SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 20, 1994
THE KROGER CO.
(Exact name of registrant as specified in its charter)
An Ohio Corporation No. 1-303 31-0345740
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Number)
1014 Vine Street
Cincinnati, OH 45201
(Address of principal
executive offices)
Registrant's telephone number: (513) 762-4000
Item 5. Other Events
On July 19, 1994, the Company entered into and closed
on its Senior Competitive Advance and Revolving Credit
Agreement (the "Credit Agreement"), among the Company,
Dillon Companies, Inc., Chemical Bank, Citibank, N.A.,
and the Lenders named therein. A copy of the Credit
Agreement is filed herewith as Exhibit 99.1.
On July 19, 1994, the Company released its earnings for
the second quarter 1994 in the form attached hereto as
Exhibit 99.2.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Other Exhibits--Senior Competitive Advance and
Revolving Credit Agreement dated as of July 19,
1994, among The Kroger Co., Dillon Companies,
Inc., Chemical Bank, Citibank, N.A., and the
Lenders named therein
99.2 Other Exhibits--Earnings Release for Second
Quarter 1994<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereto duly authorized.
THE KROGER CO.
July 20, 1994 By (Paul W. Heldman)
Paul Heldman
Vice President, Secretary
and General Counsel
<PAGE>
EXHIBIT INDEX
Exhibit
99.1 Other Exhibits--Senior Competitive Advance and
Revolving Credit Agreement dated as of July 19, 1994,
among The Kroger Co., Dillon Companies, Inc., Chemical
Bank, Citibank, N.A., and the Lenders named therein
99.2 Other Exhibits--Earnings Release for Second Quarter
1994
Exhibit 99.2
KROGER 2ND QTR OPER NET PER SHARE:
57 CENTS VS. 27 CENTS
CINCINNATI, Ohio, July 19, 1994 --- The Kroger Co. said today that earnings
before extraordinary charges in the 1994 second quarter rose to $70.0
million, equal to 57 cents per share on a fully diluted basis, compared to
$29.6 million, or 27 cents per share, in the prior year's second quarter.
Operating cash flow -- earnings before interest, taxes, depreciation and
LIFO -- increased 9.8 percent to $261.2 million from $237.9 million in the
1993 second quarter.
The Company noted that last year's results included a one-time after tax
special charge of $15 million, or 12 cents per share fully diluted, for the
closing of San Antonio stores in 1993.
After the extraordinary charge from the early retirement of debt, net
earnings in the second quarter totaled $67.3 million, or 55 cents per share
fully diluted, compared to $27.5 million, or 25 cents per share fully
diluted, in last year's second quarter.
Total sales in the quarter increased 1.2 percent to $5.4 billion from $5.3
billion. Identical food store sales increased 1.8 percent.
Kroger's net interest expense in the second quarter declined 20.7 percent
to $75.0 million. Long-term debt at the end of the second quarter was
$3.944 billion, a decrease of $269.4 million from the previous year's
second quarter.
Joseph A. Pichler, Chairman and Chief Executive Officer, said the Company's
performance in the second quarter reflected across-the-board improvements
in operating efficiencies, the favorable impact of technology, and strong
merchandising programs tailored to individual markets.
"In the highly competitive environment of food retailing, Kroger is
succeeding by controlling distribution and logistics costs, and through the
implementation of new technologies," Pichler said. "At the same time, our
localized merchandising strategies are using the full strengths of Kroger's
combination food and drug stores and our strong private brands to maintain
our market leadership position," he added.
During the first half of 1994, Kroger opened, expanded or acquired 33
stores, which is on target with the Company's current plan to expand new
retail square footage by a minimum of approximately 5 to 6 percent annually
in 1994-96.
In the first half, operating cash flow increased 9.4 percent to $498.7
million, and sales increased 2.1 percent to $10.7 billion. Identical food
store sales through the first half were up 2.0 percent over the prior
year's first half.
Separately, Kroger said it expects to close a new bank credit agreement
later today that will lower costs of borrowing and permit increased capital
expenditures.
<PAGE>
The Kroger Co.
Sales and Earnings
2nd Qtr 2nd Qtr Percent
1994 1993 Change
-------------- -------------- ---------
Sales $5,394,228,355 $5,329,372,598 1.2
============== ============== ==========
EBITD <F1> $ 261,170,719 $ 237,860,959 9.8
Non-EBITD
charges <F2> $ (4,500,000) $ (27,225,000)
LIFO $ (3,000,000) $ (3,750,000)
Interest $ (75,008,364) $ (94,590,856)
Depreciation
$ (64,383,531) $ (59,902,574)
--------------- ---------------
Pre-tax earnings
before extraordinary
loss $ 114,278,824 $ 52,392,529
Tax expense
$ (44,300,337) $ (22,771,217)
--------------- ---------------
Earnings before
extraordinary
loss $ 69,978,487 $ 29,621,312
Extraordinary
loss <F3> $ (2,645,544) $ (2,135,947)
--------------- ---------------
Net earnings
$ 67,332,943 $ 27,485,365
============== ===============
Primary earnings (loss) per
common share:
From operations
$ 0.62 $ 0.27
From extraordinary
loss <F3> $ (0.02) $ (0.02)
_______________ ________________
Primary net earnings
per common share
$ 0.60 $ 0.25
Fully-diluted earnings (loss)
per common share:
From operations
$ 0.57 $ 0.27
From extraordinary
loss <F3> $ (0.02) $ (0.02)
_______________ ________________
Fully-diluted net earnings
per common share
$ 0.55 $ 0.25
============== ===============
Number of shares
used in primary per share
calculation 112,966,394 108,392,949
Number of shares
used in fully-diluted
per share
calculation
130,271,502 125,482,008
[FN]
<F1> EBITD represents pre-tax earnings before interest, depreciation, and
LIFO as defined in the Company's Bank Credit Agreement.
<F2> Represents $4.5 million, or $2.7 million after-tax, for additional
quarterly charge from the adoption of FASB 106 in 1994 and 1993 and $22.7
million, or $15 million after-tax, in 1993 from the Company's
withdrawal from the San Antonio market, which are excluded from EBITD as
defined by the Company's Bank Credit Agreement.
<F3> Represents the after-tax loss from the early retirement of debt.
<PAGE>
[CAPTION] 2 Qtrs 2 Qtrs Percent
1994 1993 Change
6/18/94 6/19/93
--------------- --------------- ----------
Sales $10,723,032,262 $10,503,298,306 2.1
=============== =============== ==========
EBITD <F1> $ 498,718,562 $ 455,928,697 9.4
Non-EBITD
charges <F2>
$ (9,000,000) $ (31,725,000)
LIFO $ (6,500,000) $ (7,750,000)
Interest $ (151,039,852) $ (191,579,989)
Depreciation
$ (126,693,700) $ (122,878,893
---------------- ----------------
Pre-tax earnings before
cumulative effect adjustment and
extraordinary
loss $ 205,485,010 $ 101,994,815
Tax expense
$ (79,816,711) $ (42,909,745)
---------------- ---------------
Earnings before
cumulative effect adjustment and
extraordinary
loss $ 125,668,299 $ 59,085,070
Extraordinary
loss <F3> $ (10,977,622) $ (11,177,855)
Cumulative effect of change
in accounting for
postretirement
benefits <F4>
$ NA $ (159,192,961)
---------------- ---------------
Net earnings
(loss) $ 114,690,677 (111,285,746)
================ ===============
Primary earnings (loss) per
common share:
From operations
$ 1.12 $ 0.57
From extraordinary
loss <F3> $ (0.10) $ (0.11)
From cumulative effect of
change in accounting for
postretirement
benefits <F4>
$ NA $ (1.54)
---------------- -----------------
Primary net earnings
(loss) per common
share $ 1.02 $ (1.08)
================ =================
Fully-diluted earnings (loss)
per common share:
From operations
$ 1.02 $ 0.55
From extraordinary
loss <F3> $ (0.08) $ (0.09)
From cumulative effect of
change in accounting for
postretirement
benefits <F4>
$ NA $ (1.32)
--------------- ----------------
Fully-diluted net earnings
(loss) per common
share: $ 0.94 $ (0.86)
=============== ================
Number of shares
used in primary per share
calculations 112,444,812 103,079,043
Number of shares
used in fully-diluted
per share
calculation
129,962,861 120,408,073
------------ ------------
[FN]
<F1> EBITD represents pre-tax earnings before interest, depreciation and
LIFO as defined in the Company's Bank Credit Agreement.
<F2> Represents $9.0 million, or $5.4 million after-tax, for additional
quarterly charges from the adoption of FASB 106 in 1994 and 1993 and $22.7
million, or $15 million after-tax in 1993, from the Company's withdrawal
from the San Antonio market, which are excluded from EBITD as defined by
the Company's Bank Credit Agreement.
<F3> Represents the after-tax loss from the early retirement of debt.
<F4> Represents the after-tax cumulative effect adjustment from the
adoption of FASB 106, "Accounting for Postretirement Benefits other than
Pensions".
Exhibit 99.1
SENIOR COMPETITIVE ADVANCE AND REVOLVING CREDIT
AGREEMENT dated as of July 19, 1994, among THE
KROGER CO., an Ohio corporation (the "Parent
Borrower"); the wholly owned subsidiaries of the
Parent Borrower listed on Schedule 2.01(a)(i) (the
"Subsidiary Borrowers"); the financial institutions
listed on Schedule 2.01 (the "Lenders"); CHEMICAL
BANK, a New York banking corporation ("Chemical
Bank"), as a swingline lender (in such capacity, a
"Swing Line Bank"), as an Issuing Bank (as defined
below), as an administrative agent (in such
capacity, an "Administrative Agent"), for the
Lenders, the Swing Line Banks and the Issuing Banks
and as the collateral agent (in such capacity, the
"Collateral Agent") for the Lenders, the Swing Line
Banks and the Issuing Banks; and CITIBANK, N.A., a
national banking association ("Citibank"), as a
swingline lender (in such capacity, a "Swing Line
Bank"), as an Issuing Bank, as an administrative
agent (in such capacity, an "Administrative Agent")
for the Lenders, the Swing Line Banks and the
Issuing Banks and as the paying and calculation
agent (in such capacity, the "Paying Agent") for the
Lenders, the Swing Line Banks and the Issuing Banks.
The Parent Borrower has requested that (a) the Lenders
extend credit in order to enable the Borrowers (such term and
each other capitalized term used but not defined in this
introductory statement having the meanings assigned to such
terms in Article I) to borrow, at any time and from time to
time prior to the Termination Date, Advances in an aggregate
principal amount at any time outstanding not to exceed
$1,750,000,000, (b) the Swing Line Banks extend credit in
order to enable the Borrowers to borrow, at any time and from
time to time prior to the Termination Date, Swing Line
Advances in an aggregate principal amount at any time
outstanding not to exceed $300,000,000 and (c) the Issuing
Banks issue Letters of Credit in an aggregate face amount at
any time outstanding not to exceed $450,000,000.
The proceeds of the Borrowings on the Closing Date will
be used by the Parent Borrower to pay in full on the Closing
Date the principal amount of all advances outstanding under,
and all other amounts due in respect of, the Existing Credit
Agreement. The proceeds of the Borrowings following the
Closing Date will be used for general corporate purposes of
the Borrowers, including but not limited to funding the
working capital requirements of the Borrowers and their
respective Subsidiaries. Letters of Credit will be used to
support obligations of the Borrowers and their respective
Subsidiaries incurred in the ordinary course of business.
Accordingly, the Parent Borrower, the Subsidiary
Borrowers, the Lenders, the Issuing Banks, the Swing Line
Banks, the Administrative Agents, the Collateral Agent and the
Paying Agent agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement,
the following terms shall have the meanings specified below:
"Acquired EBITDA" means, for any period, with respect to
any Acquired Entity, (a) the sum of (i) Acquired Net Income
for such period, (ii) depreciation and amortization expense
for such period, (iii) interest expense net of interest income
for such period, (iv) Federal and state income taxes for such
period as determined in accordance with GAAP,
(v) extraordinary losses that have been included in the
calculation of Acquired Net Income for such period and
(vi) LIFO charges included in the calculation of Acquired Net
Income for such period minus (b) the sum of (i) extraordinary
gains that have been included in the calculation of Acquired
Net Income for such period and (ii) LIFO credits included in
the calculation of Acquired Net Income for such period.
"Acquired Entity" means any Person or the assets of any
Person to be invested in or acquired pursuant to
Section 6.07(i).
"Acquired Entity Fiscal Quarter" means, with respect to
any Acquired Entity, any fiscal quarter of such Acquired
Entity.
"Acquired Entity Fiscal Year" means, with respect to any
Acquired Entity, any fiscal year of such Acquired Entity.
"Acquired Entity Rolling Period" means, in respect of any
Acquired Entity Fiscal Quarter, such Acquired Entity Fiscal
Quarter and the three preceding Acquired Entity Fiscal Quarters.
"Acquired Net Income" means, for any period, with respect
to any Acquired Entity, the net income of such Acquired Entity
for such period before the payment of dividends on all capital
stock, determined in accordance with GAAP.
"Additional Capital Expenditures" has the meaning
specified in Section 6.08(c).
"Adjusted Eurodollar Rate" means, for an Interest Period
for an Adjusted Eurodollar Rate Advance, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the
rate of interest determined by the Paying Agent to be the
average (rounded upward to the nearest whole multiple of 1/100
of 1% per annum, if such average is not such a multiple) of
the rate per annum at which deposits in U.S. dollars are
offered by the principal office of each of the Reference Banks
in London, England, to prime banks in the London interbank
market at 11:00 a.m. (London time) two Business Days before
the first day of such Interest Period in an amount
substantially equal to such Reference Bank's Adjusted
Eurodollar Rate Advance to be outstanding during such Interest
Period (or, if such Reference Bank shall not have an Adjusted
Eurodollar Rate Advance that is to be outstanding during such
Interest Period, in an amount equal to $1,000,000) and for a
period equal to such Interest Period by (b) a percentage equal
to 100% minus the Adjusted Eurodollar Rate Reserve Percentage
for such Interest Period. The Adjusted Eurodollar Rate for an
Interest Period shall be determined by the Paying Agent on the
basis of applicable rates furnished to and received by the
Paying Agent from the Reference Banks two Business Days before
the first day of such Interest Period, subject, however, to
the provisions of Section 2.07.
"Adjusted Eurodollar Rate Advance" means an Advance that
bears interest as provided in Section 2.06(b).
"Adjusted Eurodollar Rate Reserve Percentage" means, for
an Interest Period, the reserve percentage applicable two
Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by
reference to which the interest rate on Adjusted Eurodollar
Rate Advances is determined) having a term equal to such
Interest Period.
"Administrative Agents" means Chemical Bank and Citibank
in their capacities as administrative agents for the Lenders
hereunder and any successors thereto appointed in accordance
with Article VIII.
"Administrative Questionnaire" means an Administrative
Questionnaire in the form of Exhibit C.
"Advance" has the meaning specified in Section 2.01(a)
and shall include Swing Line Advances, drawings under Letters
of Credit, drawings under Auction Bid LOCs, Auction Bid
Advances and advances pursuant to Section 2.01(d) in respect
of Overnight Overdrafts.
"Affiliate" means, with respect to any designated Person,
any other Person that has a relationship with the designated
Person whereby either of such Persons directly or indirectly
controls or is controlled by or is under common control with
the other of such Persons, or holds or beneficially owns 10%
or more of the equity interest in the other Person or 10% or
more of any class of voting securities of the other Person.
The term "control" means the possession, directly or
indirectly, of the power, whether or not exercised, to direct
or cause the direction of the management or policies of any
Person, whether through ownership of voting securities, by
contract or otherwise.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's Eurodollar Lending Office in
the case of an Adjusted Eurodollar Rate Advance and, in the
case of an Auction Bid Advance, the office of such Lender
specified in a notice of such Lender to the Paying Agent as
such Lender's Applicable Lending Office with respect to such
Auction Bid Advance.
"Applicable Percentage" means at any time, with respect
to Adjusted Eurodollar Rate Advances, the Facility Fees,
Standby Letters of Credit and Documentary Letters of Credit,
the applicable percentage set forth below based upon (a) the
Senior Debt Ratings at such time or (b) the Applicable
Percentage Ratio at such time:
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7
------- ------- ------- ------- ------- ------- -------
Moody's/ Baa1 or Baa2 and Baa2 or Baa3 and Baa3 or Ba2 or Lower than
S&P better or BBB BBB BBB- BBB- better Ba2 or
BBB+ or and BB lower than
or better or better BB
Appli- 5.0 to 4.5 to 4.0 to 3.5 to 3.0 to 2.5 to Lower than
cable 1.0 or 1.0 or 1.0 or 1.0 or 1.0 or 1.0 or 2.5 to 1.0
Percen- greater greater greater greater greater greater
tage Ratio
(spreads expressed in basis points per annum)
Adjusted
Eurodollar
Rate
Advances 25.0 27.5 30.0 35.0 40.0 50.0 62.5
Standby
Letters
of Credit 25.0 27.5 30.0 35.0 40.0 50.0 62.5
Documen-
tary
Letters
of Credit 25.0 25.0 25.0 25.0 25.0 25.0 37.5
Facility
Fees 15.0 17.5 20.0 21.25 22.5 25.0 37.5
For purposes of the foregoing, (a) from and including the
Closing Date and to but excluding the date that is 180 days
following the Closing Date, the Applicable Percentages shall
be determined in accordance with Level 6, (b) from and
including the date that is 180 days following the Closing
Date, the Applicable Percentages shall be determined at any
time by reference to the more favorable to the Borrowers of
(i) the Senior Debt Ratings at such time and (ii) the
Applicable Percentage Ratio in effect at such time, (c) if any
rating established or deemed to have been established by
Moody's or S&P shall be changed (other than as a result of a
change in the rating system of either Moody's or S&P), such
change shall be effective as of the date on which such change
is first announced publicly by the rating agency making such
change, (d) any change in the Applicable Percentages based on
a change in the Applicable Percentage Ratio shall be effective
for all purposes on and after the date of delivery to the
Administrative Agents of an Officer's Certificate of the
Parent Borrower with respect to the financial statements to be
delivered, as applicable, pursuant to Section 5.03 for the
most recently ended Fiscal Quarter (i) setting forth in
reasonable detail the calculation of the Applicable Percentage
Ratio for such Fiscal Quarter and (ii) stating that the signer
has reviewed the terms of this Agreement and has made, or
caused to be made under his or her supervision, a review in
reasonable detail of the transactions and condition of the
Parent Borrower and its Subsidiaries during the accounting
period covered by the related financial statements and that
such review has not disclosed the existence during or at the
end of such accounting period, and that the signer does not
have knowledge of the existence as at the date of such
Officer's Certificate, of any condition or event that
constitutes a Default or an Event of Default (provided
however, that any change in the Applicable Percentages based
on the Applicable Percentage Ratio in effect on the date that
is 180 days following the Closing Date shall be effective for
all purposes on and after such date based on the Applicable
Percentage Ratio set forth in an Officer's Certificate of the
Parent Borrower delivered with respect to the financial
statements to be delivered pursuant to Section 5.03 for the
Fiscal Quarter ending October 8, 1994) and (e) notwithstanding
the foregoing provisions of clauses (b) and (c), no reduction
in the Applicable Percentages shall be effective if any
Default or Event of Default shall have occurred and be
continuing. It is understood that the foregoing Officer's
Certificate shall be permitted to be delivered prior to, but
in no event later than, the time of the actual delivery of the
financial statements required to be delivered pursuant to
Section 5.03 for the applicable Fiscal Quarter. Any change in
the Applicable Percentages due to a change in the applicable
Level shall be effective on the effective date of such change
in the applicable Level and shall apply to all Adjusted
Eurodollar Rate Advances made or continued on or after the
commencement of the period (and to Base Rate Advances that are
outstanding at any time during the period) commencing on the
effective date of such change in the applicable Level and
ending on the date immediately preceding the effective date of
the next such change in applicable Level. If the rating
system of either Moody's or S&P shall change, the Parent
Borrower and the Lenders shall negotiate in good faith to
amend the references to specific ratings in this definition to
reflect such changed rating system. If either Moody's or S&P
shall cease to be in the business of rating corporate debt
obligations, the Parent Borrower and the Lenders shall
negotiate in good faith to agree upon a substitute rating
agency and to amend the references to specific ratings in this
definition to reflect the ratings used by such substitute
rating agency and, pending such agreement, the Applicable
Percentages shall be determined on the basis of the ratings
provided by the other rating agency and the Applicable
Percentage Ratio. The Applicable Percentage for Base Rate
Advances is zero.
"Applicable Percentage Ratio" means the ratio (determined
as of the last day of each Fiscal Quarter for the Rolling
Period ending on such day) of (a) Consolidated EBITDA for such
Rolling Period to (b) Consolidated Total Interest Expense for
such Rolling Period.
"Appropriate Lender" means (a) as to the Facility, a
Lender that has a Commitment for a portion of, or an Advance
under, the Facility, (b) as to the Swing Line Advances, a
Swing Line Bank or (c) as to the Auction Bid Advances, any
Lender making an Auction Bid Advance.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an assignee and, to
the extent required by Section 9.04(b), accepted by the Parent
Borrower, the Administrative Agents, the Swing Line Banks and
the Issuing Banks, in the form of Exhibit B or such other form
as shall be approved by the Administrative Agents.
"Auction Bid Advance" means an Advance by a Lender to a
Borrower as part of an Auction Bid Borrowing resulting from
the auction bidding procedure described in Section 2.01(e) or
from a drawing under an Auction Bid LOC.
"Auction Bid Borrowing" means a Borrowing consisting of
simultaneous Auction Bid Advances from each of the Lenders
whose offer to make one or more Auction Bid Advances as part
of such Borrowing has been accepted by a Borrower under the
auction bidding procedure described in Section 2.01(e).
"Auction Bid LOC" means a letter of credit issued by a
Lender for the account of a Borrower resulting from the
auction bidding procedure described in Section 2.01(f).
"Auction Bid Reduction" has the meaning specified in
Section 2.01(a).
"Base Capital Expenditure Amount" has the meaning
specified in Section 6.08(a).
"Base Capital Expenditures" has the meaning specified in
Section 6.08(a).
"Base Rate" means a fluctuating rate per annum equal to
the highest from time to time of:
(a) the arithmetic average of (i) the rate of
interest announced publicly by Chemical Bank in New York,
New York, from time to time as Chemical Bank's prime rate
and (ii) the rate of interest announced publicly by
Citibank in New York, New York, from time to time as
Citibank's base rate;
(b) the sum (adjusted to the nearer 1/16 of 1% or,
if there is no nearer 1/16 of 1%, to the next higher 1/16
of 1%) of (i) 1/2 of 1% per annum plus (ii) the rate
obtained by dividing (A) the latest three-week moving
average of secondary market morning offering rates in the
United States for three-month certificates of deposit of
major United States money market banks, such three-week
moving average (adjusted to the basis of a year of
360 days) being determined weekly on each Monday (or, if
any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending
on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to, and
published by, the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the
basis of quotations for such rates received by the Paying
Agent from three New York certificate of deposit dealers
of recognized standing selected by the Paying Agent, by
(B) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period
by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve
requirement (including any emergency, supplemental or
other marginal reserve requirement) for Citibank in
respect of liabilities consisting of or including (among
other liabilities) three-month U.S. dollar nonpersonal
time deposits in the United States, plus (iii) the
average during such three-week period of the daily annual
assessment rates estimated by Citibank for determining
the current annual assessment payable by Citibank to the
Federal Deposit Insurance Corporation (or any successor)
for insuring U.S. dollar deposits of Citibank in the
United States; and
(c) a rate equal to 1/2 of 1% per annum above the
Federal Funds Rate.
Each change in the fluctuating interest rate hereunder shall
take effect simultaneously with the corresponding change in
the Base Rate.
"Base Rate Advance" means an Advance that bears interest
as provided in Section 2.06(a).
"Board" means the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrowers" means the Parent Borrower and the Subsidiary
Borrowers.
"Borrowing" means a borrowing consisting of Advances of a
single Type made on the same day by the Appropriate Lenders
and as to which a single Interest Period is in effect.
"Business Day" means a day of the year on which banks are
not required or authorized to close in New York City or the
City of Chicago and, if the applicable Business Day relates to
any Adjusted Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Capital Expenditures" of any Person means, for any
period, all expenditures of such Person during such period
(whether paid in cash or accrued as liabilities during such
period) that, in conformity with GAAP, are required to be
included in or reflected by the property, plant or equipment
or similar fixed asset accounts on the balance sheet of such
Person and, without duplication, investments permitted by
Sections 6.04 and 6.07(g), including equipment that is
purchased simultaneously with the trade-in of existing
equipment owned by such Person to the extent of the gross
amount of the purchase price of such purchased equipment less
the book value of the equipment being traded in at such time,
but excluding (a) expenditures made in connection with the
replacement or restoration of assets, to the extent such
replacement or restoration is financed out of (i) insurance
proceeds paid on account of the loss of or damage to the
assets so replaced or restored or (ii) awards of compensation
arising from the taking by condemnation or eminent domain of
the assets so replaced, (b) any portion of Capital Lease
Obligations that is capitalized on such Person's balance sheet
and (c) interest capitalized during construction.
"Capital Lease Obligation" means, with respect to any
lessee, the obligations under any lease of property that, in
accordance with GAAP, should be capitalized on such lessee's
balance sheet.
"Cash Collateral Account" has the meaning specified in
Section 7(e)(i) of the Security Agreement.
"Change of Control" means any one or more of the
following events:
(a) the acquisition, by contract or otherwise
(including the entry into a contract or arrangement that
upon consummation will result in such acquisition), by
any Person or group (as such term is defined for purposes
of Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and
regulations pertaining thereto), other than the trusts
for the employee benefit plans (as defined in
Section 3(2) of ERISA) maintained by the Parent Borrower
or any Subsidiary of the Parent Borrower that is an ERISA
Affiliate, of beneficial ownership (within the meaning of
Rule 13d-3, or any regulation or ruling promulgated to
replace or supplement Rule 13d-3, of the General Rules
and Regulations under the Exchange Act), directly or
indirectly, of securities of the Parent Borrower
representing 20% or more of the Voting Power of all
securities of the Parent Borrower, or
(b) during any period of up to 24 consecutive
months, commencing before or after the date of this
Agreement, individuals who at the beginning of such
period were directors of the Parent Borrower (together
with any new directors whose election by the Board of
Directors or whose nomination for election by the
stockholders of the Parent Borrower was approved by a
vote of at least 75% of the directors then in office who
either were directors at the beginning of such period or
whose election or nomination for election was previously
so approved) shall cease for any reason to constitute at
least 75% of the Board of Directors of the Parent
Borrower.
"Closing Date" means the date of the first Borrowing
hereunder.
"Code" means the Internal Revenue Code of 1986, or any
successor statute thereto, as the same may be amended from
time to time.
"Collateral" means all the "Collateral" described in
Section 1 of the Security Agreement, the "Trademark
Collateral" described in Section 1 of the Trademark Security
Agreement and all other property and assets of any Loan Party
to which any Collateral Document relates.
"Collateral Agent" means Chemical in its capacity as
Collateral Agent for the Secured Parties and as custodian for
the Hedge Banks and the Senior Secured Lenders under the
Collateral Documents and any successor thereto appointed in
accordance with Article VIII.
"Collateral Documents" means the Security Agreement and
the Trademark Security Agreement, as the same may be amended,
modified or supplemented from time to time and any agreements
in replacement thereof and any intercreditor or other
agreements in respect of the collateral for the benefit of the
Senior Secured Lenders, the Lenders and the Hedge Banks.
"Commercial Paper" means any unsecured promissory note
issued by a Borrower pursuant to any commercial paper program
(whether rated or unrated) with a maturity of not more than
nine months from the time of issuance, exclusive of grace
periods.
"Commercial Paper Set-Aside Amount" has the meaning
specified in Section 2.01(g).
"Commitment" has the meaning specified in
Section 2.01(a). The Commitments shall automatically and
permanently terminate on the Termination Date.
"Concentration Account Bank" means, at any time, the
Lender with which the Parent Borrower maintains the
concentration account required to be so maintained pursuant to
Section 5.11 of this Agreement and Section 7(b) of the
Security Agreement.
"Confidential Information Memorandum" means the
Confidential Information Memorandum of the Parent Borrower
dated June 1994.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP, including principles of consolidation,
consistent with those applied in the preparation of the
Consolidated financial statements referred to in
Section 3.05(b).
"Consolidated Cash Interest Expense" means, for any
period, interest expense net of interest income, whether paid
or accrued (including the interest component of Capital Lease
Obligations) on all Debt of the Parent Borrower and its
Subsidiaries on a Consolidated basis for such period,
including (a) commissions and other fees and charges payable
in connection with Letters of Credit, Auction Bid LOCs and
letters of credit issued under the Existing Credit Agreement,
(b) net payments payable in connection with all Interest Rate
Agreements, (c) interest capitalized during construction and
(d) cash dividends paid in respect of any preferred stock
issued by the Parent Borrower, but excluding, however, the sum
of (i) interest expense not payable in cash and
(ii) amortization of discount and deferred debt expense, all
as determined in conformity with GAAP.
"Consolidated EBITDA" means, for any period, on a
Consolidated basis for the Parent Borrower and its
Subsidiaries, (a) the sum of (i) Consolidated Net Income for
such period, (ii) depreciation and amortization expense for
such period, (iii) interest expense net of interest income for
such period, (iv) Federal and state income taxes for such
period as determined in accordance with GAAP,
(v) extraordinary losses (and any unusual losses in excess of
$1,000,000 arising in or outside of the ordinary course of
business not included in extraordinary losses (determined in
accordance with GAAP) that have been included in the
calculation of Consolidated Net Income) for such period and
(vi) LIFO charges that have been included in the calculation
of Consolidated Net Income for such period minus (b) the sum
of (i) extraordinary gains (and any unusual gains in excess of
$1,000,000 arising in or outside of the ordinary course of
business not included in extraordinary gains (determined in
accordance with GAAP) that have been included in the
calculation of Consolidated Net Income) for such period and
(ii) LIFO credits that have been included in the calculation
of Consolidated Net Income for such period.
