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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of Earliest Event Reported): August 17, 1998
THE GRAND UNION COMPANY
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-26602 22-1518276
(Commission File Number) (I.R.S. Employer Identification No.)
201 Willowbrook Boulevard
Wayne, New Jersey 07470
(Address of Principal Executive Offices) (Zip Code)
(973) 890-6000
(Registrant's Telephone Number, Including Area Code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. OTHER EVENTS.
On August 17, 1998 (the "Effective Date"), pursuant to an order of the
United States Bankruptcy Court for the District of New Jersey entered on August
5, 1998 confirming the plan of reorganization (the "Plan") of The Grand Union
Company (the "Company"), the Company substantially consummated its Plan. The
Company's press release announcing the consummation of the Plan is attached as
an exhibit hereto.
Pursuant to the Plan and as disclosed in the Company's Disclosure
Statement dated May 22, 1998, as previously filed, the unofficial committee of
holders of the Company's 12% Senior Notes due September 1, 2004 added eight (8)
members to the Company's Board of Directors on the Effective Date. Certain
information with respect to the Directors and Executive Officers of the Company
on the Effective Date is attached as an exhibit hereto and is incorporated
herein by reference thereto. After the Effective Date, the holders of the new
common stock will be entitled to elect all of the directors of the Company.
On the Effective Date, the Company also entered into a $300 million credit
facility underwritten by UBS AG, Stamford Branch, and Lehman Commercial Paper
Inc. and a related Guarantee and Collateral Agreement, each of which are
attached as exhibits hereto and are incorporated herein by reference thereto.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
2.1 Disclosure Statement, dated May 22, 1998 (including Plan of
Reorganization attached as Exhibit 1 thereto), incorporated by
reference to the Company's Current Report on Form 8-K dated
May 27, 1998.
4.1 Certificate of Elimination of Class A and Class B Convertible
Preferred Stock of the Company.
10.1 Credit Agreement, dated as of August 17, 1998, by and among
the Company, the several lenders from time to time party
thereto, Warburg Dillon Read LLC, as Co-Advisor and
Co-Arranger, UBS AG, Stamford Branch, as Syndication Agent,
Lehman Brother Inc., as Co-Advisor and Co-Arranger, and Lehman
Commercial Paper Inc., as Administrative Agent and Collateral
Agent.
2
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10.2 Guarantee and Collateral Agreement, dated as of August 17,
1998, made by the Company and its subsidiaries in favor of
Lehman Commercial Paper Inc., as Collateral Agent.
99.1 Press Release, dated August 17, 1998.
99.2 Directors and Executive Officers of the Company.
3
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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.
THE GRAND UNION COMPANY
Dated: August 19, 1998 By: /s/ Jeffrey P. Freimark
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Name: Jeffrey P. Freimark
Title: Executive Vice President
and Chief Financial Officer
4
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EXHIBIT INDEX
Exhibit
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2.1 Disclosure Statement, dated May 22, 1998 (including Plan of Reorganization
attached as Exhibit 1 thereto), incorporated by reference to the Company's
Current Report on Form 8-K dated May 27, 1998.
4.1 Certificate of Elimination of Class A and Class B Convertible Preferred
Stock of the Company.
10.1 Credit Agreement, dated as of August 17, 1998, by and among the Company,
the several lenders from time to time party thereto, Warburg Dillon Read
LLC, as Co-Advisor and Co-Arranger, UBS AG, Stamford Branch, as
Syndication Agent, Lehman Brother Inc., as Co-Advisor and Co-Arranger, and
Lehman Commercial Paper Inc., as Administrative Agent and Collateral
Agent.
10.2 Guarantee and Collateral Agreement, dated as of August 17, 1998, made by
the Company and its subsidiaries in favor of Lehman Commercial Paper Inc.,
as Collateral Agent.
99.1 Press Release, dated August 17, 1998.
99.2 Directors and Executive Officers of the Company.
5
EXHIBIT 4.1
CERTIFICATE OF ELIMINATION
OF
CLASS A AND CLASS B CONVERTIBLE PREFERRED STOCK
OF
THE GRAND UNION COMPANY
Pursuant to Section 151(g)
of the General Corporation Law
of the State of Delaware
The Grand Union Company, a corporation organized and existing under
the laws of the State of Delaware (the "Company"), in accordance with the
provisions of Section 151(g) of the General Corporation Law of the State of
Delaware, hereby certifies as follows:
1. That, pursuant to Section 151 of the General Corporation Law of
the Sate of Delaware and authority granted in the Certificate of Incorporation
of the Company, as theretofore amended, the Board of Directors of the Company,
by resolution adopted, authorized the issuance of a series of Class A and Class
B Convertible Preferred Stock, par value $1.00 per share (the "Class A and Class
B Preferred Stock"), establishing the voting powers, designations, limitations
or restrictions thereof, and on September 5, 1996 and June 11, 1997,
respectively, filed Certificates of Designation with respect to such Class A and
Class B Preferred Stock in the office of the Secretary of State of the State of
Delaware.
2. That no shares of said Class A or Clas B Preferred Stock are
outstanding and no shares thereof will be issued subject to said Certificate of
Designation.
3. That the Board of Directors of the Company has adopted the
following resolutions:
WHEREAS, by resolution of the Board of Directors of the Company and
by Certificates of Designation (the "Certificate of Designation") filed in
the office of the Secretary of State of the State of Delaware on September
5, 1996 and June 11, 1997, repsectively, this Company authorized the
issuance of a series of Class A and Class B Convertible Preferred Stock,
par value
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$1.00 per share (the "Class A and Class B Preferred Stock") and
established the voting powers, designations, preferences and relative,
participating and other rights, and the qualifications, limitations or
restrictions thereof; and
WHEREAS, all shares of the Class A and Class B Preferred Stock were
issued by the Company and have been cancelled pursuant to the order of the
United States Bankruptcy Court for the District of New Jersey confirming
the Company's plan of reorganization; and
WHEREAS, such cancelled shares have been restored to the status of
authorized and unissued preferred stock of the Company and the authorized
number of shares of Class A and Class B Preferred Stock available for
issuance was correspondingly reduced to zero; and
WHEREAS, as of the date hereof no shares of such Class A Preferred
Stock are outstanding and no shares of such Class A and Class B Preferred
Stock will be issued subject to the Certificates of Designation; and
WHEREAS, it is desirable that all matters set forth in the
Certificates of Designation with respect to such Class A and Class B
Preferred Stock be eliminated from the Certificate of Incorporation, as
heretofore amended, of the Company;
NOW, THEREFORE, BE IT AND IT HEREBY IS
RESOLVED, that all matters set forth in the Certificates of
Designation with respect to the Class A and Class B Preferred Stock be
eliminated from the Certificate of Incorporation, as heretofore amended,
of the Company; and it is further
RESOLVED, that the appropriate officers of the Company be, and
hereby are, authorized and directed to file a Certificate of Elimination
with the office of the Secretary of State of the State of Delaware for the
purpose of effecting the foregoing resolution.
4. That, accordingly, all matters set forth in the Certificates of
Designation with respect to the Class A and Class B Preferred Stock be, and
hereby are, eliminated from the Certificate of Incorporation, as heretofore
amended, of the Company.
2
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IN WITNESS WHEREOF, The Grand Union Company has caused this
Certificate to be signed by Francis E. Nicastro, its Vice President and
Treasurer, as of this 17th day of August, 1998.
THE GRAND UNION COMPANY
By: /s/ Francis E. Nicastro
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Name: Francis E. Nicastro
Title: Vice President and
Treasurer
3
EXHIBIT 10.1
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$300,000,000
CREDIT AGREEMENT
AMONG
THE GRAND UNION COMPANY,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
WARBURG DILLON READ LLC,
AS CO-ADVISOR AND CO-ARRANGER
UBS AG, STAMFORD BRANCH,
AS SYNDICATION AGENT
LEHMAN BROTHERS INC.,
AS CO-ADVISOR AND CO-ARRANGER
LEHMAN COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
AND
LEHMAN COMMERCIAL PAPER INC.,
AS COLLATERAL AGENT
DATED AS OF AUGUST 17, 1998
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053113\1071\02409\9868EMVN.CRA
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS.................................................... 2
1.1 Defined Terms................................................... 2
1.2 Other Definitional Provisions................................... 23
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS................................ 23
2.1 Term Loan Commitments........................................... 23
2.2 Procedure for Term Loan Borrowing............................... 23
2.3 Repayment of Term Loans......................................... 24
2.4 Revolving Credit Commitments.................................... 24
2.5 Procedure for Revolving Credit Borrowing........................ 24
2.6 Swing Line Commitment........................................... 25
2.7 Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans ..................................................... 25
2.8 Repayment of Loans; Evidence of Debt............................ 27
2.9 Commitment Fees, etc. .......................................... 28
2.10 Termination or Reduction of Revolving Credit Commitments....... 28
2.11 Optional Prepayments........................................... 28
2.12 Mandatory Prepayments and Commitment Reductions................ 29
2.13 Conversion and Continuation Options............................ 30
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches...... 31
2.15 Interest Rates and Payment Dates............................... 31
2.16 Computation of Interest and Fees............................... 32
2.17 Inability to Determine Interest Rate........................... 32
2.18 Pro Rata Treatment and Payments................................ 33
2.19 Requirements of Law............................................ 35
2.20 Taxes.......................................................... 36
2.21 Indemnity...................................................... 38
2.22 Illegality..................................................... 38
2.23 Change of Lending Office....................................... 39
SECTION 3. LETTERS OF CREDIT.............................................. 39
3.1 L/C Commitment.................................................. 39
3.2 Procedure for Issuance of Letter of Credit...................... 39
3.3 Fees and Other Charges.......................................... 40
3.4 L/C Participations.............................................. 40
3.5 Reimbursement Obligation of the Borrower........................ 41
3.6 Obligations Absolute............................................ 41
3.7 Letter of Credit Payments....................................... 42
3.8 Applications.................................................... 42
SECTION 4. REPRESENTATIONS AND WARRANTIES................................. 42
4.1 Financial Condition............................................. 42
4.2 No Change....................................................... 43
4.3 Corporate Existence; Compliance with Law........................ 43
4.4 Corporate Power; Authorization; Enforceable Obligations......... 43
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Page
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4.5 No Legal Bar.................................................... 43
4.6 No Material Litigation.......................................... 44
4.7 No Default...................................................... 44
4.8 Ownership of Property; Liens.................................... 44
4.9 Intellectual Property........................................... 44
4.10 Taxes.......................................................... 44
4.11 Federal Regulations............................................ 45
4.12 Labor Matters.................................................. 45
4.13 ERISA.......................................................... 45
4.14 Investment Company Act; Other Regulations...................... 45
4.15 Subsidiaries................................................... 46
4.16 Use of Proceeds................................................ 46
4.17 Environmental Matters.......................................... 46
4.18 Accuracy of Information, etc................................... 47
4.19 Security Documents............................................. 47
4.20 Solvency....................................................... 48
4.21 Regulation H................................................... 48
SECTION 5. CONDITIONS PRECEDENT........................................... 48
5.1 Conditions to Initial Extension of Credit....................... 48
5.2 Conditions to Each Extension of Credit.......................... 52
SECTION 6. AFFIRMATIVE COVENANTS.......................................... 53
6.1 Financial Statements............................................ 53
6.2 Certificates; Other Information................................. 54
6.3 Payment of Obligations.......................................... 55
6.4 Conduct of Business and Maintenance of Existence, etc. ......... 55
6.5 Maintenance of Property; Insurance.............................. 55
6.6 Inspection of Property; Books and Records;
Discussions; Collateral Audit................................... 55
6.7 Notices......................................................... 56
6.8 Environmental Laws.............................................. 56
6.9 Interest Rate Protection........................................ 57
6.10 Additional Collateral, etc..................................... 57
6.11 Further Assurances............................................. 58
6.12 Survey, etc.................................................... 59
SECTION 7. NEGATIVE COVENANTS............................................. 60
7.1 Financial Condition Covenants................................... 61
7.2 Limitation on Indebtedness...................................... 62
7.3 Limitation on Liens............................................. 62
7.4 Limitation on Fundamental Changes............................... 64
7.5 Limitation on Disposition of Property........................... 64
7.6 Limitation on Restricted Payments............................... 64
7.7 Limitation on Capital Expenditures.............................. 65
7.8 Limitation on Investments....................................... 65
7.9 Limitation on Optional Payments and Modifications
of Debt Instruments, etc........................................ 66
7.10 Limitation on Transactions with Affiliates..................... 66
7.11 Limitation on Sales and Leasebacks............................. 67
7.12 Limitation on Changes in Fiscal Periods........................ 67
7.13 Limitation on Negative Pledge Clauses.......................... 67
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7.14 Limitation on Restrictions on Subsidiary Distributions......... 67
7.15 Limitation on Lines of Business................................ 68
SECTION 8. EVENTS OF DEFAULT.............................................. 68
SECTION 9. THE AGENTS..................................................... 71
9.1 Appointment..................................................... 71
9.2 Delegation of Duties............................................ 71
9.3 Exculpatory Provisions.......................................... 71
9.4 Reliance by Administrative Agent................................ 72
9.5 Notice of Default............................................... 72
9.6 Non-Reliance on Agents and Other Lenders........................ 73
9.7 Indemnification................................................. 73
9.8 Agent in Its Individual Capacity................................ 73
9.9 Successor Administrative Agent.................................. 74
9.10 Authorization to Release Liens................................. 74
9.11 The Arranger................................................... 74
SECTION 10. MISCELLANEOUS................................................. 74
10.1 Amendments and Waivers......................................... 74
10.2 Notices........................................................ 75
10.3 No Waiver; Cumulative Remedies................................. 76
10.4 Survival of Representations and Warranties..................... 77
10.5 Payment of Expenses............................................ 77
10.6 Successors and Assigns; Participations and Assignments......... 78
10.7 Adjustments; Set-off........................................... 80
10.8 Counterparts................................................... 80
10.9 Severability................................................... 81
10.10 Integration................................................... 81
10.11 GOVERNING LAW................................................. 81
10.12 Submission To Jurisdiction; Waivers........................... 81
10.13 Acknowledgements.............................................. 82
10.14 Confidentiality............................................... 82
10.15 WAIVERS OF JURY TRIAL......................................... 82
10.16 Delivery of Lender Addenda.................................... 82
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ANNEX:
A Pricing Grid
SCHEDULES:
1.1 Mortgaged Property
4.15 Subsidiaries
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.8(h) Existing Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Weil, Gotshal & Manges LLP
F-2 Form of Local Counsel Opinion
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note
H Form of Prepayment Option Notice
I Form of Exemption Certificate
J Form of Lender Addendum
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CREDIT AGREEMENT, dated as of August 17, 1998, among THE GRAND UNION
COMPANY, a Delaware corporation (the "Borrower"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the "Lenders"), WARBURG DILLON READ LLC, as co-advisor and co-arranger, UBS AG,
STAMFORD BRANCH, as syndication agent (in such capacity, the "Syndication
Agent"), LEHMAN BROTHERS INC., as co-advisor and co-arranger (together with
Warburg Dillon Read LLC in their capacities as co-advisors and co-arrangers, the
"Arrangers"), LEHMAN COMMERCIAL PAPER INC., as administrative agent (in such
capacity, the "Administrative Agent"), and LEHMAN COMMERCIAL PAPER INC., as
collateral agent (in such capacity, the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, on June 24, 1998 (the "Petition Date"), the Borrower filed
a voluntary petition under Section 301 of the Bankruptcy Code with the United
States Bankruptcy Court for the District of New Jersey (the "Bankruptcy Court")
initiating its chapter 11 case (the "Case");
WHEREAS, on the Petition Date, following a prepetition solicitation
of votes for the acceptance or rejection of the Borrower's plan of
reorganization dated May 22, 1998 (the "Plan of Reorganization") pursuant to
Section 1126 of the Bankruptcy Code, the Borrower filed with the Bankruptcy
Court the Plan of Reorganization, together with a certification of its balloting
agent certifying that the Plan of Reorganization had been accepted by the
requisite number and amount of claims and amount of Preferred Stock interests
pursuant to Section 1126 of the Bankruptcy Code;
WHEREAS, the Borrower requested that the Lenders make available a
term loan and revolving credit and letter of credit facility in an aggregate
principal amount not to exceed $300,000,000, under which all of the Borrower's
obligations are guaranteed by the Subsidiary Guarantors, and the proceeds of
which will be used (a) to refinance revolving credit loans, and to replace or
cash collateralize letters of credit outstanding under the Borrower's
$172,022,020 secured debtor-in-possession credit facility (the "DIP Credit
Facility"), (b) to refinance the Supplemental Term Loans under the Prepetition
Credit Facility, (c) to pay fees and expenses in connection with the Plan of
Reorganization as confirmed by the Bankruptcy Court, (d) to finance the working
capital needs of the Borrower and the Subsidiary Guarantors in the ordinary
course of business and (e) for general corporate purposes, including, without
limitation, capital expenditures; and
WHEREAS, the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
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2
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Accounts": as to any Person, all rights to receive payment for
goods sold or leased by such Person or for services rendered in the
ordinary course of business of such Person to the extent not evidenced by
an instrument or chattel paper, together with all interest, finance
charges and other amounts payable by an account debtor in respect thereof.
"Adjustment Date": as defined in the Pricing Grid.
"Affiliate": 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, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b) direct or
cause the direction of the management and policies of such Person, whether
by contract or otherwise.
"Agents": the collective reference to the Syndication Agent, the
Administrative Agent and the Collateral Agent.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and
(ii) the amount of such Lender's Revolving Credit Commitment then in
effect or, if the Revolving Credit Commitments have been terminated, the
amount of such Lender's Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage" with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such
time.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": (a) during the period from and including the
Closing Date to the first Adjustment Date occurring on or after the first
anniversary of the Closing Date, (i) 2% per annum with respect to Base
Rate Loans and (ii) 3% per annum with respect to Eurodollar Loans and (b)
on and after the first Adjustment Date, the Applicable Margin determined
pursuant to the Pricing Grid.
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3
"Application": an application, in such form as the Issuing Lender
may specify from time to time, requesting the Issuing Lender to open a
Letter of Credit.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (b), (c) or (d) of Section 7.5) which yields gross proceeds to the
Borrower or any of its Subsidiaries (valued at the initial principal
amount thereof in the case of non-cash proceeds consisting of notes or
other debt securities and valued at fair market value in the case of other
non-cash proceeds) in excess of $100,000.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Available Revolving Credit Commitment": as to any Revolving Credit
Lender at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment then in effect over (b) such Lender's
Revolving Extensions of Credit then outstanding; provided, that in
calculating any Lender's Revolving Extensions of Credit for the purpose of
determining such Lender's Available Revolving Credit Commitment pursuant
to Section 2.9(a), the aggregate principal amount of Swing Line Loans then
outstanding shall be deemed to be zero.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978, as heretofore
and hereafter amended, and codified as 11 U.S.C. ss.ss.101 et seq.
