SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
July 19, 1994
Date of Report
(Date of earliest event reported)
FLEMING COMPANIES, INC.
(Exact name of Registrant as specified in its charter)
OKLAHOMA 1-8140
48-0222760
(State or other jurisdiction (Commission File (IRS Employer
Identi-
of incorporation) Number) fication
Number)
6301 Waterford Boulevard, Box 26647
Oklahoma City, Oklahoma 73126
(Address of Principal Executive Offices)
(405) 840-7200
Registrant's telephone number,
including area code
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On July 19, 1994, the registrant acquired Haniel Corporation
("Haniel"), the parent of Scrivner, Inc. ("Scrivner"), from Franz
Haniel & Cie. GmbH ("Franz Haniel"), a corporation organized under
the laws of the Republic of Germany, pursuant to a Stock Purchase
Agreement between the registrant and Franz Haniel dated as of July
15, 1994.
Scrivner is the third largest food wholesaler and the 26th
largest food retailer in the United States serving approximately
2,900 supermarkets and 1,900 convenience stores in 28 states.
Scrivner also owns and operates 179 corporate retail stores, of
which 150 are supermarkets and 29 are convenience stores.
The acquisition adds the facilities and inventory of 21
distribution centers, with seven million square feet of storage,
plus two million square feet of outside storage, to Fleming's
existing network of 28 distribution centers. Scrivner's 150
supermarkets carry a full assortment of inventory and range in size
from 6,000 square feet to 95,000 square feet. Scrivner's
transportation fleet consists of 900 tractors and 1,500 trailers,
principally owned, which will be used to support wholesale and
retail food distribution operations.
Upon the acquisition, Fleming became the second largest food
marketing and distribution company in the country.
Fleming paid $388 million in cash for the stock of Haniel.
Fleming also agreed to refinance substantially all of Haniel's and
Scrivner's pre-existing debt (approximately $680 million), and to
refinance approximately $400 million of its own debt, during the 90
day period following the acquisition. Transaction expenses are
estimated at $40 million.
To finance the acquisition, the related refinancings and to
provide future working capital, Fleming entered into a new $2.2
billion credit facility with a group of banks led by Morgan
Guaranty Trust Company of New York, dated as of July 19, 1994 (the
"Credit Agreement"). The Credit Agreement consists of a $900
million five-year revolving credit facility, an $800 million
six-year amortizing term loan and a $500 million two-year term
loan. Concurrently with establishing the new Credit Agreement,
Fleming terminated its $400 million and $200 million credit
agreements.
To secure its obligations under the Credit Agreement, Fleming
pledged the stock of its subsidiaries, including Scrivner, and
substantially all of its inventory and accounts. A portion of the
collateral was also pledged for the equal and ratable benefit of
holders of debt issued under two prior Indentures. The collateral
will be released upon the earlier to occur of the repayment of the
debt or Fleming's senior unsecured debt returning to investment
grade as rated by Standard and Poor's and Moody's. The Credit
Agreement also contains various covenants and restrictions.
The incurrence of debt in connection with the acquisition and
the related downgrading of Fleming's senior unsecured debt rating
obligates the registrant to offer to repurchase approximately $97
million of outstanding medium-term notes.
The transaction was accomplished through arms-length
negotiations between the managements of the registrant and Franz
Haniel. There is no material relationship between Fleming and
Franz Haniel, or other respective affiliates, any director or
officer of the registrant, or any associate of any such director or
officer.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired:
Providing historical financial statements for the business
acquired is not practical at this time. The required information
will be filed under cover of a Form 8-K/A as soon as practicable,
but no later than September 30, 1994.
(b) Pro forma financial information:
The provision of pro forma financial information is not
practical at this time. The related pro forma information will be
filed by an amendment under the cover of a Form 8-K/A as soon as
practicable, but no later than September 30, 1994.
(c) Exhibits.
2.0 Stock Purchase Agreement, dated as of July 15, 1994, by and
between Fleming Companies, Inc. and Franz Haniel & Cie. GmbH
(containing a list briefly identifying the contents of all omitted
schedules at p. (iv))
2.1 Agreement to furnish supplementally a copy of any omitted
schedule to the Securities and Exchange Commission upon request
4.0 Credit Agreement, dated as of July 19, 1994, among Fleming
Companies, Inc., the Banks listed therein and Morgan Guaranty Trust
Company of New York, as Managing Agent
4.1 Pledge Agreement, dated as of July 19, 1994, among Fleming
Companies, Inc. and Morgan Guaranty Trust Company of New York, as
Collateral Agent
4.2 Security Agreement, dated as of July 19, 1994, between Fleming
Companies, Inc. in favor of Morgan Guaranty Trust Company of New
York, as Collateral Agent
4.3 Amendment No. 1 to Credit Agreement, dated as of July 21, 1994
<PAGE>
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.
Date: August 1, 1994 FLEMING COMPANIES,
INC.
By: /s/ Donald N. Eyler
Donald N. Eyler, Senior Vice President/Controller
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Paper (P) or
Exhibit Electronic (E)
- - -------- --------------
<C> <S> <C>
2.0 Stock Purchase Agreement E
2.1 Agreement to Furnish Omitted Schedules E
4.0 Credit Agreement E
4.1 Pledge Agreement E
4.2 Security Agreement E
4.3 Amendment No. 1 to Credit Agreement E
</TABLE>
<PAGE>
STOCK PURCHASE AGREEMENT
by and between
FLEMING COMPANIES, INC.
and
FRANZ HANIEL & CIE. GmbH
Dated as of July 15, 1994<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I SALE OF SHARES . . . . . . . . . . . . . . . .
1
1.01 Closing . . . . . . . . . . . . . . . . . . .
1
1.02 Delivery of the Shares by Seller . . . . . . .
1
1.03 Delivery of the Consideration by Buyer . . . .
2
1.04 Letter of Credit . . . . . . . . . . . . . . .
2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER . . .
2
2.01 Ownership of Shares; Equity Capital
Structure . . . . . . . . . . . . . . . . . .
2
2.02 Organization; Authorization; Valid and
Binding Agreement . . . . . . . . . . . . . .
4
2.03 No Violation . . . . . . . . . . . . . . . . .
5
2.04 Financial Statements . . . . . . . . . . . . .
6
2.05 No Undisclosed Liabilities . . . . . . . . . .
7
2.06 Absence of Certain Changes . . . . . . . . . .
8
2.07 Certain Tax Matters . . . . . . . . . . . . .
11
2.08 Title to Properties; Encumbrances. . . . . . .
15
2.09 Inventory. . . . . . . . . . . . . . . . . . .
16
2.10 Receivables . . . . . . . . . . . . . . . . .
17
2.11 Proprietary Rights . . . . . . . . . . . . . .
17
2.12 Litigation . . . . . . . . . . . . . . . . . .
18
2.13 Insurance . . . . . . . . . . . . . . . . . .
19
2.14 Employee Benefit Plans . . . . . . . . . . . .
19
2.15 Contracts and Commitments . . . . . . . . . .
23
2.16 Labor Relations . . . . . . . . . . . . . . .
24
2.17 No Breach . . . . . . . . . . . . . . . . . .
25
2.18 Compliance with Applicable Law . . . . . . . .
26
2.19 Hazardous Materials . . . . . . . . . . . . .
26
2.20 Assets Necessary to Business . . . . . . . . .
28
2.21 Disclosure . . . . . . . . . . . . . . . . . .
28
2.22 Brokers . . . . . . . . . . . . . . . . . . .
28
2.23 Note Sales/Purchase Program . . . . . . . . .
29
2.24 Corporate Books and Records . . . . . . . . .
29
2.25 Environmental and Other Permits . . . . . . .
29
2.26 Customers . . . . . . . . . . . . . . . . . .
29
2.27 Key Employees. . . . . . . . . . . . . . . . . 30
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER . . .
30
3.01 Organization . . . . . . . . . . . . . . . . .
30
3.02 Authorization . . . . . . . . . . . . . . . .
30
3.03 Valid and Binding Agreement . . . . . . . . .
30
3.04 No Violation . . . . . . . . . . . . . . . . .
30
3.05 Disclosure . . . . . . . . . . . . . . . . . .
31
3.06 Purchase for Investment . . . . . . . . . . .
31
3.07 Brokers . . . . . . . . . . . . . . . . . . .
31
ARTICLE IV CERTAIN OBLIGATIONS OF THE PARTIES . . . . . .
31
4.01 Conduct of Business Pending the Closing . . .
31
4.02 Other Obligations of Seller Pending the
Closing . . . . . . . . . . . . . . . . . . .
34
(a) Access . . . . . . . . . . . . . . . . .
34
(b) Other Transactions. . . . . . . . . . . . 35
(c) Insurance . . . . . . . . . . . . . . . .
35
(d) Interim Financial Statements . . . . . .
35
4.03 Public Announcements . . . . . . . . . . . . .
35
4.04 HSR Act . . . . . . . . . . . . . . . . . . .
36
4.05 Other Action . . . . . . . . . . . . . . . . .
36
4.06 Consents and Best Efforts . . . . . . . . . .
36
4.07 Indebtedness . . . . . . . . . . . . . . . . .
37
4.08 Confidentiality . . . . . . . . . . . . . . .
37
4.09 Satisfaction of Certain Obligations . . . . .
38
4.10 Notification of Certain Matters . . . . . . .
38
4.11 Environmental Matters . . . . . . . . . . . .
39
4.12 Funded Debt . . . . . . . . . . . . . . . . .
39
4.13 Release of Indemnity Obligations . . . . . . .
39
4.14 Liability under the Multiemployer Plans. . . .
39
4.15 Insurance. . . . . . . . . . . . . . . . . . .
40
4.16 Change of Name . . . . . . . . . . . . . . . .
40
4.17 Tax Records. . . . . . . . . . . . . . . . . .
40
4.18 Fairness Opinion . . . . . . . . . . . . . . .
41
ARTICLE V CONDITIONS TO OBLIGATIONS OF THE PARTIES . . .
41
5.01 HSR Act . . . . . . . . . . . . . . . . . . .
41
5.02 No Injunction or Litigation . . . . . . . . .
41
ARTICLE VI CONDITIONS TO OBLIGATIONS OF BUYER . . . . . .
41
6.01 Representations and Warranties . . . . . . . .
41
6.02 Performance . . . . . . . . . . . . . . . . .
42
6.03 Consents . . . . . . . . . . . . . . . . . . .
42
6.04 Funded Debt . . . . . . . . . . . . . . . . .
42
6.05 Officers' Certificates . . . . . . . . . . . .
42
6.06 Opinions of Counsel to Seller . . . . . . . .
42
6.07 Resolutions of Seller. . . . . . . . . . . . .
42
6.08 Incumbency Certificate of Seller . . . . . . .
42
6.09 Seller's Obligations . . . . . . . . . . . . .
43
6.10 Environmental Matters. . . . . . . . . . . . .
43
6.11 Resignations of Directors. . . . . . . . . . .
43
6.12 Organizational Documents . . . . . . . . . . .
43
6.13 Minute Books . . . . . . . . . . . . . . . . .
43
6.14 Affidavit. . . . . . . . . . . . . . . . . . .
43
6.15 Good Standing; Qualification To Do Business. .
44
6.16 Release of Indemnity Obligations . . . . . . .
44
6.17 Letter of Credit . . . . . . . . . . . . . . .
44
6.18 Documents. . . . . . . . . . . . . . . . . . .
44
6.19 No Material Adverse Change . . . . . . . . . .
44
6.20 NationsBank Waiver . . . . . . . . . . . . . .
44
6.21 Employment Agreement . . . . . . . . . . . . .
44
6.22 The Trust. . . . . . . . . . . . . . . . . . .
45
6.23 Scrivner Shares. . . . . . . . . . . . . . . .
45
ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLER . . . . .
45
7.01 Representations and Warranties . . . . . . . .
45
7.02 Performance . . . . . . . . . . . . . . . . .
45
7.03 Officers' Certificates . . . . . . . . . . . .
45
7.04 Opinion of Counsel to Buyer . . . . . . . . .
45
7.05 Consents . . . . . . . . . . . . . . . . . . .
46
7.06 Documents . . . . . . . . . . . . . . . . . .
46
7.07 Resolutions of Buyer . . . . . . . . . . . . .
46
7.08 Incumbency Certificate of Buyer. . . . . . . .
46
7.09 NationsBank Waiver . . . . . . . . . . . . . .
46
7.10 Scrivner Shares. . . . . . . . . . . . . . . .
46
ARTICLE VIII SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION .
46
8.01 Survival of Representations . . . . . . . . . .
46
8.02 Statements as Representations . . . . . . . . .
47
8.03 Agreement to Indemnify . . . . . . . . . . . .
47
8.04 Limitation of Liability . . . . . . . . . . . .
47
8.05 Conditions of Indemnification . . . . . . . . .
50
8.06 Security for Seller's Indemnification . . . . .
51
8.07 Officers' and Directors' Insurance;
Indemnification . . . . . . . . . . . . . . . .
52
8.08 Remedies Exclusive . . . . . . . . . . . . . .
53
ARTICLE IX TERMINATION; AMENDMENT AND WAIVER . . . . . . .
53
9.01 Termination of Agreement . . . . . . . . . . .
53
9.02 Effect of Termination . . . . . . . . . . . . .
53
9.03 Amendment, Extension and Waiver . . . . . . . .
54
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . .
54
10.01 Commissions . . . . . . . . . . . . . . . . . .
54
10.02 Expenses; Taxes . . . . . . . . . . . . . . . .
54
10.03 Governing Law; Submission to Jurisdiction,
Waiver of Jury Trial. . . . . . . . . . . . . .
54
10.04 Assignment. . . . . . . . . . . . . . . . . . .
55
10.05 Entire Agreement . . . . . . . . . . . . . . .
55
10.06 Headings . . . . . . . . . . . . . . . . . . .
55
10.07 Notices . . . . . . . . . . . . . . . . . . . .
55
10.08 Counterparts . . . . . . . . . . . . . . . . .
57
10.09 Specific Performance . . . . . . . . . . . . .
57
10.10 Severability. . . . . . . . . . . . . . . . . .
57
10.11 Certain Definitions . . . . . . . . . . . . . .
57
10.12 Cut Off Date. . . . . . . . . . . . . . . . . .
58
10.13 Scrivner Employees. . . . . . . . . . . . . . .
58
EXHIBITS
Exhibit A Letter of Credit
Exhibit B The Sites
Exhibit C-1 Opinion of Milbank, Tweed, Hadley & McCloy
Exhibit C-2 Opinion of Martin von Gehren
Exhibit C-3 Opinion of James V. Barwick
Exhibit C-4 Opinion of Counsel to the Bank
Exhibit C-5 Opinion of Counsel to General Partnership
Exhibit D Opinion of McAfee & Taft A Professional
Corporation
INDEX TO SCHEDULES
Volume
Schedule 2.01 Subsidiaries
1
Schedule 2.02 Jurisdictions
1
Schedule 2.03 No Violations
1
Schedule 2.04 Financial Statements
1
Schedule 2.05A Undisclosed Liabilities
1
Schedule 2.05B Funded Debt
1
Schedule 2.06 Absence of Certain Changes
1
Schedule 2.07 Taxes
2
Schedule 2.08 Permitted Liens, Real Property and Leases
3
Schedule 2.09 Inventory
3
Schedule 2.10 Receivables
3
Schedule 2.11 Proprietary Rights
3
Schedule 2.12 Litigation
4
Schedule 2.13 Insurance
4
Schedule 2.14 Employee Benefit Plans
4
Schedule 2.15 Contracts
5
Schedule 2.16 Labor Relations
6
Schedule 2.17 No Breach
6
Schedule 2.18 Compliance with Laws
6
Schedule 2.19 Hazardous Materials
6
Hazardous Materials (cont'd)
7
Schedule 2.20 Assets Necessary to Business
7
Schedule 2.25 Permits
7
Schedule 2.26 Customers
7
Schedule 2.27 Key Employees
7
Schedule 4.01 Conduct of Business
7
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of the 15th day of
July, 1994 (the "Agreement"), between Fleming Companies, Inc., an
Oklahoma corporation (the "Buyer"), and Franz Haniel & Cie. GmbH,
a corporation organized under the laws of the Federal Republic of
Germany (the "Seller").
WHEREAS, Seller owns all of the issued and outstanding
shares of the common stock, par value $100.00 per share (the
"Shares"), of Haniel Corporation, a Delaware corporation (the
"Company"); and
WHEREAS, the Company is the owner of all of the issued
and outstanding shares of capital stock of Scrivner, Inc.
("Scrivner"), a Delaware corporation; and
WHEREAS, Seller desires to sell to Buyer, and Buyer
desires to purchase from Seller, the Shares.
NOW, THEREFORE, in consideration of the foregoing and
the
respective representations, warranties, covenants, agreements and
conditions set forth herein, the parties agree as follows:
ARTICLE I
SALE OF SHARES
1.01 Closing. Upon the terms and subject to the
conditions of this Agreement, the sale and purchase of the Shares
contemplated by this Agreement shall take place at a closing (the
"Closing") to be held at the offices of Milbank, Tweed, Hadley &
McCloy, One Chase Manhattan Plaza, New York, New York at 10:00
A.M.
New York time on the later to occur of (i) July 19, 1994 and (ii)
the first Tuesday that is at least three Business Days following
satisfaction of the conditions set forth in Section 5.01,
provided
all of the other conditions to the obligations the parties set
forth in Section 5.02 and in Articles VI and VII have been
satisfied or waived, or at such other place or at such other time
or on such other date as Seller and Buyer may mutually agree upon
in writing. The date of the Closing is sometimes referred to
herein as the "Closing Date."
1.02 Delivery of the Shares by Seller. At the
Closing,
Seller will deliver or cause to be delivered to Buyer the follow-
ing:
(a) A stock certificate or certificates
represent-
ing all of the Shares, accompanied by stock powers duly executed
in
blank, and otherwise in form acceptable to Buyer for transfer on
the books of the Company;
(b) The resignations of such officers and
members
of the board of directors of the Company and the Subsidiaries (as
defined herein) that Buyer may request which resignations shall
not
prejudice such officers' rights under any employment agreement;
(c) The stock books, stock ledgers, minute books
and corporate seals of the Company;
(d) A receipt for the Purchase Price (as defined
herein) as provided in Section 1.03 below; and
(e) All other documents, instruments or writings
required to be delivered by Seller at or prior to the Closing
pursuant to this Agreement or otherwise required in connection
herewith or reasonably requested by Buyer to be delivered by
Seller
at or prior to the Closing.
1.03 Delivery of the Consideration by Buyer. At the
Closing, Buyer will deliver or cause to be delivered to Seller
the
following:
(a) Immediately available funds to an account to
be designated by Seller (such designation to occur not later than
two Business Days prior to Closing) in a total amount equal to
$388
million (U.S.) or $776.00 (U.S.) per share (the "Purchase
Price").
(b) All other documents, instruments or writings
required to be delivered by Buyer at or prior to the Closing
pursuant to this Agreement or otherwise required in connection
herewith or reasonably requested by Seller to be delivered by
Buyer
at or prior to the Closing.
1.04 Letter of Credit. Buyer and Seller agree that as
security for Seller's indemnification provided in Article VIII of
this Agreement, Seller shall deliver to Buyer at Closing an
irrevocable letter of credit from Morgan Guaranty Trust Company
of
New York (the "Bank") substantially in the form of Exhibit A
annexed hereto and made a part hereof (the "Letter of Credit").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as
follows:
2.01 Ownership of Shares; Equity Capital Structure.
(a) Seller is the record and beneficial owner
of,
and upon consummation of the transactions contemplated hereby
Buyer
will acquire, good, valid and marketable title to, the Shares,
free
and clear of all liens, claims, options, pledges, security
interests, charges, encumbrances, equities, agreements and
restrictions whatsoever and, except as set forth in Schedule 2.01
delivered to Buyer by Seller upon the execution of this
Agreement,
the Company is the record and beneficial owner of, and upon
consummation of the transactions contemplated hereby the Company
will have good, valid and marketable title to all of the issued
and
outstanding capital stock of each of the Subsidiaries either
directly or indirectly through one or more of the Subsidiaries.
(b) The authorized capital stock of the Company
consists solely of 500,000 shares of common stock, par value
$100.00 per share, all of which shares are issued and
outstanding.
The Shares constitute all of the issued and outstanding shares of
capital stock of the Company. The authorized capital stock of
Scrivner consists of 17,200 shares of class B common stock, par
value $1,000 per share all of which shares are issued and
outstand-
ing and owned by the Company (the "Scrivner Shares") and 100
shares
of class A common stock, $1.00 par value, and 100 shares of
preferred stock, no par value, none of which has been issued.
All
of the Shares and the Scrivner Shares have been duly authorized
and
are validly issued and outstanding, fully paid and nonassessable
and are not subject to and were not issued in violation of any
preemptive rights.
(c) Except as set forth above, there are not
now,
and at the Closing there will not be, any shares of capital stock
of the Company or Scrivner issued or outstanding or any subscrip-
tions, options, warrants, calls, rights, convertible securities
or
other rights or other agreements, arrangements or commitments of
any character relating to the issued or unissued capital stock or
other securities of the Company or Scrivner, or otherwise obli-
gating the Company or Scrivner to issue, transfer or sell any of
its respective securities or other instruments convertible into
or
exchangeable or exercisable for any securities of the Company or
Scrivner. All of the outstanding shares of capital stock of each
of the Subsidiaries other than Scrivner have been duly authorized
and are validly issued and are fully paid and non-assessable, are
not subject to and were not issued in violation of any preemptive
rights and, except as set forth in Schedule 2.01, are owned by
either the Company or another of the Subsidiaries free and clear
of
all liens, charges, claims or encumbrances. Each of the Partner-
ship Interests is owned free and clear of all liens, charges,
claims or encumbrances. Schedule 2.01 sets forth the name,
jurisdiction of incorporation and number of outstanding shares
and
the ownership of such shares of the Company and each of the
Subsidiaries including Scrivner. Schedule 2.01 sets forth the
general partnership in which the Company or any of the
Subsidiaries
holds an interest, the percentage ownership and the name of the
other partners. Except as set forth in Schedule 2.01, neither
the
Company nor any of the Subsidiaries has any investment in any
corporation, association, partnership, joint venture or other
entity or is obligated to make any such investment. Except as
set
forth in Schedule 2.01, there are not now, and at the Closing
there
will not be, any subscriptions, options, warrants, calls, rights,
convertible securities or other rights or other agreement,
arrangements or commitments of any character relating to the
issued
or unissued capital stock or other securities of any of the
Subsidiaries, or otherwise obligating the Company or any
Subsidiar-
ies to issue, transfer or sell any such securities or other
instruments convertible into or exchangeable or exercisable for
any
securities of the Subsidiaries. Except as set forth on Schedule
2.01, there are no, and at the Closing there will not be, any
voting trusts or other agreements or understandings to which
Seller, the Company, Scrivner or any of the other Subsidiaries is
a party or is bound with respect to the voting or transfer of the
capital stock of the Company or any of the Subsidiaries other
than
this Agreement. There are no outstanding contractual or other
obligations of the Company or any of the Subsidiaries to repur-
chase, redeem or otherwise acquire any shares of the Company or
Scrivner or any of the other Subsidiaries.
2.02 Organization; Authorization; Valid and Binding
Agreement.
(a) Seller is a corporation duly organized,
validly existing and in good standing under the laws of the
Federal
Republic of Germany. The Company and Scrivner are corporations
duly organized, validly existing and in good standing under the
laws of the State of Delaware. Seller has the corporate power
and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby.
(b) Seller has duly authorized the execution and
delivery of this Agreement and the consummation of the
transactions
contemplated hereby. No further corporate actions on the part of
Seller are necessary to authorize the execution of this Agreement
or to consummate the transactions contemplated hereby.
(c) This Agreement constitutes a valid and
binding
agreement of Seller, enforceable against Seller in accordance
with
its terms subject to applicable bankruptcy, reorganization,
insolvency, moratorium, and similar laws affecting creditors'
rights generally from time to time in effect and to general
principles of equity.
(d) The Company and each of the Subsidiaries is
a
corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation
and
each of the general partnerships described in Schedule 2.01 is
organized and each of them has the corporate or partnership power
and authority, as the case may be, to carry on its business as
presently conducted, and to own, lease and operate the properties
and other assets (of every kind, nature, character and
description,
whether real, personal or mixed, whether tangible or intangible,
whether accrued, contingent or otherwise and wherever situated),
goodwill and business as a going concern which it owns, leases,
or
operates.
(e) Except as set forth in Schedule 2.02
delivered
by Seller to Buyer upon the execution of the Agreement, the
Company
and each of the Subsidiaries which is a corporation is duly
licensed or qualified to do business as a foreign corporation,
and
is in good standing, in each jurisdiction wherein the character
of
the assets or properties owned, leased or operated by it, or the
nature of its business, makes such licensing or qualification to
do
business necessary, except where failure to be so qualified would
not have a material adverse effect on the business, financial
position and results of operations of the Company and the Major
Subsidiaries (as herein defined) taken as a whole. Schedule 2.02
contains a complete list of each jurisdiction in which the
Company
and each of the Subsidiaries is qualified or registered to do
business.
2.03 No Violation. Except as set forth in Schedule
2.03
delivered by Seller to Buyer upon the execution of this
Agreement,
and except for compliance with the notice filing requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") which requirements have been met and the
waiting period provided for therein expired, neither the
execution
and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (a) violate or conflict
with
any statute, law, ordinance, rule, regulation, order, writ,
injunction, judgment or decree applicable to Seller, the Company
or
any of the Subsidiaries or by which any of their properties may
be
bound or affected, (b) violate or conflict with any provisions of
the respective Certificates of Incorporation or By-Laws (or other
comparable charter documents or partnership agreements relating
to
the Partnership Interests) of Seller, the Company or any of the
Subsidiaries, (c) constitute a violation of or a default or
breach
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the termination of,
accelerate the performance required by, or give rise to any right
of termination, acceleration, cancellation, or amendment under,
or
result in the creation of any mortgages, pledges, liens, security
interests, conditional sale agreements, encumbrances,
restrictions,
charges or claims of any kind (whether absolute, accrued, contin-
gent or otherwise) (collectively, "Liens") upon Seller, the
Company, any of the Subsidiaries or any of their assets or have
any
other adverse effect under, any term or provision of any
contract,
commitment, understanding, arrangement, agreement or restriction
of
any kind or character to which Seller, the Company or any of the
Subsidiaries is a party or by which any of them or any of their
respective assets or properties may be bound, subject or
affected,
or (d) cause, or give any person grounds to cause (with or
without
notice, the passage of time, or both), the maturity of any debt,
liability or obligation of the Company or any of the Subsidiaries
to be accelerated or increase any such liability or obligation of
the Company or any of the Subsidiaries except, in the case of
(a),
(c) or (d), where such violations, terminations, conflicts,
accelerations, defaults, breaches or grounds and rights of
termination, cancellation, acceleration and amendment would not
have a material adverse effect on the Company or any of the Major
Subsidiaries so affected or prevent or materially delay the
consummation of the transactions contemplated hereby. Except for
compliance with the notice filing requirements of the HSR Act
which
have been satisfied, and except as set forth in Schedule 2.03, no
filing with, notification to, and no permit, consent, approval,
authorization or action by any federal, state, local, foreign or
other governmental agency, instrumentality, commission,
authority,
board or body (collectively, a "Governmental Agency") is required
in connection with the execution, delivery and performance by
Seller, the Company or any of the Subsidiaries of this Agreement,
or the consummation by Seller, the Company or any of the Subsid-
iaries, as the case may be, of the transactions contemplated
hereby, except where the failure to make such filing, give notice
to or to obtain such permit, consent, approval, authorization or
action would not have a material adverse effect on the Company
and
the Major Subsidiaries taken as a whole or prevent or materially
delay the consummation of the transactions contemplated hereby.
Schedule 2.03 lists and describes all consents, approvals,
authorizations or orders of any Governmental Agency or other
third
party necessary for the authorization, execution and delivery by
Seller of this Agreement, and the consummation of the
transactions
contemplated hereby, except where the failure to obtain such
consent, approval, authorization or order would not have a
material
adverse effect on the Company and the Major Subsidiaries taken as
a whole or prevent or materially delay the consummation of the
transactions contemplated hereby. Neither the execution and
delivery of this Agreement nor the consummation of the
transactions
contemplated hereby will constitute a tortious interference by
the
Company, the Subsidiaries or the Buyer with any contract or
business relationship to which Seller or any of its subsidiaries
is
a party.
2.04 Financial Statements. Attached hereto as
Schedule
2.04 delivered by Seller to Buyer upon the execution of this
Agreement, are (i) the audited consolidated balance sheets of the
Company and Subsidiaries as of December 31, 1993 (the "Company
Balance Sheet"), December 31, 1992 and December 31, 1991, (ii)
the
related consolidated statements of income, stockholders
investment
and cash flows of the Company and Subsidiaries for the years then
ended, (iii) the unaudited balance sheet of the Company and
Subsidiaries as of March 19, 1994 (the "Interim Balance Sheet")
and
(iv) the related consolidated statements of income, stockholders
investment and cash flows of the Company and Subsidiaries (the
financial statements referred to in the preceding clauses (i) and
(ii) are collectively referred to as the "Audited Financial
Statements" and shall be presented together with all related
notes
and schedules thereto, and accompanied by the reports thereon of
the Company's independent accountants; the financial statements
referred to in the preceding clauses (iii) and (iv) are
collective-
ly referred to as the "Unaudited Financial Statements". Except
as
otherwise disclosed therein, all such balance sheets (and the
footnotes and schedules thereto) (w) were prepared in accordance
with the books of account and other financial records of the
Company and the Subsidiaries, (x) fairly present the consolidated
financial position of the Company and Subsidiaries as of the
respective dates thereof and (y) have been prepared in accordance
with GAAP (as herein defined) applied on a consistent basis,
except
in the case of the Unaudited Financial Statements for the
omission
of all footnote disclosures and for normal year end adjustments.
Except as otherwise disclosed therein, all such statements of
income fairly present the results of operations of the Company
and
Subsidiaries for the respective periods indicated, in accordance
with GAAP applied on a consistent basis, except in the case of
the
Unaudited Financial Statements for the omission of all footnote
disclosures and for normal year end adjustments. Except for
updating the footnotes to the Audited Financial Statements, such
footnotes are applicable to the Unaudited Financial Statements
without additions or deletions other than a footnote relating to
this Agreement.
The Company represents in value less than one third of
the total fair market value of all of the assets of Seller and
its
affiliates determined immediately prior to Closing.
2.05 No Undisclosed Liabilities. The Company and the
Subsidiaries do not have any liabilities or obligations, except
(i)
as and to the extent of the amounts reflected or reserved against
in the Company Balance Sheet or in the notes thereto or in the
Interim Balance Sheet, (ii) as set forth in Schedule 2.05A
delivered by Seller to Buyer upon the execution of this
Agreement,
(iii) liabilities and obligations incurred in the ordinary course
of business and consistent with past practices since December 31,
1993, or (iv) for such liabilities or obligations as are not
material to the Company or any of the Major Subsidiaries. Except
as provided in the preceding sentence, Seller knows of no reason-
able basis for the assertion against the Company or any of the
Subsidiaries of any liability or obligation not fully reflected
or
reserved against in the Company Balance Sheet or in the notes
thereto or in the Interim Balance Sheet or incurred in the
ordinary
course of business and consistent with past practice since the
date
thereof.
Schedule 2.05B, delivered by Seller to Buyer upon the
execution of this Agreement, contains a description of all of the
Funded Debt and all other indebtedness of the Company and Subsid-
iaries, including obligor, obligee, amount owed, amount
outstanding
(principal and accrued interest), interest rate, scheduled
maturity, whether secured or unsecured, whether voluntarily
prepayable, whether the execution and delivery of this Agreement
and the performance of the transactions contemplated hereby gives
the obligee the right to declare a default and/or accelerate
payment and whether there are any prepayment penalties. Schedule
2.05B also contains the same information with respect to any
property or facility, where the Company or any Subsidiary is the
primary tenant, which property or facility was financed through
the
use of Industrial Development Bonds or Industrial Revenue Bonds
issued by a governmental authority.
2.06 Absence of Certain Changes. Except as set forth
in
Schedule 2.06 delivered by Seller to Buyer upon the execution of
this Agreement, since December 31, 1993 the businesses of the
Company and the Subsidiaries have been operated in the usual and
ordinary course, consistent with past practices. As
amplification
and not limitation of the foregoing, except as set forth in
Schedule 2.06, since December 31, 1993, there has not been:
(a) any material change in the business, opera-
tions or financial position of the Company or any of the Major
Subsidiaries from that reflected in the Audited Financial Stat-
ements or the Unaudited Financial Statements, other than those
occurring as a result of the general economic conditions or other
developments which are not unique to the Company or the
Subsidiar-
ies but also affect other persons who are engaged in the lines of
business in which the Company and the Subsidiaries are engaged;
(b) any damage, destruction or other casualty
loss
(whether or not covered by insurance) materially affecting the
business, operations or financial position of the Company or any
of
the Major Subsidiaries;
(c) any amendment, modification or termination
of
any existing, or entry into any new, contract, agreement, plan,
lease, license, permit or franchise which is, either individually
or in the aggregate, material to the business, operations or
financial position of the Company or any of the Major
Subsidiaries,
except for the amendment, modification or termination of
existing,
and the entry into of, new contracts, agreements, plans, leases,
licenses, permits or franchises in the ordinary course of
business;
(d) (A) any increase granted, promised or
announced in the wages, salaries, compensation, bonuses, in-
centives, pension or other benefits payable by the Company or any
Subsidiary to any of its employees, including, without
limitation,
any increase or change pursuant to any Benefit Plan or (B) any
increase established or promised of any benefits under any
Benefit
Plan, in either case except as required by Law (as herein
defined)
or any collective bargaining agreement or involving ordinary
increases consistent with the past practices of the Company or
such
Subsidiary;
(e) any disposition of any asset of the Company
or
any of the Subsidiaries which had a fair market or net book value
at the time of disposition of $100,000 or more;
(f) any labor dispute material to the business,
operations or financial position of the Company or any of the
Subsidiaries;
(g) any incurrence of any liabilities or obliga-
tions (whether absolute, accrued, contingent or otherwise and
whether due or to become due) by the Company or any of the
Subsidiaries except to the extent incurred in the ordinary course
of business and consistent with past practice; or any increase
of,
or any experience of any change in any assumptions underlying or
methods of calculating, any bad debt, contingency or other
reserves;
(h) any payment, discharge or satisfaction of
any
material claims, liabilities or obligations (whether absolute,
accrued, contingent or otherwise and whether due or to become
due)
of the Company or any of the Subsidiaries other than the payment,
discharge or satisfaction in the ordinary course of business and
consistent with past practice, including liabilities and obliga-
tions (i) reflected or reserved against in the Company Balance
Sheet, (ii) incurred in the ordinary course of business and
consistent with past practice since the date of the Company
Balance
Sheet, or (iii) incurred prior to the date of the Company Balance
Sheet in the ordinary course of business and consistent with past
practices;
(i) any mortgage, pledge, lien, security
interest,
encumbrance, restriction or charge of any kind, except for liens
for current taxes not yet due or other statutory liens for
obligations not yet due, placed, permitted or, if not in
existence
on December 31, 1993, allowed to exist on any property or assets
(real, personal or mixed, tangible or intangible) of the Company
or
any of the Subsidiaries;
(j) any write-off as uncollectible of any note
or
account receivable of the Company or any of the Subsidiaries,
except for write-offs in the ordinary course of business and
consistent with past practice;
(k) any cancellation of debts other than in the
ordinary course of business and consistent with past practice or
waiver of any claims or rights of more than $100,000 in value of
the Company or any of the Subsidiaries;
(l) any capital expenditure or commitment for
capital expenditures by the Company or any of the Subsidiaries
which individually per item exceeds $75,000 for replacements of
and
additions to property, plant, equipment or intangible capital
assets;
(m) any payment, loan or advance of any amount
by
the Company or any of the Subsidiaries to, or sale, transfer or
lease of any properties or assets (real, personal or mixed,
tangible or intangible) by the Company or any of the Subsidiaries
to, or any agreement or arrangement by the Company or any of the
Subsidiaries with, Seller or any of its affiliates or associates
(other than the Company or any of the Subsidiaries);
(n) any failure to replace or replenish
inventory
as such inventory may have been depleted from time to time,
collect
accounts receivable, pay accounts payable or otherwise manage its
working capital accounts in the ordinary course of business and
in
a manner consistent with past practices;
(o) any failure to pay any creditor any amount
owed to such creditor when due, other than in the ordinary course
of business consistent with past practice or except for matters
being contested in good faith;
(p) any redemption of any of the capital stock
or
any declaration or payment of any dividends or distributions
(whether in cash, securities or other property) to the holders of
capital stock of the Company or any Subsidiary or otherwise,
other
than dividends, distributions and redemptions declared, made or
paid by any Subsidiary solely to the Company or any other
Subsidi-
ary;
(q) any merger or consolidation with, or any
acquisition of an interest of 5% or more in, any entity or of a
substantial portion of the assets or business of any entity or
any
division or line of business thereof, or any other acquisition of
any material assets other than in the ordinary course of business
consistent with past practice;
(r) any issuance or sale of capital stock,
notes,
bonds or other securities, or options, warrants or other rights
to
acquire the same, of, or any other interest in, the Company or
any
Subsidiary;
(s) any agreement, arrangement or transaction
with
any directors, officers, employees or shareholders of the Company
or any Subsidiary (or with any relative, beneficiary, spouse or
affiliate of such person) except for (A) director's fees and
compensation to officers and employees of the Company or any of
the
Subsidiaries at rates not exceeding the rates of compensation in
effect as of the date hereof, or (B) advances made to employees
of
the Company and Subsidiaries for travel and other business
expenses
in reasonable amounts consistent with past practice or (C)
transactions pursuant to arrangements disclosed in Schedule 2.15;
(t) any writedown or writeup of (or failure to
write down or write up in accordance with GAAP consistent with
past
practice) the value of any inventories or receivables or revalua-
tion of any assets of the Company or any Subsidiary other than in
the ordinary course of business consistent with past practice and
in accordance with GAAP;
(u) any change in any method of accounting or
accounting practice or policy used by the Company or any Subsid-
iary, other than such changes required by GAAP;
(v) any failure to maintain the material assets
of
the Company and the Subsidiaries in accordance with good business
practice and in good operating condition and repair, ordinary
wear
and tear excepted;
(w) any lapse or termination of any material
Permit (as herein defined) that was issued or relates to the
Company or any Subsidiary or otherwise relates to any asset of
the
Company or Subsidiary or any failure to renew such Permit or
Environmental Permit or any insurance policy that is scheduled to
terminate or expire within 45 calendar days after the Closing
Date;
(x) any termination, discontinuation, closure or
disposition of any plant, facility or other business operation,
or
any layoff of any employees (other than layoffs of less than 50
employees in any six-month period in the ordinary course of
business consistent with past practice) or any implementation of
early retirement, separation or program providing early
retirement
window benefits within the meaning of Section 1.401(a)-4 of the
Treasury Regulations or any announcement of or plan regarding any
such action or program for the future;
(y) any charitable contribution in an amount
exceeding $1,000;
(z) any express or deemed election or settlement
or compromise of any liability with respect to Taxes of the
Company
or any Subsidiary (other than retail sales or retail use Taxes);
or
(aa) any agreement, whether in writing or other-
wise, to take or refrain from taking any action which, if taken
or
omitted to be taken subsequent to December 31, 1993, would render
any of the representations or warranties set forth in this
Section
2.06 untrue or incorrect.
2.07 Certain Tax Matters.
(a) The Company, and each of the Subsidiaries
has,
or shall cause to be prior to Closing, properly prepared and
filed
(and Seller has, or shall cause to be properly prepared and filed
prior to Closing, with respect to consolidated or combined
returns
in which the Company and any of the Subsidiaries are members of
the
same Affiliated Group (as defined below)), with the appropriate
governmental or taxing agency or authority ("Taxing Authority"),
all Tax Returns (as defined below) which are or were required to
be
filed by the Company or the Subsidiaries prior to Closing with
respect to all taxable years or the taxable periods which have
ended or end on or prior to the Closing Date. Except as set
forth
in Schedule 2.07 delivered by Seller to Buyer upon the execution
of
this Agreement, the Company and each of the Subsidiaries has
paid,
or shall cause to be paid, when due and payable, all Taxes (as
defined below) that are shown to be due and payable on the Tax
Returns described above. The reserves and allowances for Taxes
required by Section 2.07(e) hereof shall include all Taxes
payable
with respect to any Tax Returns of the Company or any Subsidiary
not due prior to the Closing but relating to tax periods (i)
ending
on or prior to the Closing, or (ii) commencing before but ending
after the Closing.
(b) Except as set forth on Schedule 2.07: (i) no
adjustment or deficiency relating to any Tax Return described in
Section 2.07(a) hereof has been proposed by any Taxing Authority
(insofar as either relates to the activities or income of the
Company or any Subsidiary or could result in liability of the
Company or any Subsidiary on the basis of joint and/or several
liability); (ii) there are no pending or, to the knowledge of
Seller, the Company and Subsidiaries threatened actions or
proceedings for the assessment or collection of Taxes against the
Company or any Subsidiary or (insofar as either relates to the
activities or income of the Company or any Subsidiary or could
result in liability of the Company or any Subsidiary on the basis
of joint and/or several liability) any corporation that was
included in the filing of a Tax Return with the Company or any
Subsidiary on a consolidated or combined basis; (iii) no
accelera-
tion of the vesting schedule for any property that is
substantially
unvested within the meaning of the regulations under Section 83
of
the Internal Revenue Code of 1986, as amended (the "Code") will
occur in connection with the transactions contemplated by this
Agreement; (iv) no adjustment or deficiency has been proposed by
any Taxing Authority relative to any Tax Return filed or required
to be filed by any partnership or joint venture of which the
Company or any Subsidiary is a member or any trust of which the
Company or any Subsidiary holds a beneficial interest; (v)
neither
the Company nor any Subsidiary is or has been a United States
real
property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in
Section 897(c)(1)(A)(ii) of the Code; and (vi) neither the
Company
nor any Subsidiary is subject to any accumulated earnings tax
penalty or personal holding company tax.
(c) Except as disclosed with reasonable
specific-
ity on Schedule 2.07: (i) there are no outstanding waivers or
agreements extending the statute of limitations for any period
with
respect to any Tax which the Company or any Subsidiary may be
subject; (ii) neither the Company nor any Subsidiary (A) has an
unrecaptured overall foreign loss within the meaning of Section
904(f) of the Code or (B) has participated in or cooperated with
an
international boycott within the meaning of Section 999 of the
Code; (iii) neither the Company nor any Subsidiary has any
income,
gain, loss or deduction reportable for a period ending after the
Closing Date but attributable to a transaction (e.g., an install-
ment sale) occurring in, or a change in accounting method made
for,
a period ending on or prior to the Closing Date which resulted in
a deferred reporting of income, gain, loss or deduction from such
transaction or from such change in accounting method; (iv)
neither
the Company nor any Subsidiary is obligated under any agreement
with respect to industrial development bonds or similar obliga-
tions, with respect to which the excludibility from gross income
of
the holder for federal income tax purposes could be affected by
the
transactions contemplated hereunder; and (v) no power of attorney
that is currently in force has been granted with respect to any
matter relating to Taxes that could affect the Company or a
Subsidiary.
(d) Schedule 2.07 lists and describes with
reasonable specificity: (i) all Tax Returns filed with respect to
the Company or any Subsidiary for the most recent taxable periods
ended on or before Closing, indicating (A) the jurisdictions to
which the Tax Returns relate, (B) the most recent Tax Return for
each relevant jurisdiction for which an audit has been completed
or
the statute of limitations has lapsed, and (C) all Tax Returns
that
currently are the subject of audit; (ii) the amount of any unused
net operating loss, net capital loss, foreign tax credit, other
tax
credits, or excess charitable contribution allocable to the
Company
or any Subsidiary, and the tax periods to which those losses,
credits, and contributions relate in each case as shown on any
Tax
Return; and (iii) any partnership or joint venture of which the
Company or any Subsidiary has been a member, or any trust in
which
the Company or any Subsidiary has had a beneficial interest,
during
any tax period for which the statute of limitation for assessment
of Taxes has not expired prior to the Closing.
(e) On the Company Balance Sheet, reserves and
allowances have been provided, and on the books of account and on
the Interim Balance Sheet and on any other balance sheet required
to be delivered by Seller to Buyer hereunder reserves and
allowanc-
es will be provided, in each case adequate to satisfy all
liabili-
ties for Taxes relating to the Company and the Subsidiaries for
periods through the Closing Date (without regard to the
materiality
thereof).
(f) Except as set forth in Schedule 2.07, the
Company has filed a consolidated Tax Return for federal income
tax
purposes since 1977, as common parent corporation of an
"affiliated
group" (within the meaning of Section 1504(a) of the Code which
included all Subsidiaries that met the definition of an
"includible
corporation" (within the meaning of Section 1504(b) of the Code)
for such period.
(g) Except as set forth in Schedule 2.07, no
deficiency for Taxes has been assessed against the Company or any
of the Subsidiaries which has not been paid in full.
(h) None of Seller, the Company or any of the
Subsidiaries has filed a consent pursuant to Section 341(f) of
the
Code with respect to the Company and any of the Subsidiaries, or
agreed to have Section 341(f)(2) of the Code apply to any
disposi-
tion of a subsection (f) asset (as such term is defined in
Section
341(f)(4) of the Code) owned by the Company or any of its Subsid-
iaries.
(i) Except as set forth on Schedule 2.07, there
are no liens for Taxes upon the assets of the Company or any of
the
Subsidiaries except for liens for Taxes not yet due.
(j) Except as set forth on Schedule 2.07, at the
Closing Date none of Seller, the Company nor any of the
Subsidiar-
ies is or will be a party to or have any liabilities or
obligations
under any agreement providing for the allocation, sharing or
indemnification of Taxes among any of them other than pursuant to
this Agreement.
(k) Except as set forth in Schedule 2.07,
neither
the Company nor any of the Subsidiaries is required to include in
income any adjustment pursuant to Section 481(a) of the Code by
reason of a voluntary change in accounting method initiated by
the
Company, the Subsidiaries, or any Affiliated Group or as a result
of the Tax Reform Act of 1986.
(l) Neither the Company nor any of the Subsid-
iaries is a party to any agreement, contract or arrangement that
would result, separately or in the aggregate, in the payment by
the
Company or any of the Subsidiaries of any "excess parachute
payment" within the meaning of Section 280G of the Code.
(m) Except as set forth in Schedule 2.07, no
property of the Company or any of its Subsidiaries is property
that
the Company or any of its Subsidiaries is or will be required to
treat as being owned by another person pursuant to Section
168(f)(8) of the Code (prior to its amendment by the Tax Reform
Act
of 1986) or is "tax-exempt use property" within the meaning of
Section 168(h) of the Code.
(n) The term "Tax Return," as used in this
Agreement, shall include any report, return, rendition or other
document or information required to be supplied to a federal,
state, local or foreign Taxing Authority in connection with
Taxes.
(o) The term "Affiliated Group," as used in this
Agreement, shall mean any group of corporations which heretofore
has filed or is currently filing a consolidated federal income
tax
return or a combined or consolidated tax return for state tax
purposes and of which the Company and/or any of the Subsidiaries
are or have been members.
(p) The term "Taxes," as used in this Agreement,
shall mean all taxes, charges, fees, levies or other assessments
including, without limitation, income, net worth, gross receipts,
excise, business and/or occupation, property, real property
transfer, use, service, license, payroll, franchise, sales,
withholding or employment taxes imposed by the United States or
any
state, local or foreign government or subdivision or agency
thereof
whether computed on a separate, consolidated, unitary, combined
or
any other basis, including all interest, additions, and penalties
thereon.
2.08 Title to Properties; Encumbrances.
(a) The Company or a Subsidiary has good, valid
and marketable title to all the material assets, rights and
property, real, personal or mixed, tangible or intangible, owned,
used or useful in the operations of the Company and the Subsid-
iaries, including, without limitation, (i) all the material
assets
reflected in the Company Balance Sheet (except for assets
disposed
of since December 31, 1993 by the Company and the Subsidiaries)
and
(ii) all tangible and intangible material assets, agreements,
leases, licenses, and permits used by or useful to the Company
and
the Subsidiaries which exist or are in effect as of the date
hereof
or at any time through the Closing, including the leasehold
estates
covering assets leased to the Company or the Subsidiaries and
assets acquired between the date hereof and the Closing Date free
and clear of all Liens, except (w) as set forth in Schedule 2.08
delivered by Seller to Buyer upon the execution of this
Agreement,
(x) Liens for current taxes not yet delinquent and taxes for
which
adequate provision is made in the Company Balance Sheet, (y)
statutory liens for obligations not yet due and (z) minor
imperfec-
tions of title and encumbrances, if any, which are not
substantial
in amount, do not materially detract from the value of the
property
subject thereto and do not impair the use of such properties and
assets or the business and operations of the Company and the
Subsidiaries (such Liens referred to in clauses (w), (x), (y) and
(z) of this sentence are hereinafter referred to as "Permitted
Liens").
(b) Except as set forth on Schedule 2.08, to the
knowledge of Seller, the Company's and the Subsidiaries' struc-
tures, plants and equipment are structurally sound, in good
operating condition and repair, ordinary wear and tear excepted,
and not in need of repair, other than ordinary and routine
repairs
and adjustments.
(c) Schedule 2.08 contains a list of all real
property owned by the Company or a Subsidiary and material real
property leases and subleases to which the Company or a
Subsidiary
is a party.
2.09 Inventory. The inventory of the Company and the
Subsidiaries, whether reflected in the Company Balance Sheet or
Interim Balance Sheet or otherwise, consists of a quality and
quantity usable and salable in the ordinary course of business
without discount or reduction except in the ordinary course of
business consistent with past practices and subject to normal and
customary allowances in the food wholesale and retail industry
for
spoilage, damage and outdated items. The quantities of the
Company's and the Subsidiaries' inventory are reasonable and
warranted in the present and anticipated circumstances of their
businesses. Subject to amounts reserved therefor on the Company
Balance Sheet, the values at which all inventories are carried on
the Company Balance Sheet reflect the historical inventory
valuation policy of the Company and the Subsidiaries of stating
such inventories at the lower of cost (determined as respects the
majority of the inventory on the last-in, first-out method) or
market value and all inventories are valued such that the Company
and the Subsidiaries will earn their customary gross margins
thereon. Except as set forth on Schedule 2.09 delivered by
Seller
to Buyer upon the execution of this Agreement, the Company or a
Subsidiary, as the case may be, has good and marketable title to
the inventories free and clear of all encumbrances. The invento-
ries of the Company and the Subsidiaries do not consist of, in
any
material amount, items that are obsolete, damaged or slow-moving.
The inventories reflected in the Company Balance Sheet or the
Interim Balance Sheet or in the books of account of the Company
or
the Subsidiaries do not consist of any items held on consignment.
Neither the Company nor any Subsidiary is under any obligation or
liability with respect to accepting returns of inventory or
merchandise in the possession of their customers other than in
the
ordinary course of business consistent with past practice. No
clearance or extraordinary sale of the inventories has been
conducted since December 31, 1993 other than in the ordinary
course
of business consistent with past practices. Neither the Company
nor any Subsidiary has acquired or committed to acquire inventory
for sale which is not of a quality and quantity usable in the
ordinary course of business within a reasonable period of time
and
consistent with past practice, nor has the Company or any Subsid-
iary changed the price of any inventory except for (i) price
reductions to reflect any reduction in the cost thereof to the
Company or any such Subsidiary, (ii) reductions and increases
responsive to normal competitive conditions and consistent with
the
Company's or such Subsidiary's past sales practices and (iii)
increases to reflect any increase in the cost thereof to the
Company or such Subsidiary. Schedule 2.09 is a complete list of
the addresses of all warehouses and other facilities in which the
inventories are located and the name and the chief executive
office
address of the Company or Subsidiary owning such warehouse or
other
facility. To the knowledge of Seller, the Company and the
Subsidiaries, all of the inventory of the Company and the Subsid-
iaries: (a) comply with the Federal Food, Drug and Cosmetic Act,
as
amended (the "FDA Act"), the Nutrition Labeling and Education Act
Amendments of 1993, and with the pure food and drug laws of each
of
the states of the United States into which any product would be
shipped by the Company, (b) are not adulterated or misbranded
within the meaning of the FDA Act or such state laws, (c) are not
prohibited from introduction into interstate commerce under
Section
404 or 505 of the FDA Act and (d) do not contain a misbranded
hazardous substance or a banned hazardous substance.
2.10 Receivables. Schedule 2.10, delivered by Seller
to
Buyer upon the execution of this Agreement, sets forth an aged
list
of the wholesale receivables of the Company and the Subsidiaries
as
of May 14, 1994 showing separately those trade receivables for
wholesale operations that as of such date have been outstanding
(i)
7 days or less, (ii) 8 to 14 days, (iii) 15 to 21 days, and (iv)
more than 21 days and showing separately all other miscellaneous
wholesale receivables (e.g. coupon redemptions, vendor charge
backs, etc.) that as of such date have been outstanding (i) 29
days
or less, (ii) 30 to 59 days, (iii) 60 to 89 days and (iv) more
than
89 days . Except as disclosed in Schedule 2.10 or to the extent,
if any, reserved for on the Company Balance Sheet or the Interim
Balance Sheet, all receivables reflected on the Company Balance
Sheet arose from, and the receivables existing on the Closing
Date
will have arisen from, the sale of inventory or services to
persons
not affiliated with Seller, the Company or any Subsidiary and in
the ordinary course of their business consistent with past
practice. Except as reserved against on the Company Balance
Sheet
or the Interim Balance Sheet, the receivables referred to in the
preceding sentence constitute or will constitute, as the case may
be, valid receivables, and to the knowledge of Seller such
receivables are undisputed claims of the Company or a Subsidiary
not subject to valid claims of set-off or other defenses or
counterclaims other than normal cash discounts accrued in the
ordinary course of their business consistent with past practice.
All receivables reflected on the Company Balance Sheet or arising
from the date thereof until the Closing (subject to the reserve
for
bad debts reflected on the books and records of the Company and
the
Subsidiaries as of the Closing Date plus $5 million, and except
as
disclosed in Schedule 2.10) are or will be good and have been
collected or are or will be collectible through the utilization
of
collection efforts in the ordinary course of business consistent
with past practice.
2.11 Proprietary Rights. Schedule 2.11 delivered by
Seller to Buyer upon the execution of this Agreement, contains a
complete list and an accurate description of all trademarks,
trade
names, assumed names, service marks, logos, patents, patent
applications, copyrights and copyright registrations, and all
applications therefor, inventions, trade secrets, confidential
processes and formulae, and all other similar rights (other than
customer lists) presently owned or held by the Company or any of
the Subsidiaries, or with respect to which the Company or any of
the Subsidiaries owns or holds any license or other direct or
indirect interest or with respect to which Seller holds title for
the benefit of the Company and the Subsidiaries and which are
listed as such on Schedule 2.11 (collectively, the "Proprietary
Rights"); and no other Proprietary Rights are used in or are
necessary for the conduct of the Company's and the Subsidiaries'
businesses as presently conducted. To the knowledge of Seller,
except as so designated on Schedule 2.11, no Proprietary Rights
used by the Company or any of the Subsidiaries conflict with or
infringe any similar rights of any other person in the states
where
the Company and the Subsidiaries do business. To the knowledge
of
Seller, the Company and the Subsidiaries, no claims have been
asserted by any person with respect to the ownership, validity,
license or use of the Proprietary Rights by the Company or any of
the Subsidiaries, and, to the knowledge of Seller, the Company
and
the Subsidiaries, there is no basis for any such claim. The
consummation of the transactions contemplated hereby will not
alter
or impair any of the Proprietary Rights. Except as set forth on
Schedule 2.11, Seller does not know of any reasonable basis for
the
denial of any pending applications to register trademarks,
service
marks or copyrights or any pending patent applications from being
granted.
2.12 Litigation. Except as set forth in Part I of
Schedule 2.12 (which, with respect to each item of Litigation (as
herein defined) disclosed herein, sets forth the parties, nature
of
the proceeding, date and method commenced, amount of damages or
other relief sought, and if applicable, paid or granted)
delivered
by Seller to Buyer upon the execution of this Agreement, none of
the Litigation which is not Insured (as herein defined) would, if
determined adversely to the Company or the Subsidiaries, as the
case may be, individually or in the aggregate, have a material
adverse effect on the business, financial position or results or
operations of the Company or any of the Major Subsidiaries. To
Seller's knowledge, Part II of Schedule 2.12 lists all Litigation
with respect to the Company and the Subsidiaries that is not
Insured. Part III of Schedule 2.12 lists all Litigation with
respect to the Company and the Subsidiaries that is Insured.
Except as set forth on Schedule 2.12, to the knowledge of Seller,
there is no valid basis for any Litigation not described on
Schedule 2.12. As used herein, the term "Litigation" shall mean
any claims, actions, suits, proceedings, arbitrations or
investiga-
tions pending or, to the knowledge of Seller, threatened, by or
against the Company or any of the Subsidiaries or any properties
or
rights of any of them before any court, arbitrator or administr-
ative, governmental or regulatory body. As used herein, the term
"Insured" when used with respect to any Litigation shall mean
Litigation covered by the policies listed on Schedule 2.13 and
described in Section 2.13 below or any policies covering earlier
periods, without regard to whether amounts incurred for legal
fees
and expenses and amounts incurred for indemnity with respect to
any
Litigation falls within the deductibles or self-insured
retentions
under any of the policies and without regard to whether any such
amounts incurred are otherwise charged back to Seller, the
Company
or the Subsidiaries in any manner or to any extent by any insurer
under any such policies.
2.13 Insurance. (a) Schedule 2.13 delivered by
Seller
to Buyer upon the execution of this Agreement, sets forth a
complete description (name of the insurer, policy number,
premiums,
type of insurance, etc.) with respect to all policies of fire,
liability, product liability, worker's compensation, health,
property, casualty and bond and surety arrangements and other
forms
of insurance presently in effect with respect to the Company and
the Subsidiaries (true and complete copies of policies with
respect
to the Company and the Subsidiaries have heretofore been
delivered
to Buyer) under which the Company or any Subsidiary has been an
insured, a named insured or otherwise the principal beneficiary
of
coverage at any time within the past three years.
(b) With respect to each insurance policy: (i)
the
policy is legal, valid, binding and enforceable in accordance
with
its terms and, except for policies that have expired under their
terms in the ordinary course, is in full force and effect; (ii)
neither the Company nor any Subsidiary is in breach or default
(including any breach or default with respect to the payment of
premiums or the giving of notice), and no event has occurred
which,
with notice or the lapse of time, would constitute such a breach
or
default or permit termination or modification, under the policy;
and (iii) no party to the policy has repudiated, or given notice
of
an intent to repudiate, any provision thereof.
(c) No insurance policy listed on Schedule 2.13
will cease to be legal, valid, binding, enforceable in accordance
with its terms and in full force and effect on terms identical to
those in effect as of the date hereof as a result of the consum-
mation of the transactions contemplated by this Agreement.
2.14 Employee Benefit Plans. Except as otherwise set
forth on Schedule 2.14 delivered by Seller to Buyer upon the
execution of this Agreement:
(a) The Company and the Subsidiaries do not
currently sponsor, maintain or participate in and are not
required
to contribute to any employee benefit plan, as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974 as
amended ("ERISA"), any multiemployer plan ("Multiemployer
Plans")as
defined in Section 3(37)(A) or (D) of ERISA, any incentive
compensation plan, bonus plan, deferred compensation agreement or
arrangement, stock option, stock bonus and stock purchase plan or
to any other employee benefit plan (whether or not subject to
ERISA), program or arrangement of any kind whatsoever which
provides or is obligated to provide any kind of benefit (such
plans, benefit programs and agreements (excluding Multiemployer
Plans) are collectively referred to herein as the "Benefit
Plans").
For the purpose of this Section 2.14, references to the Company
and
its Subsidiaries shall also include any entity affiliated with
the
Company or its Subsidiaries under Sections 414(b), (c) or (m) of
the Code or Section 4001(b)(1) of ERISA (excluding any foreign
affiliate of the Company).
(b) All material obligations of the Company and
the Subsidiaries, whether arising by operation of law, by
contract
or by past custom, for payments to trusts or other funds or to
any
governmental agency or to any Benefit Plans or Multiemployer
Plans
have been paid, or adequate accruals for such payments have been
made by the Company and the Subsidiaries on their respective
books
of account as of December 31, 1993 and prior to June 11, 1994,
except accruals for such payments attributable solely to events
occurring subsequent to December 31, 1993, all of which material
accruals will have been made by the Company and each Subsidiary
on
its books of account as of June 11, 1994.
(c) All reports relating to the Benefit Plans
required to be filed with or furnished to any governmental body,
agency or court, and to the knowledge of Seller, the Company or
the
Subsidiaries to the participants or beneficiaries prior to the
date
hereof have been timely filed or furnished in accordance with
applicable law.
(d) There are no actions, suits or claims
pending
(other than routine claims for benefits), or to the knowledge of
the Company and its Subsidiaries , threatened against any of the
Benefit Plans or against the assets of any of such Benefit Plans.
(e) The Benefit Plans and related trust agree-
ments, if any, are valid and in full force and effect. Other
than
in respect of qualification requirements still subject to the
remedial amendment period under Section 401(b) of the Code, the
Internal Revenue Service has issued a favorable determination
with
respect to each Benefit Plan (and all amendments thereto) which
may
be and is intended to be qualified under Section 401(a) of the
Code
and no event has occurred since such favorable determinations
which, to the knowledge of the Company or its Subsidiaries,
adversely affects any such prior determination.
(f) Each Benefit Plan which is a "welfare
benefit
plan" (as defined in Section (3)(1) of ERISA) is either (i)
unfunded or (ii) funded through insurance contracts.
(g) Neither the Company nor any Subsidiary
participates in any Multiemployer Plan or in any employee Benefit
Plan which provides health and welfare benefits, and based upon
information provided to the Company by the applicable
Multiemployer
Plan sponsors, neither the Company nor any Subsidiary has as of
the
respective dates of the information provided, any withdrawal
liability with respect to any such Benefit Plan or Multiemployer
Plan and neither the Seller, the Company nor any Subsidiary has
any
knowledge that would render such representation inaccurate.
Neither the Company, Scrivner, nor any of the Subsidiaries has
committed any act or acts prior to Closing which has effected, or
could be reasonably expected to effect a partial or complete
withdrawal as such terms are defined under ERISA from any Multi-
employer Plan or Benefit Plan.
(h) Neither the Company nor any Subsidiary (i)
has
experienced any reportable event within the meaning of ERISA or
other event or condition which presents a material risk of the
termination of any pension Benefit Plan by the Pension Benefit
Guaranty Corporation ("PBGC"); (ii) has had any tax imposed on it
by the Internal Revenue Service for any violation under Section
4975 of the Code; or (iii) has engaged in any transaction which
could reasonably be expected to subject the Company or any of the
Subsidiaries or any such Benefit Plan to any liability for any
such
tax under Section 4975 of the Code.
(i) The terms of all Benefit Plans comply
substantially with ERISA, the Code and all applicable statutes,
orders or governmental rules and regulations. None of the
Benefit
Plans, nor any trust created thereunder has engaged in any non-
exempt material "prohibited transaction" as such term is defined
in
Section 4975 of the Internal Revenue Code and Section 406 of
ERISA
which involves the Company or any of its Subsidiaries.
(j) As to each Benefit Plan for which an Annual
Report (IRS Form 5500), including schedules, was filed by the
Company or any of the Subsidiaries under ERISA or the Code, no
material liabilities with respect to any such Benefit Plan
existed
on the date of the financial statements contained in the most
recent Annual Report except as disclosed therein, and no material
adverse change has occurred with respect to the financial state-
ments covered by such Annual Report since the date thereof.
(k) To the knowledge of the Company, there is no
issue relating to any Benefit Plan maintained or established for
employees of the Company or the Subsidiaries which is pending
before the Internal Revenue Service, the Department of Labor or
any
other governmental agency or court.
(l) As of the last day of the last plan year for
which the Company has received such information, the aggregate
fair
market value of the assets of the Benefit Plans which are defined
benefit pension plans under ERISA (excluding for these purposes
any
accrued but unpaid contributions) equalled or exceeded the
present
value of all benefits accrued under such employee pension plans
determined on an ongoing basis and on a termination basis using
the
assumptions established by the PBGC as in effect on such date.
(m) As to any Benefit Plan subject to Title IV
of
ERISA, (i) there has been no event or condition that presents the
risk of termination of any such Benefit Plan, (ii) no accumulated
funding deficiency, whether or not waived, within the meaning of
Section 302 of ERISA or Section 412 of the Code has been
incurred,
(iii) no reportable event within the meaning of Section 4043 of
ERISA (for which the disclosure requirements of Regulation Section
2615.3
promulgated by the PBGC have not been waived) has occurred, (iv)
no
notice of intent to terminate the Benefit Plan has been given
under
Section 4041 of ERISA, (v) no proceeding has been instituted
under
Section 4042 of ERISA to terminate any such Benefit Plan, (vi) no
liability to the PBGC has been incurred (other than PBGC
insurance
premiums), and, (vii) as to any such Benefit Plan intended to be
qualified under Section 401 of the Code, to the knowledge of the
Company there has been no termination or partial termination of
any
such Benefit Plan within the meaning of Section 411(d)(3) of the
Code.
(n) To the knowledge of the Company, no act,
omission or transaction has occurred which could result in
imposition on the Company or its Subsidiaries of (i) a breach of
fiduciary duty liability under Section 409 of ERISA, or (ii) a
civil penalty assessed pursuant to subsections (c), (i) or (l) of
Section 502 of ERISA.
(o) There have been no payments made or agree-
ments entered into with respect to any individual employed by the
Company or any Subsidiary which as a result of this transaction
would result in the imposition of the sanctions imposed under
Sections 280G and 4999 of the Code.
(p) Neither the Company nor any Subsidiary has
any
liabilities or other obligations, whether actual or contingent,
with respect to the Benefit Plans, including, without limitation,
liability for post-retirement medical benefits, post-retirement
life insurance benefits or severance benefits excluding routine
premiums due under any Benefit Plan that is an employee welfare
benefit plan as defined in Section 3(l) of ERISA.
(q) Seller has listed in Schedule 2.14 and made
available to Buyer, or will make available to Buyer prior to the
Closing, true, complete and correct copies of (i) all Benefit
Plans
(including amendments), (ii) all summary plan descriptions
(whether
or not required to be furnished under ERISA), (iii) all latest
Annual Report forms filed with respect to any such employee
benefit
plan, (iv) substantially all former employees who have elected as
of June 1, 1994 COBRA continuation coverage, and (v) the most
recent actuarial valuation and determination letters received
from
the Internal Revenue Service with respect to any such Benefit
Plan.
(r) Neither the Company nor any of its
Subsidiar-
ies is a party to any written or oral deferred or incentive
compensation, employment, severance, consulting or other similar
contract, arrangement or policy or labor contracts or collective
bargaining agreements relating to its employees which would
result
in any material adverse effect on the Company or any of its Major
Subsidiaries.
2.15 Contracts and Commitments. Except as set forth
in
Schedule 2.15 delivered by Seller to Buyer upon the execution of
this Agreement:
(a) Neither the Company nor any of the Subsid-
iaries is a party to any contract, commitment, arrangement or
understanding, written or oral, which (i) involves payments or
the
disbursements of money by or to the Company or the Subsidiaries
in
excess of $250,000 that is not cancelable on thirty (30) days
notice with other than a nominal penalty, (ii) has a duration of
twelve (12) months or more and involves transfers by or to the
Company or the Subsidiaries in excess of $25,000 per annum, (iii)
is a financing document, loan agreement, repurchase agreement,
credit accommodation (other than accounts receivable or accounts
payable resulting from the purchase or sale of inventory and
customer financing documents, in each case incurred and entered
into in the ordinary course of business and consistent with past
practices provided, however all loans or other extensions of
credit
to customers shall not be excluded) or agreement providing for
the
guarantee of the obligations of any party other than the Company
or
a Subsidiary, (iv) requires the purchase or sale of a required
amount of product not terminable on thirty (30) days or less
notice
with other than a nominal penalty or (v) involves both (A) the
Company or the Subsidiaries and (B) Seller or its affiliates
(other
than the Company and the Subsidiaries);
(b) Subject to obtaining any requisite consents
of
third parties as specified in Section 2.03 hereof, the legal
enforceability of the contracts, commitments, arrangements and
understandings referred to in Section 2.15(a) hereof (the "Con-
tracts") after the Closing will not be affected in any manner by
the execution and delivery of this Agreement or the consummation
of
the transactions contemplated hereby;
(c) No purchase commitment of the Company or any
of the Subsidiaries, or by which the Company or any of the
Subsidiaries is bound, is in excess of the normal, ordinary and
usual requirements of the Company and the Subsidiaries;
(d) Neither the Company nor any of the Subsid-
iaries is a party to or bound by (i) any outstanding contracts
with
officers, employees, agents, consultants, advisors, salesmen,
sales
representatives, distributors or dealers that are not cancelable
by
the Company or any of the Subsidiaries, as the case may be, on
notice of not longer than thirty (30) days and without liability,
penalty or premium or (ii) any agreements that contain any
severance or termination pay, liabilities or obligations or
change
of control provisions; and
(e) True and correct copies of all written
contracts, commitments, arrangements and understandings set forth
in Schedule 2.15 and true and correct summaries of all unwritten
contracts, commitments, arrangements and understandings set forth
in Schedule 2.15 have heretofore been delivered by or made
available to Buyer by Seller or the Company.
2.16 Labor Relations. Except as and to the extent set
forth in Schedule 2.16 delivered by Seller to Buyer upon the
execution of this Agreement:
(a) no collective bargaining agreement presently
covers (nor has any, in the past five years), covered, any
employees of the Company or any of the Subsidiaries, nor is any
currently being negotiated by the Company or any of the
Subsidiar-
ies and, to the knowledge of Seller, the Company and the
Subsidiar-
ies, no attempt to organize any group or all of the employees of
the Company or any of the Subsidiaries has been made or proposed
and is currently outstanding;
(b) to the knowledge of Seller there are no
controversies (other than controversies in respect of labor
contract negotiations arising in the ordinary course of
business),
strikes, slowdowns or work stoppages (other than isolated
individu-
al cases) pending or, to the knowledge of Seller, threatened
between the Company or any Subsidiary and any of their respective
employees, and neither the Company nor any Subsidiary has experi-
enced such controversy, strike, slowdown or work stoppage within
the past three years;
(c) neither the Company nor any Subsidiary has
breached or otherwise failed to comply with the material
provisions
of any collective bargaining or union contract and, to the
knowledge of Seller, there are no grievances outstanding against
the Company or any Subsidiary under any such agreement or
contract
which could reasonably be expected to have a material adverse
effect upon the Company, the Major Subsidiaries or their
business-
es;
(d) there are no unfair labor practice
complaints
pending against the Company or any Subsidiary before the National
Labor Relations Board or any Governmental Authority or any
current
union representation questions involving employees of the Company
or any Subsidiary which could have a material adverse effect upon
the Company, the Major Subsidiaries or their businesses;
(e) to the knowledge of Seller, the Company and
each Subsidiary is currently substantially in compliance with all
applicable Laws relating to the employment of labor, including
those related to wages, hours, collective bargaining and the
payment and withholding of taxes and other sums as required by
the
appropriate Governmental Authority and has withheld and paid to
the
appropriate Governmental Authority or is holding for payment not
yet due to such Governmental Authority all amounts required to be
withheld from employees of the Company or any Subsidiary and is
not
liable for any arrears of wages, taxes, penalties or other sums
for
failure to comply with any of the foregoing;
(f) the Company and each Subsidiary has paid in
full to all their respective employees or adequately accrued for
in
accordance with GAAP all wages, salaries, commissions, bonuses,
benefits and other compensation due to or on behalf of such
employees;
(g) there is no claim with respect to payment of
wages, salary or overtime pay that has been asserted and is now
pending or, to the knowledge of Seller, threatened before any
Governmental Authority with respect to any persons currently or
formerly employed by the Company or any Subsidiary;
(h) neither the Company nor any Subsidiary is a
party to, or otherwise bound by, any consent decree with, or
citation by, any Governmental Authority relating to employees or
employment practices;
(i) there is no charge or proceeding with
respect
to a violation of any occupational safety or health standards
that
has been asserted and is now pending or, to the knowledge of
Seller, threatened with respect to the Company or any Subsidiary;
and
(j) there is no charge of discrimination in
employment or employment practices, for any reason, including,
without limitation, age, gender, race, religion or other legally
protected category, which has been asserted and is now pending
or,
to the knowledge of Seller, threatened before the United States
Equal Employment Opportunity Commission, or any other
Governmental
Authority in any jurisdiction in which the Company or any Subsid-
iary has employed or currently employs any person.
2.17 No Breach. Each Contract is, except as specifi-
cally indicated herein or in Schedule 2.17 delivered by Seller to
Buyer upon the execution of this Agreement describing such
arrange-
ment, in full force and effect in all material respects. Except
as
specified in Schedule 2.17, there are no outstanding disputes
under
the Contracts, or, to the knowledge of Seller, the Company and
the
Subsidiaries, threatened cancellations of the Contracts and
neither
the Company nor any of the Subsidiaries has breached any
provision
of, nor does there exist any default in any material respect of,
or
event (including the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby) which
with the giving of notice or the passage of time or both would
become a breach or default in any material respect of, the terms
of
any Contract by the Company and the Subsidiaries except for such
breaches and defaults as would not, in the aggregate, have a
material adverse effect on the business, operations or financial
position of the Company or any of the Major Subsidiaries.
2.18 Compliance with Applicable Law. Except as set
forth in Schedule 2.18 delivered by Seller to Buyer upon the
execution of this Agreement, the Company and the Subsidiaries
have
in the past five years duly complied, and are presently duly
complying, in all material respects, with respect to each of
their
operations, real property, equipment and all other property,
leases, practices and all other aspects of each of their busi-
nesses, with all applicable laws (whether statutory or
otherwise),
rules, regulations, orders, ordinances, judgments or decrees of
all
governmental authorities (federal, state, local, foreign or
otherwise) (collectively, "Laws"), including, without limitation,
the Federal Occupational Safety and Health Act, ERISA, the
Americans With Disabilities Act of 1990, the Civil Rights Act of
1991 and all Laws relating to the safe conduct of business and
all
Laws relating to environmental protection and conservation.
Except
as described in Schedule 2.18, none of Seller, the Company or any
of the Subsidiaries has, in the past five years, received any
notification of any asserted present or past failure of the
Company
or any of the Subsidiaries to comply with any of such Laws except
for such failures as would not have a material adverse effect on
the business, operations or financial position of the Company and
the Subsidiaries taken as a whole.
2.19 Hazardous Material. (a) Except as set forth in
Schedule 2.19 delivered by Seller to Buyer upon the execution of
this Agreement, (i) any handling, transportation, storage,
treatment or usage of Hazardous Material (as defined below) that
has occurred on any tract of real property owned by the Company
or
any Subsidiary or real property covered by any real property
lease
to which the Company or a Subsidiary is a party, has been in
compliance with all applicable laws relating to the protection of
the environment (including without limitation, ambient air and
surface and subsurface soil and water), natural resources,
wildlife
or human health (the "Environmental Laws"), (ii) no leak, spill,
release, discharge, emission or disposal of any Hazardous
Material
has occurred on any such tract which would subject the property
to
remedial action under any Environmental Laws, (iii) each such
tract
is in substantial compliance with applicable Environmental Laws,
and (iv) each underground storage tank located on any such tract,
has been registered, maintained and operated in accordance with
all
applicable Environmental Laws. Schedule 2.19 lists and Seller
has
provided Buyer with full, accurate and complete copies of any and
all reports, studies, tests and other information in its
possession
or in the possession of the Company or any Subsidiary relating to
the presence or suspected presence of any Hazardous Material on
any
such tract or relating to the existence of any underground
storage
tank thereon and agrees that it will, promptly following its or
the
Company's or any Subsidiary's receipt thereof, furnish to Buyer
full, accurate and complete copies of any such reports, studies,
tests and other information hereafter obtained by Seller or the
Company or any Subsidiary on or prior to the Closing Date.
"Hazardous Material" means asbestos, petroleum (including without
limitation, oil, used oil, waste oil, gasoline, diesel and
petroleum based fuels), petroleum products and by-products,
petroleum wastes, petroleum contaminated soils, and any
substance,
material or waste which is regulated as "hazardous", "toxic" or
under any other similar designation by any local, state or
federal
governmental authority. Such term includes, without limitation,
(i) any material, substance or waste defined as a "hazardous
waste"
pursuant to Section 1004 of the Resource Conservation and
Recovery
Act (42 U.S.C. Section 6901, et seq.) ("RCRA"), (ii) any material,
substance or waste defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response Compensa-
tion and Liability Act (42 U.S.C. Section 9601, et seq.) ("CERCLA") or
(iii) any material, substance or waste defined as a "regulated
sub-
stance" pursuant to Subchapter IX of the Solid Waste Disposal Act
(42 U.S.C. Section 6991, et seq.).