"Consolidated Free Cash Flow" means, for any Fiscal Year,
on a Consolidated basis for the Parent Borrower and its
Subsidiaries, (a) the sum of (i) Consolidated EBITDA for such
period, (ii) the Net Cash Proceeds (to the extent not
otherwise included in Consolidated EBITDA) received during
such Fiscal Year from (A) the sale, transfer or other
disposition by the Parent Borrower or any of its Subsidiaries
of assets pursuant to Section 6.05(c) or 6.05(d) and (B) in
the case of Fiscal Year 1994, the sale, transfer or other
disposition of assets between January 2, 1994, and the Closing
Date by the Parent Borrower or any of its Subsidiaries
pursuant to Section 5.02(f)(iii), 5.02(f)(iv), 5.02(f)(v) or
5.02(f)(xii) of the Existing Credit Agreement, (iii) the Net
Issuance Proceeds from Debt (other than Debt permitted under
Section 6.02(a)) incurred during such Fiscal Year to finance
Real Estate Capital Expenditures and (iv) decreases in working
capital during such Fiscal Year minus (b) the sum of
(i) Consolidated Cash Interest Expense for such Fiscal Year,
(ii) cash taxes paid in such Fiscal Year, (iii) the aggregate
amount of any payments of the principal of Debt during such
Fiscal Year (other than any payments made with the proceeds of
Debt incurred pursuant to Section 6.02(a), 6.02(f) or 6.02(o)
and other than payments that, by their terms, may be
reborrowed), (iv) the amount of Consolidated Capital
Expenditures made during such Fiscal Year (excluding any
portion of such Consolidated Capital Expenditures that
consists of Additional Capital Expenditures) and (v) increases
in working capital during such Fiscal Year.
"Consolidated Net Income" means, for any period, the net
income of the Parent Borrower and its Consolidated
Subsidiaries for such period, before the payment of dividends
on all capital stock, determined in accordance with GAAP.
"Consolidated Rental Expense" means, for any period, the
aggregate rental expense (including any contingent or
percentage rental expense) of the Parent Borrower and its
Subsidiaries on a Consolidated basis for such period
(excluding real estate taxes and common area maintenance
charges) in respect of all rent obligations under all
operating leases for real or personal property minus any
rental income of the Parent Borrower and its Subsidiaries on a
Consolidated basis for such period, all as determined in
conformity with GAAP.
"Consolidated Total Interest Expense" means, for any
period, interest expense net of interest income, whether paid
or accrued (including the interest component of Capital Lease
Obligations) on all Debt of the Parent Borrower and its
Subsidiaries on a Consolidated basis for such period,
including (a) commissions and other fees and charges payable
in connection with Letters of Credit, Auction Bid LOCs and
letters of credit issued under the Existing Credit Agreement,
(b) net payments payable in connection with all Interest Rate
Agreements, (c) interest capitalized during construction and
(d) cash dividends paid in respect of any preferred stock
issued by the Parent Borrower, but excluding, however,
amortization of deferred debt expense, all as determined in
conformity with GAAP.
"Conversion", "Convert" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other
Type pursuant to Section 2.02(c), 2.07 or 2.08.
"Copyrights" means all copyrights, copyright
registrations, applications for copyright registrations and
all rights corresponding thereto throughout the world,
including the right to recover all past, current and future
infringements thereof, and all other rights of any kind
whatsoever accruing thereunder or pertaining thereto.
"Credit Event" has the meaning specified in Section 4.01.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (including all
obligations, contingent or otherwise, of such Person in
connection with the Letters of Credit, Auction Bid LOCs,
letter of credit facilities, acceptance facilities or other
similar facilities and in connection with any agreement to
purchase, redeem, exchange into debt securities, convert into
debt securities or otherwise acquire for value (i) any capital
stock of such Person or (ii) any warrants, rights or options
to acquire such capital stock, now or hereafter outstanding),
(b) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments, (c) all indebtedness
created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are
limited to repossession or sale of such property), (d) all
Capital Lease Obligations of such Person, (e) all Debt
referred to in clause (a), (b), (c) or (d) above secured by
(or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any lien, security
interest or other charge or encumbrance upon or in property
(including accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for
the payment of such Debt, (f) all Guaranteed Debt of such
Person and (g) any preferred stock of such Person that is
classified as a liability on such Person's Consolidated
balance sheet.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
"Dillon" means Dillon Companies, Inc., a wholly owned
Subsidiary of the Parent Borrower.
"Documentary Letter of Credit" means any Letter of Credit
that is issued under the Letter of Credit Facility in support
of trade obligations incurred in the ordinary course of
business and that includes, as a condition to drawing
thereunder, the presentation to the Issuing Bank of negotiable
bills of lading, invoices and related documents sufficient, in
the judgment of the Issuing Bank, to create a valid and
perfected security interest in the goods covered thereby.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule 2.01 or in the
Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender may
from time to time specify to the Parent Borrower and the
Paying Agent.
"Environmental Laws" means all current and future
Federal, state, local and foreign laws, rules or regulations,
codes, ordinances, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder or other
requirements of Governmental Authorities or the common law,
relating to health, safety, or pollution or protection of the
environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances, or
wastes into the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing,
distribution, use, generation, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances, or wastes, or
underground storage tanks and emissions therefrom.
"ERISA" means the Employee Retirement Income Security Act
of 1974, or any successor statute, as the same may be amended
from time to time.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) that, together with the Parent Borrower, is
treated as a single employer under Section 414 of the Code.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to each
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule 2.01 or in the
Assignment and Acceptance pursuant to which it became a Lender
(or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender
may from time to time specify to the Parent Borrower and the
Paying Agent.
"Event of Default" has the meaning specified in
Section 7.01.
"Existing Credit Agreement" means the Second Restated
Credit Agreement dated as of January 21, 1992, among the
Parent Borrower, the lenders named therein and Citibank, N.A.,
as administrative agent for such Lenders.
"Existing Debt" means the Debt of the Parent Borrower and
its Subsidiaries that is outstanding on the Closing Date, as
specifically described on Schedule 6.02(b).
"Existing Auction Bid Advance" means each Auction Bid
Advance that (a) was made for the account of the Parent
Borrower by one of the Existing Lenders that is also a Lender
under this Agreement, (b) remains unpaid on the Closing Date
and (c) is listed on Schedule 2.01(e).
"Existing Lenders" has the meaning specified in
Section 2.01(b).
"Existing Letters of Credit" means each standby Letter of
Credit that (a) was issued for the account of the Parent
Borrower by one of the issuing banks under the Existing Credit
Agreement that is also an Issuing Bank under this Agreement,
(b) is outstanding on the Closing Date and (c) is listed on
Schedule 2.01(b).
"Facility" means the aggregate of the Commitments of all
Lenders without taking into account any reduction pursuant to
subsection (b), (e) or (f) of Section 2.01.
"Facility Fee" has the meaning specified in
Section 2.03(a).
"Facility Usage" means, at any time, without duplication,
the sum of (a) the amount of Advances outstanding at such
time, (b) the aggregate amount available at such time to be
drawn under outstanding (i) Letters of Credit and (ii) Auction
Bid LOCs (in each case assuming the occurrence of, and
compliance with, all conditions referred to therein) and
(c) the Commercial Paper Set-Aside Amount at such time.
"Fair Market Value" means, with respect to any asset, the
value of the consideration obtainable in a sale of such asset
in the open market at a specific date assuming a sale by a
willing seller to a willing purchaser dealing at arm's length
and arranged in an orderly manner over a reasonable period of
time having regard to the nature and characteristics of such
asset, which value is, for any asset with a Fair Market Value
in excess of $25,000,000, either (a) determined in good faith
by the Board of Directors of the Parent Borrower or (b) if
such asset shall have been the subject of a relatively
contemporaneous appraisal by an independent third party
appraiser, the basic assumptions underlying which appraisal
have not materially changed since its date, determined in such
appraisal.
"Federal Funds Rate" means a fluctuating rate per annum
equal for each day to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for
such day on such transactions received by the Paying Agent
from three Federal funds brokers of recognized standing
selected by it.
"Fees" means the fees specified in Section 2.03.
"Financial Officer" means, with respect to any
corporation, the chief financial officer, principal accounting
officer, treasurer or controller of such corporation.
"Fiscal Quarter" means (a) with respect to the first
Fiscal Quarter of any Fiscal Year, the first 12 calendar weeks
of such Fiscal Year, (b) with respect to the second Fiscal
Quarter of such Fiscal Year, the next successive period of
12 calendar weeks in such Fiscal Year, (c) with respect to the
third Fiscal Quarter of any Fiscal Year, the next successive
period of 16 calendar weeks in such Fiscal Year and (d) with
respect to the last Fiscal Quarter of any Fiscal Year, the
period of time after the first three Fiscal Quarters of such
Fiscal Year through the last day of such Fiscal Year.
"Fiscal Year" means, with respect to any Loan Party, a
year of 364 or 371 days, as the case may be, ending on the
Saturday closest to the 1st day of January in any calendar
year, and such Fiscal Year, when referred to from time to time
herein by reference to a calendar year shall be the Fiscal
Year that includes January 30th of such calendar year.
"Fixed Charge Coverage Ratio" means the ratio (determined
as of the last day of each Fiscal Quarter for the Rolling
Period ending on such day) of (a) the sum of (i) Consolidated
EBITDA for such Rolling Period and (ii) Consolidated Rental
Expense for such Rolling Period to (b) the sum of
(i) Consolidated Cash Interest Expense for such Rolling Period
and (ii) Consolidated Rental Expense for such Rolling Period.
"Fixed Rate" means, for the period for each Fixed Rate
Advance comprising part of the same Auction Bid Borrowing, the
fixed interest rate per annum determined for such Advance, as
provided in Section 2.01(e).
"Fixed Rate Advance" means an Auction Bid Advance that
bears interest at a fixed rate per annum determined as
provided in Section 2.01(e).
"Funded Debt" means the Debt resulting from the Advances
hereunder and all other Debt of the Parent Borrower or its
Subsidiaries that (on the date of its incurrence or issuance)
matures more than one year from the date of determination or
matures within one year from such date but is renewable or
extendable, at the option of the debtor, to a date more than
one year from such date or arises under a revolving credit or
similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such
date (in each case including amounts of Funded Debt required
to be paid or prepaid within one year from the date of
calculation).
"GAAP" means generally accepted accounting principles in
the United States of America, applied on a consistent basis.
"Governmental Authority" means any Federal, state, local
or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Grantor" means each Subsidiary of the Parent Borrower
that is a "Grantor" (as defined in the Security Agreement or
the Trademark Security Agreement).
"Guarantee Agreements" means, collectively, the Parent
Borrower Guarantee Agreement and the Subsidiary Guarantee
Agreement.
"Guaranteed Debt" of any Person means all Debt referred
to in clause (a), (b), (c), (d) or (e) of the definition of
the term "Debt" in this Section guaranteed directly or
indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an
agreement (a) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (b) to
purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, (c) to supply funds to,
or in any other manner invest in, the debtor (including any
agreement to pay for property or services irrespective of
whether such property is received or such services are
rendered) or (d) otherwise to assure a creditor against loss,
but excluding leases at a rental at least as favorable to the
Parent Borrower as could be obtained in an arm's-length
transaction with a party that is not an Affiliate.
"Guarantors" means, collectively, the Parent Borrower and
the Subsidiary Guarantors.
"Hazardous Materials" has the meaning specified in
Section 3.17(d).
"Hedge Banks" means the Lenders with which the Parent
Borrower enters into secured Interest Rate Agreements as
required or permitted under Article V.
"Intellectual Property Rights" means all Patents,
Trademarks, Copyrights, trade names, trade secrets,
confidential research development and commercial information,
know-how and other proprietary information.
"Intercreditor Agreement" means the Intercreditor
Agreement dated as of January 1, 1993, between Chemical, as
successor to Citibank, as Collateral Holder and IBJ Schroder
Bank & Trust Company, as trustee for the holders of the Senior
Secured Notes, as such agreement shall be amended,
supplemented or otherwise modified from time to time.
"Interest Period" means, for any Adjusted Eurodollar Rate
Advance, the period commencing on the date of such Advance or
the date of the Conversion of any Base Rate Advance into such
Advance and ending on the last day of the period selected by
the applicable Borrower pursuant to the provisions below, and,
thereafter, each subsequent period commencing on the last day
of the immediately preceding Interest Period and ending on the
last day of the period selected by such Borrower pursuant to
the provisions below. The duration of each such Interest
Period shall be 1, 2, 3 or 6 months (or, if available from all
the Lenders, 12 months), in each case as the applicable
Borrower may, upon notice received by the Paying Agent not
later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period,
select; provided, however, that:
(a) no Borrower may select any Interest Period for
any Advances that ends after the Termination Date for the
Facility; and
(b) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day; provided that
if such extension would cause the last day of such
Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur
on the next preceding Business Day.
"Interest Rate Agreement" means any forward contract,
forward option, futures contract, futures option, interest
rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate floor agreement or other
similar agreement or arrangement entered into by the Parent
Borrower.
"Investment Grade Rating Condition" has the meaning
specified in Section 9.17.
"Issuing Bank" means any Lender that is a commercial bank
acting through a branch or agency located in the United
States, as issuer of a Letter of Credit.
"Letter of Credit" means any Standby Letter of Credit and
any Documentary Letter of Credit.
"Letter of Credit Collateral" has the meaning specified
in Section 7.02(b).
"Letter of Credit Collateral Account" has the meaning
specified in Section 7.02(a).
"Letter of Credit Documents" has the meaning specified in
Section 2.15.
"Letter of Credit Facility" has the meaning specified in
Section 2.01(b)(ii).
"Letter of Credit Obligations" means, at any time, the
sum of (a) the maximum aggregate amount then available to be
drawn under the Letters of Credit outstanding at such time
(the determination of such maximum amount to assume the
occurrence of, and compliance with, all conditions for drawing
referred to therein) plus (b) the aggregate amount of the
Borrowers' obligations then outstanding under this Agreement
in respect of the Letters of Credit, including all Advances
resulting from drawings under Letters of Credit and all fees
and expenses in respect of the Letters of Credit payable
pursuant to Section 2.03.
"Lien" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, assignment for security
(whether collateral or otherwise), hypothecation, encumbrance,
lease, sublease, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention
agreement relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a
third party with respect to such securities.
"LIFO" means the pretax charge against income determined
by using the last-in-first-out method of valuing inventory.
"Loan Documents" means (a) for purposes of this
Agreement, (i) this Agreement, (ii) the Collateral Documents,
(iii) the Guarantee Agreements and (iv) the Letter of Credit
Documents and (b) for purposes of the Collateral Documents,
(i) this Agreement, (ii) the Collateral Documents, (iii) the
Guarantee Agreements, (iv) the Interest Rate Agreements
entered into by the Parent Borrower with counterparties who
are Lenders as required or permitted by Article V, (v) the
Letter of Credit Documents and (vi) the Senior Secured Debt
Documents, in case of each of the foregoing agreements set
forth or referred to in (a) or (b) as it may be amended,
modified or supplemented from time to time and any facilities
or agreements in replacement thereof.
"Loan Parties" means the Borrowers and the Grantors.
"Majority Lenders" means, at any time, Lenders holding at
least 51% of the sum of (a) the then aggregate unpaid
principal amount of all outstanding Advances and (b) the then
aggregate amount of the Commitments (without taking into
account any reduction pursuant to subsection (b), (e) or (f)
of Section 2.01).
"Margin Stock" has the meaning specified under
Regulation U.
"Material Adverse Effect" means (a) a materially adverse
effect on the business, assets, operations, properties,
prospects or condition (financial or otherwise) of the Parent
Borrower and its Subsidiaries, taken as a whole, (b) material
impairment of the ability of the Parent Borrower or any
Subsidiary Guarantor to perform any of its obligations under
any Loan Document to which it is or will be a party or
(c) material impairment of the rights of or benefits available
to the Administrative Agents, the Collateral Agent, the Paying
Agent, the Issuing Banks, the Swing Line Banks or the Lenders
under any Loan Document.
"Material Subsidiary" of the Parent Borrower means, at
any time, any Subsidiary of the Parent Borrower (other than
One Holdings, Inc.) having (a) assets with a value of not less
than 5% of the total value of the assets of the Parent
Borrower and its Consolidated Subsidiaries, taken as a whole,
or (b) Consolidated EBITDA not less than 5% of the
Consolidated EBITDA of the Parent Borrower and its
Consolidated Subsidiaries, taken as a whole, in each case as
of the end of or for the most recently completed Fiscal Year
of the Parent Borrower.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which any Loan Party
or any ERISA Affiliate (other than one considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation
to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make
contributions.
"Net Cash Proceeds" means, with respect to any sale,
lease transfer or other disposition of assets, the cash
proceeds (including all cash proceeds received by way of
deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when
received) received by the Parent Borrower or any Subsidiary
thereof, in each case net of (a) brokerage commissions and
other reasonable fees and expenses (including fees and
expenses of counsel and investment bankers) payable by the
Parent Borrower or any Subsidiary in connection with such
sale, transfer or other disposition, (b) taxes actually paid
by the Parent Borrower or any Subsidiary as a result of any
prior sale, transfer or other disposition, provided that such
taxes have not previously been deducted from Net Cash Proceeds
of this or any other sale, transfer or other disposition,
(c) payments made by the Parent Borrower or any Subsidiary to
retire Debt of the Parent Borrower or any Subsidiary (other
than the Advances under this Agreement, any Subordinated Debt,
and Senior Unsecured Notes or any Senior Secured Debt) where
payment of such Debt is required in connection with such sale,
transfer or other disposition and (d) appropriate amounts to
be provided by the Parent Borrower or any Subsidiary thereof,
as the case may be, as a reserve, in accordance with GAAP,
against liabilities associated with such assets and retained
by the Parent Borrower or such Subsidiary, as the case may be,
after such sale, transfer or other disposition of such assets.
"Net Issuance Proceeds" means with respect to any
issuance, sale or incurrence of any Debt or any issuance or
sale of Parent Borrower Common Stock or any other equity
permitted under this Agreement, the aggregate amount of cash
received by or on behalf of the Parent Borrower after
deducting therefrom placement agents' or underwriters'
commissions and other reasonable fees and expenses (including
fees and expenses of counsel and investment bankers) payable
by the Parent Borrower or any Subsidiary in connection with
such issuance, sale or incurrence.
"Net Senior Debt" means, on a Consolidated basis for the
Parent Borrower and its Subsidiaries as of any date, Net Total
Debt as of such date minus the sum as of such date of (a) the
aggregate outstanding amount of any Subordinated Debt of the
Parent Borrower or any of the Subsidiary Guarantors, (b) the
capitalized amount of any Capitalized Lease Obligations of the
Parent Borrower or any of its Subsidiaries and (c) the
aggregate outstanding face amount of any preferred stock of
the Parent Borrower that is classified as a liability on the
Parent Borrower's Consolidated balance sheet.
"Net Total Debt" means, on a Consolidated basis for the
Parent Borrower and its Subsidiaries as of any date, (a) the
sum as of such date of (i) the aggregate outstanding amount of
Funded Debt including current maturities thereof, (ii) the
aggregate outstanding amount of Commercial Paper and (iii) the
aggregate outstanding amount of Subsidiary Commercial Paper
minus (b) the sum as of such date of (i) the aggregate
outstanding face amount of letters of credit included in
Funded Debt, (ii) the aggregate outstanding amount of Debt
represented by investments made by the Parent Borrower
pursuant to Section 6.07(n) and (iii) the aggregate amount of
Permitted Investments in excess of $100,000,000.
"Notice of Auction Bid Borrowing" has the meaning
specified in Section 2.01(e).
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"Notice of Request for Auction Bid LOC" has the meaning
specified in Section 2.01(f).
"Notice of Swing Line Borrowing" has the meaning
specified in Section 2.02(b).
"Obligations" means, with respect to any Person, all
obligations of such Person under or in respect of this
Agreement and the other Loan Documents in respect of loans,
advances, debts, liabilities, covenants and indemnities of any
kind or nature, current or future, whether or not evidenced by
any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of
credit, loan, guaranty, letter of credit, indemnification, or
in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or
to become due, now existing or hereafter arising and however
acquired. Without limitation of the foregoing, the
Obligations of the Borrowers under this Agreement and the
other Loan Documents include (a) all principal, interest,
charges, expenses, indemnities, fees, attorneys' fees and
disbursements and any other amounts payable or to become
payable by the Borrowers under this Agreement or any other
Loan Document and (b) any amount in respect of any of the
foregoing that any Lender, in its sole discretion, may elect
to advance on behalf of any of the Borrowers.
"Officer's Certificate" means, as applied to any
corporation, a certificate executed on behalf of such
corporation by its principal financial officer, principal
accounting officer or Treasurer, provided that every Officer's
Certificate with respect to the compliance with a condition
precedent to the making of any Credit Event hereunder shall
include (a) a statement that the officer making or giving such
Officer's Certificate has read such condition and any
definitions or other provisions contained in this Agreement
relating thereto, (b) a statement that, in the opinion of the
signer, he or she has made or has caused to be made such
examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such
condition has been complied with and (c) a statement as to
whether, in the opinion of the signer, such condition has been
complied with.
"Overnight Overdraft" means, as of any day, the net
overdraft in the concentration account maintained by the
Parent Borrower with the Concentration Account Bank, as
measured for such day by the excess of debits posted to such
account over the funds available in such account to satisfy
such debits.
"Parent Borrower Common Stock" means the Parent Borrower
Common Stock, par value $1.00 per share, of the Parent
Borrower.
"Parent Borrower Guarantee Agreement" means the Parent
Borrower Guarantee Agreement, substantially in the form of
Exhibit F-2, as amended, supplemented or otherwise modified
from time to time in compliance with Section 9.08.
"Patents" means all patents and patent applications,
including all rights corresponding thereto throughout the
world, all reissues, divisions, continuations, continuations-
in-part, substitutes, renewals and extensions thereof, all
improvements thereon, and all other rights of any kind
whatsoever accruing thereunder or pertaining thereto, and the
right to recover for all past, current and future
infringements thereof.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Perfection Certificate" means the Perfection
Certificate, substantially in the form of Exhibit O hereto,
prepared by the Parent Borrower.
"Permitted Investments" means (a) cash, (b) readily
marketable securities issued or guaranteed by the government
of the United States of America or any agency thereof having a
maturity at the time of issuance not exceeding one year,
(c) commercial paper rated at least A-1 by S&P or P-1 by
Moody's, in each case having a maturity at the time of
issuance not exceeding one year, and (d) certificates of
deposit of or time deposits with any commercial bank, the
long-term debt of which has been assigned a rating of at least
A- (or BBB in the case of any Lender) by S&P or A3 by Moody's
and which is a Lender and is organized and existing under the
laws of the United States of America or any state thereof or
the District of Columbia.
"Permitted Lien" means any of the following:
(a) liens for taxes, assessments or governmental
charges or levies not yet overdue;
(b) liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's, employees' and
repairmen's liens and other similar liens arising in the
ordinary course of the Parent Borrower's or any of its
Subsidiaries' businesses securing obligations that
(i) have not remained unpaid for more than 60 days from
the date the same shall have become due, (ii) are being
contested in good faith after bonding in the full amount
thereof or (iii) are not in excess of $500,000 in the
case of a single property or $10,000,000 in the aggregate
at any time;
(c) pledges or deposits to secure obligations under
workmen's compensation laws or similar legislation or to
secure public or statutory obligations of the Parent
Borrower or any of its Subsidiaries or deposits of cash
or United States Government bonds to secure surety or
appeal bonds to which such Person is a party;
(d) minor survey exceptions, reciprocal easement
agreements, customary encumbrances, easements or
reservations of, or rights of others for, rights of way,
sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions
as to the use of real properties or liens or agreements
incidental to the conduct of the business of the Parent
Borrower or any of its Subsidiaries or to the ownership,
development or operation of its properties (other than
liens referred to in subparagraph (b) above) that were
not incurred in connection with indebtedness or other
extensions of credit and which do not in the aggregate
materially adversely affect the value of said properties
or materially impair their use in the operation of the
business of such Person;
(e) (i) purchase money liens or purchase money
security interests upon or in any property, provided that
the principal amount of the Debt incurred that is secured
by such purchase money liens or purchase money security
interests shall not, in any event, exceed $25,000,000 in
the aggregate in any Fiscal Year, and provided further
that any such lien shall be placed on the property within
two years following the purchase of such property and any
such purchase money security interest shall be perfected
within 20 days following the placement of any such lien
on such property; and (ii) liens and security interests
in connection with leases of land or buildings or
equipment that may be treated as Capital Lease
Obligations; provided, however, that no lien or security
interest referred to in this clause (e) shall extend to
or cover any property other than the related property
being acquired or leased (as the case may be) and the
proceeds thereof; and provided further that the deferred
purchase price (not including financing costs) relating
to such purchase money liens or purchase money security
interest shall not be more than 80% of the total price of
the property being acquired;
(f) liens of the Parent Borrower or its
Subsidiaries that are existing at the Closing Date and
are listed on Schedule 6.01;
(g) liens to secure any extension, renewal or
replacement (or successive extensions, renewals or
replacements) as a whole, or in part, of any Debt secured
by any lien referred to in the foregoing clause (e) or
(f), provided that (i) such extended, renewed or replaced
lien shall be limited to all or a part of the same
property that secured the lien extended, renewed or
replaced (plus improvements on such property) and cash
proceeds thereof and (ii) the Debt secured by such lien
at such time is not increased except as otherwise
permitted by this Agreement;
(h) liens resulting from the grant of franchises or
licenses in the Trademarks or trade names in accordance
with the Collateral Documents;
(i) any other lien or agreement permitted by this
Agreement or any of the Collateral Documents, whether by
the express terms thereof or by any waiver, modification
or amendment thereof;
(j) liens securing Debt permitted by
Section 6.02(k) and 6.02(o) and liens on assets acquired
or invested in pursuant to Section 6.07(f), 6.07(g) or
6.07(i) and existing at the time of such acquisition or
investment;
(k) purchase money security interests or statutory
liens (other than as described in the foregoing
clause (e)) upon or in any inventory, equipment or other
Property, including proceeds thereof, acquired in the
ordinary course of business in favor of the vendors
thereof or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount;
(l) liens (other than liens described in the
foregoing clauses (a) through (k)) created after the
Closing Date that have been expressly approved by the
Administrative Agents in writing, provided that any such
lien securing Debt in an aggregate amount exceeding
$50,000,000 from the Closing Date shall have been
expressly approved by the Majority Lenders in writing; or
(m) liens on accounts receivable granted by the
Parent Borrower or any of its Subsidiaries in connection
with any Receivables Securitization;
provided, however, that no lien in favor of the PBGC shall, in
any event, be a Permitted Lien.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or any other entity,
or a government (domestic or foreign) or any political
subdivision or any agency thereof.
"Plan" means any pension plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code that is maintained for current or
former employees, or any beneficiary thereof, of the Parent
Borrower or any ERISA Affiliate.
"Pledged Debt" means all Pledged Debt described in
Section 1(e) of the Security Agreement.
"Pledged Shares" means all Pledged Shares described in
Section 1(e) of the Security Agreement.
"Property Held for Sale" means at any time Real Property
the book value of which is reflected in the item "Property
Held for Sale" on the Consolidated balance sheet of the Parent
Borrower most recently delivered to the Lenders pursuant to
Section 5.03(a) or 5.03(b).
"Real Estate Capital Expenditures" has the meaning
specified in Section 6.08(b).
"Real Estate Financing" means the approximately
$612,475,000 real estate financing entered into by the Parent
Borrower and certain of its Subsidiaries pursuant to (a) the
Real Estate Loan Agreement and (b) the "Loan Documents"
referred to in the Real Estate Loan Agreement.
"Real Estate Loan Agreement" means the Advance Agreement
dated as of December 20, 1989, among Secured Finance Inc. and
the "Borrowers" referred to therein.
"Real Property" means all the Parent Borrower's and its
Subsidiaries' rights, title and interest in and to land,
improvements and fixtures.
"Receivables Securitization" means any securitization by
the Parent Borrower or any of its Subsidiaries of accounts
receivables of the Parent Borrower or any of its Subsidiaries
yielding gross cash proceeds to the Parent Borrower and its
Subsidiaries not in excess of $250,000,000.
"Reference Banks" means Chemical Bank, Citibank, The
First National Bank of Chicago and The Fuji Bank, Limited.
"Register" has the meaning specified in Section 9.04(d).
"Regulation G" means Regulation G of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as from
time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Related Documents" means (a) for purposes of this
Agreement, (i) the Subordinated Debt Documents and (ii) the
Senior Secured Debt Documents and (b) for purposes of the
Collateral Documents, the Subordinated Debt Documents.
"Reportable Event" means any reportable event as defined
in Section 4043(b) of ERISA or the regulations issued there-
under with respect to a Plan (other than a Plan maintained by
an ERISA Affiliate that is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code).
"Responsible Officer" of any corporation means any
executive officer or Financial Officer of such corporation and
any other officer or similar official thereof responsible for
the administration of the obligations of such corporation in
respect of this Agreement.
"Rolling Period" means, in respect of any Fiscal Quarter,
such Fiscal Quarter and the three preceding Fiscal Quarters.
"Secured Parties" means the Senior Secured Lenders, the
Lenders, the Issuing Banks, the Swing Line Banks, the Hedge
Banks, the Administrative Agents and the Collateral Agent.
"Security Agreement" means the Security Agreement,
substantially in the form of Exhibit D, entered into pursuant
to this Agreement, as amended, supplemented, replaced or
modified from time to time in compliance with Section 9.08.
"Selling Entity" means (a) with respect to any Acquired
Entity that is a Person invested in pursuant to
Section 6.07(i), such Person, (b) with respect to any Acquired
Entity that consists of assets invested in pursuant to Section
6.07(i), the owner of such Acquired Entity prior to such
investment and (c) with respect to any Acquired Entity that
consists of a Person or assets acquired pursuant to
Section 6.07(i), the owner of such Acquired Entity prior to
such acquisition.
"Senior Debt Ratings" means at any time (a) if any Senior
Secured Notes are outstanding at such time, the ratings of
Moody's and S&P in effect at such time with respect to the
Senior Secured Notes, (b) if no Senior Secured Notes are
outstanding at such time, the ratings of Moody's and S&P in
effect at such time with respect to other senior unsecured
non-credit-enhanced long-term debt of the Parent Borrower and
(c) if no senior unsecured non-credit-enhanced long-term debt
of the Parent Borrower is outstanding at such time, the
ratings of Moody's and S&P that would be in effect at such
time with respect to outstanding Advances under the Facility,
as determined by the Administrative Agents in good faith at
any time from the most senior unsecured non-credit-enhanced
long-term debt of the Parent Borrower outstanding at such
time.