"Bankruptcy Court": as defined in the Recitals.
"Base Rate": 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 Citibank N.A.
as its prime or base rate in effect at its principal office in New York
City (the Prime Rate not being intended to be the lowest rate of interest
charged by Citibank N.A. in connection with extensions of credit to
debtors); "Base CD Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) a fraction, the numerator of which
is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; and "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
<PAGE>
4
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 Citibank N.A. from
three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. Any change in the 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 as of the opening of business on
the effective day of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrowing Date": any Business Day specified by the Borrower as a
date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Business": as defined in Section 4.17.
"Business Day": (i) for all purposes other than as covered by clause
(ii) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to
close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (i) and which
is also a day for trading by and between banks in Dollar deposits in the
interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for
the acquisition or leasing (pursuant to a capital lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) which should be
capitalized under GAAP on a consolidated balance sheet of such Person and
its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP, and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
<PAGE>
5
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any
of the foregoing.
"Case": as defined in the Recitals.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits having maturities of one year or less
from the date of acquisition issued by any Lender or by any commercial
bank organized under the laws of the United States of America or any state
thereof having combined capital and surplus of not less than $500,000,000;
(c) commercial paper of an issuer rated at least A-2 by Standard & Poor's
Ratings Services ("S&P") or P-2 by Moody's Investors Service, Inc.
("Moody's"), or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally, and maturing within six
months from the date of acquisition; (d) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A by S&P or A by Moody's; (f) securities with
maturities of six months or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; or (g)
shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.
"C/D Assessment Rate": for any day as applied to any Base Rate Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation (the "FDIC") classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. ss. 327.4 (or any
successor provision) to the FDIC (or any successor) for the FDIC's (or
such successor's) insuring time deposits at offices of such institution in
the United States.
"C/D Reserve Percentage": for any day as applied to any Base Rate
Loan, that percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board, for determining the maximum reserve
requirement for a Depositary
<PAGE>
6
Institution (as defined in Regulation D of the Board as in effect from
time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
"Closing Date": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": as to any Lender, the sum of the Term Loan Commitment
and the Revolving Credit Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of
the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated July, 1998 and furnished to the Lenders.
"Confirmation Order": an order of the Bankruptcy Court confirming
the Plan of Reorganization in the Case.
"Consolidated Current Assets": at any date, all amounts (other than
cash and Cash Equivalents) which would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on
a consolidated balance sheet of the Borrower and its Subsidiaries at such
date.
"Consolidated Current Liabilities": at any date, all amounts which
would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet
of the Borrower and its Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of the Borrower and its Subsidiaries
and (b) without duplication of clause (a) above, all Indebtedness
consisting of Revolving Credit Loans or Swing Line Loans to the extent
otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a
charge in the statement
<PAGE>
7
of such Consolidated Net Income for such period, the sum of (a) income tax
expense, (b) interest expense, amortization or writeoff of debt discount
and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c)
depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any
extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of
such Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business), (f) Chapter 11 expenses or
administrative costs reflecting Chapter 11 expenses and (g) any other
non-cash charges, and minus, to the extent included in the statement of
such Consolidated Net Income for such period, the sum of (a) interest
income, (b) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the
sales of assets outside of the ordinary course of business; it being
understood that the foregoing excludes up to $3,000,000 per fiscal year
derived from recurring asset sales) and (c) any other non-cash income, all
as determined on a consolidated basis.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense": for any period, total interest
expense (including that attributable to Capital Lease Obligations but
excluding amortization of deferred financing costs) of the Borrower and
its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and
net costs under Hedge Agreements in respect of interest rates to the
extent such net costs are allocable to such period in accordance with
GAAP).
"Consolidated Leverage Ratio": as at the last day of any period of
four consecutive fiscal quarters, the ratio of (a) Consolidated Total Debt
on such day to (b) Consolidated EBITDA for such period; provided that for
purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period, the Consolidated EBITDA of any Person
acquired by the Borrower or its Subsidiaries during such period shall be
included on a pro forma basis for such period (assuming the consummation
of such acquisition and the incurrence or assumption of any Indebtedness
in connection therewith occurred on the first day of such period) if the
consolidated balance sheet of such acquired Person and its consolidated
Subsidiaries as at the end of the period preceding the acquisition of such
Person and the related consolidated statements of income and stockholders'
equity and of cash flows for the period in respect of which Consolidated
EBITDA is to be calculated (i) have been previously provided to the
Administrative Agent and the Lenders and (ii) either (A)
have been reported on without a qualification arising out of the scope of
the audit by
<PAGE>
8
independent certified public accountants of nationally recognized standing
or (B) have been found reasonably acceptable by the Administrative Agent.
"Consolidated Net Income": for any period, the consolidated net
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries, (b) the income
(or deficit) of any Person (other than a Subsidiary of the Borrower) in
which the Borrower or any of its Subsidiaries has an ownership interest,
except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by
the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.
"Consolidated Total Debt": at any date, the aggregate principal
amount of all Funded Debt of the Borrower and its Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Disposition": with respect to any Property, any sale, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof;
the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United States
of America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States of America.
"ECF Percentage": 75%; provided, that, with respect to each fiscal
year of the Borrower (commencing with the fiscal year in which Closing
Date occurs), the ECF Percentage shall be reduced to 50% if the
Consolidated Leverage Ratio on the last day of such fiscal year is less
than 3.25 to 1.0.
<PAGE>
9
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirement (including, without limitation, common law) of the
United States or any other nation, or any state, local, municipal or other
governmental authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human
health, or employee health and safety, as has been, is now, or may at any
time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses, approvals,
registrations, notifications, exemptions and any other authorization
required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board)
maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a period
equal to such Interest Period commencing on the first day of such Interest
Period appearing on Page 3750 of the Dow Jones Markets screen as of 11:00
A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750
of the Dow Jones Markets screen (or otherwise on such screen), the
"Eurodollar Base Rate" for purposes of this definition shall be determined
by reference to such other comparable publicly available service for
displaying eurodollar rates as may be selected by the Administrative Agent
or, in the absence of such availability, by reference to the rate at which
the Administrative Agent is offered Dollar deposits at or about 11:00
A.M., New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where its eurodollar
and foreign currency and exchange operations are then being conducted for
delivery on the first day of such Interest Period for the number of days
comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
<PAGE>
10
Eurodollar Base Rate
-----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess,
if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) an amount equal to the amount of all
non-cash charges (including depreciation and amortization) deducted in
arriving at such Consolidated Net Income, (iii) decreases in Consolidated
Net Working Capital for such fiscal year, (iv) an amount equal to the
aggregate net non-cash loss on the Disposition of Property by the Borrower
and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent deducted in
arriving at such Consolidated Net Income and (v) the net increase during
such fiscal year (if any) in deferred tax accounts of the Borrower over
(b) the sum, without duplication, of (i) an amount equal to the amount of
all non-cash credits included in arriving at such Consolidated Net Income,
(ii) the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such fiscal year on account of Capital
Expenditures and any such expenditures permitted to be carried over
pursuant to Section 7.7 (excluding (A) the principal amount of
Indebtedness incurred in connection with such expenditures, (B) any such
expenditures financed with the proceeds of any Reinvestment Deferred
Amount and (C) any such expenditures permitted to be carried over from the
prior fiscal year pursuant to Section 7.7), (iii) the aggregate amount of
all prepayments of Revolving Credit Loans and Swing Line Loans during such
fiscal year to the extent accompanying permanent optional reductions of
the Revolving Credit Commitments and all optional prepayments of the Term
Loans during such fiscal year, (iv) the aggregate amount of all regularly
scheduled principal payments of Funded Debt (including, without
limitation, the Term Loans) of the Borrower and its Subsidiaries made
during such fiscal year (other than in respect of any revolving credit
facility to the extent there is not an equivalent permanent reduction in
commitments thereunder), (v) increases in Consolidated Net Working Capital
for such fiscal year, (vi) an amount equal to the sum of (A) the aggregate
net non-cash gain on the Disposition of Property and (B) the aggregate net
cash gain on the first $5 million of proceeds on the Disposition of
Property, by the Borrower and its Subsidiaries during such fiscal year
(other than sales of inventory in the ordinary course of business), to the
extent included in arriving at such Consolidated Net Income, (vii) the net
decrease during such fiscal year (if any) in deferred tax accounts of the
Borrower, and (viii) cash disbursements made in respect of liabilities to
the extent reserved against on the financial statements of the Borrower
and its Subsidiaries as of the Closing Date and not otherwise deducted in
determining Consolidated Net Income.
<PAGE>
11
"Excess Cash Flow Application Date": as defined in Section 2.12(c).
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in respect
of which either (i) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (ii) the guaranteeing by such Subsidiary of
the Obligations, would, in the good faith judgment of the Borrower, result
in adverse tax consequences to the Borrower.
"Facility": each of (a) the Term Loan Commitments and the Term Loans
made thereunder (the "Term Loan Facility") and (b) the Revolving Credit
Commitments and the extensions of credit made thereunder (the "Revolving
Credit Facility").
"Federal Funds Effective Rate": 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
Citibank N.A. from three federal funds brokers of recognized standing
selected by it.
"Fee Properties": the collective reference to the real properties
owned in fee by the respective Loan Parties described on Part I of
Schedule 1.1, including all buildings, improvements, structures and
fixtures now or subsequently located thereon.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or matures
within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year from such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
from such date, including, without limitation, all current maturities and
current sinking fund payments in respect of such Indebtedness whether or
not required to be paid within one year from the date of its creation and,
in the case of the Borrower, Indebtedness in respect of the Loans.
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time, except that for purposes
of Section 7.1, GAAP shall be determined on the basis of such principles
in effect on the date hereof and consistent with those used in the
preparation of the most recent audited financial statements delivered
pursuant to Section 4.1(b). In the event that any "Accounting Change" (as
defined below) shall occur and such change results in a change in the
method of calculation of financial covenants, standards or terms in this
Agreement,
<PAGE>
12
then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the
same after such Accounting Changes as if such Accounting Changes had not
been made. Until such time as such an amendment shall have been executed
and delivered by the Borrower, the Administrative Agent and the Required
Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Changes
had not occurred. "Accounting Changes" refers to changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of
the American Institute of Certified Public Accountants or, if applicable,
the Securities and Exchange Commission (or successors thereto or agencies
with similar functions).
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government (including, without limitation, the National
Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued
a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (iii) to purchase Property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable
<PAGE>
13
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements entered into by the Borrower providing
for protection against fluctuations in interest rates or currency exchange
rates or the exchange of nominal interest obligations, either generally or
under specific contingencies.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of Property or services (other
than current trade payables incurred in the ordinary course of such
Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness
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), (e) all Capital Lease Obligations of such Person, (f) all
obligations of such Person, contingent or otherwise, as an account party
under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem,
retire or otherwise acquire for value any Capital Stock of such Person,
(h) all Guarantee Obligations of such Person in respect of obligations of
the kind referred to in clauses (a) through (g) above; (i) all obligations
of the kind referred to in clauses (a) through (h) above secured by (or
for which the holder of such obligation has an existing right, contingent
or otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or
not such Person has assumed or become liable for the payment of such
obligation, (j) for the purposes of Section 8(e) only, all obligations of
such Person in respect of Hedge Agreements and (k) the liquidation value
of any mandatorily redeemable preferred Capital Stock of such Person or
its Subsidiaries held by any Person other than such Person and its Wholly
Owned Subsidiaries.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States,
<PAGE>
14
multinational or foreign laws or otherwise, including, without limitation,
copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to
sue at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three months,
or a whole multiple thereof, after the first day of such Interest Period
and the last day of such Interest Period and (d) as to any Loan (other
than any Revolving Credit Loan that is a Base Rate Loan and any Swing Line
Loan), the date of any repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower in its notice of borrowing
or notice of conversion, as the case may be, given with respect thereto;
and (b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current Interest Period
with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month
in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond
the scheduled Revolving Credit Termination Date or beyond the date
final payment is due on the Term Loans shall end on the Revolving
Credit Termination Date or such due date, as applicable;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to require
a payment or prepayment of any Eurodollar Loan during an Interest Period
for such Loan.
<PAGE>
15
"Inventory": all inventory of the Borrower and its Subsidiaries as defined
and classified by the Borrower and the Subsidiary Guarantors on a basis
consistent with the Borrower's and Subsidiary Guarantors' current and
historical accounting practices, excluding perishables.
"Investments": as defined in Section 7.8.
"Issuing Lender": UBS AG, Stamford Branch, in its capacity as issuer
of any Letter of Credit.
"L/C Commitment": $50,000,000.
"L/C Fee Payment Date": the last day of each March, June, September
and December and the last day of the Revolving Credit Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters
of Credit which have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
Credit Lenders other than the Issuing Lender.
"Leased Properties": the collective reference to the real properties
leased by the respective Loan Parties described on Part II of Schedule
1.1, including all buildings, improvements, structures and fixtures now or
subsequently located thereon and owned or leased by the respective Loan
Parties.
"Lender Addendum": with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit J, to be executed and
delivered by such Lender on the Closing Date as provided in Section 10.16.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement and any capital lease having substantially the same economic
effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents and the
Notes.
<PAGE>
16
"Loan Parties": the Borrower and each Subsidiary of the Borrower
which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the
Term Loans or the Total Revolving Extensions of Credit, as the case may
be, outstanding under such Facility (or, in the case of the Revolving
Credit Facility, prior to any termination of the Revolving Credit
Commitments, the holders of more than 50% of the Total Revolving Credit
Commitments).
"Majority Revolving Credit Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Agents or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by the Borrower
and/or its Subsidiaries for investigative and remedial costs, compliance
costs, compensatory damages, natural resource damages, punitive damages,
fines, penalties or any combination thereof which, in the aggregate,
exceed $5,000,000.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
pollutants, contaminants, radioactivity, and any other substances or
forces of any kind, whether or not any such substance or force is defined
as hazardous or toxic under any Environmental Law, that is regulated
pursuant to or could give rise to liability under any Environmental Law.
"Mortgaged Properties": the collective reference to each of the Fee
Properties and the Leased Properties.
"Mortgages": the collective reference to each of the mortgages,
deeds of trust and deeds to secure debt encumbering each of the Mortgaged
Properties to be executed and delivered by the respective Loan Parties in
favor of, or for the benefit of, the Administrative Agent for the benefit
of the Lenders, substantially in the form of Exhibit D (with such changes
thereto as shall be advisable under the law of the jurisdiction in which
such mortgage, deed to secure debt or deed of trust is to be recorded), as
the same may be amended, supplemented or otherwise modified from time to
time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
<PAGE>
17
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied
to the repayment of Indebtedness secured by a Lien expressly permitted
hereunder on any asset which is the subject of such Asset Sale or Recovery
Event and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and (b) in
connection with any issuance or sale of equity securities or debt
securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"New Lending Office": as defined in Section 2.17(d).
"Non-Excluded Taxes": as defined in Section 2.20(a).
"Non-U.S. Lender": as defined in Section 2.20(d).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender (or, in the case of
Hedge Agreements, any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
this Agreement, any other Loan Document, the Letters of Credit, any Hedge
Agreement entered into with any Lender or any affiliate of any Lender or
any other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
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"Participant": as defined in Section 10.6(b).
"Payment Office": the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and
the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Liens": Liens permitted to exist under Section 7.3.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Petition Date": as defined in the Recitals.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Plan of Reorganization": as defined in the Recitals.
"Prepetition Credit Facility": the prepetition $250,000,000 senior
secured credit facility agented by Bankers Trust Company.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Borrower or any of its Subsidiaries.
"Refunded Swing Line Loans": as defined in Section 2.7.
"Refunding Date": as defined in Section 2.7.
"Register": as defined in Section 10.6(d).
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19
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any of
its Subsidiaries in connection therewith which are not applied to prepay
the Term Loans or reduce the Revolving Credit Commitments pursuant to
Section 2.12(b) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing
and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash
Proceeds of an Asset Sale or Recovery Event to acquire assets useful in
its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire
assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring one year after such
Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets
useful in the Borrower's business with all or any portion of the relevant
Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice period
is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. ss. 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments and (b) thereafter, the sum of (i)
the aggregate unpaid principal amount of the Term Loans then outstanding
and (ii) the Total Revolving Credit Commitments then in effect or, if the
Revolving Credit Commitments have been terminated, the Total Revolving
Extensions of Credit then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders in
respect of each Facility.
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20
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Responsible Officer": the chief executive officer, president, chief
administrative officer or chief financial officer of the Borrower, but in
any event, with respect to financial matters, the chief financial officer,
the treasurer and controller of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Credit Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Credit Loans and participate in
Swing Line Loans and Letters of Credit, in an aggregate principal and/or
face amount not to exceed the amount set forth under the heading
"Revolving Credit Commitment" opposite such Lender's name on Schedule 1 to
the Letter Addendum delivered by such Lender, or, as the case may be, in
the Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original amount of the Total Revolving Credit Commitments is
$70,000,000.
"Revolving Credit Commitment Period": the period from and including
the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Lender": each Lender which has a Revolving Credit
Commitment or which is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Percentage": as to any Revolving Credit Lender at
any time, the percentage which such Lender's Revolving Credit Commitment
then constitutes of the Total Revolving Credit Commitments (or, at any
time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Revolving Credit Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Credit Loans then
outstanding).
"Revolving Credit Termination Date": August 17, 2003.
"Revolving Extensions of Credit": as to any Revolving Credit Lender
at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Lender then outstanding,
(b) such Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding and (c) such Lender's Revolving Credit Percentage of the
aggregate principal amount of Swing Line Loans then outstanding.
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21
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents
hereafter delivered to the Administrative Agent granting a Lien on any
Property of any Person to secure the obligations and liabilities of any
Loan Party under any Loan Document.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise", as of
such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the assets
of such Person will, as of such date, be greater than the amount that will
be required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors
or other managers of such corporation, partnership or other entity are at
the time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a "Subsidiary"
or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than
any Excluded Foreign Subsidiary.
"Swing Line Commitment": the obligation of the Swing Line Lender to
make Swing Line Loans pursuant to Section 2.6 in an aggregate principal
amount at any one time outstanding not to exceed $10,000,000.
"Swing Line Lender": Lehman Commercial Paper Inc., in its capacity
as the lender of Swing Line Loans.
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22
"Swing Line Loans": as defined in Section 2.6.