(b) Except as disclosed in Schedule 2.19 (i)
Hazardous Materials have not been generated, used, treated,
handled
or stored on, or transported to or from, or released or disposed
on
or from any tract of real property owned by the Company or any
Subsidiary or any real property covered by any real property
lease
to which the Company or a Subsidiary is a party in violation of
any
Environmental Law, or, to the knowledge of Seller, any property
adjoining any such tract; (ii) the Company and the Subsidiaries
have disposed of all wastes, including those wastes containing
Hazardous Materials, in compliance with all applicable
Environmen-
tal Laws and Permits; (iii) there are no past, pending or, to the
knowledge of Seller, threatened actions against the Company or
any
Subsidiary relating to compliance with Environmental Laws or
asserting damages or injury to natural resources, wildlife or the
environment; (iv) no such tract or, to the knowledge of Seller,
any
property adjoining such tract, is listed or proposed for listing
on
the National Priorities List under CERCLA or on the Comprehensive
Environmental Response, Compensation and Liability Act
Information
System ("CERCLIS"), the Facility Index System ("FINDS"), RCRA,
Hazardous Waste Registrations Listing Report ; and (v) to the
knowledge of Seller, neither the Company nor any Subsidiary has
transported or arranged for the transportation of any Hazardous
Materials to any location that is listed or proposed for listing
on
the National Priorities List under CERCLA or on the CERCLIS or
FINDS or which is the subject of any environmental claim.
(c) Schedule 2.19 also contains a list of all
underground storage tanks including the street address and owner
thereof located on real property owned or leased by the Company
or
any of the Subsidiaries.
2.20 Assets Necessary to Business. Except as set
forth
in Schedule 2.20 delivered by Seller to Buyer upon the execution
of
this Agreement, the Company and each of the Subsidiaries has
good,
valid and marketable title to all properties and assets, real,
personal and mixed, tangible and intangible, individually or in
the
aggregate material to the operation of their respective
businesses,
and is a party to all leases, licenses and other agreements, and
holds such authorizations, permits and approvals of Governmental
Agencies and other third parties, as is reasonably necessary to
permit it lawfully to carry on its businesses as presently
conducted, and, upon the Closing, the Company and the
Subsidiaries
will have all such assets and rights necessary to conduct their
respective businesses substantially as conducted immediately
prior
to Closing. Except as set forth in Schedule 2.20, there is no
material usage by either the Company or any of the Subsidiaries
of
any assets, operations, services or personnel of Seller or any
affiliate of Seller and there is no material usage by Seller or
any
affiliate of Seller (other than the Company and the Subsidiaries)
of the assets, operations, services or personnel of the Company
or
any of the Subsidiaries.
2.21 Disclosure. No representation or warranty made
to
Buyer contained in this Agreement, and no statement contained in
any of the Schedules or any certificate, document or instrument
delivered by Seller, the Company or any Subsidiary pursuant
hereto
contains any untrue statement of a material fact or omits to
state
a material fact, necessary in order to make the statements
contained herein or therein, in light of the circumstances under
which they were made, not misleading.
2.22 Brokers. Other than the arrangement among
Seller,
the Company and J.P. Morgan Securities, Incorporated ("J.P.
Morgan"), neither the Seller nor any affiliate of the Seller
including the Company and Scrivner have entered into or will
enter
into any agreement, arrangement or understanding with any person
or
firm which will result in the obligation of Buyer or the Company,
Scrivner or any of their respective Subsidiaries to pay any
finder's fee, brokerage commission or similar payment in
connection
with the transactions contemplated hereby. The parties hereby
acknowledge the arrangement with respect to the transaction
contemplated by this Agreement between the Seller, the Company
and
J.P. Morgan, with respect to which all fees due J.P. Morgan will
be
paid by the Company or Scrivner.
2.23 Note Sales/Purchase Program. The execution and
delivery of this Agreement and the performance of the terms and
provisions hereof by Seller will not cause Company or Scrivner to
breach any of the agreements governing the Company's Note Sales/
Purchase Program.
2.24 Corporate Books and Records. The minute books of
the Company and the Subsidiaries contain accurate records in all
material respects of all meetings and accurately reflect in all
material respects all other actions taken by the stockholders,
Boards of Directors and all committees of the Boards of Directors
of the Company and the Subsidiaries. Complete and accurate
copies
of all such minute books and of the stock register of the Company
and each Subsidiary have been made available by Seller to Buyer.
2.25 Environmental and Other Permits. (a) Except as
disclosed on Schedule 2.25 delivered by Seller to Buyer upon the
execution of this Agreement, the Company and the Subsidiaries
currently hold all the health and safety, environmental and other
permits, licenses, authorizations, certificates, exemptions and
approvals of Governmental Authorities including without
limitation,
those issued under Environmental Laws (collectively, "Permits"),
necessary or proper for the current use, occupancy and operation
of
each material asset of the Company and the Subsidiaries and the
conduct of their business, and all such Permits are in full force
and effect. To the knowledge of Seller, none of Seller, the
Company or any Subsidiary has received any notice from any
Governmental Authority revoking, cancelling, rescinding,
materially
modifying or refusing to renew any Permit or providing written
notice of violations under any Environmental Law. Except as
disclosed on Schedule 2.25, the Company and each Subsidiary is in
all material respects in compliance with the Permits and the
requirements of the Permits. Schedule 2.25 identifies all
Permits
which will require the consent of any Governmental Authority in
the
event of the consummation of the transactions contemplated by
this
Agreement.
2.26 Customers. Listed on Schedule 2.26, delivered by
Seller to Buyer upon the execution of this Agreement, are the
names
and addresses of the ten most significant independent customers
(by
revenue) of the Company and the Subsidiaries considered as a
whole
for the twelve-month period ended May 14, 1994 and the amount for
which each such customer was invoiced during such period. Except
as disclosed on Schedule 2.26, none of Seller, the Company or any
Subsidiary has received any written notice, nor to the knowledge
of
Seller, is there any reason to believe that any of such customers
has since May 14, 1994 ceased, or will in the reasonably foresee-
able future cease, to use the products or services of the Company
or any Subsidiary, or has since May 14, 1994 substantially
reduced,
or will in the reasonably foreseeable future substantially
reduce,
the use of such products or services.
2.27 Key Employees. Schedule 2.27, delivered by
Seller
to Buyer upon the execution of this Agreement, lists the name,
place of employment, the current annual salary rates, bonuses,
deferred or contingent compensation, pension, accrued vacation,
"golden parachute" (as defined in Section 280G of the Code) and
other like benefits paid or payable (in cash or otherwise) in
1993
and 1994, the date of employment and a description of position
and
job function of each current salaried employee, officer, director
or consultant of the Company or any Subsidiary whose annual
compensation exceeded (or, in 1994, is expected to exceed)
$100,000.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as
follows:
3.01 Organization. Buyer is a corporation duly
organized, validly existing and in good standing under the laws
of
the State of Oklahoma. Buyer has the corporate power and
authority
to enter into this Agreement and to consummate the transactions
contemplated hereby.
3.02 Authorization. Buyer has duly authorized the
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby. No further corporate
actions
on the part of Buyer are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby.
3.03 Valid and Binding Agreement. This Agreement
constitutes a valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms subject to applicable
bankruptcy, reorganization, insolvency, moratorium, and similar
laws affecting creditors' rights generally from time to time in
effect and to general principles of equity.
3.04 No Violation. Except for compliance with the
notice filing requirements of the HSR Act which have been satis-
fied, neither the execution and delivery of this Agreement nor
the
consummation by Buyer of the transactions contemplated hereby
will
(a) violate or conflict with any Law applicable to Buyer or by
which any of its properties may be bound or affected, or (b)
violate or conflict with any provisions of the Certificate of
Incorporation or By-Laws of Buyer. Except for compliance with
the
notice filing requirements of the HSR Act which have been satis-
fied, no filing with, notification to, and no permit, consent,
approval, authorization or action by, any Governmental Agency is
required in connection with the execution, delivery and
performance
by Buyer of this Agreement or the consummation by Buyer of the
transactions contemplated hereby except where the failure to make
such filing, give notice to or obtain such permit, consent,
approval, authorization or action would not have a material
adverse
effect on the Buyer and its material subsidiaries taken as a
whole,
or prevent or delay the consummation of the transactions contem-
plated hereby. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will constitute a tortious interference by Seller with any
contract or business relationship to which Buyer is a party.
3.05 Disclosure. No representation or warranty made
to
Seller contained in this Agreement, and no statement contained in
any certificate, document or instrument delivered by Buyer,
pursuant hereto contains any untrue statement of a material fact
or
omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circum-
stances under which they were made, not misleading.
3.06 Purchase for Investment. Buyer is purchasing the
Shares for investment and not with a view toward distribution,
except in compliance with applicable securities laws.
3.07 Brokers. Other than the arrangement between
Buyer
and Merrill Lynch & Co. ("Merrill Lynch"), neither Buyer nor any
affiliate of Buyer has entered into or will enter into any
agreement, arrangement or understanding with any person or firm
which will result in the obligation of Seller or any affiliate of
Seller to pay any finder's fee, brokerage commission or similar
payment in connection with the transactions contemplated hereby.
The parties hereby acknowledge the arrangement with respect to
this
transaction between Buyer and Merrill Lynch, with respect to
which
all fees due Merrill Lynch will be paid by Buyer.
ARTICLE IV
CERTAIN OBLIGATIONS OF THE PARTIES
4.01 Conduct of Business Pending the Closing. Seller
agrees that, except as provided in Schedule 4.01 delivered by
Seller to Buyer upon the execution of this Agreement, from the
date
hereof until the Closing, unless otherwise consented to by Buyer
in
writing:
Seller will cause the Company and each of the Subsid-
iaries to conduct their respective businesses in the ordinary
course and consistent with past practice. Seller will cause the
Company and each of the Subsidiaries to use commercially
reasonable
efforts to preserve intact their business, operations, organiza-
tion, goodwill and work force in a manner consistent with past
practices. Without limiting the generality of the foregoing, and
except as otherwise expressly provided in this Agreement or as
set
forth on a Schedule or with the prior written consent of Buyer,
from the date hereof to the Closing, Seller will not permit the
Company or any of the Subsidiaries to:
(a) Incur any obligations or liabilities
(whether
absolute, accrued, contingent or otherwise and whether due or to
become due), except items incurred in the ordinary course of
business and consistent with past practice.
(b) Pay, discharge or satisfy any Lien or
liability (whether absolute, accrued, contingent or otherwise and
whether due or to become due), other than Liens or liabilities
discharged or satisfied in the ordinary course of business and
consistent with past practices.
(c) Permit or allow any of the properties or
assets (whether real, personal or mixed, tangible or intangible)
of
the Company or any of the Subsidiaries to be mortgaged, pledged
or
subjected to any lien, encumbrance, restriction or charge of any
kind except Permitted Liens.
(d) Write off as uncollectible any of its notes
or
accounts receivable or any portion thereof, except for write offs
in the ordinary course of business, consistent with past practice
and at a rate and amount no greater than during the twelve months
ended December 31, 1993.
(e) Cancel or release any other debts or claims,
or waive any rights of value in excess of $100,000, or sell,
transfer or convey any of the properties or assets (whether real,
personal or mixed, tangible or intangible) of the Company or any
of
the Subsidiaries, except in the ordinary course of business and
consistent with past practice.
(f) Dispose of, permit to lapse, or otherwise
fail
to preserve any material Proprietary Rights (except for any right
not by its terms renewable), dispose of or permit to lapse any
material license, permit or other form of authorization (except
for
any such licenses, permits or other authorizations not by its
terms
renewable), dispose of or disclose to any person, other than
authorized representatives of Buyer, any trade secret, formula,
process or know-how or dispose of or fail to use its best efforts
not to disclose to any person, other than authorized representa-
tives of Buyer, any customer list.
(g) Grant any increase in the compensation of
any
director, officer or employee of the Company or any of the
Subsidiaries (including, without limitation, any increase
pursuant
to any bonus, pension, profit sharing or other plan or
commitment),
institute or adopt any new Plan for directors, officers or
employees of the Company or any of the Subsidiaries, or modify,
amend or terminate any existing Plan other than increases in the
ordinary course of business, consistent with past practice or as
required by law or agreements in effect on the date hereof.
(h) Make any pension, retirement, profit
sharing,
bonus, severance or other employee welfare or benefit payment to
any officer or employee of the Company or any of the
Subsidiaries,
except in the ordinary course of business and consistent with
past
practice or as required by law or agreements in effect on the
date
hereof.
(i) Declare, pay or make, or set aside for
payment
or making, any dividend or other distribution in respect of the
capital stock of the Company or any of the Subsidiaries (other
than
to the Company or any of its Subsidiaries), or directly or
indirectly redeem, purchase or otherwise acquire any of their
capital stock or other securities.
(j) Issue, authorize, or propose the issuance of
any shares of the capital stock of the Company or any of the
Subsidiaries or securities convertible into, or rights, warrants
or
options to acquire, any such shares or other convertible securi-
ties.
(k) Make any capital expenditure or commitment
for
capital expenditures which individually per item exceeds $75,000
or
in the aggregate exceeds $500,000, for replacements or additions
to
property, plant, equipment or intangible capital assets.
(l) Make any change in any method of financial
or
tax accounting or accounting practice for financial or tax
accounting purposes (except as required by Law and disclosed in
writing to Buyer), or permit any change in any assumptions
underlying or methods of calculating any bad debt, contingency or
other reserves.
(m) Pay, loan or advance any amount to or in
respect of, or sell, transfer or lease any properties, assets
(whether real, personal or mixed, tangible or intangible) or
services to, or enter into any agreement, arrangement or transac-
tion with, Seller, any of the officers or directors of Seller,
the
Company or any of the Subsidiaries, any affiliate or associate of
Seller, the Company or any of the Subsidiaries or of any of
Seller's or the Company's or any Subsidiaries officers or direc-
tors, or any business or entity in which Seller, the Company or
any
of the Subsidiaries, any officer or director of Seller, the
Company
or any of the Subsidiaries, or any affiliate or associate of any
such persons, has any direct or indirect interest, except for (A)
directors' fees and compensation to officers and employees of the
Company or any of the Subsidiaries at rates not exceeding the
rates
of compensation in effect as of the date hereof (as may be
adjusted
in accordance with Section 4.01(f) hereof), or (B) advances made
to
employees of the Company and Subsidiaries for travel and other
business expenses in reasonable amounts consistent with past
practice or (C) transactions pursuant to agreements disclosed in
Schedule 2.15.
(n) Enter into any lease of real or personal
property involving the annual expenditure of more than $50,000,
individually, or $200,000, in the aggregate.
(o) Terminate or amend or suffer the termination
or amendment of, or fail to perform in all material respects all
of
its obligations or suffer or permit any default to exist, under
any
contract, lease, agreement or license except for defaults and
failures to perform obligations which would not, in the
aggregate,
have a material adverse effect on the business operations or
financial position of the Company or any of the Major
Subsidiaries.
(p) (i) Discontinue its advertising and
promotion-
al activities or its pricing and purchasing policies, in either
case in any material respect; (ii) shorten or lengthen the
customary payment cycles for any of its payables or receivables;
(iii) exercise any rights of renewal pursuant to the terms of any
of the leases or subleases set forth on Schedule 2.08 which by
their terms would otherwise expire except only after notice to
Buyer and receipt of Buyer's prior written approval (which
approval
shall not be unreasonable withheld or delayed); and (iv) engage
in
any practice, take any action, fail to take any action or enter
into any transaction which could reasonably be expected to cause
any representation or warranty made by Seller to be untrue or
result in a breach of any covenant made by Seller in this Agree-
ment.
(q) Agree, whether in writing or otherwise, to
take any action prohibited in this Section 4.01.
4.02 Other Obligations of Seller Pending the Closing.
Seller agrees that from the date hereof until the Closing, unless
otherwise consented to by Buyer in writing:
(a) Access. Seller will, and will cause the
Company and the Subsidiaries to, permit Buyer, its agents,
financial advisors and attorneys and their representatives (the
"Buyer's Representatives") and Buyer's financing sources (the
"Buyer's Banks") full access, during normal business hours,
throughout the period prior to the Closing, to all of Seller's
(to
the extent solely related to the Company and the Subsidiaries),
the
Company's and the Subsidiaries' officers, directors, employees,
agents, accountants and counsel who have any knowledge relating
to
the Company or any Subsidiary or their business, property, books,
contracts, commitments and records and will furnish Buyer, the
Buyer's Representatives and the Buyer's Banks during such period
with all information concerning Seller's (to the extent solely
related to the Company and the Subsidiaries), the Company's and
the
Subsidiaries' businesses and their operations, assets,
liabilities
and prospects as Buyer, the Buyer's Representatives, and the
Buyer's Banks may reasonably request. Pending the Closing, Buyer
agrees to keep all such information confidential except that
Buyer
may deliver and disclose the same to Buyer's Representatives and
the Buyer's Banks, and to instruct Buyer's Representatives and
the
Buyer's Banks to keep such information confidential, all in
accordance with the Confidentiality Agreement between Buyer and
J.P. Morgan on behalf of the Company and Scrivner dated March 29,
1994 (the "Confidentiality Agreement").
(b) Other Transactions. Seller and its
affiliates
will not, and will cause the Company, each of the Subsidiaries,
and
their directors, officers, employees, agents and affiliates not
to,
directly or indirectly, solicit or initiate the submission of
proposals or offers from, or solicit, encourage, entertain or
enter
into any agreement, arrangement or understanding with, or engage
in
any discussions with, or furnish any information to, any person
or
entity, other than Buyer or Buyer's Representatives or Buyer's
Banks, with respect to (i) the acquisition of all or any part of
the Company or any of the Subsidiaries or their businesses, (ii)
any business combination with the Company or any of the Subsid-
iaries or (iii) any other extraordinary business transaction
involving or otherwise relating to the Company of any Subsidiary.
Should Seller, the Company or any of the Subsidiaries or any of
their respective affiliates or representatives, during such
period,
receive any offer or inquiry relating to such a transaction, or
obtain information that such an offer is likely to be made,
Seller
will provide Buyer with immediate notice thereof, which notice
will
include the identity of the prospective offeror and the price and
terms of any offer.
(c) Insurance. Seller will use its best
efforts
to maintain the insurance coverage specified in Schedule 2.13, or
policies providing substantially equivalent coverage, in full
force
and effect.
(d) Interim Financial Statements. As promptly
as
practicable after the end of each four week accounting period
prior
to the Closing, and including the period ending next before the
Closing Date, Seller will make available to Buyer such unaudited
interim financial statements of the Company and the Subsidiaries
as
of the end of such four week accounting period as are prepared by
the Company and the Subsidiaries consistent with past practice.
4.03 Public Announcements. Buyer, on the one hand,
and
Seller, on the other hand, agree that they will consult with each
other before issuing any press releases or otherwise making any
public statements with respect to this Agreement or the transac-
tions contemplated hereby and shall not issue any press release
or
make any public statement prior to such consultation, except as
may
be required by law or any listing agreements with a national
securities exchange.
4.04 HSR Act. Buyer and Seller agree that as of
11:59
p.m. July 1, 1994 the waiting period under the HSR Act expired.
4.05 Other Action. Each of the parties hereto shall
use
its best efforts to cause the fulfillment at the earliest practi-
cable date of all of the conditions to their respective
obligations
to consummate the transactions contemplated by this Agreement.
4.06 Consents and Best Efforts. (a) Subject to the
terms and conditions herein provided, the parties hereto agree to
use their respective best efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by
this
Agreement. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of
this
Agreement, the proper officers and directors of each party to
this
Agreement shall, at the expense of the requesting party, take all
such necessary action and will execute any additional instruments
necessary to consummate the transactions contemplated hereby.
(b) Buyer and Seller shall, and Seller shall
cause
the Company and Scrivner to, as soon as practicable, commence to
use their respective best efforts required to (i) obtain all
waivers, consents, estoppel certificates (as requested),
approvals
and agreements of, and to give all notices and make all other
filings with, any third parties, including governmental
authorities, necessary and appropriate to authorize, approve or
permit the transaction contemplated by this Agreement and (ii)
defend and cooperate with each other in defending any lawsuits,
including appeals, whether individual or administrative and
whether
brought derivatively or on behalf of third parties (including
governmental agencies or officials) challenging this Agreement or
the consummation of the transactions contemplated hereby. The
Buyer will furnish to the Seller, and the Seller will furnish to
the Buyer, such necessary information and reasonable assistance
as
Seller, or Buyer, as the case may be, may request in connection
with its or their preparation of all necessary filings with any
third parties, including governmental authorities. The Buyer
will
furnish to the Seller, and the Seller will furnish to the Buyer,
copies of all correspondence, filings or communications (or
memoranda setting forth the substance thereof) between Buyer, or
the Seller or Buyer, or any of their respective representatives,
on
the one hand, and any governmental agency or authority, on the
other hand, with respect to this Agreement.
(c) Prior to the Closing Date, the Seller and
the
Buyer shall each use its respective best efforts to obtain the
consent or approval of each person whose consent or approval
shall
be required in order to permit the Seller and the Buyer, as the
case may be, to consummate the transaction contemplated by this
Agreement, including, without limitation, consents or waivers
from
the third parties identified on Schedule 2.03 hereof.
(d) Upon the terms and subject to the conditions
contained herein, each of the parties hereto covenants and agrees
to use its best efforts to take, or cause to be taken, all action
or do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated hereby.
(e) Notwithstanding anything to the contrary
contained herein, neither Seller nor Buyer shall be required to
expend any significant sum of money or suffer a significant
economic detriment in the fulfillment of its respective
obligations
under this Section 4.06.
4.07 Indebtedness. Seller will take such actions as
are
necessary to insure that, as of the Closing Date, the Company and
the Subsidiaries will not have Funded Debt in excess of the
amount
set forth in Section 6.04 of this Agreement provided, however,
that
Funded Debt may exceed the amount set forth in Section 6.04 by
ten
(10) percent (%) if such excess is the result of and has been
used
by the Company or its Subsidiaries to purchase inventory as
described in Section 2.09 necessary and requisite for the
business
operation of the Company and its Subsidiaries. Seller further
agrees to notify Buyer as soon as it shall become evident that
the
Funded Debt will exceed the amount set forth in Section 6.04 and
the amount of such excess.
4.08 Confidentiality. Seller acknowledges that Buyer
would be irreparably damaged if confidential information about
the
business of the Company or the Subsidiaries were disclosed to or
utilized on behalf of any person, firm, corporation or other
business organization which is in competition in any material
respect with any line or lines of business of the Company or any
of
the Subsidiaries. Seller covenants and agrees that it will not
and
will cause its agents, affiliates, investment bankers and legal
advisors (collectively, the "Seller's Representatives") not to,
at
any time, without the prior written consent of Buyer, use or
disclose any such confidential information, except to Buyer's
Representatives or Buyer's Banks, for a period of two (2) years
from the Closing in the same manner and to the same extent Buyer
and Buyer's Representatives are restricted from disclosing
"Evaluation Material" in the Confidentiality Agreement the terms,
provisions, restrictions and exceptions of which are incorporated
herein by reference.
4.09 Satisfaction of Certain Obligations.
(a) Buyer shall provide funds sufficient to
cause
the Company and Scrivner, contemporaneously with the Closing, to
satisfy in full (i) such of the Company's and Scrivner's Funded
Debt and other obligations as Buyer shall provide in writing to
Seller two (2) Business Days prior to Closing, and (ii) the fees
and expenses of the Company in connection with the transaction
contemplated hereby, including the fees of J.P. Morgan in the sum
of $4,950,000 (less the $675,000 of such fees previously paid
prior
to the date hereof) and J.P. Morgan's reasonable out of pocket
expenses.
(b) It is understood and agreed by Seller and
Buyer that any prepayment or other penalty obligation incurred in
respect of the Senior Notes due 2001 (Series A), the Senior Notes
due 2001 (Series B) and the Senior Subordinated Notes due 2001 by
Scrivner to The Prudential Insurance Company of America and
certain
other institutional holders in connection with or resulting from
the transaction contemplated hereby will be for the account of
Buyer if such transaction is consummated.
(c) It is further understood and agreed by
Seller
and Buyer that any prepayment or other penalty obligation
incurred
with respect to the consummation of the transaction contemplated
hereby or as the result of the prepayment by the Company or
Scrivner with funds provided by Buyer as contemplated by Section
4.09(a) under (i) the term bank loan with Bayerische Hypotheken-
und-Wechsel Bank Aktiengesellschaft, New York Branch, (ii) the
term
bank loan with Norddeutsche Landesbank Girozentrale, and (iii)
any
other obligations for borrowed money under which a LIBOR tranche
that has a maturity subsequent to the Closing of the transaction
described herein shall be for the account of Seller and shall be
paid by Seller to Scrivner prior to Closing.
(d) Seller covenants and agrees that prior to
Closing it will obtain a waiver from NationsBank of Texas, N.A.
with respect to acceleration of the notes purchased by it from
Scrivner under Scrivner's Note Purchase Program and resulting
from
the transactions contemplated by this Agreement.
4.10 Notification of Certain Matters. The Seller and
the Company shall give prompt notice to Buyer, and Buyer shall
give
prompt notice to Seller and the Company, of (i) the occurrence,
or
failure to occur, of any event which occurrence or failure would
be
likely to cause any representation or warranty of the notifying
parties contained in this Agreement to be untrue or inaccurate in
any material respect any time from the date hereof to the Closing
Date, and (ii) any material failure of the Company, Buyer or
Seller, as the case may be, to comply with or satisfy any
covenant,
condition or agreement to be complied with or satisfied by the
notifying parties hereunder. Any matters discovered by Buyer in
the course of its due diligence review or disclosed to Buyer by
Seller other than through this Agreement or in a Schedule, will
not
be deemed to cure any breach of any representation or warranty
made
in this Agreement whether made herein or at Closing. For all
purposes (including but not limited to Seller's indemnification
obligations under Article VIII hereof) the accuracy of the
representations and warranties made by Seller in this Agreement
shall be determined by reference to this Agreement and the
Schedules.
4.11 Environmental Matters. Seller shall cause to be
conducted Phase I Environmental Assessments ("Assessments") at
the
distribution centers, convenience store locations and other
locations listed on Exhibit B annexed hereto and made a part
hereof
(the "Environmental Assessment Sites" or "Sites") in accordance
with the specifications attached to Exhibit B as Appendix I (the
"Specifications"). The Assessments will be performed by DPRA
Incorporated, St. Paul, MN 55101 ("DPRA") and Environmental
Materials, Inc., Dallas, Texas 75240 ("EMI") and will include at
least one hand augured soil core sample from each Environmental
Assessment Site where an underground storage tank exists and
other
surface and subsurface soil and ground water samplings requested
by
Buyer. DPRA will be responsible for the Assessments at the
convenience store Sites and some distribution centers and EMI
will
be responsible for the Assessments at the remaining distribution
center Sites and other Sites set forth on Exhibit B. Seller
shall
deliver to Buyer a report of each Environmental Assessment Site
(the "Reports") listed on Exhibit B as required by and described
in
the Specifications on or before five (5) Business Days prior to
the
Closing. Each Report shall be addressed to Seller and Buyer.
4.12 Funded Debt. Seller shall cause the Company to
use
its best efforts to assist Buyer with the negotiations toward the
prepayment at Closing of the Funded Debt and the other
obligations
listed on Schedule 2.05B selected by Buyer.
4.13 Release of Indemnity Obligations. Seller
covenants
and agrees, on or prior to the Closing, to execute and deliver to
the Company, for the benefit of the Company and each Subsidiary,
a
general release and discharge, in form and substance satisfactory
to Buyer releasing and discharging the Company and each
Subsidiary
from any and all obligations to indemnify Seller or otherwise
hold
it harmless pursuant to any agreement or other arrangement
entered
into prior to the Closing.
4.14 Liability Under the Multiemployer Plans. To the
extent requested by Buyer, Seller shall use its reasonable best
efforts to obtain from the relevant plan sponsors and the
Multiemp-
loyer Plans and provide Buyer with a list of the amount of
liability of the Company and its Subsidiaries under any
Multiemplo-
yer Plan as defined in Section 2.14 hereof at least two (2)
Business days prior to Closing.
4.15 Insurance. At the time of Closing, all insurance
policies described in Schedule 2.13 shall be outstanding and duly
in force and effect unless the failure to maintain such policies
or
any of them is not within the control of the Company or one or
more
of the Subsidiaries.
4.16 Change of Name. From and after the Closing,
neither Buyer, the Company nor any of their Subsidiaries or
affiliates will use the name "Haniel", or any confusingly similar
name, in any business conducted by any of them, without the prior
written consent of Seller, and in furtherance thereof, Seller
shall, as of the Closing Date cause an amendment to the Company's
or any Subsidiary's Certificate (Articles) of Incorporation to
become effective changing the name of the Company or the
Subsidiary
to delete the name "Haniel" and Buyer shall, as soon after the
Closing Date as shall be practicable but in no event later than
fifteen (15) days following the Closing, remove, strike over or
otherwise obliterate all references to the name "Haniel" from all
materials constituting the property or assets of Buyer, the
Company
or any Subsidiary or affiliate, including, without limitation,
any
business cards, schedules, stationery, displays, signs,
advertising
material, manuals, forms and other materials, if such materials
are
distributed or made available or proposed to be distributed or
made
available to third parties.
4.17 Tax Records. With respect to the Company, any
Subsidiary, any partnership or joint venture of which the Company
or any Subsidiary is a member, or any trust of which the Company
or
any Subsidiary has a beneficial interest, the Company shall
maintain in its possession or control through the Closing: (i)
correct and complete copies of all Tax Returns, examination
reports, and statements of proposed adjustments or deficiencies
assessed against or agreed to by the Company or any Subsidiary
relating to any period for which the statute of limitations for
assessment of Taxes has not expired prior to Closing; (ii) a true
and complete copy of any tax-sharing or allocation agreement or
arrangement involving the Company or any Subsidiary and a true
and
complete description of any such unwritten or informal agreement
or
arrangement; (iii) depreciation schedules describing with reason-
able specificity the historical cost or other basis, adjusted tax
basis, depreciation method and accumulated depreciation of all
assets and properties of the Company and any Subsidiary as of the
most recent practical date, including, to the extent available,
the
adjusted tax basis of the Company in each Subsidiary in its stock
(or the amount of any excess loss account); and (iv) to the
extent
available, complete and correct copies of all pro forma federal
income Tax Returns of the Subsidiaries, prepared in connection
with
the Company's or any other consolidated federal income Tax
Return,
accompanied by a schedule reconciling the items in the pro forma
Tax Return to the items as included in the consolidated Tax
Return
for all taxable years for which the statute of limitations for
assessment of Taxes has not expired prior to Closing.
4.18 Fairness Opinion. Simultaneously upon the
execution of this Agreement, Merrill Lynch, Pierce, Fenner and
Smith Incorporated has delivered to Buyer a fairness opinion to
the
effect that the Purchase Price plus the Funded Debt (including
the
additional amount, if any, described in Section 4.07) plus the
prepayment of penalties or other penalty payments with respect to
certain senior notes of Scrivner, to be paid or assumed by Buyer
through the acquisition of the equity capital stock of the
Company
is fair to the Buyer from a financial point of view.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF THE PARTIES
The respective obligations of Buyer and Seller
hereunder
are subject to the fulfillment, prior to the Closing, of each of
the following conditions, neither of which may be waived:
5.01 HSR Act. All waiting periods applicable to this
Agreement and the transactions contemplated hereby under the HSR
Act shall have expired which Seller and Buyer recognizes has
occurred effective as of 11:59 p.m., July 1, 1994.
5.02 No Injunction or Litigation. There shall not be
in
effect on the Closing Date any judgment, order, injunction or
decree of any court enjoining, prohibiting or otherwise making
illegal consummation of the transaction (or any material portion
thereof) contemplated by this Agreement or any pending litigation
with respect to which there is a substantial likelihood that such
litigation could have a material adverse effect on the business,
operation or financial position of any of Seller, Buyer or the
Company and its Subsidiaries taken as a whole.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the
fulfillment, prior to or at the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part
by Buyer):
6.01 Representations and Warranties. The representa-
tions and warranties made by Seller in this Agreement and the
statements of Seller contained in the Schedules, or in any other
agreement, instrument or certificate delivered by Seller pursuant
to this Agreement which are made subject to the qualification
that
they are true and correct in all material respects, shall be true
and correct when made and at and as of the Closing Date as though
made at and as of the Closing Date, and all other representations
and warranties made by Seller shall be true and correct in all
material respects when made and at and as of the Closing Date as
though such representations and warranties were made at and as of
such date.
6.02 Performance. Seller shall have performed and
complied with, in all material respects, all agreements,
covenants,
obligations and conditions required by this Agreement to be so
performed or complied with by Seller prior to or at the Closing.
6.03 Consents. Buyer shall have received copies of
all
consents, approvals, authorizations and orders necessary to
consummate the transactions contemplated hereby, including those
listed in Schedule 2.03, all of which shall be in form and
substance satisfactory to Buyer and shall continue to be in full
force and effect, unless the failure to obtain such consent,
approval, authorization or order, other than those listed on
Schedule 2.03, would not have a materially adverse effect on the
Company and the Subsidiaries taken as a whole or would not
prevent
or materially delay consummation of the transactions contemplated
hereby.
6.04 Funded Debt. As of the Closing, subject to the
exception set forth in Section 4.07, Funded Debt shall not exceed
the total sum of $662 million.
6.05 Officers' Certificates. Seller shall have
delivered to Buyer a certificate, dated the Closing Date and
executed by two (2) members of managing board of Seller,
certifying
as to the fulfillment of the conditions set forth in Sections
6.01,
6.02, 6.03 and 6.04 hereof.
6.06 Opinions of Counsel to Seller. Buyer shall have
received an opinion of Milbank Tweed Hadley & McCloy, special
United States counsel to Seller, an opinion from Martin von
Gehren,
inhouse legal counsel to Seller, an opinion from James V.
Barwick,
Vice President, General Counsel and Secretary of Scrivner, an
opinion from counsel to the Bank regarding the Letter of Credit
and
an opinion or opinions from counsel to the general partnerships
described on Schedule 2.01, each dated the Closing Date, in the
form of Exhibits C-1, C-2, C-3, C-4 and C-5 respectively, annexed
hereto.
6.07 Resolutions of Seller. Buyer shall have received
a true and complete copy, certified by the Chairman of the
Supervisory Board of Seller, of the resolutions duly and validly
adopted by the Supervisory Board of Seller evidencing its
authori-
zation of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
6.08 Incumbency Certificate of Seller. Buyer shall
have
received a duly notarized certified excerpt of the Commercial
Register of the District Court of Duisburg, Germany certifying
the
names of the persons authorized to sign this Agreement and the
other documents to be delivered hereunder on behalf of Seller and
appropriate evidence of the signatures of all persons signing
documents on behalf of Seller and delivered hereunder.
6.09 Seller's Obligations. Seller shall have provided
Buyer evidence reasonably satisfactory to Buyer that Seller has
complied with the provisions of Sections 4.09 (c)(i) and (ii) and
4.09(d) hereof and that Seller has appointed CT Corporation as
its
service agent in accordance with Section 10.03 hereof.
6.10 Environmental Matters. Seller shall have
delivered
to Buyer the Reports described in Section 4.11 hereof and the
Reports shall not have revealed the existence or reasonably
suspected existence of any fact that would render the
representations and warranties contained in Sections 2.19 and
2.25
hereof untrue.
6.11 Resignations of Directors. Buyer shall have
received the resignations, effective as of the Closing, of all
the
directors and officers of the Company and each Subsidiary which
is
a corporation, except for such persons as shall have been
designat-
ed in writing prior to the Closing by Buyer to Seller. Buyer
agrees that such resignations will not prejudice such director's
or
officer's rights under any written employment agreement disclosed
to Buyer under this Agreement.
6.12 Organizational Documents. Buyer shall have
received a copy of (i) the Certificates of Incorporation, as
amended (or similar organizational documents), of the Company and
of each Subsidiary which is a corporation, certified by the
secretary of state of the jurisdiction in which each such entity
is
incorporated or organized, as of a date not earlier than five
Business Days prior to the Closing Date (unless available only at
an earlier date) and accompanied by a certificate of the
Secretary
or Assistant Secretary of each such entity, dated as of the
Closing
Date, stating that no amendments have been made to such
Certificate
of Incorporation (or similar organizational documents) since such
date, and (ii) the Bylaws (or similar organizational documents)
of
the Company and of each Subsidiary, certified by the Secretary or
Assistant Secretary of each such entity.
6.13 Minute Books. Buyer shall have received a copy
of
the minute books and stock register of the Company and each
Subsidiary which is a corporation, certified by their respective
Secretaries or Assistant Secretaries as of the Closing Date and
all
of the issued and outstanding shares of capital stock of the
Company and the Subsidiaries as reflected in Schedule 2.01.
6.14 Affidavit. Buyer shall have received an
affidavit
from the Seller and an affidavit from the Company (which complies
with Section 1445(b)(3) of the Code), stating that the Company is
not and has not been a United States real property holding
corporation (as defined in Section 897(c)(2) of the Code) during
the applicable period specified in Section 897(c)(1)(A)(ii) of
the
Code.
6.15 Good Standing; Qualification To Do Business.
Buyer
shall have received good standing certificates for the Company
and
for each Subsidiary which is a corporation from the secretary of
state of the jurisdiction of its incorporation and from each
jurisdiction in which each such entity is duly licensed or
qualified to do business as a foreign corporation, and in each
jurisdiction wherein the character of the assets or properties
make
such licensing or qualification to do business necessary, except
where failure to be so qualified would not have a material
adverse
effect on the business, financial position and results of opera-
tions of the Company and Major Subsidiaries taken as a whole, in
each case dated as of a date as close as practicable prior to the
Closing date.
6.16 Release of Indemnity Obligations. Buyer shall
have
received the general release and discharge from Seller referred
to
in Section 4.13 in form and substance satisfactory to Buyer in
its
sole and absolute discretion.
6.17 Letter of Credit. Seller shall have caused the
Letter of Credit (Exhibit A) to be issued and delivered to Buyer.
6.18 Documents. All documents to be delivered by
Seller
to Buyer at the Closing shall be in form and substance reasonably
satisfactory to Buyer.
6.19 No Material Adverse Change. Since the date of
this
Agreement, there shall not have occurred a material adverse
change
in the business, operations or financial position of the Company
and the Subsidiaries taken as a whole, other than those occurring
as a result of general economic conditions or other developments
which are not unique to the Company or the Subsidiaries but also
affect other persons who are engaged in the lines of business in
which the Company and the Subsidiaries are engaged.
6.20 NationsBank Waiver. The waiver described in
Section 4.09(d) shall be in full force and effect.
6.21 Employment Agreement. Simultaneously with the
Closing the Cancellation Agreement between Jerry D. Metcalf,
Chairman and Chief Executive Officer of Scrivner and Scrivner of
even date with the Agreement shall be in full force and effect
and
shall have closed in accordance with the terms and provisions
thereof.
6.22 The Trust. The Trust Agreement dated July 1,
1981,
among the Company, Seller and the trustees named therein (the
"Trust") shall have been terminated and all of the outstanding
shares of capital stock of the Company shall have been issued to
Buyer, free and clear of the Trust.
6.23 Scrivner Shares. Buyer and Seller shall have
received a letter of indemnification from First Chicago Trust
Company of New York agreeing to defend, indemnify and hold the
Company, the Seller and Scrivner harmless from and against any
and
all claims and demands, costs, damages and expenses (including
reasonable attorney's fee), which may, at any time, be made
against
any of them directly relating to the loss or destruction of the
original stock certificate representing 17,200 shares of
Scrivner,
Inc. Class B Common Stock.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller hereunder are subject to the
fulfillment, prior to or at the Closing, of each of the following
conditions (all or any of which may be waived in whole or in
part
by Seller):
7.01 Representations and Warranties. The representa-
tions and warranties made by Buyer in this Agreement, and the
statements of Buyer contained in any agreement, instrument or
certificate delivered by Buyer pursuant to this Agreement which
are
made subject to the qualification that they are true and correct
in
all material respects, shall be true and correct when made and at
and as of the Closing Date as though made at and as of the
Closing
Date, and all other representations and warranties made by Buyer
shall be true and correct in all material respects when made and
at and as of the Closing Date as though such representations and
warranties were made at and as of such date.
7.02 Performance. Buyer shall have performed and
complied with, in all material respects, all agreements,
covenants,
obligations and conditions required by this Agreement to so be
performed or complied with by it prior to or at the Closing.
7.03 Officers' Certificates. Buyer shall have
delivered
to Seller a certificate, dated the Closing Date and executed by
Buyer's Chairman, President and CEO or Vice Chairman, or one of
its
Executive or Senior Vice Presidents and Secretary, certifying as
to
the fulfillment of the conditions set forth in Sections 7.01 and
7.02 hereof.
7.04 Opinion of Counsel to Buyer. Seller shall have
received an opinion of McAfee & Taft A Professional Corporation,
counsel to Buyer, dated the Closing Date, in the form of Exhibit
D
annexed hereto.
7.05 Consents. Seller shall have received copies of
all
consents, approvals, authorizations and orders necessary to
consummate the transactions contemplated hereby, including those
listed in Schedule 2.03, all of which shall be in form and
substance satisfactory to Seller and shall continue to be in full
force and effect; provided, however, that the failure to obtain
any
such consent, approval, authorization or order shall not be a
condition to Seller's obligations hereunder unless Seller has
used
its best efforts to obtain such consent, approval, authorization
or order.
7.06 Documents. All documents to be delivered by
Buyer
to Seller at the Closing shall be in form and substance
reasonably
satisfactory to Seller.
7.07 Resolutions of Buyer. Seller shall have received
a true and complete copy, certified by the Secretary or an
Assistant Secretary of Buyer, of the resolutions duly and validly
adopted by the Board of Directors of Buyer evidencing its
authori-
zation of the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
7.08 Incumbency Certificate of Buyer. Seller shall
have
received a certificate of the Secretary or an Assistant Secretary
of Buyer certifying the names and signatures of the officers of
Buyer authorized to sign this Agreement and the other documents
to
be delivered hereunder.
7.09 NationsBank Waiver. The waiver described in
Section 4.09(d) shall be in full force and effect.
7.10 Scrivner Shares. Buyer and Seller shall have
received a letter of indemnification from First Chicago Trust
Company of New York agreeing to defend, indemnify and hold the
Company, the Seller and Scrivner harmless from and against any
and
all claims and demands, costs, damages and expenses (including
reasonable attorney's fee), which may, at any time, be made
against
any of them directly relating to the loss or destruction of the
original stock certificate representing 17,200 shares of
Scrivner,
Inc. Class B Common Stock.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
8.01 Survival of Representations. Subject to Section
8.04 hereof, the representations and warranties made by Seller
contained in this Agreement (the "Surviving Seller Representa-
tions") and the representations and warranties made by Buyer
contained in this Agreement (the "Surviving Buyer
Representations")
and the covenants and agreements of each of Seller and Buyer (the
"Seller's Agreements" and the "Buyer's Agreements" respectively)
set forth in Article IV of this Agreement, shall survive the
Closing and any investigation at any time made by or on behalf of
any party. The representations and warranties herein shall be
deemed to be remade as of the Closing, as if made on the date
thereof.
8.02 Statements as Representations. All statements
contained in this Agreement, the Schedules, or any other
agreement,
instrument or certificate delivered pursuant hereto, shall be
deemed representations and warranties for all purposes of this
Agreement, including, without limitation, the references to
representations and warranties in Sections 6.01 and 7.01 hereof.
8.03 Agreement to Indemnify. (a) Subject to the terms
and conditions of this Article VIII, Seller hereby agrees to
indemnify, defend and hold harmless Buyer and its subsidiaries
(of
which it owns directly or through subsidiaries, 50% or more of
(x)
the stock of any class having power under ordinary circumstances
to
vote for the election of directors or (y) the capital, right to
profits or equity, however named), and each officer and director
of
Buyer, and their successors and assigns (collectively, the "Buyer
Group"), from and against all claims, actions or causes of
action,
assessments, demands, losses, damages, judgments, settlements,
liabilities, costs and expenses, including, without limitation,
interest, penalties and reasonable attorneys', accountants' and
consultants' fees and expenses of any nature whatsoever (but
excluding consequential damages) (collectively, "Damages"),
asserted against, resulting to, imposed upon or incurred by any
member of the Buyer Group, by reason of or resulting from a
breach
of any Surviving Seller Representation or any Seller Agreement;
(collectively, the "Buyer's Claims").
(b) Subject to the terms and conditions of this
Article VIII, Buyer hereby agrees to indemnify, defend and hold
harmless Seller and its subsidiaries, and each officer and
director
of Seller or of any of its subsidiaries (of which it owns
directly
or through subsidiaries, 50% or more of (x) the stock of any
class
having power under ordinary circumstances to vote for the
election
of directors or (y) the capital, right to profits or equity,
however named) and their successors and assigns (collectively,
the
"Seller Group"), from and against all Damages, asserted against,
resulting to, imposed upon or incurred by any member of the
Seller
Group, by reason of or resulting from a breach of any Surviving
Buyer Representation or any Buyer Agreement (collectively, the
"Seller Claims").
8.04 Limitation of Liability. The obligations and
liabilities of Seller with respect to Buyer Claims under Section
8.03 hereof to the Buyer Group and Buyer with respect to Seller
Claims under Section 8.03 hereof to the Seller Group shall be
subject to the following limitations:
(a) No indemnification shall be required to be
made by Seller under this Article VIII with respect to any
Buyer's
Claims, except to the extent that the aggregate amount of Damages
with respect to all of such claims incurred by the Buyer Group
exceeds $2 million (the "Seller's Cushion"). Notwithstanding the
foregoing, Seller shall not have any liability under this Section
8.04(a) for any single loss resulting in Damages of less than
$75,000 ("De Minimis Losses") provided, however, Damages arising
directly or indirectly from a breach of any covenant, representa-
tion or warranty contained in Sections 2.01, 2.07, 2.14, 4.09(c)
and 4.09(d) shall not be subject to the provision for De Minimis
Losses or Seller's Cushion (the "Excluded Damages") and Seller
shall, subject to Section 8.04(g), be required to indemnify the
Buyer Group in full for all Excluded Damages pursuant to this
Article VIII.
(b) No indemnification shall be required to be
made by Buyer under this Article VIII with respect to any
Seller's
Claims, except to the extent that the aggregate amount of Damages
with respect to all such claims incurred by the Seller group
exceeds $2 million (the "Buyer's Cushion"). Notwithstanding the
foregoing, Buyer shall not have any liability under this Section
8.04(b) for any De Minimis Losses.
(c) Seller shall be obligated to indemnify the
Buyer Group only for those Buyer's Claims as to which the Buyer
Group has given Seller written notice thereof on or prior to
eighteen (18) months following the Closing (subject to Section
8.04(h) below, whether or not such Buyer's Claims have then
actually been sustained), except those Buyer's Claims relating to
the covenants, representations, warranties and agreements set
forth
in Sections 2.14 and 2.19 hereof as to which the Buyer Group has
given written notice thereof on or prior to three (3) years
following the Closing and except those Buyer's Claims relating to
the covenants, representations, warranties and agreements
contained
in Sections 2.01 and 2.07 hereof as to which the Buyer Group has
given Seller written notice thereof on or prior to the expiration
of the applicable statute of limitation.
(d) Buyer shall be obligated to indemnify the
Seller Group only for the Seller's Claims, as to which the Seller
Group has given Buyer written notice thereof prior to eighteen
(18)
months following the Closing (subject to Section 8.04(h) below,
whether or not such Seller Claims have actually been sustained).
(e) The amount of Damages any party is required
to
pay to indemnify any other party pursuant to Section 8.03 as a
result of any Buyer's Claim or Seller's Claim shall be reduced to
the extent of any amounts actually received by the party seeking
indemnification after the Closing Date pursuant to the terms of
the
insurance policies or other contractual arrangements (if any)
covering such claim which the party seeking indemnification shall
in good faith seek to collect (without the requirement that it
resort to litigation or undue expense) before seeking to obtain
payment from the indemnifying party.
(f) The amount of Damages payable by the Seller
pursuant to Section 8.03 as a result of any Buyer's Claim shall
(i)
be reduced by the amount of any tax benefit actually realized by
any member of the Buyer Group as a result of such Buyer's Claim,
and (ii) to the extent required in accordance with applicable
law,
be reported as an adjustment to the Purchase Price, but, to the
extent required by law to be reported as taxable income by the
Buyer, the reduced amount (referred to in clause (i) hereof)
shall
be increased by the amount of any Taxes actually payable by any
member of the Buyer Group as a result of Seller's payment of
Damages for such Buyer's Claim.
(g) No indemnification shall be required to be
made by Seller under this Article VIII to the extent the
aggregate
amount of Damages incurred by the Buyer Group exceeds $30
million,
except for indemnification for Buyer's Claims relating to the
covenants, representations, warranties and agreements contained
in
Section 2.01 and Section 2.07(b)(v), hereof with respect to which
there shall be no limitation.
(h) No payment shall be required to be made by
any
party under this Article VIII with respect to any claim for
indemnification hereunder unless written notice of such claim,
setting forth in reasonable detail the specific facts and
circumstances which the party seeking indemnity believes in good
faith have resulted or can reasonably be expected to result in a
valid claim for indemnification under this Article VIII, shall
have
been delivered to the party from whom indemnification is sought
as
soon as practicable following the time that the indemnified party
discovered such claim, and in any event prior to the termination
of
the applicable period set forth in Sections 8.04(c) or (d) above.
(i) No indemnification shall be required to be
made by the Seller under this Article VIII for an assessment of
Taxes to the extent that: (x) the assessment reduces the
"deferred
tax liability" or the assessment creates or increases a "deferred
tax asset" (as those terms are defined in SFAS 109) but in the
case
of the deferred tax liability, only to the extent it is included
in
the reserves and allowances for Taxes required by Section
2.07(e);
(y) the assessment relates to Taxes Paid or payable with respect
to
(A) Tax returns not due prior to the Closing for periods ending
on
or prior to the Closing, or (B) the pre-Closing portion of a tax
period commencing before but ending after the Closing, but in the
case of (A) or (B) only to the extent that such Taxes represent
income taxes (exclusive of penalties for underpayment of
estimated
income taxes) attributable to taxable income that is derived from
1994 earnings determined in accordance with GAAP; or (z) the
aggregate after-tax cost of assessments of Taxes, increased by
the
after-tax cost of any reasonable expenses and fees paid to
attorneys and accountants, incurred with respect to such assess-
ments of Taxes, after reduction for $7,175,400 paid to the
Internal
Revenue Service prior to Closing with respect to the 1983 through
1987 tax periods and exclusive of any assessments of Taxes
described in clauses (x) and (y) of this Section 8.04(i), is less
than or equal to $10,854,739, increased by the amount of any
overpayments reflected in the 1993 income tax returns filed
subsequent to Closing.
8.05 Conditions of Indemnification. The obligations
and
liabilities of Seller to indemnify the Buyer Group and Buyer to
indemnify the Seller Group under Section 8.03 hereof with respect
to Buyer's Claims and Seller's Claims, respectively, resulting
from
the assertion of liability by third parties shall be subject to
the
following terms and conditions:
(a) The indemnified party shall give the
indemni-
fying party prompt notice of any such claim, and the indemnifying
party shall undertake the defense, compromise or settlement
thereof
by representatives of its own choosing reasonably satisfactory to
the indemnified party, provided that failure to provide such
notice
will not relieve the indemnifying party of its obligations
hereunder unless it is actually prejudiced by such failure to
receive such notice. If the indemnifying party, within ten (10)
Business Days after notice of any such claim, fails to commence
the
defense of such claim, the indemnified party will (upon further
notice to the indemnifying party) have the right to undertake the
defense, compromise or settlement of such claim on behalf of and
for the account and risk of indemnifying party; provided that the
failure by the indemnifying party to undertake the defense of any
such claim shall not be deemed an admission that such party has
an
obligation to indemnify the indemnified party pursuant to Section
8.03; provided that the indemnified party shall not settle any
such
claim as to which the indemnifying party has failed to undertake
the defense thereof without the consent of the indemnifying
party,
the consent shall not be unreasonably withheld or delayed, unless
the indemnified party waives its rights under Section 8.03 with
respect to such claim.
(b) Anything in this Section 8.05 to the
contrary
notwithstanding, (i) an indemnified party shall have the right,
at
its own cost and expense, to participate in the defense,
compromise
or settlement of such claim, (ii) the indemnifying party shall
not,
without the written consent of the indemnified party, settle or
compromise any claim or consent to the entry of any judgment (x)
which does not include as an unconditional term thereof the
giving
by the claimant or the plaintiff to the indemnified party a
release
from all liability in respect of such claim or (y) as a result of
which injunctive or other equitable relief would be imposed
against
the indemnified party and (iii) the indemnified party shall have
the right, at its own cost and expense, to control the defense or
settlement of that portion of any claim which seeks an order,
injunction or other equitable relief against the indemnified
party
which, if successful, could materially interfere with the
business,
operations, assets, financial condition or prospects of the
indemnified party; provided, however, that in connection with the
defense or settlement of the portion of such claim which seeks
equitable relief, the indemnified party shall cooperate with the
indemnifying party and use its reasonable best efforts to limit
any
liability that may arise from the damages portion of such claim.
8.06 Security for Seller's Indemnification. As
security
for performance of its indemnification obligations under this
Article VIII, Seller shall deliver the Letter of Credit (Exhibit
A)
in the initial amount of $30 million issued by the Bank naming
Buyer as beneficiary. Buyer, on behalf of itself or any member
of
the Buyer Group shall be able to draw on the Letter of Credit (i)
in an amount equal to the amount of any final nonappealable
judgment obtained by Buyer or any member of the Buyer Group
against
Seller on claims for Damages recoverable in accordance with this
Article VIII or (ii) with the written consent of Seller. The
Letter of Credit shall be for a term of three (3) years plus an
additional period of time that the Buyer Group or any member
thereof (a "Claimant") is pursuing to final judgment in good
faith
any Buyer's Claim of which Seller has been given written notice
in
accordance with Sections 8.04(c) and 8.04(h) prior to the end of
such three (3) year period (a "Contested Claim"). If the Bank
elects not to extend the Letter of Credit beyond the additional
one
(1) year period or beyond any six (6) month extension as
described
in the Letter of Credit and provides Buyer and Seller with the
Termination Notice as provided for therein, and provided that the
Claimant continues to pursue such Contested Claims to final
judgment in good faith, Seller shall either (a) deliver to Buyer
a
replacement letter of credit issued by the Bank or another bank
reasonably acceptable to Buyer in an initial amount equal to the
amount then available to be drawn under the Letter of Credit in
respect of such Contested Claims and which contains such other
terms as are consistent with those then in effect under the
Letter
of Credit, or (b) deposit with an escrow agent, pursuant to an
escrow agreement, reasonably acceptable to Buyer and Seller an
amount equal to the amount then available to be drawn under the
Letter of Credit in respect of such Contested Claims on terms
reasonably satisfactory to Buyer and Seller; provided, however,
that if Seller fails within twenty (20) days prior to the expira-
tion of the Letter of Credit to either (x) provide Buyer with a
replacement letter of credit as described herein or (y) establish
an escrow as described herein, Buyer shall be entitled to draw on
the Letter of Credit to the extent of any Contested Claims prior
to
the expiry date thereof, in which event Buyer shall forthwith
deposit such funds with an escrow agent, pursuant to an escrow
agreement, reasonably acceptable to Buyer and Seller to be held
and
administered pending final resolution of all Contested Claims.
8.07 Officers' and Directors' Insurance; Indemnificat-
ion.
(a) For a period of four (4) years from and
after
the Closing Date Buyer shall, or shall cause the Company and
Scrivner to, indemnify and hold harmless each present and former
director and officer of the Company and the Subsidiaries (the
"Indemnified Parties") against any expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually
and
reasonable incurred by such Indemnified Party in connection with
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative to which
each Indemnified Party was made, or threatened to be made, a
party
by reason of the fact that such Indemnified Party was or is a
director, officer, employee or agent of the Company or a Subsid-
iary, or was serving at the request of the Company or a
Subsidiary
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise and which
arises out of or pertains to any action or omission occurring
prior
to the Closing Date (including, without limitation, any which
arise
out of or relate to the transactions contemplated by this Agree-
ment) to the full extent permitted under the Delaware Law (and
each
person will be advanced expenses to the full extent so
permitted);
provided, that any determination required to be made with respect
to whether an Indemnified Party's conduct complied with the
standards set forth in the Delaware Law shall be made by indepen-
dent counsel selected by such Indemnified Party and reasonably
satisfactory to the Buyer (which shall pay such counsel's fees
and
expenses). In the event any such claim, action, suit, proceeding
or investigation is brought against any Indemnified Party
(whether
arising before or after the Closing Date, (a) the Indemnified
Parties may retain counsel satisfactory to them and the Company
and
the Buyer, (b) Buyer shall, or shall cause the Company and
Scrivner
to, pay all fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received, and (c)
Buyer
shall cause the Company or Scrivner to use its best efforts to
assist in the defense of any such matter, provided, that neither
the Company nor the Buyer shall be liable for any such settlement
effected without their written consent, which consent, however,
shall not be unreasonably withheld. Any Indemnified Party
wishing
to claim indemnification under this Section 8.07 upon learning of
any such claim, action, suit proceeding or investigation, shall
notify the Company, Scrivner or the Buyer thereof and shall
deliver
to the Company, Scrivner or the Buyer an undertaking to repay any
amounts advanced pursuant thereto in the event a court of
competent
jurisdiction shall ultimately determine, after exhaustion of all
avenues of appeal, that such Indemnified Party was not entitled
to
indemnification under this Section. The Indemnified Parties as a
group may retain only one law firm in each jurisdiction to
represent them with respect to any such matter unless there is,
under applicable standards of professional conduct, a conflict on
any significant issue between the positions of any two or more
Indemnified Parties.
(b) For four (4) years after the Closing Date,
the
Buyer shall use its best efforts to provide officers' and direc-
tors' liability insurance covering the Indemnified Parties who
are
currently covered by the Company's Officers' and directors'
liability insurance policy (a copy of which has heretofore been
delivered to Buyer) on terms substantially similar to those of
such
policy in terms of coverage and amounts.
(c) This Section 8.07 shall survive the
consumma-
tion of the transactions contemplated by this Agreement. Subject
to Delaware Law, the Certificate of Incorporation and Bylaws of
the
Company shall not be amended in a manner which adversely affects
the rights of the Indemnified Parties under this Section 8.07.
8.08 Remedies Exclusive. Except for the remedy of
specific performance and except as otherwise provided herein, the
remedies provided herein shall be exclusive and shall preclude
the
assertion by either party hereto of any other rights or the
seeking
of any other remedies against the other party hereto.
ARTICLE IX
TERMINATION; AMENDMENT AND WAIVER
9.01 Termination of Agreement. This Agreement may be
terminated at any time prior to the Closing:
(a) By mutual written agreement of Buyer and
Seller:
(b) By either Buyer or Seller if the Closing
shall
not have occurred on or before August 31, 1994, unless such
failure
to close shall be due to a material breach of this Agreement by
the
party seeking to terminate the Agreement pursuant to this
Section;
or
(c) If a United States court of competent
jurisdiction shall permanently enjoin the consummation of the
transactions contemplated hereby and such injunction shall be
final
and nonappealable.
9.02 Effect of Termination. In the event of
termination
of this Agreement as provided above, this Agreement shall
forthwith
become void and there shall be no liability on the part of any
party hereto (or any of their respective officers or directors),
except based upon obligations set forth in Sections 10.01 and
10.02
hereof and the confidentiality provisions of Section 4.02(a).
Nothing contained in this Section 9.02 shall relieve any party
from
liability for any breach of this Agreement.
9.03 Amendment, Extension and Waiver. Buyer and
Seller
may amend this Agreement at any time by an instrument in writing
signed on behalf of such parties. Any agreement on the part of a
party hereto to any waiver of compliance with any of the
agreements
or conditions contained herein shall be valid only if set forth
in
an instrument in writing signed by the party to be bound thereby.
ARTICLE X
MISCELLANEOUS
10.01 Commissions. Buyer, on the one hand, and
Seller,
on the other hand, represent and warrant that there are no known
claims for brokerage commissions or finder's fees in connection
with the transactions contemplated by this Agreement except as
set
forth in this Agreement.
10.02 Expenses; Taxes. Buyer, on the one hand, and
the
Company on behalf of the Seller, on the other hand, will pay all
fees and expenses incurred by it in connection with this Agree-
ment. All sales and transfer taxes and fees (including all
sales,
transfers, stamp, real estate transfer and recording fees, if
any)
incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the Company and the Company
shall file all necessary documentation with respect to such taxes
and make all payments on a timely basis. All gains and similar
taxes incurred as a result of the sale of the Shares contemplated
hereby shall be borne by the Seller.
10.03 Governing Law; Submission to Jurisdiction,
Waiver
of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF
SELLER AND BUYER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT; PROVIDED, HOWEVER,
THAT SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE
REFERRED TO IN THIS SECTION AND SHALL NOT BE DEEMED TO BE A
GENERAL
SUBMISSION TO THE JURISDICTION OF SAID COURTS OR IN THE STATE OF
NEW YORK OTHER THAN FOR SUCH PURPOSE. EACH OF SELLER AND BUYER
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH EITHER OF THEM MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH COURT
AND ANY CONTENTION THAT ANY SUCH PROCEEDING BROUGHT IN SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
TO
THE TRANSACTIONS CONTEMPLATED HEREBY.
At or before the Closing, Seller shall appoint the CT
Corporation System, 1633 Broadway, New York, New York 10019 (the
"CT Corporation") as its service agent for the purpose of
accepting
service of process on Seller for all legal proceedings arising
out
of or relating to this Agreement or the transactions contemplated
hereby. Such appointment of the CT Corporation by Seller shall
be
irrevocable until the later of (i) the third anniversary of the
Closing Date or (ii) the expiration of the Letter of Credit (in
either event, the "Appointment Period"). The expense of the
appointment of CT Corporation for the entire Appointment Period
shall be borne by the Seller and shall be paid in advance.
Seller
further agrees that in the event Buyer brings legal proceedings
against Seller arising out of or relating to this Agreement or
the
transactions contemplated hereby and obtains service of process
on
Seller by serving the CT Corporation, Seller shall not object to
such service of process.
10.04 Assignment. This Agreement and all the
provisions
hereof shall be binding upon and inure to the benefit of the
parties hereto and in the case of Sections 6.11 and 8.07, the
directors and officers of the Company referred to therein, and
their respective successors and permitted assigns. Neither this
Agreement nor any of the rights hereunder shall be assigned by
either of the parties hereto without the prior written consent of
the other party, except that (i) Buyer may assign all or any part
of its rights or obligations hereunder to any subsidiary or
corporate affiliate of Buyer provided that no such assignment
shall
relieve Buyer of its obligations hereunder and (ii) Buyer and any
assignee described in clause (i) above may grant a security
interest in this Agreement to Buyer's Banks.
10.05 Entire Agreement. This Agreement and the
Schedules and the other agreements, instruments and writings
referred to herein or delivered pursuant hereto contain the
entire
understanding of the parties with respect to its subject matter.
This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter, including
the Letter of Intent dated May 31, 1994 except that the
Confidenti-
ality Agreement shall survive until the Closing. The parties
agree
that the provisions of Section 4.08 shall survive for a period of
two (2) years following the Closing.
10.06 Headings. The Article and Section headings
contained in this Agreement are for reference purposes only and
will not affect in any way the meaning or interpretation of this
Agreement.
10.07 Notices. All notices, claims, certificates,
requests, demands and other communications hereunder will be in
writing (whether by letter, telecopy, telex or other commercially
reasonable means of written communication) and will be deemed to
have been duly given upon receipt as follows:
(a) If to Buyer:
Fleming Companies, Inc.
6301 Waterford Blvd.
P.0. Box 26647
Oklahoma City, Oklahoma 73126
Attention: R. Randolph Devening,
Vice Chairman
FAX: 405/840-7266
with a copy to:
David R. Almond, Esq.
Senior Vice President and General Counsel
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126
FAX: 405/841-8504
and
McAfee & Taft A Professional Corporation
Tenth Floor
Two Leadership Square
Oklahoma City, Oklahoma 73102
Attention: John M. Mee, Esq.
FAX: 405/235-0439
(b) If to Seller:
Franz Haniel & Cie. GmbH
Franz-Haniel-Platz 1
D-47119 Duisburg-Ruhrort
Federal Republic of Germany
Attention: Dr. Ernst Alers
FAX: 011-49-203-806-689
with a copy to:
Milbank, Tweed, Hadley & McCloy
One Chase Manhattan Plaza
New York, New York 10005
Attention: Robert S. Reder, Esq.
FAX: 212/530-5219
or to such other address as the person to whom notice is to be
given may have previously furnished to the other in writing in
the
manner set forth above.
10.08 Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the
same instrument.
10.09 Specific Performance. Seller and Buyer each
acknowledge that Buyer and Seller would not have an adequate
remedy
at law for money damages in the event that this Agreement were
not
performed in accordance with its terms, and therefore agree that
Buyer and Seller each shall be entitled to specific enforcement
of
the term hereof in addition to any other remedy to which it may
be
entitled, at law or in equity.
10.10 Severability. If any term, provision, covenant
or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, provisions, covenants and restrictions of this
Agreement
shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
10.11 Certain Definitions. As used in this Agreement:
(a) "Business Day" means any day other than a
Saturday, Sunday or other day on which banks in New York City are
authorized or required by law to close.
(b) "Funded Debt" means (i) long term debt
(including the current portion) and (ii) capitalized lease
obligations (including the current portion) of the Company and
Subsidiaries.
(c) "GAAP" means generally accepted accounting
principles set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of
Certified
Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements
by
such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circum-
stances as of the date of determination.
(d) "Governmental Authorities" shall mean all
federal, state, county, municipal and local governments and all
departments, commissions, boards, bureaus and offices thereof.
(e) "Knowledge" or "to the knowledge of" means
in
the case of Seller, the Company or the Subsidiaries or any
combination of the foregoing, matters known to Jerry D. Metcalf,
Bill Bishop, Larry W. Kordisch, Jim Mills, Rudy Comchoc, Leon
Halbrook, Tom Arledge, Dave Brumley, Arlyn Larson, Jim Demme, and
James V. Barwick and in the case of Buyer, matters known to
Robert
E. Stauth, R. Randolph Devening, Gerald G. Austin, E. Stephen
Davis, Robert G. Dolan, Jr., David R. Almond, Donald N. Eyler,
Robert W. Smith, Stephen G. Mangold, Bill C. Zumwalt and Gary S.
Capshaw.
(f) "Major Subsidiaries" means Scrivner, Inc.,
Food Holdings, Inc., Scrivner-Food Holdings, Inc., Gateway Foods,
Inc., Scrivner of Kansas, Inc., Scrivner of North Carolina, Inc.,
Scrivner of Illinois, Inc., Scrivner of New York, Inc., Scrivner
of
Iowa, Inc., and Scrivner of Pennsylvania, Inc.
(g) "Partnership Interests" means the interests
of 109 West Main Street, Inc., Route 219, Inc., Route 16, Inc.,
Route 417, Inc. and Scrivner of Kansas, Inc. in the general
partnerships described in Schedule 2.01.
(h) "Permit" has the meaning set forth in
Section
2.25.
(i) "Subsidiaries" means all corporations
including without limitation Scrivner and other entities of which
the Company or another Subsidiary of the Company owns 50 percent
or
more of (x) the stock of any class having power under ordinary
circumstances to vote for the election of directors or (y) the
capital, right to profits or equity, however named.
10.12 Cutoff Date The parties agree that for tax and
accounting purposes, the cutoff date for the Company and its
Subsidiaries shall be the close of business July 9, 1994,
notwith-
standing that the representations, warranties and covenants of
the
parties shall run through the Closing Date.
10.13 Scrivner Employees. Subsequent to the Closing
and
in the event Buyer offers employment to any of the employees of
the
Company or any of the Subsidiaries, Buyer agrees, to the extent
permitted by the Code and the Internal Revenue Service
regulations
promulgated thereunder, that it will recognize the service of any
such hired Company or Subsidiary employee for the purpose of
determining eligibility to enter any of Buyer's employee benefit
plans (as defined in Section 3(3) of ERISA), and Buyer's vacation
and sick pay policies, and for purposes of vesting of benefits
under such plans assuming such employee otherwise meets the
eligibility requirements for participation, provided, however, in
no event shall the recognition of prior service be included for
purposes of calculating the amount or level of benefits the
employee would be entitled to receive under such benefit plans.
Nothing herein contained shall prohibit Buyer at any time in its
sole and absolute discretion from amending, modifying or
terminat-
ing any benefit plan which it may offer any of such employees of
the Company or any of the Subsidiaries. Further, regardless of
the
provisions of this Section 10.12 or any other provision of this
Agreement (except as provided in Section 10.04) there are no
third-
party beneficiaries of this Agreement. For the purpose of this
Section 10.13, the term "Buyer" shall also include Buyer's
subsidiaries.
IN WITNESS WHEREOF, this Agreement has been duly
executed
and delivered by the duly authorized officers of Seller and Buyer
as of the date first above written.
FLEMING COMPANIES, INC.
/s/ Robert E. Stauth
Name:
Robert E. Stauth
Title: Chairman, President and
Chief Executive Officer
FRANZ HANIEL & CIE. GmbH
/s/ Ernst Alers
Name:
Ernst Alers
Title: Member of the Managing
Board
/s/ Jerry D. Metcalf
Name: Jerry D. Metcalf
Title: Member of the Managing
Board
<PAGE>
EXHIBIT A
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
IRREVOCABLE TRANSFERABLE LETTER
OF CREDIT NO.
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126-0647
Ladies and Gentlemen:
We hereby establish, at the request and for the account
of Franz Haniel & Cie. GmbH ("Franz Haniel"), our Irrevocable
Tran-
sferable Letter of Credit No. in your favor in the
amount of Thirty Million U.S. Dollars (U.S. $30,000,000).
We hereby irrevocably authorize you to draw on us, in
accordance with the terms and conditions contained herein, in one
or more drawings by your draft, payable at sight on a day other
than (a) a Saturday or a Sunday, (b) a legal holiday or the
equiva-
lent on which banking institutions generally are authorized or
required to close in New York, New York, or (c) a day on which
the
New York Stock Exchange is closed (a "Business Day"), and accom-
panied by your written and completed certificate signed by you in
the form of Annex A attached hereto, an aggregate amount not to
exceed the amount of this Letter of Credit set forth above.
Each draft submitted hereunder shall be dated the date
of
its presentation and shall be presented at our office located at
, Attn:
(or by fax to ( ) - , Attn:
) and shall be signed by one who states therein that he
is
your duly authorized officer or agent. If we receive any of your
drafts at such office, together with the required certificate,
not
later than 11:00 a.m. ( time) on a
Business Day prior to the termination hereof, we will honor the
same on such Business Day in accordance with your payment
instruc-
tions. If we receive any of your Drafts at such office, together
with the required certificate, after 11:00 a.m. (
time) on a Business Day prior to the termination hereof, we
will honor the same by the next succeeding Business Day in
accordance with your payment instructions. If requested by you,
payment under this Letter of Credit may be made by wire transfer
of
immediately available funds to your account in a bank on the
Federal Reserve wire system or by deposit of same day funds into
a
designated account that you maintain with us.
Multiple drawings may be made hereunder, provided that
(a) each drawing honored by us hereunder shall pro tanto reduce
the
amount available under this Letter of Credit, and (b) drawings
hereunder honored by us shall not, in the aggregate, exceed the
amount set forth above.
The initial term of this Letter of Credit will expire
at
2:00 p.m, New York, New York, on , 1997
(the
"Initial Expiration Date"), unless not more than twenty (20) and
not less than ten (10) days before such date (an "Extension
Notice
Period") you give us written notice in the form of Annex B
attached
hereto of each claim under Article VIII of the Stock Purchase
Agr-
eement by and between you and Franz Haniel dated ,
1994
(the "Stock Purchase Agreement") against Franz Haniel (a "Claim")
which is being diligently prosecuted. In such event, this Letter
of Credit shall automatically be extended for one (1) year from
the
Initial Expiration Date (the last day of which shall be referred
to
as the "Second Expiration Date"). Thereafter, this Letter of
Cred-
it shall be extended for successive six (6) month periods (the
last
day of each such six (6) month period being referred to herein as
a "Subsequent Expiration Date"); provided that, during each
related
Extension Notice Period, you shall have delivered written notice
in
the form of Annex C attached hereto identifying each previously
identified claim which is still being diligently prosecuted.
Not-
withstanding the foregoing sentence, this Letter of Credit shall
not be extended for six (6) month periods if, at least sixty (60)
days prior to the Second Expiration Date or the then current
Subse-
quent Expiration Date, as the case may be, we notify you and
Franz
Haniel in writing, delivered by facsimile, to be followed by
hand,
registered mail or courier, to the effect that the expiry date of
this Letter of Credit will not be extended (the "Termination No-
tice").
This Letter of Credit is transferable to any pledgee to
which you have granted a security interest in the Stock Purchase
Agreement. We shall not be obligated to recognize any transfer
of
this Letter of Credit until an executed transfer form is filed
with
us and notice thereof is endorsed by us. You shall not be
obligat-
ed to pay any fees or charges to us in connection with any
transfer
of this Letter of Credit. A form for filing transfer
instructions
is attached hereto as Annex D.
We hereby agree with you and the drawers, endorsers,
and
bona fide holders of all drafts drawn under and in conformity
with
the terms of this Letter of Credit that such drafts will be duly
honored by us upon presentation within the validity period. This
Letter of Credit sets forth in full the terms of our undertaking
and such undertaking shall not in any way be amended, modified,
amplified or limited by reference to any document, instrument or
agreement referred to herein or in which this Letter of Credit is
referred to or to which this Letter of Credit relates (other than
the annexes attached hereto), and any such reference shall not be
deemed to incorporate herein by reference any document,
instrument
or agreement. We hereby waive the right to defer the honor of
such
drafts presented by you or by any drawer, endorser, or bona fide
holder of any such drafts.
On the day that is eighteen (18) months after the date
hereof, the aggregate amount available to be drawn under this
Let-
ter of Credit will automatically decrease by an amount equal to
$15,000,000 less (i) the sum of the aggregate amount of any draw-
ings on this Letter of Credit paid to you by us and (ii) the
amount
of any unpaid Claims as of the last day of such period of which
we
have received written notice from you, but in no event more than
$15,000,000. On the day that is twenty-four (24) months after
the
date hereof the amount available to be drawn under this Letter of
Credit will automatically decrease by an amount equal to
$7,500,000
less (i) the sum of the aggregate amount of any drawings on this
Letter of Credit paid to you by us during the prior six (6) month
period and (ii) the amount of any unpaid Claims as of the last
day
of such period of which we have received written notice from you,
but in no event more than $7,500,000. On the day that is thirty-
six (36) months after the date hereof, the amount available to be
drawn under the Letter of Credit will automatically decrease to
an
amount equal to the aggregate amount of any unpaid Claims as of
the
last day of such period and of which we have received notice from
you during the initial Extension Notice Period. On the Second
Expiration Date and each Subsequent Expiration Date the amount
which may be drawn under this Letter of Credit shall
automatically
decrease to an amount equal to the aggregate amount of any
remain-
ing unpaid Claims as of the last day of such period and of which
we
have received notice from you during the related Extension Notice
Period.
Except as specifically otherwise set forth herein, this
Letter of Credit shall be governed by and construed in accordance
with the "Uniform Customs and Practice for Documentary Credits"
(1993 Revision, International Chamber of Commerce Publication No.
500 (hereinafter, the "Uniform Customs")). This Letter of Credit
shall be deemed to be a contract made under the laws of the State
of New York and shall, as to matters not governed by the Uniform
Customs, be governed by and construed in accordance with the laws
of said state.
Communications to us with respect to this Letter of
Cred-
it shall be in writing and be addressed to us at
(Attention:
), specifically referring to the number of this
Letter
of Credit. Communications to you with respect to this Letter of
Credit shall be in writing and be addressed to you at 6301
Waterford Boulevard, Post Office Box 26647, Oklahoma City,
Oklahoma
73126-0647 (Attention:
).
Morgan Guaranty Trust Company of
New York
By
<PAGE>
ANNEX A
[Date]
Attention:
Re: Irrevocable Transferable Letter
of
Credit No.
Ladies and Gentlemen:
Fleming Companies, Inc. (the "Beneficiary") hereby
certi-
fies to you with reference to Irrevocable Transferable Letter of
Credit No. that:
1. The Beneficiary is the beneficiary under the
Letter
of Credit.
2. The Beneficiary is entitled under Article VIII of
the Stock Purchase Agreement dated , 1994 by and between
Fleming Companies, Inc. and Franz Haniel & Cie. GmbH to draw
under
the Letter of Credit.
3. The Beneficiary demands payment of U.S. $
under the Letter of Credit.
