantors jointly and severally represent and warrant as follows:
SECTION 3.1 ORGANIZATION AND AUTHORITY. Each of the Borrower and the
Guarantors (i) is a corporation duly organized and validly existing under the
laws of the State of its incorporation and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which the failure to
so qualify would have a material adverse effect on the financial condition,
operations, business, properties or assets of the Borrower and the Guarantors
taken as a whole; (ii) has the requisite corporate power and authority to effect
the
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transactions contemplated hereby, and by the other Loan Documents to which it is
a party, and (iii) has all requisite corporate power and authority and the legal
right to own, pledge, mortgage and operate its properties, and to conduct its
business as now or currently proposed to be conducted.
SECTION 3.2 DUE EXECUTION. The execution, delivery and performance
by each of the Borrower and the Guarantors of each of the Loan Documents to
which it is a party (i) are within the respective corporate powers of each of
the Borrower and the Guarantors, have been duly authorized by all necessary
corporate action including the consent of shareholders where required, and do
not (A) contravene the charter or by-laws of any of the Borrower or the
Guarantors, (B) violate any law (including, without limitation, the Securities
Exchange Act of 1934) or regulation (including, without limitation, Regulations
G, T, U or X of the Board of Governors of the Federal Reserve System), or any
order or decree of any court or governmental instrumentality, (C) conflict with
or result in a breach of, or constitute a default under, any material indenture,
mortgage or deed of trust entered into after the Filing Date or any material
lease, agreement or other instrument entered into after the Filing Date binding
on the Borrower or the Guarantors or any of their properties, or (D) result in
or require the creation or imposition of any Lien upon any of the property of
any of the Borrower or the Guarantors other than the Liens granted pursuant to
this Agreement; and do not require the consent, authorization by or approval of
or notice to or filing or registration with any Governmental Authority other
than the entry of the Orders. This Agreement has been duly executed and
delivered by each of the Borrower and the Guarantors. This Agreement is, and
each of the other Loan Documents to which the Borrower and each of the
Guarantors is or will be a party, when delivered hereunder or thereunder, will
be, a legal, valid and binding obligation of the Borrower and each Guarantor, as
the case may be, enforceable against the Borrower and the Guarantors, as the
case may be, in accordance with its terms.
SECTION 3.3 STATEMENTS MADE. The information that has been delivered
in writing by the Borrower or any of the Guarantors to the Agent or to the
Bankruptcy Court in connection with any Loan Document, and any financial
statement delivered pursuant hereto or thereto (other than to the extent that
any such statements constitute projections), taken as a whole and in light of
the circumstances in which made, contains no untrue statement of a material fact
and does not omit to state a material fact necessary to make such statements not
misleading; and, to the extent that any such information constitutes
projections, such projections were prepared in good faith on the basis of
assumptions, methods, data, tests and information believed by the Borrower or
such Guarantor to be reasonable at the time such projections were furnished.
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SECTION 3.4 FINANCIAL STATEMENTS. The Borrower has furnished the
Banks with copies of (i) the audited consolidated financial statement and
schedules of the Borrower for the fiscal year ended February 1, 1997 and (ii)
the unaudited consolidated financial statement and schedules of the Borrower for
the fiscal quarter ended November 1, 1997. Such financial statements present
fairly the financial condition and results of operations of the Borrower and the
Guarantors on a consolidated basis as of such dates and for such periods; such
balance sheets and the notes thereto disclose all liabilities, direct or
contingent, of the Borrower and the Guarantors as of the dates thereof required
to be disclosed by GAAP and such financial statements were prepared in a manner
consistent with GAAP, subject (in the case of such fiscal quarter statement) to
normal year end adjustments. No material adverse change in the operations,
business, properties, assets, prospects or condition (financial or otherwise) of
the Borrower and the Guarantors, taken as a whole, has occurred from that set
forth in the Borrower's consolidated financial statements for the fiscal quarter
ended November 1, 1997 other than those which customarily occur and as a result
of events leading up to and following the commencement of a proceeding under
Chapter 11 of the Bankruptcy Code and (y) the commencement of the Cases.
SECTION 3.5 OWNERSHIP. Each of the Persons listed on Schedule 3.05
is a wholly-owned, direct or indirect Subsidiary of the Borrower, and the
Borrower owns no other Subsidiaries, whether directly or indirectly, other than
as set forth on Schedule 3.05.
SECTION 3.6 LIENS. Except for Liens existing on the Filing Date as
reflected on Schedule 3.06, there are no Liens of any nature whatsoever on any
assets of the Borrower or any of the Guarantors other than: (i) Liens granted
pursuant to the Existing Agreement; (ii) Permitted Liens; (iii) Liens permitted
pursuant to Section 6.01(ii); and (iv) Liens in favor of the Agent and the
Banks. Neither the Borrower nor the Guarantors are parties to any contract,
agreement, lease or instrument the performance of which, either unconditionally
or upon the happening of an event, will result in or require the creation of a
Lien on any assets of the Borrower or any Guarantor or otherwise result in a
violation of this Agreement other than the Liens granted to the Agent and the
Banks as provided for in this Agreement.
SECTION 3.7 COMPLIANCE WITH LAW.
(a) (i) The operations of the Borrower and the Guarantors comply in
all material respects with all applicable environmental, health and safety
statutes and regulations, including, without limitation, regulations promulgated
under the Resource Conservation and Recovery Act (42 U.S.C. ss.ss. 6901 et
seq.); (ii) to the Borrower's and each of the Guarantor's knowledge, none of the
operations of the Borrower or the Guarantors is the subject of any Federal or
state investigation evaluating whether any remedial action involving a material
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expenditure by the Borrower or any Guarantor is needed to respond to a release
of any Hazardous Waste or Hazardous Substance (as such terms are defined in any
applicable state or Federal environmental law or regulations) into the
environment; and (iii) to the Borrower's and each of the Guarantor's knowledge,
the Borrower and the Guarantors do not have any material contingent liability in
connection with any release of any Hazardous Waste or Hazardous Substance into
the environment.
(b) Neither the Borrower nor any Guarantor is, to the best of its
knowledge, in violation of any law, rule or regulation, or in default with
respect to any judgment, writ, injunction or decree of any Governmental
Authority the violation of which, or a default with respect to which, would have
a material adverse effect on the financial condition, operations, business,
properties or assets of the Borrower and the Guarantors taken as a whole.
SECTION 3.8 INSURANCE. All policies of insurance of any kind or
nature owned by or issued to the Borrower and the Guarantors, including, without
limitation, policies of life, fire, theft, product liability, public liability,
property damage, other casualty, employee fidelity, workers' compensation,
employee health and welfare, title, property and liability insurance, are in
full force and effect and are of a nature and provide such coverage as is
sufficient and as is customarily carried by companies of the size and character
of the Borrower and the Guarantors.
SECTION 3.9 THE ORDERS. On the date of the making of the initial
Loans or the issuance of the initial Letters of Credit hereunder, whichever
first occurs, the Interim Order will have been entered and will not have been
stayed, amended, vacated, reversed or rescinded. On the date of the making of
any Loan or the issuance of any Letter of Credit, the Interim Order or the Final
Order, as the case may be, shall have been entered and shall not have been
amended, stayed, vacated or rescinded. Upon the maturity (whether by the
acceleration or otherwise) of any of the obligations of the Borrower and the
Guarantors hereunder and under the other Loan Documents, the Banks shall,
subject to the provisions of Section 7.01, be entitled to immediate payment of
such obligations, and to enforce the remedies provided for hereunder, without
further application to or order by the Bankruptcy Court.
SECTION 3.10 USE OF PROCEEDS. The proceeds of the Loans shall be
used for working capital and for other general corporate purposes of the
Borrower and the Guarantors in accordance with the Budget.
SECTION 3.11 LITIGATION. Except as set forth on Schedule 3.11, there
are no unstayed actions, suits or proceedings pending or, to the knowledge of
the Borrower or the
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Guarantors, threatened against or affecting the Borrower or the Guarantors or
any of their respective properties, before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, which
is reasonably likely to be determined adversely to the Borrower or the
Guarantors and, if so determined adversely to the Borrower or the Guarantors
would have a material adverse effect on the financial condition, business,
properties, prospects, operations or assets of the Borrower and the Guarantors,
taken as a whole.
SECTION 4. CONDITIONS OF LENDING
SECTION 4.1 CONDITIONS PRECEDENT TO INITIAL LOANS AND INITIAL
LETTERS OF CREDIT. The obligation of the Banks to make the initial Loans or the
Fronting Bank to issue the initial Letter of Credit, whichever may occur first,
is subject to the following conditions precedent:
(a) Supporting Documents. The Agent shall have received for each of
the Borrower and the Guarantors:
(i) a copy of such entity's certificate of incorporation, as
amended, certified as of a recent date by the Secretary of State of the
state of its incorporation;
(ii) a certificate of such Secretary of State, dated as of a
recent date, as to the good standing of and payment of taxes by that
entity and as to the charter documents on file in the office of such
Secretary of State; and
(iii) a certificate of the Secretary or an Assistant Secretary of
that entity dated the date of the initial Loans or the initial Letter of
Credit hereunder, whichever first occurs, and certifying (A) that attached
thereto is a true and complete copy of the by-laws of that entity as in
effect on the date of such certification, (B) that attached thereto is a
true and complete copy of resolutions adopted by the Board of Directors of
that entity authorizing the Borrowings and Letter of Credit extensions
hereunder, the execution, delivery and performance in accordance with
their respective terms of this Agreement, the Loan Documents and any other
documents required or contemplated hereunder or thereunder and the
granting of the security interest in the Letter of Credit Account and
other Liens contemplated hereby, (C) that the certificate of incorporation
of that entity has not been amended since the date of the last amendment
thereto indicated on the certificate of the Secretary of State furnished
pursuant to clause (i) above and (D) as to the incumbency and specimen
signature of each officer of that entity executing this Agreement and the
Loan Documents or any other document
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delivered by it in connection herewith or therewith (such certificate to
contain a certification by another officer of that entity as to the
incumbency and signature of the officer signing the certificate referred
to in this clause (iii)).
(b) Interim Order. At the time of the making of the initial Loans or
at the time of the issuance of the initial Letters of Credit, whichever first
occurs, the Agent and the Banks shall have received a certified copy of an order
of the Bankruptcy Court in substantially the form of Exhibit A-1 (the "Interim
Order") approving the Loan Documents and granting the Superpriority Claim status
and priming and other Liens described in Section 2.23 which (i) shall have been
entered upon an application or motion of the Borrower reasonably satisfactory in
form and substance to the Agent, on such prior notice to such parties (including
the Existing Lenders) as may in each case be reasonably satisfactory to the
Agent, (ii) authorize extensions of credit in an aggregate amount of up to
$75,000,000, (iii) approve the payment by the Borrower of all of the Fees set
forth in Section 2.19, (iv) shall be in full force and effect, and (v) shall
have authorized the use by the Borrower and the Guarantors of any cash
collateral in which any Existing Lender under the Existing Agreement may have an
interest and shall have provided, as adequate protection for the use of such
cash collateral and the priming contemplated hereby, for (x) a priority claim as
contemplated by Section 507(b) of the Bankruptcy Code, (y) a Lien on
substantially all of the assets of the Borrower and the Guarantors having a
priority junior to the priming and other Liens granted in favor of the Agent and
the Banks hereunder and under the other Loan Documents and (z) additional
adequate protection in the form of the payment on a current basis of the
reasonable fees and disbursements of respective counsel for the Pre-Petition
Agent (including any unpaid pre-petition fees and expenses) and (vi) shall not
have been stayed, reversed, modified or amended in any respect without the prior
written consent of the Agent and the Required Banks and, if the Interim Order is
the subject of a pending appeal in any respect, neither the making of such Loans
nor the issuance of such Letter of Credit nor the performance by the Borrower or
any of the Guarantors of any of their respective obligations hereunder or under
the Loan Documents or under any other instrument or agreement referred to herein
shall be the subject of a presently effective stay pending appeal.
