SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 4, 1998
RICHFOOD HOLDINGS, INC.
(Exact name of registrant as specified in charter)
Virginia 0-16900 54-1438602
-------- ------- ----------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4860 Cox Road, Suite 300
Glen Allen, Virginia 23060
-------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 915-6000
--------------
Not Applicable
- --------------------------------------------------------------------------------
(former name or former address if changed since last report)
Page 1 of 28 pages. Exhibit
Index appears on Page 3.
<PAGE>
INFORMATION TO BE INCLUDED IN REPORT
Item 2. Acquisition or Disposition of Assets.
On March 4, 1998, FF Acquisition, L.L.C., a wholly-owned subsidiary of
the Registrant ("FF Acquisition"), acquired substantially all of the assets and
assumed certain liabilities of Farm Fresh, Inc., a privately-held supermarket
chain headquartered in Norfolk, Virginia ("Farm Fresh"). The acquisition was
effected through a "prepackaged" Chapter 11 bankruptcy proceeding pursuant to a
Joint Plan of Reorganization (the "Plan"), which was filed by Farm Fresh and FF
Holdings Corporation, Farm Fresh's parent corporation, in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") on
January 7, 1998. The Plan was confirmed by the Bankruptcy Court pursuant to an
Order Approving Disclosure Statement, Confirming Debtors' Joint Plan of
Reorganization and Approving Asset Purchase Agreement entered on February 20,
1998.
In connection with the acquisition, FF Acquisition acquired
substantially all of Farm Fresh's owned real property, leases, equipment,
inventory, supplies, contracts, accounts receivable, permits, intangibles and
rights under insurance policies (collectively, the "Assets") and assumed certain
capital lease and other liabilities associated with the Assets. FF Acquisition
did not assume Farm Fresh's indebtedness for borrowed money or lease obligations
for previously closed stores (with the sole exception of one currently closed
store to be reopened) or stores to be closed in connection with the acquisition.
At the time of the acquisition, Farm Fresh was the third largest customer of the
Registrant's Wholesale Division.
The purchase price, which was determined in arms-length negotiations,
consisted of approximately $221.7 million cash, plus $29.5 million in assumed
capital leases, plus 1.5 million warrants for the purchase of the Registrant's
common stock, without par value, at an exercise price equal to $25 per share
with a term of five years following issuance. The amount of cash consideration
is subject to adjustment based on a reconciliation of Farm Fresh's working
capital at the time of closing. The purchase price was financed primarily with
cash on hand and the proceeds of new revolving credit facilities (the "Credit
Facilities") with First Union National Bank, as administrative agent and lender,
and a syndicate of banks. The Credit Facilities permit borrowings of up to an
aggregate $350 million at interest rates that generally will not exceed the
LIBOR rate plus 0.35% on an all-in drawn basis. The Credit Facilities replace
the Registrant's existing committed revolving lines of credit.
Farm Fresh will initially operate 45 supermarkets in the Hampton Roads,
metropolitan Richmond and Shenandoah Valley areas of Virginia. Management
expects to initially operate the acquired assets in substantially the same
manner as they had been operated by Farm Fresh and intends to increase sales by,
among other things, remodeling and upgrading existing stores and opening new
stores. Management also expects to improve Farm Fresh's competitive position in
the Hampton Roads market by enhancing and reinforcing Farm Fresh's reputation
for providing higher service levels, product freshness and variety.
Additional information with respect to the transaction described herein
is set forth in the exhibits hereto, which are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
a) Financial Statements of Business Acquired
Audited Historical Financial Statements of Farm Fresh, Inc.:
Independent Auditors' Report
Consolidated Balance Sheets as of December 28, 1996 and January 3,
1998
Consolidated Statements of Loss for the years ended December 28,
1996 and January 3, 1998
Consolidated Statements of Stockholder's Deficit for the years
ended December 28, 1996 and January 3, 1998
Consolidated Statements of Cash Flows for the years ended December
28, 1996 and January 3, 1998
2
<PAGE>
Notes to Consolidated Financial Statements
b) Pro Forma Financial Information
The Registrant has determined that it is impractical to file the
pro forma financial information concurrently with this Form 8-K.
The Registrant will file such pro forma financial information as
soon as practicable, but in any event not later than May 18, 1998.
c) Exhibits
Number Exhibit
------ -------
2.1 Asset Purchase Agreement, dated as of November 26,
1997, by and among Farm Fresh, Inc., Richfood
Holdings, Inc. and FF Acquisition, L.L.C.
(incorporated herein by reference to Exhibit 2.1
to the Registrant's Quarterly Report on Form 10-Q
for the quarterly period ended October 18, 1997).
2.2 Letter Agreement, dated as of March 4, 1998, by
and among Farm Fresh, Inc., Richfood Holdings,
Inc. and FF Acquisition, L.L.C.
10.1 Credit Agreement, dated as of February 27, 1998,
by and among Richfood Holdings, Inc., First Union
National Bank, as administrative agent, Crestar
Bank, as syndication agent, and Suntrust Bank,
Atlanta, as documentation agent.
10.2 Credit Agreement, dated as of February 27, 1998,
by and among Richfood Holdings, Inc., First Union
National Bank, as administrative agent, Crestar
Bank, as syndication agent, and Suntrust Bank,
Atlanta, as documentation agent.
23.1 Consent of KPMG Peat Marwick LLP.
3
<PAGE>
<TABLE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
OF FARM FRESH, INC.
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report 5
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 28, 1996
and January 3, 1998 6
Consolidated Statements of Loss for the years ended December 28, 1996 and
January 3, 1998 8
Consolidated Statements of Stockholder's Deficit for the years ended
December 28, 1996 and January 3, 1998 9
Consolidated Statements of Cash Flows for the years ended December 28, 1996
and January 3, 1998 10
Notes to Consolidated Financial Statements 12
</TABLE>
4
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Farm Fresh, Inc.:
We have audited the accompanying consolidated balance sheets of Farm Fresh, Inc.
and subsidiaries as of December 28, 1996 and January 3, 1998, and the related
consolidated statements of loss, stockholder's deficit and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Farm Fresh, Inc. and
subsidiaries as of December 28, 1996 and January 3, 1998, and the results of
their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that Farm Fresh, Inc. will continue as a going concern which contemplates
continuity of its operations, realization of its assets and payment of its
liabilities in the ordinary course of business. As discussed in note 1 to the
consolidated financial statements, on January 7, 1998, Farm Fresh, Inc. filed a
voluntary petition for relief under Chapter 11 of the United States Bankruptcy
Code and submitted a plan of reorganization to the Bankruptcy Court. The
Bankruptcy filing, Farm Fresh Inc.'s leveraged financial structure and its
recurring net losses resulting in a stockholder's deficit raise substantial
doubt about Farm Fresh, Inc.'s ability to continue as a going concern. As a
result of the reorganization proceedings, Farm Fresh, Inc. may sell or otherwise
dispose of assets and liquidate or settle liabilities for amounts other than
those reflected in the accompanying consolidated financial statements. Further,
a plan of reorganization, as finally approved by the Bankruptcy Court, could
materially change the amounts recorded. The accompanying consolidated financial
statements do not reflect any adjustments that might be necessary to the
carrying value of assets and the amounts and classification of liabilities or
stockholder's deficit as a consequence of the bankruptcy proceedings.
On February 20, 1998, the Bankruptcy Court entered an order confirming the plan
of reorganization which includes an agreement to sell substantially all of the
operating assets of Farm Fresh, Inc. The order confirming the plan of
reorganization will become effective on March 4, 1998 if no challenges to the
order are filed. (see note 1)
KPMG PEAT MARWICK LLP
Norfolk, Virginia
February 17, 1998, except as to note 1,
which is as of February 20, 1998
5
<PAGE>
<TABLE>
FARM FRESH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 28, January 3,
1996 1998
-------------- -----------
ASSETS (notes 1 and 7)
<S> <C>
Current assets:
Cash $ 847,665 $ 642,541
Accounts receivable, net of allowance for doubtful
accounts of $1,003,038 at December 28, 1996 and
$1,036,249 at January 3, 1998 14,792,965 14,881,913
Merchandise inventories, net
Assuming the first-in, first-out method 54,164,510 47,636,275
Less adjustment to the last-in, first-out method 3,355,394 4,004,031
-------------- -----------
50,809,116 43,632,244
-------------- -----------
Prepaid expenses and other current assets 1,355,115 1,306,536
-------------- -----------
Total current assets 67,804,861 60,463,234
-------------- -----------
Assets held for sale 9,998,102 3,671,304
Property, plant and equipment (notes 5, 6 and 13):
Land 8,727,365 10,111,014
Buildings 62,675,865 69,354,307
Leasehold improvements 35,955,672 35,414,607
Fixtures and equipment 87,093,915 89,119,457
Transportation equipment 608,037 549,257
Construction in progress 894,515 -
-------------- ----------
195,955,369 204,548,642
Less accumulated depreciation and amortization 91,778,403 103,811,277
-------------- ------------
Net property, plant and equipment 104,176,966 100,737,365
-------------- ------------
Favorable lease rights, net of accumulated amortization
of $7,283,859 at December 28, 1996 and $7,575,145 at
January 3, 1998 3,540,441 2,923,088
Goodwill, net of accumulated amortization of $2,348,851
at December 28, 1996 and $3,621,943 at January 3, 1998 7,227,683 5,954,591
Deferred financing costs, net of accumulated amortization
of $6,301,559 at December 28, 1996 and $8,043,707 at
January 3, 1998 (note 9) 5,785,031 3,918,802
Other, net (note 13) 175,677 997,217
-------------- -----------
$ 198,708,761 $ 178,665,601
============= ============
(continued)
6
<PAGE>
FARM FRESH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
<CAPTION>
December 28, January 3,
1996 1998
-------------- -----------
LIABILITIES AND STOCKHOLDER'S DEFICIT (note 1)
Current liabilities:
Current installments of notes payable (notes 1 and 6) $ 801,467 $ 18,459
Current installments of obligations under capital
leases (notes 5 and 13) 3,040,132 3,368,413
Trade accounts payable 36,149,820 22,683,457
Accrued expenses (note 4) 24,424,898 38,169,161
Accrued costs relating to closed stores,
current portion (note 3) 1,901,305 1,565,424
Debt in default:
Revolving credit facility (notes 1 and 7) - 25,009,566
Notes payable (notes 1 and 6) - 688,463
12.25% senior notes (notes 1 and 8) - 165,000,000
12.25% senior notes, Series A (notes 1 and 8) - 36,780,034
Convertible subordinated debentures (notes 1 and 9) - 4,279,374
-------------- -----------
Total current liabilities 66,317,622 297,562,351
-------------- -------------
Long-term debt, excluding current installments and debt in default:
Notes payable (note 6) 919,698 129,971
Obligations under capital leases (notes 5 and 13) 33,958,653 35,727,082
Revolving credit facility (notes 1 and 7) 24,289,957 -
12.25% senior notes (notes 1 and 8) 165,000,000 -
12.25% senior notes, Series A (notes 1 and 8) 37,074,410 -
Convertible subordinated debentures (notes 1 and 9) 4,380,243 -
-------------- -----------
Total long-term debt, excluding current installments and
debt in default 265,622,961 35,857,053
-------------- -----------
Accrued costs relating to closed stores, excluding current portion (note 3) 7,470,884 6,110,356
Deferred credits and other liabilities (note 15) 3,424,988 2,342,747
-------------- -----------
Total liabilities 342,836,455 341,872,507
-------------- -------------
Stockholder's deficit (notes 7, 8 and 10):
Common stock; $.01 par value; authorized 200 shares,
issued 10 shares - -
Additional paid-in capital 29,423,528 29,381,731
Accumulated deficit (172,442,282) (191,479,697)
FF Holdings stockholder loans (note 13) (1,108,940) (1,108,940)
--------------- ------------
Total stockholder's deficit (144,127,694) (163,206,906)
Commitments, contingencies and subsequent events
(notes 1, 5, 7, 10, 12, 13 and 16) - -
-------------- -----------
$ 198,708,761 $ 178,665,601
============== ==============
See accompanying notes to consolidated financial statements.
7
<PAGE>
FARM FRESH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF LOSS
<CAPTION>
Years Ended
December 28, January 3,
1996 1998
----------------- ----------------
(52 weeks) (53 weeks)
Sales $ 761,493,845 $ 693,224,618
Cost of sales 583,521,074 527,915,183
----------------- ----------------
Gross profit 177,972,771 165,309,435
Depreciation and amortization (20,677,935) (19,476,031)
Other selling, general and administrative expenses (138,607,053) (124,477,383)
Store closure and write down of long-lived assets (notes 2 and 3) (4,253,491) (150,000)
Interest expense (34,547,000) (34,592,528)
Loss on disposition of assets (537,956) (1,480,860)
Reorganization costs (note 1) - (4,180,591)
Other, net (note 9) 322,027 10,543
----------------- ----------------
Net loss $ (20,328,637) $ (19,037,415)
================= ================
See accompanying notes to consolidated financial statements.
8
<PAGE>
FARM FRESH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIT
December 28, 1996 and January 3, 1998
<CAPTION>
Additional FF Holdings Total
Common Stock Paid-in Accumulated Stockholder Stockholder's
Shares Amount Capital Deficit Loans Deficit
------ ------ ------- ------- ----- -------
Balance at December 30, 1995 10 $ - 29,457,988 (152,113,645) (1,314,037) (123,969,694)
Write down of stockholder loans (note 13) - - - - 205,097 205,097
Dividend to FF Holdings - - (34,460) - - (34,460)
Net loss - - - (20,328,637) - (20,328,637)
-- --- ---------- ---------- --------- ----------
Balance at December 28, 1996 10 $ - 29,423,528 (172,442,282) (1,108,940) (144,127,694)
Dividend to FF Holdings - - (41,797) - - (41,797)
Net loss - - - (19,037,415) - (19,037,415)
-- --- ---------- ---------- --------- ----------
Balance at January 3, 1998 10 $ - 29,381,731 (191,479,697) (1,108,940) (163,206,906)
== ===== ========== =========== ========= ===========
See accompanying notes to consolidated financial statements.
9
<PAGE>
FARM FRESH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended
-----------------------------------------
December 28, January 3,
1996 1998
---------- ----------
(52 weeks) (53 weeks)
Cash flows from operating activities:
Net loss $ (20,328,637) $ (19,037,415)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 20,677,935 19,476,031
Store closure and other charges 1,497,284 150,000
Loss on disposition of property and equipment 537,956 1,480,860
Write down of long-lived assets to be disposed 2,756,207 -
Write down of FF Holdings' stockholder loans 205,097 -
Gain on conversion of convertible subordinated
debentures, net (298,536) (6,546)
LIFO charge to earnings 318,498 648,637
Noncash recognition of deferred revenue (1,124,194) (1,082,241)
Amortization of premium on 12.25% senior notes,
series A (263,463) (294,376)
Changes in assets and liabilities that increase
(decrease) net cash provided by operating activities:
Accounts receivable 2,233,269 (88,948)
Merchandise inventories 781,332 5,665,849
Prepaid expenses and other current assets 728,628 48,579
Trade accounts payable 3,249,710 (13,466,363)
Accrued expenses (15,933) 13,744,263
Accrued costs relating to closed stores (2,059,627) (1,846,409)
Deferred credits and other liabilities 192,523 -
Other, net 175,098 (439,142)
---------- ----------
Total adjustments 29,591,784 23,990,194
---------- ----------
Net cash provided by operating
activities 9,263,147 4,952,779
--------- ---------
Cash flows from investing activities:
Acquisitions of property and equipment (18,329,078) (4,893,619)
Proceeds from sale of property and equipment 4,880,711 3,031,905
--------- ---------
Net cash used in investing activities (13,448,367) (1,861,714)
------------ -----------
(continued)
10
<PAGE>
FARM FRESH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
<CAPTION>
Years Ended
-----------------------------------------
December 28, January 3,
1996 1998
---------- ----------
(52 weeks) (53 weeks)
Cash flows from financing activities:
Borrowings under revolving credit facility $ 151,656,252 $ 108,282,131
Repayments under revolving credit facility (139,535,553) (107,562,522)
Repayments of long-term debt (1,104,515) (815,525)
Repayments of obligations under capital leases (2,188,222) (2,995,406)
Payments upon conversion of convertible
subordinated debentures (4,667,521) (163,070)
Payment of refinancing costs (1,172,970) -
Dividend to FF Holdings (34,460) (41,797)
--------------- ---------------
Net cash provided by (used in)
financing activities 2,953,011 (3,296,189)
--------------- ----------------
Net decrease in cash (1,232,209) (205,124)
Cash at beginning of year 2,079,874 847,665
--------------- ---------------
Cash at end of year $ 847,665 $ 642,541
============== ==============
Supplemental disclosures of cash
flow information -
Cash paid during the year for interest $ 34,352,498 $ 22,728,045
============== ==============
Supplemental information on noncash investing and financing activities:
During the years ended December 28, 1996 and January 3, 1998, the
Company entered into capital lease obligations of $5,765,295 and
$5,092,116, respectively.
See accompanying notes to consolidated financial statements.
</TABLE>
11
<PAGE>
(1) The Company and Recent Developments
Farm Fresh, Inc. (Farm Fresh or the Company) is a wholly owned
subsidiary of FF Holdings Corporation (FF Holdings), whose principle
asset is the common stock of the Company. Although the Company is not
legally liable for the obligations of FF Holdings, the ability of FF
Holdings to meet its obligations is dependent on the Company's
ability to pay dividends to FF Holdings in an amount sufficient to
service these obligations.
Beginning April 1, 1998, FF Holdings would be required to make level
semiannual cash interest payments of $7.1 million each or $14.1
million annually through the maturity of its 14.25% senior notes (FF
Holdings notes). The Company's limited cash flow, as well as the
restrictive covenants in its debt agreements, preclude the Company
from paying cash dividends to FF Holdings to make its April 1, 1998
interest payment. Without cash dividends from Farm Fresh, FF Holdings
would be unable to make cash interest payments on the notes and, as a
result, upon the expiration of the applicable grace periods, the FF
Holdings noteholders would have the right to acquire a controlling
interest in the Company. A "Change of Control" as defined in the
indentures would result in an acceleration of the maturity of the
Company's senior notes and other indebtedness.
In late 1996, because of significant doubt about the Company's ability
to make dividend payments to FF Holdings to service its debt
obligations, the Company and FF Holdings began to explore strategic
alternatives, including but not limited to, the sale of some or all
of the Company's assets. In September 1997, Farm Fresh and Richfood
Holdings, Inc. (Richfood), a leading wholesale food distributor in
the Mid-Atlantic region and a major supplier of the Company,
announced an agreement in principle regarding the purchase of
substantially all the Company's assets and assumption of
substantially all of the Company's operating liabilities by FF
Acquisition, LLC (FF Acquisition), a Virginia limited liability
company and a wholly-owned subsidiary of Richfood.
On October 1, 1997, the Company failed to make the interest payment on
its 12.25% Senior Notes and 12.25% Senior Notes, Series A
(collectively referred to as the senior notes). Therefore, upon the
expiration of a 30-day grace period, the senior notes were in default
and the bondholders had the right to exercise all rights available to
them under the indentures governing the senior notes. Under cross
default provisions in the instruments governing the Company's other
debt, the revolving credit facility, industrial development revenue
bond and convertible subordinated debentures were also in default.
On November 26, 1997, Farm Fresh, Richfood and FF Acquisition executed
an asset purchase agreement (the Richfood Purchase Agreement) which
established the terms for the purchase of substantially all of the
Company's assets for approximately $220 million in cash, assumption
of certain operating liabilities and 1.5 million warrants to purchase
Richfood common stock. The purchase price is subject to adjustment
based upon actual working capital at the date of closing of the
transaction and certain other terms and conditions.
Also on November 26, 1997, the Company and FF Holdings submitted a
Pre-Petition Solicitation of Votes on the Chapter 11 Joint Plan of
Reorganization (the Plan) to their creditors. Under the Plan, the
Company would sell substantially all of its assets to FF Acquisition
in accordance with the Richfood Purchase Agreement. The Company would
distribute the proceeds from the sale to certain creditors in
proportion to their estimated recovery percentages by class and
category of creditor as more fully defined in the Plan document filed
with the Bankruptcy Court. The Plan contemplated seven major classes
of claims against the Company and FF Holdings plus administrative
claims related to the Bankruptcy filing and certain tax claims. The
claim categories and their estimated recovery percentages under the
November 26, 1997 Plan, either from the proceeds of the Richfood
Purchase Agreement or through assumption by FF Acquisition were as
follows:
12
<PAGE>
<TABLE>
<CAPTION>
Estimated Claim Estimated Estimated
Class / Category or Equity Interest Recovery ($) Recovery (%)
-------------------------------------------------------------------------------------------------------
<S> <C>
Administrative Claims $ 6,000,000 $ 6,000,000 100%
Tax Claims $ - $ - 100%
1-Priority Claims $ - $ - 100%
2-Secured Claims Against
Farm Fresh:
2A-Revolving Credit
Facility $ 26,688,693 $ 26,688,693 100%
2B-Other Secured Claims $ 1,021,000 $ 1,021,000 100%
3-Unsecured Claims Against
Farm Fresh:
3A-Convertible
Subordinated
Debentures $ 7,203,000 $ 6,499,267 90.23%
3B-Senior Notes $ 212,800,000 $ 192,009,440 90.23%
3C-General Unsecured
Claims $ 5,700,000 $ 5,143,110 90.23%
3D-Trade Claims $ 300,000 $ 300,000 100%
4-Farm Fresh Common
Stock Common Stock $ - 0%
5-Unsecured Claims Against
FF Holdings:
5A-FF Holdings Notes $ 97,247,000 $ - 0%
5B-General Unsecured
Claims $ - $ - 0%
6-Holdings Preferred Stock $ 36,700,000 $ - 0%
7-Holdings Common Stock Common Stock $ - 0%
</TABLE>
Note: This table sets forth estimated distributions of assets under
the November 26, 1997 Plan, based upon certain assumptions as
discussed more fully in the Plan document filed with the Bankruptcy
Court. This table is a preliminary estimate based upon assumptions
and other information which may prove to be incorrect. The revolver
has been estimated in the above table as of November 21, 1997. The
remaining amounts of debt were estimated as of September 6, 1997 and
include accrued interest. Actual recovery percentages may be
different and possibly lower.
On January 7, 1998, Farm Fresh and FF Holdings filed a petition for
relief under Chapter 11 of the United States Bankruptcy Code (Chapter
11) and submitted the Plan to the Bankruptcy Court. From January 7,
1998, the Company has operated its business as a
debtor-in-possession. On January 7, 1998, the Company, as a
debtor-in-possession, entered into a revolving credit agreement (the
DIP facility) with Fleet Financial Corporation, as agent for the
lenders. The DIP facility provides up to $50 million in financing to
meet the Company's working capital needs and is available through
January 7, 1999 or the confirmation of the Plan, whichever is
earlier. The facility bears interest at the option of the Company at
either the lender's prime rate plus 0.75% or LIBOR plus 1.5%. The DIP
facility also bears a commitment fee of 0.5% on the undrawn
13
<PAGE>
availability. At February 20, 1998, there was approximately $21.4
million outstanding on the DIP facility which is expected to be
repaid with the proceeds from the Richfood Purchase Agreement.
The Bankruptcy Court issued an order confirming the Plan (the
Confirmation Order) on February 20, 1998. The Confirmation Order, if
unchallenged, will become effective on March 4, 1998 (the Effective
Date). The confirmed Plan remained substantially unchanged from the
initial Plan, however, the confirmed amended plan allowed certain
legal claims including punitive damages. Under the amended Plan, the
reorganized Farm Fresh will continue to exist as a separate
corporate identity and will be principally responsible for
administration of the Plan. All remaining unsold property of the
Company will vest in the reorganized Farm Fresh. The reorganized
Farm Fresh will perform all obligations and responsibilities
required by the Plan and the Confirmation Order, including, but not
limited to, effecting the asset sale, liquidating all residual
assets, making all distributions required by the Plan, objecting to
the allowance of any improper claims or interests, and prosecuting
any litigation pertaining thereto. This purpose is restricted in
scope and it is anticipated that the reorganized Farm Fresh will not
have any operations or sources of income other than from the
liquidation of its assets. Certain of the Company's executive
officers will be retained by the reorganized Farm Fresh. These
officers have certain incentive compensation and bonus agreements
which will be paid by the reorganized Farm Fresh as discussed in
note 13.
As of the Effective Date under the Plan, FF Holdings will be dissolved
and cease to exist as a separate corporate entity with all of the
assets of FF Holdings distributed to the reorganized Farm Fresh. Each
of the senior notes, the convertible subordinated debentures, the FF
Holdings notes, the Farm Fresh common stock, and the FF Holdings
preferred and common stock will be canceled. The reorganized Farm
Fresh will issue 1,000,000 shares of new common stock with a par
value of $0.01. This common stock will be distributed to the holders
of allowed Class 3B claims that are "accredited investors" pursuant
to the Plan and Confirmation Order.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern which
contemplates continuity of its operations, realization of its assets
and payment of its liabilities in the ordinary course of business.
The Bankruptcy filing, Farm Fresh Inc.'s leveraged financial
structure and its recurring net losses resulting in a stockholder's
deficit raise substantial doubt about Farm Fresh Inc.'s ability to
continue as a going concern. As a result of the reorganization
proceedings discussed above, the Company may sell or otherwise
dispose of assets or settle liabilities for amounts other than those
reflected in the consolidated financial statements. Further, a plan
of reorganization, as finally approved by the Bankruptcy Court, could
materially change the amounts recorded. The consolidated financial
statements do not reflect any adjustments that might be necessary to
the carrying value of assets and the amounts and classification of
liabilities or stockholder's deficit as a consequence of the
bankruptcy proceedings.
During 1997, because of significant doubt about the Company's ability
to make dividend payments to FF Holdings to service its debt
obligations, the Company incurred costs relating to exploring
strategic alternatives, including but not limited to, the sale of all
or some of the Company's assets and filing for bankruptcy. Costs
incurred during 1997 amounted to approximately $4.2 million for
attorneys and other fees relating to resolving these matters.
(2) Summary of Significant Accounting Policies
(a) Nature of Business and Consolidation
The Company is engaged in the retail grocery business under the names
"Farm Fresh," "Rack & Sack," and "3 Stores, 1 Roof. " These
operations include combination stores and super warehouse stores
located in the Hampton Roads, Richmond and Shenandoah Valley areas of
Virginia. As discussed in note 1, the scope of the Company's
operations will be substantially changed if the Confirmation Order
becomes effective.
14
<PAGE>
The consolidated financial statements include the accounts of Farm
Fresh, Inc. and subsidiaries. All significant intercompany balances
and transactions of consolidated subsidiaries have been eliminated.
The consolidated financial statements do not include the accounts of
certain joint venture partnerships in which the Company has less
than a 50% interest. These joint ventures were formed to acquire,
renovate, construct and operate various rental properties. The joint
venture partnerships are carried on the equity method.
(b) Definition of Fiscal Year
The fiscal year of the Company ends on the Saturday nearest to December
31. Fiscal year 1996 ended December 28, 1996 and consisted of 52
weeks. Fiscal year 1997 ended January 3, 1998 and consisted of 53
weeks.
(c) Merchandise Inventories
Inventories are stated at the lower of cost or market. For
substantially all of the inventories, cost has been determined on a
last-in, first-out (LIFO) basis. With respect to the remaining
inventories, cost has been determined on a first-in, first-out (FIFO)
basis. Approximately 93% of total merchandise inventories in 1996 and
1997 were costed using the LIFO method. Movies held for rent are
included in merchandise inventories and amortized to their net
realizable value over 90 days.
(d) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Buildings and
equipment under capital leases are stated at the lower of the present
value of minimum lease payments at the beginning of the lease term or
fair value of the property at the inception of the lease. Owned
buildings, fixtures and equipment are depreciated over the estimated
useful lives of the respective assets using the straight-line method.
Buildings under capital leases, fixtures and equipment under capital
leases and leasehold improvements are amortized using the
straight-line method over the lesser of the lease term or the
estimated useful life of the related asset. The Company uses the
following estimated useful lives for depreciating and amortizing
property, plant and equipment:
Buildings 10-40 years
Leasehold improvements 10 years
Fixtures and equipment 3-8 years
Transportation equipment 3-5 years
(e) Favorable Lease Rights
Favorable lease rights are amortized over the term of the lease using
the straight-line method.
(f) Goodwill
Goodwill represents the excess purchase price over the estimated fair
value at the date of acquisition of the tangible and identifiable
intangible net assets acquired and is amortized over its estimated
recovery period using the straight-line method. The maximum recovery
period used by the Company is 25 years.
(g) Deferred Financing Costs
Deferred financing costs are amortized over the term of the related
financing primarily using the effective interest method.
(h) Income Taxes
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
15
<PAGE>
The Company and its wholly-owned subsidiaries are included in the
Federal income tax return of the consolidated group comprised of FF
Holdings and the Company. The income tax information reflected in the
accompanying financial statements has been calculated as if Farm
Fresh were filing a separate tax return.
(i) Assets Held for Sale
Assets held for sale are carried at estimated net realizable value less
estimated costs to sell. Included in assets held for sale at January
3, 1998 is one building, which is currently leased to a third party
through 2000, and two parcels of land. These assets are expected to
be sold to Richfood as described in note 1. Approximately $4.1
million of the December 28, 1996 balance relating to one store was
reclassified from assets held for sale to property, plant and
equipment at January 3, 1998 as a result of the Company's decision to
reopen the store.
(j) Advertising Costs
Advertising costs, which are included in selling, general and
administrative expenses in the accompanying consolidated statements
of loss, are expensed as incurred. Advertising expenses, net of
cooperative advertising allowances, amounted to $3,296,464 and
$3,099,671, respectively, for the years ended December 28, 1996 and
January 3, 1998.
(k) Impairment of Long-Lived Assets
The Company reviews long-lived assets and certain identifiable
intangible assets to be held and used for impairment when events or
changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. If an evaluation is required, the
estimated future undiscounted cash flows associated with the asset
are compared to the asset's carrying amount to determine if a
write-down to market or discounted cash flow value is required. The
Company reports long-lived assets and certain identifiable
intangibles to be disposed of at the lower of carrying amount or fair
value less costs to sell. The Company recorded a charge of $2.8
million in 1996 for impairment of assets held for disposal. No
impairment losses have been recorded for assets to be held and used.
(l) Use of Estimates
Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and
expenses during the reporting period to prepare these financial
statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
(m) Reclassifications
Certain reclassifications have been made to the consolidated financial
statements for the year ended December 28, 1996 in order to conform
with the financial statement presentation for the year ended January
3, 1998.
(3) Accrued Costs Relating to Closed Stores
During 1996 and 1997, the Company closed two stores and one store,
respectively. In conjunction with the closures, the Company accrued
future costs of $1.5 million in 1996 and $150,000 in 1997. The costs,
recorded based on discounted cash flows, are directly attributable to
the closed stores. The costs accrued include rent, taxes, utilities,
common area maintenance and other costs associated with the store
locations.
During the years ended December 28, 1996 and January 3, 1998, $2.1
million and $1.5 million, respectively, net of related interest
expense, related to closed facilities were charged against the
liability for accrued costs relating to closed stores in the
accompanying consolidated balance sheets. These costs represent rent,
taxes, utilities, common area maintenance and other costs associated
with the specific closed store locations.
16
<PAGE>
<TABLE>
(4) Accrued Expenses
Accrued expenses consisted of the following:
<CAPTION>
December 28, January 3,
1996 1998
---- ----
<S> <C>
Accrued licenses and other taxes $ 5,407,620 $ 5,187,968
Accrued interest 7,181,091 19,029,216
Accrued insurance claims 4,125,522 6,626,219
Accrued other 7,710,665 7,325,758
----------- -----------
$ 24,424,898 $ 38,169,161
=========== ===========
(5) Leases
Included in property, plant and equipment are the following amounts
applicable to capital leases:
<CAPTION>
December 28, January 3,
1996 1998
---- ----
Buildings $ 36,396,380 $ 39,737,818
Fixtures and equipment 4,897,322 6,389,438
----------- ------------
41,293,702 46,127,256
Less accumulated amortization 14,308,039 17,877,306
----------- ------------
$ 26,985,663 $ 28,249,950
=========== ============
Amortization expense of assets under capital leases was $2,709,123 and $3,721,505
for the years ended December 28, 1996 and January 3, 1998, respectively.
Future minimum lease payments under noncancelable operating leases and
the present value of future minimum capital lease payments as of
January 3, 1998 are as follows:
<CAPTION>
Fiscal Year Capital leases Operating leases
------------ -------------- ----------------
1998 $ 8,363,317 $ 7,543,842
1999 7,757,657 6,950,748
2000 7,197,771 6,556,552
2001 5,972,295 6,376,901
2002 5,711,484 6,059,593
Later years 54,502,327 40,855,188
------------- ------------
Total minimum lease payments 89,504,851 $ 74,342,824
============
Less amount representing interest 50,409,356
Present value of net minimum
capital lease payments 39,095,495
Less current installments of obligations
under capital leases 3,368,413
-------------
Long-term obligations
under capital leases $ 35,727,082
=============
</TABLE>
17
<PAGE>
Minimum payments under capital leases have not been reduced by minimum
sublease rentals of $450,370 due in the future under noncancelable
subleases.
Rental expense for operating leases and contingent rentals for both
operating and capital leases are as follows:
<TABLE>
<CAPTION>
Years Ended
December 28, January 3,
1996 1998
---- ----
<S> <C>
Minimum rentals - operating leases $7,276,377 $ 6,673,808
Contingent rentals - operating leases 200,638 214,130
Contingent rentals - capital leases 180,803 90,666
---------- -------------
$7,657,818 $ 6,978,604
========= =============
</TABLE>
Contingent rentals are determined as a percentage of sales in excess of
stipulated amounts for certain stores. Most of the Company's leases
provide for payment of taxes, maintenance, insurance and certain
other operating expenses applicable to leased property.
Minimum payments under capital leases and operating leases do not
include minimum rentals for certain leases assumed by Nash Finch and
the operators of the Tinee Giant stores. The Company is secondarily
liable for these leases in the event of default by the present
lessee. Future minimum lease payments on these leases as of January
3, 1998 are approximately $1,664,000.
The Company sold its North Carolina stores in early 1991 and its Nick's
conventional stores in 1992 to independent operators financed by
Richfood. Under the agreements, Richfood agreed to guarantee the
lease payments for these stores. Therefore, the Company would be
liable under these leases only to the extent that the current lessee
and Richfood default. Future minimum lease payments under these
leases amount to approximately $7,010,000 as of January 3, 1998.
Certain leases are expected to be assumed by FF Acquisition, LLC under
the Richfood Purchase Agreement if the Confirmation Order is approved
as discussed in note 1. Any lease obligations not assumed by FF
Acquisition, LLC are expected to be "rejected contracts" as discussed
more fully in the Chapter 11 filing.
18
<PAGE>
<TABLE>
(6) Notes Payable
Notes payable consist of the following:
<CAPTION>
December 28, January 3,
1996 1998
---- ----
<S> <C>
Industrial Development Revenue Bonds (IRB); 65% of
prime, which averaged 5.4% for1996 and
5.5% for 1997, quarterly installments of
$90,000 plus interest, due January 2000 $ 1,138,463 $ 688,463
Obligations under noncompete agreements; 10% to 12%
interest; monthly payments ranging from $2,950 to
$3,462; due November 2003 228,379 148,430
Notes payable:
Prime + 2% notes, which averaged 10% for 1996;
repaid in 1997 198,767 -
Prime + 2% notes, which averaged 10% for 1996;
repaid in 1997 155,556 -
----------- -----------
Total notes payable 1,721,165 836,893
Less current installments of notes payable 801,467 18,459
Less IRB reflected as debt in default - 688,463
----------- -----------
Notes payable, excluding current
installments and debt in default $ 919,698 $ 129,971
=========== ===========
</TABLE>
At January 3, 1998, collateral for the industrial development revenue
bond consisted of certain property, plant and equipment against which
the note was issued. The net book value of the related collateral is
approximately $2,690,000 at January 3, 1998. As discussed in note 1,
the Company failed to make its October 1, 1997 interest payment on
its 12.25% Senior Notes. The Company's failure to make its October 1,
1997 interest payment on its senior notes results in a cross default
of the industrial development revenue bond. Therefore, the industrial
development revenue bond has been reflected as debt in default in the
accompanying January 3, 1998 balance sheet.
Aggregate annual maturities of notes payable for fiscal years ending
after January 3, 1998, excluding debt in default, are as follows:
1998--$18,459; 1999--$20,800; 2000--$23,438; 2001--$26,426; 2002 and
thereafter--$59,307.
(7) Revolving Credit Facility
In 1996, the Company renewed its existing revolving credit facility. The
revolving credit facility allowed the Company to borrow up to $40.0
million, less $4.0 million reserved for the redemption of convertible
debentures, subject to certain borrowing base limitations through
January 13, 1998. The availability of the revolving credit facility
was also reduced by outstanding letters of credit amounting to $2.3
million at January 3, 1998.
The revolving credit facility bore interest at prime plus 1.75% or LIBOR
plus 3%, payable quarterly. The actual interest rate on the revolving
credit facility averaged 10% for 1996 and 10.25% for 1997. The
facility was collateralized by accounts receivable, inventory and
substantially all other assets of the Company. In addition, FF
Holdings pledged all of the outstanding capital stock of Farm Fresh
for the repayment of the facility.
19
<PAGE>
The agreement governing the revolving credit facility contained
covenants which, among other things, limited the incurrence of
additional indebtedness, capital expenditures, payment of dividends,
transactions with affiliates, mergers and consolidations, prepayment
of other indebtedness and liens and encumbrances. The Company was
also required to maintain a minimum level of cashflow.
The Company's failure to make its October 1, 1997 interest payments on
the senior notes resulted in a cross default of the revolving credit
facility. As a result, the revolving credit facility has been
reflected as debt in default in the accompanying January 3, 1998
balance sheet. On January 7, 1998, Farm Fresh repaid the entire
balance of the revolving credit facility with funds borrowed against
the DIP financing facility described in note 1.
(8) Senior Notes
On October 9, 1992, the Company issued $165,000,000 of senior notes
through a public offering. The notes, which bear interest at 12.25%
payable semiannually each April 1 and October 1, represent general
unsecured obligations of the Company and mature October 1, 2000.
On December 13, 1993, Farm Fresh issued an additional $36,000,000 face
value of 12.25% senior notes, for gross proceeds of $37,800,000, to
finance the acquisition of 12 stores from Safeway Inc. The related
premium is being amortized over the life of the notes using the
effective interest method. The effective rate on the notes is 11.1%.
These notes, labeled Series A in the accompanying balance sheets,
have terms that mirror the previously issued senior notes.
The senior notes are redeemable, at the option of the Company, in whole
or in part, at any time on or after October 1, 1997 at specified
redemption prices, together with interest to the date fixed for
redemption. A sinking fund payment of $100,500,000 is due on October
1, 1999. This sinking fund payment is calculated to retire 50% of the
senior notes originally issued prior to maturity. In the event of a
change of control of the Company, the Company is obligated to make an
offer to purchase all outstanding senior notes at a redemption price
of 101% of the principal amount plus accrued interest to the date of
repurchase. A foreclosure by the FF Holdings noteholders on the
common stock of Farm Fresh would constitute a change of control.
Theindentures governing the senior notes (the Indentures) contain
certain covenants that, among other things, limit the ability of the
Company to incur additional indebtedness, transfer or sell assets,
pay dividends or make certain other restricted payments, create
liens, enter into certain transactions with affiliates or merge or
consolidate.
On October 1, 1997, the Company failed to make its interest payment on
the senior notes which, upon the expiration of a 30-day grace period,
caused the Company to be in default under the indentures. As a
result, the senior notes have been reflected as debt in default in
the accompanying January 3, 1998 balance sheet.
(9) Convertible Subordinated Debentures
In March 1985, $40,000,000 of 7.5% convertible subordinated debentures
(convertible debentures) due in 2010 were issued. Interest is payable
March 1 and September 1. On October 2, 1988, as a result of the
acquisition of Farm Fresh by FF Holdings, the convertible debentures
were written down from their original face value by $18,613,867 to
$21,386,133 to reflect their fair value at the date of acquisition.
Therefore, convertible debentures that would formerly have converted,
at the option of the holder, at $25.25 per share into common stock
converted into $10.50 cash and $3.00 in merger debentures of FF
Holdings per equivalent common share. Subsequent to the
recapitalization in 1992 and the corresponding repayment of the FF
Holdings merger debentures, the convertible debentures now convert
into $13.50 in cash per equivalent common share. For the years ended
December 28, 1996 and January 3, 1998, convertible debentures with
face value of $8,730,000 and $305,000, respectively, were converted,
resulting in cash payments by the Company of $4,667,521 and $163,070,
20
<PAGE>
respectively. Due to the significant amount converted in 1996, the
Company also wrote off a proportionate amount of deferred financing
costs associated with issuance of the convertible debentures. This
amount, $85,212 for the year ended December 28, 1996, has been netted
against the gain of $383,748 on conversion and included in other, net
in the accompanying consolidated statement of loss for the year ended
December 28, 1996.
The face value of debentures outstanding was $7,508,000 at December 28,
1996 and $7,203,000 at January 3, 1998. The difference between the
face value of the convertible debentures and the carrying value is
being amortized over the term of the bonds using the effective
interest method. The effective interest rate is 14.7%.
Commencing March 1, 1996, the Company is required to make annual sinking
fund payments of $2,000,000. Under the terms of the indenture, this
requirement can be met through either cash payments or contribution
of retired convertible debentures. As a result, the Company would not
be required to make a sinking fund payment in cash until March 1,
2009, at the earliest.
Although the convertible debentures are convertible on demand, a portion
of the revolving credit facility described in note 7 had been
reserved to finance the conversion of all outstanding debentures as
they occur. As a result, the convertible debentures were classified
as a long-term liability in the December 28, 1996 balance sheet.
The Company's failure to make its October 1, 1997 interest payment on
the senior notes resulted in a cross default under the indenture
governing the convertible subordinated debentures. As a result, the
convertible subordinated debentures have been reflected as debt in
default in the accompanying January 3, 1998 balance sheet.
(10) Common Stock and Additional Paid-In Capital
In October 1988, FF Holdings purchased all of the outstanding common
stock of Farm Fresh. At the time of the acquisition, FF Holdings made
a capital contribution of $55,600,000 to Farm Fresh. Although the
Company is not legally liable for the obligations of FF Holdings, the
ability of FF Holdings to meet its obligations is dependent on the
Company's ability to pay dividends to FF Holdings in an amount
sufficient to service these obligations and to make dividend payments
on the preferred stock. The following paragraphs summarize the terms
of FF Holdings outstanding securities.
In conjunction with the issuance of the Company's senior notes (note 8),
FF Holdings issued senior notes (FF Holdings notes) with a face value
of $50,000,000 and common stock representing 20% of the fully-diluted
ownership of FF Holdings for gross proceeds of $49,000,000. The notes
bear interest at 14.25% payable semiannually in arrears on each April
1 and October 1. FF Holdings has the option to pay interest with
additional securities through the October 1, 1997 interest payment
date. No principal repayments are required until maturity on October
1, 2002. The proceeds from the issuance of these securities along
with a dividend from Farm Fresh were used to redeem in full the FF
Holdings 16.5% merger debentures, which were issued in conjunction
with the acquisition of the Company by FF Holdings.
Also in conjunction with the recapitalization, FF Holdings exchanged
14.25% cumulative preferred stock for all of its existing 16.75%
junior debentures and 16.75% cumulative preferred stock. The
preferred stock is required by its terms to be redeemed in its
entirety on or before October 1, 2004. At January 3, 1998, there was
$39,579,504 of cumulative preferred stock outstanding at the
liquidation value of $100 per share plus accrued and unpaid
dividends.
FF Holdings is a holding company with no operations independent from the
Company. As a result, the ability of FF Holdings to make the debt
service payments on the FF Holdings notes or pay dividends on the
redeemable preferred stock is dependent upon the Company's ability to
pay dividends to FF Holdings in an amount sufficient to satisfy such
obligations. Beginning April 1, 1998, FF Holdings would be required
to make level semiannual cash interest payments of $7.1 million each
or $14.1 million annually through the maturity of the notes. Even if
the Company generated sufficient cash flow to pay the required
21
<PAGE>
dividends to FF Holdings, restrictive covenants in the Indentures and
other instruments evidencing the Company's indebtedness restrict the
Company's ability to make cash dividends to FF Holdings. Without cash
dividends from Farm Fresh, FF Holdings will be unable to make cash
interest payments on the notes and, as a result, upon the expiration
of the applicable grace periods, the FF Holdings noteholders would
have the right to acquire a controlling interest in the Company. A
"Change of Control" as defined in the indentures would result in an
acceleration of the maturity of the Company's senior notes and other
indebtedness.
As described in note 1, on January 7, 1998, the Company and FF Holdings
filed a petition for relief under Chapter 11 and submitted the Plan
to the Bankruptcy Court. As of the Effective Date under the confirmed
Plan, FF Holdings will be dissolved and cease to exist as a separate
corporate entity with all of the assets of FF Holdings distributed to
the reorganized Farm Fresh. The FF Holdings notes and the redeemable
convertible preferred stock will be canceled.