4. A copy of this certificate has been delivered to
Franz Haniel & Cie. GmbH at least three (3) business days prior
to
the date thereof.
IN WITNESS WHEREOF, the Beneficiary has executed and
de-
livered this certificate by its duly authorized officer as of the
day of , 199 .
FLEMING COMPANIES, INC.
By
Its:
cc: Franz Haniel & Cie. GmbH.
ANNEX B
NOTICE OF PENDING CLAIM
TO:
RE: Irrevocable Transferable Letter of Credit
No.
DATE:
Ladies and Gentlemen:
Please be advised that a claim relating to
and
in the amount of $ has been asserted against Franz
Haniel
& Cie. GmbH under Article VIII of the Stock Purchase Agreement
dated , 1994, by and between Franz Haniel & Cie. GmbH
and
Fleming Companies, Inc. and that such claim is being diligently
prosecuted by the undersigned.
A copy of this notice has been delivered to Franz
Haniel
& Cie. GmbH.
Dated the day and year first written above.
FLEMING COMPANIES, INC.
By
cc: Franz Haniel & Cie. GmbH
ANNEX C
NOTICE OF CLAIM
TO:
RE: Irrevocable Transferable Letter of Credit
No.
DATE:
Ladies and Gentlemen:
Please be advised that each of the claims identified
below, in the aggregate amount of $ , were asserted
again-
st Franz Haniel & Cie. GmbH under Article VIII of the Stock Pur-
chase Agreement dated , 1994, by and between Franz
Haniel
& Cie. GmbH and Fleming Companies, Inc., were previously
identified
to you in our initial notice dated , and remain
unpaid.
Subject of Claim Amount
A copy of this notice has been delivered to Franz
Haniel
& Cie. GmbH.
Dated the day and year first written above.
FLEMING COMPANIES, INC.
By
cc: Franz Haniel & Cie. GmbH
<PAGE>
ANNEX D
NOTICE OF TRANSFER
TO:
RE: Irrevocable Transferable Letter of Credit
No.
DATE:
Ladies and Gentlemen:
Please be advised that the undersigned, the current
named
beneficiary of the above-referenced Irrevocable Transferable
Letter
of Credit, has transferred the Letter of Credit to:
and we hereby certify that such transferee is a pledgee to which
we
have granted a security interest in the Stock Purchase Agreement
referred to in the Letter of Credit.
A copy of this notice of transfer has been delivered to
Franz Haniel & Cie. GmbH.
Dated the day and year first written above.
Beneficiary:
FLEMING COMPANIES, INC.
By
cc: Franz Haniel & Cie. GmbH<PAGE>
EXHIBIT C-1
[Form of Opinion of Milbank, Tweed, Hadley & McCoy]
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126
Ladies and Gentlemen:
We have acted as special United States counsel to Franz
Haniel & Cie. GmbH,a German Corporation ("Seller"), in connection
with the Stock Purchase Agreement dated as of July , 1994
(the
"Stock Purchase Agreement"), by and between Fleming Companies,
Inc., an Oklahoma corporation, and Seller and the transactions
contemplated thereby. Capitalized terms used but not defined
herein shall have the respective meanings given to such terms in
the Stock Purchase Agreement.
In rendering the opinions expressed below, we have
examined (a) the Stock Purchase Agreement and the Trust Agreement
entered into as of the 1st day of July 1981 between Seller,
Hanamerica, Inc. (now Haniel Corporation, a Delaware
corporation),
and the trustees named therein for the benefit of Seller, the
Company and the Haniel Shareholders (as defined therein)(the
"Trust
Agreement") and (b) corporate records of Seller, the Company and
the Subsidiaries and such other documents as we have deemed
necessary as a basis for the opinions expressed below. In our
examination, we have assumed the genuineness of all signatures,
the
authenticity of all documents submitted to us as originals and
the
conformity with the authentic original documents of all documents
submitted to us as copies. When relevant facts were not inde-
pendently established, we have relied upon certificates of
government officials and of Seller, the Company and the Subsidi-
aries and their respective officers and upon representations and
warranties made in or pursuant to the Stock Purchase Agreement.
In rendering the opinions expressed below, we have
assumed that all of the documents referred to in this opinion
have
been duly authorized by, have been duly executed and delivered
by,
and (other than as to Seller) constitute legal, valid, binding
and
enforceable obligations of, all of the parties to such documents.
We have also assumed that all signatories to such documents have
been duly authorized and that all such parties are duly organized
and validly existing and have the power and authority (corporate
or
other) to execute, deliver and perform such documents.
With respect to paragraph 1 below, we are expressing no
opinion as to the enforceability of (a) the provisions of Section
10.12 of the Agreement or (b) waiver of the right to trial by
jury
as provided in Section 10.04 of the Agreement.
Based upon and subject to the foregoing, and having
considered such questions as law as we deemed necessary as a
basis
for the opinions expressed below, we are of the opinion that:
1. The Stock Purchase Agreement constitutes a valid
and
binding obligation of Seller, enforceable against Seller in
accordance with its terms, except as may be limited by
bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally and
except as the enforceability of the Stock Purchase Agreement is
subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at
law), including without limitations (i) the possible
unavailability
of specific performance, injunctive relief or any other equitable
remedy and (ii) concepts of materiality, reasonableness, good
faith
and fair dealing.
2. Each of the Company and Scrivner is a corporation
duly incorporated, validly existing and in good standing under
the
laws of the State of Delaware, and has the corporate power and
authority to carry on its business as presently conducted, and to
own, lease and operate its properties and other assets.
3. Assuming that Buyer acquires the Shares in good
faith and without notice of any adverse claim within the meaning
of
Section 8-302 of the New York Uniform Commercial Code, the
delivery
of the certificate or certificates representing the Shares in the
manner provided in Section 1.02 of the Stock Purchase Agreement
will transfer to Buyer good and valid title to the Shares, free
of
any adverse claims.
4. Except as set forth in Schedule 2.03 delivered by
Seller to Buyer upon the execution of the Stock Purchase
Agreement,
and except for compliance with the notice filing requirements of
the HSR Act, the execution and delivery by Seller of the Stock
Purchase Agreement did not, and the consummation of the transac-
tions contemplated thereby will not (a) violate or conflict with
any statute, law, ordinance, rule or regulation applicable to
Seller, the Company or any Subsidiary or by which any of their
properties may be bound of affected or (b) violate or conflict
with
any provisions of the respective Certificates of Incorporation or
By-Laws of the Company or Scrivner.
5. Under the laws of the State of New York relating
to
submission of jurisdiction, assuming the validity of such action
under German law, Seller has, pursuant to Section 10.03 of the
Stock Purchase Agreement, validly submitted to the nonexclusive
personal jurisdiction of the United States District Court for the
Southern District of New York sitting in New York City for
purposes
of all legal proceedings arising out of or relating to the Stock
Purchase Agreement, has validly and irrevocably waived any
objection to the laying of venue of any such proceeding in such
court, and has validly and irrevocably appointed CT Corporation
System as its agent for service of process as described in
Section
10.03 of the Stock Purchase Agreement; and service of process
effected on such agent in the manner set forth in Section 10.03
of
the Stock Purchase Agreement will be effective to confer valid
personal jurisdiction over Seller.
6. The trust created pursuant to the Trust Agreement
has been validly terminated as of the Closing Date in accordance
with the terms thereof.
The foregoing opinions are limited to matters involving
the laws of the State of New York, the General Corporation Law of
the State of Delaware and the Federal laws of the United States
of
America, and we do not express any opinion as to the laws of any
other jurisdiction.
At the request of our client, this opinion is being
provided to you pursuant to Section 6.06 of the Stock Purchase
Agreement, and this opinion may not be relied upon by any other
person or for any other purpose other than in connection with the
transactions contemplated by the Stock Purchase Agreement
without,
in each instance, our prior written consent, except that a copy
of
this opinion may be delivered by you to Morgan Guaranty Trust
Company of New York, as Agent, in connection with the Credit
Agreement dated July , 1994, among Buyer, the banks listed
therein, the Co-Agents listed therein and the Agent and such
person
may rely upon this opinion as if it were addressed to and had
been
delivered to such person on the date hereof.
Very truly yours,
<PAGE>
EXHIBIT C-2
[Form of Opinion of Martin von Gehren]
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126
Ladies and Gentlemen:
I have acted as inhouse legal counsel to Franz Haniel
&
Cie. GmbH, a German corporation, ("Seller"), in connection with
the
Stock Purchase Agreement dated as of July , 1994 (the "Stock
Purchase Agreement"), by and between Fleming Companies, Inc., an
Oklahoma corporation, and Seller and the transactions
contemplated
thereby. Capitalized terms used but not defined herein shall
have
the respective meanings given to such terms in the Stock Purchase
Agreement.
In rendering the opinions expressed below, I have
examined (a) the Stock Purchase Agreement and the Trust Agreement
entered into as of the 1st day of July 1981 between Seller,
Hanamerica, Inc. (now Haniel Corporation, a Delaware
corporation),
and the trustees named therein for the benefit of Seller, the
Company and the Haniel Shareholders (as defined therein)(the
"Trust
Agreement") and (b) corporate records of Seller and such other
documents as I have deemed necessary as a basis for the opinions
expressed below. In my examination, I have assumed the
genuineness
of all signatures (other than those of officers of Seller), the
authenticity of all documents submitted to me as originals and
the
conformity with the authentic original documents of all documents
submitted to me as copies. When relevant facts were not inde-
pendently established, I have relied upon certificates of govern-
ment officials and of Seller and its officers and upon
representa-
tions and warranties made in or pursuant to the Stock Purchase
Agreement.
Based upon and subject to the foregoing, and having
considered such questions of law as I deemed necessary as a basis
for the opinions expressed below, I am of the opinion that:
1. Seller is a corporation duly organized and validly
existing under the laws of the Federal Republic of Germany.
Seller
has the corporate power and authority to enter into the Stock
Purchase Agreement and to consummate the transactions
contemplated
thereby.
2. Seller has duly authorized (a) the execution and
delivery of the Stock Purchase Agreement and the consummation of
the transactions contemplated thereby and (b) the termination of
the Trust Agreement. No further corporate actions on the part of
Seller are necessary to authorize (c) the execution of the Stock
Purchase Agreement or to consummate the transactions contemplated
thereby or (d) the termination of the Trust Agreement.
3. The Stock Purchase Agreement has been duly and
validly executed and delivered by Seller. The notice dated July
11, 1994 terminating the Trust Agreement as of the Closing Date
has
been duly and validly executed and delivered by Seller.
4. To my knowledge, the Shares are owned by Seller
free
and clear of any liens, encumbrances, equities and claims.
5. Except as set forth in Schedule 2.03 delivered by
Seller to Buyer upon the execution of the Stock Purchase
Agreement,
the execution and delivery by Seller of the Stock Purchase
Agreement did not, and the consummation of the transactions
contemplated thereby will not (a) violate or conflict with any
statute, law, ordinance, rule or regulation of the Federal
Republic
of Germany or any order, writ, injunction, judgment or decree,
applicable to Seller or by which any of its properties may be
bound
or affected, (b) violate or conflict with any provisions of the
constituent documents of Seller, (c) constitute a violation of or
a default or breach (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in
the
termination of, accelerate the performance required by, or give
rise to any right of termination, acceleration, cancellation, or
amendment under, or result in any Liens upon Seller or any of its
assets or have any other adverse effect under, any term or
provision of any contract, commitment, understanding,
arrangement,
agreement or restriction of any kind or character to which Seller
is a party or by which any of its assets or properties may be
bound, subjected or affected.
6. Under the laws of the Federal Republic of Germany
relating to submission of jurisdiction, assuming the validity of
such action under the laws of the State of New York, Seller has,
pursuant to Section 10.03 of the Stock Purchase Agreement,
validly
submitted to the nonexclusive personal jurisdiction of the United
States District Court for the Southern District of New York
sitting
in New York City for purposes of all legal proceedings arising
out
of or relating to the Stock Purchase Agreement, has validly and
irrevocably waived any objection of venue of a proceeding in such
court, and has validly and irrevocably appointed CT Corporation
System as its agent for service of process as described in
Section
10.03 of the Stock Purchase Agreement; and service of process
effected on such agent in the manner set forth in Section 10.03
of
the Stock Purchase Agreement will be effective to confer valid
personal jurisdiction over Seller.
The foregoing opinions are limited to matters involving
the laws of the Federal Republic of Germany, and I do not express
any opinion as to the laws of any other jurisdiction.
This opinion is being provided to you pursuant to
Section
6.06 of the Stock Purchase Agreement, and this opinion may not be
relied upon by any other person or for any purpose other than in
connection with the transactions contemplated by the Stock
Purchase
Agreement without, in each instance, my prior written consent.
Notwithstanding the foregoing, copy of this opinion may be
delivered by you to Morgan Guaranty Trust company of New York, as
Agent, in connection with the Credit Agreement dated July ,
1994,
among Buyer, the banks listed therein,
and
as Co-Agents and Agent, provided that
none
of such persons may rely on this opinion. No expansion or
interpretation of the opinions herein may be made by implication
or
otherwise. The opinions herein are based on the law and facts in
existence on the date of this letter and I assume no
responsibility
or obligation to monitor any change in such law or facts
hereafter
or to modify or update this opinion as a result thereof.
Very truly yours,
Martin von Gehren
Inhouse Legal Counsel for
Franz Haniel & Cie. GmbH
<PAGE>
EXHIBIT C-3
[Form of Opinion of James V. Barwick]
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
P. O. Box 26647
Oklahoma City, Oklahoma 73127
Ladies and Gentlemen:
I am Vice President, General Counsel and Secretary of
Scrivner, Inc., a Delaware corporation, and I am rendering this
opinion in such capacity, pursuant to the request of Seller in
connection with the Stock Purchase Agreement dated as of July ,
1994 (the "Stock Purchase Agreement"), by and between Fleming
Companies, Inc., an Oklahoma corporation ("Buyer"), and Franz
Haniel & Cie. GmbH, a German corporation ("Seller"), and the
transactions contemplated thereby. Capitalized terms used but
not
defined herein shall have the respective meanings given to such
terms in the Stock Purchase Agreement or the Accord referenced
below.
This opinion letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications, excep-
tions, definitions, limitations on coverage and other
limitations,
all as more particularly described in the Accord, and this
opinion
letter should be read in conjunction therewith. Furthermore,
reference herein to the phrase "to my knowledge," shall have the
same meaning as the term "Actual knowledge" is defined in the
Accord.
In rendering the opinions expressed below, I have
examined (a) the Stock Purchase Agreement and (b) corporate
records
of the Company and the Subsidiaries and such other documents as I
have deemed necessary as a basis for the opinions expressed
below.
In my examination, I have assumed the genuineness of all signa-
tures, the authenticity of all documents submitted to me as
originals and the conformity with the authentic original
documents
of all documents submitted to me as copies. When relevant facts
were not independently established or known, I have relied solely
upon information from and/or certificates of governmental
officials
and of or from the Company and the Subsidiaries and their respec-
tive officers or employees and upon the representations and
warranties made in or pursuant to the Stock Purchase Agreement.
Based upon and subject to the assumptions, qualifica-
tions, exceptions and limitations contained in or referred to
herein, and having considered such questions of law as I deemed
necessary as a basis for the opinions expressed below, I am of
the
opinion that:
1. Each of the Company and Subsidiaries is a corpora-
tion duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, and has the
corporate power and authority to carry on its business as
presently
conducted, and to own, lease and operate its properties and other
assets. Except as set forth in Schedule 2.02 delivered by Seller
to Buyer upon the execution of the Stock Purchase Agreement, each
of the Company and Subsidiaries which is a corporation is duly
licensed or qualified to do business as a foreign corporation,
and
is in good standing, in each jurisdiction wherein the character
of
the assets or properties owned, leased or operated by it, or the
nature of its business, makes such licensing or qualification
necessary, except where failure to be so licensed or qualified
and
in good standing would not have a material adverse effect on the
Company and the Subsidiaries taken as a whole.
2. Schedule 2.01 delivered by Seller to Buyer upon
the
execution of the Stock Purchase Agreement correctly lists for the
Company and each Subsidiary which is a corporation the amount of
its authorized capital stock, the amount of its outstanding
capital
stock and the record owners of such outstanding capital stock.
Except as disclosed on Schedule 2.01, all of the outstanding
shares
of capital stock of the Company and each Subsidiary which is a
corporation owned by Seller, the Company or any Subsidiary and,
to
my knowledge, by any other person, have been validly issued, are
fully paid and nonassessable, and to my knowledge are owned by
the
Company or Subsidiaries as stated in Schedule 2.01, free and
clear
of any liens, encumbrances, equities and claims. To my
knowledge,
except as disclosed in Schedule 2.01, there are no outstanding
options, warrants or rights convertible into or exercisable or
shares of capital stock of the Company or any of the Subsidiaries
which is a corporation.
3. Except as set forth in Schedule 2.03 delivered by
Seller to Buyer upon the execution of the Stock Purchase
Agreement,
and except for compliance with the notice filing requirements of
the HSR Act, the execution and delivery of the Stock Purchase
Agreement did not, and the consummation of the transactions
contemplated thereby will not, as to the Company or any
Subsidiary
(a) violate or conflict with any statute, law, ordinance, rule or
regulation of the State of Oklahoma applicable to the Company or
any Subsidiary or any order, writ, injunction, judgment or decree
applicable to the Company or any Subsidiary which is a
corporation
or by which any of their properties may be bound or affected or
to
my knowledge any order, writ, injunction, judgment or decree
applicable to any Subsidiary that is not a corporation or by
which
any of its properties may be bound or affected, (b) violate or
conflict with any provisions of the respective certificates of
Incorporation or By-Laws (or other comparable charter documents)
of
the Company or any Subsidiary, or (c) to my knowledge, constitute
a violation of or a default or breach (or an event which, with
notice or lapse of time, or both, would constitute a default)
under, or result in or give rise to, any right of termination,
acceleration, cancellation, or amendment under or result in any
Liens upon the Company, any Subsidiary or any of their assets or
have any other adverse effect under any term or provision of any
Contract of the Company or any Subsidiary, except in the case of
(a), or (c), where such violations, terminations, conflicts,
accelerations, defaults, breaches or grounds and rights of
termination, cancellation, acceleration and amendment would not
have a material adverse effect on the Company or any of the
Subsidiaries taken as a whole so effected or prevent or
materially
delay the consummation of the transactions contemplated by the
Stock Purchase Agreement.
4. Schedule 2.12 delivered by Seller to Buyer upon
execution of the Stock Purchase Agreement, to my knowledge, lists
all of the Litigation which is Insured and not Insured with
respect
to the Company and the Subsidiaries.
In addition to the qualifications, exceptions, defini-
tions, limitations on coverage and other limitations described
herein or in the Accord, this Opinion Letter is limited by,
subject
to or based on the following:
a. I express no opinion in paragraph 3 as to any
violation of law, statute, ordinance, rule or regulation of the
State of Oklahoma (i) which may have become applicable to the
Company or any Subsidiary as a result of the involvement by Buyer
and Seller in the transactions contemplated by the Stock Purchase
Agreement because of their legal or regulatory status or because
of
any other facts specifically pertaining to the Seller or Buyer;
(ii) which does not have any material adverse effect on the Buyer
and does not deprive the Buyer of any material benefit under the
Stock Purchase Agreement or (iii) which can be readily cured
without significant delay or expense to the Buyer or loss of any
material benefit under the Stock Purchase Agreement and without
any
material adverse effect on the Buyer during the period of such
violation.
Please be advised that I am a member of the Bar of the
State of Oklahoma and not admitted to practice in any other
state,
and I do not purport to be an expert on, or to express any
opinion
herein concerning, any law of any jurisdiction, including without
limitation the jurisdictions of incorporation of the Company or
any
Subsidiary (other than the laws of the State of Oklahoma).
This opinion is being provided to you pursuant to
Section
6.06 of the Stock Purchase Agreement, and this opinion may not be
used or relied upon by any other person or for any purpose other
than in connection with the transactions contemplated by the
Stock
Purchase Agreement without, in each instance, my prior written
consent. Notwithstanding the foregoing, a copy of this opinion
may
be delivered by you to Morgan Guaranty Trust Company of New York,
as Agent, in connection with the Credit Agreement dated July ,
1994, among Buyer, the banks listed therein, theCo-Agents listed
therein and the Agent; provided that none of such persons may
rely
on this opinion. No expansion or interpretation of the opinions
herein may be made by implication or otherwise. The opinions
herein are based on the law and facts in existence on the date of
this letter and I assume no responsibility or obligation to
monitor
any change in such law or facts hereafter or to modify or update
this opinion as a result thereof.
Very truly yours,
James V. Barwick
Vice President, General Counsel,
and Secretary
<PAGE>
EXHIBIT C-4
[Form of Legal Opinion for
Letter of Credit Issued by MGT]
, 199
Dear Sirs:
This opinion is furnished to you in connection with
Letter of Credit No. (the "Letter of Credit") issued by
Morgan Guaranty Trust Company of New York (the "Bank") for the
account of . Terms defined in the Letter of
Credit and used but not defined herein have the meanings given to
them in the Letter of Credit.
I am Vice President and Assistant General Counsel of
[the
Bank][J.P. Morgan & Co. Incorporated] and have represented the
Bank
in connection with issuance of the Letter of Credit. In
connection
with the delivery of this opinion, I have examined (a) a copy of
the Letter of Credit and (b) copies, certified or otherwise
identified to my satisfaction, of such documents, corporate
records, certificates of public officials and other instruments,
and have conducted such investigation of fact and law, as I have
deemed necessary or appropriate for the opinions expressed
herein.
In rendering the opinions expressed below, (a) I have
assumed and have not verified that the signatures (other than
signatures of officers of the Bank) on all documents that I have
examined are genuine and (b) I have assumed that no draft or
certificate presented under the Letter of Credit will be forged
or
fraudulent and that there is no fraud in the transaction within
the
meaning of Section 5-114 of the Uniform Commercial Code as in
effect in the State of New York.
Based on the foregoing, I am of the opinion that:
(1) The Bank is a corporation, duly organized, validly
existing and in good standing under the laws of the State of New
York.
(2) The Bank has full corporate power and authority to
execute and deliver the Letter of Credit and to perform its
obligations thereunder and the Letter of Credit has been duly
authorized, executed and delivered by the Bank.
(3) No consents, authorizations or approvals are
required for the execution and delivery by the Bank of the Letter
of Credit and the performance of its obligations thereunder, and
no
other action by, and no notice to or filing with, any
governmental
authority or regulatory body is required for such execution,
delivery or performance.
(4) The execution, delivery and performance by the
Bank
of the Letter of Credit do not and will not contravene any law or
governmental regulation or order presently binding on the Bank or
its articles of incorporation or bylaws or contravene any
provision
of or constitute a default under any indenture, contract or other
instrument to which the Bank is a party or by which the Bank is
bound.
(5) The Letter of Credit constitutes the legal, valid
and binding obligation of the Bank enforceable in accordance with
its terms (except as enforcement thereof may be limited by
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights generally).
I call your attention to the inherent equitable powers
of
Bankruptcy Courts. No opinion is expressed as to the
availability
to any person of any equitable or injunctive relief.
I am a member of the bar of the State of New York and
the
opinions expressed herein are limited to the laws of the State of
New York and the Federal Laws of the United States of America.
I am furnishing this letter to you in my capacity as
Counsel for the Bank and this opinion may not be relied upon by
or
furnished to any other person without my prior written consent.
Very truly yours,
<PAGE>
EXHIBIT C-5
[Form of Opinion of Counsel to General Partnership]
, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
Post Office Box 26647
Oklahoma City, Oklahoma 73126
Ladies and Gentlemen:
We have acted as special counsel to , a
general partnership organized under the laws of the State of
(the "Partnership") and we are rendering this opinion in such
capacity pursuant to the request of Franz Haniel & Cie. GmbH, a
German corporation ("Seller") in connection with the Stock
Purchase
Agreement dated as of July , 1994 (the "Stock Purchase Agree-
ment"), by and between Fleming Companies, Inc., an Oklahoma
corporation, and Seller, and the transactions contemplated
thereby.
Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Stock Purchase
Agreement or the Accord referenced below.
The opinion is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord, (the "Accord") of the
ABA Section of Business Law, (1991). As a consequence, it is
subject to a number of qualifications, exceptions, definitions,
limitations on coverage and other limitations, all as more
particularly described in the Accord, and this opinion letter
should be read in conjunction therewith.
In rendering the opinions expressed below, we have
examined (a) the Stock Purchase Agreement, (b) the Partnership
Agreement dated as of , 19 with respect to the
Partnership
(the "Partnership Agreement") and (c) records to the Partnership
and such other documents as we have deemed necessary as a basis
for
the opinions expressed below. In our examination, we have
assumed
the genuineness of all signatures, the authenticity of all
documents submitted to me as originals and the conformity with
the
authentic original documents of all documents submitted to me as
copies. When relevant facts were not independently established
or
known, we have relied solely upon information from and/or
certifi-
cates of government officials and of or from a general partner of
the Partnership and its respective officers or employees and upon
the representations and warranties made in or pursuant to the
Stock
Purchase Agreement.
In rendering the opinions expressed below, we have
assumed that all of the documents referred to in this opinion
have
been duly authorized by, have been duly executed and delivered
by,
and constitute legal, valid, binding and enforceable obligations
of, all of the parties to such documents, that all signatures to
such documents have been duly authorized and that all such
parties
are duly organized and validly existing and have the power and
authority (corporate or other) to execute, deliver and perform
such
documents.
Based upon and subject to the assumptions, qualifica-
tions, exceptions and limitations contained in or referred to
herein, and having considered such questions of law as we deemed
necessary as a basis for the opinions expressed below, we are of
the opinion that:
1. The Partnership is properly organized under the
laws
of the state of its organization, and has the authority to carry
on
its business as presently conducted, and to own, lease and
operate
its properties and other assets.
2. The execution and delivery of the Stock Purchase
Agreement did not, and the consummation of the transactions
contemplated thereby will not, violate or conflict with the
Partnership Agreement.
The foregoing opinions are limited matters involving
the
laws of the State of , and we do not express any
opinion
as to the laws of any other jurisdiction.
This opinion is being provided to you pursuant to
Section
6.06 of the Stock Purchase Agreement, and this opinion may not be
relied upon by any other person or for any other purpose other
then
in connection with the transactions contemplated by the Stock
Purchase Agreement without, in each instance, our prior written
consent. Notwithstanding the foregoing, a copy of this opinion
may
be delivered by you to Morgan Guaranty Trust Company of New York,
as Agent, in connection with the Credit Agreement dated July ,
1994, among Buyer, the banks listed therein, the Co-Agents listed
therein and the Agent; provided that none of such persons may
rely
on this opinion. No expansion or interpretation of the opinion
herein may be made by implication or otherwise. The opinions
herein are based on the law and facts in existence on the date of
this letter and we assume no responsibility or obligation to
monitor any change in such law or facts hereafter or to modify or
update this opinion as a result thereof.
Very truly yours,
<PAGE>
EXHIBIT D
[McAfee & Taft A Professional Corporation]
, 1994
Franz Haniel & Cie. GmbH
Franz - Haniel - Platz 1
D-47119 Duisburg - Ruhrort
Re: Stock Purchase Agreement by and
between Fleming Companies, Inc.
and Franz Haniel & Cie. GmbH
Ladies and Gentlemen:
We have acted as counsel to Fleming Companies, Inc.
(the
"Buyer") in connection with the preparation of the Stock Purchase
Agreement dated July , 1994 (the "Agreement"), between Buyer
and
Franz Haniel & Cie. GmbH (the "Seller") and have participated on
Buyer's behalf in connection with the acquisition by Buyer of all
of the issued and outstanding shares of common stock of Haniel
Corporation, a Delaware corporation (the "Company"). This
Opinion
Letter is provided to you at the request of Buyer pursuant to
Sec-
tion 7.04 of the Agreement. Except as otherwise indicated
herein,
capitalized terms used in this Opinion Letter are defined as set
forth in the Agreement or the Accord (see below).
This Opinion Letter is governed by, and shall be inter-
preted in accordance with, the Legal Opinion Accord (the
"Accord")
of the ABA Section of Business Law (1991). As a consequence, it
is
subject to a number of qualifications, exceptions, definitions,
limitations on coverage and other limitations, all as more
particu-
larly described in the Accord, and this Opinion Letter should be
read in conjunction therewith. The law covered by the opinions
expressed herein is limited to the Federal Law of the United
States
and the Law of the State of Oklahoma.
Subject to the exceptions, qualifications and
limitations
contained herein, we are of the opinion that:
1. Buyer is a corporation duly organized, validly ex-
isting and in good standing under the laws of the State of
Oklaho-
ma. Buyer has the corporate power and authority to enter into
the
Agreement and to consummate the transactions contemplated
thereby.
2. Buyer has duly authorized the execution and
delivery
of the Agreement and the consummation of the transactions contem-
plated thereby. No further corporate actions on the part of
Buyer
are necessary to authorize the Agreement or to consummate the
tran-
sactions contemplated thereby.
3. The Agreement is enforceable against the Buyer.
4. Execution and delivery by Buyer of, and
performance
of its agreements in, the Agreement do not (i) violate the
Constit-
uent Documents of Buyer or (ii) breach or otherwise violate any
existing obligation of Buyer under any order, writ, injunction,
judgment or decree applicable to Buyer or by which any of its
prop-
erties may be bound or affected.
5. Execution and delivery by Buyer of, and
performance
by Buyer of its agreements in, the Agreement do not violate pro-
visions of statutory law and regulation.
In addition to the qualifications, exceptions, defini-
tions, limitations on coverage and other limitations described in
the Accord, this opinion is limited by, subject to or based on
the
following:
(a) With respect to paragraph 3, we are expressing no
opinions as to (i) the enforceability of provisions that purport
to
(a) establish any evidentiary standard, (b) specify any
interpreta-
tion or standard of interpretation, (c) specify the scope or
effect
of any waiver or any omission or delay of enforcement of any
remedy
or (d) dictate severance or reformation of contractual remedies,
or
(ii) the enforceability of Sections 8.08, 10.03, 10.09 and 10.12
of
the Agreement. Furthermore, our opinion as to the enforceability
of the Agreement which is governed by state law other than
Oklahoma
means that if the Agreement had reference to Oklahoma law rather
than the law of another state as the governing law, or if an
Okla-
homa court having jurisdiction were to decide that,
notwithstanding
the reference to the law of another state, such document shall be
construed in accordance with, and governed by Oklahoma law, then
such document would be enforceable.
(b) We express no opinion in paragraph 5 as to any
vio-
lation of law or regulation (i) which may have become applicable
to
Buyer as a result of the involvement of Seller in the
transactions
contemplated by the Agreement because of its legal or regulatory
status or because of any other facts specifically pertaining to
Seller; (ii) which does not have any material adverse effect on
you
and does not deprive you of any material benefit under the Agree-
ment; or (iii) which can be readily cured without significant
delay
or expense to you of any material benefit under the Agreement and
without any material adverse effect on you during the period of
such violation or the period such permit, consent, approval,
autho-
rization or action was not obtained or effected.
This Opinion Letter may be relied upon by you only in
connection with the transactions contemplated by the Agreement
and
may not be used or relied upon by you or any other person for any
purpose whatsoever, except to the extent authorized in the
Accord,
without in each instance our prior written consent.
Very truly yours,
EXHIBIT 2.1
AGREEMENT TO FURNISH OMITTED SCHEDULES
Fleming Companies, Inc. hereby agrees, upon request, to
provide to the Securities and Exchange Commission on a supplemental
basis a copy of any schedule to the Stock Purchase Agreement, dated
as of July 15, 1994, by and between Fleming Companies, Inc. and
Franz Haniel & Cie. GmbH which was omitted from the registrant's
filing on Form 8-K.
FLEMING COMPANIES, INC.
Dated: August 1, 1994 By: /s/ Donald N. Eyler
Donald N. Eyler
Senior Vice President-
Controller
$2,200,000,000
CREDIT AGREEMENT
dated as of
July 19, 1994
among
Fleming Companies, Inc.,
The Banks Listed Herein,
Bank of America National Trust and
Savings Association
The Bank of Nova Scotia
Canadian Imperial Bank of Commerce
Credit Suisse
Deutsche Bank AG New York Branch
The Fuji Bank, Limited
NationsBank of Texas, N.A.
Societe Generale, Southwest Agency
The Sumitomo Bank Ltd. Houston Agency
Texas Commerce Bank, National Association
The Toronto-Dominion Bank
and
Union Bank of Switzerland, Houston Agency
as Agents
and
Morgan Guaranty Trust Company of New York,
as Managing Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . 23
1.03 Use of Ratings . . . . . . . . . . . . . 24
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend . . . . . . . . . . . . 24
2.02 Notice of Borrowings. . . . . . . . . . . 27
2.03 Notice to Banks; Funding of Loans . . . . 28
2.04 Notes . . . . . . . . . . . . . . . . . . 29
2.05 Interest Rates. . . . . . . . . . . . . . 30
2.06 Method of Electing Interest Rates . . . . 35
2.07 Fees. . . . . . . . . . . . . . . . . . . 37
2.08 Optional Termination or Reduction
of Tranche A Commitments by
the Borrower. . . . . . . . . . . . . . 40
2.09 Maturity of Loans; Mandatory
Prepayments . . . . . . . . . . . . . . 40
2.10 Optional Prepayments. . . . . . . . . . . 43
2.11 Optional Termination of Commitment
on Non-Pro Rata Basis . . . . . . . . . 44
2.12 General Provisions as to Payments . . . . 48
2.13 Funding Losses. . . . . . . . . . . . . . 49
2.14 Computation of Interest and Fees. . . . . 50
2.15 Regulation D Compensation . . . . . . . . 50
2.16 Letters of Credit . . . . . . . . . . . . 50
ARTICLE III
CONDITIONS TO BORROWINGS, ISSUANCES OF
LETTERS OF CREDIT AND EFFECTIVENESS
SECTION 3.01 Conditions to All Borrowings and
Issuances of Letters of Credit . . . . 54
3.02 Conditions to Effectiveness . . . . . . . 55
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power . . . . . . . 58
4.02 Corporate and Governmental
Authorization; Contravention. . . . . . 58
4.03 Binding Effect. . . . . . . . . . . . . . 59
4.04 Financial Information . . . . . . . . . . 59
4.05 Litigation. . . . . . . . . . . . . . . . 59
4.06 Compliance with ERISA . . . . . . . . . . 60
4.07 Environmental Matters . . . . . . . . . . 60
4.08 Taxes . . . . . . . . . . . . . . . . . . 61
4.09 Subsidiaries. . . . . . . . . . . . . . . 61
4.10 Not an Investment Company . . . . . . . . 62
4.11 No Conflicting Requirements . . . . . . . 62
4.12 Haniel Transaction. . . . . . . . . . . . 62
4.13 Disclosure. . . . . . . . . . . . . . . . 63
4.14 Guarantee Requirement; Certain
Collateral and Other Matters . . . .. . 63
ARTICLE V
COVENANTS
SECTION 5.01 Information . . . . . . . . . . . . . . . . 64
5.02 Payment of Obligations. . . . . . . . . . 67
5.03 Maintenance of Property; Insurance. . . . 67
5.04 Conduct of Business and
Maintenance of Existence. . . . . . . . 68
5.05 Compliance with Laws. . . . . . . . . . . 68
5.06 Inspection of Property,
Books and Records . . . . . . . . . . . 68
5.07 Leverage Ratio. . . . . . . . . . . . . . 69
5.08 Minimum Consolidated Net Worth . . . . . 69
5.09 Fixed Charge Coverage Ratio . . . . . . . 69
5.10 Negative Pledge . . . . . . . . . . . . . 70
5.11 Mergers, Consolidations and
Sales of Assets . . . . . . . . . . . . 72
5.12 Use of Any and All Proceeds . . . . . . . 73
5.13 Debt. . . . . . . . . . . . . . . . . . . 74
5.14 Restricted Payments . . . . . . . . . . . 76
5.15 Transactions with Affiliates. . . . . . . 77
5.16 Capital Expenditures. . . . . . . . . . . 78
5.17 Acquisitions and Investments . . . . . . 78
5.18 Interest Rate Protection. . . . . . . . . 81
5.19 Guarantee Requirement; Other
Collateral Matters. . . . . . . . . . . 81
5.20 Limitation on Payment Restrictions
Affecting Subsidiaries. . . . . . . . . 82
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default . . . . . . . . . . . . 82
6.02 Notice of Default . . . . . . . . . . . . 85
6.03 Cash Cover. . . . . . . . . . . . . . . . 85
ARTICLE VII
THE MANAGING AGENT AND THE AGENTS
SECTION 7.01 Appointment and Authorization . . . . . . . 86
7.02 Managing Agent, Agents and Affiliates . . 86
7.03 Action by Managing Agent and Agents . . . 86
7.04 Consultation with Experts . . . . . . . . 86
7.05 Liability of Managing Agent and Agents. . 87
7.06 Indemnification . . . . . . . . . . . . . 87
7.07 Credit Decision . . . . . . . . . . . . . 87
7.08 Successor Managing Agent and Agents . . . 88
7.09 Managing Agent's Fees . . . . . . . . . . 88
7.10 Collateral Agent. . . . . . . . . . . . . 88
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair . . . . . . . 88
8.02 Illegality. . . . . . . . . . . . . . . . 89
8.03 Increased Cost and Reduced Return . . . . 90
8.04 Base Rate Loans Substituted for
Affected Fixed Rate Loans . . . . . . . 92
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices . . . . . . . . . . . . . . . . . . 93
9.02 No Waivers. . . . . . . . . . . . . . . . 93
9.03 Expenses; Documentary Taxes;
Indemnification . . . . . . . . . . . . 93
9.04 Amendments and Waivers. . . . . . . . . . 94
9.05 Successors and Assigns. . . . . . . . . . 95
9.06 Collateral. . . . . . . . . . . . . . . . 97
9.07 Governing Law; Submission to Juris-
diction; Waiver of Jury Trial . . . . . 97
9.08 Counterparts; Integration . . . . . . . . 97
9.09 Sharing of Set-Offs . . . . . . . . . . . 97
Schedule 1 - Commitments
Schedule 2 - Existing Liens
Schedule 3 - Certain Legal Proceedings
Schedule 4 - Exceptions to ERISA Compliance
Schedule 5 - Existing Fleming Debt
Schedule 6 - Existing Haniel Debt
Schedule 7(a) - Initial Guaranteeing Subsidiaries
Schedule 7(b) - Subsidiaries Directly or Indirectly Owning
Capital Stock of any Initial Guaranteeing
Subsidiary
Schedule 8 - Collateral Subsidiaries Owning Inventory or
Receivables (other than only Excepted
Inventory
or Excepted Receivables or Intercompany
Receivables)
Schedule 9 - Scrivner Subsidiaries Treated as Equity Stores
or Business Development Ventures
Schedule 10 - Permitted Institutions for Syndication
Schedule 11 - Certain Permitted Investments
Schedule 12 - Certain Stores Held for Sale
Schedule 13 - Certain Multiemployer Plan Liabilities
Exhibit A-1 - Tranche A Note
Exhibit A-2 - Tranche B Note
Exhibit A-3 - Tranche C Note
Exhibit A-4 - Swingline Note
Exhibit B-1 - Opinion of Special Counsel for the Borrower
Exhibit B-2 - Opinion of General Counsel for the Borrower
Exhibit C - Opinion of Special Counsel for the Managing
Agent
Exhibit D - Form of Assignment and Assumption Agreement
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Subsidiary Guarantee Agreement
Exhibit G-1 - Form of Borrower Pledge Agreement
Exhibit G-2 - Form of Subsidiary Pledge Agreement
Exhibit H-1 - Form of Borrower Security Agreement
Exhibit H-2 - Form of Subsidiary Security Agreement
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of July 19, 1994 among FLEMING
COMPANIES, INC. (the "Borrower"), the BANKS listed on the
signature
pages hereof, the AGENTS listed on the signature pages hereof
(the
"Agents") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Managing Agent (the "Managing Agent").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"1989 ESOP" means that portion of the Consolidated Savings
Plus and Stock Ownership Plan for Fleming Companies, Inc. and its
Subsidiaries, effective September 1, 1989, entitled "Fleming
Stock
Ownership Plan", or any similar stock ownership plan for the sole
benefit of employees of the Borrower and its Subsidiaries.
"Acquisition" means (i) an investment by the Borrower or
any
of its Subsidiaries in any Person (other than the Borrower or any
of its Subsidiaries) pursuant to which such Person shall become a
Subsidiary or shall be merged into or consolidated with the
Borrower or any of its Subsidiaries or (ii) an acquisition by
the
Borrower or any of its Subsidiaries of the property and assets of
any Person (other than the Borrower or any of its Subsidiaries)
that constitute substantially all of the assets of such Person or
of any division or line of business of such Person.
"Adjusted CD Rate" has the meaning set forth in Section
2.05(b).
"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire prepared by the Managing
Agent and submitted to the Managing Agent (with a copy to the
Borrower) duly completed by such Bank.
"Affiliate" means (i) any Person that directly, or
indirectly through one or more intermediaries, controls the
Borrower (a "Controlling Person") or (ii) any Person (other than
the Borrower or a Subsidiary) which is controlled by or is under
common control with a Controlling Person. As used herein, the
term
"control" means possession, directly or indirectly, of the power
to
direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise.
"Applicable Lending Office" means, with respect to any
Bank,
(i) in the case of its Domestic Loans, its Domestic Lending
Office
and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar
Lending Office.
"Assessment Rate" has the meaning set forth in Section
2.05(b).
"Asset Sale" means (i) any sale, transfer or other
disposition of all or substantially all of the capital stock of
any
Subsidiary (including, without limitation, the merger of any
Subsidiary with or into any Person other than the Borrower or any
Wholly-Owned Subsidiary) to any Person other than the Borrower or
any Wholly-Owned Subsidiary or (ii) any sale, transfer or other
disposition of any other property or asset of the Borrower or any
Subsidiary to any Person other than the Borrower or any Wholly-
Owned Subsidiary, other than any sale, transfer or other
disposition of: (A) any current asset in the ordinary course of
business; (B) any property or assets in connection with a
Permitted
Receivables Financing; (C) any property or assets within 180 days
after the acquisition, or completion of construction, thereof, to
a Person other than the Borrower or a Subsidiary who then leases
such property to the Borrower or a Subsidiary; (D) existing
property or assets in consideration (in whole or in part) for the
acquisition of new property or assets of a similar character in
the
ordinary course of business; or (E) any other property or assets
in
the ordinary course of business if the total consideration
received
by the Borrower and its Subsidiaries in respect thereof and any
property or assets sold concurrently or in a related transaction
or
series of transactions does not exceed $40,000.
"Assignee" has the meaning set forth in Section 9.05(c).
"Available Commitment" means, at any date, the excess of
(i)
the aggregate amount of the Commitments on such date over (ii)
the
aggregate principal amount of Loans and, in the case of Tranche
A,
Letter of Credit Liabilities, outstanding on such date.
"Availability Period" means, with respect to Tranche B and
Tranche C Loans, the period from the date hereof to and including
the date which is 60 days thereafter.
"Bank" means each bank listed in Schedule 1 hereof as
having
a Commitment, unless and until the Commitment of such Bank is
terminated pursuant to Section 2.11(c), each Assignee that
becomes
a Bank pursuant to Section 9.05(c), each bank that becomes a
party
to this Agreement pursuant to Section 2.11(e) and their
respective
successors and shall include, as the context may require, each
Issuing Bank and the Swingline Bank in such capacities.
"Base Rate" means, for any day, a rate per annum equal to
the higher of (i) the Prime Rate for such day and (ii) the sum of
1/2 of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Loan which bears interest at
the Base Rate pursuant to the applicable Notice of Borrowing or
Notice of Interest Rate Election or Section 2.01(d) or the
provisions of Article VIII or (ii) an overdue amount which was a
Base Rate Loan immediately before it became overdue.
"Base Rate Margin" has the meaning set forth in Section
2.05(a).
"Benefit Arrangement" means at any time an employee
benefit
plan within the meaning of Section 3(3) of ERISA which is not a
Plan or a Multiemployer Plan and which is maintained or otherwise
contributed to by any member of the ERISA Group.
"Borrower" means Fleming Companies, Inc., an Oklahoma
corporation, and its successors.
"Borrower Designated Date" has the meaning set forth in
Section 2.11(a).
"Borrower's Knowledge" shall mean the knowledge of any
executive officer of the Borrower or any other employee of the
Borrower charged with the responsibility of administering this
Agreement, provided that with respect to any representations or
warranties made by the Borrower in Article III as they relate to
Haniel Corporation and its Subsidiaries, "Borrower's Knowledge"
shall also mean the knowledge gained by any officer of the
Borrower
regarding Haniel and its Subsidiaries prior to the Effective
Date.
"Borrower's 1993 Form 10-K" means the Borrower's annual
report on Form 10-K for 1993, as filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of
1934.
"Borrower Special Charges" means the charges to the
Borrower's earnings in December 1993 relating to (i) facilities
consolidation and restructuring, as approved by the board of
directors of the Borrower at a meeting on January 17, 1994 and
(ii)
the extraordinary loss from the early retirement of debt, as
approved by the board of directors of the Borrower at a meeting
on
December 15, 1993.
"Borrowing" means a borrowing hereunder consisting of
Loans
made to the Borrower at the same time by the Banks pursuant to
Article II. A Borrowing is a "Domestic Borrowing" if such Loans
are Domestic Loans or a "Euro-Dollar Borrowing" if such Loans are
Euro-Dollar Loans. A Domestic Borrowing is a "CD Borrowing" if
such Domestic Loans are CD Loans or a "Base Rate Borrowing" if
such
Domestic Loans are Base Rate Loans.
"Business Development Program" means the business practice
of the Borrower and its Subsidiaries of making or guaranteeing
loans to, or making equity investments in, third parties engaged
in
the retail grocery business in exchange for long-term supply
agreements with the Borrower or any Subsidiary.
"Business Development Venture" means any Person
participating in the Business Development Program and any Person
listed on Schedule 9.
"Capital Expenditures" means for any period and with
respect
to any Person, the gross amount of additions
to property, plant and equipment and other capital expenditures
of
such Person during such period, as reflected in the statement of
cash flows for such period of such Person; provided that any
transaction that constitutes an Acquisition or an Investment
shall
not be treated as a Capital Expenditure.
"CD Base Rate" has the meaning set forth in Section
2.05(b).
"CD Loan" means (i) a Loan which bears interest at a CD
Rate
pursuant to the applicable Notice of Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a CD
Loan immediately before it became overdue.
"CD Margin" has the meaning set forth in Section 2.05(b).
"CD Rate" means a rate of interest determined pursuant to
Section 2.05(b) on the basis of an Adjusted CD Rate.
"CD Reference Banks" means Union Bank of Switzerland, The
Bank of Nova Scotia and Morgan Guaranty Trust Company of New York
and each such other bank as may be appointed pursuant to Section
9.05(f).
"Collateral Agent" means Morgan Guaranty Trust Company of
New York in its capacity as Collateral Agent under the Security
Documents and its successors in such capacity.
"Collateral Requirement" means at any date that all
Inventory and Receivables owned by the Borrower or any Collateral
Subsidiary (other than Excepted Inventory and Excepted
Receivables)
is Pledged, provided that (i) Inventory and Receivables with an
aggregate book value not exceeding $25,000,000 (apart from any
Excepted Inventory and Excepted Receivables and any Intercompany
Receivables) may at any time be not Pledged without causing the
Collateral Requirement not to be met and (ii) Inventory and
Receivables with an aggregate book value exceeding $25,000,000
but
not exceeding $75,000,000 (in each case apart from any Excepted
Inventory and Excepted Receivables and any Intercompany
Receivables) may at any time be not Pledged without causing the
Collateral Requirement not to be met so long as (A) the Borrower
has not willfully failed to Pledge or caused to be Pledged such
Inventory and Receivables and (B) the Borrower, upon the
occurrence
of Borrower's Knowledge that any such Inventory or Receivables is
not Pledged, promptly initiates and within 30 days completes or
causes to be completed all such actions as may be necessary to
cause such Inventory or Receivables to be Pledged and provided
further that in any event the Collateral Requirement shall not
fail
to be met merely because a Collateral Subsidiary that owns no
Inventory and owns only Receivables of the character described in
Excepted Inventory and Excepted Receivables or Intercompany
Receivables did not Pledge its Receivables.
"Collateral Subsidiary" means a Subsidiary that is neither
an Equity Store nor a Business Development Venture.
"Commitment" means (except as provided in the definitions
of "Tranche A", "Tranche B" and "Tranche C"), with respect to
each
Bank, the amount set forth opposite the name of such Bank on
Schedule 1 hereto as its Total Commitment as such amount may be
reduced from time to time pursuant to Sections 2.08, 2.11 and
9.05(c) or may be increased from time to time pursuant to Section
2.11.
"Commitment Increase" has the meaning set forth in Section
2.11(b)(iv).
"Commitment Transfer" has the meaning set forth in Section
2.11(b)(iii).
"Consolidated Debt" means at any date the Debt of the
Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date, provided that solely for
purposes of Section 5.07 and 5.09 Consolidated Debt shall not
include the Haniel Receivables.
"Consolidated Fixed Charges" for any period means the sum
of (i) all interest charges on Consolidated Debt (including the
interest component of payments under capitalized lease
obligations)
for such period, (ii) Net Rental Expense From Operating Leases
for
such period and (iii) dividends payable on the Borrower's
preferred
stock during such period.
"Consolidated Net Income" means for any period the
consolidated net income (or loss) of the Borrower and its
Consolidated Subsidiaries for such period.
"Consolidated Net Worth" means at any date the
consolidated
stockholders' equity of the Borrower and its Consolidated
Subsidiaries determined as of such date.
"Consolidated Subsidiary" means at any date any Subsidiary
or other entity the accounts of which would be consolidated with
those of the Borrower in its consolidated financial statements as
of such date.
"Consolidated Total Assets" means, as of any date, the
total
assets of the Borrower and its Consolidated Subsidiaries,
determined on a consolidated basis as of such date.
"Credit Watch Period" means, but only if on the Effective
Date the Borrower is on CreditWatch with negative implications,
in
the case of S&P, and under review for possible downgrading, in
the
case of Moody's, the period commencing on the Effective Date and
ending on the first date thereafter on which S&P announces that
the
Borrower is no longer on CreditWatch with negative implications
or
Moody's announces that the Borrower is no longer under review for
possible downgrading.
"Debt" of any Person means at any date, without
duplication,
(i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes
or
other similar instruments, (iii) all obligations of such Person
to
pay the deferred purchase price of property or services, except
trade accounts payable and other accrued short-term obligations,
in
each case arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases, (v)
all
Debt of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person, (vi) all non-
contingent obligations (and, for purposes of Section 5.10 and
clauses (e) and (f) of Section 6.01, all contingent obligations)
of
such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument
and (vii) all Debt of others Guaranteed by such Person.
"Debt Financing" means any incurrence of Debt pursuant to
Section 5.13(a)(iii).
"Default" means any condition or event that constitutes an
Event of Default or that with the giving of notice or lapse of
time
or both would, unless cured or waived, become an Event of
Default.
"Delivery Date" has the meaning set forth in Section
2.11(e)(ii).
"Derivatives Obligations" of any Person means all
obligations of such Person in respect of any rate swap
transaction,
basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index
option,
bond option, interest rate option, foreign exchange transaction,
cap transaction, floor trans-action, collar transaction, currency
swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option
with
respect to any of the foregoing transactions) or any combination
of
the foregoing transactions.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City
are
authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its
office
located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire
as
its Domestic Lending Office) or such other office as such Bank
may
hereafter designate as its Domestic Lending Office by notice to
the
Borrower and the Managing Agent; provided that any Bank may so
designate separate Domestic Lending Offices for its Base Rate
Loans, on the one hand, and its CD Loans, on the other hand, in
which case all references herein to the Domestic Lending Office
of
such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or
both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.05(b).
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 3.02.
"Environmental Laws" means any and all federal, state,
local
and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, plans,
injunctions,
permits, concessions, grants, franchises, licenses, agreements
and
other governmental restrictions relating to the environment, the
effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"Equity Issuance" means the issuance by the Borrower or
any
Subsidiary to any Person other than the Borrower or a
Wholly-Owned
Subsidiary of any shares of its capital stock or any securities
exchangeable or convertible into such shares (other than any such
securities that constitute Debt) or any warrants or similar
rights
to subscribe for such shares.
"Equity Store" means any Person participating in the
Equity
Store Program and any Person listed on Schedule 9.
"Equity Store Program" means the business practice of the
Borrower and its Subsidiaries of making equity investments in
Persons, and making or guaranteeing loans to such Persons, for
the
purpose of assisting such Person in acquiring, remodeling,
refurbishing, expanding or operating one or more retail grocery
stores and pursuant to which such Person is permitted or required
to reduce the Borrower's or the Subsidiary's equity interest to a
minority position over time (usually five to ten years).
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a
controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which,
together
with the Borrower, are treated as a single employer under Section
414 of the Internal Revenue Code.
"ESOP Loan" means the loan pursuant to the Amended and
Restated Loan and Guarantee Agreement dated as of June 1, 1990,
as
amended to the date hereof, by and among Stock Ownership Trust
for
Fleming Companies, Inc. and its Subsidiaries, the Borrower and
Wachovia Bank and Trust Company, N.A.
"Euro-Dollar Business Day" means any Domestic Business Day
on which commercial banks are open for international business
(including dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in
its
Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or such other
office, branch or affiliate of such Bank as it may hereafter
designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Managing Agent.
"Euro-Dollar Loan" means (i) a Loan which bears interest
at
a Euro-Dollar Rate pursuant to the applicable Notice of Borrowing
or Notice of Interest Rate Election or (ii) an overdue amount
which
was a Euro-Dollar Loan immediately before it became overdue.
"Euro-Dollar Margin" has the meaning set forth in Section
2.05(c).
"Euro-Dollar Rate" means a rate of interest determined
pursuant to Section 2.05(c) on the basis of a London Interbank
Offered Rate.
"Euro-Dollar Reference Banks" means the principal London
offices of Union Bank of Switzerland, The Bank of Nova Scotia and
Morgan Guaranty Trust Company of New York and each such other
bank
as may be appointed pursuant to Section 9.05(f).
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) that is in effect on such
day,
as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in
New
York City with deposits exceeding five billion dollars in respect
of "Eurocurrency liabilities" (or in respect of any other
category
of liabilities that includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category
of
extensions of credit or other assets that includes loans by a
non-United States office of any Bank to United States residents).
"Event of Default" has the meaning set forth in Section
6.01.
"Excepted Inventory and Excepted Receivables" means: (i)
Inventory and Receivables attributable to the stores listed on
Schedule 12 hereto, (ii) retail Inventory and retail Receivables
owned by Save-U-Foods, Inc., an Oklahoma corporation, but only if
the aggregate book value of such retail Inventory and retail
Receivables does not exceed $10,000,000 during 1994, $15,000,000
during 1995, $20,000,000 during 1996, $25,000,000 during 1997,
$30,000,000 during 1998, $35,000,000 during 1999 and $40,000,000
thereafter, (iii) Inventory and Receivables owned by Gateway
Insurance Agency, Inc. and SMF Insurance Company, Ltd. and (iv)
at
any time prior to January 1, 1995, Receivables arising out of
advances made to or for the account of retail grocers to finance
the construction of facilities, but only if the aggregate book
value of such Receivables does not exceed $12,000,000.
"Existing Fleming Debt" means the Debt of Fleming and its
Subsidiaries listed on Schedule 5 hereto.
"Existing Haniel Debt" means the Debt of Haniel
Corporation
and its subsidiaries listed on Schedule 6 hereto.
"Facility Fee Rate" has the meaning set forth in Section
2.07(b).
"Federal Funds Rate" means, for any day, the rate per
annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%)
equal
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by
Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Domestic Business Day next
succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall
be
such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic
Business Day, and (ii) if no such rate is so published on such
next
succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Morgan Guaranty Trust
Company of New York on such day on such transactions as
determined
by the Managing Agent.
"Financing Receivables" means receivables arising from
investments in direct financing leases or in retailer notes or
chattel paper (other than any retailer note or chattel paper
received in exchange or substitution for or in payment or other
satisfaction of any Receivable).
"Fixed Rate Borrowing" means a CD Borrowing or a
Euro-Dollar
Borrowing.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or
both.
"General Syndication" means the assignment by the Managing
Agent and the Agents of rights and obligations under this
Agreement
and the Notes pursuant to Section 9.05(c) at any time prior to
the
date which is 60 days after the date hereof.
"Group of Loans" means at any time a group of Loans
consisting of (i) all Base Rate Loans of a Tranche at such time
or
(ii) all Loans which are Fixed Rate Loans of the same type of a
Tranche having the same Interest Period at such time; provided
that, if a Loan of any particular Bank is converted to or made as
a Base Rate Loan pursuant to Section 8.02 or 8.04, such Loan
shall
be included in the same Group or Groups of Loans from time to
time
as it would have been in if it had not been so converted or made.
"Guarantee" by any Person means any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing
any Debt of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect, contingent
or
otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-orpay, or to maintain financial statement conditions or
other-
wise) or (ii) entered into for the purpose of assuring in any
other
manner the obligee of such Debt of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include (a)
endorsements for collection or deposit in the ordinary course of
business, (b) agreements entered into in the ordinary course of
business to purchase inventory or retail store fixtures of
another
Person at a price not greater than the market value thereof or
(c)
agreements entered into in connection with a Permitted
Receivables
Financing pursuant to which the Borrower or a Subsidiary
guarantees
the collection of Transferred Receivables to the extent of an
amount not exceeding 15% of the book value of Transferred
Receivables from time to time, or in the case of receivables
arising from direct financing leases for retail electronics
systems, 30% of the book value thereof. The term "Guarantee"
used
as a verb has a corresponding meaning.
"Guarantee Agreements" means Guarantee Agreements made on
the Effective Date by the initial Guaranteeing Subsidiaries and
thereafter by any other Subsidiary pursuant to Section 5.19 in
favor of the Managing Agent and the Banks in substantially the
form
of Exhibit F hereto, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions
thereof.
"Guaranteeing Subsidiaries" means, initially, the
Subsidiaries listed on Schedule 7(a) hereto and thereafter means
each such Subsidiary and each other Subsidiary that executes a
Guarantee Agreement pursuant to Section 5.19, provided that a
Subsidiary that is an indirect Subsidiary of the Borrower shall
not
be considered a Guaranteeing Subsidiary unless each intermediate
Subsidiary has also executed a Guarantee Agreement.
"Guarantee Requirement" means at any date that the
properties and assets of Subsidiaries of the Borrower that are
Guaranteeing Subsidiaries, together with the properties and
assets
of the Borrower, constituted as at the last day of the most
recently ended fiscal quarter at least 85% of the consolidated
total properties and assets of the Borrower and its Subsidiaries,
provided that prior to the Rating Target Date the Guarantee
Requirement shall not be met unless each Subsidiary that executes
a Security Agreement also executes a Guarantee Agreement. For
purposes of this definition, properties and assets shall be taken
at their book value and all stock or other equity interests in
Subsidiaries and other intercompany items shall be disregarded.
"Haniel Receivables" means the Existing Haniel Debt listed
on Part E of Schedule 6 hereto.
"Haniel Transaction" means the acquisition by the Borrower
of Haniel Corporation pursuant to the Stock Purchase Agreement
and
the related refinancing of certain outstanding debt of Haniel
Corporation and its subsidiaries and the Borrower and its
Subsidiaries.
"Hazardous Substances" means any toxic, radioactive,
caustic
or otherwise hazardous substance, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance
having any constituent elements displaying any of the foregoing
characteristics.
"Intercompany Receivables" means, for purposes solely of
this Agreement and not for purposes of any Security Documents,
any
Receivable the obligor of which is the Borrower or a Subsidiary.
"Interest Period" means: (1) with respect to each
Euro-Dollar Loan, a period commencing on the date of borrowing
specified in the applicable Notice of Borrowing or on the date
specified in the applicable Notice of Interest Rate Election and
ending one, two, three, six or, if the Managing Agent determines
that deposits in such maturity are available in the London
interbank market for such period, twelve months thereafter, as
the
Borrower may elect in the applicable notice; provided that:
(a) any Interest Period that would otherwise end on a day
that is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day unless such
Euro-Dollar
Business Day falls in another calendar month, in which case
such
Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period that begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Dollar Business Day of a
calendar month; and
(c) if any Interest Period includes a date on which a
payment of principal of the Tranche A, Tranche B or Tranche C
Loans is required to be made under Section 2.09(a) but does not
end on such date, then (i) the principal amount (if any) of
such
Tranche A, Tranche B or Tranche C Euro-Dollar Loan required to
be repaid on such date shall have an Interest Period ending on
such date and (ii) the remainder (if any) of such Tranche A,
Tranche B or Tranche C Euro-Dollar Loan shall have an Interest
Period determined as set forth above.
(2) with respect to each CD Loan, a period commencing on the
date
of borrowing specified in the applicable Notice of Borrowing or
on
the date specified in the applicable Notice of Interest Rate
Election and ending 30, 60, 90, 180 or, if the Managing Agent
determines that certificates of deposit in such maturity are
available in accordance with the definition of CD Base Rate for
such period, 360 days thereafter, as the Borrower may elect in
the
applicable notice; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) that would otherwise
end on a day that is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day; and
(b) if any Interest Period includes a date on which a
payment of principal of the Tranche A, Tranche B or Tranche C
Loans is required to be made under Section 2.09(a) but does not
end on such date, then (i) the principal amount (if any) of
such
Tranche A, Tranche B or Tranche C CD Loan required to be repaid
on such date shall have an Interest Period ending on such date
and (ii) the remainder (if any) of such Tranche A, Tranche B or
Tranche C CD Loan shall have an Interest Period determined as
set forth above.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"Inventory" has the meaning set forth in the Security
Agreements.
"Investment" means any investment in any Person, whether
by
means of share purchase, capital contribution, loan, Guarantee,
time deposit or otherwise, provided that accounts receivable
arising in the ordinary course of business do not constitute an
Investment.
"Issuing Bank" means NationsBank of Texas, N.A., or
Societe
Generale, Southwest Agency, as issuer of a Letter of Credit.
"Letter of Credit" means a letter of credit to be issued
hereunder by an Issuing Bank.
"Letter of Credit Commitment" means the lesser of (x)
$160,000,000 and (y) the aggregate Tranche A Commitments.
"Letter of Credit Liabilities" means, for any Bank and at
any time, the sum of (x) the amounts then owing to such Bank
(including in its capacity as an Issuing Bank) under Section 2.16
to reimburse it in respect of amounts drawn under Letters of
Credit
and (y) such Bank's ratable participation in the aggregate amount
then available for drawing under all Letters of Credit,
calculated
in accordance with Section 2.16.
"Lien" means, with respect to any asset, any mortgage,
lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a
Lien
any asset that it has acquired or holds subject to the interest
of
a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan and
"Loans" means Domestic Loans or Euro-Dollar Loans or both;
provided
that if any Loan or Loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the
term
"Loan" shall refer to the combined principal amount resulting
from
such combination or to each of the separate principal amounts
resulting from such subdivision, as the case may be.
"London Interbank Offered Rate" has the meaning set forth
in Section 2.05(c).
"Managing Agent" means Morgan Guaranty Trust Company of
New
York in its capacity as agent for the Banks hereunder, and its
successors in such capacity.
"Material Derivatives Obligations" means payment
obligations
in respect of Derivatives Obligations of the Borrower or any
Material Subsidiary, arising in one or more related or unrelated
transactions, exceeding in the aggregate $25,000,000.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $35,000,000.
"Material Subsidiary" means at any time a Subsidiary that
as of such time meets the definition of a "significant
subsidiary"
contained as of the date hereof in Regulation S-X of the
Securities
and Exchange Commission.
"Moody's" means Moody's Investors Service, a Delaware
corporation, and its successors or, absent any successor, such
nationally recognized statistical rating organization as the
Borrower and the Managing Agent may select.
"Multiemployer Plan" means at any time an emplo-yee
pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to
which any member of the ERISA Group is then making or accruing an
obligation to make contributions or has within the preceding five
plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such
five-year period.
"Net Earnings Available for Fixed Charges" for any period
means the sum of (i) Consolidated Net Income for such period,
(ii)
income taxes and interest charges on Consolidated Debt deducted
in
determining Consolidated Net Income for such period and (iii) Net
Rental Expense From Operating Leases for such period.
"Net Proceeds" means the gross consideration received by
or
on behalf of the Borrower or any of its Subsidiaries in respect
of
any Asset Sale, Debt Financing or Equity Issuance, minus (i) any
expenses (including, in the case of any Debt Financing or Equity
Issuance, any underwriting discount) reasonably incurred by the
Borrower or any Subsidiary (and not payable to an Affiliate or a
Subsidiary of the Borrower) in connection with such Asset Sale,
Debt Financing or Equity Issuance and (ii) in the case of any
Asset
Sale, (A) estimated income taxes to be paid by the Borrower or
any
Subsidiary in connection with such Asset Sale (calculated on the
basis of the highest applicable corporate tax rate regardless of
the Borrower's then current tax position), (B) any cash escrowed
or
retained by the Person who is the acquiror in such Asset Sale on
account of holdbacks or contingencies, but only until such cash
or
any portion thereof is received by the Borrower or any Subsidiary
(at which time such cash shall constitute Net Proceeds), (C) any
amount expended by the Borrower or any Subsidiary in
contemplation
of such Asset Sale to refurbish or otherwise improve the property
subject thereto and (D) all Debt paid by the Borrower or any
Subsidiary in connection therewith.
"Net Rental Expense From Operating Leases" means for any
period, the net rental expenses of the Borrower and its
Consolidated Subsidiaries for such period under all operating
leases that have initial non-cancelable lease terms exceeding one
year.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibits A-1, A-2, A-3 and A-4
hereto,
evidencing the obligation of the Borrower to repay the Loans, and
"Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section
2.02.
"Notice of Interest Rate Election" has the meaning set
forth
in Section 2.06(a).
"Notice of Issuance" has the meaning set forth in Section
2.16.
"Notice of Termination" means a notice delivered by the
Borrower pursuant to Section 2.11(a)
"Operative Agreements" means this Agreement, the Notes,
the
Guarantee Agreements, the Pledge Agreements and the Security
Agreements.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section
9.05(b).
"PBGC" means the Pension Benefit Guaranty Corporation or
any
entity succeeding to any or all of its functions under ERISA.
"Permitted Receivables Financing" means any transaction
involving the transfer (by way of sale, pledge or otherwise) by
the
Borrower or any of any its Subsidiaries of Financing Receivables
or, after the Rating Target Date, other receivables to any other
Person, provided that after giving effect to such transaction the
sum of (i) the aggregate uncollected balances of Financing
Receivables and, after the Rating Target Date, other receivables
so
transferred ("Transferred Receivables") plus (ii) the aggregate
amount of all collections on Transferred Receivables theretofore
received by the seller but not yet remitted to the purchaser, in
each case at the date of determination, would not exceed
$600,000,000.
"Person" means an individual, a corporation, a
partnership,
an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) that is covered by Title IV of
ERISA or subject to the minimum funding standards under Section
412
of the Internal Revenue Code and either (i) is maintained, or
contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the
preceding five years been maintained, or contributed to, by any
Person that was at such time a member of the ERISA Group for
employees of any Person that was at such time a member of the
ERISA
Group.
"Pledge Agreements" means Pledge Agreements made on the
Effective Date by the Borrower and each Subsidiary that, directly
or indirectly, owns any capital stock of an initial Guaranteeing
Subsidiary listed on Schedule 7(b) hereto and thereafter by any
other Subsidiary pursuant to Section 5.19 in favor of the
Managing
Agent and the Banks in substantially the form of Exhibit G-1 or
G-2
hereto, as appropriate, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions
thereof.
"Pledged" means, with respect to any Inventory or
Receivables owned by the Borrower or a Collateral Subsidiary,
that
such Person has duly authorized, executed and delivered a
Security
Agreement and all such actions (including the filing of Uniform
Commercial Code financing statements) have been taken as the
Required Banks may consider necessary or appropriate to ensure
the
validity, enforceability and binding effect of such Security
Agreement and the validity, enforceability, perfection and
priority
(to the extent required by such Security Agreement) of the Liens
to
be created thereon by such Security Agreement. The term "Pledge"
has a corresponding meaning.
"Prime Rate" means the rate of interest publicly announced
by Morgan Guaranty Trust Company of New York in New York City
from
time to time as its Prime Rate.
"Quarterly Date" means the first Euro-Dollar Business Day
of each January, April, July and October.
"Rating Level" means, with respect to the Borrower at any
time, the category established as follows:
(a) Rating Level I means that a rating of the Borrower's
senior unsecured long-term debt of A- or higher by S&P or A3 or
higher by Moody's is currently in effect;
(b) Rating Level II means that a rating of the Borrower's
senior unsecured long-term debt of BBB+ by S&P or Baa1 by
Moody's is currently in effect;
(c) Rating Level III means that a rating of the
Borrower's
senior unsecured long-term debt of BBB by S&P or Baa2 by
Moody's
is currently in effect;
(d) Rating Level IV means that a rating of the Borrower's
senior unsecured long-term debt of BBB- by S&P or Baa3 by
Moody's is currently in effect;
(e) Rating Level V means that a rating of the Borrower's
senior unsecured long-term debt of BB+ by S&P or Ba1 by Moody's
is currently in effect;
(f) Rating Level VI means that a rating of the Borrower's
senior unsecured long-term debt of BB by S&P or Ba2 by Moody's
is currently in effect; and
(g) Rating Level VII means that (1) a rating of the
Borrower's senior unsecured long-term debt below BB by S&P or
below Ba2 by Moody's is currently in effect or (2), subject to
the provisions of Section 1.03, neither S&P nor Moody's has any
rating of such debt currently in effect.
If on any day the conditions for two Rating Levels are
met,
then the applicable Rating Level for such day shall be the Rating
Level with the lower number.
"Rating Target Date" means the first day after the first
Borrowing on which the Borrower's senior unsecured long-term debt
is rated BBB- or higher by S&P and Baa3 or higher by Moody's.
"Rating Test" means that at the time of determination the
Borrower's senior unsecured long-term debt is rated BBB- or
higher
by S&P and Baa3 or higher by Moody's.
"Receivables" has the meaning set forth in the Security
Agreements.
"Reference Banks" means the CD Reference Banks or the
Euro-Dollar Reference Banks, as the context may require, and
"Reference Bank" means any one of such Reference Banks.
"Regulation U" means Regulation U of the Board of
Governors
of the Federal Reserve System, as in effect from time to time.
"Releasing Banks" means at any time Banks having more than
80% of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, holding more than 80% of
the sum of (i) Notes evidencing the aggregate unpaid principal
amount of the Loans and (ii) the aggregate Letter of Credit
Liabilities.
"Remaining Bank" has the meaning set forth in Section
2.11(a).
"Required Banks" means at any time Banks having more than
50% of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, holding more than 50% of
the sum of (i) Notes evidencing the aggregate unpaid principal
amount of the Loans and (ii) the aggregate Letter of Credit
Liabilities.
"Required Remaining Banks" means at any time the Required
Banks without taking into consideration the Commitment of, or any
Loans or Letter of Credit Liabilities held by, any Terminating
Bank.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Borrower's capital stock
(except
dividends payable solely in shares of its capital stock) or (ii)
any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of the Borrower's capital stock or
(b) any option, warrant or other right to acquire shares of the
Borrower's capital stock, provided that the repurchase by the
Borrower of shares of its common stock contemplated by item 1 on
Schedule 11 shall not constitute a Restricted Payment.
"Restricted Payments Cap" means $50,000,000 (as increased
pursuant hereto in connection with any Equity Issuance occurring
after the Effective Date and prior to the time of calculation)
multiplied by one plus a fraction, the numerator of which is the
Net Proceeds of any Equity Issuance occurring after the Effective
Date and not previously taken into account for the purposes of
calculating the Restricted Payments Cap and the denominator of
which is Consolidated Net Worth as at the last day of the fiscal
quarter most recently ended at the time of such Equity Issuance.
For purposes of this definition, the Borrower shall treat all
Equity Issuances during a fiscal quarter to any employee or
director of a member of the ERISA Group (or to any trust
established for their benefit) pursuant to a stock option plan or
other employee benefit arrangement approved by the Board of
Directors of the Borrower or any Subsidiary as a single Equity
Issuance occurring on the last day of such fiscal quarter.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., a New York corporation, and its successors or,
absent any successor, such nationally recognized statistical
rating
organization as the Borrower and Managing Agent may select.
"Security Agreements" means Security Agreements made on
the
Effective Date by the Borrower and each Collateral Subsidiary
listed in Schedule 8 hereto and thereafter by any other
Collateral
Subsidiary pursuant to Section 5.19 in favor of the Managing
Agent
and the Banks in substantially the form of Exhibit H-1 or H-2
hereto, as appropriate, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions
thereof.
"Security Documents" means the Pledge Agreements and the
Security Agreements.
"Stock Purchase Agreement" means the Stock Purchase
Agreement dated as of July 15, 1994 between the Borrower and
Franz
Haniel & Cie. GmbH.
"Subsidiary" means any corporation or other entity of
which
securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or
indirectly owned by the Borrower (or, if such term is used with
reference to another Person, by such Person).
"Substituting Bank" has the meaning set forth in Section
2.11(b)(i).
"Substitution" has the meaning set forth in Section
2.11(b)(ii).
"Swingline Bank" means Morgan Guaranty Trust Company of
New
York, in its capacity as the Swingline Bank under Section
2.01(d),
and its successors in such capacity.
"Swingline Commitment" means the obligation of the
Swingline
Bank to make Swingline Loans to the Borrower not exceeding
$25,000,000 (or such other amount not in excess of the Tranche A
Commitment from time to time as the Borrower and the Swingline
Bank
may agree from time to time) in aggregate principal amount at any
one time outstanding, as the amount of such obligation may be
reduced from time to time pursuant to Section 2.01(d) or Section
2.08.
"Swingline Loan" means a Tranche A Base Rate Loan made by
the Swingline Bank pursuant to Section 2.01(d).
"Swingline Maturity Date" means the earlier of (i) the
Tranche A Termination Date and (ii) the date on which the
Swingline
Commitment is terminated pursuant to Section 2.01(d) or Section
2.08.
"Temporary Cash Investment" means any Investment in (i)
direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency
thereof,
(ii) commercial paper rated at least A-1 by S&P and P-1 by
Moody's,
(iii) time deposits with, including certificates of deposit
issued
by, any office located in the United States of any bank or trust
company which is organized under the laws of the United States or
any state thereof and has capital, surplus and undivided profits
aggregating at least $1,000,000,000, (iv) repurchase agreements
with respect to securities described in clause (i) above entered
into with an office of a bank or trust company meeting the
criteria
specified in clause (iii) above, (v) short term tax exempt bonds
rated at least AA by S&P or Aa2 by Moody's, or (vi) shares in a
mutual fund, the investment objectives and policies of which
require it to invest substantially all of its assets in short
term
tax exempt bonds rated at least AA by S&P or Aa2 by Moody's,
provided that in the case of clauses (i) through (v) above such
Investment matures within one year from the date of acquisition
thereof by the Borrower or a Subsidiary.
"Terminating Bank" means any Bank the Commitment of which
is to be terminated as a result of a Notice of Termination given
pursuant to Section 2.11(a).
"Termination Date" means, with respect to any Terminating
Bank, the Borrower Designated Date.
"Tranche A", "Tranche B" or "Tranche C" means, when used
with respect to (i) a Bank's Commitment, the portion of such
Bank's
Commitment identified with respect to such Tranche on Schedule 1
hereto, as such portion of the Commitment may be reduced pursuant
to Section 2.08, 2.11 or 9.05(c), (ii) a Borrowing, a Borrowing
made by the Borrower under such Tranche, as identified in the
Notice of Borrowing with respect thereto, (iii) a Loan, a Loan
made
as part of a Borrowing under such Tranche, and (iv) a Note, a
Note
evidencing the obligation of the Borrower to pay Loans
outstanding
under such Tranche.
"Tranche A Commitment Fee Rate" has the meaning set forth
in Section 2.07(a).
"Tranche C Prepayment Date" has the meaning set forth in
Section 2.09(a).
"Tranche A Termination Date" means the fifth anniversary
of
the initial Borrowing hereunder, or such earlier date as may be
designated by the Borrower pursuant to Section 2.08 (or, if such
day is not a Euro-Dollar Business Day, the next preceding Euro-
Dollar Business Day).
"Tranche B Termination Date" means the second anniversary
of the initial Borrowing hereunder (or, if such day is not a Euro
Dollar Business Day, the next preceding Euro-Dollar Business
Day).
"Tranche C Termination Date" means the sixth anniversary
of
the initial Borrowing hereunder (or, if such day is not a Euro-
Dollar Business Day, the next preceding Euro-Dollar Business
Day).
"Transferee Bank" has the meaning set forth in Section
2.11(b)(i).
"Transferred Receivables" has the meaning set forth in the
definition of Permitted Receivables Financing.