(c) Security and Pledge Agreement. The Borrower and each of the
Guarantors shall have duly executed and delivered to the Agent a Security and
Pledge Agreement in substantially the form of Exhibit B (the "Security and
Pledge Agreement").
(d) First Day Orders. All of the "first day orders" entered by the
Bankruptcy Court at the time of the commencement of the Cases shall be
reasonably satisfactory in form and substance to the Agent.
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(e) Opinion of Counsel. The Agent and the Banks shall have received
the favorable written opinion of counsel to the Borrower and the Guarantors
reasonably acceptable to the Agent, dated the date of the initial Loans or the
issuance of the initial Letter of Credit, whichever first occurs, substantially
in the form of Exhibit C.
(f) Payment of Fees. The Borrower shall have paid to the Agent the
then unpaid balance of all accrued and unpaid Fees due under and pursuant to
this Agreement and the letter referred to in Section 2.19.
(g) Corporate and Judicial Proceedings. All corporate and judicial
proceedings and all instruments and agreements in connection with the
transactions among the Borrower, the Guarantors, the Agent and the Banks
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to the Agent, and the Agent shall have received all information and
copies of all documents and papers, including records of corporate and judicial
proceedings, which the Agent may have reasonably requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate, governmental or judicial authorities.
(h) Information. The Agent shall have received such information
(financial or otherwise) as may be reasonably requested by the Agent and shall
have discussed the Borrower's business plan heretofore delivered to the Agent
with the Borrower's management and shall be satisfied with the nature and
substance of such discussions.
(i) Budget. The Agent and the Banks shall have received from the
Borrower a budget detailing the Borrower's cash receipts and disbursements for
the following year on a monthly basis and setting forth the uses of the
Commitment that is satisfactory in form and substance to them (the "Budget").
(j) Other Statutes, Rules or Regulations. The Agent shall be
satisfied with the applicability and effect of the Perishable Agricultural
Commodities Act, the Packers and Stockyards Act and any similar statute, rule or
regulation on the transactions contemplated hereby .
(k) Compliance with Laws. The Borrower and the Guarantors shall have
granted the Agent access to and the right to inspect all reports, audits and
other internal information of the Borrower and the Guarantors relating to
environmental matters, and any third party verification of certain matters
relating to compliance with environmental laws and regulations requested by the
Agent, and the Agent shall be reasonably satisfied that the Borrower and the
Guarantors are in compliance in all material respects with all applicable
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environmental laws and regulations and be satisfied with the costs of
maintaining such compliance.
(l) UCC-11 Searches. The Agent shall have received UCC-11 searches
conducted in the jurisdictions in which the Borrower and the Guarantors conduct
business (dated as of a date reasonably satisfactory to the Agent), reflecting
the absence of Liens and encumbrances on the assets of the Borrower and the
Guarantors other than such Liens as may be satisfactory to the Agent.
(m) Closing Documents. The Agent shall have received all documents
required by this Agreement reasonably satisfactory in form and substance to the
Agent.
SECTION 4.2 CONDITIONS PRECEDENT TO EACH LOAN AND EACH LETTER OF
CREDIT. The obligation of the Banks to make each Loan and of the Fronting Bank
to issue each Letter of Credit, including the initial Loan and the initial
Letter of Credit, is subject to the following conditions precedent:
(a) Notice. The Agent shall have received a notice with respect to
such borrowing or issuance, as the case may be, as required by Section 2.
(b) Representations and Warranties. All representations and
warranties contained in this Agreement and the other Loan Documents or otherwise
made in writing in connection herewith or therewith shall be true and correct in
all material respects on and as of the date of each Borrowing or the issuance of
each Letter of Credit hereunder with the same effect as if made on and as of
such date except to the extent such representations and warranties expressly
relate to an earlier date.
(c) No Default. On the date of each Borrowing hereunder or the
issuance of each Letter of Credit, the Borrower and Guarantors shall be in
compliance with all of the terms and provisions set forth herein to be observed
or performed and no Event of Default or event which upon notice or lapse of time
or both would constitute an Event of Default shall have occurred and be
continuing.
(d) Orders. The Interim Order shall be in full force and effect and
shall not have been stayed, reversed, modified or amended in any respect without
the prior written consent of the Agent and the Required Banks, provided, that at
the time of the making of any Loan or the issuance of any Letter of Credit the
aggregate amount of either of which, when added to the sum of the principal
amount of all Loans then outstanding and the Letter of Credit Outstandings,
would exceed $75,000,000 or, if less, the amount thereof which was authorized
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by the Bankruptcy Court in the Interim Order (collectively, the "Additional
Credit"), the Agent and each of the Banks shall have received a certified copy
of an order of the Bankruptcy Court in substantially the form of Exhibit A-2
(the "Final Order"), which, in any event, shall have been entered by the
Bankruptcy Court no later than 30 days after the entry of the Interim Order, and
at the time of the extension of any Additional Credit the Final Order shall be
in full force and effect, and shall not have been stayed, reversed, modified or
amended in any respect without the prior written consent of the Agent and the
Required Banks; and if either the Interim Order or the Final Order is the
subject of a pending appeal in any respect, neither the making of the Loans nor
the issuance of any Letter of Credit nor the performance by the Borrower or any
Guarantor of any of their respective obligations under any of the Loan Documents
shall be the subject of a presently effective stay pending appeal.
(e) Appraisals. At the time of the extension of any Additional
Credit, the Agent shall have received appraisals of such real property that is
owned or leased by the Borrower and the Guarantors as may be specified by the
Agent and such appraisals shall be satisfactory to the Agent.
(f) Payment of Fees. The Borrower shall have paid to the Agent the
then unpaid balance of all accrued and unpaid Fees then payable under and
pursuant to this Agreement and the letter referred to in Section 2.19.
(g) Borrowing Base Certificate. At the time of any extension of
credit from and after the entry of the Final Order, the Agent shall have
received the timely delivery of the most recent Borrowing Base Certificate
(dated no more than seven (7) days prior to the making of a Loan or the issuance
of a Letter of Credit) required to be delivered hereunder.
(h) Year 2000. The Agent shall be satisfied with the then status of
the Borrower's Year 2000 compliance program.
The request by the Borrower for, and the acceptance by the Borrower of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrower that the conditions specified in this Section have been
satisfied or waived at that time.
SECTION 5. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or the
face amount of back-to-back letters of credit delivered, in each case pursuant
to Section 2.03(b)), or any amount shall remain outstanding or
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unpaid under this Agreement, the Borrower and each of the Guarantors agree that,
unless the Required Banks shall otherwise consent in writing, the Borrower and
each of the Guarantors will:
SECTION 5.1 FINANCIAL STATEMENTS, REPORTS, ETC. In the case of the
Borrower and the Guarantors, deliver to the Agent and each of the Banks:
(a) within 90 days after the end of each fiscal year, the Borrower's
consolidated and (if available) consolidating balance sheet and related
statement of income and cash flows, showing the financial condition of the
Borrower and the Guarantors on a consolidated and (if available) consolidating
basis as of the close of such fiscal year and the results of their respective
operations during such year, the consolidated statement of the Borrower to be
audited for the Borrower and the Guarantors by independent public accountants of
recognized national standing acceptable to the Required Banks and accompanied by
an opinion of such accountants (which shall not be qualified in any material
respect other than with respect to the Cases), and the consolidating statement
(if any) to be subjected to the auditing procedures applied to such audit of the
consolidated statement, and to be certified by a Financial Officer of the
Borrower to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of the Borrower and
the Guarantors on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 45 days after the end of each of the first three fiscal
quarters and within 90 days after the end of the fourth fiscal quarter of each
fiscal year, the Borrower's consolidated and (if available) consolidating
balance sheets and related statements of income and cash flows, showing the
financial condition of the Borrower and the Guarantors on a consolidated and (if
available) consolidating basis as of the close of such fiscal quarter and the
results of their operations during such fiscal quarter and the then elapsed
portion of the fiscal year, each certified by a Financial Officer as fairly
presenting the financial condition and results of operations of the Borrower and
the Guarantors on a consolidated and (if available) consolidating basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments;
(c) concurrently with any delivery of financial statements under (a)
or (b) above, (i) a certificate of a Financial Officer certifying such
statements (A) certifying that no Event of Default or event which upon notice or
lapse of time or both would constitute an Event of Default has occurred, or, if
such an Event of Default or event has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto and (B) setting forth computations in reasonable detail satisfactory to
the Agent demonstrating compliance with the provisions of Sections 6.03, 6.04,
6.05 and 6.10 and (ii) a
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certificate (which certificate may be limited to accounting matters and disclaim
responsibility for legal interpretations) of such accountants accompanying the
audited consolidated financial statements delivered under (a) above certifying
that, in the course of the regular audit of the business of the Borrower and its
consolidated Subsidiaries, such accountants have obtained no knowledge that an
Event of Default has occurred and is continuing, or if, in the opinion of such
accountants, an Event of Default has occurred and is continuing, specifying the
nature thereof and all relevant facts with respect thereto;
(d) within 30 days after the end of each month, the unaudited
monthly cash flow reports of the Borrower and the Guarantors on a consolidated
basis and as of the close of such fiscal month and the results of their
operations during such fiscal period and the then elapsed portion of the fiscal
year, all certified by a Financial Officer as fairly presenting the results of
operations of the Borrower and the Guarantors on a consolidated basis, subject
to normal year-end audit adjustments;
(e) concurrently with any delivery of financial statements under (b)
above, monthly financial projections for the following six fiscal month period;
(f) as soon as possible, and in any event within 30 days of the
Closing Date, a consolidated pro forma statement of the Borrower's and the
Guarantors' financial condition as of the Filing Date;
(g) on the second Friday following the Closing Date, and on each
second Friday thereafter, bi-weekly updates of the Budget satisfactory in form
and substance to the Agent;
(h) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by it
with the Securities and Exchange Commission, or any governmental authority
succeeding to any of or all the functions of said commission, or with any
national securities exchange, as the case may be;
(i) as soon as available and in any event (A) within 30 days after
the Borrower or any of its ERISA Affiliates knows or has reason to know that any
Termination Event described in clause (i) of the definition of Termination Event
with respect to any Single Employer Plan of the Borrower or such ERISA Affiliate
has occurred and (B) within 10 days after the Borrower or any of its ERISA
Affiliates knows or has reason to know that any other Termination Event with
respect to any such Plan has occurred, a statement of a Financial Officer of the
Borrower describing such Termination Event and the action, if any, which the
Borrower or such ERISA Affiliate proposes to take with respect thereto;
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(j) promptly and in any event within 10 days after receipt thereof
by the Borrower or any of its ERISA Affiliates from the PBGC copies of each
notice received by the Borrower or any such ERISA Affiliate of the PBGC's
intention to terminate any Single Employer Plan of the Borrower or such ERISA
Affiliate or to have a trustee appointed to administer any such Plan;
(k) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each Single
Employer Plan of the Borrower or any of its ERISA Affiliates;
(l) within 10 days after notice is given or required to be given to
the PBGC under Section 302(f)(4)(A) of ERISA of the failure of the Borrower or
any of its ERISA Affiliates to make timely payments to a Plan, a copy of any
such notice filed and a statement of a Financial Officer of the Borrower setting
forth (A) sufficient information necessary to determine the amount of the lien
under Section 302(f)(3), (B) the reason for the failure to make the required
payments and (C) the action, if any, which the Borrower or any of its ERISA
Affiliates proposed to take with respect thereto;
(m) promptly and in any event within 10 days after receipt thereof
by the Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor, a copy
of each notice received by the Borrower or any ERISA Affiliate concerning (A)
the imposition of Withdrawal Liability by a Multiemployer Plan, (B) the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA, (C) the termination of a
Multiemployer Plan within the meaning of Title IV of ERISA, or (D) the amount of
liability incurred, or which may be incurred, by the Borrower or any ERISA
Affiliate in connection with any event described in clause (A), (B) or (C)
above;
(n) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
Guarantor, or compliance with the terms of any material loan or financing
agreements as the Agent or any Bank may reasonably request; and
(o) furnish to the Agent and its counsel promptly after the same is
available, copies of all pleadings, motions, applications, judicial information,
financial information and other documents filed by or on behalf of the Borrower
or any of the Guarantors with the Bankruptcy Court in the Cases, or distributed
by or on behalf of the Borrower or any of the Guarantors to any official
committee appointed in the Cases.