(11) Income Taxes
The Company's operating results are included in the consolidated Federal
income tax return of FF Holdings. At January 3, 1998, the
consolidated group had net operating loss carryforwards of $128.3
million expiring at various dates through 2012. The Company, on a
separate tax return basis, had net operating loss carryforwards for
regular Federal income tax purposes which expire as follows:
Year
----
2005 $ 9,100,000
2006 500,000
2007 6,500,000
2008 12,400,000
2009 21,500,000
2010 7,700,000
2011 11,500,000
2012 17,200,000
-------------
$ 86,400,000
================
22
<PAGE>
<TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities of the Company on
a separate tax return basis at December 28, 1996 and January 3, 1998
are presented below:
<CAPTION>
December 28, January 3,
1996 1998
---- ----
<S> <C>
Deferred tax assets:
Net operating loss carryforwards $ 26,334,000 32,873,000
Accrued costs relating to closed stores, deductible
when paid for tax purposes 3,558,000 2,914,000
Capital leases, deductible when paid for tax purposes 3,897,000 4,097,000
General business credit carryforwards 1,798,000 1,798,000
Vacation and bonus accruals, deductible when paid
for tax purposes 731,000 746,000
Allowance for doubtful accounts, deductible as
receivables are written off for tax purposes 560,000 393,000
Noncompete agreements, due to differences
between book and tax amortization periods 411,000 396,000
Other 91,000 92,000
------------- -------------
Total deferred tax assets 37,380,000 43,309,000
Less valuation allowance (26,779,000) (34,031,000)
-------------- --------------
Net deferred tax assets 10,601,000 9,278,000
------------- -------------
<CAPTION>
December 28, January 3,
1996 1998
---- ----
Deferred tax liabilities:
Property, plant and equipment, due to differences
between book and tax depreciation methods
and adjustments made in purchase accounting
not recognized for tax purposes $ (4,979,000) $ (4,509,000)
Convertible debentures, due to write downs
in purchase accounting not recognized
for tax purposes (1,187,000) (1,110,000)
Goodwill, due to differences between book and tax
amortization periods (432,000) (148,000)
LIFO, due to adjustments made in purchase
accounting not recognized for tax purposes (2,569,000) (2,562,000)
Leasehold rights, due to differences between book
and tax depreciation periods and adjustments
made in purchase accounting (1,146,000) (949,000)
Other (288,000) -
-------------- ------------
Total deferred tax liabilities (10,601,000) (9,278,000)
-------------- --------------
Net deferred tax assets $ - -
============= ============
</TABLE>
A valuation allowance is provided when it is more likely than not that
some portion of the deferred tax asset will not be realized. Due to
losses incurred historically and the uncertainty of future income,
the Company has recorded a valuation allowance to defer recognition
23
<PAGE>
of its deferred tax assets until it is more likely than not the
benefit will be realized. The valuation allowance for deferred tax
assets as of December 31, 1995 was $20,805,000, therefore, an
increase of $5,974,000 was reflected in the year ended December 28,
1996. An increase of $7,252,000 in the valuation allowance was
reflected in the year ended January 3, 1998. Except for amounts for
which a valuation allowance is provided, management believes it is
more likely than not that the deferred tax assets will be realized.
As discussed in note 1, if the Confirmation Order becomes effective, the
Company would sell substantially all of its operating assets to FF
Acquisition. The sale is anticipated to result in a gain for both
financial statement and tax purposes. The tax resulting from the gain
is expected to be significantly reduced through the utilization of
net operating loss carryforwards.
(12) Supply Agreement
Farm Fresh has an agreement with Richfood to purchase store merchandise
and products of at least $350 million annually, subject to adjustment
based on the number of stores in operation. Under the agreement,
which expires in December 2001, Richfood's prices for products sold
to Farm Fresh will not exceed Richfood's prevailing lowest offering
price to its customers, and Richfood will continue to offer to Farm
Fresh billing and payment terms at least as favorable as those
offered to Richfood's ten largest customers.
(13) Related Party Transactions
At January 3, 1998, one store is leased from a real estate partnership
in which Farm Fresh is a general partner. The store is treated as a
capital lease with net assets of $1,060,972 and $996,547 and
long-term obligations of $1,691,341 and $1,682,640 in 1996 and 1997,
respectively. The lease expires in May 2013. Aggregate annual
payments under all related party leases were $650,616 in 1996 and
$308,061 in 1997.
Included in other assets are investments in real estate partnerships in
which Farm Fresh is a general partner. Under the terms of the
partnership agreements, Farm Fresh guarantees a portion of the
partnership debt. In January 1997, Farm Fresh assigned its ownership
interest in one real estate partnership to the other partners. Farm
Fresh guaranteed $4,364,570 and $4,299,863 of notes payable at
December 28, 1996 and January 3, 1998, respectively, relating to the
two remaining partnerships, representing the two partnerships' total
outstanding debt.
Included in stockholder's deficit are loans to certain members of
management and stockholders of FF Holdings amounting to $1,108,940 at
December 28, 1996 and January 3, 1998, which were made to enable them
to purchase securities of FF Holdings. Accrued and unpaid interest
and cash loans have been charged against net loss in the accompanying
1996 consolidated statement of loss.
The Company has employment contracts with certain members of management.
In 1997, the Company amended employment agreements with two of its
key executive officers which provide for annual compensation of
$600,000 per year and bonus payments of $1,500,000 based upon meeting
certain criteria, including the sale of assets to Richfood. In 1997,
a $200,000 bonus was paid out under the employment agreements. As
discussed in note 1, these two contracts will be assumed by the
reorganized Farm Fresh.
The remaining employment contracts provide for severance payments
ranging from six months to one year's salary upon termination without
cause or the occurrence of a change in control of the Company, as
defined in the agreements. If these employees had been terminated as
of January 3, 1998, the Company would be obligated to pay
approximately $680,000 relating to these agreements.
(14) Retirement Savings Plan
Farm Fresh, Inc. Retirement Savings Plan (Plan) is a defined
contribution plan sponsored by the Company. The Plan is designed to
provide employees an opportunity to accumulate capital for their
future economic security. The Plan provides for employee salary
deferral and matching employer contributions.
24
<PAGE>
Employees of Farm Fresh become eligible to participate in the Plan when
they attain age 21 and have completed a 12-month period of not less
than 1,000 hours of service. Participation by employees commences at
the beginning of the quarter subsequent to the quarter in which the
above conditions have been met. Participants become fully vested in
the Plan upon normal retirement (age 60 or older), permanent
disability, death or completion of one year of credited service.
Contributions to the Plan accrued by the Company were $1,399,938 and
$1,126,384 for 1996 and 1997, respectively.
(15) Disclosures About Fair Value of Financial Instruments
The following summarizes disclosure regarding the estimated fair value
of the Company's financial instruments at December 28, 1996 and
January 3, 1998. The amounts reflected below do not consider any
adjustments which may result upon the resolution of the Company's
bankruptcy filing described in note 1.
(a) Cash, accounts receivable, accounts payable and accrued expenses
The carrying amount approximates fair value because of the short
maturity of these instruments.
(b) Notes payable
The fair value of the Company's notes payable is estimated based on
the present value of future cash flows discounted using the
Company's revolving credit facility interest rate of prime plus
1 3/4%.
(c) Accrued costs relating to closed stores
The carrying amount of these obligations is determined based upon
discounted future cash flows and, therefore, approximates fair
value.
(d) Revolving Credit Facility
At December 28, 1996, the carrying amount approximates the fair
value since the rate was renegotiated in conjunction with the
renewal of the facility in December 1996. The revolving credit
facility was repaid in full on January 7, 1998 in conjunction
with the bankruptcy filing described in note 1. As a result, the
carrying amount approximates the fair value at January 3, 1998.
(e) Senior notes
At December 28, 1996, the fair value of the Company's senior notes
was based upon recent trading of those securities in public
markets. As described in note 8, the Company's senior notes are
in default at January 3, 1998 due to the Company's failure to
make the October 1997 interest payment. As a result, trading of
the notes on public markets has been suspended and the fair
value at January 3, 1998 is not determinable.
(f) Convertible debentures
At December 28, 1996, the fair value of the Company's convertible
debentures was based upon recent trading of those securities in
public markets. As described in note 9, the Company's
convertible subordinated debentures are in default at January 3,
1998. As a result, trading of the notes on public markets has
been suspended and the fair value at January 3, 1998 is not
determinable.
(g) Letters of credit
The Company has letters of credit outstanding which guarantee
various trade activities. The contract amounts of the letters of
credit approximate their fair value.
25
<PAGE>
<TABLE>
(h) Financial guarantees
A reasonable estimate of the fair value of the Company's
guarantees of long-term debt and lease obligations of others,
more fully described in notes 5 and 13, could not be made
without incurring excessive costs.
The estimated fair values of the Company's financial instruments are
summarized as follows:
<CAPTION>
<S> <C>
At December 28, 1996
-------------------------------
Carrying Estimated
Amount Fair Value
------ ----------
Cash $ 847,665 $ 847,665
Accounts receivable 14,792,965 14,792,965
Revolving credit facility 24,289,957 24,289,957
Notes payable 1,721,165 1,761,714
Accounts payable 36,149,820 36,149,820
Accrued expenses 24,424,898 24,424,898
Accrued costs relating to closed stores 9,372,189 9,372,189
Senior notes 165,000,000 125,400,000
Senior notes, Series A 37,074,410 27,360,000
Convertible subordinated debentures 4,380,243 4,014,178
Letters of credit - 1,072,501
Financial guarantees, for which
it is not practicable to estimate
fair value - -
<CAPTION>
At January 3, 1998
-------------------------------
Carrying Estimated
Amount Fair Value
------ ----------
Cash $ 642,541 $ 642,541
Accounts receivable 14,881,913 14,881,913
Notes payable 148,430 157,614
Accounts payable 22,683,457 22,683,457
Accrued expenses 38,169,161 38,169,161
Accrued costs relating to closed stores 7,675,780 7,675,780
Debt in default:
Revolving credit facility 25,009,566 25,009,566
Notes payable 688,463 643,600
Senior notes 165,000,000 -
Senior notes, Series A 36,780,034 -
Convertible subordinated debentures 4,279,374 -
Letters of credit - 2,300,000
Financial guarantees, for which
it is not practicable to estimate
fair value - -
</TABLE>
(16) Contingencies
(a) Year 2000 Conversion
Certain of the Company's information systems are not year 2000
compliant. The Company has not completed its analysis to determine
the scope of its year 2000 issues and has not fully developed a year
26
<PAGE>
2000 transformation plan. Failure to achieve year 2000 compliance by
the Company or its suppliers could negatively impact the Company's
ability to conduct business for an extended period of time.
(b) Legal Proceedings
The Company and its subsidiaries are defendants in certain legal
proceedings. While the outcome of these matters cannot be predicted
with certainty, it is the opinion of management, based upon the known
facts and circumstances, that the amount of the Company's ultimate
liability is unlikely to have a materially adverse effect on the
Company's financial position, results of operations or liquidity.
27
<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, thereunto duly authorized.
RICHFOOD HOLDINGS, INC.
Date: March 18, 1998 By: /s/ John C. Belknap
---------------------------
John C. Belknap
Executive Vice President,
Chief Financial Officer
and Secretary
Exhibit 2.2
RICHFOOD HOLDINGS, INC.
FF ACQUISITION, L.L.C.
4860 Cox Road
Richmond, VA 23060
March 4, 1998
Farm Fresh, Inc.
7530 Tidewater Drive
Norfolk, VA 23505
Letter Agreement
Gentlemen:
This letter agreement is intended to memorialize certain agreements and
understandings we have reached with respect to the transactions contemplated in
the Asset Purchase Agreement, dated as of November 26, 1997 (the "Purchase
Agreement"), by and among Farm Fresh, Inc. ("Seller"), Richfood Holdings, Inc.
("Richfood"), and FF Acquisition, L.L.C. ("Buyer"). Seller, Richfood and Buyer
have agreed as follows (capitalized terms that are not otherwise defined herein
shall have the meanings given in the Purchase Agreement):
1. Closing Date. The Closing Date shall be March 4, 1998.
2. Store 299. The parties have agreed to include Seller's Store No.
299, 460 Wythe Creek Road, Poquoson, Virginia 23662 ("Store 299"), among the
Stores to be conveyed to Buyer at Closing. Accordingly, (a) the reference to
Store 299 set forth on Schedule 2.3D (Non-Assumed Contracts) to the Purchase
Agreement is hereby deleted from such Schedule and added to Schedule 1.1D
(Stores), (b) the lease summary for Store 299, attached hereto as Exhibit I, is
hereby added to Schedule 2.3B (Leased Real Property) to the Purchase Agreement,
(c) Section 2.4(a)(i) of the Purchase Agreement is hereby amended to change the
reference to "TWO HUNDRED FIFTY ONE MILLION THREE HUNDRED FIFTY THOUSAND DOLLARS
($251,350,000)" to "TWO HUNDRED FIFTY ONE MILLION TWO HUNDRED THOUSAND SEVEN
HUNDRED NINETY EIGHT DOLLARS ($251,200,798), and (d) the definition of "Closing
Capital Lease Liability" set forth in Section 1.1 of the Purchase Agreement is
hereby amended to change the phrase "excluding the Capital Lease for Store 841"
to "excluding the Capital Leases for Stores 299 and 841."
<PAGE>
If the foregoing accurately reflects your understanding of our
agreement, please execute this Letter Agreement on behalf of Seller below.
RICHFOOD HOLDINGS, INC.
By: /s/ John E. Stokely
Name: John E. Stokely
Title: President and Chief Executive
Officer
FF ACQUISITION, L.L.C.
By: /s/ John E. Stokely
Name: John E. Stokely
Title: Manager and President
Seen and Agreed to
as of March 4, 1998
FARM FRESH, INC.
By: /s/ Richard D. Coleman
Name: Richard D. Coleman
Title: Executive Vice President
Exhibit 10.1
CREDIT AGREEMENT
dated as of February 27, 1998,
by and among
RICHFOOD HOLDINGS, INC.,
as Borrower,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
CRESTAR BANK,
as Syndication Agent,
and
SUNTRUST BANK, ATLANTA,
as Documentation Agent
<PAGE>
<TABLE>
TABLE OF CONTENTS
<S> <C>
ARTICLE 1 DEFINITIONS...................................................................................1
Section 1.1 Definitions...................................................................................1
Section 1.2 General......................................................................................12
Section 1.3 Other Definitions and Provisions.............................................................12
ARTICLE 2 REVOLVING CREDIT FACILITY....................................................................12
Section 2.1 Revolving Credit Loans.......................................................................12
Section 2.2 Procedure for Advances of Revolving Credit Loans.............................................12
Section 2.3 Repayment of Revolving Credit Loans..........................................................13
Section 2.4 Revolving Credit Notes.......................................................................14
Section 2.5 Reduction of the Aggregate Revolving Credit Commitment.......................................14
Section 2.6 Termination of Revolving Credit Facility.....................................................14
Section 2.7 Use of Proceeds..............................................................................14
ARTICLE 3 GENERAL LOAN PROVISIONS......................................................................15
Section 3.1 Interest.....................................................................................15
Section 3.2 Notice and Manner of Conversion or Continuation of Loans.....................................17
Section 3.3 Fees.........................................................................................18
Section 3.4 Manner of Payment............................................................................19
Section 3.5 Crediting of Payments and Proceeds...........................................................19
Section 3.6 Adjustments..................................................................................19
Section 3.7 Nature of Obligations of Lenders Regarding Extensions of Credit;
Assumption by the Administrative Agent.......................................................20
Section 3.8 Changed Circumstances........................................................................20
Section 3.9 Indemnity....................................................................................22
Section 3.10 Capital Requirements.........................................................................22
Section 3.11 Taxes........................................................................................23
Section 3.12 Mitigation...................................................................................24
Section 3.13 Replacement of Demanding Lender..............................................................25
ARTICLE 4 CLOSING; CONDITIONS OF CLOSING AND BORROWING.................................................25
Section 4.1 Closing......................................................................................25
Section 4.2 Conditions to Closing and Initial Extensions of Credit.......................................25
Section 4.3 Conditions to All Loans and Letters of Credit................................................28
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE BORROWER...............................................28
Section 5.1 Representations and Warranties...............................................................28
Section 5.2 Survival of Representations and Warranties, Etc..............................................35
ARTICLE 6 FINANCIAL INFORMATION AND NOTICES............................................................35
Section 6.1 Financial Statements and Projections.........................................................35
Section 6.2 Officer's Compliance Certificate.............................................................36
Section 6.3 Other Reports................................................................................36
Section 6.4 Notice of Subsidiaries, Litigation and Other Matters. .......................................37
Section 6.5 Accuracy of Information......................................................................38
ARTICLE 7 AFFIRMATIVE COVENANTS........................................................................38
Section 7.1 Preservation of Corporate Existence and Related Matters......................................38
Section 7.2 Maintenance of Property......................................................................38
Section 7.3 Insurance....................................................................................38
Section 7.4 Accounting Methods and Financial Records.....................................................39
Section 7.5 Payment and Performance of Obligations.......................................................39
Section 7.6 Compliance With Laws and Approvals...........................................................39
Section 7.7 Environmental Laws...........................................................................39
Section 7.8 Compliance with ERISA........................................................................40
Section 7.9 Compliance With Agreements...................................................................40
Section 7.10 Conduct of Business..........................................................................40
Section 7.11 Visits and Inspections.......................................................................40
Section 7.12 Year 2000 Compatibility......................................................................40
Section 7.13 Further Assurances...........................................................................41
ARTICLE 8 FINANCIAL COVENANTS..........................................................................41
Section 8.1 Leverage Ratio...............................................................................41
Section 8.2 Fixed Charge Coverage Ratio..................................................................41
ARTICLE 9 NEGATIVE COVENANTS...........................................................................41
Section 9.1 Limitations on Debt..........................................................................41
Section 9.2 Intentionally Omitted........................................................................42
Section 9.3 Limitations on Liens.........................................................................42
Section 9.4 Limitations on Mergers and Liquidation.......................................................43
Section 9.5 Limitations on Sale of Assets................................................................44
Section 9.6 Prohibition against Limitations on Dividends and Distributions...............................44
Section 9.7 Intentionally Omitted........................................................................44
Section 9.8 Transactions with Affiliates.................................................................44
Section 9.9 Certain Accounting Changes...................................................................45
Section 9.10 Amendments; Payments and Prepayments of Subordinated Debt....................................45
ARTICLE 10 DEFAULT AND REMEDIES.........................................................................45
Section 10.1 Events of Default............................................................................45
Section 10.2 Remedies.....................................................................................47
Section 10.3 Rights and Remedies Cumulative; Non-Waiver; etc..............................................48
ARTICLE 11 THE ADMINISTRATIVE AGENT.....................................................................48
Section 11.1 Appointment..................................................................................48
Section 11.2 Delegation of Duties.........................................................................48
Section 11.3 Exculpatory Provisions.......................................................................49
Section 11.4 Reliance by the Administrative Agent.........................................................49
Section 11.5 Notice of Default............................................................................49
Section 11.6 Non-Reliance on the Administrative Agent and Other Lenders...................................50
Section 11.7 Indemnification..............................................................................50
Section 11.8 The Administrative Agent in Its Individual Capacity..........................................51
Section 11.9 Resignation of the Administrative Agent; Successor Administrative Agent......................51
Section 11.10 Syndication Agent and Documentation Agent....................................................51
ARTICLE 12 MISCELLANEOUS................................................................................51
Section 12.1 Notices......................................................................................51
Section 12.2 Expenses; Indemnity..........................................................................53
Section 12.3 Set-off......................................................................................53
Section 12.4 Governing Law................................................................................53
Section 12.5 Consent to Jurisdiction......................................................................54
Section 12.6 Binding Arbitration; Waiver of Jury Trial....................................................54
Section 12.7 Reversal of Payments.........................................................................55
Section 12.8 Injunctive Relief; Punitive Damages..........................................................55
Section 12.9 Accounting Matters...........................................................................55
Section 12.10 Successors and Assigns; Participations.......................................................55
Section 12.11 Amendments, Waivers and Consents.............................................................58
Section 12.12 Performance of Duties........................................................................59
Section 12.13 All Powers Coupled with Interest.............................................................59
Section 12.14 Survival of Indemnities......................................................................59
Section 12.15 Titles and Captions..........................................................................59
Section 12.16 Severability of Provisions...................................................................59
Section 12.17 Counterparts.................................................................................59
Section 12.18 Term of Agreement............................................................................59
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Revolving Credit Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
SCHEDULES
Schedule 1 - Lenders and Commitments
Schedule 5.1(a) - Jurisdictions of Organization and Qualification
Schedule 5.1(b) - Subsidiaries and Capitalization
Schedule 5.1(i) - Employee Benefit Plans
Schedule 5.1(l) - Material Contracts
Schedule 5.1(m) - Labor and Collective Bargaining Agreements
Schedule 5.1(t) - Debt and Guaranty Obligations
Schedule 9.3 - Existing Liens
Schedule 9.6 - Existing Restrictions on Dividends
</TABLE>
<PAGE>
CREDIT AGREEMENT, dated as of the 27th day of February, 1998, by and
among RICHFOOD HOLDINGS, INC., a Virginia corporation (the "Borrower"), the
Lenders who are or may become a party to this Agreement (the "Lenders"), FIRST
UNION NATIONAL BANK, a national banking association (the "Administrative
Agent"), as Administrative Agent for the Lenders, CRESTAR BANK, as Syndication
Agent, and SUNTRUST BANK, ATLANTA, as Documentation Agent.
STATEMENT OF PURPOSE
The Borrower has requested that the Lenders extend, and the Lenders
have agreed to extend, a certain credit facility to the Borrower on the terms
and conditions contained in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Administrative Agent" means First Union in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 11.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
12.1.
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary of such first Person) which directly or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such first Person or any of its Subsidiaries. The term "control"
means (a) the power to vote five percent (5%) or more of the securities or other
equity interests of a Person having ordinary voting power, or (b) the
possession, directly or indirectly, of any other power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agents" means the Administrative Agent, Crestar Bank as Syndication
Agent and/or SunTrust Bank, Atlanta as Documentation Agent as the context may
require.
"Aggregate Revolving Credit Commitment" means the aggregate amount of
the Lenders' Revolving Credit Commitments hereunder, as such amount may be
increased, reduced or modified at any time or from time to time pursuant to the
terms hereof. On the Closing Date, the Aggregate Revolving Credit Commitment
shall be One Hundred Million Dollars ($100,000,000.00).
"Agreement" means this Credit Agreement, as amended, restated or
otherwise modified.
"Applicable Law" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
3.1(c).
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 12.10.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Base Rate Loan" means any Revolving Credit Loan bearing interest at a
rate based upon the Base Rate as provided in Section 3.1(a).
"Borrower" means Richfood Holdings, Inc. in its capacity as borrower
hereunder.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
"Capital Asset" means, with respect to the Borrower and its
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a Consolidated balance sheet of the Borrower
and its Subsidiaries.
"Capital Lease" means, with respect to the Borrower and its
Subsidiaries, any lease of any property that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrower and its Subsidiaries.
"Change in Control" shall have the meaning assigned thereto in Section
10.1(i).
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Article 4 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended, supplemented or otherwise modified.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Borrower and its Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Consolidated EBITDA" means, for any period and without duplication,
the Consolidated net income of the Borrower and its Subsidiaries for such period
plus the aggregate amount deducted in determining such Consolidated net income
for such period with respect to interest, taxes, depreciation and amortization;
provided that, in calculating Consolidated EBITDA for any period, (i) any
Subsidiary acquired during such period shall be treated as if it were a
Subsidiary for the entire period and (ii) any non-cash gains or losses resulting
from the sale, conversion or other disposition of assets, any gains or losses
resulting from the write-up or write-down of assets, any equity in the
unremitted earnings of any company which is not a Wholly-Owned Subsidiary and
any other non-cash extraordinary items shall be disregarded.
"Consolidated EBITDAR" means, for any period and without duplication,
the Consolidated net income of the Borrower and its Subsidiaries for such period
plus the aggregate amount deducted in determining such Consolidated net income
for such period with respect to interest, taxes, depreciation, amortization and
net rent (including, without limitation, rent under synthetic and other
structured leases); provided that, in calculating Consolidated EBITDAR for any
period, (i) any Subsidiary acquired during such period shall be treated as if it
were a Subsidiary for the entire period, and (ii) any non-cash gains or losses
resulting from the sale, conversion or other disposition of assets, any gains or
losses resulting from the write-up or write-down of assets, any equity in the
unremitted earnings of any company which is not a Wholly-Owned Subsidiary and
any other non-cash extraordinary items shall be disregarded.
"Consolidated Fixed Charges" means, for any period and without
duplication, the sum of the Consolidated interest expense (including, without
limitation, the portion of any obligation under Capital Leases allocable to
Consolidated interest expense in accordance with GAAP) of the Borrower and its
Subsidiaries for such period, the Consolidated net rent expense (including,
without limitation, rent expense under synthetic and other structured leases) of
the Borrower and its Subsidiaries for such period, the Consolidated current
maturities of long-term debt of the Borrower and its Subsidiaries as of the end
of such period, and the Consolidated obligations of the Borrower and its
Subsidiaries with respect to the principal components of payments under Capital
Leases which were payable during such period.
"Consolidated Funded Debt" means, at any date and without duplication,
the sum of (i) the Consolidated Debt of the Borrower and its Subsidiaries of the
types described in clauses (a), (b), (c) and (d) of the definition of Debt at
such date (including current maturities of such Debt), and (ii) the aggregate
implied principal amount of synthetic and other structured leases of the
Borrower and its Subsidiaries at such date calculated in accordance with
applicable Federal income tax laws and regulations.
"Consolidated Net Tangible Assets" means, at any date and without
duplication, the aggregate amount of assets of the Borrower and its Subsidiaries
(less applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities, and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent balance sheet of the Borrower
and its Subsidiaries and computed in accordance with GAAP.
"Debt" means, with respect to the Borrower and its Subsidiaries at any
date and without duplication, the sum of the following calculated in accordance
with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money
including but not limited to obligations evidenced by bonds, debentures, notes
or other similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person, except trade
payables arising in the ordinary course of business, (c) all obligations of any
such Person as lessee with respect to the principal components of Capital
Leases, (d) all Debt of any other Person secured by a Lien on any asset of any
such Person, (e) all Guaranty Obligations of any such Person, (f) all
obligations, contingent or otherwise, of any such Person relative to the face
amount of letters of credit, whether or not drawn, and banker's acceptances
issued for the account of any such Person and (g) all obligations incurred by
any such Person pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 10.1 which with
the passage of time, the giving of notice or any other condition would
constitute an Event of Default.
"Demanding Lender" shall have the meaning assigned thereto in Section
3.13.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Eligible Assignee" means, with respect to any assignment of the
rights, interests and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof or under the laws of a country which is a
member of the Organization for Economic Cooperation and Development, having
combined capital and surplus in excess of $500,000,000, (b) a finance company,
insurance company or other financial institution which in the ordinary course of
business extends credit of the type extended hereunder and that has total assets
in excess of $1,000,000,000, (c) already a Lender hereunder (whether as an
original party to this Agreement or as the assignee of another Lender), (d) the
successor (whether by transfer of assets, merger or otherwise) to all or
substantially all of the commercial lending business of the assigning Lender, or
(e) any other Person that has been approved in writing as an Eligible Assignee
by the Borrower and the Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any current or former
ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended, supplemented or otherwise
modified.
"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 10.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Existing Credit Facilities" means the following credit facilities of
the Borrower and its Subsidiaries which will be refinanced with the proceeds of
Loans made hereunder: (i) the credit facility described in the letter agreement
dated February 20, 1996, as amended, between Market Funding, Inc. and Crestar
Bank, and (ii) the credit facility evidenced by the Revolving Loan Promissory
Note, dated December 4, 1995, made by Market Funding, Inc. to NationsBank, N.A.
"Facility Fee Percentage" shall have the meaning assigned thereto in
Section 3.3(b).
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Borrower and its
Subsidiaries ending on the Saturday nearest April 30.
"GAAP" means generally accepted accounting principles, as recognized
from time to time by the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board, consistently applied and maintained on
a consistent basis for the Borrower and its Subsidiaries throughout the period
indicated and consistent with the prior financial practice of the Borrower and
its Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, with respect to the Borrower and its
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other similar obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Applicable Law, (b) which are toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise harmful to human health or the environment and are or
become regulated by any Governmental Authority, (c) the presence of which
require investigation or remediation under any Applicable Law, (d) the discharge
or emission or release of which requires a permit or license under any
Applicable Law or other Governmental Approval, (e) which are found by a court of
competent jurisdiction or by any Governmental Authority to constitute a
nuisance, a trespass or pose a health or safety hazard to persons or neighboring
properties, (f) which consist of underground or aboveground storage tanks,
whether empty, filled or partially filled with any substance of the type listed
in any other part of this definition, or (g) which contain asbestos,
polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel,
natural gas or synthetic gas.
"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrower, and any confirming letter
executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified.
"Interest Period" shall have the meaning assigned thereto in Section
3.1(b).
"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 12.10(b).
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Revolving Credit Loans.
"LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Telerate
Page 3750 at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of the applicable Interest Period (rounded upward, if
necessary, to the nearest one-sixteenth of one percent (1/16%)). If, for any
reason, such rate does not appear on Telerate Page 3750, then "LIBOR" shall be
determined by the Administrative Agent to be the arithmetic average (rounded
upward, if necessary, to the nearest one-sixteenth of one percent (1/16%)) of
the rate per annum at which deposits in Dollars would be offered by first class
banks in the London interbank market to the Administrative Agent at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of the applicable Interest Period for a period equal to such Interest Period
and in an amount substantially equal to the amount of the applicable Loan.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Revolving Credit Loan bearing interest at a
rate based upon the LIBOR Rate as provided in Section 3.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind with respect to such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loan Documents" means, collectively, this Agreement, the Revolving
Credit Notes and each other document, instrument and agreement executed and
delivered by the Borrower, its Subsidiaries or their counsel in connection with
this Agreement or otherwise referred to herein or contemplated hereby, all as
may be amended, restated or otherwise modified.
"Material Adverse Change" means a material adverse change in the
condition (financial or otherwise), operations, business, properties or
financial prospects of the Borrower or the Borrower and its Subsidiaries taken
as a whole.
"Material Adverse Effect" means a material adverse effect upon (a) the
condition (financial or otherwise), operations, business, properties or
financial prospects of the Borrower or the Borrower and its Subsidiaries taken
as a whole, (b) the ability of the Borrower to perform its obligations under
this Agreement or any of the other Loan Documents, or (c) the legality, validity
or enforceability of this Agreement or any of the other Loan Documents.
"Material Contract" means (a) any multi-year supply agreement with a
customer producing revenue in excess of $50,000,000 per year or any other
contract or other agreement, written or oral, of the Borrower or any of its
Subsidiaries involving monetary liability of or to any such Person in an amount
in excess of $10,000,000 per year, or (b) any other contract or agreement,
written or oral, of the Borrower or any of its Subsidiaries the failure to
comply with which could reasonably be expected to have a Material Adverse
Effect.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or is
accruing an obligation to make contributions or has made or has accrued an
obligation to make contributions within the preceding six years.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.2(b).
"Notice of Revolving Credit Borrowing" shall have the meaning assigned
thereto in Section 2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 3.2.
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.3(c).
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Revolving
Credit Loans and (b) all other fees and commissions (including attorneys' fees),
charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by the Borrower to the Lenders or the
Administrative Agent, of every kind, nature and description, direct or indirect,
absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, and
whether or not for the payment of money, under or with respect to this
Agreement, any Revolving Credit Note or any of the other Loan Documents.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 6.2.
"Other Taxes" shall have the meaning assigned thereto in Section
3.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any of their current
or former ERISA Affiliates.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by First Union as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
day such change in the Prime Rate occurs. The parties hereto acknowledge that
the rate announced publicly by First Union as its Prime Rate is an index or base
rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"Register" shall have the meaning assigned thereto in Section 12.10(d).
"Required Lenders" means, at any date, any combination of holders of
51% or more of the aggregate unpaid principal amount of the Revolving Credit
Notes, or if no amounts are outstanding under the Revolving Credit Notes, any
combination of Lenders whose Revolving Credit Commitment Percentages aggregate
51% or more.
"Responsible Officer" means any of the following: the chief executive
officer, chief financial officer or treasurer of the Borrower or any other
officer of the Borrower reasonably acceptable to the Administrative Agent.
"Revolving Credit Commitment" means, as to any Lender, the obligation
of such Lender to make Revolving Credit Loans to the Borrower hereunder in an
aggregate principal amount at any time outstanding not to exceed the amount set
forth opposite such Lender's name under Revolving Credit Commitment on Schedule
1 hereto, as the same may be reduced or modified at any time or from time to
time pursuant to the terms hereof.
"Revolving Credit Commitment Percentage" means, as to any Lender at any
time, the ratio of (a) the amount of the Revolving Credit Commitment of such
Lender to (b) the Aggregate Revolving Credit Commitment of all of the Lenders.
"Revolving Credit Extensions of Credit" means, as to any Lender at any
time, an amount equal to the aggregate principal amount of all Revolving Credit
Loans made by such Lender then outstanding.
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article 2.
"Revolving Credit Loans" means any revolving loan made to the Borrower
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"Revolving Credit Notes" means the collective reference to the
Revolving Credit Notes made by the Borrower payable to the order of the Lenders,
each substantially in the form of Exhibit A hereto, evidencing the Revolving
Credit Loans of the Lenders, and any amendments and modifications thereto, any
substitutes therefor, and any replacements, restatements, renewals and
extensions thereof, in whole or in part; "Revolving Credit Note" means any of
such Revolving Credit Notes.
"Revolving Credit Termination Date" means the earliest of the dates
referred to in Section 2.6.
"SEC" means the Securities and Exchange Commission or any successor
agency.
"Senior Debt Rating" means the senior debt rating assigned to the
Borrower from time to time by S&P or, if no senior debt rating is so assigned,
the corporate debt rating assigned to the Borrower from time to time by S&P.
"Separate Revolving Credit Facility" means the revolving credit
facility established pursuant to the separate Credit Agreement dated February
27, 1998, by and among the Borrower, the Lenders parties thereto, First Union as
Administrative Agent, Crestar Bank as Syndication Agent and SunTrust Bank,
Atlanta as Documentation Agent.
"Significant Subsidiary" means (i) Richfood, Inc., Rotelle, Inc.,
SuperRite Corporation, SuperRite Foods, Inc. and Foodarama Incorporated, and
(ii) each other Subsidiary, whether now existing or hereafter formed or
acquired, which now or at any time hereafter owns three percent (3%) or more of
Consolidated Net Tangible Assets.
"Solvent" means, as to the Borrower and its Subsidiaries on a
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill
Companies, Inc., or any successor rating agency thereto.
"Subordinated Debt" means the Debt described on Schedule 5.1(t)
designated as Subordinated Debt and any other Debt of the Borrower or any
Subsidiary the payment of which is subordinated to the payment to the
Obligations.
"Subsidiary" means as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time, directly or indirectly, owned by such Person (irrespective of whether,
at the time, capital stock or other ownership interests of any other class or
classes of such corporation, partnership, limited liability company or other
entity shall have or might have voting power by reason of the happening of any
contingency). Unless otherwise qualified, references to "Subsidiary" or
"Subsidiaries" herein shall refer to those of the Borrower. Notwithstanding the
foregoing, the term "Subsidiary" shall not include any "Equity Store" or Person
participating in the Business Development Program. For purposes of this
definition, (a) "Equity Store" means a Person in which the Borrower or any of
its Subsidiaries has invested capital or to which it has made loans in
accordance with the business practice of the Borrower and its Subsidiaries of
making equity investments in Persons, and making or guaranteeing loans to such
Persons, for the purpose of assisting such Persons in acquiring, remodeling,
refurbishing, expanding or operating one or more retail grocery stores and
pursuant to which such Persons are permitted or required to reduce the
Borrower's or the Subsidiary's equity interest to a minority position over time,
and (b) "Business Development Program" means the business practice of the
Borrower and its Subsidiaries of making or guaranteeing loans to, or making
equity investments in, third parties engaged in the retail grocery business in
exchange for long-term supply agreements with the Borrower or any Subsidiary.
"Taxes" shall have the meaning assigned thereto in Section 3.11(a).
"Termination Event" means any of the following events which results or
is reasonably likely to result, either in any given instance or in the aggregate
with one or more other such events, in a Material Adverse Effect or in liability
of the Borrower or any Subsidiary in excess of $25,000,000: (a) a "Reportable
Event" described in Section 4043 of ERISA, or (b) the withdrawal of the Borrower
or any ERISA Affiliate from a Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c) the
termination of a Pension Plan, the filing of a notice of intent to terminate a
Pension Plan or the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA, or (d) the institution of proceedings to terminate, or
the appointment of a trustee with respect to, any Pension Plan by the PBGC, or
(e) any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan, or (f) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan, or (g) the imposition
of a Lien pursuant to Section 412 of the Code or Section 302 of ERISA, or (h)
any event or condition which results in the reorganization or insolvency of a
Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any event or
condition which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by the PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA.
"UCC" means the Uniform Commercial Code as in effect in the
Commonwealth of Virginia.
"United States" means the United States of America.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the
shares of capital stock or other ownership interests of such Subsidiary (other
than qualifying shares held by directors) are, directly or indirectly, owned or
controlled by the Borrower and/or one or more of its Wholly-Owned Subsidiaries.
Section 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
Section 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Revolving Credit Notes and the other Loan Documents
or any certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE 2
REVOLVING CREDIT FACILITY
Section 2.1 Revolving Credit Loans. Subject to the terms and conditions
of this Agreement, each Lender severally agrees to make Revolving Credit Loans
to the Borrower from time to time from the Closing Date to but excluding the
Revolving Credit Termination Date as requested by the Borrower in accordance
with the terms of Section 2.2; provided that (a) the aggregate principal amount
of all outstanding Revolving Credit Loans (after giving effect to any amount
requested) shall not exceed the Aggregate Revolving Credit Commitment and (b)
the principal amount of outstanding Revolving Credit Loans from any Lender to
the Borrower (after giving effect to any amount requested) shall not at any time
exceed such Lender's Revolving Credit Commitment. Each Revolving Credit Loan by
a Lender shall be in a principal amount equal to such Lender's Revolving Credit
Commitment Percentage of the aggregate principal amount of Revolving Credit
Loans requested on such occasion. Subject to the terms and conditions hereof,
the Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder
until the Revolving Credit Termination Date.
Section 2.2 Procedure for Advances of Revolving Credit Loans.
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached hereto as Exhibit B
(a "Notice of Revolving Credit Borrowing") not later than 11:00 a.m. (Charlotte
time) (i) at least one (1) Business Day before each Revolving Credit Loan which
is initially to be a Base Rate Loan is to be made and (ii) at least three (3)
Business Days before each Revolving Credit Loan which is initially to be a LIBOR
Rate Loan is to be made, of its intention to borrow, specifying (A) the date of
such borrowing, which shall be a Business Day, (B) the amount of such borrowing,
which shall be in an amount equal to the amount of the Aggregate Revolving
Credit Commitment then available to the Borrower, or if less, (x) with respect
to Base Rate Loans in an aggregate principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof and (y) with respect to LIBOR Rate Loans
in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof, (C) whether such Revolving Credit Loans are initially to be
LIBOR Rate Loans or Base Rate Loans, and (D) in the case of a LIBOR Rate Loan,
the duration of the initial Interest Period applicable thereto. Notices received
after 11:00 a.m. (Charlotte time) shall be deemed received on the next Business
Day. The Administrative Agent shall promptly notify the Lenders of each Notice
of Revolving Credit Borrowing received by the Administrative Agent.
(b) Disbursement of Revolving Credit Loans. Not later than 2:00 p.m.
(Charlotte time) on the proposed borrowing date, each Lender will make available
to the Administrative Agent, for the account of the Borrower, at the
Administrative Agent's Office in funds immediately available to the
Administrative Agent, such Lender's Revolving Credit Commitment Percentage of
the Revolving Credit Loans to be made on such borrowing date. The Borrower
hereby irrevocably authorizes the Administrative Agent to disburse the proceeds
of each borrowing requested pursuant to this Section 2.2 in immediately
available funds by crediting or wiring such proceeds to the deposit account of
the Borrower identified in the most recent notice substantially in the form of
Exhibit C hereto (a "Notice of Account Designation") delivered by the Borrower
to the Administrative Agent or as may be otherwise agreed upon by the Borrower
and the Administrative Agent from time to time. Subject to Section 3.7, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.2 to
the extent that any Lender has not made available to the Administrative Agent
its Revolving Credit Commitment Percentage of such Revolving Credit Loan.
Section 2.3 Repayment of Revolving Credit Loans.
(a) Repayment Provisions. The Borrower shall repay the outstanding
principal amount of all Revolving Credit Loans in full on the Revolving Credit
Termination Date, together with all accrued but unpaid interest thereon.
(b) Mandatory Repayment of Excess Loans. If at any time the outstanding
principal amount of all Revolving Credit Loans exceeds the Aggregate Revolving
Credit Commitment, the Borrower shall repay immediately upon notice from the
Administrative Agent, by payment to the Administrative Agent for the account of
the Lenders, Revolving Credit Loans in an amount equal to such excess. Each such
repayment shall be accompanied by any amount required to be paid pursuant to
Section 3.9.
(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Revolving Credit Loans, in whole or in part, upon at least three
(3) Business Days' irrevocable notice to the Administrative Agent with respect
to LIBOR Rate Loans and one (1) Business Day irrevocable notice with respect to
Base Rate Loans, in the form attached hereto as Exhibit D (a "Notice of
Prepayment") specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans, Base Rate Loans or a combination thereof, and,
if of a combination thereof, the amount allocable to each. Upon receipt of such
notice, the Administrative Agent shall promptly notify each Lender. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date set forth in such notice. Partial repayments shall be in an aggregate
amount of $1,000,000 or a whole multiple of $500,000 in excess thereof with
respect to Base Rate Loans and $5,000,000 or a whole multiple of $1,000,000 in
excess thereof with respect to LIBOR Rate Loans. Each such repayment shall be
accompanied by any amount required to be paid pursuant to Section 3.9.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 3.9.
Section 2.4 Revolving Credit Notes. Each Lender's Revolving Credit
Loans and the obligation of the Borrower to repay such Revolving Credit Loans
shall be evidenced by a separate Revolving Credit Note executed by the Borrower
payable to the order of such Lender representing the Borrower's obligation to
pay such Lender's Revolving Credit Commitment or, if less, the aggregate unpaid
principal amount of all Revolving Credit Loans made and to be made by such
Lender to the Borrower hereunder, plus interest and all other fees, charges and
other amounts due thereon. Each Revolving Credit Note shall be dated the date
hereof and shall bear interest on the unpaid principal amount thereof at the
applicable interest rate per annum specified in Section 3.1.
Section 2.5 Reduction of the Aggregate Revolving Credit Commitment.
(a) The Borrower shall have the right at any time and from time to
time, upon at least five (5) Business Days prior written notice to the
Administrative Agent, to permanently reduce, without premium or penalty, (i) the
entire Aggregate Revolving Credit Commitment at any time or (ii) portions of the
Aggregate Revolving Credit Commitment, from time to time, in an aggregate
principal amount of $10,000,000 or any whole multiple of $5,000,000 in excess
thereof.
(b) Each permanent reduction permitted pursuant to this Section 2.5
shall be accompanied by a payment of principal sufficient to reduce the
aggregate outstanding Revolving Credit Loans after such reduction to the
Aggregate Revolving Credit Commitment as so reduced. Any reduction of the
Aggregate Revolving Credit Commitment to zero shall result in the termination of
the Revolving Credit Facility. If the reduction of the Aggregate Revolving
Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment
shall be accompanied by any amount required to be paid pursuant to Section 3.9.
Section 2.6 Termination of Revolving Credit Facility. The Revolving
Credit Facility shall terminate on the earliest of (a) February 26, 1999 (it
being understood and agreed that such date may be extended for one or more
successive periods of 364 days upon the request of the Borrower and with the
written consent of each of the Lenders), (b) the date of termination by the
Borrower pursuant to Section 2.5, and (c) the date of termination by the
Administrative Agent on behalf of the Lenders pursuant to Section 10.2(a).
Section 2.7 Use of Proceeds. The Borrower shall use the proceeds of the
Revolving Credit Extensions of Credit (a) either directly by the Borrower or
indirectly by intercompany advance to one or more of its Subsidiaries to finance
the acquisition of substantially all of the assets of Farm Fresh, Inc., (b) to
refinance certain existing indebtedness, (c) to finance the acquisition of
Capital Assets and other permitted acquisitions, and (d) for working capital and
general corporate requirements of the Borrower and its Subsidiaries, including
the payment of certain fees and expenses incurred in connection with the
transactions described herein.
ARTICLE 3
GENERAL LOAN PROVISIONS
Section 3.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
3.1, at the election of the Borrower, the aggregate principal balance of the
Revolving Credit Notes or any portion thereof shall bear interest at the Base
Rate or the LIBOR Rate plus, in each case, the Applicable Margin as set forth
below; provided that the LIBOR Rate shall not be available until three (3)
Business Days after the Closing Date. The Borrower shall select the rate of
interest and Interest Period, if any, applicable to any Revolving Credit Loan at
the time a Notice of Revolving Credit Borrowing is given pursuant to Section 2.2
and at the time a Notice of Conversion/Continuation is given pursuant to Section
3.2. Each Revolving Credit Loan or portion thereof bearing interest based on the
Base Rate shall be a "Base Rate Loan", and each Revolving Credit Loan or portion
thereof bearing interest based on the LIBOR Rate shall be a "LIBOR Rate Loan."
Any Revolving Credit Loan or any portion thereof as to which the Borrower has
not duly specified an interest rate as provided herein shall be deemed a Base
Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 3.1(a), shall elect
an interest period (each, an "Interest Period") to be applicable to such LIBOR
Rate Loan, which Interest Period shall be a period of one (1), two (2), three
(3), or six (6) months; provided that:
(i) the Interest Period shall commence on the date of advance
of or conversion to any LIBOR Rate Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall commence on
the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, that if any Interest Period with respect to a
LIBOR Rate Loan would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the relevant
calendar month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving
Credit Termination Date; and
(v) there shall be no more than five (5) Interest Periods
outstanding at any time with respect to LIBOR Rate Loans.