"Senior Secured Debt Documents" means the Senior Secured
Note Indentures and any other indentures, loan agreements or
other agreements, notes or similar instruments relating to
Senior Secured Notes, as such indentures, loan agreements or
other agreements, notes or similar instruments may be amended,
supplemented or otherwise modified from time to time after the
date of such issuance in compliance with Section 6.09 and any
other indentures, agreements or instruments pursuant to which
any Senior Secured Notes are issued, refinanced or given
rights in the Collateral from time to time.
"Senior Secured Lenders" means lenders, from time to
time, under the Senior Secured Debt Documents.
"Senior Secured Note Indentures" means (a) the Indenture
dated as of January 1, 1993, between the Parent Borrower, as
issuer, and IBJ Schroder Bank & Trust Company, as trustee, and
(b) the Indenture dated as of July 1, 1993, between the Parent
Borrower, as issuer, and Star Bank, National Association, as
trustee, in each case relating to the Senior Secured Notes, as
such Indentures may be amended, supplemented or otherwise
modified hereafter from time to time in compliance with
Section 6.09.
"Senior Secured Notes" means the Parent Borrower's 9-1/4%
Senior Secured Debentures due 2005 and the Parent Borrower's
8-1/2% Senior Secured Debentures due 2003.
"Settlement Amount" has the meaning specified in
Section 2.17.
"Settlement Date" has the meaning specified in
Section 2.17.
"S&P" means Standard & Poor's Corporation.
"Standby Letter of Credit" means a Letter of Credit other
than a Documentary Letter of Credit, including direct-pay
Letters of Credit.
"Subordinated Debt" means Debt of the Parent Borrower or
any Subsidiary Guarantor that is subordinated to all
Obligations of the Borrowers from time to time under the Loan
Documents.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, trust or estate of which (or in
which) more than 50% of
(a) the outstanding capital stock having Voting
Power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time
capital stock of any other class or classes of such
corporation shall or might have Voting Power upon the
occurrence of any contingency),
(b) the interest in the capital or profits of such
partnership or joint venture or
(c) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by
such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"Subsidiary Guarantee Agreement" means the Subsidiary
Guarantee Agreement, substantially in the form of Exhibit F-1,
among the Subsidiary Guarantors and the Collateral Agent, as
amended, supplemented or otherwise modified from time to time
in compliance with Section 9.08.
"Subsidiary Guarantor" means (a) each Subsidiary
Borrower, (b) each existing and hereafter created or acquired
Material Subsidiary of the Parent Borrower and (c) any other
existing and hereafter created or acquired Subsidiary of the
Parent Borrower designated from time to time by the Parent
Borrower as a Subsidiary Guarantor.
"Swing Line Advance" has the meaning specified in
Section 2.01(c).
"Swing Line Bank" means each of the Administrative Agents
and up to eight additional Lenders as may be designated by the
Parent Borrower from time to time (with the consent of any
Lender so designated), provided that either Administrative
Agent or any Lender as shall have been so designated may
resign upon 30 days' prior written notice to the Parent
Borrower, or may be replaced by the Parent Borrower as a Swing
Line Bank from time to time so long as the replacement is a
Lender.
"Swing Line Borrowing" means a Borrowing consisting of
Swing Line Advances.
"Termination Date" means the seventh anniversary of the
Closing Date.
"Trademark Security Agreement" means the Trademark
Security Agreement, substantially in the form of Exhibit E,
entered into pursuant to this Agreement, as amended,
supplemented, replaced or modified from time to time in
compliance with Section 9.08.
"Trademarks" means all trademarks, trade names, trade
dress, service marks, trademark and service mark registrations
and applications for trademark or service mark registrations
and any renewals thereof (including each mark, registration
and application identified on Schedule I to the Trademark
Security Agreement), and including all income, royalties,
damages and payments now and hereafter due and/or payable with
respect thereto (including damages for past or future
infringements thereof), the right to sue or otherwise recover
for all past, current and future infringements thereof, all
rights corresponding thereto throughout the world and all
other rights of any kind whatsoever accruing thereunder or
pertaining thereto, together, in each case, with the goodwill
of the business connected with the use of, and symbolized by,
each such trademark and service mark.
"Transactions" has the meaning assigned to such term in
Section 3.02.
"Trade-Related Letters of Credit" means Documentary
Letters of Credit and Standby Letters of Credit issued in
support of trade obligations incurred in the ordinary course
of business.
"Type" means, with respect to any Advance, a Base Rate
Advance or an Adjusted Eurodollar Rate Advance.
"U.S. dollars" or "$" means lawful money of the United
States of America.
"Withdrawal Liability" means liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in
Section 1.01 shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding mascu-
line, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by
the phrase "without limitation". All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed to
be references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall
otherwise require. 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 GAAP as in effect from time to
time, applied on a basis consistent with the application used
in the financial statements referred to in Section 3.05(b);
provided, however, that for purposes of making any
determination required by Article VI, all accounting terms
used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP
as applied by the Parent Borrower on January 1, 1993.
ARTICLE II
The Advances and the Letters of Credit
SECTION 2.01. The Advances and the Letters of Credit.
(a) The Advances. Each Lender severally agrees, on the terms
and subject to the conditions set forth in this Agreement, to
make one or more advances (such advances, together with
(i) the Swing Line Advances, (ii) Advances resulting from
drawings under Letters of Credit as provided in subsection (b)
of this Section 2.01, (iii) Advances resulting from drawings
under Auction Bid LOCs as provided in subsection (f) of this
Section 2.01, (iv) Advances in respect of Overnight Overdrafts
as provided in subsection (d) of this Section 2.01 and (v) to
the extent any Lender elects to make them, Auction Bid
Advances as provided in subsection (e) of this Section 2.01,
being the "Advances") to any Borrower from time to time on any
Business Day during the period from the Closing Date to but
excluding the Termination Date in an aggregate amount with
respect to all Borrowers not to exceed at any time outstanding
the amount set forth opposite such Lender's name on
Schedule 2.01 or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Paying Agent pursuant to
Section 9.04(d) (such amount, as it shall be reduced or
terminated pursuant to this Section 2.01 or pursuant to
Section 2.04, being such Lender's "Commitment"); provided,
however, that (A) the Facility Usage shall not exceed the
Facility, (B) the aggregate amount available under any of the
facilities set forth in clauses (i) through (v) above shall
not exceed any limitations set forth in Section 2.01(b)
through (g), inclusive, and (C) the deemed use of the
aggregate amount of the Commitments resulting from outstanding
Auction Bid Advances and Auction Bid LOCs shall be applied to
all the Lenders ratably according to their respective
Commitments (such deemed use of the aggregate amount of the
Commitments being an "Auction Bid Reduction"). The aggregate
principal amount of each Lender's Advances outstanding at any
time shall be adjusted to the extent necessary to give effect
to the provisions for the adjustment of Advances set forth in
Section 2.17. Each Borrowing consisting of Adjusted
Eurodollar Rate Advances shall have the same Interest Period
and shall be in an aggregate amount not less than $10,000,000.
Each Borrowing consisting of Base Rate Advances shall be in an
aggregate amount not less than $5,000,000. Within the limits
of the foregoing, each Borrower may borrow under this
Section 2.01(a), repay pursuant to Section 2.05(a) or prepay
pursuant to Section 2.09(a) and reborrow under this
Section 2.01(a).
(b) The Letters of Credit. (i) Effective as of the
Closing Date, the lenders under the Existing Credit Agreement
(the "Existing Lenders") will be deemed to have sold and
transferred an undivided interest and participation, pro rata
to such Existing Lender's "Facility C Commitment" under the
Existing Credit Agreement, in respect of the Existing Letters
of Credit and each Lender under this Agreement will be deemed
to have purchased and received, without further action on the
part of any party, an undivided interest and participation in
such Existing Letters of Credit, pro rata to such Lender's
Commitment under this Agreement and such Existing Letters of
Credit shall be deemed to be issued and outstanding hereunder.
(ii) Upon the terms and subject to the conditions of
this Agreement, any Borrower may request any Issuing Bank to
issue, and any such Issuing Bank may in its discretion issue,
additional Letters of Credit for the account of such Borrower
(and, if applicable, one or more of its Subsidiaries) from
time to time on any Business Day during the period from the
Closing Date until the date that is 30 days prior to the
Termination Date in an aggregate undrawn amount that (together
with (A) the aggregate undrawn amount at such time under
Existing Letters of Credit, if any, and (B) the aggregate
undrawn amount at such time under outstanding Auction Bid
LOCs), shall not exceed $450,000,000 (such aggregate amount
being the "Letter of Credit Facility"); provided, however,
that immediately after giving effect to each such issuance,
Facility Usage shall not exceed the Facility.
(iii) Each Letter of Credit (other than Existing Letters
of Credit) shall be for a period of no more than one year or
shall be renewable or terminable (upon no more than 180 days'
notice) annually (provided, however, that Letters of Credit in
an aggregate principal amount not to exceed $50,000,000 at any
one time may be for a period of up to 395 days (such Letters
of Credit, the "Specified Letters of Credit")) and, in each
case, shall contain such terms and conditions as may be
acceptable to the Administrative Agents and the Issuing Bank
in their sole discretion, but in any event shall expire no
later than 30 days prior to the Termination Date in effect at
the date of issuance thereof. The Issuing Bank may, in its
sole discretion, renew such Letter of Credit, and such renewal
shall in any case be subject to the conditions specified
herein. Concurrently with the issuance of each Letter of
Credit by an Issuing Bank, such Issuing Bank shall be deemed
to have sold and transferred to each Lender, and each Lender
shall be deemed to have purchased and received from such
Issuing Bank, in each case without any further action on the
part of any party, an undivided interest and participation,
pro rata to such Lender's Commitment, in and to such Letter of
Credit and the obligations of the applicable Borrower under
this Agreement in respect of such Letter of Credit. Upon each
drawing or payment under a Letter of Credit, the amount of
such drawing or payment shall become and be deemed to be,
without any further action on the part of any Person, an
Advance by the Issuing Bank that issued such Letter of Credit
(subject to later adjustments pursuant to Section 2.17) made
on the date of such drawing or payment for all purposes under
this Agreement (but without any requirement for compliance
with the conditions to the making of Advances contained in
Article IV).
(c) The Swing Line Advances. Each Swing Line Bank
shall, on the terms and subject to the conditions hereinafter
set forth, make one or more additional advances (such advances
being the "Swing Line Advances") to any Borrower from time to
time on any Business Day during the period from the Closing
Date to but excluding the Termination Date in an aggregate
amount (for all Swing Line Advances by all Swing Line Banks)
with respect to all Borrowers not to exceed at any time
outstanding $300,000,000; provided, however, that immediately
after giving effect to each such Swing Line Advance, Facility
Usage shall not exceed the Facility; and provided further that
(A) each Swing Line Advance shall be deemed to utilize the
Commitment of each Lender by such Lender's pro rata portion
(based on the Commitments of the Lenders before giving effect
to such Swing Line Advance) of the amount of such Swing Line
Advance; (B) the aggregate amount of Swing Line Advances of
each Swing Line Bank at any time outstanding may exceed the
unused portion of the Commitment of such Swing Line Bank;
(C) each Swing Line Borrowing shall be in an Amount of at
least $1,000,000; and (D) each Swing Line Advance shall be
repaid no later than seven days after such Swing Line
Borrowing. Each Swing Line Borrowing shall be a Base Rate
Advance. Within the limits and subject to the conditions of
the foregoing, each Borrower may borrow under this
Section 2.01(c), repay pursuant to Section 2.05(b) or prepay
pursuant to Section 2.09(a) and reborrow under this
Section 2.01(c).
(d) Overnight Overdrafts. So long as the Parent
Borrower maintains its concentration account with the
Concentration Account Bank and the Concentration Account Bank
is a Lender, the Concentration Account Bank may, if in its
sole discretion it elects to do so, on the terms and
conditions hereinafter set forth (including those set forth in
Section 4.01) and such other terms and conditions as may be
acceptable to the Concentration Account Bank, make Advances to
the Parent Borrower to cover Overnight Overdrafts from time to
time during the period from the Closing Date to but excluding
the Termination Date in an aggregate amount not to exceed at
any time outstanding $100,000,000; provided, however, that
immediately after giving effect to each such Advance to cover
an Overnight Overdraft, Facility Usage shall not exceed the
Facility; and provided further that (i) each outstanding
Advance made in respect of an Overnight Overdraft shall be
deemed to utilize the Commitment of each Lender by such
Lender's pro rata portion (based on the Commitments of the
Lenders before giving effect to such Advance) of the amount of
such Advance; (ii) the aggregate amount of Advances made in
respect of Overnight Overdrafts at any time outstanding may
exceed the unused portion of the Commitment of the
Concentration Account Bank; (iii) the principal amount of each
Advance made in respect of an Overnight Overdraft shall be due
and payable on demand of the Concentration Account Bank, but
in no event later than the Termination Date; and (iv) until
paid, each Advance made in respect of an Overnight Overdraft
shall bear interest (A) until delivery by the Concentration
Account Bank to the Lenders of a demand for payment of
participations in such Advance as contemplated below in this
paragraph (d), at any rate of interest agreed upon by the
Parent Borrower and the Concentration Account Bank and
(B) from and after delivery by the Concentration Account Bank
to the Lenders of any such demand for payment, at the rate of
interest applicable to Base Rate Advances. Each Advance made
in respect of an Overnight Overdraft in accordance with the
foregoing provisions of this paragraph (d) shall be deemed to
be an Advance for all purposes of this Agreement. Each Lender
other than the Concentration Account Bank shall, forthwith
upon the making of each Advance in respect of an Overnight
Overdraft, be deemed to have committed irrevocably to purchase
from the Concentration Account Bank a participation in such
Advance in an amount equal to the product of (i) a fraction
the numerator of which is the Commitment of such Lender and
the denominator of which is the Facility multiplied by
(ii) the outstanding principal amount of such Advance;
provided, however, that none of the other Lenders shall be
required to pay for such participation until demand therefor
by the Concentration Account Bank; and provided further that
no other Lender shall be entitled to receive any repayment
from the Parent Borrower in respect of an Advance resulting
from an Overnight Overdraft until such Lender has paid any
amounts due hereunder to the Concentration Account Bank in
respect of its participation in such Advance.
(e) The Auction Bid Advances. (i) Effective as of the
Closing Date, each Lender that is an Existing Lender that has
made an Existing Auction Bid Advance will be deemed, without
further action on the part of any party, to have made an
Auction Bid Advance to the Parent Borrower under this
Agreement in the amount of such Existing Auction Bid Advance
on the Closing Date, such Auction Bid Advance to (A) have a
remaining term equal to the remaining term of such Existing
Auction Bid Advance on the Closing Date and (B) bear interest
at the interest rate applicable to such Existing Auction Bid
Advance on the Closing Date.
(ii) Each Lender severally agrees that each Borrower may
make additional Auction Bid Borrowings under this
Section 2.01(e)(ii) from time to time on any Business Day
during the period from the Closing Date until the date that is
27 days prior to the Termination Date, in the case of an
Auction Bid Borrowing consisting of Adjusted Eurodollar Rate
Advances, or one day prior to the Termination Date, in the
case of an Auction Bid Borrowing consisting of Fixed Rate
Advances, in the manner set forth below, provided that,
immediately after giving effect to each such Auction Bid
Advance, Facility Usage shall not exceed the Facility:
(A) Any Borrower, either directly or through the
Specified Administrative Agent (as defined in
paragraph (B) below), may request an Auction Bid
Borrowing or Auction Bid Borrowings under this
Section 2.01(e) by delivering to the Paying Agent and
some or all of the Lenders, by telephone, telex or cable,
confirmed immediately in writing or by telecopier, a
notice of an Auction Bid Borrowing or Borrowings (a
"Notice of Auction Bid Borrowing"), in substantially the
form of Exhibit A-2 or in such other form as the
Administrative Agents and such Borrower may agree upon
specifying the date and aggregate amount of the proposed
Auction Bid Borrowing, the maturity date for repayment of
each Auction Bid Advance to be made as part of such
Auction Bid Borrowing (which maturity date may not be
earlier than the date that is 27 days after the date of
such Auction Bid Borrowing in the case of Adjusted
Eurodollar Rate Advances, may not be later than the date
that is 270 days after the date of such Auction Bid
Borrowing in the case of Fixed Rate Advances, and in any
case may not be later than the Termination Date), whether
the Lenders should offer to make Fixed Rate Advances or
Adjusted Eurodollar Rate Advances, the interest payment
date or dates relating thereto and any other terms to be
applicable to such Auction Bid Borrowing, not later than
(1) Noon (New York City time) on the same Business Day as
any proposed Auction Bid Borrowing consisting of Fixed
Rate Advances and (2) 12:00 noon (New York City time) at
least three Business Days, or, if through the Specified
Administrative Agent, 10:00 a.m. (New York City time) at
least four Business Days prior to the date of a proposed
Auction Bid Borrowing consisting of Adjusted Eurodollar
Rate Advances.
(B) Each Lender so notified may, if, in its sole
discretion, it elects to do so, irrevocably offer to make
one or more Auction Bid Advances (which Auction Bid
Advances may, subject to the provisos to the first
sentence to this Section 2.01(e)(ii), have a principal
amount exceeding such Lender's Commitment) to the
Borrower as part of such proposed Auction Bid Borrowing
at a Fixed Rate or Rates or a margin or margins relative
to the Adjusted Eurodollar Rate, as requested by the
applicable Borrower. Each Lender electing to make such
an offer shall do so by notifying the Borrower or one of
the Administrative Agents, as shall be specified in the
Notice of Auction Bid Borrowing (the "Specified
Administrative Agent"), before such time and date as is
specified in the Notice of Auction Bid Borrowing in
subparagraph (A) above, of the minimum amount and maximum
amount of each Auction Bid Advance that such Lender would
be willing to make as part of such proposed Auction Bid
Borrowing (which amount may exceed such Lender's
Commitment), the Fixed Rate or Rates or margin or margins
relative to the Adjusted Eurodollar Rate, as requested by
the applicable Borrower, that such Lender would be
willing to accept for such Auction Bid Advance and such
Lender's Applicable Lending Office with respect to such
Auction Bid Advance, provided that, if the Specified
Administrative Agent in its capacity as a Lender shall,
in its sole discretion, elect to make any such offer, it
shall notify the applicable Borrower of such offer before
15 minutes prior to the Borrower's deadline specified in
paragraph (A) above on the date on which notice of such
election is to be given to such Administrative Agent by
the other Lenders. If any Lender shall elect not to make
such an offer, such Lender shall so notify the Specified
Administrative Agent, before such time as is specified in
the Notice of Auction Bid Borrowing on the date on which
notice of such election is to be given to the Borrower or
the Specified Administrative Agent, as the case may be,
by the other Lenders, and such Lender shall not be
obligated to, and shall not, make any Auction Bid Advance
as part of such Auction Bid Borrowing, provided that the
failure by any Lender to give such notice shall not cause
such Lender to be obligated to make any Auction Bid
Advance as part of such proposed Auction Bid Borrowing.
(C) The applicable Borrower (either directly or
through the Specified Administrative Agent) shall, in
turn, before such time and date as is specified in the
Notice of Auction Bid Borrowing, either
(x) cancel such Auction Bid Borrowing by giving
the Lenders who received notice pursuant to
paragraph (A) above notice to that effect, or
(y) accept one or more of the offers (or
portions of such offers) made by any Lender or
Lenders pursuant to paragraph (B) above, in its sole
discretion, by giving notice to the applicable
Lender or Lenders of the amount of each Auction Bid
Advance to be made by each Lender as part of such
Auction Bid Borrowing, with simultaneous notice
thereof to the Paying Agent, and reject any
remaining offers made by Lenders pursuant to
paragraph (B) above by giving them notice to that
effect.
(D) If the applicable Borrower notifies the Paying
Agent that such Auction Bid Borrowing is canceled
pursuant to paragraph (C)(x) above, the applicable
Borrower or the Specified Administrative Agent, as the
case may be, shall give prompt notice thereof to the
Lenders and such Auction Bid Borrowing shall not be made.
(E) If the applicable Borrower accepts one or more
of the offers (or portions of such offers) made by any
Lender or Lenders pursuant to paragraph (C)(y) above, the
applicable Borrower or the Specified Administrative
Agent, as the case may be, shall in turn promptly notify
each Lender that is to make an Auction Bid Advance as
part of such Auction Bid Borrowing, of the amount of each
Auction Bid Advance to be made by such Lender as part of
such Auction Bid Borrowing.
(iii) Each Lender that is to make an Auction Bid Advance
as part of an Auction Bid Borrowing shall, before 12:00 noon
(New York City time) on the date of such Auction Bid Borrowing
specified in the Notice of Auction Bid Borrowing relating
thereto, make available for the account of its Applicable
Lending Office to the Paying Agent in same day funds, such
Lender's ratable portion of such Auction Bid Borrowing. Upon
fulfillment of the applicable conditions set forth in
Article IV and after receipt by the Paying Agent of such
funds, the Paying Agent will make such funds available to the
applicable Borrower. Promptly after each Auction Bid
Borrowing, the Paying Agent will notify each Lender of the
amount of the Auction Bid Borrowing, the consequent Auction
Bid Reduction and the dates upon which such Auction Bid
Reduction commenced and will terminate.
(iv) Each Auction Bid Borrowing shall be in an aggregate
principal amount of not less than $5,000,000. Following the
making of each Auction Bid Borrowing, the Borrowers shall be
in compliance with the limitations set forth in the proviso to
the first sentence of subsection (ii) above.
(v) Within the limits and on the conditions set forth in
this Section 2.01(e), each Borrower may from time to time
borrow under this Section 2.01(e), repay or prepay pursuant to
subsection (vi) below, and reborrow under this
Section 2.01(e).
(vi) The applicable Borrower shall repay to the Paying
Agent for the account of each Lender that has made, or holds
the right to repayment of, an Auction Bid Advance on the
maturity date of each Auction Bid Advance (such maturity date
being that specified by the Borrower for repayment of such
Auction Bid Advance in the related Notice of Auction Bid
Borrowing delivered pursuant to subsection (ii)(A) above) the
then-unpaid principal amount of such Auction Bid Advance. No
Borrower shall have any right to prepay any principal amount
of any Auction Bid Advance unless, and then only on the terms,
specified by the applicable Borrower for such Auction Bid
Advance in the related Notice of Auction Bid Borrowing
delivered pursuant to subsection (ii)(A) above.
(vii) The applicable Borrower shall pay interest on the
unpaid principal amount of each Auction Bid Advance from and
including the date of such Auction Bid Advance to but
excluding the date the principal amount of such Auction Bid
Advance is repaid in full, at the rate of interest for such
Auction Bid Advance (including any rate specified for past due
amounts) specified by the Lender making such Auction Bid
Advance in its notice with respect thereto delivered pursuant
to subsection (ii)(B) above, payable on the interest payment
date or dates specified by the Borrower for such Auction Bid
Advance in the related Notice of Auction Bid Borrowing
delivered pursuant to subsection (ii)(A) above.
(f) Auction Bid LOCs. (i) Each Lender severally agrees
that any Lender may issue Auction Bid LOCs for the account of
any Borrower (and, if applicable, one or more of its
Subsidiaries) under this Section 2.01(f) from time to time on
any Business Day during the period from the Closing Date until
the date that is 30 days prior to the Termination Date in the
manner set forth below; provided, however, that following the
issuance of each Auction Bid LOC, the maximum aggregate amount
available at such time to be drawn under all Auction Bid LOCs
then outstanding (together with (A) the aggregate undrawn
amount at such time under Existing Letters of Credit, if any,
and (B) the aggregate undrawn amount at such time under
outstanding Letters of Credit) shall not exceed $450,000,000;
and provided further that immediately after giving effect to
each such issuance, Facility Usage shall not exceed the
Facility:
(A) Any Borrower, either directly or through the
Specified Administrative Agent, may request the issuance
of an Auction Bid LOC under this Section 2.01(f) by
delivering to the Paying Agent and some or all the
Lenders, by telecopier, telex or cable, confirmed
immediately in writing, a notice of a Request for Auction
Bid LOC (a "Notice of Request for Auction Bid LOC"), in
substantially the form of Exhibit A-3 or in such other
form as the Administrative Agents and the Parent Borrower
may agree upon, specifying the date and aggregate
principal amount of the proposed Auction Bid LOC, the
maturity date thereof (which maturity date may not be
later than the Termination Date) and any other terms to
be applicable to such Auction Bid LOC.
(B) Each Lender so notified may, if, in its sole
discretion, it elects to do so, irrevocably offer to
issue for the account of the applicable Borrower a
proposed Auction Bid LOC (which Auction Bid LOC may,
subject to the provisos to the first sentence of this
Section 2.01(f), have a principal amount exceeding such
Lender's Commitment) having such fees and other terms
requested by the applicable Borrower as such Lender may
elect, including the names of such other Lenders, if any,
as may be participants in the Auction Bid LOC to be
issued by such Lender. Each Lender electing to make such
an offer shall do so by notifying the applicable Borrower
or the Specified Administrative Agent, as the case may
be, before the time and date specified in the Notice of
Request for Auction Bid LOC of the minimum amount and
maximum amount of Auction Bid LOC that such Lender would
be willing to issue (that amount may exceed such Lender's
Commitment), the fees and terms that such Lender would be
willing to accept with regard to such Auction Bid LOC
(including the letter of credit fee that such Lender
would be willing to accept with regard to such Auction
Bid LOC) and such Lender's Applicable Lending Office with
respect thereto, provided that if the Specified
Administrative Agent in its capacity as a Lender shall,
in its sole discretion, elect to make any such offer, it
shall notify the applicable Borrower of such offer before
such time as is specified in the Notice of Request for
Auction Bid LOC on the date on which notice of such
election is to be given to such Administrative Agent by
the other Lenders. If any Lender shall elect not to make
such an offer, such Lender shall so notify the applicable
Borrower or the Specified Administrative Agent, as the
case may be, before such time as specified in the Notice
of Request for Auction Bid LOC on the date on which
notice of such election is to be given to the applicable
Borrower or the Specified Administrative Agent, as the
case may be, by the other Lenders, and such Lender shall
not be obligated to, and shall not, issue any Auction Bid
LOC, provided that the failure by any Lender to give such
notice shall not cause such Lender to be obligated to
issue any Auction Bid LOC.
(C) The applicable Borrower shall, in turn, before
such time and date as is specified in the Notice of
Request for Auction Bid LOC, either
(x) cancel the issuance of such Auction Bid LOC
by giving the Lenders who received notice pursuant
to paragraph (A) above notice to that effect or
(y) accept one or more of the offers (or
portions of such offers) made by any Lender pursuant
to paragraph (B) above, in its sole discretion, by
giving notice to the applicable Lender of such
acceptance with simultaneous notice thereof to the
Paying Agent, and reject any remaining offers made
by Lenders pursuant to paragraph (B) above by giving
them notice to that effect.
(D) If the applicable Borrower cancels the issuance
of such Auction Bid LOC pursuant to paragraph (C)(x)
above, the Borrower or the Specified Administrative
Agent, as the case may be, shall give prompt notice
thereof to the Lenders and such Auction Bid LOC shall not
be issued.
(E) If the applicable Borrower accepts one or more
of the offers (or portions of such offers) made by any
Lender or Lenders pursuant to paragraph (C)(y) above, the
Borrower or the Specified Administrative Agent shall in
turn promptly notify each Lender that has made an offer
as described in paragraph (B) above, of the issuance date
and aggregate amount of such Auction Bid LOC and whether
or not any offer or offers (or any portion thereof) made
by such Lender pursuant to paragraph (B) above have been
accepted by the applicable Borrower.
(ii) Upon fulfillment of the applicable conditions set
forth in Article IV, the applicable Lender will issue such
Auction Bid LOC for the account of the applicable Borrower,
notify the Paying Agent of such issuance and provide the
Paying Agent with copies of all documentation relevant
thereto, including the names and amounts of participations of
other Lenders, if any, that have purchased such participations
in such Auction Bid LOC. Promptly after receiving notice of
the issuance of each Auction Bid LOC, the Paying Agent will
notify each Lender of the amount of the Auction Bid LOC, the
consequent Auction Bid Reduction and the dates upon which such
Auction Bid Reduction commenced and will terminate.
(iii) Following the issuance of each Auction Bid LOC,
the Borrowers shall be in compliance with the limitations set
forth in the provisos to the first sentence of subsection (i)
above.
(iv) Upon each drawing or payment under an Auction Bid
LOC, the amount of such drawing or payment shall become and be
deemed to be, without any further action on the part of any
Person, an Auction Bid Advance by the Lender and by the other
participant Lenders, if any, to the applicable Borrower to the
extent of such Lenders' respective participations that issued
such Auction Bid LOC made on the date of such drawing or
payment for all purposes under this Agreement (but without any
requirement for compliance with the conditions to the making
of Advances contained in Article IV), which Auction Bid
Advance shall be payable on demand of such Lender and shall
bear interest at the rate of interest specified by such Lender
in its notice with respect thereto delivered pursuant to
subsection (i)(B) above until paid in full.
(g) Set Aside of Commitments to Backstop Commercial
Paper. At any time during which the Parent Borrower has
outstanding any Commercial Paper, a portion of the unused
Commitments in an aggregate amount equal to the aggregate face
amount of such Commercial Paper outstanding at such time
shall, without further action on the part of any party, be
deemed to be reserved for use as support for the obligations
of the Parent Borrower under such Commercial Paper. The
amount of the Commitments so reserved at any time pursuant to
this Section 2.01(g) is referred to herein as the "Commercial
Paper Set-Aside Amount".
SECTION 2.02. Making the Advances; Issuing the Letters of
Credit. (a) Each Borrowing (other than a Swing Line
Borrowing, an Auction Bid Borrowing, a Borrowing resulting
from a drawing under a Letter of Credit or Auction Bid LOC or
a borrowing resulting from Advances made in respect of
Overnight Overdrafts) consisting of Advances (a "Borrowing")
shall be made on notice (a "Notice of Borrowing"), given by
the applicable Borrower to the Paying Agent not later than
11:00 a.m. (New York City time) on (i) if such Advances are
Adjusted Eurodollar Rate Advances, the third Business Day
prior to the date of the proposed Borrowing or (ii) if such
Advances are Base Rate Advances, the Business Day prior to the
date of the proposed Borrowing. The Paying Agent shall give
to each Appropriate Lender prompt notice thereof by telex,
telecopier or cable, confirmed promptly thereafter in writing.