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SECTION 5.2 CORPORATE EXISTENCE. Do or cause to be done and cause
each of the Guarantors to do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its corporate existence,
material rights, licenses, permits and franchises and comply in all material
respects with all laws and regulations applicable to it.
SECTION 5.3 INSURANCE. (a) Keep its insurable properties insured at
all times, against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies of the same or similar size in
the same or similar businesses; and maintain in full force and effect public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Borrower or any Guarantor, as the case may
be, in such amounts and with such deductibles as are customary with companies of
the same or similar size in the same or similar businesses and in the same
geographic area; and (b) maintain such other insurance or self insurance as may
be required by law.
SECTION 5.4 OBLIGATIONS AND TAXES. With respect to the Borrower and
each Guarantor, pay all its material obligations arising after the Filing Date
promptly and in accordance with their terms and pay and discharge promptly all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property arising after the
Filing Date, before the same shall become in default, as well as all material
lawful claims for labor, materials and supplies or otherwise arising after the
Filing Date which, if unpaid, might become a Lien or charge upon such properties
or any part thereof; provided, however, that the Borrower and each Guarantor
shall not be required to pay and discharge or to cause to be paid and discharged
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings (if
the Borrower and the Guarantors shall have set aside on their books adequate
reserves therefor).
SECTION 5.5 NOTICE OF EVENT OF DEFAULT, ETC. Promptly give to the
Agent notice in writing of any Event of Default or the occurrence of any event
or circumstance which with the passage of time or giving of notice or both would
constitute an Event of Default.
SECTION 5.6 ACCESS TO BOOKS AND RECORDS. Maintain or cause to be
maintained at all times true and complete books and records of the financial
operations of the Borrower and the Guarantors; and provide the Agent and its
representatives access to all such books and records during regular business
hours, in order that the Agent may examine and make abstracts from such books,
accounts, records and other papers for the purpose of verifying the accuracy of
the various reports delivered by the Borrower or the Guarantors to the Agent or
the Banks pursuant to this Agreement or for otherwise ascertaining compliance
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with this Agreement; and at any reasonable time and from time to time during
regular business hours, upon reasonable notice, permit the Agent and any agents
or representatives (including, without limitation, appraisers) thereof to visit
the properties of the Borrower and the Guarantors and to conduct examinations of
and to monitor the Collateral held by the Agent.
SECTION 5.7 BUSINESS PLAN. As soon as practicable, and in any event
within 60 days of the Filing Date, furnish to the Agent the Borrower's business
plan which shall be satisfactory in form and substance to the Agent, and make
its senior officers available to discuss the same with the Agent upon the
Agent's reasonable request.
SECTION 5.8 MAINTENANCE OF CONCENTRATION ACCOUNT. The Borrower and
the Guarantors shall, by no later than 30 days following the Closing Date, and
at all times thereafter, maintain with the Agent an account or accounts to be
used by the Borrower and the Guarantors as their principal concentration
accounts for day-to-day operations conducted by the Borrower and the Guarantors.
SECTION 5.9 BORROWING BASE CERTIFICATE. Furnish to the Agent as soon
as available and in any event (i) on or before Wednesday of each week a
Borrowing Base Certificate as of the last day of the immediately preceding week
and (ii) within 15 days after the end of each calendar month a Borrowing Base
Certificate showing the Borrowing Base as of the close of business on the last
day of such calendar month, each such certificate to be certified as complete
and correct on behalf of the Borrower by a Financial Officer of the Borrower,
and (iii) such other supporting documentation and additional reports with
respect to the Borrowing Base as the Agent shall reasonably request.
SECTION 5.10 AUDITS. At any time upon the request of the Agent or
the Required Banks through the Agent, permit the Agent or professionals
(including consultants, accountants and appraisers) retained by the Agent to
conduct evaluations and appraisals of (i) the Borrower's practices in the
computation of the Borrowing Base and (ii) the assets included in the Borrowing
Base, and pay the reasonable fees and expenses in connection therewith
(including, without limitation, the fees and expenses associated with services
performed by the Agent's Collateral Monitoring Department).
SECTION 6. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Letter of Credit shall remain outstanding (in a face amount in
excess of the amount of cash then held in the Letter of Credit Account, or the
face amount of back-to-back letters of credit delivered, in each case pursuant
to Section 2.03(b)) or any amount shall remain outstanding or
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unpaid under this Agreement, unless the Required Banks shall otherwise consent
in writing, the Borrower and each of the Guarantors will not (and will not apply
to the Bankruptcy Court for authority to):
SECTION 6.1 LIENS. Incur, create, assume or suffer to exist any Lien
on any asset of the Borrower or the Guarantors, now owned or hereafter acquired
by the Borrower or any of such Guarantors, other than (i) Liens which were
existing on the Filing Date as reflected on Schedule 3.06 hereto and Liens
granted pursuant to the Existing Agreement; (ii) Liens in favor of the Existing
Lenders as adequate protection granted pursuant to the Orders, which Liens are
junior to the Liens contemplated hereby in favor of the Agent and the Banks,
provided that the Interim Order and the Final Order provide that the holder of
such junior Liens shall not be permitted to take any action to foreclose with
respect to, or otherwise realize upon, such junior Liens so long as any amounts
shall remain outstanding hereunder or any Commitment shall be in effect; (iii)
Permitted Liens; (iv) Liens in favor of the Agent and the Banks; and (v) Liens
securing purchase money Indebtedness permitted by Section 6.03(iii).
SECTION 6.2 MERGER, ETC. Consolidate or merge with or into another
Person.
SECTION 6.3 INDEBTEDNESS. Contract, create, incur, assume or suffer
to exist any Indebtedness, except for (i) Indebtedness under this Agreement;
(ii) Indebtedness incurred prior to the Filing Date (including existing
Capitalized Leases); (iii) Indebtedness incurred subsequent to the Filing Date
secured by purchase money Liens (exclusive of Capitalized Leases) in an
aggregate amount not to exceed $2,000,000; (iv) Capitalized Leases to the extent
of Capital Expenditures permitted by Section 6.04; (v) Indebtedness arising from
Investments among the Borrower and the Guarantors that are permitted hereunder;
and (vi) Indebtedness owed to Chase or any banking Affiliates in respect of any
overdrafts and related liabilities arising from treasury, depository and cash
management services or in connection with any automated clearing house transfers
of funds.
SECTION 6.4 CAPITAL EXPENDITURES. Make Capital Expenditures in an
aggregate amount in excess of $65,000,000 for the fiscal year ending January 30,
1999 (in accordance with and as described in Schedule 6.04) or, for the period
from January 30, 1999 through the Maturity Date, in excess of an aggregate
amount to be agreed upon by the Borrower and the Agent based upon a capital
expenditures budget to be furnished by the Borrower to the Agent and which shall
be satisfactory to the Agent.
SECTION 6.5 EBITDA. (a) Permit cumulative EBITDA for each period
beginning on March 29, 1998 and ending on each of the dates listed below to be
less than the amount specified opposite such date:
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Period Ending EBITDA
------------- ------
May 2, 1998 $ 1,000,000
May 30, 1998 3,500,000
June 27, 1998 6,000,000
August 1, 1998 10,000,000
August 29, 1998 12,500,000
September 26, 1998 16,500,000
October 31, 1998 21,000,000
November 28, 1998 24,500,000
December 26, 1998 29,500,000
January 30, 1999 33,500,000
(b) Permit cumulative EBITDA for each period beginning on January
31, 1999 and ending in each case on the last day of each month falling
thereafter through the Maturity Date to be less than an amount that is
satisfactory to the Agent.
SECTION 6.6 GUARANTEES AND OTHER LIABILITIES. Purchase or repurchase
(or agree, contingently or otherwise, so to do) the Indebtedness of, or assume,
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance of any obligation or capability of so
doing, or otherwise), endorse or otherwise become liable, directly or
indirectly, in connection with the obligations, stock or dividends of any
Person, except (i) for any guaranty of Indebtedness or other obligations of any
Borrower or Guarantor if the Guarantor could have incurred such Indebtedness or
obligations under this Agreement and (ii) by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
SECTION 6.7 CHAPTER 11 CLAIMS. Incur, create, assume, suffer to
exist or permit any other Super-Priority Claim which is pari passu with or
senior to the claims of the Agent and the Banks against the Borrower and the
Guarantors hereunder, except for the Carve-Out.
SECTION 6.8 DIVIDENDS; CAPITAL STOCK. Declare or pay, directly or
indirectly, any dividends or make any other distribution or payment, whether in
cash, property, securities or a combination thereof, with respect to (whether by
reduction of capital or otherwise) any shares of capital stock (or any options,
warrants, rights or other equity securities or agreements relating to any
capital stock), or set apart any sum for the aforesaid purposes, provided that
any Guarantor may pay dividends to the Borrower or to any other Guarantor.
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SECTION 6.9 TRANSACTIONS WITH AFFILIATES. Sell or transfer any
property or assets to, or otherwise engage in any other material transactions
with, any of its Affiliates (other than the Borrower and the Guarantors), other
than in the ordinary course of business at prices and on terms and conditions
not less favorable to the Borrower or such Guarantor than could be obtained on
an arm's-length basis from unrelated third parties.
SECTION 6.10 INVESTMENTS, LOANS AND ADVANCES. Purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment in, any other Person (all of the foregoing, "Investments"), except
for (i) ownership by the Borrower or the Guarantors of the capital stock of each
of the Subsidiaries listed on Schedule 3.05, (ii) Permitted Investments and
(iii) advances and loans among the Borrower and the Guarantors in the ordinary
course.
SECTION 6.11 DISPOSITION OF ASSETS. Sell or otherwise dispose of any
assets (including, without limitation, the capital stock of any Subsidiary)
except for (i) sales of inventory, fixtures and equipment in the ordinary course
of business, (ii) sales in accordance with and described on Schedule 6.11 and
(iii) sales or other dispositions of other assets having a fair market value not
exceeding $4,000,000 in the aggregate.