(c) Applicable Margin. The Applicable Margin provided for in Section
3.1(a) with respect to the Revolving Credit Loans (the "Applicable Margin")
shall (i) on the Closing Date equal the percentages set forth in the certificate
delivered pursuant to Section 4.2(e)(ii) and (ii) thereafter be determined by
reference to the Senior Debt Rating of the Borrower in accordance with the
following table:
Senior Debt Applicable Margin for Revolving
Rating Credit Loans
----------- -------------------------------
Base Rate + LIBOR Rate +
----------- ------------
Higher than A- 0% 0.155%
Equal to or higher 0% 0.17%
than BBB+ but not
higher than A-
Equal to or higher 0% 0.21%
than BBB but lower
than BBB+
Equal to or higher 0% 0.25%
than BBB- but lower than BBB
Lower than BBB- 0% 0.34%
The Applicable Margin shall be automatically adjusted by the Administrative
Agent on the fifth Business Day after the effective date of any change in the
Senior Debt Rating of the Borrower which would cause a change in the Applicable
Margin in accordance with the preceding table.
(d) Default Rate. Subject to Section 10.3, at the discretion of the
Administrative Agent and Required Lenders, upon the occurrence and during the
continuance of an Event of Default, (i) the Borrower shall no longer have the
option to request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall
bear interest at a rate per annum two percent (2%) in excess of the rate then
applicable to LIBOR Rate Loans, as applicable, until the end of the applicable
Interest Period and thereafter at a rate two percent (2%) in excess of the rate
then applicable to Base Rate Loans, and (iii) all outstanding Base Rate Loans
shall bear interest at a rate per annum two percent (2%) in excess of the rate
then applicable to Base Rate Loans. Interest shall continue to accrue on the
Revolving Credit Notes after the filing by or against the Borrower of any
petition seeking any relief in bankruptcy or under any act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing March 31, 1998; and interest on each LIBOR Rate Loan shall be payable
on the last day of each Interest Period applicable thereto, and if such Interest
Period extends over three (3) months, at the end of each three (3) month
interval during such Interest Period. All interest rates, fees and commissions
provided hereunder shall be computed on the basis of a 360-day year and assessed
for the actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Revolving
Credit Notes charged or collected pursuant to the terms of this Agreement or
pursuant to any of the Revolving Credit Notes exceed the highest rate
permissible under any Applicable Law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto. In the event that such
a court determines that the Lenders have charged or received interest hereunder
in excess of the highest applicable rate, the rate in effect hereunder shall
automatically be reduced to the maximum rate permitted by Applicable Law and the
Lenders shall at the Administrative Agent's option (i) promptly refund to the
Borrower any interest received by Lenders in excess of the maximum lawful rate
or (ii) apply such excess to the principal balance of the Obligations. It is the
intent hereof that the Borrower not pay or contract to pay, and that neither the
Administrative Agent nor any Lender receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by the Borrower under Applicable Law.
Section 3.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Event of Default has occurred and is then continuing, the
Borrower shall have the option to (a) convert at any time all or any portion of
the outstanding Revolving Credit Loans constituting Base Rate Loans in a
principal amount equal to $5,000,000 or any whole multiple of $1,000,000 in
excess thereof into one or more LIBOR Rate Loans and (b) upon the expiration of
any Interest Period, (i) convert all or any part of the outstanding Revolving
Credit Loans constituting LIBOR Rate Loans in a principal amount equal to
$1,000,000 or a whole multiple of $500,000 in excess thereof into Base Rate
Loans or (ii) continue any LIBOR Rate Loans as LIBOR Rate Loans. Whenever the
Borrower desires to convert or continue Revolving Credit Loans as provided
above, the Borrower shall give the Administrative Agent irrevocable prior
written notice in the form attached as Exhibit E (a "Notice of
Conversion/Continuation") not later than 11:00 a.m. (Charlotte time) three (3)
Business Days before the day on which a proposed conversion or continuation of
such Revolving Credit Loan is to be effective specifying (A) the Revolving
Credit Loans to be converted or continued, and, in the case of any LIBOR Rate
Loan to be converted or continued, the last day of the Interest Period therefor,
(B) the effective date of such conversion or continuation (which shall be a
Business Day), (C) the principal amount of such Revolving Credit Loans to be
converted or continued, and (D) the Interest Period to be applicable to such
converted or continued LIBOR Rate Loan. The Administrative Agent shall promptly
notify the Lenders of such Notice of Conversion/Continuation.
Section 3.3 Fees.
(a) Revolving Credit Facility Fee. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, a non-refundable facility
fee relating to the Revolving Credit Facility at a rate per annum equal to the
applicable Facility Fee Percentage as set forth below times the average daily
Aggregate Revolving Credit Commitment. This facility fee shall be payable
quarterly in arrears on the last Business Day of each calendar quarter occurring
prior to the Revolving Credit Termination Date commencing March 31, 1998, and on
the Revolving Credit Termination Date. Each installment of this facility fee
shall be equal to the product of (i) the average daily Aggregate Revolving
Credit Commitment during the applicable period, times (ii) the applicable
Facility Fee Percentage on the day such installment is due, times (iii) a
fraction the numerator of which is the number of days that elapse during the
applicable period and the denominator of which is 360.
(b) Facility Fee Percentages. The Facility Fee Percentages provided for
in Section 3.3(a) (the "Facility Fee Percentage") shall (i) on the Closing Date
equal the percentages set forth in the certificate delivered pursuant to Section
4.2(e)(ii) and (ii) thereafter be determined by reference to the Senior Debt
Rating of the Borrower in accordance with the following table:
Facility Fee
Senior Debt Percentage
Rating for Revolving Credit Facility
------------ -----------------------------
Higher than A- 0.07%
Equal to or higher 0.08%
than BBB+ but not
higher than A-
Equal to or higher 0.09%
than BBB but lower
than BBB+
Equal to or higher 0.10%
than BBB- but lower
than BBB
Lower than BBB- 0.16%
The Facility Fee Percentage shall be automatically adjusted on the fifth
Business Day after the effective day of any change in the Senior Debt Rating of
the Borrower which would cause a change in the Facility Fee Percentage in
accordance with the preceding table.
(c) Administrative Agent's and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Revolving Credit Loans
and for its obligations hereunder, the Borrower agrees to pay to the
Administrative Agent, for its account, the fees set forth in the separate fee
letter agreement executed by the Borrower and the Administrative Agent dated
December 22, 1997.
Section 3.4 Manner of Payment. Each payment by the Borrower on account
of the principal of or interest on the Revolving Credit Loans or of any fee,
commission or other amounts payable to the Lenders under this Agreement or any
Revolving Credit Note shall be made not later than 1:00 p.m. (Charlotte time) on
the date specified for payment under this Agreement to the Administrative Agent
at the Administrative Agent's Office for the account of the Lenders (other than
as set forth below) pro rata in accordance with their respective Revolving
Credit Commitment Percentages (except as specified below), in Dollars, in
immediately available funds and shall be made without any set-off, counterclaim
or deduction whatsoever. Any payment received after such time but before 2:00
p.m. (Charlotte time) on such day shall be deemed a payment on such date for the
purposes of Section 10.1, but for all other purposes shall be deemed to have
been made on the next succeeding Business Day. Any payment received after 2:00
p.m. (Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Administrative Agent of each
such payment, the Administrative Agent shall distribute to each Lender at its
address for notices set forth herein its pro rata share of such payment in
accordance with such Lender's Revolving Credit Commitment Percentage (except as
specified below) and shall wire advice of the amount of such credit to each
Lender. Each payment to the Administrative Agent of Administrative Agent's fees
or expenses shall be made for the account of the Administrative Agent and any
amount payable to any Lender under Sections 3.8, 3.9, 3.10, 3.11 or 12.2 shall
be paid to the Administrative Agent for the account of the applicable Lender.
Section 3.5 Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 10.2, all payments received by the
Lenders upon the Revolving Credit Notes and the other Obligations and all net
proceeds from the enforcement of the Obligations shall be applied first to all
expenses then due and payable by the Borrower hereunder, then to all indemnity
obligations then due and payable by the Borrower hereunder, then to all
Administrative Agent's fees then due and payable, then to all facility and other
fees and commissions then due and payable, then to accrued and unpaid interest
on the Revolving Credit Notes (pro rata in accordance with all such amounts due)
and then to the principal amount of the Revolving Credit Notes.
Section 3.6 Adjustments. If any Lender (a "Benefitted Lender") shall at
any time receive any payment of all or part of its Revolving Credit Extensions
of Credit, or interest thereon, or if any Lender shall at any time receive any
collateral in respect to its Revolving Credit Extensions of Credit (whether
voluntarily or involuntarily, by set-off or otherwise) in a greater proportion
than any such payment to and collateral received by any other Lender, if any,
with respect to such other Lender's Revolving Credit Extensions of Credit, or
interest thereon, such Benefitted Lender shall purchase for cash from the other
Lenders such portion of each such other Lender's Revolving Credit Extensions of
Credit, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned to the extent of such recovery, but without interest. The Borrower
agrees that each Lender so purchasing a portion of another Lender's Revolving
Credit Extensions of Credit may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such portion as fully as
if such Lender were the direct holder of such portion.
Section 3.7 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
under this Agreement to make the Revolving Credit Loans are several and are not
joint or joint and several. Unless the Administrative Agent shall have received
notice from a Lender prior to a proposed borrowing date that such Lender will
not make available to the Administrative Agent such Lender's ratable portion of
the amount to be borrowed on such date (which notice shall not release such
Lender of its obligations hereunder), the Administrative Agent may assume that
such Lender has made such portion available to the Administrative Agent on the
proposed borrowing date in accordance with Section 2.2(b), and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such borrowing date, such
Lender shall pay to the Administrative Agent on demand an amount, until paid,
equal to the product of (a) the amount of such Lender's ratable portion of such
borrowing, times (b) the daily average Federal Funds Rate during such period as
determined by the Administrative Agent, times (c) a fraction the numerator of
which is the number of days that elapse from and including such borrowing date
to the date on which such Lender's ratable portion of such borrowing shall have
become immediately available to the Administrative Agent and the denominator of
which is 360. A certificate of the Administrative Agent with respect to any
amounts owing under this Section 3.7 shall be conclusive, absent manifest error.
If such Lender's ratable portion of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days of such
borrowing date, the Administrative Agent shall be entitled to recover such
amount not made available to the Administrative Agent with interest thereon at
the rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrower. The failure of any Lender to make its ratable portion of any Revolving
Credit Loan available shall not relieve it or any other Lender of its
obligation, if any, hereunder to make its ratable portion of such Revolving
Credit Loan available on such borrowing date, but no Lender shall be responsible
for the failure of any other Lender to make its ratable portion of such
Revolving Credit Loan available on the borrowing date.
Section 3.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period applicable to a LIBOR Rate Loan the Administrative Agent or
any Lender (after consultation with the Administrative Agent) shall determine
that, by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in eurodollars, in the applicable amounts are not
being quoted via Telerate Page 3750 or offered to the Administrative Agent or
such Lender for such Interest Period, then the Administrative Agent shall
forthwith give notice thereof to the Borrower. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of
the Borrower to convert any Revolving Credit Loan to or continue any Revolving
Credit Loan as a LIBOR Rate Loan shall be suspended, and the Borrower shall
repay in full (or cause to be repaid in full) the then outstanding principal
amount of each such LIBOR Rate Loans together with accrued interest thereon on
the last day of the then current Interest Period applicable to such LIBOR Rate
Loan or convert the then outstanding principal amount of each such LIBOR Rate
Loan to a Base Rate Loan as of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Administrative Agent and the Administrative Agent shall promptly give notice
to the Borrower and the other Lenders. Thereafter, until the Administrative
Agent notifies the Borrower that such circumstances no longer exist, (i) the
obligations of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Revolving Credit Loan or continue any Revolving Credit
Loan as a LIBOR Rate Loan shall be suspended and thereafter the Borrower may
select only Base Rate Loans hereunder, and (ii) if any of the Lenders may not
lawfully continue to maintain a LIBOR Rate Loan to the end of the then current
Interest Period applicable thereto as a LIBOR Rate Loan, the applicable LIBOR
Rate Loan shall immediately be converted to a Base Rate Loan for the remainder
of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with respect to any
Revolving Credit Note or shall change the basis of taxation of payments to any
of the Lenders (or any of their respective Lending Offices) of the principal of
or interest on any Revolving Credit Note or any other amounts due under this
Agreement with respect thereto (except for changes in the rate of tax on the
overall net income of any of the Lenders or any of their respective Lending
Offices imposed by the jurisdiction in which such Lender is organized or is or
should be qualified to do business or such Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve requirement included in the
calculation of the LIBOR Rate), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Revolving Credit Note;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or to reduce the yield or amount of
any sum received or receivable by any of the Lenders under this Agreement or
under any of the Revolving Credit Notes in respect of a LIBOR Rate Loan, then
such Lender shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify the Borrower of such fact and demand
compensation therefor and, within fifteen (15) days after such notice by the
Administrative Agent, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or Lenders for such increased
cost or reduction, provided that such Lender is generally imposing similar
charges on its other similarly situated borrowers. The Administrative Agent will
promptly notify the Borrower of any event of which it has knowledge which will
entitle such Lender to compensation pursuant to this Section 3.8(c); provided
that the Administrative Agent shall incur no liability whatsoever to the Lenders
or the Borrower in the event it fails to do so. The amount of such compensation
shall be determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Revolving Credit Commitment Percentage of
the LIBOR Rate Loans in the London interbank market and using any reasonable
attribution or averaging methods which such Lender deems appropriate and
practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrower through the Administrative Agent and shall be conclusively presumed
to be correct in the absence of manifest error.
Section 3.9 Indemnity. The Borrower hereby indemnifies each of the
Lenders against any loss or expense which may arise or be attributable to such
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Revolving Credit Loan (a) as a consequence of any
failure by the Borrower to make any payment when due of any amount due hereunder
in connection with a LIBOR Rate Loan, (b) due to any failure of the Borrower to
borrow on a date specified therefor in a Notice of Revolving Credit Borrowing or
Notice of Continuation/Conversion or (c) due to any payment, prepayment or
conversion of any LIBOR Rate Loan on a date other than the last day of the
Interest Period therefor. The amount of such loss or expense shall be
determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Revolving Credit Commitment Percentage of
the LIBOR Rate Loans in the London interbank market and using any reasonable
attribution or averaging methods which such Lender deems appropriate and
practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrower through the Administrative Agent and shall be conclusively presumed
to be correct in the absence of manifest error.
Section 3.10 Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained
by, any Lender or any corporation controlling such Lender as a consequence of,
or with reference to the Revolving Credit Commitments and other commitments of
this type, below the rate which the Lender or such other corporation could have
achieved but for such introduction, change or compliance, then within five (5)
Business Days after written demand by any such Lender, the Borrower shall pay to
such Lender from time to time as specified by such Lender additional amounts
sufficient to compensate such Lender or other corporation for such reduction,
provided that such Lender is generally imposing similar charges on its other
similarly situated borrowers. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender, shall, in the absence of
manifest error, be presumed to be correct and binding for all purposes.
Section 3.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Revolving Credit Notes shall be made free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect thereto
excluding, (i) in the case of each Lender and the Administrative Agent, income
and franchise taxes imposed by the jurisdiction under the laws of which such
Lender or the Administrative Agent, as the case may be, is organized or is or
should be qualified to do business or any political subdivision thereof, (ii) in
the case of each Lender, income and franchise taxes imposed by the jurisdiction
of such Lender's Lending Office or any political subdivision thereof, and (iii)
in the case of each Lender, income and franchise taxes payable solely as a
result of such Lender's failure to comply with Section 3.11(e) (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Revolving Credit Note to any Lender or the Administrative
Agent, (A) 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 3.11) such Lender or the Administrative Agent,
as the case may be, receives an amount equal to the amount such party would have
received had no such deductions been made, (B) the Borrower shall make such
deductions, (C) the Borrower shall pay the full amount deducted to the relevant
taxing authority or other authority in accordance with applicable law, and (D)
the Borrower shall deliver to the Administrative Agent evidence of such payment
to the relevant taxing authority or other authority in the manner provided in
Section 3.11(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Revolving Credit Loans, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent, as the case may be, makes written demand
therefor. In the event that the Borrower has indemnified a Lender or the
Administrative Agent for the full amount of any Taxes or Other Taxes as required
hereby, the Borrower shall have the right, at its sole cost and expense, to
contest the validity of such Taxes or Other Taxes by appropriate proceedings, to
seek a refund with respect thereto and to receive and retain any such refund
obtained for its own account.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 12.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrower, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding taxes. Each such Lender further agrees to deliver to the Borrower,
with a copy to the Administrative Agent, a Form 1001 or 4224 and Form W-8 or
W-9, or successor applicable forms or manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, certifying in the case of a Form
1001 or 4224 that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable or
the exemption to which such forms relate unavailable and such Lender notifies
the Borrower and the Administrative Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income taxes)
and, in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax.
(f) Survival. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.11 shall survive the payment in full of the
Obligations and the termination of the Revolving Credit Commitments.
Section 3.12 Mitigation. If the Borrower is required to pay additional
amounts to or for the account of any Lender pursuant to Sections 3.8(c), 3.10 or
3.11, then such Lender shall change the jurisdiction of its Lending Office if,
in the judgment of such Lender, such change (i) will eliminate or, if it is not
possible to eliminate, will reduce to the greatest extent possible any such
additional amounts which may thereafter accrue, and (ii) is not otherwise
disadvantageous to such Lender. In addition, any Lender claiming any indemnity
payment or additional amounts pursuant to Sections 3.8(c), 3.10 or 3.11 shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
file any certificate or document reasonably requested in writing by the Borrower
if the making of such a filing would avoid the need for or reduce the amount of
any such indemnity payment or additional amounts that may thereafter accrue and
would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
Section 3.13 Replacement of Demanding Lender. As long as no Default or
Event of Default has occurred and is continuing, the Borrower may replace any
Demanding Lender with one or more Eligible Assignees acceptable to the
Administrative Agent (each, a "Replacement Lender"), in any case by giving
written notice to the Demanding Lender and the Administrative Agent not more
than thirty (30) days after the occurrence of the event which causes the
applicable Demanding Lender to be a Demanding Lender. The replacement of the
Demanding Lender shall be effective ten (10) Business Days following the date
written notice of such replacement is given to the Demanding Lender and the
Administrative Agent, subject to the satisfaction of the following conditions:
(A) the Demanding Lender and the Replacement Lender(s) shall have satisfied the
conditions to assignment and assumption set forth in Section 12.10(b) (with all
fees payable pursuant to Section 12.10(b) to be paid by the Borrower), and, in
connection therewith, the Replacement Lender(s) shall have paid to the Demanding
Lender an amount equal to the principal of and all accrued but unpaid interest
on all outstanding Revolving Credit Loans of the Demanding Lender and all
accrued but unpaid fees owing to the Demanding Lender pursuant to Section 3.3,
and (B) the Borrower shall have paid to the Administrative Agent for the account
of the Demanding Lender an amount equal to all other Obligations owing to the
Demanding Lender. For purposes of this Agreement, a "Demanding Lender" is any
Lender which has requested any indemnity payment or additional amounts pursuant
to Sections 3.8(c), 3.10 or 3.11.
ARTICLE 4
CLOSING; CONDITIONS OF CLOSING AND BORROWING
Section 4.1 Closing. The closing shall take place at the offices of
Mays & Valentine, L.L.P. at 10:00 a.m. on February 27, 1998, or on such other
date as the parties hereto shall mutually agree.
Section 4.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to enter into this Agreement and to make the initial
Revolving Credit Loan is subject to the satisfaction of each of the following
conditions:
(a) Executed Loan Documents. This Agreement and the Revolving Credit
Notes shall have been duly authorized, executed and delivered to the
Administrative Agent by the parties thereto, shall be in full force and effect
and no default shall exist thereunder, and the Borrower shall have delivered
original counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officers' Certificate of the Borrower. The Administrative
Agent shall have received a certificate from a Responsible Officer, in form and
substance reasonably satisfactory to the Administrative Agent, to the effect
that all representations and warranties of the Borrower contained in this
Agreement and the other Loan Documents are true, correct and complete in all
material respects; that the Borrower is not in violation of any of the covenants
contained in this Agreement and the other Loan Documents; that, after giving
effect to the transactions contemplated by this Agreement, no Default or Event
of Default has occurred and is continuing; and that the Borrower has satisfied
each of the closing conditions.
(ii) Certificate of Secretary of the Borrower. The
Administrative Agent shall have received a certificate of the secretary or
assistant secretary of the Borrower certifying as to the incumbency and
genuineness of the signature of each officer of the Borrower executing Loan
Documents to which it is a party and certifying that attached thereto is (A) a
true and complete copy of the articles of incorporation of the Borrower and all
amendments thereto, certified as of a recent date by the State Corporation
Commission of Virginia; (B) a true and complete copy of the bylaws of the
Borrower as in effect on the date of such certification; (C) a true and complete
copy of resolutions duly adopted by the Board of Directors of the Borrower
authorizing the extensions of credit contemplated hereunder and the execution,
delivery and performance of this Agreement and the other Loan Documents to which
it is a party; and (D) a true and complete copy of each certificate required to
be delivered pursuant to Section 4.2(b)(iii).
(iii) Certificates of Good Standing. To the extent requested
by the Administrative Agent, the Administrative Agent shall have received a
certificate of good standing of the Borrower and each of its Significant
Subsidiaries as of a recent date from the appropriate Governmental Authority in
its jurisdiction of incorporation and in each other jurisdiction where the
Borrower is qualified to do business and a certificate of the relevant taxing
authorities of such jurisdictions certifying that the Borrower and each of its
Significant Subsidiaries has filed required tax returns and owes no delinquent
taxes.
(iv) Opinion of Counsel. The Administrative Agent shall have
received a favorable opinion of Hunton & Williams, counsel to the Borrower,
addressed to the Administrative Agent and the Lenders and in form and substance
reasonably satisfactory to the Administrative Agent with respect to the
Borrower, the Loan Documents and such other matters as the Lenders shall
request.
(v) Tax Forms. The Administrative Agent shall have received
copies of the United States Internal Revenue Service forms required by Section
3.11(e).
(c) Consents; Defaults.
(i) Governmental and Third Party Approvals. The Borrower shall
have obtained all approvals, authorizations and consents of any Governmental
Authority, court or other Person required with respect to the transactions
contemplated by this Agreement and the other Loan Documents.
(ii) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages with respect to, or which is related to or arises out of,
this Agreement or any of the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby, or which, in the Administrative
Agent's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default
shall have occurred and be continuing.
(d) Existing Credit Facilities. The Borrower shall have delivered to
the Administrative Agent evidence reasonably satisfactory to the Administrative
Agent that the Existing Credit Facilities (other than the letters of credit
issued by Crestar Bank which are reflected on Schedule 5.1(t) hereto and which
will remain outstanding after the Closing Date) have been repaid in full and
terminated or will be repaid in full and terminated upon the making of the
initial Loans.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received the most recent audited Consolidated financial statements of the
Borrower and its Subsidiaries, all in form and substance reasonably satisfactory
to the Administrative Agent.
(ii) Initial Calculations Certificate. The Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance
reasonably satisfactory to the Administrative Agent, and certified as accurate
by a Responsible Officer, that attached thereto is a calculation of the
Applicable Margin and the Facility Fee Percentage as of the Closing Date.
(iii) Payment at Closing; Fee Letter. The Borrower shall have
paid the fees set forth or referenced in Section 3.3 which are due and payable
on or before the Closing Date and any other accrued and unpaid fees or
commissions due hereunder (including, without limitation, legal fees and
expenses) to the Administrative Agent and Lenders, and to any other Person such
amount as may be due thereto in connection with the transactions contemplated
hereby, including all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of any of the Loan
Documents. The Administrative Agent shall have received duly authorized and
executed copies of the fee letter agreement referred to in Section 3.3(c).
(f) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall have
received from the Borrower a Notice of Revolving Credit Borrowing in accordance
with Section 2.2(a) and a Notice of Account Designation specifying the account
or accounts to which the proceeds of any Revolving Credit Loans made after the
Closing Date are to be disbursed.
(ii) Proceedings and Documents. All opinions, certificates and
other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to the Lenders. The Lenders shall have received copies of all other
instruments and other evidence as the Lenders may reasonably request, in form
and substance reasonably satisfactory to the Lenders, with respect to the
transactions contemplated by this Agreement and the taking of all actions in
connection therewith.
(iii) Due Diligence and Other Documents. The Borrower shall
have delivered to the Administrative Agent such other documents, certificates
and opinions as the Administrative Agent reasonably requests, certified by a
Responsible Officer as a true and correct copy thereof.
Section 4.3 Conditions to All Loans and Letters of Credit. The
obligations of the Lenders to make any Revolving Credit Loan is subject to the
satisfaction of the following conditions precedent on the relevant borrowing
date:
(a) Continuation of Representations and Warranties. The representations
and warranties contained in Article 5 shall be true and correct in all material
respects on and as of such borrowing date with the same effect as if made on and
as of such date; except for any representation and warranty made as of an
earlier date, which representation and warranty shall remain true and correct as
of such earlier date.
(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder on the borrowing date with respect to such
Revolving Credit Loan or after giving effect to the Revolving Credit Loans to be
made on such date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Section 5.1 Representations and Warranties. To induce the
Administrative Agent and the Lenders to enter into this Agreement and to induce
the Lenders to make the Revolving Credit Loans, the Borrower hereby represents
and warrants to the Administrative Agent and the Lenders that:
(a) Organization; Power; Qualification. Each of the Borrower and its
Significant Subsidiaries is duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation,
has the power and authority to own its properties and to carry on its business
as now being and as hereafter proposed to be conducted and is duly qualified and
authorized to do business in each other jurisdiction in which the character of
its properties or the nature of its business requires such qualification and
authorization, except in cases in which a failure to be so qualified and
authorized in another jurisdiction would not in any given instance or in the
aggregate have a Material Adverse Effect. The jurisdictions in which the
Borrower and its Subsidiaries are incorporated and qualified to do business as
of the Closing Date are described on Schedule 5.1(a).
(b) Ownership. Each Subsidiary of the Borrower as of the Closing Date
is listed on Schedule 5.1(b). As of the Closing Date, each Subsidiary is a
Wholly-Owned Subsidiary. All outstanding shares have been duly authorized and
validly issued and are fully paid and nonassessable. As of the Closing Date,
there are no outstanding stock purchase warrants, subscriptions, options,
securities, instruments or other rights of any type or nature whatsoever, which
are convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the Borrower or its Subsidiaries, except as
described on Schedule 5.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. The
Borrower has the corporate right, power and authority and has taken all
necessary corporate and other action to authorize the execution, delivery and
performance of this Agreement and each of the other Loan Documents to which it
is a party in accordance with their respective terms. This Agreement and each of
the other Loan Documents have been duly executed and delivered by a duly
authorized officer of the Borrower, and each such document constitutes the
legal, valid and binding obligation of the Borrower, enforceable in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar state or federal debtor relief
laws from time to time in effect affecting creditors' rights generally or by
general equitable principles.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by the Borrower of the Loan
Documents in accordance with their respective terms, the borrowings hereunder
and the transactions contemplated hereby do not and will not, with the passage
of time, the giving of notice or otherwise, (i) require any Governmental
Approval or violate any Applicable Law relating to the Borrower or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute a default
under the articles of incorporation, bylaws or other organizational documents of
the Borrower or any of its Subsidiaries or any indenture, agreement or other
instrument to which the Borrower or any of its Subsidiaries is a party or by
which any of their respective properties may be bound or any Governmental
Approval relating to the Borrower or any of its Subsidiaries, or (iii) result in
or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any of its
Subsidiaries other than Liens arising under the Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower
and its Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, and (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties, except in cases in which a failure to have
such Governmental Approvals or to be in compliance therewith or with any other
Applicable Laws would not in any given instance or in the aggregate have a
Material Adverse Effect.
(f) Tax Returns and Payments. Each of the Borrower and its Subsidiaries
has duly filed or caused to be filed all federal, state, local and other tax
returns required by Applicable Law to be filed, and has paid, or made adequate
provision for the payment of, all federal, state, local and other taxes,
assessments and governmental charges or levies upon it and its property, income,
profits and assets which are due and payable, other than those which are not yet
delinquent, those which are being contested by the Borrower or such Subsidiary
in good faith and by appropriate proceedings and for which the Borrower or such
Subsidiary has established reserves as required by GAAP and those which, either
in any given instance or in the aggregate, do not involve a potential tax
liability in excess of $1,000,000. No Governmental Authority has asserted any
Lien or other claim against the Borrower or any of its Subsidiaries with respect
to unpaid taxes which has not been discharged or resolved, other than statutory
liens for taxes not yet due and payable. The charges, accruals and reserves on
the books of the Borrower and each of its Subsidiaries with respect to any
unpaid federal, state, local and other taxes for all Fiscal Years and portions
thereof since the organization of the Borrower and each of its Subsidiaries are
in the judgment of the Borrower adequate in accordance with GAAP. The Borrower
does not anticipate any additional taxes or assessments in the aggregate for all
such years which would be reasonably likely to cause or result in a Material
Adverse Effect.
(g) Intellectual Property Matters. Each of the Borrower and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are required to
conduct its business, except in cases in which a failure to own or possess any
such rights would not, in any instance or in the aggregate, have a Material
Adverse Effect. No event has occurred which permits, or after notice or lapse of
time or both would permit, the revocation or termination of any such rights, and
neither the Borrower nor any of its Subsidiaries is liable to any Person for
infringement under Applicable Law with respect to any such rights as a result of
its business operations, except in cases in which any such revocation,
termination or liability would not, in any instance or in the aggregate, have a
Material Adverse Effect.
(h) Environmental Matters.
(i) To the best of the Borrower's knowledge, the properties of
the Borrower and its Subsidiaries do not contain, and have not previously
contained, any Hazardous Materials in amounts or concentrations which (A)
constitute or constituted a violation of applicable Environmental Laws or (B)
could give rise to liability under applicable Environmental Laws, except in
cases in which any such violation or liability is not reasonably likely to
result, in any given instance or in the aggregate, in liability of the Borrower
or any Subsidiary in excess of $25,000,000;
(ii) To the best of the Borrower's knowledge, such properties
and all operations conducted in connection therewith are in compliance, and have
been in compliance, with all applicable Environmental Laws, except in cases in
which any failure to be in compliance is not reasonably likely to result, in any
given instance or in the aggregate, in liability of the Borrower or any
Subsidiary in excess of $25,000,000, and there is no contamination at, under or
about such properties or such operations which could materially interfere with
the continued operation of such properties or materially impair the fair
saleable value thereof;
(iii) Neither the Borrower nor any Subsidiary has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of its properties or the operations conducted in connection
therewith, nor does the Borrower or any Subsidiary have knowledge or reason to
believe that any such notice will be received or is being threatened, except in
cases in which the liability of the Borrower or any Subsidiary, in any given
instance or in the aggregate, is not reasonably likely to exceed $25,000,000;
(iv) Hazardous Materials have not been transported or disposed
of from the properties of the Borrower and its Subsidiaries in violation of, or
in a manner or to a location which could give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Laws, except in cases in which the liability of the Borrower or
any Subsidiary, in any given instance or in the aggregate, is not reasonably
likely to exceed $25,000,000;
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to such properties or operations conducted in connection
therewith, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to such
properties or such operations, except in cases in which the liability of the
Borrower or any Subsidiary, in any given instance or in the aggregate, is not
reasonably likely to exceed $25,000,000; and
(vi) There has been no release, or to the best of the
Borrower's knowledge, the threat of release, of Hazardous Materials at or from
such properties, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws, except in cases in which the
liability of the Borrower or any Subsidiary, in any given instance or in the
aggregate, is not reasonably likely to exceed $25,000,000.
(i) ERISA.
(i) As of the Closing Date, neither the Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Pension
Plan or Multiemployer Plan other than those identified on Schedule 5.1(i);
(ii) Each of the Borrower and its ERISA Affiliates is in
compliance in all material respects with all applicable provisions of ERISA and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet expired,
and except in cases in which a failure to be in compliance is not reasonably
likely to result, in any given instance or in the aggregate, in liability of the
Borrower or any ERISA Affiliate in excess of $25,000,000. Each Employee Benefit
Plan that is intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified, and each trust
related to such plan has been determined to be exempt under Section 501(a) of
the Code. No liability has been incurred by the Borrower or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan, except in cases in which such
liability is not reasonably likely to result, in any given instance or in the
aggregate, in liability of the Borrower or any ERISA Affiliate in excess of
$25,000,000;
(iii) To the best of the Borrower's knowledge, no Pension Plan
has been terminated, nor has any accumulated funding deficiency (as defined in
Section 412 of the Code) been incurred (without regard to any waiver granted
under Section 412 of the Code), nor has any funding waiver from the Internal
Revenue Service been received or requested with respect to any Pension Plan, nor
has the Borrower or any ERISA Affiliate failed to make any contributions or to
pay any amounts due and owing as required by Section 412 of the Code, Section
302 of ERISA or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 302 of ERISA, nor has
there been any event requiring any disclosure under Section 4041(c)(3)(C) or
4063(a) of ERISA with respect to any Pension Plan, except in cases in which the
liability of the Borrower or any ERISA Affiliate, in any given instance or in
the aggregate, is not reasonably likely to exceed $25,000,000;
(iv) Neither the Borrower nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section 406 of the
ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC which
remains outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid, (C) failed to make a required contribution or
payment to a Multiemployer Plan, or (D) failed to make a required installment or
other required payment under Section 412 of the Code, except in cases in which
the liability of the Borrower or any ERISA Affiliate, in any given instance or
in the aggregate, is not reasonably likely to exceed $25,000,000;
(v) No Termination Event has occurred or, to the best of the
Borrower's knowledge, is reasonably expected to occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is
existing or, to the best knowledge of the Borrower after due inquiry, threatened
concerning or involving any (A) employee welfare benefit plan (as defined in
Section 3(1) of ERISA) currently maintained or contributed to by the Borrower or
any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan (other than
routine claims for benefits), except in cases in which the liability of the
Borrower or any ERISA Affiliate, in any given instance or in the aggregate, is
not reasonably likely to exceed $25,000,000.
(j) Margin Stock. Neither the Borrower nor any Subsidiary is engaged
principally or as one of its activities in the business of extending credit for
the purpose of "purchasing" or "carrying" any "margin stock" (as each such term
is defined or used in Regulations G and U of the Board of Governors of the
Federal Reserve System). No part of the proceeds of any of the Revolving Credit
Loans will be used for purchasing or carrying margin stock or for any purpose
which violates, or which would be inconsistent with, the provisions of
Regulation G, T, U or X of such Board of Governors.
(k) Government Regulation. Neither the Borrower nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company" (as
each such term is defined or used in the Investment Company Act of 1940, as
amended) and neither the Borrower nor any Subsidiary is, or after giving effect
to any Revolving Credit Extension of Credit will be, subject to regulation under
the Public Utility Holding Company Act of 1935 or the Interstate Commerce Act,
each as amended, or any other Applicable Law which limits its ability to incur
or consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 5.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and its Subsidiaries in
effect as of the Closing Date not listed on any other Schedule hereto. Other
than as set forth on Schedule 5.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms thereof
as of the Closing Date. The Borrower and its Subsidiaries have made available to
the Administrative Agent a true and complete copy of each Material Contract
required to be listed on Schedule 5.1(l) or any other Schedule hereto as of the
Closing Date.
(m) Employee Relations. As of the Closing Date, each of the Borrower
and its Subsidiaries is not party to any collective bargaining agreement nor has
any labor union been recognized as the representative of its employees except as
set forth on Schedule 5.1(m). The Borrower knows of no pending, threatened or
contemplated strikes, work stoppage or other collective labor disputes involving
its employees or those of any of its Subsidiaries, except as disclosed on page 9
of the Borrower's Form 10-Q dated February 24, 1998, with respect to the West
Point, Pennsylvania Distribution Center and except for those which are not
reasonably likely to have a Material Adverse Effect.
(n) Burdensome Provisions. Neither the Borrower nor any Subsidiary is a
party to any indenture, agreement, lease or other instrument, or subject to any
corporate or partnership restriction, Governmental Approval or Applicable Law
which is so unusual or burdensome as in the foreseeable future could be
reasonably expected to have a Material Adverse Effect. The Borrower and its
Subsidiaries do not presently anticipate that future expenditures needed to meet
the provisions of any statutes, orders, rules or regulations of a Governmental
Authority will be so burdensome as to have a Material Adverse Effect.
(o) Financial Statements. The (i) Consolidated balance sheets of the
Borrower and its Subsidiaries as of May 3, 1997, and the related statements of
earnings, shareholders' equity and cash flows for the Fiscal Year then ended and
(ii) unaudited Consolidated balance sheets of the Borrower and its Subsidiaries
as of October 18, 1997, and related unaudited interim statements of earnings,
shareholders' equity and cash flows for the period then ended, copies of which
have been furnished to the Administrative Agent and each Lender, are complete
and correct in all material respects and fairly present in all material respects
the assets, liabilities and financial position of the Borrower and its
Subsidiaries as at such dates, and the results of the operations and changes of
financial position for the periods then ended. All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP. The Borrower and its Subsidiaries have no Debt, obligation
or other unusual forward or long-term commitment which is not fairly reflected
in the foregoing financial statements or in the notes thereto in accordance with
GAAP, except for those relating to the Borrower's agreement to acquire
substantially all of the assets of Farm Fresh, Inc.
(p) No Material Adverse Change. Since May 3, 1997, there has been no
Material Adverse Change, and no event has occurred or condition arisen that
could reasonably be expected to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Revolving Credit Extension of Credit made hereunder, the Borrower and each of
its Subsidiaries will be Solvent.
(r) Titles to Properties. Each of the Borrower and its Significant
Subsidiaries has such title to the real property owned by it as is necessary or
desirable to the conduct of its business and valid and legal title to all of its
material personal property and assets, including, but not limited to, those
reflected on the Consolidated balance sheets of the Borrower and its
Subsidiaries described in Section 5.1(o), except those which have been disposed
of by the Borrower or its Subsidiaries subsequent to May 3, 1997, which
dispositions have been in the ordinary course of business or as otherwise
expressly permitted hereunder.
(s) Liens. None of the properties and assets of the Borrower or any
Subsidiary is subject to any Lien, except Liens permitted by Section 9.3. No
financing statement under the Uniform Commercial Code of any state which names
the Borrower or any Subsidiary thereof or any of their respective trade names or
divisions as debtor, and which has not been terminated, has been filed in any
state or other jurisdiction and neither the Borrower nor any Subsidiary has
signed any such financing statement or any security agreement authorizing any
secured party thereunder to file any such financing statement, except financing
statements filed to perfect those Liens permitted by Section 9.3 and financing
statements filed with respect to operating leases or with respect to Debt which
is no longer outstanding.
(t) Debt and Guaranty Obligations. Schedule 5.1(t) is a complete and
correct listing of all Debt and Guaranty Obligations of the Borrower and its
Subsidiaries as of the Closing Date in excess of $10,000,000. The Borrower and
its Subsidiaries have performed and are in compliance in all material respects
with all of the terms of (i) all Debt and Guaranty Obligations of the Borrower
and its Subsidiaries in excess of $10,000,000 and all instruments and agreements
relating thereto, and (ii) all synthetic and other structural leases the
aggregate implied principal amount of which (calculated in accordance with
applicable Federal income tax laws and regulations) is in excess of $10,000,000
and all instruments and agreements relating thereto, and no default or event of
default, or event or condition which with notice or lapse of time or both would
constitute such a default or event of default on the part of the Borrower or its
Subsidiaries exists with respect to any such Debt or Guaranty Obligation or any
such synthetic or other structured lease.
(u) Litigation. There are no actions, suits or proceedings pending nor,
to the knowledge of the Borrower, threatened against or in any other way
relating adversely to or affecting the Borrower or any Subsidiary or any of
their respective properties in any court or before any arbitrator of any kind or
before or by any Governmental Authority in which there is a reasonable
possibility of an adverse decision and which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred and is continuing which
constitutes a Default or an Event of Default. As of the Closing Date, no event
has occurred and is continuing which constitutes, or which with the passage of
time or giving of notice or both would constitute, a default or event of default
by the Borrower or any Subsidiary under any Material Contract or judgment,
decree or order to which the Borrower or one or more its Subsidiaries is a party
or by which the Borrower or one or more of its Subsidiaries or any of their
respective properties may be bound or which would require the Borrower or one or
more of its Subsidiaries to make any payment thereunder prior to the scheduled
maturity date therefor, except in cases in which any such default or event of
default would not, in any instance or in the aggregate, have a Material Adverse
Effect.
(w) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of the Borrower or
any Subsidiary and furnished to the Lenders were, at the time the same were so
furnished, complete and correct in all material respects to the extent necessary
to give the recipient a true and accurate knowledge of the subject matter. No
document furnished or written statement made to the Administrative Agent or the
Lenders by the Borrower or any Subsidiary in connection with the negotiation,
preparation or execution of this Agreement or any of the Loan Documents contains
or will contain any untrue statement of a fact material to the creditworthiness
of the Borrower or its Subsidiaries or omits or will omit to state a fact
necessary in order to make the statements contained therein not misleading. The
Borrower is not aware of any facts which it has not disclosed in writing to the
Administrative Agent having a Material Adverse Effect, or insofar as the
Borrower can now foresee, could reasonably be expected to have a Material
Adverse Effect.
Section 5.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article 5 and all
representations and warranties contained in any certificate or any of the other
Loan Documents (including but not limited to any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date, shall survive the Closing Date and shall not be
waived by the execution and delivery of this Agreement, any investigation made
by or on behalf of the Lenders or any extension of credit hereunder.
ARTICLE 6
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and all
of the Revolving Credit Commitments terminated, unless consent has been obtained
in the manner set forth in Section 12.11, the Borrower will furnish or cause to
be furnished to the Administrative Agent and to each of the Lenders at its
address as set forth on Schedule 1, or at such other office as may be designated
by the Administrative Agent or any Lender from time to time:
Section 6.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each of the first three (3)
fiscal quarters of the Borrower in each Fiscal Year, unaudited Consolidated
balance sheets of the Borrower and its Subsidiaries as of the close of such
fiscal quarter and unaudited Consolidated statements of earnings, shareholders'
equity and cash flows for the fiscal quarter then ended and that portion of the
Fiscal Year then ended, including the notes thereto, all in reasonable detail
setting forth in comparative form the corresponding figures for the preceding
Fiscal Year and prepared by the Borrower in accordance with GAAP and, if
applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries as of their respective dates and the
results of operations of the Borrower and its Subsidiaries for the respective
periods then ended, subject to normal year end adjustments; provided that the
Borrower may deliver, in lieu of the foregoing, the quarterly report of the
Borrower for such fiscal quarter on Form 10-Q filed with the SEC, but only as
long as the financial statements contained in such quarterly report are
substantially the same in content as the financial statements referred to above
in this Section 6.1(a).
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, audited
Consolidated balance sheets of the Borrower and its Subsidiaries as of the close
of such Fiscal Year and audited Consolidated statements of earnings,
shareholders' equity and cash flows for the Fiscal Year then ended, including
the notes thereto, all in reasonable detail setting forth in comparative form
the corresponding figures for the preceding Fiscal Year and prepared by an
independent certified public accounting firm of national standing in accordance
with GAAP and, if applicable, containing disclosure of the effect on the
financial position or results of operation of any change in the application of
accounting principles and practices during the year, and accompanied by a report
thereon by such certified public accountants that is not qualified with respect
to scope limitations imposed by the Borrower or any of its Subsidiaries or with
respect to accounting principles followed by the Borrower or any of its
Subsidiaries not in accordance with GAAP; provided that the Borrower may
deliver, in lieu of the foregoing, the annual report of the Borrower for such
Fiscal Year on Form 10-K filed with the SEC, but only as long as the financial
statements contained in such annual report are substantially the same in content
as the financial statements referred to above in this Section 6.1(b).
Section 6.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 6.1 (a) or (b), a certificate of
the chief financial officer or the treasurer of the Borrower in the form of
Exhibit F hereto (an "Officer's Compliance Certificate"), with the blanks
therein appropriately completed.
Section 6.3 Other Reports.
(a) Promptly after the same become publicly available, copies of all
periodic and other reports on Forms 10-K, 10-Q and 8-K and all definitive proxy
statements filed by the Borrower or any Subsidiary with the SEC or any other
documents distributed by the Borrower to its shareholders generally which
contain information equivalent to that contained in such forms or proxy
statements;
(b) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent certified
public accounting firm in connection with their auditing function, including,
without limitation, any management report and any management responses thereto;
and
(c) Such other information regarding the operations, business affairs
and financial condition of the Borrower or any of its Subsidiaries as the
Administrative Agent or any Lender may reasonably request.
Section 6.4 Notice of Subsidiaries, Litigation and Other Matters.
Prompt (but in no event later than ten (10) days after an executive officer of
the Borrower obtains knowledge thereof) telephonic and written notice of:
(a) the formation or acquisition of any Subsidiary which is, or on a
pro forma basis is expected to be, a Significant Subsidiary;
(b) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving the Borrower or any Subsidiary or any
of their respective properties, assets or businesses in which there is a
reasonable possibility of an adverse decision and which if adversely determined,
could reasonably be expected to have a Material Adverse Effect;
(c) any notice of any violation received by the Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws which in any such case
could reasonably be expected to have a Material Adverse Effect;
(d) any labor controversy that has resulted in, or is reasonably likely
to result in, a strike or other work action against the Borrower or any
Significant Subsidiary which is reasonably likely to have a material adverse
effect on the operations of the Borrower or any Significant Subsidiary;
(e) any attachment, judgment, nonconsensual lien, levy or order
exceeding $10,000,000 that may be assessed against the Borrower or any
Subsidiary;
(f) any Default or Event of Default, or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
material default or event of default by the Borrower or any Subsidiary under any
Debt or Guaranty Obligation in excess of $10,000,000 or any Material Contract;
(g) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA; and
(h) any event which makes any of the representations set forth in
Section 5.1 inaccurate in any material respect.
Section 6.5 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrower
to the Administrative Agent or any Lender (other than financial forecasts)
whether pursuant to this Article 6 or any other provision of this Agreement
shall be, at the time the same is so furnished, complete and correct in all
material respects based on the Borrower's knowledge thereof.