Such Notice of Borrowing shall be by telex, telecopier or
cable, in substantially the form of Exhibit A-1 or in such
other form as the Administrative Agents and the Parent
Borrower may agree upon, specifying therein the applicable
Borrower and the requested (A) date of the proposed Borrowing,
(B) Type of Advances comprising the proposed Borrowing,
(C) amount of the proposed Borrowing, (D) Interest Period for
the proposed Borrowing if such Borrowing is comprised of
Adjusted Eurodollar Rate Advances and (E) additional
information set forth in Exhibit A-1, as the case may be. If
the proposed Borrowing is comprised of Adjusted Eurodollar
Rate Advances, the Paying Agent shall promptly notify the
applicable Borrower and each Appropriate Lender of the
applicable interest rate under Section 2.06. Each Appropriate
Lender shall, before 11:00 a.m. (New York City time) on the
date of the Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the
Paying Agent's address referred to in Section 9.01, or at such
other address and account as shall be designated by the Paying
Agent in writing to the Lenders, in same day funds, such
Lender's ratable portion of the Borrowing. After the Paying
Agent's receipt of such funds and upon fulfillment of the
conditions set forth in Article IV, the Paying Agent will make
such funds available to the applicable Borrower at the Paying
Agent's aforesaid address; provided, however, that upon the
receipt of such funds with respect to any Borrower, the Paying
Agent shall first make a portion of such funds equal to the
aggregate amount of the Swing Line Advances outstanding with
respect to such Borrower on the date of such Borrowing
available to the Swing Line Banks for repayment of such Swing
Line Advances.
(b) Each Swing Line Borrowing shall be made on notice,
given not later than 12:00 noon (New York City time) on the
date of the proposed Swing Line Borrowing, by the applicable
Borrower to the Paying Agent, which shall give each Swing Line
Bank prompt notice thereof by telephone, telex or telecopier.
Each such notice of a Swing Line Borrowing (the "Notice of
Swing Line Borrowing") shall be in the form of Exhibit A-4 or
in such other form as the Administrative Agents and the
Borrower may agree upon, and shall be given by telephone,
telex, telecopier or cable and, if by telephone, shall be
confirmed immediately in writing (which may be by telecopier)
and specifying therein the applicable Borrower, the requested
date and amount of such Swing Line Borrowing and the date of
the maturity thereof. Upon the making of any Swing Line
Advance by one or more Swing Line Banks, such Swing Line Banks
shall on the date of the Swing Line Borrowing make the amount
thereof available for the account of its Domestic Lending
Office to the Paying Agent at the Paying Agent's address
referred to in Section 9.01, or at such other address and
account as shall be designated by the Paying Agent in writing
to the Lenders, in same day funds. After the Paying Agent's
receipt of such funds and upon fulfillment of the conditions
set forth in Article IV, the Paying Agent will make such funds
available to the applicable Borrower at the Paying Agent's
aforesaid address. Each other Lender shall, forthwith upon
the making of each Swing Line Advance, be deemed to have
committed irrevocably to purchase from each Swing Line Bank a
participation in the Swing Line Advance made by each such
Swing Line Bank in an amount equal to the product of (i) a
fraction, the numerator of which is the Commitment of such
Lender and the denominator of which is the Facility multiplied
by (ii) the outstanding principal amount of such Swing Line
Advance; provided, however, that none of the other Lenders
shall be required to pay for such participation until demand
therefor pursuant to Section 2.17; and provided further that
no other Lender shall be entitled to receive any repayment
from the applicable Borrower in respect of a Swing Line
Advance until such Lender has paid any amounts due hereunder
to the appropriate Swing Line Banks in respect of its
participation in such Swing Line Advance.
(c) Anything in Section 2.02(b) above or Section 2.08 to
the contrary notwithstanding:
(i) if fewer than two Reference Banks furnish timely
information to the Paying Agent for determining the
Adjusted Eurodollar Rate for any Adjusted Eurodollar Rate
Advances,
(A) the Paying Agent shall forthwith notify the
Parent Borrower and the Lenders that the interest
rate cannot be determined for such Adjusted
Eurodollar Rate Advances;
(B) each such Advance will automatically, on
the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance (or if
such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance); and
(C) the obligations of the Lenders to make, or
to Convert Advances into, Adjusted Eurodollar Rate
Advances shall be suspended until the Paying Agent
shall notify the Parent Borrower and the Lenders
that the circumstances causing such suspension no
longer exist;
(ii) if, with respect to any Adjusted Eurodollar Rate
Advances, Lenders required to make at least 51% of such
Adjusted Eurodollar Rate Advances shall notify the Paying
Agent that the Adjusted Eurodollar Rate for any Interest
Period for such Adjusted Eurodollar Rate Advances will
not adequately reflect the cost to such Lenders of making
or funding their respective Adjusted Eurodollar Rate
Advances for such Interest Period, the Paying Agent shall
forthwith so notify the Parent Borrower and the
Appropriate Lenders, whereupon
(A) each such Adjusted Eurodollar Rate Advance
will automatically, on the last day of the
then-existing Interest Period therefor, Convert into
a Base Rate Advance (or, if such Advance is then a
Base Rate Advance, will continue as a Base Rate
Advance), and
(B) the obligations of the Appropriate Lenders
to make, or to Convert Advances into, Adjusted
Eurodollar Rate Advances shall be suspended until
the Paying Agent shall notify the Parent Borrower
and such Lenders that the circumstances causing such
suspension no longer exist; and
(iii) if any Borrower shall select an Interest Period
of six months or twelve months for any Adjusted
Eurodollar Rate Advances and any Appropriate Lender shall
notify the Paying Agent that the Adjusted Eurodollar Rate
for such Interest Period will not adequately reflect the
cost to such Lender of making or funding its Adjusted
Eurodollar Rate Advance for such Interest Period, the
Paying Agent shall forthwith so notify such Borrower and
the Appropriate Lenders, whereupon
(A) each such Adjusted Eurodollar Rate Advance
will automatically, on the last day of the then
existing Interest Period therefor, Convert into a
Base Rate Advance (or, if such Advance is then a
Base Rate Advance, will continue as a Base Rate
Advance), and
(B) the obligations of the Appropriate Lenders
to make, or to Convert Advances into, Adjusted
Eurodollar Rate Advances having an Interest Period
of six months or twelve months shall be suspended
until the Paying Agent shall notify the Borrower and
such Lenders that the circumstances causing such
suspension no longer exist.
(d) Each Notice of Borrowing shall be irrevocable and
binding on the applicable Borrower and, in respect of any
Borrowing comprised of or including Adjusted Eurodollar Rate
Advances specified in such Notice of Borrowing, the applicable
Borrower shall indemnify each Appropriate Lender against any
loss, cost or expense incurred by such Lender solely as a
result of any failure by such Borrower to borrow on the date
specified in the Notice of Borrowing for such Borrowing,
including any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such
Lender to fund the Adjusted Eurodollar Rate Advance to be made
by such Lender as part of such Borrowing when such Adjusted
Eurodollar Rate Advance, solely as a result of such failure,
is not made on such date. Without prejudice to the survival of
any other provision of this Agreement, the provisions of this
paragraph shall survive any termination of this Agreement.
(e) Unless the Paying Agent shall have received notice
from an Appropriate Lender prior to the date of any Borrowing
(other than a Swing Line Borrowing or Auction Bid Borrowing)
that such Lender will not make available to the Paying Agent
such Lender's ratable portion of such Borrowing, the Paying
Agent may assume that such Lender has made such portion
available to the Paying Agent on the date of such Borrowing in
accordance with this Section 2.02 and the Paying Agent may, in
reliance on such assumption, make available to the applicable
Borrower on such date a corresponding amount. If and to the
extent such Lender shall not have made available to the Paying
Agent on the date of any Borrowing such Lender's ratable
portion of such Borrowing, such Lender agrees, and the
Borrower agrees, to pay or repay to the Paying Agent forthwith
on demand such amount together with interest thereon, for each
day from the date such amount is made available to such
Borrower until the date such amount is paid or repaid to the
Paying Agent, at (in the case of such Lender) the Federal
Funds Rate and (in the case of each Borrower) the Base Rate
plus the Applicable Percentage (provided that such payment at
the Federal Funds Rate or the Base Rate (plus the Applicable
Percentage) with respect to any Adjusted Eurodollar Rate
Advance shall not affect the status of such Advance as an
Adjusted Eurodollar Rate Advance). If such Lender shall pay
to the Paying Agent such amount, the amount so paid shall
constitute such Lender's Advance as part of such Borrowing for
purposes of this Agreement from and including the date of such
Borrowing.
(f) The failure of any Lender to make the Advance to be
made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any
Borrowing.
(g) Each Letter of Credit or Auction Bid LOC shall be
issued on reasonable notice from the applicable Borrower to
the Paying Agent specifying the date of issuance (which shall
be a Business Day) and the amount, expiration date,
beneficiary, whether such Letter of Credit is to be a
Specified Letter of Credit and if so, the aggregate principal
amount of Specified Letters of Credit outstanding and other
terms thereof. Upon fulfillment of such conditions as the
Issuing Bank issuing such Letter of Credit or Auction Bid LOC
or the Paying Agent may reasonably require, including the
conditions set forth in Article IV (as though the issuance of
the Letter of Credit or Auction Bid LOC were an Advance), the
Issuing Bank will issue the Letter of Credit in accordance
with its terms. The Paying Agent shall notify the Lenders of
any issuance by an Issuing Bank of a Letter of Credit on the
Settlement Date next succeeding the date of such issuance.
SECTION 2.03. Fees. (a) Facility Fees. The Parent
Borrower agrees to pay to the Paying Agent for distribution to
each Lender a facility fee (the "Facility Fee") with respect
to such Lender's Commitment, at a rate per annum equal to the
Applicable Percentage from time to time in effect on the
aggregate amount of such Lender's Commitment, regardless of
usage. The Facility Fees will commence to accrue on the date
of execution of this Agreement and will be payable in arrears
on (i) the Closing Date, (ii) on the third day of each
January, April, July and October and (iii) on the Termination
Date.
(b) Administrative Agents' Fees. The Parent Borrower
agrees to pay to the Administrative Agents the annual
Administrative Agents' fees set forth in the separate letter
from the Administrative Agents to the Parent Borrower dated
June 8, 1994.
(c) Letter of Credit Fees. (i) Upon the issuance,
extension or renewal of each Letter of Credit by an Issuing
Bank, the applicable Borrower agrees to pay to such Issuing
Bank a fee in an amount to be agreed upon between such Issuing
Bank and such Borrower, payable on the date of such issuance
(or on such other date as may be agreed upon by such Issuing
Bank and the applicable Borrower).
(ii) Each Borrower agrees to pay to the Paying Agent, for
the ratable benefit of the Lenders (determined in accordance
with the respective amounts of their Commitments), a letter of
credit fee at the Applicable Percentage on the maximum amount
available to be drawn on each day under outstanding Letters of
Credit issued pursuant to Section 2.01(b) for the account of
such Borrower (the determination of such maximum amount to
assume the occurrence of, and compliance with, all conditions
for drawing referred to therein), in each case payable
quarterly in arrears on the third day of each January, April,
July and October after the date of issuance until the date
each such Letter of Credit shall expire or terminate in
accordance with its terms and on the date of such expiration
or termination.
(d) Auction Bid LOC Fees. (i) Upon the issuance,
extension or renewal of each Auction Bid LOC by a Lender, the
Parent Borrower agrees to pay to such Lender a Fee in an
amount to be agreed upon between such Lender and the Parent
Borrower, payable upon such date as may be agreed upon by such
Lender and the Parent Borrower.
(ii) The Parent Borrower agrees to pay to the Paying
Agent, for the ratable benefit of each Lender issuing an
Auction Bid LOC and the other participant Lenders, if any, in
such Auction Bid LOC (determined in accordance with the
respective amounts of their participations in such Auction Bid
LOC), a letter of credit fee at the rate agreed upon pursuant
to Section 2.01(f) between the Parent Borrower and the Lender
issuing such Auction Bid LOC on the maximum amount available
to be drawn on each day under such Auction Bid LOC (the
determination of such maximum amount to assume the occurrence
of, and compliance with, all conditions for drawing referred
to therein), in each case payable quarterly in arrears on the
third day of each January, April, July and October after the
date of issuance until the date such Auction Bid LOC expires
or terminates in accordance with its terms and on the date of
such expiration or termination.
(e) Transfer Fee; Amendment Fee. (i) Each Borrower
agrees to pay to each Issuing Bank, upon each transfer or
amendment of a Letter of Credit issued for the account of such
Borrower, the normal and customary transfer fee or amendment
fee, as the case may be (or such other fee as such Borrower
and such Issuing Bank may agree upon), charged by such Issuing
Bank upon the transfer or amendment of letters of credit.
(ii) The Parent Borrower agrees to pay to each Lender
that issues an Auction Bid LOC, upon each transfer or
amendment of such Auction Bid LOC, the normal and customary
transfer fee or amendment fee, as the case may be (or such
other fee as the Parent Borrower and such Lender may agree
upon), charged by such Lender upon the transfer or amendment
of letters of credit.
(f) Letter of Credit Expenses. Each Borrower agrees to
pay to each Issuing Bank, on demand, sums equal to any and all
reasonable charges such Issuing Bank may assess, and expenses
that such Issuing Bank may pay or incur, relative to the
issuance by such Issuing Bank of any Letter of Credit issued
for the account of such Borrower or to presentment to, or to a
payment by, the Issuing Bank thereunder.
SECTION 2.04. Termination or Reduction of Facilities.
(a) The Commitments shall be automatically terminated on the
Termination Date.
(b) The Parent Borrower shall have the right, upon at
least five Business Days' notice to the Administrative Agents,
to terminate in whole, or reduce ratably in part (in minimum
principal amounts of $10,000,000), the unused portion of the
Facility (such unused portion having been determined after
subtracting the Facility Usage from the Facility).
(c) The Letter of Credit Facility shall not be reduced
until such time as the Facility shall equal such Letter of
Credit Facility, and thereafter shall reduce proportionately
with any reduction in the amount of Facility pursuant to this
Section 2.04.
SECTION 2.05. Repayment of Advances. (a) Advances.
Each Borrower shall repay to the Paying Agent for the account
of the Lenders the aggregate principal amount of the Advances
(other than Auction Bid Advances) then outstanding with
respect to such Borrower on the Termination Date.
(b) Swing Line Advances. Each Borrower shall repay to
the Paying Agent for the account of the applicable Swing Line
Bank the outstanding principal amount of any Swing Line
Advance made by it with respect to such Borrower (other than a
Swing Line Advance for which the appropriate Settlement
Amounts have been paid pursuant to Section 2.17) on the
earlier of the date specified in the applicable Notice of
Swing Line Borrowing or the Termination Date.
(c) Auction Bid Advances. Each Borrower shall repay
the aggregate principal amount of the Auction Bid Advances to
the applicable Lenders with respect to such Borrower in
accordance with the provisions of Section 2.01(e)(vi).
SECTION 2.06. Interest. Each Borrower shall pay interest
on the unpaid principal amount of each Advance made by each
Lender with respect to such Borrower from the date of such
Advance until such principal amount shall be paid in full, at
the following rates per annum:
(a) Base Rate Advances. During such periods as
such Advance is a Base Rate Advance, a rate per annum
equal at all times to the Base Rate in effect from time
to time plus the Applicable Percentage, payable quarterly
in arrears on the third day of each January, April, July
and October and on the date such Base Rate Advance shall
be Converted into an Adjusted Eurodollar Rate Advance or
paid in full; provided that commencing on the date and
during the continuance of any Event of Default the
applicable interest rate for all outstanding Base Rate
Advances shall be a rate per annum equal at all times to
2% per annum above the rate otherwise in effect for such
Base Rate Advances pursuant to this Section 2.06(a) from
time to time.
(b) Adjusted Eurodollar Rate Advances. During such
periods as such Advance is an Adjusted Eurodollar Rate
Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the Adjusted
Eurodollar Rate for such Interest Period plus the
Applicable Percentage, payable on the last day of each
Interest Period and, if such Interest Period has a
duration of six months or twelve months, on each day that
occurs during such Interest Period every three months
from the first day of such Interest Period, provided that
commencing on the date and during the continuance of any
Event of Default the applicable interest rate for all
outstanding Adjusted Eurodollar Rate Advances shall be a
rate per annum equal at all times to 2% per annum above
the rate otherwise in effect for such Adjusted Eurodollar
Rate Advances pursuant to this Section 2.06(b).
SECTION 2.07. Interest Rate Determination. (a) Each
Reference Bank agrees to furnish to the Paying Agent timely
information for the purpose of determining each Adjusted
Eurodollar Rate. If any one or more of the Reference Banks
shall not furnish such timely information to the Paying Agent
for the purpose of determining any such interest rate (but at
least two Reference Banks shall have furnished such
information), the Paying Agent shall determine such interest
rate on the basis of timely information furnished by the
remaining Reference Banks.
(b) The Paying Agent shall give prompt notice to the
applicable Borrower and the Appropriate Lenders of the
applicable interest rate determined by the Paying Agent for
purposes of Section 2.06(a) or (b), and the applicable rate,
if any, furnished by each Reference Bank for the purpose of
determining the applicable interest rate under
Section 2.06(b).
(c) If any Borrower shall fail to select the duration of
any Interest Period for any Adjusted Eurodollar Rate Advances
with respect to such Borrower in accordance with the
provisions contained in the definition of the term "Interest
Period" in Section 1.01, the Paying Agent will forthwith so
notify such Borrower and the Lenders and such Advances will
automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances (or, if such
Advances are then Base Rate Advances, will continue as Base
Rate Advances).
SECTION 2.08. Conversion of Advances. (a) Each Borrower
may on any Business Day, upon notice given to the Paying Agent
not later than 11:00 a.m. (New York City time) on the third
Business Day prior to the date of the proposed Conversion, and
subject to the provisions of Sections 2.02(d), 2.06, 2.07,
2.08(d) and 2.10(d), Convert all or any Advances (except Swing
Line Advances, Advances made in respect of Overnight
Overdrafts and Auction Bid Advances) with respect to such
Borrower of one Type into Advances of the other Type;
provided, however, that (i) except as provided in
Section 2.10(d), any Conversion of any Adjusted Eurodollar
Rate Advances into Base Rate Advances shall be made on, and
only on, the last day of an Interest Period for such Adjusted
Eurodollar Rate Advances and (ii) no Borrower may Convert any
Base Rate Advances into Adjusted Eurodollar Rate Advances
unless such Base Rate Advances are in an aggregate amount not
less than $10,000,000. Each such notice of a Conversion
shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the Type and aggregate
amount of Advances to be Converted and (iii) if such
Conversion is into Adjusted Eurodollar Rate Advances, the
duration of the Interest Period for such Advances.
(b) Each notice of Conversion shall be irrevocable and
binding on the applicable Borrower and, in respect of any
notice of Conversion to Adjusted Eurodollar Rate Advances, the
applicable Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender solely as a
result of any failure to Convert on the date specified in such
notice, including any loss (including loss of anticipated
profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Adjusted Eurodollar Rate
Advance to be made by such Lender as part of such Conversion
when such Adjusted Eurodollar Rate Advance, solely as a result
of such failure, is not made on such date. Without prejudice
to the survival of any other provision of this Agreement, the
provisions of this paragraph shall survive any termination of
this Agreement
(c) On the date on which the aggregate unpaid principal
amount of Adjusted Eurodollar Rate Advances with respect to
such Borrower having the same Interest Period shall be
reduced, by payment or prepayment or otherwise, to less than
$10,000,000, such Advances shall automatically Convert into
Base Rate Advances.
(d) Upon the occurrence of any Default and so long as
such Default shall continue, the right of the Borrowers to
Convert any Advance into an Adjusted Eurodollar Rate Advance
shall be suspended.
SECTION 2.09. Prepayments. (a) Optional Prepayment.
Each Borrower may, upon at least three Business Days' notice
in the case of Adjusted Eurodollar Rate Advances, and upon at
least one Business Day's notice in the case of Base Rate
Advances, to the Paying Agent stating the proposed date and
aggregate principal amount of the prepayment, (and if such
notice is given the applicable Borrower shall) prepay the
outstanding principal amounts of the Advances in whole or
ratably in part, together with accrued interest to the date of
such prepayment on the principal amount prepaid and all fees,
costs and expenses otherwise payable by the applicable
Borrower under the Advance Documents with respect to the
principal amount prepaid; provided, however, that:
(i) each prepayment pursuant to this Section 2.09(a)
shall be in an aggregate principal amount of not less
than $1,000,000;
(ii) in the case of any such prepayment of an
Adjusted Eurodollar Rate Advance, such prepayment shall
either be made on the last day of an Interest Period for
such Adjusted Eurodollar Rate Advance or shall be made
together with the payment of all amounts required
pursuant to Section 9.05(c); and
(iii) prepayments of Swing Line Advances may be made
upon notice given the same day as such prepayment on or
prior to 12:00 noon so long as the Swing Line Advance
shall have remained outstanding for at least one Business
Day.
(b) Mandatory Prepayments. (i) If any Lender
shall for any reason fail to pay the Settlement Amount payable
by it on a Settlement Date, on demand by the Administrative
Agents the Borrowers shall forthwith prepay the Advances in an
amount equal to such Settlement Amount, and the Paying Agent
shall apply such prepayment in the same manner as is specified
in the second sentence of Section 2.17.
(ii) The Borrowers shall, on each Business Day,
prepay Advances comprising part of the same Borrowings or, if
no Advances are then outstanding, shall deposit cash in the
Cash Collateral Account, in an aggregate principal amount
equal to the amount by which (A) the Facility Usage exceeds
(B) the Facility.
(iii) The Borrowers shall, on each Business Day,
pay to the Paying Agent for deposit in the Cash Collateral
Account an amount sufficient to cause the aggregate amount on
deposit in such Account to equal the amount by which the
aggregate maximum amount available to be drawn under Letters
of Credit then outstanding (assuming compliance with all
conditions to drawing) exceeds the Letter of Credit Facility
on such Business Day.
(iv) All prepayments by any Borrower under this
subsection (b) shall be made together with accrued interest to
the date of such prepayment on the principal amount prepaid
and shall be applied first against the Advances with respect
to such Borrower to be prepaid under the Facility that are
Base Rate Advances and thereafter against the Advances with
respect to such Borrower to be prepaid under the Facility that
are Eurodollar Advances having Interest Periods ending as
close as possible to the date of such Prepayment.
SECTION 2.10. Increased Costs; Illegality. (a) If, due
to either (i) the introduction of or any change (other than
any change by way of imposition or increase of reserve
requirements included in the Adjusted Eurodollar Rate Reserve
Percentage) in or change in the interpretation of any law or
regulation or (ii) the compliance with any guideline or
request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any
increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Adjusted Eurodollar Rate
Advances, then the Parent Borrower shall from time to time,
upon demand by such Lender (with a copy of such demand to the
Administrative Agents), pay to the Paying Agent for the
account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate
as to the amount of such increased cost, submitted to the
Parent Borrower and the Administrative Agents by such Lender,
shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender determines that compliance with any
law or regulation or any guideline or request from any central
bank or other Governmental Authority (whether or not having
the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender
or any corporation controlling such Lender and that the amount
of such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder and other
commitments of this type or of the Letters of Credit or
Auction Bid LOCs (or similar contingent obligations), then,
upon demand by such Lender (with a copy of such demand to the
Administrative Agents), the Parent Borrower shall pay to the
Paying Agent for the account of such Lender, from time to time
as specified by such Lender, additional amounts sufficient to
compensate such Lender in the light of such circumstances, to
the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such
Lender's commitment to lend hereunder or to the issuance or
maintenance of the Letters of Credit or Auction Bid LOCs. A
certificate as to such amounts, submitted to the Parent
Borrower and the Administrative Agents by such Lender, shall
be conclusive and binding for all purposes, absent manifest
error.
(c) If, due to either (i) the introduction of or any
change in or change in the interpretation of any law or
regulation or (ii) the compliance with any guideline or
request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any
increase in the cost to any Issuing Bank or any Lender of
agreeing to issue or of issuing or maintaining any Letter of
Credit or Auction Bid LOCs or any participation therein, then
the Parent Borrower shall from time to time, upon demand by
such Issuing Bank or Lender (with a copy of such demand to the
Administrative Agents), pay to the Paying Agent for the
account of such Issuing Bank or such Lender, as the case may
be, additional amounts sufficient to compensate such Issuing
Bank or such Lender, as the case may be, for such increased
cost. A certificate as to the amount of such increased cost,
submitted to the Parent Borrower and the Administrative Agents
by such Issuing Bank or such Lender, as the case may be, shall
be conclusive and binding for all purposes, absent manifest
error.
(d) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it
unlawful, as determined by any Lender, or any central bank or
other Governmental Authority shall assert that it is unlawful,
for such Lender or its Eurodollar Lending Office to perform
its obligations hereunder to make Adjusted Eurodollar Rate
Advances or to continue to fund or maintain Adjusted
Eurodollar Rate Advances hereunder, then, on notice thereof
and demand therefor by such Lender to the Borrower through the
Administrative Agent, (i) the obligation of such Lender to
make Adjusted Eurodollar Rate Advances and to Convert Advances
into Adjusted Eurodollar Rate Advances shall terminate and
(ii) each Borrower shall forthwith Convert all Adjusted
Eurodollar Rate Advances of such Lender then outstanding into
Base Rate Advances in accordance with Section 2.08, except
that such Conversion may occur, notwithstanding Section 2.08,
other than on the last day of the respective Interest Periods
for such Adjusted Eurodollar Rate Advances, if the applicable
Borrower has paid all amounts payable under Section 9.05(c).
SECTION 2.11. Payments and Computations. (a) Each
Borrower shall make each payment hereunder without set-off or
counterclaim not later than Noon (New York City time) on the
day when due in U.S. dollars to the Paying Agent at
641 Lexington Avenue, New York, New York 10043, in same day
funds. The Paying Agent will promptly thereafter cause to be
distributed (i) like funds relating to the payment of
principal, interest, letter of credit fees payable pursuant to
Section 2.03(c)(ii) or Facility Fees ratably (other than
amounts payable (A) to a Swing Line Bank in respect of any
Swing Line Advance made by it, (B) to the Concentration
Account Bank in respect of Advances made in respect of
Overnight Overdrafts prior to settlement pursuant to
Section 2.17, (C) to a Lender in respect of any Auction Bid
Advance or Auction Bid LOC or (D) pursuant to
Sections 2.03(b), 2.03(c), 2.03(d)(i), 2.03(e), 2.03(f), 2.10,
2.13, 2.17 or 9.05) to the Appropriate Lenders for the account
of their Applicable Lending Offices and (ii) like funds
relating to the payment of any other amount payable to any
Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with
the terms of this Agreement.
(b) Each Borrower hereby authorizes (i) each Issuing
Bank on behalf of each Lender, if and to the extent payment
owed to such Lender is not made by such Borrower to the Paying
Agent when due hereunder, to charge from time to time against
any or all of such Borrower's accounts with such Issuing Bank
any amount so due and (ii) each Lender, if and to the extent
payment is not made when due hereunder, to charge from time to
time against any or all of such Borrower's accounts with such
Lender any amount so due to such Lender prior to any sharing
under Section 2.12. Nothing contained in this subsection (b)
shall impair the obligations of any Lender under Section 2.12,
the rights of the Administrative Agents, the Collateral Agent,
the Paying Agent or any Lender under Section 9.06 or any other
rights and remedies (including other rights of set-off) that
the Administrative Agents, the Collateral Agent, the Paying
Agent or such Lender may have.
(c) All computations of interest based on the Base Rate,
the Adjusted Eurodollar Rate, any Fixed Rate or the Federal
Funds Rate, of letter of credit fees payable pursuant to
Section 2.03(c)(ii) or 2.03(d)(ii) and of Facility Fees shall
be made by the Paying Agent on the basis of a year of 360
days, in each case for the actual number of days (including
the first day but excluding the last day) occurring in the
period for which such interest or fees are payable; provided,
however, that all computations of interest based on the Base
Rate when the Base Rate is determined by reference to
paragraph (a) of the definition thereof shall be made by the
Paying Agent on the basis of a year of 365 or 366 days, as
applicable, in each case for the actual number of days
(including the first day but excluding the last day) occurring
in the period for which such interest is payable. Each
determination by the Paying Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of
payment of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of
interest on or principal of Adjusted Eurodollar Rate Advances
to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(e) Unless the Paying Agent shall have received notice
from any Borrower prior to the date on which any payment is
due to the Appropriate Lenders hereunder that such Borrower
will not make such payment in full, the Paying Agent may
assume that such Borrower has made such payment in full to the
Paying Agent on such date and the Paying Agent may, in
reliance upon such assumption, cause to be distributed to each
Appropriate Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the
applicable Borrower shall not have so made such payment in
full to the Paying Agent, each Appropriate Lender shall repay
to the Paying Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for
each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the
Paying Agent, at the Federal Funds Rate.
SECTION 2.12. Sharing of Payments, Etc. If any Lender
shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on
account of the Advances made by it (other than pursuant to
Sections 2.03(b), 2.03(c), 2.03(d), 2.03(e), 2.03(f), 2.10,
2.13, 2.17 or 9.05 and other than amounts payable to a Swing
Line Bank in respect of any Swing Line Advance made by it, to
the Concentration Account Bank in respect of Advances made in
respect of Overnight Overdrafts prior to settlement pursuant
to Section 2.17 or to a Lender in respect of an Auction Bid
Advance) in excess of its ratable share of payments on account
of the Advances obtained by all the Appropriate Lenders, such
Lender shall forthwith purchase from the other Appropriate
Lenders such participations in the Advances made by the other
Appropriate Lenders as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with
each of them; provided, however, that, if all or any portion
of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Appropriate Lender
shall be rescinded and each such other Lender shall repay to
the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such other Lender's
ratable share (according to the proportion of (a) the amount
of such Lender's required repayment to (b) the total amount so
recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of
the total amount so recovered. Each Borrower agrees that any
Lender so purchasing a participation from another Lender
pursuant to this Section 2.12 may, to the fullest extent
permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such
participation as fully as if such Lender were the direct
creditor of such Borrower in the amount of such participation.