"Unfunded Liabilities" means, with respect to any Plan at
any time, the amount (if any) by which (i) the value of all
benefit
liabilities under such Plan, determined on a plan termination
basis
using the assumptions prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds (ii) the fair market value of all
Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined
as
of the then most recent valuation date for such Plan, but only to
the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under
Title IV of ERISA.
"Wholly-Owned Subsidiary" means any Subsidiary all of the
shares of capital stock or other ownership interests of which
(except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations.
Unless
otherwise specified herein, all accounting terms used herein
shall
be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time, applied on
a
basis consistent (except for changes concurred in by the
Borrower's
independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that,
if
the Borrower notifies the Managing Agent that the Borrower wishes
to amend any covenant in Article V to eliminate the effect of any
change in generally accepted accounting principles on the
operation
of such covenant (or if the Managing Agent notifies the Borrower
that the Required Banks wish to amend Article V for such
purpose),
then the Borrower's compliance with such covenant shall be
determined on the basis of generally accepted accounting
principles
in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either
such
notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.03. Use of Ratings. For purposes of the
definitions of Rating Level, Rating Target Date and Rating Test,
the credit ratings to be utilized are the ratings assigned to
unsecured obligations of the Borrower without third party credit
support. If at any time the Borrower does not have outstanding
any
senior unsecured long-term debt but the Borrower has received
from
S&P or Moody's an implied rating, using the same procedures and
criteria that such rating agency would apply for purposes of
making
an actual rating of senior unsecured long-term public debt
hypothetically issued by the Borrower, and has made effective
arrangements whereby such implied rating will be subject to
ongoing
review and revision using the same procedures and criteria that
such rating agency would apply in the case of an actual rating of
such debt, then such implied rating or ratings as in effect from
time to time shall be utilized for purposes of such definitions.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend.
(a) Tranche A Loans. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make Tranche
A Loans to the Borrower pursuant to this subsection 2.01(a) from
time to time prior to the Tranche A Termination Date in amounts
such that the sum of the aggregate principal amount of Tranche A
Loans by such Bank at any one time outstanding, such Bank's
Letter
of Credit Liabilities and such Bank's ratable share of Swingline
Loans shall not exceed the amount of its Tranche A Commitment,
provided that no Tranche A Borrowing may be made unless prior to
or
concurrently with such Tranche A Borrowing the Borrower has made
Tranche B and Tranche C Borrowings in the full amount of the
Tranche B and Tranche C Commitments. Each Tranche A Borrowing
shall be in an aggregate principal amount of $15,000,000 or any
larger multiple of $1,000,000 (except that any such Borrowing may
be in the aggregate amount of the unused Tranche A Commitments)
and
shall be made from the several Banks ratably in proportion to
their
respective Tranche A Commitments. Within the foregoing limits,
the
Borrower may borrow under this subsection 2.01(a), repay or, to
the
extent permitted by Section 2.10, prepay Tranche A Loans and
reborrow at any time under this subsection 2.01(a).
(b) Tranche B Loans. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make Tranche
B Loans to the Borrower from time to time during the Availability
Period in amounts not exceeding in the aggregate the amount of
its
Tranche B Commitment, such Borrowings to be in an aggregate
principal amount of $15,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the
aggregate
amount of the unused Tranche B Commitments) and to be made from
the
several Banks ratably in proportion to their respective Tranche B
Commitments. The Tranche B Commitments are not revolving in
nature, and amounts prepaid prior to the Tranche B Termination
Date
may not be reborrowed, provided that amounts prepaid pursuant to
Section 2.01(e) may be reborrowed as provided therein. The
Tranche
B Commitments shall terminate on the last day of the Availability
Period.
(c) Tranche C Loans. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make Tranche
C Loans to the Borrower from time to time during the Availability
Period, in amounts not exceeding in the aggregate the amount of
its
Tranche C Commitment, such Borrowings to be in an aggregate
principal amount of $15,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the
aggregate
amount of the unused Tranche C Commitments) and to be made from
the
several Banks ratably in proportion to their respective Tranche C
Commitments. The Tranche C Commitments are not revolving in
nature, and amounts prepaid prior to the Tranche C Termination
Date
may not be reborrowed, provided that amounts prepaid pursuant to
Section 2.01(e) may be reborrowed as provided therein. The
Tranche
C Commitments shall terminate on the last day of the Availability
Period.
(d) Swingline Facility. (i) Until the Swingline
Maturity
Date, the Swingline Bank agrees, on the terms and conditions set
forth in this Agreement, to make Tranche A Base Rate Loans to the
Borrower, solely for purposes of reimbursing the Issuing Bank for
draws on a Letter of Credit pursuant to Section 2.16(c), in an
aggregate principal amount at any one time outstanding not
exceeding its Swingline Commitment. Notwithstanding the
foregoing,
to the extent that the aggregate Swingline Loans made under this
subsection (d), when added to the aggregate outstanding principal
amount of Tranche A Loans outstanding hereunder and the aggregate
Letter of Credit Liabilities, would exceed the aggregate amount
of
the Tranche A Commitments, such excess shall not be available for
borrowing under this subsection (d). Each borrowing under this
subsection (d) shall be in a principal amount of at least
$5,000,000 (except that any such borrowing may be in the amount
of
the unused Swingline Commitment). Within the foregoing limits,
the
Borrower may borrow under this subsection (d), repay Swingline
Loans and reborrow at any time prior to the Swingline Maturity
Date
under this subsection (d).
(ii) If the Borrower wishes to borrow from the Swingline
Bank pursuant to subsection (d)(i) of this Section, the Borrower
shall give the Swingline Bank irrevocable notice before Noon (New
York City time) on the date of such borrowing, specifying the
borrowing date and the principal amount to be borrowed and
stating
as set forth in the final paragraph of Exhibit E. Unless the
Swingline Bank determines that any applicable condition specified
in Section 3.01 has not been satisfied, the Swingline Bank shall
deposit the specified amount in the Borrower's account (number
02138228) at the Managing Agent's address specified in or
pursuant
to Section 9.01 by 2:30 P.M. (New York City time) on the
specified
borrowing date. The Swingline Bank shall notify each Bank of the
making of any Swingline Loan that remains outstanding for more
than
three Domestic Business Days.
(iii) Interest on the Swingline Loans shall be due and
payable on the last Euro-Dollar Business Day of each month and on
the Swingline Maturity Date.
(iv) The Borrower, upon notice to the Swingline Bank not
later than Noon (New York City time) on the date of such
prepayment, may prepay the Swingline Loans in whole at any time
or
from time to time in part in amounts aggregating at least
$5,000,000 and, in any event, shall prepay each Swingline Loan in
whole no later than the third Domestic Business Day after such
Swingline Loan was made, in each case by paying the principal
amount to be prepaid together with accrued interest thereon to
the
date of prepayment.
(v) The Swingline Bank may terminate the Swingline
Commitment at any time by giving at least three Domestic Business
Days' notice to the Managing Agent and the Borrower. On such
date
of termination the Borrower shall repay the principal amount of
all
outstanding Swingline Loans, together with accrued interest
thereon.
(vi) Each Bank having a Tranche A Commitment severally
agrees to pay to the Swingline Bank forthwith upon demand to all
of
the Banks having a Tranche A Commitment an amount equal to such
Bank's ratable share of each Swingline Loan outstanding at the
time
of such demand. The amount so paid shall constitute a Tranche A
Base Rate Loan of such Bank for the purposes of this Agreement.
(e) Certain Initial Borrowings. All Borrowings of each
Tranche made on the Effective Date (the "Initial Borrowings")
shall
be Base Rate Borrowings. The Borrower shall on the Effective
Date
give a Notice of Borrowing with respect to a Euro-Dollar
Borrowing
of each Tranche (the "Interim Borrowings"), to be made on the
third
Euro-Dollar Business Day after the Effective Date and in an
amount
at least equal to the principal amount of the Initial Borrowing
of
the same Tranche. Other than the Interim Borrowings, all
Borrowings of each Tranche made after the Effective Date but
before
the General Syndication Date ("Additional Borrowings") shall be
Base Rate Borrowings. Each Interim Borrowing shall, the
provisions
of the definition of Interest Period to the contrary
notwithstanding, have an Interest Period ending on the fifth
Euro-
Dollar Business Day after the Effective Date (the "General
Syndication Date"), provided that the interest rate applicable to
the Euro-Dollar Loans comprising each such Borrowing shall be
determined with reference to a London Interbank Offered Rate for
an
assumed Interest Period of one week. The proceeds of the Interim
Borrowings shall be applied to the extent necessary to prepay the
Initial Borrowings and, to the extent of any excess, may be
applied
to prepay any Additional Borrowings, and the Borrower shall give
a
timely notice of such prepayment pursuant to Section 2.10. The
Borrower shall timely give such further Notices of Borrowing with
respect to a Borrowing of each Tranche, each to be made on the
General Syndication Date such that the aggregate principal amount
of Borrowings of such Tranche on the General Syndication Date at
least equals the aggregate principal amount of the Interim
Borrowing and any Additional Borrowings of the same Tranche
outstanding on the General Syndication Date. The proceeds of
such
Borrowings shall be applied to prepay the Interim Borrowings and
any Additional Borrowings, and the Borrower shall give a timely
notice of such prepayment pursuant to Section 2.10.
SECTION 2.02. Notice of Borrowings. Except in the case
of
Swingline Loans, the Borrower shall give the Managing Agent
notice
substantially in the form of Exhibit E (a "Notice of Borrowing")
not later than Noon (New York City time) on (x) the date of each
Base Rate Borrowing, (y) the second Domestic Business Day before
each CD Borrowing and (z) the third Euro-Dollar Business Day
before
each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a
Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to
bear interest initially at the Base Rate or at a CD Rate or a
Euro-Dollar Rate,
(d) in the case of a Fixed Rate Borrowing, the duration
of
the initial Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period, and
(e) whether such Borrowing is to consist of Tranche A
Loans, Tranche B Loans or Tranche C Loans;
provided that if a Termination Date has been designated in
accordance with Section 2.11, the Borrower may not request
pursuant
to any Notice of Borrowing any Fixed Rate Borrowing that would
take
place before such Termination Date and that would have an
Interest
Period the last day of which would fall after such Termination
Date.
SECTION 2.03. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Managing
Agent shall promptly notify each Bank (and, if (i) the date of
the
Borrowing contemplated in such Notice of Borrowing is a date on
which any Substituting Bank is to become a Bank for purposes of
this Agreement and (ii) the Managing Agent shall have received
the
amendments to this Agreement on or prior to the Delivery Date
applicable thereto, the Substituting Bank) of the contents
thereof
and of such Bank's (and such Substituting Bank's) ratable share
of
such Borrowing and such Notice of Borrowing shall not thereafter
be
revocable by the Borrower.
(b) Not later than 2:00 P.M. (New York City time) on the
date of each Borrowing, each Bank participating therein shall
make
available its share of such Borrowing, in Federal or other funds
immediately available in New York City, to the Managing Agent at
its address specified in or pursuant to Section 9.01. Unless the
Managing Agent determines that any applicable condition specified
in Article III has not been satisfied, the Managing Agent will
deposit the funds so received from the Banks in the Borrower's
account (number 02138228) at the Managing Agent's aforesaid
address.
(c) Unless the Managing Agent shall have received notice
from a Bank prior to the date of any Borrowing (except in the
case
of a Base Rate Borrowing, in which case prior to the time of such
Borrowing) that such Bank will not make available to the Managing
Agent such Bank's share of such Borrowing, the Managing Agent may
assume that such Bank has made such share available to the
Managing
Agent on the date of such Borrowing in accordance with subsection
(b) of this Section 2.03 and the Managing Agent may, in reliance
upon such assumption, make available to the Borrower on such date
a corresponding amount. If and to the extent that such Bank
shall
not have so made such share available to the Managing Agent, such
Bank and the Borrower severally agree to repay to the Managing
Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made
available to the Borrower until (but excluding) the date such
amount is repaid to the Managing Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the Federal
Funds
Rate and the interest rate applicable thereto pursuant to Section
2.05 and (ii) in the case of such Bank, the Federal Funds Rate.
If
such Bank shall repay to the Managing Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan
included in such Borrowing for purposes of this Agreement.
SECTION 2.04. Notes. (a) The Loans of each Bank (other
than Swingline Loans) shall be evidenced by a single Tranche A
Note, a single Tranche B Note and a single Tranche C Note, each
payable to the order of such Bank for the account of its
Applicable
Lending Office in an amount equal to the aggregate unpaid
principal
amount of such Bank's Tranche A, Tranche B or Tranche C Loans, as
applicable. The Swingline Loans shall be evidenced by a single
Swingline Note in substantially the form of Exhibit A-4 hereto,
payable to the order of the Swingline Bank for the account of
its
Applicable Lending Office in an amount equal to the aggregate
unpaid principal amount of the Swingline Loans.
(b) Each Bank may, by notice to the Borrower and the
Managing Agent, request that its Base Rate Loans, CD Loans and
Euro-Dollar Loans be evidenced by separate Notes in an amount
equal
to the aggregate unpaid principal amount of such Loans. Each
such
Note shall be in substantially the form of Exhibit A-1, A-2 or
A-3
hereto with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant type. Each reference in
this Agreement to the "Note" of such Bank shall be deemed to
refer
to and include any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Notes pursuant to Section
3.02(b), the Managing Agent shall mail such Notes to such Bank.
Each Bank shall record the date, amount and maturity of each Loan
made by it and the date and amount of each payment of principal
made by the Borrower with respect thereto, and prior to any
transfer of its Notes shall endorse on the schedule forming a
part
thereof appropriate notations to evidence the foregoing
information
with respect to each such Loan then outstanding; provided that
the
failure of any Bank to make any such recordation or endorsement
shall not affect the obligations of the Borrower hereunder or
under
the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Notes and to attach to and make a part
of its Notes a continuation of any such schedule as and when
required.
SECTION 2.05. Interest Rates. (a) Each Base Rate Loan
of
a Tranche shall bear interest on the outstanding principal amount
thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the sum of the Base
Rate
for such day and the Base Rate Margin for Loans of such Tranche.
Such interest shall be payable quarterly in arrears on each
Quarterly Date and, with respect to the principal amount of any
Base Rate Loan converted to a CD Loan or a Euro-Dollar Loan, on
each date a Base Rate Loan is so converted. Any overdue
principal
of or interest on any Base Rate Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to
the
sum of 1% plus the rate otherwise applicable to Base Rate Loans
of
the same Tranche for such day.
Subject to Subsection 2.05(g), the "Base Rate Margin"
applicable to any Base Rate Loan for any day shall be the Base
Rate
Margin set forth below opposite the relevant Rating Level in
effect
on such day or, if such day is in the Credit Watch Period, set
forth with respect to the Credit Watch Period:
Rating Level Base Rate Margin Additional Margin
I through IV 0% 0.1250%
V 0% 0.1875%
VI 0.1875% 0.2500%
VII 0.3750% 0.3750%
During Credit Watch
Period 0% 0.2500%
provided that the Base Rate Margin for Tranche B and Tranche C
Loans shall be the margin otherwise determined as set forth in
this
paragraph plus the applicable Additional Margin set forth above.
(b) Each CD Loan of a Tranche shall bear interest on the
outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the sum of the
CD
Margin for Loans of such Tranche plus the applicable Adjusted CD
Rate; provided that if any CD Loan or any portion thereof shall,
as
a result of clause (2)(b) of the definition of Interest Period,
have an Interest Period of less than 30 days, such portion shall
bear interest for each day during such Interest Period at the
rate
applicable to Base Rate Loans of the same Tranche for such day.
Such interest shall be payable for each Interest Period on the
last
day thereof and, if such Interest Period is longer than 90 days,
at
intervals of 90 days after the first day thereof. Any overdue
principal of or interest on any CD Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum
equal to the sum of 1% plus the higher of (i) the sum of the CD
Margin plus any Additional Margin plus any Further Margin
referred
to in Section 2.05(g) plus the Adjusted CD Rate applicable to the
last Interest Period for such Loan at the date such payment was
due
and (ii) the rate applicable to Base Rate Loans of the same
Tranche
for such day.
Subject to Subsection 2.05(g), the "CD Margin" applicable
to any CD Loan for any Interest Period shall be the margin set
forth below opposite the relevant Rating Level in effect on the
first day of such Interest Period or, if such first day is in the
Credit Watch Period, set forth with respect to the Credit Watch
Period:
Rating Level CD Margin Additional Margin
I 0.3750% 0.1250%
II 0.4250% 0.1250%
III 0.5250% 0.1250%
IV 0.6875% 0.1250%
V 0.9375% 0.1875%
VI 1.3125% 0.2500%
VII 1.5000% 0.3750%
During Credit Watch
Period 1.1250% 0.2500%
provided that the CD Margin for Tranche B and Tranche C Loans
shall
be the margin otherwise determined as set forth in this paragraph
plus the applicable Additional Margin set forth above.
The "Adjusted CD Rate" applicable to any Interest Period
means a rate per annum determined pursuant to the following
formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upwards, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is
the
rate of interest determined by the Managing Agent to be the
arithmetic average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing rates per annum bid at
10:00
A.M. (New York City time) (or as soon thereafter as practicable)
on
the first day of such Interest Period by two or more New York
certificate of deposit dealers of recognized standing for the
purchase at face value from each CD Reference Bank of its
certificates of deposit in an amount comparable to the unpaid
principal amount of the CD Loan of such CD Reference Bank to
which
such Interest Period applies and having a maturity comparable to
such Interest Period.
"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) that is in effect on such
day,
as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement (including without limitation any basic, supplemental
or emergency reserves) for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion
dollars in respect of new non-personal time deposits in dollars
in
New York City having a maturity comparable to the related
Interest
Period and in an amount of $100,000 or more. The Adjusted CD
Rate
shall be adjusted automatically on and as of the effective date
of
any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment
rate in effect on such day which is payable by a member of the
Bank
Insurance Fund classified as adequately capitalized and within
supervisory subgroup "A" (or a comparable successor assessment
risk
classification) within the meaning of 12 C.F.R. Section 327.3(d)
(or any successor provision) to the Federal Deposit Insurance
Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such
institution
in the United States. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change in
the
Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the sum of the
Euro-Dollar Margin plus the applicable London Interbank Offered
Rate. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day
thereof.
Subject to Subsection 2.05(g), the "Euro-Dollar Margin"
applicable to any Euro-Dollar Loan for any Interest Period shall
be
the margin set forth below opposite the relevant Rating Level in
effect on the first day of such Interest Period or, if such first
day is in the Credit Watch Period, set forth with respect to the
Credit Watch Period:
Euro-Dollar
Rating Level Margin Additional Margin
I 0.2500% 0.1250%
II 0.3000% 0.1250%
III 0.4000% 0.1250%
IV 0.5625% 0.1250%
V 0.8125% 0.1875%
VI 1.1875% 0.2500%
VII 1.3750% 0.3750%
During Credit Watch
Period 1.0000% 0.2500%
provided that the Euro-Dollar Margin for Tranche B and Tranche C
Loans shall be the margin otherwise determined as set forth in
this
paragraph plus the applicable Additional Margin set forth above.
The "London Interbank Offered Rate" applicable to any
Interest Period means the average (rounded upward, if necessary,
to
the next higher 1/16 of 1%) of the respective rates per annum at
which deposits in dollars are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at approximately
11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately
equal
to the principal amount of the Euro-Dollar Loan of such
Euro-Dollar
Reference Bank to which such Interest Period is to apply and for
a
period of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any
Euro-Dollar
Loan shall bear interest, payable on demand, for each day from
and
including the date payment thereof was due to but excluding the
date of actual payment, at a rate per annum equal to the sum of
1%
plus the higher of (i) the sum of the Euro-Dollar Margin plus any
Additional Margin plus any Further Margin referred to in Section
2.05(g) plus the London Interbank Offered Rate applicable to the
last Interest Period for such Loan at the date such payment was
due
and (ii) the Euro-Dollar Margin plus any Additional Margin plus
any
Further Margin referred to in Section 2.05(g) plus the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of
the respective rates per annum at which one day (or, if such
amount
due remains unpaid more than three Euro-Dollar Business Days,
then
for such other period of time not longer than six months as the
Managing Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the
Euro-Dollar Reference Banks are offered to such Euro-Dollar
Reference Bank in the London interbank market for the applicable
period determined as provided above (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a
rate per annum equal to the sum of 1% plus the rate applicable to
Base Rate Loans of the same Tranche for such day).
(e) The Managing Agent shall determine each interest rate
applicable to the Loans hereunder. The Managing Agent shall give
prompt notice to the Borrower and the participating Banks of each
rate of interest so determined, and its determination thereof
shall
be conclusive in the absence of manifest error. Any notice with
respect to CD Loans or Euro-Dollar Loans shall, without the
necessity of the Managing Agent so stating in such notice, be
subject to the provisions of the definition of "CD Margin" and
"Euro-Dollar Margin" providing for adjustments in the CD Margin
or
Euro-Dollar Margin, as the case may be, applicable to such Loans
after the beginning of the Interest Period applicable thereto,
and
when during an Interest Period any event occurs that causes an
adjustment in the CD Margin or Euro-Dollar Margin applicable to
Loans to which such Interest Period is applicable, the Managing
Agent shall give prompt notice to the Borrower and the Banks of
such event and the adjusted rate of interest so determined for
such
Loans, and its determination thereof shall be conclusive in the
absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Managing Agent as contemplated by this
Section. If any Reference Bank does not furnish a timely
quotation, the Managing Agent shall determine the relevant
interest
rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations
is
available on a timely basis, the provisions of Section 8.01 shall
apply.
(g) The Base Rate Margin, the CD Margin and the Euro
Dollar
Margin otherwise applicable to any Tranche B Loan shall be
increased for each day during the periods set forth below by the
amount of the further margin set forth opposite such relevant
period:
Period Further Margin
From and including the date six
months after the initial
Tranche B Borrowing hereunder
through and including the first
anniversary of the Effective Date 0.125%
Thereafter 0.250%
SECTION 2.06. Method of Electing Interest Rates. (a) The
Loans included in each Borrowing shall bear interest initially at
the type of rate specified by the Borrower in the applicable
Notice
of Borrowing. Thereafter, the Borrower may from time to time
elect
to change or continue the type of interest rate borne by each
Group
of Loans (subject in each case to the provisions of Article
VIII),
as follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to CD Loans as of any Domestic
Business Day or to Euro-Dollar Loans as of any Euro-Dollar
Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or Euro-Dollar Loans or
elect to continue such Loans as CD Loans for an additional
Interest Period, in each case effective on the last day of the
then current Interest Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower
may
elect to convert such Loans to Base Rate Loans or CD Loans or
elect to continue such Loans as Euro-Dollar Loans for an
additional Interest Period, in each case effective on the last
day of the then current Interest Period applicable to such
Loans.
Each such election shall be made by delivering a notice (a
"Notice
of Interest Rate Election") to the Managing Agent at least three
Euro-Dollar Business Days before the conversion or continuation
selected in such notice is to be effective (unless the relevant
Loans are to be converted from Domestic Loans to Domestic Loans
of
the other type or continued as CD Loans for an additional
Interest
Period, in which case such notice shall be delivered to the
Managing Agent at least two Domestic Business Days before such
conversion or continuation is to be effective). A Notice of
Interest Rate Election may, if it so specifies, apply to only a
portion of the aggregate principal amount of the relevant Group
of
Loans; provided that (i) such portion is allocated ratably among
the Loans comprising such Group of Loans and (ii) the portion to
which such Notice applies, and the remaining portion to which it
does not apply, are each $15,000,000 or any larger multiple of
$1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply
with the applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if such new Loans are
Fixed Rate Loans, the duration of the initial Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or
Euro-
Dollar Loans for an additional Interest Period, the duration of
such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate
Election shall comply with the provisions of the definition of
Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election
from
the Borrower pursuant to subsection (a) above, the Managing Agent
shall promptly notify each Bank of the contents thereof and such
notice shall not thereafter be revocable by the Borrower. If the
Borrower fails to deliver a timely Notice of Interest Rate
Election
to the Managing Agent for any Group of Fixed Rate Loans, such
Loans
shall be converted into Base Rate Loans on the last day of the
then
current Interest Period applicable thereto.
SECTION 2.07. Fees.
(a) Commitment Fees. The Borrower shall pay to the
Managing
Agent for the account of the Banks:
(i) ratably in proportion to their Tranche A Commitments a
commitment fee for each day at a rate per annum equal to the
Tranche A Commitment Fee Rate in effect from time to time. The
"Tranche A Commitment Fee Rate" in effect on any day shall be the
rate set forth below opposite the relevant Rating Level in effect
on such day or, if such day is in the Credit Watch Period, set
forth with respect to the Credit Watch Period:
Rating Level Commitment Fee Rate
I 0.0250%
II 0.0500%
III 0.0750%
IV, V, VI or VII 0.1250%
During Credit Watch
Period 0.1250%
Such commitment fee shall accrue from and including the date
hereof
to but excluding the Tranche A Termination Date on the Tranche A
Available Commitment in effect on each day during such period
(or,
with respect to a Terminating Bank, the Termination Date
applicable
to such Bank); provided that any commitment fee payable in
respect
of the Tranche A Commitment of a Bank that has become a party to
this Agreement in connection with a Substitution pursuant to
Section 2.11(e) shall accrue from and including the date on which
such Substitution shall become effective; and
(ii) ratably in proportion to the aggregate of their
Tranche
B and Tranche C Commitments a commitment fee for each day at a
rate
per annum equal 0.375%. Such commitment fee shall accrue from
and
including the date hereof to but excluding the last day of the
Availability Period on the aggregate of the Tranche B and Tranche
C Available Commitments in effect on each day during such period.
(b) Facility Fee. The Borrower shall pay to the Managing
Agent for the account of the Banks ratably in proportion to their
Tranche A Commitments a facility fee for each day at a rate per
annum equal to the Facility Fee Rate in effect from time to time.
The "Facility Fee Rate" in effect on any day shall be the rate
set
forth below opposite the relevant Rating Level in effect on such
day or, if such day is in the Credit Watch Period, set forth with
respect to the Credit Watch Period:
Rating Level Facility Fee Rate
I, II, III or IV 0.1250%
V 0.1875%
VI 0.2500%
VII 0.3750%
During Credit Watch
Period 0.2500%
Such facility fee shall accrue (i) from and including the date
hereof to but excluding the Tranche A Termination Date (or, with
respect to a Terminating Bank, the Termination Date applicable to
such Bank), on the aggregate amount of the Tranche A Commitments
(whether used or unused) in effect on each day during such period
and (ii) from and including the Tranche A Termination Date to but
excluding the date all Tranche A Loans and Letter of Credit
Liabilities shall be repaid in their entirety, on the aggregate
amount of the Tranche A Loans and Letter of Credit Liabilities
outstanding on each day during such period; provided that any
facility fee payable in respect of the Tranche A Commitment of a
Bank that has become a party to this Agreement in connection with
a Substitution pursuant to Section 2.11(e) shall accrue from and
including the date on which such Substitution shall become
effective.
(c) Letter of Credit Fees. The Borrower shall pay to the
Managing Agent a letter of credit fee at a rate per annum equal
to
the Letter of Credit Fee Rate in effect from time to time on the
aggregate amount available for drawing under any Letters of
Credits
issued from time to time, such fee to be payable for the account
of
the Banks ratably in proportion to their participation therein.
The "Letter of Credit Fee Rate" in effect on any day shall be the
rate set forth below opposite the relevant Rating Level in effect
on such day or, if such day is in the Credit Watch Period, set
forth with respect to the Credit Watch Period:
Rating Level Letter of Credit Fee Rate
I 0.2500%
II 0.3000%
III 0.4000%
IV 0.5625%
V 0.8125%
VI 1.1875%
VII 1.3750%
During Credit Watch
Period 1.0000%
Such fee shall be payable in arrears on each Quarterly Date for
so
long as any Letter of Credit is outstanding. The Borrower shall
also pay to each Issuing Bank fronting fees and issuance,
drawing,
amendment and extension charges in the amounts and at the times
as
agreed between the Borrower and such Issuing Bank.
(d) Payments. Accrued fees under this Section in respect
of Tranche A Loans and Letter of Credit Liabilities shall be
payable quarterly in arrears on each Quarterly Date, on the
Tranche
A Termination Date and, if later, the date the Loans and Letter
of
Credit Liabilities shall be repaid in their entirety. Accrued
fees
under this Section in respect of Tranche B and Tranche C Loans
shall be payable on each date during the Availability Period on
which the Tranche B and Tranche C Loans are made and on the last
day of the Availability Period.
SECTION 2.08. Optional Termination or Reduction of
Tranche
A Commitments by the Borrower. The Borrower may, upon at least
three Domestic Business Days' notice to the Managing Agent,
(i) terminate the Tranche A Commitments at any time, if no Loans
or
Letter of Credit Liabilities are outstanding at such time, or
(ii)
ratably reduce from time to time by an aggregate amount of
$10,000,000 or any greater multiple of $1,000,000, the aggregate
amount of the Tranche A Commitments in excess of the aggregate
outstanding principal amount of the Tranche A Loans and Letter of
Credit Liabilities. If the Tranche A Commitments are terminated
in
their entirety, all accrued fees shall be payable on the
effective
date of such termination.
SECTION 2.09. Maturity of Loans; Mandatory Prepayments.
(a) The Tranche A Loans shall mature on the Tranche A
Termination
Date, and any Tranche A Loans or Letter of Credit Liabilities
then
outstanding (together with accrued interest thereon and Letter of
Credit fees in respect thereof) shall be due and payable on such
date. The Tranche B Loans shall mature on the Tranche B
Termination Date, and any Tranche B Loans then outstanding
(together with accrued interest thereon) shall be due and payable
on such date. On each of the dates set forth below (each, a
"Tranche C Prepayment Date"), the Tranche C Loans shall be repaid
in the aggregate principal amount set forth opposite such date,
and
the Tranche C Loans of each Bank shall be ratably repaid:
Date Amount
March 31, 1995 $12,500,000
June 30, 1995 $12,500,000
September 30, 1995 $12,500,000
December 31, 1995 $12,500,000
March 31, 1996 $18,750,000
June 30, 1996 $18,750,000
September 30, 1996 $18,750,000
December 31, 1996 $18,750,000
March 31, 1997 $33,750,000
June 30, 1997 $33,750,000
September 30, 1997 $33,750,000
December 31, 1997 $33,750,000
March 31, 1998 $45,000,000
June 30, 1998 $45,000,000
September 30, 1998 $45,000,000
December 31, 1998 $45,000,000
March 31, 1999 $57,500,000
June 30, 1999 $57,500,000
September 30, 1999 $57,500,000
December 31, 1999 $57,500,000
March 31, 2000 $65,000,000
June 30, 2000 $65,000,000
provided that if the Tranche C Loans are repaid on any date
pursuant to subsection (b) of this Section or Section 2.10, then
the amount of each repayment of the Tranche C Loans required on
or
after such date pursuant to this subsection (a) shall be reduced
as
provided in subsection (b)(iv) of this Section.
The Tranche C Loans shall mature on the Tranche C
Termination Date, and any Tranche C Loans then outstanding
(together with accrued interest thereon) shall be due and payable
on such date.
(b) In addition to any other repayments of Loans set
forth
herein, the Tranche B and Tranche C Loans shall be further repaid
as follows:
(i) Within 14 days after receipt by the Borrower or any
Collateral Subsidiary of the Net Proceeds of any Asset Sale
consisting of cash or Temporary Cash Investments (and within 14
days after receipt of any cash or Temporary Cash Investments by
the Borrower or any Collateral Subsidiary in respect of any Net
Proceeds of any Asset Sale not previously consisting of cash or
Temporary Cash Investments (whether by way of sale or other
transfer or any payment, however characterized, on account
thereof)), the Tranche B Loans shall be repaid in an amount
equal to the lesser of such Net Proceeds (or such other
receipts) and the aggregate amount of the Tranche B Loans
outstanding at the time of such receipt. If at the time of
such
receipt the Rating Test is not satisfied and the amount of the
Tranche B Loans outstanding is less than such Net Proceeds (or
such other receipts), the Tranche C Loans shall be repaid in an
amount equal to 50% of the remaining Net Proceeds (or such
other
receipts) after their application in accordance with the
preceding sentence. If at the time of such receipt the Rating
Test is not satisfied and the Tranche B Loans have been repaid,
the Tranche C Loans shall be repaid in an amount equal to 50%
of
such Net Proceeds (or such other receipts). Notwithstanding
the
foregoing provisions of this clause (i): (A) no repayment of
Loans shall take place until the Net Proceeds of Asset Sales
consisting of cash or Temporary Cash Investments (or such other
receipts) not previously applied exceed $7,500,000, at which
time the unapplied amount shall be applied to the repayment of
Loans as provided in this Subsection 2.09(b)(i) and (B) the
Borrower or any Collateral Subsidiary shall not be considered
to
have received any such cash or Temporary Cash Investments to
the
extent it was required to deliver the same to the Collateral
Agent under any Security Document in connection with a release
of Collateral thereunder until such time, if ever, as such cash
or Temporary Cash Investments are released (or upon the
Borrower's request are available for release) by the Collateral
Agent pursuant to the provisions of such Security Document.
(ii) Within 7 days after receipt by the Borrower or any
Collateral Subsidiary of the Net Proceeds of any Debt
Financing,
the Tranche B Loans shall be repaid in an amount equal to the
lesser of such Net Proceeds and the aggregate amount of the
Tranche B Loans outstanding at the time of such receipt. If at
the time of such receipt the Rating Test is not satisfied and
the amount of the Tranche B Loans outstanding is less than such
Net Proceeds the Tranche C Loans of the Banks shall be repaid
in
an amount equal to the remaining Net Proceeds after their
application in accordance with the preceding sentence. If at
the time of such receipt the Rating Test is not satisfied and
the Tranche B Loans have been repaid, the Tranche C Loans shall
be repaid in an amount equal to such Net Proceeds.
(iii) Within 7 days after receipt by the Borrower or any
Collateral Subsidiary of the Net Proceeds of any Equity
Issuance
(other than any Equity Issuance (A) made in connection with an
Acquisition or an Investment (except to the extent of any cash
or Temporary Cash Investments received by the Borrower or any
Collateral Subsidiary in connection therewith) or (B) any
Equity
Issuance to any employee or director of a member of the ERISA
Group (or to any trust established for their benefit) pursuant
to a stock option plan or other employee benefit arrangement
approved by the Board of Directors of the Borrower or any
Subsidiary), the Tranche B Loans shall be repaid in an amount
equal to the lesser of such Net Proceeds and the amount of the
Tranche B Loans outstanding at the time of such receipt. If at
the time of such receipt the Rating Test is not satisfied and
the amount of the Tranche B Loans is less than such Net
Proceeds
the Tranche C Loans of the Banks shall be repaid in an amount
equal to 75% of the remaining Net Proceeds after their
application in accordance with the preceding sentence. If at
the time of such receipt the Rating Test is not satisfied and
the Tranche B Loans have been repaid, the Tranche C Loans shall
be repaid in an amount equal to 75% of such Net Proceeds.
(iv) Each repayment of the Loans of any Tranche pursuant
to this Section 2.09(b) shall be applied to repay ratably the
Loans of such Tranche of the several Banks. At least three
Euro-Dollar Business Days before the date of each mandatory
repayment pursuant to this subsection (b), the Borrower shall
select which of the outstanding Borrowings of the applicable
Tranche are to be repaid and shall notify the Managing Agent
thereof. Upon receipt of such notice, the Managing Agent shall
promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such repayment, and such notice shall
not thereafter be revocable by the Borrower. Each such
repayment shall be applied to repay the Loans of the several
Banks included in the Borrowings of the applicable Tranche so
selected, in proportion to the respective outstanding principal
amounts thereof. The Borrower shall use its best efforts to
exercise its options with regard to the selection of Loans and
Interest Periods so that to the extent possible, on any date on
which a repayment is required pursuant to this subsection (b),
the aggregate principal amount of Fixed Rate Loans with
Interest
Periods ending on such date and Base Rate Loans is not less
than
the amount of such required repayment. Any repayment of
Tranche
C Loans pursuant to this Section 2.09(b) or Section 2.10 shall
be applied to the amounts due on Tranche C Prepayment Dates as
to 50% in inverse order of maturity, and as to the remaining
50%, pro rata to all remaining Tranche C Prepayment Dates.
SECTION 2.10. Optional Prepayments. (a) The Borrower
may,
upon at least one Domestic Business Day's (three Euro-Dollar
Business Days in the case of any Fixed Rate Borrowing) notice to
the Managing Agent, prepay any Borrowing in whole at any time, or
from time to time in part in amounts aggregating $5,000,000 or
any
larger multiple of $5,000,000, by paying the principal amount to
be
prepaid together with accrued interest thereon to the date of
prepayment and any amounts payable pursuant to Section 2.13.
Each
such optional prepayment shall be applied to prepay ratably the
Loans of the several Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to
this
Section, the Managing Agent shall promptly notify each Bank of
the
contents thereof and of such Bank's ratable share (if any) of
such
prepayment and such notice shall not thereafter be revocable by
the
Borrower.
SECTION 2.11. Optional Termination of Commitment on
Non-Pro
Rata Basis. (a) At any time the Borrower may, upon at least
five
Euro-Dollar Business Days' notice to the Managing Agent, in its
sole and absolute discretion elect to repay in whole the Loans of
any Bank (a "Terminating Bank") by delivering a Notice of
Termination to the Terminating Bank and the Managing Agent,
specifying therein (i) the amount of the Terminating Bank's
Commitments, Loans and Letter of Credit Liabilities of each
Tranche
(any Tranche of which such Bank has a Commitment, a Loan or any
Letter of Credit Liabilities being referred to herein as an
"Affected Tranche") and (ii) the date on which the Terminating
Bank's Loans shall be repaid and the Terminating Bank's
Commitments
and Letter of Credit Liabilities shall terminate (the "Borrower
Designated Date"); provided that such Borrower Designated Date
shall be a Euro-Dollar Business Day falling no earlier than the
latest last day of any Interest Period then in effect. Upon
receipt of such Notice of Termination, the Managing Agent shall
promptly notify each other Bank that has a Commitment, a Loan or
Letter of Credit Liabilities in any Affected Tranche (a
"Remaining
Bank") of the contents thereof, and such Notice of Termination
shall not thereafter be revocable by the Borrower.
(b)(i) If the Borrower elects to exercise its rights
under
subsection (a) of this Section, the Borrower must concurrently
send a notice to the Remaining Banks and the Managing Agent
setting forth the details of (x) a bank that is not then a
party
to this Agreement (a "Substituting Bank") becoming a Bank for
purposes of this Agreement, with Commitments, Loans and Letter
of Credit Liabilities of each Affected Tranche in an amount
equal to the Commitments, Loans and Letter of Credit
Liabilities
of each Affected Tranche of the Terminating Bank, in the place
and stead of the Terminating Bank (y) a bank that is at such
time a party to this Agreement (a "Transferee Bank") accepting
a transfer of the Commitments, Loan and Letter of Credit Lia-
bilities of each Affected Tranche of the Terminating Bank, in
the stead of the Terminating Bank or (z) an increase in the
Commitments, Loans and Letter of Credit Liabilities of each
Affected Tranche of each Remaining Bank in proportion to the
respective Commitments, Loans and Letter of Credit Liabilities
of each Affected Tranche of the Remaining Banks (the aggregate
amount of all such increases in each Affected Tranche to be in
an amount equal to the aggregate amount of the Terminating
Bank's Commitments, Loans and Letter of Credit Liabilities of
such Affected Tranche).
(ii) In order to effect the substitution of parties
contemplated in clause (x) of subsection (b)(i) of this Section
(a "Substitution"), the Borrower shall, on or prior to the
thirtieth Domestic Business Day immediately preceding the
Termination Date applicable to the Terminating Bank, obtain the
consent of the Required Remaining Banks, provided that the
consent of the Required Remaining Banks shall not be required
if, after giving effect to such Substitution, the aggregate
Commitments, Loans and Letter of Credit Liabilities of each
Tranche of all Banks that were Substituting Banks would not
exceed 20% of the aggregate Commitments, Loans and Letter of
Credit Liabilities of such Tranche of the Banks.
(iii) In order to effect the transfer contemplated in
clause
(y) of subsection (b)(i) of this Section (a "Commitment
Transfer"), the Borrower shall, on or prior to the thirtieth
Domestic Business Day immediately preceding the Termination
Date
applicable to the Terminating Bank, obtain the consent of the
Required Remaining Banks, provided that the consent of the
Required Remaining Banks shall not be required if, after giving
effect to such Commitment Transfer, the aggregate Commitments,
Loans and Letter of Credit Liabilities of each Tranche of all
Banks that were Transferee Banks would not exceed 10% of the
aggregate Commitments, Loans and Letter of Credit Liabilities
of
such Tranche of the Banks.
(iv) In order to effect the increase in the Commitments,
Loans and Letter of Credit Liabilities of the Remaining Banks
contemplated in clause (z) of subsection (b)(i) of this Section
(a "Commitment Increase"), the Borrower shall, on or prior to
the sixth Euro-Dollar Business Day immediately preceding the
Termination Date applicable to the Terminating Bank, obtain the
consent of all the Remaining Banks.
(v) If the Borrower obtains the consent of the Remaining
Banks, if any, required pursuant to subsection (b)(ii),
(b)(iii)
or (b)(iv) of this Section, the Borrower shall promptly notify
the Banks and the Managing Agent thereof.
(c) On the Termination Date, and subject to the
provisions
of subsection (f) of this Section, any Commitments, Loans or
Letter
of Credit Liabilities of the Terminating Bank outstanding on such
date (together with accrued interest thereon), accrued commitment
fees on its Commitment and any other amounts then due such Bank
shall be due and payable and, upon receipt of payment of such
amounts, the Terminating Bank shall cease thereafter to be a Bank
for purposes of this Agreement, provided that (i) the Terminating
Bank shall remain liable pursuant to Section 7.06 with respect to
any costs, expenses, claims, demands, actions, losses or
liabilities that arose or accrued during or otherwise relate to
the
period prior to the Termination Date and (ii) the rights of the
Terminating Bank pursuant to Section 9.03 shall survive the
Termination Date.
(d) If, in connection with the repayment of a Bank's
Loans
and termination of a Bank's Commitments and Letter of Credit
Liabilities pursuant to subsection (a) of this Section, the
Borrower shall have obtained the consent of the Remaining Banks
to
a Commitment Increase of the Affected Tranches in accordance with
subsection (b)(iv) of this Section, such Commitment Increase
shall,
subject to subsection (f) of this Section, become effective
without
further act upon receipt by the Terminating Bank of all amounts
due
it pursuant to subsection (c) of this Section and on the
Termination Date the Remaining Banks shall make Loans of each
Affected Tranche, and assume Commitments and Letter of Credit
Liabilities in respect of each Affected Tranche, in substitution
for the Commitments, Loans and Letter of Credit Liabilities of
the
Terminating Bank of such Tranche to be repaid or terminated on
the
Termination Date, in an aggregate amount equal to the amount of
such Commitments, Loan and Letter of Credit Liabilities, the
Commitments, Loan and Letter of Credit Liabilities of each
Remain-
ing Bank to be in proportion to the respective Commitments, Loans
and Letter of Credit Liabilities of the Affected Tranche of the
Remaining Banks.
(e)(i) If, in connection with the repayment of a Bank's
Loans and termination of a Bank's Commitments and Letter of
Credit Liabilities pursuant to subsection (a) of this Section,
the Borrower shall have notified the Remaining Banks and the
Managing Agent of a Substitution or a Commitment Transfer and,
if required, shall have obtained the consent of the Required
Remaining Banks thereto in accordance with subsection (b)(ii)
or
(iii) of this Section, such Substitution or a commitment
transfer shall, subject to subsection (f) of this Section,
become effective on the Termination Date applicable to the
Terminating Bank upon the fulfillment in the case of a
Substitution of the conditions set forth in subsections (e)(ii)
through (e)(v) below and in the case of a Commitment Transfer
of
the condition set forth in subsection (e)(v) below. If the
Borrower shall have delivered a Notice of Borrowing involving
an
Affected Tranche in accordance with Section 2.02 with respect
to
a Borrowing to be made on such Termination Date, and the
provisions of Section 2.04(a) shall have been complied with,
the
Substituting Bank, or the Transferee Bank, as the case may be,
shall, in its capacity as a Bank for purposes of this
Agreement,
make available its ratable share of such Borrowing in
accordance
with Section 2.04(b). If the Issuing Bank shall have made any
demand pursuant to Section 2.16(c) involving an Affected
Tranche
which is payable on such Termination Date, the Substituting
Bank, or the Transferee Bank, as the case may be, shall, in its
capacity as a Bank for all purposes of this Agreement, make
available its ratable share of the Letter of Credit Drawing in
accordance with Section 2.16(c).
(ii) The Borrower, the Managing Agent and the Substituting
Bank shall execute and deliver an appropriate instrument
evidencing that, from and after the Termination Date applicable
to the Terminating Bank, the Substituting Bank has become a
Bank
for purposes of this Agreement. Such instrument (A) may be
signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto
were
on the same instrument and (B) shall be executed and delivered
to the Managing Agent by the other parties thereto no later
than
six Euro-Dollar Business Days prior to such Termination Date
(the "Delivery Date"); provided that no such instrument shall
become effective, and no Substitution contemplated thereby
shall
be consummated, if such instrument is executed and delivered at
any time after the Delivery Date. The Managing Agent shall
promptly notify the other parties to such instrument and the
Remaining Banks as to whether or not it shall have received
executed copies of such instrument on or prior to the Delivery
Date.
(iii) On or prior to the Termination Date, the Borrower
shall deliver to the Managing Agent for the account of the
Substituting Bank (A) a duly executed Note for each Affected
Tranche, dated such date and complying with the provisions of
Section 2.04 and (B) if requested by the Substituting Bank at
least six Euro-Dollar Business Days before the Termination
Date, an opinion of counsel for the Borrower, dated such date,
covering the matters set forth in paragraphs 2 and 3 of
Exhibit B-1 hereto with respect to the Note referred to in
clause (A) above.
(iv) On the Termination Date, the Borrower shall make a
payment to the Managing Agent for the account of the
Terminating
Bank of all amounts due to such Terminating Bank in accordance
with subsection (c) of this Section, and the Managing Agent
shall promptly distribute to such Terminating Bank the amount
of
such payment.
(v) On the Termination Date, the Substituting Bank or the
Transferee Bank, as the case may be, shall make a Loan of each
Affected Tranche, and assume Commitments and Letter of Credit
Liabilities in respect of each Affected Tranche in substitution
for the Commitments, Loans and Letter of Credit Liabilities of
the Terminating Bank of such Tranche to be repaid on the
Termination Date, in an amount equal to the amount of such
Commitments, Loans and Letter of Credit Liabilities of the
Terminating Bank.
(f) Any provision of this Section to the contrary
notwithstanding, if on any Termination Date any Default shall
have
occurred and be continuing or the representation and warranty set
forth in Section 4.04(c) shall not be true and correct on such
date
as if made on such date or the substitute Loans and assumption of
Commitments and Letter of Credit Liabilities to be made on such
Termination Date as provided in subsection (d) or (e)(v) are not
made, (i) neither the Loans of the Terminating Bank nor any other
amount payable to such Bank under this Agreement shall be due and
payable on such date solely on account of the provisions of
subsection (c) of this Section, (ii) the Commitment and Letter of
Credit Liabilities of the Terminating Bank shall not terminate
and
(iii) no Substitution, Commitment Transfer or Commitment Increase
shall become effective pursuant to subsection (d) or (e) of this
Section. On any Termination Date the Borrower shall deliver to
the
Managing Agent a certificate of the President or any Vice
President
of the Borrower stating that (i) no Default has occurred and is
continuing on such date and (ii) the representation and warranty
set forth in Section 4.04(c) is true and correct on such date as
if
made on such date.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest
on,
the Loans and of fees payable hereunder, not later than 11:00
A.M.
(New York City time) on the date when due, without set-off,
counterclaim or other deduction, in Federal or other funds
immediately available in New York City, to the Managing Agent at
its address referred to in Section 9.01. The Managing Agent will
promptly distribute to each Bank its ratable share of each such
payment received by the Managing Agent for the account of the
Banks. Whenever any payment of principal of, or interest on, the
Domestic Loans or of fees shall be due on a day that is not a
Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever
any payment of principal of, or interest on, the Euro-Dollar
Loans
shall be due on a day that is not a Euro-Dollar Business Day, the
date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls
in another calendar month, in which case the date for payment
thereof shall be the next preceding Euro-Dollar Business Day. If
the date for any payment of principal is extended by operation of
law or otherwise, interest thereon shall be payable for such
extended time.
(b) Unless the Managing Agent shall have received notice
from the Borrower prior to the date on which any payment is due
to
the Banks hereunder that the Borrower will not make such payment
in
full, the Managing Agent may assume that the Borrower has made
such
payment in full to the Managing Agent on such date and the
Managing
Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent that the
Borrower
shall not have so made such payment, each Bank shall repay to the
Managing Agent forthwith on demand such amount distributed to
such
Bank together with interest thereon, for each day from the date
such amount is distributed to such Bank until the date such Bank
repays such amount to the Managing Agent, at the Federal Funds
Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan
(pursuant
to Article II, VI or VIII or otherwise; any conversion of a Fixed
Rate Loan to a Base Rate Loan pursuant to Section 8.04 shall be
treated as a payment of such Fixed Rate Loan on the date of
conversion for purposes of this Section 2.13) on any day other
than
the last day of the Interest Period applicable thereto, or the
end
of an applicable period fixed pursuant to Section 2.05(d), or if
the Borrower fails to borrow any Fixed Rate Loans after notice
has
been given to any Bank in accordance with Section 2.03(a), or if
the Borrower fails to prepay any Fixed Rate Borrowing after
giving
notice of prepayment in accordance with Section 2.10(a), the
Borrower shall reimburse each Bank on demand for any resulting
loss
or expense incurred by it (or by any existing or prospective
Participant in the related Loan), including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period
after any such payment or failure to borrow, provided that such
Bank shall have delivered to the Borrower a certificate setting
forth in reasonable detail the amount of such loss or expense,
which certificate shall be conclusive in the absence of manifest
error.
SECTION 2.14. Computation of Interest and Fees. Interest
based on the Prime Rate and fees hereunder shall be computed on
the
basis of a year of 365 days (or 366 days in a leap year) and paid
for the actual number of days elapsed (including the first day
but
excluding the last day). All other interest shall be computed on
the basis of a year of 360 days and paid for the actual number of
days elapsed, calculated as to each Interest Period or period
fixed
pursuant to Section 2.05(d) from and including the first day
thereof but excluding the last day thereof.
SECTION 2.15. Regulation D Compensation. Each Bank may
require the Borrower to pay, contemporaneously with each payment
of
interest on the Euro-Dollar Loans, additional interest on the
related Euro-Dollar Loan of such Bank at a rate per annum equal
to
the excess of (i) (A) the applicable London Interbank Offered
Rate
(or other base rate determined pursuant to Section 2.06(d))
divided
by (B) one minus the Euro-Dollar Reserve Percentage over (ii) the
rate specified in clause (i)(A). Any Bank wishing to require
payment of such additional interest (x) shall so notify the
Borrower and the Managing Agent, in which case such additional
interest on the Euro-Dollar Loans of such Bank shall be payable
to
such Bank at the place indicated in such notice with respect to
each related Interest Period commencing at least five Euro-Dollar
Business Days after the giving of such notice and (y) shall
notify
the Borrower and the Managing Agent at least five Euro-Dollar
Business Days prior to each date on which interest is payable on
the Euro-Dollar Loans of the amount then due it under this
Section.
SECTION 2.16. Letters of Credit. (a) Subject to the
terms
and conditions hereof, each Issuing Bank agrees to issue letters
of
credit hereunder from time to time before the 30th day before the
Tranche A Termination Date upon the request of the Borrower (the
"Letters of Credit"); provided that, immediately after each
Letter
of Credit is issued, (i) the aggregate amount of the Letter of
Credit Liabilities shall not exceed the Letter of Credit
Commitment
and (ii) the aggregate amount of the Letter of Credit Liabilities
plus the aggregate outstanding amount of all Tranche A Loans and
Swingline Loans does not exceed the aggregate amount of the
Tranche
A Commitments. Upon the date of issuance by an Issuing Bank of a
Letter of Credit, such Issuing Bank shall be deemed, without
further action by any party hereto, to have sold to each Bank,
and
each Bank shall be deemed, without further action by any party
hereto, to have purchased from such Issuing Bank, a participation
in such Letter of Credit and the related Letter of Credit
Liabilities in the proportion its Tranche A Commitment bears to
the
aggregate Tranche A Commitments.
(b) The Borrower shall give an Issuing Bank notice at
least
10 Domestic Business Days, or such shorter period as may be
agreed
to by an Issuing Bank in any particular instance, prior to the
requested issuance of a Letter of Credit specifying the date such
Letter of Credit is to be issued, and describing the terms of
such
Letter of Credit and the nature of the transactions to be
supported
thereby (such notice, including any such notice given in
connection
with the extension of a Letter of Credit, a "Notice of
Issuance").
Upon receipt of a Notice of Issuance, such Issuing Bank shall
promptly notify the Managing Agent, and the Managing Agent shall
promptly notify each Bank, of the contents thereof and of the
amount of such Bank's participation in such Letter of Credit.
The
issuance by an Issuing Bank of each Letter of Credit shall, in
addition to the conditions precedent set forth in Article III, be
subject to the conditions precedent that such Letter of Credit
shall be in such form and contain such terms as shall be
satisfactory to such Issuing Bank and that the Borrower shall
have
executed and delivered such other instruments and agreements
relating to such Letter of Credit as such Issuing Bank shall have
reasonably requested. The extension or renewal of any Letter of
Credit shall be deemed to be an issuance of such Letter of
Credit,
and if any Letter of Credit contains a provision pursuant to
which
it is deemed to be extended unless notice of termination is given
by the relevant Issuing Bank, such Issuing Bank shall timely give
such notice of termination unless it has theretofore timely
received a Notice of Issuance and the other conditions to
issuance
of a Letter of Credit have also theretofore been met with respect
to such extension. No Letter of Credit shall have a term of more
than one year; provided that a Letter of Credit may contain a
provision pursuant to which it is deemed to be extended on an
annual basis unless notice of termination is given by the
relevant
Issuing Bank; provided further that no Letter of Credit shall
have
a term extending or be so extendible beyond the Tranche A
Termination Date.
(c) Upon receipt from the beneficiary of any Letter of
Credit of any notice of a drawing under such Letter of Credit,
the
relevant Issuing Bank shall notify the Managing Agent and the
Managing Agent shall promptly notify the Borrower and each other
Bank as to the amount to be paid as a result of such demand or
drawing and the payment date. The Borrower shall be irrevocably
and unconditionally obligated forthwith to reimburse each Issuing
Bank for any amounts paid by such Issuing Bank upon any drawing
under any Letter of Credit issued by it, without presentment,
demand, protest or other formalities of any kind. All such
amounts
paid by an Issuing Bank and remaining unpaid by the Borrower
shall
bear interest, payable on demand, for each day until paid at a
rate
per annum equal to the sum of 1% plus the rate applicable to
Tranche A Base Rate Loans for such day. In addition, each Bank
will pay to the Managing Agent, for the account of each Issuing
Bank, immediately upon such Issuing Bank's demand at any time
during the period commencing after such drawing until
reimbursement
therefor in full by the Borrower, an amount equal to such Bank's
ratable share of such drawing (in proportion to its participation
therein), together with interest on such amount for each day from
the date of such Issuing Bank's demand for such payment (or, if
such demand is made after Noon (New York City time) on such date,
from the next succeeding Domestic Business Day) to the date of
payment by such Bank of such amount at a rate of interest per
annum
equal to the rate applicable to Tranche A Base Rate Loans for
such
period. Each Issuing Bank will pay to the Managing Agent for the
account of each Bank ratably all amounts received from the
Borrower
for application in payment of its reimbursement obligations in
respect of any Letter of Credit, but only to the extent such Bank
has made payment to such Issuing Bank in respect of such Letter
of
Credit pursuant hereto.
(d) The obligations of the Borrower and each Bank under
subsection (c) above shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with
the
terms of this Agreement, under all circumstances whatsoever,
including without limitation the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any Letter of Credit or any document related
hereto or thereto;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of this
Agreement or any Letter of Credit or any document related
hereto or thereto;
(iii) the use which may be made of the Letter of
Credit
by, or any acts or omission of, a beneficiary of a Letter
of Credit (or any Person for whom the beneficiary may be
acting);
(iv) the existence of any claim, set-off, defense or
other rights that the Borrower may have at any time
against
a beneficiary of a Letter of Credit (or any Person for
whom
the beneficiary may be acting), the Banks (including an
Issuing Bank) or any other Person, whether in connection
with this Agreement or any Letter of Credit or any
document
related hereto or thereto or any unrelated transaction;
(v) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent
or invalid in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever;
(vi) payment under a Letter of Credit against
presentation to the relevant Issuing Bank of a draft or
certificate that does not comply with the terms of such
Letter of Credit, provided that such Issuing Bank's
determination that documents presented under such Letter
of
Credit comply with the terms thereof shall not have
constituted gross negligence or willful misconduct of such
Issuing Bank; or
(vii) any other act or omission to act or delay of any
kind by any Bank (including any Issuing Bank), the
Managing
Agent or any other Person or any other event or
circumstance whatsoever that might, but for the provisions
of this subsection (vii), constitute a legal or equitable
discharge of the Borrower's or the Bank's obligations
hereunder.
(e) The Borrower hereby indemnifies and holds harmless
each
Bank (including each Issuing Bank) and the Managing Agent from
and
against any and all claims, damages, losses, liabilities, costs
or
expenses which such Bank or the Managing Agent may incur
(including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which any Issuing Bank may incur
by
reason of or in connection with the failure of any other Bank to
fulfill or comply with its obligations to such Issuing Bank
hereunder (but nothing herein contained shall affect any rights
the
Borrower may have against such defaulting Bank)), and none of the
Banks (including any Issuing Bank) nor the Managing Agent nor any
of their officers or directors or employees or agents shall be
liable or responsible, by reason of or in connection with the
execution and delivery or transfer of or payment or failure to
pay
under any Letter of Credit, including without limitation any of
the
circumstances enumerated in subsection (d) above, as well as (i)
any error, omission, interruption or delay in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise, (ii) any error in interpretation of technical terms,
(iii) any loss or delay in the transmission of any document
required in order to make a drawing under a Letter of Credit,
(iv)
any consequences arising from causes beyond the control of any
Issuing Bank, including without limitation any government acts,
or
any other circumstances whatsoever in making or failing to make
payment under such Letter of Credit; provided that the Borrower
shall not be required to indemnify an Issuing Bank for any
claims,
damages, losses, liabilities, costs or expenses, and the Borrower
shall have a claim for direct (but not consequential) damage
suffered by it, to the extent found by a court of competent
jurisdiction to have been caused by (x) the willful misconduct or
gross negligence of such Issuing Bank in determining whether a
request presented under any Letter of Credit issued by it
complied
with the terms of such Letter of Credit or (y) such Issuing
Bank's
failure to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms
and conditions of such Letter of Credit. Nothing in this
subsection (e) is intended to limit the obligations of the
Borrower
under any other provision of this Agreement.
ARTICLE III
CONDITIONS TO BORROWINGS, ISSUANCES OF
LETTERS OF CREDIT AND EFFECTIVENESS
SECTION 3.01. Conditions to All Borrowings and Issuances
of Letters of Credit. The obligation of each Bank to make a Loan
on the occasion of each Borrowing or of an Issuing Bank to issue
a
Letter of Credit is subject to the satisfaction of the following
conditions:
(a) receipt by the Managing Agent of a Notice of
Borrowing
as required by Section 2.02 or by such Issuing Bank of a Notice
of Issuance as required by Section 2.16;
(b) the fact that, immediately before and after such
Borrowing or Letter of Credit issuance, no Default shall have
occurred and be continuing; and
(c) the fact that the representations and warranties of
the Borrower contained in this Agreement shall be true on and
as
of the date of such Borrowing or Letter of Credit issuance and
the representations and warranties of the Borrower and the
Subsidiaries party to any Operative Agreement contained in the
other Operative Agreements (or, after the Rating Target Date,
the Guarantee Agreements), taken as a whole, shall be true in
all material respects on and as of the date of such Borrowing
or
Letter of Credit issuance.
Each Borrowing and Letter of Credit issuance hereunder shall be
deemed to be a representation and warranty by the Borrower on the
date of such Borrowing as to the facts specified in clauses (b)
and
(c) of this Section.
SECTION 3.02. Conditions to Effectiveness. This
Agreement
shall become effective and the initial Borrowings shall take
place
on the date (the "Effective Date") on which each of the following
conditions shall have been satisfied (or waived in accordance
with
Section 9.04):
(a) receipt by the Managing Agent of (i) a counterpart of
this Agreement from each of the parties hereto duly executed by
such party or (ii), in the case of any Bank or Agent,
confirmation from such Bank or Agent that a counterpart hereof
has been duly executed by such Bank or Agent and sent to the
Managing Agent;
(b) receipt by the Managing Agent of duly executed Notes
(other than a Swingline Note) for the account of each Bank and
a duly executed Swingline Note for the account of the Swingline
Bank, each dated on or before the Effective Date and complying
with the provisions of Section 2.04;
(c) receipt by the Managing Agent of an opinion of McAfee
& Taft A Professional Corporation, special counsel for the
Borrower, substantially in the form of Exhibit B-1 hereto and
an
opinion of General Counsel for the Borrower substantially in
the
form of Exhibit B-2 hereto, in each case covering such
additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) receipt by the Managing Agent of an opinion of Davis
Polk & Wardwell, special counsel for the Managing Agent,
substantially in the form of Exhibit C hereto and covering such
additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(e) receipt by the Managing Agent of a certificate signed
by the Chairman of the Board, the Vice Chairman of the Board,
the Chief Executive Officer, the Chief Financial Officer, the
Chief Operating Officer, the President or the Treasurer of the
Borrower to the effect that (i) each of the representations and
warranties contained in the Operative Agreements is true and
correct on and as of the date thereof, (ii) no Default has
occurred and is continuing and (iii) the conditions set forth
in
clauses (f), (h), (i), (m) and (n) of this Section 3.02 have
been satisfied;
(f) the commitments under the $400 million Credit
Agreement dated as of October 21, 1993, as amended, among the
Borrower, the banks parties thereto and Morgan Guaranty Trust
Company of New York, as Agent, and the $200 million Credit
Agreement dated as of May 13, 1994 among the Borrower, the
banks
parties thereto and Morgan Guaranty Trust Company of New York,
as Agent (the "Existing Agreements"), shall have been
terminated
and the principal of and interest on all loans outstanding
thereunder and all accrued fees thereunder shall have been paid
in full;
(g) receipt by the Managing Agent from the Borrower (to
the
extent not already paid by the Borrower) of (i) for the account
of
each Agent, the management and participation fees payable to such
Agent as contemplated by the memorandum from J. P. Morgan
Securities, Inc. ("JPMS") to prospective co-agents dated May 14,
1994 and the commitment and facility fees accrued to the date
hereof and payable to such Agent as contemplated by the Summary
of
Terms and Conditions included in the Confidential Report
described
in Section 4.13 and (ii) for its own account and the account of
JPMS, the arrangement, management, participation and, insofar as
accrued to the date hereof, commitment and facility fees payable
to
it and JPMS as contemplated by the Managing Agent's letter to the
Borrower dated May 14, 1994;
(h) the fact that the final structure and terms of the
Haniel Transaction shall not differ in any material respect
from
those set forth in the Stock Purchase Agreement;
(i) that all of the conditions to the effectiveness of
the
Haniel Transaction and the consummation of the transactions
contemplated to occur in connection therewith (other than the
payment of the consideration and the delivery of the stock
certificates thereunder) set forth in the Stock Purchase
Agreement shall have been satisfied (without any material
waiver
or material amendment thereof) and the Banks shall have
received
a copy of each agreement, certificate, opinion of counsel or
other writing delivered in connection therewith or in
satisfaction thereof (and each such certificate or opinion
delivered by or on behalf of the Borrower shall, if requested
by
the Required Banks, be accompanied by a letter from the Person
delivering such certificate or opinion authorizing reliance
thereon by the Banks);
(j) receipt by the Managing Agent from the Borrower and
each other Person listed on Schedule 7(b) hereto of a fully
executed original of each Pledge Agreement, together with
certificates for all of the shares of capital stock of any
Guaranteeing Subsidiary owned by such Person, all in the form
and with such other documentation as is required by such Pledge
Agreement;
(k) receipt by the Managing Agent from the Borrower and
each other Person listed on Schedule 8 hereto of a fully
executed Security Agreement, together with the Uniform
Commercial Code financing statements initially required to be
filed thereunder, all completed, executed and otherwise ready
for filing;
(l) receipt by the Managing Agent from each Person listed
on Schedule 7(a) hereto of a fully executed Guarantee
Agreement;
(m) at least $95 million of the Existing Fleming Debt
listed in item 2 of Part B of Schedule 5 shall have been repaid
in full or arrangements for it being repaid in full on the
Effective Date after the Borrower's receipt of the proceeds of
the Borrowings on the Effective Date shall have been made;
(n) all Existing Haniel Debt listed in items 1 and 2 of
Part B of Schedule 6 shall have been repaid in full or
arrangements for it being repaid in full on the Effective Date
after the Borrower's receipt of the proceeds of the Borrowings
on the Effective Date shall have been made;
(o) receipt by the Managing Agent of evidence
satisfactory
to the Required Banks as to the matters specified in
subsections
(f), (m) and (n) above; and
(p) receipt by the Managing Agent of all documents that
the Managing Agent may reasonably request relating to the
existence of the Borrower, any Material Subsidiary and any
other
Subsidiary executing an Operative Agreement, the corporate
authority for and the validity of each Operative Agreement and
the Notes, and any other matters relevant thereto, all in form
and substance satisfactory to the Managing Agent.
As promptly as practicable after receipt by the Managing Agent of
all the documents referred to in this Section, the Managing Agent
shall notify each of the other parties hereto of the
effectiveness
of this Agreement. Each Bank that is a party to the Existing
Agreements, by its execution hereof, waives with respect to any
notice of termination of the commitments under the Existing
Agreements given on the Effective Date the requirement set forth
in
Section 2.09 of the Existing Agreements that the Borrower give
the
agent under the Existing Agreements three Domestic Business Days'
notice thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Borrower
is a corporation duly incorporated, validly existing and in good
standing under the laws of Oklahoma, and has all corporate powers
and all material governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the
Borrower of this Agreement and the Notes are within the
Borrower's
corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or
filing
with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of
incorporation
or by-laws of the Borrower or of any judgment, injunction, order
or
decree or any material agreement or other material instrument
binding upon the Borrower (other than the provisions of any
Existing Fleming Debt and any Existing Haniel Debt as to which
Schedule 5 or 6, as the case may be, states a specific period
following the Effective Date within which it is to be repaid) or
result in the creation or imposition of any Lien (other than
those
contemplated by the Security Documents) on any asset of the
Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes
a valid and binding agreement of the Borrower and the Notes, when
executed and delivered in accordance with this Agreement, will
constitute valid and binding obligations of the Borrower.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and
its
Consolidated Subsidiaries as of December 25, 1993 and the related
consolidated statement of earnings and statement of cash flows
for
the fiscal year then ended, reported on by Deloitte & Touche and
set forth in the Borrower's 1993 Form 10-K, a copy of which has
been delivered to each of the Banks, fairly present, in
conformity
with generally accepted accounting principles, the financial
position of the Borrower and its Consolidated Subsidiaries as of
such date and their results of operations and cash flows for such
fiscal year.
(b) The unaudited condensed consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of April 16,
1994
and the related unaudited consolidated statement of earnings and
condensed consolidated statement of cash flows for the 16 weeks
then ended, set forth in the Borrower's quarterly report for the
fiscal quarter ended April 16, 1994 as filed with the Securities
and Exchange Commission on Form 10-Q, a copy of which has been
delivered to each of the Banks, fairly present, in conformity
with
generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in paragraph
(a) of this Section (except for the omission of certain
information
and substantially all footnote disclosure as permitted by
Regulation S-X promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended), the
financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their results of operations and
cash flows for such 16-week period (subject to normal year-end
adjustments).
(c) Since December 25, 1993, there has been no material
adverse change, actual or prospective, in the business, financial
position or results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. Subject to the last sentence
of
this Section and except as set forth in Schedule 3, there is no
action, suit or proceeding pending against, or to the knowledge
of
the Borrower threatened against or affecting, the Borrower or any
of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a
reasonable possibility of an adverse decision that could
materially
adversely affect the business, financial position or results of
operations of the Borrower and its Consolidated Subsidiaries,
taken
as a whole, or that in any manner draws into question the
validity
of this Agreement or the Notes. The representations and
warranties
in this Section 4.05 shall, insofar as they apply to Haniel
Corporation and its Subsidiaries and insofar as the Borrower
makes
or is deemed to make representations and warranties to that
effect
within 12 months after the Effective Date, be based on the best
of
the Borrower's Knowledge.
SECTION 4.06. Compliance with ERISA. Subject to the last
sentence of this Section and except as set forth in Schedule 4,
each member of the ERISA Group has fulfilled its obligations
under
the minimum funding standards of ERISA and the Internal Revenue
Code with respect to each Plan and is in compliance in all
material
respects with the presently applicable provisions of ERISA and
the
Internal Revenue Code with respect to each Plan. Subject to the
last sentence of this Section and except as set forth in Schedule
4, no member of the ERISA Group has (i) sought a waiver of the
minimum funding standard under Section 412 of the Internal
Revenue
Code in respect of any Plan, (ii) failed to make any contribution
or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security under ERISA
or
the Internal Revenue Code or (iii) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA. The representations and warranties
in
this Section 4.06 shall, insofar as they apply to Haniel
Corporation and its Subsidiaries and insofar as the Borrower
makes
or is deemed to make representations and warranties to that
effect
within 12 months after the Effective Date, be based on the best
of
the Borrower's Knowledge.
SECTION 4.07. Environmental Matters. In the ordinary
course of its business, the Borrower reviews the effect of
Environmental Laws on the business, operations and properties of
the Borrower and its Subsidiaries, in the course of which it
evaluates associated liabilities and costs which it has
identified
(including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties
presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a
condition
of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent
shutdown
of any facility or reduction in the level of or change in the
nature of operations conducted thereat, any costs or liabilities
in
connection with off-site disposal of wastes or Hazardous
Substances, and any actual or potential liabilities to third
parties, including employees, and any related costs and
expenses).
Subject to the following sentence, on the basis of this review,
the
Borrower has reasonably concluded that such associated
liabilities
and costs, including the costs of compliance with Environmental
Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as
a
whole. The conclusion in the previous sentence shall, insofar as
it applies to Haniel Corporation and its Subsidiaries and insofar
as the Borrower makes or is deemed to make a representation and
warranty to that effect within 12 months after the Effective
Date,
be based on the best of the Borrower's Knowledge.
SECTION 4.08. Taxes. United States Federal income tax
returns of the Borrower and its Material Subsidiaries (other than
Malone & Hyde Inc. and other than Haniel Corporation and any
Material Subsidiaries owned by it) have been examined and closed
through the fiscal year ended December 27, 1986. United States
Federal income tax returns of Malone & Hyde Inc. have been
examined
and closed through the fiscal year ended December 25, 1977.
United
States Federal income tax returns of Haniel Corporation and any
Material Subsidiaries owned by it have been examined and closed
through the fiscal year ended December 31, 1982. The Borrower
and
its Material Subsidiaries have filed all United States Federal
income tax returns and all other material tax returns that are
required to be filed by them and have paid all taxes due pursuant
to such returns or pursuant to any assessment received by the
Borrower or any Material Subsidiary, except such taxes, if any,
as
are being contested in good faith and as to which adequate
reserves
have been provided. The charges, accruals and reserves on the
books of the Borrower and its Material Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the
Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's
Material Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction
of
incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is
not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 4.11. No Conflicting Requirements. Subject to
the
last sentence of this Section, neither the Borrower nor any
Subsidiary is in violation of, or in default under, any provision
of applicable law, rule or regulation or of its charter or
by-laws
or of any agreement, judgment, injunction, order, decree or other
instrument binding upon it or any of its properties, which
violation or default could reasonably be expected to have
consequences that would materially and adversely affect the
business, financial position or results of operations of the
Borrower and its Consolidated Subsidiaries, taken as a whole.
The
representations and warranties in this Section 4.11 shall,
insofar
as they apply to Haniel Corporation and its Subsidiaries and
insofar as the Borrower makes or is deemed to make
representations
and warranties to that effect within 12 months after the
Effective
Date, be based on the best of the Borrower's Knowledge.
SECTION 4.12. Haniel Transaction. The execution,
delivery
and performance of the Stock Purchase Agreement and the
consummation of the Haniel Transaction are within the Borrower's
corporate powers and have been duly authorized by the Borrower's
Board of Directors and do not require shareholder approval or any
other corporate action, and (i) except for the filing of a Report
on Form 8-K with the Securities and Exchange Commission, will
require no action by or in respect of, or filing with, any
governmental body, agency or official, (ii) will not contravene,
or
constitute a default under, any provision of applicable law, rule
or regulation applicable to the Borrower or any Material
Subsidiary
or of the charter or by-laws of the Borrower or any Material
Subsidiary or of any material agreement or instrument binding
upon
the Borrower or any Material Subsidiary, other than the
provisions
of any Existing Fleming Debt and any Existing Haniel Debt as to
which Schedule 5 or 6, as the case may be, states a specific
period
following the Effective Date within which it is to be repaid,
(iii)
will not contravene any provision of any judgment, injunction,
order or decree binding upon the Borrower or any Material
Subsidiary and (iv) will not (except as contemplated by the
Security Documents) result in the creation or imposition of any
Lien on any material asset of the Borrower or any Material
Subsidiary, except for any action or filing or any contravention
of
or default under or Lien arising under any law, rule, regulation,
agreement, judgment, order, decree or other instrument not
material
to the business of the Borrower and its Consolidated
Subsidiaries,
taken as a whole, which contravention, default or Lien would not
materially adversely affect the financial position, results of
operations or business of the Borrower and its Consolidated
Subsidiaries, taken as a whole.
SECTION 4.13. Disclosure. Subject to the last sentence
of
this Section, the material furnished to the Managing Agent and
the
Banks by the Borrower (including the Confidential Report dated as
of May 13, 1994 distributed to the Agents as supplemented from
time
to time prior to the Effective Date) in connection with the
negotiation, execution and delivery of this Agreement, taken as a
whole, does not contain as of the date hereof, and did not
contain
at the time so furnished (provided that such time was prior to
the
completion of the General Syndication), any untrue statement of a
material fact and does not as of the date hereof omit, and did
not
omit at the time so furnished, to state any material fact
necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Any
projections and appraisals provided by the Borrower to the
Managing
Agent and the Banks in connection herewith were prepared in good
faith on the basis of information and assumptions that the
Borrower
believed to be reasonable as of the date such material was
provided, and the Borrower believes that such assumptions are
reasonable as of the date hereof. The representations and
warranties in this Section 4.13 shall, insofar as they apply to
Haniel Corporation and its Subsidiaries, be based on the best of
the Borrower's Knowledge.