SECTION 6.12 NATURE OF BUSINESS. Modify or alter in any material
manner the nature and type of its business as conducted at or prior to the
Filing Date or the manner in which such business is conducted (except as
required by the Bankruptcy Code).
SECTION 7. EVENTS OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT. In the case of the happening of any
of the following events and the continuance thereof beyond the applicable period
of grace if any (each, an "Event of Default"):
(a) any material representation or warranty made by the Borrower or
any Guarantor in this Agreement or in any Loan Document or in connection with
this Agreement or the credit extensions hereunder or any material statement or
representation made in any report, financial statement, certificate or other
document furnished by the Borrower or any Guarantors to the Banks under or in
connection with this Agreement, shall prove to have been false or misleading in
any material respect when made or delivered; or
(b) default shall be made in the payment of any (i) Fees or interest
on the Loans when due, and such default shall continue unremedied for more than
two (2) Business Days or (ii) principal of the Loans or other amounts payable by
the Borrower hereunder
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(including, without limitation, reimbursement obligations or cash
collateralization in respect of Letters of Credit), when and as the same shall
become due and payable, whether at the due date thereof (including the
Prepayment Date) or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise; or
(c) default shall be made by the Borrower or any Guarantor in the
due observance or performance of any covenant, condition or agreement contained
in Section 6 hereof; or
(d) default shall be made by the Borrower or any Guarantor in the
due observance or performance of any other covenant, condition or agreement to
be observed or performed pursuant to the terms of this Agreement or any of the
other Loan Documents and such default shall continue unremedied for more than
ten (10) days; or
(e) any of the Cases shall be dismissed or converted to a case under
Chapter 7 of the Bankruptcy Code; a trustee under Chapter 7 or Chapter 11 of the
Bankruptcy Code, a responsible officer or an examiner with enlarged powers
relating to the operation of the business (powers beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of the
Bankruptcy Code shall be appointed in any of the Cases and the order appointing
such trustee, responsible officer or examiner shall not be reversed or vacated
within 30 days after the entry thereof; or an application shall be filed by the
Borrower or any Guarantor for the approval of any other Super-Priority Claim
(other than the Carve-Out) in any of the Cases which is pari passu with or
senior to the claims of the Agent and the Banks against the Borrower or any
Guarantor hereunder, or there shall arise or be granted any such pari passu or
senior Super-Priority Claim; or
(f) the Bankruptcy Court shall enter an order or orders granting
relief from the automatic stay applicable under Section 362 of the Bankruptcy
Code to the holder or holders of any security interest to permit foreclosure (or
the granting of a deed in lieu of foreclosure or the like) on any assets of the
Borrower or any of the Guarantors which have a value in excess of $500,000 in
the aggregate; or
(g) a Change of Control shall occur; or
(h) the Borrower shall fail to deliver a certified Borrowing Base
Certificate when due and such default shall continue unremedied for more than
three (3) Business Days.
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(i) any material provision of any Loan Document shall, for any
reason, cease to be valid and binding on the Borrower or any of the Guarantors,
or the Borrower or any of the Guarantors shall so assert in any pleading filed
in any court; or
(j) an order of the Bankruptcy Court shall be entered (without the
prior written consent of the Agent and the Required Banks) reversing, amending,
supplementing, staying for a period in excess of 10 days, vacating or otherwise
modifying either of the Orders or terminating the use of cash collateral by the
Borrower or the Guarantors pursuant to the Orders; or
(k) any judgment or order as to a post-petition liability or debt
for the payment of money in excess of $1,000,000 shall be rendered against the
Borrower or any of the Guarantors and the enforcement thereof shall not have
been stayed; or
(l) `any non-monetary judgment or order with respect to a
post-petition event shall be rendered against the Borrower or any of the
Guarantors which does or would reasonably be expected to (i) cause a material
adverse change in the financial condition, business, prospects, operations or
assets of the Borrower and the Guarantors taken as a whole on a consolidated
basis, (ii) have a material adverse effect on the ability of the Borrower or any
of the Guarantors to perform their respective obligations under any Loan
Document, or (iii) have a material adverse effect on the rights and remedies of
the Agent or any Bank under any Loan Document, and there shall be any period of
10 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(m) the Borrower or the Guarantors shall make any Pre-Petition
Payment (other than as permitted by the Orders) in excess of (x) an aggregate of
$23,000,000 in respect of certain critical vendor payments pursuant to one or
more orders entered by the Bankruptcy Court or (y) an amount that is
satisfactory to the Agent in the case of reclamation claims; or
(n) any Termination Event described in clauses (iii) or (iv) of the
definition of such term shall have occurred and shall continue unremedied for
more than 10 days and the sum (determined as of the date of occurrence of such
Termination Event) of the Insufficiency of the Plan in respect of which such
Termination Event shall have occurred and be continuing and the Insufficiency of
any and all other Plans with respect to which such a Termination Event
(described in such clauses (iii) or (iv)) shall have occurred and then exist is
equal to or greater than $5,000,000; or
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(o) (i) the Borrower or any ERISA Affiliate thereof shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan, (ii) the Borrower or such ERISA Affiliate
does not have reasonable grounds to contest such Withdrawal Liability and is not
in fact contesting such Withdrawal Liability in a timely and appropriate manner,
and (iii) the amount of such Withdrawal Liability specified in such notice, when
aggregated with all other amounts required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the date of such
notification), exceeds $5,000,000 allocable to post-petition obligations or
requires payments exceeding $500,000 per annum in excess of the annual payments
made with respect to such Multiemployer Plans by the Borrower or such ERISA
Affiliate for the plan year immediately preceding the plan year in which such
notification is received; or
(p) the Borrower or any ERISA Affiliate thereof shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years that include the date hereof by an amount exceeding $5,000,000; or
(q) the Borrower or any ERISA Affiliate shall have committed a
failure described in Section 302(f)(1) of ERISA (other than the failure to make
any contribution accrued and unpaid as of the Filing Date) and the amount
determined under Section 302(f)(3) of ERISA is equal to or greater than
$5,000,000; or
(r) it shall be determined (whether by the Bankruptcy Court or by
any other judicial or administrative forum) that the Borrower or any Guarantor
is liable for the payment of claims arising out of any failure to comply (or to
have complied) with applicable environmental laws or regulations the payment of
which will have a material adverse effect on the financial condition, business,
properties, operations or assets of the Borrower or the Guarantors, taken as a
whole, and the enforcement thereof shall not have been stayed; then, and in
every such event and at any time thereafter during the continuance of such
event, and without further order of or application to the Bankruptcy Court, the
Agent may, and at the request of the Required Banks, shall, by notice to the
Borrower (with a copy to counsel for the Official Creditors' Committee appointed
in the Cases, to counsel for the Pre-Petition Agent and to the United States
Trustee for the District of Delaware), take one or more of the following
actions, at the same or different times (provided, that with respect to clause
(iv) below and the enforcement of Liens or other remedies with respect to the
Collateral under clause (v) below, the Agent shall provide the Borrower (with a
copy to counsel for the Official
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Creditors' Committee in the Cases, to counsel for the Pre-Petition Agent and to
the United States Trustee for the District of Delaware) with five (5) Business
Days' written notice prior to taking the action contemplated thereby and
provided, further, that upon receipt of notice referred to in the immediately
preceding clause with respect to the accounts referred to in clause (iv) below,
the Borrower may continue to make ordinary course disbursements from such
accounts (other than the Letter of Credit Account) but may not withdraw or
disburse any other amounts from such accounts): (i) terminate forthwith the
Total Commitment; (ii) declare the Loans then outstanding to be forthwith due
and payable, whereupon the principal of the Loans together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document, shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower and the
Guarantors, anything contained herein or in any other Loan Document to the
contrary notwithstanding; (iii) require the Borrower and the Guarantors upon
demand to forthwith deposit in the Letter of Credit Account cash in an amount
which, together with any amounts then held in the Letter of Credit Account, is
equal to the sum of 105% of the then outstanding Letters of Credit and to the
extent the Borrower and the Guarantors shall fail to furnish such funds as
demanded by the Agent, the Agent shall be authorized to debit the accounts of
the Borrower and the Guarantors maintained with the Agent in such amount; (iv)
set-off amounts in the Letter of Credit Account or any other accounts maintained
with the Agent and apply such amounts to the obligations of the Borrower and the
Guarantors hereunder and in the other Loan Documents; and (v) exercise any and
all remedies under the Loan Documents and under applicable law available to the
Agent and the Banks.
SECTION 8. THE AGENT
SECTION 8.1 ADMINISTRATION BY AGENT. The general administration of
the Loan Documents shall be by the Agent. Each Bank hereby irrevocably
authorizes the Agent, at its discretion, to take or refrain from taking such
actions as agent on its behalf and to exercise or refrain from exercising such
powers under the Loan Documents as are delegated by the terms hereof or thereof,
as appropriate, together with all powers reasonably incidental thereto
(including the release of Collateral in connection with any transaction that is
expressly permitted by the Loan Documents). The Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents.
SECTION 8.2 ADVANCES AND PAYMENTS
(a) On the date of each Loan, the Agent shall be authorized (but not
obligated) to advance, for the account of each of the Banks, the amount of the
Loan to be
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made by it in accordance with its Commitment hereunder. Should the Agent do so,
each of the Banks agrees forthwith to reimburse the Agent in immediately
available funds for the amount so advanced on its behalf by the Agent, together
with interest at the Federal Funds Effective Rate if not so reimbursed on the
date due from and including such date but not including the date of
reimbursement.
(b) Any amounts received by the Agent in connection with this
Agreement (other than amounts to which the Agent is entitled pursuant to
Sections 2.19, 8.06, 10.05 and 10.06), the application of which is not otherwise
provided for in this Agreement shall be applied, first, in accordance with each
Bank's Commitment Percentage to pay accrued but unpaid Commitment Fees or Letter
of Credit Fees, and second, in accordance with each Bank's Commitment Percentage
to pay accrued but unpaid interest and the principal balance outstanding and all
unreimbursed Letter of Credit drawings. All amounts to be paid to a Bank by the
Agent shall be credited to that Bank, after collection by the Agent, in
immediately available funds either by wire transfer or deposit in that Bank's
correspondent account with the Agent, as such Bank and the Agent shall from time
to time agree.
SECTION 8.3 SHARING OF SETOFFS. Each Bank agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, including, but not limited to, a secured claim under Section 506
of the Bankruptcy Code or other security or interest arising from, or in lieu
of, such secured claim and received by such Bank under any applicable
bankruptcy, insolvency or other similar law, or otherwise, obtain payment in
respect of its Loans as a result of which the unpaid portion of its Loans is
proportionately less than the unpaid portion of the Loans of any other Bank (a)
it shall promptly purchase at par (and shall be deemed to have thereupon
purchased) from such other Bank a participation in the Loans of such other Bank,
so that the aggregate unpaid principal amount of each Bank's Loans and its
participation in Loans of the other Banks shall be in the same proportion to the
aggregate unpaid principal amount of all Loans then outstanding as the principal
amount of its Loans prior to the obtaining of such payment was to the principal
amount of all Loans outstanding prior to the obtaining of such payment and (b)
such other adjustments shall be made from time to time as shall be equitable to
ensure that the Banks share such payment pro-rata, provided that if any such
non-pro-rata payment is thereafter recovered or otherwise set aside such
purchase of participations shall be rescinded (without interest). The Borrower
expressly consents to the foregoing arrangements and agrees that any Bank
holding (or deemed to be holding) a participation in a Loan may exercise any and
all rights of banker's lien, setoff (in each case, subject to the same notice
requirements as pertain to clause (iv) of the remedial provisions of Section
7.01) or counterclaim with respect to any and all moneys owing by the Borrower
to such Bank as fully as if such Bank held a Note and was the original obligee
thereon, in the amount of such participation.