SECTION 2.13. Taxes. (a) Any and all payments by each
Borrower hereunder or under any other Loan Document shall be
made, in accordance with Section 2.11, free and clear of and
without deduction for any and all current or future taxes,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto (including interest,
additions to tax, and penalties thereon) imposed by the United
States of America or any political subdivision thereof (or, in
the event that the Borrower assigns any of its rights or
obligations or any interest hereunder or under the other Loan
Documents, by any foreign country and its political
subdivisions in which the assignee is incorporated or is
resident), excluding, in the case of each Lender, the
Collateral Agent, the Paying Agent and each Administrative
Agent, taxes imposed on or measured by its net income, and
franchise taxes imposed on it, by the jurisdiction under the
laws of which such Administrative Agent, the Collateral Agent,
the Paying Agent or such Lender (as the case may be) is
organized or any political subdivision thereof and, in the
case of each Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it, by the jurisdiction
of such Lender's Applicable Lending Office or any political
subdivision thereof (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "Taxes"). If any Borrower
shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender, the
Collateral Agent, the Paying Agent or either Administrative
Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 2.13) such Lender, the Collateral Agent,
the Paying Agent or such Administrative Agent (as the case may
be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall
make such deductions and (iii) such Borrower shall pay the
full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, each Borrower agrees to pay any current
or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies that arise from any
payment made hereunder or under any other Loan Document or
from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) Each Borrower will indemnify each Lender, the
Collateral Agent, the Paying Agent and each Administrative
Agent for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.13) paid by such Lender,
the Collateral Agent, the Paying Agent or such Administrative
Agent (as the case may be) and any liability (including
interest, expenses, additions to tax, and penalties) arising
therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payments
under this indemnification shall be made within 30 days from
the date such Lender, the Collateral Agent, the Paying Agent
or such Administrative Agent (as the case may be) makes
written demand therefor. However, in the case of any Taxes
not required by law to be deducted by the applicable Borrower
from or in respect of any sum payable hereunder to any Lender,
the Collateral Agent, the Paying Agent or either
Administrative Agent, payment under this indemnification must
be made by such Borrower only if such written demand has been
made within 60 days from the date on which such Lender, the
Collateral Agent, the Paying Agent or such Administrative
Agent, as the case may be, makes payment of the Taxes to the
relevant taxing authority.
(d) Within 30 days after the reasonable request therefor
by the Paying Agent in connection with any payment of Taxes or
Other Taxes, each Borrower will furnish to the Paying Agent,
at its address referred to in, or determined pursuant to,
Section 9.01, the original or a certified copy of an official
receipt from the jurisdiction to which payment is made
evidencing payment thereof or, if unavailable, a certificate
from such Borrower's treasurer or responsible officer that
states that such payment has been made and that sets forth the
date and amount of such payment.
(e) Prior to or on the Closing Date in the case of each
Lender that is a Lender on the Closing Date, and on the date
of the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender, and from time to time
thereafter if reasonably requested by the Parent Borrower or
the Paying Agent, each Lender organized under the laws of a
foreign jurisdiction that is exempt from United States Federal
withholding tax, or that is subject to such tax at a reduced
rate under an applicable treaty, with respect to payments
under this Agreement has provided or is herewith providing the
Parent Borrower or the Paying Agent with an Internal Revenue
Form 4224 or Form 1001 or other certificate or document
required under United States law to establish entitlement to
such exemption or reduced rate. Such form, certificate or
document will be provided by each such Lender from time to
time after the Closing Date as reasonably requested by the
Parent Borrower or the Paying Agent. A determination of
whether a Lender is exempt from United States Federal
withholding tax or is subject to such tax at a reduced rate
shall be within the reasonable judgment of the Lender.
(f) Without prejudice to the survival of any other
agreement of the Borrowers hereunder, the agreements and
obligations of the Borrowers contained in this Section 2.13
shall survive the payment in full of principal and interest
hereunder.
SECTION 2.14. Evidence of Debt Under This Agreement.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of
the Borrowers to such Lender resulting from each Advance owing
to such Lender from time to time, including the amount of
principal and interest payable and paid to such Lender from
time to time hereunder.
(b) The Register maintained by the Paying Agent pursuant
to Section 9.04(d) shall include a control account, and a
subsidiary account for each Lender, in which accounts (taken
together) shall be recorded (i) the date and amount of each
Borrowing made hereunder, the Type of Advances comprising such
Borrowing and the Interest Period applicable thereto, (ii) the
terms of each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest
due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iv) the amount of any
sum received by the Paying Agent from each Borrower hereunder
and each Appropriate Lender's share thereof.
(c) The entries made in the Register shall be conclusive
and binding for all purposes, absent manifest error.
SECTION 2.15. Obligations Absolute. The obligations of
each Borrower under this Agreement in respect of any Letter of
Credit or Auction Bid LOC and under any other agreement or
instrument relating to any Letter of Credit or Auction Bid LOC
shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and
such other agreement or instrument under all circumstances,
including to the extent permitted by law, the following
circumstances:
(a) any lack of validity or enforceability of any
Letter of Credit or Auction Bid LOC or any other
agreement or instrument relating thereto (collectively,
the "Letter of Credit Documents") or any Loan Document;
(b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
obligations of such Borrower in respect of any Letter of
Credit or Auction Bid LOC or any other amendment or
waiver of or any consent to departure from all or any of
the Letter of Credit Documents or any other Loan
Document;
(c) any exchange, release or nonperfection of any
collateral, or any release or amendment or waiver of or
consent to departure from any guaranty, for all or any of
the obligations of such Borrower in respect of any Letter
of Credit or Auction Bid LOC;
(d) the existence of any claim, set-off, defense or
other right that such Borrower may have at any time
against any beneficiary or any transferee of a Letter of
Credit or Auction Bid LOC (or any Persons for whom any
such beneficiary or any such transferee may be acting),
any of the Lenders, the Administrative Agent, the
Collateral Agent, the Paying Agent or any other Person,
whether in connection with any Loan Document, the
transactions contemplated hereby or thereby or any
unrelated transaction;
(e) any statement or any other document presented
under or in connection with any Letter of Credit or
Auction Bid LOC or other Loan Document proving to be
forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or
inaccurate in any respect;
(f) payment in good faith by an Issuing Bank under a
Letter of Credit or by a Lender under an Auction Bid LOC
against presentation of a draft or certificate that does
not comply with the terms of such Letter of Credit or
Auction Bid LOC; and
(g) any other circumstance or happening whatsoever
other than the payment in full of all obligations
hereunder in respect of any Letter of Credit or Auction
Bid LOC or any agreement or instrument relating to any
Letter of Credit or Auction Bid LOC, whether or not
similar to any of the foregoing, that might otherwise
constitute a defense available to, or a discharge of,
such Borrower.
SECTION 2.16. Use of Proceeds. The proceeds of the
Advances shall be used by each Borrower to finance the working
capital needs of the Borrower and its Subsidiaries and for
other general corporate purposes of each Borrower (including
repayment of advances outstanding under, and other amounts due
in respect of, the Existing Credit Agreement).
SECTION 2.17. Special Adjustments of Advances. The
Paying Agent will notify the Lenders of the aggregate amount
of Advances (other than Auction Bid Advances) outstanding upon
the occurrence of a Default and at such times and at such
frequencies as the Paying Agent or any Swing Line Bank,
Concentration Account Bank or Issuing Bank in their sole
discretion may determine, but in any event not less frequently
than weekly (the date of each such notice by the Paying Agent
being a "Settlement Date"). Upon receipt of any such notice,
such Swing Line Bank, Concentration Account Bank or Issuing
Bank or each of the other Lenders, as the case may be, will
forthwith unconditionally pay to the Paying Agent (for
distribution by the Paying Agent to such Swing Line Bank,
Concentration Account Bank or Issuing Bank or each of the
other Lenders, as the case may be) such amount (a "Settlement
Amount"), if any, as is necessary to cause the aggregate
unpaid principal amount of the Advances (other than Auction
Bid Advances) to be shared by the Lenders ratably in
accordance with the amounts of their Commitments. Upon each
payment and distribution pursuant to the preceding sentence,
each Lender will be deemed from the date of such payment and
distribution for all purposes under the Loan Documents
(including in respect of interest accruing from such date on
the principal amount of such Advances) to have outstanding
Advances owed to it in the amount of its ratable share of such
Advances as aforesaid.
ARTICLE III
Representations and Warranties
The Borrowers represent and warrant to each of the
Lenders, the Administrative Agents, the Collateral Agent, the
Paying Agent, the Issuing Banks and the Swing Line Banks that:
SECTION 3.01. Organization; Powers. Each of the Loan
Parties (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own
its property and assets and to carry on its business as now
conducted, (c) is qualified to do business in every juris-
diction where such qualification is required by the nature of
its business, the character and location of its property,
business or customers, or the ownership or leasing of its
properties, except for such jurisdictions in which the failure
so to qualify, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, and (d) has
the corporate power and authority to execute, deliver and
perform its obligations under each of the Loan Documents and
each other agreement or instrument contemplated thereby or in
connection with the Transactions to which it is or will be a
party and, in the case of Borrowers, to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and
performance by each of the Loan Parties of each of the Loan
Documents to which it is a party, the Borrowings hereunder,
the issuance of the Letters of Credit, the use of the proceeds
of the Advances, the Swing Line Advances and the Letters of
Credit, the creation of the security interests contemplated by
the Collateral Documents and the other transactions
contemplated by the Loan Documents (all the foregoing,
collectively, the "Transactions") (a) have been duly
authorized by all requisite corporate and, if required,
stockholder action and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, the certificate
of incorporation or other constitutive documents or by-laws of
any Loan Party or (B) any order of any Governmental Authority,
(ii) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default
under any contractual obligation of any Loan Party or
(iii) result in or require the creation or imposition of any
Lien (other than any Lien created hereunder or under the
Collateral Documents) upon or with respect to any property or
assets now owned or hereafter acquired by any Loan Party.
SECTION 3.03. Enforceability. This Agreement has been
duly executed and delivered by the Borrowers and constitutes,
and each other Loan Document when executed and delivered by
the Borrowers and each other Loan Party thereto will
constitute, a legal, valid and binding obligation of the
Borrowers and the other Loan Parties, as applicable, enforce-
able against each of them in accordance with its terms except
as enforcement may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally or
equitable principles relating to or limiting creditors' rights
generally.
SECTION 3.04. Governmental Approvals. No action, consent
or approval of, registration or filing with or any other
action by any Governmental Authority is or will be required in
connection with the Transactions, except for (a) the filing of
Uniform Commercial Code financing statements and filings with
the United States Patent and Trademark Office and the United
States Copyright Office to perfect the security interests that
can be perfected by such filings and (b) such actions,
consents, approvals, registrations and filings as have been
made or obtained and are in full force and effect.
SECTION 3.05. Financial Statements. (a) The Parent
Borrower has heretofore delivered to the Lenders its unaudited
Consolidated balance sheet as of the Fiscal Quarter ended
March 26, 1994. Neither the Parent Borrower nor any of its
Subsidiaries has any material contingent obligation, material
contingent liability or material liability for taxes, long-
term lease or unusual forward or long-term commitment or
obligations to retired employees for medical or other employee
benefits that is not reflected in the foregoing financial
statements, the notes thereto or the most recent financial
statements, if any, delivered pursuant to Section 5.03.
(b) The Parent Borrower has delivered to the Lenders its
audited consolidated financial statements for the Fiscal Year
ended January 1, 1994, together with its annual report on
Form 10-K, filed with the Securities and Exchange Commission.
Such financial statements were prepared in conformity with
GAAP and fairly present the Consolidated financial position of
the Parent Borrower and its Subsidiaries as at the date
thereof and the Consolidated results of operations and changes
in financial position of the Parent Borrower and its
Subsidiaries for each of the periods covered thereby. Except
as disclosed in such financial statements, neither the Parent
Borrower nor any of its Subsidiaries had, at the date of such
financial statements or as of the date of this Agreement or on
the Closing Date, as the case may be, any material contingent
obligation, material contingent liability or material
liability for taxes, long-term lease or unusual forward or
long-term commitment or obligations to retired employees for
medical or other employee benefits that is not reflected in
the foregoing financial statements or the notes thereto.
SECTION 3.06. No Material Adverse Change. There has been
no material adverse change in the business, assets,
operations, properties, prospects or condition (financial or
otherwise) of the Parent Borrower and its Subsidiaries, taken
as a whole, since January 1, 1994.
SECTION 3.07. Title to Properties; Possession Under
Leases. (a) The Parent Borrower and its Subsidiaries have good
and marketable title to, or valid leasehold interests in, all
their material properties and assets, except where the failure
to have such title or leasehold interests, individually or in
the aggregate, could not reasonably be expected to result in a
Material Adverse Effect. All such title to, or leasehold
interest in, material properties and assets are free and clear
of Liens, other than Permitted Liens and Liens with respect to
which the Collateral Agent has received on or prior to the
Closing Date duly executed releases and termination statements
in connection therewith.
(b) Each of the Parent Borrower and its Subsidiaries has
complied with all obligations under all leases to which it is
a party and enjoys peaceful and undisturbed possession under
all such leases necessary in any respect for the operation of
their respective properties and assets, except where the
failure so to comply, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as
of the Closing Date a list of all the Subsidiaries of the
Parent Borrower, their jurisdiction of organization and the
percentage ownership interest of each of them and any other
Subsidiary therein. The capital stock of each of the
Subsidiaries is duly authorized, validly issued, fully paid
and nonassessable and, except as set forth on Schedule 3.08,
is owned free and clear of all Liens. No authorized but
unissued treasury shares of capital stock of the Parent
Borrower or any such Subsidiary are subject to any option,
warrant, right to call or commitment of any kind or character
except as set forth on Schedule 3.08.
SECTION 3.09. Litigation; Compliance with Laws. (a)
Except as set forth in Schedule 3.09, there are not any
actions, suits, proceedings or arbitrations at law or in
equity or by or before any Governmental Authority now pending
or, to the knowledge of the Parent Borrower, threatened
against or affecting the Parent Borrower, or any of its
Subsidiaries or any business or property of any such Person
that (i) involve any Loan Document or the Transactions or
(ii) could reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Effect.
(b) Neither the Parent Borrower nor any of its
Subsidiaries nor any of their respective properties or assets
is (i) in violation of, nor will the continued operation of
their properties and assets as currently conducted violate,
any law, rule, regulation, statute (including any zoning,
building, environmental and safety law, ordinance, code or
approval or any building permits) or any restrictions of
record or agreements affecting such properties or assets,
where such violations could reasonably be expected to have a
material adverse effect on the value, use or operation of any
such property or asset, or (ii) in default with respect to any
judgment, writ, injunction, decree or order of any
Governmental Authority, where such defaults, individually or
in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. The issuance of the Letters of Credit
will not violate any applicable law or regulation or violate
or be prohibited by any judgment, writ, injunction, decree or
order of any Governmental Authority.
SECTION 3.10. Agreements. Neither the Parent Borrowers
nor any of its Subsidiaries is in default with respect to any
contractual obligation of it or by which it or any of its
properties or assets are or may be bound, where such default
could reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.11. Federal Reserve Regulations. (a) Neither
the Parent Borrowers nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Letter of Credit or
any Advance or Swing Line Advance will be used, whether
directly or indirectly, and whether immediately, incidentally
or ultimately, (i) to purchase or carry Margin Stock or to
extend credit to others for the purpose of purchasing or
carrying Margin Stock or to refund indebtedness originally
incurred for such purpose or (ii) for any purpose that entails
a violation of, or is inconsistent with, the provisions of the
Regulations of the Board, including Regulation G, U or X.
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act. Neither the Parent Borrowers nor any of
its Subsidiaries (a) is an "investment company" as defined in,
or is subject to regulation under, the Investment Company Act
of 1940 or (b) is a "holding company" as defined in, or is
subject to regulation under, the Public Utility Holding
Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrowers will use the
Letters of Credit and the proceeds of the Advances and any
Swing Line Advances only for the purposes specified in
Section 2.16.
SECTION 3.14. Tax Returns. Each of the Borrowers and
their Subsidiaries has filed or caused to be filed all
Federal, state and local income and other material tax returns
required to have been filed by it or with respect to it and
has paid or caused to be paid all taxes shown to be due and
payable on such returns or on any assessments received by it
or with respect to it, except taxes that are being contested
in good faith by appropriate proceedings and for which it has
set aside on its books adequate reserves in accordance with
GAAP.
SECTION 3.15. No Material Misstatements. The written
information provided by or on behalf of the Borrowers and
contained in the Confidential Information Memorandum (includ-
ing all attachments and exhibits thereto), as supplemented,
and as supplemented further by written information heretofore
provided by or on behalf of the Borrowers to the Lenders and
any other materials, documents and written information that
the Borrowers or any of their Affiliates may have furnished to
the Lenders, taken as a whole, was as of the date of such
Confidential Information Memorandum, the dates otherwise
specified therein or the dates upon which such information was
provided, accurate in all material respects and does not
contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading, provided that to the extent any such
information therein was based upon or constitutes a forecast
or projection, the Borrowers represent only that they acted in
good faith and utilized reasonable assumptions, due and
careful consideration and the information actually known to
Responsible Officers at the time in the preparation of such
information.
SECTION 3.16. Employee Benefit Plans. Each of the Parent
Borrower and its ERISA Affiliates is in compliance in all
material respects with the applicable provisions of ERISA and
the Code and the regulations and published interpretations
thereunder. No Reportable Event has occurred in respect of any
Plan of the Parent Borrower or any ERISA Affiliate. As of the
Closing Date, the present value of all benefit liabilities
under each Plan (based on those assumptions used to fund such
Plan) did not, as of the last annual valuation date applicable
thereto, exceed the value of the assets of such Plan. Neither
the Parent Borrower nor any ERISA Affiliate has incurred any
Withdrawal Liability that materially adversely affects the
financial condition of the Parent Borrower and its ERISA
Affiliates taken as a whole. Neither the Parent Borrower nor
any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization or has been terminated
within the meaning of Title IV of ERISA, and no Multiemployer
Plan is reasonably expected to be in reorganization or to be
terminated, where such reorganization or termination has
resulted or could reasonably be expected to result in an
increase in the contributions required to be made to such Plan
that would materially and adversely affect the financial
condition of the Parent Borrower and its ERISA Affiliates
taken as a whole.
SECTION 3.17. Environmental and Safety Matters. Except as
set forth on Schedule 3.17:
(a) The Parent Borrower and each of its
Subsidiaries has obtained and is in compliance with all
permits, licenses and other authorizations that are
required and material with respect to the operation of
the business under any Environmental Law, and each such
permit, license and authorization is in full force and
effect.
(b) The Parent Borrower and each of its
Subsidiaries is in compliance with all limitations,
restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables
contained in any Environmental Law applicable and
material to it and its business, assets, operations and
properties, including those arising under the Resource
Conservation and Recovery Act of 1976, as amended, the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("CERCLA"),
the Federal Water Pollution Control Act, as amended, the
Federal Clean Air Act, as amended, the Occupational,
Safety and Health Act and the Toxic Substances Control
Act and any analogous or comparable state laws, except
where the failure so to comply could not reasonably be
expected to result in a Material Adverse Effect.
(c) There is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand
letter or request for information pending or, to the
knowledge of the Parent Borrower or any of its
Subsidiaries, after reasonable inquiry, threatened
against the Parent Borrower or any of its Subsidiaries
under any Environmental Law, except to the extent that
the same could not reasonably be expected to result in a
Material Adverse Effect.
(d) Neither the Parent Borrower nor any of its
Subsidiaries has received notice that it has been
identified as a potentially responsible party under
CERCLA or any comparable state law, nor has any such
Person received any notification that any hazardous
substances or any pollutant or contaminant, as defined in
CERCLA and its implementing regulations, or any toxic
substance, hazardous waste, hazardous constituents,
hazardous materials, asbestos or asbestos containing
material, polychlorinated biphenyls, petroleum, including
crude oil and any fractions thereof, or other wastes,
chemicals, substances or materials regulated by any
Environmental Laws (collectively "Hazardous Materials")
that it or any of their respective predecessors in
interest has used, generated, stored, treated, handled,
transported or disposed of, has been found at any site at
which any Governmental Authority or private party is
conducting a removal action, remedial investigation or
other action pursuant to any Environmental Law, except to
the extent that the same could not reasonably be expected
to result in a Material Adverse Effect.
(e) There have been no releases or threatened
releases (in each case as defined in CERCLA) of Hazardous
Materials by the Parent Borrower or any of its
Subsidiaries on, upon, into or from any of their
respective facilities or operations that could reasonably
be expected to result in a Material Adverse Effect. To
the best knowledge of the Parent Borrower and each of its
Subsidiaries, there have been no such releases or
threatened releases on, upon, under or into any real
property in the vicinity of any of their respective
facilities or operations that, through soil, surface
water or groundwater migration or contamination, may be
located on, in or under such facilities or operations and
that could reasonably be expected to result in a Material
Adverse Effect.
(f) There is no asbestos in, on, or at any of the
facilities or operations of the Parent Borrower or any of
its Subsidiaries, except to the extent that the presence
of such material could not reasonably be expected to
result in a Material Adverse Effect.
(g) To the best knowledge of the Parent Borrower
and each of its Subsidiaries after reasonable inquiry,
none of the material properties or assets of the Parent
Borrower or any of its Subsidiaries is (i) listed or
proposed for listing on the National Priorities List
under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability
Information System List promulgated pursuant to CERCLA,
or on any comparable list maintained by any Governmental
Authority.
(h) There are no past or current events,
conditions, circumstances, activities, practices,
incidents, actions or plans that could reasonably be
anticipated to interfere with or prevent compliance with
any Environmental Law, or which may give rise to
liability under any Environmental Law, or otherwise form
the basis of any claim, action, demand, suit, proceeding,
hearing or notice of violation, study or investigation,
based on or related to the manufacture, processing,
distribution, use, generation, treatment, storage,
disposal, transport, shipping or handling, or the
emission, discharge, release or threatened release into
the environment, of any Hazardous Material that could
reasonably be expected to result in a Material Adverse
Effect.
(i) No Lien in favor of any Person relating to or
in connection with any liability under any Environmental
Law has been filed or has been attached to any property
or asset of the Parent Borrower or any of its
Subsidiaries, except to the extent that the same could
not reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.18. Security Documents. (a) The Security
Agreement, upon execution and delivery by the parties thereto,
will create in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral (as defined in the
Security Agreement), including the Pledged Debt and the
Pledged Stock, and proceeds thereof, and when financing state-
ments in appropriate form are filed in the offices specified
on Schedule 3.18(a), the Lien created under the Security
Agreement will constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the
Loan Parties in such Collateral and the proceeds thereof, in
each case prior and superior in right to any other Person.
(b) The Trademark Security Agreement, upon execution and
delivery by the parties thereto, will create in favor of the
Collateral Agent, for the benefit of the Secured Parties, a
legal, valid and enforceable security interest in the
Intellectual Property Rights and, upon the recordation of such
Trademark Security Agreement with the United States Patent and
Trademark Office, together with financing statements in
appropriate form filed in the offices specified on
Schedule 3.18(b), the Liens created under the Trademark
Security Agreement will constitute a fully perfected Lien on,
and security interest in, all right title and interest of the
Loan Parties in the Collateral (as defined in the Trademark
Security Agreement) in which a security interest may be
perfected by filing in the United States and its territories
and possessions, in each case prior and superior in right to
any other Person (it being understood that subsequent
recordings in the United States Patent and Trademark Office
may be necessary to perfect a Lien on registered trademarks
and trademark applications acquired by the Loan Parties after
the date hereof).
SECTION 3.19. Labor Matters. There are no strikes, lock-
outs or slowdowns against the Parent Borrower or any of its
Subsidiaries pending or, to the knowledge of the Parent
Borrower threatened, except where such strikes, lockouts or
slowdowns could not reasonably be expected to, individually or
in the aggregate, result in a Material Adverse Effect. The
hours worked by and payment made to employees of the Parent
Borrower or any of its Subsidiaries have not been in violation
of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such
matters, where such violations could reasonably be expected,
individually or in the aggregate, to result in a Material
Adverse Effect. The consummation of the Transactions will not
give rise to a right of termination or right of renegotiation
on the part of any union under any collective bargaining
agreement to which the Parent Borrower or any of its
Subsidiaries is a party or by which the Parent Borrower or any
of its Subsidiaries is bound.
SECTION 3.20. Location of Real Property. (a)
Schedule 3.20(a) sets forth completely and correctly as of the
date hereof and the Closing Date all material real property
owned by the Parent Borrower or any of its Subsidiaries, the
addresses thereof and the county or counties in which such
properties are situated. All the real property set forth on
Schedule 3.20(a) is owned in fee by the Parent Borrower or its
Subsidiaries.
(b) Schedule 3.20(b) sets forth completely and correctly
as of the date hereof and the Closing Date all material real
property leased by the Parent Borrower or any of its
Subsidiaries, the addresses thereof and the county or counties
in which such properties are situated.
SECTION 3.21. Patents, Trademarks, etc. Each of the
Parent Borrower and each of its Subsidiaries owns, or is
licensed to use, all patents, trademarks, trade names,
copyrights, technology, know-how and processes, service marks
and rights with respect to the foregoing that are (a) used in
or necessary for the conduct of their respective businesses as
currently conducted and (b) material to the business, assets,
operations, properties, prospects or condition (financial or
otherwise) of the Parent Borrower and its Subsidiaries taken
as a whole. The use of such patents, trademarks, trade names,
copyrights, technology, know-how, processes and rights with
respect to the foregoing by the Parent Borrower and its
Subsidiaries does not infringe on the rights of any Person. To
the best knowledge of the Parent Borrower, its rights and the
rights of its Subsidiaries to sell, franchise or license under
such brand names then being used may be transferred in
connection with any sale of assets or stock of the related
business by the Parent Borrower or any of its Subsidiaries.
ARTICLE IV
Conditions of Lending and Issuance of Letters of Credit.
SECTION 4.01. Conditions of All Credit Events. The
obligation of each Lender to make Advances hereunder, the
obligation of the Swing Line Banks to make Swing Line Advances
hereunder and the obligation of the Issuing Banks to issue any
Letters of Credit hereunder (each, a "Credit Event") are
subject to the satisfaction on the date of each Credit Event
of the following conditions:
(a) The Administrative Agents, the Paying Agent and,
where applicable, the Issuing Banks or the Swing Line
Banks shall have received a notice of such Credit Event
as required by Section 2.02.
(b) The representations and warranties set forth in
Article III shall be true and correct in all material
respects on and as of the date of such Credit Event with
the same effect as though made on and as of such date,
except to the extent that such representations and
warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Credit
Event, no Default or Event of Default shall have occurred
and be continuing.
The giving of each notice of a Credit Event and the receipt of
the proceeds of each Advance (including a Swing Line Advance)
referred to therein, and the making of a request for issuance
of Letters of Credit and Auction Bid LOCs and the issuance of
such Letters of Credit and Auction Bid LOCs, shall each
constitute a representation and warranty by the Borrowers as
to the matters specified in paragraphs (b) and (c) of this
Section 4.01; provided, however, that the obligation of each
Lender to make any Advance (i) on the occasion of a Borrowing
to the extent that the amount of such Borrowing does not
exceed the aggregate amount of Swing Line Advances outstanding
on the date of such Borrowing and the proceeds of such
Borrowing are applied to the repayment of Swing Line Advances
and (ii) pursuant to Section 2.01(b)(iii) or
Section 2.01(f)(iv), provided that such Swing Line Advance was
made or Auction Bid LOC was issued in compliance with the
terms of Section 4.01, shall be absolute and unconditional and
such Advance shall be made by such Lender notwithstanding the
failure of the Borrowers to satisfy any condition set forth in
this Section 4.01.
SECTION 4.02. First Borrowing. The obligation of each
Lender to make the Advances to be made by it on the Closing
Date shall be subject to the satisfaction of the following
additional conditions precedent:
(a) The Lenders shall have received a written
opinion of Paul W. Heldman, Vice President, Secretary and
General Counsel of the Parent Borrower, substantially to the
effect set forth in Exhibit N-1 (i) dated the Closing Date,
(ii) addressed to the Administrative Agents, the Issuing
Banks, the Lenders, the Swing Line Banks, the Collateral Agent
and the Paying Agent and (iii) covering such other matters
relating to the Loan Documents and the Transactions as the
Administrative Agents shall reasonably request. The Parent
Borrower hereby instructs such counsel to deliver such
opinion.
(b) All legal matters incident to this Agreement and
the Borrowings hereunder shall be satisfactory to the Lenders
and to Cravath, Swaine & Moore, counsel for the Administrative
Agents.
(c) The Lenders shall have received (i) a copy of
the certificate of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by
the Secretary of State of the state of its organization, and a
certificate as to the good standing of each Loan Party as of a
recent date, from such Secretary of State; (ii) a certificate
of the Secretary or Assistant Secretary of each Loan Party
dated the Closing Date and certifying (A) that attached
thereto is a true and complete copy of the by-laws or
regulations of such Loan Party, as in effect on the Closing
Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly
adopted by such Loan Party, authorizing the execution,
delivery and performance of the Loan Documents to which such
Loan Party is or will be a party and, in the case of the
Borrowers, the borrowings hereunder, and that such resolutions
have not been modified, rescinded or amended and are in full
force and effect as of the Closing Date, (C) that the
certificate of incorporation of such Loan Party has not been
amended since the date of the last amendment thereto shown on
the certificate of good standing furnished pursuant to clause
(i) above and (D) as to the incumbency and specimen signature
of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such
Loan Party; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) such other documents as the Lenders or
Cravath, Swaine & Moore, counsel for the Administrative
Agents, may reasonably request.
(d) The Lenders shall have received a certificate,
dated the Closing Date and signed by a Financial Officer of
the Parent Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of Section 4.01.
(e) The Administrative Agents shall have received
all Fees and other amounts due and payable on or prior to the
Closing Date.
(f) The Guarantee Agreements shall have been duly
executed by the Guarantors and delivered to the Collateral
Agent, and shall be in full force and effect.