SECTION 4.14. Guarantee Requirement; Certain Collateral
and
Other Matters. Schedule 7(a) hereto lists each Person that, on
the
Effective Date (and after giving effect to the Haniel
Transaction),
will be an initial Guaranteeing Subsidiary. Schedule 7(b) hereto
lists each Person that, on the Effective Date (and after giving
effect to the Haniel Transaction), will be a Subsidiary that,
directly or indirectly, owns any capital stock of an initial
Guaranteeing Subsidiary. Schedule 8 hereto lists each Person
that,
on the Effective Date (and after giving effect to the Haniel
Transaction), will be a Collateral Subsidiary that owns any
Inventory or Receivables (other than only Excepted Inventory and
Excepted Receivables or Intercompany Receivables), provided that
if
on the Effective Date (and after giving effect to the Haniel
Transaction) there was a Collateral Subsidiary not listed on
Schedule 8 that owned Inventory or Receivables (other than only
Excepted Inventory and Excepted Receivables or Intercompany
Receivables), this representation and warranty shall nevertheless
not be incorrect or misleading so long as, if each Collateral
Subsidiary listed on Schedule 8 Pledged its Inventory and
Receivables, the Collateral Requirement would be met. On the
Effective Date (and after giving effect to the Haniel Transaction
and the execution of Guarantee Agreements by the initial
Guarantee-
ing Subsidiaries), the Guarantee Requirement will be met. On the
Effective Date (and after giving effect to the Haniel Transaction
and the execution of Security Agreements by the Collateral
Subsidiaries listed on Schedule 8 hereto and the completion of
the
initial filings contemplated thereby) the Collateral Requirement
will be met. The Borrower and its Subsidiaries have no Debt
Outstanding on the date hereof other than the Existing Fleming
Debt. Haniel Corporation and its Subsidiaries have no Debt
outstanding on the date hereof other than the Existing Haniel
Debt.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any
Commitment or Letter of Credit Liability hereunder or any amount
payable hereunder or under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to
each of the Banks:
(a) as soon as available and in any event within 95 days
after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year and the related
consolidated statements of earnings and cash flows for such
fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on in a
manner acceptable to the Securities and Exchange Commission by
Deloitte & Touche or other independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 50 days
after the end of each of the first three quarters of each
fiscal
year of the Borrower, (i) a consolidated condensed balance
sheet
of the Borrower and its Consolidated Subsidiaries as of the end
of such quarter setting forth in comparative form the figures
for the previous fiscal year end, (ii) the related consolidated
statement of earnings of the Borrower and its Consolidated
Subsidiaries for such quarter and for the portion of the
Borrower's fiscal year ended at the end of such quarter setting
forth in comparative form the figures for the corresponding
quarter and the corresponding portion of the Borrower's
previous
fiscal year, and (iii) the related consolidated condensed
state-
ment of cash flows of the Borrower and its Consolidated
Subsidiaries for the portion of the Borrower's fiscal year
ended
at the end of such quarter setting forth in comparative form
the
figures for the corresponding portion of the Borrower's
previous
fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted
accounting principles (except for the omission of certain
information and substantially all footnote disclosure as
permitted by Regulation S-X promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as
amended) and consistency by the chief financial officer or the
chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above,
a certificate of the chief financial officer, treasurer or the
chief accounting officer of the Borrower (i) setting forth in
reasonable detail the calculations required to establish
whether
the Borrower was in compliance with the requirements of
Sections
5.07 to 5.11, inclusive and Sections 5.13, 5.14, 5.16, 5.17 and
5.19 on the date of such financial statements and (ii) stating
whether any Default exists on the date of such certificate and,
if any Default then exists, setting forth the details thereof
and the action which the Borrower is taking or proposes to take
with respect thereto;
(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a
statement of the firm of independent public accountants that
reported on such statements (i) whether anything has come to
their attention to cause them to believe that any Default
existed on the date of such statements and (ii) confirming the
calculations set forth in the officer's certificate delivered
simultaneously therewith pursuant to clause (c) above;
(e) within five Domestic Business Days after the
obtaining
of the Borrower's Knowledge of any Default, a certificate of
the
chief financial officer, treasurer or the chief accounting
officer of the Borrower setting forth the details thereof and
the action which the Borrower is taking or proposes to take
with
respect thereto;
(f) promptly upon the mailing thereof to the shareholders
of the Borrower generally, copies of all financial statements,
reports and proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and
any
registration statements on Form S-8 or its equivalent) and
reports on Forms 10-K, 10-Q and 8-K (or their equivalents) that
the Borrower shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the ERISA Group (i) gives
or
is required to give notice to the PBGC of any "reportable
event"
(as defined in Section 4043 of ERISA) with respect to any Plan
that might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator
of
any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event
given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of
such notice; (iii) receives notice from the PBGC under Title IV
of ERISA of an intent to terminate, impose liability (other
than
for premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer any Plan, a copy of such
notice;
(iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any Plan
(other than The Godfrey Company Subsidiaries Pension Plan under
Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of
withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to
any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the
imposition
of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer, treasurer or the
chief accounting officer of the Borrower setting forth details
as to such occurrence and action, if any, which the Borrower or
applicable member of the ERISA Group is required or proposes to
take;
(i) forthwith upon (i) any change in the rating
(including
any implied rating) given by S&P or Moody's to the Borrower's
senior long-term unsecured debt, (ii) the placement of any such
debt on CreditWatch with negative implications by S&P or (iii)
the announcement by Moody's that its rating of such debt is
under review for possible downgrading, a certificate of the
chief financial officer or the treasurer of the Borrower to
such
effect, together with a written statement or other writing from
each such rating agency confirming the change in such rating,
the placement of such debt on CreditWatch with negative
implications or the fact that its rating of such debt is under
review for possible downgrading; and
(j) from time to time such additional information
regarding the financial position or business of the Borrower as
the Managing Agent, at the request of any Bank, may reasonably
request.
SECTION 5.02. Payment of Obligations. The Borrower will
pay and discharge, and will cause each Subsidiary to pay and
discharge, at or before maturity, all their respective material
obligations and liabilities, including, without limitation, tax
liabilities, except where the same may be contested in good faith
by appropriate proceedings or where the failure to do so would
not
materially adversely affect the business, financial position or
results of operations of the Borrower and its Consolidated
Subsidi-
aries, considered as a whole, and will maintain, and will cause
each Subsidiary to maintain, in accordance with generally
accepted
accounting principles, appropriate reserves for the accrual of
any
of the same.
SECTION 5.03. Maintenance of Property; Insurance. (a)
The
Borrower will keep, and will cause each Subsidiary to keep, all
property useful and necessary in its business in good working
order
and condition, ordinary wear and tear excepted, except where the
failure to do so would not materially adversely affect the
business, financial position or results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a
whole.
(b) The Borrower will, and will cause each of its
Subsidiaries to, maintain (either in the name of the Borrower or
in
such Subsidiary's own name) with financially sound and
responsible
insurance companies, insurance on all their respective properties
in at least such amounts and against at least such risks (and
with
such risk retention) as are usually insured against in the same
general area by companies of established repute engaged in the
same
or a similar business; and will furnish to the Banks, upon
request
from the Managing Agent, information presented in reasonable
detail
as to the insurance so carried.
SECTION 5.04. Conduct of Business and Maintenance of
Existence. The Borrower will continue, and will cause its
Material
Subsidiaries to continue, to engage in business of the same
general
type as conducted by the Borrower and its Consolidated
Subsidiaries
taken as a whole, and will preserve, renew and keep in full force
and effect, and, except as permitted by Section 5.11, will cause
each Material Subsidiary to preserve, renew and keep in full
force
and effect their respective corporate existence and their respec-
tive rights, privileges and franchises necessary or desirable in
the normal conduct of business.
SECTION 5.05. Compliance with Laws. The Borrower will
comply, and cause each Consolidated Subsidiary to comply, in all
material respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and
the rules and regulations thereunder) except where the necessity
of
compliance therewith is contested in good faith by appropriate
proceedings or where the failure to do so would not materially
adversely affect the business, financial position or results of
operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole.
SECTION 5.06. Inspection of Property, Books and Records.
The Borrower will keep, and will cause each Material Subsidiary
to
keep, proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in
relation to its business and activities; and will permit, and
will
cause each Subsidiary to permit, representatives of any Bank at
such Bank's expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such
reasonable times and as often as may reasonably be desired,
provided that this section shall not be construed to require the
Borrower to waive or cause to be waived any attorney-client
privilege applicable to information in the Borrower's or a
Subsidiary's possession. Each Bank agrees to maintain in
confidence any information conspicuously identified by the
Borrower
or any Subsidiary as trade secrets or proprietary information
which
such Bank may obtain as a result of the inspections, examinations
and discussions undertaken pursuant to this section, provided
that
each Bank (i) may discuss any such information with any other
Bank;
(ii) may furnish any such information to its attorneys and
accountants; (iii) may furnish any such information to any
agency,
authority, commission or other regulatory body to whose
jurisdiction it may be subject, to any shareholder, director or
other person to whom it in good faith believes it owes a duty of
disclosure under applicable law and to any other person if
required
by law; and (iv) shall not be prohibited from using, or seeking
to
admit as evidence, any such information in connection with any
litigation to which such Bank is a party.
SECTION 5.07. Leverage Ratio. At no time during any of
the
periods set forth below shall the ratio of Consolidated Debt to
Consolidated Net Worth exceed the applicable ratio set forth
below:
Period Ratio
Effective Date through
December 30, 1995 2.45 to 1
December 31, 1995 through
December 30, 1996 2.25 to 1
December 31, 1996 through
December 30, 1997 2.15 to 1
December 31, 1997 through
December 30, 1998 2.05 to 1
December 31, 1998 through
December 30, 1999 1.95 to 1
Thereafter 1.80 to 1
SECTION 5.08. Minimum Consolidated Net Worth.
Consolidated
Net Worth at any time shall be not less than the sum of (i)
$850,000,000, plus (ii) for each fiscal quarter of the Borrower,
beginning with the fiscal quarter ending October 1, 1994, for
which
Consolidated Net Income is a positive number, 50% of Consolidated
Net Income for such fiscal quarter plus (iii) 50% of the Net
Proceeds of any Equity Issuance occurring during the period from
the Effective Date through the date of calculation.
SECTION 5.09. Fixed Charge Coverage Ratio. As of the
last
day of each fiscal quarter of the Borrower, the ratio of Net
Earnings Available for Fixed Charges to Consolidated Fixed
Charges,
in each case for the four fiscal quarters ending on such day,
shall
not be less than the applicable ratio set forth below:
Period Ratio
Effective Date through
December 30, 1995 1.40 to 1
December 31, 1995 through
December 30, 1996 1.45 to 1
December 31, 1996 through
December 30, 1997 1.55 to 1
December 31, 1997 through
December 30, 1998 1.66 to 1
December 31, 1998 through
December 30, 1999 1.77 to 1
Thereafter 1.90 to 1
provided that Net Earnings Available for Fixed Charges for any
period shall be calculated on a pro forma basis excluding any
charge of up to $105,700,000 for the Borrower Special Charges.
SECTION 5.10. Negative Pledge. Neither the Borrower nor
any Collateral Subsidiary will create, assume or suffer to exist
any Lien on any asset now owned or hereafter acquired by it
(including Inventory on consignment), except:
(a) Liens existing on July 19, 1994 and described in
Schedule 2 hereto;
(b) any Lien existing on any asset of any corporation at
the time (if after the Effective Date) such corporation becomes
a Consolidated Subsidiary and not created in contemplation of
such event;
(c) any Lien on any asset securing Debt incurred or
assumed (after the Effective Date) for the purpose of financing
all or any part of the cost of acquiring or constructing such
asset (other than, any time prior to the Rating Target Date,
any
Lien on Inventory), provided that such Lien attaches to such
asset concurrently with or within 180 days after the
acquisition
or completion of construction thereof;
(d) any Lien on any asset of any corporation existing at
the time (if after the Effective Date) such corporation is
merged or consolidated with or into the Borrower or a
Consolidated Subsidiary and not created in contemplation of
such
event;
(e) any Lien existing on any asset prior to the
acquisition thereof (if after the Effective Date) by the
Borrower or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted
by any of the foregoing clauses of this Section, provided that
such Debt is not increased other than by an amount equal to any
reasonable financing fees and is not secured by any additional
assets;
(g) Liens arising in the ordinary course of its business
which (i) other than landlord's liens, do not secure Debt or
Derivatives Obligations and (ii) either (x) do not in the
aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its
business or (y) are being contested in good faith by
appropriate
proceedings, which proceedings have the effect of preventing
the
forfeiture or sale of the property or asset subject to such
Lien, provided that prior to the Rating Target Date Liens on
Inventory (and Receivables arising therefrom and other proceeds
thereof) in favor of any Person from whom the Borrower or any
Subsidiary has acquired such Inventory shall not be considered
to arise in the ordinary course of business except to the
extent
of Liens of such character on Inventory and related Receivables
having a book value not exceeding $50,000,000 at any time
outstanding;
(h) any Lien on a Financing Receivable or other
receivable
that is transferred in a Permitted Receivables Financing;
(i) Liens in favor of the Borrower or another
Consolidated
Subsidiary;
(j) Liens securing the Haniel Receivables;
(k) Liens not otherwise permitted by the foregoing or
following clauses of this Section securing Debt in an aggregate
principal or face amount at any time outstanding not to exceed
$25,000,000;
(l) Liens securing Debt of the type described in
subsections 5.13(a)(vi) and (vii);
(m) Liens contemplated by the Security Documents;
(n) Liens on cash and cash equivalents securing
Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed
$25,000,000; and
(o) Liens on Inventory (and any Receivables arising from
such Inventory and proceeds thereof) in favor of General
Electric Corporation or any of its Subsidiaries or in favor of
L'eggs Products, A Division of Sara Lee Corporation, to secure
amounts due from the Borrower or any Collateral Subsidiary in
respect of goods sold on consignment.
SECTION 5.11. Mergers, Consolidations and Sales of
Assets.
The Borrower will not, and will not permit any Collateral
Subsidiary to, be a party to any merger or consolidation,
provided
that:
(a) any Subsidiary may consolidate with or merge into the
Borrower or another Subsidiary if in any such merger or
consolidation involving the Borrower, the Borrower shall be the
surviving or continuing corporation;
(b) any other corporation may consolidate with or merge
into the Borrower or any Subsidiary if (i) in any such merger
or
consolidation involving the Borrower, the Borrower shall be the
surviving or continuing corporation, (ii) in any such merger or
consolidation involving a Subsidiary the corporation resulting
from such merger or consolidation shall be a Subsidiary, and
(iii) at the time of such merger or consolidation and after
giving effect thereto no Default shall have occurred and be
continuing;
(c) the Borrower may engage in a reorganization pursuant
to Section 368(a)(1)(F) of the Internal Revenue Code solely for
the purpose of changing its place of organization; and
(d) this paragraph shall not prohibit any merger or
consolidation that would otherwise be permitted under the
immediately following paragraph.
Other than Permitted Receivables Financings, the Borrower
will not, and will not permit any Collateral Subsidiary to, sell,
lease, transfer or otherwise dispose of (by merger or otherwise
to
a Person who is not a Wholly-Owned Subsidiary) all or any part of
its property if such transaction involves a substantial part of
the
property of the Borrower and its Subsidiaries. As used in this
paragraph, a sale, lease, transfer or other disposition of the
property of the Borrower or a Subsidiary shall be deemed to be a
substantial part of such property if the amount of property
proposed to be disposed of when added to the amount of all other
property sold, leased, transferred or disposed of (other than in
the ordinary course of business and other than as permitted by
the
next sentence) during any one fiscal year of the Borrower
contributed more than 20% of Consolidated Net Income for any one
of
the immediately preceding three fiscal years of the Borrower.
Notwithstanding any other provision of this paragraph, the
Borrower
or any Subsidiary may sell, lease, transfer or otherwise dispose
of
one or more warehouse facilities, provided that (i) such
transactions do not in the aggregate involve all or substantially
all of the property of the Borrower and its Subsidiaries and (ii)
the Borrower or any Subsidiary retains the right to receive at
least 85% of the revenue derived from such warehouse facilities,
notwithstanding the sale thereof.
Prior to the Rating Target Date, the Borrower will not,
and
will not permit any Collateral Subsidiary to, make any Asset Sale
unless the portion of the Net Proceeds thereof consisting of
cash,
Temporary Cash Investments and instruments at least equals the
portion of the Net Proceeds thereof allocable to any Collateral
(as
defined in the Security Documents) that is to be released from
the
Lien of the Security Documents in connection therewith.
SECTION 5.12. Use of Any and All Proceeds.
The proceeds of the Loans made under this Agreement will
be used by the Borrower for the Haniel Transaction, including
transaction expenses incurred by the Borrower and its
Subsidiaries
in connection therewith, and for general corporate purposes;
provided that no more than $1,200,000,000 (subject to any
adjustments for working capital fluctuations) of the Loans will
be
used by the Borrower for that portion of the Haniel Transaction
consisting of the purchase of Haniel Corporation and the related
refinancing of outstanding debt of Haniel Corporation and it
Subsidiaries. None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any "margin stock" within the
meaning of Regulation U. None of such proceeds will be used in
violation of any applicable law or regulation.
SECTION 5.13. Debt. (a) The Borrower will not, and will
not permit any Collateral Subsidiary to, incur or at any time be
liable with respect to any Debt except:
(i) Debt outstanding under this Agreement, the Notes and
the other Operative Agreements;
(ii) Debt outstanding on the date hereof and listed in
Parts A and C of Schedule 5 and Parts A and D of Schedule 6,
including, except in the case of Debt listed in items 1 and 2
of
Part A of Schedule 6, any extension, renewal or refunding
thereof so long as (A) the principal amount outstanding is not
increased other than by an amount equal to any reasonable
financing fees and (B) such Debt does not mature and is not
subject to mandatory repayment or repurchase at the option of
the holders thereof or otherwise earlier or on more stringent
terms than such Debt was so subject prior to such extension,
renewal or refunding; provided that such Debt may so mature or
be so subject to mandatory repayment or repurchase so long as
neither the Borrower nor any Subsidiary has any obligation to
repay, repurchase or otherwise retire such Debt at any time
when
any Loans, Letter of Credit Liabilities or Commitments are
outstanding hereunder;
(iii) Debt incurred by the Borrower after the date hereof
that has a final maturity at least six months after the Tranche
C Termination Date and no portion of which is subject to
mandatory repayment or repurchase at the option of the holders
thereof or otherwise prior to such time; provided that such
Debt
may be so subject to mandatory repayment or repurchase so long
as neither the Borrower nor any Subsidiary has any obligation
to
repay, repurchase or otherwise retire such Debt at any time
when
any Loans, Letter of Credit Liabilities or Commitments are
outstanding hereunder;
(iv) Debt of the Borrower to a Wholly-Owned Subsidiary or
of a Consolidated Subsidiary to the Borrower or a Wholly-Owned
Subsidiary or Debt of the Borrower to a Subsidiary that is not
a Wholly-Owned Subsidiary that arises out of the Borrower's
cash
management activities in the ordinary course of business;
(v) a Guaranteeing Subsidiary may Guarantee, on terms no
more favorable to the beneficiary than the Guarantee
Agreements,
Debt, the net proceeds of which are used solely to repay
Tranche
B or Tranche C Loans, incurred pursuant to clause (iii) of this
Section 5.13(a); provided that such Debt shall not be secured
by
the Security Documents or otherwise;
(vi) obligations of the Borrower or any Subsidiary as
lessee under capital leases, but only to the extent that the
Borrower or such Subsidiary has entered into (and not
terminated), or has a binding commitment for, subleases on
terms
which, to the Borrower, are at least as favorable, on a current
basis, as the terms of the corresponding capital lease;
(vii) obligations of the Borrower or its Subsidiaries
(other
than as covered by clause (vi) above) as lessee under capital
leases under which the aggregate principal component of the
annual rent payable does not exceed $5,000,000;
(viii) Debt outstanding on the date hereof and listed in
Part
B of Schedule 5 or Parts B and C of Schedule 6, but only during
the periods after the Effective Date specified therefor in such
Schedules;
(ix) the Haniel Receivables;
(x) Debt assumed by the Borrower or any Subsidiary in
connection with an Acquisition (if after the Effective Date)
and
not created in contemplation of such Acquisition; and
(xi) Debt of any corporation outstanding at the time (if
after the Effective Date) such corporation becomes a
Consolidated Subsidiary and not created in contemplation of
such
event;
(xii) Guarantees made by the Borrower or any Subsidiary
constituting Investments made pursuant to Sections 5.17 (vi),
(vii), (ix), (x) and (xi);
(xiii) Debt of the Borrower incurred in order to extend,
renew or refund the ESOP Loan, so long as (A) the principal
amount outstanding is not increased other than by an amount
equal to any reasonable financing fees and (B) such Debt does
not mature and is not subject to mandatory repayment or
repurchase at the option of the holders thereof or otherwise
earlier or on more stringent terms than such Debt was so
subject
prior to such extension, renewal or refunding; provided that
such Debt may so mature or be so subject to mandatory repayment
or repurchase so long as neither the Borrower nor any
Subsidiary
has any obligation to repay, repurchase or otherwise retire
such
Debt at any time when any Loans, Letter of Credit Liabilities
or
Commitments are outstanding hereunder;
(xiv) Guarantees made by the Borrower or any Subsidiary in
connection with a Permitted Receivables Financing to the extent
in excess of any amount described in clause (c) of the proviso
to the definition of Guarantee; and
(xv) other Debt in an aggregate principal amount
outstanding not to exceed $25,000,000, no more than $2,000,000
of which may have been incurred by a Subsidiary.
(b) The Borrower will not, and will not permit any
Collateral Subsidiary to, make any payment of the principal of,
or
repurchase, redeem, defease or otherwise retire, any Debt,
except:
(i) Debt outstanding under this Agreement, the Notes and
the other Operative Agreements;
(ii) Debt outstanding on the date hereof that is repaid on
the Effective Date (or that is designated to be repaid within a
specific period after the Effective Date on Schedule 5 or 6)
with the proceeds of Loans made under this Agreement;
(iii) Debt outstanding on the date hereof and listed
as
items 4 through 10 in Part A of Schedule 6;
(iv) Existing Fleming Debt and Existing Haniel Debt, but
only to the extent of any repayments, repurchases or
redemptions
which the Borrower or its Subsidiaries are obligated to make
under the terms thereof as in effect on the date hereof;
(v) Debt of the Borrower to a Consolidated Subsidiary or
of
a Consolidated Subsidiary to the Borrower or another
Consolidated Subsidiary; and
(vi) Debt of the character described in clauses (iv), (vi),
(vii), (ix), (x), (xi), (xii), (xiii), (xiv) and (xv) of
Section
5.13(a); and
(vii) in connection with the refunding of such Debt where
such refunding is expressly permitted by Section 5.13(a).
SECTION 5.14. Restricted Payments. Neither the Borrower
nor any Subsidiary will declare or make any Restricted Payment
except, so long as no Default has occurred and is continuing,
(i) prior to the Rating Target Date, cash dividends in an
aggregate
amount in any fiscal year of the Borrower not exceeding the
Restricted Payments Cap, and (ii) after the Rating Target Date,
cash dividends in an aggregate amount in any fiscal year of the
Borrower not exceeding the higher of the Restricted Payments Cap
and an amount equal to 33 1/3% of Consolidated Net Income for the
four fiscal quarters most recently ended minus the amount of any
cash dividends declared or made during the three fiscal quarters
immediately preceding the quarter during which such cash dividend
is declared or made. Nothing in this Section shall prohibit the
payment of any dividend or distribution within 45 days after the
declaration thereof if such declaration was not prohibited by
this
Section.
SECTION 5.15. Transactions with Affiliates. The Borrower
will not, and will not permit any Subsidiary to, directly or
indirectly, pay any funds to or for the account of, make any
investment (whether by acquisition of stock or indebtedness, by
loan, advance, transfer of property, guarantee or other agreement
to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any
assets, tangible or intangible, to, or participate in, or effect
any transaction in connection with any joint enterprise or other
joint arrangement with, any Affiliate; provided however, that the
foregoing provisions of this Section shall not prohibit (a) the
Borrower from declaring or paying any lawful dividend so long as,
after giving effect thereto, no Default shall have occurred and
be
continuing, (b) the Borrower or any Subsidiary from making sales
to
or purchases from any Affiliate and, in connection therewith,
extending credit or making payments, or from making payments for
services rendered by any Affiliate, if such sales or purchases
are
made or such services are rendered in the ordinary course of
business and on terms and conditions at least as favorable to the
Borrower or such Subsidiary as the terms and conditions which
would
apply in a similar transaction with a Person not an Affiliate,
(c)
the Borrower or any Subsidiary from making payments of principal,
interest and premium on any Debt of the Borrower or such
Subsidiary
held by an Affiliate if the terms of such Debt are substantially
as
favorable to the Borrower or such Subsidiary as the terms which
could have been obtained at the time of the creation of such Debt
from a lender which was not an Affiliate, (d) the Borrower or any
Subsidiary from participating in, or effecting any transaction in
connection with, any joint enterprise or other joint arrangement
with any Affiliate if the Borrower or such Subsidiary
participates
in the ordinary course of its business and on a basis no less
advantageous than the basis on which such Affiliate participates
and (e) the Borrower or any Subsidiary from making payments of
reasonable compensation, fees and expenses to their respective
directors and executive officers for services rendered to the
board
of directors of the Borrower or any Subsidiary or any committee
of
any thereof.
SECTION 5.16. Capital Expenditures. The Borrower will
not,
and will cause each Collateral Subsidiary not to, make any
Capital
Expenditures unless the aggregate Capital Expenditures of the
Borrower and its Collateral Subsidiaries in the fiscal year of
the
Borrower in which such Capital Expenditure is made will not
exceed
the amount set forth below for the year in which such Capital
Expenditure is made, provided that this Section 5.16 shall not
apply on and after the Rating Target Date:
Period Amount
Effective Date through
December 31, 1994 155,000,000
January 1, 1995 through
December 31, 1995 155,000,000
January 1, 1996 through
December 31, 1996 160,000,000
January 1, 1997 through
December 31, 1997 165,000,000
January 1, 1998 through
December 31,1998 165,000,000
January 1, 1999 through
December 31, 1999 175,000,000
January 1, 2000 through
December 31, 2000 185,000,000
SECTION 5.17. Acquisitions and Investments. Neither the
Borrower nor any Collateral Subsidiary will make any Acquisitions
or Investments except:
(i) in connection with the Haniel Transaction;
(ii) Temporary Cash Investments;
(iii) Investments by the Borrower in any Wholly-Owned
Subsidiary and Investments by any Wholly-Owned Subsidiary in
the
Borrower or in any other Wholly-Owned Subsidiary;
(iv) any Acquisition or Investment, to the extent the
consideration for which is an Equity Issuance;
(v) the reclassification of any Investment originally
made
in the form of Debt as an Investment by way of capital
contribution or share purchase or the reclassification of any
Investment originally made by way of capital contribution or
share purchase as an Investment in the form of Debt;
(vi) Guarantees by the Borrower or any Subsidiary of the
obligations of any Person other than the Borrower or any
Subsidiary as lessee under capital leases, but only to the
extent that either (A) such Person has entered into (and not
terminated), or has a binding commitment for, subleases on
terms
which, to such Person, are at least as favorable, on a current
basis, as the terms of the corresponding capital lease or (B)
the aggregate principal component of annual rent payable under
such capital leases (excluding any such capital leases
permitted
by subclause (A) of this clause (vi)) does not exceed
$10,000,000;
(vii) a loan of the proceeds of Debt incurred pursuant to
Section 5.13(a)(xiii) to the 1989 ESOP;
(viii) accounts receivable converted to Investments, so long
as such Investments either mature within one year or are in an
outstanding aggregate unrecovered amount (excluding those
maturing within one year) not exceeding $10,000,000 during 1994
and $20,000,000 in each year thereafter;
(ix) Investments resulting from the transactions described
on Schedule 11;
(x) in connection with the Haniel Receivables;
(xi) Guarantees by a Guaranteeing Subsidiary of the
character described in Section 5.13(a)(v); and
(xii) other Acquisitions or Investments (other than
Acquisitions and Investments covered by clauses (i) through
(xi)
above) where the consideration for such Acquisition or
Investment (when aggregated with the total consideration for
all
other Acquisitions and Investments made from the Effective Date
through the applicable date of measurement (other than
Acquisitions and Investments covered by clauses (i) through
(xi)
above)) does not exceed the amount set forth below for the year
in which such Acquisition or Investment is to be made:
Period Amount
Effective Date through
December 31, 1994 $100,000,000
January 1, 1995 through
December 31, 1995 $150,000,000
January 1, 1996 through
December 31, 1996 $200,000,000
January 1, 1997 through
December 31, 1997 $250,000,000
January 1, 1998 through
December 31, 1998 $300,000,000
January 1, 1999 through
December 31, 1999 $350,000,000
Thereafter $400,000,000
provided that as at any time of determination the amount set
forth
above for any year shall be increased by (A) the net proceeds
received at any time after the Effective Date by the Borrower or
any Subsidiary in respect of sales or other transfers of
Financing
Receivables, less any non-contingent amount paid or payable by
the
Borrower or any Subsidiary with respect to credit losses
associated
with, or other recourse to the Borrower or any Subsidiary with
respect to, any such Financing Receivables, (B) the amount of
cash
or Temporary Cash Investments received by the Borrower or any
Subsidiary representing the net proceeds of any loan repayment or
return of capital in respect of an Investment previously made
which
was either permitted only by this subsection (xii) or would have
been permitted only by this subsection (xii) if this Agreement
had
been in effect at the time such Investment was made and (C) the
amount of any Guarantee previously issued which was either
permitted only by this subsection (xii) or would have been
permitted only by this subsection (xii) if this Agreement had
been
in effect at the time such Guarantee was issued, to the extent
such
Guarantee is subsequently terminated without any payment having
been made pursuant thereto.
SECTION 5.18. Interest Rate Protection. At September 30,
1994 the Borrower shall have established ceiling rate or other
interest rate protection with respect to the Loans in a manner
and
upon terms and conditions acceptable to the Required Banks,
either
with financial institutions acceptable to the Required Banks or
with one or more Banks, subject to the following. The Borrower
shall agree with the Required Banks on a projected principal
amount
of Tranche A and Tranche C Loans that will be outstanding on and
after September 30, 1994. The required interest rate protection
must be in respect of an amount equal to at least (a) 50% of the
principal amount of such Loans projected to be outstanding from
time to time minus (b) $150,000,000. The Borrower shall
thereafter
maintain such interest rate protection, provided that the amount
thereof may be decreased from time to time if actual Borrowings
and
repayments would, on a pro forma basis applying the criterion set
forth above, require a lesser amount and no such interest rate
protection need be maintained after the Rating Target Date.
SECTION 5.19. Guarantee Requirement; Other Collateral
Matters. If at any date the Guarantee Requirement is not met,
the
Borrower will promptly cause one or more Subsidiaries that are
not
then Guaranteeing Subsidiaries to execute and deliver a Guarantee
Agreement so as to result in the Guarantee Requirement being met.
If a Subsidiary executes a Guarantee Agreement after the
Effective
Date but prior to the Rating Target Date, the Borrower will
deliver
the capital stock of such new Guaranteeing Subsidiary (or, as the
case may be and if it has not already done so, the capital stock
of
any Subsidiary through which it indirectly owns the capital stock
of such new Guaranteeing Subsidiary) in pledge under the
Borrower's
Pledge Agreement and cause any Subsidiary directly or indirectly
owning capital stock of such new Guaranteeing Subsidiary to
execute, if it has not already done so, a Pledge Agreement with
respect to all shares of capital stock constituting such direct
or
indirect ownership and cause all such actions (including the
filing
of Uniform Commercial Code financing statements) to be taken as
the
Managing Agent may consider necessary or appropriate to ensure
the
validity, binding effect and enforceability of such Pledge
Agreement and the validity, enforceability, perfection and
priority
of the Liens created thereby. After the Effective Date but prior
to the Rating Target Date, the Borrower will not permit any
Collateral Subsidiary to own any Inventory or Receivables (other
than only Excepted Inventory and Excepted Receivables or only
Intercompany Receivables) unless the Collateral Requirement will
be
met.
SECTION 5.20. Limitation on Payment Restrictions
Affecting
Subsidiaries. The Borrower will not, and will not permit any of
its Collateral Subsidiaries to, create or otherwise cause or
suffer
to exist or become effective any consensual restriction on the
ability of any Collateral Subsidiary to pay, directly or
indirectly, to the Borrower any dividends or other distributions
on
such Collateral Subsidiary's capital stock.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of
the
following events ("Events of Default") shall have occurred and be
continuing:
(a) the Borrower shall fail to pay when due any principal
of any Loan, shall fail to reimburse any drawing under any Letter
of Credit when required hereunder, or shall fail to pay within
five
days of the due date thereof any interest on any Loan or any fee
payable hereunder;
(b) the Borrower shall fail to observe or perform any
covenant or agreement contained in Sections 5.07 to 5.11,
inclusive
or Sections 5.13, 5.14, 5.16 or 5.17;
(c) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement or any other
Operative Agreement (other than those covered by clauses (a) and
(b) above) for 30 days after written notice thereof has been
given
to the Borrower by the Managing Agent at the request of any Bank;
(d) any representation, warranty, certification or
statement made by the Borrower in this Agreement or in any
certificate, financial statement or other document delivered
pursuant to this Agreement (other than such a document covered by
the following portion of this clause (d)) shall prove to have
been
incorrect or misleading in any material respect when made (or
deemed made) or the representations, warranties, certifications
and
statements made by the Borrower and the Subsidiaries party to any
Operative Agreement in the other Operative Agreements and in the
certificates, financial statements and other documents delivered
pursuant to the other Operative Agreements, taken as a whole,
shall
prove to have been incorrect or misleading in any material
respect
when made (or deemed made);
(e) the Borrower or any Material Subsidiary shall fail to
make any payment in respect of any Debt having an aggregate
principal or face amount outstanding amount at such time equal to
or exceeding $5,000,000 (other than the Notes) when due or within
any applicable grace period or the Borrower shall fail to make
any
payment in respect of any Material Derivatives Obligations when
due
or within any applicable grace period;
(f) any event or condition shall occur that results in
the
acceleration of the maturity of any Debt of the Borrower or any
Material Subsidiary having an aggregate principal or face amount
outstanding at such time equal to or exceeding the greater of (i)
$25,000,000 and (ii) 2% of Consolidated Net Worth as at the last
day of the most recently ended fiscal quarter, or enables (or,
with
the giving of notice or lapse of time or both, would enable) the
holder of such Debt or any Person acting on such holder's behalf
to
accelerate the maturity thereof;
(g) the Borrower or any Material Subsidiary shall
commence
a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its
debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
recei-
ver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they
become
due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Material Subsidiary seeking
liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law
now
or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it
or
any substantial part of its property, and such involuntary case
or
other proceeding shall remain undismissed and unstayed for a
period
of 60 days; or an order for relief shall be entered against the
Borrower or any Material Subsidiary under the federal bankruptcy
laws as now or hereafter in effect;
(i) (1) any member of the ERISA Group shall fail to pay
when
due an amount or amounts aggregating in excess of $15,000,000
which
it shall have become liable to pay under Title IV of ERISA; (2)
or
notice of intent to terminate a Material Plan shall be filed
under
Title IV of ERISA by any member of the ERISA Group, any plan
admin-
istrator or any combination of the foregoing; (3) or the PBGC
shall
institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan; (4) or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or (5)
there shall occur a complete or partial withdrawal from, or a
default, within the meaning of Section 4219(c)(5) of ERISA (a
"4219
Default"), with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a
current payment obligation in excess of $15,000,000 provided
that,
for purposes of this clause (5), the aggregate liability, if any,
incurred in connection with the withdrawal or partial withdrawal
of
the Borrower or any Subsidiary from any one or more of the
Multiemployer Plans set forth on Schedule 13 hereto shall be
disregarded to the extent such aggregate liability does not
exceed
$2,400,000 while the excess, if any, of such aggregate liability
over $2,400,000 shall be regarded for such purposes; provided
further that the immediately preceding proviso shall not, in the
event of a 4219 Default, apply to any liability or payment
obligation that could be accelerated by the applicable
Multiemployer Plan(s) as a result of such 4219 Default;
(j) a judgment or order for the payment of money in
excess
of $7,500,000 shall be rendered against the Borrower or any
Material Subsidiary and such judgment or order shall continue
unsatisfied in an amount exceeding $7,500,000 and unstayed for a
period of 60 days;
(k) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) other than the 1989 ESOP shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 20% or more
of the outstanding shares of common stock of the Borrower; or,
during any period of 12 consecutive calendar months, individuals
who were directors of the Borrower on the first day of such
period
shall cease to constitute a majority of the board of directors of
the Borrower; or
(l) at any time prior to the Rating Target Date, the
Liens
created by the Security Documents shall for any reason not
constitute valid and perfected Liens subject to no prior or equal
Lien other than Permitted Liens (as defined in the Security
Agreements), or the Borrower shall so assert in writing;
then, and in every such event, the Managing Agent shall (i) if
requested by the Required Banks, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and
(ii) if requested by Banks holding Notes evidencing more than 50%
in aggregate principal amount of the Loans, by notice to the
Borrower declare the Notes and any Letter of Credit Liabilities
(together with accrued interest and Letter of Credit Fees
thereon)
to be, and the Notes and any Letter of Credit Liabilities shall
thereupon become, immediately due and payable without
presentment,
demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided that in the case of any
of
the Events of Default specified in clause (g) or (h) above with
respect to the Borrower, without any notice to the Borrower or
any
other act by the Managing Agent or the Banks, the Commitments
shall
thereupon terminate and the Notes and any Letter of Credit
Liabilities (together with accrued interest and Letter of Credit
Fees thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Managing Agent
shall give notice to the Borrower under Section 6.01(c) promptly
upon being requested to do so by any Bank and shall thereupon
notify all the Banks thereof.
SECTION 6.03. Cash Cover. The Borrower agrees, in
addition
to the provisions of Section 6.01 hereof, that upon the
occurrence
and during the continuance of any Event of Default, it shall, if
requested by the Managing Agent upon the instruction of the Banks
having more than 50% in aggregate amount of the Tranche A
Commitments (or, if the Tranche A Commitments shall have been
terminated, holding at least 50% of the Letter of Credit
Liabilities), pay to the Managing Agent an amount in immediately
available funds (which funds shall be held as collateral pursuant
to arrangements satisfactory to the Managing Agent) equal to the
aggregate amount available for drawing under all Letters of
Credit
then outstanding at such time, provided that, upon the occurrence
of any Event of Default specified in clause (g) or (h) of Section
6.01 with respect to the Borrower, the Borrower shall pay such
amount forthwith without any notice or demand or any other act by
the Managing Agent or the Banks.
ARTICLE VII
THE MANAGING AGENT AND THE AGENTS
SECTION 7.01. Appointment and Authorization. Each
Bank
irrevocably appoints and authorizes the Managing Agent and the
Agents to take such action as managing agent or agent, as the
case
may be, on its behalf and to exercise such powers under the
Operative Agreements as are delegated to the Managing Agent or
the
Agents, as the case may be, by the terms hereof or thereof,
together with all such powers as are reasonably incidental
thereto.
SECTION 7.02. Managing Agent, Agents and Affiliates.
Morgan Guaranty Trust Company of New York and each other bank
listed on as an Agent on the signature pages hereof shall have
the
same rights and powers under the Operative Agreements as any
other
Bank and may exercise or refrain from exercising the same as
though
they were not the Managing Agent, or Agents, as the case may be,
and Morgan Guaranty Trust Company of New York and such other
banks
and their respective affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with the
Borrower or any Subsidiary or affiliate of the Borrower as if
they
were not the Managing Agent or Agents, as the case may be,
hereunder.
SECTION 7.03. Action by Managing Agent and Agents.
The
obligations of the Managing Agent and the Agents under the
Operative Agreements are only those expressly set forth herein
and
in the other Operative Agreements. Without limiting the
generality
of the foregoing, neither the Managing Agent nor the Agents shall
be required to take any action with respect to any Default,
except
as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Managing
Agent and the Agents may consult with legal counsel (who may be
counsel for the Borrower), independent public accountants and
other
experts selected by them and shall not be liable for any action
taken or omitted to be taken by them in good faith in accordance
with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Managing Agent and Agents.
Neither the Managing Agent, any Agent nor any of their respective
directors, officers, agents or employees shall be liable for any
action taken or not taken by them in connection herewith (i) with
the consent or at the request of the Required Banks or (ii) in
the
absence of their own gross negligence or willful misconduct.
Neither the Managing Agent, any Agent nor any of their respective
directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with any
Operative Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements
of
the Borrower; (iii) the satisfaction of any condition specified
in
Article III, except receipt of items required to be delivered to
the Managing Agent; or (iv) the validity, effectiveness or
genuineness of any Operative Agreement or any other instrument or
writing furnished in connection herewith. Neither the Managing
Agent nor any Agent shall incur any liability by acting in
reliance
upon any notice, consent, certificate, statement or other writing
(which may be a bank wire, telex, facsimile or similar writing)
believed by them to be genuine or to be signed by the proper
party
or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably
in accordance with its Commitment, indemnify the Managing Agent,
the Agents, their affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed by
the
Borrower) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except
such as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur in
connection
with any Operative Agreement or any action taken or omitted by
such
indemnitees thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges
that it has, independently and without reliance upon the Managing
Agent, any Agent or any other Bank, and based on such documents
and
information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank
also
acknowledges that it will, independently and without reliance
upon
the Managing Agent, any Agent or any other Bank, and based on
such
documents and information as it shall deem appropriate at the
time,
continue to make its own credit decisions in taking or not taking
any action under this Agreement.
SECTION 7.08. Successor Managing Agent and Agents.
The
Managing Agent or any Agent may resign at any time by giving
written notice thereof to the Banks and the Borrower. Upon any
resignation of the Managing Agent, the Required Banks shall have
the right to appoint a successor Managing Agent. If no successor
Managing Agent shall have been so appointed by the Required
Banks,
and shall have accepted such appointment, within 30 days after
the
retiring Managing Agent gives notice of resignation, then the
retiring Managing Agent may, on behalf of the Banks, appoint a
successor Managing Agent, which shall be a commercial bank
organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and
surplus of at least $100,000,000. Upon the acceptance of its
appointment as Managing Agent hereunder by a successor Managing
Agent, such successor Managing Agent shall thereupon succeed to
and
become vested with all the rights and duties of the retiring
Managing Agent, and the retiring Managing Agent shall be
discharged
from its duties and obligations hereunder. After any retiring
Managing Agent's resignation hereunder as Managing Agent, the
provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Managing
Agent.
SECTION 7.09. Managing Agent's Fees. The Borrower
shall
pay to the Managing Agent for its own account fees in the amounts
and at the times previously agreed upon between the Borrower and
the Managing Agent.
SECTION 7.10 Collateral Agent. Each Bank (i)
irrevocably
appoints and authorizes the Managing Agent, as Collateral Agent
under the other Operative Agreements, to take such action as
agent
on its behalf and to exercise such powers under the other
Operative
Agreements as are delegated to the Collateral Agent by the terms
thereof, together with all such powers as are reasonably
incidental
thereto, and (ii) agrees to be bound by the provisions of each
such
Agreement relating to the Collateral Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of any
Interest Period for any Fixed Rate Borrowing:
(a) the Managing Agent is advised by the Reference Banks
that deposits in dollars (in the applicable amounts) are not
being offered to the Reference Banks in the relevant market for
such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks
having 50% or more of the aggregate principal amount of the
affected Loans advise the Managing Agent that the Adjusted CD
Rate or the London Interbank Offered Rate, as the case may be,
as determined by the Managing Agent will not adequately and
fairly reflect the cost to such Banks of funding their CD Loans
or Euro-Dollar Loans, as the case may be, for such Interest
Period,
the Managing Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Managing Agent
notifies
the Borrower that the circumstances giving rise to such
suspension
no longer exist, (i) the obligations of the Banks to make CD
Loans
or Euro-Dollar Loans, as the case may be, or to convert
outstanding
Loans into CD Loans or Euro-Dollar Loans, as the case may be,
shall
be suspended and (ii) each outstanding CD Loan or Euro-Dollar
Loan,
as the case may be, shall be converted into a Base Rate Loan on
the
last day of the then current Interest Period applicable thereto.
Unless the Borrower notifies the Managing Agent at least one
Domestic Business Day before the date of (or, if at the time the
Borrower receives such notice the day is the date of such Fixed
Rate Borrowing, by 10:00 A.M. (New York City time) on the day of)
any Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such date,
such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, on or after the date of
this
Agreement, the adoption of any applicable law, rule or
regulation,
or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance
by
any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it
unlawful
or impossible for any Bank (or its Euro-Dollar Lending Office) to
make, maintain or fund its Euro-Dollar Loans and such Bank shall
so
notify the Managing Agent, the Managing Agent shall forthwith
give
notice thereof to the other Banks and the Borrower, whereupon
until
such Bank notifies the Borrower and the Managing Agent that the
circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans, or to convert
outstanding Loans into Euro-Dollar Loans, shall be suspended.
Before giving any notice to the Managing Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar
Lending
Office if such designation will avoid the need for giving such
notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, each
Euro-
Dollar Loan of such Bank then outstanding shall be converted to a
Base Rate Loan either (a) on the last day of the then current
Interest Period applicable to such Euro-Dollar Loan if such Bank
may lawfully continue to maintain and fund such Loan to such day
or
(b) immediately if such Bank shall determine that it may not
lawfully continue to maintain and fund such Loan to such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If
on or after the date hereof, the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Applicable Lending Office) with
any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending
Office) to any tax, duty or other charge with respect to its
Fixed Rate Loans, its Note or its obligation to make Fixed Rate
Loans, or shall change the basis of taxation of payments to any
Bank (or its Applicable Lending Office) of the principal of or
interest on its Fixed Rate Loans or any other amounts due under
this Agreement in respect of its Fixed Rate Loans or its
obligation to make Fixed Rate Loans (except for changes in the
rate of tax on the overall net income of such Bank or its
Applicable Lending Office imposed by the jurisdiction in which
such Bank's principal executive office or Applicable Lending
Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by
the Board of Governors of the Federal Reserve System, but
excluding (A) with respect to any CD Loan any such requirement
included in an applicable Domestic Reserve Percentage and (B)
with respect to any Euro-Dollar Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage),
special deposit, insurance assessment (excluding, with respect
to any CD Loan, any such requirement reflected in an applicable
Assessment Rate) or similar requirement against Letters of
Credit issued or participated in by, assets of, deposits with
or
for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for
certificates of deposit or the London interbank market any
other
condition affecting its Fixed Rate Loans, its Note or its
obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or of issuing or maintaining a
Letter of Credit or its obligations with respect thereto as
Issuing
Bank or a Bank participating therein, or to reduce the amount of
any sum received or receivable by such Bank (or its Applicable
Lending Office) under this Agreement or under its Note with
respect
thereto, by an amount deemed by such Bank to be material, then,
within 15 days after demand by such Bank (with a copy to the
Managing Agent), the Borrower shall pay to such Bank such
additional amount or amounts, as determined by such Bank in good
faith, as will compensate such Bank for such increased cost or
reduction.
(b) If any Bank shall have determined that, after the
date
hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change in any such law, rule
or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof,
or any request or directive regarding capital adequacy (whether
or
not having the force of law) of any such authority, central bank
or
comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below
that which such Bank (or its Parent) could have achieved but for
such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by
an
amount deemed by such Bank to be material, then from time to
time,
within 15 Domestic Business Days after demand by such Bank (with
a
copy to the Managing Agent), the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank
(or
its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the
Managing Agent of any event of which it has knowledge, occurring
after the date hereof, that will entitle such Bank to
compensation
pursuant to this Section and will designate a different
Applicable
Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank.
A certificate of any Bank claiming compensation under this
Section
and setting forth in reasonable detail the additional amount or
amounts to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, such Bank
may use any reasonable averaging and attribution methods.
SECTION 8.04. Base Rate Loans Substituted for Affected
Fixed Rate Loans. If (i) the obligation of any Bank to make or
maintain Euro-Dollar Loans has been suspended pursuant to Section
8.02 or (ii) any Bank has demanded compensation under Section
8.03(a) and the Borrower shall, by at least four Euro-Dollar
Business Days' prior notice to such Bank through the Managing
Agent, have elected that the provisions of this Section shall
apply
to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or
demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank
as (or continued as or converted into) CD Loans or Euro-Dollar
Loans, as the case may be, shall instead be Base Rate Loans (on
which interest and principal shall be payable contemporaneously
with the related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as
the case may be, has been repaid (or converted to a Base Rate
Loan), all payments of principal that would otherwise be
applied
to repay such Fixed Rate Loans shall be applied to repay its
Base Rate Loans instead.
If such Bank notifies the Borrower that the circumstances giving
rise to such notice no longer apply, the principal amount of each
such Base Rate Loan shall be converted into a CD Loan or Euro-
Dollar Loan, as the case may be, on the first day of the next
succeeding Interest Period applicable to the related CD Loans or
Euro-Dollar Loans of the other Banks.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and
other
communications to any party hereunder shall be in writing
(including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party: (x) in the case of
the
Borrower or the Managing Agent, at its address or telex or
facsimile number set forth on the signature pages hereof, (y) in
the case of any Bank, at its address or telex or facsimile number
set forth in its Administrative Questionnaire or (z) in the case
of
any party, such other address or telex or facsimile number as
such
party may hereafter specify for the purpose by notice to the
Managing Agent and the Borrower. Each such notice, request or
other communication shall be effective (i) if given by telex,
when
such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given
by facsimile transmission, when receipt of such transmission is
confirmed, either orally or in writing, by the party receiving
such
transmission, (iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid, or (iv) if given by any other
means, when delivered at the address specified in this Section;
provided that notices to the Managing Agent and the Issuing Bank
under Article II or Article VIII shall not be effective until
received.
SECTION 9.02. No Waivers. No failure or delay by the
Managing Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any
other
right, power or privilege. The rights and remedies herein
provided
shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes;
Indemnification. (a) The Borrower shall pay (i) all reasonable
out-of-pocket expenses of the Managing Agent, including fees and
disbursements of special counsel for the Managing Agent, in
connection with the preparation of this Agreement and the other
Operative Documents, any waiver or consent hereunder or
thereunder
or any amendment hereof or thereof or any Default or alleged
Default hereunder and (ii) if an Event of Default occurs, all
reasonable out-of-pocket expenses incurred by the Managing Agent,
any Agent or any Bank, including fees and disbursements of
counsel,
in connection with such Event of Default and collection and other
enforcement proceedings resulting therefrom. The Borrower shall
indemnify each Bank to the maximum extent permitted by applicable
law against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of this Agreement, the Notes or any other
Operative Document.
(b) The Borrower agrees to indemnify the Managing Agent,
each Agent and each Bank, their respective affiliates and the
respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee
harmless
from and against any and all liabilities, losses, damages, costs
and expenses of any kind, including, without limitation,
settlement
costs and the reasonable fees and disbursements of counsel, which
may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or
not such Indemnitee shall be designated a party thereto) brought
or
threatened relating to or arising out of this Agreement or any
actual or proposed use of proceeds of Loans hereunder; provided
that no Indemnitee shall have the right to be indemnified
hereunder
for such Indemnitee's own gross negligence or willful misconduct
as
determined by a court of competent jurisdiction.
SECTION 9.04. Amendments and Waivers. Except as
otherwise provided in Section 2.11, any provision of the
Operative
Agreements may be amended or waived if, but only if, such
amendment
or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Managing
Agent
or the Issuing Banks are affected thereby, by the Managing Agent
or
the Issuing Banks, as the case may be); provided that, except as
otherwise provided in Section 2.11, no such amendment or waiver
shall, unless signed by all the Banks, (i) increase the
Commitment
of any Bank or subject any Bank to any additional obligation,
(ii) reduce the principal of or rate of interest on any Loan, any
amount to be reimbursed hereunder or interest thereon or any fees
hereunder, (iii) except in the case of an amendment or waiver to
Section 2.09(b) or the related definitions, postpone the date
fixed
for any payment of principal of or interest on any Loan, any
amount
to be reimbursed hereunder or interest thereon or any fees
hereunder or for any reduction or termination of any Commitment
or
(iv) amend this Section 9.04 or Section 9.05(a) or change the
percentage of the Commitments or of the aggregate unpaid
principal
amount of the Notes or of the Letter of Credit Liabilities, or
the
number of Banks, which shall be required for the Banks or any of
them to take any action under this Section or any other provision
of this Agreement and provided further that except in the case of
the termination of a Guarantee Agreement or any release of
Collateral (as defined in the Security Documents) under any
Security Document in connection with any Asset Sale permitted by
this Agreement (which shall be subject to the applicable
provisions
of such Guarantee or Security Document but shall not require the
consent of the Managing Agent or any Bank), no such amendment or
waiver shall, unless signed by the Releasing Banks, terminate any
Guarantee Agreement or, prior to the Rating Target Date, release
any or all of the Collateral.
SECTION 9.05. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure to
the
benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or otherwise
transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more
banks
or other institutions (each a "Participant") partici-pating
interests in its Commitment or any or all of its Loans. In the
event of any such grant by a Bank of a participating interest to
a
Participant, whether or not upon notice to the Borrower and the
Managing Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and
the
Managing Agent shall continue to deal solely and directly with
such
Bank in connection with such Bank's rights and obligations under
this Agreement. Any agreement pursuant to which any Bank may
grant
such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the
obligations
of the Borrower hereunder including, without limitation, the
right
to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such participation agreement may
provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (ii) or
(iii) of Section 9.04 without the consent of the Participant.
The
Borrower agrees that each Participant shall, to the extent
provided
in its participation agreement, be entitled to the benefits of
Section 2.15 and Article VIII with respect to its participating
interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes
of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more
banks
or other institutions (each an "Assignee") all, or any part
(equivalent, except where the Assignee is already a Bank, to an
initial Commitment for each Tranche of not less than $15,000,000)
of, its rights and obligations under this Agreement and the
Notes,
and such Assignee shall assume such rights and obligations,
pursuant to an Assignment and Assumption Agreement in
substantially
the form of Exhibit D hereto executed by such Assignee and such
transferor Bank with (and subject to) the subscribed consent of
the
Borrower, the Managing Agent and the Issuing Banks, which
consents
shall not be unreasonably withheld; provided that (i) if an
Assignee is an affiliate of such transferor Bank, no such consent
shall be required and (ii) any assignment made by a Bank party
hereto on the date hereof in connection with the General
Syndication to a bank or other institution listed on Schedule 10
shall not require any such consent. Upon execution and delivery
of
such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such
transferor Bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and
obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be
released
from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon
the
consummation of any assignment pursuant to this subsection (c),
the
transferor Bank, the Managing Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is
issued
to the Assignee. In connection with any such assignment (other
than pursuant to the General Syndication), the transferor Bank
shall pay to the Managing Agent an administrative fee for
processing such assignment in accordance with the Managing
Agent's
standard schedule for such charges in effect at the time of such
assignment.
(d) Any Bank may at any time assign all or any portion
of its rights under this Agreement and its Note to a Federal
Reserve Bank. No such assignment shall release the transferor
Bank
from its obligations hereunder.
(e) No Assignee, Participant or other transferee of
any
Bank's rights shall be entitled to receive any greater payment
under Section 8.03 than such Bank would have been entitled to
receive with respect to the rights transferred, unless such
transfer is made pursuant to the General Syndication or with the
Borrower's prior written consent or by reason of the provisions
of
Section 8.02 or 8.03 requiring such Bank to designate a different
Applicable Lending Office under certain circumstances or at a
time
when the circumstances giving rise to such greater payment did
not
exist.
(f) If any Reference Bank assigns all of its Notes to
any unaffiliated institution, the Managing Agent shall, in
consultation with the Borrower and with the consent of the
Required
Banks, appoint another Bank to act as a Reference Bank hereunder.
SECTION 9.06. Collateral. Each of the Banks
represents
to the Managing Agent and each of the other Banks that it in good
faith is not relying upon any "margin stock" (as defined in
Regulation U) as collateral in the extension or maintenance of
the
credit provided for in this Agreement.
SECTION 9.07. Governing Law; Submission to
Jurisdiction;
Waiver of Jury Trial. THIS AGREEMENT AND EACH NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE
OF NEW YORK. THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN
NEW
YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND
ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE BORROWER, THE
MANAGING AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND
ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 9.08. Counterparts; Integration. This
Agreement
may be signed in any number of counterparts, each of which shall
be
an original, with the same effect as if the signatures thereto
and
hereto were upon the same instrument. The Operative Agreements
and
the documents referred to in clause (g) of Section 3.02
constitute
the entire agreement and understanding among the parties hereto
and
supersede any and all prior agreements and understandings, oral
or
written, relating to the subject matter hereof.
SECTION 9.09. Sharing of Set-Offs. Each Bank agrees that
if it shall, by exercising any right of set-off or counterclaim
or
otherwise, receive payment of a proportion of the aggregate
amount
of principal and interest due with respect to any Note held by it
or receives payment in respect of its Letter of Credit
Liabilities
which in either case is greater than the proportion received by
any
other Bank in respect of the aggregate amount due with respect to
any Note held by, or Letter of Credit Liabilities owing to, such
other bank, the Bank receiving such proportionately greater
payment
shall purchase such participations in the Notes held by the other
Banks, and such other adjustments shall be made, as may be
required
so that all such payments with respect to the Notes held by, and
Letter of Credit Liabilities owing to, the Banks shall be shared
by
the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other
than
its indebtedness hereunder. The Borrower agrees, to the fullest
extent it may effectively do so under applicable law, that any
holder of a participation in a Note, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of
set-
off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were
a
direct creditor of the Borrower in the amount of such
participation.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
FLEMING COMPANIES, INC.
By /s/ Robert E. Stauth
Title: Chairman of the Board,
Chief Executive Officer
and President
P.O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
Telecopier: 405/840-7202
BANKS
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Michael C. Mauer
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ J. Stephen Mernick
Title: Senior Vice President
THE BANK OF NOVA SCOTIA
By /s/ A.S. Norsworthy
Title: Assistant Agent
CANADIAN IMPERIAL BANK OF COMMERCE
By /s/ J.D. Westland
Title: Authorized Signatory
CREDIT SUISSE
By /s/ Geoffrey M. Craig
Title: Member of Senior
Management
By /s/ Kristinn R. Kristinsson
Title: Associate
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By /s/ Dr. Hans-Dieter Wettlaufer
Title: Vice President
By /s/ Jean M. Hannigan
Title: Assistant Vice President
THE FUJI BANK, LIMITED
By /s/ David Kelley
Title: Vice President and
Senior Manager
NATIONSBANK OF TEXAS, N.A.
By /s/ Bianca Hemmen
Title: Senior Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY
By /s/ Richard Lewis
Title: Assistant Vice President
By /s/ Matthew C. Flanigan
Title: First Vice President and
Manager
THE SUMITOMO BANK LTD.
HOUSTON AGENCY
By /s/ Tatsuo Ueda
Title: General Manager
THE SUMITOMO BANK OF CALIFORNIA
By /s/ Seishi Jiromaru
Title: Vice President
Division Manager
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By /s/ Robert W. Bishop
Title: Vice Chairman
THE TORONTO-DOMINION BANK
By /s/ F.B. Hawley
Title: Manager
Credit Association
UNION BANK OF SWITZERLAND,
HOUSTON AGENCY
By /s/ Alfred W. Imholz
Title: First Vice President
By /s/ Jan Buettgen
Title: Assistant Vice President
BANCA DI ROMA SpA
By /s/ O.W. Cheney Jr.
Title: Chief Manager
By /s/ Josefina M. Madrid
Title: Assistant Vice President
BANK IV OKLAHOMA, N.A.
By /s/ Paul Anderson
Title: Vice President
BANK OF HAWAII
By /s/ Joseph T. Donalson
Title: Vice President
THE BANK OF TOKYO, LTD.,
DALLAS AGENCY
By /s/ John M. Mearns
Title: Vice President
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By /s/ Iain A. Whyte
Title: Assistant Vice President
By /s/ Mark A. Harrington
Title: Vice President and
Regional Manager
BANQUE NATIONALE DE PARIS
By /s/ Henry F. Setina
Title: Vice President
BANQUE PARIBAS
By /s/ Robert G. Shaw
Title: Vice President
By /s/ Pierre-Jean de Filippis
Title: General Manager
BARCLAYS BANK PLC
By /s/ David Vickrey
Title: Associate Director
BAYERISCHE VEREINSBANK AG,
LOS ANGELES AGENCY
By /s/ John Carlson
Title: Assistant Vice President
By /s/ Sylvia K. Cheng
Title: Assistant Vice President
BHF-BANK, NEW YORK BRANCH
By /s/ Paul Travers
Title: Vice President
By /s/ David Fraenkel
Title: Vice President
BOATMEN'S FIRST NATIONAL BANK
OF OKLAHOMA
By /s/ K. Randy Roper
Title: Senior Vice President
THE CHASE MANHATTAN BANK, N.A.
By /s/ Thomas T. Daniels
Title: Vice President
CITIBANK N.A.
By /s/ W. P. Stengel
Title: Vice President
COMMERZBANK AG, NEW YORK AND/OR
GRAND CAYMAN BRANCH
By /s/ J. Schmieding
Title: Assistant Vice President
By /s/ W. Niemeyer
Title: Vice President
CONTINENTAL BANK
By /s/ Mary Jo Hoch
Title: Vice President
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By /s/ Ian Reece
Title: Vice President and
Manager
By /s/ J. Scott Taylor
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Robert Ivosevich
Title: Senior Vice President
DAI-ICHI KANGYO BANK, LTD.
NEW YORK BRANCH
By /s/ Seiji Imai
Title: Assistant Vice President
DAIWA BANK TRUST COMPANY
By /s/ Kenro Kojima
Title: Vice President
By /s/ Joel Limjap
Title: Vice President
DG BANK
DEUTSCHE GENOSSENSCHAFTSBANK
By /s/ Norah McCann
Title: Senior Vice President
By /s/ Karen A. Brinkman
Title: Vice President
DRESDNER BANK AG
NEW YORK BRANCH
By /s/ R. Matthew Scherer
Title: Vice President
By /s/ Charles H. Hill
Title: Vice President
FIRST HAWAIIAN BANK
By /s/ Robert M. Wheeler, III
Title: Vice President
FIRST INTERSTATE BANK OF CALIFORNIA
By /s/ William J. Baird
Title: Vice President
By /s/ Wendy V.C. Purcell
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Jeanette Ganousis
Title: Vice President
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By /s/ A. Kimball Collins
Title: Assistant Vice President
FLEET BANK OF MASSACHUSETTS, N.A.
By /s/ Maryann S. Smith
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LTD.
By /s/ Robert W. Ramage, Jr.
Title: Senior Vice President
KREDIETBANK N.V.
By /s/ Robert Snauffer
Title: Vice President
By /s/ Diane Grimmig
Title: Vice President
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, N.A.
By /s/ Laura Christofferson
Title: Vice President
LTCB TRUST COMPANY
By /s/ Noboru Kubota
Title: Senior Vice President
MANUFACTURERS AND TRADERS
TRUST COMPANY
By /s/ Geoffrey R. Fenn
Title: Vice President
THE MITSUBISHI BANK, LIMITED
HOUSTON AGENCY
By /s/ Shoji Honda
Title: General Manager
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/ Masaaki Yamagishi
Title: Chief Manager
THE MITSUI TRUST AND BANKING
COMPANY, LIMITED
By /s/ Margaret Holloway
Title: Vice President
NATIONAL WESTMINSTER BANK Plc
NASSAU BRANCH
By /s/ David L. Smith
Title: Vice President
NATIONAL WESTMINSTER BANK Plc
NEW YORK BRANCH
By /s/ David L. Smith
Title: Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ Perry G. Pelos
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By /s/ Gregory T. Gaschler
Title: Vice President
THE SANWA BANK LIMITED,
DALLAS AGENCY
By /s/ Blake Wright
Title: Assistant Vice President
UNITED STATES NATIONAL BANK
OF OREGON
By /s/ Blake R. Howells
Title: Vice President
WACHOVIA BANK OF GEORGIA,
NATIONAL ASSOCIATION
By /s/ Terry L. Akins
Title: Senior Vice President
THE YASUDA TRUST AND BANKING
COMPANY, LTD.
By /s/ Rohn Laudenschlager
Title: Senior Vice President
AGENTS
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By /s/ Jody B. Schneider
Title: Vice President
THE BANK OF NOVA SCOTIA, as Agent
By /s/ A.S. Norsworthy
Title: Assistant Agent
CANADIAN IMPERIAL BANK OF COMMERCE,
as
Agent
By /s/ J.D. Westland
Title: Authorized Signatory
CREDIT SUISSE, as Agent
By /s/ William P. Murray
Title: Member of Senior
Management
By /s/ Kristinn R. Kristinsson
Title: Associate
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH,
as Agent
By /s/ Dr. Hans-Dieter Wettlaufer
Title: Vice President
By /s/ Jean M. Hannigan
Title: Assistant Vice President
THE FUJI BANK, LIMITED, as Agent
By /s/ David Kelley
Title: Vice President and
Senior Manager
NATIONSBANK OF TEXAS, N.A.,
as Agent
By /s/ Bianca Hemmen
Title: Senior Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Agent
By /s/ Richard M. Lewis
Title: Assistant Vice President
By /s/ Matthew C. Flanigan
Title: First Vice President
THE SUMITOMO BANK LTD.
HOUSTON AGENCY, as Agent
By /s/ Tatsuo Ueda
Title: General Manager
TEXAS COMMERCE BANK,
NATIONAL ASSOCIATION, as Agent
By /s/ John P. Dean
Title: Senior Vice President
THE TORONTO-DOMINION BANK, as Agent
By /s/ F.B. Hawley
Title: Manager
Credit Administration
UNION BANK OF SWITZERLAND,
HOUSTON AGENCY, as Agent
By /s/ Alfred W. Imholz
Title: First Vice President
By /s/ Jan Buettgen
Title: Assistant Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Managing Agent
By /s/ Michael C. Mauer
Title: Vice President
60 Wall Street
New York, New York 10260
Attention: Loan Department
Telex number: 177615
Telecopier number: (212) 648-5336
<PAGE>
EXHIBIT A-1
TRANCHE A NOTE
New York, New
York
[Dated on or
before
the Effective
Date]
For value received, Fleming Companies, Inc., an
Oklahoma corporation (the "Borrower"), promises to pay to
the order of _______________________ (the "Bank"), for the
account of its Applicable Lending Office, the unpaid
principal amount of each Tranche A Loan made by the Bank to
the Borrower pursuant to the Credit Agreement referred to
below on the maturity date provided for in the Credit
Agreement. The Borrower promises to pay interest on the
unpaid principal amount of each such Tranche A Loan on the
dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest
shall be made in lawful money of the United States in
Federal or other immediately available funds at the office
of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Tranche A Loans made by the Bank, the
respective types and maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each Tranche A Loan
then outstanding shall be endorsed by the Bank on the
schedule attached to and made a part hereof; provided that
the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the
Credit Agreement dated as of July 19, 1994 among the
Borrower, the banks and the agents listed on the signature
pages thereof and Morgan Guaranty Trust Company of New York,
as Managing Agent (as the same may be amended from time to
time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference
is made to the Credit Agreement for provisions for the
mandatory and optional prepayment hereof and the
acceleration of the maturity hereof.
FLEMING COMPANIES, INC.
By ______________________
Name: John M. Thompson
Title: Vice President &
Treasurer
<PAGE>
Tranche A Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Date
Amount of
Loan
Type of
Loan
Amount of
Principal
Repaid
Maturity
Date
Notation
Made By
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
<PAGE>
EXHIBIT A-2
TRANCHE B NOTE
New York, New
York
[Dated on or
before
the Effective
Date]
For value received, Fleming Companies, Inc., an
Oklahoma corporation (the "Borrower"), promises to pay to
the order of _______________________ (the "Bank"), for the
account of its Applicable Lending Office, the unpaid
principal amount of each Tranche B Loan made by the Bank to
the Borrower pursuant to the Credit Agreement referred to
below on the maturity date provided for in the Credit
Agreement. The Borrower promises to pay interest on the
unpaid principal amount of each such Tranche B Loan on the
dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest
shall be made in lawful money of the United States in
Federal or other immediately available funds at the office
of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Tranche B Loans made by the Bank, the
respective types and maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each Tranche B Loan
then outstanding shall be endorsed by the Bank on the
schedule attached to and made a part hereof; provided that
the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the
Credit Agreement dated as of July 19, 1994 among the
Borrower, the banks and the agents listed on the signature
pages thereof and Morgan Guaranty Trust Company of New York,
as Managing Agent (as the same may be amended from time to
time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference
is made to the Credit Agreement for provisions for the
mandatory and optional prepayment hereof and the
acceleration of the maturity hereof.
FLEMING COMPANIES, INC.
By ______________________
Name: John M. Thompson
Title: Vice President
& Treasurer
Tranche B Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Date
Amount of
Loan
Type of
Loan
Amount of
Principal
Repaid
Maturity
Date
Notation
Made By
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
<PAGE>
EXHIBIT A-3
TRANCHE C NOTE
New York, New
York
[Dated on or
before
the Effective
Date]
For value received, Fleming Companies, Inc., an
Oklahoma corporation (the "Borrower"), promises to pay to
the order of _______________________ (the "Bank"), for the
account of its Applicable Lending Office, the unpaid
principal amount of each Tranche C Loan made by the Bank to
the Borrower pursuant to the Credit Agreement referred to
below on the maturity date provided for in the Credit
Agreement. The Borrower promises to pay interest on the
unpaid principal amount of each such Tranche C Loan on the
dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest
shall be made in lawful money of the United States in
Federal or other immediately available funds at the office
of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Tranche C Loans made by the Bank, the
respective types and maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each Tranche C Loan
then outstanding shall be endorsed by the Bank on the
schedule attached to and made a part hereof; provided that
the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the
Credit Agreement dated as of July 19, 1994 among the
Borrower, the banks and the agents listed on the signature
pages thereof and Morgan Guaranty Trust Company of New York,
as Managing Agent (as the same may be amended from time to
time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference
is made to the Credit Agreement for provisions for the
mandatory and optional prepayment hereof and the
acceleration of the maturity hereof.
FLEMING COMPANIES, INC.
By ______________________
Name: John M. Thompson
Title: Vice President &
Treasurer
Tranche C Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Date
Amount of
Loan
Type of
Loan
Amount of
Principal
Repaid
Maturity
Date
Notation
Made By
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
<PAGE>
EXHIBIT A-4
SWINGLINE NOTE
New York, New
York
[Dated on or
before
the Effective
Date]
For value received, Fleming Companies, Inc., an
Oklahoma corporation (the "Borrower"), promises to pay to
the order of Morgan Guaranty Trust Company of New York (the
"Bank"), for the account of its Applicable Lending Office,
the unpaid principal amount of each Swingline Loan made by
the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the maturity date provided for in the
Credit Agreement. The Borrower promises to pay interest on
the unpaid principal amount of each such Swingline Loan on
the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States
in Federal or other immediately available funds at the
office of the Bank, 60 Wall Street, New York, New York.
All Swingline Loans made by the Bank, the
respective types and maturities thereof and all repayments
of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the
foregoing information with respect to each Swingline Loan
then outstanding shall be endorsed by the Bank on the
schedule attached to and made a part hereof; provided that
the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the
Credit Agreement dated as of July 19, 1994 among the
Borrower, the banks and the agents listed on the signature
pages thereof and Morgan Guaranty Trust Company of New York,
as Managing Agent (as the same may be amended from time to
time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference
is made to the Credit Agreement for provisions for the
mandatory and optional prepayment hereof and the
acceleration of the maturity hereof.
FLEMING COMPANIES, INC.
By ______________________
Name: John M. Thompson
Title: Vice President &
Treasurer
Swingline Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Date
Amount of
Loan
Type of
Loan
Amount of
Principal
Repaid
Maturity
Date
Notation
Made By
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
<PAGE>
EXHIBIT C
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE MANAGING AGENT
[Dated as required by
Section 3.02 of the
Credit Agreement]
To the Banks, the Agents
and the Managing Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Managing Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the
Credit Agreement (the "Credit Agreement") dated as of July
19, 1994 among Fleming Companies, Inc., an Oklahoma
corporation (the "Borrower"), the banks and agents listed on
the signature pages thereof and Morgan Guaranty Trust
Company of New York, as Managing Agent (the "Managing
Agent"), and have acted as special counsel for the Managing
Agent for the purpose of rendering this opinion pursuant to
Section 3.02(d) of the Credit Agreement. Terms defined in
the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
1. The execution, delivery and performance by
the Borrower of the Credit Agreement, the Borrower Pledge
Agreement, the Borrower Security Agreement and the Notes are
within the Borrower's corporate powers and have been duly
authorized by all necessary corporate action.
2. The Credit Agreement, the Borrower Security
Agreement and the Borrower Pledge Agreement constitute valid
and binding agreements of the Borrower and the Notes
constitute valid and binding obligations of the Borrower.
In giving the foregoing opinion, we express no
opinion as to (1) the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect; (2) any of the other Operative
Agreements; (3) the right, title or interest of any Person
in or to any property in which any security interests are or
are purported to be granted by any of the Operative
Documents or the creation, perfection or priority of any of
such security interests; and (4) whether provisions of the
Operative Documents which permit the Managing Agent, the
Collateral Agent, the Required Banks or any Bank to take
action or make determinations or to require payments under
indemnity and similar provisions may be subject to a
requirement that such action be taken or such determination
be made on a reasonable basis and in good faith and that any
action or omission to act in respect of which any such
payment is so required be reasonable and in good faith.
In giving the foregoing opinion, we also note the
possible unenforceability in whole or in part of certain
remedial provisions contained in the Borrower Security
Agreement and the Borrower Pledge Agreement; the inclusion
of any such provisions does not render any security interest
granted or created thereby invalid and each such Agreement
contains, in our judgment, adequate remedial provisions for
the practical realization of the rights and remedies
afforded thereby.
We are members of the Bar of the State of New York
and we do not herein express any opinion as to any matters
governed by any laws other than the laws of the State of New
York and the Federal laws of the United States of America.
To the extent the laws of the State of Oklahoma are relevant
to the foregoing opinions, we have relied, without
independent investigation, on the opinion of McAfee & Taft,
A Professional Corporation, dated July 19, 1994, a copy of
which has been delivered to you.
This opinion is rendered solely to you in
connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by
any other person (other than any Bank that becomes a party
to the Agreement during the General Syndication) without our
prior written consent.
Very truly yours,
<PAGE>
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of __________, 19__ among
[ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"),
FLEMING COMPANIES, INC. (the "Borrower") and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Managing Agent (the "Managing
Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the Credit Agreement dated as
of July 19, 1994 among the Borrower, the Assignor and the
other Banks party thereto, as Banks, the Agents party
thereto, and the Managing Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement,
the Assignor has a Tranche ____ Commitment to make Tranche
___ Loans to the Borrower in an aggregate principal amount
at any time outstanding not to exceed $__________;
WHEREAS, Tranche _____ Loans made to the Borrower
by the Assignor under the Credit Agreement in the aggregate
principal amount of $___________ are outstanding at the date
hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Tranche _____
Commitment thereunder in an amount equal to $_____________
(the "Assigned Amount"), together with a corresponding
portion of its outstanding Tranche ____ Loans, and the
Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on
such terms;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms
not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby
assigns and sells to the Assignee all of the rights of the
Assignor under the Credit Agreement with respect to Tranche
___ to the extent of the Assigned Amount, and the Assignee
hereby accepts such assignment from the Assignor and assumes
all of the obligations of the Assignor under the Credit
Agreement with respect to Tranche ___ to the extent of the
Assigned Amount, including the purchase from the Assignor of
the corresponding portion of the principal amount of the
Tranche ___ Loans made by the Assignor outstanding at the
date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee, the Borrower and the Managing Agent
and the payment of the amounts specified in Section 3
required to be paid on the date hereof (i) the Assignee
shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Bank under the
Credit Agreement with a Tranche ___ Commitment in an amount
equal to the Assigned Amount, and (ii) the Tranche ___
Commitment of the Assignor shall, as of the date hereof, be
reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such
obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to
the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in
Federal funds the amount heretofore agreed between them.
It is understood that commitment and/or facility fees
accrued to the date hereof are for the account of the
Assignor and such fees accruing from and including the date
hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives
any amount under the Credit Agreement which is for the
account of the other party hereto, it shall receive the same
for the account of such other party to the extent of such
other party's interest therein and shall promptly pay the
same to such other party.
SECTION 4. Consent of the Borrower and the Agent.
This Agreement is conditioned upon the consent of the
Borrower and the Managing Agent pursuant to Section 9.05(c)
of the Credit Agreement. The execution of this Agreement by
the Borrower and the Managing Agent is evidence of this
consent. Pursuant to Section 9.05(c) the Borrower agrees to
execute and deliver a Tranche ___ Note payable to the order
of the Assignee to evidence the assignment and assumption
provided for herein.
SECTION 5. Non-Reliance on Assignor. The
Assignor makes no representation or warranty in connection
with, and shall have no responsibility with respect to, the
solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it
has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the
business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of New York.
SECTION 7. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By_______________________
Title:
[ASSIGNEE]
By________________________
Title:
FLEMING COMPANIES, INC.
By________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Managing
Agent
By_________________________
Title
<PAGE>
EXHIBIT E
NOTICE OF BORROWING
____________________, 19__
Morgan Guaranty Trust Company
of New York, as Managing Agent
under the Credit Agreement
referred to below
60 Wall Street
New York, NY 10260
Dear Sirs:
The undersigned, Fleming Companies, Inc. (the
"Borrower"), hreby gives a Notice of Committed Borrowing
pursuant to the Credit Agreement dated as of July __, 1994
among the Borrower, the Banks listed therein, the Agents
listed therein and Morgan Guaranty Trust Company of New
York, as Managing Agent (as amended from time to time, the
"Credit Agreement"; capitalized terms used herein shall have
the meanings assigned to such terms therein), and specifies
as follows:
(i) The date of the Borrowing shall be
________________, 19__.
(ii) The aggregate amount of the Borrowing shall
be $ __________________.
(iii) The Loans comprising the Borrowing are to
be _______________ Loans.
<PAGE>
EXHIBIT F
SUBSIDIARY GUARANTEE AGREEMENT
AGREEMENT dated as of July 19, 1994 between the
corporation identified as the Guarantor on the signature
page hereof, a corporation organized under the laws of the
state indicated on the signature page hereof (with its
successors, the "Guarantor"), and Morgan Guaranty Trust
Company of New York, as Collateral Agent.