"Swing Line Participation Amount": as defined in Section 2.7.
"Term Loans": as defined in Section 2.1.
"Term Loan Commitment": as to any Term Loan Lender, the obligation
of such Lender, if any, to make a Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading
"Term Loan Commitment" opposite such Lender's name on Schedule 1 to the
Letter Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original aggregate amount of the Term Loan Commitments is
$230,000,000.
"Term Loan Lender": each Lender which has a Term Loan Commitment or
which is the holder of a Term Loan.
"Term Loan Percentage": as to any Lender at any time, the percentage
which such Lender's Term Loan Commitment then constitutes of the aggregate
Term Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's Term
Loans then outstanding constitutes of the aggregate principal amount of
the Term Loans then outstanding).
"Total Revolving Credit Commitments": at any time, the aggregate
amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders outstanding at such time.
"Transferee": as defined in Section 10.15.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Underlying Lease": as defined in Section 4.8.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other
Wholly Owned Subsidiaries.
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23
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that
is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. (a) Subject to the terms and conditions
hereof, each Term Loan Lender severally agrees to make a term loan (a "Term
Loan") to the Borrower on the Closing Date in an amount not to exceed the amount
of the Term Loan Commitment of such Lender. The Term Loans may from time to time
be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 2.2 and 2.13.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Term Loan Lenders
make the Term Loans on the Closing Date and specifying the amount to be
borrowed. The Term Loans made on the Closing Date shall initially be Base Rate
Loans, and no Term Loan may be converted into or continued as a Eurodollar Loan
prior to the date which is 90 days after the Closing Date, or, if earlier, the
date on which the Syndication Agent completes the syndication of the Facilities
and the entities selected in such syndication process become parties to this
Agreement. Upon receipt of such notice the Administrative Agent shall promptly
notify each Term Loan Lender thereof. Not later than 12:00 Noon, New York City
time, on the Closing Date, each Term Loan Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the Term Loan to be made by such Lender. The Administrative Agent
shall credit to the account of the Borrower on the books of the
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24
Funding Office the aggregate of the amounts made available to the
Administrative Agent by the Term Loan Lenders in immediately available funds.
2.3 Repayment of Term Loans. The Term Loan of each Lender shall
mature and be payable in one payment on August 17, 2003.
2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of the sum of (i) the L/C Obligations then outstanding and
(ii) the aggregate principal amount of the Swing Line Loans then outstanding,
does not exceed the amount of such Lender's Revolving Credit Commitment then in
effect. During the Revolving Credit Commitment Period the Borrower may use the
Revolving Credit Commitments by borrowing, prepaying the Revolving Credit Loans
in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.5 and 2.13, provided
that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit Loans
on the Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time, (a) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the requested Borrowing Date, in the case of Base
Rate Loans), specifying (i) the amount and Type of Revolving Credit Loans to be
borrowed, (ii) the requested Borrowing Date and (iii) in the case of Eurodollar
Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Period therefor. Any Revolving Credit Loans made
on the Closing Date shall initially be Base Rate Loans, and no Revolving Credit
Loan may be made as, converted into or continued as a Eurodollar Loan prior to
the date which is 90 days after the Closing Date, or, if earlier, the date on
which the Syndication Agent completes the syndication of the Facilities and the
entities selected in such syndication process become parties to this Agreement.
Each borrowing under the Revolving Credit Commitments shall be in an amount
equal to (x) in the case of Base Rate Loans, $1,000,000 or a whole multiple
thereof (or, if the then aggregate Available Revolving Credit Commitments are
less than $1,000,000, such lesser amount) and (y) in the case of Eurodollar
Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided,
that the Swing Line Lender may request, on behalf of the Borrower, borrowings
under the Revolving Credit Commitments which are Base Rate Loans in other
amounts pursuant to Section 2.7. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Credit
Lender thereof. Each
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25
Revolving Credit Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing
Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books
of the Funding Office with the aggregate of the amounts made available to the
Administrative Agent by the Revolving Credit Lenders and in like funds as
received by the Administrative Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Credit Commitments from time to
time during the Revolving Credit Commitment Period by making swing line loans
("Swing Line Loans") to the Borrower; provided that (i) the aggregate principal
amount of Swing Line Loans outstanding at any time shall not exceed the Swing
Line Commitment then in effect (notwithstanding that the Swing Line Loans
outstanding at any time, when aggregated with the Swing Line Lender's other
outstanding Revolving Credit Loans hereunder, may exceed the Swing Line
Commitment then in effect) and (ii) the Borrower shall not request, and the
Swing Line Lender shall not make, any Swing Line Loan if, after giving effect to
the making of such Swing Line Loan, the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. During the Revolving
Credit Commitment Period, the Borrower may use the Swing Line Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans on the
Revolving Credit Termination Date.
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line
Loans. (a) Whenever the Borrower desires that the Swing Line Lender make Swing
Line Loans it shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 1:00 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date (which shall be a Business Day during the Revolving Credit
Commitment Period). Each borrowing under the Swing Line Commitment shall be in
an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof.
Not later than 3:00 P.M., New York City time, on the Borrowing Date specified in
a notice in respect of Swing Line Loans, the Swing Line Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of the Swing Line Loan to be
made by the Swing Line Lender. The Administrative Agent shall make the proceeds
of such Swing Line Loan available to the Borrower on such Borrowing Date by
depositing such proceeds in the account of the Borrower with the Administrative
Agent on such Borrowing Date in immediately available funds.
(b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the
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26
Swing Line Lender to act on its behalf), on one Business Day's notice given by
the Swing Line Lender no later than 12:00 Noon, New York City time, request each
Revolving Credit Lender to make, and each Revolving Credit Lender hereby agrees
to make, a Revolving Credit Loan, in an amount equal to such Revolving Credit
Lender's Revolving Credit Percentage of the aggregate amount of the Swing Line
Loans (the "Refunded Swing Line Loans") outstanding on the date of such notice,
to repay the Swing Line Lender. Each Revolving Credit Lender shall make the
amount of such Revolving Credit Loan available to the Administrative Agent at
the Funding Office in immediately available funds, not later than 10:00 A.M.,
New York City time, one Business Day after the date of such notice. The proceeds
of such Revolving Credit Loans shall be immediately made available by the
Administrative Agent to the Swing Line Lender for application by the Swing Line
Lender to the repayment of the Refunded Swing Line Loans. The Borrower
irrevocably authorizes the Swing Line Lender to charge the Borrower's accounts
with the Administrative Agent (up to the amount available in each such account)
in order to immediately pay the amount of such Refunded Swing Line Loans to the
extent amounts received from the Revolving Credit Lenders are not sufficient to
repay in full such Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest in
the then outstanding Swing Line Loans by paying to the Swing Line Lender an
amount (the "Swing Line Participation Amount") equal to (i) such Revolving
Credit Lender's Revolving Credit Percentage times (ii) the sum of the aggregate
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's Swing Line Participation Amount,
the Swing Line Lender receives any payment on account of the Swing Line Loans,
the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's pro rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the
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27
Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower; (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other Revolving Credit Lender; or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender or Term Loan Lender, as the case may be,
(i) the then unpaid principal amount of each Revolving Credit Loan of such
Revolving Credit Lender on the Revolving Credit Termination Date (or such
earlier date on which the Loans become due and payable pursuant to Section 8),
(ii) the then unpaid principal amount of each Swing Line Loan of such Swing Line
Lender on the Revolving Credit Termination Date (or such earlier date on which
the Loans become due and payable pursuant to Section 8) and (iii) the principal
amount of each Term Loan of such Term Loan Lender as set forth in Section 2.3
(or on such earlier date on which the Loans become due and payable pursuant to
Section 8). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.15.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(e), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing any Term Loans, Revolving Credit
Loans or Swing Line Loans, as the
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28
case may be, of such Lender, substantially in the forms of Exhibit G-1, G-2 or
G-3, respectively, with appropriate insertions as to date and principal amount.
2.9 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the Closing Date.
(b) The Borrower agrees to pay to the Agents the fees in the amounts
and on the dates agreed to in writing by the Borrower and the Agents.
2.10 Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; provided
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and Swing Line Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Revolving Credit
Commitments then in effect.
2.11 Optional Prepayments. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, upon irrevocable notice
delivered to the Administrative Agent at least three Business Days prior thereto
in the case of Eurodollar Loans and at least one Business Day prior thereto in
the case of Base Rate Loans, which notice shall specify the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans or Base Rate Loans;
provided, that if a Eurodollar Loan is prepaid on any day other than the last
day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.21; and provided, further that Swing Line
Loans may be prepaid on the same day as such notice. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except in the
case of Revolving Credit Loans which are Base Rate Loans and Swing Line Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of Term
Loans and Revolving Credit Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. Partial prepayments of Swing Line Loans
shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof. Prepayments of the Term Loans shall, subject to the right of each Term
Loan Lender to decline all or any portion of any optional prepayment applicable
thereto pursuant to Section 2.18(d), be in the amounts set forth below during
the periods set forth below:
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29
Prepayment Amount
(expressed as a % of
Period Principal Amount)
- - ------ -----------------
August 17, 1998 to August 17, 1999 102%
August 18, 1999 to February 18, 2000 101%
February 19, 2000 and Thereafter 100%
2.12 Mandatory Prepayments and Commitment Reductions. (a) Unless the
Required Prepayment Lenders shall otherwise agree, if any Capital Stock shall be
issued, or Indebtedness incurred, by the Borrower or any of its Subsidiaries
(excluding any Indebtedness incurred in accordance with Section 7.2 and
excluding Capital Lease Obligations), an amount equal to 50% of the Net Cash
Proceeds thereof, in the case of any Capital Stock issued, and an amount equal
to 100% of the Net Cash Proceeds thereof, in the case of any Indebtedness
incurred, shall be applied on the date of such issuance or incurrence toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.12(e).
(b) Unless the Required Prepayment Lenders shall otherwise agree, if
on any date the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect thereof as set forth in clause (ii) below,
such Net Cash Proceeds shall be applied on the next Business Day toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.12(d); provided, that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of (A) Asset Sales up to
$5,000,000 in any fiscal year of the Borrower and (B) Recovery Events may be
excluded from the foregoing requirement pursuant to a Reinvestment Notice in any
fiscal year of the Borrower and (ii) on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Term Loans and
the reduction of the Revolving Credit Commitments as set forth in Section
2.12(e).
(c) Unless the Required Prepayment Lenders shall otherwise agree,
if, for any fiscal year of the Borrower commencing with the fiscal year ending
March 27, 1999, there shall be Excess Cash Flow, the Borrower shall, on the
relevant Excess Cash Flow Application Date, apply the ECF Percentage of such
Excess Cash Flow toward the prepayment of the Term Loans and the reduction of
the Revolving Credit Commitments as set forth in Section 2.12(c). Each such
prepayment and commitment reduction shall be made on a date (an "Excess Cash
Flow Application Date") no later than five days after the earlier of (i) the
date on which the financial statements of the Borrower referred to in Section
6.1(a), for the fiscal year with respect to which such prepayment is made, are
required to be delivered to the Lenders and (ii) the date such financial
statements are actually delivered.
(d) If, at any time during the Revolving Credit Commitment Period,
the Total Revolving Extensions of Credit exceed the amount of the Total
Revolving Credit
<PAGE>
30
Commitments, the Borrower shall, without notice of demand, immediately prepay
the Revolving Credit Loans and/or Swing Line Loans in an aggregate principal
amount equal to such excess, together with interest accrued to the date of such
payment or prepayment.
(e) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section 2.12 shall be applied,
first, to the prepayment of the Term Loans and, second, to reduce permanently
the Revolving Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving Credit Loans
and/or Swing Line Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Credit Commitments
as so reduced, provided that if the aggregate principal amount of Revolving
Credit Loans and Swing Line Loans then outstanding is less than the amount of
such excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Lenders on
terms and conditions satisfactory to the Administrative Agent. The application
of any prepayment pursuant to this Section 2.12 shall be made first to Base Rate
Loans and second to Eurodollar Loans. Each prepayment of the Loans under this
Section 2.12 (except in the case of Revolving Credit Loans that are Base Rate
Loans and Swing Line Loans) shall be accompanied by accrued interest to the date
of such prepayment on the amount prepaid. Prepayments of the Term Loans (except
with respect to prepayments pursuant to Section 2.12 (c)) shall, subject to the
right of each Term Loan Lender to decline all or any portion of any mandatory
prepayment applicable thereto pursuant to Section 2.18(d), be in the amounts set
forth below during the periods set forth below:
Prepayment Amount
(expressed as a % of
Period Principal Amount)
- - ------ -----------------
August 17, 1998 to August 17, 1999 102%
August 18, 1999 to February 18, 2000 101%
February 19, 2000 and Thereafter 100%
2.13 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor), provided that no Base Rate Loan under a particular
Facility may be converted into a Eurodollar Loan (i) when any Event of Default
has occurred and is continuing and the Administrative Agent or the Majority
Facility Lenders in respect of such Facility have determined in its or their
sole discretion not to permit such conversions or (ii) after the date that is
one month prior to the final scheduled termination or maturity date of
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31
such Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan under a particular Facility may be continued as such (i)
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations or
(ii) after the date that is one month prior to the final scheduled termination
or maturity date of such Facility, and provided, further, that if the Borrower
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to Base Rate Loans on the last day of
such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall
be outstanding at any one time.
2.15 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
which is equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section 2.15
plus 2%, or (y) in the case of Reimbursement Obligations, the rate applicable to
Base Rate Loans under the Revolving Credit Facility plus 2%, and (ii) if all or
a portion of any interest payable on any Loan or Reimbursement Obligation or any
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate then applicable
to Base Rate Loans under the relevant Facility plus 2% (or, in the case of any
such other amounts that do not relate to a particular Facility, the
<PAGE>
32
rate then applicable to Base Rate Loans under the Revolving Credit Facility plus
2%), in each case, with respect to clauses (i) and (ii) above, from the date of
such non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
2.15 shall be payable from time to time on demand.
2.16 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed with respect to Eurodollar Loans and on
the basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed with respect to Base Rate Loans. The Administrative Agent shall as soon
as practicable notify the Borrower and the relevant Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.15(a).
2.17 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the first day of such Interest Period,
to Base Rate
<PAGE>
33
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.
2.18 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Loan Percentages or Revolving
Credit Percentages, as the case may be, of the relevant Lenders. Each payment
(other than prepayments) in respect of principal or interest in respect of the
Loans, each payment in respect of fees payable hereunder, and each payment in
respect of Reimbursement Obligations, shall be applied to the amounts of such
obligations owing to the Lenders pro rata according to the respective amounts
then due and owing to the Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Loan Lenders (except as otherwise provided in Section 2.18(d)).
Amounts prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be made
pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) Notwithstanding anything to the contrary in Sections 2.11, 2.12
or 2.18, each Term Loan Lender may, at its option, decline all or any portion of
any partial prepayment applicable to the Term Loans of such Lender; accordingly,
with respect to the amount of any prepayment described in Section 2.11 or 2.12
that is allocated to Term Loans (such amounts, the "Prepayment Amount"), the
Borrower will, in the case of any prepayment required to be made pursuant to
Section 2.11 or 2.12, in lieu of applying such amount to the prepayment of Term
Loans, on the date specified in Section 2.11 or 2.12 for such prepayment, give
the Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each Term Loan
Lender a notice (each, a "Prepayment Option Notice") as described below. As
promptly as practicable after receiving such notice from the Borrower, the
Administrative Agent will send to each Term Loan Lender a Prepayment Option
Notice, which shall be in the form of Exhibit H, and shall include an offer by
the Borrower to prepay on the date (each a "Prepayment Date") that is 10
Business Days after the date of the Prepayment Option Notice, the relevant Term
Loans of such Lender by an amount equal to the portion of the Prepayment Amount
indicated in such Lender's Prepayment Option Notice as being applicable to such
Lender's Term Loans and such further amount, if any, as may be available to
additionally prepay such Lender's Term Loans from the portion of the Prepayment
Amount not accepted by the Accepting Lenders. On the Prepayment Date, (i) the
Borrower shall pay to the Administrative Agent the aggregate amount necessary to
prepay that portion of the outstanding relevant Term Loans in respect of which
Lenders have accepted prepayment as described above (such Lenders, the
<PAGE>
34
"Accepting Lenders"), and such amount shall be applied to reduce the Prepayment
Amounts with respect to each Accepting Lender, (ii) the Borrower shall pay to
the Administrative Agent an amount equal to the portion of the Prepayment Amount
not accepted by the Accepting Lenders (excluding such amount required to be
prepaid pursuant to Section 2.12(c)), and such amount shall be applied, first,
to prepay the Term Loans of each Accepting Lender, pro rata, agreeing to accept
prepayment of such additional amount as described above and, second, to the
permanent reduction of the Revolving Credit Commitments, and (iii) the Borrower
shall be entitled to retain the remaining portion of the Prepayment Amount not
accepted by the Accepting Lenders.
(e) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 1:00 p.m., New
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Payment Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans under the relevant Facility, on demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that
<PAGE>
35
the Borrower is making such payment, and the Administrative Agent may, but shall
not be required to, in reliance upon such assumption, make available to the
Lenders their respective pro rata shares of a corresponding amount. If such
payment is not made to the Administrative Agent by the Borrower within three
Business Days of such required date, the Administrative Agent shall be entitled
to recover, on demand, from each Lender to which any amount which was made
available pursuant to the preceding sentence, such amount with interest thereon
at the rate per annum equal to the daily average Federal Funds Effective Rate.
Nothing herein shall be deemed to limit the rights of the Administrative Agent
or any Lender against the Borrower.
2.19 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by Section 2.20 and changes in the rate of taxes based on or
measured by net income and franchise taxes imposed in lieu thereof of such
Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section 2.19, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of
<PAGE>
36
its obligations hereunder or under or in respect of any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, after submission
by such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section 2.19 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section 2.19 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.20 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding taxes based on or measured by net income and franchise
taxes (imposed in lieu thereof) imposed on any Agent or any Lender as a result
of a present or former connection between such Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or Other Taxes are required to be withheld from any
amounts payable to any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (d) or paragraph (e) of
this Section 2.20 or (ii) to the extent that the obligation to withhold amounts
with respect to United States federal withholding tax existed on the date such
Lender became a party to this Agreement (or, in the case of a Participant, on
the date such Participant became a Participant hereunder) or, with respect to
payments to a New Lending Office, the date such Lender designated such New
Lending Office with respect to a Loan, except to the extent that such Lender's
assignor (if any) was entitled, at the time of assignment or such Lender was
entitled at the time the New Lending Office was designated, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this Section 2.20(a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
<PAGE>
37
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Agents the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section 2.20 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a United States person
as defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) (x) two copies of either U.S. Internal Revenue Service Form 1001 or
Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a statement substantially in the form of
Exhibit I and a Form W-8, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents
and (y) any other related documents reasonably requested by the Borrower. Such
forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation) and on or
before the date, if any, such Non-U.S. Lender changes its applicable lending
office by designating a different lending office (a "New Lending Office"). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S.
Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
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(f) If any Agent or any Lender determines that it has received a
refund in respect of any Non-Excluded Taxes or Other Taxes as to which
indemnification has been paid by the Borrower pursuant to Section 2.20, it shall
promptly remit such refund (including any interest) to the Borrower, net of all
out-of-pocket expenses of such Agent or such Lender; provided, however, that the
Borrower, upon the request of such Agent or such Lender, agrees promptly to
return such refund (plus any interest) to such party in the event such party is
required to repay such refund to the relevant taxing authority requiring
prepayment or such refund. Such Agent or Lender shall provide the Borrower with
a copy of any notice or assessment from the relevant taxing authority (deleting
any confidential information contained therein) requiring repayment of such
refund.
2.21 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. A certificate as to any amounts payable pursuant to this Section 2.21
submitted to the Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.22 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.21.
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2.23 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.19 or 2.20(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the good faith judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
2.23 shall affect or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to Section 2.19 or 2.20(a).
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Revolving Credit
Lenders set forth in Section 3.4(a), agrees to issue letters of credit ("Letters
of Credit") for the account of the Borrower on any Business Day during the
Revolving Credit Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
aggregate amount of the Available Revolving Credit Commitments would be less
than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii)
expire no later than the earlier of (x) the first anniversary of its date of
issuance and (y) the date which is three Business Days prior to the Revolving
Credit Termination Date, provided that any Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which shall
in no event extend beyond the date referred to in clause (y) above).
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days but no later than five
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be
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agreed to by the Issuing Lender and the Borrower. The Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower promptly following the
issuance thereof. The Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).
3.3 Fees and Other Charges. (a) The Borrower shall pay a fee on the
daily average undrawn amount of all outstanding Letters of Credit at a per annum
rate equal to the Applicable Margin then in effect with respect to Eurodollar
Loans under the Revolving Credit Facility shared ratably among the Revolving
Credit Lenders and payable quarterly in arrears on each L/C Fee Payment Date
after the issuance date. In addition, the Borrower shall pay to the Issuing
Lender for its own account a fronting fee of 1/8 of 1% per annum, payable
quarterly in arrears on each L/C Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Revolving Credit Percentage of the amount of such draft,
or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand,
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41
such amount with interest thereon calculated from such due date at the rate per
annum applicable to Base Rate Loans under the Revolving Credit Facility. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section 3.4 shall be conclusive in the absence
of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be made
to the Issuing Lender at its address for notices specified herein in lawful
money of the United States of America and in immediately available funds.
Interest shall be payable on any and all amounts remaining unpaid by the
Borrower under this Section 3.4 from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate set forth in (i) until the second Business Day following the date of
the applicable drawing, Section 2.15(b) and (ii) thereafter, Section 2.15(c).
Each drawing under any Letter of Credit shall (unless an event of the type
described in clause (i) or (ii) of Section 8(f) shall have occurred and be
continuing with respect to the Borrower, in which case the procedures specified
in Section 3.4 for funding by L/C Participants shall apply) constitute a request
by the Borrower to the Administrative Agent for a borrowing pursuant to Section
2.5 of Base Rate Loans (or, at the option of the Administrative Agent and the
Swing Line Lender in their sole discretion, a borrowing pursuant to Section 2.7
of Swing Line Loans) in the amount of such drawing. The Borrowing Date with
respect to such borrowing shall be the date of such drawing.
3.6 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing
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42
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit, the
Borrower represents and warrants to each Agent and each Lender that:
4.1 Financial Condition. (a) The pro forma consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at August 15, 1998
(including the notes thereto) (the "Pro Forma Balance Sheet"), copies of which
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to (i) the Loans to be made on the
Closing Date and the use of proceeds thereof and (ii) the payment of fees and
expenses in connection with the foregoing. The Pro Forma Balance Sheet has been
prepared based on the best information available to the Borrower as of the date
of delivery thereof, and presents fairly on a pro forma basis the estimated
financial position of Borrower and its consolidated Subsidiaries as at August
15, 1998, assuming that the events specified in the preceding sentence had
actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower and its
Subsidiaries as at March 28, 1998, March 29, 1997 and March 30, 1996 and the
related consolidated statements of income and of cash flows for the fiscal years
ended on such dates, reported on by and accompanied by a report from Price
Waterhouse LLP, present fairly the consolidated financial condition of the
Borrower and its Subsidiaries as at such date, and the
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43
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). The Borrower and its
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, which are not reflected in the most recent financial
statements referred to in this paragraph. During the period from March 28, 1998
to and including the date hereof there has been no Disposition by the Borrower
of any material part of its business or Property.
4.2 No Change. Since March 28, 1998 there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect, other than the commencement of the Case.
4.3 Corporate Existence; Compliance with Law. Each of the Borrower
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the transactions and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except the filings referred to in Section 4.19.
Each Loan Document has been duly executed and delivered on behalf of each Loan
Party thereto. This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of each Loan
Party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by equitable principles (whether enforcement
is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings
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hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or any Contractual Obligation of the Borrower or any of its Subsidiaries
and will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any Requirement of
Law or any such Contractual Obligation (other than the Liens created by the
Security Documents). No Requirement of Law or Contractual Obligation applicable
to the Borrower or any of its Subsidiaries could reasonably be expected to have
a Material Adverse Effect.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other Property, and none of such Property is subject to any Lien except
Permitted Liens. The Fee Properties as listed on Part I of Schedule 1.1
constitute all the real properties owned in fee by the respective Loan Parties
set forth therein, the Leased Properties as listed on Part II of Schedule 1.1
constitute all of the real properties leased by the respective Loan Parties set
forth therein which may be made subject to a recorded Lien either (a) without
violating the terms of the applicable Underlying Lease or (b) with the consent
of the landlord thereunder, and each lease agreement under which an interest in
a Leased Property is held (as amended, an "Underlying Lease") is in full force
and effect.
4.9 Intellectual Property. The Borrower and each of its Subsidiaries
owns, or is licensed to use, all Intellectual Property necessary for the conduct
of its business as currently conducted. No material claim has been asserted and
is pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor does
the Borrower know of any valid basis for any such claim. The use of Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person in any material respect.
4.10 Taxes. Each of the Borrower and each of its Subsidiaries has
filed or caused to be filed all Federal, state and other material tax returns
which are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
Property and all other material taxes, fees or other charges imposed on it by
any Governmental Authority (other than any the amount or validity
of which are currently being contested in good faith by appropriate proceedings
and with
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respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be).
4.11 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose which violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in Regulation U.
4.12 Labor Matters. There are no strikes or other labor disputes
against the Borrower or any of its Subsidiaries pending or, to the knowledge of
the Borrower, threatened that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. Hours worked by and
payment made to employees of the Borrower and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due from
the Borrower or any of its Subsidiaries on account of employee health and
welfare insurance that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect if not paid have been paid or accrued
as a liability on the books of the Borrower or the relevant Subsidiary.
4.13 ERISA. Except for the voluntary petition filed by the Borrower
under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District
of Delaware in 1995 and except for the commencement of the Case, neither a
Reportable Event nor an "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code. No termination of
a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has arisen, during such five-year period. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits by a material amount.
Neither the Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan which has resulted or could
reasonably be expected to result in a material liability under ERISA, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any material liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made. To the knowledge of the Borrower, no such Multiemployer
Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the
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meaning of the Investment Company Act of 1940, as amended. No Loan Party is
subject to regulation under any Requirement of Law (other than Regulation X of
the Board) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of the Borrower at the date hereof.
4.16 Use of Proceeds. The proceeds of the Loans shall be used (a) to
refinance the DIP Credit Facility, (b) to pay fees and expenses in connection
with the Plan of Reorganization as confirmed by the Bankruptcy Court, (c) to
finance the working capital needs of the Borrower and the Subsidiary Guarantors
in the ordinary course of business, (d) to refinance the Supplemental Term Loans
under the Prepetition Credit Facility, and (e) for general corporate purposes,
including, without limitation, capital expenditures.
4.17 Environmental Matters. Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect or result in the payment of a
Material Environmental Amount:
(a) Each of the Borrower and its Subsidiaries: (i) is, and within
the period of all applicable statutes of limitation have been, in compliance
with all applicable Environmental Laws; (ii) holds all Environmental Permits
(each of which is in full force and effect) required for any of its current or
intended operations or required of it with respect to any property owned,
leased, or otherwise operated by it; (iii) is, and within the period of all
applicable statutes of limitation has been, in compliance with all of its
Environmental Permits; and (iv) reasonably believes that: each of its
Environmental Permits will be timely renewed and complied with, without material
expense; any additional Environmental Permits that may be required of any of it
will be timely obtained and complied with, without material expense; and
compliance with any Environmental Law that is or is expected to become
applicable to it will be timely attained and maintained, without material
expense.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned and, to the
knowledge of the Borrower, are not present at, on, under, in, or about any
property now or formerly leased or operated, by the Borrower or any of its
Subsidiaries or at any other location (including, without limitation, any
location to which Materials of Environmental Concern have been sent for re-use
or recycling or for treatment, storage, or disposal) which could reasonably be
expected to (i) give rise to liability of the Borrower or any of its
Subsidiaries under any applicable Environmental Law or otherwise result in costs
to the Borrower or any of its Subsidiaries, or (ii) interfere with the
Borrower's or any of its Subsidiaries' continued operations, or (iii) impair the
fair saleable value of any real property owned or leased by the Borrower or any
of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating to
any Environmental Law to which the Borrower or any of its Subsidiaries is, or to
the knowledge of the Borrower will be, named as a party that is pending or, to
the knowledge of the Borrower, threatened.
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47
(d) Neither the Borrower nor any of its Subsidiaries has received
any written request for information, or been notified that it is a potentially
responsible party under or relating to the federal Comprehensive Environmental
Response, Compensation, and Liability Act or any similar Environmental Law, or
with respect to any Materials of Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has entered
into or agreed to any consent decree, order, or settlement or other agreement,
nor is subject to any judgment, decree, or order or other agreement, in any
judicial, administrative, arbitral, or other forum, relating to compliance with
or liability under any Environmental Law.
(f) Neither the Borrower nor any of its Subsidiaries has assumed or
retained, by contract or operation of law, any liabilities of any kind, fixed or
contingent, known or unknown, under any Environmental Law or with respect to any
Material of Environmental Concern.
(g) For the purpose of Section 8 of this Agreement, each of the
foregoing representations and warranties contained in this Section 4.17 that are
qualified in any way by the knowledge of the Borrower shall be deemed not to be
so qualified.
4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Plan of Reorganization
and the disclosure statement related thereto, the Confidential Information
Memorandum or any other document, certificate or statement furnished to the
Arrangers, the Agents, the Lenders or any of them, by or on behalf of any Loan
Party for use in connection with the transactions contemplated by this Agreement
or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which such statements are made.
The projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact known
to any Loan Party that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Arrangers, the Agents or the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Agents and the Lenders, a legal, valid and enforceable security interest in
the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral
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48
Agreement, when stock certificates representing such Pledged Stock are delivered
to the Administrative Agent, and in the case of the other Collateral described
in the Guarantee and Collateral Agreement, when financing statements in
appropriate form are filed in the offices specified on Schedule 3 of the
Guarantee and Collateral Agreement, the Guarantee and Collateral Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case prior and superior in right to any other Person (except
as otherwise set forth herein).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Agents and the Lenders, a legal,
valid and enforceable Lien on the Mortgaged Properties described therein and
proceeds thereof, and when the Mortgages are filed in the offices specified on
Schedule 4.19(b), each such Mortgage shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
the Mortgaged Properties and the proceeds thereof, as security for the
Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person (except as otherwise set forth in any such
Mortgage).
4.20 Solvency. Each Loan Party is, and after giving effect to the
transaction contemplated hereby and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be and will
continue to be, Solvent.
4.21 Regulation H. No Mortgage encumbers improved real property
which is located in an area that has been identified by the Secretary of Housing
and Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
Borrower, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of the Borrower and each Subsidiary
Guarantor, (iii) a Mortgage covering each of the Mortgaged Properties,
executed and delivered by a duly authorized officer of each party thereto,
and (iv) for the account of each relevant Lender, Notes conforming to the
requirements hereof and executed and delivered by a duly authorized
officer of the Borrower.
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49
(b) Confirmation of Plan of Reorganization. The Bankruptcy Court
shall have entered on or before August 31, 1998 a final order in form and
substance reasonably satisfactory to the Agents confirming in accordance
with Section 1129 of the Bankruptcy Code the Plan of Reorganization, which
order shall be in full force and effect and shall not have been stayed,
reversed, vacated or otherwise modified.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) the audited
consolidated financial statements of the Borrower for the 1998 fiscal year
and (iii) reasonably satisfactory unaudited interim consolidated financial
statements of the Borrower for each fiscal month and quarterly period
ended subsequent to the date of the latest applicable financial statements
delivered pursuant to clause (ii) of this paragraph as to which such
financial statements are available, and such financial statements shall
not, in the reasonable judgment of the Lenders, reflect any material
adverse change in the consolidated financial condition of the Borrower,
from that reflected in the financial statements or projections contained
in the Confidential Information Memorandum.
(d) Approvals. All governmental, shareholder and third party
approvals (including landlords' and other consents) necessary in
connection with the continuing operations of the Borrower and its
Subsidiaries and the transactions contemplated hereby shall have been
obtained and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened by
any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the transaction or the financing contemplated
hereby.
(e) Related Agreements. The Administrative Agent shall have received
(in a form reasonably satisfactory to the Agents, with a copy for each
Lender, true and correct copies, certified as to authenticity by the
Borrower, of each Underlying Lease and such other documents or instruments
as may be reasonably requested by the Agents, including, without
limitation, a copy of any other debt instrument, security agreement or
other material contract to which the Loan Parties may be a party.
(f) Fees. The Lenders, the Arrangers and the Agents shall have
received all fees required to be paid, and all expenses (including,
without limitation, legal fees and expenses, title premiums, survey
charges and recording taxes and fees) for which invoices have been
presented, on or before the Closing Date. All such amounts will be paid
with proceeds of Loans made on the Closing Date and will be reflected in
the funding instructions given by the Borrower to the Administrative Agent
on or before the Closing Date.
(g) Business Plan. The Lenders shall have received a business plan
for fiscal years 1999-2003 and a written analysis of the business and
prospects of the Borrower and its Subsidiaries for the period from the
Closing Date through March 31, 2003.
(h) Termination of Prepetition Credit Facility. The Administrative
Agent shall have received evidence satisfactory to the Administrative
Agent and Syndication Agent
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50
that the Prepetition Credit Facility shall be simultaneously terminated,
all amounts thereunder shall be simultaneously paid in full and
arrangements satisfactory the Syndication Agent and the Administrative
agent shall have been made for the termination or assignment in favor of
the Collateral Agent, as the case may be, of Liens and security interests
granted in connection therewith.
(i) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Borrower or its Subsidiaries except for (i)
Permitted Liens, (ii) liens to be discharged or assigned to the Collateral
Agent on or prior to the Closing Date pursuant to documentation reasonably
satisfactory to the Agents or (iii) liens which in the aggregate are
reasonably determined by the Agents to be immaterial.
(j) Environmental Assessment. The Administrative Agent shall have
received an environmental assessment with respect to the Borrower and its
Subsidiaries specified by the Administrative Agent.
(k) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C,
with appropriate insertions and attachments.
(l) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Weil, Gotshal & Manges LLP,
counsel to the Borrower and its Subsidiaries, substantially in the
form of Exhibit F-1; and
(ii) the legal opinion of local counsel in each of New
Jersey, Vermont, Connecticut, New Hampshire, Pennsylvania, Tennessee
and Georgia and of such other special and local counsel as may be
required by the Administrative Agent, substantially in the form of
Exhibit F-2.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(m) Pledged Stock; Stock Power; Pledged Notes. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each
promissory note pledged to the Administrative Agent pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank
(or accompanied by an executed transfer form in blank satisfactory to the
Syndication Agent) by the pledgor thereof.
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51
(n) Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by
the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the Agents
and the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than Permitted
Liens), shall be in proper form for filing, registration or recordation.
(o) Title Insurance; Flood Insurance. (i) If requested by the
Administrative Agent, the Administrative Agent shall have received, and
the title insurance companies issuing the policies referred to in clause
(ii) below (collectively, the "Title Insurance Company") shall have
received, maps or plats of an as-built survey of the sites of the Fee
Properties certified to the Administrative Agent and the Title Insurance
Company in a manner satisfactory to them, dated a date satisfactory to the
Administrative Agent and the Title Insurance Company by an independent
professional licensed land surveyor satisfactory to the Administrative
Agent and the Title Insurance Company, which maps or plats and the surveys
on which they are based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established
and adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1992, and, without limiting the
generality of the foregoing, there shall be surveyed and shown on such
maps, plats or surveys the following: (A) the locations on such sites of
all the buildings, structures and other improvements and the established
building setback lines; (B) the lines of streets abutting the sites and
width thereof; (C) all access and other easements appurtenant to the
sites; (D) all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any adjoining
property by the building structures and improvements on the sites; (F) if
the site is described as being on a filed map, a legend relating the
survey to said map; and (G) the flood zone designations, if any, in which
the Fee Properties are located.
(ii) The Administrative Agent shall have received in respect of each
Mortgaged Property a mortgagee's title insurance policy (or policies) or
marked up unconditional binder for such insurance. Each such policy shall
(A) be in an amount satisfactory to the Administrative Agent; (B) be
issued at ordinary rates; (C) insure that the Mortgage insured thereby
creates a valid first Lien on such Mortgaged Property free and clear of
all defects and encumbrances, except as disclosed therein; (D) name the
Administrative Agent for the benefit of the Lenders as the insured
thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended
10/17/70 and 10/17/84) (or equivalent policies); (F) contain such
endorsements and affirmative coverage as the Administrative Agent may
reasonably request and (G) be issued by title companies satisfactory to
the Administrative Agent (including any such title companies acting as
co-insurers or reinsurers, at the option of the Administrative
Agent). The Administrative Agent shall have received evidence satisfactory
to it that all premiums
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52
in respect of each such policy, all charges for mortgage recording tax,
and all related expenses, if any, have been paid.