(g) The Security Agreement and the Trademark
Security Agreement shall have been duly executed by the Loan
Parties party thereto and the Collateral Agent and shall be in
full force and effect, and each document (including each
Uniform Commercial Code financing statement) required by law
or reasonably requested by the Collateral Agent to be filed,
registered or recorded in order to create in favor of the
Collateral Agent for the ratable benefit of the Secured
Parties a valid and perfected first-priority security interest
in or lien on the Collateral described in each of such agree-
ments (except as otherwise expressly provided therein) shall
have been delivered to the Collateral Agent.
(h) Each of (i) the Existing Credit Agreement and
(ii) all the related agreements, guarantees and security
interests shall have been terminated and all obligations and
interests thereunder discharged (or instruments of discharge
shall have been delivered to the Administrative Agents), and
the Administrative Agents shall have received satisfactory
evidence of such termination and discharge.
(i) The Collateral Agent shall have received the
results of a search of the Uniform Commercial Code (or equiva-
lent) filings made with respect to the Loan Parties in the
states (or other jurisdictions) in which the chief executive
offices of such Persons are located and in the other
jurisdictions in which Uniform Commercial Code (or equivalent)
filings are to be made pursuant to the succeeding subsection,
together with copies of the financing statements (or similar
documents) disclosed by such search, and accompanied by
evidence satisfactory to the Collateral Agent that the Liens
indicated in any such financing statement (or similar docu-
ment) would be Permitted Liens or have been released.
(j) The Collateral Agent shall have received a Per-
fection Certificate with respect to each Loan Party dated the
Closing Date and duly executed by a Financial Officer and the
chief legal officer of the Parent Borrower.
ARTICLE V
Affirmative Covenants
Each Borrower covenants and agrees with each Lender, each
Administrative Agent, each Swing Line Bank, each Issuing Bank,
the Collateral Agent and the Paying Agent that, so long as any
obligation hereunder or under any Loan Document shall remain
unpaid, any Letter of Credit or any Auction Bid LOC shall
remain outstanding or any Lender shall have any Commitment
hereunder, unless the Majority Lenders shall otherwise consent
in writing, such Borrower will and will cause its Subsidiaries
to:
SECTION 5.01. Compliance with Laws. Perform and promptly
comply in all material respects with all:
(a) current and future laws, ordinances, rules,
regulations, orders and requirements (including ERISA and
zoning ordinances, building codes and Environmental Laws) of
every duly constituted governmental, regulatory, licensing or
quasi-Governmental Authority or agency applicable to such
Borrower, any such Subsidiary or any of their respective
properties, as the case may be;
(b) similarly applicable orders, rules and regulations of
any regulatory, licensing, accrediting, insurance underwriting
or rating organization or other body exercising similar
functions having jurisdiction over such Borrower, its
Subsidiaries or their respective properties, as the case may
be; and
(c) similarly applicable duties or obligations of any
kind imposed under any certificate of occupancy, or otherwise
by law, covenant, conditions, agreement or easement, public or
private binding upon such Borrower, its Subsidiaries or their
respective properties, as the case may be; in each case unless
(i) the applicability of any such laws, ordinances, rules,
regulations, orders, requirements, duties or obligations is
being contested by the Parent Borrower or any of its
Subsidiaries in good faith and by proper proceedings and with
respect to which proper reserves are being maintained in
accordance with GAAP or (ii) the failure to so comply or to
cause property to be maintained, used or operated would not
result in a Material Adverse Effect.
SECTION 5.02. Preservation of Corporate Existence.
(a) Preserve and maintain its corporate existence, corporate
rights (charter and statutory) and corporate franchises,
except (i) in connection with the sale of any assets permitted
to be sold pursuant to Section 6.05 or (ii) as permitted by
Section 6.04.
(b) Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect the rights,
licenses, permits, trademarks, trade names, privileges and
franchises material to its business; maintain and operate such
business in substantially the manner in which it is currently
conducted and operated; and at all times keep all property
useful and necessary in its business in good, working order
and condition to the extent required by sound business practices.
SECTION 5.03. Reporting Requirements. Furnish to each
Lender the following:
(a) As soon as available and in any event within
45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year of the Parent Borrower,
(i) a copy of the Parent Borrower's quarterly report on
Form 10-Q (or any successor report), (ii) a consolidating
statement of income, substantially in the form of
Exhibit P, and (iii) a schedule in form satisfactory to
the Administrative Agents of the computation used by the
Parent Borrower in determining compliance with the
covenants contained in Sections 6.08, 6.14, 6.15 (when
applicable) and 6.16, all accompanied by an Officer's
Certificate certifying as to all the foregoing;
(b) As soon as available and in any event within
90 days after the end of each Fiscal Year, (i) a copy of
the Parent Borrower's annual report on Form 10-K (or any
successor report) certified in a manner reasonably
acceptable to the Administrative Agents by a nationally
recognized independent public accounting firm, together
with (ii) a certificate of such accounting firm stating
that in the course of the regular audit of the business
of the Parent Borrower and its Subsidiaries, which audit
was conducted by such accounting firm in accordance with
generally accepted auditing standards, such accounting
firm has obtained no knowledge that a Default has
occurred and is continuing, or, if, in the opinion of
such accounting firm, a Default has occurred and is
continuing, a statement as to the nature thereof, (iii) a
schedule in form satisfactory to the Administrative
Agents of the computations used by such accountants in
determining, as of the end of such Fiscal Year,
compliance with the covenants contained in Sections 6.08,
6.14, 6.15 (when applicable) and 6.16 and (iv) a
consolidating statement of income substantially in the
form of Exhibit P, accompanied by an Officer's
Certificate certifying to such statement of income;
(c) Promptly following its approval by the Parent
Borrower's Board of Directors, a copy of the annual
business and financial plan of the Parent Borrower and
its Consolidated Subsidiaries and forecasts customarily
prepared by management of the Parent Borrower, in each
case in form and detail reasonably satisfactory to the
Administrative Agents, showing projected balance sheets,
income statements and cash flow statements (including
divisional income statements) on a quarterly basis for
the next 12 months and on an annual basis for each of the
following years until the Termination Date, and at the
end of each Fiscal Quarter following the delivery of each
such plan until the delivery of the next annual plan,
comparisons of actual results with such plan and
forecasts, substantially in the form of Exhibit P, and a
comparison of the actual results for the most recently
ended Fiscal Quarter to the same period in the prior
Fiscal Year and a comparison of the sum of the actual
results for all Fiscal Quarters completed during the
current Fiscal Year to the same period in the prior
Fiscal Year, substantially in the form of Exhibit P;
(d) As soon as possible and in any event within
three Business Days after the Parent Borrower becomes
aware of the occurrence of each Default continuing on the
date of such statement, a statement of the chief
financial officer of the Parent Borrower setting forth
details of such Default and the action that the Parent
Borrower has taken and proposes to take with respect
thereto;
(e) Promptly after any significant change in
accounting policies or reporting practices permitted
under Section 6.11, notice and a description in
reasonable detail of such change;
(f) Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and
reports that the Parent Borrower or any of its
Subsidiaries sends to its stockholders generally, and
copies of all regular, periodic and special reports, that
the Parent Borrower or any of its Subsidiaries files with
the Securities and Exchange Commission or any
Governmental Authority that may be substituted therefor,
or with any national securities exchange; and
(g) Such other information respecting the business,
properties, operations, performance, prospects or
condition (financial or otherwise) of the Parent Borrower
or any of its Subsidiaries as any Lender through the
Administrative Agents may from time to time reasonably
request.
SECTION 5.04. Visitation Rights. At any reasonable time
and from time to time during normal business hours, upon
reasonable prior notice, permit the Administrative Agents or
any of the Lenders or any agents or representatives thereof to
examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Parent
Borrower and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Parent Borrower and any
of its Subsidiaries with any of their officers or directors
and with their independent certified public accountants and
advise such accountants that the Administrative Agents and the
Lenders have been authorized to exercise all rights of the
Parent Borrower or any such Subsidiary to require such
accountants to disclose any and all financial statements and
other information of any kind that they may have with respect
to the Parent Borrower or any such Subsidiary and direct such
accountants to comply with any reasonable request of the
Administrative Agents or any Lenders for such information so
long as such reasonable request is stated with particularity.
The chief financial officer of the Parent Borrower or his or
her designee shall be notified by the Administrative Agents
of, and be afforded an opportunity to be present at, any
meeting of the Administrative Agents or the Lenders and such
accountants but the inability of such officer(s) to attend
such meeting or absence of any such officer(s) therefrom shall
in no way interfere with the occurrence of any such meeting as
planned.
SECTION 5.05. Keeping of Books. Keep proper books of
record and account, in which proper entries shall be made of
all financial transactions and the assets and business of the
Parent Borrower and each of such Subsidiaries in accordance
with GAAP.
SECTION 5.06. Payment of Taxes, Etc. Pay and discharge
before the same shall become delinquent, (a) all taxes,
assessments and governmental charges or levies imposed upon it
or upon its property and (b) all lawful claims that, if
unpaid, might by law become a lien (other than a Permitted
Lien) upon their property; provided, however, that neither the
Parent Borrower nor any of its Subsidiaries shall be required
to pay or discharge any such tax, assessment, charge or claim
(i) that is being contested in good faith and by proper
proceedings, as long as such proceedings could not subject
either of the Administrative Agents, the Collateral Agent, the
Paying Agent or any Lender to any civil or criminal penalty or
liability or involve any risk of the sale, loss or forfeiture
of any item of Collateral, except for payments of cash that
are the subject of such proceedings and (ii) against which
proper reserves are being maintained in accordance with GAAP.
SECTION 5.07. Maintenance of Properties, Etc. Maintain
and preserve all of its properties in good working order and
condition, ordinary wear and tear excepted, and maintain all
necessary licenses and permits if, in each case, failure to so
maintain and preserve would result in a Material Adverse
Effect.
SECTION 5.08. Maintenance of Insurance. Maintain
insurance with responsible and reputable insurance companies
or associations in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which
such Borrower or such Subsidiary operates.
SECTION 5.09. Arm's-Length Transactions. Conduct all
transactions permitted under the Loan Documents, other than
transactions permitted pursuant to Sections 6.07(b) and
6.07(m), with any of its Affiliates on terms that are fair and
reasonable and (a) for transactions between the Parent
Borrower and any Affiliate thereof, no less favorable to the
Parent Borrower than the Parent Borrower would obtain in a
comparable arm's-length transaction with a Person not an
Affiliate of the Parent Borrower and (b) for transactions
between a Subsidiary of the Parent Borrower and another
Affiliate of the Parent Borrower, no less favorable to such
Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of the Parent
Borrower.
SECTION 5.10. Maintenance of Leases. Take all necessary
actions to keep the leases on all Real Property in full force
and effect; provided, however, that the Parent Borrower and
any of its Subsidiaries may terminate or fail to renew any
such leases in the ordinary course of business of the Parent
Borrower and its Subsidiaries.
SECTION 5.11. Accounts. Establish and maintain in the
United States with one of the Administrative Agents, Managing
Agents or Co-Agents principal cash concentration accounts for
all domestic operations and such local operating bank accounts
as shall be satisfactory in the reasonable judgment of the
Administrative Agents; provided, however, that prior to
establishing a cash concentration account with any Lender that
is not an Administrative Agent, the Parent Borrower shall
execute and deliver a security agreement with respect to such
account in form and substance satisfactory to the
Administrative Agents, the Collateral Agent and all the
Lenders.
SECTION 5.12. Further Assurances. (a) Execute any and
all further documents, financing statements, agreements and
instruments, and take all further action (including filing
Uniform Commercial Code and other financing statements), that
may be required under applicable law or which the Majority
Lenders, the Administrative Agents or the Collateral Agent may
reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant,
preserve, protect and perfect the validity and first priority
of the security interests created or intended to be created by
the Security Documents.
(b) Cause (i) each Material Subsidiary organized under
the laws of the United States of America or any political
subdivision thereof created or acquired by it from time to
time and (ii) each Subsidiary that is not a Material
Subsidiary prior to becoming such a Material Subsidiary to
undertake the obligation of and to become a Subsidiary
Guarantor pursuant to the Subsidiary Guarantee Agreement and a
party to the applicable Collateral Documents to which it is
not then a party pursuant to one or more instruments or
agreements satisfactory in form and substance to the
Collateral Agent. In addition, the Parent Borrower shall, or
shall cause its Subsidiaries to, pledge all the capital stock
(or other ownership interests) of any Material Subsidiary to
the Collateral Agent for the benefit of the Secured Parties
pursuant to a supplement to the Security Agreement
satisfactory in form and substance to the Collateral Agent.
SECTION 5.13. Interest Rate Protection. Maintain at all
times at least 50% of the aggregate principal amount of the
Consolidated Debt of the Parent Borrower at fixed rates of
interest. Debt shall be deemed to be at fixed rates of
interest for purposes of this Section 5.13 if such Debt either
(a) bears interest at a fixed rate or (b) the Parent Borrower
has, in connection with such Debt, entered into one or more
Interest Rate Agreements, in form and substance satisfactory
to the Administrative Agents, that have the effect of setting
the interest cost to the Parent Borrower and its Subsidiaries
of such Debt at fixed rates.
SECTION 5.14. Environmental Compliance Program.
(a) Promptly give notice to the Administrative Agents upon
becoming aware of (i) any material violation of any
Environmental Law, (ii) any claim, inquiry, proceeding,
investigation or other action, including a request for
information or a notice of potential environmental liability,
by or from any Governmental Authority or any third party
claimant, to the extent that any of the foregoing could
reasonably be expected to result in a Material Adverse Effect
or (iii) the discovery of the release of any Hazardous
Material at, on, under or from any of its properties in excess
of reportable or allowable standards, threshold amounts or
levels in a manner or amount that could reasonably be expected
to result in material liability under any Environmental Law.
(b) Upon discovery of the presence on any of the
properties or assets of the Parent Borrower or its
Subsidiaries of any Hazardous Material that is in violation
of, or that could reasonably be expected to result in material
liability under, any Environmental Law, take all necessary
steps to initiate and expeditiously complete all
investigative, remedial, corrective and other action to
eliminate any such adverse effect, and keep the Administrative
Agents informed of such actions and the results thereof.
ARTICLE VI
Negative Covenants
Each Borrower covenants and agrees with each Lender, each
Administrative Agent, each Swing Line Bank, each Issuing Bank,
the Collateral Agent and the Paying Agent that, so long as any
obligation hereunder or under any Loan Document shall remain
unpaid, any Letter of Credit or Auction Bid LOC shall remain
outstanding or any Lender shall have any Commitment hereunder,
unless the Majority Lenders otherwise consent in writing, such
Borrower will not and will cause its Subsidiaries not to:
SECTION 6.01. Liens, Etc. Create or suffer to exist any
lien, security interest or other charge or encumbrance
(including the lien or retained security title of a
conditional vendor) of any kind, or any other type of
preferential arrangement, upon or with respect to any of its
properties of any character (including accounts), whether now
owned or hereafter acquired, or assign any right to receive
income, or sign or file under the Uniform Commercial Code or
any comparable statute of any jurisdiction a financing
statement that names the Parent Borrower or any such
Subsidiary as debtor, or sign any security agreement
authorizing any secured party thereunder to file such
financing statement with respect to the Parent Borrower or any
such Subsidiary, excluding, however, from the operation of the
foregoing restrictions (i) the liens and security interests
created by or pursuant to the Loan Documents and
(ii) Permitted Liens.
SECTION 6.02. Debt. Create or suffer to exist any Debt
except:
(a) Debt under the Loan Documents;
(b) Existing Debt;
(c) Debt secured by liens or security interests
permitted by Section 6.01;
(d) trade accounts payable in the ordinary course
of business and accounted for as current accounts
payable;
(e) Commercial Paper issued by the Parent Borrower;
(f) Debt of the Parent Borrower incurred to prepay,
redeem, defease or repurchase existing Debt of the Parent
Borrower or any of the Subsidiaries so long as (i) such
Debt so incurred is subordinated in right of payment to,
or pari passu in right of payment with, the Debt being
prepaid, redeemed, defeased or repurchased and (ii) the
average life to maturity of such Debt so incurred is no
earlier than the date that is three months following the
Termination Date; provided, however, that up to
$625,000,000 of such Debt so incurred may have an average
life to maturity shorter than the date that is three
months following the Termination Date so long as (A) such
Debt does not mature before June 15, 1999, and (B) such
Debt is incurred to prepay, redeem, defease or repurchase
Debt that matures earlier than the date that is three
months following the Termination Date;
(g) Capital Lease Obligations;
(h) Debt incurred in connection with the
indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course
of business;
(i) Debt incurred or assumed in connection with any
investment or acquisition pursuant to Section 6.07(i);
(j) Debt permitted by Section 6.07(m);
(k) Debt secured by mortgages on (i) any property
purchased, acquired or developed between January 21,
1992, and the Closing Date or (ii) any property
purchased, acquired or developed with Real Estate Capital
Expenditures, in each case so long as the aggregate
amount of the Debt secured by such mortgages does not
exceed 100% of the Fair Market Value (determined at the
time of such transaction) of such property;
(l) Debt incurred by the Parent Borrower or any of
its Subsidiaries in connection with any Receivables
Securitization;
(m) Debt incurred by the Parent Borrower in
connection with Interest Rate Agreements;
(n) Debt of the Parent Borrower not referred to in
paragraphs (a) through (m) above or in paragraph (o)
below so long as the average life to maturity of such
Debt is no earlier than the date that is three months
following the Termination Date; and
(o) Debt of the Parent Borrower or any Subsidiary
not referred to in paragraphs (a) through (n) above in an
aggregate amount outstanding at any time not in excess of
$100,000,000.
SECTION 6.03. Dividends, Etc. Declare or make any
dividend payment or other distribution of assets, properties,
cash, rights, obligations or securities on account of any
shares of any class of its capital stock or purchase, redeem
or otherwise acquire for value any shares of any class of its
capital stock or any warrants, rights or options to acquire
any such shares, now or hereafter outstanding, except that
(a) the Subsidiaries of the Parent Borrower may pay dividends
to the Parent Borrower or to a wholly owned Subsidiary of the
Parent Borrower, (b) the Parent Borrower may pay dividends on
the Parent Borrower Common Stock in the form of shares of
Parent Borrower Common Stock, (c) the Parent Borrower may
repurchase odd-lot shares of Parent Borrower Common Stock for
a maximum aggregate amount of $10,000,000 from the Closing
Date, not to exceed $2,000,000 in any Fiscal Year, provided
that at the time of such proposed action and immediately after
giving effect thereto, no Default exists, and (d) the Parent
Borrower may pay dividends on any preferred stock issued
pursuant to Section 6.13, provided that at the time of any
such dividend and immediately after giving effect thereto, no
Default exists.
SECTION 6.04. Mergers, Etc. Merge or consolidate with
or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions)
all or substantially all its assets (whether now owned or
hereafter acquired) to, or acquire all or substantially all
the assets of, any Person, except that (a) the Parent Borrower
or any Subsidiary may merge with or acquire substantially all
the assets of any Person in connection with Capital
Expenditures permitted by Section 6.08 or acquisitions or
investments permitted by Section 6.07(g) or (i), so long as
the Parent Borrower or such Subsidiary is the surviving
corporation in any such merger, (b) any wholly owned
Subsidiary of the Parent Borrower may merge or consolidate
with the Parent Borrower, so long as the Parent Borrower is
the surviving corporation in any such merger or consolidation,
(c) any wholly owned Subsidiary of the Parent Borrower may
merge or consolidate with any other wholly owned Subsidiary of
the Parent Borrower and (d) any Subsidiary of the Parent
Borrower may be dissolved so long as, prior to such
dissolution (or as a result thereof), the assets owned by the
dissolved Subsidiary prior to such dissolution are owned by
the Parent Borrower or one of its wholly owned Subsidiaries.
SECTION 6.05. Sales, Etc. of Assets. Sell, lease,
transfer or otherwise dispose of any assets (including
substantially all assets constituting the business of a
division, branch or other operating unit), except that, if
immediately after giving effect thereto no Default or Event of
Default shall have occurred and be continuing:
(a) the Parent Borrower or any of its Subsidiaries
may sell or lease inventory in the ordinary course of
business;
(b) the Parent Borrower or any of its Subsidiaries
may sell (i) any Real Property (and related fixtures and
personal property) acquired, developed or purchased
between January 21, 1992, and the Closing Date, (ii) any
Real Property (and related fixtures and personal
property) acquired, developed or purchased with Real
Estate Capital Expenditures and (iii) Property Held for
Sale, in each case pursuant to sale-leaseback
transactions for not less than the Fair Market Value of
such assets;
(c) the Parent Borrower or any of its Subsidiaries
may sell, lease, transfer or otherwise dispose of (i) any
of its assets (including substantially all assets
constituting the business of a division, branch or other
operating unit) for not less than the Fair Market Value
of such assets, provided that the aggregate value of such
assets sold, leased, transferred or otherwise disposed of
during the term of this Agreement shall not be greater
than 10% of the total assets of the Parent Borrower and
its Subsidiaries on a Consolidated basis as of January 1,
1994 and (ii) its shares of Hook-SupeRx, Inc.;
(d) the Parent Borrower or any of its Subsidiaries
may sell, lease, transfer or otherwise dispose of any of
its assets for less than the Fair Market Value of such
assets, provided that the aggregate value of such assets
sold, leased, transferred or otherwise disposed of during
any Fiscal Year pursuant to this paragraph (d) shall not
be greater than $5,000,000;
(e) the Parent Borrower or any of its Subsidiaries
may make charitable donations in the ordinary course of
business consistent with past practices;
(f) the Parent Borrower or any of its Subsidiaries
may transfer assets to wholly owned Subsidiaries of the
Parent Borrower, in each case in existence on the Closing
Date or permitted to be formed under Section 6.06;
(g) the Parent Borrower or any of its Subsidiaries
may terminate leases to the extent permitted by
Section 5.10; and
(h) the Parent Borrower or any of its Subsidiaries
may sell accounts receivables (or interests therein) in
connection with any Receivables Securitization.
SECTION 6.06. Maintenance of Ownership and Formation of
Subsidiaries. Except as permitted by Section 6.05, sell or
otherwise dispose of, or commit to sell or otherwise dispose
of, any shares of capital stock of any of its Subsidiaries, or
permit any of its Subsidiaries to issue, sell or otherwise
dispose of, or commit to issue, sell or otherwise dispose of,
any shares of their capital stock or capital stock of any
other Subsidiary, or create, or permit any of its Subsidiaries
to create, any new Subsidiary except that the Parent Borrower
or any of its Subsidiaries may create new wholly owned
Subsidiaries so long as, if such Subsidiary is a Material
Subsidiary, (a) all the capital stock (or other ownership
interest) of any such Subsidiary is pledged to create a valid
and perfected first priority security interest subject to the
Security Agreement, securing the Obligations as provided for
therein, and (b) such Subsidiary becomes a Subsidiary
Guarantor under the Subsidiary Guarantee Agreement.
SECTION 6.07. Investments in Other Persons. Make any
loan or advance to, or investment in, any other Person, or
purchase or otherwise acquire any shares of capital stock,
obligations or other securities, or make any capital
contribution to, or otherwise invest in, any other Person,
except for:
(a) Permitted Investments and investments
specifically described on Schedule 6.07(a);
(b) loans or advances to employees of the Parent
Borrower or its Subsidiaries in an aggregate amount not
to exceed $5,000,000 at any time outstanding;
(c) endorsements of negotiable instruments for
purposes of collection;
(d) prepayment of expenses in the ordinary course of
business;
(e) Interest Rate Agreements;
(f) other loans, advances and investments not
otherwise permitted hereunder in an aggregate amount not
to exceed $60,000,000 at any time outstanding;
(g) investments in other Persons in connection with
Capital Expenditures permitted by Section 6.08;
(h) purchase money obligations permitted by
Section 6.02;
(i) investments in, or acquisitions of, other
Persons in the Parent Borrower's line of business or
assets of other Persons in the Parent Borrower's line of
business (including, without duplication, any investments
or acquisitions that are Capital Expenditures) so long
as, in the case of each such investment or acquisition,
such investment or acquisition satisfies the conditions
set forth in one of subparagraphs (A), (B) and (C) below:
(A) the consideration paid in connection with
such investment or acquisition consists solely of
Parent Borrower Common Stock,
(B) (x) the consideration paid in connection
with such investment or acquisition includes Parent
Borrower Common Stock, the payment of cash, the
assumption of Debt or the incurrence of Debt to the
applicable Selling Entity (or any combination of the
foregoing) and (y) the aggregate amount of all cash
paid and Debt so assumed or incurred in connection
with such investment or acquisition (when taken
together with the aggregate amount of all cash paid
and Debt so assumed or incurred in connection with
all other investments and acquisitions pursuant to
this subparagraph (B) since the Closing Date) does
not exceed $100,000,000 or
(C) (x) the consideration paid in connection
with such investment or acquisition includes Parent
Borrower Common Stock, the payment of cash, the
assumption of Debt or the incurrence of Debt to the
applicable Selling Entity (or any combination of the
foregoing) and (y) the aggregate amount of all cash
paid and Debt so assumed or incurred in connection
with such investment or acquisition (when taken
together with the aggregate amount of all cash paid
and Debt so assumed or incurred in connection with
all other investments or acquisitions pursuant to
(1) subparagraph (B) above or (2) this
subparagraph (C), in each case since the Closing
Date) does not exceed $500,000,000 and (z) the ratio
of (1) the aggregate amount of all cash paid and
Debt so assumed or incurred in connection with such
investment or acquisition to (2) the Acquired EBITDA
with respect to the Acquired Entity to be invested
in or acquired (determined as of the last day of
theAcquired Entity Fiscal Quarter most recently
ended for the Acquired Entity Rolling Period ending
on such day) is no greater than 3.0 to 1.0;
provided that (x) at the time of any such proposed
investment or acquisition under any of the foregoing
subparagraphs and immediately after giving effect
thereto, no Default exists and (y) in the case of any
investment in or acquisition of any Acquired Entity
pursuant to subparagraph (C) above, the Parent Borrower
delivers to the Administrative Agents, not later than
10 Business Days prior to such investment or acquisition,
(1) an Officer's Certificate setting forth in reasonable
detail the calculation of the Acquired EBITDA with
respect to such Acquired Entity as contemplated by
subparagraph (C) above and the calculation of the ratio
specified in clause (z) of subparagraph (C) above with
respect to such investment or acquisition and (2) either
(I) a report prepared with respect to such Acquired
Entity in accordance with Statement on Auditing Standards
No. 35 "Special Reports-Applying Agreed Upon Procedures
to Specified Elements, Accounts, or Items of a Financial
Statement" by a nationally recognized independent public
accounting firm or or (II) in the case of an Acquired
Entity that files periodic reports with the Securities
and Exchange Commission and whose annual financial
statements are audited by a nationally recognized
independent public accounting firm, the Form 10-K and
Forms 10-Q filed by such Acquired Entity with respect to
the Acquired Entity Fiscal Year and Acquired Entity
Fiscal Quarters, respectively, ending during the relevant
Acquired Entity Rolling Period;
(j) pledges and deposits described in clause (c) of
the definition of the term Permitted Liens;
(k) receivables owing to the Parent Borrower or any
of its Subsidiaries if created or acquired in the
ordinary course of business;
(l) (i) investments in respect of securities of
another Person received by the Parent Borrower or any of
its Subsidiaries in connection with a plan of
reorganization or readjustment of such Person or its
debts and (ii) investments in Indebtedness of any Person
received by the Parent Borrower or any of its
Subsidiaries in connection with any sale of assets
permitted by Section 6.05;
(m) (i) loans by any Subsidiary to its parent or to
the Parent Borrower and (ii) loans by the Parent Borrower
to any wholly owned Subsidiary or by any such wholly
owned Subsidiary of the Parent Borrower to any of its
wholly owned Subsidiaries, provided that such loans
pursuant to clause (ii) to any Subsidiary that is not a
Subsidiary Guarantor do not exceed for all such
Subsidiaries in the aggregate $25,000,000 at any one time
outstanding; and
(n) investments in Debt of any Person that is not an
Affiliate of the Parent Borrower, so long as (i) such
Debt was issued by such Person in connection with a real
estate transaction involving the Parent Borrower or one
of its Subsidiaries, (ii) the Parent Borrower or one of
its Subsidiaries has a contractual obligation to make
lease payments to such Person as a result of the real
estate transaction in which such Debt was issued and
(iii) the aggregate amount of all Debt represented by
investments held by the Parent Borrower pursuant to this
paragraph (n) does not at any time exceed $300,000,000.
SECTION 6.08. Capital Expenditures. (a) Make any
Capital Expenditures (other than Capital Expenditures made in
connection with investment or acquisitions permitted by
Section 6.07(i)) in an amount in excess of $450,000,000 (the
"Base Capital Expenditure Amount") for any Fiscal Year ("Base
Capital Expenditures") in the aggregate with respect to the
Parent Borrower and its Subsidiaries (utilization of the Base
Capital Expenditure Amount to be determined for any Fiscal
Year by applying the amount of Base Capital Expenditures
actually made in such Fiscal Year first to the amount
available pursuant to the proviso below and then to the Base
Capital Expenditure Amount for such Fiscal Year); provided,
however, that if in any Fiscal Year the Base Capital
Expenditure Amount exceeds the amount of Base Capital
Expenditures actually made by the Parent Borrower and its
Subsidiaries in such Fiscal Year, the Parent Borrower and its
Subsidiaries shall be entitled to make additional Capital
Expenditures in the next succeeding Fiscal Year equal to 45%
of the amount of such excess. For purposes of this Agreement,
the term "Base Capital Expenditures" shall, with respect to
Fiscal Year 1994, be deemed to include any Capital
Expenditures (other than Real Estate Capital Expenditures)
that were made by the Parent Borrower or any of its
Subsidiaries between January 2, 1994, and the Closing Date.