WHEREAS, Fleming Companies, Inc., an Oklahoma
corporation (the "Borrower"), of which the Guarantor is a
Subsidiary, has entered into a Credit Agreement (as the same
may be amended from time to time, the "Credit Agreement")
dated as of July 19, 1994 with the banks (the "Banks") and
agents listed on the signature pages thereof and Morgan
Guaranty Trust Company of New York, as Managing Agent,
pursuant to which the Borrower is entitled, subject to
certain conditions, to borrow up to $2,200,000,000 and to
obtain certain letters of credit;
WHEREAS, it is contemplated that the Borrower may
enter into one or more agreements ("Interest Rate Protection
Agreements") with one or more of the Banks regarding the
interest rates with respect to loans under the Credit
Agreement (all obligations of the Borrower to a Bank now
existing or hereafter arising under such Interest Rate
Protection Agreements, collectively, the "Interest Rate
Obligations");
WHEREAS, it is contemplated that the Borrower may
have or enter into one or more agreements ("Further Letter
of Credit Agreements") with one or more of the Banks to
issue certain letters of credit (in addition to those
issuable pursuant to the Credit Agreement) for the account
of the Borrower in an aggregate face amount of up to
$160,000,000;
WHEREAS, it is a condition precedent to the
obligations of the Banks to make the loans under the Credit
Agreement and a condition precedent to any letters of credit
being issued under the Credit Agreement and may be a
condition precedent to any Bank entering into Interest Rate
Protection Agreements or entering into or maintaining
Further Letter of Credit Agreements that the Guarantor
execute and deliver this Agreement; and
WHEREAS, in conjunction with the transactions
contemplated by the Credit Agreement and in consideration of
the financial and other support that the Borrower has
provided, and such financial and other support as the
Borrower may in the future provide, to the Guarantor, and in
order to induce the Banks, the Agents and the Managing Agent
to enter into the Credit Agreement and to make Loans
thereunder and to induce Banks to enter into Interest Rate
Protection Agreements and Further Letter of Credit
Agreements, the Guarantor is willing to guarantee the
obligations of the Borrower under the Credit Agreement and
the Notes and under any Interest Rate Protection Agreements
and any Further Letter of Credit Agreements;
NOW, THEREFORE, in consideration of the premises
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Terms defined in the
Credit Agreement and not otherwise defined herein are used
herein as therein defined. In addition the following terms,
as used herein, have the following meaning:
"Guaranteed Obligations" means (i) all obligations
of the Borrower in respect of the principal of and interest
on the Loans and the Notes, (ii) all obligations of the
Borrower with respect to any Interest Rate Protection
Agreement, (iii) all obligations of the Borrower with
respect to any Further Letter of Credit Agreements, (iv) all
other amounts payable by the Borrower under the Credit
Agreement, the Notes, or its Security Agreement or Pledge
Agreement or payable by the Guarantor under any Security
Agreement or Pledge Agreement to which it is a party and (v)
all renewals or extensions of the foregoing, in each case
whether now outstanding or hereafter arising, provided that
an Interest Rate Protection Agreement or a Further Letter of
Credit Agreement, or any amount payable in connection
therewith, shall not constitute a Guaranteed Obligation
unless the Borrower has designated it as such (and any
reference herein or in a Security Document to which the
Guarantor is a party to an Interest Rate Protection
Agreement or Further Letter of Credit Agreement shall
include only those so designated) by delivering to the
Collateral Agent a certificate signed by a Responsible
Officer which shall identify the obligation so designated
and specify the name and address of the counterparty thereto
and, in the case of any Further Letter of Credit Agreement,
certify that, after giving effect to such designation, the
aggregate undrawn face amount of all letters of credit that
are outstanding on such date (or that a Bank is obligated to
issue after such date) under all Further Letter of Credit
Agreements plus the aggregate amount of all reimbursement
obligations (but not any interest thereon) for amounts
previously drawn and remaining unpaid under letters of
credit issued pursuant to all Further Letter of Credit
Agreements does not exceed $160,000,000. The Guaranteed
Obligations shall include, without limitation, any interest,
costs, fees and expenses which accrue on or with respect to
any of the foregoing, whether before or after the
commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization by
the Borrower, and whether or not allowed or allowable as a
claim in any such proceeding, any such interest, costs, fees
and expenses that would have accrued thereon or with respect
thereto but for the commencement of such case, proceeding or
other action.
"Obligor" means any Subsidiary of the Borrower
that is a party to an Operative Agreement.
"Related Agreements" means the Operative
Agreements, any Interest Rate Protection Agreements and any
Further Letter of Credit Agreements.
"Responsible Officer" means the Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the Chief Operating
Officer, the President or the Treasurer of the Borrower.
ARTICLE II
The Guarantee
SECTION 2.01. The Guarantee. Subject to Section
2.03, the Guarantor hereby unconditionally and irrevocably
guarantees to the Banks, the Agents and the Managing Agent
and to each of them, the due and punctual payment of all
Guaranteed Obligations as and when the same shall become due
and payable, whether at maturity, by declaration or
otherwise, according to the terms thereof. In case of
failure by the Borrower punctually to pay any Guaranteed
Obligation, the Guarantor, subject to Section 2.03, hereby
unconditionally agrees to cause such payment to be made
punctually as and when the same shall become due and
payable, whether at maturity or by declaration or otherwise,
and as if such payment were made by the Borrower.
SECTION 2.02. Guarantees Unconditional. The
obligations of the Guarantor under this Article II shall be
unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement,
compromise, waiver or release in respect of any
obligation of the Borrower or any other Obligor under
any of the Related Agreements by operation of law or
otherwise;
(b) any modification or amendment of or
supplement to any of the Related Agreements;
(c) any modification, amendment, waiver, release,
non-perfection or invalidity of any direct or indirect
security, or of any guarantee or other liability of any
third party, for any obligation of the Borrower or any
other Obligor under any of the Related Agreements;
(d) any change in the corporate existence,
structure or ownership of the Borrower or any other
Obligor, or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting the Borrower or
any other Obligor or its assets or any resulting
release or discharge of any obligation of the Borrower
or any other Obligor contained in any of the Related
Agreements;
(e) the existence of any claim, set-off or other
rights which the Guarantor may have at any time against
the Borrower or any other Obligor, the Managing Agent,
any Agent, any Bank or any other Person, whether or not
arising in connection with any of the Related
Agreements; provided that nothing herein shall prevent
the assertion of any such claim by separate suit or
compulsory counterclaim;
(f) any invalidity or unenforceability relating
to or against the Borrower or any other Obligor for any
reason of any of the Related Agreements, or any
provision of applicable law or regulation purporting to
prohibit the payment by the Borrower or any other
Obligor of the principal of or interest on any Note or
any other amount payable by the Borrower or any other
Obligor under any of the Related Agreements; or
(g) any other act or omission to act or delay of
any kind by the Borrower or any other Obligor, the
Managing Agent, any Agent, any Bank or any other Person
or any other circumstance whatsoever that might, but
for the provisions of this paragraph, constitute a
legal or equitable discharge of the obligations of the
Guarantor under this Article II.
SECTION 2.03. Limit of Liability. The Guarantor
shall be liable under this Agreement only for amounts
aggregating up to the largest amount that would not render
its obligations hereunder subject to avoidance under Section
548 of the United States Bankruptcy Code or any comparable
provisions of any applicable state law.
SECTION 2.04. Discharge; Reinstatement in Certain
Circumstances. The Guarantor's obligations under this
Article II shall remain in full force and effect until the
Commitments are terminated, no Letters of Credit remain
outstanding and the principal of and interest on the Notes,
all Letter of Credit Liabilities and all other amounts
payable by the Borrower under any of the Operative
Agreements shall have been paid in full. If at any time any
payment of the principal of or interest on any Note, any
Letter of Credit Liability, any Interest Rate Obligation,
any obligation under any Further Letter of Credit Agreement
or any other amount payable by the Borrower under any of the
Related Agreements is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or
reorganization of the Borrower or any other Obligor or
otherwise, the Guarantor's obligations under this Article II
with respect to such payment shall be reinstated at such
time as though such payment had become due but had not been
made at such time.
SECTION 2.05. Waiver. The Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and
any notice not provided for herein, as well as any
requirement that at any time any action be taken by any
Person against the Borrower or any other Obligor or any
other Person.
SECTION 2.06. Subrogation and Contribution. The
Guarantor irrevocably waives any and all rights to which it
may be entitled, by operation of law or otherwise, upon
making any payment hereunder (i) to be subrogated to the
rights of the payee against the Borrower with respect to
such payment or otherwise to be reimbursed, indemnified or
exonerated by the Borrower or any other Obligor in respect
thereof or (ii) to receive any payment, in the nature of
contribution or for any other reason, from any other Obligor
with respect to such payment.
SECTION 2.07. Stay of Acceleration. If
acceleration of the time for payment of any amount payable
by the Borrower under any of the Related Agreements is
stayed upon the insolvency, bankruptcy or reorganization of
the Borrower, all such amounts otherwise subject to
acceleration under the terms of any of the Related
Agreements shall nonetheless be payable by the Guarantor
hereunder forthwith on demand by the Managing Agent made at
the request of the Required Banks.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor represents and warrants that:
(a) The Guarantor is a corporation duly
incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted.
(b) The execution, delivery and performance by
the Guarantor of this Agreement are within the Guarantor's
corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Guarantor or
of any judgment, injunction, orders or decree or any
material agreement or other material instrument binding upon
the Guarantor or result in the creation or imposition of any
Lien (other than Liens created by the Operative Agreements)
on any asset of the Guarantor or any of its Subsidiaries.
(c) This Agreement constitutes a valid and
binding agreement of the Guarantor.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Notices. Unless otherwise speci-
fied herein, all notices, requests and other communications
to any party hereunder shall be in writing (including bank
wire, telex, facsimile transmission or similar writing) and
shall be given to such party at its address or telex or
facsimile number set forth on the signature page hereof or
such other address or telex or facsimile number as such
party may hereafter specify for the purpose by notice to the
to the other party hereto. Each such notice, request or
other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number
specified in or pursuant to this Section 4.01 and the
appropriate answerback is received, (ii) if given by
facsimile transmission, when such facsimile is transmitted
to the facsimile transmission number specified in or
pursuant to this Section 4.01 and telephonic confirmation of
receipt thereof is received, (iii) if given by mail, 72
hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or
(iv) if given by any other means, when delivered at the
address specified in this Section 4.01.
SECTION 4.02. No Waiver. No failure or delay by
the Managing Agent, any Agent or any Bank in exercising any
right, power or privilege under this Agreement or any of the
Related Agreements shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies
herein and therein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 4.03. Amendments and Waivers. Any provi-
sion of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and is signed by
the Guarantor and the Collateral Agent with the prior
written consent of the Required Banks, provided that except
as set forth in the two immediately following sentences,
this Agreement may not be terminated (other than pursuant to
Section 2.04) without the prior written consent of the
Releasing Banks. The Guarantor may at any time request the
Collateral Agent to agree to the termination of this
Agreement if such request is accompanied by a certificate of
a Responsible Officer stating that such termination is
requested in connection with an Asset Sale in which all of
the shares of capital stock of the Guarantor owned directly
or indirectly by the Borrower will be sold. Upon receipt of
such a request and certificate, the Collateral Agent shall,
at the expense of the Guarantor and against delivery of a
further certificate of a Responsible Officer stating that
such Asset Sale has taken place (or is taking place
concurrently), execute and deliver such documents as the
Guarantor shall reasonably request to evidence the
termination of this Agreement.
SECTION 4.04. Governing Law; Submission to
Jurisdiction; Waiver of a Jury Trial. THIS AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.
THE GUARANTOR HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. THE GUARANTOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF
THE GUARANTOR, THE COLLATERAL AGENT, THE AGENTS AND THE
BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 4.05. Successors and Assigns; Collateral
Agent. (a) This Agreement is for the benefit of the Banks,
the Agents and the Managing Agent and their respective
successors and assigns and in the event of an assignment of
the Loans, the Notes or other amounts payable under the
Related Agreements, the rights hereunder, to the extent
applicable to the indebtedness so assigned, shall be
transferred with such indebtedness; provided that no
counterparty to an Interest Rate Protection Agreement or a
Further Letter of Credit Agreement shall be entitled to the
benefits hereof unless it is also a Bank. All the
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns.
(b) The Collateral Agent has become a party hereto
pursuant to the Credit Agreement. The actions of the
Collateral Agent hereunder are subject to the provisions of
the Credit Agreement (including in particular Article VII
thereof), and the Collateral Agent has no obligations other
than those expressly set forth herein.
SECTION 4.06. Counterparts. This Agreement may
be signed in any number of counterparts, each of which shall
be an original, and all of which taken together shall
constitute a single instrument, with the same effect as if
the signatures thereto and hereto were upon the same
instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the date first above written.
[NAME OF SUBSIDIARY], as Guarantor
(a _____________ corporation)
By_____________________________
Name: John M. Thompson
Title: Vice President
c/o Fleming Companies, Inc.
P. O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
Attn: Treasurer
Telecopier: (405) 840-7202
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Collateral Agent
By______________________________
Name: Michael C. Mauer
Title: Vice President
60 Wall Street
New York, New York 10260
Attention: Loan Department
Telex number: 177615
Telecopier: (212) 648-5016
<PAGE>
EXHIBIT G-1
FORM OF
BORROWER PLEDGE AGREEMENT
[Intentionally omitted.]
<PAGE>
EXHIBIT G-2
SUBSIDIARY PLEDGE AGREEMENT
dated as of
July 19, 1994
among
The Corporation Listed on the Signature Page Hereof
and
Morgan Guaranty Trust Company of New York,
as Collateral Agent<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Definitions. . . . . . . . . . . . . . . . . . . .
. . 2
SECTION 2. Representations and Warranties . . . . . . . . . .
. . 6
SECTION 3. The Security Interests . . . . . . . . . . . . . .
. . 7
SECTION 4. Delivery of Pledged Stock. . . . . . . . . . . . .
. . 8
SECTION 5. Further Assurances . . . . . . . . . . . . . . . .
. . 8
SECTION 6. Record Ownership of Pledged Stock. . . . . . . . .
. . 9
SECTION 7. Right to Receive Distributions on
Collateral . . . . . . . . . . . . . . . . . . . .
. . 9
SECTION 8. Right to Vote Pledged Stock. . . . . . . . . . . .
. . 9
SECTION 9. General Authority. . . . . . . . . . . . . . . . .
. . 10
SECTION 10. Remedies upon Event of Default. . . . . . . . . .
. . 11
SECTION 11. Expenses. . . . . . . . . . . . . . . . . . . . .
. . 12
SECTION 12. Limitation on Duty of Collateral
Agent in Respect of Collateral. . . . . . . . . .
. . 13
SECTION 13. Application of Proceeds . . . . . . . . . . . . .
. . 13
SECTION 14. Concerning the Collateral Agent . . . . . . . . .
. . 15
SECTION 15. Appointment of Co-Agents. . . . . . . . . . . . .
. . 16
SECTION 16. Termination of Security Interests;
Release of Collateral . . . . . . . . . . . . . .
. . 17
SECTION 17. Collateral Account. . . . . . . . . . . . . . . .
. . 19
SECTION 18. Notices . . . . . . . . . . . . . . . . . . . . .
. . 20
SECTION 19. Waivers, Non-Exclusive Remedies . . . . . . . . .
. . 21
SECTION 20. Successors and Assigns. . . . . . . . . . . . . .
. . 21
SECTION 21. Changes in Writing. . . . . . . . . . . . . . . .
. . 21
SECTION 22. New York Law. . . . . . . . . . . . . . . . . . .
. . 22
SECTION 23. Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial. . . . . . . .
. . 22
SECTION 24. Severability. . . . . . . . . . . . . . . . . . .
. . 22
SECTION 25. Counterparts. . . . . . . . . . . . . . . . . . .
. . 23
SECTION 26. Obligations Absolute. . . . . . . . . . . . . . .
. . 23
Schedule 1 - Issuers and Original Pledge Stock
<PAGE>
SUBSIDIARY PLEDGE AGREEMENT
AGREEMENT dated as of July 19, 1994 made by the
corporation identified as the Pledgor on the signature page
hereof, a corporation organized under the jurisdiction
listed on the signature page hereof (with its successors,
the "Pledgor"), in favor of MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Collateral Agent.
R E C I T A L S
A. Pursuant to the credit agreement, dated as of
July 19, 1994 (as amended, amended and restated, supplemen-
ted or otherwise modified from time to time, the "Credit
Agreement"), by and among Fleming Companies, Inc. (the
"Borrower"), the Banks listed therein, the Agents listed
therein and Morgan Guaranty Trust Company of New York, as
Managing Agent for the Banks, the Banks have agreed (i) to
make loans to the Borrower up to an aggregate principal
amount of $2,200,000,000 and (ii) to issue letters of credit
for the account of the Borrower.
B. It is contemplated that the Borrower may
enter into one or more agreements ("Interest Rate Protection
Agreements") with one or more of the Banks (as hereinafter
defined) regarding the interest rates with respect to loans
under the Credit Agreement (all obligations of the Borrower
now existing or hereafter arising under such Interest Rate
Protection Agreements, collectively, the "Interest Rate
Obligations").
C. It is contemplated that the Borrower may have
or enter into one or more agreements ("Further Letter of
Credit Agreements") with one or more of the Banks to issue
certain letters of credit (in addition to those issuable
pursuant to the Credit Agreement) for the account of the
Borrower in an aggregate face amount of up to $160,000,000.
D. The Credit Agreement provides, among other
things, that one condition of its effectiveness is the
execution and delivery by the Pledgor of a Subsidiary
Guarantee Agreement (the "Guarantee Agreement") dated as of
July 19, 1994, pursuant to which the Pledgor guarantees
certain obligations of the Borrower more specifically set
forth therein (the "Guaranteed Obligations");
E. It is a further condition precedent to the
obligations of the Banks to make the loans under the Credit
Agreement and a further condition precedent to any letters
of credit being issued under the Credit Agreement and may be
a condition precedent to any Bank entering into Interest
Rate Protection Agreements or entering into or maintaining
Further Letter of Credit Agreements that the Pledgor execute
and deliver this Agreement.
F. As a consequence of certain negative pledge
clauses in other instruments and agreements by which the
Borrower is bound, the Pledgor must secure certain other
obligations of the Borrower existing on the date hereof
equally and ratably with its obligations under the Guarantee
Agreement.
G. This Agreement is given by the Pledgor in
favor of the Collateral Agent for its benefit and the
benefit of the other Secured Parties (as hereinafter
defined) to secure the payment and performance of all of the
Secured Obligations (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
SECTION 1. Definitions
Capitalized terms used and not defined herein shall
have the meanings assigned to them in the Credit Agreement.
The following terms, as used herein, have the following
meanings:
"Bank Secured Obligations" means the Secured
Obligations other than the Non-Bank Secured Obligations,
provided that at any time of determination no amount of the
Borrower's obligations under any Interest Rate Protection
Agreement shall be included in Bank Secured Obligations that
are Non-Contingent Secured Obligations unless such
obligations are then due and payable.
"Cash Distributions" means dividends and other
payments and distributions made upon or with respect to the
Pledged Stock or any other Collateral in cash.
"Collateral" has the meaning set forth in Section
3(a).
"Collateral Agent" means Morgan Guaranty Trust
Company of New York in its capacity as agent for the Secured
Parties hereunder, and its successors in such capacity.
"Contingent Secured Obligation" means at any time
any Guaranteed Obligation (or portion thereof) that is at
such time:
(i) an obligation to reimburse a Bank for
drawings not yet made under a letter of credit issued
or to be issued by such Bank, or
(ii) an obligation to provide collateral to or
for the benefit of a Bank to secure reimbursement
obligations arising from drawings not yet made under a
letter of credit issued or to be issued by such Bank or
to make any other payment to the Issuing Bank that the
Issuing Bank would not be entitled to retain if no
drawings were made under the relevant letter of credit
after the time of determination.
"Credit Agreement Secured Obligations" means the
Secured Obligations arising under the Credit Agreement.
"Existing Debt Indentures" means (i) the Indenture
dated as of December 1, 1989, as supplemented to the date
hereof, from the Borrower to Morgan Guaranty Trust Company
of New York, as Trustee, and (ii) the Indenture dated as of
March 15, 1986, as supplemented to the date hereof, from the
Borrower to Morgan Guaranty Trust Company of New York, as
Trustee.
"Existing Indenture Obligations" means the notes
and debentures of the Borrower outstanding from time to time
under the Existing Debt Indentures, provided that the term
Existing Indenture Obligations shall not include any such
securities that are not issued and outstanding on July 19,
1994 unless such securities have been issued in exchange or
substitution (which do not include any refinancing or refun-
ding) for any securities constituting Existing Indenture
Obligations that were outstanding on July 19, 1994.
"Issuer" means each Subsidiary of the Pledgor
listed on Schedule 1 hereto.
"Lien" means, with respect to any asset, any mort-
gage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset.
"Liquid Investment" means (i) direct obligations
of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii)
commercial paper rated in the highest grade by a nationally
recognized credit rating agency or (iii) time deposits with,
including certificates of deposit issued by, any office
located in the United States of any bank or trust company
(including a bank or trust company acting as the Collateral
Agent or a co-agent hereunder) which is organized under the
laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least
$1,000,000,000; provided in each case that (x) such Liquid
Investment matures within 90 days from the date of acquisi-
tion thereof and (y) in order to provide the Collateral
Agent, for the benefit of the Secured Parties, with a
perfected security interest therein, such Liquid Investment
is:
(1) evidenced by a certificate or instrument
which is negotiable, or if non-negotiable is issued in
the name of the Collateral Agent or its nominee, and
which (together with any appropriate instruments of
transfer) is delivered to, and held by, the Collateral
Agent or an agent thereof (which shall not be the
Pledgor or any of its Affiliates) in the State of New
York;
(2) issued by the U.S. Treasury in book-entry
form and subject to pledge under then-applicable state
law and Treasury regulations and held by the Collateral
Agent at a Federal Reserve Bank; provided that the
books of the Collateral Agent reflect that such Trea-
sury securities are held as Collateral under this
Agreement in compliance with then applicable Treasury
regulations regarding the perfection of security
interests in Treasury securities; or
(3) otherwise issued, evidenced, registered or
recorded in such manner as will provide the Collateral
Agent, for the benefit of the Secured Parties, with a
perfected security interest therein.
"Non-Bank Percentage" means, as of any time of
determination, the percentage obtained by dividing the then-
outstanding principal amount of the Non-Bank Secured
Obligations by the sum of the then-outstanding principal
amount of (1) the Non-Bank Secured Obligations and (b) any
Bank Secured Obligations that are Non-Contingent Secured
Obligations.
"Non-Bank Secured Obligations" means the Secured
Obligations held by the Non-Bank Secured Parties.
"Non-Bank Secured Parties" means the holders from
time to time of the Secured Obligations consisting of the
Existing Indenture Obligations.
"Non-Contingent Secured Obligation" means at any
time any Secured Obligation (or portion thereof) that is not
a Contingent Secured Obligation at such time.
"Original Pledged Stock" means the shares of stock
of each Issuer listed on Schedule 1 hereto.
"Pledged Stock" means (i) the Original Pledged
Stock and (ii) any other capital stock required to be
pledged to the Collateral Agent pursuant to Section 3(b).
"Responsible Officer" means the Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the Chief Operating
Officer, the President or the Treasurer of the Borrower.
"Secured Obligations" means:
(i) the Guaranteed Obligations;
(ii) all sums payable by the Pledgor under
this Agreement; and
(iii) all principal of and premium, if any,
and interest on the Existing Indenture Obligations.
"Secured Parties" means (i) the holders from time
to time of the Secured Obligations and (ii) the Collateral
Agent, provided that for purposes of any notice to or con-
sent required from the Non-Bank Secured Parties, the Trustee
under each Existing Debt Indenture at the time in question
shall be treated as the Non-Bank Secured Party with respect
to the Existing Indenture Obligations thereunder and all
payments to be made to or for the benefit of any holder of
an Existing Indenture Obligation shall be made to the Trus-
tee in question and the Collateral Agent shall have no
further responsibilities or liability with respect thereto.
"Security Interests" means the security interests
in the Collateral granted hereunder securing the Secured
Obligations.
Unless otherwise defined herein, or unless the
context otherwise requires, all terms used herein which are
defined in the New York Uniform Commercial Code as in effect
on the date hereof shall have the meanings therein stated.
SECTION 2. Representations and Warranties
The Pledgor represents and warrants as follows:
(a) The Pledgor is a corporation duly incor-
porated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted.
(b) The execution, delivery and performance by
the Pledgor of this Agreement are within the Pledgor's
corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and
do not contravene, or constitute a default under any
provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Pledgor or of
any judgment, injunction, orders or decree or any material
agreement or other material instrument binding upon the
Pledgor or result in the creation or imposition of any Lien
(other than Liens created by the Operative Agreements) on
any asset of the Pledgor or any Subsidiary.
(c) This Agreement constitutes a valid and
binding agreement of the Pledgor.
(d) The Pledgor owns all of the Original Pledged
Stock, free and clear of any Liens other than the Security
Interests. Except as set forth on Schedule l hereto, the
Original Pledged Stock includes all of the issued and
outstanding capital stock of each Issuer, and no Issuer has
outstanding any security convertible into or exchangeable
for any shares of its capital stock or any warrant, option
or other instrument entitling the holder thereof to acquire
any such shares. All of the Original Pledged Stock has been
duly authorized and validly issued and is fully paid and
non-assessable, and is subject to no options to purchase or
similar rights of any Person. Other than this Agreement,
the Pledgor is not and will not become a party to or other-
wise bound by any agreement which restricts in any manner
the rights of the Secured Parties with respect to any of the
Pledged Stock.
(e) Upon the delivery of the certificates repre-
senting the Pledged Stock to the Collateral Agent in accor-
dance with Section 4 hereof, the Collateral Agent will have
valid and perfected security interests in the Collateral to
the extent a security interest in such Collateral can be
perfected under the Uniform Commercial Code (and subject to
the requirements of Section 9-306 of the Uniform Commercial
Code with respect to any proceeds of Collateral and to the
further requirement that additional steps may be necessary
to perfect a security interest in dividends or other distri-
butions in kind), subject to no prior Lien. No registra-
tion, recordation or filing with any governmental body,
agency or official is required in connection with the execu-
tion or delivery of this Agreement or necessary for the
validity or enforceability hereof or for the perfection or
enforcement of the Security Interests. Neither the Pledgor
nor any Subsidiary has performed or will perform any acts
which might prevent the Collateral Agent from enforcing any
of the terms and conditions of this Agreement or which would
limit the Collateral Agent in any such enforcement.
(f) The chief executive office of the Pledgor is
located within one of the jurisdictions set forth on the
signature page hereof. Except as noted on Schedule 1, under
the Uniform Commercial Code as in effect in each State in
which any such office is located, no local filing is
required to perfect a security interest in collateral
consisting of general intangibles.
SECTION 3. The Security Interests
In order to secure the full and punctual payment
of the Secured Obligations in accordance with the terms
thereof, and to secure the performance of all the
obligations of the Pledgor hereunder:
(a) The Pledgor hereby assigns and pledges to and
with the Collateral Agent for the equal and ratable benefit
of the Secured Parties and grants to the Collateral Agent
for the equal and ratable benefit of the Secured Parties
security interests in the Pledged Stock, and all of its
rights and privileges with respect to the Pledged Stock, and
all income and profits thereon, and all interest, dividends
and other payments and distributions with respect thereto,
and the Collateral Account (as hereinafter defined) and all
cash deposited therein or other property held therein from
time to time, and all proceeds of the foregoing (the "Colla-
teral"). Contemporaneously with the execution and delivery
hereof, the Pledgor is delivering the certificates represen-
ting the Original Pledged Stock in pledge hereunder.
(b) In the event that any Issuer at any time
issues any additional or substitute shares of capital stock
of any class to the Pledgor, the Pledgor will immediately
pledge and deposit with the Collateral Agent certificates
representing all such shares. All such shares constitute
Pledged Stock and are subject to all provisions of this
Agreement.
(c) The Security Interests are granted as securi-
ty only and shall not subject the Collateral Agent or any
Secured Party to, or transfer or in any way affect or
modify, any obligation or liability of the Pledgor with
respect to any of the Collateral or any transaction in
connection therewith.
SECTION 4. Delivery of Pledged Stock
All Pledged Stock shall be delivered to the Colla-
teral Agent by the Pledgor pursuant hereto indorsed to the
order of the Collateral Agent, and accompanied by any re-
quired transfer tax stamps, all in form and substance satis-
factory to the Collateral Agent. All certificates represen-
ting Pledged Stock delivered to the Collateral Agent by the
Pledgor pursuant hereto shall be in suitable form for trans-
fer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, and accompa-
nied by any required transfer tax stamps, all in form and
substance satisfactory to the Collateral Agent.
SECTION 5. Further Assurances
(a) The Pledgor agrees that it will, at its
expense and in such manner and form as the Collateral Agent
may reasonably require, execute, deliver, file and record
any financing statement, specific assignment or other paper
and take any other action that may be necessary or desira-
ble, or that the Collateral Agent may request, in order to
create, preserve, perfect or validate any Security Interest
or to enable the Collateral Agent to exercise and enforce
its rights hereunder with respect to any of the Collateral.
To the extent permitted by applicable law, the Pledgor
hereby authorizes the Collateral Agent to execute and file,
in the name of the Pledgor or otherwise, Uniform Commercial
Code financing statements (which may be carbon, photogra-
phic, photostatic or other reproductions of this Agreement
or of a financing statement relating to this Agreement)
which the Collateral Agent in its sole discretion may deem
necessary or appropriate to further perfect the Security
Interests.
(b) The Pledgor agrees that it will not change
(i) its name, identity or corporate structure in any manner
or (ii) the location of its chief executive office unless it
shall have given the Collateral Agent not less than 20 days'
prior notice thereof.
SECTION 6. Record Ownership of Pledged Stock
Upon the occurrence and during the continuance of
an Event of Default, at the request of the Required Banks,
the Collateral Agent may cause any or all of the Pledged
Stock to be transferred of record into the name of the Col-
lateral Agent or its nominee. The Pledgor will promptly
give to the Collateral Agent copies of any notices or other
communications received by it with respect to Pledged Stock
registered in the name of the Pledgor and the Collateral
Agent will promptly give to the Pledgor copies of any
notices and communications received by the Collateral Agent
with respect to Pledged Stock registered in the name of the
Collateral Agent or its nominee.
SECTION 7. Right to Receive Distributions on Collateral
The Collateral Agent shall have the right to
receive and to retain as Collateral hereunder all dividends,
interest and other payments and distributions made upon or
with respect to the Collateral and the Pledgor shall take
all such action as the Collateral Agent may deem necessary
or appropriate to give effect to such right, provided that
unless an Event of Default has occurred and is continuing
and upon the request of the Required Banks, the foregoing
sentence shall not apply to Cash Distributions. All such
dividends, interest and other payments and distributions
which are received by the Pledgor (except Cash Distributions
received when no Event of Default has occurred and is con-
tinuing) shall be received in trust for the benefit of the
Collateral Agent and the Secured Parties and, if the Colla-
teral Agent so directs during the continuance of an Event of
Default, shall be segregated from other funds of the Pledgor
and shall, forthwith upon demand by the Collateral Agent
during the continuance of an Event of Default, be paid over
to the Collateral Agent as Collateral in the same form as
received (with any necessary endorsement). After all Events
of Defaults have been cured or waived, the Collateral
Agent's right to retain Cash Distributions under this Sec-
tion 7 shall cease and the Collateral Agent shall pay over
to the Pledgor any such Cash Distributions retained by it
during the continuance of an Event of Default.
SECTION 8. Right to Vote Pledged Stock
Unless an Event of Default shall have occurred and
be continuing and the Required Banks shall have so reques-
ted, the Pledgor shall have the right, from time to time, to
vote and to give consents, ratifications and waivers with
respect to the Pledged Stock, and the Collateral Agent
shall, upon receiving a written request from the Pledgor
accompanied by a certificate signed by a Responsible Officer
stating that no Event of Default has occurred and is contin-
uing, deliver to the Pledgor or as specified in such request
such proxies, powers of attorney, consents, ratifications
and waivers in respect of any of the Pledged Stock which is
registered in the name of the Collateral Agent or its
nominee as shall be specified in such request and be in form
and substance satisfactory to the Collateral Agent.
If an Event of Default shall have occurred and be
continuing, the Collateral Agent shall have the right to the
extent permitted by law and the Pledgor shall take all such
action as may be necessary or appropriate to give effect to
such right, to vote and to give consents, ratifications and
waivers, and take any other action with respect to any or
all of the Pledged Stock with the same force and effect as
if the Collateral Agent were the absolute and sole owner
thereof.
SECTION 9. General Authority
The Pledgor hereby irrevocably appoints the Colla-
teral Agent its true and lawful attorney, with full power of
substitution, in the name of the Pledgor, the Collateral
Agent, the Secured Parties or otherwise, for the sole use
and benefit of the Collateral Agent and the Secured Parties,
but at the expense of the Pledgor, to the extent permitted
by law to exercise, at any time and from time to time while
an Event of Default has occurred and is continuing and at
the request of the Required Banks, all or any of the follow-
ing powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give
acquittance for any and all monies due or to become due
upon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or
defend any action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal
in or with the same or the proceeds or avails thereof,
as fully and effectually as if the Collateral Agent
were the absolute owner thereof, and
(iv) to extend the time of payment of any or all
thereof and to make any allowance and other adjustments
with reference thereto;
provided that the Collateral Agent shall give the Pledgor
not less than ten days' prior written notice of the time and
place of any sale or other intended disposition of any of
the Collateral except any Collateral which threatens to
decline speedily in value or is of a type customarily sold
on a recognized market. The Collateral Agent and the Pled-
gor agree that such notice constitutes "reasonable notifica-
tion" within the meaning of Section 9-504(3) of the Uniform
Commercial Code.
SECTION 10. Remedies upon Event of Default
If any Event of Default shall have occurred and be
continuing, the Collateral Agent, upon being instructed to
do so by the Required Banks, may exercise on behalf of the
Secured Parties all the rights of a secured party under the
Uniform Commercial Code (whether or not in effect in the
jurisdiction where such rights are exercised) and, in
addition, the Collateral Agent may, without being required
to give any notice, except as herein provided or as may be
required by mandatory provisions of law, (i) apply the cash,
if any, then held by it as Collateral as specified in
Section 13 and (ii) if there shall be no such cash or if
such cash shall be insufficient to pay all the Secured
Obligations in full, sell the Collateral or any part thereof
at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future
delivery, and at such price or prices as the Collateral
Agent may deem satisfactory. Any Secured Party may be the
purchaser of any or all of the Collateral so sold at any
public sale (or, if the Collateral is of a type customarily
sold in a recognized market or is of a type which is the
subject of widely distributed standard price quotations, at
any private sale). The Collateral Agent is authorized, in
connection with any such sale, if it deems it advisable so
to do, (i) to restrict the prospective bidders on or purcha-
sers of any of the Pledged Stock to a limited number of
sophisticated investors who will represent and agree that
they are purchasing for their own account for investment and
not with a view to the distribution or sale of any of such
Pledged Stock, (ii) to cause to be placed on certificates
for any or all of the Pledged Stock or on any other securi-
ties pledged hereunder a legend to the effect that such
security has not been registered under the Securities Act of
1933 and may not be disposed of in violation of the provi-
sion of said Act, and (iii) to impose such other limitations
or conditions in connection with any such sale as the Colla-
teral Agent deems necessary or advisable in order to comply
with said Act or any other law. The Pledgor covenants and
agrees that it will execute and deliver such documents and
take such other action as the Collateral Agent deems neces-
sary or advisable in order that any such sale may be made in
compliance with law. Upon any such sale the Collateral
Agent shall have the right to deliver, assign and transfer
to the purchaser thereof the Collateral so sold. Each pur-
chaser at any such sale shall hold the Collateral so sold
absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of the
Pledgor which may be waived, and the Pledgor, to the extent
permitted by law, hereby specifically waives all rights of
redemption, stay or appraisal which it has or may have under
any law now existing or hereafter adopted. The notice (if
any) of such sale required by Section 9 shall (1) in case of
a public sale, state the time and place fixed for such sale,
(2) in case of sale at a broker's board or on a securities
exchange, state the board or exchange at which such sale is
to be made and the day on which the Collateral, or the
portion thereof so being sold, will first be offered for
sale at such board or exchange, and (3) in the case of a
private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such
time or times within ordinary business hours and at such
place or places as the Collateral Agent may fix in the
notice of such sale. At any such sale the Collateral may be
sold in one lot as an entirety or in separate parcels, as
the Collateral Agent may determine. The Collateral Agent
shall not be obligated to make any such sale pursuant to any
such notice. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at
the time and place fixed for the sale, and such sale may be
made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the
selling price is paid by the purchaser thereof, but the
Collateral Agent shall not incur any liability in case of
the failure of such purchaser to take up and pay for the
Collateral so sold and, in case of any such failure, such
Collateral may again be sold upon like notice. The
Collateral Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at
law or in equity to foreclose the Security Interests and
sell the Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent
jurisdiction.
SECTION 11. Expenses
The Pledgor agrees that it will forthwith upon
demand pay to the Collateral Agent:
(i) the amount of any taxes which the Collateral
Agent may have been required to pay by reason of the
Security Interests or to free any of the Collateral
from any Lien thereon, and
(ii) the amount of any and all out-of-pocket
expenses, including the reasonable fees and disburse-
ments of counsel and of any other experts, which the
Collateral Agent may incur in connection with (w) the
administration or enforcement of this Agreement, inclu-
ding such expenses as are incurred to preserve the
value of the Collateral and the validity, perfection,
rank and value of any Security Interest, (x) the col-
lection, sale or other disposition of any of the Colla-
teral, (y) the exercise by the Collateral Agent of any
of the rights conferred upon it hereunder or (z) any
Default or Event of Default.
Any such amount not paid on demand shall bear interest at 1%
plus the rate that would be applicable to Tranche A Base
Rate Loans under the Credit Agreement. The Pledgor's
obligations under this Section shall survive the termination
of this Agreement and the discharge of the Pledgor's
obligations under the Operative Agreements.
SECTION 12. Limitation on Duty of Collateral
Agent in Respect of Collateral
Beyond the exercise of reasonable care in the
custody thereof, the Collateral Agent shall have no duty as
to any Collateral in its possession or control or in the
possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto. The Colla-
teral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own proper-
ty, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in
the value thereof, by reason of the act or omission of any
agent or bailee selected by the Collateral Agent in good
faith.
SECTION 13. Application of Proceeds
(a) Upon the occurrence and during the continu-
ance of an Event of Default, the proceeds of any sale of, or
other realization upon, all or any part of the Collateral
(including any proceeds received and held pursuant to Sec-
tion 16) and any cash held in the Collateral Account shall
be applied by the Collateral Agent, upon being instructed to
do so by the Required Banks, in the following order of
priorities:
First, to the payment of all costs and expenses,
fees, commissions and taxes of such sale, collection or
other realization, including, without limitation, rea-
sonable compensation to the Collateral Agent and its
agents and counsel, and all expenses, liabilities and
advances made or incurred by the Collateral Agent in
connection therewith, together with interest on each
such amount at 1% plus the rate of interest that would
be applicable to Tranche A Base Rate Loans under the
Credit Agreement from and after the date such amount is
due, owing or unpaid until paid in full;
Second, to pay the Secured Obligations ratably (or
provide for the payment thereof pursuant to subsection
(b) of this Section), until payment in full of all
Secured Obligations shall have been made (or so provi-
ded for), provided that before making any payment pur-
suant to this clause Second ratably to the holders of
the Secured Obligations, the Collateral Agent shall
first apply solely to the Non-Bank Secured Obligations
any amount held by it pursuant to subclause (ii)(A) of
Section 16(b) and provided further that in the case of
a Guaranteed Obligation that is in respect of an
Interest Rate Protection Agreement, the principal
amount outstanding to a Bank under such Interest Rate
Protection Agreement at the time any such payments are
to be distributed in accordance with this clause Second
shall be the amount of the Borrower's obligations then
due and payable (including any early termination
payments then due) to such Bank under such Interest
Rate Protection Agreement; and
Third, to the Pledgor, or its successors or
assigns, or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdic-
tion may direct, of any surplus then remaining from
such proceeds.
(b) If at any time any monies collected or
received by the Collateral Agent would, but for the provi-
sions of this subsection (b), be payable pursuant to subsec-
tion (a) of this Section in respect of any Contingent
Secured Obligation, the Collateral Agent shall not apply
such monies to pay such Contingent Secured Obligation but
instead shall hold such monies in the Collateral Account.
The Collateral Agent shall so hold all such monies until
such time as the holder of such Contingent Secured Obliga-
tion advises the Collateral Agent (with at least three
Business Days' prior notice to the Pledgor) that all or a
specified part of such Contingent Secured Obligation has
become a Non-Contingent Secured Obligation, whereupon the
Collateral Agent shall apply the amount so held to pay such
Non-Contingent Secured Obligation; provided that, if the
other Secured Obligations theretofore paid pursuant to
subsection (a) were not paid in full, the Collateral Agent
shall apply the amount so held to pay the same percentage of
such Non-Contingent Secured Obligation as the percentage of
such other Secured Obligations theretofore paid pursuant to
subsection (a). If (i) the holder of such Contingent
Secured Obligation shall advise the Collateral Agent (with
at least three Business Days' prior notice to the Pledgor)
that no portion thereof remains in the category of a Con-
tingent Secured Obligation and (ii) any amount held pursuant
to this subsection (b) in respect of such Contingent Secured
Obligation remains after payment of all ratable amounts
payable pursuant to the preceding sentence with respect to
any portions thereof that became Non-Contingent Secured
Obligations, such remaining amount shall be applied by the
Collateral Agent in the order of priorities set forth in
subsection (a) of this Section.
(c) In making the payments and allocations requi-
red by this Section, the Collateral Agent may, (1) as to any
Guaranteed Obligations arising under an Interest Rate Pro-
tection Agreement or Further Letter of Credit Agreement,
rely upon information from the applicable counterparty
identified by the Pledgor pursuant to the Guarantee Agree-
ment and (2) as to any Existing Indenture obligations, rely
upon information from the Trustee under the applicable Exis-
ting Debt Indenture, and shall have no liability to the
Pledgor or any other Secured Party for actions taken in
reliance on such information except in the case of its gross
negligence or willful misconduct. All distributions made by
the Collateral Agent pursuant to this Section shall be final
(except in the event of manifest error) and the Collateral
Agent shall have no duty to inquire as to the application by
the Secured Parties of any amount distributed to them.
SECTION 14. Concerning the Collateral Agent
(a) The Collateral Agent has been appointed as
Collateral Agent pursuant to the Credit Agreement. The
actions of the Collateral Agent hereunder are subject to the
provisions of the Credit Agreement. The obligations of the
Collateral Agent hereunder are only those expressly set
forth herein. In any case in which the Collateral Agent is
authorized to exercise any power or discretion, the Colla-
teral Agent may refuse to do so unless directed in writing
by the Required Banks to act in the manner specified in such
direction.
(b) The Collateral Agent may resign at any time
by giving written notice thereof to the Secured Parties and
the Pledgor. Upon any resignation of the Collateral Agent,
the Required Banks shall have the right to appoint a succes-
sor Collateral Agent. If no successor Collateral Agent
shall have been so appointed by the Required Banks, and
shall have accepted such appointment, within 30 days after
the retiring Collateral Agent gives notice of resignation,
then the retiring Collateral Agent may, on behalf of the
Secured Parties, appoint a successor Collateral Agent, which
shall be a commercial bank organized or licensed under the
laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least
$100,000,000. Upon the acceptance of its appointment as
Collateral Agent hereunder by a successor Collateral Agent,
such successor Collateral Agent shall thereupon succeed to
and become vested with all the rights and duties of the
retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations here-
under. After any retiring Collateral Agent's resignation
hereunder as Collateral Agent, the provisions of this
Section shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Collateral Agent.
SECTION 15. Appointment of Co-Agents
At any time or times, in order to comply with any
legal requirement in any jurisdiction, the Collateral Agent
may appoint another bank or trust company or one or more
other persons, either to act as co-agent or co-agents,
jointly with the Collateral Agent, or to act as separate
agent or agents on behalf of the Secured Parties with such
power and authority as may be necessary for the effectual
operation of the provisions hereof and may be specified in
the instrument of appointment (which may, in the discretion
of the Collateral Agent, include provisions for the protec-
tion of such co-agent or separate agent similar to the
provisions of Section 14). Notwithstanding any such
appointment but only to the extent not inconsistent with
such legal requirements or, in the reasonable judgment of
the Collateral Agent, not unduly burdensome to it or any
such co-agent, the Pledgor shall, so long as no Event of
Default shall have occurred and be continuing, be entitled
to deal solely and directly with the Collateral Agent rather
than any such co-agent in connection with the Collateral
Agent's rights and obligations under this Agreement.
SECTION 16. Termination of Security Interests;
Release of Collateral
(a) When all the Credit Agreement Secured
Obligations have been paid in full and the Commitments of
the Banks to make any Loan or issue any Letter of Credit
under the Credit Agreement have expired, or if earlier the
occurrence of the Rating Target Date, this Agreement shall
terminate, except as expressly set forth herein, and all
rights to the Collateral shall revert to the Pledgor.
(b)(i) The Pledgor may from time to time prior to
the termination of this Agreement request the Collateral
Agent to release all or any of the Collateral, which request
shall be accompanied by a certificate of a Responsible
Officer stating (A) whether such release is requested in
connection with an Asset Sale, (B) whether a Default has
occurred and is continuing, (C) if such release is requested
in connection with an Asset Sale, identifying the cash,
Temporary Cash Investments and instruments comprising the
Net Proceeds of such Asset Sale that, in the good faith
determination of such Responsible Officer, are allocable to
the Collateral requested to be released (the "Collateral Net
Proceeds") and (D) if such release is requested in
connection with an Asset Sale, the amount, if any, of the
cash and Temporary Cash Investments included in the
Collateral Net Proceeds that is required to be applied by
the Borrower to the prepayment of the principal amount of
the Loans pursuant to Section 2.09(b)(i) of the Credit
Agreement within 14 days after the consummation of such
Asset Sale and the date on which such prepayment is to be
made. If such request is not in connection with an Asset
Sale, the Collateral Agent shall release Collateral pursuant
to such request but only with the consent of the Releasing
Banks and the Non-Bank Secured Parties.
(ii) If such request is in connection with an
Asset Sale and such certificate states that no Default has
occurred and is continuing, the Collateral Agent shall
release Collateral pursuant to such request without the
consent of any Secured Party but only against delivery to
the Collateral Agent of (A) the Non-Bank Percentage of each
element (cash, Temporary Cash Investments and instruments)
of the Collateral Net Proceeds and (B) all other Collateral
Net Proceeds.
(iii) If such request is in connection with an
Asset Sale and such certificate states that a Default has
occurred and is continuing, the Collateral Agent shall
release Collateral pursuant to such request without the
consent of any Secured Party but only against delivery to
the Collateral Agent of all cash and other property
constituting the portion of the Net Proceeds of such Asset
Sale allocable to the Collateral to be released (as set
forth in such certificate).
(iv) All such cash shall be held in the Collateral
Account and any such other property shall be held by the
Collateral Agent as Proceeds, subject to the Lien hereof,
and
(A) in all cases, even if any other subclause
below would otherwise apply, if an Event of Default shall
occur and be continuing, applied pursuant to Section 11
hereof;
(B) in the case of any cash or Temporary Cash
Investments included in Collateral Net Proceeds held
pursuant to subclause (ii)(B), applied for the account of
the Borrower (after reducing any such Temporary Cash
Investments to cash) to make prepayments of the Loans
pursuant to Section 2.09(b)(i) of the Credit Agreement as
set forth in the related certificate of a Responsible
Officer;
(C) in the case of any instrument included in
Collateral Net Proceeds held pursuant to subclause (ii)(B),
all income thereon or other payments in respect thereof
shall be applied for the account of the Borrower to make
prepayments of the Loans pursuant to Section 2.09(b)(i) of
the Credit Agreement as shall be specified from time to time
in a certificate of a Responsible Officer;
(D) in the case of any cash, Temporary Cash
Investments and instruments held pursuant to clause (iii),
(1) an amount equal to the Non-Bank
Percentage of each element of the Collateral Net
Proceeds (determined as of the date the Collateral
Agent received such Proceeds) shall be retained by
the Collateral Agent until the termination of this
Agreement (and then paid to the Pledgor or as it
shall direct), provided that if the Collateral
Agent receives a certificate of a Responsible
Officer stating that the Non-Bank Secured
Obligations have been paid in full, any such cash
and Temporary Cash Investments shall be applied
for the account of the Borrower to make
prepayments of the Loans to the extent required by
Section 2.09(b)(i) of the Credit Agreement and the
balance, if any, paid to the Pledgor or as it
shall direct and any instruments shall be applied
as set forth in the immediately preceeding clause
(C), and
(2) as to the balance, if a Responsible
Officer shall subsequently certify that no Default
has occurred and is continuing, any such cash and
Temporary Cash Investments shall be applied for
the account of the Borrower to make prepayments of
the Loans to the extent required by Section
2.09(b)(i) of the Credit Agreement and the
balance, if any, paid to the Pledgor or as it
shall direct and any instruments shall be applied
as set forth in the immediately preceding clause
(C), and
(E) in the case of any cash or other property
held pursuant to subclause (ii)(A), applied as set forth in
subclause (1) of the immediately preceding clause (D).
(iv) All such cash shall be held in the Collateral
Account and any such other property shall be held by the
Collateral Agent as Proceeds, subject to the Lien hereof,
and (A) if an Event of Default shall occur and be contin-
uing, applied pursuant to Section 13 hereof and (B) if a
Responsible Officer shall subsequently certify that no
Default has occurred and is continuing, paid to the Pledgor
or as it shall direct, except for any cash held pursuant to
subclause (ii), which shall be retained by the Collateral
Agent until the earlier of the termination of this Agreement
and the receipt by the Collateral Agent of a certificate of
a Responsible Officer stating that the Non-Bank Secured
Obligations have been paid in full (and at that time paid to
the Pledgor or as it shall direct).
(c) Upon any such termination of this Agreement or
release of Collateral, the Collateral Agent will, at the
expense of the Pledgor, deliver any certificates evidencing
Pledged Stock and any other Collateral held by it to the
Pledgor, and execute and deliver to the Pledgor such docu-
ments as the Pledgor shall reasonably request to evidence
the termination of this Agreement or the release of such
Collateral, as the case may be.
SECTION 17. Collateral Account
(a) There is hereby established with the Colla-
teral Agent a cash collateral account (the "Collateral
Account") in the name and under the control of the Colla-
teral Agent into which there shall be deposited from time to
time the cash proceeds of the Collateral required to be
delivered to the Collateral Agent pursuant to any provision
of this Agreement. Any income received by the Collateral
Agent with respect to the balance from time to time standing
to the credit of the Collateral Account, including any
interest or capital gains on Liquid Investments, shall
remain, or be deposited, in the Collateral Account. All
right, title and interest in and to the cash amounts on
deposit from time to time in the Collateral Account together
with any Liquid Investments from time to time made pursuant
to subsection (c) of this Section shall vest in the Colla-
teral Agent, shall constitute part of the Collateral here-
under and shall not constitute payment of the Secured
Obligations until applied thereto as hereinafter provided.
(b) Upon the occurrence and during the
continuation of an Event of Default, the Collateral Agent
shall, if so instructed by the Required Banks, apply or
cause to be applied (subject to collection) any or all of
the balance from time to time standing to the credit of the
Collateral Account in the manner specified in Section 13.
Upon the cure of such Event of Default, all Liquid
Investments held by the Collateral Agent in the Collateral
Account shall be reduced to cash and all cash amounts held
in the Collateral Account shall be promptly returned to the
Pledgor, provided that any Liquid Investments or cash held
in the Collateral Account arising out of matters of the
character described in Section 7 or 16 shall be applied as
provided therein.
(c) Amounts on deposit in the Collateral Account
shall be invested and re-invested from time to time in such
Liquid Investments as the Pledgor shall determine, which
Liquid Investments shall be held in the name and be under
the control of the Collateral Agent, provided that, if an
Event of Default has occurred and is continuing, the Colla-
teral Agent shall, if instructed by the Required Banks,
liquidate any such Liquid Securities and apply or cause to
be applied in the proceeds thereof to the payment of the
Secured Obligations in the manner specified in Section 13.
SECTION 18. Notices
All notices, requests and other communications to
any party hereunder shall be in writing (including bank
wire, telex, facsimile transmission or similar writing) and
shall be given to such party at its address or telex or
facsimile number set forth on the signature pages hereof.
Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is trans-
mitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsi-
mile transmission, when receipt of such transmission is
confirmed either orally or in writing, by the party recei-
ving such transmission, (iii) if given by mail, 72 hours
after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iv)
if given by any other means, when delivered at the address
specified in this Section; provided that notices to the
Collateral Agent shall not be effective until received.
SECTION 19. Waivers, Non-Exclusive Remedies
No failure on the part of the Collateral Agent to
exercise, and no delay in exercising and no course of deal-
ing with respect to, any right under this Agreement shall
operate as a waiver thereof; nor shall any single or partial
exercise by the Managing Agent of any right under the Credit
Agreement or the Collateral Agent under this Agreement or
any other Operative Agreement preclude the Collateral Agent
from any other or further exercise or the exercise of any
other right. The rights in this Agreement and the Credit
Agreement are cumulative and are not exclusive of any other
remedies provided by law.
SECTION 20. Successors and Assigns
This Agreement is for the benefit of the Colla-
teral Agent and the Secured Parties and their successors and
assigns, and in the event of an assignment of all or any of
the Secured Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be trans-
ferred with such indebtedness, provided that no counterparty
to an Interest Rate Protection Agreement or a Further Letter
of Credit Agreement shall be entitled to the benefits hereof
unless it is also a Bank. This Agreement shall be binding
on the Pledgor and its successors and assigns.
SECTION 21. Changes in Writing
Other than in respect of any release of Collateral
pursuant to Section 16 hereof, no amendment, modification,
supplement, termination or waiver of or to any provision of
this Agreement, nor consent to any departure by the Pledgor
therefrom, shall be effective unless in writing and signed
by the Collateral Agent and the Pledgor (with the requisite
consent, if any, of the Banks, the Required Banks or the
Releasing Banks required by Section 9.04 of the Credit
Agreement); provided that without the consent of the Banks
to whom a majority of the Interest Rate Obligations are
owed, no such amendment, modification, supplement, termina-
tion or waiver may (i) exclude the Interest Rate Obligations
from the definition of Secured Obligations or (ii) change
the provisions of clause Second of Section 13 hereof;
provided further that without the consent of the Banks to
whom a majority of the obligations under Further Letter of
Credit Agreements are owed, no such amendment, modification,
supplement, termination or waiver may (i) exclude any Fur-
ther Letter of Credit Agreement from the definition of
Secured Obligations or (ii) change the provisions of clause
Second of Section 13 hereof. Any amendment, modification or
supplement of or to any provision of this Agreement, any
waiver of any provision of this Agreement, and any consent
to any departure by the Pledgor from the terms of any provi-
sion of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which
made or given. Except where notice is specifically required
by this Agreement or any other Operative Agreement, no
notice to or demand on the Pledgor in any case shall entitle
the Pledgor to any other or further notice or demand in
similar or other circumstances.
SECTION 22. New York Law
This Agreement shall be construed in accordance
with and governed by the laws of the State of New York,
except as otherwise required by mandatory provisions of law
and except to the extent that remedies provided by the laws
of any jurisdiction other than New York are governed by the
laws of such jurisdiction.
SECTION 23. Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial
THE PLEDGOR HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. THE PLEDGOR IRREV-
OCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF
THE PLEDGOR AND THE COLLATERAL AGENT HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 24. Severability
If any provision hereof is invalid or unenforce-
able in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Collateral
Agent and the Secured Parties in order to carry out the
intentions of the parties hereto as nearly as may be
possible; and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other
jurisdiction.
SECTION 25. Counterparts
This Agreement may be signed in any number of
counterparts, each of which shall be an original, and all of
which taken together shall constitute a single instrument,
with the same effect as if the signatures thereto and hereto
were upon the same instrument.
SECTION 26. Obligations Absolute
All obligations of the Pledgor hereunder shall be
absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or
the like of the Pledgor;
(ii) any lack of validity or enforceability of
the Credit Agreement, any Letter of Credit, any Inter-
est Rate Protection Agreement, any Further Letter of
Credit Agreement or any other Operative Agreement, or
any other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Secured Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit
Agreement, any Letter of Credit, any Interest Rate
Protection Agreement, any Further Letter of Credit
Agreement or any other Operative Agreement, or any
other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of
any other collateral, or any release or amendment or
waiver of or consent to any departure from any guaran-
tee, for all or any of the Secured Obligations;
(v) any exercise or non-exercise, or any waiver
of any right, remedy, power or privilege under or in
respect of this Agreement, any Interest Rate Protection
Agreement, any Further Letter of Credit Agreement, or
any other Operative Agreement except as specifically
set forth in a waiver granted pursuant to the provi-
sions of Section 19 hereof; or
(vi) any other circumstances which might other-
wise constitute a defense available to, or a discharge
of, the Pledgor.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective auth-
orized officers as of the day and year first above written.
[SUBSIDIARY], as Pledgor
(a ___________ corporation)
By___________________________
Name: John M. Thompson
Title: Vice President
c/o FLEMING COMPANIES, INC.
P. O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
Attn: Treasurer
Telecopier: (405) 840-7202
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Collateral Agent
By_____________________________
Name: Michael C. Mauer
Title: Vice President
60 Wall Street
New York, New York 10260
Attention: Loan Department
Telex number: 177615
Telecopier: (212) 648-5336
<PAGE>
EXHIBIT H-1
FORM OF
BORROWER SECURITY AGREEMENT
[Intentionally omitted.]
<PAGE>
EXHIBIT H-2
FORM OF
SUBSIDIARY SECURITY AGREEMENT
AGREEMENT dated as of July 19, 1994, made by the
corporation identified as the Pledgor on the signature page
hereof, a corporation organized under the laws of the state
indicated on the signature page hereof (with its successors,
the "Pledgor"), in favor of MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Collateral Agent.
R E C I T A L S :
A. Pursuant to the Credit Agreement, dated as of
July 19, 1994 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among Fleming Companies, Inc.
(the "Borrower"), the Pledgor, the Banks listed therein, the
Agents listed therein and Morgan Guaranty Trust Company of
New York, as Managing Agent for the Banks, the Banks have
agreed (i) to make loans to the Pledgor up to an aggregate
principal amount of $2,200,000,000 and (ii) to issue certain
letters of credit for the account of the Borrower.
B. It is contemplated that the Borrower may enter
into one or more agreements ("Interest Rate Protection
Agreements") with one or more of the Banks (as hereinafter
defined) regarding the interest rates with respect to loans
under the Credit Agreement (all obligations of the Borrower
now existing or hereafter arising under such Interest Rate
Protection Agreements, collectively, the "Interest Rate
Obligations").
C. It is contemplated that the Borrower may have
or enter into one or more agreements ("Further Letter of
Credit Agreements") with one or more of the Banks to issue
certain letters of credit (in addition to those issuable
pursuant to the Credit Agreement) for the account of the
Borrower in an aggregate face amount of up to $160,000,000.
D. The Credit Agreement provides, among other
things, that one condition to its effectiveness is the
execution and delivery by the Pledgor of a Subsidiary
Guarantee Agreement (the "Guarantee Agreement") dated as of
July 19, 1994, pursuant to which the Pledgor guarantees
certain obligations of the Borrower more specifically set
forth therein (the "Guaranteed Obligations");
E. It is a condition precedent to the obligations
of the Banks to make the loans under the Credit Agreement
and a further condition precedent to any letters of credit
being issued under the Credit Agreement and may be a
condition precedent to any Bank entering into Interest Rate
Protection Agreements or entering into or maintaining
Further Letter of Credit Agreements that the Pledgor execute
and deliver this Agreement.
F. As a consequence of certain negative pledge
clauses in other instruments and agreements by which the
Borrower is bound, the Pledgor must secure certain other
obligations of the Borrower existing on the date hereof
equally and ratably with its obligations under the Guarantee
Agreement.
G. This Agreement is given by the Pledgor in favor
of the Collateral Agent for its benefit and the benefit of
the Secured Parties, to the extent provided for herein, to
secure the payment and performance of all of the Secured
Obligations (as hereinafter defined).
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing
premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
the Pledgor and the Collateral Agent hereby agree as
follows:
Section 1. Pledge. As collateral security for the
payment and performance when due of all the Secured
Obligations, the Pledgor hereby pledges, assigns, transfers
and grants to the Collateral Agent for the benefit of the
Secured Parties, a continuing first priority security
interest in and to all of the right, title and interest of
the Pledgor in, to and under the following (collectively,
the "Collateral"):
(a) each and every Receivable (as hereinafter
defined) now existing or hereafter arising from time to
time;
(b) all Inventory (as hereinafter defined)
now existing or hereafter acquired from time to time;
(c) the Collateral Account (as hereinafter
defined) and all cash deposited therein or other property
held therein from time to time;
(d) all Documents (as hereinafter defined)
relating to any of the foregoing; and
(e) all Proceeds (as hereinafter defined) of
any and all of the foregoing;
provided that the Collateral shall not include Excepted
Inventory and Excepted Receivables and provided further that
the Non-Bank Secured Parties shall be entitled to the
benefits of only the Security Interests in the Intercompany
Receivables Collateral.
Section 2. Secured Obligations. This Agreement
secures, and the Collateral is collateral security for, the
payment and performance in full when due, whether at stated
maturity, by acceleration or otherwise (including, without
limitation, the payment of interest and other amounts which
would accrue and become due but for the filing of a petition
in bankruptcy or the operation of the automatic stay under
Section 361(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a)), of (i) all obligations of the Pledgor now
existing or hereafter arising under or in respect of the
Guarantee Agreement, and all obligations of the Borrower now
existing or hereafter arising with respect to the principal
of and premium, if any, and interest on the Existing
Indenture Obligations (including, without limitation, the
Pledgor's obligations to pay principal, interest and all
other charges, fees, expenses, commissions, reimbursements,
premiums, indemnities and other payments related to or in
respect of the Guaranteed Obligations and (ii) without
duplication of the amounts described in clause (i), all
obligations of the Pledgor now existing or hereafter arising
under or in respect of this Agreement (the obligations
described in clauses (i) and (ii), collectively, the
"Secured Obligations").
Section 3. No Release. Nothing set forth in this
Agreement shall relieve the Pledgor from the performance of
any term, covenant, condition or agreement on the Pledgor's
part to be performed or observed under or in respect of any
of the Collateral or from any liability to any Person under
or in respect of any of the Collateral or shall impose any
obligation on the Collateral Agent or any Secured Party to
perform or observe any such term, covenant, condition or
agreement on the Pledgor's part to be so performed or
observed or shall impose any liability on the Collateral
Agent or any Secured Party for any act or omission on the
part of the Pledgor relating thereto or for any breach of
any representation or warranty on the part of the Pledgor
contained in this Agreement or any other Operative
Agreement, or under or in respect of the Collateral or made
in connection herewith or therewith. The obligations of the
Pledgor contained in this Section 3 shall survive the
termination of this Agreement and the discharge of the
Pledgor's other obligations under this Agreement and under
the other Operative Agreements.
Section 4. Supplements by the Collateral Agent.
The Pledgor hereby authorizes the Collateral Agent, without
relieving the Pledgor of any obligations hereunder, to file
financing statements, continuation statements and other
documents, relative to all or any part thereof, without the
signature of the Pledgor where permitted by law, and the
Pledgor shall make, execute, endorse, acknowledge, file or
refile or make available (or, upon the occurrence of an
Event of Default, deliver) to the Collateral Agent from time
to time such lists, descriptions and designations of the
Collateral, copies of warehouse receipts, receipts in the
nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory
assignments, supplements, additional security agreements
(but in this instance only where required by law),
conveyances, financing statements, transfer endorsements,
powers of attorney, certificates, reports and other
assurances or instruments and take such further steps
relating to the Collateral and other property or rights
covered by the security interests hereby granted, which the
Collateral Agent reasonably deems appropriate or advisable,
wherever required or permitted by law, in order to perfect
and preserve the rights and interests granted to the
Collateral Agent hereunder or to carry into effect the
purposes of this Agreement or better to assure and confirm
unto the Collateral Agent its respective rights, powers and
remedies hereunder. All of the foregoing shall be at the
sole cost and expense of the Pledgor.
Section 5. Representations, Warranties and
Covenants. The Pledgor represents, warrants and covenants
as follows:
(a) Corporate Existence and Power. The
Pledgor is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
(b) Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by
the Pledgor of this Agreement are within the Pledgor's
corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any
provisions of applicable law or regulation or of the
certificate of incorporation or by-laws of the Pledgor or
result in the creation or imposition of any Lien (other than
those contemplated by this Agreement) on any asset of the
Pledgor.
(c) Necessary Filings. Within 3 Business
Days of the date hereof, Pledgor shall cause the filing of
all filings, registrations and recordings necessary,
appropriate or requested by the Collateral Agent to create,
preserve, protect and perfect the security interest granted
by the Pledgor to the Collateral Agent hereby in respect of
the Collateral. Upon the filing of all such filings,
registrations and recordings, the security interest granted
to the Collateral Agent for the benefit of the Secured
Parties pursuant to this Agreement in and to the Collateral
shall constitute and hereafter will constitute a perfected
security interest therein, superior and prior to the rights
of all other Persons therein and subject to no other Liens
other than Permitted Liens.
(d) No Liens. The Pledgor is as of the date
hereof, and, as to Collateral acquired by it from time to
time after the date hereof, the Pledgor will be, the owner
of all Collateral free from any Lien or other right, title
or interest of any Person other than Permitted Liens, and
the Pledgor shall defend the Collateral against all claims
and demands, other than Permitted Liens, of all Persons at
any time claiming any interest therein adverse to the
Collateral Agent or any Secured Party.
(e) Other Financing Statements. There is no
financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the
Collateral other than financing statements relating to
Permitted Liens, and so long as any of the Secured
Obligations remain unpaid or the Commitments of the Banks to
make any Loan or to issue any Letter of Credit shall not
have expired, the Pledgor shall not execute, authorize or
permit to be filed in any public office any financing
statement (or similar statement or instrument of
registration under the law of any jurisdiction) or
statements relating to the Collateral, except financing
statements filed or to be filed in respect of and covering
Permitted Liens.
(f) Chief Executive Office; Records. Other
than at the locations set forth on Schedule A hereto, the
Pledgor does not maintain any executive offices except as
set forth on Schedule 5(f) hereto. The chief executive
office of the Pledgor is located at one of such executive
offices. The Pledgor shall not move any of those executive
offices, except to such new location as the Pledgor may
establish in accordance with the last sentence of this
Section 5(f). All tangible evidence of the Receivables
constituting Collateral of the Pledgor and the only original
books of account and records of the Pledgor relating to the
Collateral are, and will continue to be, kept at one or more
of such executive offices, or at any such new location for
such an executive office as the Pledgor may establish in
accordance with the last sentence of this Section 5(f); any
new location of an executive office so designated shall
constitute an amendment of Schedule 5(f) for all purposes
hereof. All Collateral of the Pledgor is, and will continue
to be, controlled and monitored (including, without
limitation, for general accounting purposes) from one or
more of such executive offices as are set forth on Schedule
5(f), as such Schedule may be amended from time to time.
The Pledgor shall not establish a new location for any of
its executive offices nor shall it change its name until (i)
it shall have given the Collateral Agent not less than 20
days' prior written notice of its intention so to do,
clearly describing such new location or name and providing
such other information in connection therewith as the
Collateral Agent may request, and (ii) with respect to such
new location or name, the Pledgor shall have taken all
action satisfactory to the Collateral Agent or the Required
Banks to maintain the perfection and priority of the
security interest of the Collateral Agent for the benefit of
the Secured Parties in the Collateral intended to be granted
hereby.
(g) Location of Inventory. All Inventory
(other than Inventory constituting Excepted Inventory and
Excepted Receivables) held on the date hereof by the Pledgor
is located at one of the locations shown on Schedule A
hereto, except for Inventory in transit in the ordinary
course of business to or from one or more of such locations.
All Inventory now held or subsequently acquired shall be
kept at one of the locations shown on Schedule A hereto,
except for Inventory in transit in the ordinary course of
business to or from one or more of such locations, or such
new location as the Pledgor may establish if (i) in the case
of any location not within a jurisdiction covered by
financing statements filed pursuant to this Agreement, it
shall have given to the Collateral Agent at least 10 days'
prior written notice of its intention so to do, clearly
describing such new location and providing such other
information in connection therewith as the Collateral Agent
may request and, in the case of any other location, it gives
the Collateral Agent written notice of such location within
10 days after such action, and (ii) with respect to such new
location, the Pledgor shall have taken all action
satisfactory to the Collateral Agent or the Required Banks
to maintain the perfection and priority of the security
interest in the Collateral intended to be granted hereby.
(h) Authorization, Enforceability. The
Pledgor has the requisite corporate power, authority and
legal right to pledge and grant a security interest in all
the Collateral pursuant to this Agreement, and this
Agreement constitutes the legal, valid and binding
obligation of the Pledgor, enforceable against the Pledgor
in accordance with its terms.
(i) No Consents, etc. No consent of any
party (including, without limitation, stockholders or
creditors of the Pledgor or any account debtor under a
Receivable) and no consent, authorization, approval, or
other action by, and no notice to or filing with, any
governmental authority or regulatory body or other Person is
required either (x) for the pledge by the Pledgor of the
Collateral pursuant to this Agreement or for the execution,
delivery or performance of this Agreement by the Pledgor, or
(y) for the exercise by the Collateral Agent of the rights
provided for in this Agreement, or (z) for the exercise by
the Collateral Agent of the remedies in respect of the
Collateral pursuant to this Agreement.
(j) Collateral. All information set forth
herein, including the Schedules annexed hereto, and all
information contained in any documents, schedules and lists
heretofore delivered to any Secured Party in connection with
this Agreement, in each case, relating to the Collateral, is
accurate and complete in all respects.
(k) Initial Evidence of Collateral. Other
than in connection with the sale or lease of equipment or
the sale or lease of, or provision of services in connection
with, Computer Equipment, all of the Pledgor's rights to
payment for goods sold or services performed (other than for
services provided in connection with sales or leases of
Computer Equipment) are and will be initially evidenced by
only accounts, provided that in connection with the
refurbishment or expansion of an existing store supplied by
the Pledgor or the initial stocking of a store not
previously supplied by the Pledgor, the Pledgor may sell a
stock of inventory in consideration for a retailer note or
chattel paper.
Section 6. Special Provisions Concerning
Receivables.
(a) Maintenance of Records. The Pledgor
shall keep and maintain at its own cost and expense
satisfactory and complete records of each Receivable, in a
manner consistent with prudent business practices, and the
Pledgor shall make the same available to the Collateral
Agent for inspection, at the Pledgor's sole cost and
expense, during customary business hours upon demand. Upon
the occurrence and during the continuance of an Event of
Default, the Pledgor shall, at the Pledgor's sole cost and
expense, deliver all tangible evidence of Receivables,
including, without limitation, all documents evidencing
Receivables and any books and records relating thereto, to
the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by the
Pledgor) at any time upon the demand of the Required Banks.
Upon the cure or waiver of any Event of Default, the
Collateral Agent shall promptly return all evidence and
books and records to the Pledgor. Upon the occurrence and
during the continuance of an Event of Default, the
Collateral Agent, with the consent of the Required Banks,
may transfer a full and complete copy of the Pledgor's
books, records, credit information, reports, memoranda and
all other writings relating to the Receivables to and for
the use by any Person that has acquired or is contemplating
acquisition of an interest in the Receivables or the
Collateral Agent's security interest therein without the
consent of the Pledgor.
(b) Modification of Terms, etc. The Pledgor
shall not rescind or cancel any indebtedness evidenced by
any Receivable constituting part of the Collateral or modify
any term thereof or make any adjustment with respect
thereto, or extend or renew any such indebtedness or
compromise or settle any dispute, claim, suit or legal
proceeding relating thereto other than in the ordinary
course of business consistent with past practice. The
Pledgor shall timely fulfill all obligations on its part to
be fulfilled under or in connection with the Receivables.
(c) Collection. The Pledgor shall take all
actions to cause to be collected from the account debtor of
each of the Receivables constituting part of the Collateral,
as and when due (including, without limitation, Receivables
that are delinquent, such Receivables to be collected in
accordance with generally accepted commercial collection
procedures), any and all amounts owing under or on account
of such Receivable, and apply forthwith upon receipt thereof
all such amounts as are so collected to the outstanding
balance of such Receivable. Subject to the rights of the
Collateral Agent hereunder upon the occurrence of an Event
of Default, the Pledgor may, with respect to a Receivable
constituting part of the Collateral, allow in the ordinary
course of business (i) a refund or credit due as a result of
returned or damaged or defective merchandise and (ii) such
extension of time to pay amounts due in respect of such
Receivables and such other modifications of payment terms or
settlements in respect of such Receivables as shall be
commercially reasonable in the circumstances, all in
accordance with the Pledgor's ordinary course of business
consistent with its collection practices as in effect from
time to time. The costs and expenses (including, without
limitation, attorney's fees) of collection, in any case,
whether incurred by the Pledgor, the Collateral Agent or any
Secured Party, shall be paid by the Pledgor.
(d) Instruments. If the Pledgor receives
from any Person any instrument or chattel paper in exchange
or substitution for or in payment or other satisfaction of
any account constituting part of the Collateral and, after
giving effect thereto the aggregate outstanding face amount
of all such instruments and chattel paper received from such
Person and its Affiliates by the Pledgor exceeds $125,000,
the Pledgor shall deliver to the Collateral Agent, within 10
days after receipt of the instrument or chattel paper in
question by the Pledgor, all such instruments and chattel
paper. Any instrument or chattel paper delivered to the
Collateral Agent pursuant to this Section 6(d) shall be
appropriately endorsed (if applicable) to the order of the
Collateral Agent, as agent for the Secured Parties, and
shall be held by the Collateral Agent as further security
hereunder. If there is a bank or trust company located in
Oklahoma City, satisfactory to the Collateral Agent in its
reasonable discretion, willing and able to serve, on terms
satisfactory to the Collateral Agent in its reasonable
discretion, as a co-agent pursuant to Section 30, the
Collateral Agent shall, if so requested by or on behalf of
the Pledgor, appoint such a bank as co-agent for purposes of
holding such instruments and chattel paper in custody. The
Pledgor may, on at least three Domestic Business Days'
notice to the Collateral Agent or any such co-agent, as the
case may be (or such shorter period as may be agreed to by
the Collateral Agent or any such co-agent from time to time
or in any particular instance), obtain redelivery of any
such instrument or chattel paper to it for purposes of
cancellation or surrender to the maker thereof either in
exchange for a substitute note or against payment thereof.
(e) Upon the occurrence and during the
continuance of an Event of Default, if the Collateral Agent,
at the request of the Required Banks, so directs, the
Pledgor shall cause all payments on account of the
Receivables constituting part of the Collateral to be held
by the Collateral Agent as cash collateral in the Collateral
Account, upon acceleration or otherwise. Without notice to
or assent by the Pledgor, the Collateral Agent may apply any
or all amounts then or thereafter held as cash collateral in
the manner provided in Section 11. The costs and expenses
(including, without limitation, reasonable attorney's fees)
of collection, whether incurred by the Collateral Agent or
any Secured Party, shall be paid by the Pledgor.
Section 7. Provisions Concerning All Collateral.
(a) Protection of the Collateral Agent's
Security. The Pledgor shall not take any action that
impairs the rights of the Collateral Agent or any Secured
Party in the Collateral. The Pledgor shall at all times
keep the Inventory insured at the Pledgor's own expense, to
the Collateral Agent's reasonable satisfaction, against
fire, theft and all other risks to which the Collateral may
be subject, in such amounts and with such deductibles as
would be maintained by operators of businesses similar to
the business of the Pledgor. Within 30 days of the date
hereof, each policy or certificate with respect to such
insurance shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral
Agent as an additional insured and as provided in the next
succeeding sentence) and such policy or certificate shall be
delivered to the Collateral Agent. Each such policy shall
state that (i) it cannot be canceled without 30 days prior
written notice to the Collateral Agent, (ii) no claim in
excess of $25,000,000 shall be settled with the insurance
provider without the prior consent of the Collateral Agent
and (iii) the Collateral Agent shall be a loss payee on any
claim in excess of $25,000,000. At least 10 days prior to
the expiration of any such policy of insurance, the Pledgor
shall deliver to the Collateral Agent either (i) an
extension or renewal policy or an insurance certificate
evidencing renewal or extension of such policy, or (ii)
notice that such policy has not been extended or renewed.
If such policy has not been extended or renewed, the Pledgor
agrees to consult with the Collateral Agent, and to furnish
any information that the Collateral Agent may request, as to
the status of negotiations with such insurance provider. If
the Pledgor shall fail to insure such Collateral in
accordance with prudent industry practices or if the Pledgor
shall fail to so endorse and deposit, or to extend or renew
prior to expiration, all such insurance policies or
certificates with respect thereto, the Collateral Agent
shall have the right (but shall be under no obligation) to
advance funds to procure or renew or extend such insurance
and the Pledgor agrees to reimburse the Collateral Agent for
all costs and expenses thereof, with interest on all such
funds from the date advanced until paid in full at 1% plus
the rate that would be applicable to Tranche A Base Rate
Loans under the Credit Agreement.