ARTICLE 7
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
all of the Revolving Credit Commitments terminated, unless consent has been
obtained in the manner provided for in Section 12.11:
Section 7.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 9.4, the Borrower will preserve and maintain, and
cause each of its Significant Subsidiaries to preserve and maintain, its
separate corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and the Borrower will qualify and
remain qualified as a foreign corporation and authorized to do business in, and
cause each of its Significant Subsidiaries to qualify and remain qualified as a
foreign corporation and authorized to do business in, each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification and authorization, except in cases in which a failure to be so
qualified and authorized in another jurisdiction would not in any given instance
or in the aggregate have a Material Adverse Effect.
Section 7.2 Maintenance of Property. The Borrower will protect and
preserve, and cause each of its Significant Subsidiaries to protect and
preserve, all properties useful in and material to its business, including
copyrights, patents, trade names and trademarks; maintain, and cause each of its
Significant Subsidiaries to maintain, in good working order and condition all
buildings, equipment and other tangible real and personal property useful in and
material to its business; and from time to time make or cause to be made, and
cause each of its Significant Subsidiaries to make or cause to be made, all
renewals, replacements and additions to such property necessary for the conduct
of its business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
Section 7.3 Insurance. The Borrower will maintain, and cause each of
its Significant Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies against such risks and in such amounts as is
consistent with past practices of the Borrower and its Significant Subsidiaries
and as may be required by Applicable Law, and on the Closing Date and from time
to time thereafter the Borrower will deliver to the Administrative Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
Section 7.4 Accounting Methods and Financial Records. The Borrower will
maintain, and cause each of its Subsidiaries to maintain, a system of
accounting, and keep, and cause each of its Subsidiaries to keep, such books,
records and accounts (which shall be true and complete in all material respects)
as may be required or as may be necessary to permit the preparation of financial
statements in accordance with GAAP and in compliance with the regulations of any
Governmental Authority having jurisdiction over it or any of its properties.
Section 7.5 Payment and Performance of Obligations. The Borrower will
pay and perform, and cause each of its Subsidiaries to perform, all Obligations,
as applicable to them, under this Agreement and the other Loan Documents, and
pay or perform, and cause each of its Subsidiaries to pay and perform, (a) all
taxes, assessments and other governmental charges that may be levied or assessed
upon it or any of its property, and (b) all other indebtedness, obligations and
liabilities in excess of $10,000,000 in accordance with customary trade
practices; provided that the Borrower or such Subsidiary may contest any item
described in clauses (a) or (b) of this Section 7.5 in good faith and by
appropriate proceedings so long as adequate reserves are maintained with respect
thereto in accordance with GAAP.
Section 7.6 Compliance With Laws and Approvals. The Borrower will
observe and remain in compliance with, and cause each of its Subsidiaries to
observe and remain in compliance with, all Applicable Laws and maintain, and
cause each of its Subsidiaries to maintain, in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business,
except in cases in which a failure to observe and comply with Applicable Laws or
a failure to maintain Governmental Approvals would not, in any given instance or
in the aggregate, have a Material Adverse Effect.
Section 7.7 Environmental Laws. In addition to and without limiting the
generality of Section 7.6, the Borrower will (a) comply with and ensure such
compliance by all tenants and subtenants, with, all applicable Environmental
Laws and obtain and comply with and maintain, and ensure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except in cases in which any failure to do so is not reasonably likely to
result, in any given instance or in the aggregate, in liability of the Borrower
or any Subsidiary in excess of $25,000,000, (b) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws, and promptly comply with all
lawful orders and directives of any Governmental Authority regarding
Environmental Laws, and (c) defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the violation
of, noncompliance with or liability under any Environmental Laws applicable to
the operations of the Borrower or any Subsidiary, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorneys' and consultants' fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing directly result from the gross negligence
or willful misconduct of the party seeking indemnification therefor, and the
Borrower will cause each of its Subsidiaries to do and comply with all of the
foregoing.
Section 7.8 Compliance with ERISA. In addition to and without limiting
the generality of Section 7.6, the Borrower will (a) comply with all applicable
provisions of ERISA and the regulations and published interpretations thereunder
with respect to all Employee Benefit Plans, except in cases in which any failure
to do so is not reasonably likely to result, in any given instance or in the
aggregate, in liability of the Borrower or any Subsidiary in excess of
$25,000,000, (b) not take any action or fail to take action the result of which
could be a liability to the PBGC in excess of $25,000,000 or to a Multiemployer
Plan in excess of $25,000,000, (c) not participate in any prohibited transaction
that could result in any civil penalty in excess of $25,000,000 under ERISA or
tax under the Code, (d) operate each Employee Benefit Plan in such a manner that
will not incur any tax liability in excess of $25,000,000 under Section 4980B of
the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (e) furnish to the Administrative Agent upon the
Administrative Agent's request such additional information about any Employee
Benefit Plan as may be reasonably requested by the Administrative Agent, and the
Borrower will cause each of its Subsidiaries to do and comply with all of the
foregoing.
Section 7.9 Compliance With Agreements. The Borrower will comply in all
respects with, and cause each of its Subsidiaries to comply in all respects
with, each term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract, except in cases in which a failure so to
comply would not, in any given instance or in the aggregate, have a Material
Adverse Effect;
Section 7.10 Conduct of Business. The Borrower and its Subsidiaries,
considered as a whole, will continue to engage primarily in the wholesale and
retail food distribution and logistics business and businesses reasonably
related thereto.
Section 7.11 Visits and Inspections. The Borrower will permit, and
cause each of its Subsidiaries to permit, representatives of the Administrative
Agent or any Lender, from time to time, to visit and inspect its properties;
inspect, audit and make extracts from its books, records and files, including,
but not limited to, management letters prepared by independent certified public
accountants; and discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial condition, results of
operations and business prospects.
Section 7.12 Year 2000 Compatibility. The Borrower will take all
actions, and cause each of its Subsidiaries to take all actions, reasonably
necessary to assure that the material computer based systems of the Borrower and
its Subsidiaries are able to operate and effectively process data which includes
dates on and after January 1, 2000. At the request of the Administrative Agent,
the Borrower shall provide reasonable assurances satisfactory to the
Administrative Agent of the Year 2000 compatibility of the material computer
based systems of the Borrower and its Subsidiaries..
Section 7.13 Further Assurances. The Borrower will make, execute and
deliver, and cause each of its Subsidiaries to make, execute and deliver, all
such additional and further acts, things, deeds and instruments as the
Administrative Agent or any Lender may reasonably require to document and
consummate the transactions contemplated hereby and to vest completely in and
insure the Administrative Agent and the Lenders their respective rights under
this Agreement, the Revolving Credit Notes and the other Loan Documents.
ARTICLE 8
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and
all of the Revolving Credit Commitments terminated, unless consent has been
obtained in the manner set forth in Section 12.11:
Section 8.1 Leverage Ratio. The Borrower will maintain a ratio,
measured as of the end of each of the first three fiscal quarters during each
Fiscal Year and as of the end of each Fiscal Year, of Consolidated Funded Debt
as of the date of measurement, to Consolidated EBITDA for the four-quarter
period ending on the date of measurement, which is not greater than 3.0 to 1 at
any time.
Section 8.2 Fixed Charge Coverage Ratio. The Borrower will maintain a
ratio, measured as of the end of each of the first three fiscal quarters during
each Fiscal Year and as of the end of each Fiscal Year, of Consolidated EBITDAR
for the four-quarter period ending on the date of measurement, to Consolidated
Fixed Charges for such four-quarter period, which is not less than 1.5 to 1 at
any time.
ARTICLE 9
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
all of the Revolving Credit Commitments terminated, unless consent has been
obtained in the manner set forth in Section 12.11:
Section 9.1 Limitations on Debt. The Borrower will not create, incur,
assume or suffer to exist any Debt which is senior in right of payment to the
Obligations, or any other Debt if at the time of, or immediately upon giving
effect to, the creation, incurrence, assumption or existence of such Debt a
Default or an Event of Default exists or would exist (it being understood and
agreed that the fact that Debt is secured by a Lien permitted by Section 9.3
shall not cause such Debt to be considered senior for purposes of this Section
9.1), and the Borrower will not permit any of its Subsidiaries to create, incur,
assume or suffer to exist any Debt except:
(a) Debt of any Subsidiary existing on the Closing Date and described
on Schedule 5.1(t);
(b) Debt of any Subsidiary owing to the Borrower or any other
Subsidiary;
(c) Debt of any Subsidiary outstanding at the time such Subsidiary
becomes a Subsidiary of the Borrower and not incurred in contemplation thereof,
as long as the Debt remains the sole obligation of such Subsidiary and as long
as the outstanding principal amount of such Debt is not voluntarily increased by
such Subsidiary after the date such Subsidiary becomes a Subsidiary of the
Borrower;
(d) Debt of any Subsidiary secured by a Lien permitted by Section 9.3,
provided that such Debt does not exceed the value of the assets or property
subject to such permitted Lien;
(e) Debt constituting the renewal or refinancing of any Debt permitted
by subsections (a), (b) or (c) above as long as the aggregate principal amount
thereof is not increased; and
(f) Debt of any Subsidiary not otherwise permitted by this Section 9.1
as long as the aggregate of all such Debt for all Subsidiaries at any time
outstanding does not exceed ten percent (10%) of Consolidated Net Tangible
Assets.
Section 9.2 Intentionally Omitted.
Section 9.3 Limitations on Liens. The Borrower will not create, incur,
assume or suffer to exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any Lien on or with respect to any of its assets or
properties (including without limitation shares of capital stock or other
ownership interests), real or personal, whether now owned or hereafter acquired,
except:
(a) Liens existing on the Closing Date and described on Schedule 9.3;
(b) Liens for taxes, assessments and other governmental charges or
levies not yet due or as to which the period of grace, if any, related thereto
has not expired or which are being contested in good faith and by appropriate
proceedings if adequate reserves are maintained to the extent required by GAAP;
(c) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings if adequate reserves are maintained to the extent
required by GAAP;
(d) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or
obligations under customer service contracts;
(e) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of any material parcel of real property or
impair the use thereof in the ordinary conduct of business;
(f) Liens in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(g) Liens on the property or assets of any Subsidiary existing at the
time such Subsidiary becomes a Subsidiary of the Borrower and not incurred in
contemplation thereof, as long as the outstanding principal amount of the Debt
secured thereby is not voluntarily increased by such Subsidiary after the date
such Subsidiary becomes a Subsidiary of the Borrower;
(h) Liens on the property or assets of the Borrower or any Subsidiary
securng Debt which is permitted under Section 9.1 and which is incurred to
finance the acquisition of such property or assets; provided that (i) each such
Lien shall be created substantially simultaneously with the acquisition of the
related property or assets, (ii) each such Lien does not at any time encumber
any property other than the related property or assets financed by such Debt,
(iii) the principal amount of Debt secured by each such Lien is not increased
and (iv) the principal amount of Debt secured by each such Lien shall at no time
exceed 100% of the original purchase price of such related property or assets at
the time acquired; and
(i) Liens not otherwise permitted by this Section 9.3 as long as all of
such Liens do not encumber property and assets which constitute more than five
percent (5%) of Consolidated Net Tangible Assets; and
(j) Any lien not otherwise permitted by this Section 9.3 as long as,
prior to or contemporaneously with the creation, incurrence, assumption or
existence of such Lien, the Borrower shall have taken all steps necessary to
cause the Obligations to be secured by such Lien, equally and ratably based on
amount of indebtedness with the other Debt and obligations secured thereby, to
the satisfaction of the Administrative Agent and each of the Lenders.
Section 9.4 Limitations on Mergers and Liquidation. The Borrower will
not merge, consolidate or enter into any similar combination with any other
Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or permit any of its Significant Subsidiaries to merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), except:
(a) the Borrower or a Significant Subsidiary may merge with another
Person if (i) such Person is organized under the laws of the United States or
one of its states, (ii) the Borrower or the Significant Subsidiary, as the case
may be, is the corporation surviving such merger, and (iii) immediately prior to
and after giving effect to such merger no Default or Event of Default exists or
would exist;
(b) any Wholly-Owned Significant Subsidiary of the Borrower may merge
into the Borrower or any other Wholly-Owned Subsidiary of the Borrower; and
(c) any Wholly-Owned Significant Subsidiary of the Borrower may
liquidate, wind-up or dissolve itself into the Borrower or any other
Wholly-Owned Subsidiary of the Borrower.
Section 9.5 Limitations on Sale of Assets. The Borrower will not
convey, sell, lease, assign, transfer or otherwise dispose of, or permit any of
its Subsidiaries to convey, sell, lease, assign, transfer or otherwise dispose
of:
(a) all or substantially all of the property, business or assets of the
Borrower and its Subsidiaries on a Consolidated basis;
(b) any of its property, business or assets if such transaction would
reasonably be expected to have a Material Adverse Effect; or
(c) any of its property, business or assets if immediately prior to or
after giving effect to such transaction a Default or an Event of Default exists
or would exist.
Section 9.6 Prohibition against Limitations on Dividends and
Distributions. The Borrower will not permit any Subsidiary to agree to, incur,
assume or suffer to exist any restriction, limitation or other encumbrance (by
covenant or otherwise) on the ability of such Subsidiary to make any payment to
the Borrower or any of its Subsidiaries (in the form of dividends, intercompany
advances or otherwise) except:
(a) Restrictions and limitations existing on the Closing Date and
described on Schedule 9.6;
(b) Restrictions and limitations applicable to a Subsidiary existing at
the time such Subsidiary becomes a Subsidiary of the Borrower and not incurred
in contemplation thereof, as long as no such restriction or limitation is made
more restrictive after the date such Subsidiary becomes a Subsidiary of the
Borrower; and
(c) Other restrictions and limitations which are not material either
individually or in the aggregate.
Section 9.7 Intentionally Omitted.
Section 9.8 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly (a) make any
loan or advance to, or purchase or assume any note or other obligation to or
from, any of its officers, directors, shareholders or Affiliates, or to or from
any member of the immediate family of any of its officers, directors,
shareholders or Affiliates, other than (i) loans or advances to customers of the
Borrower and its Subsidiaries in the ordinary course of business which are arm's
length, and (ii) any other loan or advance or assumption that would not cause
the aggregate amount of all such loans and advances and assumed notes and
advances to exceed $5,000,000, or (b) enter into, or be a party to, any
subcontract of any operations or other transaction with any of its Affiliates,
except pursuant to the reasonable requirements of its business and upon fair and
reasonable terms that are no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate and except
for transactions which are not material either individually or in the aggregate.
Nothing contained in this Section 9.8 shall prohibit the Borrower or any
Subsidiary which has obtained an ownership interest in a customer in connection
with a loan or credit workout to provide non-standard payment or other terms to
such customer or otherwise to do business with such customer in the ordinary
course of business.
Section 9.9 Certain Accounting Changes. The Borrower will not change
its Fiscal Year end in order to avoid a Default or an Event of Default or if a
Material Adverse Effect would result therefrom, and the Borrower will not make
any change in its accounting treatment and reporting practices except as
required by GAAP.
Section 9.10 Amendments; Payments and Prepayments of Subordinated Debt.
At any time after the occurrence of a Default or an Event of Default and during
the continuance thereof, the Borrower will not, and will not permit any of its
Subsidiaries to, amend or modify (or permit the modification or amendment of)
any of the terms or provisions of any Subordinated Debt, or cancel or forgive,
make any voluntary or optional payment or prepayment on, or redeem or acquire
for value (including without limitation by way of depositing with any trustee
with respect thereto money or securities before due for the purpose of paying
when due) any Subordinated Debt.
ARTICLE 10
DEFAULT AND REMEDIES
Section 10.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans. The Borrower shall
default in any payment of principal of any Revolving Credit Loan or Revolving
Credit Note when and as due (whether at maturity, by reason of acceleration or
otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Revolving Credit Loan or Revolving Credit Note or the payment of
any other Obligation, and such default shall continue unremedied for three (3)
Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed to
be made by the Borrower or any of its Subsidiaries under this Agreement, any
Loan Document or any amendment hereto or thereto, shall at any time prove to
have been incorrect or misleading in any material respect when made or deemed
made.
(d) Default in Performance of Certain Covenants. The Borrower shall
default in the performance or observance of any covenant or agreement contained
in Articles 8 or 9 of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The
Borrower or any Subsidiary shall default in the performance or observance of any
term, covenant, condition or agreement contained in this Agreement (other than
as specifically provided for otherwise in this Section 10.1) or any other Loan
Document and such default shall continue for a period of thirty (30) days after
written notice thereof has been given to the Borrower by the Administrative
Agent.
(f) Hedging Agreement. Any termination payment shall be due by the
Borrower under any Hedging Agreement to which any Lender is a party and such
amount is not paid within thirty (30) Business Days of the due date thereof.
(g) Debt Cross-Default. The Borrower or any of its Subsidiaries shall
(i) default in the payment of any Debt (other than the Revolving Credit Notes)
the aggregate outstanding amount of which Debt is in excess of $10,000,000
(including, without limitation, Debt under the Separate Revolving Credit
Facility) beyond the period of grace, if any, provided in the instrument or
agreement under which such Debt was created, (ii) default in the payment of any
amount due under a synthetic or other structured lease the aggregate implied
principal amount of which lease calculated in accordance with applicable Federal
income tax laws and regulations is in excess of $10,000,000 beyond the period of
grace, if any, provided in the instrument or agreement under which such lease
was created, or (iii) default in the observance or performance of any other
agreement or condition relating to any such Debt or any such lease or contained
in any instrument or agreement evidencing, securing or relating thereto or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such Debt
or such lease (or a trustee or agent on behalf of such holder or holders) to
cause, with the giving of notice if required, any such Debt or any such lease to
become due prior to its stated maturity (any such notice having been given and
any applicable grace period having expired).
(h) Intentionally Omitted.
(i) Change in Control. Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
shall obtain ownership or control in one or more series of transactions of
thirty percent (30%) or more of the common stock or thirty percent (30%) or more
of the voting power of the Borrower entitled to vote in the election of members
of the board of directors of the Borrower or there shall have occurred under any
indenture or other instrument evidencing any Debt in excess of $10,000,000 any
"change in control" (as defined in such indenture or other evidence of Debt)
obligating the Borrower to repurchase, redeem or repay all or any part of the
Debt provided for therein (any such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
shall (i) commence a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Borrower or any Subsidiary in any court of competent
jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(ii) the appointment of a trustee, receiver, custodian, liquidator or the like
for the Borrower or any Subsidiary or for all or any substantial part of their
respective assets, domestic or foreign, and such case or proceeding shall
continue undismissed or unstayed for a period of sixty (60) consecutive days, or
an order granting the relief requested in such case or proceeding (including,
but not limited to, an order for relief under such federal bankruptcy laws)
shall be entered.
(l) Failure of Agreements. Any material provision of this Agreement or
of any other Loan Document shall for any reason cease to be valid and binding on
the Borrower or the Borrower shall so state in writing.
(m) Termination Event. The occurrence of any of the following events:
(i) the Borrower or any ERISA Affiliate fails to make full payment when due of
all amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, except in cases in which a failure to make such payment
is not reasonably likely to result, in any given instance or in the aggregate,
in liability of the Borrower or any ERISA Affiliate in excess of $25,000,000,
(ii) an accumulated funding deficiency in excess of $25,000,000 occurs or
exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) the Borrower or any ERISA Affiliate as employers under
one or more Multiemployer Plan makes a complete or partial withdrawal from any
such Multiemployer Plan and the plan sponsor of such Multiemployer Plans
notifies such withdrawing employer that such employer has incurred a withdrawal
liability requiring payments in an amount exceeding $25,000,000.
(n) Judgment. A judgment or order for the payment of money which causes
the aggregate amount of all such judgments to exceed $10,000,000 in any Fiscal
Year shall be entered against the Borrower or any of its Subsidiaries by any
court and such judgment or order shall continue undischarged or unstayed for a
period of thirty (30) days.
Section 10.2 Remedies. Upon the occurrence of an Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Revolving Credit Loans and the Revolving Credit Notes at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents and
all other Obligations, to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or the other Loan Documents to the contrary notwithstanding, and
terminate the Revolving Credit Facility and each of the Revolving Credit
Commitments and any right of the Borrower to request borrowings thereunder;
provided that upon the occurrence of an Event of Default specified in Section
10.1(j) or Section 10.1(k), the Revolving Credit Facility shall be automatically
terminated and all Obligations shall automatically become due and payable.
(b) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations.
Section 10.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE 11
THE ADMINISTRATIVE AGENT
Section 11.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent of such Lender under
this Agreement and the other Loan Documents for the term hereof, and each such
Lender irrevocably authorizes First Union as Administrative Agent for such
Lender to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Administrative Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or the other Loan Documents or
otherwise exist against the Administrative Agent.
Section 11.2 Delegation of Duties. The Administrative Agent may execute
any of its respective duties under this Agreement and the other Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any of its Subsidiaries or
any officer thereof contained in this Agreement or the other Loan Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with this
Agreement or the other Loan Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or for any failure of the Borrower or any of its Subsidiaries to
perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower or any of its Subsidiaries.
Section 11.4 Reliance by the Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Revolving Credit Note as the owner thereof for all purposes unless such
Revolving Credit Note shall have been transferred in accordance with Section
12.10. The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement and the other Loan Documents unless it
shall first receive such advice or concurrence of the Required Lenders (or, when
expressly required hereby or by the relevant other Loan Document, all the
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action
except for its own gross negligence or willful misconduct. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Revolving Credit Notes in accordance with a
request of the Required Lenders (or, when expressly required hereby, all the
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Revolving Credit Notes.
Section 11.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless it has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, it shall promptly give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided that unless and until the Administrative Agent
shall have received such direction, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
Section 11.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Administrative Agent hereinafter taken, including any review
of the affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries and made its own decision to make its Revolving
Credit Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder or by the
other Loan Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Administrative Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates.
Section 11.7 Indemnification. The Lenders agree to indemnify each of
the Agents in its capacity as such (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably according
to the respective amounts of their Revolving Credit Commitment Percentages, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Revolving Credit Notes) be imposed on, incurred by
or asserted against such Agent in any way relating to or arising out of this
Agreement or the other Loan Documents, or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by such Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
applicable Agent's bad faith, gross negligence or willful misconduct. The
agreements in this Section 11.7 shall survive the payment of the Revolving
Credit Notes and all other amounts payable hereunder and the termination of this
Agreement.
Section 11.8 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the Administrative Agent were not an Administrative Agent
hereunder. With respect to any Revolving Credit Loans made or renewed by it and
any Revolving Credit Note issued to it, the Administrative Agent shall have the
same rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Administrative Agent,
and the terms "Lender" and "Lenders" shall include the Administrative Agent in
its individual capacity.
Section 11.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders, with the approval of the Borrower so long as no Default or
Event of Default has occurred and is continuing, shall have the right to appoint
a successor Administrative Agent, which successor shall have minimum capital and
surplus of at least $500,000,000. If no successor Administrative Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the Administrative Agent's giving of
notice of resignation, then the Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which successor shall have
minimum capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 11 shall continue in effect for its benefit with respect to any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
Section 11.10. Syndication Agent and Documentation Agent.
Notwithstanding anything to the contrary contained in this Agreement, neither
Crestar Bank in its capacity as Syndication Agent nor SunTrust Bank, Atlanta in
its capacity as Documentation Agent shall have any duties or responsibilities
whatsoever.
ARTICLE 12
MISCELLANEOUS
Section 12.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing:
If to the Borrower: Richfood Holdings, Inc.
4860 Cox Road
Glen Allen, Virginia 23060
Attention: John C. Belknap
Executive Vice President and
Chief Financial Officer
Telephone No.: (804) 915-6003
Telecopy No.: (804) 915-6010
With copies to: Gary E. Thompson, Esquire
Hunton & Williams
951 E. Byrd Street
Richmond, Virginia 23219
Telephone No.: (804) 788-8787
Telecopy No.: (804) 788-8218
If to First Union as First Union National Bank
Administrative Agent: One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telephone No.: (704) 374-2698
Telecopy No.: (704) 383-0288
With copies to: Jeffrey M. Gill, Esquire
Mays & Valentine, L.L.P.
1111 East Main Street
Richmond, Virginia 23219
Telephone No.: (804) 697-1200
Telecopy No.: (804) 697-1339
If to any Lender: To the address for such Lender set forth on Schedule
1 hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Revolving Credit Loans will be
disbursed.
Section 12.2 Expenses; Indemnity. The Borrower will (a) pay all
out-of-pocket expenses of the Administrative Agent in connection with (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation all out-of-pocket syndication and due diligence expenses and
reasonable fees and disbursements of counsel for the Administrative Agent and
(ii) the preparation, execution and delivery of any waiver, amendment or consent
by the Administrative Agent or the Lenders relating to this Agreement or any
other Loan Document, including without limitation reasonable fees and
disbursements of counsel for the Administrative Agent, (b) pay all reasonable
out-of-pocket expenses of the Administrative Agent and each Lender actually
incurred in connection with the administration and enforcement of any rights and
remedies of the Administrative Agent and Lenders under the Revolving Credit
Facility, including consulting with appraisers, accountants, engineers,
attorneys and other Persons concerning the nature, scope or value of any right
or remedy of the Administrative Agent or any Lender hereunder or under any other
Loan Document or any factual matters in connection therewith, which expenses
shall include without limitation the reasonable fees and disbursements of such
Persons, and (c) defend, indemnify and hold harmless each of the Agents and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any losses, penalties, fines,
liabilities, settlements, damages, costs and expenses, suffered by any such
Person in connection with any claim, investigation, litigation or other
proceeding (whether or not the applicable Agent or Lender is a party thereto)
and the prosecution and defense thereof, arising out of or in any way connected
with this Agreement, any other Loan Document or the Revolving Credit Loans,
including without limitation reasonable attorney's and consultant's fees, except
to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
Section 12.3 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 12.10 are hereby authorized by the Borrower at any time or from
time to time, without notice to the Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, time or demand, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured) and any other indebtedness at any time held or owing by the
Lenders, or any such assignee or participant to or for the credit or the account
of the Borrower against and on account of the Obligations irrespective of
whether or not (a) the Lenders shall have made any demand under this Agreement
or any of the other Loan Documents or (b) the Administrative Agent shall have
declared any or all of the Obligations to be due and payable as permitted by
Section 10.2 and although such Obligations shall be contingent or unmatured.
Section 12.4 Governing Law. This Agreement, the Revolving Credit Notes
and the other Loan Documents, unless otherwise expressly set forth therein,
shall be governed by and construed and enforced in accordance with the laws of
the Commonwealth of Virginia, without reference to the conflicts or choice of
law principles thereof.
Section 12.5 Consent to Jurisdiction. The Borrower hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located in
the City of Richmond, Virginia and the County of Henrico, Virginia in any
action, claim or other proceeding arising out of any dispute in connection with
this Agreement, the Revolving Credit Notes and the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations. The Borrower hereby irrevocably consents to the service of a
summons and complaint and other process in any action, claim or proceeding
brought by the Administrative Agent or any Lender in connection with this
Agreement, the Revolving Credit Notes or the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner specified in
Section 12.1. Nothing in this Section 12.5 shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
permitted by Applicable Law or affect the right of the Administrative Agent or
any Lender to bring any action or proceeding against the Borrower or its
properties in the courts of any other jurisdictions.
Section 12.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, in connection with or relating to the Revolving
Credit Notes or any other Loan Document ("Disputes"), between or among parties
to the Revolving Credit Notes or any other Loan Document shall be resolved by
binding arbitration as provided herein. Institution of a judicial proceeding by
a party does not waive the right of that party to demand arbitration hereunder.
Disputes may include, without limitation, tort claims, counterclaims, claims
brought as class actions, claims arising from Loan Documents executed in the
future, or claims concerning any aspect of the past, present or future
relationships arising out of or in connection with the Loan Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association and Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Richmond, Virginia. The expedited procedures set forth in Rule 51,
et seq. of the Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any Dispute. A
judgment upon the award may be entered in any court having jurisdiction. The
panel from which all arbitrators are selected shall be comprised of licensed
attorneys. The single arbitrator selected for expedited procedure shall be a
retired judge from the highest court of general jurisdiction, state or federal,
of the state where the hearing will be conducted.
(b) Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
ADMINISTRATIVE AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
THE REVOLVING CREDIT NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.
Section 12.7 Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.
Section 12.8 Injunctive Relief; Punitive Damages.
(a) The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrower agrees that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, the Lenders and the Borrower (on behalf
of itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any dispute.
Section 12.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent to the
contrary agreed to by the Borrower, be performed in accordance with GAAP as in
effect on the Closing Date. In the event that changes in GAAP shall be mandated
by the Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower and the
Lenders shall have amended this Agreement to the extent necessary to reflect any
such changes in the financial covenants and other terms and conditions of this
Agreement.
Section 12.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and the Lenders,
all future holders of the Revolving Credit Notes, and their respective
successors and assigns, except that the Borrower shall not assign or transfer
any of its rights or obligations under this Agreement without the prior written
consent of each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, the Borrower, which consents shall not be unreasonably
withheld, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of the Revolving Credit Extensions of Credit at the
time owing to it and the Revolving Credit Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations under
this Agreement;
(ii) if less than all of the assigning Lender's Revolving
Credit Commitment is to be assigned, the Revolving Credit Commitment so assigned
shall not be less than $5,000,000;
(iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit G attached hereto
(an "Assignment and Acceptance"), together with any Revolving Credit Note or
Notes subject to such assignment;
(iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the SEC or
apply to or qualify the Revolving Credit Loans or the Revolving Credit Notes
under the blue sky laws of any state; and
(v) the assigning Lender shall pay to the Administrative Agent
an assignment fee of $3,500 upon the execution by such Lender of the Assignment
and Acceptance; provided that no such fee shall be payable upon any assignment
by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Revolving Credit
Extensions of Credit with respect to each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative 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 Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Revolving Credit Note or Notes subject to such assignment and the
written consent to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is substantially in the form of
Exhibit F:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the
Register;
(iii) give prompt notice thereof to the Lenders and the
Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance
to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Revolving Credit Note or Notes, a new Revolving Credit Note or Notes to the
order of such Eligible Assignee in amounts equal to the Revolving Credit
Commitment assumed by it pursuant to such Assignment and Acceptance and a new
Revolving Credit Note or Notes to the order of the assigning Lender in an amount
equal to the Revolving Credit Commitment retained by it hereunder. Such new
Revolving Credit Note or Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Revolving Credit Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the assigned Revolving Credit
Notes delivered to the assigning Lender. Each surrendered Revolving Credit Note
or Notes shall be canceled and returned to the Borrower.
(f) Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Revolving
Credit Extensions of Credit and the Revolving Credit Notes held by it); provided
that:
(i) each such participation shall be in an amount not less
than $5,000,000;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Revolving Credit Commitment) shall remain
unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Revolving
Credit Notes held by it for all purposes of this Agreement;
(v) the Borrower, the Administrative 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;
(vi) such Lender shall not permit such participant the right
to approve any waivers, amendments or other modifications to this Agreement or
any other Loan Document other than waivers, amendments or modifications which
would reduce the principal of or the interest rate on any Revolving Credit Loan,
extend the term or increase the amount of the Revolving Credit Commitment,
reduce the amount of any fees to which such participant is entitled or extend
any scheduled payment date for principal of any Revolving Credit Loan;
(vii) any such disposition shall not, without the consent of
the Borrower, require the Borrower to file a registration statement with the SEC
or apply to or qualify the Revolving Credit Loans or the Revolving Credit Notes
under the blue sky laws of any state; and
(viii) any such disposition shall not require the Borrower to
indemnify or make any additional payment to the participant pursuant to Sections
3.8(c), 3.10 or 3.11 unless such Lender would have been entitled to such
indemnity or additional payment.
(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to the
Borrower obtained pursuant to the Loan Documents in accordance with their
customary procedures for handling confidential information; provided that the
Administrative Agent may disclose information relating to this Agreement to Gold
Sheets and other similar bank trade publications, such information to consist of
deal terms and other information customarily found in such publications. Any
Lender may, in connection with any assignment, proposed assignment,
participation or proposed participation pursuant to this Section 12.10, disclose
to the assignee, participant, proposed assignee or proposed participant any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; provided that prior to any such disclosure, each such assignee,
proposed assignee, participant or proposed participant shall agree with the
Borrower or such Lender to preserve the confidentiality of any confidential
information relating to the Borrower received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Revolving Credit Note to any Federal
Reserve Bank in accordance with Applicable Law.
Section 12.11 Amendments, Waivers and Consents. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or consent
is in writing signed by the Required Lenders (or by the Administrative Agent
with the consent of the Required Lenders) and delivered to the Administrative
Agent and, in the case of an amendment, signed by the Borrower; provided that no
amendment, waiver or consent shall (a) increase the amount or extend the time of
the obligation of the Lenders to make Revolving Credit Loans (including without
limitation pursuant to Section 2.6), (b) extend the originally scheduled time or
times of payment of the principal of any Revolving Credit Loan or the time or
times of payment of interest on any Revolving Credit Loan, (c) reduce the rate
of interest or fees payable on any Revolving Credit Loan, (d) reduce the
principal amount of any Revolving Credit Loan, (e) permit any subordination of
the principal or interest on any Revolving Credit Loan or (f) amend the
provisions of this Section 12.11 or the definition of Required Lenders, without
the prior written consent of each Lender. In addition, no amendment, waiver or
consent to the provisions of Article 11 shall be made without the written
consent of the Administrative Agent.
Section 12.12 Performance of Duties. The Borrower's obligations under
this Agreement and each of the Loan Documents shall be performed by the Borrower
at its sole cost and expense.
Section 12.13 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied or the Revolving Credit Facility has
not been terminated.
Section 12.14 Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article 12 and any other
provision of this Agreement and the Loan Documents shall continue in full force
and effect and shall protect the Administrative Agent and the Lenders against
events arising after such termination as well as before.
Section 12.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
Section 12.16 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 12.17 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
Section 12.18 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full and all
Revolving Credit Commitments shall have been terminated. No termination of this
Agreement shall affect the rights and obligations of the parties hereto arising
prior to such termination.
[Remainder of this page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
RICHFOOD HOLDINGS, INC.,
as Borrower
By: /s/ John C. Belknap
Name: John C. Belknap
Title: Executive Vice President
FIRST UNION NATIONAL BANK,
as Administrative Agent and Lender
By: /s/ Andrew C. Calhoun
Name: Andrew C. Calhoun
Title: Senior Vice President
[Remainder of this page intentionally left blank]
<PAGE>
CRESTAR BANK, as Syndication
Agent and Lender
By: /s/ Brad A. Booker
Name: Brad A. Booker
Title: Senior Vice President
[Remainder of this page intentionally left blank]
<PAGE>
SUNTRUST BANK, ATLANTA, as
Documentation Agent and Lender
By: /s/ Willem-Jan O. Hattink
Name: Willem-Jan O. Hattink
Title: Group Vice President
By: /s/ Dan Kometor
Name: Dan Kometor
Title: Vice President
[Remainder of this page intentionally left blank]
<PAGE>
THE FIRST NATIONAL BANK
OF CHICAGO, as Co-Agent and Lender
By: /s/ Catherine A. Muszynski
Name: Catherine A. Muszynski
Title: Vice President
[Remainder of this page intentionally left blank]
<PAGE>
MELLON BANK, N.A., as Lender
By: /s/ Donald G. Cassidy, Jr.
Name: Donald G. Cassidy, Jr.
Title: First Vice President
[Remainder of this page intentionally left blank]
<PAGE>
MERCANTILE BANK NATIONAL
ASSOCIATION, as Lender
By: /s/ Kirk A. Porter
Name: Kirk A. Porter
Title: Vice President
[Remainder of this page intentionally left blank]
<PAGE>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Lender
By: /s/ Christopher C. Kuyhardt
Name: Christopher C. Kuyhardt
Title: Vice President
[Remainder of this page intentionally left blank]
<PAGE>
THE BANK OF NEW YORK, as Lender
By: /s/ Paula D. Regan
Name: Paula D. Regan
Title: Vice Pesident
[Remainder of this page intentionally left blank]
<PAGE>
WACHOVIA BANK, N.A., as Lender
By: /s/ Charlene A. Johnson
Name: Charlene A. Johnson
Title: Senior Vice President
[Remainder of this page intentionally left blank]
#495954V.3
08927.286
<PAGE>
<TABLE>
Schedule 1
LENDERS AND COMMITMENTS
<CAPTION>
REVOLVING CREDIT REVOLVING CREDIT
LENDER COMMITMENT PERCENTAGE COMMITMENT
------ --------------------- ----------
<S> <C> <C>
First Union National Bank
One First Union Center, TW-10
301 South College Street 27.1428571429% $27,142,857.14
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telephone No.: (704) 383-0281
Telecopy No.: (704) 383-0288
Crestar Bank
919 East Main Street, 22nd Floor
Richmond, Virginia 23219 13.5714285714% $13,571,428.57
Attention: Patrick Collins
Telephone No.: (804) 782-5449
Telecopy No.: (804) 782-5413
Mellon Bank, N.A.
Mellon Bank Center
1735 Market Street, Room 750 7.1428571429% $7,142,857.14
Philadelphia, Pennsylvania 19103
Attention: Donald Cassidy
Telephone No.: (215) 553-2065
Telecopy No.: (215) 553-4899
Mercantile Bank National Association
One Mercantile Center, Tram 12-3
St. Louis, Missouri 63101 5.7142857143% $5,714,285.71
Attention: Kirk A. Porter
Telephone No.: (314) 425-2413
Telecopy No.: (314) 418-8292
Morgan Guaranty Trust Company of New
York
60 Wall Street, 22nd Floor 7.1428571429% $7,142,857.14
New York, New York 10260-0060
Attention: Patricia Merritt
Telephone No.: (212) 648-6744
Telecopy No.: (212) 648-5336
<PAGE>
Schedule 1
(continued)
LENDERS AND COMMITMENTS
<CAPTION>
REVOLVING CREDIT REVOLVING CREDIT
LENDER COMMITMENT PERCENTAGE COMMITMENT
------ --------------------- ----------
The Bank of New York
One Wall Street, 8th Floor
New York, New York 10286 7.1428571429% $7,142,857.14
Attention: Paula Regan
Telephone No.: (212) 635-7867
Telecopy No.: (212) 635-1481 or 1483
The First National Bank of Chicago
One First National Plaza
Mail Suite 0086 11.4285714286% $11,428,571.43
Chicago, Illinois 60670
Attention: Jonn Runger
Telephone No.: (312) 732-7101
Telecopy No.: (312) 732-1117
SunTrust Bank
25 Park Place, 23rd Floor
Atlanta, Georgia 30303 13.5714285714% $13,571,428.57
Attention: Brian Peters
Telephone No.: (404) 827-6118
Telecopy No.: (404) 588-8833
Wachovia Bank, N.A.
100 N. Main Street
Winston-Salem, North Carolina 7.1428571429% $7,142,857.14
27150-7202
Attention: Southeast Corporate
Banking
Telephone No.: (336) 732-5472
Telecopy No.: (336) 732-6935
</TABLE>
<PAGE>
Schedule 5.1(a)
JURISDICTIONS OF ORGANIZATION AND QUALIFICATION
<PAGE>
Schedule 5.1(b)
SUBSIDIARIES AND CAPITALIZATION
<PAGE>
Schedule 5.1(i)
EMPLOYEE BENEFIT PLANS
<PAGE>
Schedule 5.1(l)
MATERIAL CONTRACTS
<PAGE>
Schedule 5.1(m)
LABOR AND COLLECTIVE BARGAINING AGREEMENTS
<PAGE>
Schedule 5.1(t)
DEBT AND GUARANTY OBLIGATIONS
<PAGE>
Schedule 9.3
EXISTING LIENS
<PAGE>
Schedule 9.6
EXISTING RESTRICTIONS ON DIVIDENDS
<PAGE>
EXHIBIT A
REVOLVING CREDIT NOTE
$ _____________________ February 27, 1998
Richmond, Virginia
FOR VALUE RECEIVED, the undersigned, RICHFOOD HOLDINGS, INC., a
corporation organized under the laws of the Commonwealth of Virginia (the
"Borrower"), promises to pay to the order of
______________________________________________________________ (the "Lender"),
at the times, at the place and in the manner provided in the Credit Agreement
(as hereinafter defined), the principal sum of
_________________________________________ Dollars ($____________), or, if less,
the aggregate unpaid principal amount of all Revolving Credit Loans made by the
Lender under the Credit Agreement, together with interest at the rates as in
effect from time to time with respect to each portion of the principal amount
hereof, determined and payable as provided in Article 3 of the Credit Agreement.
This Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of February 27, 1998,
by and among the Borrower, the Lenders parties thereto, First Union National
Bank as Administrative Agent, Crestar Bank as Syndication Agent and SunTrust
Bank, Atlanta as Documentation Agent (the "Credit Agreement"). The Credit
Agreement contains, among other things, provisions for the time, place and
manner of payment of this Note, the determination of the interest rate borne by
and fees payable with respect to this Note and the mandatory repayment of this
Note under certain circumstances.
The events of default hereunder are the same as those described in the
Credit Agreement which are incorporated herein by this reference. In the event
of the occurrence of any or all of such events, the entire amount of the
principal of this Note together with all accrued interest may automatically
become or may be declared immediately due and payable in the manner and with the
effect as provided in the Credit Agreement.
The Borrower agrees to pay on demand all costs of collection, including
reasonable attorneys' fees, if any part of this Note, principal or interest, is
collected after maturity with the aid of any attorney.
Presentment, demand, protest and notice of dishonor are hereby waived
by all makers and endorsers hereon.
This Note shall be governed by and construed and enforced in accordance
with the laws of the Commonwealth of Virginia, without reference to the
conflicts or choice of law principles thereof.
A-1
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused its name to be signed by
its duly authorized officer as of the day and year first above written.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
A-2
<PAGE>
EXHIBIT B
NOTICE OF REVOLVING CREDIT BORROWING
---------- --, ----
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Revolving Credit Borrowing is delivered to
you under Section 2.2 (a) of the Credit Agreement dated as of February 27, 1998
(as amended or supplemented from time to time, the "Credit Agreement"), by and
among Richfood Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the
"Lenders"), First Union National Bank as Administrative Agent, Crestar Bank as
Syndication Agent and SunTrust Bank, Atlanta as Documentation Agent.
1. The Borrower hereby requests that the Lenders make the Revolving
Credit Loans described below.
2. The Borrower hereby requests that the Lenders make the Revolving
Credit Loans in the aggregate principal amount of $_____________. (For LIBOR
Rate Loans, complete with an amount equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; and for Base Rate Loans, complete with an amount
equal to $1,000,000 or a whole multiple of $500,000 in excess thereof.)
3. The Borrower hereby requests that the Revolving Credit Loans be made
on the following Business Day: _______________. (Complete with a date at least
one (1) Business Day after the date of this Notice of Revolving Credit Borrowing
for Revolving Credit Loans which are initially to be Base Rate Loans, and at
least three (3) Business Days after the date of this Notice of Revolving Credit
Borrowing for Revolving Credit Loans which are initially to be LIBOR Rate
Loans.)
4. The Borrower hereby requests that the Revolving Credit Loans
initially bear interest at the following interest rate, plus the Applicable
Margin, as set forth below: (check one)
______ Base Rate
______ LIBOR Rate
B-1
<PAGE>
5. If the Revolving Credit Loans requested are initially to be LIBOR
Rate Loans, the Borrower hereby requests the following initial Interest Period
with respect thereto: (check one)
_______ 1 month
_______ 2 months
_______ 3 months
_______ 6 months
6. The principal amount of all Revolving Credit Loans outstanding after
giving effect to the Revolving Credit Loans requested hereby will not exceed the
maximum amount permitted to be outstanding pursuant to the terms of the Credit
Agreement.
7. All of the conditions applicable to the Revolving Credit Loans
requested herein as set forth in the Credit Agreement have been satisfied as of
the date hereof and will remain satisfied to the date the requested Revolving
Credit Loans are made.
8. No Default or Event of Default exists, and none will exist upon the
making of the requested Revolving Credit Loans.
9. The representations and warranties of the Borrower described in
Section 4.3(a) of the Credit Agreement are true and correct in all material
respects as of the date hereof and will be true and correct in all material
respects after giving effect to the requested Revolving Credit Loans.
10. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Revolving Credit Borrowing this _____ day of ________________, _____.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
B-2
<PAGE>
EXHIBIT C
NOTICE OF ACCOUNT DESIGNATION
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
In accordance with the terms of Section 2.2(b) of the Credit Agreement
dated February 27, 1998 (as amended or supplemented from time to time, the
"Credit Agreement"), by and among Richfood Holdings, Inc. (the "Borrower"), the
Lenders parties thereto, First Union National Bank as Administrative Agent,
Crestar Bank as Syndication Agent and SunTrust Bank, Atlanta as Documentation
Agent, the Borrower hereby designates the following account as the account to
which the proceeds of Revolving Credit Loans under the Credit Agreement may be
disbursed:
--------------------------------------
--------------------------------------
--------------------------------------
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation this _____ day of _______________, 1998.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
C-1
<PAGE>
EXHIBIT D
NOTICE OF PREPAYMENT
---------- --, -----
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you under Section
2.3(c) of the Credit Agreement dated as of February 27, 1998 (as amended or
supplemented from time to time, the "Credit Agreement"), by and among Richfood
Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the "Lenders"),
First Union National Bank as Administrative Agent, Crestar Bank as Syndication
Agent and SunTrust Bank, Atlanta as Documentation Agent.
1. The Borrower hereby gives notice that it will repay Revolving Credit
Loans in an aggregate principal amount of $________. (For LIBOR Rate Loans,
complete with an amount equal to at least $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; and for Base Rate Loans, complete with an amount
equal to $1,000,000 or a whole multiple of $500,000 in excess thereof.)
2. The repayment will be made on the following Business Day:
______________ (Complete with a date at least one (1) Business Day after the
date of this Notice of Prepayment if the Revolving Credit Loans to be repaid are
Base Rate Loans, and at least three (3) Business Days after the date of this
Notice of Prepayment if the Revolving Credit Loans to be repaid are LIBOR Rate
Loans.)