(iii) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance which (1) covers
any parcel of improved real property which is encumbered by any Mortgage
(2) is written in an amount not less than the outstanding principal amount
of the indebtedness secured by such Mortgage which is reasonably allocable
to such real property or the maximum limit of coverage made available with
respect to the particular type of property under the National Flood
Insurance Act of 1968, whichever is less, and (3) has a term ending not
later than the maturity of the Indebtedness secured by such Mortgage and
(B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(iv) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in clause (ii) above and a copy of
all other material documents affecting the Mortgaged Properties.
(p) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement and of Section 5 of each Mortgage.
(q) Estoppel Certificate. The Administrative Agent shall have
received, with a copy for each Lender, a certificate in form and substance
satisfactory to Agent and its counsel from the landlord under each
Underlying Lease with respect to each Leased Property consenting to the
Mortgage encumbering such Leased Property and certifying (i) that the Loan
Party who is the tenant under the Underlying Lease is not in default in
the performance of any of its obligations under such Underlying Lease and
(ii) to such other matters as may be requested by the Administrative
Agent.
5.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
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53
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other amount
is owing to any Lender or any Agent hereunder, the Borrower shall and shall
cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Agent and each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, setting
forth in each case in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or exception,
or qualification arising out of the scope of the audit, by Price
Waterhouse LLP or other independent certified public accountants of
nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments); and
(c) as soon as available, but in any event not later than 45 days
after the end of each month occurring during each fiscal year of the
Borrower (other than the third, sixth, ninth and twelfth such month), the
unaudited consolidated balance sheets of the Borrower and its Subsidiaries
as at the end of such month and the related unaudited consolidated
statements of income and of cash flows for such month and the portion of
the fiscal year through the end of such month, setting forth in each case
in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
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54
6.2 Certificates; Other Information. Furnish to each Agent and each
Lender, or, in the case of clause (g), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's knowledge,
each Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to which it is a party to
be observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and (ii) in the case of quarterly
or annual financial statements, (x) a Compliance Certificate containing
all information necessary for determining compliance by the Borrower and
its Subsidiaries with the provisions of this Agreement referred to therein
as of the last day of the fiscal quarter or fiscal year of the Borrower,
as the case may be, and (y) to the extent not previously disclosed to the
Administrative Agent, a listing of any county or state within the United
States where any Loan Party keeps inventory or equipment and of any
Intellectual Property acquired by any Loan Party since the date of the
most recent list delivered pursuant to this clause (y) (or, in the case of
the first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of the
following fiscal year, and the related consolidated statements of
projected cash flow, projected changes in financial position and projected
income), and, as soon as available, significant revisions, if any, of such
budget and projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the portion
of the Projections covering such periods and to the comparable periods of
the previous year;
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55
(e) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to the holders
of any class of its debt securities or public equity securities and,
within five days after the same are filed, copies of all financial
statements and reports which the Borrower may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc. (a) (i)
Preserve, renew and keep in full force and effect its corporate existence and
(ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 7.4 and except, in the case of
clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all Property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted and (b) maintain with financially sound and reputable
insurance companies insurance on all its Property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.
6.6 Inspection of Property; Books and Records; Discussions;
Collateral Audit. (a) Keep proper books of records and account in which full,
true and correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its business and
activities, (b) permit representatives of any Lender to visit and inspect any of
its properties and examine and make abstracts from any of its books and records
at any reasonable time and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants and (c)
permit a firm satisfactory to the Administrative Agent (it being understood that
Arthur Anderson & Co. shall be deemed to be satisfactory) to perform, at the
expense of the Borrower, an annual independent audit with respect to Accounts
and Inventory of the Borrower and its Subsidiaries as may be directed by
the Administrative Agent; provided that the Lenders shall have the right, to the
extent the
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56
Administrative Agent determines, in its reasonable judgment, that it is
necessary to have such an audit performed more frequently than once a year, to
have such an audit so performed, at the expense of the Borrower.
6.7 Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of
its Subsidiaries in which the amount involved is $500,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC
or the Borrower or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and
(e) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
6.8 Environmental Laws. (a) (i) Comply in all material respects with
all Environmental Laws applicable to it, and obtain, comply in all material
respects with and maintain any and all Environmental Permits necessary for its
operations as conducted and as planned; and (ii) ensure that all of its tenants,
subtenants, contractors, subcontractors, and invitees comply in all material
respects with all Environmental Laws, and obtain, comply with and maintain any
and all Environmental Permits, applicable to any of them insofar as any failure
to so comply, obtain or maintain reasonably could be expected to adversely
affect the Borrower.
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57
(b) Prior to acquiring any ownership or leasehold interest in real
property, either directly or indirectly (including without limitation a stock
purchase) the Borrower shall evaluate, based on the property's current and prior
use, whether such property could reasonably result in a potential liability
under any Environmental Law. Where such evaluation indicates the possibility of
such a potential liability, the Borrower shall take all measures to satisfy
itself reasonably that such property's potential liability under any
Environmental Law, when added to all other such liabilities of the Borrower and
its Subsidiaries at all properties of which the Borrower is aware at which the
Borrower or any Subsidiary may have liability under any Environmental Law
(whether or not the Borrower or any Subsidiary has or formerly had any ownership
or leasehold interest in such property either directly or indirectly), shall not
exceed a Material Environmental Amount; and, if the Borrower cannot be so
reasonably satisfied, it shall not acquire such interest.
6.9 Interest Rate Protection. In the case of the Borrower, within 90
days after the Closing Date, enter into Hedge Agreements to the extent necessary
to provide that at least 50% of the aggregate principal amount of the Term Loans
is subject to interest rate protection for a period of not less than three
years, which Hedge Agreements shall have terms and conditions reasonably
satisfactory to the Administrative Agent.
6.10 Additional Collateral, etc. (a) With respect to any Property
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than (x) any Property described in paragraph (b), (c) or (d) below and
(y) any Property subject to a Permitted Lien) as to which the Administrative
Agent, for the benefit of the Lenders, does not have a perfected Lien, promptly
(i) execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a security interest in such Property and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in such
Property, including without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $500,000 acquired after
the Closing Date by the Borrower or any of its Subsidiaries (other than any such
real property subject to a Permitted Lien), promptly (i) execute and deliver a
first priority Mortgage in favor of the Administrative Agent, for the benefit of
the Agents and Lenders, covering such real property, (ii) if requested by the
Administrative Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real property in an amount at least equal to the
purchase price of such real estate (or such other amount as shall be reasonably
specified by the Administrative Agent) as well as a current ALTA survey thereof,
together with a surveyor's certificate and (y) any consents or estoppels
reasonably deemed necessary or advisable by the Administrative Agent in
connection with such mortgage or deed of trust, each of the foregoing in form
and substance reasonably satisfactory to the Administrative Agent and (iii)
if requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions
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relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date (which, for the
purposes of this paragraph, shall include any existing Subsidiary that ceases to
be an Excluded Foreign Subsidiary), by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in the Capital Stock
of such new Subsidiary which is owned by the Borrower or any of its
Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement and (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Lenders a perfected first priority security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, including, without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent, and (iv) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by the Borrower or any of
its Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, and take such other action as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Lien of the
Administrative Agent thereon, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
6.11 Further Assurances. In the case of the Borrower, from time to
time execute and deliver, or cause to be executed and delivered, such additional
instruments, certificates or documents, and take all such actions, as the
Administrative Agent may reasonably request, for the purposes of implementing or
effectuating the provisions of this
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59
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds
thereof or with respect to any other property or assets hereafter acquired by
the Borrower which may be deemed to be part of the Collateral) pursuant hereto
or thereto. Upon the exercise by the Administrative Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be required to obtain from the Borrower
or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
6.12 Survey, etc. (a) To the extent not delivered by the Closing
Date, Borrower shall, within 45 days of the Closing Date, deliver to the
Administrative Agent and the Title Insurance Company surveys of the Fee
Properties meeting the requirements of Section 5.1(o)(i) such that the Title
Company will omit corresponding survey exceptions on the relevant title
insurance policies issued pursuant to Section 5.1(o)(ii) or to be issued
pursuant to Section 6.12(d) and will issue those endorsements to such title
insurance policies (such as survey and access) that cannot be issued without
such surveys.
(b) To the extent not delivered by the Closing Date, Borrower shall
use best efforts to obtain estoppel certificates meeting the requirements of
Section 5.1(q) in respect of each Underlying Lease by December 1, 1998. On the
first Business Day of each calendar month commencing October 1, 1998 and ending
on December 1, 1998, Borrower shall (i) deliver to the Administrative Agent and
the Title Company all such estoppel certificates received by Borrower to such
date, (ii) deliver to the Administrative Agent (A) a Mortgage covering each
Leased Property to which such estoppel certificate relates, executed by a duly
authorized officer of Borrower and (B) a mortgagee's title insurance policy in
respect of each such corresponding Leased Property meeting all of the
requirements of Section 5.1(o)(ii), dated a date satisfactory to the
Administrative Agent, together with all recorded documents referred to, or
listed as exceptions to title in, the title policy or policies referred to in
clause (B) above and a copy of all other material documents affecting each such
Leased Property.
(c) With respect to Leased Properties with respect to which the
corresponding Underlying Lease is not of record (pursuant to a recorded
memorandum thereof or as may otherwise be required in accordance with applicable
law of such state), Borrower shall use best efforts to cause such Underlying
Lease to be of record. Promptly after such Underlying Lease shall be of record,
Borrower shall deliver to the Administrative Agent (i) a Mortgage covering each
such corresponding Mortgaged Property, executed by a duly authorized officer of
Borrower and (ii) a mortgagee's title insurance policy in respect of each such
corresponding Mortgaged Property meeting all of the requirements of Section
5.1(o)(ii), dated a date satisfactory to the Administrative Agent, together with
all recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in clause (B) above and a copy of all other
material documents affecting each such Mortgaged Property.
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60
(d) For each Mortgaged Property set forth on Schedule 6.12(d),
Borrower shall, within 45 days of the Closing Date, deliver to the
Administrative Agent (i) a Mortgage covering each such Leased Property, executed
by a duly authorized officer of Borrower, (ii) a mortgagee's title insurance
policy in respect of each such corresponding Leased Property meeting all of the
requirements of Section 5.1(o)(ii), dated a date satisfactory to the
Administrative Agent, together with all recorded documents referred to, or
listed as exceptions to title in, the title policy or policies referred to in
clause (B) above and a copy of all other material documents affecting each such
Mortgaged Property, and (iii) the legal opinion of local counsel in each of
Tennessee, Georgia and Texas in substantially in the form of Exhibit F-2.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other amount
is owing to any Lender or any Agent hereunder, the Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly:
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61
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
- - -------------- --------------
October 16, 1999 4.60
January 8, 2000 4.50
April 1, 2000 4.50
July 22, 2000 4.45
October 14, 2000 4.30
January 6, 2001 4.15
March 31, 2001 4.00
July 21, 2001 4.00
October 13, 2001 4.00
January 5, 2002 3.75
March 30, 2002 3.75
July 20, 2002 3.75
October 12, 2002 3.75
January 4, 2003 3.75
March 29, 2003 3.75
July 19, 2003 3.75
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters subsequent to the
Closing Date) ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
- - -------------- --------------
January 2, 1999 1.60
April 3, 1999 1.65
July 24, 1999 1.75
October 16, 1999 1.80
January 8, 2000 1.90
April 1, 2000 1.90
July 22, 2000 1.90
October 14, 2000 1.95
January 6, 2001 2.00
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62
Consolidated Interest
Fiscal Quarter Coverage Ratio
- - -------------- --------------
March 31, 2001 2.00
July 21, 2001 2.10
October 13, 2001 2.20
January 5, 2002 2.25
March 30, 2002 2.30
July 20, 2002 2.40
October 12, 2002 2.40
January 4, 2003 2.40
March 29, 2003 2.40
July 19, 2003 2.40
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations other than as set forth in Section 7.2(f)) secured by
Permitted Liens in an aggregate principal amount not to exceed $15,000,000
at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or extensions
thereof (without any increase in the principal amount thereof or any
shortening of the maturity of any principal amount thereof);
(e) Guarantee Obligations made in the ordinary course of business by
the Borrower or any of its Subsidiaries of obligations of the Borrower or
any Subsidiary Guarantor;
(f) Capital Lease Obligations with respect to vehicles, new stores
and office equipment leased in the ordinary course of the Borrower's
business; and
(g) Letters of credit outstanding under the Prepetition Credit
Facility.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its Property, whether now owned or hereafter acquired,
except for:
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63
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 30 days or which are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
insurance and social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business and letters of credit
outstanding under the Prepetition Credit Facility;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Section 7.2(d), provided that no such
Lien is spread to cover any additional Property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any Property other
than the Property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into
by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased; and
(j) with the consent of the Administrative Agent, Liens in respect
of deposits with utilities in the ordinary course of business; provided,
however, that (i) the
Borrower shall use its best efforts not to make any such deposits with
utilities, (ii) the
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Borrower shall use its best efforts to terminate all such deposit
arrangements and (iii) the aggregate amount of such deposits at any time
shall not exceed $4,000,000.
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any Subsidiary
Guarantor (provided that the Subsidiary Guarantor shall be the continuing
or surviving corporation); and
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor.
7.5 Limitation on Disposition of Property. Dispose of any of its
Property (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Sections 7.4(b) or 7.11;
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Subsidiary Guarantor;
(e) the Disposition of other assets (including, without limitation,
the surrender or termination of leases or the non-exercise of lease
extensions) having a fair market value not to exceed $5,000,000 in the
aggregate for any fiscal year of the Borrower; and
(f) any Asset Sale (subject to the limitation contained in Section
7.5(e)) or Recovery Event, provided, that the requirements of Section
2.12(b) are complied with in connection therewith.
7.6 Limitation on Restricted Payments. Declare or pay any dividend
(other than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary (collectively, "Restricted
Payments"), except
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65
that any Subsidiary may make Restricted Payments to the Borrower or any
Subsidiary Guarantor.
7.7 Limitation on Capital Expenditures. Make or commit to make any
Capital Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding for any fiscal
year of the Borrower set forth below the amount set forth below opposite such
fiscal year
Fiscal Year Amount
----------- ------
1999 $60,000,000
2000 80,000,000
2001 52,500,000
2002 55,000,000
2003 57,500,000
; provided, that (i) any such amount referred to above, if not so expended in
the fiscal year for which it is permitted, may be carried over for expenditure
in the next succeeding fiscal year but such amount shall not exceed 25% of the
amount for such fiscal year set forth above, (ii) to the extent the Borrower
retains Excess Cash Flow in any fiscal year pursuant to this Agreement, the
amount referred to above for the fiscal year following the fiscal year in which
the Borrower retains Excess Cash Flow shall be increased by the amount of Excess
Cash Flow so retained by the Borrower and (iii) Capital Expenditures made
pursuant to this clause (a) during any fiscal year shall be deemed made, first,
in respect of amounts permitted for such fiscal year as provided above and,
second, in respect of amounts carried over from the prior fiscal year pursuant
to subclause (i) above, (b) Capital Expenditures made with the proceeds of any
Reinvestment Deferred Amount and (c) Capital Expenditures with respect to
Capital Lease Obligations with respect to vehicles, new stores and office
equipment leased in the ordinary course of the Borrower's business.
7.8 Limitation on Investments. Make any advance, loan, extension of
credit (by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting an ongoing business from, or make any other investment in,
any other Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b) and (e) ;
(d) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and relocation
expenses) in an aggregate amount for the Borrower and Subsidiaries of the
Borrower not to exceed $500,000 at any one time outstanding;
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66
(e) the transaction contemplated pursuant to the Plan of
Reorganization;
(f) Investments in assets useful in the Borrower's business made by
the Borrower or any of its Subsidiaries with the proceeds of any
Reinvestment Deferred Amount;
(g) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 7.8(c)) by the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such investment,
is a Subsidiary Guarantor;
(h) Investments in existence on the date hereof listed on Schedule
7.8(h);
(i) loans and advances to developers in connection with the
construction of new store locations not exceeding $10,000,000 at any one
time outstanding; provided that such advances are evidenced by promissory
notes in favor if the Borrower and such notes are pledged to the
Collateral Agent for the ratable benefit of the Lenders pursuant to the
Security Documents;
(j) notes payable from purchasers of stores to the extent permitted
pursuant to this Agreement, so long as (i) the amount of any such note
with respect to any store shall note exceed $500,000, (ii) the aggregate
amounts of all such notes shall not exceed $5,000,000 and (iii) all such
notes are pledged to the Collateral Agent for the ratable benefit of the
Lenders pursuant to the Security Documents; and
(k) debt or equity securities received in connection with the
bankruptcy or reorganization of suppliers and/or customers and in
settlement if delinquent obligations of, and other disputes with,
customers and/or suppliers in the ordinary course of business; and
(l) additional Investments of a nature not contemplated pursuant to
the foregoing clauses (a) through (k); provided that all Investments
pursuant to this clause (l) shall not exceed $1,000,000 at any one time.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Amend, modify or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms of any
Indebtedness (other than Indebtedness pursuant to this Agreement) (other than
any such amendment, modification, waiver or other change which (i) would extend
the maturity or reduce the amount of any payment of principal thereof, reduce
the rate or extend the date for payment of interest thereon or relax any
covenant or other restriction applicable to the Borrower or any of its
Subsidiaries and (ii) does not involve the payment of a consent fee in excess of
1% of the amount of Indebtedness affected), or (b) amend its certificate of
incorporation in any manner determined by the Administrative Agent to be adverse
to the Lenders.
7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering
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of any service or the payment of any management, advisory or similar fees, with
any Affiliate (other than the Borrower or any Subsidiary Guarantor) unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary
course of business of the Borrower or such Subsidiary, as the case may be, and
(c) upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate.
7.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary, except any sale by the
Borrower or any of its Subsidiaries of (x) the Borrower's stores located at New
Fairfield, Connecticut; Corinth, New York; Vestal, New York; Vestal Plaza, New
York; and Manchester Center, Vermont, (y) a store or facility, and in each case
related land, to the extent acquired or constructed after the Closing Date or
(z) equipment acquired or constructed after the Closing Date, in each case
within 270 days of such acquisition or the substantial completion of such
construction, which is then leased back to the respective seller (pursuant to,
in the case of any such equipment, a capital lease); provided that the proceeds
of the respective sale shall be entirely cash and shall not be less than 95% of
the fair market value of the respective asset being sold (as determined by the
Borrower in good faith), and the respective lease shall provide for
substantially equal annual payments (except that a balloon payment shall be
permitted at the end of the lease term) (i) based upon an amortization schedule
of at least 15 years and with a minimum term of at least 15 years or at least 5
years in the case of personal property, provided that such a transaction shall
be permitted only if the anticipated lease payments are such that, when
aggregated with the existing lease obligations of the Borrower and its
Subsidiaries, are not projected to cause a violation of any other provision of
this Agreement.