(b) Upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent, as
directed by the Required Banks, shall have the option to
apply any proceeds of insurance received by it pursuant to
this Agreement toward the payment of the Secured Obligations
in accordance with Section 11 hereof or to continue to hold
such proceeds in the Collateral Account as additional
collateral to secure the performance by the Pledgor of the
Secured Obligations. So long as no Event of Default shall
have occurred and be continuing, the Pledgor shall have the
option (i) to direct the Collateral Agent to apply any
proceeds of insurance received by it toward payment of the
Secured Obligations in accordance with Section 11 hereof or
(ii) to elect, by delivery of written notice to the
Collateral Agent, to apply the proceeds of such insurance to
the repair or replacement of the item or items of Collateral
in respect of which such proceeds were received. In the
event that the Pledgor elects to apply such proceeds to the
repair or replacement of any item of Collateral pursuant to
clause (ii) of the preceding sentence, the Collateral Agent
shall release such proceeds from the Collateral Account as
soon as practicable following its receipt of the Pledgor's
written notice of such election. The Pledgor shall upon its
receipt of such proceeds promptly commence and diligently
continue to perform such repair or promptly effect such
replacement.
(c) Payment of Taxes; Claims. The Pledgor
shall pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and
supplies) against, the Collateral. Notwithstanding the
foregoing, the Pledgor may at its own expense contest the
amount or applicability of any of the obligations described
in the preceding sentence by appropriate legal or
administrative proceedings, prosecution of which operates to
prevent the collection thereof and the sale or forfeiture of
the Collateral or any part thereof to satisfy the same;
provided, however, that in connection with such contest, the
Pledgor shall, at the option and upon the request of the
Collateral Agent (a) have made provision for the payment of
such contested amount on the Pledgor's books if and to the
extent required by generally accepted accounting principles,
and (b) upon the occurrence and continuance of an Event of
Default, have deposited with the Collateral Agent in the
Collateral Account a sum sufficient to pay and discharge
such obligation and the Collateral Agent's estimate of all
interest and penalties related thereto, if requested by the
Required Banks.
(d) Financing Statements. The Pledgor shall
sign and deliver to the Collateral Agent such financing and
continuation statements, in form acceptable to the
Collateral Agent, as may from time to time be required to
continue and maintain a valid, enforceable, first priority
security interest in the Collateral as provided herein and
the other rights, as against third parties (other than
Permitted Liens), provided hereby, all in accordance with
the Uniform Commercial Code as enacted in any and all
relevant jurisdictions or any other relevant law. The
Pledgor shall pay any applicable filing fees and other
expenses related to the filing of such financing and
continuation statements. The Pledgor authorizes the
Collateral Agent to file any such financing or continuation
statements without the signature of the Pledgor where
permitted by law.
(e) Warehouse Receipts Non-Negotiable. If
any warehouse receipt or receipt in the nature of a
warehouse receipt is issued with respect to any of the
Inventory, the Pledgor shall not permit such warehouse
receipt or receipt in the nature thereof to be negotiable.
Section 8. Transfers and Other Liens. Except in
connection with sales and other dispositions permitted by
the Credit Agreement, the Pledgor shall not (i) sell,
convey, assign or otherwise dispose of, or grant any option
with respect to, any of the Collateral other than sales and
other dispositions of Inventory in the ordinary course of
business or (ii) create or permit to exist any Lien upon or
with respect to any of the Collateral other than Permitted
Liens and the Lien and security interest granted to the
Collateral Agent under this Agreement.
Section 9. Reasonable Care. The Collateral Agent
shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession
if such Collateral is accorded treatment substantially
equivalent to that which the Collateral Agent, in its
individual capacity, accords its own property, it being
understood that the Collateral Agent shall not have
responsibility for taking any necessary steps to preserve
rights against any Person with respect to any Collateral.
Section 10. Remedies Upon Default; Obtaining the
Collateral Upon Event of Default. (a) If an Event of
Default shall have occurred and be continuing, then and in
every such case, the Collateral Agent, upon being instructed
to do so by the Required Banks, may:
(i) Personally, or by agents or attorneys,
immediately take possession of the Collateral, or
any part hereof, from the Pledgor or any other
Person who then has possession of any part thereof
with or without notice or process of law, and for
that purpose enter upon the Pledgor's premises
where any of the Collateral is located and remove
such Collateral and use in connection with such
removal any and all services, supplies, aids and
other facilities of the Pledgor.
(ii) Instruct the obligor or obligors on any
agreement, instrument or other obligation
(including, without limitation, the Receivables)
constituting the Collateral to make any payment
required by the terms of such instrument or
agreement directly to the Collateral Agent;
provided, however, that in the event that any such
payments are made directly to the Pledgor, prior to
receipt by any such obligor of such instruction,
the Pledgor shall segregate all amounts received
pursuant thereto in a separate account and pay the
same promptly to the Collateral Agent.
(iii) Sell, assign or otherwise liquidate, or
direct the Pledgor to sell, assign or otherwise
liquidate, any or all investments made in whole or
in part with the Collateral or any part thereof,
and take possession of the proceeds of any such
sale, assignment or liquidation.
(iv) Take possession of the Collateral or any
part thereof, by directing the Pledgor in writing
to deliver the same to the Collateral Agent at any
place or places designated by the Collateral Agent,
in which event the Pledgor shall at its own
expense: (a) forthwith cause the same to be moved
to the place or places so designated by the
Collateral Agent and there be delivered to the
Collateral Agent; (b) store and keep any Collateral
so delivered to the Collateral Agent at such place
or places pending further action by the Collateral
Agent; and (c) while the Collateral shall be so
stored and kept, provide such security and
maintenance services as shall be necessary to
protect the same and to preserve and maintain them
in good condition. The Pledgor's obligation to
deliver the Collateral is of the essence of this
Agreement. Upon application to a court of equity
having jurisdiction, the Collateral Agent shall be
entitled to a decree requiring specific performance
by the Pledgor of such obligation.
(b) Remedies; Disposition of the Collateral.
(i) Upon the occurrence and continuance
of an Event of Default, the Collateral Agent, upon
being instructed to do so by the Required Banks,
may from time to time exercise in respect of the
Collateral, in addition to other rights and
remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured
party under the Uniform Commercial Code as enacted
in any and all relevant jurisdictions or under any
other relevant law at the time of an event of
default, and the Collateral Agent may also in its
sole discretion, without notice except as specified
below, (i) withdraw all cash in the Collateral
Account and apply such cash and any other cash held
by it as Collateral as specified in Section 11 and
(ii) if there is no such cash, or if such cash is
insufficient to pay all the Secured Obligations,
sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any
exchange, broker's board or at any of the
Collateral Agent's offices or elsewhere, for cash,
on credit or for future delivery, and at such price
or prices and upon such other terms as the
Collateral Agent may deem commercially reasonable.
The Collateral Agent or any other Secured Party or
any of their respective Affiliates may be the
purchaser of any or all of the Collateral at any
such sale and shall be entitled, for the purpose of
bidding and making settlement or payment of the
purchase price for all or any portion of the
Collateral sold at such sale, to use and apply any
of the Secured Obligations owed to such Person as a
credit on account of the purchase price of any
Collateral payable by such Person at such sale.
Each purchaser at any such sale shall acquire the
property sold absolutely free from any claim or
right on the part of the Pledgor, and the Pledgor
hereby waives, to the fullest extent permitted by
law, all rights of redemption, stay or appraisal
hereafter enacted. The Collateral Agent shall not
be obligated to make any sale of Collateral
regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or
private sale from time to time by announcement at
the time and place fixed therefor, and such sale
may, without further notice, be made at the time
and place to which it was so adjourned. The
Pledgor hereby waives, to the fullest extent
permitted by law, any claims against the Collateral
Agent arising by reason of the fact that the price
at which any Collateral may have been sold at such
a private sale was less than the price which might
have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received
and does not offer such Collateral to more than one
offeree.
(ii) The Pledgor agrees that, to the
extent notice of sale shall be required by law, 5
days' notice from the Collateral Agent of the time
and place of any public sale or of the time after
which a private sale or other intended disposition
is to take place shall be commercially reasonable
notification of such matters. No notification need
be given to the Pledgor if it has signed, after the
occurrence of an Event of Default, a statement
renouncing or modifying any right to notification
of sale or other intended disposition.
(c) Waiver of Claims. Except as otherwise
provided herein, the Pledgor hereby waives, to the fullest
extent permitted by applicable law, notice or judicial
hearing in connection with the Collateral Agent's taking
possession of any of the Collateral or of the Collateral
Agent's disposition of any of the Collateral, including,
without limitation, any and all prior notice and hearing for
any prejudgment remedy or remedies and any such right which
the Pledgor would otherwise have under law, and the Pledgor
hereby further waives, to the fullest extent permitted by
applicable law: (i) all damages occasioned by such taking of
possession; (ii) all other requirements as to the time,
place and terms of sale or other requirements with respect
to the enforcement of the Collateral Agent's rights
hereunder; and (iii) all rights of redemption, appraisal,
valuation, stay, extension or moratorium now or hereafter in
force under any applicable law. Any sale of, or the grant
of options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of
the Pledgor therein and thereto, and shall be a perpetual
bar both at law and in equity against the Pledgor and
against any and all Persons claiming or attempting to claim
the Collateral so sold, optioned or realized upon, or any
part thereof, from, through or under the Pledgor.
Section 11. Application of Proceeds. (a) The
proceeds received by the Collateral Agent in respect of any
sale of, collection from or other realization upon all or
any part of the Collateral pursuant to the exercise by the
Collateral Agent of its remedies as a secured creditor as
provided in Section 10 hereof (or held by it pursuant to
Section 18 hereof) and any cash held in the Collateral
Account shall be applied, together with any other sums then
held by the Collateral Agent pursuant to this Agreement,
promptly by the Collateral Agent while an Event of Default
has occurred and is continuing, upon being instructed to do
so by the Required Banks, as follows:
First, to the payment of all costs and
expenses, fees, commissions and taxes of such sale,
collection or other realization, including, without
limitation, reasonable compensation to the
Collateral Agent and its agents and counsel, and
all expenses, liabilities and advances made or
incurred by the Collateral Agent in connection
therewith, together with interest on each such
amount at 1% plus the rate that would be applicable
to Tranche A Base Rate Loans under the Credit
Agreement from and after the date such amount is
due, owing or unpaid until paid in full;
Second,
(a) in the case of any Intercompany
Receivables Collateral, to pay the Secured
Obligations ratably (or provide for the payment
thereof pursuant to subsection (b) of this
Section), until payment in full of all such Secured
Obligations shall have been made (or so provided
for), provided that before making any payment
pursuant to this subclause (a) of clause Second
ratably to the holders of the Secured Obligations,
the Collateral Agent shall first apply solely to
the Non-Bank Secured Obligations any amount held by
it pursuant to subclause (ii)(A) of Section 18(b)
and provided further that in the case of a
Guaranteed Obligation that is in respect of an
Interest Rate Protection Agreement, the principal
amount outstanding to a Bank under such Interest
Rate Protection Agreement at the time any such
payments are to be distributed in accordance with
this subclause (a) of clause Second shall be the
amount of the Borrower's obligations then due and
payable (including any early termination payments
then due) to such Bank under such Interest Rate
Protection Agreement; and
(b) in the case of any Bank Collateral, to pay
the Secured Obligations (other than the Non-Bank
Secured Obligations) ratably (or provide for the
payment thereof pursuant to subsection (b) of this
Section), until payment in full of all such Secured
Obligations shall have been made (or so provided
for); provided that in the case of a Guaranteed
Obligation that is in respect of an Interest Rate
Protection Agreement, the principal amount
outstanding to a Bank under such Interest Rate
Protection Agreement at the time any such payments
are to be distributed in accordance with this
subclause (b) of clause Second shall be the amount
of the Borrower's obligations then due and payable
(including any early termination payments then due)
to such Bank under such Interest Rate Protection
Agreement; and
Third, to the Pledgor, or its successors or
assigns, or to whomsoever may be lawfully entitled
to receive the same or as a court of competent
jurisdiction may direct, of any surplus then
remaining from such proceeds.
(b) If at any time any monies collected or
received by the Collateral Agent would, but for the
provisions of this subsection (b), be payable pursuant to
subsection (a) of this Section in respect of any Contingent
Secured Obligation, the Collateral Agent shall not apply
such monies to pay such Contingent Secured Obligation but
instead shall hold such monies in the Collateral Account.
The Collateral Agent shall so hold all such monies until
such time as the holder of such Contingent Secured
Obligation advises the Collateral Agent (with at least three
Business Days' prior notice to the Pledgor) that all or a
specified part of such Contingent Secured Obligation has
become a Non-Contingent Secured Obligation, whereupon the
Collateral Agent shall apply the amount so held to pay such
Non-Contingent Secured Obligation; provided that, if the
other Secured Obligations theretofore paid pursuant to
subsection (a) were not paid in full, the Collateral Agent
shall apply the amount so held to pay the same percentage of
such Non-Contingent Secured Obligation as the percentage of
such other Secured Obligations theretofore paid pursuant to
subsection (a). If (i) the holder of such Contingent
Secured Obligation shall advise the Collateral Agent (with
at least three Business Days' prior notice to the Pledgor)
that no portion thereof remains in the category of a
Contingent Secured Obligation and (ii) any amount held
pursuant to this subsection (b) in respect of such
Contingent Secured Obligation remains after payment of all
ratable amounts payable pursuant to the preceding sentence
with respect to any portions thereof that became Non-
Contingent Secured Obligations, such remaining amount shall
be applied by the Collateral Agent in the order of
priorities set forth in subsection (a) of this Section.
(c) In making the payments and allocations
required by this Section, the Collateral Agent may, (i) as
to any Guaranteed Obligations arising under an Interest Rate
Protection Agreement or Further Letter of Credit Agreement,
rely upon information from the applicable counterparty
identified by the Pledgor pursuant to the Guarantee
Agreement, and (2) as to any Existing Indenture Obligations,
rely upon information from the Trustee under the applicable
Existing Debt Indenture and shall have no liability to the
Pledgor or any other Secured Party for actions taken in
reliance on such information except in the case of its gross
negligence or willful misconduct. All distributions made by
the Collateral Agent pursuant to this Section shall be final
(except in the event of manifest error) and the Collateral
Agent shall have no duty to inquire as to the application by
the Secured Parties of any amount distributed to them.
Section 12. Expenses. The Pledgor will upon
demand pay to the Collateral Agent the amount of any and all
expenses, including the fees and expenses of its counsel and
the fees and expenses of any experts and agents which the
Collateral Agent may incur in connection with (i) the
collection of the Secured Obligations, (ii) the enforcement
and administration of this Agreement, (iii) the custody or
preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iv) the exercise
or enforcement of any of the rights of the Collateral Agent
or any Secured Party hereunder or (v) the failure by the
Pledgor to perform or observe any of the provisions hereof.
All amounts payable by the Pledgor under this Section 12
shall be due upon demand (and if not timely paid shall bear
interest at 1% plus the rate that would be applicable to
Tranche A Base Rate Loans under the Credit Agreement) and
shall be part of the Secured Obligations. The Pledgor's
obligations under this Section shall survive the termination
of this Agreement and the discharge of the Pledgor's other
obligations hereunder.
Section 13. No Waiver; Cumulative Remedies.
(a) No failure on the part of the Collateral
Agent to exercise, no course of dealing with respect to, and
no delay on the part of the Collateral Agent in exercising,
any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by
law.
(b) In the event the Collateral Agent shall
have instituted any proceeding to enforce any right, power
or remedy under this Agreement by foreclosure, sale, entry
or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in
every such case, the Pledgor, the Collateral Agent and each
holder of any of the Secured Obligations shall be restored
to their respective former positions and rights hereunder
with respect to the Collateral, and all rights, remedies and
powers of the Collateral Agent and the Secured Parties shall
continue as if no such proceeding had been instituted.
Section 14. The Collateral Agent. The Collateral
Agent has been appointed as collateral agent pursuant to the
Credit Agreement. The actions of the Collateral Agent
hereunder are subject to the provisions of the Credit
Agreement (including in particular Article VII thereof).
The obligations of the Collateral Agent hereunder are only
those expressly set forth herein. In any case in which the
Collateral Agent is authorized to exercise any power or
discretion, the Collateral Agent may refuse from such
exercise unless directed in writing by the Required Banks to
act in the manner specified in such direction. The
Collateral Agent shall have the right hereunder to make
demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking
action (including, without limitation, the release or
substitution of Collateral), in accordance with this
Agreement and the Credit Agreement. The Collateral Agent
may resign and a successor Collateral Agent may be appointed
in the manner provided in the Credit Agreement. Upon the
acceptance of any appointment as Collateral Agent by a
successor Collateral Agent, that successor Collateral Agent
shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring
Collateral Agent under this Agreement, and the retiring
Collateral Agent shall thereupon be discharged from its
duties and obligations under this Agreement. After any
retiring Collateral Agent's resignation, the provisions of
this Agreement shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement
while it was the Collateral Agent.
Section 15. Collateral Agent May Perform;
Collateral Agent Appointed Attorney-in-Fact. If the Pledgor
shall fail to do any act or thing that it has covenanted to
do hereunder or if any warranty on the part of the Pledgor
contained herein shall be breached, the Collateral Agent if
required by the Required Banks may (but shall not be
obligated to) upon three Business Days notice to the Pledgor
specifying the action to be taken, do the same or cause it
to be done or remedy any such breach, and may expend funds
for such purpose. Any and all amounts so expended by the
Collateral Agent shall be paid by the Pledgor promptly upon
demand therefor, with interest at 1% plus the rate that
would be applicable to Tranche A Base Rate Loans under the
Credit Agreement during the period from and including the
date on which such funds were so expended to the date of
repayment. The Pledgor's obligations under this Section 15
shall survive the termination of this Agreement and the
discharge of the Pledgor's other obligations under this
Agreement or any other Operative Agreement. The Pledgor
hereby appoints the Collateral Agent its attorney-in-fact,
with full authority in the place and stead of the Pledgor
and in the name of the Pledgor, or otherwise, from time to
time in the Collateral Agent's discretion to take any action
and to execute any instrument consistent with the terms of
this Agreement and the other Operative Agreements which the
Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement. The foregoing
grant and such appointment shall be irrevocable for the term
of this Agreement. The Pledgor hereby ratifies all that
such attorney shall lawfully do or cause to be done by
virtue hereof.
Section 16. Indemnity.
(a) Indemnity. The Pledgor agrees to
indemnify, pay and hold harmless the Collateral Agent and
each of the Secured Parties and the officers, directors,
employees, agents and affiliates of the Collateral Agent and
each of the Secured Parties (collectively called the
"Indemnitees") from and against any and all other
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs (including, without
limitation, settlement costs), expenses or disbursements of
any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for such
Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be
designated a party thereto), which may be imposed on,
incurred by, or asserted against that Indemnitee, in any
manner relating to or arising out of this Agreement or any
other Operative Agreement (including, without limitation,
any misrepresentation by the Pledgor in this Agreement or
any other Operative Agreement) (the "indemnified
liabilities"); provided that the Pledgor shall have no
obligation to an Indemnitee hereunder, with respect to
indemnified liabilities, if such indemnified liability arose
from the gross negligence or willful misconduct of that
Indemnitee. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any
law or public policy, the Pledgor shall contribute the
maximum which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all
indemnified liabilities incurred by the Indemnitees or any
of them.
(b) Survival. The obligations of the Pledgor
contained in this Section 16 shall survive the termination
of this Agreement and the discharge of the Pledgor's other
obligations under this Agreement and the other Operative
Agreements.
(c) Reimbursement. Any amounts paid by any
Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Secured Obligations secured
by the Collateral.
Section 17. Modification in Writing. Other than
in respect of any release of Collateral pursuant to Section
18 hereof, no amendment, modification, supplement,
termination or waiver of or to any provision of this
Agreement, nor consent to any departure by the Pledgor
therefrom, shall be effective unless in writing and signed
by the Collateral Agent and the Pledgor (with the requisite
consent, if any, of the Banks, the Required Banks or the
Releasing Banks required by Section 9.04 of the Credit
Agreement); provided that without the consent of the Banks
to whom a majority of the Interest Rate Obligations are
owed, no such amendment, modification, supplement,
termination or waiver may (i) exclude the Interest Rate
Obligations from the definition of Secured Obligations or
(ii) change the provisions of clause Second of Section 11
hereof; provided further that without the consent of the
Banks to whom a majority of the obligations under the
Further Letter of Credit Agreements are owed, no such
amendment, modification, supplement, termination or waiver
may (i) exclude any Further Letter of Credit Agreement from
the definition of Secured Obligations. or (ii) change the
provisions of clause Second of Section 11 hereof. Any
amendment, modification or supplement of or to any provision
of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by the Pledgor
from the terms of any provision of this Agreement, shall be
effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is
specifically required by this Agreement or any other
Operative Agreement, no notice to or demand on the Pledgor
in any case shall entitle the Pledgor to any other or
further notice or demand in similar or other circumstances.
Section 18. Termination; Release. (a) When all
the Credit Agreement Secured Obligations have been paid in
full and the Commitments of the Banks to make any Loan or to
issue any Letter of Credit under the Credit Agreement have
expired, or if earlier the occurrence of the Rating Target
Date, this Agreement shall terminate, except as expressly
set forth herein.
(b)(i) The Pledgor may from time to time prior
to the termination of this Agreement request the Collateral
Agent to release all or any of the Collateral, which request
shall be accompanied by a certificate of a Responsible
Officer stating (A) whether such release is requested in
connection with an Asset Sale, (B) whether a Default has
occurred and is continuing, (C) if such release is requested
in connection with an Asset Sale, identifying the cash,
Temporary Cash Investments and instruments comprising the
Net Proceeds of such Asset Sale that, in the good faith
determination of such Responsible Officer, are allocable to
the Collateral requested to be released (the "Collateral Net
Proceeds") and, if any of such Collateral is Intercompany
Receivables Collateral, the portion of the Collateral Net
Proceeds allocable to such Intercompany Receivables
Collateral (the "Intercompany Collateral Net Proceeds") and
(D) if such release is requested in connection with an Asset
Sale, the amount, if any, of the cash and Temporary Cash
Investments included in the Collateral Net Proceeds that is
required to be applied by the Borrower to the prepayment of
the principal amount of the Loans pursuant to Section
2.09(b)(i) of the Credit Agreement within 14 days after the
consummation of such Asset Sale and the date on which such
prepayment is to be made. If such request is not in
connection with an Asset Sale, the Collateral Agent shall
release Collateral pursuant to such request but only with,
if such Collateral does not include any Intercompany
Receivables Collateral, the consent of the Releasing Banks
and, if such Collateral does include any Intercompany
Receivables Collateral, the consent of the Releasing Banks
and the Non-Bank Secured Parties.
(ii) If such request is in connection with an
Asset Sale and such certificate states that no Default has
occurred and is continuing, the Collateral Agent shall
release Collateral pursuant to such request without the
consent of any Secured Party but only against delivery to
the Collateral Agent of (A) the Non-Bank Percentage of each
element (cash, Temporary Cash Investments and instruments)
of the Intercompany Collateral Net Proceeds (as set forth in
such certificate) and (B) all other Collateral Net Proceeds.
(iii) If such request is in connection with an
Asset Sale and such certificate states that a Default has
occurred and is continuing, the Collateral Agent shall
release Collateral pursuant to such request without the
consent of any Secured Party but only against delivery to
the Collateral Agent of all cash and other property
constituting the portion of the Net Proceeds of such Asset
Sale allocable to the Collateral to be released (as set
forth in such certificate).
(iv) All such cash shall be held in the
Collateral Account and any such other property shall be held
by the Collateral Agent as Proceeds, subject to the Lien
hereof, and
(A) in all cases, even if any other subclause
below would otherwise apply, if an Event of Default shall
occur and be continuing, applied pursuant to Section 11
hereof;
(B) in the case of any cash or Temporary Cash
Investments included in Collateral Net Proceeds held
pursuant to subclause (ii)(B), applied for the account of
the Borrower (after reducing any such Temporary Cash
Investments to cash) to make prepayments of the Loans
pursuant to Section 2.09(b)(i) of the Credit Agreement as
set forth in the related certificate of a Responsible
Officer;
(C) in the case of any instrument included in
Collateral Net Proceeds held pursuant to subclause (ii)(B),
all income thereon or other payments in respect thereof
shall be applied for the account of the Borrower to make
prepayments of the Loans pursuant to Section 2.09(b)(i) of
the Credit Agreement as shall be specified from time to time
in a certificate of a Responsible Officer;
(D) in the case of any cash, Temporary Cash
Investments and instruments held pursuant to clause (iii),
(1) an amount equal to the Non-Bank
Percentage of each element of the Intercompany
Collateral Net Proceeds (determined as of the
date the Collateral Agent received such
Proceeds) shall be retained by the Collateral
Agent until the termination of this Agreement
(and then paid to the Pledgor or as it shall
direct), provided that if the Collateral Agent
receives a certificate of a Responsible
Officer stating that the Non-Bank Secured
Obligations have been paid in full, any such
cash and Temporary Cash Investments shall be
applied for the account of the Borrower to
make prepayments of the Loans to the extent
required by Section 2.09(b)(i) of the Credit
Agreement and the balance, if any, paid to the
Pledgor or as it shall direct, and any
instruments shall be applied as set forth in
the immediately preceding clause (C), and
(2) as to the balance, if a Responsible
Officer shall subsequently certify that no
Default has occurred and is continuing, any
such cash and Temporary Cash Investments shall
be applied for the account of the Borrower to
make prepayments of the Loans to the extent
required by Section 2.09(b)(i) of the Credit
Agreement and the balance, if any, paid to the
Pledgor or as it shall direct and any
instruments shall be applied as set forth in
the immediately preceding clause (C), and
(E) in the case of any cash or other property
held pursuant to subclause (ii)(A), applied as set forth in
subclause (1) of the immediately preceding clause (D).
(c) Upon termination of this Agreement or any
release of Collateral in accordance with the provisions
hereof, the Collateral Agent shall, upon the request and at
the sole cost and expense of the Pledgor, forthwith assign,
transfer and deliver to the Pledgor, against receipt and
without recourse to or warranty by the Collateral Agent,
such of the Collateral to be released (in the case of a
release) as may be in possession of the Collateral Agent and
as shall not have been sold or otherwise applied pursuant to
the terms hereof, and, with respect to any other Collateral,
proper instruments (including Uniform Commercial Code
termination statements on Form UCC-3) acknowledging the
termination of this Agreement or the release of such
Collateral, as the case may be.
Section 19. Collateral Account.
(a) There is hereby established with the
Collateral Agent a cash collateral account (the "Collateral
Account") in the name and under the control of the
Collateral Agent into which there shall be deposited from
time to time the cash proceeds of the Collateral required to
be delivered to the Collateral Agent pursuant to any
provision of this Agreement. Any income received by the
Collateral Agent with respect to the balance from time to
time standing to the credit of the Collateral Account,
including any interest or capital gains on Liquid
Investments, shall remain, or be deposited, in the
Collateral Account. All right, title and interest in and to
the cash amounts on deposit from time to time in the
Collateral Account together with any Liquid Investments from
time to time made pursuant to subsection (c) of this Section
shall vest in the Collateral Agent, shall constitute part of
the Collateral hereunder and shall not constitute payment of
the Secured Obligations until applied thereto as hereinafter
provided.
(b) Upon the occurrence and during the
continuation of an Event of Default, the Collateral Agent
shall, if so instructed by the Required Banks, apply or
cause to be applied (subject to collection) any or all of
the balance from time to time standing to the credit of the
Collateral Account in the manner specified in Section 11.
Upon the cure of such Event of Default, all Liquid
Investments held by the Collateral Agent in the Collateral
Account shall be reduced to cash and all cash amounts held
in the Collateral Account shall be promptly returned to the
Pledgor, provided that any Liquid Investments or cash held
in the Collateral Account arising out of matters of the
character described in Section 6(d), 7(b) or 18 shall be
applied as provided therein.
(c) Amounts on deposit in the Collateral
Account shall be invested and re-invested from time to time
in such Liquid Investments as the Pledgor shall determine,
which Liquid Investments shall be held in the name and be
under the control of the Collateral Agent, provided that, if
an Event of Default has occurred and is continuing, the
Collateral Agent shall, if instructed by the Required Banks,
liquidate any such Liquid Securities and apply or cause to
be applied in the proceeds thereof to the payment of the
Secured Obligations in the manner specified in Section 11.
Section 20. Definitions. Capitalized terms used
and not defined herein shall have the meanings assigned to
them in the Credit Agreement. Unless otherwise defined
herein or in the Credit Agreement, or unless the context
otherwise requires, all terms used herein which are defined
in Article 9 of the New York Uniform Commercial Code as in
effect on the date hereof have the meanings stated therein.
The following terms shall have the following meanings.
"Bank Collateral" means all Collateral other
than Intercompany Receivables Collateral.
"Bank Secured Obligations" means the Secured
Obligations other than the Non-Bank Secured Obligations,
provided that at any time of determination no amount of the
Borrower's obligations under any Interest Rate Protection
Agreement shall be included in Bank Secured Obligations that
are Non-Contingent Secured Obligations unless such
obligations are then due and payable.
"Contingent Secured Obligation" means at any
time any Guaranteed Obligation (or portion thereof) that is
at such time:
(i) an obligation to reimburse a Bank for
drawings not yet made under a letter of credit
issued or to be issued by such Bank or
(ii) an obligation to provide collateral to or
for the benefit of a Bank to secure reimbursement
obligations arising from drawings not yet made
under a letter of credit issued or to be issued by
such Bank or to make any other payment to the
Issuing Bank that such Issuing Bank would not be
entitled to retain if no drawings were made under
the relevant letter of credit after the time of
determination.
"Credit Agreement Secured Obligations" means
the Secured Obligations arising under the Credit Agreement.
"Documents" shall mean all documents and all
books, records, ledgers, printouts, computer recording
media, data files, tapes, file materials and other papers
containing information relating to (a) Receivables and any
account debtors, beneficiaries and subcontractors in respect
thereof and (b) all other Collateral.
"Existing Debt Indentures" means (i) the
Indenture dated as of December 1, 1989, as supplemented to
the date hereof, from the Borrower to Morgan Guaranty Trust
Company of New York, as Trustee, and (ii) the Indenture
dated as of March 15, 1986, as supplemented to the date
hereof, from the Borrower to Morgan Guaranty Trust Company
of New York, as Trustee.
"Existing Indenture Obligations" means the
notes and debentures of the Borrower outstanding from time
to time under the Existing Debt Indentures, provided that
the term Existing Indenture Obligations shall not include
any such securities that are not issued and outstanding on
July 19, 1994 unless such securities have been issued in
exchange or substitution (which do not include any
refinancing or refunding) for any securities constituting
Existing Indenture Obligations that were outstanding on July
19, 1994.
"Intercompany Receivable" means any Receivable
the obligor of which is a Domestic Subsidiary (as defined in
the Existing Debt Indentures).
"Intercompany Receivables Collateral" means
the Intercompany Receivables, any instruments, chattel paper
or Document relating to any Intercompany Receivables and any
Proceeds of any thereof.
"Inventory" shall mean all inventory and, in
any event, shall include, without limitation, wherever
located, and whether now existing or hereafter acquired, all
raw materials, work in process, returned goods, finished
goods and consigned goods to the extent of the consignee's
interest therein, materials and supplies of any kind or
nature which are or might be used in connection with the
manufacture, printing, publication, packing, shipping,
advertising, selling or finishing of any such goods, and all
other products, goods, materials and supplies, provided,
however, that personal computers, electronic point-of-sale
equipment and related software and printers ("Computer
Equipment") shall not constitute Inventory.
"Liquid Investment" means (i) direct
obligations of the United States or any agency thereof, or
obligations guaranteed by the United Sates or any agency
thereof, (ii) commercial paper rated in the highest grade by
a nationally recognized credit rating agency or (iii) time
deposits with, including certificates of deposit issued by,
any office located in the United States of any bank or trust
company (including a bank or trust company acting as the
Collateral Agent or a co-agent hereunder) which is organized
under the laws of the United States or any state thereof and
has capital, surplus and undivided profits aggregating at
least $1,000,000,000; provided in each case that (x) such
Liquid Investment matures within 90 days from the date of
acquisition thereof and (y) in order to provide the
Collateral Agent, for the benefit of the Secured Parties,
with a perfected security interest therein, such Liquid
Investment is:
(1) evidenced by a certificate or instrument
which is negotiable, or if non-negotiable is issued
in the name of the Collateral Agent or its nominee,
and which (together with any appropriate
instruments of transfer) is delivered to, and held
by, the Collateral Agent or an agent thereof (which
shall not be the Pledgor or any of its Affiliates)
in the State of New York;
(2) issued by the U.S. Treasury in book-entry
form and subject to pledge under then-applicable
state law and Treasury regulations and held by the
Collateral Agent at a Federal Reserve Bank;
provided that the books of the Collateral Agent
reflect that such Treasury securities are held as
Collateral under this Agreement in compliance with
then applicable Treasury regulations regarding the
perfection of security interests in Treasury
securities; or
(3) otherwise issued, evidenced, registered
or recorded in such manner as will provide the
Collateral Agent, for the benefit of the Secured
Parties, with a perfected security interest
therein.
"Non-Bank Percentage" means, as of any time of
determination, the percentage obtained by dividing the
then-outstanding principal amount of the Non-Bank Secured
Obligations by the sum of the then-outstanding principal
amount of (a) the Non-Bank Secured Obligations and (b) any
Bank Secured Obligations that are Non-Contingent Secured
Obligations.
"Non-Bank Secured Obligations" means the
Secured Obligations held by the Non-Bank Secured Parties.
"Non-Bank Secured Parties" means the holders
from time to time of the Existing Indenture Obligations.
"Non-Contingent Secured Obligation" means at
any time any Secured Obligation (or portion thereof) that is
not a Contingent Secured Obligation at such time.
"Permitted Liens" means any Lien permitted by
clauses (a), (b), (c), (d), (e), (f), (g) and (o) of Section
5.10 of the Credit Agreement.
"Proceeds" shall mean all proceeds and, in any
event, shall include, without limitation, any and all (i)
proceeds of any insurance (except payments made to a Person
which is not a party to this Agreement), indemnity, warranty
or guaranty payable to the Collateral Agent or to the
Pledgor from time to time with respect to any of the
Collateral, (ii) payments (in any form whatsoever) made or
due and payable to the Pledgor from time to time in
connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral
by any governmental authority (or any person acting on
behalf of a governmental authority), (iii) instruments
representing obligations to pay amounts in respect of
Inventory or Receivables, (iv) products of the Collateral
and (v) other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Receivables" shall mean:
(a) all of the Pledgor's rights to payment for
goods sold or services performed by the Pledgor or any other
party, whether now in existence or arising from time to time
hereafter, evidenced by or consisting of accounts, together
with (i) all instruments or chattel paper received in
exchange or substitution for, or in payment or other
satisfaction of, any such account (but not including any
instrument or chattel paper arising out of a transaction of
the character described in the proviso to Section 5(k)), and
(ii) all of the Pledgor's rights under any guarantees,
indemnities, letters of credit or other collateral securing
the payment of any such account, provided that receivables
related to services provided in connection with the lease of
Computer Equipment shall not constitute Receivables
hereunder; and
(b) any chattel paper or instrument or any
right to receive a payment of money which constitutes an
account, contract right or general intangible, but only in
such instances where the obligor is the Borrower or a
Subsidiary, and all of the Pledgor's rights under any
guarantees, indemnities, letters of credit or other
collateral securing the payment of any thereof.
"Responsible Officer" means the Chairman of
the Board, the Vice Chairman of the Board, the Chief
Executive Officer, the Chief Financial Officer, the Chief
Operating Officer, the President or the Treasurer of the
Borrower.
"Secured Parties" means (i) the holders from
time to time of the Secured Obligations and (ii) the
Collateral Agent, provided that for purposes of any notice
to or consent required from the Non-Bank Secured Parties,
the Trustee under each Existing Debt Indenture at the time
in question shall be treated as the Non-Bank Secured Party
with respect to the Existing Indenture Obligations
thereunder and all payments to be made to or for the benefit
of any holder of an Existing Indenture Obligation shall be
made to the Trustee in question and the Collateral Agent
shall have no further responsibilities or liability with
respect thereto.
"Security Interests" means the security
interests in the Collateral granted hereunder securing the
Secured Obligations.
Section 21. Notices. Unless otherwise
provided herein or in the Credit Agreement, any notice or
other communication herein required or permitted to be given
shall be given in the manner set forth in the Credit
Agreement, if to the Pledgor, addressed to it at the address
set forth on the signature page of this Agreement, if to the
Collateral Agent, addressed to it at the address set forth
on the signature page of this Agreement or as to any party
at such other address as shall be designated by such party
in a written notice to the other party complying as to
delivery with the terms of this Section 21; provided that
notices to the Collateral Agent shall not be effective until
received by the Collateral Agent.
Section 22. Continuing Security Interest;
Assignment. This Agreement shall create a continuing
security interest in the Collateral and shall (i) be binding
upon the Pledgor, its successors and assigns, and (ii)
inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral
Agent and the other Secured Parties and each of their
respective successors, transferees and assigns; no other
Persons (including, without limitation, any other creditor
of the Pledgor) shall have any interest herein or any right
or benefit with respect hereto. Without limiting the
generality of the foregoing clause (ii), any Bank may assign
or otherwise transfer any indebtedness held by it secured by
this Agreement to any other Person, and such other Person
shall thereupon become vested with all the benefits in
respect thereof granted to such Bank, herein or otherwise,
subject however, with respect to any Bank, to the provisions
of the Credit Agreement and provided further that no
counterparty to an Interest Rate Protection Agreement or a
Further Letter of Credit Agreement shall be entitled to the
benefits hereof unless it is also a Bank.
Section 23. GOVERNING LAW; TERMS. THIS
AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS,
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 24. CONSENT TO JURISDICTION AND
SERVICE OF PROCESS. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST THE PLEDGOR WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT THE PLEDGOR ACCEPTS FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE COLLATERAL
AGENT TO BRING PROCEEDINGS AGAINST THE PLEDGOR IN THE COURTS
OF ANY OTHER JURISDICTION.
Section 25. Severability of Provisions. 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 26. Execution in Counterparts. This
Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered
shall be deemed to be an original, but all such counterparts
together shall constitute one and the same agreement.
Section 27. Headings. The Section headings
used in this Agreement are for convenience of reference only
and shall not affect the construction of this Agreement.
Section 28. Obligations Absolute. All
obligations of the Pledgor hereunder shall be absolute and
unconditional irrespective of:
(i) any bankruptcy, insolvency,
reorganization, arrangement, readjustment,
composition, liquidation or the like of the
Pledgor;
(ii) any lack of validity or enforceability
of the Credit Agreement, any Letter of Credit, any
Interest Rate Protection Agreement, any Further
Letter of Credit Agreement or any other Operative
Agreement, or any other agreement or instrument
relating thereto;
(iii) any change in the time, manner or place
of payment of, or in any other term of, all or any
of the Secured Obligations, or any other amendment
or waiver of or any consent to any departure from
the Credit Agreement, any Letter of Credit, any
Interest Rate Protection Agreement, any Further
Letter of Credit Agreement or any other Operative
Agreement, or any other agreement or instrument
relating thereto;
(iv) any exchange, release or non-perfection
of any other collateral, or any release or
amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Secured
Obligations;
(v) any exercise or non-exercise, or any
waiver of any right, remedy, power or privilege
under or in respect of this Agreement, any Interest
Rate Protection Agreement, any Further Letter of
Credit Agreement, or any other Operative Agreement
except as specifically set forth in a waiver
granted pursuant to the provisions of Section 17
hereof; or
(vi) any other circumstances which might
otherwise constitute a defense available to, or a
discharge of, the Pledgor.
Section 29. Future Advances. This Agreement
shall secure the payment of any amounts advanced from time
to time pursuant to the Credit Agreement or any Further
Letter of Credit Agreement.
Section 30. Appointment of Co-Agents. At any
time or times, in order to comply with any legal requirement
in any jurisdiction or in connection with Section 6(d), the
Collateral Agent may appoint another bank or trust company
or one or more other persons, either to act as co-agent or
co-agents, jointly with the Collateral Agent, or to act as
separate agent or agents on behalf of the Secured Parties
with such power and authority as may be necessary for the
effectual operation of the provisions hereof and may be
specified in the instrument of appointment (which may, in
the discretion of the Collateral Agent, include provisions
for the protection of such co-agent or separate agent
similar to the provisions of or incorporated by reference in
Section 14). Notwithstanding any such appointment but only
to the extent not inconsistent with such legal requirements
or, in the reasonable judgment of the Collateral Agent, not
unduly burdensome to it or any such co-agent, the Pledgor
shall, so long as no Event of Default shall have occurred
and be continuing, be entitled to deal solely and directly
with the Collateral Agent rather than any such co-agent in
connection with the Collateral Agent's rights and
obligations under this Agreement.
Section 31. The other provisions of this
Agreement to the contrary notwithstanding, the obligation of
the Pledgor to file financing statements in the State of
Tennessee with respect to Collateral shall be subject to the
following. Financing statements need be filed in the State
of Tennessee by the Pledgor and all other parties to a
Security Document (collectively, the "Pledgors") only with
respect to Collateral having an aggregate value equal to
$108.25 million, to be allocated among all Pledgors on the
basis of the estimated value of Inventory located in
Tennessee owned by each of them as of a date reasonably
proximate to the date hereof, provided that this sentence
shall not affect the determination at any time of whether
the Collateral Requirement has been met. In connection with
the foregoing, the Pledgor represents and warrants to the
Collateral Agent, for the benefit of the Banks, that the
aggregate value as of a date reasonably proximate to the
date hereof of all Inventory owned by the Pledgors located
in the State of Tennessee is approximately $90.2 million.<PAGE>
IN WITNESS WHEREOF, the Pledgor has caused
this Agreement to be executed and delivered by its duly
authorized officer as of the date first above written.
[SUBSIDIARY], as Pledgor
(a ______________ corporation)
By______________________________
Name: John M. Thompson
Title: Vice President
FLEMING COMPANIES, INC.
c/o P. O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
Attn: Treasurer
Telecopier: (405) 840-7202
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral
Agent
By ______________________________
Name: Michael C. Mauer
Title: Vice President
Notice Address:
60 Wall Street
New York, New York 10260
Attention: Loan Department
Telecopier: (212) 648-5016
Telex: 177615
EXHIBIT 4.1
BORROWER PLEDGE AGREEMENT
dated as of
July 19, 1994
among
Fleming Companies, Inc.
and
Morgan Guaranty Trust Company of New York,
as Collateral Agent
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Definitions 2
SECTION 2. Representations and Warranties 6
SECTION 3. The Security Interests 7
SECTION 4. Delivery of Pledged Stock 8
SECTION 5. Further Assurances 8
SECTION 6. Record Ownership of Pledged Stock 9
SECTION 7. Right to Receive Distributions on
Collateral 9
SECTION 8. Right to Vote Pledged Stock 10
SECTION 9. General Authority 10
SECTION 10. Remedies upon Event of Default 11
SECTION 11. Expenses 13
SECTION 12. Limitation on Duty of Collateral
Agent in Respect of Collateral 13
SECTION 13. Application of Proceeds 14
SECTION 14. Concerning the Collateral Agent 16
SECTION 15. Appointment of Co-Agents 16
SECTION 16. Termination of Security Interests;
Release of Collateral 17
SECTION 17. Collateral Account 20
SECTION 18. Notices 20
SECTION 19. Waivers, Non-Exclusive Remedies 21
SECTION 20. Successors and Assigns 21
SECTION 21. Changes in Writing 21
SECTION 22. New York Law 22
SECTION 23. Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial 22
SECTION 24. Severability 23
SECTION 25. Counterparts 23
Schedule 1 - Issuers and Original Pledge Stock
<PAGE>
BORROWER PLEDGE AGREEMENT
AGREEMENT dated as of July 19, 1994 made by FLEMING
COMPANIES, INC., an Oklahoma corporation (with its successors, the
"Pledgor"), in favor of MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent.
R E C I T A L S
A. Pursuant to the credit agreement, dated as of July
19, 1994 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by
and among the Pledgor, the Banks listed therein, the Agents listed
therein and Morgan Guaranty Trust Company of New York, as Managing
Agent for the Banks, the Banks have agreed (i) to make loans to the
Pledgor up to an aggregate principal amount of $2,200,000,000 and
(ii) to issue letters of credit for the account of the Pledgor.
B. It is contemplated that the Pledgor may enter into
one or more agreements ("Interest Rate Protection Agreements") with
one or more of the Banks (as hereinafter defined) regarding the
interest rates with respect to loans under the Credit Agreement
(all obligations of the Pledgor now existing or hereafter arising
under such Interest Rate Protection Agreements, collectively, the
"Interest Rate Obligations").
C. It is contemplated that the Pledgor may have or
enter into one or more agreements ("Further Letter of Credit
Agreements") with one or more of the Banks to issue certain letters
of credit (in addition to those issuable pursuant to the Credit
Agreement) for the account of the Pledgor in an aggregate face
amount of up to $160,000,000.
D. It is a condition precedent to the obligations of
the Banks to make the loans under the Credit Agreement and a
condition precedent to any letters of credit being issued under the
Credit Agreement and may be a condition precedent to any Bank
entering into Interest Rate Protection Agreements or entering into
or maintaining Further Letter of Credit Agreements that the Pledgor
execute and deliver this Agreement.
E. In order to comply with certain negative pledge
clauses in other instruments and agreements by which it is bound,
the Pledgor must secure certain other obligations existing on the
date hereof equally and ratably with its obligations under the
Credit Agreement and the notes issued pursuant thereto.
F. This Agreement is given by the Pledgor in favor of
the Collateral Agent for its benefit and the benefit of the other
Secured Parties (as hereinafter defined) to secure the payment and
performance of all of the Secured Obligations (as hereinafter
defined).
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions
Capitalized terms used and not defined herein shall have the
meanings assigned to them in the Credit Agreement. The following
terms, as used herein, have the following meanings:
"Bank Secured Obligations" means the Secured Obligations
other than the Non-Bank Secured Obligations, provided that at any
time of determination no amount of the Pledgor's obligations under
any Interest Rate Protection Agreement shall be included in Bank
Secured Obligations that are Non-Contingent Secured Obligations
unless such obligations are then due and payable.
"Cash Distributions" means dividends and other payments
and distributions made upon or with respect to the Pledged Stock or
any other Collateral in cash.
"Collateral" has the meaning set forth in Section 3(a).
"Collateral Agent" means Morgan Guaranty Trust Company of
New York in its capacity as agent for the Secured Parties
hereunder, and its successors in such capacity.
"Contingent Secured Obligation" means at any time any
Secured Obligation (or portion thereof) that is at such time:
(i) an obligation to reimburse a Bank for drawings
not yet made under a letter of credit issued or to be issued by
such Bank, or
(ii) an obligation to provide collateral to or for
the benefit of a Bank to secure reimbursement obligations arising
from drawings not yet made under a letter of credit issued or to be
issued by such Bank or to make any other payment to the Issuing
Bank that the Issuing Bank would not be entitled to retain if no
drawings were made under the relevant letter of credit after the
time of determination.
"Credit Agreement Secured Obligations" means the Secured
Obligations arising under the Credit Agreement.
"Existing Debt Indentures" means (i) the Indenture dated
as of December 1, 1989, as supplemented to the date hereof, from
the Pledgor to Morgan Guaranty Trust Company of New York, as
Trustee, and (ii) the Indenture dated as of March 15, 1986, as
supplemented to the date hereof, from the Pledgor to Morgan
Guaranty Trust Company of New York, as Trustee.
"Existing Indenture Obligations" means the notes and
debentures of the Pledgor outstanding from time to time under the
Existing Debt Indentures, provided that the term Existing Indenture
Obligations shall not include any such securities that are not
issued and outstanding on July 19, 1994 unless such securities have
been issued in exchange or substitution (which do not include any
refinancing or refunding) for any securities constituting Existing
Indenture Obligations that were outstanding on July 19, 1994.
"Issuer" means each Subsidiary of the Pledgor listed on
Schedule 1 hereto.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset.
"Liquid Investment" means (i) direct obligations of the
United States or any agency thereof, or obligations guaranteed by
the United States or any agency thereof, (ii) commercial paper
rated in the highest grade by a nationally recognized credit rating
agency or (iii) time deposits with, including certificates of
deposit issued by, any office located in the United States of any
bank or trust company (including a bank or trust company acting as
the Collateral Agent or a co-agent hereunder) which is organized
under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least
$1,000,000,000; provided in each case that (x) such Liquid
Investment matures within 90 days from the date of acquisition
thereof and (y) in order to provide the Collateral Agent, for the
benefit of the Secured Parties, with a perfected security interest
therein, such Liquid Investment is:
(1) evidenced by a certificate or instrument which is
negotiable, or if non-negotiable is issued in the name of the
Collateral Agent or its nominee, and which (together with any
appropriate instruments of transfer) is delivered to, and held by,
the Collateral Agent or an agent thereof (which shall not be the
Pledgor or any of its Affiliates) in the State of New York;
(2) issued by the U.S. Treasury in book-entry form and
subject to pledge under then-applicable state law and Treasury
regulations and held by the Collateral Agent at a Federal Reserve
Bank; provided that the books of the Collateral Agent reflect that
such Treasury securities are held as Collateral under this
Agreement in compliance with then applicable Treasury regulations
regarding the perfection of security interests in Treasury
securities; or
(3) otherwise issued, evidenced, registered or recorded
in such manner as will provide the Collateral Agent, for the
benefit of the Secured Parties, with a perfected security interest
therein.
"Non-Bank Percentage" means, as of any time of
determination, the percentage obtained by dividing the
then-outstanding principal amount of the Non-Bank Secured
Obligations by the sum of the then-outstanding principal amount of
(a) the Non-Bank Secured Obligations and (b) any Bank Secured
Obligations that are Non-Contingent Secured Obligations.
"Non-Bank Secured Obligations" means the Secured
Obligations held by the Non-Bank Secured Parties.
"Non-Bank Secured Parties" means the holders from time to
time of the Secured Obligations consisting of the Existing
Indenture Obligations.
"Non-Contingent Secured Obligation" means at any time any
Secured Obligation (or portion thereof) that is not a Contingent
Secured Obligation at such time.
"Original Pledged Stock" means the shares of stock of
each Issuer listed on Schedule 1 hereto.
"Pledged Stock" means (i) the Original Pledged Stock and
(ii) any other capital stock required to be pledged to the
Collateral Agent pursuant to Section 3(b).
"Responsible Officer" means the Chairman of the Board,
the Vice Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the Chief Operating Officer, the President
or the Treasurer of the Pledgor.
"Secured Obligations" means:
(i) all principal of and interest on the Notes, the
Letter of Credit Liabilities and all other sums payable by the
Pledgor under the Credit Agreement;
(ii) all sums payable by the Pledgor under this
Agreement and any other Operative Agreement;
(iii) all principal of and premium, if any, and
interest on the Existing Indenture Obligations;
(iv) all Interest Rate Obligations of the Pledgor
now or hereafter arising under or in respect of any Interest Rate
Protection Agreement; and
(v) all obligations of the Pledgor now existing or
hereafter arising under or in respect of any Further Letter of
Credit Agreement;
provided that an Interest Rate Protection Agreement or a Further
Letter of Credit Agreement, or any amount payable in connection
therewith, shall not constitute a Secured Obligation unless the
Pledgor has designated it as such (and any references herein to an
Interest Rate Protection Agreement or Further Letter of Credit
Agreement shall include only those that have been so designated) by
delivering to the Collateral Agent a certificate signed by a
Responsible Officer which shall identify the obligation so
designated and specify the name and address of the counter- party
thereto and, in the case of any Further Letter of Credit Agreement,
certify that, after giving effect to such designation, the
aggregate undrawn face amount of all letters of credit that are
outstanding on such date (or that a Bank is obligated to issue
after such date) under all Further Letter of Credit Agreements plus
the aggregate amount of all reimbursement obligations (but not any
interest thereon) for amounts previously drawn and remaining unpaid
under letters of credit issued pursuant to all Further Letter of
Credit Agreements does not exceed $160,000.000.
"Secured Parties" means (i) the holders from time to time
of the Secured Obligations and (ii) the Collateral Agent, provided
that for purposes of any notice to or consent required from the
Non-Bank Secured Parties, the Trustee under each Existing Debt
Indenture at the time in question shall be treated as the Non-Bank
Secured Party with respect to the Existing Indenture Obligations
thereunder and all payments to be made to or for the benefit of any
holder of an Existing Indenture Obligation shall be made to the
Trustee in question and the Collateral Agent shall have no further
responsibilities or liability with respect thereto.
"Security Interests" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.
Unless otherwise defined herein, or unless the context
otherwise requires, all terms used herein which are defined in the
New York Uniform Commercial Code as in effect on the date hereof
shall have the meanings therein stated.
SECTION 2. Representations and Warranties
The Pledgor represents and warrants as follows:
(a) The Pledgor is a corporation duly incorporated,
validly existing and in good standing under the laws of Oklahoma,
and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
(b) The execution, delivery and performance by the
Pledgor of this Agreement are within the Pledgor's corporate
powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or
constitute a default under any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the
Pledgor or of any judgment, injunction, orders or decree or any
material agreement or other material instrument binding upon the
Pledgor or result in the creation or imposition of any Lien (other
than Liens created by the Operative Agreements) on any asset of the
Pledgor or any Subsidiary.
(c) This Agreement constitutes a valid and binding
agreement of the Pledgor.
(d) The Pledgor owns all of the Original Pledged Stock,
free and clear of any Liens other than the Security Interests.
Except as set forth on Schedule l hereto, the Original Pledged
Stock includes all of the issued and outstanding capital stock of
each Issuer, and no Issuer has outstanding any security convertible
into or exchangeable for any shares of its capital stock or any
warrant, option or other instrument entitling the holder thereof to
acquire any such shares. All of the Original Pledged Stock has
been duly authorized and validly issued and is fully paid and
non-assessable, and is subject to no options to purchase or similar
rights of any Person. Other than this Agreement and the Existing
Debt Indentures, the Pledgor is not and will not become a party to
or otherwise bound by any agreement which restricts in any manner
the rights of the Secured Parties with respect to any of the
Pledged Stock.
(e) Upon the delivery of the certificates representing
the Pledged Stock to the Collateral Agent in accordance with
Section 4 hereof, the Collateral Agent will have valid and
perfected security interests in the Collateral to the extent a
security interest in such Collateral can be perfected under the
Uniform Commercial Code (and subject to the requirements of Section
9-306 of the Uniform Commercial Code with respect to any proceeds
of Collateral and to the further requirement that additional steps
may be necessary to perfect a security interest in dividends or
other distributions in kind), subject to no prior Lien. No
registration, recordation or filing with any governmental body,
agency or official is required in connection with the execution or
delivery of this Agreement or necessary for the validity or
enforceability hereof or for the perfection or enforcement of the
Security Interests. Neither the Pledgor nor any Subsidiary has
performed or will perform any acts which might prevent the
Collateral Agent from enforcing any of the terms and conditions of
this Agreement or which would limit the Collateral Agent in any
such enforcement.
(f) The chief executive office of the Pledgor is located
at its address set forth on the signature pages of this Agreement.
Under the Uniform Commercial Code as in effect in the State in
which such office is located, no local filing is required to
perfect a security interest in collateral consisting of general
intangibles.
SECTION 3. The Security Interests
In order to secure the full and punctual payment of the
Secured Obligations in accordance with the terms thereof, and to
secure the performance of all the obligations of the Pledgor
hereunder:
(a) The Pledgor hereby assigns and pledges to and with
the Collateral Agent for the equal and ratable benefit of the
Secured Parties and grants to the Collateral Agent for the equal
and ratable benefit of the Secured Parties security interests in
the Pledged Stock, and all of its rights and privileges with
respect to the Pledged Stock, and all income and profits thereon,
and all interest, dividends and other payments and distributions
with respect thereto, and the Collateral Account (as hereinafter
defined) and all cash deposited therein or other property held
therein from time to time, and all proceeds of the foregoing (the
"Collateral"). Contemporaneously with the execution and delivery
hereof, the Pledgor is delivering the certificates representing the
Original Pledged Stock in pledge hereunder.
(b) In the event that any Issuer at any time issues any
additional or substitute shares of capital stock of any class to
the Pledgor, the Pledgor will, within two Domestic Business Days
after the issuance thereof, pledge and deposit with the Collateral
Agent certificates representing all such shares. All such shares
constitute Pledged Stock and are subject to all provisions of this
Agreement.
(c) The Security Interests are granted as security only
and shall not subject the Collateral Agent or any Secured Party to,
or transfer or in any way affect or modify, any obligation or
liability of the Pledgor with respect to any of the Collateral or
any transaction in connection therewith.
SECTION 4. Delivery of Pledged Stock
All Pledged Stock shall be delivered to the Collateral
Agent by the Pledgor pursuant hereto indorsed to the order of the
Collateral Agent, and accompanied by any required transfer tax
stamps, all in form and substance satisfactory to the Collateral
Agent. All certificates representing Pledged Stock delivered to
the Collateral Agent by the Pledgor pursuant hereto shall be in
suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, and
accompanied by any required transfer tax stamps, all in form and
substance satisfactory to the Collateral Agent.
SECTION 5. Further Assurances
(a) The Pledgor agrees that it will, at its expense and
in such manner and form as the Collateral Agent may reasonably
require, execute, deliver, file and record any financing statement,
specific assignment or other paper and take any other action that
may be necessary or desirable, or that the Collateral Agent may
request, in order to create, preserve, perfect or validate any
Security Interest or to enable the Collateral Agent to exercise and
enforce its rights hereunder with respect to any of the Collateral.
To the extent permitted by applicable law, the Pledgor hereby
authorizes the Collateral Agent to execute and file, in the name of
the Pledgor or otherwise, Uniform Commercial Code financing
statements (which may be carbon, photographic, photostatic or other
reproductions of this Agreement or of a financing statement
relating to this Agreement) which the Collateral Agent in its sole
discretion may deem necessary or appropriate to further perfect the
Security Interests.
(b) The Pledgor agrees that it will not change (i) its
name, identity or corporate structure in any manner or (ii) the
location of its chief executive office unless it shall have given
the Collateral Agent not less than 20 days' prior notice thereof.
SECTION 6. Record Ownership of Pledged Stock
Upon the occurrence and during the continuance of an
Event of Default, at the request of the Required Banks, the
Collateral Agent may cause any or all of the Pledged Stock to be
transferred of record into the name of the Collateral Agent or its
nominee. The Pledgor will promptly give to the Collateral Agent
copies of any notices or other communications received by it with
respect to Pledged Stock registered in the name of the Pledgor and
the Collateral Agent will promptly give to the Pledgor copies of
any notices and communications received by the Collateral Agent
with respect to Pledged Stock registered in the name of the
Collateral Agent or its nominee.
SECTION 7. Right to Receive Distributions on Collateral
The Collateral Agent shall have the right to receive and
to retain as Collateral hereunder all dividends, interest and other
payments and distributions made upon or with respect to the
Collateral and the Pledgor shall take all such action as the
Collateral Agent may deem necessary or appropriate to give effect
to such right, provided that unless an Event of Default has
occurred and is continuing and upon the request of the Required
Banks, the foregoing sentence shall not apply to Cash
Distributions. All such dividends, interest and other payments and
distributions which are received by the Pledgor (except Cash
Distributions received when no Event of Default has occurred and is
continuing) shall be received in trust for the benefit of the
Collateral Agent and the Secured Parties and, if the Collateral
Agent so directs during the continuance of an Event of Default,
shall be segregated from other funds of the Pledgor and shall,
forthwith upon demand by the Collateral Agent during the
continuance of an Event of Default, be paid over to the Collateral
Agent as Collateral in the same form as received (with any
necessary endorsement). After all Events of Defaults have been
cured or waived, the Collateral Agent's right to retain Cash
Distributions under this Section 7 shall cease and the Collateral
Agent shall pay over to the Pledgor any such Cash Distributions
retained by it during the continuance of an Event of Default.
SECTION 8. Right to Vote Pledged Stock
Unless an Event of Default shall have occurred and be
continuing and the Required Banks shall have so requested, the
Pledgor shall have the right, from time to time, to vote and to
give consents, ratification and waivers with respect to the Pledged
Stock, and the Collateral Agent shall, upon receiving a written
request from the Pledgor accompanied by a certificate signed by a
Responsible Officer stating that no Event of Default has occurred
and is continuing, deliver to the Pledgor or as specified in such
request such proxies, powers of attorney, consents, ratification
and waivers in respect of any of the Pledged Stock which is
registered in the name of the Collateral Agent or its nominee as
shall be specified in such request and be in form and substance
satisfactory to the Collateral Agent.
If an Event of Default shall have occurred and be
continuing, the Collateral Agent shall have the right to the extent
permitted by law and the Pledgor shall take all such action as may
be necessary or appropriate to give effect to such right, to vote
and to give consents, ratification and waivers, and take any other
action with respect to any or all of the Pledged Stock with the
same force and effect as if the Collateral Agent were the absolute
and sole owner thereof.
SECTION 9. General Authority
The Pledgor hereby irrevocably appoints the Collateral
Agent its true and lawful attorney, with full power of
substitution, in the name of the Pledgor, the Collateral Agent, the
Secured Parties or otherwise, for the sole use and benefit of the
Collateral Agent and the Secured Parties, but at the expense of the
Pledgor, to the extent permitted by law to exercise, at any time
and from time to time while an Event of Default has occurred and is
continuing and at the request of the Required Banks, all or any of
the following powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give
acquittance for any and all monies due or to become due upon or by
virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend
any action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or
with the same or the proceeds or avails thereof, as fully and
effectually as if the Collateral Agent were the absolute owner
thereof, and
(iv) to extend the time of payment of any or all thereof
and to make any allowance and other adjustments with reference
thereto;
provided that the Collateral Agent shall give the Pledgor not less
than ten days' prior written notice of the time and place of any
sale or other intended disposition of any of the Collateral except
any Collateral which threatens to decline speedily in value or is
of a type customarily sold on a recognized market. The Collateral
Agent and the Pledgor agree that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of
the Uniform Commercial Code.
SECTION 10. Remedies upon Event of Default
If any Event of Default shall have occurred and be
continuing, the Collateral Agent, upon being instructed to do so by
the Required Banks, may exercise on behalf of the Secured Parties
all the rights of a secured party under the Uniform Commercial Code
(whether or not in effect in the jurisdiction where such rights are
exercised) and, in addition, the Collateral Agent may, without
being required to give any notice, except as herein provided or as
may be required by mandatory provisions of law, (i) apply the cash,
if any, then held by it as Collateral as specified in Section 13
and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Secured Obligations in full, sell the
Collateral or any part thereof at public or private sale or at any
broker's board or on any securities exchange, for cash, upon credit
or for future delivery, and at such price or prices as the
Collateral Agent may deem satisfactory. Any Secured Party may be
the purchaser of any or all of the Collateral so sold at any public
sale (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely
distributed standard price quotations, at any private sale). The
Collateral Agent is authorized, in connection with any such sale,
if it deems it advisable so to do, (i) to restrict the prospective
bidders on or purchasers of any of the Pledged Stock to a limited
number of sophisticated investors who will represent and agree that
they are purchasing for their own account for investment and not
with a view to the distribution or sale of any of such Pledged
Stock, (ii) to cause to be placed on certificates for any or all of
the Pledged Stock or on any other securities pledged hereunder a
legend to the effect that such security has not been registered
under the Securities Act of 1933 and may not be disposed of in
violation of the provision of said Act, and (iii) to impose such
other limitations or conditions in connection with any such sale as
the Collateral Agent dems necessary or advisable in order to comply
with said Act or any other law. The Pledgor covenants and agrees
that it will execute and deliver such documents and take such other
action as the Collateral Agent deems necessary or advisable in
order that any such sale may be made in compliance with law. Upon
any such sale the Collateral Agent shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so
sold. Each purchaser at any such sale shall hold the Collateral so
sold absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Pledgor
which may be waived, and the Pledgor, to the extent permitted by
law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or
hereafter adopted. The notice (if any) of such sale required by
Section 9 shall (1) in case of a public sale, state the time and
place fixed for such sale, (2) in case of sale at a broker's board
or on a securities exchange, state the board or exchange at which
such sale is to be made and the day on which the Collateral, or the
portion thereof so being sold, will first be offered for sale at
such board or exchange, and (3) in the case of a private sale,
state the day after which such sale may be consummated. Any such
public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent
may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may determine. The Collateral
Agent shall not be obligated to make any such sale pursuant to any
such notice. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same
to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or
place to which the same may be so adjourned. In cse of any sale of
all or any part of the Collateral on credit or for future delivery,
the Collateral so sold may be retained by the Collateral Agent
until the selling price is paid by the purchaser thereof, but the
Collateral Agent shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may again be
sold upon like notice. The Collateral Agent, instead of exercising
the power of sale herein conferred upon it, may proceed by a suit
or suits at law or in equity to foreclose the Security Interests
and sell the Collateral, or any portion thereof, under a judgment
or decree of a court or courts of competent jurisdiction.
SECTION 11. Expenses
The Pledgor agrees that it will forthwith upon demand pay
to the Collateral Agent:
(i) the amount of any taxes which the Collateral Agent
may have been required to pay by reason of the Security Interests
or to free any of the Collateral from any Lien thereon, and
(ii) the amount of any and all out-of-pocket expenses,
including the reasonable fees and disbursements of counsel and of
any other experts, which the Collateral Agent may incur in
connection with (w) the administration or enforcement of this
Agreement, including such expenses as are incurred to preserve the
value of the Collateral and the validity, perfection, rank and
value of any Security Interest, (x) the collection, sale or other
disposition of any of the Collateral, (y) the exercise by the
Collateral Agent of any of the rights conferred upon it hereunder
or (z) any Default or Event of Default.
Any such amount not paid on demand shall bear interest at 1% plus
the rate that would be applicable to Tranche A Base Rate Loans
under the Credit Agreement. The Pledgor's obligations under this
Section shall survive the termination of this Agreement and the
discharge of the Pledgor's obligations under the Operative
Agreements.
SECTION 12. Limitation on Duty of Collateral
Agent in Respect of Collateral
Beyond the exercise of reasonable care in the custody
thereof, the Collateral Agent shall have no duty as to any
Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the
preservation of rights against prior parties or any other rights
pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own
property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any agent or bailee
selected by the Collateral Agent in good faith.
SECTION 13. Application of Proceeds
(a) Upon the occurrence and during the continuance of an
Event of Default, the proceeds of any sale of, or other realization
upon, all or any part of the Collateral (including any proceeds
received and held pursuant to Section 16) and any cash held in the
Collateral Account shall be applied by the Collateral Agent, upon
being instructed to do so by the Required Banks, in the following
order of priorities:
First, to the payment of all costs and expenses, fees,
commissions and taxes of such sale, collection or other
realization, including, without limitation, reasonable compensation
to the Collateral Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith, together with interest on
each such amount at 1% plus the rate of interest that would be
applicable to Tranche A Base Rate Loans under the Credit Agreement
from and after the date such amount is due, owing or unpaid until
paid in full;
Second, to pay the Secured Obligations ratably (or
provide for the payment thereof pursuant to subsection (b) of this
Section), until payment in full of all Secured Obligations shall
have been made (or so provided for), provided that before making
any payment pursuant to this clause Second ratably to the holders
of the Secured Obligations, the Collateral Agent shall first apply
solely to the Non-Bank Secured Obligations any amount held by it
pursuant to subclause (ii)(A) of Section 16(b) and provided further
that the principal amount outstanding to any Bank under any
Interest Rate Protection Agreement at the time any such payments
are to be distributed in accordance with this clause Second shall
be the amount of the Pledgor's obligations then due and payable
(including any early termination payments then due) to such Bank
under such Interest Rate Protection Agreement; and
Third, to the Pledgor, or its successors or assigns, or
to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
(b) If at any time any monies collected or received by
the Collateral Agent would, but for the provisions of this
subsection (b), be payable pursuant to subsection (a) of this
Section in respect of any Contingent Secured Obligation, the
Collateral Agent shall not apply such monies to pay such Contingent
Secured Obligation but instead shall hold such monies in the
Collateral Account. The Collateral Agent shall so hold all such
monies until such time as the holder of such Contingent Secured
Obligation advises the Collateral Agent (with at least three
Business Days' prior notice to the Pledgor) that all or a specified
part of such Contingent Secured Obligation has become a
Non-Contingent Secured Obligation, whereupon the Collateral Agent
shall apply the amount so held to pay such Non-Contingent Secured
Obligation; provided that, if the other Secured Obligations
theretofore paid pursuant to subsection (a) were not paid in full,
the Collateral Agent shall apply the amount so held to pay the same
percentage of such Non-Contingent Secured Obligation as the
percentage of such other Secured Obligations theretofore paid
pursuant to subsection (a). If (i) the holder of such Contingent
Secured Obligation shall advise the Collateral Agent (with at least
three Business Days' prior notice to the Pledgor) that no portion
thereof remains in the category of a Contingent Secured Obligation
and (ii) any amount held pursuant to this subsection (b) in
respect of such Contingent Secured Obligation remains after payment
of all ratable amounts payable pursuant to the preceding sentence
with respect to any portions thereof that became Non-Contingent
Secured Obligations, such remaining amount shall be applied by the
Collateral Agent in the order of priorities set forth in subsection
(a) of this Section.
(c) In making the payments and allocations required by
this Section, the Collateral Agent may, (1) as to any Secured
Obligations arising under an Interest Rate Protection Agreement or
Further Letter of Credit Agreement, rely upon information from the
applicable counterparty identified by the Pledgor pursuant to the
proviso in the definition of Secured Parties and (2) as to any
Existing Indenture Obligations, rely upon information from the
Trustee under the applicable Existing Debt Indenture, and shall
have no liability to the Pledgor or any other Secured Party for
actions taken in reliance on such information except in the case of
its gross negligence or willful misconduct. All distributions made
by the Collateral Agent pursuant to this Section shall be final
(except in the event of manifest error) and the Collateral Agent
shall have no duty to inquire as to the application by the Secured
Parties of any amount distributed to them.
SECTION 14. Concerning the Collateral Agent
(a) The Collateral Agent has been appointed as
Collateral Agent pursuant to the Credit Agreement. The actions of
the Collateral Agent hereunder are subject to the provisions of the
Credit Agreement. The obligations of the Collateral Agent
hereunder are only those expressly set forth herein. In any case
in which the Collateral Agent is authorized to exercise any power
or discretion, the Collateral Agent may refuse to do so unless
directed in writing by the Required Banks to act in the manner
specified in such direction.
(b) The Collateral Agent may resign at any time by
giving written notice thereof to the Secured Parties and the
Pledgor. Upon any resignation of the Collateral Agent, the
Required Banks shall have the right to appoint a successor
Collateral Agent. If no successor Collateral Agent shall have been
so appointed by the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Collateral Agent
gives notice of resignation, then the retiring Collateral Agent
may, on behalf of the Secured Parties, appoint a successor
Collateral Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of at least
$100,000,000. Upon the acceptance of its appointment as Collateral
Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and
obligations hereunder. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this
Section shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Collateral Agent.
SECTION 15. Appointment of Co-Agents
At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Collateral Agent may appoint
another bank or trust company or one or more other persons, either
to act as co-agent or co-agents, jointly with the Collateral Agent,
or to act as separate agent or agents on behalf of the Secured
Parties with such power and authority as may be necessary for the
effectual operation of the provisions hereof and may be specified
in the instrument of appointment (which may, in the discretion of
the Collateral Agent, include provisions for the protection of such
co-agent or separate agent similar to the provisions of Section
14). Notwithstanding any such appointment but only to the extent
not inconsistent with such legal requirements or, in the reasonable
judgment of the Collateral Agent, not unduly burdensome to it or
any such co-agent, the Pledgor shall, so long as no Event of
Default shall have occurred and be continuing, be entitled to deal
solely and directly with the Collateral Agent rather than any such
co-agent in connection with the Collateral Agent's rights and
obligations under this Agreement.
SECTION 16. Termination of Security Interests;
Release of Collateral
(a) When all the Credit Agreement Secured Obligations
have been paid in full and the Commitments of the Banks to make any
Loan or issue any Letter of Credit under the Credit Agreement have
expired, or if earlier the occurrence of the Rating Target Date,
this Agreement shall terminate, except as expressly set forth
herein, and all rights to the Collateral shall revert to the
Pledgor.
(b)(i) The Pledgor may from time to time prior to the
termination of this Agreement request the Collateral Agent to
release all or any of the Collateral, which request shall be
accompanied by a certificate of a Responsible Officer stating (A)
whether such release is requested in connection with an Asset Sale,
(B) whether a Default has occurred and is continuing, (C) if such
release is requested in connection with an Asset Sale, identifying
the cash, Temporary Cash Investments and instruments comprising the
Net Proceeds of such Asset Sale that, in the good faith
determination of such Responsible Officer, are allocable to the
Collateral requested to be released (the "Collateral Net Proceeds")
and (D) if such release is requested in connection with an Asset
Sale, the amount, if any, of the cash and Temporary Cash
Investments included in the Collateral Net Proceeds that is
required to be applied by the Pledgor to the prepayment of the
principal amount of the Loans pursuant to Section 2.09(b)(i) of the
Credit Agreement within 14 days after the consummation of such
Asset Sale and the date on which such prepayment is to be made. If
such request is not in connection with an Asset Sale, the
Collateral Agent shall release Collateral pursuant to such request
but only with the consent of the Releasing Banks and the Non-Bank
Secured Parties.
(ii) If such request is in connection with an Asset Sale
and such certificate states that no Default has occurred and is
continuing, the Collateral Agent shall release Collateral pursuant
to such request without the consent of any Secured Party but only
against delivery to the Collateral Agent of (A) the Non-Bank
Percentage of each element (cash, Temporary Cash Investments and
instruments) of the Collateral Net Proceeds and (B) all other
Collateral Net Proceeds.
(iii) If such request is in connection with an Asset Sale
and such certificate states that a Default has occurred and is
continuing, the Collateral Agent shall release Collateral pursuant
to such request without the consent of any Secured Party but only
against delivery to the Collateral Agent of all cash and other
property constituting the portion of the Net Proceeds of such Asset
Sale allocable to the Collateral to be released (as set forth in
such certificate).
(iv) All such cash shall be held in the Collateral
Account and any such other property shall be held by the Collateral
Agent as Proceeds, subject to the Lien hereof, and
(A) in all cases, even if any other subclause below would
otherwise apply, if an Event of Default shall occur and be
continuing, applied pursuant to Section 11 hereof;
(B) in the case of any cash or Temporary Cash
Investments included in Collateral Net Proceeds held pursuant to
subclause (ii)(B), applied for the account of the Pledgor (after
reducing any such Temporary Cash Investments to cash) to make
prepayments of the Loans pursuant to Section 2.09(b)(i) of the
Credit Agreement as set forth in the related certificate of a
Responsible Officer;
(C) in the case of any instrument included in Collateral
Net Proceeds held pursuant to subclause (ii)(B), all income thereon
or other payments in respect thereof shall be applied for the
account of the Pledgor to make prepayments of the Loans pursuant to
Section 2.09(b)(i) of the Credit Agreement as shall be specified
from time to time in a certificate of a Responsible Officer;
(D) in the case of any cash, Temporary Cash Investments
and instruments held pursuant to clause (iii),
(1) an amount equal to the Non-Bank
Percentage of each element of the Collateral Net Proceeds
(determined as of the date the Collateral Agent received such
Proceeds) shall be retained by the Collateral Agent until the
termination of this Agreement (and then paid to the Pledgor or as
it shall direct), provided that if the Collateral Agent receives a
certificate of a Responsible Officer stating that the Non-Bank
Secured Obligations have been paid in full, any such cash and
Temporary Cash Investments shall be applied for the account of the
Pledgor to make prepayments of the Loans to the extent required by
Section 2.09(b)(i) of the Credit Agreement and the balance, if any,
paid to the Pledgor or as it shall direct and any instruments shall
be applied as set forth in the immediately preceding clause (C),
and
(2) as to the balance, if a Responsible Officer
shall subsequently certify that no Default has occurred and is
continuing, any such cash and temporary Cash Investments shall be
applied for the account of the Pledgor to make prepayments of the
Loans to the extent required by Section 2.09(b)(i) of the Credit
Agreement and the balance, if any, paid to the Pledgor or as it
shall direct and any instruments shall be applied as set forth in
the immediately preceding clause (C), and
(E) in the case of any cash or other property held
pursuant to subclause (ii)(A), applied as set forth in subclause
(1) of the immediately preceding clause (D).
(c) Upon any such termination of the Security Interests
or release of Collateral, the Collateral Agent will, at the expense
of the Pledgor, deliver any certificates evidencing Pledged Stock
and any other Collateral held by it to the Pledgor, and execute and
deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be.
SECTION 17. Collateral Account.