3. The Revolving Credit Loans to be repaid are: (check one or more).
Base Rate Loans in the amount of $____________
LIBOR Rate Loans in the amount of $__________
4. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
D-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Prepayment this ____ day of __________________, ______.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
D-2
<PAGE>
EXHIBIT E
NOTICE OF CONVERSION/CONTINUATION
---------- --, ----
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 23288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation is delivered to you
under Section 3.2 of the Credit Agreement dated as of February 27, 1998 (as
amended or supplemented from time to time, the "Credit Agreement"), by and among
Richfood Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the
"Lenders"), First Union National Bank as Administrative Agent, Crestar Bank as
Syndication Agent and SunTrust Bank, Atlanta as Documentation Agent.
1. This Notice of Conversion/Continuation is submitted with respect to
Revolving Credit Loans for the purpose of:
(a) [Converting] [continuing] a ________ Loan [into] [as] a
________ Loan.1
(b) The aggregate outstanding principal balance of such Revolving
Credit Loans is $_______________.2
(c) The last day of the current Interest Period for such Revolving
Credit Loans is __________ __, _____.3
(d) The principal amount of such Revolving Credit Loan to be
[converted] [continued] is $____________.4
(e) The requested effective date of the [conversion]
[continuation] of such Revolving Credit Loans is __________
__, _____.5
(f) The requested Interest Period applicable to the [converted]
[continued] Loan is _______________.6
2. No Default or Event of Default exists, and none will exist upon the
conversion or continuation of the Revolving Credit Loans requested herein.
E-1
<PAGE>
3. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Conversion/Continuation this ______ day of _______________, ____.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
1. Delete the brackets and the bracketed language as appropriate and
insert "Base Rate" or "LIBOR Rate," as applicable, in each blank.
2. Insert the amount of the applicable Loans.
3. Insert applicable date for any LIBOR Rate Loan being converted or
continued.
4. Complete with an amount in compliance with Section 3.2 of the Credit
Agreement.
5. Delete the brackets and bracketed language as appropriate, and complete
with a Business Day at least one (1) Business Day after the date of
this Notice for a continuation of or conversion to a Base Rate Loan and
at least three (3) Business Days after the date of this Notice for a
continuation of or conversion to a LIBOR Rate Loan.
6. Complete for any LIBOR Rate Loan with an Interest Period in compliance
with the definition of Interest Period contained in the Credit
Agreement.
E-2
<PAGE>
EXHIBIT F
OFFICER'S COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement dated as of February 27, 1998
(as amended or supplemented from time to time, the "Credit Agreement"), by and
among Richfood Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the
"Lenders"), First Union National Bank as Administrative Agent, Crestar Bank as
Syndication Agent and SunTrust Bank, Atlanta as Documentation Agent. Capitalized
terms which are defined in the Credit Agreement and which are used herein
without definition shall have the same meanings herein as in the Credit
Agreement.
Pursuant to Section 6.2 of the Credit Agreement, ______________, the
duly authorized ____________________ of the Borrower, hereby certifies to the
Administrative Agent and each of the Lenders that the information contained
below is true, accurate and complete for the four-quarter period ending
______________ __, ____, or as of such date, as applicable, and that as of such
date no Default or Event of Default has occurred and is continuing:
Leverage Ratio:
Fixed Charge Coverage Ratio:
[Other Negative Covenants:]
---------------------------------------
(Officer's Signature)
F-1
<PAGE>
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of February 27, 1998
(as amended or supplemented from time to time, the "Credit Agreement"), by and
among Richfood Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the
"Lenders"), First Union National Bank as Administrative Agent, Crestar Bank as
Syndication Agent and SunTrust Bank, Atlanta as Documentation Agent. Capitalized
terms which are defined in the Credit Agreement and which are used herein
without definition shall have the same meanings herein as in the Credit
Agreement.
________________________________________________________ (the "Assignor")
and ___________________________________________________ (the "Assignee") agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, as of the Effective
Date (as defined below), a _____% interest (the "Assigned Interest") in and to
the Assignor's Revolving Credit Commitment under the Credit Agreement and the
Assignor thereby retains _____% of its interest therein (the "Retained
Interest"). This Assignment and Acceptance is entered pursuant to, and
authorized by, Section 12.10 of the Credit Agreement.
2. The Assignor (a) represents that, as of the date hereof, (i) its
Revolving Credit Commitment (without giving effect to assignments thereof which
have not yet become effective) under the Credit Agreement, and (ii) the
outstanding balance of its Revolving Credit Loans (unreduced by any assignments
thereof which have not yet become effective) under the Credit Agreement, are
each set forth in Section 2 of Schedule I hereto; (b) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto, other than that the Assignor
is the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or its Subsidiaries or the performance or
observance by the Borrower or its Subsidiaries of any of their obligations under
the Credit Agreement or any other Loan Document; and (d) attaches the Revolving
Credit Note delivered to it under the Credit Agreement and requests that the
Borrower exchange such Note for new Notes payable to each of the Assignor and
the Assignee as follows:
G-1
<PAGE>
Revolving Credit Note
Payable to the Order of: Principal Amount of Note:
- ----------------------------------- $---------------
- ----------------------------------- $---------------
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.1 thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (c)
agrees that it will, independently and without reliance upon the Assignor or any
other Lender or the Administrative Agent 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 the Credit Agreement; (d)
confirms that it is an Eligible Assignee; (e) appoints and authorizes the
Administrative Agent to take such action as Agent on its behalf and to exercise
such powers under the Credit Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (f) agrees that it will perform in
accordance with their terms all the obligations which by the terms of the Credit
Agreement and the other Loan Documents are required to be performed by it as a
Lender; and (g) agrees that it will keep confidential all non-public information
with respect to the Borrower obtained pursuant to the Loan Documents in
accordance with Section 12.10(g) of the Credit Agreement.
4. The effective date for this Assignment and Acceptance shall be as
set forth in Section 1 of Schedule I hereto (the "Effective Date"). Following
the execution of this Assignment and Acceptance, it will be delivered to the
Administrative Agent [and the Borrower] for consent thereby and acceptance and
recording in the Register.
5. Upon such consents, acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and
the other Loan Documents to which Lenders are parties and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender under each such agreement, and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement and the other Loan
Documents.
6. Upon such consents, acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments with respect to
the interest assigned hereby (including payments of principal, interest, fees
and other amounts) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
G-2
<PAGE>
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO
CONFLICT OF LAW PRINCIPLES.
ASSIGNOR
-------------------------------------------
By:
----------------------------------------
Title:
-------------------------------------
ASSIGNEE
-------------------------------------------
By:
----------------------------------------
Title:
-------------------------------------
Consented to and Accepted:
FIRST UNION NATIONAL BANK,
as Administrative Agent
By:
----------------------------------------
Title:
-------------------------------------
[RICHFOOD HOLDINGS, INC.
By:
----------------------------------------
Title:
-------------------------------------
G-3
<PAGE>
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
1. Effective Date: ________________ __, ____
2. Assignor's Revolving Credit Commitment $____________
Assignor's Outstanding Revolving Credit Loans $____________
G-4
Exhibit 10.2
CREDIT AGREEMENT
dated as of February 27, 1998,
by and among
RICHFOOD HOLDINGS, INC.,
as Borrower,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
CRESTAR BANK,
as Syndication Agent,
and
SUNTRUST BANK, ATLANTA,
as Documentation Agent
<PAGE>
<TABLE>
TABLE OF CONTENTS
<S> <C>
ARTICLE 1 DEFINITIONS...................................................................................1
Section 1.1 Definitions...................................................................................1
Section 1.2 General. ....................................................................................14
Section 1.3 Other Definitions and Provisions.............................................................14
ARTICLE 2 REVOLVING CREDIT FACILITY....................................................................14
Section 2.1 Revolving Credit Loans.......................................................................14
Section 2.2 Swingline Loans..............................................................................14
Section 2.3 Procedure for Advances of Revolving Credit and Swingline Loans...............................16
Section 2.4 Competitive Bid Loans........................................................................17
Section 2.5 Repayment of Loans...........................................................................21
Section 2.6 Notes........................................................................................22
Section 2.7 Increase in the Aggregate Revolving Credit Commitment........................................22
Section 2.8 Reduction in the Aggregate Revolving Credit Commitment.......................................23
Section 2.9 Termination of Revolving Credit Facility.....................................................24
Section 2.10 Use of Proceeds..............................................................................24
ARTICLE 3 LETTER OF CREDIT FACILITY....................................................................24
Section 3.1 L/C Commitment...............................................................................24
Section 3.2 Procedure for Issuance of Letters of Credit..................................................25
Section 3.3 Commissions and Other Charges................................................................25
Section 3.4 L/C Participations...........................................................................26
Section 3.5 Reimbursement Obligation of the Borrower.....................................................27
Section 3.6 Obligations Absolute.........................................................................28
Section 3.7 Effect of Application........................................................................28
ARTICLE 4 GENERAL LOAN PROVISIONS......................................................................28
Section 4.1 Interest.....................................................................................28
Section 4.2 Notice and Manner of Conversion or Continuation of Loans.....................................31
Section 4.3 Fees.........................................................................................31
Section 4.4 Manner of Payment............................................................................32
Section 4.5 Crediting of Payments and Proceeds...........................................................33
Section 4.6 Adjustments..................................................................................33
Section 4.7 Nature of Obligations of Lenders Regarding Extensions of Credit;
Assumption by the Administrative Agent.......................................................34
Section 4.8 Changed Circumstances........................................................................34
Section 4.9 Indemnity....................................................................................36
Section 4.10 Capital Requirements.........................................................................36
Section 4.11 Taxes........................................................................................37
Section 4.12 Mitigation...................................................................................38
Section 4.13 Replacement of Demanding Lender..............................................................39
ARTICLE 5 CLOSING; CONDITIONS OF CLOSING AND BORROWING.................................................39
Section 5.1 Closing......................................................................................39
Section 5.2 Conditions to Closing and Initial Extensions of Credit.......................................39
Section 5.3 Conditions to All Loans and Letters of Credit................................................42
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE BORROWER 42
Section 6.1 Representations and Warranties...............................................................42
Section 6.2 Survival of Representations and Warranties, Etc..............................................49
ARTICLE 7 FINANCIAL INFORMATION AND NOTICES............................................................49
Section 7.1 Financial Statements and Projections.........................................................50
Section 7.2 Officer's Compliance Certificate.............................................................50
Section 7.3 Other Reports................................................................................50
Section 7.4 Notice of Subsidiaries, Litigation and Other Matters. .......................................51
Section 7.5 Accuracy of Information......................................................................52
ARTICLE 8 AFFIRMATIVE COVENANTS........................................................................52
Section 8.1 Preservation of Corporate Existence and Related Matters......................................52
Section 8.2 Maintenance of Property......................................................................52
Section 8.3 Insurance....................................................................................53
Section 8.4 Accounting Methods and Financial Records.....................................................53
Section 8.5 Payment and Performance of Obligations.......................................................53
Section 8.6 Compliance With Laws and Approvals...........................................................53
Section 8.7 Environmental Laws...........................................................................53
Section 8.8 Compliance with ERISA........................................................................54
Section 8.9 Compliance With Agreements...................................................................54
Section 8.10 Conduct of Business..........................................................................54
Section 8.11 Visits and Inspections.......................................................................54
Section 8.12 Year 2000 Compatibility......................................................................54
Section 8.13 Further Assurances...........................................................................55
ARTICLE 9 FINANCIAL COVENANTS..........................................................................55
Section 9.1 Leverage Ratio...............................................................................55
Section 9.2 Fixed Charge Coverage Ratio..................................................................55
ARTICLE 10 NEGATIVE COVENANTS...........................................................................55
Section 10.1 Limitations on Debt..........................................................................55
Section 10.2 Intentionally Omitted........................................................................56
Section 10.3 Limitations on Liens.........................................................................56
Section 10.4 Limitations on Mergers and Liquidation.......................................................57
Section 10.5 Limitations on Sale of Assets................................................................58
Section 10.6 Prohibition against Limitations on Dividends and Distributions...............................58
Section 10.7 Intentionally Omitted........................................................................58
Section 10.8 Transactions with Affiliates.................................................................58
Section 10.9 Certain Accounting Changes...................................................................59
Section 10.10 Amendments; Payments and Prepayments of Subordinated Debt....................................59
ARTICLE 11 DEFAULT AND REMEDIES.........................................................................59
Section 11.1 Events of Default............................................................................59
Section 11.2 Remedies.....................................................................................61
Section 11.3 Rights and Remedies Cumulative; Non-Waiver; etc..............................................62
ARTICLE 12 THE ADMINISTRATIVE AGENT.....................................................................62
Section 12.1 Appointment..................................................................................63
Section 12.2 Delegation of Duties.........................................................................63
Section 12.3 Exculpatory Provisions.......................................................................63
Section 12.4 Reliance by the Administrative Agent.........................................................63
Section 12.5 Notice of Default............................................................................64
Section 12.6 Non-Reliance on the Administrative Agent and Other Lenders...................................64
Section 12.7 Indemnification..............................................................................65
Section 12.8 The Administrative Agent in Its Individual Capacity..........................................65
Section 12.9 Resignation of the Administrative Agent; Successor Administrative Agent......................65
Section 12.10 Syndication Agent and Documentation Agent ...................................................65
ARTICLE 13 MISCELLANEOUS................................................................................66
Section 13.1 Notices......................................................................................66
Section 13.2 Expenses; Indemnity..........................................................................67
Section 13.3 Set-off......................................................................................67
Section 13.4 Governing Law................................................................................68
Section 13.5 Consent to Jurisdiction......................................................................68
Section 13.6 Binding Arbitration; Waiver of Jury Trial....................................................69
Section 13.7 Reversal of Payments.........................................................................69
Section 13.8 Injunctive Relief; Punitive Damages..........................................................69
Section 13.9 Accounting Matters...........................................................................69
Section 13.10 Successors and Assigns; Participations.......................................................70
Section 13.11 Amendments, Waivers and Consents.............................................................72
Section 13.12 Performance of Duties........................................................................73
Section 13.13 All Powers Coupled with Interest.............................................................73
Section 13.14 Survival of Indemnities......................................................................73
Section 13.15 Titles and Captions..........................................................................73
Section 13.16 Severability of Provisions...................................................................73
Section 13.17 Counterparts.................................................................................73
Section 13.18 Term of Agreement............................................................................74
EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swingline Note
Exhibit A-3 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Revolving Credit Borrowing
Exhibit B-2 - Form of Competitive Bid Request
Exhibit B-3 - Form of Competitive Bid
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
SCHEDULES
Schedule 1 - Lenders and Commitments
Schedule 6.1(a) - Jurisdictions of Organization and Qualification
Schedule 6.1(b) - Subsidiaries and Capitalization
Schedule 6.1(i) - Employee Benefit Plans
Schedule 6.1(l) - Material Contracts
Schedule 6.1(m) - Labor and Collective Bargaining Agreements
Schedule 6.1(t) - Debt and Guaranty Obligations
Schedule 10.3 - Existing Liens
Schedule 10.6 - Existing Restrictions on Dividends
</TABLE>
<PAGE>
CREDIT AGREEMENT, dated as of the 27th day of February, 1998, by and
among RICHFOOD HOLDINGS, INC., a Virginia corporation (the "Borrower"), the
Lenders who are or may become a party to this Agreement (the "Lenders"), FIRST
UNION NATIONAL BANK, a national banking association (the "Administrative
Agent"), as Administrative Agent for the Lenders, CRESTAR BANK, as Syndication
Agent, and SUNTRUST BANK, ATLANTA, as Documentation Agent.
STATEMENT OF PURPOSE
The Borrower has requested that the Lenders extend, and the Lenders
have agreed to extend, certain credit facilities to the Borrower on the terms
and conditions contained in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Absolute Competitive Bid Borrowing" means a Competitive Bid Borrowing
of Competitive Bid Loans bearing interest at a fixed interest rate.
"Administrative Agent" means First Union in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 12.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
13.1.
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary of such first Person) which directly or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such first Person or any of its Subsidiaries. The term "control"
means (a) the power to vote five percent (5%) or more of the securities or other
equity interests of a Person having ordinary voting power, or (b) the
possession, directly or indirectly, of any other power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
"Agents" means the Administrative Agent, Crestar Bank as Syndication
Agent and/or SunTrust Bank, Atlanta as Documentation Agent as the context may
require.
"Aggregate Revolving Credit Commitment" means the aggregate amount of
the Lenders' Revolving Credit Commitments hereunder, as such amount may be
increased, reduced or modified at any time or from time to time pursuant to the
terms hereof. On the Closing Date, the Aggregate Revolving Credit Commitment
shall be Two Hundred Fifty Million Dollars ($250,000,000.00).
"Agreement" means this Credit Agreement, as amended, restated or
otherwise modified.
"Applicable Law" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
4.1(c).
"Application" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 13.10.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Base Rate Loan" means any Revolving Credit Loan bearing interest at a
rate based upon the Base Rate as provided in Section 4.1(a).
"Borrower" means Richfood Holdings, Inc. in its capacity as borrower
hereunder.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
"Capital Asset" means, with respect to the Borrower and its
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a Consolidated balance sheet of the Borrower
and its Subsidiaries.
"Capital Lease" means, with respect to the Borrower and its
Subsidiaries, any lease of any property that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrower and its Subsidiaries.
"Change in Control" shall have the meaning assigned thereto in Section
11.1(i).
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Article 5 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended, supplemented or otherwise modified.
"Competitive Bid" means an offer by a Lender to make one or more
Competitive Bid Loans in accordance with the provisions of Section 2.4.
"Competitive Bid Borrowing" means the borrowing by the Borrower on a
single date of any one or more Competitive Bid Loans as to which a single
Interest Period is in effect in accordance with the provisions of Section 2.4.
"Competitive Bid Loans" means any competitive bid loan made to the
Borrower pursuant to Section 2.4; and all such competitive bid loans
collectively as the context requires.
"Competitive Bid Notes" means the collective reference to the
Competitive Bid Notes made by the Borrower payable to the order of the Lenders,
each substantially in the form of Exhibit A-3 hereto, evidencing the Competitive
Bid Loans of the Lenders, and any amendments and modifications thereto, any
substitutes therefor, and any replacements, renewals and extensions thereof, in
whole or in part; "Competitive Bid Note" means any of such Competitive Bid
Notes.
"Competitive Bid Rate" shall have the meaning assigned thereto in
Section 2.4(d).
"Competitive Bid Request" shall have the meaning assigned thereto in
Section 2.4(b).
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Borrower and its Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Consolidated EBITDA" means, for any period and without duplication,
the Consolidated net income of the Borrower and its Subsidiaries for such period
plus the aggregate amount deducted in determining such Consolidated net income
for such period with respect to interest, taxes, depreciation and amortization;
provided that, in calculating Consolidated EBITDA for any period, (i) any
Subsidiary acquired during such period shall be treated as if it were a
Subsidiary for the entire period and (ii) any non-cash gains or losses resulting
from the sale, conversion or other disposition of assets, any gains or losses
resulting from the write-up or write-down of assets, any equity in the
unremitted earnings of any company which is not a Wholly-Owned Subsidiary and
any other non-cash extraordinary items shall be disregarded.
"Consolidated EBITDAR" means, for any period and without duplication,
the Consolidated net income of the Borrower and its Subsidiaries for such period
plus the aggregate amount deducted in determining such Consolidated net income
for such period with respect to interest, taxes, depreciation, amortization and
net rent (including, without limitation, rent under synthetic and other
structured leases); provided that, in calculating Consolidated EBITDAR for any
period, (i) any Subsidiary acquired during such period shall be treated as if it
were a Subsidiary for the entire period, and (ii) any non-cash gains or losses
resulting from the sale, conversion or other disposition of assets, any gains or
losses resulting from the write-up or write-down of assets, any equity in the
unremitted earnings of any company which is not a Wholly-Owned Subsidiary and
any other non-cash extraordinary items shall be disregarded.
"Consolidated Fixed Charges" means, for any period and without
duplication, the sum of the Consolidated interest expense (including, without
limitation, the portion of any obligation under Capital Leases allocable to
Consolidated interest expense in accordance with GAAP) of the Borrower and its
Subsidiaries for such period, the Consolidated net rent expense (including,
without limitation, rent expense under synthetic and other structured leases) of
the Borrower and its Subsidiaries for such period, the Consolidated current
maturities of long-term debt of the Borrower and its Subsidiaries as of the end
of such period, and the Consolidated obligations of the Borrower and its
Subsidiaries with respect to the principal components of payments under Capital
Leases which were payable during such period.
"Consolidated Funded Debt" means, at any date and without duplication,
the sum of (i) the Consolidated Debt of the Borrower and its Subsidiaries of the
types described in clauses (a), (b), (c) and (d) of the definition of Debt at
such date (including current maturities of such Debt), and (ii) the aggregate
implied principal amount of synthetic and other structured leases of the
Borrower and its Subsidiaries at such date calculated in accordance with
applicable Federal income tax laws and regulations.
"Consolidated Net Tangible Assets" means, at any date and without
duplication, the aggregate amount of assets of the Borrower and its Subsidiaries
(less applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities, and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent balance sheet of the Borrower
and its Subsidiaries and computed in accordance with GAAP.
"Credit Facility" means the collective reference to the Revolving
Credit Facility and the L/C Facility.
"Debt" means, with respect to the Borrower and its Subsidiaries at any
date and without duplication, the sum of the following calculated in accordance
with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money
including but not limited to obligations evidenced by bonds, debentures, notes
or other similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person, except trade
payables arising in the ordinary course of business, (c) all obligations of any
such Person as lessee with respect to the principal components of Capital
Leases, (d) all Debt of any other Person secured by a Lien on any asset of any
such Person, (e) all Guaranty Obligations of any such Person, (f) all
obligations, contingent or otherwise, of any such Person relative to the face
amount of letters of credit, whether or not drawn, including without limitation
any Reimbursement Obligation, and banker's acceptances issued for the account of
any such Person and (g) all obligations incurred by any such Person pursuant to
Hedging Agreements.
"Default" means any of the events specified in Section 11.1 which with
the passage of time, the giving of notice or any other condition would
constitute an Event of Default.
"Demanding Lender" shall have the meaning assigned thereto in Section
4.13.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Eligible Assignee" means, with respect to any assignment of the
rights, interests and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof or under the laws of a country which is a
member of the Organization for Economic Cooperation and Development, having
combined capital and surplus in excess of $500,000,000, (b) a finance company,
insurance company or other financial institution which in the ordinary course of
business extends credit of the type extended hereunder and that has total assets
in excess of $1,000,000,000, (c) already a Lender hereunder (whether as an
original party to this Agreement or as the assignee of another Lender), (d) the
successor (whether by transfer of assets, merger or otherwise) to all or
substantially all of the commercial lending business of the assigning Lender, or
(e) any other Person that has been approved in writing as an Eligible Assignee
by the Borrower and the Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any current or former
ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended, supplemented or otherwise
modified.
"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 11.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Existing Credit Facilities" means the following credit facilities of
the Borrower and its Subsidiaries which will be refinanced with the proceeds of
Loans made hereunder: (i) the credit facility described in the letter agreement
dated February 20, 1996, as amended, between Market Funding, Inc. and Crestar
Bank, and (ii) the credit facility evidenced by the Revolving Loan Promissory
Note, dated December 4, 1995, made by Market Funding, Inc. to NationsBank, N.A.
"Facility Fee Percentage" shall have the meaning assigned thereto in
Section 4.3(b).
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Borrower and its
Subsidiaries ending on the Saturday nearest April 30.
"GAAP" means generally accepted accounting principles, as recognized
from time to time by the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board, consistently applied and maintained on
a consistent basis for the Borrower and its Subsidiaries throughout the period
indicated and consistent with the prior financial practice of the Borrower and
its Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, with respect to the Borrower and its
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other similar obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Applicable Law, (b) which are toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise harmful to human health or the environment and are or
become regulated by any Governmental Authority, (c) the presence of which
require investigation or remediation under any Applicable Law, (d) the discharge
or emission or release of which requires a permit or license under any
Applicable Law or other Governmental Approval, (e) which are found by a court of
competent jurisdiction or by any Governmental Authority to constitute a
nuisance, a trespass or pose a health or safety hazard to persons or neighboring
properties, (f) which consist of underground or aboveground storage tanks,
whether empty, filled or partially filled with any substance of the type listed
in any other part of this definition, or (g) which contain asbestos,
polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel,
natural gas or synthetic gas.
"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrower, and any confirming letter
executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified.
"Interest Period" shall have the meaning assigned thereto in Section
4.1(b) in the case of LIBOR Rate Loans and LIBOR Competitive Bid Borrowings, and
means a period not less than seven (7) days or more than one hundred eighty
(180) days as provided in Section 2.4 in the case of Absolute Competitive Bid
Borrowings.
"Issuing Lender" means First Union, in its capacity as issuer of any
Letter of Credit, or any successor thereto.
"L/C Commission Percentage" shall have the meaning assigned thereto in
Section 3.3(b).
"L/C Commitment" means Twenty-Five Million Dollars ($25,000,000.00).
"L/C Facility" means the letter of credit facility established pursuant
to Article 3.
"L/C Obligations" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders
other than the Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 13.10(b).
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Revolving Credit Loans.
"Letters of Credit" shall have the meaning assigned thereto in Section
3.1.
"LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Telerate
Page 3750 at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of the applicable Interest Period (rounded upward, if
necessary, to the nearest one-sixteenth of one percent (1/16%)). If, for any
reason, such rate does not appear on Telerate Page 3750, then "LIBOR" shall be
determined by the Administrative Agent to be the arithmetic average (rounded
upward, if necessary, to the nearest one-sixteenth of one percent (1/16%)) of
the rate per annum at which deposits in Dollars would be offered by first class
banks in the London interbank market to the Administrative Agent at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of the applicable Interest Period for a period equal to such Interest Period
and in an amount substantially equal to the amount of the applicable Loan.
"LIBOR Competitive Bid Borrowing" means a Competitive Bid Borrowing of
Competitive Bid Loans bearing interest at an interest rate based on LIBOR.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 4.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind with respect to such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loans" means the collective reference to the Revolving Credit Loans,
the Swingline Loans and the Competitive Bid Loans, and "Loan" means any of such
Loans.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Applications and each other document, instrument and agreement executed and
delivered by the Borrower, its Subsidiaries or their counsel in connection with
this Agreement or otherwise referred to herein or contemplated hereby, all as
may be amended, restated or otherwise modified.
"Material Adverse Change" means a material adverse change in the
condition (financial or otherwise), operations, business, properties or
financial prospects of the Borrower or the Borrower and its Subsidiaries taken
as a whole.
"Material Adverse Effect" means a material adverse effect upon (a) the
condition (financial or otherwise), operations, business, properties or
financial prospects of the Borrower or the Borrower and its Subsidiaries taken
as a whole, (b) the ability of the Borrower to perform its obligations under
this Agreement or any of the other Loan Documents, or (c) the legality, validity
or enforceability of this Agreement or any of the other Loan Documents.
"Material Contract" means (a) any multi-year supply agreement with a
customer producing revenue in excess of $50,000,000 per year or any other
contract or other agreement, written or oral, of the Borrower or any of its
Subsidiaries involving monetary liability of or to any such Person in an amount
in excess of $10,000,000 per year, or (b) any other contract or agreement,
written or oral, of the Borrower or any of its Subsidiaries the failure to
comply with which could reasonably be expected to have a Material Adverse
Effect.
"Maximum Competitive Bid Loan Amount" means Two Hundred Fifty Million
Dollars ($250,000,000.00).
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making or is
accruing an obligation to make contributions or has made or has accrued an
obligation to make contributions within the preceding six years.
"Notes" means the collective reference to the Revolving Credit Notes,
the Swingline Note and the Competitive Bid Notes, and "Note" means any of such
Notes.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.3(b).
"Notice of Revolving Credit Borrowing" shall have the meaning assigned
thereto in Section 2.3(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 4.2.
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.5(c).
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans, (b)
the L/C Obligations and (c) all other fees and commissions (including attorneys'
fees), charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by the Borrower to the Lenders or the
Administrative Agent, of every kind, nature and description, direct or indirect,
absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, and
whether or not for the payment of money, under or with respect to this
Agreement, any Note, any Letter of Credit or any of the other Loan Documents.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 7.2.
"Other Taxes" shall have the meaning assigned thereto in Section
4.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any of their current
or former ERISA Affiliates.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by First Union as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
day such change in the Prime Rate occurs. The parties hereto acknowledge that
the rate announced publicly by First Union as its Prime Rate is an index or base
rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"Register" shall have the meaning assigned thereto in Section 13.10(d).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means, at any date, any combination of holders of
51% or more of the aggregate unpaid principal amount of the Revolving Credit
Notes, or if no amounts are outstanding under the Revolving Credit Notes, any
combination of Lenders whose Revolving Credit Commitment Percentages aggregate
51% or more.
"Responsible Officer" means any of the following: the chief executive
officer, chief financial officer or treasurer of the Borrower or any other
officer of the Borrower reasonably acceptable to the Administrative Agent.
"Revolving Credit Commitment" means, as to any Lender, the obligation
of such Lender to make Revolving Credit Loans to and issue or participate in
Letters of Credit issued for the account of the Borrower hereunder in an
aggregate principal or face amount at any time outstanding not to exceed the
amount set forth opposite such Lender's name under Revolving Credit Commitment
on Schedule 1 hereto, as the same may be reduced or modified at any time or from
time to time pursuant to the terms hereof.
"Revolving Credit Commitment Percentage" means, as to any Lender at any
time, the ratio of (a) the amount of the Revolving Credit Commitment of such
Lender to (b) the Aggregate Revolving Credit Commitment of all of the Lenders.
"Revolving Credit Extensions of Credit" means, as to any Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Credit Loans made by such Lender then outstanding, (b) such Lender's
Revolving Credit Commitment Percentage of the Swingline Loans then outstanding,
(c) the aggregate principal amount of all Competitive Bid Loans made by such
Lender then outstanding and (d) such Lender's Revolving Credit Commitment
Percentage of the L/C Obligations then outstanding.
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article 2.
"Revolving Credit Loans" means any revolving loan made to the Borrower
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"Revolving Credit Notes" means the collective reference to the
Revolving Credit Notes made by the Borrower payable to the order of the Lenders,
each substantially in the form of Exhibit A-1 hereto, evidencing the Revolving
Credit Loans of the Lenders, and any amendments and modifications thereto, any
substitutes therefor, and any replacements, restatements, renewals and
extensions thereof, in whole or in part; "Revolving Credit Note" means any of
such Revolving Credit Notes.
"Revolving Credit Termination Date" means the earliest of the dates
referred to in Section 2.9.
"SEC" means the Securities and Exchange Commission or any successor
agency.
"Senior Debt Rating" means the senior debt rating assigned to the
Borrower from time to time by S&P or, if no senior debt rating is so assigned,
the corporate debt rating assigned to the Borrower from time to time by S&P.
"Separate Revolving Credit Facility" means the $100,000,000 revolving
credit facility established pursuant to the separate Credit Agreement dated
February 27, 1998, by and among the Borrower, the Lenders thereunder, First
Union as Administrative Agent, Crestar Bank as Syndication Agent and SunTrust
Bank, Atlanta, as Documentation Agent.
"Significant Subsidiary" means (i) Richfood, Inc., Rotelle, Inc.,
SuperRite Corporation, SuperRite Foods, Inc., and Foodarama Incorporated, and
(ii) each other Subsidiary, whether now existing or hereafter formed or
acquired, which now or at any time hereafter owns three percent (3%) or more of
Consolidated Net Tangible Assets.
"Solvent" means, as to the Borrower and its Subsidiaries on a
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill
Companies, Inc., or any successor rating agency thereto.
"Subordinated Debt" means the Debt described on Schedule 6.1(t)
designated as Subordinated Debt and any other Debt of the Borrower or any
Subsidiary the payment of which is subordinated to the payment to the
Obligations.
"Subsidiary" means as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time, directly or indirectly, owned by such Person (irrespective of whether,
at the time, capital stock or other ownership interests of any other class or
classes of such corporation, partnership, limited liability company or other
entity shall have or might have voting power by reason of the happening of any
contingency). Unless otherwise qualified, references to "Subsidiary" or
"Subsidiaries" herein shall refer to those of the Borrower. Notwithstanding the
foregoing, the term "Subsidiary" shall not include any "Equity Store" or Person
participating in the Business Development Program. For purposes of this
definition, (a) "Equity Store" means a Person in which the Borrower or any of
its Subsidiaries has invested capital or to which it has made loans in
accordance with the business practice of the Borrower and its Subsidiaries of
making equity investments in Persons, and making or guaranteeing loans to such
Persons, for the purpose of assisting such Persons in acquiring, remodeling,
refurbishing, expanding or operating one or more retail grocery stores and
pursuant to which such Persons are permitted or required to reduce the
Borrower's or the Subsidiary's equity interest to a minority position over time,
and (b) "Business Development Program" means the business practice of the
Borrower and its Subsidiaries of making or guaranteeing loans to, or making
equity investments in, third parties engaged in the retail grocery business in
exchange for long-term supply agreements with the Borrower or any Subsidiary.
"Swingline Commitment" means Thirty Million Dollars ($30,000,000.00).
"Swingline Interest Rate" means an interest rate equal to the Base Rate
minus one and one-half percent (1-1/2%) per annum; each change in the Swingline
Interest Rate shall take effect simultaneously with the corresponding change in
the Base Rate.
"Swingline Lender" means First Union in its capacity as swingline
lender hereunder.
"Swingline Loan" means any swingline loan made by the Swingline Lender
to the Borrower pursuant to Section 2.2, and all such swingline loans
collectively as the context requires.
"Swingline Note" means the Swingline Note made by the Borrower payable
to the order of the Swingline Lender, substantially in the form of Exhibit A-2
hereto, evidencing the Swingline Loans, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extensions thereof, in whole or in part.
"Swingline Termination Date" means the earlier to occur of (a) the
resignation of First Union as Administrative Agent in accordance with Section
12.9 and (b) the Revolving Credit Termination Date.
"Taxes" shall have the meaning assigned thereto in Section 4.11(a).
"Termination Event" means any of the following events which results or
is reasonably likely to result, either in any given instance or in the aggregate
with one or more other such events, in a Material Adverse Effect or in liability
of the Borrower or any Subsidiary in excess of $25,000,000: (a) a "Reportable
Event" described in Section 4043 of ERISA, or (b) the withdrawal of the Borrower
or any ERISA Affiliate from a Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (c) the
termination of a Pension Plan, the filing of a notice of intent to terminate a
Pension Plan or the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA, or (d) the institution of proceedings to terminate, or
the appointment of a trustee with respect to, any Pension Plan by the PBGC, or
(e) any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan, or (f) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan, or (g) the imposition
of a Lien pursuant to Section 412 of the Code or Section 302 of ERISA, or (h)
any event or condition which results in the reorganization or insolvency of a
Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any event or
condition which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by the PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA.
"Trade Letter of Credit" means a Letter of Credit issued as credit
enhancement for the obligations of the Borrower or any Subsidiary with respect
to a trade payable of the Borrower or such Subsidiary arising in the ordinary
course of business which is not delinquent.
"Uniform Customs" means the Uniform Customs and Practice for
Documentary Credits (1994 Revision), International Chamber of Commerce
Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the
Commonwealth of Virginia.
"United States" means the United States of America.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the
shares of capital stock or other ownership interests of such Subsidiary (other
than qualifying shares held by directors) are, directly or indirectly, owned or
controlled by the Borrower and/or one or more of its Wholly-Owned Subsidiaries.
Section 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
Section 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE 2
REVOLVING CREDIT FACILITY
Section 2.1 Revolving Credit Loans. Subject to the terms and conditions
of this Agreement, each Lender severally agrees to make Revolving Credit Loans
to the Borrower from time to time from the Closing Date to but excluding the
Revolving Credit Termination Date as requested by the Borrower in accordance
with the terms of Section 2.3; provided that (a) the aggregate principal amount
of all outstanding Revolving Credit Loans (after giving effect to any amount
requested) shall not exceed the Aggregate Revolving Credit Commitment less the
sum of all outstanding Swingline Loans, all outstanding Competitive Bid Loans
and all L/C Obligations and (b) the principal amount of outstanding Revolving
Credit Loans from any Lender to the Borrower shall not at any time exceed such
Lender's Revolving Credit Commitment less the sum of such Lender's Revolving
Credit Commitment Percentage of all outstanding Swingline Loans and such
Lender's Revolving Credit Commitment Percentage of all L/C Obligations. Each
Revolving Credit Loan by a Lender shall be in a principal amount equal to such
Lender's Revolving Credit Commitment Percentage of the aggregate principal
amount of Revolving Credit Loans requested on such occasion. Subject to the
terms and conditions hereof, the Borrower may borrow, repay and reborrow
Revolving Credit Loans hereunder until the Revolving Credit Termination Date.
Section 2.2 Swingline Loans.
(a) Availability. Subject to the terms and conditions of this
Agreement, the Swingline Lender agrees to make Swingline Loans to the Borrower
from time to time from the Closing Date to but excluding the Swingline
Termination Date; provided that the aggregate principal amount of all
outstanding Swingline Loans (after giving effect to any amount requested) shall
not exceed the lesser of (i) the Aggregate Revolving Credit Commitment less the
sum of all outstanding Revolving Credit Loans, all outstanding Competitive Bid
Loans and all L/C Obligations and (ii) the Swingline Commitment. After the
Swingline Lender has received written notice from the Required Lenders stating
that a Default or an Event of Default exists accompanied by a written request by
the Required Lenders that the Swingline Lender not make any further Swingline
Loans as a result thereof, the Swingline Lender shall not make any Swingline
Loans to the Borrower until such time as the Swingline Lender shall have
received a written rescission of such notice and request from the Required
Lenders or until a written waiver of such Default or Event of Default is
provided by the Required Lenders.
(b) Refunding.
(i) Swingline Loans shall be refunded by the Lenders on demand
by the Swingline Lender. Such refundings shall be made by the Lenders in
accordance with their respective Revolving Credit Commitment Percentages and
shall thereafter be reflected as Revolving Credit Loans of the Lenders on the
books and records of the Administrative Agent. Each Lender shall fund its
respective Revolving Credit Commitment Percentage of Revolving Credit Loans as
required to repay Swingline Loans outstanding to the Swingline Lender upon
demand by the Swingline Lender but in no event later than 2:00 p.m. (Charlotte
time) on the next succeeding Business Day after such demand is made. No Lender's
obligation to fund its Revolving Credit Commitment Percentage of a Swingline
Loan shall be affected by any other Lender's failure to fund its Revolving
Credit Commitment Percentage of a Swingline Loan, nor shall any Lender's
Revolving Credit Commitment Percentage be increased as a result of any such
failure of any other Lender to fund its Revolving Credit Commitment Percentage.
(ii) The Borrower shall pay to the Swingline Lender on demand
the amount of such Swingline Loans to the extent amounts received from the
Lenders are not sufficient to repay in full the outstanding Swingline Loans
requested or required to be refunded. In addition, the Borrower hereby
authorizes the Administrative Agent to charge any account maintained with the
Swingline Lender (up to the amount available therein) in order to immediately
pay the Swingline Lender the amount of such Swingline Loans to the extent
amounts received from the Lenders are not sufficient to repay in full the
outstanding Swingline Loans requested or required to be refunded. If any portion
of any such amount paid to the Swingline Lender shall be recovered by or on
behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise, the
loss of the amount so recovered shall be ratably shared among all the Lenders in
accordance with their respective Revolving Credit Commitment Percentages.
(iii) Each Lender acknowledges and agrees that its obligation
to refund Swingline Loans in accordance with the terms of this Section 2.2 is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, non-satisfaction of the conditions
set forth in Article 5. Further, each Lender agrees and acknowledges that if
prior to the refunding of any outstanding Swingline Loans pursuant to this
Section 2.2, one of the events described in Section 11.1(j) or (k) shall have
occurred, each Lender will, on the date the applicable Revolving Credit Loan
would have been made, purchase an undivided participating interest in the
Swingline Loan to be refunded in an amount equal to its Revolving Credit
Commitment Percentage of the aggregate amount of such Swingline Loan. Each
Lender will immediately transfer to the Swingline Lender, in immediately
available funds, the amount of its participation and upon receipt thereof the
Swingline Lender will deliver to such Lender a certificate evidencing such
participation dated the date of receipt of such funds and for such amount.
Whenever, at any time after the Swingline Lender has received from any Lender
such Lender's participating interest in a Swingline Loan, the Swingline Lender
receives any payment on account thereof, the Swingline Lender will distribute to
such Lender its participating interest in such amount (appropriately adjusted,
in the case of interest payments, to reflect the period of time during which
such Lender's participating interest was outstanding and funded).
(c) Termination of Swingline Commitment. The Swingline Commitment shall
terminate on the Swingline Termination Date.
Section 2.3 Procedure for Advances of Revolving Credit and Swingline
Loans.
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached hereto as Exhibit
B-1 (a "Notice of Revolving Credit Borrowing") (i) not later than 12:00 noon
(Charlotte time) on the Business Day on which each Swingline Loan is to be made,
(ii) not later than 11:00 a.m. (Charlotte time) at least one (1) Business Day
before each Revolving Credit Loan which is initially to be a Base Rate Loan is
to be made and (iii) not later than 11:00 a.m. (Charlotte time) at least three
(3) Business Days before each Revolving Credit Loan which is initially to be a
LIBOR Rate Loan is to be made, of its intention to borrow, specifying (A) the
date of such borrowing, which shall be a Business Day, (B) the amount of such
borrowing, which shall be in an amount equal to the amount of the Aggregate
Revolving Credit Commitment then available to the Borrower, or if less, (x) with
respect to Base Rate Loans in an aggregate principal amount of $1,000,000 or a
whole multiple of $500,000 in excess thereof, (y) with respect to LIBOR Rate
Loans in an aggregate principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (z) with respect to Swingline Loans in an
aggregate principle amount of $500,000 or a whole multiple of $100,000 in excess
thereof, (C) whether such Loan is to be a Revolving Credit Loan or a Swingline
Loan, (D) in the case of a Revolving Credit Loan, whether the Loans are
initially to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a
LIBOR Rate Loan, the duration of the initial Interest Period applicable thereto.
Notices received after 12:00 noon (Charlotte time) in the case of Swingline
Loans or 11:00 a.m. (Charlotte time) in the case of Base Rate Loans and LIBOR
Rate Loans shall be deemed received on the next Business Day. The Administrative
Agent shall promptly notify the Lenders of each Notice of Revolving Credit
Borrowing received by the Administrative Agent.
(b) Disbursement of Revolving Credit and Swingline Loans. Not later
than 2:00 p.m. (Charlotte time) on the proposed borrowing date, (i) each Lender
will make available to the Administrative Agent, for the account of the
Borrower, at the Administrative Agent's Office in funds immediately available to
the Administrative Agent, such Lender's Revolving Credit Commitment Percentage
of the Revolving Credit Loans to be made on such borrowing date and (ii) the
Swingline Lender will make available to the Administrative Agent, for the
account of the Borrower, at the Administrative Agent's Office in funds
immediately available to the Administrative Agent, the Swingline Loans to be
made on such borrowing date. The Borrower hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of each borrowing requested
pursuant to this Section 2.3 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrower identified in the
most recent notice substantially in the form of Exhibit C hereto (a "Notice of
Account Designation") delivered by the Borrower to the Administrative Agent or
as may be otherwise agreed upon by the Borrower and the Administrative Agent
from time to time. Subject to Section 4.7, the Administrative Agent shall not be
obligated to disburse the portion of the proceeds of any Revolving Credit Loan
requested pursuant to this Section 2.3 to the extent that any Lender has not
made available to the Administrative Agent its Revolving Credit Commitment
Percentage of such Loan. Revolving Credit Loans to be made for the purpose of
refunding Swingline Loans shall be made by the Lenders as provided in Section
2.2(b).
Section 2.4 Competitive Bid Loans.
(a) General. Subject to the terms and conditions of this Agreement, the
Borrower may request that the Lenders submit bids to make Competitive Bid Loans
to the Borrower from time to time on any Business Day from the fifth Business
Day after the Closing Date to but excluding the thirtieth Business Day prior to
the Revolving Credit Termination Date; provided that (a) no Lender shall have
any obligation to submit any such bids or to make any such Competitive Bid Loans
and the Borrower shall have no obligation to accept any such bids, and (b) the
aggregate principal amount of all outstanding Competitive Bid Loans (after
giving effect to any amount requested) shall not exceed the lesser of (i) the
Aggregate Revolving Credit Commitment less the sum of all outstanding Revolving
Credit Loans, all outstanding Swingline Loans and all L/C Obligations and (ii)
the Maximum Competitive Bid Loan Amount.
(b) Requests for Bids. In order to request Competitive Bids from the
Lenders hereunder, the Borrower shall give the Administrative Agent prior
written notice in the form attached hereto as Exhibit B-2 (a "Competitive Bid
Request") not later than 11:00 a.m. (Charlotte time) at least two (2) Business
Days before the date of a proposed Absolute Competitive Bid Borrowing and at
least five (5) Business Days before the date of a LIBOR Competitive Bid
Borrowing, of its intention to request Competitive Bids, specifying with respect
to each requested Competitive Bid Borrowing for a particular Interest Period (A)
the date of such requested Competitive Bid Borrowing, which shall be a Business
Day, (B) the aggregate amount of such requested Competitive Bid Borrowing, which
shall be $10,000,000 or a whole multiple of $5,000,000 in excess thereof, (C)
the Interest Period to be applicable to such Competitive Bid Borrowing, which
shall not be less than seven (7) or more than one hundred eighty (180) days in
the case of an Absolute Competitive Bid Borrowing or one (1), two (2), three (3)
or six (6) months in the case of a LIBOR Competitive Bid Borrowing, and (D)
whether such Competitive Bid Borrowing will be an Absolute Competitive Bid
Borrowing or a LIBOR Competitive Bid Borrowing. The Borrower may request offers
to make Competitive Bid Loans for up to three (3) separate Interest Periods in a
single Competitive Bid Request, and each such request for a separate Interest
Period shall be deemed a request for a separate Competitive Bid Borrowing;
provided that (x) no Interest Period applicable to any Competitive Bid Borrowing
shall expire on a date later than the last Business Day prior to the Revolving
Credit Termination Date, (y) the Borrower may not submit a Competitive Bid
Request within five (5) Business Days after the date of submission of any
previous Competitive Bid Request or more than three (3) Competitive Bid Requests
in one calendar month, and (z) no Competitive Bid Borrowing shall be made if,
immediately after giving effect thereto, there would be outstanding Competitive
Bid Loans having more than three (3) separate Interest Periods or outstanding
LIBOR Loans and Competitive Bid Loans together having more than eight (8)
separate Interest Periods (for which purpose Interest Periods applicable to
LIBOR Rate Loans and Interest Periods applicable to Competitive Bid Loans shall
be deemed to be separate Interest Periods even if they are coterminous). A
Competitive Bid Request not given in the form of Exhibit B-2 or otherwise not
given in compliance with the requirements of this Section 2.4(b) may be rejected
by the Administrative Agent in its sole discretion, and the Administrative Agent
shall promptly notify the Borrower of any such rejection.