7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year
of the Borrower to end on a day other than the Saturday closest to the last day
in March or change the Borrower's method of determining fiscal periods.
7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement which prohibits or limits the ability of
the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, to secure the Obligations or, in the case of any guarantor,
its obligations under the Guarantee and Collateral Agreement, other than (a)
this Agreement and the other Loan Documents and (b) any agreements governing any
purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in
which case, any prohibition or limitation shall only be effective against the
assets financed thereby).
7.14 Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary,
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(b) make Investments in the Borrower or any other Subsidiary or (c) transfer any
of its assets to the Borrower or any other Subsidiary, except for such
encumbrances or restrictions existing under or by reason of (i) any restrictions
existing under the Loan Documents and (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement which has been entered into in
connection with the Disposition of all or substantially all of the Capital Stock
or assets of such Subsidiary.
7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
which are reasonably related thereto.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within three days after any such interest or other amount
becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party in any Loan Document or which is contained in any certificate,
document or financial or other statement furnished by it at any time under
or in connection with this Agreement or any such other Loan Document shall
prove to have been inaccurate in any material respect on or as of the date
made or deemed made; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained Section 6.4(a)(i) and (ii) (with
respect to the Borrower only), Section 6.7(a) or Section 7 of this
Agreement, or Section 5.5(a), Section 5.6, Section 5.7, Section 5.8(a),
Section 5.8(b), Section 5.9(a) or Section 5.10(b) of the Guarantee and
Collateral Agreement or (ii) an "Event of Default" under and as defined in
any Mortgage shall have occurred and be continuing; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section 8),
and such default shall continue unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Loans) on
the scheduled or original due date with respect thereto; or (ii) default
in making any payment of any interest on any such
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Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or
(iii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $5,000,000; or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against the Borrower or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Borrower or any
of its Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have
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a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could, in the sole judgment of
the Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage) of $5,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) Any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), shall become, or obtain rights (whether by means or
warrants, options or otherwise) to become, the "beneficial owner" (as
defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 50% of the outstanding common stock of the
Borrower;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon
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71
the Revolving Credit Commitments shall immediately terminate; and (ii)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. With respect to all Letters
of Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
9.2 Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing
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72
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by any Loan Party
or any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Agents under or in connection with, this Agreement or
any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent. Each Agent shall be entitled
to rely, and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by the Administrative Agent. The Agents may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Loans.
9.5 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all Lenders); provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
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73
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, no Agent shall have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party which may
come into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section 9.6 (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements which are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from such Agent's
gross negligence or willful misconduct. The agreements in this Section 9.7 shall
survive the payment of the Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan
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Party as though such Agent was not an Agent. With respect to its Loans made or
renewed by it and with respect to any Letter of Credit issued or participated in
by it, each Agent shall have the same rights and powers under this Agreement and
the other Loan Documents as any Lender and may exercise the same as though it
were not an Agent, and the terms "Lender" and "Lenders" shall include each Agent
in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. The Syndication Agent may, at
any time, by notice to the Lenders and the Administrative Agent, resign as
Syndication Agent hereunder, whereupon the duties, rights, obligations and
responsibilities hereunder shall automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the Syndication
Agent, the Administrative Agent or any Lender. After any retiring Agent's
resignation as Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
9.10 Authorization to Release Liens. The Administrative Agent is
hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 10.1.
9.11 The Arrangers. The Arrangers, in their capacity as such, shall
have no duties or responsibilities, and shall incur no liability, under this
Agreement and the other Loan Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified
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except in accordance with the provisions of this Section 10.1. The Required
Lenders and each Loan Party to the relevant Loan Document may, or (with the
written consent of the Required Lenders) the Agents and each Loan Party to the
relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions as
the Required Lenders, or the Agents, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement
or modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan, reduce the stated rate of any interest
or fee payable hereunder or extend the scheduled date of any payment thereof, or
increase the amount or extend the expiration date of any Commitment of any
Lender, in each case without the consent of each Lender directly affected
thereby; (ii) amend, modify or waive any provision of this Section 10.1 or
reduce any percentage specified in the definition of Required Lenders or
Required Prepayment Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral or release
all or substantially all of the Subsidiary Guarantors from their obligations
under the Guarantee and Collateral Agreement, in each case without the consent
of all Lenders; (iii) amend, modify or waive any condition precedent to any
extension of credit under the Revolving Credit Facility set forth in Section 5.2
(including, without limitation, in connection with any waiver of an existing
Default or Event of Default) without the consent of the Majority Revolving
Credit Facility Lenders; (iv) reduce the percentage specified in the definition
of Majority Facility Lenders with respect to any Facility without the written
consent of all Lenders under such Facility; (v) amend, modify or waive any
provision of Section 9 without the consent of the Agents; (vi) amend, modify or
waive any provision of Section 2.6 or 2.7 without the written consent of the
Swing Line Lender; (vii) amend, modify or waive any provision of Section 2.18
without the consent of each Lender directly affected thereby; or (viii) amend,
modify or waive any provision of Section 3 without the consent of the Issuing
Lender. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Loan Parties,
the Lenders, the Administrative Agent and all future holders of the Loans. In
the case of any waiver, the Loan Parties, the Lenders and the Administrative
Agent shall be restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon. Any such waiver, amendment, supplement or modification shall be
effected by a written instrument signed by the parties required to sign pursuant
to the foregoing provisions of this Section 10.1; provided, that
delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered,
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or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when received, addressed (a) in the case of the
Borrower, the Syndication Agent and the Administrative Agent, as follows and (b)
in the case of the Lenders, as set forth on Schedule 1 to the Letter Addendum to
which such Lender is a party or, in the case of a Lender which becomes a party
to this Agreement pursuant to an Assignment and Acceptance, in such Assignment
and Acceptance or (c) in the case of any party, to such other address as such
party may hereafter notify to the other parties hereto:
The Borrower: The Grand Union Company
201 Willowbrook Boulevard
Wayne, New Jersey 07470-0466
Attention: Chief Financial Officer
Telecopy: (973) 890-6551
Telephone: (973) 890-6340
with a copy Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Ted S. Waksman, Esq.
Telecopy: (212) 310-8007
Telephone: (212) 310-8000
The Administrative Agent: Lehman Commercial Paper Inc.
3 World Financial Center
New York, New York 10285
Attention: Michael O'Brien
Telecopy: (212) 528-0819
Telephone: (212) 526-0437
The Syndication Agent: UBS AG, Stamford Branch
677 Washington Blvd.
Stamford, Conn. 06912
Attention: Denise Clerkin
Telecopy: (203) 719-4176
Telephone: (203) 719-3146
provided that any notice, request or demand to or upon the either Agent or any
Lender shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the either Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
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10.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agents (b) to pay or reimburse each Lender and
the Agents for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel (including the allocated fees and expenses of
in-house counsel), consultants and other experts to each Lender and of counsel
to the Agents, (c) to pay, indemnify, and hold each Lender and the Agents
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Agents and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower any of its Subsidiaries or any of the Properties (all the foregoing
in this clause (d), collectively, the "Indemnified Liabilities"), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries so to
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee. The agreements in this Section 10.5 shall survive repayment of the
Loans and all other amounts payable hereunder.
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10.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Agents, all future holders of the Loans and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. In no event shall any Participant under
any such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.19, 2.20 and 2.21 with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it was a Lender; provided, that no Participant shall be entitled to receive
any greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable
law, at any time and from time to time assign to any Lender or any Affiliate
thereof or, with the consent of the Borrower, the Agents and, with respect to
Revolving Credit Loans, the Issuing Lender, which, in each case, shall not be
unreasonably withheld or delayed, to a bank, financial institution or other
entity (an "Assignee") all or any part of its rights and obligations under this
Agreement pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit E, executed by such Assignee and such Assignor and delivered to the
Administrative Agent for its acceptance and recording in the Register; provided
that no such assignment to an
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Assignee shall be in an aggregate principal amount of less than $2,000,000
(other than in the case of an assignment of all of a Lender's interests under
this Agreement). Any such assignment need not be ratable as among the
Facilities. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (y) the
Assignor 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 of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto). Notwithstanding any provision of this Section 10.6, the consent of the
Borrower shall not be required for any assignment which occurs at any time when
any Event of Default shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address referred
to in Section 10.2 a copy of each Assignment and Acceptance delivered to it and
a register (the "Register") for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Agents and the Lenders
shall treat each Person whose name is recorded in the Register as the owner of
the Loans and any Notes evidencing such Loans recorded therein for all purposes
of this Agreement. Any assignment of any Loan, whether or not evidenced by a
Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance; thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the designated Assignee, and the old Notes
shall be returned by the Administrative Agent to the Borrower marked
"cancelled". The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 10.6(c), by each such other Person) together with payment
to the Administrative Agent of a registration and processing fee of $3,500
(except that no such registration and processing fee shall be payable (y) in
connection with an assignment involving Lehman Commercial Paper Inc. or Swiss
Bank Corporation or (z) in the case of an Assignee which is already a Lender or
is an affiliate of a Lender or a Person under common management with a Lender),
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower. On or prior to such effective
date, the Borrower, at its own expense, upon request, shall execute and deliver
to the Administrative Agent (in exchange for the Revolving Credit Note and/or
applicable Term Notes, as the case may be, of the assigning Lender) a
new Revolving Credit Note and/or applicable Term Notes, as the case may be, to
the order of such
<PAGE>
80
Assignee in an amount equal to the Revolving Credit Commitment and/or applicable
Term Loans, as the case may be, assumed or acquired by it pursuant to such
Assignment and Acceptance and, if the Assignor has retained a Revolving Credit
Commitment and/or Term Loans, as the case may be, upon request, a new Revolving
Credit Note and/or Term Notes, as the case may be, to the order of the Assignor
in an amount equal to the Revolving Credit Commitment and/or applicable Term
Loans, as the case may be, retained by it hereunder. Such new Note or Notes
shall be dated the Closing Date and shall otherwise be in the form of the Note
or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, if any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts
<PAGE>
81
taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. A set of the copies of this Agreement signed by all the parties shall be
lodged with the Borrower and the Administrative Agent.
10.9 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.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower, as the case may be at its address set forth in Section 10.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
<PAGE>
82
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section 10.12 any special, exemplary, punitive or consequential
damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and
the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
10.14 Confidentiality. Each of the Agents and the Lenders agrees to
keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to any other Agent, any other Lender or
any affiliate of any Lender, (b) to any Participant or Assignee (each, a
"Transferee") or prospective Transferee which agrees to comply with the
provisions of this Section 10.14, (c) any of its employees, directors, agents,
attorneys, accountants and other professional advisors, (d) upon the request or
demand of any Governmental Authority having jurisdiction over it, (e) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f) if requested or
required to do so in connection with any litigation or similar proceeding, (g)
which has been publicly disclosed other than in breach of this Section 10.14,
(h) to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender or (i) in connection with the exercise of any
remedy hereunder or under any other Loan Document.
10.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.16 Delivery of Lender Addenda. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent and the
Syndication Agent a Letter Addendum duly executed by such Lender, the Borrower
and each Agent.
<PAGE>
83
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
THE GRAND UNION COMPANY
By: /s/ Francis E. Nicastro
---------------------------------
Name: Francis E. Nicastro
Title: Vice President and Treasurer
LEHMAN BROTHERS INC.,
as Co-Arranger
By: /s/ William Gallagher
---------------------------------
Name: William Gallagher
Title:
LEHMAN COMMERCIAL PAPER INC., as
Administrative Agent and as a Lender
By: /s/ William Gallagher
---------------------------------
Name: William Gallagher
Title:
LEHMAN COMMERCIAL PAPER INC.,
as Collateral Agent
By: /s/ William Gallagher
---------------------------------
Name: William Gallagher
Title:
<PAGE>
84
WARBURG DILLON READ LLC, as
Co-Arranger
By: /s/ Michael R. Grayer
---------------------------------
Name: Michael R. Grayer
Title: Managing Director
Leveraged Finance
By: /s/ David W. Barth
---------------------------------
Name: David W. Barth
Title: Associate Director
Leveraged Finance
UBS AG, STAMFORD BRANCH,
as Syndication Agent and as a Lender
By: /s/ Michael R. Grayer
---------------------------------
Name: Michael R. Grayer
Title: Managing Director
Leveraged Finance
By: /s/ Thomas R. Salzano
---------------------------------
Name: Thomas R. Salzano
Title: Associate Director
EXHIBIT 10.2
================================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
THE GRAND UNION COMPANY
and certain of its Subsidiaries
in favor of
LEHMAN COMMERCIAL PAPER INC.,
as Collateral Agent
Dated as of August 17, 1998
================================================================================
053113\1071\00824\98453AA4.SCA
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS.................................................. 1
1.1 Definitions..................................................... 1
1.2 Other Definitional Provisions................................... 5
SECTION 2. GUARANTEE...................................................... 5
2.1 Guarantee....................................................... 5
2.2 Right of Contribution........................................... 6
2.3 No Subrogation.................................................. 6
2.4 Amendments, etc. with respect to the Borrower Obligations....... 6
2.5 Guarantee Absolute and Unconditional............................ 6
2.6 Reinstatement................................................... 7
2.7 Payments........................................................ 7
SECTION 3. GRANT OF SECURITY INTEREST..................................... 7
3.1 Collateral...................................................... 7
3.2 Grant of Security Interest in Collateral........................ 8
SECTION 4. REPRESENTATIONS AND WARRANTIES................................. 8
4.1 Representations in Credit Agreement............................. 8
4.2 Title; No Other Liens........................................... 9
4.3 Perfected Liens................................................. 9
4.4 Chief Executive Office.......................................... 9
4.5 Inventory and Equipment......................................... 9
4.6 Farm Products................................................... 9
4.7 Pledged Securities.............................................. 9
4.8 Receivables..................................................... 10
4.9 Contracts....................................................... 10
4.10 Intellectual Property.......................................... 10
SECTION 5. COVENANTS...................................................... 11
5.1 Covenants in Credit Agreement................................... 11
5.2 Delivery of Instruments and Chattel Paper....................... 11
5.3 Maintenance of Insurance........................................ 11
5.4 Payment of Obligations.......................................... 12
5.5 Maintenance of Perfected Security Interest;
Further Documentation........................................... 12
5.6 Changes in Locations, Name, etc................................. 12
5.7 Notices......................................................... 13
5.8 Pledged Securities.............................................. 13
5.9 Receivables..................................................... 14
5.10 Contracts...................................................... 14
5.11 Intellectual Property.......................................... 14
5.12 Vehicles....................................................... 15
SECTION 6. REMEDIAL PROVISIONS............................................ 16
6.1 Certain Matters Relating to Receivables......................... 16
6.2 Communications with Obligors; Grantors Remain Liable............ 16
i
<PAGE>
6.3 Pledged Stock................................................... 17
6.4 Proceeds to be Turned Over To Collateral Agent.................. 17
6.5 Application of Proceeds......................................... 18
6.6 Code and Other Remedies......................................... 18
6.7 Registration Rights............................................. 19
6.8 Waiver; Deficiency.............................................. 20
SECTION 7. THE COLLATERAL AGENT........................................... 20
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc......... 20
7.2 Duty of Collateral Agent........................................ 21
7.3 Execution of Financing Statements............................... 22
7.4 Authority of Collateral Agent................................... 22
SECTION 8. MISCELLANEOUS.................................................. 22
8.1 Amendments in Writing........................................... 22
8.2 Notices......................................................... 22
8.3 No Waiver by Course of Conduct; Cumulative Remedies............. 22
8.4 Enforcement Expenses; Indemnification........................... 22
8.5 Successors and Assigns.......................................... 23
8.6 Set-Off......................................................... 23
8.7 Counterparts.................................................... 23
8.8 Severability.................................................... 23
8.9 Section Headings................................................ 24
8.10 Integration.................................................... 24
8.11 GOVERNING LAW.................................................. 24
8.12 Submission To Jurisdiction; Waivers............................ 24
8.13 Acknowledgements............................................... 24
8.14 Additional Grantors............................................ 25
8.15 Releases....................................................... 25
8.16 WAIVERS OF JURY TRIAL.......................................... 25
ii
<PAGE>
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of August 17, 1998,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of Lehman
Commercial Paper Inc., as Collateral Agent (in such capacity, the "Collateral
Agent") for the banks and other financial institutions (the "Lenders") from time
to time parties to the Credit Agreement, dated as of August 17, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among The Grand Union Company (the "Borrower"), the Lenders,
Warburg Dillon Read LLC, as co-advisor and co-arranger, UBS AG, Stamford Branch,
as syndication agent (in such capacity, the "Syndication Agent"), Lehman
Brothers Inc., as co-advisor and co-arranger (together with Warburg Dillon Read
LLC in their capacities as co-advisors and co-arrangers, the "Arrangers"),
Lehman Commercial Paper Inc., as administrative agent (in such capacity, the
"Administrative Agent") and the Collateral Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Collateral Agent for the ratable benefit of the Agents and the
Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Agents, the Arrangers and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Collateral Agent, for the
ratable benefit of the Agents and the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof are used
herein as so defined: Accounts, Chattel Paper, Documents, Equipment, Farm
Products, Instruments, Inventory and Investment Property.
<PAGE>
2
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Loans and Reimbursement Obligations and
all other obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in the
Credit Agreement after the maturity of the Loans and Reimbursement
Obligations and interest accruing at the then applicable rate provided in
the Credit Agreement after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Agents or any
Lender (or, in the case of any Hedge Agreement, any Affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, the Credit Agreement, this Agreement, the
other Loan Documents, any Letter of Credit or any Hedge Agreement entered
into by the Borrower with any Lender (or any Affiliate of any Lender) or
any other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Agents or
to the Lenders that are required to be paid by the Borrower pursuant to
the terms of any of the foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the
Collateral Agent as provided in Section 6.1 or 6.4.