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SECTION 8.4 AGREEMENT OF REQUIRED BANKS. Upon any occasion requiring
or permitting an approval, consent, waiver, election or other action on the part
of the Required Banks, action shall be taken by the Agent for and on behalf or
for the benefit of all Banks upon the direction of the Required Banks, and any
such action shall be binding on all Banks. No amendment, modification, consent,
or waiver shall be effective except in accordance with the provisions of Section
10.10.
SECTION 8.5 LIABILITY OF AGENT.
(a) The Agent when acting on behalf of the Banks, may execute any of
its respective duties under this Agreement by or through any of its respective
officers, agents, and employees, and neither the Agent nor its directors,
officers, agents, employees or Affiliates shall be liable to the Banks or any of
them for any action taken or omitted to be taken in good faith, or be
responsible to the Banks or to any of them for the consequences of any oversight
or error of judgment, or for any loss, unless the same shall happen through its
gross negligence or willful misconduct. The Agent and its respective directors,
officers, agents, employees and Affiliates shall in no event be liable to the
Banks or to any of them for any action taken or omitted to be taken by them
pursuant to instructions received by them from the Required Banks or in reliance
upon the advice of counsel selected by it. Without limiting the foregoing,
neither the Agent, nor any of its respective directors, officers, employees,
agents or Affiliates shall be responsible to any Bank for the due execution,
validity, genuineness, effectiveness, sufficiency, or enforceability of, or for
any statement, warranty, or representation in, this Agreement, any Loan Document
or any related agreement, document or order, or shall be required to ascertain
or to make any inquiry concerning the performance or observance by the Borrower
of any of the terms, conditions, covenants, or agreements of this Agreement or
any of the Loan Documents.
(b) Neither the Agent nor any of its respective directors, officers,
employees, agents or Affiliates shall have any responsibility to the Borrower or
the Guarantors on account of the failure or delay in performance or breach by
any Bank or by the Borrower or the Guarantors of any of their respective
obligations under this Agreement or any of the Loan Documents or in connection
herewith or therewith.
(c) The Agent, in its capacity as Agent hereunder, shall be entitled
to rely on any communication, instrument, or document reasonably believed by
such person to be genuine or correct and to have been signed or sent by a person
or persons believed by such person to be the proper person or persons, and such
person shall be entitled to rely on advice of legal counsel, independent public
accountants, and other professional advisers and experts selected by such
person.
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SECTION 8.6 REIMBURSEMENT AND INDEMNIFICATION. Each Bank agrees (i)
to reimburse (x) the Agent for such Bank's Commitment Percentage of any expenses
and fees incurred for the benefit of the Banks under this Agreement and any of
the Loan Documents, including, without limitation, counsel fees and compensation
of agents and employees paid for services rendered on behalf of the Banks, and
any other expense incurred in connection with the operations or enforcement
thereof not reimbursed by the Borrower or the Guarantors and (y) the Agent for
such Bank's Commitment Percentage of any expenses of the Agent incurred for the
benefit of the Banks that the Borrower has agreed to reimburse pursuant to
Section 10.05 and has failed to so reimburse and (ii) to indemnify and hold
harmless the Agent and any of its directors, officers, employees, agents or
Affiliates, on demand, in the amount of its proportionate share, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against it
or any of them in any way relating to or arising out of this Agreement or any of
the Loan Documents or any action taken or omitted by it or any of them under
this Agreement or any of the Loan Documents to the extent not reimbursed by the
Borrower or the Guarantors (except such as shall result from their respective
gross negligence or willful misconduct).
SECTION 8.7 RIGHTS OF AGENT. It is understood and agreed that Chase
shall have the same rights and powers hereunder (including the right to give
such instructions) as the other Banks and may exercise such rights and powers,
as well as its rights and powers under other agreements and instruments to which
it is or may be party, and engage in other transactions with the Borrower or any
Guarantor, as though it were not the Agent of the Banks under this Agreement.
SECTION 8.8 INDEPENDENT BANKS. Each Bank acknowledges that it has
decided to enter into this Agreement and to make the Loans hereunder based on
its own analysis of the transactions contemplated hereby and of the
creditworthiness of the Borrower and the Guarantors and agrees that the Agent
shall bear no responsibility therefor.
SECTION 8.9 NOTICE OF TRANSFER. The Agent may deem and treat a Bank
party to this Agreement as the owner of such Bank's portion of the Loans for all
purposes, unless and until a written notice of the assignment or transfer
thereof executed by such Bank shall have been received by the Agent.
SECTION 8.10 SUCCESSOR AGENT. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent, which shall be reasonably satisfactory to the Borrower. If no successor
Agent shall have been so appointed by the
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Required Banks and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation, the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of a least $100,000,000, which shall
be reasonably satisfactory to the Borrower. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 8 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
SECTION 9. GUARANTY
SECTION 9.1 GUARANTY
(a) Each of the Guarantors unconditionally and irrevocably
guarantees the due and punctual payment and performance by the Borrower of the
Obligations. Each of the Guarantors further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and it will remain bound upon this guaranty notwithstanding any
extension or renewal of any of the Obligations. The Obligations of the
Guarantors shall be joint and several.
(b) Each of the Guarantors waives presentation to, demand for
payment from and protest to the Borrower or any other Guarantor, and also waives
notice of protest for nonpayment. The Obligations of the Guarantors hereunder
shall not be affected by (i) the failure of the Agent or a Bank to assert any
claim or demand or to enforce any right or remedy against the Borrower or any
other Guarantor under the provisions of this Agreement or any other Loan
Document or otherwise; (ii) any extension or renewal of any provision hereof or
thereof; (iii) any rescission, waiver, compromise, acceleration, amendment or
modification of any of the terms or provisions of any of the Loan Documents;
(iv) the release, exchange, waiver or foreclosure of any security held by the
Agent for the Obligations or any of them; (v) the failure of the Agent or a Bank
to exercise any right or remedy against any other Guarantor; or (vi) the release
or substitution of any Guarantor or any other Guarantor.
(c) Each of the Guarantors further agrees that this guaranty
constitutes a guaranty of performance and of payment when due and not just of
collection, and waives any right to require that any resort be had by the Agent
or a Bank to any security held for payment
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of the Obligations or to any balance of any deposit, account or credit on the
books of the Agent or a Bank in favor of the Borrower or any other Guarantor, or
to any other Person.
(d) Each of the Guarantors hereby waives any defense that it might
have based on a failure to remain informed of the financial condition of the
Borrower and of any other Guarantor and any circumstances affecting the ability
of the Borrower to perform under this Agreement.
(e) Each Guarantor's guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Obligations or any
other instrument evidencing any Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor or by any other
circumstance relating to the Obligations which might otherwise constitute a
defense to this Guaranty. Neither of the Agent, nor any of the Banks makes any
representation or warranty in respect to any such circumstances or shall have
any duty or responsibility whatsoever to any Guarantor in respect of the
management and maintenance of the Obligations.
(f) Subject to the provisions of Section 7.01, upon the Obligations
becoming due and payable (by acceleration or otherwise), the Banks shall be
entitled to immediate payment of such Obligations by the Guarantors upon written
demand by the Agent, without further application to or order of the Bankruptcy
Court.
SECTION 9.2 NO IMPAIRMENT OF GUARANTY. The obligations of the
Guarantors hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations. Without limiting the generality of the foregoing, the obligations
of the Guarantors hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Agent or a Bank to assert any claim or demand or
to enforce any remedy under this Agreement or any other agreement, by any waiver
or modification of any provision thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantors or would otherwise
operate as a discharge of the Guarantors as a matter of law, unless and until
the Obligations are paid in full.
SECTION 9.3 SUBROGATION. Upon payment by any Guarantor of any sums
to the Agent or a Bank hereunder, all rights of such Guarantor against the
Borrower arising as a
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result thereof by way of right of subrogation or otherwise, shall in all
respects be subordinate and junior in right of payment to the prior final and
indefeasible payment in full of all the Obligations. If any amount shall be paid
to such Guarantor for the account of the Borrower, such amount shall be held in
trust for the benefit of the Agent and the Banks and shall forthwith be paid to
the Agent and the Banks to be credited and applied to the Obligations, whether
matured or unmatured.
SECTION 10. MISCELLANEOUS
SECTION 10.1 NOTICES. Notices and other communications provided for
herein shall be in writing (including telegraphic, telex, facsimile or cable
communication) and shall be mailed, telegraphed, telexed, transmitted, cabled or
delivered to the Borrower or any Guarantor at 800 Lakeshore Parkway, Birmingham,
Alabama 35211, Attention: Chief Financial Officer and to a Bank or the Agent to
it at its address set forth on Annex A, or such other address as such party may
from time to time designate by giving written notice to the other parties
hereunder. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the fifth Business Day after the date when sent by registered or
certified mail, postage prepaid, return receipt requested, if by mail; or when
delivered to the telegraph company, charges prepaid, if by telegram; or when
receipt is acknowledged, if by any telegraphic communications or facsimile
equipment of the sender; in each case addressed to such party as provided in
this Section 10.01 or in accordance with the latest unrevoked written direction
from such party; provided, however, that in the case of notices to the Agent
notices pursuant to the preceding sentence and pursuant to Section 2 shall be
effective only when received by the Agent.
SECTION 10.2 SURVIVAL OF AGREEMENT, REPRESENTATIONS AND WARRANTIES,
ETC. All warranties, representations and covenants made by the Borrower or any
Guarantor herein or in any certificate or other instrument delivered by it or on
its behalf in connection with this Agreement shall be considered to have been
relied upon by the Banks and shall survive the making of the Loans herein
contemplated regardless of any investigation made by any Bank or on its behalf
and shall continue in full force and effect so long as any amount due or to
become due hereunder is outstanding and unpaid and so long as the Commitments
have not been terminated. All statements in any such certificate or other
instrument shall constitute representations and warranties by the Borrower and
the Guarantors hereunder with respect to the Borrower.
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SECTION 10.3 SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Agent and the Banks and their respective successors and
assigns. Neither the Borrower nor any of the Guarantors may assign or transfer
any of their rights or obligations hereunder without the prior written consent
of all of the Banks. Each Bank may sell participations to any Person in all or
part of any Loan, or all or part of its Commitment, in which event, without
limiting the foregoing, the provisions of Section 2.15 shall inure to the
benefit of each purchaser of a participation (provided that such participant
shall look solely to the seller of such participation for such benefits and the
Borrower's and the Guarantors' liability, if any, under Sections 2.15 and 2.18
shall not be increased as a result of the sale of any such participation) and
the PRO RATA treatment of payments, as described in Section 2.17, shall be
determined as if such Bank had not sold such participation. In the event any
Bank shall sell any participation, such Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower and each of the
Guarantors relating to the Loans, including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this Agreement
(provided that such Bank may grant its participant the right to consent to such
Bank's execution of amendments, modifications or waivers which (i) reduce any
Fees payable hereunder to the Banks, (ii) reduce the amount of any scheduled
principal payment on any Loan or reduce the principal amount of any Loan or the
rate of interest payable hereunder or (iii) extend the maturity of the
Borrower's obligations hereunder). The sale of any such participation shall not
alter the rights and obligations of the Bank selling such participation
hereunder with respect to the Borrower.