(c) Notice to Lenders of Competitive Bid Request. Upon receipt of a
Competitive Bid Request that is not rejected as provided above, the
Administrative Agent shall promptly deliver to the Lenders a copy of such
Competitive Bid Request, the delivery of which shall constitute an invitation by
the Borrower to each Lender to submit a Competitive Bid on the terms and subject
to the conditions of this Agreement, offering to make Competitive Bid Loans
pursuant to such Competitive Bid Request.
(d) Submission of Competitive Bids. Each Lender may, but shall have no
obligation to, submit a Competitive Bid containing an offer or offers to make
Competitive Bid Loans in response to any Competitive Bid Request; provided that,
if the relevant Competitive Bid Request specifies more than one Interest Period,
such Lender may submit a single Competitive Bid containing an offer or offers to
make Competitive Bid Loans for one or more of such Interest Periods. Each
Competitive Bid must comply with the requirements of this Section 2.4(d) and
must be submitted to the Administrative Agent in writing (by facsimile
transmission or otherwise) not later than 10:30 a.m. (Charlotte time) (i) on the
proposed borrowing date in the case of an Absolute Competitive Bid Borrowing,
and (ii) three (3) Business Days prior to the proposed borrowing date in the
case of a LIBOR Competitive Bid Borrowing; provided that Competitive Bids
submitted by the Administrative Agent (or any Affiliate of the Administrative
Agent) in its capacity as a Lender may be submitted only if the Administrative
Agent or such Affiliate notifies the Borrower of the terms of the offer or
offers contained therein not later than 10:15 a.m. (Charlotte time) on the date
the applicable Competitive Bids are due. Each Competitive Bid by a Lender shall
(subject to Section 5.3 and Section 11.2) be irrevocable, shall be submitted in
substantially the form of Exhibit B-3 and shall specify (A) the identity of such
Lender, (B) the Interest Period with respect to each Competitive Bid Loan for
which such Competitive Bid is being made, each of which Interest Periods shall
be not less than seven (7) or more than one hundred eighty (180) days in the
case of an Absolute Competitive Bid Borrowing or one (1), two (2), three (3) or
six (6) months in the case of a LIBOR Competitive Bid Borrowing, (C) the
principal amount of each Competitive Bid Loan for which such competitive bid is
being made, which principal amount shall be $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; provided that (y) the aggregate principal amount
of all Competitive Bid Loans for which a Competitive Bid is submitted may be
equal to, greater than or less than the Revolving Credit Commitment of such
Lender, and (z) the aggregate principal amount of all Competitive Bid Loans
offered by such Lender for a single Interest Period shall not exceed the
requested principal amount of the Competitive Bid Borrowing for such Interest
Period, (D) the fixed rate or LIBOR based rate of interest per annum (rounded to
the nearest 1/100th of 1%) offered for each such Competitive Bid Loan (the
"Competitive Bid Rate"), it being understood that a Competitive Bid may contain
offers to make Competitive Bid Loans at up to three separate Competitive Bid
Rates with respect to each Interest Period, and (E) the proposed borrowing date.
A Competitive Bid may be disregarded by the Administrative Agent if it (w) is
not given substantially in the form of Exhibit B-3 or fails to specify all of
the information required by this Section 2.4(d), (x) contains qualifying,
conditional or similar language, (y) proposes terms other than or in addition to
those set forth in the applicable Competitive Bid Request (other than setting
forth separate Competitive Bid Rates for Competitive Bid Loans offered for any
Interest Period as contemplated by clause (D) above), or (z) is submitted to the
Administrative Agent after 10:30 a.m. (Charlotte time) on the applicable
requested borrowing date.
(e) Notice to Borrower of Competitive Bids. Promptly upon receipt
thereof and in any event not later than 11:00 a.m. (Charlotte time) (i) on the
requested borrowing date in the case of an Absolute Competitive Bid Borrowing,
and (ii) three (3) Business Days prior to the requested borrowing date in the
case of a LIBOR Competitive Bid Borrowing, the Administrative Agent will notify
the Borrower of the terms (i) of each Competitive Bid, if any, submitted by a
Lender in compliance with the provisions of Section 2.4(d), and (ii) of each
Competitive Bid, if any, submitted by a Lender that amends, modifies or is
otherwise inconsistent with a previous Competitive Bid submitted by such Lender
with respect to the same Competitive Bid Request. Any such subsequent
Competitive Bid shall be disregarded by the Administrative Agent unless such
subsequent Competitive Bid is submitted solely to correct a manifest error in
such former Competitive Bid and is timely received as provided in Section
2.4(d). The Administrative Agent's notice to the Borrower shall specify the
principal amount of each Competitive Bid Loan with respect to which a
Competitive Bid was made for each Interest Period specified in the relevant
Competitive Bid Request, the respective Competitive Bid Rates therefor, and the
identity of the Lender that made each such Competitive Bid.
(f) Acceptance or Rejection of Competitive Bids. Not later than 11:30
a.m. (Charlotte time) on the date Competitive Bids are due, the Borrower will
notify the Administrative Agent of its acceptance or rejection of the
Competitive Bids referred to in Section 2.4(e). The Borrower shall be under no
obligation to accept any Competitive Bid and may choose to reject all
Competitive Bids, and the failure by the Borrower to give such notice in a
timely manner shall be deemed to constitute a rejection of all Competitive Bids.
In the case of acceptance, such notice shall specify the aggregate principal
amount of offers for each Interest Period that are accepted. The Borrower may
accept any Competitive Bid in whole or in part, subject to the limitations on
the aggregate outstanding principal amount of Competitive Bid Loans set forth in
Section 2.4(a); provided that:
(i) the aggregate principal amount of each Competitive Bid
Borrowing with regard to each Interest Period shall not exceed the applicable
amount set forth in the related Competitive Bid Request;
(ii) the principal amount of each Competitive Bid Loan with
regard to each Interest Period shall be $10,000,000 or a whole multiple of
$5,000,000 in excess thereof (subject to the provisions of clause (v) below);
(iii) acceptance of Competitive Bids may be made only on the
basis of ascending (i.e., from the lowest effective yield to the highest)
Competitive Bid Rates offered within each Interest Period;
(iv) the Borrower may not accept any Competitive Bid that is
required to be disregarded under the provisions of Section 2.4(d) or that
otherwise fails to comply with the terms and conditions of this Section 2.4; and
(v) if offers are made by two or more Lenders at the same
Competitive Bid Rates for a greater aggregate principal amount than the amount
in respect of which such offers are permitted to be accepted for the related
Interest Period, then if the Borrower elects to accept any such offers, the
aggregate principal amount of Competitive Bid Loans in respect of which such
offers are accepted shall be allocated by the Borrower among such Lenders (after
consultation with the Administrative Agent) as nearly as practicable (in such
whole multiples of not less than $500,000 as the Borrower, after consultation
with the Administrative Agent, may deem appropriate) in proportion to the
respective aggregate principal amounts of such offers. Determinations by the
Borrower and the Administrative Agent of the respective amounts of Competitive
Bid Loans shall be conclusive absent manifest error.
(g) Funding of Competitive Bid Loans. The Administrative Agent will
promptly notify each Lender which has submitted a Competitive Bid whether its
offer has been accepted or rejected, and, if a Lender's Competitive Bid is
accepted, the Administrative Agent will also notify the Lender of the amount and
Competitive Bid Rate with regard to each applicable Interest Period. Not later
than 2:00 p.m. (Charlotte time) on the proposed borrowing date, each Lender
which has been so notified that its Competitive Bid has been accepted will make
available to the Administrative Agent, for the account of the Borrower, at the
Administrative Agent's Office in funds immediately available to the
Administrative Agent, an amount equal to such Lender's Competitive Bid Loan or
Competitive Bid Loans. The Borrower hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of each Competitive Bid Borrowing
in immediately available funds by crediting or wiring such proceeds to the
deposit account of the Borrower identified in the most recent Notice of Account
Designation delivered by the Borrower to the Administrative Agent or as may be
otherwise agreed upon by the Borrower and the Administrative Agent from time to
time. Subject to Section 4.7, the Administrative Agent shall not be obligated to
disburse a Lender's portion of the proceeds of any Competitive Bid Borrowing to
the extent that any Lender has not made such portion available to the
Administrative Agent.
(h) Repayment of Competitive Bid Loans. The Borrower shall repay the
unpaid principal amount of all Competitive Bid Loans on the last day of the
Interest Period applicable thereto.
(i) Effect on Revolving Credit Commitment. The Borrower and each Lender
acknowledge and agree that (i) all outstanding Competitive Bid Loans shall
reduce the overall amount available to the Borrower under the Revolving Credit
Facility as provided herein, but (ii) the outstanding Competitive Bid Loans of
each individual Lender shall not reduce the availability under such Lender's
Revolving Credit Commitment or affect such Lender's obligation to fund or
participate in, to the extent of its Revolving Credit Commitment Percentage,
Revolving Credit Loans, Swingline Loans and L/C Obligations.
(j) Administrative Agent's Fee. With respect to each Competitive Bid
Request received by the Administrative Agent hereunder (regardless of whether
any Competitive Bid Loans shall be offered or made in response thereto), the
Borrower will pay to the Administrative Agent, on the date of receipt by the
Administrative Agent of such Competitive Bid Request, a fee in an amount equal
to $1,500.
Section 2.5 Repayment of Loans.
(a) Repayment Provisions. The Borrower shall repay the outstanding
principal amount of (i) all Revolving Credit Loans in full on the Revolving
Credit Termination Date, (ii) all Swingline Loans in accordance with Section
2.2(b), and (iii) all Competitive Bid Loans in accordance with Section 2.4(h),
together, in each case, with all accrued but unpaid interest thereon.
(b) Mandatory Repayment of Excess Loans. If at any time the aggregate
outstanding principal amount of all Revolving Credit Loans, Swingline Loans and
Competitive Bid Loans exceeds the Aggregate Revolving Credit Commitment less the
L/C Obligations, the Borrower shall repay immediately upon notice from the
Administrative Agent, by payment to the Administrative Agent for the account of
the Lenders, Loans in an amount equal to such excess with each such repayment
applied first to the principal amount of outstanding Swingline Loans, second to
the principal amount of outstanding Revolving Credit Loans and third to the
principal amount of outstanding Competitive Bid Loans. Each such repayment shall
be accompanied by any amount required to be paid pursuant to Section 4.9.
(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Revolving Credit Loans, the Swingline Loans and, subject to the
last sentence of this Section 2.5(c), the Competitive Bid Loans, in whole or in
part, upon at least three (3) Business Days' irrevocable notice to the
Administrative Agent with respect to LIBOR Rate Loans and Competitive Bid Loans
and one (1) Business Day irrevocable notice with respect to Base Rate Loans and
Swingline Loans, in the form attached hereto as Exhibit D (a "Notice of
Prepayment") specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans, Competitive
Bid Loans or a combination thereof, and, if of a combination thereof, the amount
allocable to each. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender. If any such notice is given, the amount specified
in such notice shall be due and payable on the date set forth in such notice.
Partial repayments shall be in an aggregate amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof with respect to Base Rate Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to
LIBOR Rate Loans and Competitive Bid Loans and $500,000 or a whole multiple of
$100,000 in excess thereof with respect to Swingline Loans. Each such repayment
shall be accompanied by any amount required to be paid pursuant to Section 4.9.
The Borrower may not repay a Competitive Bid Loan other than on the last day of
the applicable Interest Period without the prior written consent of the Lender
which made such Competitive Bid Loan.
(d) Limitation on Repayment of LIBOR Rate Loans and Competitive Bid
Loans. The Borrower may not repay any LIBOR Rate Loan or Competitive Bid Loan on
any day other than the last day of the Interest Period applicable thereto unless
such repayment is accompanied by any amount required to be paid pursuant to
Section 4.9.
Section 2.6 Notes.
(a) Revolving Credit Notes. Each Lender's Revolving Credit Loans and
the obligation of the Borrower to repay such Revolving Credit Loans shall be
evidenced by a separate Revolving Credit Note executed by the Borrower payable
to the order of such Lender representing the Borrower's obligation to pay such
Lender's Revolving Credit Commitment or, if less, the aggregate unpaid principal
amount of all Revolving Credit Loans made and to be made by such Lender to the
Borrower hereunder, plus interest and all other fees, charges and other amounts
due thereon. Each Revolving Credit Note shall be dated the date hereof and shall
bear interest on the unpaid principal amount thereof at the applicable interest
rate per annum specified in Section 4.1.
(b) Swingline Notes. The Swingline Loans and the obligation of the
Borrower to repay such Swingline Loans shall be evidenced by the Swingline Note
executed by the Borrower payable to the order of the Swingline Lender
representing the Borrower's obligation to pay the Swingline Lender's Swingline
Commitment or, if less, the aggregate unpaid principal amount of all Swingline
Loans made by the Swingline Lender to the Borrower hereunder, plus interest on
such principal amounts and all other fees, charges and other amounts due
thereon. The Swingline Note shall be dated the date hereof and shall bear
interest on the unpaid principal amount thereof at the applicable interest rate
per annum specified in Section 4.1.
(c) Competitive Bid Notes. Each Lender's Competitive Bid Loans and the
obligation of the Borrower to repay such Competitive Bid Loans shall be
evidenced by a separate Competitive Bid Note executed by the Borrower payable to
the order of such Lender representing the Borrower's obligation to pay the
aggregate unpaid principal amount of all Competitive Bid Loans made and to be
made by such Lender to the Borrower hereunder, plus interest and all other fees,
charges and other amounts due thereon. Each Competitive Bid Note shall be dated
the date hereof and shall bear interest on the unpaid principal amount thereof
at the applicable Competitive Bid Rates.
Section 2.7 Increase in the Aggregate Revolving Credit Commitment.
(a) Request for Increase. As long as no Event of Default has occurred
and is continuing, the Borrower shall have the option, at any time prior to the
Revolving Credit Termination Date after the Separate Revolving Credit Facility
has been terminated, by giving written notice thereof to the Administrative
Agent and each of the Lenders not less than thirty (30) days prior to the
proposed effective date of the requested increase, to request that the Lenders
increase the Aggregate Revolving Credit Commitment by up to $100,000,000, it
being understood and agreed that the separate consent of the Administrative
Agent will not be a condition to the Borrower's right to request such an
increase from the Lenders. Upon such a request to the Lenders, each Lender shall
have the right to increase its Revolving Credit Commitment pro rata based on the
amount of the requested increase to the Aggregate Revolving Credit Commitment,
but no Lender shall have any obligation to increase its Revolving Credit
Commitment. No Lender shall have agreed to increase its Revolving Credit
Commitment, or shall be deemed to have agreed to increase its Revolving Credit
Commitment, unless and until it has delivered a signed writing to that effect to
the Borrower and the Administrative Agent. In the event that the Borrower
requests an increase in the Aggregate Revolving Credit Commitment as provided
above, but one or more of the existing Lenders declines to increase its
Revolving Credit Commitment by its pro rata share of the requested increase, the
Borrower shall nonetheless have the option to increase the Aggregate Revolving
Credit Commitment by up to $100,000,000 by causing one or more of the existing
Lenders not so declining to increase its or their Revolving Credit Commitments
in an aggregate amount equal to the requested increase, by causing one or more
new Lenders acceptable to the Administrative Agent (such acceptance not to be
unreasonably withheld) to provide Revolving Credit Commitments in an aggregate
amount equal to the requested increase and to be added as Lenders under this
Agreement or by obtaining sufficient increased Revolving Credit Commitments from
such existing Lenders and new Revolving Credit Commitments from such new Lenders
in an aggregate amount equal to the requested increase.
(b) Documentation. In connection with any increase in the Aggregate
Revolving Credit Commitment provided for in Section 2.7(a), the Borrower will
make, execute and deliver, and cause each of its Subsidiaries to make, execute
and deliver, all amendments and modifications to this Agreement, all amended and
restated and new Notes, all resolutions and opinions of counsel and all other
documents, agreements and instruments as may be required by the Administrative
Agent or any Lender in order to document and consummate such increase in the
Aggregate Revolving Credit Commitment.
Section 2.8 Reduction in the Aggregate Revolving Credit Commitment.
(a) The Borrower shall have the right at any time and from time to
time, upon at least five (5) Business Days prior written notice to the
Administrative Agent, to permanently reduce, without premium or penalty, (i) the
entire Aggregate Revolving Credit Commitment at any time or (ii) portions of the
Aggregate Revolving Credit Commitment, from time to time, in an aggregate
principal amount of $10,000,000 or any whole multiple of $5,000,000 in excess
thereof.
(b) Each permanent reduction permitted pursuant to this Section 2.8
shall be accompanied by a payment of principal sufficient to reduce the
aggregate outstanding Revolving Credit Extensions of Credit of the Lenders after
such reduction to the Aggregate Revolving Credit Commitment as so reduced. Any
reduction of the Aggregate Revolving Credit Commitment to zero shall be
accompanied by payment of all outstanding Obligations (and furnishing of cash
collateral satisfactory to the Administrative Agent for all L/C Obligations)
and, if such reduction is permanent, termination of the Revolving Credit
Facility and the Swingline Commitment. Such cash collateral shall be applied as
specified in Section 11.2(b). If the reduction of the Aggregate Revolving Credit
Commitment requires the repayment of any LIBOR Rate Loan or Competitive Bid
Loan, such repayment shall be accompanied by any amount required to be paid
pursuant to Section 4.9.
Section 2.9 Termination of Revolving Credit Facility. The Revolving
Credit Facility shall terminate on the earliest of (a) February 27, 2003, (b)
the date of termination by the Borrower pursuant to Section 2.8, and (c) the
date of termination by the Administrative Agent on behalf of the Lenders
pursuant to Section 11.2(a).
Section 2.10 Use of Proceeds. The Borrower shall use the proceeds of
the Revolving Credit Extensions of Credit (a) either directly by the Borrower or
indirectly by intercompany advance to one or more of its Subsidiaries to finance
the acquisition of substantially all of the assets of Farm Fresh, Inc., (b) to
refinance certain existing indebtedness, (c) to finance the acquisition of
Capital Assets and other permitted acquisitions, and (d) for working capital and
general corporate requirements of the Borrower and its Subsidiaries, including
the payment of certain fees and expenses incurred in connection with the
transactions described herein.
ARTICLE 3
LETTER OF CREDIT FACILITY
Section 3.1 L/C Commitment. Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in Section 3.4(a), agrees to issue standby and trade letters of credit (the
"Letters of Credit") for the account of the Borrower on any Business Day from
the Closing Date to but excluding the Revolving Credit Termination Date in such
form as may be approved from time to time by the Issuing Lender; provided that
the Issuing Lender shall not issue any Letter of Credit if, after giving effect
to such issuance, the L/C Obligations would exceed the lesser of (i) the
Aggregate Revolving Credit Commitment less the sum of all outstanding Revolving
Credit Loans, all outstanding Swingline Loans and all outstanding Competitive
Bid Loans and (ii) the L/C Commitment. Each Letter of Credit shall (i) be
denominated in Dollars in a minimum amount of $500,000, (ii) be a standby or
trade letter of credit issued to support obligations of the Borrower or any of
its Subsidiaries, contingent or otherwise, incurred in the ordinary course of
business or to support the obligations of other Persons to which the Borrower or
a Subsidiary provides credit support in the ordinary course of its business,
(iii) expire on a date no later than the Revolving Credit Termination Date and
(iv) be subject to the Uniform Customs and, to the extent not inconsistent
therewith, the laws of the Commonwealth of Virginia. The Issuing Lender shall
not at any time be obligated to issue any Letter of Credit hereunder if such
issuance would conflict with, or cause the Issuing Lender or any L/C Participant
to exceed any limits imposed by, any Applicable Law. References herein to
"issue" and derivations thereof with respect to Letters of Credit shall also
include extensions or modifications of any existing Letters of Credit, unless
the context otherwise requires.
Section 3.2 Procedure for Issuance of Letters of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at the Administrative Agent's Office an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
shall process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to Section 3.1 and Article 5, promptly
issue the Letter of Credit requested thereby (but in no event shall the Issuing
Lender be required to issue any Letter of Credit earlier than three (3) Business
Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish to the Borrower a copy of such Letter of Credit and furnish
to each Lender a copy of such Letter of Credit and the amount of each Lender's
L/C participation therein, all promptly following the issuance of such Letter of
Credit.
Section 3.3 Commissions and Other Charges.
(a) Annual Letter of Credit Commission. The Borrower shall pay to the
Administrative Agent, for the account of the Issuing Lender and the L/C
Participants, an annual letter of credit commission with respect to each Letter
of Credit in an amount equal to (i) the L/C Commission Percentage as set forth
below in the case of all Letters of Credit other than Trade Letters of Credit
and (ii) thirty percent (30%) of the L/C Commission Percentage in the case of
Trade Letters of Credit. The annual letter of credit commission for each Letter
of Credit shall be payable quarterly in arrears on the last Business Day of each
calendar quarter while such Letter of Credit is outstanding and on the last
Business Day of the calendar quarter in which such Letter of Credit expires or
is otherwise terminated, and each installment of such annual letter of credit
commission shall be equal to the product of (i) the daily average face amount of
the Letter of Credit during the applicable period, times (ii) the daily average
L/C Commission Percentage in effect during the applicable period in the case of
all Letters of Credit other than Trade Letters of Credit or 30% of the daily
average L/C Commission Percentage in effect during the applicable period in the
case of Trade Letters of Credit, times (iii) a fraction the numerator of which
is the number of days that elapse during the applicable period and the
denominator of which is 360.
(b) L/C Commission Percentage. The L/C Commission Percentage provided
for in Section 3.3(a) with respect to the Letters of Credit (the "L/C Commission
Percentage") shall (i) on the Closing Date equal the percentage set forth in the
certificate delivered pursuant to Section 5.2(e)(ii) and (ii) thereafter be
determined by reference to the Senior Debt Rating of the Borrower in accordance
with the following table:
Senior Debt Rating L/C Commission Percentage
------------------ -------------------------
Higher than A- 0.145%
Equal to or higher than BBB+ but not 0.16 %
higher than A-
Equal to or higher than BBB but lower 0.195%
than BBB+
Equal to or higher than BBB- but lower 0.225%
than BBB
Lower than BBB- 0.3125%
The L/C Commission Percentage shall be automatically adjusted on the fifth
Business Day after the effective date of any change in the Senior Debt Rating of
the Borrower which would cause a change in the L/C Commission Percentage in
accordance with the preceding table.
(c) Payments to L/C Participants. The Administrative Agent shall,
promptly following its receipt thereof, distribute to the Issuing Lender and the
L/C Participants ratably in accordance with their respective Revolving Credit
Commitment Percentages all letter of credit commissions received by the
Administrative Agent.
(d) Issuing Commission. In addition to the letter of credit commission
described above, the Borrower shall pay to the Administrative Agent, for the
account of the Issuing Lender, an issuance commission of one-eighth of one
percent (1/8th of 1%) per annum of the face amount of each Letter of Credit. The
annual issuance commission for each Letter of Credit shall be payable quarterly
in arrears on the last Business Day of each calendar quarter while such Letter
of Credit is outstanding and on the last Business Day of the calendar quarter in
which such Letter of Credit expires or is otherwise terminated, and each
installment of such annual issuance commission shall be equal to the product of
(i) the daily average face amount of the Letter of Credit during the applicable
period, times (ii) 1/8th of 1%, times (iii) a fraction the numerator of which is
the number of days that elapse during the applicable period and the denominator
of which is 360.
Section 3.4 L/C Participations.
(a) Grant and Acceptance of Participations. The Issuing Lender
irrevocably agrees to grant and hereby grants to each L/C Participant, and, to
induce the Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Revolving Credit Commitment Percentage of the
Issuing Lender's obligations and rights under each Letter of Credit issued
hereunder (other than the annual issuing commission) and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Revolving Credit Commitment Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.
(b) Payments by L/C Participants. Upon becoming aware of any amount
required to be paid by any L/C Participant to the Issuing Lender pursuant to
Section 3.4(a) in respect of any unreimbursed portion of any payment made by the
Issuing Lender under any Letter of Credit, the Issuing Lender shall notify each
L/C Participant of the amount and due date of such required payment and such L/C
Participant shall pay to the Issuing Lender the amount specified on the
applicable due date. If any such amount is paid to the Issuing Lender after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
on demand, in addition to such amount, the product of (i) such amount, times
(ii) the daily average Federal Funds Rate as determined by the Administrative
Agent during the period from and including the date such payment is due to the
date on which such payment is immediately available to the Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. A certificate of the Issuing
Lender with respect to any amounts owing under this Section 3.4(b) shall be
conclusive in the absence of manifest error. With respect to payment to the
Issuing Lender of the unreimbursed amounts described in this Section 3.4(b), if
the L/C Participants receive notice that any such payment is due (A) prior to
1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due that
Business Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day, such
payment shall be due on the following Business Day.
(c) Reversal of Payments. Whenever, at any time after the Issuing
Lender has made payment under any Letter of Credit and has received from any L/C
Participant its Revolving Credit Commitment Percentage of such payment in
accordance with this Section 3.4, the Issuing Lender receives any payment
related to such Letter of Credit (whether directly from the Borrower or
otherwise), or any payment of interest on account thereof, the Issuing Lender
will distribute to such L/C Participant its pro rata share thereof; provided
that in the event that any such payment received by the Issuing Lender shall be
required to be returned by the Issuing Lender, such L/C Participant shall return
to the Issuing Lender the portion thereof previously distributed by the Issuing
Lender to it.
Section 3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft paid under any Letter of
Credit for the amount of (a) such draft so paid and (b) any taxes, fees, charges
or other costs or expenses incurred by the Issuing Lender in connection with
such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Article 3 from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full at the rate which would be payable on any outstanding Base Rate
Loans which were then overdue. If the Borrower fails to timely reimburse the
Issuing Lender on the date the Borrower receives the notice referred to in this
Section 3.5, the Borrower shall be deemed to have timely given a Notice of
Revolving Credit Borrowing hereunder to the Administrative Agent requesting the
Lenders to make a Base Rate Loan on such date in an amount equal to the amount
of such drawing and, regardless of whether or not the conditions precedent
specified in Article 5 have been satisfied, the Lenders shall make Base Rate
Loans in such amount, the proceeds of which shall be applied to reimburse the
Issuing Lender for the amount of the related drawing and costs and expenses.
Section 3.6 Obligations Absolute. The Borrower's obligations under this
Article 3 (including without limitation the Reimbursement Obligation) shall be
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which the Borrower may have or
have had against the Issuing Lender, any L/C Participant or any beneficiary of a
Letter of Credit. The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower's Reimbursement
Obligation under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Borrower agrees that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Customs and, to the extent not inconsistent therewith, the UCC shall
be binding on the Borrower and shall not result in any liability of the Issuing
Lender to the Borrower. The responsibility of the Issuing Lender to the Borrower
in connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
Section 3.7 Effect of Application. To the extent that any provision of
any Application related to any Letter of Credit is inconsistent with the
provisions of this Article 3 or any other provisions of this Agreement, the
provisions of this Article 3 and such other provisions shall control, and any
additional events of default specified in such Application that are not Events
of Default hereunder shall not be applicable to the Obligations.
ARTICLE 4
GENERAL LOAN PROVISIONS
Section 4.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
4.1, at the election of the Borrower, the aggregate principal balance of the
Revolving Credit Notes or any portion thereof shall bear interest at the Base
Rate or the LIBOR Rate plus, in each case, the Applicable Margin as set forth
below; provided that the LIBOR Rate shall not be available until three (3)
Business Days after the Closing Date. The Borrower shall select the rate of
interest and Interest Period, if any, applicable to any Revolving Credit Loan at
the time a Notice of Revolving Credit Borrowing is given pursuant to Section 2.3
and at the time a Notice of Conversion/Continuation is given pursuant to Section
4.2. Each Revolving Credit Loan or portion thereof bearing interest based on the
Base Rate shall be a "Base Rate Loan", and each Revolving Credit Loan or portion
thereof bearing interest based on the LIBOR Rate shall be a "LIBOR Rate Loan."
Any Revolving Credit Loan or any portion thereof as to which the Borrower has
not duly specified an interest rate as provided herein shall be deemed a Base
Rate Loan. Each Swingline Loan shall bear interest at the Swingline Interest
Rate. Each Competitive Bid Loan shall bear interest at the Competitive Bid Rate
applicable thereto.
(b) Interest Periods. In connection with each LIBOR Rate Loan and LIBOR
Competitive Bid Borrowing, the Borrower, by giving notice at the times described
in Section 4.1(a) or 2.4(b), as the case may be, shall elect an interest period
(each, an "Interest Period") to be applicable to such borrowing, which Interest
Period shall be a period of one (1), two (2), three (3), or six (6) months;
provided that:
(i) in the case of LIBOR Rate Loans, the Interest Period shall
commence on the date of advance of or conversion to a LIBOR Rate Loan and, in
the case of immediately successive Interest Periods, each successive Interest
Period shall commence on the date on which the next preceding Interest Period
expires;
(ii) in the case of LIBOR Rate Loans and LIBOR Competitive Bid
Borrowings, if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided, that if any Interest Period would otherwise expire on a day that
is not a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(iii) in the case of LIBOR Rate Loans and LIBOR Competitive
Bid Borrowings, any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month at the end of such Interest Period;
(iv) in the case of LIBOR Rate Loans, no Interest Period shall
extend beyond the Revolving Credit Termination Date; and
(v) there shall be no more than five (5) Interest Periods
outstanding at any time with respect to LIBOR Rate Loans.
(c) Applicable Margin. The Applicable Margin provided for in Section
4.1(a) with respect to the Revolving Credit Loans (the "Applicable Margin")
shall (i) on the Closing Date equal the percentages set forth in the certificate
delivered pursuant to Section 5.2(e)(ii) and (ii) thereafter be determined by
reference to the Senior Debt Rating of the Borrower in accordance with the
following table:
Senior Debt Applicable Margin for
Rating Revolving Credit Loans
----------- -------------------------------------
Base Rate + LIBOR Rate +
----------- ------------
Higher than A- 0% 0.145%
Equal to or higher 0% 0.16%
than BBB+ but not
higher than A-
Equal to or higher 0% 0.195%
than BBB but lower
than BBB+
Equal to or higher 0% 0.225%
than BBB- but lower than BBB
Lower than BBB- 0% 0.3125%
The Applicable Margin shall be automatically adjusted by the Administrative
Agent on the fifth Business Day after the effective date of any change in the
Senior Debt Rating of the Borrower which would cause a change in the Applicable
Margin in accordance with the preceding table.
(d) Default Rate. Subject to Section 11.3, at the discretion of the
Administrative Agent and Required Lenders, upon the occurrence and during the
continuance of an Event of Default, (i) the Borrower shall no longer have the
option to request LIBOR Rate Loans or Competitive Bid Loans, (ii) all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum two percent
(2%) in excess of the rate then applicable to LIBOR Rate Loans, as applicable,
until the end of the applicable Interest Period and thereafter at a rate two
percent (2%) in excess of the rate then applicable to Base Rate Loans, and (iii)
all outstanding Base Rate Loans and Swingline Loans shall bear interest at a
rate per annum two percent (2%) in excess of the rate then applicable to Base
Rate Loans. Interest shall continue to accrue on the Notes after the filing by
or against the Borrower of any petition seeking any relief in bankruptcy or
under any act or law pertaining to insolvency or debtor relief, whether state,
federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing March 31, 1998; and interest on each LIBOR Rate Loan and each
Competitive Bid Loan shall be payable on the last day of each Interest Period
applicable thereto, and if such Interest Period extends over three (3) months,
at the end of each three (3) month interval during such Interest Period.
Interest on the Swingline Loans shall be payable on demand, and, if demand is
not sooner made, on the last Business Day of each month. All interest rates,
fees and commissions provided hereunder shall be computed on the basis of a
360-day year and assessed for the actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Administrative
Agent's option (i) promptly refund to the Borrower any interest received by
Lenders in excess of the maximum lawful rate or (ii) apply such excess to the
principal balance of the Obligations. It is the intent hereof that the Borrower
not pay or contract to pay, and that neither the Administrative Agent nor any
Lender receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by the Borrower under
Applicable Law.
Section 4.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Event of Default has occurred and is then continuing, the
Borrower shall have the option to (a) convert at any time all or any portion of
the outstanding Revolving Credit Loans constituting Base Rate Loans in a
principal amount equal to $5,000,000 or any whole multiple of $1,000,000 in
excess thereof into one or more LIBOR Rate Loans and (b) upon the expiration of
any Interest Period, (i) convert all or any part of the outstanding Revolving
Credit Loans constituting LIBOR Rate Loans in a principal amount equal to
$1,000,000 or a whole multiple of $500,000 in excess thereof into Base Rate
Loans or (ii) continue any LIBOR Rate Loans as LIBOR Rate Loans. Whenever the
Borrower desires to convert or continue Loans as provided above, the Borrower
shall give the Administrative Agent irrevocable prior written notice in the form
attached as Exhibit E (a "Notice of Conversion/Continuation") not later than
11:00 a.m. (Charlotte time) three (3) Business Days before the day on which a
proposed conversion or continuation of such Loan is to be effective specifying
(A) the Loans to be converted or continued, and, in the case of any LIBOR Rate
Loan to be converted or continued, the last day of the Interest Period therefor,
(B) the effective date of such conversion or continuation (which shall be a
Business Day), (C) the principal amount of such Loans to be converted or
continued, and (D) the Interest Period to be applicable to such converted or
continued LIBOR Rate Loan. The Administrative Agent shall promptly notify the
Lenders of such Notice of Conversion/Continuation.
Section 4.3 Fees.
(a) Revolving Credit Facility Fee. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, a non-refundable facility
fee relating to the Revolving Credit Facility at a rate per annum equal to the
applicable Facility Fee Percentage as set forth below times the average daily
Aggregate Revolving Credit Commitment. This facility fee shall be payable
quarterly in arrears on the last Business Day of each calendar quarter occurring
prior to the Revolving Credit Termination Date commencing March 31, 1998, and on
the Revolving Credit Termination Date. Each installment of this facility fee
shall be equal to the product of (i) the average daily Aggregate Revolving
Credit Commitment during the applicable period, times (ii) the applicable
Facility Fee Percentage on the day such installment is due, times (iii) a
fraction the numerator of which is the number of days that elapse during the
applicable period and the denominator of which is 360.
(b) Facility Fee Percentages. The Facility Fee Percentage provided for
in Section 4.3(a) (the "Facility Fee Percentage") shall (i) on the Closing Date
equal the percentages set forth in the certificate delivered pursuant to Section
5.2(e)(ii) and (ii) thereafter be determined by reference to the Senior Debt
Rating of the Borrower in accordance with the following table:
Senior Debt Facility Fee Percentage for
Rating Revolving Credit Facility
----------- ---------------------------
Higher than A- 0.08%
Equal to or higher 0.09%
than BBB+ but not
higher than A-
Equal to or higher 0.105%
than BBB but lower
than BBB+
Equal to or higher 0.125%
than BBB- but lower
than BBB
Lower than BBB- 0.1875%
The Facility Fee Percentage shall be automatically adjusted on the fifth
Business Day after the effective day of any change in the Senior Debt Rating of
the Borrower which would cause a change in the Facility Fee Percentage in
accordance with the preceding table.
(c) Administrative Agent's and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Loans and for its
obligations hereunder, the Borrower agrees to pay to the Administrative Agent,
for its account, the fees set forth in the separate fee letter agreement
executed by the Borrower and the Administrative Agent dated December 22, 1997.
Section 4.4 Manner of Payment. Each payment by the Borrower on account
of the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) payable to the Lenders under
this Agreement or any Note shall be made not later than 1:00 p.m. (Charlotte
time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent's Office for the account of the
Lenders (other than as set forth below) pro rata in accordance with their
respective Revolving Credit Commitment Percentages (except as specified below),
in Dollars, in immediately available funds and shall be made without any
set-off, counterclaim or deduction whatsoever. Any payment received after such
time but before 2:00 p.m. (Charlotte time) on such day shall be deemed a payment
on such date for the purposes of Section 11.1, but for all other purposes shall
be deemed to have been made on the next succeeding Business Day. Any payment
received after 2:00 p.m. (Charlotte time) shall be deemed to have been made on
the next succeeding Business Day for all purposes. Upon receipt by the
Administrative Agent of each such payment, the Administrative Agent shall
distribute to each Lender at its address for notices set forth herein its pro
rata share of such payment in accordance with such Lender's Revolving Credit
Commitment Percentage (except as specified below) and shall wire advice of the
amount of such credit to each Lender. Each payment to the Administrative Agent
of the Issuing Lender's fees or L/C Participants' commissions shall be made in
like manner, but for the account of the Issuing Lender or the L/C Participants,
as the case may be. Each payment to the Administrative Agent of Administrative
Agent's fees or expenses shall be made for the account of the Administrative
Agent and any amount payable to any Lender under Sections 4.8, 4.9, 4.10, 4.11
or 13.2 shall be paid to the Administrative Agent for the account of the
applicable Lender.
Section 4.5 Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 11.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrower hereunder, then to all indemnity obligations then
due and payable by the Borrower hereunder, then to all Administrative Agent's
and Issuing Lender's fees then due and payable, then to all facility and other
fees and commissions then due and payable, then to accrued and unpaid interest
on the Swingline Note to the Swingline Lender, then to the principal amount
outstanding under the Swingline Note to the Swingline Lender, then to accrued
and unpaid interest on the Revolving Credit Notes, the Competitive Bid Notes and
the Reimbursement Obligation (pro rata in accordance with all such amounts due),
then to the principal amount of the Revolving Credit Notes, the Competitive Bid
Notes and Reimbursement Obligation and then to the cash collateral account
described in Section 11.2(b) to the extent of any L/C Obligations then
outstanding, in that order.
Section 4.6 Adjustments. If any Lender (a "Benefitted Lender") shall at
any time receive any payment of all or part of its Revolving Credit Extensions
of Credit, or interest thereon, or if any Lender shall at any time receive any
collateral in respect to its Revolving Credit Extensions of Credit (whether
voluntarily or involuntarily, by set-off or otherwise) in a greater proportion
than any such payment to and collateral received by any other Lender, if any,
with respect to such other Lender's Revolving Credit Extensions of Credit, or
interest thereon, such Benefitted Lender shall purchase for cash from the other
Lenders such portion of each such other Lender's Revolving Credit Extensions of
Credit, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned to the extent of such recovery, but without interest. The Borrower
agrees that each Lender so purchasing a portion of another Lender's Revolving
Credit Extensions of Credit may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such portion as fully as
if such Lender were the direct holder of such portion.
Section 4.7 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
under this Agreement to make the Loans and issue or participate in Letters of
Credit are several and are not joint or joint and several. Unless the
Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of the amount to be borrowed
on such date (which notice shall not release such Lender of its obligations
hereunder), the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the proposed borrowing date in
accordance with Section 2.3(b) or Section 2.4(g), as applicable, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such borrowing date, such
Lender shall pay to the Administrative Agent on demand an amount, until paid,
equal to the product of (a) the amount of such Lender's ratable portion of such
borrowing, times (b) the daily average Federal Funds Rate during such period as
determined by the Administrative Agent, times (c) a fraction the numerator of
which is the number of days that elapse from and including such borrowing date
to the date on which such Lender's ratable portion of such borrowing shall have
become immediately available to the Administrative Agent and the denominator of
which is 360. A certificate of the Administrative Agent with respect to any
amounts owing under this Section 4.7 shall be conclusive, absent manifest error.
If such Lender's ratable portion of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days of such
borrowing date, the Administrative Agent shall be entitled to recover such
amount not made available to the Administrative Agent with interest thereon at
the rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrower. The failure of any Lender to make its ratable portion of any Loan
available shall not relieve it or any other Lender of its obligation, if any,
hereunder to make its ratable portion of such Loan available on such borrowing
date, but no Lender shall be responsible for the failure of any other Lender to
make its ratable portion of such Loan available on the borrowing date.
Section 4.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period applicable to a LIBOR Rate Loan the Administrative Agent or
any Lender (after consultation with the Administrative Agent) shall determine
that, by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in eurodollars, in the applicable amounts are not
being quoted via Telerate Page 3750 or offered to the Administrative Agent or
such Lender for such Interest Period, then the Administrative Agent shall
forthwith give notice thereof to the Borrower. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of
the Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan
shall be suspended, and the Borrower shall repay in full (or cause to be repaid
in full) the then outstanding principal amount of each such LIBOR Rate Loans
together with accrued interest thereon on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan or convert the then
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as
of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Administrative Agent and the Administrative Agent shall promptly give notice
to the Borrower and the other Lenders. Thereafter, until the Administrative
Agent notifies the Borrower that such circumstances no longer exist, (i) the
obligations of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Loan or continue any Loan as a LIBOR Rate Loan shall be
suspended and thereafter the Borrower may select only Base Rate Loans hereunder,
and (ii) if any of the Lenders may not lawfully continue to maintain a LIBOR
Rate Loan to the end of the then current Interest Period applicable thereto as a
LIBOR Rate Loan, the applicable LIBOR Rate Loan shall immediately be converted
to a Base Rate Loan for the remainder of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with respect to any
Note, Letter of Credit or Application or shall change the basis of taxation of
payments to any of the Lenders (or any of their respective Lending Offices) of
the principal of or interest on any Note, Letter of Credit or Application or any
other amounts due under this Agreement with respect thereto (except for changes
in the rate of tax on the overall net income of any of the Lenders or any of
their respective Lending Offices imposed by the jurisdiction in which such
Lender is organized or is or should be qualified to do business or such Lending
Office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve requirement included in the
calculation of the LIBOR Rate), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Note;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or issuing or participating in any
Letter of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement or under any of the Notes
in respect of a LIBOR Rate Loan or Letter of Credit or Application, then such
Lender shall promptly notify the Administrative Agent, and the Administrative
Agent shall promptly notify the Borrower of such fact and demand compensation
therefor and, within fifteen (15) days after such notice by the Administrative
Agent, the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or Lenders for such increased cost or reduction,
provided that such Lender is generally imposing similar charges on its other
similarly situated borrowers. The Administrative Agent will promptly notify the
Borrower of any event of which it has knowledge which will entitle such Lender
to compensation pursuant to this Section 4.8(c); provided that the
Administrative Agent shall incur no liability whatsoever to the Lenders or the
Borrower in the event it fails to do so. The amount of such compensation shall
be determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Revolving Credit Commitment Percentage of
the LIBOR Rate Loans in the London interbank market and using any reasonable
attribution or averaging methods which such Lender deems appropriate and
practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrower through the Administrative Agent and shall be conclusively presumed
to be correct in the absence of manifest error.
Section 4.9 Indemnity. The Borrower hereby indemnifies each of the
Lenders against any loss or expense which may arise or be attributable to such
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Loan (a) as a consequence of any failure by the
Borrower to make any payment when due of any amount due hereunder in connection
with a LIBOR Rate Loan or a Competitive Bid Loan, (b) due to any failure of the
Borrower to borrow on a date specified therefor in a Notice of Revolving Credit
Borrowing or Notice of Continuation/Conversion or (c) due to any payment,
prepayment or conversion of any LIBOR Rate Loan or any Competitive Bid Loan on a
date other than the last day of the Interest Period therefor. The amount of such
loss or expense shall be determined, in the applicable Lender's sole discretion,
based upon the assumption that such Lender funded its Revolving Credit
Commitment Percentage of the LIBOR Rate Loans in the London interbank market and
using any reasonable attribution or averaging methods which such Lender deems
appropriate and practical. A certificate of such Lender setting forth the basis
for determining such amount or amounts necessary to compensate such Lender shall
be forwarded to the Borrower through the Administrative Agent and shall be
conclusively presumed to be correct in the absence of manifest error.
Section 4.10 Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained
by, any Lender or any corporation controlling such Lender as a consequence of,
or with reference to the Revolving Credit Commitments and other commitments of
this type, below the rate which the Lender or such other corporation could have
achieved but for such introduction, change or compliance, then within five (5)
Business Days after written demand by any such Lender, the Borrower shall pay to
such Lender from time to time as specified by such Lender additional amounts
sufficient to compensate such Lender or other corporation for such reduction,
provided that such Lender is generally imposing similar charges on its other
similarly situated borrowers. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender, shall, in the absence of
manifest error, be presumed to be correct and binding for all purposes.