"Contracts": the contracts and agreements in effect as of the date
hereof, as the same may be amended, supplemented or otherwise modified
from time to time, including, without limitation, (i) all rights of any
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of any Grantor to damages arising
thereunder and (iii) all rights of any Grantor to perform and to exercise
all remedies thereunder.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished
(including, without limitation, those listed in Schedule 6), all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings
and applications in the United States Copyright Office, and (ii) the right
to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
Schedule 6) granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9- 106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts,
<PAGE>
3
agreements, instruments and indentures in any form, and portions thereof,
to which such Grantor is a party or under which such Grantor has any
right, title or interest or to which such Grantor or any property of such
Grantor is subject, as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (i) all
rights of such Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of such Grantor to
damages arising thereunder and (iii) all rights of such Grantor to perform
and to exercise all remedies thereunder, in each case to the extent the
grant by such Grantor of a security interest pursuant to this Agreement in
its right, title and interest in such contract, agreement, instrument or
indenture is not prohibited by such contract, agreement, instrument or
indenture without the consent of any other party thereto, would not give
any other party to such contract, agreement, instrument or indenture the
right to terminate its obligations thereunder, or is permitted with
consent if all necessary consents to such grant of a security interest
have been obtained from the other parties thereto (it being understood
that the foregoing shall not be deemed to obligate such Grantor to obtain
such consents); provided, that the foregoing limitation shall not affect,
limit, restrict or impair the grant by such Grantor of a security interest
pursuant to this Agreement in any Receivable or any money or other amounts
due or to become due under any such contract, agreement, instrument or
indenture.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2)
or any other Loan Document to which such Guarantor is a party, in each
case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Agents or
to the Lenders that are required to be paid by such Guarantor pursuant to
the terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other than
the Borrower.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses,
and all rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and
damages therefrom.
"Intercompany Note": any promissory note evidencing loans made by
any Grantor to any of its Subsidiaries.
"Issuers": the collective reference to each issuer of a Pledged
Security.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in Schedule 6, (ii) all
<PAGE>
4
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any of the foregoing referred to in
Schedule 6, and (iii) all rights to obtain any reissues or extensions of
the foregoing.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or
sell any invention covered in whole or in part by a Patent, including,
without limitation, any of the foregoing referred to in Schedule 6.
"Pledged Notes": all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory
notes issued in connection with extensions of trade credit by any Grantor
in the ordinary course of business) while this Agreement is in effect.
"Pledged Securities": the collective reference to the Pledged Notes
and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Person that
may be issued or granted to, or held by, any Grantor while this Agreement
is in effect.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, shall include, without limitation,
all dividends or other income from the Pledged Securities, collections
thereon or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule 6, and (ii) the
right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred to
in Schedule 6.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title law
of any state and all tires and other appurtenances to any of the
foregoing.
<PAGE>
5
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Collateral Agent,
for the ratable benefit of the Agents and the Lenders and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Collateral Agent or any Lender
hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Borrower
Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any
other guarantor or any other Person or received or collected by the Collateral
Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
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6
2.2 Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Collateral Agent and the Lenders, and each Guarantor shall
remain liable to the Collateral Agent and the Lenders for the full amount
guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Collateral Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Collateral Agent or any Lender against
the Borrower or any other Guarantor or any collateral security or guarantee or
right of offset held by the Collateral Agent or any Lender for the payment of
the Borrower Obligations, nor shall any Guarantor seek or be entitled to seek
any contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Collateral Agent and the Lenders by the Borrower on account of the Borrower
Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Collateral Agent and the Lenders, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Collateral Agent in the exact form received by
such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if
required), to be applied against the Borrower Obligations, whether matured or
unmatured, in such order as the Collateral Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by any Agent or Lender may be rescinded by such Agent or Lender
and any of the Borrower Obligations continued, and the Borrower Obligations, or
the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
any Agent or Lender, and the Credit Agreement and the other Loan Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Collateral Agent (or the requisite Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by any Agent or Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Agents nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Borrower Obligations
or for the guarantee contained in this Section 2 or any property subject
thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by any Agent or Lender
upon the guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Section 2; and all dealings between the Borrower and any of the Guarantors, on
the one hand, and the Agents and the Lenders, on the other
<PAGE>
7
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Borrower Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
any Agent or Lender, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower or any other Person against any Agent or Lender, or (c)
any other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, any
Agent or any Lender may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
the Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by any Agent or Lender to make any such demand,
to pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Collateral Agent or any Lender against any Guarantor. For
the purposes hereof "demand" shall include the commencement and continuance of
any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by any Agent or Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Collateral Agent without set-off or counterclaim
in Dollars at the office of the Collateral Agent located at the Payment Office
specified in the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
3.1 Collateral. For the purposes of this Agreement, all of the
following property now owned or at any time hereafter acquired by a Grantor or
in which a Grantor now has or at any time in the future may acquire any right,
title or interest is collectively referred the "Collateral":
(a) all Accounts;
(b) all Chattel Paper;
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8
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Pledged Securities;
(k) all Vehicles;
(l) all Investment Property;
(m) all deposit accounts and other bank accounts;
(n) all books and records pertaining to the Collateral; and
(o) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
3.2 Grant of Security Interest in Collateral. As collateral security
for the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of such Grantor's Obligations, each
Grantor hereby assigns and transfers to the Collateral Agent, and grants to the
Collateral Agent for the ratable benefit of the Agents and the Lenders, a
security interest in all of its Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Agents and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Agents and each Lender shall be
entitled to rely on each of them as if they were fully set forth herein,
provided that each reference in each such representation and warranty to the
Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed to
be a reference to such Guarantor's knowledge.
<PAGE>
9
4.2 Title; No Other Liens. Except for the security interests granted
to the Collateral Agent for the ratable benefit of the Agents and the Lenders
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Collateral Agent, for the ratable benefit of the
Agents and the Lenders, pursuant to this Agreement or as are permitted by the
Credit Agreement.
4.3 Perfected Liens. (a) The security interests granted pursuant to
this Agreement upon completion of the filings and other actions specified on
Schedule 3 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Collateral Agent in completed and duly
executed form) will constitute valid perfected security interests in the
Collateral in favor of the Collateral Agent, for the ratable benefit of the
Agents and the Lenders, having the priority ascribed to such security interests
in Section 3.
(b) The security interests granted pursuant to this Agreement upon
completion of the filings and other actions specified in Section 5.12(b) and on
Schedule 3 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Collateral Agent in completed and duly
executed form) are prior to all other Liens on the Collateral in existence on
the date of the initial Extension of Credit under the Credit Agreement except
for (i) Liens described in Schedule 7, and (ii) unrecorded Liens permitted by
the Credit Agreement which have priority over the Liens on the Collateral by
operation of law.
4.4 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
4.5 Inventory and Equipment. On the date hereof, such Grantor's
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5.
4.6 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.7 Pledged Securities. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.
<PAGE>
10
4.8 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Collateral Agent.
(b) None of the obligors on any Receivables is a Governmental
Authority.
(c) The amounts represented by such Grantor to the Lenders from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
4.9 Contracts. (a) No consent of any party (other than such Grantor)
to any Contract is required, or purports to be required, in connection with the
execution, delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and constitutes a
valid and legally enforceable obligation of the Grantor party thereto, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act by or
in respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any Grantor party thereto other than those which have been duly
obtained, made or performed, are in full force and effect and do not subject the
scope of any such Contract to any material adverse limitation, either specific
or general in nature.
(d) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof in any manner that, in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) The right, title and interest of such Grantor in, to and under
the Contracts are not subject to any defenses, offsets, counterclaims or claims
that, in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(f) Such Grantor has delivered to the Collateral Agent a complete
and correct copy of each Contract, including all amendments, supplements and
other modifications thereto.
(g) No amount payable to such Grantor under or in connection with
any Contract is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Collateral Agent.
(h) None of the parties to any Contract is a Governmental Authority.
4.10 Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and does not
infringe the intellectual property rights of any other Person.
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11
(c) Except as set forth in Schedule 6, on the date hereof, none of
the Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor which could
reasonably be expected to have a Material Adverse Effect.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Agents and the Lenders
that, from and after the date of this Agreement until the Obligations shall have
been paid in full, no Letter of Credit shall be outstanding and the Commitments
shall have terminated:
5.1 Covenants in Credit Agreement. Such Grantor shall take, or shall
refrain from taking, as the case may be, each action that is necessary to be
taken or not taken, as the case may be, so that no Default or Event of Default
is caused by the failure to take such action or to refrain from taking such
action by such Grantor.
5.2 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Collateral Agent, duly indorsed in a manner
satisfactory to the Collateral Agent, to be held as Collateral pursuant to this
Agreement.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory, Equipment and Vehicles against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Collateral Agent
and (ii) to the extent requested by the Agents, insuring such Grantor, the
Agents and the Lenders against liability for personal injury and property damage
relating to such Inventory, Equipment and Vehicles, such policies to be in such
form and amounts and having such coverage as may be reasonably satisfactory to
the Collateral Agent and the Lenders.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Collateral Agent of
written notice thereof, (ii) name the Collateral Agent as insured party or loss
payee, (iii) if reasonably requested by the Collateral Agent, include a breach
of warranty clause and (iv) be reasonably satisfactory in all other respects to
the Collateral Agent.
(c) The Borrower shall deliver to the Collateral Agent and the
Lenders a report of a reputable insurance broker with respect to such insurance
substantially concurrently with the delivery by the Borrower to the Collateral
Agent of its audited financial statements for each fiscal year and
<PAGE>
12
such supplemental reports with respect thereto as the Collateral Agent may from
time to time reasonably request.
5.4 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interests created by
this Agreement as a perfected security interests having at least the priorities
described in Section 4.3 and shall defend such security interests against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Collateral Agent
may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of
the Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby.
5.6 Changes in Locations, Name, etc. Such Grantor will not, except
upon 15 days' prior written notice to the Collateral Agent and delivery to the
Collateral Agent of (a) all additional executed financing statements and other
documents reasonably requested by the Collateral Agent to maintain the validity,
perfection and priority of the security interests provided for herein and (b) if
applicable, a written supplement to Schedule 5 showing any additional location
at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 5;
(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Collateral Agent in
connection with this Agreement would become misleading.
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13
5.7 Notices. Such Grantor will advise the Collateral Agent and the
Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Collateral Agent to exercise any of its
remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5.8 Pledged Securities. (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer, whether in addition to, in substitution of, as
a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Collateral Agent and the Lenders, hold the same in trust for the Collateral
Agent and the Lenders and deliver the same forthwith to the Collateral Agent in
the exact form received, duly indorsed by such Grantor to the Collateral Agent,
if required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Collateral Agent so requests,
signature guaranteed, to be held by the Collateral Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Securities upon the liquidation or dissolution
of any Issuer shall be paid over to the Collateral Agent to be held by it
hereunder as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Pledged Securities
or any property shall be distributed upon or with respect to the Pledged
Securities pursuant to the recapitalization or reclassification of the capital
of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Collateral Agent, be delivered to the Collateral Agent to be held
by it hereunder as additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect of the Pledged
Securities shall be received by such Grantor, such Grantor shall, until such
money or property is paid or delivered to the Collateral Agent, hold such money
or property in trust for the Lenders, segregated from other funds of such
Grantor, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Collateral Agent, such
Grantor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock or other equity securities of any nature or to issue
any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Pledged Securities or Proceeds thereof (except
pursuant to a transaction expressly permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Pledged Securities or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Collateral Agent to sell, assign or transfer
any of the Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Pledged Securities issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Collateral Agent
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14
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it.
5.9 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Collateral Agent a copy of each
material demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables.
5.10 Contracts. (a) Such Grantor will perform and comply in all
material respects with all its obligations under the material Contracts.
(b) Such Grantor will not amend, modify, terminate or waive any
provision of any material Contract in any manner which could reasonably be
expected to materially adversely affect the value of such Contract as
Collateral.
(c) Such Grantor will exercise promptly and diligently each and
every material right which it may have under each material Contract (other than
any right of termination).
(d) Such Grantor will deliver to the Collateral Agent a copy of each
material demand, notice or document received by it relating in any way to any
material Contract that questions the validity or enforceability of such
Contract.
5.11 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any mark which is confusingly similar or a colorable
imitation of such Trademark unless the Collateral Agent, for the ratable benefit
of the Lenders, shall obtain a perfected security interest in such mark pursuant
to this Agreement, and (v) not (and not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby such Trademark
may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do
any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.
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15
(d) Such Grantor (either itself or through licensees) will not do
any act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Collateral Agent and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Collateral Agent within five Business Days after the last day of
the fiscal quarter in which such filing occurs. Upon request of the Collateral
Agent, such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Collateral Agent may
request to evidence the Collateral Agent's and the Lenders' security interest in
any Copyright, Patent or Trademark and the goodwill and general intangibles of
such Grantor relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Collateral Agent after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
5.12 Vehicles. (a) No Vehicle shall be removed from the state which
has issued the certificate of title/ownership therefor for a period in excess of
four months.
(b) Within 30 days after the date hereof, and, with respect to any
Vehicles acquired by such Grantor subsequent to the date hereof, within 30 days
after the date of acquisition thereof, all applications for certificates of
title/ownership indicating the Collateral Agent's first priority security
interest in the Vehicle covered by such certificate, and any other necessary
documentation, shall be filed in each office in each jurisdiction which the
Collateral Agent shall deem advisable to perfect its security interests in the
Vehicles.
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SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Collateral
Agent shall have the right to make test verifications of the Receivables in any
manner and through any medium that it reasonably considers advisable, and each
Grantor shall furnish all such assistance and information as the Collateral
Agent may require in connection with such test verifications. At any time and
from time to time, upon the Collateral Agent's request and at the expense of the
relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Collateral Agent to furnish to the Collateral Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables, provided, however that unless a Default or Event
of Default shall have occurred and be continuing, the Collateral Agent shall
request no more than four such reports during any calendar year.
(b) The Collateral Agent hereby authorizes each Grantor to collect
such Grantor's Receivables, subject to the Collateral Agent's direction and
control, and the Collateral Agent may curtail or terminate said authority at any
time after the occurrence and during the continuance of an Event of Default. If
required by the Collateral Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith (and, in any event, within two Business
Days) deposited by such Grantor in the exact form received, duly indorsed by
such Grantor to the Collateral Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Collateral Agent, subject
to withdrawal by the Collateral Agent for the account of the Lenders only as
provided in Section 6.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Collateral Agent and the Lenders, segregated from other
funds of such Grantor. Each such deposit of Proceeds of Receivables shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.
(c) At the Collateral Agent's request, each Grantor shall deliver to
the Collateral Agent all original and other documents evidencing, and relating
to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Collateral Agent in its own name or in the name of others may at any time
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the Collateral Agent's satisfaction the existence, amount
and terms of any Receivables or Contracts.
(b) Upon the request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables and parties to the Contracts that the
Receivables and the Contracts have been assigned to the Collateral Agent for the
ratable benefit of the Agents and the Lenders and that payments in respect
thereof shall be made directly to the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables and Contracts to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither any Agent nor any Lender shall have any obligation or liability
under any Receivable (or any agreement giving rise thereto) or Contract by
reason of or arising out of this Agreement or the receipt by any Agent or Lender
of any payment relating thereto, nor shall any Agent or Lender be obligated in
any manner to perform any of the obligations of any Grantor under or
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17
pursuant to any Receivable (or any agreement giving rise thereto) or Contract,
to make any payment, to make any inquiry as to the nature or the sufficiency of
any payment received by it or as to the sufficiency of any performance by any
party thereunder, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice to
the relevant Grantor of the Collateral Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Pledged Securities; provided, however, that
no vote shall be cast or corporate right exercised or other action taken which,
in the Collateral Agent's reasonable judgment, would impair the Collateral or
which would be inconsistent with or result in any violation of any provision of
the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Collateral Agent shall give notice of its intent to exercise such rights to the
relevant Grantor or Grantors, (i) the Collateral Agent shall have the right to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Pledged Securities and make application thereof to the Obligations in the
order set forth in Section 6.5, and (ii) any or all of the Pledged Securities
shall be registered in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Pledged Securities as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the Collateral Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it, but the Collateral Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Collateral Agent in writing that (x) states
that an Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Collateral Agent.
6.4 Proceeds to be Turned Over To Collateral Agent. In addition to
the rights of the Collateral Agent and the Lenders specified in Section 6.1 with
respect to payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of cash, checks and
other near-cash items shall be held by such Grantor in trust for the Agents and
the Lenders, segregated from other funds of such Grantor, and shall, forthwith
upon receipt by such
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18
Grantor, be turned over to the Collateral Agent in the exact form received by
such Grantor (duly indorsed by such Grantor to the Collateral Agent, if
required). All Proceeds received by the Collateral Agent hereunder shall be held
by the Collateral Agent in a Collateral Account maintained under its sole
dominion and control. All Proceeds while held by the Collateral Agent in a
Collateral Account (or by such Grantor in trust for the Collateral Agent and the
Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed upon
by the Borrower and the Collateral Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Collateral Agent's election, the
Collateral Agent may apply all or any part of Proceeds constituting Collateral,
whether or not held in any Collateral Account, and any proceeds of the guarantee
set forth in Section 2, in payment of the Obligations in the following order:
First, to pay incurred and unpaid fees and expenses of the Agents
under the Loan Documents;
Second, to the Collateral Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect of
the Obligations, pro rata among the Lenders according to the amounts of
such obligations then due and owing and remaining unpaid to the Lenders;
and
Third, any balance of such Proceeds remaining after the Obligations
shall have been paid in full, no Letters of Credit shall be outstanding
(or such Letters of Credit shall be cash collateralized or secured by a
backstop letter of credit as provided in the Credit Agreement) and the
Commitments shall have terminated shall be paid over to the Borrower or to
whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur and
be continuing, the Collateral Agent, on behalf of the Agents and the Lenders,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the Collateral Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker's board or office of the Collateral Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Collateral Agent or any Lender shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released. Each Grantor further
agrees, at the Collateral Agent's request, to assemble the Collateral and make
it available to the Collateral Agent at places which the Collateral Agent shall
reasonably select, whether at such Grantor's premises or elsewhere. The
Collateral Agent shall apply the net proceeds of any action taken by it pursuant
to this Section 6.6, after deducting all reasonable costs and expenses of every
kind
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19
incurred in connection therewith or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Collateral Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as Section 6.5 shall proscribe, and only after
such application and after the payment by the Collateral Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the New York UCC, need the Collateral Agent account for the
surplus, if any, to any Grantor. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands it may acquire against the
Collateral Agent or any Lender arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.
6.7 Registration Rights. (a) If the Collateral Agent shall determine
to exercise its right to sell any or all of the Pledged Stock pursuant to
Section 6.6, and if in the opinion of the Collateral Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor will
cause the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Collateral Agent, necessary or advisable to register the Pledged
Stock, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its best efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Collateral Agent, are necessary
or advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable
thereto. Each Grantor agrees to cause such Issuer to comply with the provisions
of the securities or "Blue Sky" laws of any and all jurisdictions which the
Collateral Agent shall designate and to make available to its security holders,
as soon as practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral Agent may be unable
to effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Agents and the Lenders,
that the Agents and the Lenders have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in
this Section 6.7 shall be specifically enforceable against such Grantor,
<PAGE>
20
and such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred under the Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Agents or any Lender to collect such deficiency.