(b) Each Bank may assign to one or more Banks or Eligible Assignees
all or a portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment and the same
portion of the related Loans at the time owing to it), PROVIDED, HOWEVER, that
(i) other than in the case of an assignment to a Person at least 50% owned by
the assignor Bank, or by a common parent of both, or to another Bank, the Agent
and the Fronting Bank must give their respective prior written consent to such
assignment, which consent will not be unreasonably withheld, (ii) the aggregate
amount of the Commitment and/or Loans of the assigning Bank subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Agent) shall, unless otherwise agreed to
in writing by the Borrower and the Agent, in no event be less than $5,000,000
(or $1,000,000 in the case of an assignment between Banks) and (iii) the parties
to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register (as defined below), an Assignment and
Acceptance with blanks appropriately completed, together with a processing and
recordation fee of $3,500 (for which the Borrower shall have no liability). Upon
such execution, delivery,
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acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be within ten Business
Days after the execution thereof (unless otherwise agreed to in writing by the
Agent), (A) 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
Bank hereunder and (B) the Bank 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 Bank's rights and obligations under this Agreement, such
Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Bank assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Bank
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents; (ii) such Bank assignor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or any Guarantor or the performance
or observance by the Borrower or any Guarantor of any of its obligations under
this Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
copies of the financial statements referred to in Section 3.04 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such Bank
assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
thereto, together with such powers as are reasonably incidental hereof; and (vi)
such assignee agrees that it will perform in accordance with their terms all
obligations that by the terms of this Agreement are required to be performed by
it as a Bank.
(d) The Agent shall maintain at its office a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Banks and the Commitments of, and principal amount of the
Loans owing to, each Bank from time to time (the "Register"). The entries in the
Register shall be conclusive, in the absence of
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manifest error, and the Borrower, the Guarantors, the Agent and the Banks shall
treat each Person the name of which is recorded in the Register as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Bank at any reasonable time and from time
to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and the assignee thereunder together with the fee payable in
respect thereto, the Agent shall, if such Assignment and Acceptance has been
completed with blanks appropriately filled and consented to by the Agent and the
Fronting Bank (to the extent such consent is required hereunder), (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt written notice thereof to the Borrower
(together with a copy thereof). No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in this
paragraph.
(f) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 10.03, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower or any of the Guarantors furnished to such
Bank by or on behalf of the Borrower or any of the Guarantors; provided that
prior to any such disclosure, each such assignee or participant or proposed
assignee or participant shall agree in writing to be bound by the provisions of
Section 10.04.
(g) The Borrower hereby agrees, to the extent set forth in the
Commitment Letter, to actively assist and cooperate with the Agent in the
Agent's efforts to sell participations herein (as described in Section 10.03(a))
and assign to one or more Banks or Eligible Assignees a portion of its
interests, rights and obligations under this Agreement (as set forth in Section
10.03(b)).
SECTION 10.4 CONFIDENTIALITY. Each Bank agrees to keep any
information delivered or made available by the Borrower or any of the Guarantors
to it confidential from anyone other than persons employed or retained by such
Bank who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; PROVIDED that nothing herein shall
prevent any Bank from disclosing such information (i) to any other Bank, (ii) to
any other person if reasonably incidental to the administration of the Loans,
(iii) upon the order of any court or administrative agency, (iv) upon the
request or demand of any regulatory agency or authority, (v) which has been
publicly disclosed other than as a result of a disclosure by the Agent or any
Bank which is not permitted by this Agreement, (vi) in connection with any
litigation to which the Agent, any Bank, or their respective Affiliates may be a
party to the extent reasonably required, (vii) to the extent reasonably required
in
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connection with the exercise of any remedy hereunder, (viii) to such Bank's
legal counsel and independent auditors, and (ix) to any actual or proposed
participant or assignee of all or part of its rights hereunder subject to the
proviso in Section 10.03(f).
SECTION 10.5 EXPENSES. Whether or not the transactions hereby
contemplated shall be consummated, the Borrower and the Guarantors agree to pay
all reasonable out-of-pocket expenses incurred by the Agent (including but not
limited to the reasonable fees and disbursements of Zalkin, Rodin & Goodman LLP,
special counsel for the Agent, any other counsel that the Agent shall retain and
any internal or third-party consultants and auditors advising the Agent and
Chase Securities Inc.) in connection with the preparation, execution, delivery
and administration of this Agreement and the other Loan Documents, the making of
the Loans and the issuance of the Letters of Credit, the perfection of the Liens
contemplated hereby, the syndication of the transactions contemplated hereby,
the reasonable and customary costs, fees and expenses of the Agent in connection
with its monthly and other periodic field audits, monitoring of assets
(including reasonable and customary internal collateral monitoring fees) and
publicity expenses, and, following the occurrence of an Event of Default, all
reasonable out-of-pocket expenses incurred by the Banks and the Agent in the
enforcement or protection of the rights of any one or more of the Banks or the
Agent in connection with this Agreement or the other Loan Documents, including
but not limited to the reasonable fees and disbursements of any counsel for the
Banks or the Agent. Such payments shall be made on the date of the Interim Order
and thereafter on demand upon delivery of a statement setting forth such costs
and expenses. Whether or not the transactions hereby contemplated shall be
consummated, the Borrower and the Guarantors agree to reimburse the Agent and
Chase Securities Inc. for the expenses set forth in the Commitment Letter and
the reimbursement provisions thereof are hereby incorporated herein by
reference. The obligations of the Borrower and the Guarantors under this Section
shall survive the termination of this Agreement and/or the payment of the Loans.
SECTION 10.6 INDEMNITY. The Borrower and each of the Guarantors
agree to indemnify and hold harmless the Agent, Chase Securities Inc. and the
Banks and their directors, officers, employees, agents and Affiliates (each an
"Indemnified Party") from and against any and all expenses, losses, claims,
damages and liabilities incurred by such Indemnified Party arising out of claims
made by any Person in any way relating to the transactions contemplated hereby,
but excluding therefrom all expenses, losses, claims, damages, and liabilities
to the extent that they are determined by the final judgment of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Party. The obligations of the Borrower and the
Guarantors under this Section shall survive the termination of this Agreement
and/or the payment of the Loans.
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SECTION 10.7 CHOICE OF LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE AND THE BANKRUPTCY CODE.
SECTION 10.8 NO WAIVER. No failure on the part of the Agent or any
of the Banks to exercise, and no delay in exercising, any right, power or remedy
hereunder or any of the other Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 10.9 EXTENSION OF MATURITY. Should any payment of principal
of or interest or any other amount due hereunder become due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, in the case of principal, interest shall be payable
thereon at the rate herein specified during such extension.
SECTION 10.10 AMENDMENTS, ETC.
(a) No modification, amendment or waiver of any provision of this
Agreement or the Security and Pledge Agreement, and no consent to any departure
by the Borrower or any Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Banks, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given; provided, however, that no such modification or
amendment shall without the written consent of the Bank affected thereby (x)
increase the Commitment of a Bank (it being understood that a waiver of an Event
of Default shall not constitute an increase in the Commitment of a Bank), or (y)
reduce the principal amount of any Loan or the rate of interest payable thereon,
or extend any date for the payment of interest hereunder or reduce any Fees
payable hereunder or extend the final maturity of the Borrower's obligations
hereunder; and, provided, further, that no such modification or amendment shall
without the written consent of (A) all of the Banks (i) amend or modify any
provision of this Agreement which provides for the unanimous consent or approval
of the Banks, (ii) amend this Section 10.10 or the definition of Required Banks
or (iii) amend or modify the Super-Priority Claim status of the Banks
contemplated by Section 2.23 or (B) Banks holding Loans representing at least
66-2/3% of the aggregate principal amount of the Loans outstanding, or if no
Loans are outstanding, Banks having Commitments representing at least 66-2/3% of
the Total Commitment, release all or any substantial portion
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of the Liens granted to the Agent hereunder, under the Orders or under any other
Loan Document, or release any Guarantor. No such amendment or modification may
adversely affect the rights and obligations of the Agent or any Fronting Bank
hereunder without its prior written consent. No notice to or demand on the
Borrower or any Guarantor shall entitle the Borrower or any Guarantor to any
other or further notice or demand in the same, similar or other circumstances.
Each assignee under Section 10.03(b) shall be bound by any amendment,
modification, waiver, or consent authorized as provided herein, and any consent
by a Bank shall bind any Person subsequently acquiring an interest on the Loans
held by such Bank. No amendment to this Agreement shall be effective against the
Borrower or any Guarantor unless signed by the Borrower or such Guarantor, as
the case may be.
(b) Notwithstanding anything to the contrary contained in Section
10.10(a), in the event that the Borrower requests that this Agreement be
modified or amended in a manner which would require the unanimous consent of all
of the Banks (or the consent described in clause (B) of the first sentence of
Section 10.10(a)) and such modification or amendment is agreed to by the
Super-majority Banks (as hereinafter defined), then with the consent of the
Borrower and the Super-majority Banks, the Borrower and the Super-majority Banks
shall be permitted to amend the Agreement without the consent of the Bank or
Banks which did not agree to the modification or amendment requested by the
Borrower (such Bank or Banks, collectively the "Minority Banks") to provide for
(w) the termination of the Commitment of each of the Minority Banks, (x) the
addition to this Agreement of one or more other financial institutions (each of
which shall be an Eligible Assignee), or an increase in the Commitment of one or
more of the Super-majority Banks, so that the Total Commitment after giving
effect to such amendment shall be in the same amount as the Total Commitment
immediately before giving effect to such amendment, (y) if any Loans are
outstanding at the time of such amendment, the making of such additional Loans
by such new financial institutions or Super-majority Bank or Banks, as the case
may be, as may be necessary to repay in full the outstanding Loans of the
Minority Banks immediately before giving effect to such amendment and (z) such
other modifications to this Agreement as may be appropriate. As used herein, the
term "Super-majority Banks" shall mean, at any time, Banks, including Chase,
holding Loans representing at least 66-2/3% of the aggregate principal amount of
the Loans outstanding, or if no Loans are outstanding, Banks having Commitments
representing at least 66-2/3% of the Total Commitment.
SECTION 10.11 SEVERABILITY. Any provision of this Agreement which 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.
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SECTION 10.12 HEADINGS. Section headings used herein are for
convenience only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 10.13 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which shall constitute an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 10.14 PRIOR AGREEMENTS. This Agreement represents the entire
agreement of the parties with regard to the subject matter hereof and the terms
of any letters and other documentation entered into between the Borrower or a
Guarantor and any Bank or the Agent prior to the execution of this Agreement
which relate to Loans to be made hereunder shall be replaced by the terms of
this Agreement (except as otherwise expressly provided herein with respect to
the Commitment Letter and the fee letter referred to therein, including without
limitation the Borrower's agreement to actively assist the Agent in the
syndication of the transactions contemplated hereby referred to in Section
10.03(g) and including also the provisions of Section 2.19).