Section 4.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Notes or the Applications shall be made free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect thereto
excluding, (i) in the case of each Lender and the Administrative Agent, income
and franchise taxes imposed by the jurisdiction under the laws of which such
Lender or the Administrative Agent, as the case may be, is organized or is or
should be qualified to do business or any political subdivision thereof, (ii) in
the case of each Lender, income and franchise taxes imposed by the jurisdiction
of such Lender's Lending Office or any political subdivision thereof, and (iii)
in the case of each Lender, income and franchise taxes payable solely as a
result of such Lender's failure to comply with Section 4.11(e) (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note or Application to any Lender or the Administrative
Agent, (A) 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 4.11) such Lender or the Administrative Agent,
as the case may be, receives an amount equal to the amount such party would have
received had no such deductions been made, (B) the Borrower shall make such
deductions, (C) the Borrower shall pay the full amount deducted to the relevant
taxing authority or other authority in accordance with applicable law, and (D)
the Borrower shall deliver to the Administrative Agent evidence of such payment
to the relevant taxing authority or other authority in the manner provided in
Section 4.11(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 4.11) paid by such Lender or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent, as the case may be, makes written demand
therefor. In the event that the Borrower has indemnified a Lender or the
Administrative Agent for the full amount of any Taxes or Other Taxes as required
hereby, the Borrower shall have the right, at its sole cost and expense, to
contest the validity of such Taxes or Other Taxes by appropriate proceedings, to
seek a refund with respect thereto and to receive and retain any such refund
obtained for its own account.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 13.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrower, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding taxes. Each such Lender further agrees to deliver to the Borrower,
with a copy to the Administrative Agent, a Form 1001 or 4224 and Form W-8 or
W-9, or successor applicable forms or manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, certifying in the case of a Form
1001 or 4224 that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable or
the exemption to which such forms relate unavailable and such Lender notifies
the Borrower and the Administrative Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income taxes)
and, in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax.
(f) Survival. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 4.11 shall survive the payment in full of the
Obligations and the termination of the Revolving Credit Commitments.
Section 4.12 Mitigation. If the Borrower is required to pay additional
amounts to or for the account of any Lender pursuant to Sections 4.8(c), 4.10 or
4.11, then such Lender shall change the jurisdiction of its Lending Office if,
in the judgment of such Lender, such change (i) will eliminate or, if it is not
possible to eliminate, will reduce to the greatest extent possible any such
additional amounts which may thereafter accrue, and (ii) is not otherwise
disadvantageous to such Lender. In addition, any Lender claiming any indemnity
payment or additional amounts pursuant to Sections 4.8(c), 4.10 or 4.11 shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
file any certificate or document reasonably requested in writing by the Borrower
if the making of such a filing would avoid the need for or reduce the amount of
any such indemnity payment or additional amounts that may thereafter accrue and
would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
Section 4.13 Replacement of Demanding Lender. As long as no Default or
Event of Default has occurred and is continuing, the Borrower may replace any
Demanding Lender with one or more Eligible Assignees acceptable to the
Administrative Agent (each, a "Replacement Lender"), in any case by giving
written notice to the Demanding Lender and the Administrative Agent not more
than thirty (30) days after the occurrence of the event which causes the
applicable Demanding Lender to be a Demanding Lender. The replacement of the
Demanding Lender shall be effective ten (10) Business Days following the date
written notice of such replacement is given to the Demanding Lender and the
Administrative Agent, subject to the satisfaction of the following conditions:
(A) the Demanding Lender and the Replacement Lender(s) shall have satisfied the
conditions to assignment and assumption set forth in Section 13.10(b) (with all
fees payable pursuant to Section 13.10(b) to be paid by the Borrower), and, in
connection therewith, the Replacement Lender(s) shall have paid to the Demanding
Lender an amount equal to the principal of and all accrued but unpaid interest
on all outstanding Loans of the Demanding Lender and all accrued but unpaid fees
owing to the Demanding Lender pursuant to Section 4.3, and (B) the Borrower
shall have paid to the Administrative Agent for the account of the Demanding
Lender an amount equal to all other Obligations owing to the Demanding Lender.
For purposes of this Agreement, a "Demanding Lender" is any Lender which has
requested any indemnity payment or additional amounts pursuant to Sections
4.8(c), 4.10 or 4.11.
ARTICLE 5
CLOSING; CONDITIONS OF CLOSING AND BORROWING
Section 5.1 Closing. The closing shall take place at the offices of
Mays & Valentine, L.L.P. at 10:00 a.m. on February 27, 1998, or on such other
date as the parties hereto shall mutually agree.
Section 5.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to enter into this Agreement and to make the initial
Loan (including the initial Swingline Loan) or issue the initial Letter of
Credit is subject to the satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Revolving Credit
Notes, the Swingline Note and the Competitive Bid Notes shall have been duly
authorized, executed and delivered to the Administrative Agent by the parties
thereto, shall be in full force and effect and no default shall exist
thereunder, and the Borrower shall have delivered original counterparts thereof
to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officers' Certificate of the Borrower. The Administrative
Agent shall have received a certificate from a Responsible Officer, in form and
substance reasonably satisfactory to the Administrative Agent, to the effect
that all representations and warranties of the Borrower contained in this
Agreement and the other Loan Documents are true, correct and complete in all
material respects; that the Borrower is not in violation of any of the covenants
contained in this Agreement and the other Loan Documents; that, after giving
effect to the transactions contemplated by this Agreement, no Default or Event
of Default has occurred and is continuing; and that the Borrower has satisfied
each of the closing conditions.
(ii) Certificate of Secretary of the Borrower. The
Administrative Agent shall have received a certificate of the secretary or
assistant secretary of the Borrower certifying as to the incumbency and
genuineness of the signature of each officer of the Borrower executing Loan
Documents to which it is a party and certifying that attached thereto is (A) a
true and complete copy of the articles of incorporation of the Borrower and all
amendments thereto, certified as of a recent date by the State Corporation
Commission of Virginia; (B) a true and complete copy of the bylaws of the
Borrower as in effect on the date of such certification; (C) a true and complete
copy of resolutions duly adopted by the Board of Directors of the Borrower
authorizing the extensions of credit contemplasted hereunder and the execution,
delivery and performance of this Agreement and the other Loan Documents to which
it is a party; and (D) a true and complete copy of each certificate required to
be delivered pursuant to Section 5.2(b)(iii).
(iii) Certificates of Good Standing. To the extent requested
by the Administrative Agent, the Administrative Agent shall have received a
certificate of good standing of the Borrower and each of its Significant
Subsidiaries as of a recent date from the appropriate Governmental Authority in
its jurisdiction of incorporation and in each other jurisdiction where the
Borrower is qualified to do business and a certificate of the relevant taxing
authorities of such jurisdictions certifying that the Borrower and each of its
Significant Subsidiaries has filed required tax returns and owes no delinquent
taxes.
(iv) Opinion of Counsel. The Administrative Agent shall have
received a favorable opinion of Hunton & Williams, counsel to the Borrower,
addressed to the Administrative Agent and the Lenders and in form and substance
reasonably satisfactory to the Administrative Agent with respect to the
Borrower, the Loan Documents and such other matters as the Lenders shall
request.
(v) Tax Forms. The Administrative Agent shall have received
copies of the United States Internal Revenue Service forms required by Section
4.11(e).
(c) Consents; Defaults.
(i) Governmental and Third Party Approvals. The Borrower shall
have obtained all approvals, authorizations and consents of any Governmental
Authority, court or other Person required with respect to the transactions
contemplated by this Agreement and the other Loan Documents.
(ii) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages with respect to, or which is related to or arises out of,
this Agreement or any of the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby, or which, in the Administrative
Agent's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default
shall have occurred and be continuing.
(d) Existing Credit Facilities. The Borrower shall have delivered to
the Administrative Agent evidence reasonably satisfactory to the Administrative
Agent that the Existing Credit Facilities (other than the letters of credit
issued by Crestar Bank which are reflected on Schedule 6.1(t) hereto and which
will remain outstanding after the Closing Date) have been repaid in full and
terminated or will be repaid in full and terminated upon the making of the
initial Loans.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received the most recent audited Consolidated financial statements of the
Borrower and its Subsidiaries, all in form and substance reasonably satisfactory
to the Administrative Agent.
(ii) Initial Calculations Certificate. The Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance
reasonably satisfactory to the Administrative Agent, and certified as accurate
by a Responsible Officer, that attached thereto is a calculation of the L/C
Commission Percentage, the Applicable Margin and the Facility Fee Percentage as
of the Closing Date.
(iii) Payment at Closing; Fee Letter. The Borrower shall have
paid the fees set forth or referenced in Section 4.3 which are due and payable
on or before the Closing Date and any other accrued and unpaid fees or
commissions due hereunder (including, without limitation, legal fees and
expenses) to the Administrative Agent and Lenders, and to any other Person such
amount as may be due thereto in connection with the transactions contemplated
hereby, including all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of any of the Loan
Documents. The Administrative Agent shall have received duly authorized and
executed copies of the fee letter agreement referred to in Section 4.3(c).
(f) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall have
received from the Borrower a Notice of Revolving Credit Borrowing in accordance
with Section 2.3(a) and a Notice of Account Designation specifying the account
or accounts to which the proceeds of any Loans made after the Closing Date are
to be disbursed.
(ii) Proceedings and Documents. All opinions, certificates and
other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to the Lenders. The Lenders shall have received copies of all other
instruments and other evidence as the Lenders may reasonably request, in form
and substance reasonably satisfactory to the Lenders, with respect to the
transactions contemplated by this Agreement and the taking of all actions in
connection therewith.
(iii) Due Diligence and Other Documents. The Borrower shall
have delivered to the Administrative Agent such other documents, certificates
and opinions as the Administrative Agent reasonably requests, certified by a
Responsible Officer as a true and correct copy thereof.
Section 5.3 Conditions to All Loans and Letters of Credit. The
obligations of the Lenders to make any Loan (including, without limitation, the
obligation of the Swingline Lender to make any Swingline Loan) or issue any
Letter of Credit is subject to the satisfaction of the following conditions
precedent on the relevant borrowing or issue date, as applicable:
(a) Continuation of Representations and Warranties. The representations
and warranties contained in Article 6 shall be true and correct in all material
respects on and as of such borrowing or issuance date with the same effect as if
made on and as of such date; except for any representation and warranty made as
of an earlier date, which representation and warranty shall remain true and
correct as of such earlier date.
(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date or (ii) on
the issue date with respect to such Letter of Credit or after giving affect to
the Letters of Credit to be issued on such date.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Section 6.1 Representations and Warranties. To induce the
Administrative Agent and the Lenders to enter into this Agreement and to induce
the Lenders to make the Loans or issue or participate in the Letters of Credit,
the Borrower hereby represents and warrants to the Administrative Agent and the
Lenders that:
(a) Organization; Power; Qualification. Each of the Borrower and its
Significant Subsidiaries is duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation,
has the power and authority to own its properties and to carry on its business
as now being and as hereafter proposed to be conducted and is duly qualified and
authorized to do business in each other jurisdiction in which the character of
its properties or the nature of its business requires such qualification and
authorization, except in cases in which a failure to be so qualified and
authorized in another jurisdiction would not in any given instance or in the
aggregate have a Material Adverse Effect. The jurisdictions in which the
Borrower and its Subsidiaries are incorporated and qualified to do business as
of the Closing Date are described on Schedule 6.1(a).
(b) Ownership. Each Subsidiary of the Borrower as of the Closing Date
is listed on Schedule 6.1(b). As of the Closing Date, each Subsidiary is a
Wholly-Owned Subsidiary. All outstanding shares have been duly authorized and
validly issued and are fully paid and nonassessable. As of the Closing Date,
there are no outstanding stock purchase warrants, subscriptions, options,
securities, instruments or other rights of any type or nature whatsoever, which
are convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the Borrower or its Subsidiaries, except as
described on Schedule 6.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. The
Borrower has the corporate right, power and authority and has taken all
necessary corporate and other action to authorize the execution, delivery and
performance of this Agreement and each of the other Loan Documents to which it
is a party in accordance with their respective terms. This Agreement and each of
the other Loan Documents have been duly executed and delivered by a duly
authorized officer of the Borrower, and each such document constitutes the
legal, valid and binding obligation of the Borrower, enforceable in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar state or federal debtor relief
laws from time to time in effect affecting creditors' rights generally or by
general equitable principles.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by the Borrower of the Loan
Documents in accordance with their respective terms, the borrowings hereunder
and the transactions contemplated hereby do not and will not, with the passage
of time, the giving of notice or otherwise, (i) require any Governmental
Approval or violate any Applicable Law relating to the Borrower or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute a default
under the articles of incorporation, bylaws or other organizational documents of
the Borrower or any of its Subsidiaries or any indenture, agreement or other
instrument to which the Borrower or any of its Subsidiaries is a party or by
which any of their respective properties may be bound or any Governmental
Approval relating to the Borrower or any of its Subsidiaries, or (iii) result in
or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any of its
Subsidiaries other than Liens arising under the Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower
and its Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, and (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties, except in cases in which a failure to have
such Governmental Approvals or to be in compliance therewith or with any other
Applicable Laws would not in any given instance or in the aggregate have a
Material Adverse Effect.
(f) Tax Returns and Payments. Each of the Borrower and its Subsidiaries
has duly filed or caused to be filed all federal, state, local and other tax
returns required by Applicable Law to be filed, and has paid, or made adequate
provision for the payment of, all federal, state, local and other taxes,
assessments and governmental charges or levies upon it and its property, income,
profits and assets which are due and payable, other than those which are not yet
delinquent, those which are being contested by the Borrower or such Subsidiary
in good faith and by appropriate proceedings and for which the Borrower or such
Subsidiary has established reserves as required by GAAP and those which, either
in any given instance or in the aggregate, do not involve a potential tax
liability in excess of $1,000,000. No Governmental Authority has asserted any
Lien or other claim against the Borrower or any of its Subsidiaries with respect
to unpaid taxes which has not been discharged or resolved, other than statutory
liens for taxes not yet due and payable. The charges, accruals and reserves on
the books of the Borrower and each of its Subsidiaries with respect to any
unpaid federal, state, local and other taxes for all Fiscal Years and portions
thereof since the organization of the Borrower and each of its Subsidiaries are
in the judgment of the Borrower adequate in accordance with GAAP. The Borrower
does not anticipate any additional taxes or assessments in the aggregate for all
such years which would be reasonably likely to cause or result in a Material
Adverse Effect.
(g) Intellectual Property Matters. Each of the Borrower and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are required to
conduct its business, except in cases in which a failure to own or possess any
such rights would not, in any instance or in the aggregate, have a Material
Adverse Effect. No event has occurred which permits, or after notice or lapse of
time or both would permit, the revocation or termination of any such rights, and
neither the Borrower nor any of its Subsidiaries is liable to any Person for
infringement under Applicable Law with respect to any such rights as a result of
its business operations, except in cases in which any such revocation,
termination or liability would not, in any instance or in the aggregate, have a
Material Adverse Effect.
(h) Environmental Matters.
(i) To the best of the Borrower's knowledge, the properties of
the Borrower and its Subsidiaries do not contain, and have not previously
contained, any Hazardous Materials in amounts or concentrations which (A)
constitute or constituted a violation of applicable Environmental Laws or (B)
could give rise to liability under applicable Environmental Laws, except in
cases in which any such violation or liability is not reasonably likely to
result, in any given instance or in the aggregate, in liability of the Borrower
or any Subsidiary in excess of $25,000,000;
(ii) To the best of the Borrower's knowledge, such properties
and all operations conducted in connection therewith are in compliance, and have
been in compliance, with all applicable Environmental Laws, except in cases in
which any failure to be in compliance is not reasonably likely to result, in any
given instance or in the aggregate, in liability of the Borrower or any
Subsidiary in excess of $25,000,000, and there is no contamination at, under or
about such properties or such operations which could materially interfere with
the continued operation of such properties or materially impair the fair
saleable value thereof;
(iii) Neither the Borrower nor any Subsidiary has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of its properties or the operations conducted in connection
therewith, nor does the Borrower or any Subsidiary have knowledge or reason to
believe that any such notice will be received or is being threatened, except in
cases in which the liability of the Borrower or any Subsidiary, in any given
instance or in the aggregate, is not reasonably likely to exceed $25,000,000;
(iv) Hazardous Materials have not been transported or disposed
of from the properties of the Borrower and its Subsidiaries in violation of, or
in a manner or to a location which could give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Laws, except in cases in which the liability of the Borrower or
any Subsidiary, in any given instance or in the aggregate, is not reasonably
likely to exceed $25,000,000;
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to such properties or operations conducted in connection
therewith, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to such
properties or such operations, except in cases in which the liability of the
Borrower or any Subsidiary, in any given instance or in the aggregate, is not
reasonably likely to exceed $25,000,000; and
(vi) There has been no release, or to the best of the
Borrower's knowledge, the threat of release, of Hazardous Materials at or from
such properties, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws, except in cases in which the
liability of the Borrower or any Subsidiary, in any given instance or in the
aggregate, is not reasonably likely to exceed $25,000,000.
(i) ERISA.
(i) As of the Closing Date, neither the Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Pension
Plan or Multiemployer Plan other than those identified on Schedule 6.1(i);
(ii) Each of the Borrower and its ERISA Affiliates is in
compliance in all material respects with all applicable provisions of ERISA and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet expired,
and except in cases in which a failure to be in compliance is not reasonably
likely to result, in any given instance or in the aggregate, in liability of the
Borrower or any ERISA Affiliate in excess of $25,000,000. Each Employee Benefit
Plan that is intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified, and each trust
related to such plan has been determined to be exempt under Section 501(a) of
the Code. No liability has been incurred by the Borrower or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan, except in cases in which such
liability is not reasonably likely to result, in any given instance or in the
aggregate, in liability of the Borrower or any ERISA Affiliate in excess of
$25,000,000;
(iii) To the best of the Borrower's knowledge, no Pension Plan
has been terminated, nor has any accumulated funding deficiency (as defined in
Section 412 of the Code) been incurred (without regard to any waiver granted
under Section 412 of the Code), nor has any funding waiver from the Internal
Revenue Service been received or requested with respect to any Pension Plan, nor
has the Borrower or any ERISA Affiliate failed to make any contributions or to
pay any amounts due and owing as required by Section 412 of the Code, Section
302 of ERISA or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 302 of ERISA, nor has
there been any event requiring any disclosure under Section 4041(c)(3)(C) or
4063(a) of ERISA with respect to any Pension Plan, except in cases in which the
liability of the Borrower or any ERISA Affiliate, in any given instance or in
the aggregate, is not reasonably likely to exceed $25,000,000;
(iv) Neither the Borrower nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section 406 of the
ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC which
remains outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid, (C) failed to make a required contribution or
payment to a Multiemployer Plan, or (D) failed to make a required installment or
other required payment under Section 412 of the Code, except in cases in which
the liability of the Borrower or any ERISA Affiliate, in any given instance or
in the aggregate, is not reasonably likely to exceed $25,000,000;
(v) No Termination Event has occurred or, to the best of the
Borrower's knowledge, is reasonably expected to occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is
existing or, to the best knowledge of the Borrower after due inquiry, threatened
concerning or involving any (A) employee welfare benefit plan (as defined in
Section 3(1) of ERISA) currently maintained or contributed to by the Borrower or
any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan (other than
routine claims for benefits), except in cases in which the liability of the
Borrower or any ERISA Affiliate, in any given instance or in the aggregate, is
not reasonably likely to exceed $25,000,000.
(j) Margin Stock. Neither the Borrower nor any Subsidiary is engaged
principally or as one of its activities in the business of extending credit for
the purpose of "purchasing" or "carrying" any "margin stock" (as each such term
is defined or used in Regulations G and U of the Board of Governors of the
Federal Reserve System). No part of the proceeds of any of the Loans or Letters
of Credit will be used for purchasing or carrying margin stock or for any
purpose which violates, or which would be inconsistent with, the provisions of
Regulation G, T, U or X of such Board of Governors.
(k) Government Regulation. Neither the Borrower nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company" (as
each such term is defined or used in the Investment Company Act of 1940, as
amended) and neither the Borrower nor any Subsidiary is, or after giving effect
to any Revolving Credit Extension of Credit will be, subject to regulation under
the Public Utility Holding Company Act of 1935 or the Interstate Commerce Act,
each as amended, or any other Applicable Law which limits its ability to incur
or consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 6.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and its Subsidiaries in
effect as of the Closing Date not listed on any other Schedule hereto. Other
than as set forth on Schedule 6.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms thereof
as of the Closing Date. The Borrower and its Subsidiaries have made available to
the Administrative Agent a true and complete copy of each Material Contract
required to be listed on Schedule 6.1(l) or any other Schedule hereto as of the
Closing Date.
(m) Employee Relations. As of the Closing Date, each of the Borrower
and its Subsidiaries is not party to any collective bargaining agreement nor has
any labor union been recognized as the representative of its employees except as
set forth on Schedule 6.1(m). The Borrower knows of no pending, threatened or
contemplated strikes, work stoppage or other collective labor disputes involving
its employees or those of any of its Subsidiaries, except as disclosed on page 9
of the Borrower's Form 10-Q dated February 24, 1998, with respect to the West
Point, Pennsylvania Distribution Center and except for those which are not
reasonably likely to have a Material Adverse Effect.
(n) Burdensome Provisions. Neither the Borrower nor any Subsidiary is a
party to any indenture, agreement, lease or other instrument, or subject to any
corporate or partnership restriction, Governmental Approval or Applicable Law
which is so unusual or burdensome as in the foreseeable future could be
reasonably expected to have a Material Adverse Effect. The Borrower and its
Subsidiaries do not presently anticipate that future expenditures needed to meet
the provisions of any statutes, orders, rules or regulations of a Governmental
Authority will be so burdensome as to have a Material Adverse Effect.
(o) Financial Statements. The (i) Consolidated balance sheets of the
Borrower and its Subsidiaries as of May 3, 1997, and the related statements of
earnings, shareholders' equity and cash flows for the Fiscal Year then ended and
(ii) unaudited Consolidated balance sheets of the Borrower and its Subsidiaries
as of October 18, 1997, and related unaudited interim statements of earnings,
shareholders' equity and cash flows for the period then ended, copies of which
have been furnished to the Administrative Agent and each Lender, are complete
and correct in all material respects and fairly present in all material respects
the assets, liabilities and financial position of the Borrower and its
Subsidiaries as at such dates, and the results of the operations and changes of
financial position for the periods then ended. All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP. The Borrower and its Subsidiaries have no Debt, obligation
or other unusual forward or long-term commitment which is not fairly reflected
in the foregoing financial statements or in the notes thereto in accordance with
GAAP, except for those relating to the Borrower's agreement to acquire
substantially all of the assets of Farm Fresh, Inc.
(p) No Material Adverse Change. Since May 3, 1997, there has been no
Material Adverse Change, and no event has occurred or condition arisen that
could reasonably be expected to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Revolving Credit Extension of Credit made hereunder, the Borrower and each of
its Subsidiaries will be Solvent.
(r) Titles to Properties. Each of the Borrower and its Significant
Subsidiaries has such title to the real property owned by it as is necessary or
desirable to the conduct of its business and valid and legal title to all of its
material personal property and assets, including, but not limited to, those
reflected on the Consolidated balance sheets of the Borrower and its
Subsidiaries described in Section 6.1(o), except those which have been disposed
of by the Borrower or its Subsidiaries subsequent to May 3, 1997, which
dispositions have been in the ordinary course of business or as otherwise
expressly permitted hereunder.
(s) Liens. None of the properties and assets of the Borrower or any
Subsidiary is subject to any Lien, except Liens permitted by Section 10.3. No
financing statement under the Uniform Commercial Code of any state which names
the Borrower or any Subsidiary thereof or any of their respective trade names or
divisions as debtor, and which has not been terminated, has been filed in any
state or other jurisdiction and neither the Borrower nor any Subsidiary has
signed any such financing statement or any security agreement authorizing any
secured party thereunder to file any such financing statement, except financing
statements filed to perfect those Liens permitted by Section 10.3 and financing
statements filed with respect to operating leases or with respect to Debt which
is no longer outstanding.
(t) Debt and Guaranty Obligations. Schedule 6.1(t) is a complete and
correct listing of all Debt and Guaranty Obligations of the Borrower and its
Subsidiaries as of the Closing Date in excess of $10,000,000. The Borrower and
its Subsidiaries have performed and are in compliance in all material respects
with all of the terms of (i) all Debt and Guaranty Obligations of the Borrower
and its Subsidiaries in excess of $10,000,000 and all instruments and agreements
relating thereto, and (ii) all synthetic and other structural leases the
aggregate implied principal amount of which (calculated in accordance with
applicable Federal income tax laws and regulations) is in excess of $10,000,000
and all instruments and agreements relating thereto, and no default or event of
default, or event or condition which with notice or lapse of time or both would
constitute such a default or event of default on the part of the Borrower or its
Subsidiaries exists with respect to any such Debt or Guaranty Obligation or any
such synthetic or other structured lease.
(u) Litigation. There are no actions, suits or proceedings pending nor,
to the knowledge of the Borrower, threatened against or in any other way
relating adversely to or affecting the Borrower or any Subsidiary or any of
their respective properties in any court or before any arbitrator of any kind or
before or by any Governmental Authority in which there is a reasonable
possibility of an adverse decision and which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred and is continuing which
constitutes a Default or an Event of Default. As of the Closing Date, no event
has occurred and is continuing which constitutes, or which with the passage of
time or giving of notice or both would constitute, a default or event of default
by the Borrower or any Subsidiary under any Material Contract or judgment,
decree or order to which the Borrower or one or more its Subsidiaries is a party
or by which the Borrower or one or more of its Subsidiaries or any of their
respective properties may be bound or which would require the Borrower or one or
more of its Subsidiaries to make any payment thereunder prior to the scheduled
maturity date therefor, except in cases in which any such default or event of
default would not, in any instance or in the aggregate, have a Material Adverse
Effect.
(w) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of the Borrower or
any Subsidiary and furnished to the Lenders were, at the time the same were so
furnished, complete and correct in all material respects to the extent necessary
to give the recipient a true and accurate knowledge of the subject matter. No
document furnished or written statement made to the Administrative Agent or the
Lenders by the Borrower or any Subsidiary in connection with the negotiation,
preparation or execution of this Agreement or any of the Loan Documents contains
or will contain any untrue statement of a fact material to the creditworthiness
of the Borrower or its Subsidiaries or omits or will omit to state a fact
necessary in order to make the statements contained therein not misleading. The
Borrower is not aware of any facts which it has not disclosed in writing to the
Administrative Agent having a Material Adverse Effect, or insofar as the
Borrower can now foresee, could reasonably be expected to have a Material
Adverse Effect.
Section 6.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article 6 and all
representations and warranties contained in any certificate or any of the other
Loan Documents (including but not limited to any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date, shall survive the Closing Date and shall not be
waived by the execution and delivery of this Agreement, any investigation made
by or on behalf of the Lenders or any extension of credit hereunder.
ARTICLE 7
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and all
of the Revolving Credit Commitments terminated, unless consent has been obtained
in the manner set forth in Section 13.11, the Borrower will furnish or cause to
be furnished to the Administrative Agent and to each of the Lenders at its
address as set forth on Schedule 1, or at such other office as may be designated
by the Administrative Agent or any Lender from time to time:
Section 7.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each of the first three (3)
fiscal quarters of the Borrower in each Fiscal Year, unaudited Consolidated
balance sheets of the Borrower and its Subsidiaries as of the close of such
fiscal quarter and unaudited Consolidated statements of earnings, shareholders'
equity and cash flows for the fiscal quarter then ended and that portion of the
Fiscal Year then ended, including the notes thereto, all in reasonable detail
setting forth in comparative form the corresponding figures for the preceding
Fiscal Year and prepared by the Borrower in accordance with GAAP and, if
applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries as of their respective dates and the
results of operations of the Borrower and its Subsidiaries for the respective
periods then ended, subject to normal year end adjustments; provided that the
Borrower may deliver, in lieu of the foregoing, the quarterly report of the
Borrower for such fiscal quarter on Form 10-Q filed with the SEC, but only as
long as the financial statements contained in such quarterly report are
substantially the same in content as the financial statements referred to above
in this Section 7.1(a).
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, audited
Consolidated balance sheets of the Borrower and its Subsidiaries as of the close
of such Fiscal Year and audited Consolidated statements of earnings,
shareholders' equity and cash flows for the Fiscal Year then ended, including
the notes thereto, all in reasonable detail setting forth in comparative form
the corresponding figures for the preceding Fiscal Year and prepared by an
independent certified public accounting firm of national standing in accordance
with GAAP and, if applicable, containing disclosure of the effect on the
financial position or results of operation of any change in the application of
accounting principles and practices during the year, and accompanied by a report
thereon by such certified public accountants that is not qualified with respect
to scope limitations imposed by the Borrower or any of its Subsidiaries or with
respect to accounting principles followed by the Borrower or any of its
Subsidiaries not in accordance with GAAP; provided that the Borrower may
deliver, in lieu of the foregoing, the annual report of the Borrower for such
Fiscal Year on Form 10-K filed with the SEC, but only as long as the financial
statements contained in such annual report are substantially the same in content
as the financial statements referred to above in this Section 7.1(b).
Section 7.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 7.1 (a) or (b), a certificate of
the chief financial officer or the treasurer of the Borrower in the form of
Exhibit F hereto (an "Officer's Compliance Certificate"), with the blanks
therein appropriately completed.
Section 7.3 Other Reports.
(a) Promptly after the same become publicly available, copies of all
periodic and other reports on Forms 10-K, 10-Q and 8-K and all definitive proxy
statements filed by the Borrower or any Subsidiary with the SEC or any other
documents distributed by the Borrower to its shareholders generally which
contain information equivalent to that contained in such forms or proxy
statements;
(b) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent certified
public accounting firm in connection with their auditing function, including,
without limitation, any management report and any management responses thereto;
and
(c) Such other information regarding the operations, business affairs
and financial condition of the Borrower or any of its Subsidiaries as the
Administrative Agent or any Lender may reasonably request.
Section 7.4 Notice of Subsidiaries, Litigation and Other Matters.
Prompt (but in no event later than ten (10) days after an executive officer of
the Borrower obtains knowledge thereof) telephonic and written notice of:
(a) the formation or acquisition of any Subsidiary which is, or on a
pro forma basis is expected to be, a Significant Subsidiary;
(b) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving the Borrower or any Subsidiary or any
of their respective properties, assets or businesses in which there is a
reasonable possibility of an adverse decision and which if adversely determined,
could reasonably be expected to have a Material Adverse Effect;
(c) any notice of any violation received by the Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws which in any such case
could reasonably be expected to have a Material Adverse Effect;
(d) any labor controversy that has resulted in, or is reasonably likely
to result in, a strike or other material work action against the Borrower or any
Significant Subsidiary which is reasonably likely to have a material adverse
effect on the operations of the Borrower or any Significant Subsidiary;
(e) any attachment, judgment, nonconsensual lien, levy or order
exceeding $10,000,000 that may be assessed against the Borrower or any
Subsidiary;
(f) any Default or Event of Default, or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
material default or event of default by the Borrower or any Subsidiary under any
Debt or Guaranty Obligation in excess of $10,000,000 or any Material Contract;
(g) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA; and
(h) any event which makes any of the representations set forth in
Section 6.1 inaccurate in any material respect.
Section 7.5 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrower
to the Administrative Agent or any Lender (other than financial forecasts)
whether pursuant to this Article 7 or any other provision of this Agreement
shall be, at the time the same is so furnished, complete and correct in all
material respects based on the Borrower's knowledge thereof.
ARTICLE 8
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
all of the Revolving Credit Commitments terminated, unless consent has been
obtained in the manner provided for in Section 13.11:
Section 8.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 10.4, the Borrower will preserve and maintain,
and cause each of its Significant Subsidiaries to preserve and maintain, its
separate corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and the Borrower will qualify and
remain qualified as a foreign corporation and authorized to do business in, and
cause each of its Significant Subsidiaries to qualify and remain qualified as a
foreign corporation and authorized to do business in, each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification and authorization, except in cases in which a failure to be so
qualified and authorized in another jurisdiction would not in any given instance
or in the aggregate have a Material Adverse Effect.
Section 8.2 Maintenance of Property. The Borrower will protect and
preserve, and cause each of its Significant Subsidiaries to protect and
preserve, all properties useful in and material to its business, including
copyrights, patents, trade names and trademarks; maintain, and cause each of its
Significant Subsidiaries to maintain, in good working order and condition all
buildings, equipment and other tangible real and personal property useful in and
material to its business; and from time to time make or cause to be made, and
cause each of its Significant Subsidiaries to make or cause to be made, all
renewals, replacements and additions to such property necessary for the conduct
of its business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
Section 8.3 Insurance. The Borrower will maintain, and cause each of
its Significant Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies against such risks and in such amounts as is
consistent with past practices of the Borrower and its Significant Subsidiaries
and as may be required by Applicable Law, and on the Closing Date and from time
to time thereafter the Borrower will deliver to the Administrative Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
Section 8.4 Accounting Methods and Financial Records. The Borrower will
maintain, and cause each of its Subsidiaries to maintain, a system of
accounting, and keep, and cause each of its Subsidiaries to keep, such books,
records and accounts (which shall be true and complete in all material respects)
as may be required or as may be necessary to permit the preparation of financial
statements in accordance with GAAP and in compliance with the regulations of any
Governmental Authority having jurisdiction over it or any of its properties.
Section 8.5 Payment and Performance of Obligations. The Borrower will
pay and perform, and cause each of its Subsidiaries to perform, all Obligations,
as applicable to them, under this Agreement and the other Loan Documents, and
pay or perform, and cause each of its Subsidiaries to pay and perform, (a) all
taxes, assessments and other governmental charges that may be levied or assessed
upon it or any of its property, and (b) all other indebtedness, obligations and
liabilities in excess of $10,000,000 in accordance with customary trade
practices; provided that the Borrower or such Subsidiary may contest any item
described in clauses (a) or (b) of this Section 8.5 in good faith and by
appropriate proceedings so long as adequate reserves are maintained with respect
thereto in accordance with GAAP.
Section 8.6 Compliance With Laws and Approvals. The Borrower will
observe and remain in compliance with, and cause each of its Subsidiaries to
observe and remain in compliance with, all Applicable Laws and maintain, and
cause each of its Subsidiaries to maintain, in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business,
except in cases in which a failure to observe and comply with Applicable Laws or
a failure to maintain Governmental Approvals would not, in any given instance or
in the aggregate, have a Material Adverse Effect.
Section 8.7 Environmental Laws. In addition to and without limiting the
generality of Section 8.6, the Borrower will (a) comply with and ensure such
compliance by all tenants and subtenants, with, all applicable Environmental
Laws and obtain and comply with and maintain, and ensure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except in cases in which any failure to do so is not reasonably likely to
result, in any given instance or in the aggregate, in liability of the Borrower
or any Subsidiary in excess of $25,000,000, (b) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws, and promptly comply with all
lawful orders and directives of any Governmental Authority regarding
Environmental Laws, and (c) defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the violation
of, noncompliance with or liability under any Environmental Laws applicable to
the operations of the Borrower or any Subsidiary, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorneys' and consultants' fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing directly result from the gross negligence
or willful misconduct of the party seeking indemnification therefor, and the
Borrower will cause each of its Subsidiaries to do and comply with all of the
foregoing.
Section 8.8 Compliance with ERISA. In addition to and without limiting
the generality of Section 8.6, the Borrower will (a) comply with all applicable
provisions of ERISA and the regulations and published interpretations thereunder
with respect to all Employee Benefit Plans, except in cases in which any failure
to do so is not reasonably likely to result, in any given instance or in the
aggregate, in liability of the Borrower or any Subsidiary in excess of
$25,000,000, (b) not take any action or fail to take action the result of which
could be a liability to the PBGC in excess of $25,000,000 or to a Multiemployer
Plan in excess of $25,000,000, (c) not participate in any prohibited transaction
that could result in any civil penalty in excess of $25,000,000 under ERISA or
tax under the Code, (d) operate each Employee Benefit Plan in such a manner that
will not incur any tax liability in excess of $25,000,000 under Section 4980B of
the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (e) furnish to the Administrative Agent upon the
Administrative Agent's request such additional information about any Employee
Benefit Plan as may be reasonably requested by the Administrative Agent, and the
Borrower will cause each of its Subsidiaries to do and comply with all of the
foregoing.
Section 8.9 Compliance With Agreements. The Borrower will comply in all
respects with, and cause each of its Subsidiaries to comply in all respects
with, each term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract, except in cases in which a failure so to
comply would not, in any given instance or in the aggregate, have a Material
Adverse Effect;
Section 8.10 Conduct of Business. The Borrower and its Subsidiaries,
considered as a whole, will continue to engage primarily in the wholesale and
retail food distribution and logistics business and businesses reasonably
related thereto.
Section 8.11 Visits and Inspections. The Borrower will permit, and
cause each of its Subsidiaries to permit, representatives of the Administrative
Agent or any Lender, from time to time, to visit and inspect its properties;
inspect, audit and make extracts from its books, records and files, including,
but not limited to, management letters prepared by independent certified public
accountants; and discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial condition, results of
operations and business prospects.
Section 8.12 Year 2000 Compatibility. The Borrower will take all
actions, and cause each of its Subsidiaries to take all actions, reasonably
necessary to assure that the material computer based systems of the Borrower and
its Subsidiaries are able to operate and effectively process data which includes
dates on and after January 1, 2000. At the request of the Administrative Agent,
the Borrower shall provide reasonable assurances satisfactory to the
Administrative Agent of the Year 2000 compatibility of the material computer
based systems of the Borrower and its Subsidiaries.
Section 8.13 Further Assurances. The Borrower will make, execute and
deliver, and cause each of its Subsidiaries to make, execute and deliver, all
such additional and further acts, things, deeds and instruments as the
Administrative Agent or any Lender may reasonably require to document and
consummate the transactions contemplated hereby and to vest completely in and
insure the Administrative Agent and the Lenders their respective rights under
this Agreement, the Notes, the Letters of Credit and the other Loan Documents.
ARTICLE 9
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and
all of the Revolving Credit Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11:
Section 9.1 Leverage Ratio. The Borrower will maintain a ratio,
measured as of the end of each of the first three fiscal quarters during each
Fiscal Year and as of the end of each Fiscal Year, of Consolidated Funded Debt
as of the date of measurement, to Consolidated EBITDA for the four-quarter
period ending on the date of measurement, which is not greater than 3.0 to 1 at
any time.
Section 9.2 Fixed Charge Coverage Ratio. The Borrower will maintain a
ratio, measured as of the end of each of the first three fiscal quarters during
each Fiscal Year and as of the end of each Fiscal Year, of Consolidated EBITDAR
for the four-quarter period ending on the date of measurement, to Consolidated
Fixed Charges for such four-quarter period, which is not less than 1.5 to 1 at
any time.
ARTICLE 10
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
all of the Revolving Credit Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11:
Section 10.1 Limitations on Debt. The Borrower will not create, incur,
assume or suffer to exist any Debt which is senior in right of payment to the
Obligations, or any other Debt if at the time of, or immediately upon giving
effect to, the creation, incurrence, assumption or existence of such Debt a
Default or an Event of Default exists or would exist (it being understood and
agreed that the fact that Debt is secured by a Lien permitted by Section 10.3
shall not cause such Debt to be considered senior for purposes of this Section
10.1), and the Borrower will not permit any of its Subsidiaries to create,
incur, assume or suffer to exist any Debt except:
(a) Debt of any Subsidiary existing on the Closing Date and
described on Schedule 6.1(t);
(b) Debt of any Subsidiary owing to the Borrower or any other
Subsidiary;
(c) Debt of any Subsidiary outstanding at the time such Subsidiary
becomes a Subsidiary of the Borrower and not incurred in contemplation thereof,
as long as the Debt remains the sole obligation of such Subsidiary and as long
as the outstanding principal amount of such Debt is not voluntarily increased by
such Subsidiary after the date such Subsidiary becomes a Subsidiary of the
Borrower;
(d) Debt of any Subsidiary secured by a Lien permitted by Section 10.3,
provided that such Debt does not exceed the value of the assets or property
subject to such permitted Lien;
(e) Debt constituting the renewal or refinancing of any Debt permitted
by subsections (a), (b) or (c) above as long as the aggregate principal amount
thereof is not increased; and
(f) Debt of any Subsidiary not otherwise permitted by this Section 10.1
as long as the aggregate of all such Debt for all Subsidiaries at any time
outstanding does not exceed ten percent (10%) of Consolidated Net Tangible
Assets.
Section 10.2 Intentionally Omitted.
Section 10.3 Limitations on Liens. The Borrower will not create, incur,
assume or suffer to exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any Lien on or with respect to any of its assets or
properties (including without limitation shares of capital stock or other
ownership interests), real or personal, whether now owned or hereafter acquired,
except:
(a) Liens existing on the Closing Date and described on Schedule 10.3;
(b) Liens for taxes, assessments and other governmental charges or
levies not yet due or as to which the period of grace, if any, related thereto
has not expired or which are being contested in good faith and by appropriate
proceedings if adequate reserves are maintained to the extent required by GAAP;
(c) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings if adequate reserves are maintained to the extent
required by GAAP;
(d) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or
obligations under customer service contracts;
(e) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of any material parcel of real property or
impair the use thereof in the ordinary conduct of business;
(f) Liens in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(g) Liens on the property or assets of any Subsidiary existing at the
time such Subsidiary becomes a Subsidiary of the Borrower and not incurred in
contemplation thereof, as long as the outstanding principal amount of the Debt
secured thereby is not voluntarily increased by such Subsidiary after the date
such Subsidiary becomes a Subsidiary of the Borrower;
(h) Liens on the property or assets of the Borrower or any Subsidiary
securing Debt which is permitted under Section 10.1 and which is incurred to
finance the acquisition of such property or assets; provided that (i) each such
Lien shall be created substantially simultaneously with the acquisition of the
related property or assets, (ii) each such Lien does not at any time encumber
any property other than the related property or assets financed by such Debt,
(iii) the principal amount of Debt secured by each such Lien is not increased
and (iv) the principal amount of Debt secured by each such Lien shall at no time
exceed 100% of the original purchase price of such related property or assets at
the time acquired;
(i) Liens not otherwise permitted by this Section 10.3 as long as all
such Liens do not encumber property and assets which constitute more than five
percent (5%) of Consolidated Net Tangible Assets; and
(j) Any lien not otherwise permitted by this Section 10.3 as long as,
prior to or contemporaneously with the creation, incurrence, assumption or
existence of such Lien, the Borrower shall have taken all steps necessary to
cause the Obligations to be secured by such Lien, equally and ratably based on
amount of indebtedness with the other Debt and obligations secured thereby, to
the satisfaction of the Administrative Agent and each of the Lenders.
Section 10.4 Limitations on Mergers and Liquidation. The Borrower will
not merge, consolidate or enter into any similar combination with any other
Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or permit any of its Significant Subsidiaries to merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), except:
(a) the Borrower or a Significant Subsidiary may merge with another
Person if (i) such Person is organized under the laws of the United States or
one of its states, (ii) the Borrower or the Significant Subsidiary, as the case
may be, is the corporation surviving such merger, and (iii) immediately prior to
and after giving effect to such merger no Default or Event of Default exists or
would exist;
(b) any Wholly-Owned Significant Subsidiary of the Borrower may merge
into the Borrower or any other Wholly-Owned Subsidiary of the Borrower; and
(c) any Wholly-Owned Significant Subsidiary of the Borrower may
liquidate, wind-up or dissolve itself into the Borrower or any other
Wholly-Owned Subsidiary of the Borrower.
Section 10.5 Limitations on Sale of Assets. The Borrower will not
convey, sell, lease, assign, transfer or otherwise dispose of, or permit any of
its Subsidiaries to convey, sell, lease, assign, transfer or otherwise dispose
of:
(a) all or substantially all of the property, business or assets of the
Borrower and its Subsidiaries on a Consolidated basis;
(b) any of its property, business or assets if such transaction would
reasonably be expected to have a Material Adverse Effect; or
(c) any of its property, business or assets if immediately prior to or
after giving effect to such transaction a Default or an Event of Default exists
or would exist.
Section 10.6 Prohibition against Limitations on Dividends and
Distributions. The Borrower will not permit any Subsidiary to agree to, incur,
assume or suffer to exist any restriction, limitation or other encumbrance (by
covenant or otherwise) on the ability of such Subsidiary to make any payment to
the Borrower or any of its Subsidiaries (in the form of dividends, intercompany
advances or otherwise) except:
(a) Restrictions and limitations existing on the Closing Date and
described on Schedule 10.6;
(b) Restrictions and limitations applicable to a Subsidiary existing at
the time such Subsidiary becomes a Subsidiary of the Borrower and not incurred
in contemplation thereof, as long as no such restriction or limitation is made
more restrictive after the date such Subsidiary becomes a Subsidiary of the
Borrower; and
(c) Other restrictions and limitations which are not material either
individually or in the aggregate.
Section 10.7 Intentionally Omitted.
Section 10.8 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly (a) make any
loan or advance to, or purchase or assume any note or other obligation to or
from, any of its officers, directors, shareholders or Affiliates, or to or from
any member of the immediate family of any of its officers, directors,
shareholders or Affiliates, other than (i) loans or advances to customers of the
Borrower and its Subsidiaries in the ordinary course of business which are arm's
length, and (ii) any other loan or advance or assumption that would not cause
the aggregate amount of all such loans and advances and assumed notes and
advances to exceed $5,000,000, or (b) enter into, or be a party to, any
subcontract of any operations or other transaction with any of its Affiliates,
except pursuant to the reasonable requirements of its business and upon fair and
reasonable terms that are no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate and except
for transactions which are not material either individually or in the aggregate.
Nothing contained in this Section 10.8 shall prohibit the Borrower or any
Subsidiary which has obtained an ownership interest in a customer in connection
with a loan or credit workout to provide non-standard payment or other terms to
such customer or otherwise to do business with such customer in the ordinary
course of business.
Section 10.9 Certain Accounting Changes. The Borrower will not change
its Fiscal Year end in order to avoid a Default or an Event of Default or if a
Material Adverse Effect would result therefrom, and the Borrower will not make
any change in its accounting treatment and reporting practices except as
required by GAAP.
Section 10.10 Amendments; Payments and Prepayments of Subordinated
Debt. At any time after the occurrence of a Default or an Event of Default and
during the continuance thereof, the Borrower will not, and will not permit any
of its Subsidiaries to, amend or modify (or permit the modification or amendment
of) any of the terms or provisions of any Subordinated Debt, or cancel or
forgive, make any voluntary or optional payment or prepayment on, or redeem or
acquire for value (including without limitation by way of depositing with any
trustee with respect thereto money or securities before due for the purpose of
paying when due) any Subordinated Debt.