(b) In addition to the Capital Expenditures that can
be made pursuant to paragraph (a) above, the Parent Borrower
and its Subsidiaries shall be permitted to make Capital
Expenditures in an amount not to exceed $200,000,000 for any
Fiscal Year ("Real Estate Capital Expenditures") in the
aggregate with respect to the Parent Borrower and its
Subsidiaries to the extent that such additional Capital
Expenditures are made in connection with (i) the acquisition
or development of real property (and related fixtures and
personal property) on which the Parent Borrower or any of its
Subsidiaries intends to open new stores or other facilities
related to the Parent Borrower's primary business, (ii) the
purchase of real property (and related fixtures and personal
property) currently being leased by the Parent Borrower or its
Subsidiaries or (iii) the acquisition or development of real
property (and related fixtures and personal property)
permitting the expansion of existing stores or other
facilities related to the Parent Borrower's line of primary
business. For purposes of this Agreement, the term "Real
Estate Capital Expenditures" shall, with respect to Fiscal
Year 1994, be deemed to include any Capital Expenditures that
were made by the Parent Borrower or any of its Subsidiaries
between January 2, 1994, and the Closing Date in connection
with activities of the type described in clauses (i), (ii) and
(iii) of the immediately preceding sentence.
(c) In addition to the Capital Expenditures that
can be made pursuant to paragraphs (a) and (b) above, the
Parent Borrower and its Subsidiaries shall be permitted to
make additional Capital Expenditures in any Fiscal Year
("Additional Capital Expenditures") in an aggregate amount
with respect to the Parent Borrower and its Subsidiaries equal
to a percentage of Consolidated Free Cash Flow for the
immediately preceding Fiscal Year, such percentage with
respect to any Fiscal Year to be equal to (a) 100% in the
event that the Parent Borrower's Consolidated ratio of Net
Total Debt to Consolidated EBITDA for the immediately
preceding Fiscal Year is 3.0 to 1 or lower, (b) 75% in the
event that the Parent Borrower's Consolidated Ratio of Net
Total Debt to Consolidated EBITDA for the immediately
preceding Fiscal Year is 3.5 to 1 or lower and (c) 50% in the
event that the Parent Borrower's Consolidated Ratio of Net
Total Debt to Consolidated EBITDA for the immediately
preceding Fiscal Year is lower than the amount set forth below
with respect to such preceding Fiscal Year:
Preceding Ratio of Net Total Debt To Consolidated EBITDA for
Fiscal Year Immediately Preceding Fiscal Year
1994 4.30 to 1.00
1995 4.20 to 1.00
1996 4.10 to 1.00
1997 4.00 to 1.00
1998 3.90 to 1.00
1999 3.80 to 1.00
2000 3.80 to 1.00
The entire amount of Additional Capital Expenditures that are
permitted to be made in any Fiscal Year but are not made in
such Fiscal Year may be carried forward to, and made in, the
two succeeding Fiscal Years.
SECTION 6.09. Amendment, Etc. of Certain Agreements.
(a) Except in connection with any prepayment, redemption,
defeasance or repurchase, cancel or terminate any term or
provision of any of the Related Documents or (b) amend or
otherwise modify, or waive any breach of or default under, or
take any other action in connection with, any term or
provision of the Subordinated Debt Documents or the Senior
Secured Debt Documents, except that the Parent Borrower may
amend, modify or waive any breach of or default under the
Subordinated Debt Documents if the Parent Borrower would be
permitted under Section 6.02 to issue the Debt represented by
such documents as so amended, modified or waived.
SECTION 6.10. Change in Business. Make any material
change in the nature or conduct of their respective businesses
as carried on at the Closing Date except in connection with
the sale of assets permitted pursuant to Section 6.05.
SECTION 6.11. Accounting Changes. Make or permit any
significant change in accounting policies (including a change
of its Fiscal Year) or reporting practices, except for any
such change required by GAAP.
SECTION 6.12. Charter and By-Laws. Amend, modify or
change in any manner the certificate of incorporation or
by-laws or regulations of the Parent Borrower or any
Subsidiary of the Parent Borrower in any manner that could
result in a Material Adverse Effect.
SECTION 6.13. Issuance and Sale of Stock. Issue or sell
any of its stock without the prior written consent of the
Majority Lenders, except, in the case of the Parent Borrower,
(a) Parent Borrower Common Stock or (b) preferred stock having
an aggregate face amount not in excess of $500,000,000.
SECTION 6.14. Fixed Charge Coverage Ratio. In the case
of the Parent Borrower, permit the Fixed Charge Coverage Ratio
(determined as of the last day of any Fiscal Quarter for the
Rolling Period ending on such day) to be lower than 1.7 to
1.0.
SECTION 6.15. Ratio of Net Senior Debt to Consolidated
EBITDA. In the case of the Parent Borrower, permit at any
time following the release of the security interest in all the
Collateral pursuant to Section 9.17, the ratio (determined as
of the last day of any Fiscal Quarter for the Rolling Period
ending on such day) of (a) Net Senior Debt on such day to
(b) the sum of (i) Consolidated EBITDA for such Rolling Period
and (ii) from and after the making of any investment or
acquisition pursuant to Section 6.07(i)(C), the Acquired
EBITDA for any Acquired Entity so invested in or acquired (but
only to the extent that such Acquired EBITDA has been
calculated pursuant to Section 6.07(i)(C) with respect to any
Acquired Entity Fiscal Quarter ending during such Rolling
Period) to be greater than 2.85 to 1.00. Notwithstanding
anything in this Agreement to the contrary, the covenant set
forth in this Section 6.15 shall cease to be applicable for
any purpose from and after the date on which the Parent
Borrower satisfies the Investment Grade Rating Condition,
whether satisfaction of such condition occurs prior to,
simultaneously with, or subsequent to, the release of the
security interest in all the Collateral pursuant to
Section 9.17.
SECTION 6.16. Ratio of Net Total Debt to Consolidated
EBITDA. (a) In the case of the Parent Borrower, prior to the
release of the security interest in all the Collateral
pursuant to Section 9.17, permit the ratio (determined as of
the last day of any Fiscal Quarter for the Rolling Period
ending on such day) of (a) Net Total Debt on such day to
(b) the sum of (i) Consolidated EBITDA for such Rolling Period
and (ii) from and after the making of any investment or
acquisition pursuant to Section 6.07(i)(C), the Acquired
EBITDA for any Acquired Entity so invested in or acquired (but
only to the extent that such Acquired EBITDA has been
calculated pursuant to Section 6.07(i)(C) with respect to any
Acquired Entity Fiscal Quarter ending during such Rolling
Period) to be greater than the ratio set forth below opposite
such Fiscal Quarter:
Fiscal Quarter Ratio
2nd Fiscal Quarter 1994 4.5 to 1.0
3rd Fiscal Quarter 1994 4.5 to 1.0
4th Fiscal Quarter 1994 4.5 to 1.0
1st Fiscal Quarter 1995 4.5 to 1.0
2nd Fiscal Quarter 1995 4.5 to 1.0
3rd Fiscal Quarter 1995 4.5 to 1.0
4th Fiscal Quarter 1995 4.4 to 1.0
1st Fiscal Quarter 1996 4.4 to 1.0
2nd Fiscal Quarter 1996 4.4 to 1.0
3rd Fiscal Quarter 1996 4.4 to 1.0
4th Fiscal Quarter 1996 4.3 to 1.0
1st Fiscal Quarter 1997 4.3 to 1.0
2nd Fiscal Quarter 1997 4.3 to 1.0
3rd Fiscal Quarter 1997 4.3 to 1.0
4th Fiscal Quarter 1997 4.2 to 1.0
1st Fiscal Quarter 1998 4.2 to 1.0
2nd Fiscal Quarter 1998 4.2 to 1.0
3rd Fiscal Quarter 1998 4.2 to 1.0
4th Fiscal Quarter 1998 4.1 to 1.0
1st Fiscal Quarter 1999 4.1 to 1.0
2nd Fiscal Quarter 1999 4.1 to 1.0
3rd Fiscal Quarter 1999 4.1 to 1.0
4th Fiscal Quarter 1999 4.0 to 1.0.
and thereafter
(b) In the case of the Parent Borrower, following the release
of the security interest in all the Collateral pursuant to
Section 9.17, permit the ratio (determined as of the last day
of each Fiscal Quarter for the Rolling Period ending on such
day) of (a) Net Total Debt on such day to (b) the sum of
(i) Consolidated EBITDA for such Rolling Period and (ii) from
and after the making of any investment or acquisition pursuant
to Section 6.07(i)(C), the Acquired EBITDA for any Acquired
Entity so invested in or acquired (but only to the extent that
such Acquired EBITDA has been calculated pursuant to
Section 6.07(i)(C) with respect to any Acquired Entity Fiscal
Quarter ending during such Rolling Period) to be greater than
3.5 to 1.00.
ARTICLE VII
Events of Default
SECTION 7.01. Events of Default. In case of the
happening and during the continuation of any of the following
events ("Events of Default"):
(a) any representation or warranty made or deemed
made in any Loan Document, or any representation, war-
ranty, statement or information contained in any report,
certificate, financial statement or other instrument
furnished pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect
when so made, deemed made or furnished;
(b) default shall be made in the payment of any
principal of any Advance, any Swing Line Advance or any
other amount payable under any Loan Document with respect
to any Auction Bid Advance, in each case when and as the
same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof,
by acceleration thereof or otherwise;
(c) default shall be made in the payment of (i) any
interest on any Advance, Swing Line Advance or Auction
Bid Advance or (ii) any Fee or any other amount (other
than an amount referred to in paragraph (b) above) due
under any Loan Document, in each case, when and as the
same shall become due and payable, and such default shall
continue unremedied for a period of three Business Days
after written notice thereof from either Administrative
Agent or any Lender to the Parent Borrower;
(d) default shall be made in the due observance or
performance by the Parent Borrower of any covenant,
condition or agreement contained in Section 5.02(a),
5.03(d), 5.11 or in Article VI;
(e) default shall be made in the due observance or
performance by any Loan Party of any covenant, condition
or agreement contained in any Loan Document (other than
those defaults specified in paragraph (b), (c) or (d)
above) and such default shall continue unremedied for a
period of 30 days after written notice thereof from
either Administrative Agent or any Lender to the Parent
Borrower;
(f) any Loan Party shall (i) fail to pay any
principal or interest, regardless of amount, due in
respect of any Debt in a principal amount in excess of
$30,000,000, when and as the same shall become due and
payable at maturity, by acceleration or otherwise (after
giving effect to any applicable grace period), or
(ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or
instrument evidencing or governing any such Debt (after
giving effect to any applicable grace period), if the
effect of any failure referred to in this clause (ii) is
to cause, or to permit the holder or holders of such Debt
or a trustee on its or their behalf to cause, such Debt
to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or
an involuntary petition shall be filed in a court of com-
petent jurisdiction seeking (i) relief in respect of any
Loan Party, or of a substantial part of the property or
assets of any Loan Party, under Title 11 of the United
States Code, as now constituted or hereafter amended, or
any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, seques-
trator, conservator or similar official for any Loan
Party or for a substantial part of the property or assets
of any Loan Party or (iii) the winding-up or liquidation
of any Loan Party; and such proceeding or petition shall
continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be
entered;
(h) any Loan Party shall (i) voluntarily commence
any proceeding or file any petition seeking relief under
Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or the
filing of any petition described in paragraph (g) above,
(iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator
or similar official for any Loan Party or for a substan-
tial part of the property or assets of any Loan Party,
(iv) file an answer admitting the material allegations of
a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of
effecting any of the foregoing;
(i) one or more judgments or orders for the payment
of money aggregating in excess of $30,000,000 shall be
rendered against the Parent Borrower or any of its
Subsidiaries, and either (i) enforcement proceedings
shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 10
consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;
(j) a Reportable Event or Reportable Events, or a
failure to make a required installment or other payment
(within the meaning of Section 412(n)(l) of the Code),
shall have occurred with respect to any Plan or Plans
that reasonably could be expected to result in liability
of the Parent Borrower or any of its Subsidiaries to the
PBGC or to a Plan in an aggregate amount exceeding
$30,000,000 and, within 30 days after the Parent Borrower
has provided written notice of any such Reportable Event
to the Administrative Agents, the Administrative Agents
shall have notified the Parent Borrower in writing that
(i) the Majority Lenders have determined that, on the
basis of such Reportable Event or Reportable Events or
the failure to make a required payment, there are
reasonable grounds (A) for the termination of such Plan
or Plans by the PBGC, (B) for the appointment by the
appropriate United States District Court of a trustee to
administer such Plan or Plans or (C) for the imposition
of a lien in favor of a Plan and (ii) as a result thereof
an Event of Default exists hereunder; or a trustee shall
be appointed by a United States District Court to admin-
ister any such Plan or Plans; or the PBGC shall institute
proceedings (including giving notice of intent thereof)
to terminate any Plan or Plans;
(k) (i) the Parent Borrower or any ERISA Affiliate
shall have been notified by the sponsor of a Multi-
employer Plan that it has incurred Withdrawal Liability
to such Multiemployer Plan, (ii) the Parent Borrower or
such ERISA Affiliate does not have reasonable grounds for
contesting such Withdrawal Liability or is not in fact
contesting such Withdrawal Liability in a timely and
appropriate manner and (iii) the amount of the Withdrawal
Liability specified in such notice, when aggregated with
all other amounts required to be paid to Multiemployer
Plans in connection with Withdrawal Liabilities
(determined as of the date or dates of such
notification), either (A) exceeds $100,000,000 or
requires payments exceeding $30,000,000 in any year or
(B) is less than $100,000,000 but any Withdrawal
Liability payment remains unpaid 30 days after such
payment is due (unless such Withdrawal Liability is being
contested in good faith by the Parent Borrower or any
ERISA Affiliate);
(l) the Parent Borrower or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of
ERISA, if solely as a result of such reorganization or
termination the aggregate contributions of the Parent
Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or have been or are
being terminated have been or will be increased over the
amounts required to be contributed to such Multiemployer
Plans for their most recently completed plan years by an
amount exceeding $30,000,000;
(m) there shall have occurred a Change in Control;
(n) any security interest purported to be created by
any Collateral Document shall cease to be, or shall be
asserted by the Parent Borrower or any Guarantor not to
be, a valid, perfected, first priority (except as other-
wise expressly provided in this Agreement or such Coll-
ateral Document) security interest in Collateral with a
fair market value or book value (whichever is greater) in
excess, individually or in the aggregate, of
$30,000,000, except to the extent that any such loss of
perfection or priority results from the failure of the
Collateral Agent to maintain possession of certificates
representing securities pledged under the Security
Agreement or otherwise take any action within its control
(including the filing of Uniform Commercial Code
continuation statements); or
(o) any Loan Document shall not be for any reason,
or shall be asserted by any Borrower or any Guarantor
party thereto (except as otherwise expressly provided in
this Agreement or such Loan Document) not to be, in full
force and effect and enforceable in all material respects
in accordance with its terms;
then, and in every such event (other than an event described
in paragraph (g) or (h) above), the Administrative Agents (i)
shall at the request, or may with the consent, of the Majority
Lenders by notice to the Parent Borrower declare the
obligation of each Lender to make Advances and the obligation
of each of the Swing Line Banks to make Swing Line Advances to
be terminated, whereupon the same shall forthwith terminate,
(ii) shall at the request, or may with the consent, of any
Issuing Bank or of the Majority Lenders by notice to the
Parent Borrower declare the obligation of any Issuing Bank to
issue Letters of Credit to be terminated, whereupon the same
shall forthwith terminate, and (iii) shall at the request, or
may with the consent, of the Majority Lenders declare the
Advances, all interest thereon and all other amounts payable
under this Agreement to be forthwith due and payable,
whereupon the Advances, all such interest and all such amounts
shall become and be forthwith due and payable, without
presentment, demand, protest, prior notice of intention to
accelerate or any other notice, all of which are hereby
expressly waived by the Borrowers; and in any event described
in paragraph (g) or (h) above, (A) the obligation of each
Lender to make Advances and of any Issuing Bank to issue
Letters of Credit shall automatically be terminated and (B)
the Advances, all such interest and all such amounts shall
automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrowers.
SECTION 7.02. Actions in Respect of Letters of Credit.
(a) If, at any time and from time to time, any Letters of
Credit (which, for purposes of this Section 7.02, shall
include Auction Bid LOCs) shall have been issued by any
Issuing Bank hereunder and (i) a Default shall have occurred
and be continuing, (ii) the Borrowers shall have given notice
of prepayment in whole under Section 2.09 of all Advances or
shall have prepaid in whole all Advances, (iii) the
Termination Date shall have occurred or (iv) if at any time,
as a result of prepayments pursuant to Section 2.09, the
Termination Date shall be a date not more than 30 days
following the expiration of any Letter of Credit, then, upon
the occurrence of any of the events described in clauses (i)
through (iv) above, the Administrative Agents may, and upon
the request of any Issuing Bank or of the Majority Lenders
shall, whether in addition to the taking by the Administrative
Agents of any of the actions described in Article VIII or
otherwise, make demand upon the Borrowers to, and forthwith
upon such demand the Borrowers will, pay to the Collateral
Agent for its benefit and the ratable benefit of the Lenders
in same day funds at the Collateral Agent's office designated
in such demand, for deposit in a special cash collateral
account (the "Letter of Credit Collateral Account") to be
maintained in the name of the Collateral Agent and under the
sole dominion and control of the Collateral Agent for the
benefit of the Collateral Agent and the ratable benefit of the
Lenders at such place as shall be designated by the Collateral
Agent, an amount equal to the amount of the Letter of Credit
Obligations.
(b) Each Borrower hereby pledges and assigns to the
Collateral Agent for its benefit and the ratable benefit of
the Lenders, and grants to the Collateral Agent for its
benefit and the ratable benefit of the Lenders a lien on and a
security interest in, the following collateral (the "Letter of
Credit Collateral"):
(i) the Letter of Credit Collateral Account, all
cash deposited therein, and all certificates and
instruments, if any, from time to time representing or
evidencing the Letter of Credit Collateral Account;
(ii) all Eligible Securities (as defined below) from
time to time held by the Collateral Agent and all
certificates and instruments from time to time
representing or evidencing Eligible Securities;
(iii) all notes, certificates of deposit and other
instruments from time to time hereafter delivered to or
otherwise possessed by the Collateral Agent for or on
behalf of the Borrower in substitution for or in respect
of any or all of the then existing Letter of Credit
Collateral;
(iv) all interest, dividends, cash, instruments and
other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for
any or all of the then existing Letter of Credit
Collateral; and
(v) to the extent not covered by clauses (i) through
(iv) above, all proceeds of any or all of the foregoing
Letter of Credit Collateral.
The lien and security interest granted hereby secures the
payment of all obligations of each Borrower now or hereafter
existing hereunder and under any other Loan Document.
(c) Each Borrower hereby authorizes the Collateral Agent
to apply, from time to time after funds are deposited in the
Letter of Credit Collateral Account, funds then held in the
Letter of Credit Collateral Account to the payment of any
amounts, in such order as the Collateral Agent may elect, as
shall have become or shall become due and payable by the
Borrowers to the Lenders in respect of the Letters of Credit.
(d) Neither the Borrowers nor any Person claiming or
acting on behalf of or through the Borrowers shall have any
right to withdraw any of the funds held in the Letter of
Credit Collateral Account, except as provided in Section
7.02(h); provided, however, that as long as no Default shall
have occurred and be continuing, and to the extent that there
is an amount in excess of $1,000,000 in the Letter of Credit
Collateral Account at the end of any Business Day after taking
into account applications of funds, if any, from the Letter of
Credit Collateral Account made pursuant to Section 7.02(c),
the Collateral Agent will, at the written request of the
Parent Borrower, from time to time invest amounts on deposit
in the Letter of Credit Collateral Account in such instruments
described in clause (b), (c) or (d) of the definition of the
term "Permitted Investments" in Section 1.01 as the Parent
Borrower may select and the Collateral Agent may approve (the
"Eligible Securities"); provided further that in order to
provide the Collateral Agent with a perfected security
interest therein, each investment in Eligible Securities shall
be evidenced by negotiable certificates or instruments, of
which the Collateral Agent shall take physical possession. If
the Parent Borrower shall have the right to have amounts on
deposit in the Letter of Credit Collateral Account invested by
the Collateral Agent, but shall have failed to request the
Collateral Agent to invest such amounts, the Collateral Agent
will endeavor to invest such amounts in such Eligible
Securities as the Collateral Agent shall select. Any interest
received by the Collateral Agent in respect of Eligible
Securities shall be credited against the Letter of Credit
Obligations. Non-interest proceeds from Eligible Securities
that are not invested or reinvested in Eligible Securities as
provided above shall be deposited and held in cash in the
Letter of Credit Collateral Account under the sole dominion
and control of the Collateral Agent.
(e) The Borrowers agree that they will not (i) sell or
otherwise dispose of any interest in the Letter of Credit
Collateral or (ii) create or permit to exist any lien,
security interest or other charge or encumbrance upon or with
respect to any of the Letter of Credit Collateral, except for
the security interest created by this Section 7.02.
(f) If any Event of Default shall have occurred and be
continuing:
(i) The Collateral Agent may, in its sole
discretion, without notice to the Borrowers except as
required by law and at any time from time to time,
charge, set off and otherwise apply all or any part of
first, the Letter of Credit Obligations and second, the
obligations of the Borrowers now or hereafter existing
under any of the Loan Documents, against the Letter of
Credit Collateral Account or any part thereof, in such
order as the Collateral Agent shall elect. The
Collateral Agent agrees promptly to notify the Borrowers
after any such set-off and application made by the
Collateral Agent, provided that the failure to give such
notice shall not affect the validity of such set-off and
application. The rights of the Collateral Agent under
this Section 7.02(f) are in addition to other rights and
remedies (including other rights of set-off) that the
Collateral Agent may have.
(ii) The Collateral Agent may also exercise, in its
sole discretion, in respect of the Letter of Credit
Collateral Account, in addition to the other rights and
remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party upon
default under the Uniform Commercial Code in effect in
the State of New York at that time, and the Collateral
Agent may, without notice except as specified below,
sell the Letter of Credit Collateral or any part thereof
in one or more parcels at public or private sale, at any
of the Collateral Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such
other terms as the Collateral Agent may deem commercial-
ly reasonable. The Borrowers agree that, to the extent
notice of sale shall be required by law, at least ten
days' notice to the Parent Borrower of the time and
place of any public sale or the time after which any
private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be
obligated to make any sale of Letter of Credit Col-
lateral or any part thereof, 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 fixed therefor, and such
sale may, without further notice, be made at the time
and place to which it was so adjourned.
(iii) Any cash held in the Letter of Credit
Collateral Account, and all cash proceeds received by
the Collateral Agent in respect of any sale of,
collection from or other realization upon all or any
part of the Letter of Credit Collateral Account may, in
the discretion of the Collateral Agent, then or at any
time thereafter be applied (after payment of any amounts
payable pursuant to Section 9.05) in whole or in part by
the Collateral Agent for the ratable benefit of the
Lenders against all or any part of the obligations of
the Borrowers now or hereafter existing under any of
the Loan Documents in such order as the Collateral
Agent may elect.
(g) The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of
the Letter of Credit Collateral if the Letter of Credit
Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property, it being
understood that the Collateral Agent shall not have any
responsibility or liability (i) for ascertaining or taking
action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Eligible
Securities, whether or not the Collateral Agent has or is
deemed to have knowledge of such matters, (ii) for taking any
necessary steps to preserve rights against any parties with
respect to the Letter of Credit Collateral, (iii) for the
collection of any proceeds from Eligible Securities, (iv) by
reason of any invalidity, lack of value or uncollectability of
any of the payments received by the Collateral Agent from
obligors with respect to Eligible Securities, or (v) for any
loss resulting from investments made pursuant to
Section 7.02(d), except to the extent such loss was
attributable to the Collateral Agent's gross negligence or
wilful misconduct in complying with Section 7.02(d), or
(vi) in connection with any investments made pursuant to
Section 7.02(d) without a written request from the Parent
Borrower, or any failure by the Collateral Agent to make any
such investment.
(h) Any surplus of the funds held in the Letter of
Credit Collateral Account and remaining after payment in full
of all of the Obligations of the Borrowers under the
Facility and under any other Loan Document after the
Termination Date shall be paid to the Parent Borrower or to
whomsoever may be lawfully entitled to receive such surplus.
ARTICLE VIII
The Administrative Agents, the Collateral Agent,
the Paying Agent and the Issuing Banks
In order to expedite the transactions contemplated by
this Agreement, Chemical Bank and Citibank are hereby
appointed to act as Administrative Agents, Chemical Bank is
hereby appointed to act as Collateral Agent (and Collateral
Holder under the Intercreditor Agreement) for the Issuing
Banks, the Swing Line Banks and the Lenders and Citibank is
hereby appointed to act as Paying Agent for the Issuing Banks,
the Swing Line Banks and the Lenders (the Administrative
Agents, the Collateral Agent and the Paying Agent for purposes
of this Article are collectively referred to as the "Agents").
Each of the Lenders, the Swing Line Banks and the Issuing
Banks hereby irrevocably authorizes each Agent to take such
actions on their behalf and to exercise such powers as are
specifically delegated to such Agent by the terms and provi-
sions hereof and of the other Loan Documents, together with
such actions and powers as are reasonably incidental thereto.
The Agents are hereby expressly authorized by the Lenders, the
Swing Line Banks and the Issuing Banks, without hereby
limiting any implied authority, (a) in the case of the
Administrative Agents to receive all Loan Documents on the
Closing Date, (b) in the case of the Paying Agent, to receive
on behalf of the Lenders, the Swing Line Banks and the Issuing
Banks all payments of principal of and interest on the
Advances and the Swing Line Advances, all payments in respect
of Letters of Credit and all other amounts due to the Lenders,
the Swing Line Banks and the Issuing Banks hereunder, and
promptly to distribute to each Lender, each Swing Line Bank
and each Issuing Bank its proper share of each payment so
received, (c) in the case of the Administrative Agents, to
give notice on behalf of each of the Lenders and the Swing
Line Banks to the Parent Borrower of any Event of Default
specified in this Agreement of which the Administrative Agents
have actual knowledge acquired in connection with their agency
hereunder and (d) in the case of the Administrative Agents, to
distribute to each Lender, each Swing Line Bank and each
Issuing Bank copies of all notices, financial statements and
other materials delivered by the Loan Parties pursuant to this
Agreement as received by the Administrative Agents (including
notices of an occurrence of any Event of Default). The
Administrative Agents and the Collateral Agent are hereby
expressly authorized to execute any and all documents
(including releases) with respect to the Collateral and the
rights of the Secured Parties with respect thereto, in each
case as contemplated by and in accordance with the terms and
provisions of this Agreement and the Collateral Documents.
None of the Agents or the Issuing Banks or any of their
respective directors, officers, employees or agents shall be
liable as such for any action taken or omitted by any of them
except for its, his or her own gross negligence or wilful
misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document
delivered in connection herewith, or be required to ascertain
or to make any inquiry concerning the performance or
observance by the Loan Parties of any of the terms,
conditions, covenants or agreements contained in any Loan
Document. The Agents shall not be responsible to the Lenders,
the Swing Line Banks or the Issuing Banks for the due
execution, genuineness, validity, enforceability or effec-
tiveness of this Agreement, any other Loan Document or any
other instruments or agreements. The Administrative Agents,
the Collateral Agent and the Paying Agent shall in all cases
be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Majority
Lenders (and the Issuing Banks, with respect to Letters of
Credit) and, except as otherwise specifically provided herein,
such instructions and any action or inaction pursuant thereto
shall be binding on all the Lenders, the Swing Line Banks and
the Issuing Banks. The Administrative Agents, the Collateral
Agent and the Paying Agent shall, in the absence of knowledge
to the contrary, be entitled to rely on any instrument or
document believed by them in good faith to be genuine and cor-
rect and to have been signed or sent by the proper Person or
Persons. None of the Agents or the Issuing Banks or any of
their respective directors, officers, employees or agents
shall have any responsibility to the Loan Parties on account
of the failure of or delay in performance or breach by any
Lender (or, in the case of the Agents, by the Issuing Banks or
the Swing Line Banks) of any of its obligations hereunder or
to any Lender (or, in the case of the Agents, the Issuing
Banks or the Swing Line Banks) on account of the failure of or
delay in performance or breach by any other Lender (or, in the
case of the Agents, the Issuing Banks or the Swing Line Banks)
or the Loan Parties or any of their respective obligations
hereunder or under any other Loan Document or in connection
herewith or therewith. Each Agent and each Issuing Bank may
execute any and all duties hereunder by or through agents or
employees and shall be entitled to rely upon the advice of
legal counsel selected by any of them with respect to all
matters arising hereunder and shall not be liable for any
action taken or suffered in good faith by any of them in
accordance with the advice of such counsel.
The Lenders, the Swing Line Banks and Issuing Banks
hereby acknowledge that none of the Agents or the Issuing
Banks shall be under any duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this
Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Majority Lenders.
Subject to the appointment and acceptance of a successor
Agent as provided below, any Agent may resign at any time by
notifying the Lenders, the Issuing Banks, the Swing Line Banks
and the Parent Borrower. Upon any such resignation, the
Majority Lenders shall have the right to appoint a Lender as
the successor. If no successor shall have been so appointed by
the Majority Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the
Lenders and the Issuing Banks, appoint a successor Agent,
which shall be a bank with an office in New York, New York,
having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any Agent's resignation
hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting
as Agent.
With respect to the Advances made by it hereunder, each
Agent and each Issuing Bank, in its individual capacity and
not as Agent or Issuing Bank, as the case may be, shall have
the same rights and powers as any other Lender and may
exercise the same as though it were not an Agent or a Issuing
Bank, as the case may be, and each Agent and its Affiliates
and each Issuing Banks and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of
business with the Loan Parties or their Affiliates as if it
were not an Agent or a Issuing Bank, as the case may be.
Each Lender agrees (a) to reimburse each Agent and each
Issuing Bank, on demand, in the amount of such Lender's pro
rata share (based on its Commitment hereunder) of any expenses
incurred for the benefit of the Lenders by such Agent or such
Issuing Bank, including fees, disbursements and other charges
of counsel and compensation of agents paid for services
rendered on behalf of the Lenders, that shall not have been
reimbursed by the Loan Parties and (b) to indemnify and hold
harmless each Agent and each Issuing Bank and any of their
respective directors, officers, employees or agents, on
demand, in the amount of such pro rata share, from and against
any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or dis-
bursements of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against it in its capacity
as an Agent or a Issuing Bank, as the case may be, or any of
them in any way relating to or arising out of this Agreement
or any other Loan Document or any action taken or omitted by
it or any of them under this Agreement or any other Loan
Document, to the extent the same shall not have been reim-
bursed by the Loan Parties, provided that no Lender shall be
liable to any Agent or any Issuing Bank for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or wilful misconduct of
such Agent or such Issuing Bank, as the case may be, or any of
their respective directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Agents, any other Lender, any Swing
Line Banks or any Issuing 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
Lender also acknowledges that it will, independently and
without reliance upon the Agents, any other Lender, any Swing
Line Banks or any Issuing Bank and based on such documents and
information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking
action under or based upon this Agreement or any other Loan
Document, any related agreement or any document furnished
hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except as otherwise expressly
permitted herein, notices and other communications provided
for herein shall be in writing and shall be delivered by hand
or overnight courier service, mailed or sent by telecopy, as
follows:
(a) If to the Parent Borrower, to it at The Kroger
Co., 1014 Vine Street, Cincinnati, Ohio 45202, Attention
of Mr. Lawrence M. Turner (Telecopy No. (513) 762-4454);
with a copy to Mr. Paul W. Heldman (Telecopy
No. (513) 762-4935).