SECTION 10.15 FURTHER ASSURANCES. Whenever and so often as
reasonably requested by the Agent, the Borrower and the Guarantors will promptly
execute and deliver or cause to be executed and delivered all such other and
further instruments, documents or assurances, and promptly do or cause to be
done all such other and further things as may be necessary and reasonably
required in order to further and more fully vest in the Agent all rights,
interests, powers, benefits, privileges and advantages conferred or intended to
be conferred by this Agreement and the other Loan Documents.
SECTION 10.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
GUARANTORS, THE AGENT AND EACH BANK HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
BORROWER:
BRUNO'S, INC.
By: _________________________
Title:
GUARANTORS:
PWS HOLDING CORPORATION
By: _________________________
Title:
FOOD MAX OF MISSISSIPPI, INC.
By: _________________________
Title:
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A.F. STORES, INC.
By: _________________________
Title:
BR AIR, INC.
By: _________________________
Title:
FOOD MAX OF GEORGIA, INC.
By: _________________________
Title:
FOOD MAX OF TENNESSEE, INC.
By: _________________________
Title:
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FOODMAX, INC.
By: _________________________
Title:
LAKESHORE FOODS, INC.
By: _________________________
Title:
BRUNO'S FOOD STORES, INC.
By: _________________________
Title:
GEORGIA SALES COMPANY
By: _________________________
Title:
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SSS ENTERPRISES, INC.
By: _________________________
Title:
AGENT:
THE CHASE MANHATTAN BANK,
INDIVIDUALLY AND AS AGENT
By: _________________________
Title:
270 Park Avenue
New York, New York 10017
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ANNEX A
to
REVOLVING CREDIT AND GUARANTY AGREEMENT
Dated as of February 2, 1998
----------------------------
COMMITMENT COMMITMENT
BANK AMOUNT PERCENTAGE
- ---- ------ ----------
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017 $200,000,000 100%
Attn: Ms. Norma Corio
Managing Director
Total $200,000,000 100.0000%
============ =========
75
Exhibit 10.51
FIRST AMENDMENT
TO REVOLVING CREDIT
AND GUARANTY AGREEMENT
FIRST AMENDMENT, dated as of March 5, 1998 (the "Amendment"), to the
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of February 2, 1998, among
BRUNO'S, INC., an Alabama corporation (the "Borrower"), a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code, the Guarantors
named therein (the "Guarantors"), THE CHASE MANHATTAN BANK, a New York banking
corporation ("Chase"), each of the other financial institutions party thereto
(together with Chase, the "Banks") and THE CHASE MANHATTAN BANK, as Agent for
the Banks (in such capacity, the "Agent"):
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent are parties
to that certain Revolving Credit and Guaranty Agreement, dated as of February 2,
1998 (as the same may be further amended, modified or supplemented from time to
time, the "Credit Agreement"); and
WHEREAS, the Credit Agreement provides that from and after the entry of
the Final Order referred to therein, the aggregate extensions of credit
thereunder shall not exceed a Borrowing Base to be defined in a manner
satisfactory to the Agent; and
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent have agreed
to certain modifications to the Credit Agreement in addition to the
incorporation of the Borrowing Base; and
WHEREAS, from and after the Effective Date (as hereinafter defined) of
this Amendment, the Credit Agreement shall be amended, subject to and upon the
terms and conditions set forth herein, to set forth the definition of the
Borrowing Base (and of related terms), and to reflect such additional
modifications, as follows:
NYFS10...:\80\56880\0003\1187\AGR3278K.020
<PAGE>
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. As used herein, all terms that are defined in the Credit Agreement
shall have the same meanings herein.
2. Subparagraph (b) of the fourth paragraph of the Introductory Statement
is hereby amended by inserting the following immediately after the words
"Bankruptcy Code" appearing in the fourth line thereof: "but pari passu with the
Participating Vendor Claims".
3. Subparagraphs (c), (d) and (e) of the Introductory Statement are hereby
amended in their entireties to read as follows:
(c) with respect to the Obligations of the Borrower and the
Guarantors hereunder, a perfected first priority Lien, pursuant to
Section 364(c)(2) of the Bankruptcy Code, upon (x) all property of
the Borrower and the Guarantors that either was not subject to valid
and perfected Liens in existence on the Filing Date or was subject
to Liens in existence on the Filing Date that were released
subsequent to the Filing Date (which perfected first priority Lien
shall be pari passu with the Lien under Section 364(c)(2) of the
Bankruptcy Code granted pursuant to the Final Order to secure
Participating Vendor Claims) and (y) all cash and cash equivalents
that are (i) deposited in the Letter of Credit Account prior to the
Termination Date and (ii) deposited in the Letter of Credit Account,
out of the Agent's and the Banks' PARI PASSU recoveries from the
assets of the Borrower and the Guarantors, on and after the
Termination Date (which cash and cash equivalents so deposited in
the Letter of Credit Account (the "Separate Account") shall not be
subject to the Lien securing Participating Vendor Claims), provided
that following the Termination Date, amounts in the Letter of Credit
Account shall not be subject to the Carve-Out hereinafter referred
to; and
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(d) with respect to the Obligations of the Borrower and the
Guarantors hereunder, a perfected Lien, pursuant to Section
364(c)(3) of the Bankruptcy Code, upon all property of the Borrower
and the Guarantors that was subject to valid and perfected Liens in
existence on the Filing Date (including the existing Liens that
presently secure the Borrower's and Guarantors' pre-petition
Indebtedness under or in connection with that certain Credit
Agreement dated as of August 18, 1995, among the Borrower, the
several lenders from time to time party thereto and Chase, as
administrative agent (as heretofore amended, amended and restated or
otherwise modified, the "Existing Agreement") and any Liens granted
after the Filing Date on the property of the Guarantors to provide
adequate protection in respect of the Existing Agreement), junior to
such valid and perfected Liens (which junior Lien shall be pari
passu with the Lien under Section 364(c)(3) of the Bankruptcy Code
granted pursuant to the Final Order to secure Participating Vendor
Claims).
4. The definition of the term "Borrowing Base" set forth in Section 1.01
of the Credit Agreement is hereby amended in its entirety to read as follows:
"Borrowing Base" shall mean, on any date, an amount
(calculated based on the most recent Borrowing Base Certificate
delivered pursuant to this Agreement) that is equal to (i) the
amount by which the sum of (a) 65% of the Adjusted Eligible
Inventory located at the Distribution Center at such date and (b)
60% of the Adjusted Eligible Inventory located at the Stores (or in
transit from the Distribution Center to the Stores) at such date
exceeds the aggregate amount of Participating Vendor Claims at such
date, MINUS (ii) the aggregate amount of gift certificates then
outstanding entitling the holder thereof to use all or a portion
thereof to pay all or a portion of the purchase price for any
Inventory as of such day, PLUS (iii) the Real Property Component.
The Borrowing Base will be computed on a weekly and monthly basis
and established based upon the most recent
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Borrowing Base Certificate delivered to the Agent and shall remain
in effect until the delivery to the Agent of a subsequent Borrowing
Base Certificate. Borrowing Base standards may be fixed and revised
from time to time solely by the Agent in the Agent's exclusive
judgment with three Business Days prior notice by the Agent to the
Borrower and the Guarantors.
5. The definition of the term "Prepayment Date" set forth in Section 1.01
of the Credit Agreement is hereby amended by deleting the words (x) "thirty (30)
days after the entry of the Interim Order by the Bankruptcy Court" appearing in
the first and second lines thereof and inserting in lieu thereof the date "March
11, 1998" and (y) "the expiration of such thirty (30) day period" appearing at
the end thereof and inserting in lieu thereof the words "such date".
6. The definition of the term "Borrowing Base Certificate" set forth in
Section 1.01 of the Credit Agreement is hereby amended in its entirety to read
as follows:
"Borrowing Base Certificate" shall mean a certificate
substantially in the form of Exhibit E (with such changes therein as
may be required by the Agent to reflect the components of and
reserves against the Borrowing Base as provided for hereunder from
time to time), executed and certified by a Financial Officer of the
Borrower, which shall include appropriate exhibits and schedules as
referred to therein.
7. Section 1.01 of the Credit Agreement is hereby amended by inserting the
following new definitions in appropriate alphabetical order:
"Additional Reserve" shall mean, on any date, an amount that
is equal to 2% of Eligible Inventory on such date (other than
Eligible Inventory consisting of general merchandise located at the
Stores), PROVIDED that the calculation of the Additional Reserve
shall include
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<PAGE>
general merchandise located at the Stores at such times as the
Additional Shrink Percentage is zero.
"Additional Shrink Amount" shall be calculated only if the
Additional Shrink Percentage is greater than zero and shall mean, on
any date, an amount that is equal to (x) (a) the Additional Shrink
Percentage multiplied by total sales of general merchandise for all
Stores for the immediately preceding twelve fiscal monthly periods
divided by (b) twelve, MULTIPLIED BY (y) the Turnover Rate for
general merchandise located at the Stores.
"Additional Shrink Percentage" shall be applicable solely to
general merchandise located at the Stores and shall mean, on any
date, a percentage that is equal to (a) a percentage equal to the
amount of shrink in cost dollars actually incurred by the Stores at
which physical inventories were taken by the Borrower and the
Guarantors divided by sales in retail dollars for the Stores at
which physical inventories were taken by the Borrower and the
Guarantors, in each case during the immediately preceding twelve
fiscal monthly periods MINUS (b) a percentage equal to the amount of
shrink in cost dollars recorded in the accounting records of the
Borrower and the Guarantors for all Stores divided by sales in
retail dollars for all Stores, in each case during the immediately
preceding twelve fiscal monthly periods (it being understood that
the Additional Shrink Percentage may not be less than zero).
"Adjusted Eligible Inventory" shall mean, on any date,
Eligible Inventory minus the sum of (a) the Additional Reserve and
(b) the Additional Shrink Amount.
"Average Inventory" shall mean, on any date, (a) aggregate
Inventory at the end of each fiscal monthly period beginning with
the first fiscal monthly period of the current fiscal year through
the most recent fiscal monthly period of the current fiscal year
divided by (b) the number of fiscal monthly periods then elapsed in
the current fiscal year.
5
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"Distribution Center" shall mean the warehouse facility
operated by the Borrower and the Guarantors and located in
Birmingham, Alabama.
"Eligible Inventory" shall mean grocery, general merchandise
and deli (as described in the definition of the term "Inventory"),
PROVIDED that no Inventory shall be considered eligible if: (a) it
is located at the reclamation center of the Distribution Center or
is held at the Distribution Center for return to vendor; (b) it
includes any profits or transfer price additions charged or accrued
in connection with transfers of Inventory between the Borrower and
the Guarantors or among the Guarantors; (c) it is supplies,
packaging, selling or display materials; (d) it is located at the
Distribution Center and is in excess of an eight weeks' supply based
on sales for the most recently preceding eight-week period
determined at an individual product level; (e) it is not owned
solely by the Borrower and the Guarantors; (f) it is on consignment
to the Borrower and the Guarantors; (g) it is not located at
property that is owned or leased by the Borrower and the Guarantors
or in transit from vendors; (h) it is not located in the United
States of America; (i) it is not subject to a perfected first
priority Lien securing the Obligations and Participating Vendor
Claims; or (j) it is not in good condition, does not meet all
standards imposed by any Governmental Authority having regulatory
authority over it, or is not currently saleable in the normal course
of business of the Borrower and the Guarantors.