ARTICLE 11
DEFAULT AND REMEDIES
Section 11.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrower shall default in any payment of principal of any Loan,
Note or Reimbursement Obligation when and as due (whether at maturity, by reason
of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue unremedied for three (3)
Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed to
be made by the Borrower or any of its Subsidiaries under this Agreement, any
Loan Document or any amendment hereto or thereto, shall at any time prove to
have been incorrect or misleading in any material respect when made or deemed
made.
(d) Default in Performance of Certain Covenants. The Borrower shall
default in the performance or observance of any covenant or agreement contained
in Articles 9 or 10 of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The
Borrower or any Subsidiary shall default in the performance or observance of any
term, covenant, condition or agreement contained in this Agreement (other than
as specifically provided for otherwise in this Section 11.1) or any other Loan
Document and such default shall continue for a period of thirty (30) days after
written notice thereof has been given to the Borrower by the Administrative
Agent.
(f) Hedging Agreement. Any termination payment shall be due by the
Borrower under any Hedging Agreement to which any Lender is a party and such
amount is not paid within thirty (30) Business Days of the due date thereof.
(g) Debt Cross-Default. The Borrower or any of its Subsidiaries shall
(i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $10,000,000 (including, without limitation, Debt under the Separate
Revolving Credit Facility) beyond the period of grace, if any, provided in the
instrument or agreement under which such Debt was created, (ii) default in the
payment of an amount due under a synthetic or other structured lease the
aggregate implied principal amount of which lease calculated in accordance with
applicable Federal income tax laws and regulations is in excess of $10,000,000
beyond the period of grace, if any, provided in the instrument or agreement
under which such lease was created, or (iii) default in the observance or
performance of any other agreement or condition relating to any such Debt or any
such lease or contained in any instrument or agreement evidencing, securing or
relating thereto or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Debt or such lease (or a trustee or agent on behalf of
such holder or holders) to cause, with the giving of notice if required, any
such Debt or any such lease to become due prior to its stated maturity (any such
notice having been given and any applicable grace period having expired).
(h) Intentionally Omitted.
(i) Change in Control. Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
shall obtain ownership or control in one or more series of transactions of
thirty percent (30%) or more of the common stock or thirty percent (30%) or more
of the voting power of the Borrower entitled to vote in the election of members
of the board of directors of the Borrower or there shall have occurred under any
indenture or other instrument evidencing any Debt in excess of $10,000,000 any
"change in control" (as defined in such indenture or other evidence of Debt)
obligating the Borrower to repurchase, redeem or repay all or any part of the
Debt provided for therein (any such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
shall (i) commence a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Borrower or any Subsidiary in any court of competent
jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(ii) the appointment of a trustee, receiver, custodian, liquidator or the like
for the Borrower or any Subsidiary or for all or any substantial part of their
respective assets, domestic or foreign, and such case or proceeding shall
continue undismissed or unstayed for a period of sixty (60) consecutive days, or
an order granting the relief requested in such case or proceeding (including,
but not limited to, an order for relief under such federal bankruptcy laws)
shall be entered.
(l) Failure of Agreements. Any material provision of this Agreement or
of any other Loan Document shall for any reason cease to be valid and binding on
the Borrower or the Borrower shall so state in writing.
(m) Termination Event. The occurrence of any of the following events:
(i) the Borrower or any ERISA Affiliate fails to make full payment when due of
all amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, except in cases in which a failure to make such payment
is not reasonably likely to result, in any given instance or in the aggregate,
in liability of the Borrower or any ERISA Affiliate in excess of $25,000,000,
(ii) an accumulated funding deficiency in excess of $25,000,000 occurs or
exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) the Borrower or any ERISA Affiliate as employers under
one or more Multiemployer Plan makes a complete or partial withdrawal from any
such Multiemployer Plan and the plan sponsor of such Multiemployer Plans
notifies such withdrawing employer that such employer has incurred a withdrawal
liability requiring payments in an amount exceeding $25,000,000.
(n) Judgment. A judgment or order for the payment of money which causes
the aggregate amount of all such judgments to exceed $10,000,000 in any Fiscal
Year shall be entered against the Borrower or any of its Subsidiaries by any
court and such judgment or order shall continue undischarged or unstayed for a
period of thirty (30) days.
Section 11.2 Remedies. Upon the occurrence of an Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and all other Obligations, to be forthwith due
and payable, whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, and terminate the Credit Facility and each of the
Revolving Credit Commitments and any right of the Borrower to request borrowings
or Letters of Credit thereunder; provided that upon the occurrence of an Event
of Default specified in Section 11.1(j) or Section 11.1(k), the Credit Facility
shall be automatically terminated and all Obligations shall automatically become
due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrower at such
time to deposit in a cash collateral account opened by the Administrative Agent
an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, the Reimbursement Obligation shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations.
Section 11.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE 12
THE ADMINISTRATIVE AGENT
Section 12.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent of such Lender under
this Agreement and the other Loan Documents for the term hereof, and each such
Lender irrevocably authorizes First Union as Administrative Agent for such
Lender to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Administrative Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or the other Loan Documents or
otherwise exist against the Administrative Agent.
Section 12.2 Delegation of Duties. The Administrative Agent may execute
any of its respective duties under this Agreement and the other Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent with reasonable care.
Section 12.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any of its Subsidiaries or
any officer thereof contained in this Agreement or the other Loan Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with this
Agreement or the other Loan Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or for any failure of the Borrower or any of its Subsidiaries to
perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower or any of its Subsidiaries.
Section 12.4 Reliance by the Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 13.10. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
and the other Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders (or, when expressly required hereby or by
the relevant other Loan Document, all the Lenders) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action except for its own gross negligence or
willful misconduct. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
Section 12.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless it has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, it shall promptly give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided that unless and until the Administrative Agent
shall have received such direction, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
Section 12.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Administrative Agent hereinafter taken, including any review
of the affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries and made its own decision to make its Loans and
issue or participate in Letters of Credit hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder or by the other Loan Documents, the Administrative Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial and other
condition or creditworthiness of the Borrower or any of its Subsidiaries which
may come into the possession of the Administrative Agent or any of its
respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
Section 12.7 Indemnification. The Lenders agree to indemnify each of
the Agents in its capacity as such (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably according
to the respective amounts of their Revolving Credit Commitment Percentages, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Notes or any Reimbursement Obligation) be imposed
on, incurred by or asserted against such Agent in any way relating to or arising
out of this Agreement or the other Loan Documents, or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the applicable Agent's bad faith, gross negligence or willful misconduct.
The agreements in this Section 12.7 shall survive the payment of the Notes, any
Reimbursement Obligation and all other amounts payable hereunder and the
termination of this Agreement.
Section 12.8 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the Administrative Agent were not an Administrative Agent
hereunder. With respect to any Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued by it or participated in
by it, the Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
Section 12.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders, with the approval of the Borrower so long as no Default or
Event of Default has occurred and is continuing, shall have the right to appoint
a successor Administrative Agent, which successor shall have minimum capital and
surplus of at least $500,000,000. If no successor Administrative Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the Administrative Agent's giving of
notice of resignation, then the Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which successor shall have
minimum capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 12 shall continue in effect for its benefit with respect to any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
Section 12.10 Syndication Agent and Documentation Agent.
Notwithstanding anything to the contrary contained in this Agreement, neither
Crestar Bank in its capacity as Syndication Agent nor SunTrust Bank, Atlanta in
its capacity as Documentation Agent shall have any duties or responsibilities
whatsoever.
ARTICLE 13
MISCELLANEOUS
Section 13.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing:
If to the Borrower: Richfood Holdings, Inc.
4860 Cox Road
Glen Allen, Virginia 23060
Attention: John C. Belknap
Executive Vice President and
Chief Financial Officer
Telephone No.: (804) 915-6003
Telecopy No.: (804) 915-6010
With copies to: Gary E. Thompson, Esquire
Hunton & Williams
951 E. Byrd Street
Richmond, Virginia 23219
Telephone No.: (804) 788-8787
Telecopy No.: (804) 788-8218
If to First Union as First Union National Bank
Administrative Agent: One First Union Center, TW-10
301 South College Street
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telephone No.: (704) 374-2698
Telecopy No.: (704) 383-0288
With copies to: Jeffrey M. Gill, Esquire
Mays & Valentine, L.L.P.
1111 East Main Street
Richmond, Virginia 23219
Telephone No.: (804) 697-1200
Telecopy No.: (804) 697-1339
If to any Lender: To the address for such Lender set forth on Schedule
1 hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be disbursed and
Letters of Credit issued.
Section 13.2 Expenses; Indemnity. The Borrower will (a) pay all
out-of-pocket expenses of the Administrative Agent in connection with (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation all out-of-pocket syndication and due diligence expenses and
reasonable fees and disbursements of counsel for the Administrative Agent and
(ii) the preparation, execution and delivery of any waiver, amendment or consent
by the Administrative Agent or the Lenders relating to this Agreement or any
other Loan Document, including without limitation reasonable fees and
disbursements of counsel for the Administrative Agent, (b) pay all reasonable
out-of-pocket expenses of the Administrative Agent and each Lender actually
incurred in connection with the administration and enforcement of any rights and
remedies of the Administrative Agent and Lenders under the Credit Facility,
including consulting with appraisers, accountants, engineers, attorneys and
other Persons concerning the nature, scope or value of any right or remedy of
the Administrative Agent or any Lender hereunder or under any other Loan
Document or any factual matters in connection therewith, which expenses shall
include without limitation the reasonable fees and disbursements of such
Persons, and (c) defend, indemnify and hold harmless each of the Agents and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any losses, penalties, fines,
liabilities, settlements, damages, costs and expenses, suffered by any such
Person in connection with any claim, investigation, litigation or other
proceeding (whether or not the applicable Agent or Lender is a party thereto)
and the prosecution and defense thereof, arising out of or in any way connected
with this Agreement, any other Loan Document or the Loans, including without
limitation reasonable attorney's and consultant's fees, except to the extent
that any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor.
Section 13.3 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 13.10 are hereby authorized by the Borrower at any time or from
time to time, without notice to the Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, time or demand, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured) and any other indebtedness at any time held or owing by the
Lenders, or any such assignee or participant to or for the credit or the account
of the Borrower against and on account of the Obligations irrespective of
whether or not (a) the Lenders shall have made any demand under this Agreement
or any of the other Loan Documents or (b) the Administrative Agent shall have
declared any or all of the Obligations to be due and payable as permitted by
Section 11.2 and although such Obligations shall be contingent or unmatured.
Section 13.4 Governing Law. This Agreement, the Notes and the other
Loan Documents, unless otherwise expressly set forth therein, shall be governed
by and construed and enforced in accordance with the laws of the Commonwealth of
Virginia, without reference to the conflicts or choice of law principles
thereof.
Section 13.5 Consent to Jurisdiction. The Borrower hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located in
the City of Richmond, Virginia and the County of Henrico, Virginia in any
action, claim or other proceeding arising out of any dispute in connection with
this Agreement, the Notes and the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations. The Borrower hereby irrevocably consents to the service of a
summons and complaint and other process in any action, claim or proceeding
brought by the Administrative Agent or any Lender in connection with this
Agreement, the Notes or the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations, on
behalf of itself or its property, in the manner specified in Section 13.1.
Nothing in this Section 13.5 shall affect the right of the Administrative Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of the Administrative Agent or any Lender to bring any
action or proceeding against the Borrower or its properties in the courts of any
other jurisdictions.
Section 13.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, in connection with or relating to the Notes or any
other Loan Document ("Disputes"), between or among parties to the Notes or any
other Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, or claims concerning any aspect of the
past, present or future relationships arising out of or in connection with the
Loan Documents. Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association and Title 9 of the U.S. Code. All arbitration
hearings shall be conducted in Richmond, Virginia. The expedited procedures set
forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims
of less than $1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted.
(b) Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
ADMINISTRATIVE AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
Section 13.7 Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.
Section 13.8 Injunctive Relief; Punitive Damages.
(a) The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrower agrees that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, the Lenders and the Borrower (on behalf
of itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any dispute.
Section 13.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent to the
contrary agreed to by the Borrower, be performed in accordance with GAAP as in
effect on the Closing Date. In the event that changes in GAAP shall be mandated
by the Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower and the
Lenders shall have amended this Agreement to the extent necessary to reflect any
such changes in the financial covenants and other terms and conditions of this
Agreement.
Section 13.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and the Lenders,
all future holders of the Notes, and their respective successors and assigns,
except that the Borrower shall not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, the Borrower, which consents shall not be unreasonably
withheld, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of the Revolving Credit Extensions of Credit at the
time owing to it and the Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations under
this Agreement;
(ii) if less than all of the assigning Lender's Revolving
Credit Commitment is to be assigned, the Revolving Credit Commitment so assigned
shall not be less than $5,000,000;
(iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit G attached hereto
(an "Assignment and Acceptance"), together with any Note or Notes subject to
such assignment;
(iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the SEC or
apply to or qualify the Loans or the Notes under the blue sky laws of any state;
and
(v) the assigning Lender shall pay to the Administrative Agent
an assignment fee of $3,500 upon the execution by such Lender of the Assignment
and Acceptance; provided that no such fee shall be payable upon any assignment
by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Revolving Credit
Extensions of Credit with respect to each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative 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 Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of Exhibit F:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the
Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance
to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Eligible Assignee in
amounts equal to the Revolving Credit Commitment assumed by it pursuant to such
Assignment and Acceptance and a new Note or Notes to the order of the assigning
Lender in an amount equal to the Revolving Credit Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes delivered to the
assigning Lender. Each surrendered Note or Notes shall be canceled and returned
to the Borrower.
(f) Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Revolving
Credit Extensions of Credit and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less
than $5,000,000;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Revolving Credit Commitment) shall remain
unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by
it for all purposes of this Agreement;
(v) the Borrower, the Administrative 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;
(vi) such Lender shall not permit such participant the right
to approve any waivers, amendments or other modifications to this Agreement or
any other Loan Document other than waivers, amendments or modifications which
would reduce the principal of or the interest rate on any Loan or Reimbursement
Obligation, extend the term or increase the amount of the Revolving Credit
Commitment, reduce the amount of any fees to which such participant is entitled
or extend any scheduled payment date for principal of any Loan;
(vii) any such disposition shall not, without the consent of
the Borrower, require the Borrower to file a registration statement with the SEC
or apply to or qualify the Loans or the Notes under the blue sky laws of any
state; and
(viii) any such disposition shall not require the Borrower to
indemnify or make any additional payment to the participant pursuant to Sections
4.8(c), 4.10 or 4.11 unless such Lender would have been entitled to such
indemnity or additional payment.
(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to the
Borrower obtained pursuant to the Loan Documents in accordance with their
customary procedures for handling confidential information; provided that the
Administrative Agent may disclose information relating to this Agreement to Gold
Sheets and other similar bank trade publications, such information to consist of
deal terms and other information customarily found in such publications. Any
Lender may, in connection with any assignment, proposed assignment,
participation or proposed participation pursuant to this Section 13.10, disclose
to the assignee, participant, proposed assignee or proposed participant any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; provided that prior to any such disclosure, each such assignee,
proposed assignee, participant or proposed participant shall agree with the
Borrower or such Lender to preserve the confidentiality of any confidential
information relating to the Borrower received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
Section 13.11 Amendments, Waivers and Consents. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or consent
is in writing signed by the Required Lenders (or by the Administrative Agent
with the consent of the Required Lenders) and delivered to the Administrative
Agent and, in the case of an amendment, signed by the Borrower; provided that no
amendment, waiver or consent shall (a) increase the amount or extend the time of
the obligation of the Lenders to make Loans or issue or participate in Letters
of Credit (including without limitation pursuant to Section 2.9), except as
specifically provided in Section 2.7, (b) extend the originally scheduled time
or times of payment of the principal of any Loan or Reimbursement Obligation or
the time or times of payment of interest on any Loan or Reimbursement
Obligation, (c) reduce the rate of interest or fees payable on any Loan or
Reimbursement Obligation, (d) reduce the principal amount of any Loan or
Reimbursement Obligation, (e) permit any subordination of the principal or
interest on any Loan or Reimbursement Obligation or (f) amend the provisions of
this Section 13.11 or the definition of Required Lenders, without the prior
written consent of each Lender. In addition, no amendment, waiver or consent to
the provisions of (a) Article 12 shall be made without the written consent of
the Administrative Agent and (b) Article 3 without the written consent of the
Issuing Lender.
Section 13.12 Performance of Duties. The Borrower's obligations under
this Agreement and each of the Loan Documents shall be performed by the Borrower
at its sole cost and expense.
Section 13.13 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied or the Credit Facility has not been
terminated.
Section 13.14 Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article 13 and any other
provision of this Agreement and the Loan Documents shall continue in full force
and effect and shall protect the Administrative Agent and the Lenders against
events arising after such termination as well as before.
Section 13.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
Section 13.16 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 13.17 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
Section 13.18 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full and all
Revolving Credit Commitments shall have been terminated. No termination of this
Agreement shall affect the rights and obligations of the parties hereto arising
prior to such termination.
[Remainder of this page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
RICHFOOD HOLDINGS, INC.,
as Borrower
By: /s/ John C. Belknap
Name: John C. Belknap
Title: Executive Vice President
FIRST UNION NATIONAL BANK,
as Administrative Agent and Lender
By: /s/ Andrew C. Calhoun
Name: Andrew C. Calhoun
Title: Senior Vice President
[Remainder of this page intentionally left blank]
<PAGE>
CRESTAR BANK, as Syndication
Agent and Lender
By: /s/ Brad A. Booker
Name: Brad A. Booker
Title: Senior Vice President
[Remainder of this page intentionally left blank]
<PAGE>
SUNTRUST BANK, ATLANTA, as
Documentation Agent and Lender
By: /s/ Willem-Jan O. Hattink
Name: Willem-Jan O. Hattink
Title: Group Vice President
By: /s/ Dan Kometor
Name: Dan Kometor
Title: Vice President
[Remainder of this page intentionally left blank]
<PAGE>
THE FIRST NATIONAL BANK
OF CHICAGO, as Co-Agent and Lender
By: /s/ Catherine A. Muszynski
Name: Catherine A. Muszynski
Title: Vice President
[Remainder of this page intentionally left blank]
<PAGE>
MELLON BANK, N.A., as Lender
By: /s/ Donald G. Cassidy, Jr.
Name: Donald G. Cassidy, Jr.
Title: First Vice President
[Remainder of this page intentionally left blank]
<PAGE>
MERCANTILE BANK NATIONAL
ASSOCIATION, as Lender
By: /s/ Kirk A. Porter
Name: Kirk A. Porter
Title: Vice President
[Remainder of this page intentionally left blank]
<PAGE>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Lender
By: /s/ Christopher C. Kuyhardt
Name: Christopher C. Kuyhardt
Title: Vice President
[Remainder of this page intentionally left blank]
<PAGE>
THE BANK OF NEW YORK, as Lender
By: /s/ Paula D. Regan
Name: Paula D. Regan
Title: Vice Pesident
[Remainder of this page intentionally left blank]
<PAGE>
WACHOVIA BANK, N.A., as Lender
By: /s/ Charlene A. Johnson
Name: Charlene A. Johnson
Title: Senior Vice President
[Remainder of this page intentionally left blank]
<PAGE>
<TABLE>
Schedule 1
LENDERS AND COMMITMENTS
<CAPTION>
REVOLVING CREDIT REVOLVING CREDIT
LENDER COMMITMENT PERCENTAGE COMMITMENT
------ --------------------- ----------
<S> <C>
First Union National Bank
One First Union Center, TW-10
301 South College Street 27.1428571429% $67,857,142.86
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telephone No.: (704) 383-0281
Telecopy No.: (704) 383-0288
Crestar Bank
919 East Main Street, 22nd Floor
Richmond, Virginia 23219 13.5714285714% $33,928,571.43
Attention: Patrick Collins
Telephone No.: (804) 782-5449
Telecopy No.: (804) 782-5413
Mellon Bank, N.A.
Mellon Bank Center
1735 Market Street, Room 750 7.1428571429% $17,857,142.86
Philadelphia, Pennsylvania 19103
Attention: Donald Cassidy
Telephone No.: (215) 553-2065
Telecopy No.: (215) 553-4899
Mercantile Bank National Association
One Mercantile Center, Tram 12-3
St. Louis, Missouri 63101 5.7142857143% $14,285,714.29
Attention: Kirk A. Porter
Telephone No.: (314) 425-2413
Telecopy No.: (314) 418-8292
Morgan Guaranty Trust Company of New
York
60 Wall Street, 22nd Floor 7.1428571429% $17,857,142.86
New York, New York 10260-0060
Attention: Patricia Merritt
Telephone No.: (212) 648-6744
Telecopy No.: (212) 648-5336
<PAGE>
Schedule 1
(continued)
LENDERS AND COMMITMENTS
<CAPTION>
REVOLVING CREDIT REVOLVING CREDIT
LENDER COMMITMENT PERCENTAGE COMMITMENT
------ --------------------- ----------
The Bank of New York
One Wall Street, 8th Floor
New York, New York 10286 7.1428571429% $17,857,142.86
Attention: Paula Regan
Telephone No.: (212) 635-7867
Telecopy No.: (212) 635-1481 or 1483
The First National Bank of Chicago
One First National Plaza
Mail Suite 0086 11.4285714286% $28,571,428.57
Chicago, Illinois 60670
Attention: Jonn Runger
Telephone No.: (312) 732-7101
Telecopy No.: (312) 732-1117
SunTrust Bank, Atlanta
25 Park Place, 23rd Floor
Atlanta, Georgia 30303 13.5714285714% $33,928,571.43
Attention: Brian Peters
Telephone No.: (404) 827-6118
Telecopy No.: (404) 588-8833
Wachovia Bank, N.A.
100 N. Main Street
Winston-Salem, North Carolina 7.1428571429% $17,857,142.86
27150-7202
Attention: Southeast Corporate
Banking
Telephone No.: (336) 732-5472
Telecopy No.: (336) 732-6935
</TABLE>
<PAGE>
Schedule 6.1(a)
JURISDICTIONS OF ORGANIZATION AND QUALIFICATION
<PAGE>
Schedule 6.1(b)
SUBSIDIARIES AND CAPITALIZATION
<PAGE>
Schedule 6.1(i)
EMPLOYEE BENEFIT PLANS
<PAGE>
Schedule 6.1(l)
MATERIAL CONTRACTS
<PAGE>
Schedule 6.1(m)
LABOR AND COLLECTIVE BARGAINING AGREEMENTS
<PAGE>
Schedule 6.1(t)
DEBT AND GUARANTY OBLIGATIONS
<PAGE>
Schedule 10.3
EXISTING LIENS
<PAGE>
Schhedule 10.6
EXISTING RESTRICTIONS ON DIVIDENDS
<PAGE>
EXHIBIT A-1
REVOLVING CREDIT NOTE
$ _____________________ February 27, 1998
Richmond, Virginia
FOR VALUE RECEIVED, the undersigned, RICHFOOD HOLDINGS, INC., a
corporation organized under the laws of the Commonwealth of Virginia (the
"Borrower"), promises to pay to the order of
______________________________________________________________ (the "Lender"),
at the times, at the place and in the manner provided in the Credit Agreement
(as hereinafter defined), the principal sum of
_________________________________________ Dollars ($____________), or, if less,
the aggregate unpaid principal amount of all Revolving Credit Loans made by the
Lender under the Credit Agreement, together with interest at the rates as in
effect from time to time with respect to each portion of the principal amount
hereof, determined and payable as provided in Article 4 of the Credit Agreement.
This Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of February 27, 1998,
by and among the Borrower, the Lenders parties thereto, First Union National
Bank as Administrative Agent, Crestar Bank as Syndication Agent and SunTrust
Bank, Atlanta as Documentation Agent (the "Credit Agreement"). The Credit
Agreement contains, among other things, provisions for the time, place and
manner of payment of this Note, the determination of the interest rate borne by
and fees payable with respect to this Note and the mandatory repayment of this
Note under certain circumstances.
The events of default hereunder are the same as those described in the
Credit Agreement which are incorporated herein by this reference. In the event
of the occurrence of any or all of such events, the entire amount of the
principal of this Note together with all accrued interest may automatically
become or may be declared immediately due and payable in the manner and with the
effect as provided in the Credit Agreement.
The Borrower agrees to pay on demand all costs of collection, including
reasonable attorneys' fees, if any part of this Note, principal or interest, is
collected after maturity with the aid of any attorney.
Presentment, demand, protest and notice of dishonor are hereby waived
by all makers and endorsers hereon.
This Note shall be governed by and construed and enforced in accordance
with the laws of the Commonwealth of Virginia, without reference to the
conflicts or choice of law principles thereof.
$250 Million Facility
495961v.2
IN WITNESS WHEREOF, the Borrower has caused its name to be signed by
its duly authorized officer as of the day and year first above written.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
<PAGE>
EXHIBIT A-2
SWINGLINE NOTE
$ 30,000,000.00 February 27, 1998
Richmond, Virginia
FOR VALUE RECEIVED, the undersigned, RICHFOOD HOLDINGS, INC., a
corporation organized under the laws of the Commonwealth of Virginia (the
"Borrower"), promises to pay to the order of FIRST UNION NATIONAL BANK (the
"Lender"), at the times, at the place and in the manner provided in the Credit
Agreement (as hereinafter defined), the principal sum of Thirty Million Dollars
($30,000,000.00), or, if less, the aggregate unpaid principal amount of all
Swingline Loans made by the Lender under the Credit Agreement, together with
interest at the rates as in effect from time to time with respect to the
principal amount hereof, determined and payable as provided in Article 4 of the
Credit Agreement.
This Note is the Swingline Note referred to in, and is entitled to the
benefits of, the Credit Agreement dated as of February 27, 1998, by and among
the Borrower, the Lenders parties thereto, First Union National Bank as
Administrative Agent, Crestar Bank as Syndication Agent and SunTrust Bank,
Atlanta as Documentation Agent (the "Credit Agreement"). The Credit Agreement
contains, among other things, provisions for the time, place and manner of
payment of this Note, the determination of the interest rate borne by and fees
payable with respect to this Note and the mandatory repayment of this Note under
certain circumstances.
The events of default hereunder are the same as those described in the
Credit Agreement which are incorporated herein by this reference. In the event
of the occurrence of any or all of such events, the entire amount of the
principal of this Note together with all accrued interest may automatically
become or may be declared immediately due and payable in the manner and with the
effect as provided in the Credit Agreement.
The Borrower agrees to pay on demand all costs of collection, including
reasonable attorneys' fees, if any part of this Note, principal or interest, is
collected after maturity with the aid of any attorney.
Presentment, demand, protest and notice of dishonor are hereby waived
by all makers and endorsers hereon.
This Note shall be governed by and construed and enforced in accordance
with the laws of the Commonwealth of Virginia, without reference to the
conflicts or choice of law principles thereof.
IN WITNESS WHEREOF, the Borrower has caused its name to be signed by
its duly authorized officer as of the day and year first above written.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
<PAGE>
EXHIBIT A-3
COMPETITIVE BID NOTE
$250,000,000.00 February 27, 1998
Richmond, Virginia
FOR VALUE RECEIVED, the undersigned, RICHFOOD HOLDINGS, INC., a
corporation organized under the laws of the Commonwealth of Virginia (the
"Borrower"), promises to pay to the order of
____________________________________________________________ (the "Lender"), at
the times, at the place and in the manner provided in the Credit Agreement (as
hereinafter defined), the principal sum of Two Hundred Fifty Million Dollars
($250,000,000.00), or, if less, the aggregate unpaid principal amount of all
Competitive Bid Loans made by the Lender under the Credit Agreement, together
with interest at the rates as in effect from time to time with respect to the
principal amount hereof, determined and payable as provided in Article 4 of the
Credit Agreement.
This Note is one of the Competitive Bid Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of February 27, 1998,
by and among the Borrower, the Lenders parties thereto, First Union National
Bank as Administrative Agent, Crestar Bank as Syndication Agent and SunTrust
Bank, Atlanta as Documentation Agent (the "Credit Agreement"). The Credit
Agreement contains, among other things, provisions for the time, place and
manner of payment of this Note, the determination of the interest rate borne by
and fees payable with respect to this Note and the mandatory repayment of this
Note under certain circumstances.
The events of default hereunder are the same as those described in the
Credit Agreement which are incorporated herein by this reference. In the event
of the occurrence of any or all of such events, the entire amount of the
principal of this Note together with all accrued interest may automatically
become or may be declared immediately due and payable in the manner and with the
effect as provided in the Credit Agreement.
The Borrower agrees to pay on demand all costs of collection, including
reasonable attorneys' fees, if any part of this Note, principal or interest, is
collected after maturity with the aid of any attorney.
Presentment, demand, protest and notice of dishonor are hereby waived
by all makers and endorsers hereon.
This Note shall be governed by and construed and enforced in accordance
with the laws of the Commonwealth of Virginia, without reference to the
conflicts or choice of law principles thereof.
IN WITNESS WHEREOF, the Borrower has caused its name to be signed by
its duly authorized officer as of the day and year first above written.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
<PAGE>
EXHIBIT B-1
NOTICE OF REVOLVING CREDIT BORROWING
---------- --, ----
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Revolving Credit Borrowing is delivered to
you under Section 2.3 (a) of the Credit Agreement dated as of February 27, 1998
(as amended or supplemented from time to time, the "Credit Agreement"), by and
among Richfood Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the
"Lenders"), First Union National Bank as Administrative Agent, Crestar Bank as
Syndication Agent and SunTrust Bank, Atlanta as Documentation Agent.
1. The Borrower hereby requests that the [Lenders] [Swingline Lender]
make the [Revolving Credit Loans] [Swingline Loans] described below.
2. The Borrower hereby requests that the [Lenders] [Swingline Lender]
make [Revolving Credit Loans] [Swingline Loans] in the aggregate principal
amount of $_____________. (For LIBOR Rate Loans, complete with an amount equal
to $5,000,000 or a whole multiple of $1,000,000 in excess thereof; for Base Rate
Loans, complete with an amount equal to $1,000,000 or a whole multiple of
$500,000 in excess thereof; and for Swingline Loans, complete with an amount
equal to $500,000 or a whole multiple of $100,000 in excess thereof.)
3. The Borrower hereby requests that the [Revolving Credit Loans]
[Swingline Loans] be made on the following Business Day: _______________.
(Complete with a date at least one (1) Business Day after the date of this
Notice of Revolving Credit Borrowing for Loans which are initially to be Base
Rate Loans, and at least three (3) Business Days after the date of this Notice
of Revolving Credit Borrowing for Loans which are initially to be LIBOR Rate
Loans.)
4. If this Notice of Revolving Credit Borrowing requests Revolving
Credit Loans, the Borrower hereby requests that the Revolving Credit Loans
initially bear interest at the following interest rate, plus the Applicable
Margin, as set forth below: (check one)
______ Base Rate
______ LIBOR Rate
5. If this Notice of Revolving Credit Borrowing requests Revolving
Credit Loans and the Revolving Credit Loans are initially to be LIBOR Rate
Loans, the Borrower hereby requests the following initial Interest Period with
respect thereto: (check one)
_______ 1 month
_______ 2 months
_______ 3 months
_______ 6 months
6. The principal amount of all [Revolving Credit Loans] [Swingline
Loans] outstanding after giving effect to the Loans requested hereby will not
exceed the maximum amount permitted to be outstanding pursuant to the terms of
the Credit Agreement.
7. All of the conditions applicable to the Loans requested herein as
set forth in the Credit Agreement have been satisfied as of the date hereof and
will remain satisfied to the date the requested Loans are made.
8. No Default or Event of Default exists, and none will exist upon the
making of the requested Loans.
9. The representations and warranties of the Borrower described in
Section 5.3(a) of the Credit Agreement are true and correct in all material
respects as of the date hereof and will be true and correct in all material
respects after giving effect to the requested Loans.
10. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Revolving Credit Borrowing this _____ day of ________________, _____.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
<PAGE>
EXHIBIT B-2
COMPETITIVE BID REQUEST
---------- --, ----
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Competitive Bid Request is delivered to you under Section 2.4(b)
of the Credit Agreement dated as of February 27, 1998 (as amended or
supplemented from time to time, the "Credit Agreement"), by and among Richfood
Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the "Lenders"),
First Union National Bank as Administrative Agent, Crestar Bank as Syndication
Agent and SunTrust Bank, Atlanta as Documentation Agent.
1. The Borrower hereby requests that the Lenders submit Competitive
Bids to make Competitive Bid Loans on the following Business Day:
_________________________________.1
2. The Borrower hereby requests that the Lenders submit Competitive
Bids in the following principal amount(s) and for the following Interest
Period(s):
Principal Amount2 Interest Period3
3. This Competitive Bid Borrowing will be [an Absolute Competitive Bid
Borrowing] [a LIBOR Competitive Bid Borrowing].
4. The principal amount of all Competitive Bid Loans outstanding after
giving effect to the Competitive Bid Loans requested hereby will not exceed the
maximum amount permitted to be outstanding pursuant to the terms of the Credit
Agreement.
5. All of the conditions applicable to the Competitive Bid Loans
requested herein as set forth in the Credit Agreement have been satisfied as of
the date hereof and will remain satisfied to the date the requested Competitive
Bid Loans are made.
6. No Default or Event of Default exists, and none will exist upon the
making of the requested Competitive Bid Loans.
7. The representations and warranties of the Borrower contained in
Section 5.3(a) of the Credit Agreement are true and correct in all material
respects as of the date hereof and will be true and correct in all material
respects after giving effect to the requested Competitive Bid Loans.
8. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Competitive Bid
Request this _____ day of ________________, _____.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
1. Complete with a date at least two (2) Business Days after the date of
this Competitive Bid Request in the case of an Absolute Competitive Bid
Borrowing and at least five (5) Business Days after the date of this
Competitive Bid Request in the case of a LIBOR Competitive Bid
Borrowing.
2. Complete with an amount not less than $10,000,000 or a whole multiple
of $5,000,000 in excess thereof.
3. Complete with an Interest Period of not less than seven (7) or more
than one hundred eighty (180) days in the case of an Absolute
Competitive Bid Borrowing and an Interest Period of one (1), two (2),
three (3) or six (6) months in the case of a LIBOR Competitive Bid
Borrowing.
<PAGE>
EXHIBIT B-3
COMPETITIVE BID FORM
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 23288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Competitive Bid is delivered to you under Section 2.4(d) of the
Credit Agreement dated as of February 27, 1998 (as amended or supplemented from
time to time, the "Credit Agreement"), by and among Richfood Holdings, Inc. (the
"Borrower"), the Lenders parties thereto (the "Lenders"), First Union National
Bank as Administrative Agent, Crestar Bank as Syndication Agent and SunTrust
Bank, Atlanta as Documentation Agent.
1. Lender:
2. Lender Contact:
Telephone:
Telecopy:
3. Borrowing Date: _________________ ___, ____1
4. Lender hereby offers to make Competitive Bid Loans in the following
principal amount(s), for the following Interest Period(s), and at the following
interest rate(s):
Principal Amount2 Interest Period3 Interest Rate4
5. All capitalized undefined terms used herein have
the meanings assigned thereto in the Credit Agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Competitive Bid
this ___ day of __________, ____.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
1. Insert date specified in Competitive Bid Request.
2. Principal amount shall not be less than $5,000,000 or a whole multiple
of $1,000,000 in excess thereof and shall not exceed the principal
amount requested in the Competitive Bid Request.
3. Interest period shall not be less than seven (7) or more than one
hundred eighty (180) days in the case of an Absolute Competitive Bid
Borrowing and one (1), two (2), three (3) or six (6) months in the case
of a LIBOR Competitive Bid Borrowing.
4. Interest rate shall be a fixed rate in the case of an Absolute
Competitive Bid Borrowing or a rate based on LIBOR in the case of a
LIBOR Competitive Bid Borrowing.
<PAGE>
EXHIBIT C
NOTICE OF ACCOUNT DESIGNATION
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
In accordance with the terms of Section 2.3(b) of the Credit Agreement
dated February 27, 1998 (as amended or supplemented from time to time, the
"Credit Agreement"), by and among Richfood Holdings, Inc. (the "Borrower"), the
Lenders parties thereto, First Union National Bank as Administrative Agent,
Crestar Bank as Syndication Agent and SunTrust Bank, Atlanta as Documentation
Agent, the Borrower hereby designates the following account as the account to
which the proceeds of Loans under the Credit Agreement may be disbursed:
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation this _____ day of _______________, 1998.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
<PAGE>
EXHIBIT D
NOTICE OF PREPAYMENT
---------- --, -----
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 28288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you under Section
2.5(c) of the Credit Agreement dated as of February 27, 1998 (as amended or
supplemented from time to time, the "Credit Agreement"), by and among Richfood
Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the "Lenders"),
First Union National Bank as Administrative Agent, Crestar Bank as Syndication
Agent and SunTrust Bank, Atlanta as Documentation Agent.
1. The Borrower hereby gives notice that it will repay _____ Revolving
Credit Loans _____ Swingline Loans __________ Competitive Bid Loans (check one)
in an aggregate principal amount of $________. (For LIBOR Rate Loans and
Competitive Bid Loans, complete with an amount equal to at least $5,000,000 or a
whole multiple of $1,000,000 in excess thereof; for Base Rate Loans, complete
with an amount equal to $1,000,000 or a whole multiple of $500,000 in excess
thereof; and for any Swingline Loan, complete with an amount equal to $500,000
or a whole multiple of $100,000 in excess thereof.)
2. The repayment will be made on the following Business Day:
______________ (Complete with a date at least one (1) Business Day after the
date of this Notice of Prepayment if the Loans to be repaid are Base Rate Loans
or Swingline Loans, and at least three (3) Business Days after the date of this
Notice of Prepayment if the Loans to be repaid are LIBOR Rate Loans or
Competitive Bid Loans.)
3. The Loans to be repaid are: (check one or more).
Base Rate Loans in the amount of $____________
LIBOR Rate Loans in the amount of $__________
Swingline Loans in the amount of $____________
Competitive Bid Loans in the amount of $_______
4. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Prepayment this ____ day of __________________, ______.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
<PAGE>
EXHIBIT E
NOTICE OF CONVERSION/CONTINUATION
---------- --, ----
First Union National Bank
One First Union Center, TW-10
301 South College Street
Charlotte, NC 23288-0608
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation is delivered to you
under Section 4.2 of the Credit Agreement dated as of February 27, 1998 (as
amended or supplemented from time to time, the "Credit Agreement"), by and among
Richfood Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the
"Lenders"), First Union National Bank as Administrative Agent, Crestar Bank as
Syndication Agent and SunTrust Bank, Atlanta as Documentation Agent.
1. This Notice of Conversion/Continuation is submitted with respect to
Revolving Credit Loans for the purpose of:
(a) [Converting] [continuing] a ________ Loan [into] [as] a
________ Loan.1
(b) The aggregate outstanding principal balance of such Revolving
Credit Loans is $_______________.2
(c) The last day of the current Interest Period for such Revolving
Credit Loans is __________ __, _____.3
(d) The principal amount of such Loan to be [converted]
[continued] is $____________.4
(e) The requested effective date of the [conversion]
[continuation] of such Revolving Credit Loans is __________
__, _____.5
(f) The requested Interest Period applicable to the [converted]
[continued] Loan is _______________.6
2. No Default or Event of Default exists, and none will exist upon the
conversion or continuation of the Loan requested herein.
3. All capitalized undefined terms used herein have the meanings
assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Conversion/Continuation this ______ day of _______________, ____.
RICHFOOD HOLDINGS, INC.
By:
------------------------------------
Name:
-----------------------------
Title:
-----------------------------
1. Delete the brackets and the bracketed language as appropriate and
insert "Base Rate" or "LIBOR Rate," as applicable, in each blank.
2. Insert the amount of the applicable Loans.
3. Insert applicable date for any LIBOR Rate Loan being converted or
continued.
4. Complete with an amount in compliance with Section 4.2 of the Credit
Agreement.
5. Delete the brackets and bracketed language as appropriate, and complete
with a Business Day at least one (1) Business Day after the date of
this Notice for a continuation of or conversion to a Base Rate Loan and
at least three (3) Business Days after the date of this Notice for a
continuation of or conversion to a LIBOR Rate Loan.
6. Complete for any LIBOR Rate Loan with an Interest Period in compliance
with the definition of Interest Period contained in the Credit
Agreement.
<PAGE>
EXHIBIT F
OFFICER'S COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement dated as of February 27, 1998
(as amended or supplemented from time to time, the "Credit Agreement"), by and
among Richfood Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the
"Lenders"), First Union National Bank as Administrative Agent, Crestar Bank as
Syndication Agent and SunTrust Bank, Atlanta as Documentation Agent. Capitalized
terms which are defined in the Credit Agreement and which are used herein
without definition shall have the same meanings herein as in the Credit
Agreement.
Pursuant to Section 7.2 of the Credit Agreement, ______________, the
duly authorized ____________________ of the Borrower, hereby certifies to the
Administrative Agent and each of the Lenders that the information contained
below is true, accurate and complete for the four-quarter period ending
______________ __, ____, or as of such date, as applicable, and that as of such
date no Default or Event of Default has occurred and is continuing:
Leverage Ratio:
Fixed Charge Coverage Ratio:
[Other Negative Covenants:]
----------------------------------------
Officer's Signature)
<PAGE>
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of February 26, 1998
(as amended or supplemented from time to time, the "Credit Agreement"), by and
among Richfood Holdings, Inc. (the "Borrower"), the Lenders parties thereto (the
"Lenders"), First Union National Bank as Administrative Agent, Crestar Bank as
Syndication Agent and SunTrust Bank, Atlanta as Documentation Agent. Capitalized
terms which are defined in the Credit Agreement and which are used herein
without definition shall have the same meanings herein as in the Credit
Agreement.
________________________________________________________ (the "Assignor")
and ___________________________________________________ (the "Assignee") agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, as of the Effective
Date (as defined below), a _____% interest (the "Assigned Interest") in and to
the Assignor's Revolving Credit Commitment under the Credit Agreement and the
Assignor thereby retains _____% of its interest therein (the "Retained
Interest"). This Assignment and Acceptance is entered pursuant to, and
authorized by, Section 13.10 of the Credit Agreement.
2. The Assignor (a) represents that, as of the date hereof, (i) its
Revolving Credit Commitment (without giving effect to assignments thereof which
have not yet become effective) under the Credit Agreement, and (ii) the
outstanding balance of its Revolving Credit Loans (unreduced by any assignments
thereof which have not yet become effective) under the Credit Agreement, are
each set forth in Section 2 of Schedule I hereto; (b) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto, other than that the Assignor
is the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or its Subsidiaries or the performance or
observance by the Borrower or its Subsidiaries of any of their obligations under
the Credit Agreement or any other Loan Document; and (d) attaches the Revolving
Credit Note delivered to it under the Credit Agreement and requests that the
Borrower exchange such Note for new Notes payable to each of the Assignor and
the Assignee as follows:
Revolving Credit Note
Payable to the Order of: Principal Amount of Note:
- ----------------------------------- $---------------
- ----------------------------------- $---------------
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.1 thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (c)
agrees that it will, independently and without reliance upon the Assignor or any
other Lender or the Administrative Agent 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 the Credit Agreement; (d)
confirms that it is an Eligible Assignee; (e) appoints and authorizes the
Administrative Agent to take such action as Agent on its behalf and to exercise
such powers under the Credit Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (f) agrees that it will perform in
accordance with their terms all the obligations which by the terms of the Credit
Agreement and the other Loan Documents are required to be performed by it as a
Lender; and (g) agrees that it will keep confidential all non-public information
with respect to the Borrower obtained pursuant to the Loan Documents in
accordance with Section 13.10(g) of the Credit Agreement.
4. The effective date for this Assignment and Acceptance shall be as
set forth in Section 1 of Schedule I hereto (the "Effective Date"). Following
the execution of this Assignment and Acceptance, it will be delivered to the
Administrative Agent [and the Borrower] for consent thereby and acceptance and
recording in the Register.
5. Upon such consents, acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and
the other Loan Documents to which Lenders are parties and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender under each such agreement, and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement and the other Loan
Documents.
6. Upon such consents, acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments with respect to
the interest assigned hereby (including payments of principal, interest, fees
and other amounts) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO
CONFLICT OF LAW PRINCIPLES.
ASSIGNOR
-------------------------------------------
By:
----------------------------------------
Title:
-------------------------------------
ASSIGNEE
-------------------------------------------
By:
----------------------------------------
Title:
-------------------------------------
Consented to and Accepted:
FIRST UNION NATIONAL BANK,
as Administrative Agent
By:
----------------------------------------
Title:
-------------------------------------
[RICHFOOD HOLDINGS, INC.]
By:
----------------------------------------
Title:
-------------------------------------
<PAGE>
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
1. Effective Date: ________________ __, ____
2. Assignor's Revolving Credit Commitment $____________
Assignor's Outstanding Revolving Credit Loans $____________
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Farm Fresh, Inc.:
We consent to the inclusion of our report dated February 17, 1998, except as to
note 1, which is as of February 20, 1998, with respect to the consolidated
balance sheets of Farm Fresh, Inc. and subsidiaries as of January 3, 1998 and
December 28, 1996, and the related consolidated statements of loss,
stockholder's deficit and cash flows for the years then ended, which report
appears tin the Form 8-K of Richfood Holdings, Inc. dated March 19, 1998.
Our report dated February 17, 1998, except as to note 1, which is as of February
20, 1998, contains an explanatory paragraph that states that the Company filed a
voluntary petition for relief under Chapter 11 of the United States Bankruptcy
Code and submitted a plan of reorganization to the Bankruptcy Court. The
Bankruptcy filing, Farm Fresh Inc.'s leveraged financial structure and its
recurring net losses resulting in a deficit in stockholder's equity raise
substantial doubt about its ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of that uncertainty.
Norfolk, Virginia /s/ KPMG Peat Marwick LLP
March 19, 1998