SECTION 7. THE COLLATERAL AGENT
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of such Grantor and in the name of such Grantor or in its own
name, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or Contract or with respect to any other Collateral and file
any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Collateral Agent for the
purpose of collecting any and all such moneys due under any Receivable or
Contract or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Collateral Agent may request to evidence the Agents' and the
Lenders' security interest in such Intellectual Property and the goodwill
and general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section
6.6 or 6.7, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent
shall direct; (2) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any Collateral; (3) sign
and indorse any
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21
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and
other documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (5)
defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (6) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Collateral Agent may deem appropriate; (7) assign any
Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the
world for such term or terms, on such conditions, and in such manner, as
the Collateral Agent shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as
though the Collateral Agent were the absolute owner thereof for all
purposes, and do, at the Collateral Agent's option and such Grantor's
expense, at any time, or from time to time, all acts and things which the
Collateral Agent deems necessary to protect, preserve or realize upon the
Collateral and the Collateral Agent's and the Lenders' security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Revolving Credit Loans that are Base Rate Loans
under the Credit Agreement, from the date of payment by the Collateral Agent to
the date reimbursed by the relevant Grantor, shall be payable by such Grantor to
the Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of Collateral Agent. The Collateral Agent's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the New York UCC or otherwise, shall
be to deal with it in the same manner as the Collateral Agent deals with similar
property for its own account. Neither the Agents, any Lender nor any of their
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Agents and the Lenders hereunder are solely to protect
the Agents' and the Lenders' interests in the Collateral and shall not impose
any duty upon the any Agent or Lender to exercise any such powers. The Agents
and the Lenders shall be accountable only for amounts that they actually receive
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22
as a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of
the New York UCC and any other applicable law, each Grantor authorizes the
Collateral Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Collateral
Agent reasonably determines appropriate to perfect the security interests of the
Collateral Agent under this Agreement. A photographic or other reproduction of
this Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.
7.4 Authority of Collateral Agent. Each Grantor acknowledges that
the rights and responsibilities of the Collateral Agent under this Agreement
with respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Grantors, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Agents and the Lenders with full and
valid authority so to act or refrain from acting, and no Grantor shall be under
any obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Agents nor any Lender shall by any act (except by a written instrument pursuant
to Section 8.1), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default. No failure to exercise, nor any delay in exercising, on the
part of any Agent or Lender, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by any Agent or
Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which such Agent or Lender would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees
to pay or reimburse each Lender and the Collateral Agent for all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or
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23
preserving any rights under this Agreement and the other Loan Documents to which
such Guarantor is a party, including, without limitation, the reasonable fees
and disbursements of counsel (including the allocated reasonable fees and
expenses of in-house counsel) to each Lender and of counsel to the Agents.
(b) Each Guarantor agrees to pay, and to save the Agents and the
Lenders harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Agents and the
Lenders harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 10.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Agents and the Lenders and their successors and assigns; provided that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Collateral Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Agents
and each Lender at any time and from time to time, without notice to such
Grantor or any other Grantor, any such notice being expressly waived by each
Grantor, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Agent or Lender to or for the credit or the account of such
Grantor, or any part thereof in such amounts as such Agent or Lender may elect,
against and on account of the obligations and liabilities of such Grantor to
such Agent or Lender hereunder and claims of every nature and description of
such Agent or Lender against such Grantor, in any currency, whether arising
hereunder, under the Credit Agreement, any other Loan Document or otherwise, as
the Collateral Agent or such Lender may elect, whether or not any Agent or
Lender has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Agents and each
Lender shall notify such Grantor promptly of any such set-off and the
application made by the Collateral Agent or such Lender of the proceeds thereof,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Agents and each Lender under
this Section 8.6 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Agent or Lender may
have.
8.7 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 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
<PAGE>
24
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Agents and the Lenders with respect
to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by any Agent or Lender relative to
subject matter hereof and thereof not expressly set forth or referred to herein
or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address
of which the Collateral Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential
damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Collateral Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in connection
with this Agreement or any of the other
<PAGE>
25
Loan Documents, and the relationship between the Grantors, on the one
hand, and the Collateral Agent and Lenders, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Grantors and the Lenders.
8.14 Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to the Credit Agreement
shall become a Grantor for all purposes of this Agreement upon execution and
delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1
hereto.
8.15 Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be outstanding
which are not cash collateralized or backstopped, the Collateral shall be
released from the Liens created hereby, and this Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Collateral Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors. At the request and sole
expense of any Grantor following any such termination, the Collateral Agent
shall deliver to such Grantor any Collateral held by the Collateral Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Collateral Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Borrower, a Guarantor
shall be released from its obligations hereunder in the event that all the
Capital Stock of such Guarantor shall be sold, transferred or otherwise disposed
of in a transaction permitted by the Credit Agreement; provided that the
Borrower shall have delivered to the Collateral Agent, at least ten Business
Days prior to the date of the proposed release, a written request for release
identifying the relevant Guarantor and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Borrower stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents.
8.16 WAIVERS OF JURY TRIAL. THE AGENTS, THE LENDERS AND EACH GRANTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
<PAGE>
26
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
THE GRAND UNION COMPANY
By: /s/ Francis E. Nicastro
----------------------------------
Name: Francis E. Nicastro
Title: Vice President
and Treasurer
GRAND UNION STORES, INC.
OF VERMONT
By: /s/ Francis E. Nicastro
----------------------------------
Name: Francis E. Nicastro
Title: Vice President
and Treasurer
GRAND UNION STORES OF
NEW HAMPSHIRE, INC.
By: /s/ Francis E. Nicastro
----------------------------------
Name: Francis E. Nicastro
Title: Vice President
and Treasurer
MERCHANDISING SERVICES, INC.
By: /s/ Francis E. Nicastro
----------------------------------
Name: Francis E. Nicastro
Title: Vice President
and Treasurer
SPECIALTY MERCHANDISING
SERVICES, INC.
By: /s/ Francis E. Nicastro
----------------------------------
Name: Francis E. Nicastro
Title: Vice President
and Treasurer
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
- - ---------------------
GRAND UNION COMPLETES CAPITAL RESTRUCTURING
WAYNE, NJ, Aug. 17, 1998 -- The Grand Union Company announced today that
it has completed its previously announced capital restructuring and successfully
emerged from its voluntary, prepackaged reorganization.
The Company also announced that it has closed on its new $300 million
credit facility underwritten by UBS AG, Stamford Branch, and Lehman Commercial
Paper Inc.
"The successful completion of our capital restructuring paves the way for
an exciting future for Grand Union," said J. Wayne Harris, Chairman of the Board
and Chief Executive Officer. "By eliminating approximately $600 million in debt,
our Company now has the opportunity and financial strength to become a much
stronger, more effective competitor.
"Grand Union now has a vastly improved financial structure, an experienced
and creative management team, and a solid business plan focused on building
sales, profits and shareholder value. Our plan includes substantial investment
in new store development, the remodeling of existing stores, new technologies to
increase efficiency and improve customer service, and merchandising programs
designed to make Grand Union one of the premier food retailers in the
Northeast."
Grand Union's Plan of Reorganization was confirmed by the U.S.
Bankruptcy Court in Newark, NJ, on August 5, following overwhelming
NYFS03...:\18\50318\0003\1708\REL8188J.460
<PAGE>
support from the Company's Senior Noteholders and Preferred Stockholders in a
consent solicitation completed on June 22, 1998.
Pursuant to the Company's Plan of Reorganization, Grand Union's Old Senior
Notes, Old Preferred Stock, Old Common Stock and Old Series 1 and Series 2
Warrants have been cancelled. Holders of Old Senior Notes, Old Preferred Stock
and Old Common Stock will receive information explaining the process by which
they may tender their Old Senior Notes for New Common Stock and their Old
Preferred Stock and Old Common Stock for New Warrants. The Company's New Common
Stock, under the symbol GUCOV, and the New Warrants, under the symbol GUCLV,
will commence trading on the OTC Market on a "when, and as if, issued" basis.
Grand Union's Old Common Stock, which has traded under the symbol GUCO, will
cease trading on the OTC Bulletin Board as of the close of the market today,
August 17, 1998. The Company has a pending application for listing of the New
Common Stock on the NASDAQ National Market.
Grand Union currently operates 222 retail food stores in six Northeastern
states.
Some of the matters discussed herein are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. For additional
information about the Company and its various risk factors, please see the
Company's most recent Form 10-K dated March 28, 1998, as filed with the
Securities and Exchange Commission on June 26, 1998, and other documents as
filed with the Securities and Exchange Commission.
2
EXHIBIT 99.2
DIRECTORS AND EXECUTIVE OFFICERS OF THE GRAND UNION COMPANY
- - -----------------------------------------------------------
The names, ages and present principal occupations of the directors and
executive officers of The Grand Union Company as of August 17, 1998, are set
forth below.
<TABLE>
<CAPTION>
- - --------------------------------- ----------- ----------------------------------------------------------------------------
NAME AGE POSITION
- - --------------------------------- ----------- ----------------------------------------------------------------------------
<S> <C> <C>
J. Wayne Harris................. 59 Director, Chairman and Chief Executive Officer
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Jack W. Partridge, Jr........... 53 Director, Vice Chairman and Chief Administrative Officer
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Gary M. Philbin................. 41 Director, President and Chief Merchandising Officer
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Jeffrey P. Freimark............. 43 Executive Vice President and Chief Financial Officer
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Raymond H. Ayers................ 53 Corporate Vice President, Real Estate
- - --------------------------------- ----------- ----------------------------------------------------------------------------
L. Andrew DePaolis.............. 55 Corporate Vice President, Advertising and Marketing
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Jasper Meadows.................. 47 Corporate Vice President, Grocery and General Merchandising
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Manouchehr Moslemi.............. 53 Corporate Vice President, Management Information Systems
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Francis E. Nicastro............. 56 Corporate Vice President and Treasurer
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Glenn J. Smith.................. 34 Corporate Vice President, General Counsel and Assistant Secretary
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Donald C. Vaillancourt.......... 54 Corporate Vice President, Public Affairs Counsel and Secretary
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Martin Bernstein................ 61 Director
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Thomas R. Cochill............... 58 Director
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Joe Colonnetta.................. 38 Director
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Jacob W. Doft................... 28 Director
- - --------------------------------- ----------- ----------------------------------------------------------------------------
David M. Green.................. 43 Director
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Joseph V. Lash.................. 35 Director
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Anthony Petrillo................ 57 Director
- - --------------------------------- ----------- ----------------------------------------------------------------------------
Scott Tepper.................... 38 Director
- - --------------------------------- ----------- ----------------------------------------------------------------------------
</TABLE>
MR. HARRIS has been a Director, Chairman and Chief Executive Officer of the
Company since August 1, 1997. From September, 1992 until joining the Company,
Mr. Harris served as: Senior Vice President, North East Operations, The Great
Atlantic and Pacific Tea Company ("A&P"), a leading supermarket chain; Executive
Vice President and Chief Operating Officer for A&P's US Operations; and, most
recently, Chairman and Chief Executive Officer of A&P Canada, Ltd. Between 1986
and 1992, Mr. Harris was President of the Cincinnati/Dayton Division of The
Kroger Company ("Kroger"), the largest food retailer in the United States.
MR. PARTRIDGE has been a Director of Grand Union since January 15, 1998 and
was elected Vice Chairman and Chief Administrative Officer effective January 5,
1998. Mr. Partridge joined Grand Union after a 23-year career with Kroger, where
he served as Group Vice President and a member of the company's Senior
Management Committee.
MR. PHILBIN has been a Director of the Company since October 30, 1997, and
was elected President and Chief Merchandising Officer of the Company on October
3, 1997. From June, 1996 until joining the Company, Mr. Philbin was Executive
Vice President in charge of Merchandising and Operations for the Cub Food Store
Division of SuperValu, Inc. ("Cub Foods"). Before joining Cub Foods, Mr. Philbin
was Vice President of Merchandising with the Waldbaum's Division of A&P from
July, 1993. Prior to his employment with Waldbaum's, Mr. Philbin served in
merchandising and operations capacities with Kroger commencing in 1973.
MR. FREIMARK has been the Company's Executive Vice President and Chief
Financial Officer since March 3, 1997. From March 3, 1997, to January 5, 1998,
Mr. Freimark also served as the Company's Chief Administrative Officer. Prior to
joining the Company, Mr. Freimark served as Executive Vice President and Chief
Financial Officer of Pueblo Xtra International, Inc., a leading
<PAGE>
supermarket chain in the Commonwealth of Puerto Rico and the Territory of the
U.S. Virgin Islands, from 1992 and as Senior Vice President, Finance,
Administration and Treasurer beginning in 1986. Prior to that he was Vice
President-Finance and Corporate Secretary of Kings Super Markets, Inc., a New
Jersey supermarket chain.
MR. AYERS has been the Corporate Vice President in charge of Real Estate
since 1988. He has been with the Company for 30 years. Prior to his present
position, Mr. Ayers served in several capacities in the Real Estate Department,
starting in 1968, as a trainee.
MR. DEPAOLIS has been the Corporate Vice President in charge of Advertising
and Marketing since 1996. Mr. DePaolis served as Corporate Vice President of
Advertising and Sales Promotion from 1990 until 1996 when he was appointed to
his present position. Mr. DePaolis joined the Company in 1968 and has served in
a number of division and regional advertising positions throughout his tenure
with the Company.
MR. MEADOWS has been Corporate Vice President in charge of Grocery and
General Merchandise since May 1997. Preceding that Mr. Meadows served in various
positions in the Company's Grocery and General Merchandise Department. He joined
the Company in 1972 as a trainee in our stores.
MR. MOSLEMI commenced his employment with the Company on July 6, 1998. On
August 13, 1998, the Board of Directors elected Mr. Moslemi Corporate Vice
President, Management Information Systems. Prior to joining Grand Union, Mr.
Moslemi served as Corporate Vice President, Information Technology in
Stillwater, Minnesota with Cub Foods from 1995 to July 1998. From 1993 to 1995,
Mr. Moslemi was Vice President, Information Technology in Salt Lake City, Utah,
with American Stores, a supermarket and drug retailer.
MR. NICASTRO has been Corporate Vice President and Treasurer of the Company
since September 1989. Prior to that, he spent 20 years with the Singer Company,
a manufacturing company, the last three of which were as Treasurer.
MR. SMITH has been Corporate Vice President, General Counsel and Assistant
Secretary since February 1998. Mr. Smith commenced his employment with Grand
Union in August 1995 as Director of Labor Relations and Employment Practices. He
was promoted to Vice President of Labor and Employment Counsel in May 1997 and
to Vice President, General Counsel and Assistant Secretary in August 1997. Prior
to joining Grand Union, Mr. Smith was an Associate with the law firm of Grotta,
Glassman and Hoffman, P.A., in Roseland, New Jersey from September 1991 to
August 1995.
MR. VAILLANCOURT has been Corporate Vice President, Public Affairs Counsel
and Secretary since June, 1997. Prior to that he served in a number of
capacities with the Company. Effective November 1985, Mr. Vaillancourt became
Corporate Vice President, Corporate Communications and Consumer Affairs.
Effective January 1980, he was appointed Vice President, Corporate
Communications and Consumer Affairs. Effective October 1976, he became Director,
Corporate Communications and Consumer Affairs. In December 1971, he was promoted
to Assistant to the Director of Public Relations.
MR. BERNSTEIN has been a private investor since 1988. Mr. Bernstein is also
a director of Astro Communications, a publishing and strobe lighting company,
MBO Properties, a real estate mortgage company, Laser Mortgage Management, a
specialty finance company, and Value Property Trust, a real estate investment
trust.
MR. COCHILL has been the President, Chief Executive Officer and Chairman of
the Board of Webcraft Technologies Inc., a printer of personalized direct mail
formats, specialized government
<PAGE>
forms and complex commercial print formats, since 1992. Mr. Cochill is also a
director of Quantegy, Inc., a manufacturer of professional recording media, and
U.S. Leather, Inc., a producer of leather.
MR. COLONNETTA has been a Managing Principal of a management affiliate of
Hicks, Muse, Tate & Furst, a private investment firm, since 1995. From 1994 to
1995, Mr. Colonnetta was an Operating Partner and Chief Executive Officer
Triangle FoodService and StarMark Foods. From 1989 to 1994, Mr. Colonnetta was
the Chief Financial Officer of TRC, a company specializing in repositioning and
growing food-related companies. Mr. Colonnetta is also a director of Back Yard
Burgers, Del Monte-Latin America and StarMark Foods.
MR. DOFT has served as a Managing Director of Highline Capital Management,
L.L.C., a New York-based investment management firm, since 1995. From 1994
through 1995, Mr. Doft served as a consultant to The Blackstone Group's asset
management subsidiary, Blackstone Alternative Asset Management. From 1991 to
1993, Mr. Doft worked as a Financial Analyst at Gleacher & Co., Inc., a New York
mergers and acquisitions advisory and merchant banking firm. Mr. Doft is also a
director of Edison Brothers Stores, Inc.
MR. GREEN was the Chairman, Chief Executive Officer and President of
Southwest Supermarkets from January 1997 to February 1998. Mr. Green was with
Smitty's Super Valu, Inc., a supermarket chain, from 1991 to 1996, serving as
its President from 1992 to 1996, its Chief Executive Officer from 1995 to 1996,
and its Senior Vice President of Marketing, Merchandising and Procurement from
1991 to 1992.
MR. LASH has been a Managing Director in the global Mergers and
Acquisitions group of Chase Securities, Inc., a securities unit of Chase
Manhattan Bank, since June 1998. From January 1996 to June 1998, Mr. Lash was
the President of Lash & Co. Incorporated, a mergers and acquisitions advisory
firm. From December 1994 to December 1995, Mr. Lash was a Managing Director and
Co-Head of the Mergers and Acquisitions Department at PaineWebber Incorporated.
From 1985 to 1994, Mr. Lash served as a financial analyst and ultimately a
Managing Director and Co-Head of the M&A Department at Kidder, Peabody & Co.,
Incorporated.
MR. PETRILLO has been associated with Leonard Green & Co., LLP, a private
investment Company commencing in 1994. Since 1995, Mr. Petrillo has been an
Operating Partner of Leonard Green. In 1993, Mr. Petrillo was in retirement. Mr.
Petrillo is also a director of Center Holdings, a holding company for Home
Quarters, Builders Square and Hechingers.
MR. TEPPER is the founder and lead integration consultant for KST
Consulting, a healthcare and healthcare technology consulting firm. Prior to
that, Mr. Tepper served as the Senior Vice President for Medisolution Ltd., a
healthcare company in Canada from August 1994 to June 1998. From 1992 to 1994,
Mr. Tepper was a Senior Director for Foxmeyer Health, a pharmaceutical
distribution and product logistics firm.