"Inventory" shall mean all products available for sale by the
Borrower and the Guarantors in the following categories as defined
and classified by the Borrower and the Guarantors on a basis
consistent with the Borrower's and the Guarantors' current and
historical accounting practices: grocery, general merchandise,
pharmacy, meat, seafood, produce, floral, bakery and deli; valued at
cost on a basis consistent with the Borrower's and the Guarantors'
current and historical accounting practices (without giving effect
to LIFO reserves).
6
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"Participating Vendors" shall have the meaning set forth in
the Final Order.
"Participating Vendor Claims" shall mean the claims (net of
allowances, rebates, coupon reconciliations and other credits) held
by Participating Vendors on account of Inventory shipped to the
Borrower by Participating Vendors and accepted by the Borrower from
and after the date on which such vendors have become Participating
Vendors pursuant to the terms of the Final Order, provided that no
claim for goods shipped more than seven calendar days following the
giving of notice by the Agent to the Borrower and to the Vendor
Trustee referred to in the Final Order (or, in the absence of the
appointment of a Vendor Trustee, to counsel for the Official
Creditors' Committee appointed in the Cases) of the occurrence of an
Event of Default shall constitute a Participating Vendor Claim.
"Real Property Component" shall mean $125,000,000, PROVIDED
that such amount shall be (i) automatically and permanently reduced
at the time of the sale, transfer or other disposition by the
Borrower or any of the Guarantors of any real property or any
leasehold interest in real property (other than real property and
leasehold interests in real property described in Schedule 6.11) by
an amount that is equal to the appraised value thereof as reflected
in the most recent appraisal with respect thereto furnished to the
Agent pursuant to Section 5.10 or delivered to the Pre-Petition
Agent pursuant to the requirements of the Existing Agreement (it
being understood that if any such appraisal sets forth a range of
values for the subject property, the "appraised value" of such
property shall be the arithmetic mean of the high and low values
specified for such property in such appraisal as determined by the
Agent) and (ii) otherwise adjusted as determined by the Agent to
reflect the appraised values that are set forth in the appraisals
that are furnished to the Agent from time to time pursuant to
Section 5.10.
"Stores" shall mean all supermarket retail locations selling
Inventory owned by the Borrower and the Guarantors.
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"Turnover Rate" shall be an amount stated in months and shall
mean, on any date, an amount that is equal to (x) twelve DIVIDED BY
(y) (i) (a) the aggregate cost of goods sold from the beginning of
the current fiscal year through the end of the most recent fiscal
monthly period divided by (b) the number of weeks then elapsed in
the current fiscal year multiplied by (c) the total number of weeks
in the current fiscal year divided by (ii) Average Inventory.
8. Section 2.03(d) of the Credit Agreement is hereby amended by deleting
the percentage (x) "1-1/4%" appearing in the fourth line thereof and inserting
in lieu thereof the percentage "3/4 of 1%" and (y) "3-1/4%" appearing in the
fifth line thereof and inserting in lieu thereof the percentage "2-3/4%".
9. Section 2.08(a) of the Credit Agreement is hereby amended by deleting
the percentage "1-1/4%" appearing in the third line thereof and inserting in
lieu thereof the percentage "3/4 of 1%".
10. Section 2.08(b) of the Credit Agreement is hereby amended by deleting
the percentage "2-1/4%" appearing in the fourth line thereof and inserting in
lieu thereof the percentage "1-3/4%".
11. Section 2.09 of the Credit Agreement is hereby amended by deleting the
percentage (i) "4-1/4%" appearing in clause (x) thereof and inserting in lieu
thereof the percentage "3-3/4%" and (ii) "3-1/4%" appearing in clause (y)
thereof and inserting in lieu thereof the percentage "2-3/4%".
12. Section 2.19 of the Credit Agreement is hereby amended by inserting
the following sentence at the end thereof:
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Notwithstanding anything to the contrary set forth in such letter,
the annual administration fee referred to therein shall be equal to
$150,000, payable in quarterly installments each in the amount of
$37,500 at the times set forth in such letter.
13. Section 2.21 of the Credit Agreement is hereby amended by deleting the
words "two and one-quarter (2-1/4%)" appearing in the third line thereof and
inserting in lieu thereof the words "one and three-quarters per cent (1-3/4%)".
14. The first sentence of Section 2.23(a) of the Credit Agreement is
hereby amended in its entirety to read as follows:
The Borrower and each of the Guarantors hereby covenants, represents
and warrants that, upon entry of the Final Order, (i) pursuant to
Section 364(c)(1) of the Bankruptcy Code, the Obligations of the
Borrower and the Guarantors hereunder and under the Loan Documents
and in respect of Indebtedness permitted by Section 6.03(vi) shall
at all times constitute allowed administrative expense claims in the
Cases having priority over all administrative expenses of the kind
specified in Sections 503(b) or 507(b) of the Bankruptcy Code but
pari passu with the Participating Vendor Claims, (ii) pursuant to
Section 364(c)(2) of the Bankruptcy Code, the Obligations of the
Borrower and the Guarantors hereunder and under the Loan Documents
and in respect of Indebtedness permitted by Section 6.03(vi) shall
at all times be secured by a perfected first priority Lien on (x)
all property of the Borrower and the Guarantors that either was not
subject to valid and perfected Liens in existence on the Filing Date
or was subject to Liens in existence on the Filing Date that were
released subsequent to the Filing Date (which perfected first
priority Lien shall be pari passu with the Lien under Section
364(c)(2) of the Bankruptcy Code granted pursuant to the Final Order
to secure Participating Vendor Claims) and (y) the Separate Account
(which Separate Account shall not be subject to the Lien securing
Participating Vendor Claims), and (iii) pursuant to Section
364(c)(3) of the Bankruptcy Code, the Obligations of the
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Borrower and the Guarantors hereunder and under the Loan Documents
and in respect of Indebtedness permitted by Section 6.03(vi) shall
be secured by a perfected Lien upon all property of the Borrower and
the Guarantors that was subject to valid and perfected Liens in
existence on the Filing Date (including the existing Liens that
presently secure the Borrower's and the Guarantors' pre-petition
Indebtedness under the Existing Agreement and any Liens granted
after the Filing Date on the property of the Guarantors to provide
adequate protection in respect of the Existing Agreement), junior to
such valid and perfected Liens (which junior Lien shall be pari
passu with the Lien under Section 364(c)(3) of the Bankruptcy Code
granted pursuant to the Final Order to secure Participating Vendor
Claims), subject only to (x) in the event of the occurrence and
during the continuance of an Event of Default or an event that would
constitute an Event of Default with the giving of notice or lapse of
time or both, the payment of allowed and unpaid professional fees
and disbursements incurred by the Borrower, the Guarantors and any
statutory committees appointed in the Cases in an aggregate amount
not in excess of $2,500,000 and (y) the payment of unpaid fees
pursuant to 28 U.S.C. ss. 1930 (collectively, the "Carve-Out"),
provided that following the Termination Date amounts in the Letter
of Credit Account shall not be subject to the Carve-Out.
15. Clause (iv) of the first sentence of Section 3.06 of the Credit
Agreement is hereby amended by inserting the following at the end thereof:
and (from and after the entry of the Final Order) Liens securing
Participating Vendor Claims (all of which Liens referred to in this
clause (iv) shall be pari passu with one another, provided that the
Separate Account shall not be subject to the Lien securing
Participating Vendor Claims)
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16. Section 4.02 (d) of the Credit Agreement is hereby amended by deleting
the words "30 days after the entry of the Interim Order" appearing in the tenth
and eleventh lines thereof and inserting in lieu thereof the date "March 11,
1998".
17. Section 5.09 of the Credit Agreement is hereby amended by inserting
(x) the word "second" before the word "immediately" appearing in the third line
thereof and (y) the following sentence at the end thereof:
In addition, the Borrower shall furnish to the Agent, together with
each Borrowing Base Certificate, an estimate of the aggregate amount
of the Participating Vendor Claims as of the date of the Borrowing
Base set forth in such Borrowing Base Certificate.
18. Clause (iv) of Section 6.01 of the Credit Agreement is hereby amended
by inserting the following at the end thereof:
"and Liens securing Participating Vendor Claims (all of which Liens
referred to in this clause shall be pari passu with one another,
provided that the Separate Account shall not be subject to the Lien
securing Participating Vendor Claims)"
19. Section 6.04 of the Credit Agreement is hereby amended by inserting
the word "reasonably" immediately before the word "satisfactory" appearing in
the last line thereof.
20. Section 6.05(b) of the Credit Agreement is hereby amended by inserting
the word "reasonably" immediately before the word "satisfactory" appearing in
the last line thereof.
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21. Section 6.07 of the Credit Agreement is hereby amended by inserting
the following after the words "except for" appearing in the third line thereof:
"Participating Vendor Claims (which shall be pari passu with the
claims of the Agent and the Banks against the Borrower and the
Guarantors hereunder) and except for"
22. Section 7.01(e) of the Credit Agreement is hereby amended by inserting
the following at the end thereof:
", in each case other than Participating Vendor Claims (which shall
be pari passu with the claims of the Agent and the Banks hereunder)"
23. The Credit Agreement is hereby amended by replacing Exhibit A-2
thereto with Schedule 1 hereto.
24. The Credit Agreement is hereby further amended by adding Schedule 2
hereto as Exhibit E to the Credit Agreement.
25. This Amendment shall not become effective until the date (the "
Effective Date") on which this Amendment shall have been executed by the
Borrower, the Guarantors, the Banks and the Agent, and the Agent shall have
received evidence satisfactory to it of such execution.
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26. Except to the extent hereby amended, the Credit Agreement and each of
the Loan Documents remain in full force and effect and are hereby ratified and
affirmed.
27. The Borrower agrees that its obligations set forth in Section 10.05 of
the Credit Agreement shall extend to the preparation, execution and delivery of
this Amendment, including the reasonable fees and disbursements of special
counsel to the Agent.
28. This Amendment shall be limited precisely as written and shall not be
deemed (a) to be a consent granted pursuant to, or a waiver or modification of,
any other term or condition of the Credit Agreement or any of the instruments or
agreements referred to therein or (b) to prejudice any right or rights which the
Agent or the Banks may now have or have in the future under or in connection
with the Credit Agreement or any of the instruments or agreements referred to
therein. Whenever the Credit Agreement is referred to in the Credit Agreement or
any of the instruments, agreements or other documents or papers executed or
delivered in connection therewith, such reference shall be deemed to mean the
Credit Agreement as modified by this Amendment.
29. This Amendment may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
30. This Amendment shall be governed by, and construed in accordance with,
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and the year first above written.
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BORROWER:
BRUNO'S, INC.
By: _________________________
Title:
GUARANTORS:
PWS HOLDING CORPORATION
By: _________________________
Title:
FOOD MAX OF MISSISSIPPI, INC.
By: _________________________
Title:
A.F. STORES, INC.
By: _________________________
Title:
BR AIR, INC.
By: _________________________
Title:
FOOD MAX OF GEORGIA, INC.
By: _________________________
Title:
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FOOD MAX OF TENNESSEE, INC.
By: _________________________
Title:
FOODMAX, INC.
By: _________________________
Title:
LAKESHORE FOODS, INC.
By: _________________________
Title:
BRUNO'S FOOD STORES, INC.
By: _________________________
Title:
GEORGIA SALES COMPANY
By: _________________________
Title:
SSS ENTERPRISES, INC.
By: _________________________
Title:
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AGENT:
THE CHASE MANHATTAN BANK,
INDIVIDUALLY AND AS AGENT
By: _________________________
Title:
270 Park Avenue
New York, New York 10017
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