(a) There is hereby established with the Collateral Agent
a cash collateral account (the "Collateral Account") in the name
and under the control of the Collateral Agent into which there
shall be deposited from time to time the cash proceeds of the
Collateral required to be delivered to the Collateral Agent
pursuant to any provision of this Agreement. Any income received
by the Collateral Agent with respect to the balance from time to
time standing to the credit of the Collateral Account, including
any interest or capital gains on Liquid Investments, shall remain,
or be deposited, in the Collateral Account. All right, title and
interest in and to the cash amounts on deposit from time to time in
the Collateral Account together with any Liquid Investments from
time to time made pursuant to subsection (c) of this Section shall
vest in the Collateral Agent, shall constitute part of the
Collateral hereunder and shall not constitute payment of the
Secured Obligations until applied thereto as hereinafter provided.
(b) Upon the occurrence and during the continuation of an
Event of Default, the Collateral Agent shall, if so instructed by
the Required Banks, apply or cause to be applied (subject to
collection) any or all of the balance from time to time standing to
the credit of the Collateral Account in the manner specified in
Section 13. Upon the cure of such Event of Default, all Liquid
Investments held by the Collateral Agent in the Collateral Account
shall be reduced to cash and all cash amounts held in the
Collateral Account shall be promptly returned to the Pledgor,
provided that any Liquid Investments or cash held in the Collateral
Account arising out of matters of the character described in
Section 7 or 16 shall be applied as provided therein.
(c) Amounts on deposit in the Collateral Account shall be
invested and re-invested from time to time in such Liquid
Investments as the Pledgor shall determine, which Liquid
Investments shall be held in the name and be under the control of
the Collateral Agent, provided that, if an Event of Default has
occurred and is continuing, the Collateral Agent shall, if
instructed by the Required Banks, liquidate any such Liquid
Securities and apply or cause to be applied in the proceeds thereof
to the payment of the Secured Obligations in the manner specified
in Section 13.
SECTION 18. Notices
All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to
such party at its address or telex or facsimile number set forth on
the signature pages hereof. Each such notice, request or other
communication shall be effective (i) if given by telex, when such
telex is transmitted to the telex number specified in this Section
and the appropriate answerback is received, (ii) if given by
facsimile transmission, when receipt of such transmission is
confirmed either orally or in writing, by the party receiving such
transmission, (iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iv) if given by any other
means, when delivered at the address specified in this Section;
provided that notices to the Collateral Agent shall not be
effective until received.
SECTION 19. Waivers, Non-Exclusive Remedies
No failure on the part of the Collateral Agent to
exercise, and no delay in exercising and no course of dealing with
respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the
Managing Agent of any right under the Credit Agreement or the
Collateral Agent under this Agreement or any other Operative
Agreement preclude the Collateral Agent from any other or further
exercise or the exercise of any other right. The rights in this
Agreement and the Credit Agreement are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 20. Successors and Assigns
This Agreement is for the benefit of the Collateral Agent
and the Secured Parties and their successors and assigns, and in
the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such
indebtedness, provided that no counterparty to an Interest Rate
Protection Agreement or a Further Letter of Credit Agreement shall
be entitled to the benefits hereof unless it is also a Bank. This
Agreement shall be binding on the Pledgor and its successors and
assigns.
SECTION 21. Changes in Writing
Other than in respect of any release of Collateral
pursuant to Section 16 hereof, no amendment, modification,
supplement, termination or waiver of or to any provision of this
Agreement, nor consent to any departure by the Pledgor therefrom,
shall be effective unless in writing and signed by the Collateral
Agent and the Pledgor (with the requisite consent, if any, of the
Banks, the Required Banks or the Releasing Banks required by
Section 9.04 of the Credit Agreement); provided that without the
consent of the Banks to whom a majority of the Interest Rate
Obligations are owed, no such amendment, modification, supplement,
termination or waiver may (i) exclude the Interest Rate Obligations
from the definition of Secured Obligations or (ii) change the
provisions of clause Second of Section 13 hereof; provided further
that without the consent of the Banks to whom a majority of the
obligations under Further Letter of Credit Agreements are owed, no
such amendment, modification, supplement, termination or waiver may
(i) exclude any Further Letter of Credit Agreement from the
definition of Secured Obligations or (ii) change the provisions of
clause Second of Section 13 hereof. Any amendment, modification or
supplement of or to any provision of this Agreement, any waiver of
any provision of this Agreement, and any consent to any departure
by the Pledgor from the terms of any provision of this Agreement,
shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is
specifically required by this Agreement or any other Operative
Agreement, no notice to or demand on the Pledgor in any case shall
entitle the Pledgor to any other or further notice or demand in
similar or other circumstances.
SECTION 22. New York Law
This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, except as otherwise
required by mandatory provisions of law and except to the extent
that remedies provided by the laws of any jurisdiction other than
New York are governed by the laws of such jurisdiction.
SECTION 23. Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial
THE PLEDGOR HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
THE PLEDGOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PLEDGOR AND THE
COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 24. Severability
If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i)
the other provisions hereof shall remain in full force and effect
in such jurisdiction and shall be liberally construed in favor of
the Collateral Agent and the Secured Parties in order to carry out
the intentions of the parties hereto as nearly as may be possible;
and (ii) the invalidity or unenforceability of any provision hereof
in any jurisdiction shall not affect the validity or enforceability
of such provision in any other jurisdiction.
SECTION 25. Counterparts.
This Agreement may be signed in any number of
counterparts, each of which shall be an original, and all of which
taken together shall constitute a single instrument, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
FLEMING COMPANIES, INC.
By /s/ John M. Thompson
Name: John M. Thompson
Title: Vice President
P. O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
Attn: Treasurer
Telecopier: (405) 840-7202
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Collateral Agent
By /s/ Michael C. Mauer
Name: Michael C. Mauer
Title: Vice President
60 Wall Street
New York, New York 10260
Attention: Loan Department
Telex number: 177615
Telecopier: (212) 648-5016
EXHIBIT 4.2
FORM OF
BORROWER SECURITY AGREEMENT
AGREEMENT dated as of July 19, 1994, made by FLEMING
COMPANIES, INC., an Oklahoma Corporation (with its successors, the
"Pledgor"), in favor of MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Collateral Agent.
R E C I T A L S :
A. Pursuant to the Credit Agreement, dated as of July
19, 1994 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by
and among the Pledgor, the Banks listed therein, the Agents listed
therein and Morgan Guaranty Trust Company of New York, as Managing
Agent for the Banks, the Banks have agreed (i) to make loans to the
Pledgor up to an aggregate principal amount of $2,200,000,000 and
(ii) to issue certain letters of credit for the account of the
Pledgor.
B. It is contemplated that the Pledgor may enter into
one or more agreements ("Interest Rate Protection Agreements") with
one or more of the Banks (as hereinafter defined) regarding the
interest rates with respect to loans under the Credit Agreement
(all obligations of the Pledgor now existing or hereafter arising
under such Interest Rate Protection Agreements, collectively, the
"Interest Rate Obligations").
C. It is contemplated that the Pledgor may have or enter
into one or more agreements ("Further Letter of Credit Agreements")
with one or more of the Banks to issue certain letters of credit
(in addition to those issuable pursuant to the Credit Agreement)
for the account of the Pledgor in an aggregate face amount of up to
$160,000,000.
D. It is a condition precedent to the obligations of the
Banks to make the loans under the Credit Agreement and a condition
precedent to any letters of credit being issued under the Credit
Agreement and may be a condition precedent to any Bank entering
into Interest Rate Protection Agreements or entering into or
maintaining Further Letter of Credit Agreements that the Pledgor
execute and deliver this Agreement.
E. In order to comply with certain negative pledge
clauses in other instruments and agreements by which it is bound,
the Pledgor must, with respect to certain of the Collateral (as
hereinafter defined), secure certain other obligations existing on
the date hereof equally and ratably with its obligations under the
Credit Agreement and the notes issued pursuant thereto.
F. This Agreement is given by the Pledgor in favor of
the Collateral Agent for its benefit and the benefit of the Secured
Parties, to the extent provided for herein, to secure the payment
and performance of all of the Secured Obligations (as hereinafter
defined).
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing
premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor and the
Collateral Agent hereby agree as follows:
Section 1. Pledge. As collateral security for the
payment and performance when due of all the Secured Obligations,
the Pledgor hereby pledges, assigns, transfers and grants to the
Collateral Agent for the benefit of the Secured Parties, a
continuing first priority security interest in and to all of the
right, title and interest of the Pledgor in, to and under the
following (collectively, the "Collateral"):
(a) each and every Receivable (as hereinafter defined)
now existing or hereafter arising from time to time;
(b) all Inventory (as hereinafter defined) now existing
or hereafter acquired from time to time;
(c) the Collateral Account (as hereinafter defined) and
all cash deposited therein or other property held therein from time
to time;
(d) all Documents (as hereinafter defined) relating to
any of the foregoing; and
(e) all Proceeds (as hereinafter defined) of any and all
of the foregoing;
provided that the Collateral shall not include Excepted Inventory
and Excepted Receivables and provided further that the Non-Bank
Secured Parties shall be entitled to the benefits of only the
Security Interests in the Intercompany Receivables Collateral.
Section 2. Secured Obligations. This Agreement secures,
and the Collateral is collateral security for, the payment and
performance in full when due, whether at stated maturity, by
acceleration or otherwise (including, without limitation, the
payment of interest and other amounts which would accrue and become
due but for the filing of a petition in bankruptcy or the operation
of the automatic stay under Section 361(a) of the Bankruptcy Code,
11 U.S.C. Section 362(a)), of (i) all obligations of the Pledgor
now existing or hereafter arising under or in respect of the Credit
Agreement, all Interest Rate Obligations of the Pledgor now
existing or hereafter arising under or in respect of any Interest
Rate Protection Agreement, all obligations of the Pledgor now
existing or hereafter arising under or in respect of any Further
Letter of Credit Agreement and all obligations of the Pledgor now
existing or hereafter arising with respect to the principal of and
premium, if any, and interest on the Existing Indenture Obligations
(including, without limitation, the Pledgor's obligations to pay
principal, interest and all other charges, fees, expenses,
commissions, reimbursements, premiums, indemnities and other
payments related to or in respect of the obligations contained in
the Credit Agreement, the obligations contained in any Interest
Rate Protection Agreement and the obligations contained in any
Further Letter of Credit Agreement) and (ii) without duplication of
the amounts described in clause (i), all obligations of the Pledgor
now existing or hereafter arising under or in respect of this
Agreement (the obligations described in clauses (i) and (ii),
collectively, the "Secured Obligations").
No Interest Rate Protection Agreement or Further Letter
of Credit Agreement, or any amount payable in connection therewith,
shall constitute a Secured Obligation unless the Pledgor has
designated it as such (and any references herein to an Interest
Rate Protection Agreement or Further Letter of Credit Agreement
shall include only those that have been so designated) by
delivering to the Collateral Agent a certificate signed by a
Responsible Officer which shall identify the obligation so
designated and specify the name and address of the counter party
thereto and, in the case of any Further Letter of Credit Agreement,
certify that, after giving effect to such designation, the
aggregate undrawn face amount of all letters of credit that are
outstanding on such date (or that a Bank is obligated to issue
after such date) under all Further Letter of Credit Agreements plus
the aggregate amount of all reimbursement obligations (but not any
interest thereon) for amounts previously drawn and remaining unpaid
under letters of credit issued pursuant to all Further Letter of
Credit Agreements does not exceed $160,000,000.
Section 3. No Release. Nothing set forth in this
Agreement shall relieve the Pledgor from the performance of any
term, covenant, condition or agreement on the Pledgor's part to be
performed or observed under or in respect of any of the Collateral
or from any liability to any Person under or in respect of any of
the Collateral or shall impose any obligation on the Collateral
Agent or any Secured Party to perform or observe any such term,
covenant, condition or agreement on the Pledgor's part to be so
performed or observed or shall impose any liability on the
Collateral Agent or any Secured Party for any act or omission on
the part of the Pledgor relating thereto or for any breach of any
representation or warranty on the part of the Pledgor contained in
this Agreement, any Interest Rate Protection Agreement, any Further
Letter of Credit Agreement or any other Operative Agreement, or
under or in respect of the Collateral or made in connection
herewith or therewith. The obligations of the Pledgor contained in
this Section 3 shall survive the termination of this Agreement and
the discharge of the Pledgor's other obligations under this
Agreement, any Interest Rate Protection Agreement, any Further
Letter of Credit Agreement and under the other Operative
Agreements.
Section 4. Supplements by the Collateral Agent.
The Pledgor hereby authorizes the Collateral Agent, without
relieving the Pledgor of any obligations hereunder, to file
financing statements, continuation statements and other documents,
relative to all or any part thereof, without the signature of the
Pledgor where permitted by law, and the Pledgor shall make,
execute, endorse, acknowledge, file or refile or make available
(or, upon the occurrence of an Event of Default, deliver) to the
Collateral Agent from time to time such lists, descriptions and
designations of the Collateral, copies of warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory
assignments, supplements, additional security agreements (but in
this instance only where required by law), conveyances, financing
statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or
rights covered by the security interests hereby granted, which the
Collateral Agent reasonably deems appropriate or advisable,
wherever required or permitted by law, in order to perfect and
preserve the rights and interests granted to the Collateral Agent
hereunder or to carry into effect the purposes of this Agreement or
better to assure and confirm unto the Collateral Agent its
respective rights, powers and remedies hereunder. All of the
foregoing shall be at the sole cost and expense of the Pledgor.
Section 5. Representations, Warranties and Covenants.
The Pledgor represents, warrants and covenants as follows:
(a) Corporate Existence and Power. The Pledgor is a
corporation duly incorporated, validly existing and in good
standing under the laws of Oklahoma, and has all corporate powers
and all material governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted.
(b) Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the
Pledgor of this Agreement are within the Pledgor's corporate
powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene, or
constitute a default under, any provisions of applicable law or
regulation or of the certificate of incorporation or by-laws of the
Pledgor or result in the creation or imposition of any Lien (other
than those contemplated by this Agreement) on any asset of the
Pledgor.
(c) Necessary Filings. Within 3 Business Days of the
date hereof, Pledgor shall cause the filing of all filings,
registrations and recordings necessary, appropriate or requested by
the Collateral Agent to create, preserve, protect and perfect the
security interest granted by the Pledgor to the Collateral Agent
hereby in respect of the Collateral. Upon the filing of all such
filings, registrations and recordings, the security interest
granted to the Collateral Agent for the benefit of the Secured
Parties pursuant to this Agreement in and to the Collateral shall
constitute and hereafter will constitute a perfected security
interest therein, superior and prior to the rights of all other
Persons therein and subject to no other Liens other than Permitted
Liens.
(d) No Liens. The Pledgor is as of the date hereof,
and, as to Collateral acquired by it from time to time after the
date hereof, the Pledgor will be, the owner of all Collateral free
from any Lien or other right, title or interest of any Person other
than Permitted Liens, and the Pledgor shall defend the Collateral
against all claims and demands, other than Permitted Liens, of all
Persons at any time claiming any interest therein adverse to the
Collateral Agent or any Secured Party.
(e) Other Financing Statements. There is no financing
statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any
interest of any kind in the Collateral other than financing
statements relating to Permitted Liens, and so long as any of the
Secured Obligations remain unpaid or the Commitments of the Banks
to make any Loan or to issue any Letter of Credit shall not have
expired, the Pledgor shall not execute, authorize or permit to be
filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any
jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be filed in respect of and
covering Permitted Liens.
(f) Chief Executive Office; Records. The chief
executive office of the Pledgor is located at 6301 Waterford
Boulevard, Oklahoma City, Oklahoma 73126. The Pledgor shall not
move its chief executive office, except to such new location as the
Pledgor may establish in accordance with the last sentence of this
Section 5(f). All tangible evidence of the Receivables
constituting Collateral of the Pledgor and the only original books
of account and records of the Pledgor relating to the Collateral
are, and will continue to be, kept at such chief executive office,
or at any such new location for such chief executive office as the
Pledgor may establish in accordance with the last sentence of this
Section 5(f), or at such other locations as are set forth on
Schedule 5(f) or Schedule A hereto, as such Schedules may be
amended from time to time. All Collateral of the Pledgor is, and
will continue to be, controlled and monitored (including, without
limitation, for general accounting purposes) from such chief
executive office location shown above, from such new location as
the Pledgor may establish in accordance with the last sentence of
this Section 5(f), or from such other locations as are set forth on
Schedule 5(f) or Schedule A hereto, as such Schedules may be
amended from time to time. The Pledgor shall not establish a new
location for its chief executive office nor shall it change its
name until (i) it shall have given the Collateral Agent not less
than 20 days' prior written notice of its intention so to do,
clearly describing such new location or name and providing such
other information in connection therewith as the Collateral Agent
may request, and (ii) with respect to such new location or name,
the Pledgor shall have taken all action satisfactory to the
Collateral Agent or the Required Banks to maintain the perfection
and priority of the security interest of the Collateral Agent for
the benefit of the Secured Parties in the Collateral intended to be
granted hereby.
(g) Location of Inventory. All Inventory (other than
Inventory constituting Excepted Inventory and Excepted Receivables)
held on the date hereof by the Pledgor is located at one of the
locations shown on Schedule A hereto, except for Inventory in
transit in the ordinary course of business to or from one or more
of such locations. All Inventory now held or subsequently acquired
shall be kept at one of the locations shown on Schedule A hereto,
except for Inventory in transit in the ordinary course of business
to or from one or more of such locations, or such new location as
the Pledgor may establish if (i) in the case of any location not
within a jurisdiction covered by financing statements filed
pursuant to this Agreement, it shall have given to the Collateral
Agent at least 10 days' prior written notice of its intention so to
do, clearly describing such new location and providing such other
information in connection therewith as the Collateral Agent may
request and, in the case of any other location, it gives the
Collateral Agent written notice of such location within 10 days
after such action, and (ii) with respect to such new location, the
Pledgor shall have taken all action satisfactory to the Collateral
Agent or the Required Banks to maintain the perfection and priority
of the security interest in the Collateral intended to be granted
hereby.
(h) Authorization, Enforceability. The Pledgor has the
requisite corporate power, authority and legal right to pledge and
grant a security interest in all the Collateral pursuant to this
Agreement, and this Agreement constitutes the legal, valid and
binding obligation of the Pledgor, enforceable against the Pledgor
in accordance with its terms.
(i) No Consents, etc. No consent of any party
(including, without limitation, stockholders or creditors of the
Pledgor or any account debtor under a Receivable) and no consent,
authorization, approval, or other action by, and no notice to or
filing with, any governmental authority or regulatory body or other
Person is required either (x) for the pledge by the Pledgor of the
Collateral pursuant to this Agreement or for the execution,
delivery or performance of this Agreement by the Pledgor, or (y)
for the exercise by the Collateral Agent of the rights provided for
in this Agreement, or (z) for the exercise by the Collateral Agent
of the remedies in respect of the Collateral pursuant to this
Agreement.
(j) Collateral. All information set forth herein,
including the Schedules annexed hereto, and all information
contained in any documents, schedules and lists heretofore
delivered to any Secured Party in connection with this Agreement,
in each case, relating to the Collateral, is accurate and complete
in all respects.
(k) Initial Evidence of Collateral. Other than in
connection with the sale or lease of Computer Equipment or other
equipment, all of the Pledgor's rights to payment for goods sold or
services performed (other than for services provided in connection
with sales or leases of Computer Equipment) are and will be
initially evidenced by only accounts, provided that in connection
with the refurbishment or expansion of an existing store supplied
by the Pledgor or the initial stocking of a store not previously
supplied by the Pledgor, the Pledgor may sell a stock of inventory
in consideration for a retailer note or chattel paper.
Section 6. Special Provisions Concerning Receivables.
(a) Maintenance of Records. The Pledgor shall keep and
maintain at its own cost and expense satisfactory and complete
records of each Receivable, in a manner consistent with prudent
business practices, and the Pledgor shall make the same available
to the Collateral Agent for inspection, at the Pledgor's sole cost
and expense, during customary business hours upon demand. Upon the
occurrence and during the continuance of an Event of Default, the
Pledgor shall, at the Pledgor's sole cost and expense, deliver all
tangible evidence of Receivables, including, without limitation,
all documents evidencing Receivables and any books and records
relating thereto, to the Collateral Agent or to its representatives
(copies of which evidence and books and records may be retained by
the Pledgor) at any time upon the demand of the Required Banks.
Upon the cure or waiver of any Event of Default, the Collateral
Agent shall promptly return all evidence and books and records to
the Pledgor. Upon the occurrence and during the continuance of an
Event of Default, the Collateral Agent, with the consent of the
Required Banks, may transfer a full and complete copy of the
Pledgor's books, records, credit information, reports, memoranda
and all other writings relating to the Receivables to and for the
use by any Person that has acquired or is contemplating acquisition
of an interest in the Receivables or the Collateral Agent's
security interest therein without the consent of the Pledgor.
(b) Modification of Terms, etc. The Pledgor shall not
rescind or cancel any indebtedness evidenced by any Receivable
constituting part of the Collateral or modify any term thereof or
make any adjustment with respect thereto, or extend or renew any
such indebtedness or compromise or settle any dispute, claim, suit
or legal proceeding relating thereto other than in the ordinary
course of business consistent with past practice. The Pledgor
shall timely fulfill all obligations on its part to be fulfilled
under or in connection with the Receivables.
(c) Collection. The Pledgor shall take all actions to
cause to be collected from the account debtor of each of the
Receivables constituting part of the Collateral, as and when due
(including, without limitation, Receivables that are delinquent,
such Receivables to be collected in accordance with generally
accepted commercial collection procedures), any and all amounts
owing under or on account of such Receivable, and apply forthwith
upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Receivable. Subject to the rights of
the Collateral Agent hereunder upon the occurrence of an Event of
Default, the Pledgor may, with respect to a Receivable constituting
part of the Collateral, allow in the ordinary course of business
(i) a refund or credit due as a result of returned or damaged or
defective merchandise and (ii) such extension of time to pay
amounts due in respect of such Receivables and such other
modifications of payment terms or settlements in respect of such
Receivables as shall be commercially reasonable in the
circumstances, all in accordance with the Pledgor's ordinary course
of business consistent with its collection practices as in effect
from time to time. The costs and expenses (including, without
limitation, attorney's fees) of collection, in any case, whether
incurred by the Pledgor, the Collateral Agent or any Secured Party,
shall be paid by the Pledgor.
(d) Instruments. If the Pledgor receives from any
Person any instrument or chattel paper in exchange or substitution
for or in payment or other satisfaction of any account constituting
part of the Collateral and, after giving effect thereto the
aggregate outstanding face amount of all such instruments and
chattel paper received from such Person and its Affiliates by the
Pledgor exceeds $125,000, the Pledgor shall deliver to the
Collateral Agent, within 10 days after receipt of the instrument or
chattel paper in question by the Pledgor, all such instruments and
chattel paper. Any instrument or chattel paper delivered to the
Collateral Agent pursuant to this Section 6(e) shall be
appropriately endorsed (if applicable) to the order of the
Collateral Agent, as agent for the Secured Parties, and shall be
held by the Collateral Agent as further security hereunder. If
there is a bank or trust company located in Oklahoma City,
satisfactory to the Collateral Agent in its reasonable discretion,
willing and able to serve, on terms satisfactory to the Collateral
Agent in its reasonable discretion, as a co-agent pursuant to
Section 30, the Collateral Agent shall, if so requested by or on
behalf of the Pledgor, appoint such a bank as co-agent for purposes
of holding such instruments and chattel paper in custody. The
Pledgor may, on at least three Domestic Business Days' notice to
the Collateral Agent or any such co-agent, as the case may be (or
such shorter period as may be agreed to by the Collateral Agent or
any such co-agent from time to time or in any particular instance),
obtain redelivery of any such instrument or chattel paper to it for
purposes of cancellation or surrender to the maker thereof either
in exchange for a substitute note or against payment thereof.
(e) Upon the occurrence and during the continuance of
an Event of Default, if the Collateral Agent, at the request of the
Required Banks, so directs, the Pledgor shall cause all payments on
account of the Receivables constituting part of the Collateral to
be held by the Collateral Agent as cash collateral in the
Collateral Account, upon acceleration or otherwise. Without notice
to or assent by the Pledgor, the Collateral Agent may apply any or
all amounts then or thereafter held as cash collateral in the
manner provided in Section 11. The costs and expenses (including,
without limitation, reasonable attorney's fees) of collection,
whether incurred by the Collateral Agent or any Secured Party,
shall be paid by the Pledgor.
Section 7. Provisions Concerning All Collateral.
(a) Protection of the Collateral Agent's Security. The
Pledgor shall not take any action that impairs the rights of the
Collateral Agent or any Secured Party in the Collateral. The
Pledgor shall at all times keep the Inventory insured at the
Pledgor's own expense, to the Collateral Agent's reasonable
satisfaction, against fire, theft and all other risks to which the
Collateral may be subject, in such amounts and with such
deductibles as would be maintained by operators of businesses
similar to the business of the Pledgor. Within 30 days of the date
hereof, each policy or certificate with respect to such insurance
shall be endorsed to the Collateral Agent's satisfaction for the
benefit of the Collateral Agent (including, without limitation, by
naming the Collateral Agent as an additional insured and as
provided in the next succeeding sentence) and such policy or
certificate shall be delivered to the Collateral Agent. Each such
policy shall state that (i) it cannot be canceled without 30 days
prior written notice to the Collateral Agent, (ii) no claim in
excess of $25,000,000 shall be settled with the insurance provider
without the prior consent of the Collateral Agent and (iii) the
Collateral Agent shall be a loss payee on any claim in excess of
$25,000,000. At least 10 days prior to the expiration of any such
policy of insurance, the Pledgor shall deliver to the Collateral
Agent either (i) an extension or renewal policy or an insurance
certificate evidencing renewal or extension of such policy, or (ii)
notice that such policy has not been extended or renewed. If such
policy has not been extended or renewed, the Pledgor agrees to
consult with the Collateral Agent, and to furnish any information
that the Collateral Agent may request, as to the status of
negotiations with such insurance provider. If the Pledgor shall
fail to insure such Collateral in accordance with prudent industry
practices or if the Pledgor shall fail to so endorse and deposit,
or to extend or renew prior to expiration, all such
insurancepolicies or certificates with respect thereto, the
Collateral Agent shall have the right (but shall be under no
obligation) to advance funds to procure or renew or extend such
insurance and the Pledgor agrees to reimburse the Collateral Agent
for all costs and expenses thereof, with interest on all such funds
from the date advanced until paid in full at 1% plus the rate that
would be applicable to Tranche A Base Rate Loans under the Credit
Agreement.
(b) Upon the occurrence and during the continuance of an
Event of Default, the Collateral Agent, as directed by the Required
Banks, shall have the option to apply any proceeds of insurance
received by it pursuant to this Agreement toward the payment of the
Secured Obligations in accordance with Section 11 hereof or to
continue to hold such proceeds in the Collateral Account as
additional collateral to secure the performance by the Pledgor of
the Secured Obligations. So long as no Event of Default shall have
occurred and be continuing, the Pledgor shall have the option (i)
to direct the Collateral Agent to apply any proceeds of insurance
received by it toward payment of the Secured Obligations in
accordance with Section 11 hereof or (ii) to elect, by delivery of
written notice to the Collateral Agent, to apply the proceeds of
such insurance to the repair or replacement of the item or items of
Collateral in respect of which such proceeds were received. In the
event that the Pledgor elects to apply such proceeds to the repair
or replacement of any item of Collateral pursuant to clause (ii) of
the preceding sentence, the Collateral Agent shall release such
proceeds from the Collateral Account as soon as practicable
following its receipt of the Pledgor's written notice of such
election. The Pledgor shall upon its receipt of such proceeds
promptly commence and diligently continue to perform such repair or
promptly effect such replacement.
(c) Payment of Taxes; Claims. The Pledgor shall pay
promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the
Collateral. Notwithstanding the foregoing, the Pledgor may at its
own expense contest the amount or applicability of any of the
obligations described in the preceding sentence by appropriate
legal or administrative proceedings, prosecution of which operates
to prevent the collection thereof and the sale or forfeiture of the
Collateral or any part thereof to satisfy the same; provided,
however, that in connection with such contest, the Pledgor shall,
at the option and upon the request of the Collateral Agent (a) have
made provision for the payment of such contested amount on the
Pledgor's books if and to the extent required by generally accepted
accounting principles, and (b) upon the occurrence and continuance
of an Event of Default, have deposited with the Collateral Agent in
the Collateral Account a sum sufficient to pay and discharge such
obligation and the Collateral Agent's estimate of all interest and
penalties related thereto, if requested by the Required Banks.
(d) Financing Statements. The Pledgor shall sign and
deliver to the Collateral Agent such financing and continuation
statements, in form acceptable to the Collateral Agent, as may from
time to time be required to continue and maintain a valid,
enforceable, first priority security interest in the Collateral as
provided herein and the other rights, as against third parties
(other than Permitted Liens), provided hereby, all in accordance
with the Uniform Commercial Code as enacted in any and all relevant
jurisdictions or any other relevant law. The Pledgor shall pay any
applicable filing fees and other expenses related to the filing of
such financing and continuation statements. The Pledgor authorizes
the Collateral Agent to file any such financing or continuation
statements without the signature of the Pledgor where permitted by
law.
(e) Warehouse Receipts Non-Negotiable. If any warehouse
receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of the Inventory, the Pledgor shall not permit
such warehouse receipt or receipt in the nature thereof to be
negotiable.
Section 8. Transfers and Other Liens. Except in
connection with sales and other dispositions permitted by the
Credit Agreement, the Pledgor shall not (i) sell, convey, assign or
otherwise dispose of, or grant any option with respect to, any of
the Collateral other than sales and other dispositions of Inventory
in the ordinary course of business or (ii) create or permit to
exist any Lien upon or with respect to any of the Collateral other
than Permitted Liens and the Lien and security interest granted to
the Collateral Agent under this Agreement.
Section 9. Reasonable Care. The Collateral Agent shall
be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if such Collateral
is accorded treatment substantially equivalent to that which the
Collateral Agent, in its individual capacity, accords its own
property, it being understood that the Collateral Agent shall not
have responsibility for taking any necessary steps to preserve
rights against any Person with respect to any Collateral.
Section 10. Remedies Upon Default; Obtaining the
Collateral Upon Event of Default. (a) If an Event of Default
shall have occurred and be continuing, then and in every such case,
the Collateral Agent, upon being instructed to do so by the
Required Banks, may:
(i) Personally, or by agents or attorneys, immediately
take possession of the Collateral, or any part hereof, from the
Pledgor or any other Person who then has possession of any part
thereof with or without notice or process of law, and for that
purpose enter upon the Pledgor's premises where any of the
Collateral is located and remove such Collateral and use in
connection with such removal any and all services, supplies, aids
and other facilities of the Pledgor.
(ii) Instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables) constituting the Collateral to make any payment
required by the terms of such instrument or agreement directly to
the Collateral Agent; provided, however, that in the event that any
such payments are made directly to the Pledgor, prior to receipt by
any such obligor of such instruction, the Pledgor shall segregate
all amounts received pursuant thereto in a separate account and pay
the same promptly to the Collateral Agent.
(iii) Sell, assign or otherwise liquidate, or direct the
Pledgor to sell, assign or otherwise liquidate, any or all
investments made in whole or in part with the Collateral or any
part thereof, and take possession of the proceeds of any such sale,
assignment or liquidation.
(iv) Take possession of the Collateral or any part
thereof, by directing the Pledgor in writing to deliver the same to
the Collateral Agent at any place or places designated by the
Collateral Agent, in which event the Pledgor shall at its own
expense: (a) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there be delivered
to the Collateral Agent; (b) store and keep any Collateral so
delivered to the Collateral Agent at such place or places pending
further action by the Collateral Agent; and (c) while the
Collateral shall be so stored and kept, provide such security and
maintenance services as shall be necessary to protect the same and
to preserve and maintain them in good condition. The Pledgor's
obligation to deliver the Collateral is of the essence of this
Agreement. Upon application to a court of equity having
jurisdiction, the Collateral Agent shall be entitled to a decree
requiring specific performance by the Pledgor of such obligation.
(b) Remedies; Disposition of the Collateral.
(i) Upon the occurrence and continuance of an Event
of Default, the Collateral Agent, upon being instructed to do so by
the Required Banks, may from time to time exercise in respect of
the Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and
remedies of a secured party under the Uniform Commercial Code as
enacted in any and all relevant jurisdictions or under any other
relevant law at the time of an event of default, and the Collateral
Agent may also in its sole discretion, without notice except as
specified below, (i) withdraw all cash in the Collateral Account
and apply such cash and any other cash held by it as Collateral as
specified in Section 11 and (ii) if there is no such cash, or if
such cash is insufficient to pay all the Secured Obligations, sell
the Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker's board or at any of the
Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other
terms as the Collateral Agent may deem commercially reasonable.
The Collateral Agent or any other Secured Party or any of their
respective Affiliates may be the purchaser of any or all of the
Collateral at any such sale and shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price
for all or any portion of the Collateral sold at such sale, to use
and apply any of the Secured Obligations owed to such Person as a
credit on account of the purchase price of any Collateral payable
by such Person at such sale. Each purchaser at any such sale shall
acquire the property sold absolutely free from any claim or right
on the part of the Pledgor, and the Pledgor hereby waives, to the
fullest extent permitted by law, all rights of redemption, stay or
appraisal hereafter enacted. The Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of
sale having been given. Th Collateral Agent may adjourn any public
or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. The
Pledgor hereby waives, to the fullest extent permitted by law, any
claims against the Collateral Agent arising by reason of the fact
that the price at which any Collateral may have been sold at such
a private sale was less than the price which might have been
obtained at a public sale, even if the Collateral Agent accepts the
first offer received and does not offer such Collateral to more
than one offeree.
(ii) The Pledgor agrees that, to the extent notice
of sale shall be required by law, 5 days' notice from the
Collateral Agent of the time and place of any public sale or of the
time after which a private sale or other intended disposition is to
take place shall be commercially reasonable notification of such
matters. No notification need be given to the Pledgor if it has
signed, after the occurrence of an Event of Default, a statement
renouncing or modifying any right to notification of sale or other
intended disposition.
(c) Waiver of Claims. Except as otherwise provided
herein, the Pledgor hereby waives, to the fullest extent permitted
by applicable law, notice or judicial hearing in connection with
the Collateral Agent's taking possession of any of the Collateral
or of the Collateral Agent's disposition of any of the Collateral,
including, without limitation, any and all prior notice and hearing
for any prejudgment remedy or remedies and any such right which the
Pledgor would otherwise have under law, and the Pledgor hereby
further waives, to the fullest extent permitted by applicable law:
(i) all damages occasioned by such taking of possession; (ii) all
other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and (iii) all rights of redemption,
appraisal, valuation, stay, extension or moratorium now or
hereafter in force under any applicable law. Any sale of, or the
grant of options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title, interest,
claim and demand, either at law or in equity, of the Pledgor
therein and thereto, and shall be a perpetual bar both at law and
in equity against the Pledgor and against any and all Persons
claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, from, through or under the
Pledgor.
Section 11. Application of Proceeds. (a) The proceeds
received by the Collateral Agent in respect of any sale of,
collection from or other realization upon all or any part of the
Collateral pursuant to the exercise by the Collateral Agent of its
remedies as a secured creditor as provided in Section 10 hereof (or
held by it pursuant to Section 18 hereof) and any cash held in the
Collateral Account shall be applied, together with any other sums
then held by the Collateral Agent pursuant to this Agreement,
promptly by the Collateral Agent while an Event of Default has
occurred and is continuing, upon being instructed to do so by the
Required Banks, as follows:
First, to the payment of all costs and expenses, fees,
commissions and taxes of such sale, collection or other
realization, including, without limitation, reasonable compensation
to the Collateral Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith, together with interest on
each such amount at 1% plus the rate that would be applicable to
Tranche A Base Rate Loans under the Credit Agreement from and after
the date such amount is due, owing or unpaid until paid in full;
Second,
(a) in the case of any Intercompany Receivables
Collateral, to pay the Secured Obligations ratably (or provide for
the payment thereof pursuant to subsection (b) of this Section),
until payment in full of all such Secured Obligations shall have
been made (or so provided for), provided that before making any
payment pursuant to this subclause (a) of clause Second ratably to
the holders of the Secured Obligations, the Collateral Agent shall
first apply solely to the Non-Bank Secured Obligations any amount
held by it pursuant to subclause (ii)(A) of Section 18(b) and
provided further that the principal amount outstanding to any Bank
under any Interest Rate Protection Agreement at the time any such
payments are to be distributed in accordance with this clause
Second shall be the amount of the Pledgor's obligations then due
and payable (including any early termination payments then due) to
such Bank under such Interest Rate Protection Agreement; and
(b) in the case of any Bank Collateral, to pay the
Secured Obligations (other than the Non-Bank Secured Obligations)
ratably (or provide for the payment thereof pursuant to subsection
(b) of this Section), until payment in full of all such Secured
Obligations shall have been made (or so provided for), provided
that the principal amount of the outstanding Interest Rate
Obligations of any Bank at the time any such payments are to be
distributed in accordance with this clause shall be the amount of
the Pledgor's obligations then due and payable (including any early
termination payments then due) to such Bank under the applicable
Interest Rate Protection Agreement(s); and
Third, to the Pledgor, or its successors or assigns, or
to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
(b) If at any time any monies collected or received by
the Collateral Agent would, but for the provisions of this
subsection (b), be payable pursuant to subsection (a) of this
Section in respect of any Contingent Secured Obligation, the
Collateral Agent shall not apply such monies to pay such Contingent
Secured Obligation but instead shall hold such monies in the
Collateral Account. The Collateral Agent shall so hold all such
monies until such time as the holder of such Contingent Secured
Obligation advises the Collateral Agent (with at least three
Business Days' prior notice to the Pledgor) that all or a specified
part of such Contingent Secured Obligation has become a
Non-Contingent Secured Obligation, whereupon the Collateral Agent
shall apply the amount so held to pay such Non-Contingent Secured
Obligation; provided that, if the other Secured Obligations
theretofore paid pursuant to subsection (a) were not paid in full,
the Collateral Agent shall apply the amount so held to pay the same
percentage of such Non-Contingent Secured Obligation as the
percentage of such other Secured Obligations theretofore paid
pursuant to subsection (a). If (i) the holder of such Contingent
Secured Obligation shall advise the Collateral Agent (with at least
three Business Days' prior notice to the Pledgor) that no portion
thereof remains in the category of a Contingent Secured Obligation
and (ii) any amount held pursuant to this subsection (b) in
respect of such Contingent Secured Obligation remains after payment
of all ratable amounts payable pursuant to the preceding sentence
with respect to any portions thereof that became Non-Contingent
Secured Obligations, such remaining amount shall be applied by the
Collateral Agent in the order of priorities set forth in subsection
(a) of this Section.
(c) In making the payments and allocations required by
this Section, the Collateral Agent may, (i) as to any Secured
Obligations arising under an Interest Rate Protection Agreement or
Further Letter of Credit Agreement, rely upon information from the
applicable counterparty identified by the Pledgor pursuant to
Section 2, and (2) as to any Existing Indenture Obligations, rely
upon information from the Trustee under the applicable Existing
Debt Indenture and shall have no liability to the Pledgor or any
other Secured Party for actions taken in reliance on such
information except in the case of its gross negligence or willful
misconduct. All distributions made by the Collateral Agent
pursuant to this Section shall be final (except in the event of
manifest error) and the Collateral Agent shall have no duty to
inquire as to the application by the Secured Parties of any amount
distributed to them.
Section 12. Expenses. The Pledgor will upon demand pay
to the Collateral Agent the amount of any and all expenses,
including the fees and expenses of its counsel and the fees and
expenses of any experts and agents which the Collateral Agent may
incur in connection with (i) the collection of the Secured
Obligations, (ii) the enforcement and administration of this
Agreement, (iii) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral,
(iv) the exercise or enforcement of any of the rights of the
Collateral Agent or any Secured Party hereunder or (v) the failure
by the Pledgor to perform or observe any of the provisions hereof.
All amounts payable by the Pledgor under this Section 12 shall be
due upon demand (and if not timely paid shall bear interest at 1%
plus the rate that would be applicable to Tranche A Base Rate Loans
under the Credit Agreement) and shall be part of the Secured
Obligations. The Pledgor's obligations under this Section shall
survive the termination of this Agreement and the discharge of the
Pledgor's other obligations hereunder.
Section 13. No Waiver; Cumulative Remedies.
(a) No failure on the part of the Collateral Agent to
exercise, no course of dealing with respect to, and no delay on the
part of the Collateral Agent in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right, power or remedy
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein
provided are cumulative and are not exclusive of any remedies
provided by law.
(b) In the event the Collateral Agent shall have
instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Collateral
Agent, then and in every such case, the Pledgor, the Collateral
Agent and each holder of any of the Secured Obligations shall be
restored to their respective former positions and rights hereunder
with respect to the Collateral, and all rights, remedies and powers
of the Collateral Agent and the Secured Parties shall continue as
if no such proceeding had been instituted.
Section 14. The Collateral Agent. The Collateral Agent
has been appointed as collateral agent pursuant to the Credit
Agreement. The actions of the Collateral Agent hereunder are
subject to the provisions of the Credit Agreement (including in
particular Article VII thereof). The obligations of the Collateral
Agent hereunder are only those expressly set forth herein. In any
case in which the Collateral Agent is authorized to exercise any
power or discretion, the Collateral Agent may refuse from such
exercise unless directed in writing by the Required Banks to act in
the manner specified in such direction. The Collateral Agent shall
have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or
refrain from taking action (including, without limitation, the
release or substitution of Collateral), in accordance with this
Agreement and the Credit Agreement. The Collateral Agent may
resign and a successor Collateral Agent may be appointed in the
manner provided in the Credit Agreement. Upon the acceptance of
any appointment as Collateral Agent by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and
duties of the retiring Collateral Agent under this Agreement, and
the retiring Collateral Agent shall thereupon be discharged from
its duties and obligations under this Agreement. After any
retiring Collateral Agent's resignation, the provisions of this
Agreement shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Agreement while it was the
Collateral Agent.
Section 15. Collateral Agent May Perform; Collateral
Agent Appointed Attorney-in-Fact. If the Pledgor shall fail to do
any act or thing that it has covenanted to do hereunder or if any
warranty on the part of the Pledgor contained herein shall be
breached, the Collateral Agent if required by the Required Banks
may (but shall not be obligated to) upon three Business Days notice
to the Pledgor specifying the action to be taken, do the same or
cause it to be done or remedy any such breach, and may expend funds
for such purpose. Any and all amounts so expended by the
Collateral Agent shall be paid by the Pledgor promptly upon demand
therefor, with interest at 1% plus the rate that would be
applicable to Tranche A Base Rate Loans under the Credit Agreement
during the period from and including the date on which such funds
were so expended to the date of repayment. The Pledgor's
obligations under this Section 15 shall survive the termination of
this Agreement and the discharge of the Pledgor's other obligations
under this Agreement, the Credit Agreement, any other Operative
Agreement, any Interest Rate Protection Agreement and any Further
Letter of Credit Agreement. The Pledgor hereby appoints the
Collateral Agent its attorney-in-fact, with full authority in the
place and stead of the Pledgor and in the name of the Pledgor, or
otherwise, from time to time in the Collateral Agent's discretion
to take any action and to execute any instrument consistent with
the terms of this Agreement and the other Operative Agreements
which the Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement. The foregoing grant and
such appointment shall be irrevocable for the term of this
Agreement. The Pledgor hereby ratifies all that such attorney
shall lawfully do or cause to be done by virtue hereof.
Section 16. Indemnity.
(a) Indemnity. The Pledgor agrees to indemnify, pay and
hold harmless the Collateral Agent and each of the Secured Parties
and the officers, directors, employees, agents and affiliates of
the Collateral Agent and each of the Secured Parties (collectively
called the "Indemnitees") from and against any and all other
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs (including, without limitation,
settlement costs), expenses or disbursements of any kind or nature
whatsoever (including, without limitation, the fees and
disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced
or threatened, whether or not such Indemnitee shall be designated
a party thereto), which may be imposed on, incurred by, or asserted
against that Indemnitee, in any manner relating to or arising out
of this Agreement, any other Operative Agreement, any Interest Rate
Protection Agreement or any Further Letter of Credit Agreement
(including, without limitation, any misrepresentation by the
Pledgor in this Agreement, any other Operative Agreement or any
Interest Rate Protection Agreement or any Further Letter of Credit
Agreement) (the "indemnified liabilities"); provided that the
Pledgor shall have no obligation to an Indemnitee hereunder, with
respect to indemnified liabilities, if such indemnified liability
arose from the gross negligence or willful misconduct of that
Indemnitee. To the extent that the undertaking to indemnify, pay
and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy,
the Pledgor shall contribute the maximum which it is permitted to
pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.
(b) Survival. The obligations of the Pledgor contained
in this Section 16 shall survive the termination of this Agreement
and the discharge of the Pledgor's other obligations under this
Agreement, any Interest Rate Protection Agreement, any Further
Letter of Credit Agreement and the other Operative Agreements.
(c) Reimbursement. Any amounts paid by any Indemnitee
as to which such Indemnitee has the right to reimbursement shall
constitute Secured Obligations secured by the Collateral.
Section 17. Modification in Writing. Other than in
respect of any release of Collateral pursuant to Section 18 hereof,
no amendment, modification, supplement, termination or waiver of or
to any provision of this Agreement, nor consent to any departure by
the Pledgor therefrom, shall be effective unless in writing and
signed by the Collateral Agent and the Pledgor (with the requisite
consent, if any, of the Banks, the Required Banks or the Releasing
Banks required by Section 9.04 of the Credit Agreement); provided
that without the consent of the Banks to whom a majority of the
Interest Rate Obligations are owed, no such amendment,
modification, supplement, termination or waiver may (i) exclude the
Interest Rate Obligations from the definition of Secured
Obligations or (ii) change the provisions of clause Second of
Section 11 hereof; provided further that without the consent of the
Banks to whom a majority of the obligations under the Further
Letter of Credit Agreements are owed, no such amendment,
modification, supplement, termination or waiver may (i) exclude any
Further Letter of Credit Agreement from the definition of Secured
Obligations. or (ii) change the provisions of clause Second of
Section 11 hereof. Any amendment, modification or supplement of or
to any provision of this Agreement, any waiver of any provision of
this Agreement, and any consent to any departure by the Pledgor
from the terms of any provision of this Agreement, shall be
effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is
specifically required by this Agreement or any other Operative
Agreement, no notice to or demand on the Pledgor in any case shall
entitle the Pledgor to any other or further notice or demand in
similar or other circumstances.
Section 18. Termination; Release. (a) When all the
Credit Agreement Secured Obligations have been paid in full and the
Commitments of the Banks to make any Loan or to issue any Letter of
Credit under the Credit Agreement have expired, or if earlier the
occurrence of the Rating Target Date, this Agreement shall
terminate, except as expressly set forth herein.
(b)(i) The Pledgor may from time to time prior to the
termination of this Agreement request the Collateral Agent to
release all or any of the Collateral, which request shall be
accompanied by a certificate of a Responsible Officer stating (A)
whether such release is requested in connection with an Asset Sale,
(B) whether a Default has occurred and is continuing, (C) if such
release is requested in connection with an Asset Sale, identifying
the cash, Temporary Cash Investments and instruments comprising the
Net Proceeds of such Asset Sale that, in the good faith
determination of such Responsible Officer, are allocable to the
Collateral requested to be released (the "Collateral Net Proceeds")
and, if any of such Collateral is Intercompany Receivables
Collateral, the portion of the Collateral Net Proceeds allocable to
such Intercompany Receivables Collateral (the "Intercompany
Collateral Net Proceeds") and (D) if such release is requested in
connection with an Asset Sale, the amount, if any, of the cash and
Temporary Cash Investments included in the Collateral Net Proceeds
that is required to be applied by the Pledgor to the prepayment of
the principal amount of the Loans pursuant to Section 2.09(b)(i) of
the Credit Agreement within 14 days after the consummation of such
Asset Sale and the date on which such prepayment is to be made. If
such request is not in connection with an Asset Sale, the
Collateral Agent shall release Collateral pursuant to such request
but only with, if such Collateral does not include any Intercompany
Receivables Collateral, the consent of the Releasing Banks and, if
such Collateral does include any Intercompany Receivables
Collateral, the consent of the Releasing Banks and the Non-Bank
Secured Parties.
(ii) If such request is in connection with an Asset Sale
and such certificate states that no Default has occurred and is
continuing, the Collateral Agent shall release Collateral pursuant
to such request without the consent of any Secured Party but only
against delivery to the Collateral Agent of (A) the Non-Bank
Percentage of each element (cash, Temporary Cash Investments and
instruments) of the Intercompany Collateral Net Proceeds (as set
forth in such certificate) and (B) all other Collateral Net
Proceeds.
(iii) If such request is in connection with an Asset Sale
and such certificate states that a Default has occurred and is
continuing, the Collateral Agent shall release Collateral pursuant
to such request without the consent of any Secured Party but only
against delivery to the Collateral Agent of all cash and other
property constituting the portion of the Net Proceeds of such Asset
Sale allocable to the Collateral to be released (as set forth in
such certificate).
(iv) All such cash shall be held in the Collateral
Account and any such other property shall be held by the Collateral
Agent as Proceeds, subject to the Lien hereof, and
(A) in all cases, even if any other subclause below
would otherwise apply, if an Event of Default shall occur and be
continuing, applied pursuant to Section 11 hereof;
(B) in the case of any cash or Temporary Cash
Investments included in Collateral Net Proceeds held pursuant to
subclause (ii)(B), applied for the account of the Pledgor (after
reducing any such Temporary Cash Investments to cash) to make
prepayments of the Loans pursuant to Section 2.09(b)(i) of the
Credit Agreement as set forth in the related certificate of a
Responsible Officer;
(C) in the case of any instrument included in Collateral
Net Proceeds held pursuant to subclause (ii)(B), all income thereon
or other payments in respect thereof shall be applied for the
account of the Pledgor to make prepayments of the Loans pursuant to
Section 2.09(b)(i) of the Credit Agreement as shall be specified
from time to time in a certificate of a Responsible Officer;
(D) in the case of any cash, Temporary Cash Investments
and instruments held pursuant to clause (iii),
(1) an amount equal to the Non-Bank
Percentage of each element of the Intercompany Collateral Net
Proceeds (determined as of the date the Collateral Agent received
such Proceeds) shall be retained by the Collateral Agent until the
termination of this Agreement (and then paid to the Pledgor or as
it shall direct), provided that if the Collateral Agent receives a
certificate of a Responsible Officer stating that the Non-Bank
Secured Obligations have been paid in full, any such cash and
Temporary Cash Investments shall be applied for the account of the
Pledgor to make prepayments of the Loans to the extent required by
Section 2.09(b)(i) of the Credit Agreement and the balance, if any,
paid to the Pledgor or as it shall direct and any instruments shall
be applied as set forth in the immediately preceding clause (C),
and
(2) as to the balance, if a Responsible Officer
shall subsequently certify that no Default has occurred and is
continuing, any such cash and Temporary Cash Investments shall be
applied for the account of the Pledgor to make prepayments of the
Loans to the extent required by Section 2.09(b)(i) of the Credit
Agreement and the balance, if any, paid to the Pledgor or as it
shall direct and any instruments shall be applied as set forth in
the immediately preceding clause (C), and
(E) in the case of any cash or other property held
pursuant to subclause (ii)(A), applied as set forth in subclause
(1) of the immediately preceding clause (D).
(c) Upon termination of this Agreement or any release of
Collateral in accordance with the provisions hereof, the Collateral
Agent shall, upon the request and at the sole cost and expense of
the Pledgor, forthwith assign, transfer and deliver to the Pledgor,
against receipt and without recourse to or warranty by the
Collateral Agent, such of the Collateral to be released (in the
case of a release) as may be in possession of the Collateral Agent
and as shall not have been sold or otherwise applied pursuant to
the terms hereof, and, with respect to any other Collateral, proper
instruments (including Uniform Commercial Code termination
statements on Form UCC-3) acknowledging the termination of this
Agreement or the release of such Collateral, as the case may be.
Section 19. Collateral Account.
(a) There is hereby established with the Collateral
Agent a cash collateral account (the "Collateral Account") in the
name and under the control of the Collateral Agent into which there
shall be deposited from time to time the cash proceeds of the
Collateral required to be delivered to the Collateral Agent
pursuant to any provision of this Agreement. Any income received
by the Collateral Agent with respect to the balance from time to
time standing to the credit of the Collateral Account, including
any interest or capital gains on Liquid Investments, shall remain,
or be deposited, in the Collateral Account. All right, title and
interest in and to the cash amounts on deposit from time to time in
the Collateral Account together with any Liquid Investments from
time to time made pursuant to subsection (c) of this Section shall
vest in the Collateral Agent, shall constitute part of the
Collateral hereunder and shall not constitute payment of the
Secured Obligations until applied thereto as hereinafter provided.
(b) Upon the occurrence and during the continuation of
an Event of Default, the Collateral Agent shall, if so instructed
by the Required Banks, apply or cause to be applied (subject to
collection) any or all of the balance from time to time standing to
the credit of the Collateral Account in the manner specified in
Section 11. Upon the cure of such Event of Default, all Liquid
Investments held by the Collateral Agent in the Collateral Account
shall be reduced to cash and all cash amounts held in the
Collateral Account shall be promptly returned to the Pledgor,
provided that any Liquid Investments or cash held in the Collateral
Account arising out of matters of the character described in
Section 6(d), 7(b) or 18 shall be applied as provided therein.
(c) Amounts on deposit in the Collateral Account shall
be invested and re-invested from time to time in such Liquid
Investments as the Pledgor shall determine, which Liquid
Investments shall be held in the name and be under the control of
the Collateral Agent, provided that, if an Event of Default has
occurred and is continuing, the Collateral Agent shall, if
instructed by the Required Banks, liquidate any such Liquid
Securities and apply or cause to be applied in the proceeds thereof
to the payment of the Secured Obligations in the manner specified
in Section 11.
Section 20. Definitions. Capitalized terms used and not
defined herein shall have the meanings assigned to them in the
Credit Agreement. Unless otherwise defined herein or in the Credit
Agreement, or unless the context otherwise requires, all terms used
herein which are defined in Article 9 of the New York Uniform
Commercial Code as in effect on the date hereof have the meanings
stated therein. The following terms shall have the following
meanings.
"Bank Collateral" means all Collateral other than
Intercompany Receivables Collateral.
"Bank Secured Obligations" means the Secured Obligations
other than the Non-Bank Secured Obligations, provided that at any
time of determination no amount of the Pledgor's obligations under
any Interest Rate Protection Agreement shall be included in Bank
Secured Obligations that are Non-Contingent Secured Obligations
unless such obligations are then due and payable.
"Contingent Secured Obligation" means at any time any
Secured Obligation (or portion thereof) that is at such time:
(i) an obligation to reimburse a Bank for drawings not
yet made under a letter of credit issued or to be issued by such
Bank or
(ii) an obligation to provide collateral to or for the
benefit of a Bank to secure reimbursement obligations arising from
drawings not yet made under a letter of credit issued or to be
issued by such Bank or to make any other payment to the Issuing
Bank that such Issuing Bank would not be entitled to retain if no
drawings were made under the relevant letter of credit after the
time of determination.
"Credit Agreement Secured Obligations" means the Secured
Obligations arising under the Credit Agreement.
"Documents" shall mean all documents and all books,
records, ledgers, printouts, computer recording media, data files,
tapes, file materials and other papers containing information
relating to (a) Receivables and any account debtors, beneficiaries
and subcontractors in respect thereof and (b) all other Collateral.
"Existing Debt Indentures" means (i) the Indenture dated
as of December 1, 1989, as supplemented to the date hereof, from
the Pledgor to Morgan Guaranty Trust Company of New York, as
Trustee, and (ii) the Indenture dated as of March 15, 1986, as
supplemented to the date hereof, from the Pledgor to Morgan
Guaranty Trust Company of New York, as Trustee.
"Existing Indenture Obligations" means the notes and
debentures of the Pledgor outstanding from time to time under the
Existing Debt Indentures, provided that the term Existing Indenture
Obligations shall not include any such securities that are not
issued and outstanding on July 19, 1994 unless such securities have
been issued in exchange or substitution (which do not include any
refinancing or refunding) for any securities constituting Existing
Indenture Obligations that were outstanding on July 19, 1994.
"Intercompany Receivable" means any Receivable the
obligor of which is a Domestic Subsidiary (as defined in the
Existing Debt Indentures).
"Intercompany Receivables Collateral" means the
Intercompany Receivables, any instruments, chattel paper or
Document relating to any Intercompany Receivables and any Proceeds
of any thereof.
"Inventory" shall mean all inventory and, in any event,
shall include, without limitation, wherever located, and whether
now existing or hereafter acquired, all raw materials, work in
process, returned goods, finished goods and consigned goods to the
extent of the consignee's interest therein, materials and supplies
of any kind or nature which are or might be used in connection with
the manufacture, printing, publication, packing, shipping,
advertising, selling or finishing of any such goods, and all other
products, goods, materials and supplies, provided, however, that
personal computers, electronic point-of-sale equipment and related
software and printers ("Computer Equipment") shall not constitute
Inventory.
"Liquid Investment" means (i) direct obligations of the
United States or any agency thereof, or obligations guaranteed by
the United Sates or any agency thereof, (ii) commercial paper rated
in the highest grade by a nationally recognized credit rating
agency or (iii) time deposits with, including certificates of
deposit issued by, any office located in the United States of any
bank or trust company (including a bank or trust company acting as
the Collateral Agent or a co-agent hereunder) which is organized
under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least
$1,000,000,000; provided in each case that (x) such Liquid
Investment matures within 90 days from the date of acquisition
thereof and (y) in order to provide the Collateral Agent, for the
benefit of the Secured Parties, with a perfected security interest
therein, such Liquid Investment is:
(1) evidenced by a certificate or instrument which is
negotiable, or if non-negotiable is issued in the name of the
Collateral Agent or its nominee, and which (together with any
appropriate instruments of transfer) is delivered to, and held by,
the Collateral Agent or an agent thereof (which shall not be the
Pledgor or any of its Affiliates) in the State of New York;
(2) issued by the U.S. Treasury in book-entry form and
subject to pledge under then applicable state law and Treasury
regulations and held by the Collateral Agent at a Federal Reserve
Bank; provided that the books of the Collateral Agent reflect that
such Treasury securities are held as Collateral under this
Agreement in compliance with then applicable Treasury regulations
regarding the perfection of security interests in Treasury
securities; or
(3) otherwise issued, evidenced, registered or recorded
in such manner as will provide the Collateral Agent, for the
benefit of the Secured Parties, with a perfected security interest
therein.
"Non-Bank Percentage" means, as of any time of
determination, the percentage obtained by dividing the then-
outstanding principal amount of the Non-Bank Secured Obligations by
the sum of the then - outstanding principal amount of (a) the
Non-Bank Secured Obligations and (b) any Bank Secured Obligations
that are Non-Contingent Secured Obligations.
"Non-Bank Secured Obligations" means the Secured
Obligations held by the Non-Bank Secured Parties.
"Non-Bank Secured Parties" means the holders from time to
time of the Secured Obligations consisting of the Existing
Indenture Obligations.
"Non-Contingent Secured Obligation" means at any time any
Secured Obligation (or portion thereof) that is not a Contingent
Secured Obligation at such time.
"Permitted Liens" means any Lien permitted by clauses
(a), (b), (c), (d), (e), (f), (g) and (o) of Section 5.10 of the
Credit Agreement.
"Proceeds" shall mean all proceeds and, in any event,
shall include, without limitation, any and all (i) proceeds of any
insurance (except payments made to a Person which is not a party to
this Agreement), indemnity, warranty or guaranty payable to the
Collateral Agent or to the Pledgor from time to time with respect
to any of the Collateral, (ii) payments (in any form whatsoever)
made or due and payable to the Pledgor from time to time in
connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any person acting on behalf of a
governmental authority), (iii) instruments representing obligations
to pay amounts in respect of Inventory or Receivables, (iv)
products of the Collateral and (v) other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean:
(a) all of the Pledgor's rights to payment for goods sold
or services performed by the Pledgor or any other party, whether
now in existence or arising from time to time hereafter, evidenced
by or consisting of accounts, together with (i) all instruments or
chattel paper received in exchange or substitution for, or in
payment or other satisfaction of, any such account (but not
including any instrument or chattel paper arising out of a
transaction of the character described in the proviso to Section
5(k)), and (ii) all of the Pledgor's rights under any guarantees,
indemnities, letters of credit or other collateral securing the
payment of any such account, provided that any receivables related
to services provided in connection with the lease of Computer
Equipment shall not constitute Receivables hereunder; and
(b) any chattel paper or instrument or any right to
receive a payment of money which constitutes an account, contract
right or general intangible, but only in such instances where the
obligor is the Borrower or a Subsidiary, and all of the Pledgor's
rights under any guarantees, indemnities, letters of credit or
other collateral securing the payment of any thereof.
"Responsible Officer" means the Chairman of the Board,
the Vice Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the Chief Operating Officer, the President
or the Treasurer of the Pledgor.
"Secured Parties" means (i) the holders from time to time
of the Secured Obligations and (ii) the Collateral Agent, provided
that for purposes of any notice to or consent required from the
Non-Bank Secured Parties, the Trustee under each Existing Debt
Indenture at the time in question shall be treated as the Non-Bank
Secured Party with respect to the Existing Indenture Obligations
thereunder and all payments to be made to or for the benefit of any
holder of an Existing Indenture Obligation shall be made to the
Trustee in question and the Collateral Agent shall have no further
responsibilities or liability with respect thereto.
"Security Interests" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.
Section 21. Notices. Unless otherwise provided herein
or in the Credit Agreement, any notice or other communication
herein required or permitted to be given shall be given in the
manner set forth in the Credit Agreement, if to the Pledgor,
addressed to it at the address set forth on the signature page
hereof, if to the Collateral Agent, addressed to it at the address
set forth on the signature page of this Agreement or as to any
party at such other address as shall be designated by such party in
a written notice to the other party complying as to delivery with
the terms of this Section 21; provided that notices to the
Collateral Agent shall not be effective until received by the
Collateral Agent.
Section 22. Continuing Security Interest; Assignment.
This Agreement shall create a continuing security interest in the
Collateral and shall (i) be binding upon the Pledgor, its
successors and assigns, and (ii) inure, together with the rights
and remedies of the Collateral Agent hereunder, to the benefit of
the Collateral Agent and the other Secured Parties and each of
their respective successors, transferees and assigns; no other
Persons (including, without limitation, any other creditor of the
Pledgor) shall have any interest herein or any right or benefit
with respect hereto. Without limiting the generality of the
foregoing clause (ii), any Bank may assign or otherwise transfer
any indebtedness held by it secured by this Agreement to any other
Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Bank, herein or
otherwise, subject however, with respect to any Bank, to the
provisions of the Credit Agreement and provided further than no
counterparty to an Interest Rate Protection Agreement or a Further
Letter of Credit Agreement shall be entitled to the benefits hereof
unless it is also a Bank.
Section 23. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
Section 24. CONSENT TO JURISDICTION AND SERVICE OF
PROCESS. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE PLEDGOR WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT THE PLEDGOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE COLLATERAL AGENT TO BRING PROCEEDINGS
AGAINST THE PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION.
Section 25. Severability of Provisions. 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 26. Execution in Counterparts. This Agreement
and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.
Section 27. Headings. The Section headings used in this
Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.
Section 28. Obligations Absolute. All obligations of
the Pledgor hereunder shall be absolute and unconditional
irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of
the Pledgor;
(ii) any lack of validity or enforceability of the
Credit Agreement, any Letter of Credit, any Interest Rate
Protection Agreement, any Further Letter of Credit Agreement or any
other Operative Agreement, or any other agreement or instrument
relating thereto;
(iii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations,
or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any Letter of Credit, any Interest Rate
Protection Agreement, any Further Letter of Credit Agreement or any
other Operative Agreement, or any other agreement or instrument
relating thereto;
(iv) any exchange, release or non-perfection of any
other collateral, or any release or amendment or waiver of or
consent to any departure from any guarantee, for all or any of the
Secured Obligations;
(v) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect of this
Agreement, any Interest Rate Protection Agreement, any Further
Letter of Credit Agreement, or any other Operative Agreement except
as specifically set forth in a waiver granted pursuant to the
provisions of Section 17 hereof; or
(vi) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, the Pledgor.
Section 29. Future Advances. This Agreement shall
secure the payment of any amounts advanced from time to time
pursuant to the Credit Agreement or any Further Letter of Credit
Agreement.
Section 30. Appointment of Co-Agents. At any time or
times, in order to comply with any legal requirement in any
jurisdiction or in connection with Section 6(d), the Collateral
Agent may appoint another bank or trust company or one or more
other persons, either to act as co-agent or co-agents, jointly with
the Collateral Agent, or to act as separate agent or agents on
behalf of the Secured Parties with such power and authority as may
be necessary for the effectual operation of the provisions hereof
and may be specified in the instrument of appointment (which may,
in the discretion of the Collateral Agent, include provisions for
the protection of such co-agent or separate agent similar to the
provisions of or incorporated by reference in Section 14.
Notwithstanding any such appointment but only to the extent not
inconsistent with such legal requirements or, in the reasonable
judgment of the Collateral Agent, not unduly burdensome to it or
any such co-agent, the Pledgor shall, so long as no Event of
Default shall have occurred and be continuing, be entitled to deal
solely and directly with the Collateral Agent rather than any such
co-agent in connection with the Collateral Agent's rights and
obligations under this Agreement.
Section 31. The other provisions of this Agreement to
the contrary notwithstanding, the obligation of the Pledgor to file
financing statements in the State of Tennessee with respect to
Collateral shall be subject to the following. Financing statements
need be filed in the State of Tennessee by the Pledgor and all
other parties to a Security Document (collectively, the "Pledgors")
only with respect to Collateral having an aggregate value equal to
$108.25 million, to be allocated among all Pledgors on the basis of
the estimated value of Inventory located in Tennessee owned by each
of them as of a date reasonably proximate to the date hereof,
provided that this sentence shall not affect the determination at
any time of whether the Collateral Requirement has been met. In
connection with the foregoing, the Pledgor represents and warrants
to the Collateral Agent, for the benefit of the Banks, that the
aggregate value as of a date reasonably proximate to the date
hereof of all Inventory owned by the Pledgors located in the State
of Tennessee is approximately $90.2 million.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement
to be executed and delivered by its duly authorized officer as of
the date first above written.
FLEMING COMPANIES, INC., as
Pledgor
By /s/ John M. Thompson
Name: John M. Thompson
Title: Vice President
P. O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
Attn: Treasurer
Telecopier: (405) 840-7202
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent
By /s/ Michael C. Mauer
Name: Michael C. Mauer
Title: Vice President
Notice Address:
60 Wall Street
New York, New York 10260
Attention: Loan Department
Telecopier: (212) 648-5336
Telex: 177615
EXHIBIT 4.3
AMENDMENT NO. 1 TO CREDIT AGREEMENT
Amendment No. 1, dated as of July 21, 1994, to the Credit
Agreement, dated as of July 19, 1994 (the "Agreement"), among
Fleming Companies, Inc. (the "Borrower"), the banks listed on the
signature pages of the Agreement (the "Initial Banks"), the agents
listed on the signature pages of the Agreement and Morgan Guaranty
Trust Company of New York, as Managing Agent (the "Managing
Agent").
RECITALS
A. The Borrower, the Banks and the Managing Agent wish to
amend the Agreement to provide for certain additional banks
identified below (the "New Banks") to become Banks party to the
Agreement, with the Commitments of the Initial Banks to be
reallocated in part to become the Commitments of the New Banks.
B. The Borrower, the Banks and the Managing Agent,
together with the New Banks, are executing this Amendment for the
foregoing purpose.
NOW, THEREFORE, the parties agree as follows:
1. Each Person executing the signature pages to this
Amendment, other than the Borrower, the Initial Banks and the
Managing Agent, is a New Bank and, subject to the provisions of
Section 3 hereof, as of the date hereof the signature pages of the
Agreement are supplemented to include the signature pages hereto
signed by each of the New Banks with the effect that as of the date
hereof each New Bank shall be a Bank party to and for all purposes
of the Agreement.
2. Schedule 1 to the Agreement is replaced in its
entirety by Schedule 1 attached hereto.
3. The provisions of Sections 1 and 2 hereof to the
contrary notwithstanding:
(a) all Borrowings made before July 26, 1994 shall be
made solely from the Initial Banks on the basis of their
Commitments on the original Schedule 1 attached to the Agreement;
and
(b) commitment, facility and letter of credit fees
accrued under the Credit Agreement to but excluding July 26, 1994
shall be solely for the account of the Initial Banks and on and
after July 26, 1994 such fees shall accrue for the account of the
Initial Banks and the New Banks, on the basis of their Commitments
as set forth on Schedule 1 attached hereto.
4. (a) Section 2.11(e)(i) of the Credit Agreement is
amended by changing the reference to Section 2.04(a) therein to a
reference to Section 2.03(a) and by changing the reference to
Section 2.04(b) therein to a reference to Section 2.03(b).
(b) Section 2.15 of the Credit Agreement is amended by
changing the reference to Section 2.06(d) therein to a reference to
Section 2.05(d).
5. Unless otherwise specifically defined herein, each
term used herein that is defined in the Agreement shall have the
meaning assigned to such term in the Agreement. Each reference
therein to "hereof", "hereunder", "herein" and "hereby" and each
other similar reference contained in the Agreement or any other
Operative Agreement shall from and after the date hereof refer to
the Agreement as amended hereby.
6. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same
effect as if the signatures hereto and thereto were upon the same
instrument. This Amendment shall become effective as of the date
hereof when the Managing Agent shall have received (a) duly
executed counterparts hereof signed by the Borrower, the Initial
Banks, the New Banks and the Managing Agent (or, in the case of any
Bank as to which an executed counterpart shall not have been
received, the Managing Agent shall have received telegraphic, telex
or other written confirmation from such party of execution of a
counterpart hereof by such party) and (b) duly executed Notes
(other than a Swingline Note) for the account of each New Bank,
each dated on or before the date hereof and complying with the
provisions of Section 2.04.
7. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized
officers as of the day and year first above written.
FLEMING COMPANIES, INC.
By /s/ John M. Thompson
Title: Vice President
and Treasurer
BANKS
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Michael C. Mauer
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ J. Stephen Mernick
Title: Senior Vice President
THE BANK OF NOVA SCOTIA
By /s/ A.S. Norsworthy
Title: Assistant Agent
CANADIAN IMPERIAL BANK OF COMMERCE
By /s/ J.D. Westland
Title: Authorized Signatory
CREDIT SUISSE
By /s/ Geoffrey M. Craig
Title: Member of Senior
Management
By /s/ Kristinn R. Kristinsson
Title: Associate
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By /s/ Dr. Hans-Dieter Wettlaufer
Title: Vice President
By /s/ Jean M. Hannigan
Title: Assistant Vice President
THE FUJI BANK, LIMITED
By /s/ David Kelley
Title: Vice President and
Senior Manager
NATIONSBANK OF TEXAS, N.A.
By /s/ Bianca Hemmen
Title: Senior Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY
By /s/ Richard Lewis
Title: Assistant Vice President
By /s/ Matthew C. Flanigan
Title: First Vice President and
Manager
THE SUMITOMO BANK LTD.
HOUSTON AGENCY
By /s/ Tatsuo Ueda
Title: General Manager
THE SUMITOMO BANK OF CALIFORNIA
By /s/ Seishi Jiromaru
Title: Vice President
Division Manager
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By /s/ Robert W. Bishop
Title: Vice Chairman
THE TORONTO-DOMINION BANK
By /s/ F.B. Hawley
Title: Manager
Credit Association
UNION BANK OF SWITZERLAND,
HOUSTON AGENCY
By /s/ Alfred W. Imholz
Title: First Vice President
By /s/ Jan Buettgen
Title:Assistant Vice President
BANCA DI ROMA SpA
By /s/ O.W. Cheney Jr.
Title: Chief Manager
By /s/ Josefina M. Madrid
Title: Assistant Vice President
BANK IV OKLAHOMA, N.A.
By /s/ Paul Anderson
Title: Vice President
BANK OF HAWAII
By /s/ Joseph T. Donalson
Title: Vice President
THE BANK OF TOKYO, LTD.,
DALLAS AGENCY
By /s/ John M. Mearns
Title: Vice President
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By /s/ Iain A. Whyte
Title: Assistant Vice President
By /s/ Mark A. Harrington
Title: Vice President and
Regional Manager
BANQUE NATIONALE DE PARIS
By /s/ Henry F. Setina
Title: Vice President
BANQUE PARIBAS
By /s/ Robert G. Shaw
Title: Vice President
By /s/ Pierre-Jean de Filippis
Title: General Manager
BARCLAYS BANK PLC
By /s/ David Vickrey
Title: Associate Director
BAYERISCHE VEREINSBANK AG,
LOS ANGELES AGENCY
By /s/ John Carlson
Title: Assistant Vice President
By /s/ Sylvia K. Cheng
Title: Assistant Vice President
BHF-BANK, NEW YORK BRANCH
By /s/ Paul Travers
Title: Vice President
By /s/ David Fraenkel
Title: Vice President
BOATMEN'S FIRST NATIONAL BANK
OF OKLAHOMA
By /s/ K. Randy Roper
Title: Senior Vice President
THE CHASE MANHATTAN BANK, N.A.
By /s/ Thomas T. Daniels
Title: Vice President
CITIBANK N.A.
By /s/ W. P. Stengel
Title: Vice President
COMMERZBANK AG, NEW YORK AND/OR
GRAND CAYMAN BRANCH
By /s/ J. Schmieding
Title: Assistant Vice President
By /s/ W. Niemeyer
Title: Vice President
CONTINENTAL BANK
By /s/ Mary Jo Hoch
Title: Vice President
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By /s/ Ian Reece
Title: Vice President and
Manager
By /s/ J. Scott Taylor
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Robert Ivosevich
Title: Senior Vice President
DAI-ICHI KANGYO BANK, LTD.
NEW YORK BRANCH
By /s/ Seiji Imai
Title: Assistant Vice President
DAIWA BANK TRUST COMPANY
By /s/ Kenro Kojima
Title: Vice President
By /s/ Joel Limjap
Title: Vice President
DG BANK
DEUTSCHE GENOSSENSCHAFTSBANK
By /s/ Norah McCann
Title: Senior Vice President
By /s/ Karen A. Brinkman
Title: Vice President
DRESDNER BANK AG
NEW YORK BRANCH
By /s/ R. Matthew Scherer
Title: Vice President
By /s/ Charles H. Hill
Title: Vice President
FIRST HAWAIIAN BANK
By /s/ Robert M. Wheeler, III
Title: Vice President
FIRST INTERSTATE BANK OF CALIFORNIA
By /s/ William J. Baird
Title: Vice President
By /s/ Wendy V.C. Purcell
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Jeanette Ganousis
Title: Vice President
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By /s/ A. Kimball Collins
Title: Assistant Vice President
FLEET BANK OF MASSACHUSETTS, N.A.
By /s/ Maryann S. Smith
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LTD.
By /s/ Robert W. Ramage, Jr.
Title: Senior Vice President
KREDIETBANK N.V.
By /s/ Robert Snauffer
Title: Vice President
By /s/ Diane Grimmig
Title: Vice President
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, N.A.
By /s/ Laura Christofferson
Title: Vice President
LTCB TRUST COMPANY
By /s/ Noboru Kubota
Title: Senior Vice President
MANUFACTURERS AND TRADERS
TRUST COMPANY
By /s/ Geoffrey R. Fenn
Title: Vice President
THE MITSUBISHI BANK, LIMITED
HOUSTON AGENCY
By /s/ Shoji Honda
Title: General Manager
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/ Masaaki Yamagishi
Title: Chief Manager
THE MITSUI TRUST AND BANKING
COMPANY, LIMITED
By /s/ Margaret Holloway
Title: Vice President
NATIONAL WESTMINSTER BANK Plc
NASSAU BRANCH
By /s/ David L. Smith
Title: Vice President
NATIONAL WESTMINSTER BANK Plc
NEW YORK BRANCH
By /s/ David L. Smith
Title: Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ Perry G. Pelos
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By /s/ Gregory T. Gaschler
Title: Vice President
THE SANWA BANK LIMITED,
DALLAS AGENCY
By /s/ Blake Wright
Title: Assistant Vice President
UNITED STATES NATIONAL BANK
OF OREGON
By /s/ Blake R. Howells
Title: Vice President
WACHOVIA BANK OF GEORGIA,
NATIONAL ASSOCIATION
By /s/ Terry L. Akins
Title: Senior Vice President
THE YASUDA TRUST AND BANKING
COMPANY, LTD.
By /s/ Rohn Laudenschlager
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Managing Agent
By /s/ Michael C. Mauer
Title: Vice President
60 Wall Street
New York, New York 10260
Attention: Loan Department
Telex number: 177615
Telecopier number: (212) 648-5336