(b) If to Chemical Bank in its capacity as an
Administrative Agent, Swing Line Bank, Issuing Bank or
Collateral Agent, to it at 270 Park Avenue, New York, New
York 10017, Attention of Mr. William P. Rindfuss
(Telecopy No. (212) 270-1474); with a copy to Chemical
Bank Agency Services Corporation, Grand Central Tower,
140 East 45th Street, New York, New York 10017, Attention
of Diane Gee (Telecopy No. (212) 622-0002). If to
Citibank, N.A. in its capacity as an Administrative
Agent, Swing Line Bank, Issuing Bank or Paying Agent, to
it at 399 Park Avenue, New York, NY 10043, Attention of
William Stengel (Telecopy No. (212) 793-7585).
(c) If to any other Lender as Issuing Bank, at its
address (or telecopy number) set forth on Schedule 2.01
or in the Assignment and Acceptance pursuant to which
such Lender shall have become a party hereto.
(d) If to a Lender, at its address (or telecopy
number) set forth on Schedule 2.01 or in the Assignment
and Acceptance pursuant to which such Lender shall have
become a party hereto.
All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt if delivered
by hand or overnight courier service or sent by telecopy, or
on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or
mailed (properly addressed) to such party as provided in this
Section 9.01 or in accordance with the latest unrevoked
direction from such party given in accordance with this
Section 9.01. The Administrative Agents shall deliver to the
Parent Borrower a copy of each Administrative Questionnaire
received by it.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the
Borrowers herein and by the Loan Parties in the certificates
or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders, the
Swing Line Banks and the Issuing Banks and shall survive the
making by the Lenders of the Advances, the making by the Swing
Line Banks of the Swing Line Advances and the issuance of
Letters of Credit and Auction Bid LOCs, regardless of any
investigation made by the Lenders, the Swing Line Banks or the
Issuing Banks or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued
interest on any Advance or Swing Line Advance or any Fee or
any other amount payable under this Agreement or any other
Loan Document is outstanding and unpaid or any Letter of
Credit or Auction Bid LOC is outstanding and so long as the
Commitments have not been terminated in full.
SECTION 9.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Parent
Borrower, the Administrative Agents, the Issuing Banks, the
Swing Line Banks, the Collateral Agent and the Paying Agent
and when the Administrative Agents shall have received copies
hereof that, when taken together, bear the signatures of each
Lender, and thereafter shall be binding upon and inure to the
benefit of the Borrowers, the Administrative Agents, the
Issuing Banks, the Swing Line Banks, the Collateral Agent, the
Paying Agent and each Lender and their respective successors
and assigns, except that none of the Borrowers shall have the
right to assign its rights hereunder or any interest herein
without the prior written consent of all the Lenders (and any
attempted assignment by any of the Borrowers shall be void).
SECTION 9.04. Successors and Assigns. (a) Subject to
Section 9.03, whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the
Borrowers, the Administrative Agents, the Issuing Banks, the
Collateral Agent, the Paying Agent, the Swing Line Banks or
the Lenders that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and
assigns.
(b) Each Lender may assign to one or more assignees all
or a portion of its interests, rights and obligations under
this Agreement (including all or a portion of its Commitments,
the outstanding Letters of Credit, the Auction Bid LOCs and
the Advances at the time owing to it); provided, however, that
(i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, each of the Administrative Agents and
the Parent Borrower must give its prior written consent to
such assignment (which consent shall not be unreasonably
withheld); provided further, however, the consent of the
Parent Borrower shall not be required if a Default or an Event
of Default has occurred and is continuing on the date of the
Assignment and Acceptance, (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender, the amount
of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agents) shall not be less than $10,000,000 (or
an amount equal to the remaining balance of such Lender's
Commitment), (iii) the parties to each such assignment shall
execute and deliver to the Paying Agent (with a copy to the
other Administrative Agent) an Assignment and Acceptance,
together with a processing and recordation fee of $2,500, and
(iv) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agents an Administrative Questionnaire.
Each assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's Commitment. Upon
acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in
each Assignment and Acceptance, which effective date shall be
at least five Business Days after the execution thereof and in
no event shall precede the date of such recording, (i) the
assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance,
shall have the rights and obligations of a Lender under this
Agreement and (ii) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto, but shall continue to be entitled
to the benefits of Sections 2.10, 2.13 and 9.05, as well as to
any Fees accrued for its account and not yet paid).
Notwithstanding the foregoing, (i) any Lender assigning its
rights and obligations under this Agreement may retain any
Auction Bid Advances made by it, or Auction Bid LOCs issued by
it,outstanding at such time, and in such case shall retain its
rights hereunder in respect of any Advances or Auction Bid
LOCs so retained until such Advances have been repaid , or
such Auction Bid LOCs have been terminated or have expired, in
full in accordance with this Agreement.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of
any adverse claim and that its Commitment, and the outstanding
balances of its Advances, in each case without giving effect
to assignments thereof that have not become effective, are as
set forth in such Assignment and Acceptance; (ii) except as
set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with this Agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement, any other Loan Document or any
other instrument or document furnished pursuant hereto, or the
financial condition of the Loan Parties or the performance or
observance by the Loan Parties of any of their obligations
under this Agreement or under any other Loan Document or any
other instrument or document furnished pursuant hereto;
(iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance;
(iv) such assignee confirms that it has received a copy of
this Agreement, together with copies of any amendments or
consents entered into prior to the date of such Assignment and
Acceptance and copies of the most recent financial statements
delivered pursuant to Section 5.03 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agents, such assigning Lender
or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and
authorizes the Administrative Agents and the Collateral Agent
to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the
Administrative Agents and the Collateral Agent by the terms
hereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform
in accordance with their terms all the obligations that by the
terms of this Agreement are required to be performed by it as
a Lender.
(d) The Paying Agent shall maintain at its address
referred to in, or determined pursuant to, Section 9.01 a copy
of each Assignment and Acceptance delivered to and accepted by
it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from
time to time and whether such Lender is a Lender on the
Closing Date, or the assignee of such a Lender. The entries
in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrowers, the
Administrative Agent, the Collateral Agent, the Paying Agent
and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by
the Parent Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee,
together with an Administrative Questionnaire completed in
respect of the assignee (unless the assignee shall already be
a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) above and the written consent (to
the extent required under paragraph (b) above), of the
Administrative Agents, the Parent Borrower, the Swing Line
Banks and the Issuing Banks to such assignment, the
Administrative Agents shall (i) accept such Assignment and
Acceptance, (ii) in the case of the Paying Agent, record the
information contained therein in the Register and (iii) give
prompt notice thereof to the Lenders, the Swing Line Banks and
the Issuing Banks. No assignment shall be effective unless it
has been recorded in the Register as provided in this
paragraph (e).
(f) Each Lender may, without the consent of the Parent
Borrower, the Administrative Agents, the Swing Line Banks or
the Issuing Banks, sell participations to one or more banks or
other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion
of its Commitment and the Advances owing to it); provided,
however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks
or other entities shall be entitled to the benefit of the cost
protection provisions contained in Sections 2.10, 2.13 and
9.05 to the same extent as if they were Lenders (provided that
the Parent Borrower shall not be required to reimburse the
participating banks or other entities pursuant to Section
2.10, 2.13 or 9.05 in an amount that exceeds the amount that
would have been payable thereunder to such Lender had such
Lender not sold such participation) and (iv) the Parent
Borrower, the Administrative Agents, the Issuing Banks, the
Swing Line Banks, the Collateral Agent, the Paying Agent and
the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain
the sole right to enforce the obligations of the Loan Parties
under the Loan Documents and to approve any amendment,
modification or waiver of any provision of this Agreement
(provided that the participating bank or other entity may be
provided with the right to approve amendments, modifications
or waivers affecting it with respect to (A) any decrease in
the Fees payable hereunder with respect to Advances in which
the participating bank or other entity has purchased a
participation, (B) any change in the amount of principal of,
or decrease in the rate at which interest is payable on, the
Advances in which the participating bank or other entity has
purchased a participation, (C) any extension of the final
scheduled maturity of any Advance in which the participating
bank or other entity has purchased a participation or (D) any
release of all or substantially all the Collateral other than
pursuant to the terms of this Agreement). Each participation
shall be of a constant, and not a varying, percentage of the
Lender's Commitment.
(g) Notwithstanding the limitations set forth in
paragraph (b) above, any Lender may at any time assign all or
any portion of its rights under this Agreement to a Federal
Reserve Bank without the prior written consent of the Parent
Borrower, the Administrative Agents, the Swing Line Banks or
the Issuing Banks, provided that no such assignment shall
release a Lender from any of its obligations hereunder or
substitute any such Bank for such Lender as a party hereto. In
order to facilitate such an assignment to a Federal Reserve
Bank, the Borrowers, shall, at the request of the assigning
Lender, duly execute and deliver to the assigning Lender a
promissory note or notes evidencing the Advances made to the
Borrowers, by the assigning Lender hereunder.
(h) Except as expressly provided in this Agreement,
neither the Issuing Banks nor the Swing Line Banks may assign
or delegate any of their respective rights and duties here-
under without the prior written consent of the Parent Borrower
and the Administrative Agents.
(i) The Parent Borrower may, with the prior written
consent of the Administrative Agents, replace any of the
Lenders with one or more assignees, provided (i) that the
Lender being replaced has been paid in full for all Advances
made by such Lender and all other amounts accrued or due to
such Lender hereunder, (ii) that the full amount of the
Commitments remain unchanged and (iii) that the percentages of
the total Commitments allocated to the Lenders (other than any
replaced Lenders) remain unchanged unless prior written
consent from any such affected Lenders has been obtained.
Upon any such replacement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits
of Sections 2.10, 2.13 and 9.05, as well as to any Fees
accrued for its account under Section 2.03 and not yet paid.
(j) In the event that:
(i) any Lender shall have refused (and shall not
have retracted such refusal) to make available any
Advance on its part to be made available hereunder, other
than solely as a result of the failure of any condition
set forth in Article IV to be satisfied (such condition
not having been effectively waived in accordance with the
terms hereof);
(ii) any Lender shall have notified either the
Administrative Agents or the Parent Borrower (and shall
not have retracted such notification) that it does not
intend to comply with any of its obligations hereunder,
other than solely as a result of the failure of any
condition set forth in Article IV to be satisfied (such
condition not having been effectively waived in
accordance with the terms hereof);
(iii) (A) a receiver, trustee, conservator or other
custodian shall have been appointed with respect to any
Lender or its property at the direction or request of any
Governmental Authority or (B) an order, action, process
or proceeding of the type contemplated by paragraph (g)
or (h) of Section 7.01 shall be commenced by or against
such Lender (or such Lender shall have consented to the
entry of any such order, action, process or proceeding);
or
(iv) any Lender shall made demand upon the Parent
Borrower for any amount pursuant to Section 2.10 or 2.13;
the Parent Borrower shall have the right, at its own expense,
upon notice to such Lender, the Administrative Agents and the
Issuing Banks (A) to require such Lender, and such Lender
hereby agrees, to use commercially reasonable efforts to
transfer and assign without recourse (in accordance with and
subject to the restrictions contained in Section 9.03(b)) all
the interests, rights and obligations of such Lender to an
assignee; provided, however, that (1) no such assignment shall
conflict with any law, rule or regulation or order of any
Governmental Authority and (2) the Parent Borrower or such
assignee, as the case may be, shall pay to such Lender in same
day funds on the date of such assignment the principal of and
interest accrued on the date of payment on the Advances made
by such Lender hereunder and all other amounts accrued for
such Lender's account or owed to it hereunder or (B) to
replace such Lender with one or more assignees, provided, in
the case of this clause (B), (1) that the Lender being
replaced has been paid in full for all Advances made by such
Lender and all other amounts accrued or due to such Lender
hereunder, (2) that the full amount of the Commitments remains
unchanged and (3) that the percentage of the total Commitments
allocated to the Lenders (other than any replaced Lenders)
remains unchanged unless prior written consent from such
Lenders has been obtained, and provided, further, in either of
clause (A) or (B), the Issuing Banks shall have consented to
such assignment. Upon any assignment, such Lender shall cease
to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.10, 2.13 and 9.05, as well as to any
fees accrued for its account under Section 2.03 and not yet
paid.
SECTION 9.05. Expenses; Indemnity. (a) The Parent Bor-
rower agrees to pay (i) the reasonable fees, disbursements and
other charges of counsel for the Administrative Agents, the
Issuing Banks, the Swing Line Banks, the Collateral Agent and
the Paying Agent incurred in connection with the preparation
of this Agreement and the other Loan Documents or in
connection with any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) and
(ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agents, the Issuing Banks, the Collateral
Agent, the Paying Agent or any Lender in connection with the
enforcement or protection of their rights in connection with
this Agreement and the other Loan Documents or in connection
with the Advances or Swing Line Advances made or the Letters
of Credit issued hereunder, including the reasonable fees,
disbursements and other charges of Cravath, Swaine & Moore,
counsel for the Administrative Agents, the Collateral Agent
and the Paying Agent, in connection with any such enforcement
or protection and the reasonable fees, disbursements and other
charges of any other counsel for the Administrative Agents,
the Issuing Banks, the Swing Line Banks, the Collateral Agent,
the Paying Agent or any Lender. The Parent Borrower further
agrees that it shall indemnify the Administrative Agents, the
Issuing Banks, the Swing Line Banks, the Collateral Agent, the
Paying Agent and the Lenders from, and hold them harmless
against, any documentary taxes, assessments or similar charges
made by any Governmental Authority by reason of the execution
and delivery of this Agreement or any of the other Loan Docu-
ments.
(b) The Parent Borrower agrees to indemnify the
Administrative Agents, the Collateral Agent,the Paying Agent,
the Issuing Banks, the Swing Line Banks and each Lender and
each of their respective directors, officers, employees and
agents (each such person being called an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, disbursements and other
charges, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of
(i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto or
thereto of their respective obligations hereunder or
thereunder or the consummation of the Transactions and the
other transactions contemplated hereby or thereby, (ii) the
use of the Letters of Credit or the proceeds of the Advances
and the Swing Line Advances or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages,
liabilities or related expenses have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) If any payment of principal of any Adjusted
Eurodollar Rate Advance is made other than on the last day of
the Interest Period for such Advance, as a result of any
Conversion, payment pursuant to Section 2.05, prepayment
pursuant to clause (ii) of the proviso to Section 2.09(a) or
acceleration of the maturity of the Advances pursuant to
Section 7.01 or for any other reason, the applicable Borrower
shall, upon demand by any Lender (with a copy of such demand
to the Administrative Agents), pay to the Paying Agent for the
account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that such
Lender may incur as a result of such payment, including any
loss (excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(d) The provisions of this Section 9.05 shall remain
operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of
the Advances or the Swing Line Advances, the invalidity or
unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on
behalf of the Administrative Agents, the Issuing Banks, the
Collateral Agent, the Paying Agent, the Swing Line Banks or
any Lender. All amounts due under this Section 9.05 shall be
payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default
shall have occurred and be continuing, each Lender is hereby
authorized, in addition to any other right or remedy that any
Lender may have by operation of law or otherwise, at any time
and from time to time, without notice to any Borrower (any
such notice being expressly waived by each Borrower), to
exercise its banker's lien or right of setoff and apply any
and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness
at any time owing by such Lender to or for the credit or the
account of any Loan Party against any of and all the
obligations of any Borrower now or hereafter existing under
this Agreement and other Loan Documents held by such Lender,
irrespective of whether such Lender shall have made any demand
under this Agreement or such other Loan Document and although
such obligations may be unmatured.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay
on the part of the Administrative Agents, the Issuing Banks,
the Collateral Agent, the Paying Agent, the Swing Line Banks
or any Lender in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuation of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise
of any other right or power. The rights and remedies of the
Administrative Agents, the Issuing Banks, the Collateral
Agent, the Paying Agent, the Swing Line Banks and the Lenders
hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this
Agreement or any other Loan Document or consent to any
departure by the Loan Parties therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given.
No notice or demand on the Loan Parties in any case shall
entitle the Loan Parties to any other or further notice or
demand in similar or other circumstances.
(b) Neither this Agreement or any of the other Loan
Documents nor any provision hereof or thereof may be waived,
amended or modified except (i) in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Majority Lenders, (ii) in the case of
either Guarantee Agreement, pursuant to an agreement or
agreements in writing entered into by the Guarantors party
thereto and the Collateral Agent and consented to by the
Majority Lenders, (iii) in the case of any of the Security
Documents, pursuant to an agreement or agreements in writing
entered into by the parties thereto and consented to by the
Majority Lenders or (iv) in the case of a Letter of Credit,
pursuant to an agreement or agreements entered into by the
applicable Borrower and the Issuing Banks; provided, however,
that no such agreement shall (A) change the principal amount
of any Advance or Letter of Credit Obligation, extend the
final scheduled maturity of any Advance, extend the scheduled
date for payment (but not prepayments) of principal of or
interest on any Advance, forgive any such payment or any part
thereof or reduce the rate of interest on any Advance, in each
case without the prior written consent of each Lender affected
thereby, (B) increase the amount or extend the termination
date of the Commitment of any Lender or reduce or extend the
date for payment of the Fees of any Lender, in each case
without the prior written consent of such Lender, (C) amend or
modify the provisions of this Section 9.08(b) or the defini-
tion of the term "Majority Lenders" without the prior written
consent of each Lender, (D) release Collateral in excess of
an aggregate amount of $300,000,000 (it being understood that
the Parent Borrower shall be permitted to direct the release
of up to $10,000,000 (determined by the Fair Market Value of
the Collateral) of Collateral in each Fiscal Year without the
consent of the Lenders), except as expressly permitted by the
Security Documents or this Agreement or (E) release Dillon
Companies, Inc. as a Subsidiary Guarantor (other than as
expressly provided in the Subsidiary Guarantee Agreement),
without the prior written consent of each Lender; and provided
further, that no such agreement shall amend, modify or other-
wise affect the rights or duties of the Administrative Agents,
the Collateral Agent, the Paying Agent, the Swing Line Banks
or the Issuing Banks hereunder without the prior written con-
sent of the Administrative Agents, the Collateral Agent, the
Paying Agent, the Swing Line Banks or the Issuing Banks,
respectively.
SECTION 9.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the applicable
interest rate, together with all fees and charges that are
treated as interest under applicable law (collectively, the
"Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender or any
Swing Line Bank, shall exceed the maximum lawful rate (the
"Maximum Rate") that may be contracted for, charged, taken,
received or reserved by such Lender or such Swing Line Bank in
accordance with applicable law, the rate of interest payable
to such Lender or such Swing Line Banks hereunder, together
with all Charges payable to such Lender or such Swing Line
Banks, shall be limited to the Maximum Rate.
SECTION 9.10. Entire Agreement. This Agreement and the
other Loan Documents and the letter referred to in
Section 2.03(b) constitute the entire contract between the
parties relative to the subject matter hereof. Any previous
agreement among the parties with respect to the subject matter
hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon
any party other than the parties hereto and thereto any
rights, remedies, obligations or liabilities under or by
reason of this Agreement or the other Loan Documents.
SECTION 9.11. Waiver of Jury Trial. Each party hereto
hereby waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of
any litigation directly or indirectly arising out of, under or
in connection with this Agreement or any of the other Loan
Documents. Each party hereto (a) certifies that no
representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement
and the other Loan Documents, as applicable, by, among other
things, the mutual waivers and certifications in this
Section 9.11.
SECTION 9.12. Severability. In the event any one or more
of the provisions contained in this Agreement or in any other
Loan Document should be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties
shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid
provisions, the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 9.13. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become effective
as provided in Section 9.03.
SECTION 9.14. Headings. Article and Section headings and
the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration
in interpreting, this Agreement.
SECTION 9.15. Confidentiality. Unless otherwise agreed
to in writing by the Parent Borrower, the Administrative
Agent, the Collateral Agent, the Paying Agent and each Lender
hereby agree to keep all Proprietary Information (as defined
below) confidential and not to disclose or reveal any
Proprietary Information to any Person other than the
Administrative Agent's, the Collateral Agent's, the Paying
Agent's or such Lender's directors, officers, employees,
Affiliates and agents and to actual or potential assignees and
participants, and then only on a confidential basis; provided,
however, that the Administrative Agent, the Collateral Agent,
the Paying Agent or any Lender may disclose Proprietary
Information (a) as required by law, rule, regulation or
judicial process or in connection with any litigation or other
proceeding relating to this Agreement (provided that the
applicable Person shall give the Parent Borrower notice of
such disclosure on the same day on which it determines such
disclosure to be necessary and in any event prior to such
disclosure), (b) to its attorneys and accountants or (c) as
requested or required by any state, or Federal or foreign
authority or examiner regulating banks or banking. For
purposes of this Agreement, the term "Proprietary Information"
shall include all information about the Parent Borrower or any
of its Affiliates that has been furnished by the Parent
Borrower or any of its Affiliates, whether furnished before or
after the Closing Date, and regardless of the manner in which
it is furnishes; provided, however, that Proprietary
Information does not include information that (i) is or
becomes generally available to the public other than as a
result of a disclosure by the Administrative Agent, the
Collateral Agent, the Paying Agent or any Lender not permitted
by this Agreement, (ii) was available to the Administrative
Agent, the Collateral Agent, the Paying Agent or any Lender on
a nonconfidential basis prior to its disclosure by the
Administrative Agent, the Collateral Agent, the Paying Agent
or such Lender by the Parent Borrower or any of its Affiliates
or (iii) becomes available to the Administrative Agent, the
Collateral Agent, the Paying Agent or any Lender on a
nonconfidential basis from a Person other than the Parent
Borrower or its Affiliates who, to the best knowledge of the
Administrative Agent, the Collateral Agent, the Paying Agent
or such Lender, as the case may be, is not otherwise bound by
a confidentiality agreement with the Parent Borrower or any of
its Affiliates, or is not otherwise prohibited from
transmitting the information to the Administrative Agent, the
Collateral Agent, the Paying Agent or such Lender.
SECTION 9.16. Jurisdiction; Consent to Service of
Process. (a) Each Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted
by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against
any Loan Party or its properties in the courts of any juris-
diction.
(b) Each Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively
do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out
of or relating to this agreement or the other Loan Documents
in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 9.17. Release of Collateral. (a) Upon the
occurrence of any sale, transfer or disposition of assets
permitted by, and consummated in accordance with, the
provisions of this Agreement, the Collateral Agent shall
release from the lien of the Collateral Documents the assets
so sold, transferred or otherwise disposed.
(b) Notwithstanding any provision of this Agreement or
any other Loan Document to the contrary, so long as no Default
or Event of Default has occurred and is continuing, the
security interests in all the Collateral under all the
Collateral Documents shall be released, the provisions of
Section 7.02 shall cease to be operative (and any Collateral
held pursuant thereto shall be released) and the Collateral
Documents shall be terminated (and each of the Lenders
(x) hereby consents to such release and termination and
(y) hereby authorizes the execution and delivery by the
Administrative Agents and the Collateral Agent of the
documents and instruments and the delivery of the Collateral
in the possession of the Collateral Agent, in each case as
contemplated by paragraph (c) below) upon the request of the
Parent Borrower if, at the time of such request, either
(i) the Senior Debt Ratings are (A) BBB- or better
in the case of S&P or (B) Baa3 or better in the case of
Moody's (provided, however, that the Parent Borrower
shall not be entitled to request the release of all the
Collateral pursuant to this clause (i) if, at the time
such request would otherwise be made, there shall be in
effect a Senior Debt Rating of (x) BB or lower in the
case of S&P or (y) Ba2 or lower in the case of Moody's
(the condition set forth in this clause (i) being
referred to herein as the "Investment Grade Rating
Condition")) or
(ii) the Consolidated Ratio of Net Total Debt to
Consolidated EBITDA for the most recently ended Fiscal
Quarter is 3.0 to 1.0 or lower.
Notwithstanding anything in this Agreement to the contrary,
the Parent Borrower shall not be entitled to request the release of all
the Collateral pursuant to this paragraph (b) unless, simultaneously with
the release of the security interests in all the Collateral as contemplated by
this paragraph (b), all security interests in all the Collateral for the
benefit of the Senior Secured Notes are release
(c) In connection with the above-described release and
termination, the Collateral Agent shall deliver to the Parent
Borrower any Collateral in the Collateral Agent's possession
and the Administrative Agents and the Collateral Agent shall
execute and deliver, at the Parent Borrower's expense, all
documents and instruments as the Parent Borrower or any other
Loan Party may reasonably request to evidence such release and
termination. Any such execution and delivery of such
documents or instruments shall be without recourse to the
Administrative Agents and the Collateral Agent. Nothing in
this Section 9.17 shall be construed to affect the provisions
of Section 6.01.
IN WITNESS WHEREOF, each of the Borrowers, the
Administrative Agents, the Collateral Agent, the Paying Agent,
the Issuing Banks, the Swing Line Banks and the Lenders have
caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
THE KROGER CO.,
by:
------------------------------
Name:
Title:
DILLON COMPANIES, INC.,
by:
------------------------------
Name:
Title:
CHEMICAL BANK, individually and as
Administrative Agent, Swing Line Bank,
Issuing Bank and Collateral Agent,
by:
------------------------------
Name:
Title:
CITIBANK, N.A., individually and as
Administrative Agent, Swing Line Bank,
Issuing Bank and Paying Agent,
by:
------------------------------
Name:
Title:
ABN AMRO BANK N.V.,
by:
-------------------------------
Name:
Title:
ARAB BANKING CORPORATION,
by:
-----------------------------
Name:
Title:
BANCA COMMERCIALE ITALIANA,
by:
-----------------------------
Name:
Title:
BANK OF IRELAND GRAND CAYMAN,
by:
---------------------------
Name:
Title:
BANK OF MONTREAL, CHICAGO BRANCH,
by:
---------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA,
by:
----------------------------
Name:
Title:
BANK ONE, COLUMBUS, N.A.
by:
----------------------------
Name:
Title:
THE BANK OF NEW YORK,
by:
--------------------------
Name:
Title:
THE BANK OF TOKYO TRUST COMPANY,
by:
---------------------------
Name:
Title:
BANKERS TRUST COMPANY,
by:
-------------------------
Name:
Title:
BANQUE PARIBAS,
by:
-----------------------
Name:
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE,
by:
----------------------------
Name:
Title:
CIBC, INC.,
by:
---------------------------
Name:
Title:
COMPAIGNE FINANCIERE DE CIC ET DE L'UNION
EUROPEENE,
by:
----------------------------
Name:
Title:
COMERICA BANK,
by:
-----------------------------
Name:
Title:
CREDIT LYONNAIS CHICAGO BRANCH,
by:
------------------------------
Name:
Title:
CREDIT LYONNAIS CAYMAN ISLAND BRANCH,
by:
-----------------------------
Name:
Title:
THE DAIWA BANK LIMITED, NEW YORK BRANCH,
by:
------------------------------
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.,
by:
----------------------------
Name:
Title:
DEUTSCHE BANK NEW YORK AND/OR CAYMANS ISLANDS
BRANCHES,
by:
-----------------------------
Name:
Title:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
by:
------------------------------
Name:
Title:
FLEET BANK OF MASSACHUSETTS, N.A.,
by:
-----------------------------
Name:
Title:
THE FIFTH THIRD BANK,
by:
-----------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
by:
-----------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
by:
------------------------------
Name:
Title:
THE HOKKAIDO TAKUSHOKU BANK, LTD.,
by:
------------------------------
Name:
Title:
THE HOKURIKU BANK, LTD.,
by:
------------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
by:
-----------------------------
Name:
Title:
THE LONG TERM CREDIT BANK,
by:
----------------------------
Name:
Title:
MIDLAND BANK,
by:
------------------------------
Name:
Title:
THE MITSUBISHI BANK, LIMITED, CHICAGO BRANCH,
by:
----------------------------
Name:
Title:
THE MITSUBISHI TRUST AND BANKING CORP.,
by:
----------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
by:
-----------------------------
Name:
Title:
THE NIPPON CREDIT BANK, LTD.,
by:
-----------------------------
Name:
Title:
NBD BANK, N.A.,
by:
----------------------------
Name:
Title:
NATIONSBANK OF NORTH CAROLINA, N.A.,
by:
---------------------------
Name:
Title:
THE NORTHERN TRUST COMPANY,
by:
--------------------------
Name:
Title:
PNC BANK,
by:
--------------------------
Name:
Title:
THE SAKURA BANK,
by:
--------------------------
Name:
Title:
THE SANWA BANK, LIMITED, CHICAGO BRANCH,
by:
--------------------------
Name:
Title:
STAR BANK, N.A.,
by:
----------------------------
Name:
Title:
THE SUMITOMO TRUST AND BANKING CO., LTD., NEW
YORK BRANCH,
by:
----------------------------
Name:
Title:
THE SUMITOMO BANK, LTD., CHICAGO BANCH,
by:
-----------------------------
Name:
Title:
THE TOKAI BANK, LTD., CHICAGO BRANCH,
by:
-----------------------------
Name:
Title:
UNION BANK OF FINLAND LTD., GRAND CAYMAN
BRANCH,
by:
-----------------------------
Name:
Title:
UNITED STATES NATIONAL BANK OF OREGON,
by:
----------------------------
Name:
Title:
THE YASUDA TRUST & BANKING COMPANY LIMITED,
CHICAGO BRANCH,
by:
----------------------------
Name:
Title:
WELLS FARGO BANK,
by:
-----------------------------
Name:
Title:
